La Rosa Holdings Corp.
For the period ended Dec 31, 2025. Filed Jun 4, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Jun 4, 2026
LRHC$0.76-15.4%Stored close · as of Oct 16, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-15.
0001213900-25-032211
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-06-04.
0001213900-26-065276
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 106 current paragraphs.
48 unchanged; 22 reworded; 32 added; 32 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
The discussion in this section has been impacted by the restatement described in the Explanatory Note at the beginning of this Comprehensive Form 10-K and in Note 2 and Note 3 of the consolidated financial statements of this Comprehensive Form 10-K. Certain of the financial and other information provided in this Management’s Discussion and Analysis of our Financial Condition and Results of Operations has been updated to reflect the restatement adjustments.
Current report
During the fiscal year ended December 31, 2025, in an effort to simplify our corporate structure, we dissolved Baxpi Holdings LLC, which was non-operational, La Rosa Realty NC LLC, which was not profitable, and La Rosa Realty Success LLC, agents of which were moved to La Rosa CW Properties LLC. In February 2026, we also sold our majority interests in Horeb Kissimmee Realty, LLC to the minority member of that entity.
Current report
On October 31, 2023, in the matter of Burnett v. National Association of Realtors (U.S. District Court for the Western District of Missouri), a federal jury found the NAR and certain other remaining brokerage defendants liable for $1.8 billion in damages on claims that these companies conspired to artificially inflate brokerage commissions, which is in violation of federal antitrust law (the “Burnett Ruling”). The verdict was appealed on October 31, 2023. Additionally, certain other brokerage defendants settled with the plaintiffs, including both monetary and non-monetary settlement terms. That same day, the NAR, EXP World Holdings, Inc., Compass, Inc., Redfin Corporation, Weichert Realtors, United Real Estate, Howard Hann Real Estate Services, Douglas Elliman, Inc., The Keyes Company, Illustrated Properties, LLC, Baird & Warner, Inc., Real Estate One, Inc., and others were named as defendants in Gibson v. National Association of Realtors (U.S. District Court for the Western District of Missouri), alleging a similar fact pattern and antitrust violations. On or about March 15, 2024, NAR agreed to settle the Burnett Ruling, along with a sister litigation, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions. On November 26, 2024, the NAR Settlement was granted over objections, The final approval order is currently being appealed. If the NAR Settlement is sustained on appeal, it is expected to resolve claims against the NAR and certain companies related to this matter. The terms of the NAR Settlement provide that NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS, as well as adopt new rules requiring written agreements between buyers and buyers’ agents.
Current report
On March 22, 2024, real estate brokerage company Compass Inc. (“Compass”) announced that it will pay $57.5 million as part of a proposed settlement to resolve lawsuits over real estate commissions and agreed to change its business practices to ensure clients can more easily understand how brokers and agents are compensated for their services. Compass’s motion for final approval of the settlement agreement was granted on October 31, 2024 and the settlement agreement is now effective. The final approval ruling was appealed by certain class members that objected to the settlement and is now pending before the United States Circuit Court of Appeals for the Eighth Circuit. In the same litigation, the court granted final approval of multiple additional settlements, including (i) an $8.62 million settlement on June 25, 2025 involving The Keyes Company, Illustrated Properties, LLC, Baird & Warner, Inc., Real Estate One, Inc., and other defendants, and (ii) a $42 million settlement on February 5, 2026 involving William Raveis Real Estate Inc., Hanna Holdings Inc., Windermere Real Estate Services Company Inc., Exit Realty Corp. International, Exit Realty Corp. USA, and William L. Lyon & Associates Inc.
Current report
Coaching services revenue declined by $125 thousand, or 22%, in the year ended December 31, 2025 against the comparable prior year period. This is attributable to a shift in focus by management in the agent plans to focus on agent count growth that does not require coaching. This was done in anticipation of boosting transaction volume.
Current report
Property management revenue increased $47 thousand, or 13%, in the year ended December 31, 2025 against the comparable prior year period primarily due to increases in application fees despite a reduction in total properties managed.
Current report
Real Estate Brokerage Services (Commercial)
Current report
Residential real estate services revenue increased $366 thousand, or 112%, in the year ended December 31, 2025 against the comparable prior year period. The increase was driven mostly organically due to a change in the segments management.
Current report
Title Settlement and Insurance
Current report
Revenues increased $215 thousand, or 259%, in the year ended December 31, 2025 against the comparable prior year period. The increase is due to reporting full year of revenue for the first time since this segment was acquired in August of 2024.
Current report
The percentage of gross margin remained the same year over year. Gross margin related to residential real estate brokerage services increased $924 thousand, or 17%, in the year ended December 31, 2025 against the comparable prior year period. The increase was driven in part by an increase in revenue of $9.5 million and a related cost of revenue increase of $8.6 million primarily from the seven acquisitions completed during fiscal year 2024. Therefore, gross margin remained relatively constant year-over-year.
Current report
The percentage of gross margin declined by 114.1%. Gross margin related to franchising services declined by $52 thousand. The decline is attributable to the acquisitions of the seven acquisitions in 2024 related to franchises. As a result, this decreased the franchising revenues and costs though not necessarily proportionally due to changes in aspects of cost of sales.
Current report
The percentage of gross margin declined by 5.8%. Gross margin related to coaching services declined by $82 thousand, primarily due to a change in operations which do not require the coaching services for certain plans, to expediate onboarding, therefore this resulted in the overall reduction of coaching revenues and cost of sales throughout 2025 as compared to 2024.
Current report
Real Estate Brokerage Services (Commercial)
Current report
The percentage of gross margin declined year over year. Gross margin related to commercial real estate brokerage services increased $33 thousand, or 37%, in the year ended December 31, 2025, against the comparable prior year period. The change was driven in part by an increase in revenue of $366 thousand and a related cost of revenue increase of $333 thousand primarily from organic growth.
Current report
Title Settlement and Insurance
Current report
The percentage of gross margin increased by 259%. Gross margin related to title settlement and insurance increased by $215 thousand for the year ended December 31, 2025 against the comparable prior year period due to a full year of activity as this segment was acquired in August of 2024.
Current report
Payroll and benefits increased $1.7 million or 40%, in the year ended December 31, 2025 against the comparable prior year period primarily due to benefits offered and headcount increases and certain one-time bonuses paid to our executives.
Current report
Rent and occupancy increased $472 thousand or 44% in the year ended December 31, 2025 against the comparable prior year period due to the seven acquisitions in 2024.
Current report
Professional fees increased $1.6 million, or 103%, in the year ended December 31, 2025 against the comparable prior year period. This increase was primarily due to professional and legal fees incurred related to financing transactions entered into in 2025.
Current report
Office and technology costs increased by $242 thousand, or 66%, in the year ended December 31, 2025 against the comparable prior year period. This is primarily due to one-time costs related to upgrading our accounting and internally developed customer resource applications.
Current report
Insurance, training and other costs decreased $54 thousand, or 9%, in the year ended December 31, 2025 against the comparable prior year period. This is due to new favorable contracts and using alternative less costly providers for trainings.
Current report
Public company costs decreased $470 thousand in the year ended December 31, 2025 against the comparable prior year period. This is due to a reduction in cost related to investor relations and cost related to acquisition activity.
Current report
Additionally, as part of total operating cost the Company recognized in December 31, 2025 and 2024, there were impairments of intangible and goodwill for $6,911,134 and $787,438, respectively, due to triggering conditions.
Current report
We incurred stock-based compensation of $5.0 million in 2025 based mostly upon restricted stock units granted to consultants ($1.8), agents and employees ($0.5 million) and option grants and restricted Common Stock awards to our CEO pursuant to the terms of his employment agreement and 2022 Plan ($2.7 million).
Current report
On February 4, 2025, the Company and an institutional investor entered into the securities purchase agreement, pursuant to which the Company issued to the 2025 Investor: (i) the Initial Note in the original principal amount of $5,500,000 maturing on February 4, 2027; and (ii) sixteen (16) Incremental Warrants, each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note. The purchase price paid by the 2025 Investor under the agreement for the Initial Note and Incremental Warrants was $4,963,750, of which $910,250, $496,191 and $148,724 were used to assume or extinguish other debt for net proceeds of $3,408,585. Remaining funds from the offering were used by the Company to pay-off certain indebtedness of the Company, pay certain outstanding fees and expenses (including expenses of the offering, and fees payable to the placement agent and advisors), acquisitions and general corporate purposes. Of the proceeds from the offering, $354,450 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreements with Cedar Advance, LLC, $340,421 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreement with Arin Funding, LLC and $910,250 was paid to satisfy, in full, the remaining balance of the senior secured promissory notes with an accredited investor. On June 18, 2025, the Company and 2025 Investor entered into the Exchange Agreement, pursuant to which (among other things) the 2025 Investor surrendered and exchanged all of its Incremental Warrants in exchange for 6,000 shares of the Series B Preferred Stock. The 2025 Investor fully converted the Initial Note, and the Company issued the 2025 Investor 8,215 in 2025 and 750 shares in the first quarter of 2026 for an aggregate of 8,965 shares of Common Stock upon such conversion.See Note 8 – Borrowingsto the accompanying consolidated financial statements for further disclosure.
Current report
In addition to the debt pay downs during the year ended December 31, 2025, the Company eliminated all warrants tied to the investor senior secured promissory notes outstanding as of December 31,2024. Two of the three warrants were exercised on a cashless basis, with the third warrant being bought back by the Company in the amount of $379,083, fully eliminating these unfavorable ratchet warrants.
Current report
During the year ended December 31, 2025, the Company sold 500 shares of Common Stock pursuant to the Facility for aggregate proceeds of $111,902.
Current report
For the year ended December 31, 2025, there was no cash impact from investing activities.
Current report
Critical Accounting Estimates
Current report
A critical accounting estimate is one that is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgements, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Current report
Use of Estimates. The preparation of financial statements in accordance with generally accepted accounting principles in the U.S. requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The financial statements in this report include estimates based on currently available information and our judgment as to the outcome of future conditions and circumstances. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions. The Company’s significant estimates in these financial statements are listed below:
Removed paragraphs (32)
Previous report
Coaching services revenue declined slightly by $60 thousand during the year ended December 31, 2024 against the comparable prior year period. This is attributable to structural changes to increase recruitment and NAR related matters.
Previous report
Property management revenue increased $1.435 million, or 15%, in the year ended December 31, 2024 against the comparable prior year period primarily due to increases in the number of properties under management from 600 in 2023 to 650 in 2024 along with the full year benefit in 2024 of a management fee price increase effective September 1, 2023 from $44 to $55 in 2024 per agent property.
Previous report
Costs related to residential real estate brokerage services increased $3.654 million, or 217%, in the year ended December 31, 2024 against the comparable prior year period. The increase was driven in part by $8,945 million of cost of revenue from the seven acquisitions completed during fiscal year 2024. In addition we saw a full year impact from the six acquisitions from the 4 th Quarter of 2023. The gross profit increased $3.654 million, or 216.7%, from 2023 to 2024 primarily attributable to the fee increases enacted in September of 2023 and gross profit from acquisitions. Due to these factors our gross margin increased to 9.4% compared to our 2023 gross margin of 8.2%.
Previous report
The Company uses external software that supports the Company’s franchises, which is directly used to manage real estate transactions that generates revenue. The software is classified as a cost of revenue, and the Company expects to continue to use the software for a significant portion of 2025, with internally developed options coming online in the latter half of 2025. The decrease in cost of franchising revenue is due to the six acquisitions from 2023 and six from 2024, which no longer contribute to the cost of franchising revenue, as well as a reduction of price per usage of the software costs based on our review of usage of the software in 2023. The gross profit decreased $570 thousand, or 138.7%, from 2023 to 2024 primarily attributable to the reduction in the cost of revenue.
Previous report
Costs related to coaching services decreased $20 thousand, or 6.1%, in the year ended December 31, 2024 against the comparable prior year period. Costs related to coaching services moved proportionally with the change in related revenue. Gross profit decreased by $40 thousand, or 13.5%, due to new initiatives to drive recruiting which impacted coaching programs.
Previous report
NM: Not Meaningful
Previous report
Payroll and benefits increased $1.9 million or 78%, in the year ended December 31, 2024 against the comparable prior year period primarily due to changes in the executive management team, bonus, payroll taxes and acquisitions from the 4 th quarter of 2023 and during 2024. In addition, headcount increases to facilitate growth and replace 3 rd party costs.
Previous report
Rent and occupancy increased as the Company leases its corporate office and other offices from various entities. With $669 thousand of the total increase of $724 thousand related to the acquisitions from the fourth quarter of 2023 and companies acquired in 2024.
Previous report
Professional fees increased $1.334 million, or 513%, in the year ended December 31, 2024 against the comparable prior year period. Primarily this increase is related to $666,390 of legal cost related to acquisitions, litigation and SEC reporting. Secondarily, an increase of $523,191 in fees related to the company and other professional accounting services related to audits and acquisitions.
Previous report
Office and technology costs decreased by $56 thousand due to the Company’s efforts to curtail expenses and improve productivity and efficiency. In particular, the Company streamlined its software applications, which reduced technology costs after subscription periods ended.
Previous report
Insurance, training and other costs increased in 2024 primarily due to our new directors and officers (D&O) policies that provide liability coverage.
Previous report
Public company cost increased due to fees paid to the Board of Directors of $231 thousand, investor relation and related of $357 thousand.
Previous report
Additionally, as part of total operating cost the Company recognized impairment of goodwill for $787 thousand due to triggering conditions as described in Note 4 – Goodwill and Intangible Assets, triggering events were noted on October 1, 2024 with the most significant event share price performance. We further evaluated triggering events through December 31, 2024 and determined no further impairment was necessary.
Previous report
In February 2024, we entered into securities purchase agreement with an accredited investor for the issuance of a 13% senior secured promissory note with a principal amount of $1,052,632 and a purchase price of $1,000,000 after an original issue discount of $52,632. The note was convertible into shares of our Common Stock at the option of the lender. In addition, on April 1, 2024, we entered into securities purchase agreement with the same accredited investor for the issuance of a 13% senior secured promissory note with a principal amount of $1,316,000 and a purchase price of $1,250,200 after an original issue discount of $65,800. The note was convertible into shares of our Common Stock at the option of the lender. The two promissory notes began amortizing five months after the date of each loan, with full maturity occurring twelve months after the date of each loan.
Previous report
In May 2024, we entered into a standard merchant cash advance agreement with Cedar Advance LLC (“Cedar”) where we sold in the aggregate $761,250 in future receipts of the Company for $500,000. Until the purchase price has been repaid, the Company agreed to pay Cedar $23,000 per week.
Previous report
In July 2024, we received $444,600 in net proceeds, excluding debt issuance costs of approximately $25,000, through our private sale of a 13% OID senior secured promissory note in the principal amount of $468,000 for a purchase price of $444,600 to the same accredited investor in our February 2024 and April 2024 private placements.
Previous report
In August 2024, we received $725,000 in net proceeds, excluding equity issuance costs of approximately $25,000, by issuing 761,689 shares of Common stock and a pre-funded warrant to purchase 509,498 shares of Common stock pursuant to a securities purchase agreement with an institutional accredited investor, Brown Stone Capital Ltd., at a price equal to $0.59 per share.
Previous report
In September 2024, we entered into a promissory note for the principal amount of $200,000. The promissory note bore interest at 12.5% per annum. The note is payable in three monthly installments of $75,000, beginning on November 1, 2024, with subsequent payments due on December 1, 2024, and January 1, 2025.
Previous report
In October 2024, we entered into a standard merchant cash advance agreement with Arin Funding LLC (“Arin”) where we sold in the aggregate $588,000 in future receipts of the Company for $420,000. Until the purchase price has been repaid, the Company agreed to pay Arin $15,474 per week.
Previous report
In October 2024, we entered into a standard merchant cash advance agreement with Cedar where we sold in the aggregate $616,250 in future receipts of the Company for $403,750. Until the purchase price has been repaid, the Company agreed to pay Cedar $15,400 per week. A portion of the funds provided were used to pay off the remaining balance of $301,250 of the May 2024 cash advance agreement.
Previous report
In November 2024, we received $480,000 in net proceeds, excluding equity issuance costs of approximately $20,000, by issuing 936,264 shares of Common stock and a pre-funded warrant to purchase 399,562 shares of Common stock pursuant to a securities purchase agreement with an institutional accredited investor, Abri Advisors, LTD. at a price equal to $0.37 per share.
Previous report
During 2023, we issued 1,523 shares of series A preferred stock to 77 investors in a private placement pursuant to Regulation D under the Securities Act, raising $1,523,000. We also exchanged convertible debt with an outstanding balance of $598,836, including accrued interest of $87,836, for 591 shares of series A preferred stock. In March 2023, we exchanged a portion of our related party debt with an outstanding gross balance of $1,324,631, excluding debt discount of $469,785, and including accrued interest of $28,101, for 1,321 shares of series A preferred stock. See Note 8, “Stockholders’ Equity” of the Notes to the consolidated financial statements in Part II, Item 8 of this Form 10-K for additional information on the series A preferred stock.
Previous report
When we completed our IPO in the fourth quarter of 2023, we raised net proceeds of $4,360,000 after deducting underwriter discounts, commissions, and expenses. We used the proceeds to satisfy existing term debt and accrued interest in the aggregate amount of approximately $375,000, the existing balance of our line of credit of approximately $140,000, related party debt of approximately $150,000, and existing accounts payable of $1,000,000. In October 2023, we acquired controlling interests in two of our franchisees, Nona Legacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.) and Horeb Kissimmee Realty, LLC for a total consideration of $2,963,147, including $550,000 in cash from the proceeds of the IPO, with the remainder in Common Stock. See Note 3, “Business Combinations” of the Notes to the consolidated financial statements in Part II, Item 8 of this Form 10-K for additional information regarding the acquisitions.
Previous report
For the year ended December 31, 2023, net cash used in operating activities was $1.894 million, which was primarily attributable to the net loss of $2.723 million, excluding stock-based compensation, and changes in working capital of $0.188 million, mostly due to an increase in accounts receivable and a reduction in accrued expenses after our IPO, partially offset by an increase in accounts payable, excluding payments of deferred offering costs, as well as offsets from non-cash interest expense and amortization of debt discount and financing fees of $1.061 million.
Previous report
For the year ended December 31, 2023, net cash used in investing activities was $0.1 million, which represents the cash consideration paid for the six acquisitions acquired in the fourth quarter of 2023, less cash acquired. See Note 3, “Business Combinations” of the Notes to the consolidated financial statements in Part II, Item 8 of this Form 10-K for additional information regarding the acquisitions.
Previous report
For the year ended December 31, 2023, net cash provided by financing activities was $2.950 million, which included the proceeds of our IPO from which we raised net proceeds of $4.360 million after deducting underwriter discounts, commissions, and expenses. We incurred payments related to the IPO of $1.765 million. We also raised $1.523 million attributable to the issuance of the series A convertible preferred stock. A partial use of the proceeds raised were used to pay down debt, including our line of credit, our notes payable, advances on future receipts, convertible debt, and amounts due to related party, which totaled $0.991 million, net. We also paid $0.177 million in withholding taxes related to the vesting of employee restricted stock units upon the IPO.
Previous report
Material Cash Requirements from Known Contractual and Other Obligations
Previous report
The following table summarizes our contractual obligations as of December 31, 2024 and as for the periods thereafter:
Previous report
We intend to fund our contractual obligations with cash on hand, working capital and the debt raises obtained in 2024 and February 2025.
Previous report
Critical Accounting Policies and Estimates
Previous report
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Our most critical estimates include those related to revenue recognition, goodwill and intangible assets, accounting for business combinations, and accounting for stock-based compensation. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.
Previous report
We believe the following critical accounting estimates affect the more significant judgments and estimates used in preparing our consolidated financial statements. See the footnotes to our audited financial statements for the year ended December 31, 2024, included with this annual report for our Summary of Significant Accounting Policies.
Reworded paragraphs (22)
Previous wording
Prospective investors should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this annual report. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” This discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto included elsewhere in this report.
Current wording
Prospective investors should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this annual report. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements and Industry Data.” This discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto included elsewhere in this report.
Previous wording
Our agent centric methodology, our advanced technology, and ancillary services, such as property management, will enable us to organically grow our agent base with virtually no incremental cost. In environments with increasing mortgage rates and declining sales transactions, we believe our model is more attractive to real estate agents, who retain more of their commission proceeds compared to traditional brokerage models. In fact, we have organically increased our agent count by just over 11 percent from December 31, 2022 to December 31, 2024.
Current wording
Our agent centric methodology, our advanced technology, and ancillary services, such as property management, will enable us to organically grow our agent base with virtually no incremental cost. In environments with increasing mortgage rates and declining sales transactions, we believe our model is more attractive to real estate agents, who retain more of their commission proceeds compared to traditional brokerage models. In fact, we have organically increased our agent count by just over 31 percent from December 31, 2022 to December 31, 2025.
Previous wording
On October 12, 2023, we consummated our IPO. Following our IPO, during the fiscal year ended December 31, 2023, we acquired majority ownership of the following franchisees of the Company: Nona Legacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.), Horeb Kissimmee Realty, LLC, La Rosa Realty Premier, LLC, La Rosa Realty Orlando, LLC, and 100% ownership of the following franchisees of the Company: La Rosa CW Properties, LLC and La Rosa Realty North Florida LLC. In December 2023, we also formed our majority owned subsidiary La Rosa Realty Texas LLC. During the fiscal year ended December 31, 2024, we acquired majority ownership of the following franchisees and affiliates of the Company: La Rosa Realty Georgia LLC, La Rosa Realty California, La Rosa Realty Lakeland LLC DBA La Rosa Realty Prestige, and La Rosa Realty Success LLC, and 100% ownership of La Rosa Realty Winter Garden LLC, BF Prime LLC, Nona Title Agency LLC, La Rosa Realty Beaches LLC, and Baxpi Holdings. Additionally, we acquired the remaining non-controlling interest portions of Nona Legacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.) and La Rosa Realty Premier, LLC, making them both 100% owned entities.
Current wording
On October 12, 2023, we consummated our initial public offering (the “IPO”). Since then, we acquired majority ownership of the following franchisees of the Company: Nona Legacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.), Horeb Kissimmee Realty, LLC, La Rosa Realty Georgia LLC, La Rosa Realty California, and La Rosa Realty Success LLC and 100% ownership of the following franchisees of the Company: La Rosa Realty Orlando, LLC, La Rosa Realty Premier, LLC, La Rosa CW Properties, LLC, La Rosa Realty North Florida LLC, La Rosa Realty Winter Garden LLC, BF Prime LLC, FPG Title Group, LLC (formerly, Nona Title Agency LLC), La Rosa Realty Lakeland LLC (DBA La Rosa Realty Prestige), La Rosa Realty Beaches LLC, and Baxpi Holdings LLC. In December 2023, we also formed our majority owned subsidiary La Rosa Realty Texas LLC. In December 2024, we opened our first office and wholly owned subsidiary in North Carolina, La Rosa Realty NC LLC. In January 2025, we formed LR Luxury, LLC, engaged mostly in the residential real estate brokerage business. In April 2025, we formed LR Agent Advance, LLC, offering a commission advancement program exclusively for La Rosa agents. In 2025, we also formed LR Realty Spain, S.L., our wholly owned subsidiary in Spain.
Previous wording
Our financial results are primarily driven by the total number of sales agents in our Company, the number of sales agents closing residential real estate transactions, the number of sales agents utilizing our coaching services, the number of agents who work with our franchisees, and the number of properties under management. We grew our agent count by six percent from 2,434 at December 31, 2023 to 2,581 at December 31, 2024.
Current wording
Our financial results are primarily driven by the total number of sales agents in our Company, the number of sales agents closing residential real estate transactions, the number of sales agents utilizing our coaching services, the number of agents who work with our franchisees, and the number of properties under management. We grew our agent count by 18 percent from 2,581 as of December 31, 2024 to 3,050 as of December 31, 2025.
Previous wording
The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers. We have multiple revenue streams, with the majority of our revenue derived from commissions paid by consumers who transact business with our and our franchisees’ agents, royalties paid by our franchisees, dues and technology fees paid by our sales agents, our franchisees, and our franchisees’ agents. Our major revenue streams come from such sources as: (i) residential real estate brokerage revenue, (ii) revenue from our property management services, (iii) franchise royalty fees, (iv) fees from the sale or renewal of franchises and other franchise revenue, (v) coaching, training and assistance fees, (vi) brokerage revenue generated transactionally on commercial real estate, (vii) fees generated from title services revenue and insurance and (viii) fees from our events and forums.
Current wording
The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers. We have multiple revenue streams, with the majority of our revenue derived from commissions paid by consumers who transact business with our franchisees’ agents, royalties paid by our franchisees, dues and technology fees paid by our sales agents, our franchisees, and our franchisees’ agents. Our major revenue streams come from such sources as: (i) residential real estate brokerage revenue, (ii) revenue from our property management services, (iii) franchise royalty fees, (iv) fees from the sale or renewal of franchises and other franchise revenue, (v) coaching, training and assistance fees, (vi) brokerage revenue generated transactionally on commercial real estate, (vii) fees generated from title services revenue and insurance and (viii) fees from our events and forums.
Previous wording
The majority of our revenue is derived from fees and dues based on the number of agents working under the La Rosa Realty brand. Due to the low fixed cost structure of both our Company and franchise models, the addition of new sales agents generally requires little incremental investment in capital or infrastructure. Accordingly, the number of commission producing sales agents in our Company and our franchisees is the most important factor affecting our results of operations and the addition of new agents can favorably impact our revenue and our earnings before interest, taxes, depreciation and amortization (“EBITDA”). Historically, the number of agents in the residential real estate industry has been highly correlated with overall home sale transaction activity. We believe that the number of agents and those that produce commissions in our network is the primary statistic that drives our revenue. Another major factor is the cyclicality of the real estate industry that has peaks and valleys depending on macroeconomic conditions that we cannot control. And finally, our revenues fluctuate based on the changes in the aggregate fee revenue per sales agent as a significant portion of our revenue is tied to various fees that are ultimately tied to the number of agents, including annual dues, continuing franchise fees, and certain transaction or service-based fees. Our revenue per agent also increases in other ways including when transaction sides and transaction sizes increase since a portion of our revenue comes from fees tied to the number and size of real estate transactions closed by our agents. While the Company was not named as a defendant in any of the recent class action lawsuits alleging antitrust violations, it is possible that it could be a litigant at some point in the future. Several of these lawsuits have been settled (see “Risk Factors -Adverse outcomes in litigation and regulatory actions against the NAR, other real estate brokerage companies and agents in our industry could adversely impact our financial results)***.***These settlements will result in changes in the way real estate brokers are compensated for their services. Most notably, home sellers will no longer be required to pay buyer agent commissions which will result in lower buyer agent compensation. We cannot predict the full breadth of the outcome of these lawsuits but believe that they will result in a significant adverse effect on our financial condition and results of operations for the foreseeable future.
Current wording
The majority of our revenue is derived from fees and dues based on the number of agents working under the La Rosa Realty brand. Due to the low fixed cost structure of both our Company and franchise models, the addition of new sales agents generally requires little incremental investment in capital or infrastructure. Accordingly, the number of commission producing sales agents in our Company and our franchisees is the most important factor affecting our results of operations and the addition of new agents can favorably impact our revenue and our earnings before interest, taxes, depreciation and amortization (“EBITDA”). Historically, the number of agents in the residential real estate industry has been highly correlated with overall home sale transaction activity. We believe that the number of agents and those that produce commissions in our network is the primary statistic that drives our revenue. Another major factor is the cyclicality of the real estate industry that has peaks and valleys depending on macroeconomic conditions that we cannot control. And finally, our revenues fluctuate based on the changes in the aggregate fee revenue per sales agent as a significant portion of our revenue is tied to various fees that are ultimately tied to the number of agents, including annual dues, continuing franchise fees, and certain transaction or service-based fees. Our revenue per agent also increases in other ways including when transaction sides and transaction sizes increase since a portion of our revenue comes from fees tied to the number and size of real estate transactions closed by our agents.
Previous wording
The U.S. Federal Reserve continues to take action intended to address inflation. The Federal Reserve Board maintained the federal funds rate at 533 basis points from August of 2023 through mid-September 2024, when it was reduced to 483 basis points. In February 2025, the federal funds rate was 433 basis points. The fluctuations impact interest rates, which significantly contribute to mortgage rate adjustments. During the second half of 2022, the benchmark 30 year fixed conforming mortgage rate rose above 6% for the first time since 2008, according to Freddie Mac data, and reached a peak of about 8% during the second half of 2023. That interest rate sat in between 6.62% and 6.85% during 2024. Consequently, housing demand remained soft, prices are rising, consumer sentiment has weakened, and home sales are declining. In February 2025, the existing home sales market decreased 1.2% compared to February 2024 according to the NAR. This decline had an adverse impact on consumer demand for our services, as consumers weighed the financial implications of selling or purchasing a home. Continuing poor housing market conditions would adversely affect our operating performance and results of operations.
Current wording
The benchmark 30-year fixed conforming mortgage rate rose to a peak of about 8% during the second half of 2023, according to Freddie Mac data. That interest rate then retreated to between 6.08% and 7.22% during 2024 and between 6.15% to 7.04% during 2025. Consequently, housing demand remained soft, prices are rising, consumer sentiment has weakened, and home sales are declining. The U.S. Federal Reserve continues to take action intended to address inflation. The Federal Reserve Board maintained the federal funds rate at 533 basis points from August of 2023 through mid-September 2024, when it was reduced to 483 basis points. In February 2026, the federal funds rate was 364 basis points. The fluctuations impact interest rates, which significantly contribute to mortgage rate adjustments. In February 2026, the existing home sales market decreased 1.2% compared to February 2025 according to the NAR. This decline had an adverse impact on consumer demand for our services, as consumers weighed the financial implications of selling or purchasing a home. Continuing poor housing market conditions would adversely affect our operating performance and results of operations.
Previous wording
Recent developments in the real estate industry have seen increased scrutiny and legal challenges related to the structure of real estate agent commissions. Legal actions and regulatory inquiries have been initiated to examine the fairness, transparency, and potential anticompetitive practices associated with the traditional commission model. Courts and regulatory bodies may be increasingly focused on ensuring transparency in commission structures, potentially leading to reforms that impact the earnings and business models of real estate professionals. Changes in legislation or legal precedents could impact the standard practices of commission-sharing between listing agents and buyer’s agents and may adversely affect our business model and revenues. On October 31, 2023, a federal jury in Missouri found that NAR and certain companies conspired to artificially inflate brokerage commissions, which violates federal antitrust law. The judgment was appealed on October 31, 2023, while these and other plaintiffs have filed similar lawsuits against a number of other large real estate brokerage companies. We have not, as of the date hereof, been named as a defendant in any antitrust litigation. On or about March 15, 2024, NAR agreed to settle these lawsuits, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions. This settlement resolves claims against NAR and nearly every NAR member; all state, territorial and local REALTOR® associations; all association-owned MLSs; and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below and is subject to court approval. Due to this litigation, there will be rule changes for the NAR. In the settlement, effective mid-July 2024, NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS, as well as adopt new rules requiring written agreements between buyers and buyers’ agents. However, the direct and indirect effects, if any, of the judgment upon the real estate industry are not yet entirely clear.
Current wording
Recent developments in the real estate industry have seen increased scrutiny and legal challenges related to the structure of real estate agent commissions. Legal actions and regulatory inquiries have been initiated to examine the fairness, transparency, and potential anticompetitive practices associated with the traditional commission model. Courts and regulatory bodies may be increasingly focused on ensuring transparency in commission structures, potentially leading to reforms that impact the earnings and business models of real estate professionals. Changes in legislation or legal precedents could impact the standard practices of commission-sharing between listing agents and buyer’s agents and may adversely affect our business model and revenues.
Previous wording
There could also be further changes in real estate industry practices. All of this has prompted discussion of changes to rules established by local or state real estate boards or multiple listing services. All of this may require changes to many brokers’ business models, including changes in agent and broker compensation. For example, we will likely have to develop mechanisms and a plan that enable buyers and sellers to negotiate commissions. The Company will continue to monitor ongoing and similar antitrust litigation against our competitors. However, the litigation and its ramifications could cause unforeseen turmoil in our industry, the impacts of which could have a negative effect on us as an industry participant.
Current wording
The Company will continue to monitor ongoing and similar antitrust litigation against our competitors. However, the litigation and its ramifications could cause unforeseen turmoil in our industry, the impacts of which could have a negative effect on us as an industry participant.
Previous wording
See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” of the Notes to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
Current wording
See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” of the Notes to the consolidated financial statements in Part II, Item 8 of this Comprehensive Form 10-K.
Previous wording
Residential real estate services revenue increased $36.574 million, or 179%, in the year ended December 31, 2024 against the comparable prior year period. The increase was driven by $9.789 million of revenue from the seven acquisitions completed during fiscal year 2024, in addition the increase was due to a full year of income from the six acquired companies in 2023 of $27.166 million. Also, we received a full year of revenue from the increased transaction fee, monthly agent fee, and annual fee effective September 1, 2023.
Current wording
Residential real estate services revenue increased $9.5 million, or 17%, in the year ended December 31, 2025 against the comparable prior year period. The increase was primarily related to $9.8 million of revenue due to a full year of income from the seven acquisitions completed in fiscal year 2024.
Previous wording
Franchising services revenue decreased $554 thousand, or 63%, in the year ended December 31, 2024 against the comparable prior year period. The decrease is primarily attributable to the six franchise acquisitions completed in the fourth quarter of fiscal year 2023 and the six franchise acquisitions during fiscal year 2024, which no longer contribute to franchising royalty fees. These fees would have totaled $658 thousand for the year ended December 31, 2024. Our remaining franchisees saw a slight increase in revenue due to market conditions in our residential services stabilizing in 2024, which partially offset the decline in franchising royalty fee revenue. Franchising royalties would be expected to decline as the acquisition of additional franchises continues.
Current wording
Franchising services revenue decreased $199 thousand, or 61%, in the year ended December 31, 2025 against the comparable prior year period. The decrease is primarily attributable to the six franchise acquisitions during fiscal year 2024, which no longer contribute to franchising royalty fees. Our remaining franchisees saw a slight increase in revenue due to market conditions in our residential services stabilizing in 2024, which partially offset the decline in franchising royalty fee revenue. Franchising royalties would be expected to decline as the acquisition of additional franchises continues.
Previous wording
Costs related to property management services increased $1.424 million, or 15.2%, in the year ended December 31, 2024 against the comparable prior year period. The increase in property management costs were primarily related to the increase in properties under management. The gross margin is consistent from 2023 to 2024.
Current wording
The percentage of gross margin declined by 77.5%. Gross margin related to property management services declined by $23 thousand the year ended December 31, 2025 against the comparable prior year period. The increase in property management costs is related to fixed costs of sales that did not change while the number of properties under management declined.
Previous wording
Selling, general and administrative costs increased $6.8 million, or 12%, in the year ended December 31, 2024 against the comparable prior year period. Sales and marketing costs increased as the Company worked to expand and grow the business.
Current wording
Selling, general and administrative costs increased $3.8 million, or 32%, in the year ended December 31, 2025 against the comparable prior year period. Sales and marketing costs increased as the Company worked to expand and grow the business.
Previous wording
We incurred stock-based compensation of $4.7 million in 2024 based upon restricted stock units granted to agents and employees, ($1.0 million), consultants who provided various services to the company ($1.4 million), and an option grant to our CEO pursuant to the terms of his employment agreement ($2.3 million). During 2023, we incurred stock-based compensation of $5.1 million in 2023 based upon restricted stock units granted to agents and employees, most of which was part of the IPO ($1.998 million), consultants who provided various services to the company ($1.286 million), option awards to non-management directors ($421 thousand), and an option grant to our CEO pursuant to the terms of his employment agreement ($1.395 million).
Current wording
We incurred stock-based compensation of $4.7 million in 2024 based upon restricted stock units granted to agents and employees ($0.8 million), consultants who provided various services to the company ($1.4 million), an option grant to our CEO pursuant to the terms of his employment agreement ($2.1 million) and an option grant to our COO pursuant to her employment agreement ($400,000).
Previous wording
Other expense, net for the year ended December 31, 2024 was $3.15 million compared to other expense, net of $0.7 million for the comparable prior year. The 2024 expense was mostly due to a $1.47 million change in the fair value of derivative liabilities, $0.7 million loss on extinguishment of debt and $0.4 million for the amortization of discount on debt instruments. The 2023 expense was due to costs related to the amortization of financing fees on convertible debt instruments with embedded equity elements issued in the fourth quarter of fiscal year 2022 along with interest expense associated with the existing debt issuances in 2022, partially offset by a decrease in the revaluation of the derivative liabilities and the IRS employee retention credit received for prior tax years, net of legal costs to obtain the credit.
Current wording
Other expense, net for the year ended December 31, 2025 was $10.1 million compared to other expense, net of $3.2 million for the comparable prior year. The 2025 expense was mostly due to $15.4 million in expenses related to our convertible debt and associated warrants, partially off-set by a $4.0 million gain on the extinguishment of debt and a $0.9 million change in the fair value of derivative liabilities.
Previous wording
On December 31, 2024 and 2023 we had cash of $1.4 million and $0.96 million, respectively, on hand.
Current wording
On December 31, 2025 and 2024 we had cash of $3.1 million and $1.4 million, respectively, on hand.
Previous wording
In November 2024, we entered into an ATM Agreement with A.G.P./Alliance Global Partners, as sales agent, relating to the sale of Common Stock. During the year ended December 31, 2024, we issued an aggregate of 222,000 shares of Common Stock pursuant to such ATM Agreement for net proceeds of $169,236. We paid the sales agent compensation with respect to sale of such shares in the amount of $5,728.
Current wording
During the year ended December 31, 2025, the Company received proceeds from the sale of 3,871 shares of Common Stock pursuant to its sales agreement with AGP (“ATM Agreement”) of $7,496,361. The Company paid the sales agent compensation with respect to sale of such shares in the amount of $105,885.
Previous wording
We are subject to the risks and challenges associated with companies at a similar stage of development. These include dependence on key individuals, successful development and marketing of its offerings, and competition with larger companies with greater financial, technical, and marketing resources than us. Furthermore, during the period required to achieve substantially higher revenue in order to become profitable, we will require additional funds that might not be readily available or might not be on terms that are acceptable to us. Until such time that we fully implement our growth strategy, we expect to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. As such, we anticipate that our existing working capital, including cash on hand, and cash generated from operations will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of this annual report on Form 10-K. We will be required to raise additional capital to service outstanding notes and fund ongoing operations.
Current wording
The Company is subject to the risks and challenges associated with companies at a similar stage of development. These include dependence on key individuals, successful development and marketing of its offerings, and competition with larger companies with greater financial, technical, and marketing resources. Furthermore, during the period required to achieve substantially higher revenue in order to become profitable, the Company will require additional funds that might not be readily available or might not be on terms that are acceptable to the Company. Until such time that the Company fully implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. As such, the Company anticipates that its existing working capital, including cash on hand, and cash generated from operations will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of the consolidated financial statements. The Company will be required to raise additional capital to service its promissory notes, to repay the principal balance of each of the notes, and to fund ongoing operations.
Previous wording
For the year ended December 31, 2024 net cash used in operating activities was $2.997 million, which was primarily attributable to the net loss of $8.222 million, excluding stock-based compensation and changes in operating assets and liabilities. Adding back non-cash items such as amortization and depreciation and debt discount of $1.668 million, change in fair value of derivatives, impairment of goodwill, loss on extinguishment of debt and non-cash lease and other expenses totaling $3.556 million.
Current wording
For the year ended December 31, 2024, net cash used in operating activities was $3.0 million, which was primarily attributable to the net loss of $8.2 million, excluding stock-based compensation and changes in operating assets and liabilities. Non-cash provided primarily included: amortization and depreciation and debt discount, change in fair value of derivatives, impairment of goodwill, loss on extinguishment of debt and non-cash lease and other expenses totaling $3.6 million.
Previous wording
For the year ended December 31, 2024, net cash used in investing activities was $69 thousand. This was the result of the purchase of property plan equipment and cash acquired through acquisitions.
Current wording
For the year ended December 31, 2024, net cash used in investing activities was $69 thousand. This was the result of the purchase of property and equipment and cash acquired through acquisitions.
Previous wording
For the year ended December 31, 2024, net cash provided by financing activities was $4.2 million. This was driven by cash flows from debt and equity financing that provided $6.592 million in proceeds. These proceeds were offset by $2.389 of payments and advances on debt and other financing instruments,
Current wording
For the year ended December 31, 2024, net cash provided by financing activities was $4.2 million. This was driven by cash flows from debt and equity financing that provided $6.6 million in proceeds. These proceeds were offset by $2.4 of payments and advances on debt and other financing instruments,
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
While the Company was not named as a defendant in any of the recent class action lawsuits alleging antitrust violations, it is possible that it could be a litigant at some point in the future. Several of these lawsuits have been settled (see “Risk Factors -Adverse outcomes in litigation and regulatory actions against the NAR, other real estate brokerage companies and agents in our industry could adversely impact our financial results). These settlements can result in changes in the way real estate brokers are compensated for their services. Most notably, home sellers will no longer be required to pay buyer agent commissions which will result in lower buyer agent compensation. We cannot predict the full breadth of the outcome of these lawsuits but believe that they will result in a significant adverse effect on our financial condition and results of operations for the foreseeable future.
Current report — wording carried from elsewhere
These settlements may result in changes in the way real estate brokers are compensated for their services. Most notably, home sellers may no longer be required to pay buyer agent commissions which would result in lower buyer agent compensation. We cannot predict the full breadth of the outcome of these lawsuits but believe that they may result in a significant adverse effect on our financial condition and results of operations for the foreseeable future.
Current report — wording carried from elsewhere
For the year ended December 31, 2025, net cash used in operating activities was $7.5 million, which was primarily attributable to the net loss of $26.5 million, excluding stock-based compensation and changes in operating assets and liabilities. Non-cash provided primarily included: Loss on issuance of senior secured convertible note and warrants, change on fair value of convertible note and warrants, gain on settlement of incremental warrants, amortization and depreciation and debt discount, change in fair value of derivatives, impairment of goodwill and non-cash lease and other expenses totaling $19.0 million.
Current report — wording carried from elsewhere
For the year ended December 31, 2025, net cash provided by financing activities was $8.9 million. This was driven by cash flows from debt and equity financing that provided $11.0 million in proceeds. These proceeds were offset by $2.2 million of payments and advances on debt and other financing instruments,
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
In December 2024, the Company opened its first office and wholly owned subsidiary in North Carolina, La Rosa Realty NC LLC.
Previous report — wording carried elsewhere
Furthermore, during the period required to achieve substantially higher revenue in order to become profitable, we will require additional funds that might not be readily available or might not be on terms that are acceptable to us, or at all. Until such time that we fully implement our growth strategy, we expect to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. As such, we anticipate that our existing working capital, including cash on hand and cash generated from operations, will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of this Annual Report on Form 10-K. We will be required to raise additional capital to service debt issued in the first half of 2025 and to fund ongoing operations.
Previous report — wording carried elsewhere
We have incurred recurring net losses, and our operations have not provided net positive cash flows. In view of these matters, there is substantial doubt about our ability to continue as a going concern. We plan on continuing to expand via acquisition, which will help achieve future profitability, and we have plans to raise capital from outside investors, as we have done in the past, to fund operating losses and to provide capital for further business acquisitions. We cannot provide any assurance that we can successfully raise the capital needed.