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What changed in La Rosa Holdings Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of La Rosa Holdings Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+373 added−311 removedSource: 10-K (2025-04-15) vs 10-K (2024-04-16)

Top changes in La Rosa Holdings Corp.'s 2024 10-K

373 paragraphs added · 311 removed · 219 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

66 edited+67 added−23 removed97 unchanged
Biggest change(formerly, La Rosa Realty Lake Nona Inc.) is engaged mostly in the residential real estate brokerage business; ● Horeb Kissimmee Realty, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Winter Garden, LLC is engaged mostly in the residential real estate brokerage business; and ● La Rosa Realty Texas, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Georgia, LLC is engaged mostly in the residential real estate brokerage business; and ● La Rosa Realty California is engaged mostly in the residential real estate brokerage business.
Biggest change(formerly, La Rosa Realty Lake Nona Inc.) is engaged mostly in the residential real estate brokerage business; ● Horeb Kissimmee Realty, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Winter Garden, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Texas, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Georgia, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty California is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Lakeland, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Success, LLC is engaged mostly in the residential real estate brokerage business; ● BF Prime, LLC is engaged mostly in the residential real estate brokerage business; ● Nona Title Agency, LLC is engaged in providing title services related to real estate transactions; ● La Rosa Realty Beaches, LLC is engaged mostly in the residential real estate brokerage business; ● Baxpi Holdings, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty NC, LLC is engaged mostly in the residential real estate brokerage business; ● LR Luxury, LLC is engaged mostly in the residential real estate brokerage business; and ● LR Agent Advance, LLC, formed in April 2025 for the purpose of offering a commission advancement program exclusively for La Rosa agents. 7 We are a “controlled company” as defined under the corporate governance rules of Nasdaq because our Founder, Mr.
To capitalize on this, we focus on helping our agents improve professionally and increase their financial ability to invest in their personal marketing, and, therefore, capture a greater percentage of customers. We have built our business on what we know to be our customer’s needs.
To capitalize on this, we focus on helping our agents improve professionally and in increase their financial ability to invest in their personal marketing, and, therefore, capture a greater percentage of customers. We have built our business on what we know to be our customer’s needs.
The following chart is a projection of the past and future of home ownership rates based on age groups, with the projections noting either slow or fast change. 3 As the market slows slightly in out years, we started and intend to continue increasing our use of our technology tools to make our agents more efficient and more productive.
The following chart is a projection of the past and future of home ownership rates based on age groups, with the projections noting either slow or fast change. 3 As the market slows slightly in out years, we started, and intend to continue, increasing the use of our technology tools to make our agents more efficient and productive.
While our offices and our franchisor’s offices act as their “home base,” most agents use our offices primarily for real estate closings and training. We monetize our technology by charging our agents and our franchisor’s agents what we believe to be a reasonable a monthly fee for the use of our suite of tools.
While our offices and our franchisor’s offices act as their “home base,” most agents use our offices primarily for real estate closings and training. We monetize our technology by charging our agents and our franchisor’s agents what we believe to be a reasonable monthly fee for the use of our suite of tools.
Our brokers deal primarily in sales of existing homes, rather than the sales of new homes that are typically sold by builders. The recent cycle of the growth of the real estate market hit headwinds in the second half of 2022.
Our brokers deal primarily in sales of existing homes, rather than the sales of new homes that are typically sold by builders. The recent cycle of growth of the real estate market hit headwinds in the second half of 2022.
Such information would include climate-related risks that are reasonably likely to have a material impact on a registrant’s business or results of operations, as well as certain climate-related financial statement metrics. However, on March 15, 2024, the Fifth Circuit Court of Appeals, in the case Liberty Energy Inc. and Nomad Proppant Services LLC temporarily enjoined the enforcement of those rules.
Such information would include climate-related risks that are reasonably likely to have a material impact on a registrant’s business or results of operations, as well as certain climate-related financial statement metrics. On March 15, 2024, the Fifth Circuit Court of Appeals, in the case Liberty Energy Inc. and Nomad Proppant Services LLC temporarily enjoined the enforcement of those rules.
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.
In the settlement, effective mid-July 2024, NAR 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.
At La Rosa, we inculcate these core values to our sales agents and employees and strive to live by them every day. We believe home buyers and sellers choose the agent because of their individual marketing prowess, professionalism, and personality.
At La Rosa, we inculcate these core values to our sales agents and employees and strive to live by them every day. We believe home buyers and sellers choose agent because of their individual marketing prowess, professionalism, and personality.
Climate regulation On March 6, 2024, the SEC has issued final climate disclosure rules to require public companies to include enhanced disclosure regarding corporate climate-related information in their periodic reports and registration statements.
Climate regulation On March 6, 2024, the SEC issued final climate disclosure rules to require public companies to include enhanced disclosure regarding corporate climate-related information in their periodic reports and registration statements.
The Company conducts its operations through its fifteen subsidiaries: ● La Rosa Realty, LLC is engaged in the residential real estate brokerage business; ● La Rosa Coaching, LLC is engaged in the delivery of coaching services to our brokers and franchisee’s brokers; ● La Rosa CRE, LLC is engaged in the commercial real estate brokerage business; ● La Rosa Franchising, LLC is engaged in the franchising of real estate brokerage agencies; ● La Rosa Property Management, LLC is engaged in property management services to owners of single-family residential properties; ● La Rosa Realty Premier, LLC is engaged mostly in the residential real estate brokerage business ; ● La Rosa Realty CW Properties, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty North Florida, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Orlando, LLC is engaged mostly in the residential real estate brokerage business; ● Nona Legacy Powered By La Rosa Realty, Inc.
The Company conducts its operations through its 24 subsidiaries: ● La Rosa Realty, LLC is engaged in the residential real estate brokerage business; ● La Rosa Coaching, LLC is engaged in the delivery of coaching services to our brokers and franchisee’s brokers; ● La Rosa CRE, LLC is engaged in the commercial real estate brokerage business; ● La Rosa Franchising, LLC is engaged in the franchising of real estate brokerage agencies; ● La Rosa Property Management, LLC is engaged in property management services to owners of single-family residential properties; ● La Rosa Realty Premier, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty CW Properties, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty North Florida, LLC is engaged mostly in the residential real estate brokerage business; ● La Rosa Realty Orlando, LLC is engaged mostly in the residential real estate brokerage business; ● Nona Legacy Powered By La Rosa Realty, Inc.
Event fees and break-out sessions. 2 % 2 % Commercial Real Estate Revenue 10% of every real estate commission earned by the sales agent.
Event fees and break-out sessions. 1 % 2 % Commercial Real Estate Revenue 10% of every real estate commission earned by the sales agent.
Their ability to reach potential buyers and our relationships with other brokers, both within and without our Company and franchisors helps our seller clients achieve the maximum possible price for their properties. Our Company works in the present but has its eye on the future.
Their ability to reach potential buyers and our relationships with other brokers, both within and without our Company and franchisors, help our seller clients achieve the maximum possible price for their properties. Our Company works in the present but has its eye on the future.
Other revenues recognized monthly (annual membership, technology, interest, late fees, renewal, transfer, successor, accounting, other related fees). Per agent per closed transaction; payable monthly. 3 % 4 % Coaching/Training/Assistance Revenue Based on real estate commissions earned by the sales agent.
Other revenues recognized monthly (annual membership, technology, interest, late fees, renewal, transfer, successor, accounting, other related fees). Per agent per closed transaction; payable monthly. 1 % 3 % Coaching/Training/Assistance Revenue Based on real estate commissions earned by the sales agent.
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, and (vii) fees from our events and forums.
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, (vi) title services revenue and (viii) fees from our events and forums.
Our revenue streams are illustrated in the following chart: REVENUE STREAM DESCRIPTION PERCENT OF TOTAL 2023 REVENUE PERCENT OF TOTAL 2022 REVENUE Brokerage Revenue Percentage fees paid on agent-generated residential real estate transactions.
Our revenue streams are illustrated in the following chart: REVENUE STREAM DESCRIPTION PERCENT OF TOTAL 2024 REVENUE PERCENT OF TOTAL 2023 REVENUE Brokerage Revenue Percentage fees paid on agent-generated residential real estate transactions.
We also face competition from internet-based real estate brokers including Realtor.com, Fathom Holdings Inc., Redfin.com, and Zillow.com, brokers offering deeply discounted commissions like SimpleShowing Holdings, Inc., Houwzer LLC and Real Estate Exchange, Inc. (Rexhomes.com) and “flat fee” brokers such as Homie Technology, Inc., Cottage Street Realty, LLC (FlatFeeGroup.com) and Trelora, Inc.
We also face competition from internet-based real estate brokers including Realtor.com, Fathom Holdings Inc., Redfin.com, and Zillow.com, brokers offering deeply discounted commissions like Simple Showing Holdings, Inc., Houwzer LLC and Real Estate Exchange, Inc. (Rexhomes.com) and “flat fee” brokers such as Homie Technology, Inc., Cottage Street Realty, LLC (FlatFeeGroup.com) and Trelora, Inc.
We generally enter into confidentiality agreements and invention or work product assignment agreements with our officers, employees, agents, contractors, and business partners to control access to, and clarify ownership of, our proprietary information. As of April 16, 2024, we had service mark registrations in the United States, including registration for “LR La Rosa Realty” and LR logo.
We generally enter into confidentiality agreements and invention or work product assignment agreements with our officers, employees, agents, contractors, and business partners to control access to, and clarify ownership of, our proprietary information. As of April 15, 2025, we had service mark registrations in the United States, including registration for “LR La Rosa Realty” and LR logo.
Other revenues recognized monthly (annual and monthly dues charged to our agents). 64 % 63 % Property Management Revenue Management fees paid by the sales agents from fees earned from property owners, rental fees, and rents. 31 % 31 % Franchise Sales and Other Franchise Revenues One-time fee payable upon signing of the franchise agreement.
Other revenues recognized monthly (annual and monthly dues charged to our agents). 82 % 64 % Property Management Revenue Management fees paid by the sales agents from fees earned from property owners, rental fees, and rents. 16 % 31 % Franchise Sales and Other Franchise Revenues One-time fee payable upon signing of the franchise agreement.
We added a second tier of coaching in 2021 that we believe will provide business and personal growth and advanced real estate courses to our and our franchisees’ agents for various fees based on the subject matter and length of the course. 1 https://www.redfin.com/news/housing-market-value-december-2023/ 4 Unlike most other residential real estate brokerage companies, we encourage our sales agents to seek out property management business.
We added a second tier of coaching in 2021 that we believe provide business and personal growth and advanced real estate courses to our and our franchisees’ agents for various fees based on the subject matter and length of the course. 1 https://www.redfin.com/news/housing-market-value-december-2024 8 Unlike most other residential real estate brokerage companies, we encourage our sales agents to seek out property management business.
In addition, unlike other residential real estate brokerages, we encourage our sales agents to pursue commercial real estate transactions and require them to utilize the services of our commercial real estate company. We anticipate acquiring other complementary businesses, such as title and insurance agencies and a mortgage brokerage, in the near future to enhance our gross revenues and profit margins.
In addition, unlike other residential real estate brokerages, we encourage our sales agents to pursue commercial real estate transactions and require them to utilize the services of our commercial real estate company. We anticipate acquiring other complementary businesses, such as, for example, insurance agencies and a mortgage brokerage, in the future to enhance our gross revenues and profit margins.
They can then use this additional income to reinvest in their businesses or as take-home profit. This is a strong incentive for them to compete against the discount, flat fee and internet brokerages that have sprung up in the past several years.
They can then use these additional commissions to reinvest in their businesses or as take-home profit. We believe that this is a strong incentive for them to compete against the discount, flat fee and internet brokerages that have sprung up in the past several years.
We have not, as of the date hereof, been named as a defendant in any antitrust litigation. 11 On March 15, 2024, the National Association of REALTORS® announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions.
We were not named as a defendant in any antitrust litigation. 15 On March 15, 2024, the National Association of REALTORS® announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions.
In 2018, a joint workshop by the DOJ and FTC addressed potential competition issues in the residential real estate sector which could be the subject of future enforcement actions. In recent months, lawsuits have been filed against the NAR and a number of large real estate brokers around the country alleging antitrust violations.
In 2018, a joint workshop by the DOJ and FTC addressed potential competition issues in the residential real estate sector which could be the subject of future enforcement actions. During late 2023, lawsuits were filed against the NAR and a number of large real estate brokers around the country alleging antitrust violations.
We believe that long-term demand for housing in the U.S. will be primarily driven by the economic health of the domestic economy and local factors such as demand relative to supply, and that the residential real estate market in the U.S. will also benefit over the long term from the following fundamental factors: ● a strong job market and rising real wage growth as the United States continues to recover from the Covid-19 pandemic; ● pent up demand for affordable housing in the Millennial and Gen Z generations that are seeking to acquire single-family homes; ● an increase in existing home stock as the Boomer generation downsizes due to retirement, illness and death; and ● not enough housing starts or resales to accommodate the demand.
We believe that long-term demand for housing in the U.S. will be primarily driven by the economic health of the domestic economy and local factors such as demand relative to supply, and that the residential real estate market in the U.S. will also benefit over the long term from the following fundamental factors: ● pent up demand for affordable housing in the Millennial and Gen Z generations that are seeking to acquire single-family homes; ● an increase in existing home stock as the Boomer generation downsizes due to retirement, illness and death; and ● not enough housing starts or resales to accommodate the demand, especially in the Florida market that we primarily serve.
Petersburg, Florida La Rosa Realty THG Network LLC Venice, Florida La Rosa Realty The Elite LLC Wesley Chapel, Florida We have built our business by providing the home buying public with well trained, knowledgeable realtors who have access to our proprietary and third-party in-house technology tools and quality education and training, and valuable marketing that attracts some of the best local realtors who provide value-added services to our home buyers and sellers that are attracted to our brands.
Cloud, Florida We have built our business by providing the home-buying public with well-trained, knowledgeable realtors who have access to our proprietary and third-party in-house technology tools and quality education and training, and valuable marketing that attracts some of the best local realtors who provide value-added services to our home buyers and sellers that are attracted to our brands.
We grew our total agent count from our founding in 2004 to 2,454 agents as of April 16, 2024. The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers.
We grew our total agent count from our founding in 2004 to 2,769 agents as of March 31, 2025. The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers.
We intend to expand our current management to retain skilled employees with experience relevant to our business. Our management’s relationships with our agents and technology team are good. We do not have any collective bargaining agreements and our employees are not represented by a union.
Our management functions cover corporate administration, training, agent relations, business development, technology, and research. We intend to expand our current management to retain skilled employees with experience relevant to our business. Our management’s relationships with our agents and technology team are good. We do not have any collective bargaining agreements, and our employees are not represented by a union.
Franchising began franchising real estate brokerage businesses based on its Franchise Disclosure Document filed with the Federal Trade Commission in 2019 and converted several of its largest offices in Florida to “La Rosa Realty” franchises.
Franchising began franchising real estate brokerage businesses based on its Franchise Disclosure Document filed with the Federal Trade Commission in 2019 and converted several of its largest offices in Florida to “La Rosa Realty” franchises. Franchising also oversees and administers the offices that it sells, no matter their brand.
The NAR has noted on its website: 6 ● There are more than 100,000 residential real estate brokerage firms and over an estimated 3 million active real estate licensees operating in the United States; ● 89% of all realtors are independent contractors; 4% are employees and 7% are “other;” 5 https://cdn.nar.realtor/sites/default/files/documents/2023-profile-of-home-buyers-and-sellers-highlights-11-13-2023.pdf 6 https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics 9 ● The median tenure for realtors with their current firm was six years, up from a median of four years in the 2020 NAR survey; ● Of the Realtors that use drones in their real estate business of office, 43% hire a professional, 11% have someone in their office that uses drones, and 7% personally use drones. 23% do not use drones; and ● 68% of broker/broker associates and 66% of sales agents have a website, 86% of NAR members have their own listings on their website, 70% have information about buying and selling, and 66% have a link to their firm’s website; 67% of realtors use Facebook and 49% use LinkedIn for professional purposes, and 20% of all realtor members of the NAR get 1-5% of their business from social media, and 10% get 6-10%.
On July 7, 2024, the NAR has noted on its website: 6 ● There are more than 360,000 residential real estate brokerage firms and over an estimated 1.5 million active real estate licensees operating in the United States; ● 88% of all realtors are independent contractors; 5% are employees and 8% are “other;” 5 https://www.nar.realtor/sites/default/files/2024-11/2024-profile-of-home-buyers-and-sellers-highlights-11-04-2024_2.pdf 6 https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics 13 ● The median tenure for realtors with their current firm was five years, up from a median of four years in the 2020 NAR survey; ● Of the NAR members that use drones in their real estate business of office, 46% hire a professional, 12% have someone in their office that uses drones, and 6% personally use drones. 18% do not use drones; ● 64% of broker/broker associates and 73% of sales agents have a website, 82% of NAR members have their own listings on their website, 70% have information about buying and selling, and 65% have a link to their firm’s website; and ● 77% of realtors use Facebook and 55% use LinkedIn for professional purposes, and 19% of all realtor members of the NAR get 1-5% of their business from social media, and 10% get 6-10%.
Our business is organized based on the services we provide internally to our agents and to the public, which are residential and commercial real estate brokerage, franchising, real estate brokerage education and coaching, and property management.
Our business is organized based on the services we provide internally to our agents and to the public, which are residential and commercial real estate brokerage, franchising, real estate brokerage education and coaching, property management, and title services. Our real estate brokerage business operates primarily under the trade name La Rosa Realty.
La Rosa that we refer to in this report as our affiliates. While our affiliates are not owned by us, some do use our services and contribute to our revenue stream. Our affiliates operate residential real estate brokerage, insurance brokerage and real estate title and full commercial real estate brokerage businesses.
While our affiliates are not owned by us, some do use our services and contribute to our revenue stream. Our affiliates operate residential real estate brokerage, insurance brokerage and real estate title and full commercial real estate brokerage businesses.
The research conducted by the National Association of Realtors (the “NAR”) 2 in 2023 shows that: ● 89% of buyers recently purchased their home through a real estate agent or broker and 6% purchased directly through the previous owner; ● having an agent to help them find the right home was what buyers wanted most when choosing an agent at 50%; ● 71% of buyers interviewed only one real estate agent during their home search; ● 90% of buyers would use their agent again or recommend their agent to others, and 2% of sellers recommended their agent four or more times since selling their home. 2 https://cdn.nar.realtor/sites/default/files/documents/2023-profile-of-home-buyers-and-sellers-highlights-11-13-2023.pdf 5 ● 89% of all sellers used an agent or broker to sell their home; 7% sold via FSBO, and less than 1% sold via iBuyer; ● 43% of buyers used an agent that was referred to them by a friend, neighbor, or relative, 13% used an agent that they had worked with in the past to buy or sell a home; and ● 71% of all sellers contacted only one agent before finding the right one to assist with the sale of their home.
The research conducted by the National Association of Realtors (the “NAR”) 2 in 2024 shows that: ● 88% of buyers recently purchased their home through a real estate agent or broker and 5% purchased directly through the previous owner; ● having an agent to help them find the right home was what buyers wanted most when choosing an agent at 49%; ● 77% of buyers interviewed only one real estate agent during their home search; 2 https://www.nar.realtor/sites/default/files/2024-11/2024-profile-of-home-buyers-and-sellers-highlights-11-04-2024_2.pdf 9 ● 88% of buyers would use their agent again or recommend their agent to others, and 66% of sellers recommended their agent at least once since selling their home; ● 90% of all sellers used an agent or broker to sell their home and 6% sold to the buyer directly (via FSBO) (all-time low); ● 40% of buyers used an agent that was referred to them by a friend, neighbor, or relative, 21% used an agent that they had worked with in the past to buy or sell a home; and ● 81% of all sellers contacted only one agent before finding the right one to assist with the sale of their home.
In the Ultimate Plan, an agent can participate in the Company’s Revenue Share Plan rewarding an agent for the recruitment of other agents and for the agents these recruited agents are recruiting. We are also commencing an Agent Incentive Plan by which agents can earn restricted share units of our Common Stock through their outstanding performance.
In our UPBB plan, an agent can participate in the Company’s Revenue Share Plan rewarding an agent for the recruitment of other agents and for the additional agents these recruited agents recruit. We also have an Agent Incentive Plan pursuant to which agents can earn restricted stock units convertible into our Common Stock through their outstanding performance.
On October 12, 2023, we consummated our initial public offering (the “IPO”). Following our IPO, as of the date of this annual report, we have acquired majority ownership of the following franchisees of the Company: Nona Legacy Powered By La Rosa Realty, Inc.
On October 12, 2023, we consummated our initial public offering (the “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.
Outside the office, our agents comply and observe non-discrimination laws and policies and work with all clients to ensure that they are able to acquire the home of their dreams. 3 https://www.urban.org/sites/default/files/publication/103501/the-future-of-headship-and meownership_0.pdf 6 Our Technology We provide our agents and employees with cloud-based real estate brokerage services by utilizing our consumer-facing websites, including our corporate website https://www.larosarealty.com and our proprietary technology that provides brokerage operations management tools.
Outside the office, our agents comply and observe non-discrimination laws and policies and work with all clients to ensure that they are able to acquire the home of their dreams. 3 https://www.urban.org/urban-wire/2040-us-will-experience-modest-homeownership-declines-black-households-impact-will-be-dramatic 10 Our Technology We provide our agents and employees with cloud-based real estate brokerage services by utilizing our consumer-facing websites, including our corporate website www.larosarealty.com and our proprietary technology that provides brokerage operations management tools.
Other revenues recognized monthly (monthly dues charged to our agents). * * TOTAL 100 % 100 % * Less than 1%. 8 Our Industry The residential real estate industry is cyclical in nature but has shown strong historical long-term growth.
Other revenues recognized monthly (monthly dues charged to our agents). * * Title Settlement and Insurance Fees paid by customers for comprehensive title and settlement services * N/A TOTAL 100 % 100 % * Less than 1%. 12 Our Industry The residential real estate industry is cyclical in nature but has shown strong historical long-term growth.
According to NAR: 5 ● 89% of buyers recently purchased their home through a real estate agent or broker, and 7% purchased directly through the previous owner; ● Having an agent to help them find the right home was what buyers wanted most when choosing an agent at 50%; ● 43% of buyers used an agent that was referred to them by a friend, neighbor, or relative, 13% used an agent that they had worked with in the past to buy or sell a home, and 7% found their agent when inquiring about a specific property found online; ● 71% of buyers interviewed only one real estate agent during their home search; and ● 90% of buyers would use their agent again or recommend their agent to others.
According to NAR: 5 ● 88% of buyers recently purchased their home through a real estate agent or broker, 5% purchased their home directly from a builder or builder’s agent, and 5% purchased directly from the previous owner; ● having an agent to help them find the right home was what buyers wanted most when choosing an agent at 49%; ● most buyers interviewed only one real estate agent during their home search, with 77% of repeat buyers; ● 88% of buyers would use their agent again or recommend their agent to others, and nearly 66% of sellers recommended their agent at least once since selling their home. ● 40% of buyers used an agent that was referred to them by a friend, neighbor, or relative and 21% used an agent that they had worked with in the past to buy or sell a home.
Total housing inventory at the end of February 2024 was 1.07 million units, up 5.9% from January and 10.3% from one year ago (970,000). There was a 2.9-month unsold inventory supply at thein February 2024, down from 3.0 months in January but up from 2.6 months in February 2023.
Total housing inventory at the end of February 2025 was 1.24 million units, up 5.1% from January and 17% from one year ago (1.06 million). There was a 3.5-month unsold inventory supply in February 2025, identical to January but up from 3.0 months in February 2024.
Newly licensed and agents still in training operate on a 60% to agent / 40% commission split (13% to La Rosa Coaching, 14% to the La Rosa individual coach, 10% to the brokerage office who engaged the new agent, and 3% to the Director of Coaching who is employed by La Rosa Holdings).
Newly licensed and agents still in training operate on a New Agent Coaching (NAC) 70% to agent / 30% commission split (6% to La Rosa Coaching, 14% to the La Rosa individual coach, 7% to the brokerage office who engaged the new agent, and 3% to the Director of Coaching who is employed by La Rosa Holdings) Alternatively, they may choose the Ultimate Plan Business Builder (“UPBB”)and operate on a 60% to agent / 40% that includes 10% revenue share commission split (6% to La Rosa Coaching, 14% to the La Rosa individual coach, 7% to the brokerage office who engaged the new agent, and 3% to the Director of Coaching who is employed by La Rosa Holdings).
His philosophy, seminars and educational forums have attracted numerous successful realtors that have spurred the growth of our business. In addition to providing person-to-person residential and commercial real estate brokerage services to the public, we cross sell ancillary technology-based products and services primarily to our sales agents and the sales agents associated with our franchisees.
In addition to providing person-to-person residential and commercial real estate brokerage services to the public, we cross-sell ancillary technology-based products and services primarily to our sales agents and the sales agents associated with our franchisees.
Human Capital Resources As of December 31, 2023, we had 42 full-time employees in our Company and our majority owned subsidiaries, and approximately 2,434 real estate agents that are independent contractors with Realty. Our operations are overseen directly by our management. Our management functions cover corporate administration, training, agent relations, business development, technology, and research.
Human Capital Resources As of December 31, 2024, we had 39 full-time employees in our Company and our majority owned subsidiaries, and approximately 2,581 real estate agents that are independent contractors with Realty and other subsidiaries of the Company. Our operations are overseen directly by our management.
We collect the rents and disburse payments to vendors, service providers, the agents and the property owners, while retaining $44.00 per agent per property per month. As of April 16, 2024, we had provided property management services for approximately 600 properties in Florida, including single-family residences, condominiums, townhouses and other types of real estate.
We manage the collection of rents and the disbursement of payments to vendors, service providers, agents, and property owners, while retaining a fee of $55.00 per agent, per property, per month. As of March 31, 2025, we have provided property management services for approximately 650 properties across Florida, including single-family residences, condominiums, townhouses, and other types of residential real estate.
(formerly, La Rosa Realty Lake Nona Inc.), Horeb Kissimmee Realty, LLC, La Rosa Realty Premier, LLC, La Rosa Realty Orlando, LLC, La Rosa Realty Georgia, LLC, and La Rosa Realty California, and 100% ownership of the following franchisees of the Company: La Rosa CW Properties, LLC, La Rosa Realty North Florida LLC, and La Rosa Realty Winter Garden LLC.
(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.
As of April 16, 2024, we have 19 La Rosa Realty corporate real estate brokerage offices and branches in Florida, California, Texas, and Georgia. We have 18 La Rosa Realty franchised real estate brokerage offices and branches and two affiliated real estate brokerage offices that pay us fees in two states in the United States and Puerto Rico.
We have 26 La Rosa Realty corporate real estate brokerage offices and branches located in Florida, California, Texas, Georgia, North Carolina and Puerto Rico. The Company also has 6 La Rosa Realty franchised real estate brokerage offices and branches and 3 affiliated real estate brokerage offices, that pay us fees in 7 states in the United States and Puerto Rico.
The median sales price increased to $384,500, an increase of 5.7% from February 2023 ($363,600). Properties typically remained on the market 38 days in February, up from 36 days in January and 34 days in February 2023. Realtors continue to be an integral part of the home buying process.
The median existing-home sales price increased to $398,400, an increase of 3.8% from February 2024 ($383,800). Properties typically remained on the market 42 days in February 2025, up from 41 days in January and 38 days in February 2024. Realtors continue to be an integral part of the home buying process.
In addition, a significant driver of our past growth was, and we believe, of our future growth is our ability to create revenue by referring or requiring that our agents and our franchisee’s agents use the different business services that we provide.
By creating a custom solution and a unique experience, we believe that our agents are able to guide their clients seamlessly through what may be their most expensive lifetime purchase. 1 In addition, a significant driver of our past growth was, and we believe, of our future growth is our ability to create revenue by referring or requiring that our agents and our franchisee agents use the different business services that we provide.
Instead of us taking a greater share of their income, our agents pay what we believe to be reduced rates for training and mentorship and our proprietary technology.
Instead of us taking a greater share of their income, our agents pay what we believe to be reduced rates for training and mentorship and our proprietary technology. Our franchise model has a similar pricing methodology, permitting the franchise owner the freedom to operate their business with minimal control and lower expense than other franchise offerings.
While we intend to continue to sell franchises, we will, in the future, concentrate on opening corporate offices that produce higher revenue and increased margins. Coaching grew out of Mr. La Rosa’s life and business coaching seminars which were organized in 2019 to provide education and mentoring to new real estate agents who join Realty in any of our offices.
La Rosa’s life and business coaching seminars which were organized in 2019 to provide education and mentoring to new real estate agents who join Realty in any of our offices.
Our franchised offices are currently: Name Location La Rosa Realty Success LLC Apopka, Florida La Rosa Realty Bayamón LLC Bayamón, Puerto Rico Premier Properties LLC Carolina, Puerto Rico La Rosa Realty Internacional, LLC Celebration, Florida La Rosa Realty LLC Chappells, South Carolina La Rosa Realty Central Florida, LLC Davenport, Florida La Rosa Realty Beaches LLC Fort Lauderdale, Florida Baxpi Holdings LLC Fort Lauderdale, Florida La Rosa Realty Jacksonville, LLC Jacksonville, Florida La Rosa Realty Lakeland LLC Lakeland, Florida La Rosa Realty Kendall, LLC Miami, Florida La Rosa Realty Downtown Orlando LLC Orlando, Florida La Rosa Realty St.
Our franchised offices are currently: Name Location La Rosa Realty Bayamón LLC Bayamón, Puerto Rico La Rosa Realty Internacional, LLC Celebration, Florida La Rosa Realty Central Florida, LLC Davenport, Florida La Rosa Realty Jacksonville, LLC Jacksonville, Florida La Rosa Realty Kendall, LLC Miami, Florida The Realty Experience Powered By LRR LLC St.
Joseph La Rosa, a successful real estate developer, business and life coach, author, podcaster and public speaker. Mr. La Rosa’s self-help book “Do It Now” is a roadmap to personal success and well-being based on his transformative theories of family, passion and growth.
La Rosa’s self-help book “Do It Now” is a roadmap to personal success and well-being based on his transformative theories of family, passion and growth. His philosophy, seminars and educational forums have attracted numerous successful realtors that have spurred the growth of our business.
The National Association of Realtors reported that for February 2024 (the seasonally adjusted annual rate) there were 4.38 million existing home sales, an increase of 9.5% over January 2024 but a decrease of 3.3% from the prior year.
Mortgage rates dipped from 20-year highs in early 2023 but have risen again and sales have resumed an extended period of declines. The National Association of Realtors(NAR) reported that for February 2025 (the seasonally adjusted annual rate) there were 4.26 million existing home sales, an increase of 4.2% over January 2025 but a decrease of 1.2% from the prior year.
They are attracted to the Company because they desire to work in a diverse, inclusive, welcoming and learning environment that allows the agents to attain their individual potential.
They are attracted to the Company because they desire to work in a diverse, inclusive, welcoming and learning environment that allows the agents to attain their individual potential. The financial attraction is our ability to offer competitive salaries for our employees, a 100% commission “split” with our experienced realtors and a 70%/30% commission split with our new and inexperienced agents.
We intend to comply with applicable rules as they are enacted. 12 Other regulation We are also subject to rules established by private real estate groups and/or trade organizations, including, among others, the NAR, state and local associations of realtors, local Multiple Listing Services and homeowners’ associations that have rules governing the sale of properties within their neighborhoods.
Briefing in the cases was completed before the change in Administrations, but on March 27, 2025, the SEC voted to end its defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions. 16 Other regulation We are also subject to rules established by private real estate groups and/or trade organizations, including, among others, the NAR, state and local associations of realtors, local Multiple Listing Services and homeowners’ associations that have rules governing the sale of properties within their neighborhoods.
We intend to continue to evaluate the benefit of patent protection with respect to our technology and will file additional applications when we believe it will be beneficial. 7 Our Recent Strategic Partnerships In November 2023, the Company entered into a strategic referral partnership agreement with Janover Inc.
We intend to continue to evaluate the benefit of patent protection with respect to our technology and will file additional applications when we believe it will be beneficial. 11 Our Markets Our primary market is in the United States.
We believe that our focus on the interaction between our human agents and their clients is a strong weapon against the internet-only commodity websites and the low touch discount brokerages. Our agent count continues to grow organically, which can be attributed to the positive culture created in our Company.
We believe that our support and philosophy have attracted and will continue to attract and retain the highest producing realtors in our local markets. We believe that our focus on the interaction between our human agents and their clients is a strong weapon against internet-only commodity websites and the low touch discount brokerages.
Joseph La Rosa, as of April 16, 2024, controls 75% of the total voting power of our Common Stock based on his ownership of Common Stock and the 20,000,000 votes provided by his Series X Super Voting Preferred Stock, $0.0001 par value per share, (the “Series X Preferred Stock”) that votes with the Common Stock, with respect to director elections and other matters. 3 Our Business We operate primarily in the United States residential real estate market which totaled $47.5 trillion at the end of 2023 reflecting a year over year gain of $2.4 trillion due to a shortage of houses for sale, according to Redfin Corp 1 .
Joseph La Rosa, as of April 15, 2025, controls 50.5% of the total voting power of our Common Stock based on his ownership of Common Stock and the 20,000,000 votes provided by his Series X Super Voting Preferred Stock, $0.0001 par value per share, (the “Series X Preferred Stock”) that votes with the Common Stock, with respect to director elections and other matters.
Item 1. Business. Overview We are the holding company for five agent-centric, technology-integrated, cloud-based, multi-service real estate segments.
Item 1. Business. Overview We are the holding company for six agent-centric, technology-integrated, cloud-based, multi-service real estate segments. Our business was founded by Mr. Joseph La Rosa, a successful real estate developer, business and life coach, author, podcaster, and public speaker. Mr.
Our franchise model has a similar pricing methodology, permitting the franchise owner the freedom to operate their business with minimal control and lower expense than other franchise offerings. 1 Moreover, we believe that our proprietary technology, training, and the support that we provide to our agents at a minimal cost to them is one of the best offered in the industry.
Moreover, we believe that our proprietary technology, training, and the support that we provide to our agents at a minimal cost to them is one of the best offered in the industry. Our business stands on three pillars: Family, Passion, and Growth.
Our customers come primarily from referrals from our Realty brokers who are asked by their clients to assist them in with various commercial real estate property transactions. From October 2023 to March 2024, the Company also acquired the majority ownership of the following franchisees of the Company: Nona Legacy Powered By La Rosa Realty, Inc.
Our customers come primarily from referrals from our Realty brokers who are asked by their clients to assist them in with various commercial real estate property transactions. In January 2025 2024, the Company hired a leader for this division who possesses vast experience in commercial real estate.
These companies do not provide the same personalized brokerage services that we do and emphasize low price and a do-it-yourself philosophy. 10 In the property management arena, we compete against independent local property management companies and the major national and international commercial real estate property managers such as Jones Lang LaSalle and Cushman & Wakefield plc.
This strategic approach helps FPG Title Group maintain a competitive edge in the market. 14 In the property management arena, we compete against independent local property management companies and the major national and international commercial real estate property managers such as Jones Lang LaSalle and Cushman & Wakefield plc.
We cannot guarantee that the Company will actually enter into any binding acquisition agreements with any of those companies.
Management is in discussions with several franchisees and other entities; however, any future agreements may have terms that are materially different than the terms of completed acquisitions. We cannot guarantee that the Company will actually enter into any binding acquisition agreements with any of those companies.
We intend to continue growing our business organically and by acquisition. It is management’s intention to acquire additional franchisees in 2024. We continuously look to search for potential acquisition targets. Management is in discussions with several franchisees; however, any future agreements may have terms that are materially different than the terms of completed acquisitions.
We intend to continue growing our business organically and through acquisition. It is management’s intention to acquire additional franchisees and other entities through the remainder of 2025. We continuously search for potential acquisition targets.
We give our real estate brokers and sales agents who are seeking financial independence a turnkey solution and support them in growing their brokerages while they fund their own businesses. This enables us to maintain a low fixed-cost business with several recurring revenue streams, yielding relatively high margins and cash flow.
We give our real estate brokers and sales agents who are seeking financial independence a turnkey solution and support them in growing their brokerages while they fund their own businesses. Our agent-centric commission model enables our sales agents to obtain higher net commissions than they would otherwise receive from many of our competitors in our local markets.
Final Offer is a technology platform that is designed to simplify real estate transactions, enabling buyers to make successful offers and sellers to maximize the outcome of their sales. Final Offer’s online process allows sellers to establish a minimum sales price and other deal terms online and pre-approved buyers to make binding offers.
This update is expected to improve operational efficiency for agents across the Company. - In March 2024, the Company officially launched its partnership with Final Offer, online platform that allows sellers to establish a minimum sales price and other deal terms online and pre-approved buyers to make bidding offers.
We have 18 La Rosa Realty franchised real estate brokerage offices and branches and two affiliated real estate brokerage offices that pay us fees in two states in the United States and Puerto Rico. Our real estate brokerage offices, both corporate and franchised, are staffed with 2,454 licensed real estate brokers and sales associates as of March 31, 2024.
Additionally, the Company has a full-service escrow settlement and title company in Florida. In April 2025, we also formed a company, offering a commission advancement program exclusively for La Rosa agents. Our real estate brokerage offices, both corporate and franchised, are staffed with 2,769 licensed real estate brokers and sales associates as of March 31, 2025.
If we do, we cannot assure you that the terms of such acquisitions will be substantially the same or better for the Company than those of completed acquisitions. 2 Our Organization La Rosa Holdings Corp. was incorporated in the State of Nevada on June 14, 2021 by its founder, Mr.
Such approval was effective on March 27, 2025, or 20 days after the commencement of mailing of the definitive information statement regarding this approval to the stockholders of the Company. 6 Our Organization La Rosa Holdings Corp. was incorporated in the State of Nevada on June 14, 2021 by its founder, Mr.
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Our primary business, La Rosa Realty, LLC, has been listed in the “Top 75 Residential Real Estate Firms in the United States” from 2016 through 2020 by the National Association of Realtors, the leading real estate industry trade association in the United States. Our business was founded by Mr.
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Our agent count continues to grow organically and through acquisition, we attribute our organic growth to the positive culture created in our Company and the competitive plans that we offer our agents.
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Our real estate brokerage business operates primarily under the trade name La Rosa Realty, which we own, and, to a lesser extent, under the trade name Better Homes Realty which we license. We have 19 La Rosa Realty corporate real estate brokerage offices and branches located in Florida, California, Texas, and Georgia.
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The following are developments in our business since the beginning of the fiscal year ended December 31, 2024: - In February 2023, we launched our proprietary technology system - JAEME, part of “My Agent Account.” JAIME is a real estate AI assistant created to support and inspire our agents with personalized content to drive marketing, efficiency, and sales.
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Augustine LLC St. Augustine, Florida The Realty Experience Powered By LRR LLC St. Cloud, Florida La Rosa Realty St. Petersburg LLC St.
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This advanced technology can help agents to provide services to their clients in a more efficient way - even from their mobile devices. In October 2024, the Company launched My Agent Account version 3.0, a significant upgrade to its proprietary platform, which now includes a new module specifically designed for property management disbursements.
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Our agent-centric commission model enables our sales agents to obtain higher net commissions than they would otherwise receive from many of our competitors in our local markets. We believe that agents who join our Company from the major real estate brokerage firms have increased their income by an average of approximately forty percent (40%).
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Final Offer is available to real estate brokers on the Company’s platform in key markets across Florida, California and Georgia, with plans to expand the offering across the organization. - In June 2024, the Company recruited a high-performing group of team leaders in Florida, who closed over 425 transactions and achieved sales exceeding $100 million in their prior 12 months before joining the Company. - During the fiscal year ended December 31, 2024, we acquired majority ownership of the following companies: 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.
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Our business stands on three pillars: Family, Passion, and Growth. We believe that our support and philosophy have attracted and will continue to attract and retain the highest producing realtors in our local markets.
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Additionally, we acquired the remaining non-controlling interest portions of Nona Legacy Powered By La Rosa Realty, Inc.
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By creating a custom solution and a unique experience, we believe that our agents are able to guide their clients seamlessly through what may be their most expensive lifetime purchase. Disruptions related to the COVID-19 pandemic resulted in a downturn in our local residential real estate market in 2020.
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(formerly, La Rosa Realty Lake Nona Inc.) and La Rosa Realty Premier, LLC, making them both 100% owned entities. - In December 2024, the Company opened its first office and wholly owned subsidiary in North Carolina, La Rosa Realty NC LLC. - In December 2024, the Company announced that it will offer Bitcoin and other cryptocurrencies as a payment option for its network of agents.
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However, our local real estate market rebounded significantly in 2021 and continues to hold up notwithstanding significant increases in mortgage rates as the pandemic has caused what appears to be a large migration into our market areas from other states.
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If we do, we cannot assure you that the terms of such acquisitions will be substantially the same or better for the Company than those of completed acquisitions. 2 On October 10, 2024, we received a letter from the Nasdaq Listing Qualifications Department notifying us that, for the 30 consecutive business day period between August 28, 2024 through October 9, 2024, our common stock (the “Common Stock”) had not maintained a minimum closing bid price of $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThose international risks include: ● fluctuations in foreign currency exchange rates and foreign exchange restrictions; ● exposure to local economic conditions and local laws and regulations, including those relating to the agents of our franchisees; ● foreign economic and credit markets; ● potential adverse changes in the political stability of foreign countries or in their diplomatic relations with the U.S.; ● restrictions on the withdrawal of foreign investment and earnings; ● government policies against businesses owned by foreigners; ● investment restrictions or requirements; ● diminished ability to legally enforce our contractual rights in foreign countries; ● difficulties in registering, protecting or preserving trade names and trademarks in foreign countries; ● potential governmental and industry corruption; ● restrictions on the ability to obtain or retain licenses required for operation; and ● changes in foreign tax laws.
Biggest changeThose international risks include: ● fluctuations in foreign currency exchange rates and foreign exchange restrictions; ● exposure to local economic conditions and local laws and regulations, including those relating to the agents of our franchisees; ● foreign economic and credit markets; ● potential adverse changes in the political stability of foreign countries or in their diplomatic relations with the U.S.; ● restrictions on the withdrawal of foreign investment and earnings; ● government policies against businesses owned by foreigners; ● investment restrictions or requirements; ● diminished ability to legally enforce our contractual rights in foreign countries; ● difficulties in registering, protecting or preserving trade names and trademarks in foreign countries; ● potential governmental and industry corruption; ● restrictions on the ability to obtain or retain licenses required for operation; and ● changes in foreign tax laws. 26 We depend substantially on our Founder , Joseph La Rosa, and our Chief Operating Officer, Deana La Rosa, and the loss of any our senior management or other key employees or the inability to hire additional qualified personnel could adversely affect our operations, our brand and our financial performance.
In addition, he may want the Company to pursue strategies that deviate from the interests of other stockholders. Investors should consider that the interests of the Mr. La Rosa may differ from their interests in material respects. Mr.
In addition, he may want the Company to pursue strategies that deviate from the interests of other stockholders. Investors should consider that the interests of Mr. La Rosa may differ from their interests in material respects. Mr.
Any of the following could be associated with cyclicality in the housing market by halting or limiting the current growth in the housing market, and have a material adverse effect on our business by causing periods of lower growth or a decline in the number of home sales and/or home prices which, in turn, could adversely affect our revenue and profitability: ● a continued rise in inflation; ● a period of slow economic growth or recessionary conditions; ● a continued increase in mortgage interest rates; ● a tightening of credit standards by financial institutions; ● legislative, tax or regulatory changes that would adversely impact the residential real estate market, including but not limited to those relating to mortgage financing, restrictions imposed on mortgage originators as well as retention levels required to be maintained by sponsors to securitize certain mortgages, the elimination of the deductibility of certain mortgage interest expense, the application of the alternative minimum tax, and real property taxes and employee relocation expense; ● insufficient home inventory levels in our markets; ● a continued increase in the acquisition of single-family homes by corporate buyers for rental purposes; ● a decrease in the affordability of homes; ● a decrease in consumer confidence; ● increase in the cost of premiums for home insurance due to recent hurricanes; and ● natural disasters, such as hurricanes, earthquakes and other disasters that disrupt local or regional real estate markets.
Any of the following could be associated with cyclicality in the housing market by halting or limiting the current growth in the housing market, and have a material adverse effect on our business by causing periods of lower growth or a decline in the number of home sales and/or home prices which, in turn, could adversely affect our revenue and profitability: ● a continued rise in inflation; ● a period of slow economic growth or recessionary conditions; ● a continued increase in mortgage interest rates; ● a tightening of credit standards by financial institutions; ● legislative, tax or regulatory changes that would adversely impact the residential real estate market, including but not limited to those relating to mortgage financing, restrictions imposed on mortgage originators as well as retention levels required to be maintained by sponsors to securitize certain mortgages, the elimination of the deductibility of certain mortgage interest expense, the application of the alternative minimum tax, and real property taxes and employee relocation expense; ● insufficient home inventory levels in our markets; ● a continued increase in the acquisition of single-family homes by corporate buyers for rental purposes; ● a decrease in the affordability of homes; 19 ● a decrease in consumer confidence; ● increase in the cost of premiums for home insurance due to recent hurricanes; and ● natural disasters, such as hurricanes, earthquakes and other disasters that disrupt local or regional real estate markets.
We are also subject to various other rules and regulations such as: ● the Gramm-Leach-Bliley Act which governs the disclosure and safeguarding of consumer financial information; ● the Sherman Antitrust Act which governs anti-competitive practices in the marketplace; ● various state and federal privacy laws protecting consumer data; ● the USA PATRIOT Act; ● the sale of franchises is regulated by various state laws as well as by the Federal Trade Commission (the “FTC”) that generally require that franchisors make extensive disclosure to prospective franchisees and several states have “franchise relationship laws” or “business opportunity laws” that limit the ability of franchisors to terminate franchise agreements or to withhold consent to the renewal or transfer of these agreement; ● restrictions on transactions with persons on the Specially Designated Nationals and Blocked Persons list promulgated by the Office of Foreign Assets Control of the Department of the Treasury; ● the Fair Housing Act; 20 ● state and federal employment laws and regulations, including any changes that would require classification of independent contractors to employee status, and wage and hour regulations; ● federal and state, “Do Not Call,” “Do Not Fax,” and “Do Not E-Mail” laws; ● laws and regulations in jurisdictions outside the U.S. in which we do business; and ● consumer fraud statutes that are broadly written.
We are also subject to various other rules and regulations such as: ● the Gramm-Leach-Bliley Act which governs the disclosure and safeguarding of consumer financial information; ● the Sherman Antitrust Act which governs anti-competitive practices in the marketplace; ● various state and federal privacy laws protecting consumer data; ● the USA PATRIOT Act; ● the sale of franchises is regulated by various state laws as well as by the Federal Trade Commission (the “FTC”) that generally require that franchisors make extensive disclosure to prospective franchisees and several states have “franchise relationship laws” or “business opportunity laws” that limit the ability of franchisors to terminate franchise agreements or to withhold consent to the renewal or transfer of these agreement; ● restrictions on transactions with persons on the Specially Designated Nationals and Blocked Persons list promulgated by the Office of Foreign Assets Control of the Department of the Treasury; ● the Fair Housing Act; ● state and federal employment laws and regulations, including any changes that would require classification of independent contractors to employee status, and wage and hour regulations; ● federal and state, “Do Not Call,” “Do Not Fax,” and “Do Not E-Mail” laws; ● laws and regulations in jurisdictions outside the U.S. in which we do business; and ● consumer fraud statutes that are broadly written.
In addition to being highly volatile, our Common Stock could be subject to rapid and substantial price volatility in response to a number of factors that are beyond our control, including, but not limited to: ● variations in our revenues and operating expenses; ● actual or anticipated changes in the estimates of our operating results or changes in stock market analyst recommendations regarding our Common Stock, other comparable companies or our industry generally; ● market conditions in our industry and the economy as a whole; ● actual or expected changes in our growth rates or our competitors’ growth rates; ● developments in the financial markets and worldwide or regional economies; ● announcements of innovations or new products or services by us or our competitors; 26 ● announcements by the government relating to regulations that govern our industry; ● sales of our Common Stock or other securities by us, or in the open market; ● changes in the market valuations of other comparable companies; and ● other events or factors, many of which are beyond our control, including those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, such as the COVID-19 pandemic, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations, disrupt the operations of our suppliers or result in political or economic instability.
In addition to being highly volatile, our Common Stock could be subject to rapid and substantial price volatility in response to a number of factors that are beyond our control, including, but not limited to: ● variations in our revenues and operating expenses; ● actual or anticipated changes in the estimates of our operating results or changes in stock market analyst recommendations regarding our Common Stock, other comparable companies or our industry generally; ● market conditions in our industry and the economy as a whole; ● actual or expected changes in our growth rates or our competitors’ growth rates; ● developments in the financial markets and worldwide or regional economies; ● announcements of innovations or new products or services by us or our competitors; ● announcements by the government relating to regulations that govern our industry; ● sales of our Common Stock or other securities by us, or in the open market; ● changes in the market valuations of other comparable companies; and ● other events or factors, many of which are beyond our control, including those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, such as the COVID-19 pandemic, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations, disrupt the operations of our suppliers or result in political or economic instability.
This competition creates challenges that include: ● our ability to discover and recruit independent brokerage firms in new markets and being able to acquire them; ● our ability to increase our brand awareness in new markets in order to penetrate them with our brokerages; ● our ability to effectively train and mentor a larger number of new agents and franchisees; ● our ability to continually improve the performance, features and reliability of our technological developments in response to both evolving demands of the marketplace and competitive product offerings; ● our ability to scale our business services and support quickly enough to meet the growing needs of our real estate agents by improving our internal systems, integrating with third-party systems, and maintaining infrastructure performance; ● our ability to attract and retain senior management to operate and control the expansion of our business, organically and potentially, through acquisitions; and ● our ability to enhance our financial reporting, internal control, human resources, legal and other administrative areas to effectively manage the growth of our Company.
This competition creates challenges that include: ● our ability to discover and recruit independent brokerage firms in new markets and being able to acquire them; ● our ability to increase our brand awareness in new markets in order to penetrate them with our brokerages; ● our ability to effectively train and mentor a larger number of new agents and franchisees; ● our ability to continually improve the performance, features and reliability of our technological developments in response to both evolving demands of the marketplace and competitive product offerings; ● our ability to scale our business services and support quickly enough to meet the growing needs of our real estate agents by improving our internal systems, integrating with third-party systems, and maintaining infrastructure performance; 21 ● our ability to attract and retain senior management to operate and control the expansion of our business, organically and potentially, through acquisitions; and ● our ability to enhance our financial reporting, internal control, human resources, legal and other administrative areas to effectively manage the growth of our Company.
The difficulties of integrating the operations could include, among others: ● failure to implement our business plan for the combined business; ● unanticipated issues in integrating logistics, information, communications, and other systems; ● unanticipated changes in applicable laws and regulations; ● negative impacts on our internal control over financial reporting accounting; and ● other unanticipated issues, expenses, or liabilities that could impact, among other things, our ability to realize any expected synergies on a timely basis, or at all.
The difficulties of integrating the operations could include, among others: ● failure to implement our business plan for the combined business; ● unanticipated issues in integrating logistics, information, communications, and other systems; ● unanticipated changes in applicable laws and regulations; 18 ● negative impacts on our internal control over financial reporting accounting; and ● other unanticipated issues, expenses, or liabilities that could impact, among other things, our ability to realize any expected synergies on a timely basis, or at all.
Any further increase in the Fed funds rate could push the U.S. economy into a recession which is likely to have a further negative effect on our operations, income and financial condition. The housing market is currently in flux with higher mortgage interest rates and generally increasing home prices which makes it difficult to predict future market trends.
Any further increase in the Fed funds rate could push the U.S. economy into a recession which is likely to have a further negative effect on our operations, income and financial condition. 20 The housing market is currently in flux with higher mortgage interest rates and generally increasing home prices which makes it difficult to predict future market trends.
More recently, on March 22, 2024, real estate brokerage company Compass Inc. 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.
On March 22, 2024, real estate brokerage company Compass Inc. 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.
Our corporate governance documents include provisions: ● providing for a single class of directors where each member of the Board shall serve for a one-year term and may be elected to successive terms; ● authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our Common Stock; ● limiting the liability of, and providing indemnification to, our directors, including provisions that require the Company to advance payment for defending pending or threatened claims; 31 ● limiting the ability of our stockholders to call and bring business before special meetings of stockholders; ● requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board; ● controlling the procedures for the conduct and scheduling of the Board and stockholder meetings; and, ● limiting the determination of the number of directors on our Board and the filling of vacancies or newly created seats on the Board to our Board then in office.
Our corporate governance documents include provisions: ● providing for a single class of directors where each member of the Board shall serve for a one-year term and may be elected to successive terms; ● authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our Common Stock; ● limiting the liability of, and providing indemnification to, our directors, including provisions that require the Company to advance payment for defending pending or threatened claims; 36 ● limiting the ability of our stockholders to call and bring business before special meetings of stockholders; ● requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board; ● controlling the procedures for the conduct and scheduling of the Board and stockholder meetings; and, ● limiting the determination of the number of directors on our Board and the filling of vacancies or newly created seats on the Board to our Board then in office.
If we are unable to raise capital when needed, our business, financial condition and results of operations would be materially adversely affected, and we could be forced to reduce or discontinue our operations. 14 The residential real estate market is cyclical, and we can be negatively impacted by downturns in this market and by general economic conditions.
If we are unable to raise capital when needed, our business, financial condition and results of operations would be materially adversely affected, and we could be forced to reduce or discontinue our operations. The residential real estate market is cyclical, and we can be negatively impacted by downturns in this market and by general economic conditions.
Holders of our Securities must bear the risk that any future offerings we conduct or borrowings we make may adversely affect the level of return, if any, they may be able to achieve from an investment in our Securities. 27 If our securities become subject to the penny stock rules, it would become more difficult to trade our shares.
Holders of our Securities must bear the risk that any future offerings we conduct or borrowings we make may adversely affect the level of return, if any, they may be able to achieve from an investment in our Securities. If our securities become subject to the penny stock rules, it would become more difficult to trade our shares.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. 28 Our status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need it.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. Our status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need it.
Due to the cyclicality of the real estate market, we cannot predict whether the prior several year period of sustained growth will continue, whether mortgage rates which have climbed over 2022 will remain at relatively higher levels than in years past and whether home prices will stabilize.
Due to the cyclicality of the real estate market, we cannot predict whether the prior several year period of sustained growth will continue, whether mortgage rates which have climbed over 2022-2024 will remain at relatively higher levels than in years past and whether home prices will stabilize.
From February 2017 to July 2023, La Rosa Realty, LLC, a subsidiary of the Company, provided interest free, due on demand advances to La Rosa Insurance LLC, a company owned by our Chief Executive Officer, which may have be deemed to be personal loans made by us to Mr.
From February 2017 to July 2023, La Rosa Realty, LLC, a subsidiary of the Company, provided interest free, due on demand advances to La Rosa Insurance LLC, a company owned by our Chief Executive Officer, which may be deemed to be personal loans made by us to Mr.
Under state law, the franchisees and our real estate brokers have certain duties to supervise and are responsible for the conduct of their brokerage business. Our Company owned real estate brokerage business and our franchisees (excluding commercial brokerage transactions) must comply with the Real Estate Settlement Procedures Act (“RESPA”).
Under state law, the franchisees and our real estate brokers have certain duties to supervise and are responsible for the conduct of their brokerage business. 24 Our Company owned real estate brokerage business and our franchisees (excluding commercial brokerage transactions) must comply with the Real Estate Settlement Procedures Act (“RESPA”).
In addition, we rely on third-party vendors to provide the website platforms and additional systems and related support. If we cannot continue to retain these services on acceptable terms, our access to these systems and services could be interrupted.
In addition, we rely on third-party vendors to provide website platforms and additional systems and related support. If we cannot continue to retain these services on acceptable terms, our access to these systems and services could be interrupted.
Our amended and restated articles of incorporation, bylaws and Nevada law contain provisions that could have the effect of rendering more difficult or discouraging an acquisition deemed undesirable by our Board of Directors (the “Board”).
Our amended and restated articles of incorporation, bylaws and Nevada law contain provisions that could have the effect of rendering more difficult or discouraging an acquisition deemed undesirable by our Board of Directors.
Despite the Company’s intent to fund operations through equity and debt financing arrangements, there is no assurance that such financing will be available on terms acceptable to the Company, if at all. 13 Our independent auditors have included an explanatory paragraph in their audit report, included in this Annual Report on the Form 10-K, regarding the Company’s ability to continue as a going concern.
Despite the Company’s intent to fund operations through equity and debt financing arrangements, there is no assurance that such financing will be available on terms acceptable to the Company, if at all. 17 Our independent auditors have included an explanatory paragraph in their audit report, included in this Annual Report on Form 10-K, regarding the Company’s ability to continue as a going concern.
Although, as of 2023, NAR estimated that almost nine in ten home sellers worked with a real estate agent to sell their home, a significant increase in the volume of private sales due to, for example, increased access to the internet and the proliferation of websites that facilitate such sales, and a corresponding decrease in the volume of sales through real estate agents could have a material adverse effect on our business, prospects and results of operations.
Although, as of 2024, NAR estimated that almost nine in ten home sellers worked with a real estate agent to sell their home, a significant increase in the volume of private sales due to, for example, increased access to the internet and the proliferation of websites that facilitate such sales, and a corresponding decrease in the volume of sales through real estate agents could have a material adverse effect on our business, prospects and results of operations.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Although we monitor trademark portfolios internally and impose an obligation on franchisees to notify us upon learning of potential infringement, there can be no assurance that we will be able to adequately maintain, enforce and protect our trademarks or other intellectual property rights. 23 We are not aware of any challenges to our right to use any of our brand names or trademarks.
Although we monitor trademark portfolios internally and impose an obligation on franchisees to notify us upon learning of potential infringement, there can be no assurance that we will be able to adequately maintain, enforce and protect our trademarks or other intellectual property rights. 27 We are not aware of any challenges to our right to use any of our brand names or trademarks.
During the fourth quarter of 2023, upon us completing our IPO, the Compensation Committee reviewed the advance and determined that the existing related party receivable would be charged as part of the Company’s chief executive officer’s annual bonus as specified in his employment agreement. No outstanding balance exists as of December 31, 2023.
During the fourth quarter of 2023, upon us completing our IPO, the Compensation Committee reviewed the advance and determined that the existing related party receivable would be charged as part of the Company’s chief executive officer’s annual bonus as specified in his employment agreement. No outstanding balance existed as of December 31, 2023.
Any failure to maintain effective disclosure controls and internal control over financial reporting could harm our business, financial condition, and results of operations and could cause a decline in the trading price of our Common Stock. 29 If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
Any failure to maintain effective disclosure controls and internal control over financial reporting could harm our business, financial condition, and results of operations and could cause a decline in the trading price of our Common Stock. 34 If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
Management expects the housing-market slowdown to persist throughout 2024 because home-buying affordability is near its lowest level in decades. Any decline in home sales directly affects the productivity and income of our agents who are paid only upon the closing of their clients’ home purchase or sale.
Management expects the housing-market slowdown to persist throughout 2025 because home-buying affordability is near its lowest level in decades. Any decline in home sales directly affects the productivity and income of our agents who are paid only upon the closing of their clients’ home purchase or sale.
The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our Common Stock. They could also deter potential acquirers of our Company, thereby reducing the likelihood that our stockholders could receive a premium for their Common Stock in an acquisition.
The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our Common Stock. They could also deter potential acquirers of our Company, thereby reducing the likelihood that our stockholders could receive a premium for their Common Stock in an acquisition. Item 1B.
The U.S. Bureau of Labor Statistics (“BLS”) reported that the Consumer Price Index for All Urban Consumers (CPI-U), a broad-based measure of goods and services costs, rose 0.4 percent in February 2024 seasonally adjusted, and rose 3.2 percent over the last 12 months, not seasonally adjusted.
The U.S. Bureau of Labor Statistics (“BLS”) reported that the Consumer Price Index for All Urban Consumers (CPI-U), a broad-based measure of goods and services costs, rose 0.4 percent in February 2024 seasonally adjusted, and rose 2.8 percent over the last 12 months, not seasonally adjusted.
Although we employ measures designed to prevent, detect, address, and mitigate these threats (including access controls, data encryption, vulnerability assessments, and maintenance of backup and protective systems), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our customers) and the disruption of business operations.
Although we employ measures designed to prevent, detect, address, and mitigate these threats (including access controls, data encryption, vulnerability assessments, multi-factor authentication, and maintenance of backup and protective systems), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our customers) and the disruption of business operations.
If we re-commence activities abroad, our international operations will be subject to risks that are different from those of our U.S. operations that could result in losses against which we are not insured and therefore negatively affect our profitability.
When we re-commence activities abroad, our international operations will be subject to risks that are different from those of our U.S. operations that could result in losses against which we are not insured and therefore negatively affect our profitability.
La Rosa and other senior management would have a significant detrimental effect on the Company as its brand is tied to his name, image and personality. We do not maintain key employee life insurance policies on Mr.
La Rosa and other senior management would have a significant detrimental effect on the Company as its brand is tied to their name, image and personality. We do not maintain key employee life insurance policies on Mr.
This has had an adverse effect on our agents’ ability to close sales and thus on our results of operations in the year ended December 31, 2023. Thus, we expect these trends to continue to adversely affect our revenues in 2024.
This has had an adverse effect on our agents’ ability to close sales and thus on our results of operations in the year ended December 31, 2024. Thus, we expect these trends to continue to adversely affect our revenues in 2025.
Any decrease in home sales in the future will have an adverse effect on our financial performance and results of operations. The combination of high mortgage rates, continuing high home prices and limited inventory slowed the housing market substantially in 2023.
Any decrease in home sales in the future will have an adverse effect on our financial performance and results of operations. The combination of high mortgage rates, continuing high home prices and limited inventory slowed the housing market substantially in 2024.
We cannot assure you that we will be successful in attracting and retaining qualified employees. 22 Concentration of ownership of our voting stock by Mr. La Rosa will prevent new investors from influencing significant corporate decisions. Based on our Common Stock outstanding as of December 31, 2023, Mr.
We cannot assure you that we will be successful in attracting and retaining qualified employees. Concentration of ownership of our voting stock by Mr. La Rosa will prevent new investors from influencing significant corporate decisions. Based on our Common Stock outstanding as of December 31, 2024, Mr.
Our franchise operations are subject to additional business risks. Our franchise business is exposed to other business risks which may impact our ability to collect recurring, contractual fees and dues from our franchisees, may harm the goodwill associated with our brand, and/or may materially and adversely impact our business, results of operations, financial condition and prospects.
Our franchise business is exposed to other business risks which may impact our ability to collect recurring, contractual fees and dues from our franchisees, may harm the goodwill associated with our brand, and/or may materially and adversely impact our business, results of operations, financial condition and prospects.
Based upon evaluation of our Chief Executive Officer and Chief Financial Officer as of December 31, 2023, our disclosure controls and procedures are ineffective, as we are a newly publicly traded company with limited resources in our finance department, and we are in the process of establishing our procedures around our disclosure controls.
Based upon evaluation of our Chief Executive Officer and Interim Chief Financial Officer as of December 31, 2024, our disclosure controls and procedures are ineffective, as we are a newly publicly traded company with limited resources in our finance department, and we are in the process of establishing our procedures around our disclosure controls.
Risks Related to Our Business and Operations Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.” The Company has incurred recurring net losses, including a net loss of $7,823,763 for the year ended December 31, 2023, and the Company’s operations have not provided net positive cash flows in the year ended December 31, 2023.
Risks Related to Our Business and Operations Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.” The Company has incurred recurring net losses, including a net loss of $14,349,996 for the year ended December 31, 2024, compared to $7,823,763 for the year ended December 31, 2023 and the Company’s operations have not provided net positive cash flows in the year ended December 31, 2024.
La Rosa beneficially owned approximately 44% of our outstanding Common Stock and all 2,000 shares of our Series X Preferred Stock that provides for 10,000 votes per share when voting with the Common Stock, representing 77% of the total voting power of our capital stock. Thus, Mr.
La Rosa beneficially owned approximately 28% of our outstanding Common Stock and all 2,000 shares of our Series X Preferred Stock that provides for 10,000 votes per share when voting with the Common Stock, representing 62% of the total voting power of our capital stock. Thus, Mr.
La Rosa controls, as of April 16, 2024, 75% of the total voting power of our capital stock, we are considered a “controlled company” for the purposes of the listing requirements of the Nasdaq Capital Market. A controlled company is not required to have a majority of independent directors or form an independent compensation or nominating and corporate governance committee.
La Rosa controls, as of April 15, 2025, 50.5% of the total voting power of our capital stock, we are considered a “controlled company” for the purposes of the listing requirements of the Nasdaq Capital Market. A controlled company is not required to have a majority of independent directors or form an independent compensation or nominating and corporate governance committee.
Peak mortgage interest rates have continued to have a depressing effect on the sale of existing homes, that include single-family homes, townhomes, condominiums and co-ops, with a year over year decrease of 3.3% in February 2024 to a seasonally adjusted annual rate of 4.38 million.
Mortgage interest rates have continued to have a depressing effect on the sale of existing homes, that include single-family homes, townhomes, condominiums and co-ops, with a year over year decrease of 1.2% in February 2024 to a seasonally adjusted annual rate of 4.26 million.
Fed funds rates impact interest rates on government bonds that have a correlated effect on mortgage interest rates, which, as of March 21, 2024, the average rate for a 30-year fixed rate mortgage was 6.87 according to Freddie Mac, the federally chartered home mortgage loan securitizer.
Fed funds rates impact interest rates on government bonds that have a correlated effect on mortgage interest rates, which, as of March 20, 2025, the average rate for a 30-year fixed rate mortgage was 6.67 according to Freddie Mac, the federally chartered home mortgage loan securitizer.
Our future success is largely dependent on the efforts and abilities of our Founder, Chief Executive Officer, President and Chairman, Joseph La Rosa, our senior management and other key employees. The loss of the services of Mr.
Our future success is largely dependent on the efforts and abilities of our Founder, Chief Executive Officer, Interim Chief Financial Officer, President and Chairman, Joseph La Rosa, our Chief Operating Officer, Deana La Rosa, our senior management and other key employees. The loss of the services of Mr. La Rosa, Mrs.
Additionally, if plaintiffs or regulatory bodies are successful in such actions, this may increase the likelihood that similar claims are made against the Company and/or our real estate brokers and agents which claims could result in significant liability and be adverse to our financial results if we or our brokers and agents are unable to distinguish or defend our business practices.
Additionally, if plaintiffs or regulatory bodies are successful in such actions, this may increase the likelihood that similar claims are made against the Company and/or our real estate brokers and agents which claims could result in significant liability and be adverse to our financial results if we or our brokers and agents are unable to distinguish or defend our business practices. 28 As an example, in the matter of Burnett v.
The Company is actively pursuing strategies to mitigate these risks, focusing on continuing to expand via acquisitions, which can help achieve future profitability, and expanding its customer base. However, there can be no assurance that these efforts will prove successful or that the Company will achieve its intended financial stability.
The Company is actively pursuing strategies to mitigate these risks, focusing on expansion through acquisitions, which can help achieve future profitability and growing its customer base. However, there can be no assurance that these efforts will prove successful or that the Company will achieve its intended financial stability.
However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business and prospects.
However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business and prospects. 29 Risks Associated with Our Capital Stock We are currently listed on The Nasdaq Capital Market.
Tight inventory was reflected by the rise in the national median existing home sale price in February 2024 of 5.7% to $384,500 from a year earlier ($363,600). Homes usually go under contract a month or two before they close, so the February data is based on purchase decisions made in December 2023 and January 2024.
Tight inventory was reflected by the rise in the national median existing home sale price in February 2025 of 3.8% to $398,400 from a year earlier ($384,500). Homes usually go under contract a month or two before they close, so the February data is based on purchase decisions made in December 2024 and January 2025.
La Rosa may have interests different than yours and may vote in a way with which you disagree and that may be adverse to your interests. In addition, Mr.
La Rosa may not coincide with the interests of other stockholders. Mr. La Rosa may have interests different than yours and may vote in a way with which you disagree and that may be adverse to your interests. In addition, Mr.
District Court for the Western District of Missouri), a federal jury found that 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.
National Association of Realtors (U.S. District Court for the Western District of Missouri), a federal jury found that 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”).
Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until our first annual report filed with the SEC where we are an accelerated filer or a large accelerated filer, which will not occur until at least our second annual report on Form 10-K.
Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until our first annual report filed with the SEC where we are an accelerated filer or a large accelerated filer.
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, and Douglas Elliman, Inc. were named as defendants in Gibson v. National Association of Realtors (U.S.
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, and Douglas Elliman, Inc. were named as defendants in Gibson v.
The average rate for a 30-year fixed mortgage was 6.87% as of March 21, 2024, down from 7.79% during the most recent 52 week period, according to Freddie Mac.
The average rate for a 30-year fixed mortgage was 6.67% as of March 20, 2025, down from 7.22% during the most recent 52 week period, according to Freddie Mac.
Potential franchisees, when shopping for a brand, look to see the level of support that they can receive compared to the fees and dues that they will have to pay. This is our value proposition.
Our products are the brands we sell and their reputation in the marketplace. Potential franchisees, when shopping for a brand, look to see the level of support that they can receive compared to the fees and dues that they will have to pay. This is our value proposition.
The ability of our Company owned brokerage offices to retain agents is generally subject to numerous factors, including the sales commissions, the training and coaching and technological support that they receive and their perception of our brand value.
The ability of our Company owned brokerage offices to retain agents is generally subject to numerous factors, including the sales commissions, the training and coaching and technological support that they receive and their perception of our brand value. Our largest competitors in the corporate-owned space include Compass Holdings, Inc. and Fathom Holdings, Inc.
La Rosa, our President and Chief Executive Officer, Chairman of the Board of Directors, and majority stockholder, controls all matters requiring stockholder approval, including the election and removal of directors and any merger or other significant corporate transactions. The interests of Mr. La Rosa may not coincide with the interests of other stockholders. Mr.
La Rosa, our President and Chief Executive Officer, Interim Chief Financial Officer, Chairman of the Board of Directors of the Company (“Board” or “Board of Directors”), and majority stockholder, controls all matters requiring stockholder approval, including the election and removal of directors and any merger or other significant corporate transactions. The interests of Mr.
If we fail, or we have been alleged to have failed, to comply with any existing or future applicable laws, rules and regulations, we could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings. Our noncompliance could result in significant defense costs, settlement costs, damages and penalties.
If we fail, or we have been alleged to have failed, to comply with any existing or future applicable laws, rules and regulations, we could be subject to lawsuits and administrative complaints and proceedings, as well as criminal proceedings.
The perception among investors that we are at heightened risk of delisting could also negatively affect the market price of our securities and trading volume of our Common Stock.
The perception among investors that we are at heightened risk of delisting could also negatively affect the market price of our securities and trading volume of our Common Stock. Furthermore, on April 7, 2025, the closing price of our Common Stock was $0.17.
The trading price of our shares might also decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. Each of these factors, among others, could harm the value of our Common Stock.
The trading price of our shares might also decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us.
We are an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
Notwithstanding, the imposition of any sanctions on us could have a material adverse effect on our business, financial position, results of operations or cash flows. 32 We are an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
A prolonged depression in home sales will force the least successful agents out of the industry and a decrease in the number of earning agents will have a negative impact on our financial performance and results of operations. 16 We may fail to successfully execute our strategies to grow our business, including increasing our agent count, expanding the number of our franchisees and agents, or we may fail to manage our growth effectively, which could have a material adverse effect on our brand, our financial performance and results of operations.
We may fail to successfully execute our strategies to grow our business, including increasing our agent count, expanding the number of our franchisees and agents, or we may fail to manage our growth effectively, which could have a material adverse effect on our brand, our financial performance and results of operations.
Additionally, if our franchisees are not successful, they will fail to attract and retain productive agents and will fail to generate the revenue necessary to pay the contractual fees and dues owed to us. 17 In addition, if we are unable to organically increase the number of, and acquire new, corporate realty offices in the future, our growth will stagnate and we could lose high producing agents to other competing brokerages, all of which would have a material adverse effect on our results of operations, financial condition and prospects.
In addition, if we are unable to organically increase the number of, and acquire new, corporate realty offices in the future, our growth will stagnate and we could lose high producing agents to other competing brokerages, all of which would have a material adverse effect on our results of operations, financial condition and prospects.
Total housing inventory at the end of February 2024 was 1.07 million units, up 5.9% from January and up 10.3% from one year ago (970,000). There was an unsold inventory supply of 2.9-months at the current sales pace, down from 3.0 months in January 2024 but up from 2.6 months in February 2023.
Total housing inventory at the end of February 2024 was 1.24 million units, up 5.1% from January and up 17.0% from one year ago (1.06 million). There was an unsold inventory supply of 3.5-months at the current sales pace, equal to January 2024 but up from 3.0 months in February 2024.
The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S. and international privacy and other laws, reputational damage, loss of market value, litigation with third parties (which could result in our exposure to material civil or criminal liability), diminution in the value of the services we provide to our customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on our competitiveness and results of operations. 30 Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful stockholder claims against us and may reduce the amount of money available to us.
We may also be subject to legal claims, government investigation, and additional state and federal statutory requirements. 35 The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S. and international privacy and other laws, reputational damage, loss of market value, litigation with third parties (which could result in our exposure to material civil or criminal liability), diminution in the value of the services we provide to our customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on our competitiveness and results of operations.
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 (the “Burnett Settlement”).
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 (the “Burnett Settlement”). On November 26, 2024, the Burnett Settlement received its final approval.
Moreover, the forthcoming changes in the way real estate brokers will be compensated brought about by the recent antitrust litigation settlements will likely diminish the revenues earned by lesser producing agents and agents that represent home buyers. This decrease in earnings is likely to result in many agents leaving the industry, increasing competition for high performing agents.
Moreover, the forthcoming changes in the way real estate brokers will be compensated brought about by the recent antitrust litigation settlements will likely diminish the revenues earned by lesser producing agents and agents that represent home buyers.
In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation to customers and business partners. We may also be subject to legal claims, government investigation, and additional state and federal statutory requirements.
In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation to customers and business partners.
Certain on-going governmental actions or inactions, such as the U.S. federal government’s conservatorship of Fannie Mae and Freddie Mac, capital standards imposed on banks by the Office of the Comptroller of the Currency, the monetary policy of the U.S. government, and any rising interest rate environment may adversely impact the housing industry, including homebuyers’ ability to finance and purchase homes. 15 The monetary policy of the U.S. government, and particularly the Federal Reserve Board, which regulates the supply of money and credit in the U.S., significantly affects the availability of financing at favorable rates and on favorable terms, which in turn affects the domestic real estate market.
Certain on-going governmental actions or inactions, such as the U.S. federal government’s conservatorship of Fannie Mae and Freddie Mac, capital standards imposed on banks by the Office of the Comptroller of the Currency, the monetary policy of the U.S. government, and any rising interest rate environment may adversely impact the housing industry, including homebuyers’ ability to finance and purchase homes.
Infringement, misappropriation, or dilution of our intellectual property could harm our business. We regard our “LR La Rosa Realty” service mark and the “LR” logo that we own, as well as the Better Homes trademark and logo that we license, as having significant value and as being important factors in the marketing of our brands.
Infringement, misappropriation, or dilution of our intellectual property could harm our business. We regard our “LR La Rosa Realty” service mark and the “LR” logo that we own, as having significant value and as being important factors in the marketing of our brand. We believe that this and other intellectual property are valuable assets that are critical to our success.
The performance and reliability of our systems and operations and third-party applications are critical to our reputation and ability to attract franchisees and agents to join us.
Security breaches, interruptions, delays and failures in our systems and operations could materially harm our business. The performance and reliability of our systems and operations and third-party applications are critical to our reputation and ability to attract franchisees and agents to join us.
Further, in the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, operating results and financial condition.
Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, operating results and financial condition.
If we continue to fail to maintain an effective system of disclosure controls and fail to maintain an effective system of internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected. 33 If we continue to fail to maintain an effective system of disclosure controls and fail to maintain an effective system of internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Accordingly, our financial results depend upon the operational and financial success of our franchisees and their agents and our corporate agents, all of whom are independent contractors that we do not control.
Our agents pay us dues out of their income from real estate transactions and new agents split their transaction-based commissions with us. Accordingly, our financial results depend upon the operational and financial success of our franchisees and their agents and our corporate agents, all of whom are independent contractors that we do not control.
The market price for our Common Stock may be particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, and minimal profits, which could lead to wide fluctuations in our share price.
If, in the future, we receive a Staff Delisting Determination there can be no assurance that we would be successful in preventing a determination by the Nasdaq hearing panel that our stock will be delisted. 30 The market price for our Common Stock may be particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, and minimal profits, which could lead to wide fluctuations in our share price.
In addition, to the extent that we are underpaid, we may not have a definitive method for determining such underpayment. If a material number of our franchisees were to under report or erroneously report their agent counts, agent commissions or fees due to us, it could have a material adverse effect on our financial performance and results of operations.
If a material number of our franchisees were to under report or erroneously report their agent counts, agent commissions or fees due to us, it could have a material adverse effect on our financial performance and results of operations. 23 Our franchise operations are subject to additional business risks.
Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.
Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry.
Nasdaq requires listed issuers to comply with certain standards in order to remain listed on its exchange.
Our Common Stock is currently listed on the Nasdaq Capital Market on Nasdaq under the symbol “LRHC.” Nasdaq requires listed issuers to comply with certain standards in order to remain listed on its exchange.
Competition in the residential real estate franchising business is intense and may adversely affect our financial performance. We compete against national and international real estate brokerage franchisors as well as smaller franchisors. Our products are the brands we sell and their reputation in the marketplace.
This decrease in earnings is likely to result in many agents leaving the industry, increasing competition for high performing agents. 22 Competition in the residential real estate franchising business is intense and may adversely affect our financial performance. We compete against national and international real estate brokerage franchisors as well as smaller franchisors.
We believe that this and other intellectual property are valuable assets that are critical to our success. We rely on a combination of protections provided by contracts, as well as copyright, trademark, trade secret and other laws, to protect our intellectual property from infringement, misappropriation, or dilution.
We rely on a combination of protections provided by contracts, as well as copyright, trademark, trade secret and other laws, to protect our intellectual property from infringement, misappropriation, or dilution. We have registered certain trademarks and service marks and have other trademark and service mark registration applications pending in the U.S. and foreign jurisdictions.
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. 24 Security breaches, interruptions, delays and failures in our systems and operations could materially harm our business.
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.
We continue to monitor the effects of climate change and the changes in law, regulation and policies of other companies, especially insurance companies and intend to adjust our business accordingly in the future. 21 If we re-commence activities abroad, we will be subject to risks of operating in foreign countries.
We also may face several layers of national and regional regulations. The risks may not be limited to fines and the costs of remediation. We continue to monitor the effects of climate change and the changes in law, regulation and policies of other companies, especially insurance companies and intend to adjust our business accordingly in the future.
Risks Associated with Our Capital Stock We may not be able to maintain the listing of our Common Stock on Nasdaq, which could adversely affect our liquidity and the trading volume and market price of our Common Stock and decrease or eliminate your investment. Our Common Stock is currently listed on the Nasdaq Capital Market on Nasdaq.
Our failure to maintain our compliance with Nasdaq’s continued listing standards or other requirements could result in our Common Stock being delisted from Nasdaq, which could adversely affect our liquidity and the trading volume and market price of our Common Stock and decrease or eliminate your investment.
Although Nasdaq has granted us 180 calendar days, or until May 22, 2024, to regain compliance, there can be no assurance that we will regain such compliance and Nasdaq could make a determination to delist our Common Stock. 25 Any delisting determination by Nasdaq could seriously decrease or eliminate the value of an investment in our Common Stock and other securities linked to our Common Stock.
Although Nasdaq has granted us additional 180 calendar days, to regain compliance with the Bid Price Rule, there can be no assurance that we will regain such compliance, or that we will maintain compliance with all applicable continued listing requirement for Nasdaq in the future, and Nasdaq could make a determination to delist our Common Stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+3 added−2 removed1 unchanged
Biggest changeDespite our efforts to improve our cybersecurity measures, there can be no assurance that our initiatives will fully mitigate the risks posed by cyber threats. The landscape of cybersecurity risks is constantly evolving, and the Company will continue to assess and update our cybersecurity measures in response to emerging threats.
Biggest changeThis coverage supports our risk management efforts by providing additional resources and expertise to help us identify, mitigate, and respond to potential threats effectively. Despite our efforts to improve our cybersecurity measures, there can be no assurance that our initiatives will fully mitigate the risks posed by cyber threats.
We routinely assess material cybersecurity risks, including potential unauthorized occurrences on, or conducted through, our information systems that may compromise the confidentiality, integrity or availability of those systems or information maintained in them. We devote appropriate resources and designate members of our management, including our Chief Technology Officer, to manage the risk assessment and mitigation process.
We routinely assess material cybersecurity risks, including potential unauthorized occurrences on, or conducted through, our information systems that may compromise the confidentiality, integrity or availability of those systems or information maintained in them. Our Chief Technology Officer, reporting to the Chief Executive Officer, is primarily responsible for addressing these risks.
Such events could potentially lead to unauthorized access to, or disclosure of, sensitive information, disrupt our business operations, result in regulatory fines or litigation costs, and negatively impact our reputation among customers and partners. The Company is in the process of evaluating our cybersecurity needs and developing appropriate measures to enhance our cybersecurity posture.
However, we recognize that the absence of a formalized cybersecurity framework may leave us vulnerable to cyberattacks, data breaches, and other cybersecurity incidents. Such events could potentially lead to unauthorized access to, or disclosure of, sensitive information, disrupt our business operations, result in regulatory fines or litigation costs, and negatively impact our reputation among customers and partners.
This includes considering the engagement of external cybersecurity experts to advise on best practices, conducting vulnerability assessments, and developing an incident response strategy. Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity, and the nature of our operations, thereby reducing our exposure to cybersecurity risks.
The Company is in the process of evaluating our cybersecurity needs and developing appropriate measures to enhance our cybersecurity posture. This includes considering the engagement of external cybersecurity experts to advise on best practices, conducting vulnerability assessments, and developing an incident response strategy.
For a discussion of potential cybersecurity risks affecting the Company, please refer to Item 1A - Risk Factors. 32
The landscape of cybersecurity risks is constantly evolving, and the Company will continue to assess and update our cybersecurity measures in response to emerging threats. For a discussion of potential cybersecurity risks affecting the Company, please refer to Part I, Item 1A - “Risk Factors”.
Removed
As a smaller reporting company, we currently do not have formalized cybersecurity measures, a dedicated cybersecurity team, or specific protocols in place to manage cybersecurity risks. Our approach to cybersecurity is in the developmental stage, and we have not yet conducted comprehensive risk assessments, established an incident response plan, or engaged with external cybersecurity consultants for assessments or services.
Added
We devote appropriate resources and designate members of our management to address the risk assessment and mitigation process. As a smaller reporting company, we are proactively leveraging AI and other resources to enhance our cybersecurity measures.
Removed
Given our current stage of cybersecurity development, we have not experienced any significant cybersecurity incidents to date. However, we recognize that the absence of a formalized cybersecurity framework may leave us vulnerable to cyberattacks, data breaches, and other cybersecurity incidents.
Added
While we do not yet have a dedicated cybersecurity team or fully formalized protocols, we are actively developing new practices, incorporating advanced technologies to identify and mitigate risks. Our efforts include ongoing assessments and the exploration of strategic partnerships to strengthen our security posture. Given our current stage of cybersecurity development, we have not experienced any cybersecurity incidents to date.
Added
Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity, and the nature of our operations, thereby reducing our exposure to cybersecurity risks. 37 We also have a cybersecurity insurance policy in place and fully utilize its tools, guidance, and policies to ensure compliance and enhance our overall security posture.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed3 unchanged
Biggest changeAs a real estate brokerage business, we support our agents primarily via mobile technology and video conferencing. However, we do create a primary location for each of our subsidiaries. We lease our space, as we are flexible on how the space is utilized.
Biggest changeAs a real estate brokerage business, we support our agents primarily via mobile technology and video conferencing. However, we do create a primary location for each of our subsidiaries. We lease all our space, as we are flexible on how the space is utilized.
Our subsidiaries have space that range from 360 square feet to 3,900 square feet, with relatively short terms, so as to minimize our rental expense given our ability to easily relocate. We believe our office space is adequate for at least the next 12 months.
Our subsidiaries have space that range from 360 square feet to 4,700 square feet, with relatively short terms, so as to minimize our rental expense given our ability to easily relocate. We believe our office space is adequate for at least the next 12 months.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

6 edited+7 added−3 removed4 unchanged
Biggest changeThere are no matters pending that we expect to have a material adverse impact on our business, results of operations, financial condition, or cash flows, except as set forth below. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods.
Biggest changeLitigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods.
Mark Gracy, who served as our Chief Operating Officer from November 18, 2021 to November 15, 2022, filed a civil lawsuit in the Circuit Court of Osceola County, Florida, seeking a jury trial and claiming that the Company breached his employment agreement by reducing his salary and failing to pay him his full severance payments and is looking for payment of his alleged severance of $249,000.00.
Mark Gracy, who served as our Chief Operating Officer from November 18, 2021 to November 15, 2022, filed a civil lawsuit in the Circuit Court of Osceola County, Florida, seeking a jury trial and claiming that the Company breached his employment agreement by reducing his salary and failing to pay him his full severance payments and is looking for payment of his alleged severance of $249,000.
Other than as described below, we have not been and we are not presently a party to any material pending or threatened legal proceedings. On February 13, 2023, Mr.
Other than as described below, we are not presently a party to any material pending or threatened legal proceedings. As previously disclosed, on February 13, 2023, Mr.
On October 12, 2023, the Company filed a motion to dismiss Mr. Freites’ complaint, which is still pending. On January 3, 2024, Ms. Sarah Palmer filed a putative national class action complaint against La Rosa Realty, LLC in the United States District Court, Middle District of Florida, Orlando Division. Ms.
On April 11, 2023, the Company filed a motion to dismiss Mr. Gracy’s complaint, which is still pending. 38 As previously disclosed, on January 3, 2024, Ms. Sarah Palmer filed a putative national class action complaint against La Rosa Realty, LLC in the United States District Court, Middle District of Florida, Orlando Division. Ms.
On March 12, 2024 La Rosa Realty, LLC filed a motion to dismiss the case with prejudice, which is still pending. The Company believes that the above claims are without merit, and it will vigorously defend against such claims.
On March 12, 2024, La Rosa Realty, LLC filed a motion to dismiss the case with prejudice, which is still pending.
Item 3. Legal Proceedings. From time to time, we are involved in lawsuits, claims, investigations, and proceedings, including pending opposition proceedings involving patents that arise in the ordinary course of business.
Item 3. Legal Proceedings. From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business.
Removed
On April 11, 2023, the Company filed a motion to dismiss Mr. Gracy’s complaint, which is still pending.
Added
Such litigation and other proceedings may include, but are not limited to, actions relating to employment law and intellectual property, commercial or contractual claims, brokerage or real estate disputes, or other consumer protection statutes, ordinary course brokerage disputes like the failure to disclose property defects, commission disputes, and vicarious liability based upon conduct of individuals or entities outside of the Company’s control, including agents and third-party contractor agents.
Removed
On July 14, 2023, a writ of garnishment was issued naming La Rosa Realty, LLC, a subsidiary of the Company, as a purported garnishee for an alleged, but not actual, employee or contractor, Marc Cameron, in the Seventh Judicial Circuit Court of St. Johns’ County, Florida. On October 31, 2023, the Plaintiff voluntarily dismissed the action.
Added
As previously disclosed, on July 19, 2024, LPT Realty, LLC commenced a civil action in the Ninth Judicial Circuit in Orange County, Florida against La Rosa Holdings Corp; Joseph La Rosa a/k/a Joe La Rosa; La Rosa Realty Lake Nona, Inc. n/k/a Nona Legacy Powered By La Rosa Realty, Inc.; & La Rosa Realty, LLC, seeking damages, reasonable royalty of all real estate transactions conducted by all the La Rosa defendants and injunctive relief for misappropriation of trade secrets as to all the defendants.
Removed
Anthony Freites, who was an alleged independent contractor of La Rosa Realty, LLC from January 13, 2013 until June of 2021, filed an amended complaint in the Circuit Court of Osceola County, Florida, seeking a jury trial and claiming that the Company breached his contract and is looking for payment of commissions on alleged closed real estate sales as an independent contractor in the amount unspecified but allegedly including actual damages, compensatory damages, attorney’s fees, costs, and prejudgment interest.
Added
The case was voluntarily dismissed on March 26, 2025. As previously disclosed, on July 22, 2024, the Company’s subsidiary, Nona Legacy Powered by La Rosa Realty, Inc. commenced a civil action in the Ninth Judicial Circuit in Orange County, Florida against Olga Norkis Fernandez Valdez a/k/a Norkis Fernandez and LPT Realty, LLC.
Added
The plaintiff sought monetary damages caused by Norkis Fernandez due to the breach of contract and breach of fiduciary duty by Ms. Fernandez as well as injunctive relief against Ms. Fernandez. The plaintiff also sought damages against LPT Realty, LLC for tortious interference with a contractual relationship.
Added
The parties have signed a Mediated Settlement Agreement dated October 18, 2024, whereby the plaintiffs agreed to have the case dismissed with prejudice.
Added
On October 2, 2024, FCA One Services LLC commenced a civil action in the Ninth Judicial Circuit in Orange County, Florida against Suncoasteam Realty LLC, Greg Boland, Silvia Beltran Martinez LLC, Silvia Beltran, and Nona Legacy Powered by La Rosa Realty, Inc., our subsidiary. The plaintiff alleged negligent misrepresentation in a real estate transaction.
Added
The case was settled by the parties on February 4, 2024, for immaterial amount without admission of any liability on the part of Nona Legacy Powered by La Rosa Realty, Inc. This case is now closed. The Company believes that the above claims are without merit, and it will vigorously defend against such claims.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+10 added−26 removed3 unchanged
Biggest changeSuch securities were sold without registration under the Securities Act in reliance on the exemption provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering. 35 Equity Plan Information Plan Category: Number of securities to be issued upon exercise of outstanding options, warrants and rights: Weighted average exercise price of outstanding options, warrants and rights: Number of securities remaining available for future issuance: 2022 Equity Incentive Plan: Equity compensation plans approved by security holders 1,396,125 $ 2.02 2,653,369 Equity compensation plans not approved by security holders — — — Total 1,396,125 $ 2.02 2,653,369 Use of Proceeds from our Initial Public Offering of Common Stock On October 12, 2023, we closed our IPO, in which we sold and issued 1,000,000 shares of our Common Stock, at a price to the public of $5.00 per share.
Biggest changePlan Category: Number of securities to be issued upon exercise of outstanding options, warrants and rights: Weighted average exercise price of outstanding options, warrants and rights: Number of securities remaining available for future issuance: 2022 Equity Incentive Plan: Equity compensation plans approved by security holders 4,001,676 $ 1.56 7,031,674 Equity compensation plans not approved by security holders — — — Total 4,001,676 $ 1.56 7,031,674 41 Item 6. [Reserved] Not applicable.
On April 15, 2024, the closing price for our Common Stock as reported on The Nasdaq Capital Market was $1.47 per share. Holders of Common Stock On April 16, 2024, there were 201 holders of record of our Common Stock.
On April 14, 2025, the closing price for our Common Stock as reported on The Nasdaq Capital Market was $0.201 per share. Holders of Common Stock On April 15, 2025, there were 144 holders of record of our Common Stock.
Any future determination to pay dividends will be at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements, and other factors that our Board deems relevant. In addition, the terms of any future debt or credit financings may preclude us from paying dividends.
Any future determination to pay dividends will be at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements, and other factors that our Board deems relevant.
On December 18, 2023, the Company issued 100,000 shares of restricted Common Stock to a service provider pursuant to that certain media advertising agreement between the Company and such provider.
La Rosa signed on December 7, 2023, 100% of which vested on the date of grant. On December 12, 2024, the Company issued a consultant 225,000 unregistered shares of Common Stock as consulting compensation pursuant to that certain consulting agreement between the Company and such consultant, dated December 12, 2024.
On October 13, 2023, the Company issued 125,000 shares of restricted Common Stock to an investor relations services provider pursuant to the consulting agreement between the Company and such provider.
On October 15, 2024, the Company issued 200,000 unregistered shares of Common Stock to a consulting firm for services rendered as part of a consulting agreement.
Removed
Unregistered Sales of Equity Securities On January 10, 2022, the Company issued to CGB-TRUST-1001-01-13-22 and ELG-TRUST-1004-09-01-13 equally as assignees of a consultant, Bonilla Opportunity Fund I Ltd., as compensation for its services and for the purchase price of $120.00, a total of 120,000 shares of Common Stock, with anti-dilution and reverse stock split protection to permit that consultant to maintain its percentage ownership prior to and immediately after the closing of the Company’s initial public offering.
Added
In addition, the terms of any future debt or credit financings may preclude us from paying dividends. 40 Unregistered Sales of Equity Securities In addition to the issuances of unregistered securities described in the Current Reports on Form 8-K and in the Quarterly Reports on Form 10-Q filed by the Company with the SEC, during the year ended December 31, 2024 the Company issued the following equity securities which were not registered under the Securities Act.
Removed
On July 28, 2022, the Company and Bonilla Opportunity Fund I Ltd. amended the services agreement pursuant to which the Company issued to each of two assignees of Bonilla Opportunity Fund I Ltd., CGB-TRUST-1001-01-13-22 and ELG-TRUST-1004-09-01-13, equally an additional total of 133,040 shares of Common Stock.
Added
On December 4, 2024, the Company issued to Joseph La Rosa, its Chief Executive Officer, a ten year non-qualified stock option to purchase 600,000 shares of Common Stock, having an exercise price of $0.6699, pursuant to Amendment No. 2 to the Amended and Restated Employment Agreement between the Company and Mr.
Removed
Those shares were subsequently determined by the Company to have been issued erroneously and were cancelled. On July 31, 2023, the Company evaluated the agreement and determined that the performance condition was satisfied and issued to CGB-TRUST-1001-01-13-22 and ELG-TRUST-1004-09-01-13 a total of 250,168 shares of Common Stock, which were valued at the expected IPO price of $5 a share.
Added
Unless otherwise noted, the securities above were issued pursuant to the registration requirements of the Securities Act provided by Section 4(a)(2) and/or Rule 506 of Regulation D promulgated under the Securities Act, in light of the fact that none of the issuances involved a public offering of securities and no solicitation or advertisements for such securities were made by any party.
Removed
The Company relied upon Section 4(a)(2) of the Securities Act of 1933 that exempts from registration “transactions by an issuer not involving any public offering.” The Company believes that the issuance of the Common Stock did not involve a “public offering” because: (i) the offer was made only to one entity who subsequently divided it up among trusts controlled by the managing partner of Bonilla Opportunity Fund I Ltd.
Added
Securities Authorized for Issuance under Equity Compensation Plans On January 10, 2022, our sole director and sole stockholder at the time approved the La Rosa Holdings 2022 Equity Incentive Plan. On November 19, 2024, our stockholders approved the Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (“2022 Plan”).
Removed
(ii) the issuance was not via a general solicitation; (iii) the managing member of Bonilla Opportunity Fund I Ltd was the local attorney for the Company; (iv) the services performed by Bonilla Opportunity Fund I Ltd. were related to advising the Company in the Company’s initial public offering; (v) the offeree had full access to complete due diligence related to the Company, including, but not limited to, the most recent two years of balance sheets; profit and loss, retained earnings, and similar financial statements; as well as a description of the Company’s business operations and the securities being offered for sale; (vi) the general partner of Bonilla Opportunity Fund I Ltd. is a sophisticated investor; (vii) the Company had a pre-existing business relationship with the general partner of Bonilla Opportunity Fund I Ltd.; (viii) the number of securities issued were nominal compared to the total outstanding shares to be registered; (ix) the securities were requested by Bonilla Opportunity Fund, Ltd. as part of its compensation; (x) the securities were purchased for the account of the trusts to which they were transferred; (xi) the securities were noted as “restricted” securities and were not intended to be resold unless registered or sold pursuant to an exemption from registration.
Added
The 2022 Plan governs equity awards to our employees, directors, officers, consultants and other eligible participants.
Removed
Such shares were subsequently registered pursuant to the registration statement on the Form S-1 (Reg. No. 333-264372) declared effective by the SEC on October 4, 2023.
Added
Initially the maximum aggregate number of shares of Common Stock which may be issued pursuant to awards under the plan was 5,000,000 shares as adjusted for the 1-for-10 reverse stock split of the Company’s Common Stock as of March 21, 2022 and adjusted for the 2-for-1 forward stock split of the Company’s Common Stock as of April 17, 2023.
Removed
On February 15, 2022, stock options to purchase 20,000 shares of Common Stock were granted to each independent director of the Board under the Company’s 2022 Equity Incentive Plan and vested in full on March 17, 2023. The grant was exempt from the registration requirement of the Securities Act pursuant to Rule 701 thereunder.
Added
Subject to adjustment in connection with the payment of a stock dividend, a stock split or subdivision or combination of the shares of Common Stock, or a reorganization or reclassification of the Company’s Common Stock, the maximum aggregate number of shares of Common Stock which may currently be issued pursuant to awards under the 2022 Plan is 12,500,000 shares.
Removed
Such stock options were subsequently registered pursuant to the registration statement on Form S-8 (Reg. No. 323-275118) filed with the SEC on October 20, 2023. 34 On February 1, 2023, the Company granted 2,813 restricted stock units to Alex Santos, its Chief Technology Officer, pursuant to the terms of his employment agreement and the Company’s 2022 Equity Incentive Plan.
Added
Such shares of Common Stock are made available from the authorized and unissued shares of the Company.
Removed
The grant was exempt from the registration requirement of the Securities Act pursuant to Rule 701 thereunder. Such equity award was subsequently registered pursuant to the registration statement on Form S-8 (Reg. No. 323-275118) filed with the SEC on October 20, 2023.
Added
The maximum number of shares that are subject to awards under the 2022 Plan is subject to an annual increase equal to the least of (a) 500,000 shares, (b) a number of shares equal to four percent (4%) of the total number of shares of all classes of Common Stock of the Company outstanding on the last day of the immediately preceding fiscal year, or (c) such number of shares determined by the administrator of the plan no later than the last day of the immediately preceding fiscal year.
Removed
On August 28, 2023, in accordance with the terms of the Senior Secured Promissory Note that was issued to Emmis Capital II, LLC (“Emmis Capital”) and repaid by the Company in 2022, the Company issued 30,000 shares of Common Stock valued at $5 per share to Emmis Capital.
Added
For more information about our 2022 Plan, see Part III Item 11 – “Executive Compensation” of this report which is incorporated herein by reference. Equity Compensation Plan Information The table below sets forth information as of December 31, 2024.
Removed
Such shares were subsequently registered pursuant to the registration statement on the Form S-1 (Reg. No. 333-264372) declared effective by the SEC on October 4, 2023.
Removed
From February 2023 through August 2023, we issued 1,523 shares of our Series A Preferred Stock to 77 accredited sophisticated investors in a private placement pursuant to Regulation D under the Securities Act, which automatically converted into 435,113 shares of our Common Stock upon the closing of the IPO.
Removed
From March 2023 through May 2023, we exchanged, in a private placement under Sections 3(a)(9) and 4(a)(2) of the Securities Act, certain promissory notes and convertible promissory notes, including those owed to Joseph La Rosa, our founder and Chief Executive Officer, representing an aggregate amount of principal and accrued interest of $1,923,468 for 1,912 shares of our Series A Preferred Stock at an exchange rate of $1,000.00 per share, which shares of the Series A Preferred Stock automatically converted into 546,278 shares of our Common Stock upon the closing of the IPO.
Removed
On March 18, 2016, Celebration Office Condos LLC, a company owned by Mr. La Rosa, loaned funds totaling $556,268 to La Rosa Realty LLC to be used as working capital. That loan was interest free and had no fixed payment terms.
Removed
On December 31, 2022, Celebration Office Condo LLC forgave the loan for one share of Series A Preferred Stock, which was issued in March 2023. The Series A Preferred Stock automatically converted into 285 shares of our unregistered, restricted Common Stock upon the closing of the IPO.
Removed
A total of 600,250 shares of Common Stock issued pursuant to the Series A Preferred Stock automatic conversions were subsequently registered pursuant to the registration statement on the Form S-1 (Reg. No. 333-264372) declared effective by the SEC on October 4, 2023, and remained 381,426 shares of Common Stock remained unregistered.
Removed
On October 12, 2023, in connection with the closing of the IPO, the Company issued 60,000 shares of unregistered, restricted Common Stock to the Company’s CEO, Joseph La Rosa, with a value of $5.00 per share, in accordance with the debt agreement the Company executed on December 2, 2022.
Removed
Such securities were sold without registration under the Securities Act in reliance on the exemption provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering.
Removed
On October 12, 2023, upon the repayment of a note payable to one of the Company’s lenders, the Company issued 5,000 shares of unregistered, restricted Common Stock with a value of $5.00 per share in accordance with the debt agreement.
Removed
Such securities were sold without registration under the Securities Act in reliance on the exemption provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering. On October 12, 2023, the Company issued 6,566 shares of unregistered, restricted Common Stock pursuant to conversion of outstanding debt in accordance with the debt agreements.
Removed
Such securities were sold without registration under the Securities Act in reliance on the exemption provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering.
Removed
Such securities were sold without registration under the Securities Act in reliance on the exemption provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering.
Removed
We received $4,360,000 in aggregate net proceeds from our IPO after deducting underwriting discounts and commissions and other offering expenses. Alexander Capital L.P. were the underwriters of our IPO.
Removed
The offer and sale of all of the shares of our Common Stock in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-264372), which was declared effective by the SEC on October 4, 2023.
Removed
The net proceeds from our IPO have been used to satisfy existing term debt and accrued interest in the aggregate amount of approximately $375,000, the existing balance of the Company’s line of credit of approximately $140,000, related party debt of approximately $150,000, and existing accounts payable of $1,000,000.
Removed
There has been no material change in our planned use of the net proceeds from our IPO as described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on October 10, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

49 edited+41 added−24 removed51 unchanged
Biggest changeGross Proft and Gross Margin Year Ended December 31, Change 2023 2022 $ % Real Estate Brokerage Services (Residential) $ 1,686,191 $ 1,472,070 $ 214,121 15 % Gross Margin 8.2 % 9.0 % (0.7 )% Franchising Services $ 411,297 $ 354,522 $ 56,775 16 % Gross Margin 46.5 % 34.3 % 12.3 % Coaching Services $ 298,481 $ 320,496 $ (22,015 ) (7 )% Gross Margin 47.5 % 51.4 % (3.9 )% Property Management $ 330,440 $ 275,723 $ 54,717 20 % Gross Margin 3.4 % 3.4 % 0.0 % Real Estate Brokerage Services (Commercial) $ 114,759 $ 102,291 $ 12,468 12 % Gross Margin 99.0 % 100.0 % (1.0 )% Total Gross Profit $ 2,841,168 $ 2,525,102 $ 316,066 13 % Total Gross Margin 8.9 % 9.6 % (0.7 )% Real Estate Brokerage Services (Residential) Costs related to residential real estate brokerage services increased $3.823 million, or 26%, in the year ended December 31, 2023 against the comparable prior year period.
Biggest changeProperty Management 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. 45 Gross Proft and Gross Margin Year Ended December 31, Change 2024 2023 $ % Real Estate Brokerage Services (Residential) $ 5,340,029 $ 1,686,191 $ 3,653,838 217 % Gross Margin 9.4 % 8.2 % 1.1 % Franchising Services $ (159,067 ) $ 411,297 $ (570,364 ) -139 % Gross Margin -48.3 % 46.5 % -94.9 % Coaching Services $ 258,228 $ 298,481 $ (40,253 ) -13 % Gross Margin 45.4 % 47.5 % -2.0 % Property Management $ 341,206 $ 330,440 $ 10,766 3 % Gross Margin 3.1 % 3.4 % -0.3 % Real Estate Brokerage Services (Commercial) $ 89,873 $ 114,759 $ (24,886 ) -22 % Gross Margin 27.4 % 99.0 % -71.6 % Title Settlement and Insurance $ 83,010 $ - $ 83,010 NA Gross Margin 100.0 % 0.0 % 100.0 % Total Gross Profit $ 5,953,279 $ 2,841,168 $ 3,112,111 110 % Total Gross Margin 8.6 % 8.9 % -0.4 % Real Estate Brokerage Services (Residential) 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.
All these activities are run through our La Rosa Coaching, LLC subsidiary which teaches advanced techniques for team building, personal growth, and business development, which we believe will enhance our revenue at a nominal increase in cost to us.
All these activities are run through our La Rosa Coaching, LLC, our subsidiary which teaches advanced techniques for team building, personal growth, and business development, which we believe will enhance our revenue at a nominal increase in cost to us.
The 2023 expense was due to costs related to the amortization of financing fees related to 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.
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.
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. Recent Accounting Pronouncements 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.
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. 44 Recent Accounting Pronouncements 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.
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. 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.
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. 48 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.
Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. 44 Goodwill and Intangible Assets Goodwill is tested for impairment at least annually in the fourth quarter of our fiscal year.
Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. 51 Goodwill and Intangible Assets Goodwill is tested for impairment at least annually in the fourth quarter of our fiscal year.
As of December 31, 2023, we had recorded a full valuation allowance on our net U.S. deferred tax assets because we expect that it is more likely than not that our U.S. deferred tax assets will not be realized. Should the actual amounts differ from our estimates, the amount of our valuation allowance could be materially impacted.
As of December 31, 2024, we had recorded a full valuation allowance on our net U.S. deferred tax assets because we expect that it is more likely than not that our U.S. deferred tax assets will not be realized. Should the actual amounts differ from our estimates, the amount of our valuation allowance could be materially impacted.
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, 2023, included with this annual report for our Summary of Significant Accounting Policies.
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.
On October 13, 2023 and on October 16, 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.
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.
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, and (vii) fees from our events and forums.
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.
On March 27, 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.
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.
If the fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired. If the carrying amount of a reporting unit exceeds its fair value, we then record an impairment loss equal to the difference, up to the carrying value of goodwill. The carrying values of identifiable intangible assets are reviewed for recoverability on a quarterly basis.
If the carrying amount of a reporting unit exceeds its fair value, we then record an impairment loss equal to the difference, up to the carrying value of goodwill. The carrying values of identifiable intangible assets are reviewed for recoverability on a quarterly basis.
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 five and half percent from December 31, 2022 to December 31, 2023.
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.
On February 20, 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 is convertible into shares of our Common Stock at the option of the lender.
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.
The decrease in cost of franchising revenue is due to the six acquisitions, 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.
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.
We may first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount, and, if so, we then quantitatively compare the fair value of our reporting units to their carrying amount.
We first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount, and, if so, we then quantitatively compare the fair value of our reporting units to their carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired.
The note is convertible into shares of our Common Stock at the option of the lender. The two promissory notes begin amortizing five months after the date of each loan, with full maturity occurring twelve months after the date of each loan.
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.
Cash Flows Used in Investing Activities For the year ended December 31, 2023, net cash used in operating activities was $0.141 million, which represents the cash consideration paid for the six acquisitions acquired in the fourth quarter of 2023, less cash acquired.
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.
We grew our agent count by just over five and half percent from 2,305 at December 31, 2022 to 2,434 at December 31, 2023. The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers.
We grew our agent count by six percent from 2,434 at December 31, 2023 to 2,581 at December 31, 2024. The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers.
Our revenues and operating margins will fluctuate in successive quarters due to a wide variety of factors, including seasonality, weather, health exigencies, holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations, and changes in mortgage interest rates.
Our revenues and operating margins will fluctuate in successive quarters due to a wide variety of factors, including seasonality, weather, health exigencies, holidays, national or international emergencies, the school year calendar’s impact on timing of family relocations, and changes in mortgage interest rates. This fluctuation may make it difficult to compare or analyze our financial performance effectively across successive quarters.
We cannot provide any assurance that we can successfully raise the capital needed. 42 Summary of Cash Flows Year Ended December 31, 2023 2022 Net Cash Used in Operating Activities $ (1,894,265 ) $ (1,177,105 ) Net Cash Used in Investing Activities $ (141,744 ) $ — Net Cash Provided by Financing Activities $ 2,950,060 $ 1,067,229 Cash Flows Used in Operating Activities 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.
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.
Stock-based compensation We incurred stock-based compensation of $5.100 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).
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). 47 Other Income (Expense), Net 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.
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Off-Balance Sheet Arrangements On December 31, 2024, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
Cash Flows Provided by Financing Activities 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.
These proceeds were offset by $2.389 of payments and advances on debt and other financing instruments, 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.
In order to continue to provide cutting edge technology and provide best-in-class coaching and education, we increased our pricing structure effective September 1, 2023, including increasing our agent annual fees and monthly fees, the fixed transaction fee, technology and accounting fees, and property management fees. The fee increases are the first in over two years.
In order to continue to provide cutting edge technology and provide best-in-class coaching and education, we periodically review our pricing structure, including increasing our agent annual fees and monthly fees, the fixed transaction fee, technology and accounting fees, and property management fees.
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.
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.
The gross profit increased $57 thousand, or 16%, from 2022 to 2023 primarily attributable to the reduction in the cost of revenue. Coaching Services Costs related to coaching services increased $27 thousand, or 9%, in the year ended December 31, 2023 against the comparable prior year period. Costs related to coaching services moved proportionally with the change in related revenue.
The gross profit decreased $570 thousand, or 138.7%, from 2023 to 2024 primarily attributable to the reduction in the cost of revenue. Coaching Services 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.
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 has reached a recent peak of about 8% during the second half of 2023. That interest rate stood at 6.87% as of March 21, 2024.
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.
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.
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. We have incurred recurring net losses, and our operations have not provided net positive cash flows.
In particular, the Company’s CTO, who joined the Company in early 2022, streamlined the Company’s software applications, which reduced technology costs after subscription periods ended. Insurance, training and other costs increased in 2023 primarily due to our new directors and officers (D&O) policies that provide for liability coverage.
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. Insurance, training and other costs increased in 2024 primarily due to our new directors and officers (D&O) policies that provide liability coverage.
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.
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. Cash Flows Provided by Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $4.2 million.
Moreover, with the impact of climate change, we expect more business disruptions in the coming years, many of which could be unpredictable and extreme.
While this pattern is fairly predictable, there can be no assurance that it will continue. Moreover, with the impact of climate change, we expect more business disruptions in the coming years, many of which could be unpredictable and extreme.
To maximize the utility of our technological infrastructure, we anticipate acquiring additional brokerage firms that will increase our agent count. We also expect to acquire other complementary businesses, such as title and insurance agencies and a mortgage brokerage. We continue to evaluate opportunities to drive our near-term and long-term growth.
We maintain a competitive pricing structure within the industry while simultaneously providing the necessary tools, education and perpetual innovation. 42 To maximize the utility of our technological infrastructure, we anticipate acquiring additional brokerage firms that will increase our agent count. We also expect to acquire other complementary businesses, such as title and insurance agencies and a mortgage brokerage.
The decrease was partially attributable from the six acquisitions completed in the fourth quarter of fiscal year 2023, which no longer contribute to franchising royalties fees, which would have totaled $71 thousand in the fourth quarter of 2023.
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.
Gross profit slightly decreased by $22 thousand, or 7%, due to new initiatives of marketing the coaching programs. Property Management Costs related to property management services increased $1.596 million, or 21%, in the year ended December 31, 2023 against the comparable prior year period. The increase in property management costs were primarily related to the increase in properties under management.
Gross profit decreased by $40 thousand, or 13.5%, due to new initiatives to drive recruiting which impacted coaching programs. Property Management 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 gross margin on the six acquisitions was lower than our historical results, which reduced our gross margin to 8.2% compared to our 2022 gross margin of 9.0%. Franchising Services The Company uses external software that supports the Company’s franchises, which is directly used to manage real estate transactions that generates revenue.
Franchising Services 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 the foreseeable future.
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.
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.
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. 43 Key Factors Affecting our Performance As a result of a number of factors, our historical results of operations may not be comparable to our results of operations in future periods, and our results of operations may not be directly comparable from period to period.
We are currently in the process of developing and deploying our own proprietary technology which will further decrease our overall expenses as we eliminate the need for outside technology services. 36 A significant driver of our past growth, and we believe, our future growth is our ability to create revenue by referring or requiring our agents and our franchisees’ agents use of business services that we provide.
We are currently in the process of developing and deploying our own proprietary technology which will further decrease our overall expenses as we eliminate the need for outside technology services.
Liquidity and Capital Resources On December 31, 2023 and 2022 we had cash of $0.96 million and $0.12 million, respectively, on hand. 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 will be required to raise additional capital to service debt issued in the first half of 2025 and to fund ongoing operations. 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 will be required to raise additional capital to service the two promissory notes issued in the first half of 2024, to repay the principal balance of each of the notes, and to fund ongoing operations. We have incurred recurring net losses, and our operations have not provided net positive cash flows.
We will be required to raise additional capital to service outstanding notes and fund ongoing operations. 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.
(formerly, La Rosa Realty Lake Nona Inc.), Horeb Kissimmee Realty, LLC, La Rosa CW Properties, LLC, La Rosa Realty Premier, LLC, La Rosa Realty Orlando, LLC, La Rosa Realty North Florida LLC, La Rosa Realty Winter Garden LLC, La Rose Realty Georgia LLC, and La Rosa Realty California, for a total consideration of $6,351,105, including $565,000 in cash from the proceeds from our IPO, with the remainder in Common Stock. 37 Description of Our Revenues 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.
Description of Our Revenues 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.
Seasonality Our business is affected by the seasons and weather. The spring and summer seasons, when school is out, have typically resulted in higher sales volumes compared to fall and winter seasons. With the slowdown in the later months, we have experienced slower listing activity, fewer transaction closings and lower revenues and have seen more agent turnover as well.
Set forth below is a brief discussion of the key factors impacting our results of operations. Seasonality Our business is affected by the seasons and weather. The spring and summer seasons, when school is out, have typically resulted in higher sales volumes compared to fall and winter seasons.
Franchising Services Franchising services revenue decreased $151 thousand, or 15%, in the year ended December 31, 2023 against the comparable prior year period.
Also, we received a full year of revenue from the increased transaction fee, monthly agent fee, and annual fee effective September 1, 2023. Franchising Services Franchising services revenue decreased $554 thousand, or 63%, in the year ended December 31, 2024 against the comparable prior year period.
Results of Operations Revenue Year Ended December 31, Change 2023 2022 $ % Real Estate Brokerage Services (Residential) $ 20,450,348 $ 16,413,289 $ 4,037,059 25 % Franchising Services 883,606 1,034,108 (150,502 ) (15 )% Coaching Services 628,846 623,934 4,912 1 % Property Management 9,680,688 8,030,299 1,650,389 21 % Real Estate Brokerage Services (Commercial) 115,916 102,291 13,625 13 % Total Revenue $ 31,759,404 $ 26,203,921 $ 5,555,483 21 % Real Estate Brokerage Services (Residential) Residential real estate services revenue increased $4.037 million, or 25%, in the year ended December 31, 2023 against the comparable prior year period.
Results of Operations Revenue Year Ended December 31, Change 2024 2023 $ % Real Estate Brokerage Services (Residential) $ 57,024,911 $ 20,450,348 $ 36,574,563 179 % Franchising Services 329,069 883,606 (554,537 ) -63 % Coaching Services 568,516 628,846 (60,330 ) -10 % Property Management 11,115,368 9,680,688 1,434,680 15 % Real Estate Brokerage Services (Commercial) 327,912 115,916 211,996 183 % Title Settlement and Insurance 83,010 - 83,010 N/A Total Revenue $ 69,448,786 $ 31,759,404 $ 37,689,382 119 % Real Estate Brokerage Services (Residential) 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 $4.233 million of cost of revenue from the six acquisitions completed in the fourth quarter of fiscal year 2023, offset by a decrease in total transaction volume. The gross profit increased $316 thousand, or 13%, from 2022 to 2023 primarily attributable to the gross profit from acquisitions.
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 margin is consistent from 2022 to 2023. 40 Selling, General and Administrative Expense Year Ended December 31, Change 2023 2022 $ % Sales and Marketing $ 359,717 $ 415,770 $ (56,053 ) (13 )% Payroll and benefits 2,436,888 2,043,268 393,620 19 % Rent and other 347,476 243,087 104,389 42 % Professional fees 260,106 748,371 (488,265 ) (65 )% Office 118,296 149,841 (31,545 ) (21 )% Technology 216,679 469,388 (252,709 ) (54 )% Insurance, training and other 427,904 229,901 198,003 86 % Public company costs 592,857 — 592,857 NM Amortization and deprecation 73,134 — 73,134 NM Total SG&A Expenses $ 4,833,057 $ 4,299,626 $ 533,431 12 % NM: Not Meaningful Selling, general and administrative costs increased $533 thousand, or 12%, in the year ended December 31, 2023 against the comparable prior year period.
The gross margin is consistent from 2023 to 2024. 46 Selling, General and Administrative Expense Year Ended December 31, Change 2024 2023 $ % Sales and Marketing $ 1,007,077 $ 359,717 $ 647,360 180 % Payroll and benefits 4,339,402 2,436,888 1,902,514 78 % Rent and other 1,070,708 346,281 724,427 209 % Professional fees 1,594,262 260,105 1,334,157 513 % Office 384,219 118,296 265,923 225 % Technology 372,010 216,679 155,331 72 % Insurance, training and other 614,145 427,904 186,241 44 % Public company costs 1,231,871 592,857 639,014 108 % Amortization and depreciation 1,018,934 74,330 944,604 1271 % Total SG&A Expenses $ 11,632,628 $ 4,833,057 $ 6,799,571 12 % NM: Not Meaningful Selling, general and administrative costs increased $6.8 million, or 12%, in the year ended December 31, 2024 against the comparable prior year period.
Consequently, housing demand is softening, prices are rising, consumer sentiment has weakened and home sales are declining. In 2023, the existing home sales market declined 18.7% compared to 2022, the slowest year for US home sales in nearly 30 years, according to the National Association of Realtors.
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.
Material Cash Requirements from Known Contractual and Other Obligations The following table summarizes our contractual obligations as of December 31, 2023 and as for the periods thereafter: Payments Due By Period Contractual Obligation Total Less than 1 year 1-3 years 3-5 years After 5 years Notes payable $ 619,527 $ 4,400 $ 8,800 $ 8,800 $ 597,527 Interest payments on notes payable 592,416 23,232 46,464 46,464 476,256 Advances on future receipts 84,463 84,463 Undiscounted lease obligations 749,573 366,583 302,116 80,874 Accrued acquisition cash consideration 300,000 300,000 Total Contractual Obligations $ 2,345,979 $ 778,678 $ 357,380 $ 136,138 $ 1,073,783 We intend to fund our contractual obligations with cash on hand, working capital and the debt raises on February 20, 2024 and April 1, 2024.
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders. 50 Material Cash Requirements from Known Contractual and Other Obligations The following table summarizes our contractual obligations as of December 31, 2024 and as for the periods thereafter: Payments Due By Period Contractual Obligation Total Less than 1 year 1-3 years 3-5 years After 5 years Notes payable $ 3,662,735 $ 2,187,673 $ 297,714 $ 297,714 $ 879,634 Interest payments on notes payable 595,009 24,286 48,572 48,572 473,579 Advances on future receipts 618,681 618,681 - - - Undiscounted lease obligations 1,144,550 551,173 593,377 - - Accrued acquisition cash consideration 411,404 381,404 30,000 - - Total Contractual Obligations $ 6,432,379 $ 3,763,217 $ 969,663 $ 346,286 $ 1,353,213 We intend to fund our contractual obligations with cash on hand, working capital and the debt raises obtained in 2024 and February 2025.
Removed
On October 12, 2023, we consummated our IPO pursuant to a registration statement on Form S-1 (File No: 333-264372), which was declared effective by the SEC on October 4, 2023, and we became an Exchange Act reporting company pursuant to a Form 8-A, as amended (File No. 001-41588) on October 4, 2023.
Added
A significant driver of our past growth, and we believe, our future growth is our ability to create revenue by requiring our agents and our franchisees’ agents to use business services that we provide.
Removed
On the IPO, we sold 1,000,000 shares of our Common Stock, par value $0.0001, at a price to the public of $5.00 per share, resulting in gross proceeds of $5,000,000. We received net proceeds of $4,360,000 after underwriter discounts, commissions, and expenses.
Added
We continue to evaluate opportunities to drive our near-term and long-term growth. 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.
Removed
We used the proceeds to repay existing debt and accrued interest of approximately $375,000, related party debt of approximately $150,000, existing accounts payable of $1,000,000, and to fund certain acquisitions, noted below. The remaining funds will be used for general corporate purposes, including continuing to develop propriety technology and to consider accretive acquisitions.
Added
(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.
Removed
As disclosed by the Company in the current reports on Form 8-K filed with the SEC on October 13, 2023, on October 19, 2023, on December 18, 2023, on December 27, 2023, January 4, 2024, February 23, 2024, March 13, 2024, and March 21, 2024 we acquired controlling interests in 9 of our franchisees: Nona Legacy Powered By La Rosa Realty, Inc.
Added
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.
Removed
Key Factors Affecting our Performance As a result of a number of factors, our historical results of operations may not be comparable to our results of operations in future periods, and our results of operations may not be directly comparable from period to period. Set forth below is a brief discussion of the key factors impacting our results of operations.
Added
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. In December 2024, the Company opened its first office and wholly owned subsidiary in North Carolina, La Rosa Realty NC LLC.
Removed
Bad weather or natural disasters also negatively impact listings and sales which reduces our operating income, net income, operating margins and cash flow. While this pattern is fairly predictable, there can be no assurance that it will continue.
Added
Most notably, home sellers will no longer be required to pay buyer agent commissions which will result in lower buyer agent compensation.
Removed
This fluctuation may make it difficult to compare or analyze our financial performance effectively across successive quarters. 38 Inflation and Market Interest Rates The U.S. Federal Reserve continues to take action intended to address sharp increases in inflation.
Added
With the slowdown in the later months, we have experienced slower listing activity, fewer transaction closings and lower revenues and have seen more agent turnover as well. Bad weather or natural disasters also negatively impact listings and sales which reduces our operating income, net income, operating margins and cash flow.
Removed
The Federal Reserve Board increased the federal funds rate to a range of 525 to 550 basis points as of March 20, 2024 from a range of 0 to 25 basis points as of the first quarter of 2022. These increases have impacted interest rates, which have significantly contributed to rising mortgage rates.
Added
Inflation and Market Interest Rates 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.
Removed
The increase was driven by $4.586 million of revenue from the six acquisitions completed in the fourth quarter of fiscal year 2023, offset by a 13% decrease in total transaction volume. We increased our transaction fee, monthly agent fee, and annual fee effective September 1, 2023, which, if volume remains consistent, real estate brokerage services revenue will increase in 2024.
Added
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.
Removed
Our remaining franchisees saw a similar decrease in volume related to the same market conditions in our residential services, which negatively impacted our franchising royalty fee revenue. 39 Coaching Services Coaching services revenue remained relatively constant in the year ended December 31, 2023 against the comparable prior year period.
Added
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.
Removed
We were able to maintain the same year-over-year coaching revenue while residential transactional volume decreased by emphasizing our coaching program, which increased our coaching volume, along with additional ancillary coaching services that started at the end of the June 2023.
Added
Coaching Services 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.
Removed
Property Management Property management revenue increased $1.650 million, or 21%, in the year ended December 31, 2023 against the comparable prior year period primarily due to a significant increase in the number of properties under management along with a management fee price increase effective September 1, 2023.
Added
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%.
Removed
Sales and marketing costs decreased as the Company worked to improve the efficiency of its marketing spend.
Added
The increase in property management costs were primarily related to the increase in properties under management.
Removed
Payroll and benefits increased $394 thousand, or 19%, in the year ended December 31, 2023 against the comparable prior year period primarily due to changes in the executive management team at the end of 2022, additional payroll of $177 thousand due to the six acquisitions completed in the fourth quarter of 2023, the imputed bonus award to the CEO to extinguish a related party receivable in the amount of $45 thousand, and the employer portion of payroll tax withholding of approximately $36 thousand for the employees who had their restricted stock units vest upon the Company’s IPO.
Added
Sales and marketing costs increased as the Company worked to expand and grow the business. 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.
Removed
Rent and occupancy increased as the Company leases its corporate office from an entity owned by the chief executive officer. The rent expense for 2023 was $135 thousand. During 2022, no rent expense was charged to the Company for its corporate office.
Added
In addition, headcount increases to facilitate growth and replace 3 rd party costs. 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.
Removed
Professional fees decreased $488 thousand, or 65%, in the year ended December 31, 2023 against the comparable prior year period primarily due to a reclass in 2023 of accrued director fees through September 30, 2023 of $346 thousand to stock-based compensation, as the directors accepted stock options in lieu of cash payments.

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