v3.26.1
Business Combinations
 12 Months Ended
Dec. 31, 2025
Business Combinations [Abstract]  
Business Combinations

Note 5 — Business Combinations

 

During 2024, the Company acquired majority ownership of the following franchisees and affiliates of the Company: La Rosa Realty Winter Garden LLC, Las Rosa Realty Georgia LLC, La Rosa Realty California, La Rosa Realty Lakeland LLC, La Rosa Realty Success LLC, BF Prime LLC, and La Rosa Realty Beaches LLC & La Rosa Realty Baxpi. All six franchises engage mostly in the residential real estate brokerage services to the public primarily through sales agents and also provide coaching and support services to agents on a fee basis. In addition, the company has acquired Nona Title Agency LLC (rebranded FPG Title).

 

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

 

The following table summarizes the purchase consideration and the purchase price allocation to the estimated fair values of the identifiable assets acquired and liabilities assumed for the eight acquisitions for the year ended December 31, 2024:

 

   Winter Garden   Georgia   California   Lakeland   Success   BF Prime   Nona Title   Beaches & Baxpi   Total 
Acquired ownership   100%   51%   51%   51%   51%   100%   100%   100%     
Acquisition date   2/21/2024    3/7/2024    3/15/2024    4/18/2024    5/25/2024    8/19/2024    8/21/2024    12/31/2024      
Common stock issued   37    35    1    64    7    5    58    153    360 
                                              
Cash consideration  $—   $—   $—   $50,000   $10,000   $5,890   $174,580   $100,000   $340,470 
Equity consideration   352,204    516,453    123,113    823,903    68,778    44,111    484,212    1,036,177    3,448,951 
Total purchase price  $352,204   $516,453   $123,113   $873,903   $78,778   $50,001   $658,792   $1,136,177   $3,789,421 
Noncontrolling interest   —    496,200    118,285    839,632    75,689    —    —    —    1,529,806 
Acquisition date fair value  $352,204   $1,012,653   $241,398   $1,713,535   $154,467   $50,001   $658,792   $1,136,177   $5,319,227 
                                              
Purchase price allocation  $352,204   $1,012,653   $241,398   $1,713,535   $154,467   $50,001   $658,792   $1,136,177   $5,319,227 
Less fair value of net assets acquired:                                             
Cash   17,623    79,553    1,436    32,935    171    4,542    129,157    11,461    276,878 
Working capital (less cash)   (17,148)   (54,991)   (45,027)   (59,325)   (21,323)   (3,817)   (128,306)   (24,562)   (354,499)
Intangible assets   171,767    446,657    111,202    815,411    104,798    9,632    103,074    451,143    2,213,684 
Long-term assets   —    91,118    106,542    129,521    22,697    14,545    —    —    364,423 
Long-term liabilities   —    (98,641)   (69,449)   (94,591)   (8,236)   (7,500)   —    —    (278,417)
Net assets acquired   172,242    463,696    104,704    823,951    98,107    17,402    103,925    438,042    2,222,069 
Goodwill  $179,962   $548,957   $136,694   $889,584   $56,360   $32,599   $554,867   $698,135   $3,097,158 

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

 

   Winter Garden   Georgia   California   Lakeland   Success   BF Prime   Nona Title   Beaches & Baxpi   Total 
Franchise agreement (10 to 11 years)  $146,990   $356,200   $92,367   $511,453   $48,302   $7,771   $-   $343,318   $1,506,401 
Agent relationships (8 to 11 years)   —    43,447    7,657    147,455    —    —    103,074    91,869    393,502 
Real estate listings (1 year)   22,239    37,310    10,417    129,847    55,228    1,526    —    9,390    265,957 
Non-compete agreements (4 years)   2,538    9,700    761    26,656    1,268    335    —    6,566    47,824 
Total identifiable intangible assets acquired  $171,767   $446,657   $111,202   $815,411   $104,798   $9,632   $103,074   $451,143   $2,213,684 

 

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

 

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

 

   Year ended
December 31,
2024		 
Revenue      $9,872,020 
Cost of revenue    $8,944,685 
Gross profit    $927,517 
Loss before provision for income taxes    $150,410 
Weighted average shares used in computing net loss per share of common stock  $2,528 

 

The following unaudited pro forma financial information presents the combined operating results of the Company, as if each acquisition had occurred as of January 1, 2024. The unaudited pro forma financial information includes the accounting effects of the business combinations, including adjustments to the amortization of intangible assets. The unaudited pro forma information does not necessarily reflect the actual results that would have been achieved, nor is it necessarily indicative of the Company’s future consolidated results.

The unaudited pro forma financial information is presented in the table below for the year ended December 31, 2024:

 

   Year ended
December 31,
2024		 
     
Revenue  $71,938,934 
Cost of revenue  $65,484,111 
Gross profit  $6,454,823 
      
Loss before provision for income taxes   (14,499,740)
Loss per share of common stock attributable to common stockholders, basic and diluted  $(0.79)
Weighted average shares used in computing net loss per share of common stock attributable to common stockholders   19,976,390