Note 10 — Stockholders’ Equity

The Company is authorized to issue two classes of stock consisting of 2,000,000,000 shares of Common Stock, $0.0001 par value per share, and 50,000,000 shares of preferred stock, $0.0001 par value per share. On July 22, 2021, the Company issued 750 shares of Common Stock and 2,000 shares of Series X Super Voting Preferred Stock to Mr. La Rosa as compensation for services and the founding of the Company. 

Equity Purchase Facility Agreement

On August 4, 2025, the Company and an institutional investor (the “Investor”) entered into an Equity Purchase Facility Agreement (the “EPFA”), pursuant to which the Company has the right to issue and sell to the Investor up to $150 million (subsequently amended to $1 billion on September 18, 2025) in newly issued shares of the Company’s common stock (the “Commitment Amount”). The term of the facility provided under the EPFA expires on the earlier to occur of (i) the first day of the next month following the 36-month anniversary of the first trading date after the Agreement Date and (ii) the date on which the Investor shall have made payment of advances pursuant to the EPFA for common shares equal to the Commitment Amount; provided that the Company may terminate the EPFA effective upon five trading days’ prior written notice to the Investor (provided that there are no outstanding advance notices the common shares under which have yet to be issued).

On September 18, 2025, the Company and the Investor entered into the Amended and Restated Equity Purchase Facility Agreement in order to increase the Commitment Amount to $1 billion as described above. All other terms and provisions were substantially the same as the initial EPFA.

Under the terms of the EPFA, the Company has the right (but not the obligation) to request that the Investor purchase shares of the Company’s Common Stock, subject to certain conditions and limitations (an “Advance”). The purchase price of the shares to be sold under an Advance is 100% of the Market Price, which is generally defined as the lower of (i) the lowest price of the Common Stock traded during the relevant pricing period and (ii) the lowest daily (or hourly) VWAP during the relevant pricing period. In the event the bid price of the common stock is at or below $0.10 per share, the Investor will have the right to consent to any Advance. Any purchase under an Advance would be subject to certain limitations, including that the Investor shall not purchase any shares of Common Stock that would result in the Investor beneficially owning more than 4.99% of the outstanding common shares or voting power of the Company (the Investor can request to increase this limit to 9.99%). Additionally, any purchase under an Advance would also be subject to a 19.99% limit based on the outstanding shares of common stock at the issuance date, prior to the receipt of shareholder approval.

The EPFA was determined to represent a combination of a purchased put option on the Company’s common stock (prior to an Advance, the “EPFA Option”) as well a forward contract to deliver the Company’s common stock (after an Advance, but prior to delivery of the shares). The EPFA Option was determined to be a freestanding financial instrument which did not meet the criteria to be accounted for as a derivative instrument or to be recognized within equity. Pursuant to ASC 815 Derivatives and Hedging (“ASC 815”), the Company will therefore recognize the EPFA Option as an asset or liability, measured at fair value at the date of issuance and at each reporting period, with changes in fair value recognized in earnings. The EPFA Option was determined to have a fair value of $0 on the date of issuance as well as December 31, 2025. In addition, as the EPFA Option did not meet the requirements for equity classification, the Company expensed the issuance costs incurred in association with the EPFA in the periods in which they were incurred.

Second Amended 2022 Plan

On July 9, 2025, our Compensation Committee, our Board of Directors, and the stockholders approved the Second Amended 2022 Plan. Pursuant to the Second Amended 2022 Plan (i) the total number of shares of common stock subject to the plan was revised from 1,563 shares (as adjusted the effects of stock splits effected by the Company) to 3,750 shares to ensure sufficient shares are available for future grants, and (ii) the term “Consultant” was clarified to include not only a person, including an advisor, engaged by the Company, its subsidiary or affiliate to render services to the Company or its subsidiary, but also a legal entity wholly-owned by such person. The Second Amended 2022 Plan replaced the Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan adopted on November 19, 2024 by the stockholders of the Company, in its entirety. On July 11, 2025, the Company filed a preliminary information statement on Schedule 14C with the SEC notifying stockholders of such written consent. On July 21, 2025, the Company filed a definitive preliminary statement on Schedule 14C with the SEC and commenced mailing the definitive information statement to stockholders of record as of the close of business on July 9, 2025. Such stockholders’ approval and the Second Amended 2022 Plan became effective on August 11, 2025. 

Reverse Stock Split

On July 2, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”), with the Secretary of State of Nevada to effect an 1-for-80 reverse stock split of the shares of the Company’s common stock, issued and outstanding, effective as of 12:01 a.m. EST on July 7, 2025, (the “Reverse Stock Split”).

As a result of the Reverse Stock Split, every eighty shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock. No fractional shares were issued as a result of the Reverse Stock Split, fractional entitlements were rounded up to the next whole number. The Reverse Stock Split reduced the number of shares of common stock outstanding from 58,323,795 shares to 7,290 shares. The number of authorized shares of common stock under the Articles of Incorporation remained unchanged at 2,000,000,000 shares and the par value of the common stock remained $0.0001 per share. The split also brought the Company back into a “Controlled Company” Status with the CEO owning more than 50% of the voting power.

On November 10, 2025, the Company’s stockholders holding a majority of the voting power of the Company by a written consent approved the amendment to the Company’s Amended and Restated Articles of Incorporation, as amended, to effect a reverse stock split of the Company’s Common Stock at a ratio in the range of 1-for-5 to 1-for-100, with such ratio to be determined by the Board (“Stockholders Approval”). Such resolution became effective on December 25, 2025, or twenty (20) days after the Company filed with the SEC and mailed to its stockholders respective Information Statement on Schedule 14C on or approximately December 4, 2025. Following such stockholders’ approval, the Company effected a 1-for-10 reverse stock split of the Common Stock, issued and outstanding, effective as of 12:01 a.m. (New York time) on January 26, 2026 (“January 2026 Reverse Stock Split”). As a result of the January 2026 Reverse Stock Split, every ten (10) shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share of Common Stock.

Following the Stockholders Approval described above, the Company effected a 1-for-10 reverse stock split of the Common Stock, issued and outstanding, effective as of 12:01 a.m. (New York time) on April 20, 2026 (“April 2026 Reverse Stock Split”). As a result of the April 2026 Reverse Stock Split, every ten (10) shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share of Common Stock.

As a result, all share information in the accompanying financial statements has been adjusted as if the reverse stock splits happened on the earliest date presented. The par value of the Common Stock was not impacted by the split.

Series B Preferred Stock

On June 18, 2025, with the prior approval by the Company’s Board of Directors, the Company and the Investor entered into, and closed the transactions contemplated by, that certain Amendment and Exchange Agreement (the “Exchange Agreement”) pursuant to which (among other things) the Investor surrendered and exchanged all of its Incremental Warrants in exchange for (the “Exchange”) 6,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”). On the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Nevada.

Pursuant to the terms of the Exchange Agreement, conversion of the Series B Preferred Stock into shares of common stock of the Company in excess of 19.99% of the Company’s outstanding shares of common stock is conditional upon obtaining the approval of the Company’s shareholders in accordance with the rules and regulations of the Nasdaq Capital Market (“Shareholder Approval”). The Company agreed to convene a meeting of stockholders to obtain Shareholder Approval within 120 days after the date of the Exchange Agreement. The Company obtained the Shareholder Approval effective as of August 11, 2025.

In connection with the issuance of the Series B Preferred Stock, the Company incurred direct and incremental expenses of $43,000 comprised of legal fees, which reduced the carrying value of the Preferred Stock.

Additional Common Stock Issuances

On January 17, 2025, the Company issued 50 shares of common stock as an exercise of a prefunded warrant which was part of the securities purchase agreement with an institutional accredited investor, Abri Advisors, Ltd., a corporation organized under the laws of Bermuda, agreed to on November 1, 2024.

On February 5, 2025, the Company issued the CEO an aggregate of 367 unregistered shares of common stock of the Company, par value $0.0001 per share (the “Shares”) as a compensation for the services rendered pursuant to his employment agreement with the Company. The Company issued the Shares to the CEO in reliance on exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), available to the Company under Section 4(a)(2) of the Securities Act due to the fact that the issuance did not involve a public offering of securities. The stock compensation expense for the year ended December 31, 2025 was $1,160,381.

On February 20, 2025, the Company issued shares pursuant a consulting agreement entered into on January 1, 2025 in which the Company agreed to issue 216 shares of the Company’s common stock for services rendered. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted to $411,062.

On February 20 and 24, 2025, the Company entered into marketing agreements pursuant to which the Company agreed to issue 38 and 26 shares of the Company’s common stock, respectively, for services rendered. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $122,570.

On March 10, 2025, the Company issued 5 shares to team leaders pursuant to independent contractor agreements signed in 2024. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $8,036.

On March 10, 2025, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 31 shares of the Company’s common stock for services rendered. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted $46,925.

On April 21, 2025, the Company issued the CEO an aggregate of 413 unregistered shares of common stock of the Company, par value $0.0001 per share as compensation for the services rendered pursuant to his employment agreement with the Company. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted to $444,319.

On July 7, 2025, the Company issued 3 shares of common stock pursuant to a consulting agreement for services rendered. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $3,756.

On July 8, 2025, the Company issued the remaining amount of common stock of 3 shares, pursuant to the consulting agreement entered into on February 20, 2025. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted to $2,118.

On July 14, 2025, the Company entered into an exchange agreement with certain holder (the “Holder”) of a common stock purchase warrant to purchase 18,519 shares of common stock, at $13.50 per share, issued by the Company to the Holder on November 14, 2022. Pursuant to such exchange agreement, the Holder’s warrant was cancelled and in exchange, the Company issued an aggregate of 750 shares of common stock to the Holder. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted to $559,125.

On July 14, 2025, the Company entered into a consulting agreement pursuant to which the Company agreed to issue 500 shares of the Company’s common stock for services rendered. The stock compensation expense for the year ended December 31, 2025 related to this transaction amounted to $372,750.

On July 17, 2025, the Company entered into an exchange agreement with Joseph La Rosa, its Chief Executive Officer and holder of a common stock purchase warrant to purchase 18,519 shares of common stock, at $13.50 per share, issued by the Company to Mr. La Rosa on December 2, 2022. Pursuant to such exchange agreement, Mr. La Rosa’s warrant was cancelled and in exchange, the Company issued Mr. La Rosa an aggregate of 750 shares of common stock. The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $573,000.

On August 11, 2025, the Company issued its directors, officers, certain employees an aggregate 1,011 unregistered shares of common stock pursuant to the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (“Second Amended 2022 Plan”). The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $511,116.

On August 28, 2025, the Company issued 427 registered shares of common stock pursuant to the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (“Second Amended 2022 Plan”). The stock compensation expense for the year ended December 31, 2025, related to this transaction amounted to $236,575.

On September 26, 2025, the Company issued 750 registered shares of common stock to Ross Carmel, as the designee of its legal counsel, Sichenzia Ross Ference Carmel LLP, in exchange for amounts payable for services rendered to the Company. The shares were issued to Mr. Carmel pursuant to Second Amended 2022 Plan. The value of this conversion transaction amounted to $502,875, of which $348,319 was used to offset accounts payable, while the remaining $154,557 is recorded as stock based compensation issued for consulting work.

For the year ended December 31, 2025, the holder of our Senior Secured promissory notes converted 8,215 of the Company’s common stock as part of their First warrants and principal and interest conversions.

For the year ended December 31, 2025, the Company utilized their ATM and sold a total of 3,871 shares of the Company’s common stock for gross proceeds of $ 7,781,297 and net proceeds of $7,497,266.

For the year ended December 31, 2025, the Company issued 44 shares of the Company’s common stock pursuant to the Restricted Stock Unit (RSU) vesting with a value of $173,861.

On February 20, 2024, April 1, 2024, and July 15, 2024, the Company entered into securities purchase agreements with the same accredited investor for the issuance of senior secured promissory notes. As part of these transactions, the Company issued 8 shares, 6 shares, and 4 shares respectively, of the Company’s common stock as commitment fees. The value of the shares was allocated to the debt discount.

In February 2024, the Company executed a service agreement with a service provider for efforts to initiate the Company’s brokerage business in Texas. The Company issued a single share of the Company’s unregistered, restricted common stock to the service provider, which were issued on February 22, 2024 for a share value and stock-based compensation expense amount of $6,589.

In September 2023, the Company executed a consulting agreement with a service provider to supply certain investor relations services post-IPO. The Company extended the agreement in March 2024 and issued 28 shares of the Company’s unregistered, restricted common stock, which were issued on March 13, 2024 and valued at $14,142.86 per share resulting in $396,000 of stock-based compensation expense.

In May 2024, the Company executed three consulting agreements with service providers to supply certain investor relations services post-IPO. As part of these agreements, the Company issued an aggregate of 33 shares of the Company’s unregistered, restricted common stock, which were issued on May 17, 2024 and valued at $9,454.54 per share resulting in $312,000 of stock-based compensation expense.

During 2024, $891,064 worth of principal and interest related to the first and second senior secured promissory notes were paid down through the issuance of 117 restricted common stock. Additionally, $150,000 worth of accounts payable was paid down through the issuance of 29 shares of restricted common stock.

During 2024, the Company issued 95 shares of restricted common stock and 64 in prefunded warrants in order to raise capital. The pre-funded warrants were exercised by quarter end. The restricted shares were granted at $4,720.00 per share and the pre-funded warrants were issued at $5,200 per share.

In September 2024, the Company executed a consulting agreement to receive certain investor relations services. As part of the agreement, the Company issued 29 shares of unregistered, restricted commons stock, which were issued on September 23, 2024 and valued at $5,200.00 per share.

During 2024, the Company purchased seven entities. A portion of the purchase price for all of the entities were settled by the issuance of an aggregate of 202 unregistered, restricted shares of the Company’s common stock. See Note 5— Business Combinations for additional information.