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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2025
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ until ______
Commission File Number: 001-41588
LA ROSA HOLDINGS CORP.
(Exact name of Registrant as specified in its charter)
| Nevada | 87-1641189 | |
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
| 1420 Celebration Blvd., 2nd floor Celebration, Florida | 34747 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (321) 250-1799
Securities registered under Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||
| Common Stock | LRHC | The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
| Yes ☐ No ☒ |
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
| Yes ☐ No ☒ |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| Yes ☐ No ☒ |
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
| Yes ☒ No ☐ |
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Yes ☐ No ☒ |
The aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant on June 30, 2025 (the last business day of the Registrant’s most recently completed second quarter) was approximately $7,610,490, which is based on a closing price of $1,044.00 per share of common stock on such date (as adjusted for 1-for-80 reverse stock split effected on July 7, 2025, 1-for-10 reverse stock splits effected on January 26, 2026 and April 20, 2026).
As of June 3, 2026, the Registrant had 1,616,081 shares of common stock, par value $0.0001 per share, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
In this Annual Report on Form 10-K, unless otherwise stated or as the context otherwise requires, references to “La Rosa Holdings Corp.,” the “Company,” the “Issuer,” the “Registrant,” the “LRHC,” “La Rosa,” “we,” “us,” “our” and similar references refer to La Rosa Holdings Corp., a Nevada corporation. Our logo and other trademarks or service marks of the Company appearing in this Annual Report on Form 10-K are the property of La Rosa Holdings Corp. or its subsidiaries. This Annual Report on Form 10-K also contains registered marks, trademarks, and trade names of other companies. All other trademarks, registered marks, and trade names appearing in this Annual Report on Form 10-K are the property of their respective holders.
Unless noted otherwise, all share and the price per share information for all periods presented in this Annual Report on Form 10-K have been retroactively adjusted for the reverse stock split of our issued and outstanding common stock, $0.0001 par value per share (the “Common Stock”) at a ratio of 1-for-80, which became effective as of July 7, 2025, and for the reverse stock splits of our issued and outstanding Common Stock at a ratio of 1-for-10, which became effective as of January 26, 2026 and on April 20, 2026.
EXPLANATORY NOTE
We are filing this comprehensive Annual Report on Form 10-K for the fiscal years ended December 31, 2025 and 2024 (“Comprehensive Form 10-K”). This Comprehensive Form 10-K contains our audited financial statements for the fiscal year ended December 31, 2025, as well as restatements of the following previously filed financial statements: (i) audited consolidated financial statements as of and for the fiscal year ended December 31, 2024, originally included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 10-K”), (ii) unaudited condensed consolidated financial statements for the quarterly and year-to-date periods ended March 31, 2024 through September 30, 2024, originally included in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2024, June 30, 2024 and September 30, 2024 (collectively, the “2024 Form 10-Qs”) and (iii) unaudited condensed consolidated financial statements for the quarterly and year-to-date periods ended March 31, 2025 through September 30, 2025, originally included in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2025, June 30, 2025 and September 30, 2025 (collectively, the “2025 Form 10-Qs”) and together with the 2024 Form 10-Qs and the 2024 10-K, the “Prior Financial Statements”.
Restatement Background
As previously disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 24, 2026 and amended in our Current Report on Form 8-K/A filed with the SEC on May 1, 2026, in connection with the preparation of our consolidated financial statements for the fiscal year ended December 31, 2025, the Audit Committee (the “Audit Committee”) of our Board of Directors (the “Board” or the “Board of Directors”), concluded that corrections are required to revenues and cost of revenue recognition in the Prior Financial Statements, and such financial statements should be restated accordingly.
During the preparation of the 2025 consolidated financial statements, the Company identified that certain property management fee revenue, inclusive of tenant rent revenues, were incorrectly recorded on a gross basis for the year ended December 31, 2024. Upon review of the underlying contractual arrangements and evaluation under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company concluded that La Rosa Property Management, LLC (“LRPM”) acted as an agent rather than as a principal for these arrangements. Accordingly, revenue should be presented on a net basis reflecting only the fee retained by LRPM. Originally reported gross property management fee revenue of $11.1 million was adjusted to approximately $349 thousand for the year ended December 31, 2024, with a corresponding reduction to cost of sales. The adjustment had no impact on gross profit, operating income, net income, equity, or cash flows, but significantly impacted the presentation of top-line revenue.
Restatement Overview
Other sections impacted by the restatement of the Prior Financial Statements are:
| ● | Part I, Item 1A. Risk Factors | |
| ● | Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| ● | Part II, Item 8. Financial Statements and Supplementary Data | |
| ● | Part II, Item 9A. Controls and Procedures |
We have not filed, and do not intend to file, amendments to the previously filed 2025 Form 10-Qs, or 2024 Form 10-Qs, nor the previously filed 2024 10-K. Accordingly, investors should rely only on the financial information and other disclosures regarding the restated periods in this Comprehensive Form 10-K or in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications relating to these periods.
Refer to Note 2 – Restatement of Previously Issued Consolidated Financial Statements and Note 3 – Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements in the accompanying consolidated financial statements included in Part II, Item 8 for additional information.
Internal Control Considerations
In connection with the adjustment to Prior Financial Statements, the Company has evaluated its disclosure controls and procedures and internal control over financial reporting as of December 31, 2025. As a result of that assessment, management has concluded that a material weakness existed as of December 31, 2025 as follows:
The Company did not maintain effective controls over the revenue recognition of certain property management fees. Upon review of the underlying contractual arrangements and evaluation under ASC 606, Revenue from Contracts with Customers, the Company concluded that it acted as an agent rather than as a principal for these arrangements. This material weakness resulted in the restatement of the Company’s consolidated financial statements for the year ended December 31, 2024, as well as its unaudited condensed consolidated financial statements for each quarterly and year-to-date period included in its Quarterly Reports on Form 10-Q for the periods ended March 31, 2024, June 30, 2024, September 30, 2024, March 31, 2025, June 30, 2025 and September 30, 2025.
For a discussion of management’s consideration of disclosure controls and procedures, internal controls over financial reporting, and the material weaknesses identified, see Part II, Item 9A.
Cautionary Note Regarding Forward-Looking Statements and Industry Data
This Comprehensive Form 10-K, in particular, Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements represent our expectations, beliefs, intentions, or strategies concerning future events, including, but not limited to, any statements regarding our assumptions about financial performance; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our results of operations, financial condition or cash flows; timing and the likelihood of success of various activities; anticipated problems and our plans for future operations; projected costs, prospects, plans, and objectives of our management; and the economy in general or the future of the industry in which we operate, all of which were subject to various risks and uncertainties.
When used in this Comprehensive Form 10-K and other reports, statements, and information we have filed with the SEC, in our press releases, presentations to securities analysts or investors, in oral statements made by or with the approval of an executive officer, the words or phrases “believes,” “may,” “will,” “expects,” “should,” “continue,” “anticipates,” “intends,” “aims,” “will likely result,” “estimates,” “projects” or similar expressions and variations thereof are intended to identify such forward-looking statements. However, any statements contained in this Comprehensive Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. These statements are only predictions. All forward-looking statements included in this Comprehensive Form 10-K are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Any or all of our forward-looking statements in this document may turn out to be wrong. Actual events or results may differ materially. Our forward-looking statements can be affected by inaccurate assumptions we might make or by known or unknown risks, uncertainties, and other factors.
This Comprehensive Form 10-K also contains estimates, projections, and other information concerning our industry, our business, and particular markets, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, general publications, government data, and similar sources.
SUMMARY OF RISK FACTORS
Our business is subject to numerous risks and uncertainties, any one of which could materially adversely affect our results of operations, financial condition or business. The following is a summary of the principal risks described below in Part I, Item 1A “Risk Factors” in this Comprehensive Form 10-K. We believe that the risks described in the “Risk Factors” section are material to our stockholders and investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and the other information contained in this Comprehensive Form 10-K.
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.” |
| ● | We have a limited operating history with financial results that may not be indicative of future performance, and our revenue growth rate is likely to slow down as our business matures and may slow down due to the recent antitrust litigation. |
| ● | Impairment of goodwill and intangible assets may adversely impact future results of operations. |
| ● | If we fail to raise additional capital, our ability to implement our business model and strategy could be compromised. |
| ● | The residential real estate market is cyclical, and we can be negatively impacted by downturns in this market and by general economic conditions. |
| ● | The lack of financing for homebuyers in the U.S. residential real estate market at favorable rates and on favorable terms has had a material adverse effect on our financial performance and results of operations. |
| ● | 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 decrease in home sales in the future will have an adverse effect on 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. |
| ● | We might not be able to attract and retain additional qualified agents and other personnel. |
| ● | A significant adoption by consumers of alternatives to full-service agents or loan originators could have a material adverse effect on our business, prospects and results of operations. |
| ● | Our financial results are affected directly by the operating results of franchisees and agents, over whom we do not have direct control. |
| ● | We are dependent upon the truthfulness of our franchisees to provide accurate reports and accounting to us. |
| ● | Failing to develop and maintain a positive relationship with our franchisees, agents and loan originators could compromise our ability to maintain or expand or franchisee network. |
| ● | Our franchise model can be subject to particular litigation risks. |
| ● | We depend substantially on our Founder, Joseph 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. |
| ● | Concentration of ownership of our voting stock by Mr. La Rosa will prevent new investors from influencing significant corporate decisions. |
| ● | Mr. La Rosa will control all matters that come before the stockholders for a vote and thus we are a “controlled company” within the meaning of the Nasdaq listing requirements and, as a result, the Company will qualify for exemptions from certain corporate governance requirements. If we take advantage of such exemptions, you will not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements. |
| ● | We are subject to certain risks related to litigation filed by or against us, and adverse results may harm our business and financial condition. |
| ● | Adverse outcomes in litigation and regulatory actions against the NAR (as defined below), other real estate brokerage companies and agents in our industry could adversely impact our financial results. |
| ● | If we attempt to, or acquire other complementary businesses, we will face certain risks inherent with such activities. |
Risks Related to Cryptocurrencies and Digital Assets
| ● | The continuing development and acceptance of digital assets and distributed ledger technology are subject to a variety of risks. |
| ● | Digital assets represent a new and rapidly evolving industry, and the market price of our Common Stock may in the future be impacted by the acceptance of stablecoins and other digital assets. |
| ● | Due to a lack of familiarity and some negative publicity associated with digital asset trading platforms, existing and potential customers, counterparties and regulators may lose confidence in digital asset trading platforms. |
| ● | The foreign and U.S. tax treatment of transactions in digital assets is unclear. |
| ● | Blockchain networks, digital assets and the digital asset trading platforms on which these assets are traded are dependent on internet and other blockchain infrastructure, which are susceptible to system failures, security risks and rapid technological change. |
| ● | If we hold digital assets through custodial arrangements or otherwise rely on private keys in the future, the loss, theft, destruction, or compromise of such private keys could result in the loss of digital assets and other adverse consequences. |
Risks Associated with Our Capital Stock
| ● | 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. |
| ● | 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 our securities become subject to the penny stock rules, it would become more difficult to trade our shares. |
| ● | We may have violated Section 13(k) of the Exchange Act (implementing Section 402 of the Sarbanes-Oxley Act of 2002) and may be subject to sanctions as a result. |
| ● | 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. |
Risks Relating to the Restatement of the Prior Financial Statements
| ● | We have concluded that certain of our previously issued financial statements should not be relied upon and have restated certain of our previously issued financial statements which was time-consuming and expensive and could expose us to additional risks that could have a negative effect on us. |
| ● | The restatement of the Prior Financial Statements may lead to future stockholder litigation. |
| ● | 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. |
General Risks
| ● | If we fail to protect the privacy of employees, independent contractors, or consumers or personal information that they share with us, our reputation and business could be significantly harmed. |
| ● | Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business. |
| ● | Anti-takeover provisions in our amended and restated articles of incorporation and bylaws, as well as provisions in Nevada law, might discourage, delay or prevent a change of control of our Company or changes in our management and, therefore, depress the trading price of our securities. |
We discuss these and other risks and uncertainties in the Part I, Item 1A “Risk Factors” of this Comprehensive Form 10-K.
PART I
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. 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.
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. 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. We have 23 La Rosa Realty corporate real estate brokerage offices and branches located in Florida, California, Texas, Georgia, and Puerto Rico. The Company also has 5 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. We also have LR Realty Spain, which is a full-service brokerage office located primarily in Malaga, Spain. Additionally, the Company has a full-service escrow settlement and title company in Florida, and a company offering a commission advancement program exclusively for La Rosa agents.
Our real estate brokerage offices, both corporate and franchised, are staffed with 2,842 licensed real estate brokers and sales associates as of May 31, 2026.
Our franchised offices are currently:
| Name | Location | |
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. 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 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. 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. 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.
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. 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. 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. 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.
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. For example, all agents new to our Company are required to have a “coach” and to attend multi-day training sessions to learn the Company’s philosophy, technology and business practices. Concurrently, the agent works with their coach in obtaining listings, working with consumers and closing transactions. All of these activities are run through our La Rosa Coaching, LLC subsidiary that 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. 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.
On October 12, 2023, we consummated our initial public offering (the “IPO”). Since then, we acquired majority ownership of the following franchisees of the Company: Nona Legacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.), Horeb Kissimmee Realty, LLC, La Rosa Realty Georgia LLC, La Rosa Realty California, and La Rosa Realty Success LLC and 100% ownership of the following franchisees of the Company: La Rosa Realty Orlando, LLC, La Rosa Realty Premier, LLC, La Rosa CW Properties, LLC, La Rosa Realty North Florida LLC, La Rosa Realty Winter Garden LLC, BF Prime LLC, FPG Title Group, LLC (formerly, Nona Title Agency LLC), La Rosa Realty Lakeland LLC (DBA La Rosa Realty Prestige), La Rosa Realty Beaches LLC, and Baxpi Holdings LLC. In December 2023, we also formed our majority owned subsidiary La Rosa Realty Texas LLC. In December 2024, we opened our first office and wholly owned subsidiary in North Carolina, La Rosa Realty NC LLC. In January 2025, we formed LR Luxury, LLC, engaged mostly in the residential real estate brokerage business. In April 2025, we formed LR Agent Advance, LLC, offering a commission advancement program exclusively for La Rosa agents. In March 2025, we also formed LR Realty Spain, S.L., our wholly owned subsidiary in Spain.
During the fiscal year ended December 31, 2025, in an effort to simplify our corporate structure, we dissolved Baxpi Holdings LLC, which was non-operational, La Rosa Realty NC LLC, which was not profitable, and La Rosa Realty Success LLC, agents of which were moved to La Rosa CW Properties LLC. In February 2026, we also sold our majority interests in Horeb Kissimmee Realty, LLC to the minority member of that entity.
The following are selected developments in our business since the beginning of the fiscal year ended December 31, 2025:
| - | In July 2025, we entered into a strategic agreement with The Agency Dominican Republic (“TADR”), securing rights for its agents to act as co-brokers to market and sell units of the IBIS Romana Bayahibe (“IBIS”) project in Dominican Republic, and exclusive rights for any sales of IBIS in Puerto Rico. Located in Bayahibe, La Romana, Dominican Republic, IBIS is a luxury residential and resort-style real estate development company. As part of the agreement, we will participate in sales of IBIS in Dominican Republic and serve as the exclusive sales agent for any sales of IBIS in Puerto Rico. In connection with this agreement, we intend to provide targeted sales strategies to a high-potential Latin American and Caribbean buyer base. |
| - | In July 2025, the Company announced the launch of My Agent Account (“MAA”) Version 4.0, a major enhancement to the Company’s proprietary agent platform. The new version features a fully integrated Transaction Management module that is intended to deliver significant cost savings to the Company by reducing manual processes and eliminating reliance on third-party systems. MAA was designed to empower agents with a comprehensive suite of tools and resources. Serving as a centralized hub, it enables agents by streamlining daily operations, consolidating essential business tools, and reducing administrative workload. With the introduction of the new transaction module, the Company has significantly improved the platform’s ability to manage workflows. All La Rosa agents pay an annual subscription fee to have access to MAA. |
| - | In the last quarter of 2025, we also initiated a strategic repositioning toward expansion into the AI ecosystem, through strategic acquisitions, partnerships, and development of next-generation data center infrastructure for AI computing. The management of the Company is currently evaluating strategic opportunities and transactions aligned with its AI data center strategy. |
We intend to continue growing our business organically and through acquisition. It is management’s intention to consider additional acquisition and/or merger targets through the remainder of 2026. We cannot guarantee that the Company will actually enter into any binding agreements with any of those targets. If we do, we cannot assure you that the terms of such transactions will be substantially the same or better for the Company than those of completed acquisitions.
Recent Events and Financings
ATM Offering
On November 22, 2024, the Company entered into a sales agreement (“ATM Agreement”) with A.G.P./Alliance Global Partners, as sales agent (“AGP”), relating to the sale of Common Stock. During the year ended December 31, 2025, the Company issued an aggregate of 3,871 shares of Common Stock pursuant to such ATM Agreement for net proceeds of $7,496,361. The Company paid the sales agent compensation with respect to sale of such shares in the amount of $284,031.
Increase of the Authorized Stock
On February 4, 2025, the Board of Directors, and the stockholders holding a majority of the voting power of the Company, approved the Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation to increase the number of the Company’s authorized shares of Common Stock to 2,000,000,000 shares of Common Stock. Such an increase became effective on June 2, 2025.
February 2025 Financing and June 2025 Exchange Agreement
On February 4, 2025, the Company entered into a securities purchase agreement with an institutional investor (“2025 Investor”) pursuant to which it issued and sold to the 2025 Investor: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on the two-year anniversary of the Closing Date (the “Initial Note”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (Incremental Notes and together with the Initial Note, the “Notes”). The Company received gross proceeds of $4,963,750 in this financing and used them to pay-off certain indebtedness, pay certain outstanding fees and expenses, and general corporate purposes.
On June 18, 2025, with the prior approval by the Company’s Board of Directors, the Company and the 2025 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 2025 Investor surrendered and exchanged all of its Incremental Warrants in exchange for 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 respective Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada. On June 26, 2025, the Company and 2025 Investor signed Amendment No. 1 to the Initial Note to correct an administrative error in the definition of maturity date and alternate conversion price in the Initial Note. The 2025 Investor fully converted the Initial Note and the Company issued the 2025 Investor an aggregate of 8,965 shares of Common Stock upon such conversion, including 8,215 shares in 2025 and 750 shares in the first quarter of 2026.
Stock Repurchase Program
On April 23, 2025, the Board approved a new Share Repurchase Program, authorizing the Company to purchase up to an aggregate of $500,000 of the Company’s outstanding shares of Common Stock in the open market. The Company did not use this program, and it expired on December 31, 2025.
Change of Auditor
On November 1, 2024, CBIZ CPAs P.C. (“CBIZ CPAs”) acquired the attest business of Marcum. On April 29, 2025, the Company was notified by Marcum LLP (“Marcum”) that Marcum resigned as the Company’s independent registered accounting firm effective immediately, and the Company, with the approval of the Audit Committee accepted such resignation and engaged CBIZ CPAs to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025 to be effective immediately.
July 2025 Reverse Stock Split
On July 2, 2025, the Company effected a 1-for-80 reverse stock split of the Common Stock, issued and outstanding, effective as of 12:01 a.m. (New York time) on July 7, 2025 (“July 2025 Reverse Stock Split”). As a result of the 2025 Reverse Stock Split, every eighty (80) shares of issued and outstanding Common Stock were automatically combined into one (1) issued and outstanding share of Common Stock.
Second Amended and Restated 2022 La Rosa Holdings Corp. Equity Incentive Plan and Amendment thereto
On July 9, 2025, the Compensation Committee of our Board (the “Compensation Committee”), our Board of Directors, and the stockholders holding a majority of the voting power of the Company (by written consent in lieu of a stockholders’ meeting) approved the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (as amended, the “2022 Plan”), pursuant to which: (i) the total number of shares of Common Stock subject to the plan was revised from 1,563 shares to 3,750 shares to ensure sufficient shares are available for future grants, and (ii) the term “Consultant” was clarified. The plan became effective upon effectiveness of its stockholders’ approval on August 11, 2025.
On December 11, 2025, the stockholders of the Company holding a majority of the voting power approved an Amendment No. 1 to the 2022 Plan at the annual meeting of stockholders of the Company, pursuant to which the terms of the annual automatic share reserve increase of the 2022 Plan were changed.
Equity Purchase Facility Agreement
On August 4, 2025, the Company entered into the Equity Purchase Facility Agreement with an institutional investor (“Facility Investor”), pursuant to which the Facility Investor committed to purchase, subject to certain conditions and limitations, up to $150 million (the “Commitment Amount”) in newly issued shares of the Common Stock (the “Facility”). On September 18, 2025, the Company and the Facility Investor entered into the Amended Facility Agreement, pursuant to which the parties agreed to increase the Commitment Amount under the Facility from $150 million to $1.0 billion in shares of Common Stock. During 2025 fiscal year, the Company received $111,902 in net proceeds from the sale of an aggregate of 501 shares of Common Stock pursuant to the Facility.
Departure and Appointment of the Board Members
On December 29, 2025, Siamack Alavi resigned from the Board, and upon recommendation of the Nominating and Corporate Governance Committee of the Board (“Nominating Committee”), the Board appointed Mr. Nicholas Adler as a member of the Board, effective December 29, 2025. The Board also appointed Mr. Adler to serve as the Chairman of the Board, the Chairman of the Compensation Committee and as a member of Board’s Audit Committee and Nominating Committee.
On February 5, 2026, Michael La Rosa resigned from the Board, and upon recommendation of the Nominating Committee, on February 10, 2026, the Board appointed Mr. Jaime Cosculluela as a member of the Board.
Convertible Note Facility, Redemption Agreement, and Series X Amendment to the Articles of Incorporation
On November 12, 2025, the Company and the certain institutional investors (“Investors”) entered into the Securities Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company agreed to, among other things, issue and sell, and the Investors agreed to purchase, in multiple closings, a new series of senior secured convertible notes of the Company in an aggregate original principal amount of up to $250,000,000, subject to the satisfaction or waiver of certain closing conditions. Pursuant to the Purchase Agreement, on November 12, 2025, the Company issued a Token Right (the “Token Right”) to certain Investors, pursuant to which upon exercise of the Token Right and for no further consideration the holder will be entitled to receive an aggregate number of Right Tokens (as defined therein) equal to the sum of (i) fifty percent (50%) of any and all Tokens (as defined in the Token Right) purchased by the Company using the net proceeds of each closing of the Purchase Agreement and (ii) twenty-five percent (25%) of any and all Tokens purchased by the Company using the net proceeds of any Other Financing (as defined therein).
In connection with the Purchase Agreement, on November 12, 2025, the Company and Mr. La Rosa entered into a redemption agreement (“Redemption Agreement”), pursuant to which, on the initial closing date of the Purchase Agreement, the Company agreed to redeem and immediately cancel and return to the status of “blank check” preferred stock of the Company, certain number of Mr. La Rosa’s shares of Series X Super Voting Preferred Stock (“Series X Preferred Stock”) such that, immediately after such redemption, he will own shares of Series X Preferred Stock representing not less than 80% of the total voting power of the Company for a redemption price of $2,000,000 payable upon such redemption, and $500,000 contingently payable upon the satisfaction of certain conditions. Mr. La Rosa’s remaining shares of Series X Preferred Stock will be redeemable by the Company at a subsequent time determined by the Board or otherwise as set forth in the Redemption Agreement for no additional consideration. These redemptions of the Series X Preferred Stock were conditioned upon stockholders’ approval and effectiveness of the Certificate of Amendment to the Articles of Incorporation (the “Series X Certificate of Amendment”) to provide that the shares of the Series X Preferred Stock may be redeemed from time to time and at any time in whole or in part upon such terms and conditions as may be approved by the Board and agreed to by the holder(s) thereof. Upon effectiveness of respective stockholders’ approval on December 25, 2025, such Series X Certificate of Amendment was effective as of December 26, 2025.
On January 8, 2026, the Company consummated the initial closing (the “Initial Closing”) under the Purchase Agreement, pursuant to which it issued the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “Initial Note”), together with a previously issued Token Right, for an aggregate purchase price of $9,900,000. The Initial Note is convertible into shares of Common Stock, at an initial conversion price equal to $8.347, subject to adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the floor price of $7.78, which will be lowered pursuant to the terms of the Initial Note for the Initial Note and all other notes (together, the “Notes”) upon the effectiveness of the stockholders’ approval of such reduction (the “Floor Price”). The Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears commencing on February 1, 2026, matures twenty-four (24) months from the date of issuance and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the Initial Note.
In connection with the Initial Closing on January 8, 2026, as contemplated under the Purchase Agreement: (i) the Company and each of its subsidiaries (each, a “Grantor”), and a collateral agent (the “Collateral Agent”) for the benefit of the holders of Obligations (as defined in the Security Agreement), entered into a Security and Pledge Agreement (the “Security Agreement”) with respect to the Notes, pursuant to which each Grantor granted the Collateral Agent, for the benefit of the Secured Parties (as defined in the Security Agreement), a security interest in such Grantor’s right, title and interest in and to all or substantially all of its properties and assets, or in which or to which such Grantor has any rights, whether then owned or thereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”); (ii) each subsidiary of the Company also entered into a guarantee agreement (the “Subsidiary Guaranty”) whereby each Subsidiary of the Company guaranteed to the Investors the prompt and full payment and performance of the obligations of the Company and each Subsidiary under the Purchase Agreement and other Transaction Documents; and (iii) the Company and the Collateral Agent entered into an Intellectual Property Security Agreement (“Intellectual Property Security Agreement”), pursuant to which the Company granted to the Collateral Agent a lien and security interest in certain intellectual property of the Company. As a condition to the Initial Closing as provided in the Securities Purchase Agreement on January 5, 2026, the Company and the Collateral Agent also entered into that certain Account Control Agreement.
The Company received $9,635,000 in net proceeds from the Initial Closing, that were used as follows: (i) $7,000,000 of net proceeds to acquire Note Purchased Crypto (as defined in the Notes) as a digital asset for the Company’s balance sheet, (ii) $2,000,000 of the net proceeds to redeem a portion of the outstanding shares of the Series X Preferred Stock pursuant to the Redemption Agreement, (iii) $500,000 of the net proceeds to be kept in a controlled account to fund the redemption of remaining shares of the Series X Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions. Curvature Securities LLC served as placement agent in connection with the offering.
On the Initial Closing, pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Preferred Stock held by Mr. Joseph La Rosa, and the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa a portion of the Fixed Redemption Price (as defined in the Redemption Agreement) equal to $1,700,000 immediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be agreed by the Company and Mr. La Rosa.
On March 24, 2026, the Company and Investors entered into an Amendment to the Purchase Agreement to provide that the net proceeds to the Company from any further equity line of credit, equity purchase facility, or at-the-market offering shall be allocated as follows: (i) until such time as the Company has paid to its placement agent and financial advisor (together, the “Advisors”) an aggregate of $751,221 in deferred fees, (1) 20% to pay any outstanding deferred fees due to the Advisors, (2) 40% to acquire Note Purchased Crypto (as defined in the Purchase Agreement) as a digital asset for the Company’s balance sheet, and (3) the remaining 40% for general corporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing), and (ii) thereafter (1) 50% of the net proceeds shall be used to acquire Note Purchased Crypto as a digital asset for the Company’s balance sheet and (2) the remaining 50% of the net proceeds shall be used for general corporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing), including payment of an additional $77,000 in deferred fees to the Advisors due and payable not earlier than December 31, 2026.
In addition, on March 24, 2026, the Company and Investors entered into Amendment No. 1 to the Token Right (the “Token Right Amendment”), under which the Investor will be entitled to receive upon an aggregate number of Right Tokens equal to the sum of (i) fifty percent (50%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of each closing under the Purchase Agreement and (ii) fifty- six and one quarter percent (56.25%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of any Other Financing (as defined in the Token Right).
The Company entered into the Purchase Agreement and transactions contemplated thereby to secure immediate and committed access to capital at a time when alternative financing sources were either unavailable or significantly more dilutive and restrictive. The facility was intended to provide critical liquidity to support ongoing operations, address going concern considerations, and preserve enterprise value. In addition, the Company sought to strengthen its balance sheet and position itself to deploy capital into strategic initiatives, including investments in stablecoins, A.I. infrastructure, and data center opportunities, which management believes have the potential to enhance long-term shareholder value. Unlike traditional financing, the structure allows the Company to draw capital incrementally, providing flexibility to align funding with operational needs and market conditions. While the transaction includes costs such as potential dilution and derivative liabilities, management determined that these were justified given the significant risk to the business if capital was not secured. The transaction was negotiated at arm’s length and, in management’s view, represents a reasonable and necessary financing solution under the circumstances.
Amended Employment Agreement with the CEO
On November 12, 2025, following the approval of the Board and in connection with the Securities Purchase Agreement, the Company and Mr. La Rosa, entered into an Amended and Restated Employment Agreement (the “Amended Employment Agreement”), amending and restating that certain Amended and Restated Employment Agreement between the Company and Mr. La Rosa, dated April 29, 2022, as amended, in its entirety. Pursuant to the Amended Employment Agreement, Mr. La Rosa’s compensation structure and severance package were changed as described in the agreement.
Investments in Digital Assets
As described above, on January 8, 2026, we consummated the Initial Closing pursuant to the Purchase Agreement. We agreed to use majority of net proceeds from the closings under the Purchase Agreement and any equity line of credit, equity purchase facility or at-the-market offering to acquire cryptocurrency in the form that the Investors and Company have mutually agreed to in writing as a digital asset for the Company’s balance sheet. We have further agreed with the Investors that we will acquire stablecoins as these digital assets. Since January 1, 2026, we used net $6.7 million from the Initial Closing and $3.6 million from our equity line of credit to acquire stablecoins. As of May 31, 2026, we held $10.3 million primarily in the following types of digital assets: FRXUSD and USDC. Our current strategy is to hold stablecoins to preserve the value of the initial investment. During which time we will perform counterparty due diligence potentially using our digital assets for our strategic efforts towards expansion into AI data centers ecosystem. There can be no assurance as to the timing, size, form, or success of this initiative, and it involves significant risks, evolving regulation, financing dilution, and custody or cybersecurity concerns.
January 2026 Reverse Stock Split
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 one or more reverse stock splits of the Company’s Common Stock in each case 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.
Disposition of LR Kissimmee
On February 4, 2026, the Company sold its 51% membership interest (the “Interest”) in Horeb Kissimmee Realty LLC, a Florida limited liability company (“LR Kissimmee”) to LR Kissimmee’s pre-Transaction 49% owner (the “Buyer”) pursuant to a Membership Interest Purchase Agreement (the “Sale Agreement”) by and among the Company, the Buyer and LR Kissimmee. Under the Sale Agreement, the Company will receive from the Buyer aggregate cash consideration for the Interest of $500,000, payable in twelve (12) equal monthly installments of $41,667, commencing February 28, 2026. In addition, the Buyer agreed to pay the Company $61,200, representing the Company’s pro rata share of an outstanding loan previously made by LR Kissimmee to the Buyer, payable in four (4) equal quarterly installments of $15,300 commencing on the same date. As a result of the transaction, the Company has fully withdrawn as a member of LR Kissimmee and has no continuing ownership interest therein. In connection with the Transaction, the Company also entered into a Trademark & Brand Licensing Agreement (the “Licensing Agreement”) with LR Kissimmee, pursuant to which the Company granted to LR Kissimmee a non-exclusive, non-transferable license to use certain trademarks and branding of the Company in connection with LR Kissimmee’s real estate brokerage business. The Licensing Agreement provides for a flat monthly licensing fee payable to the Company of $4,500 and has an initial term of one (1) year.
Acquisition of Remaining Interest in Lakeland
On February 11, 2026, the Company acquired from the selling member (the “Seller”) all of his 49% membership interest in La Rosa Realty Lakeland LLC, a Florida limited liability company (“Lakeland”), pursuant to a Membership Interest Purchase Agreement and a Settlement Agreement by and among the Company, Joseph La Rosa, the Chief Executive Officer of the Company, the Seller, and Lakeland, for aggregate cash consideration of $350,000 (the “Purchase Price”), consisting of (i) an initial payment of $150,000 payable within ten (10) days following the closing, and (ii) installment payments totaling $200,000, payable in twelve (12) equal monthly installments of $16,667 commencing on March 1, 2026. As a result of the transaction, Lakeland became a wholly owned subsidiary of the Company. As part of the transaction, on February 11, 2026, the Company and the Seller also entered into a Pledge Agreement, pursuant to which, as a security for the unpaid portion of the Purchase Price, the Company granted the Seller a perfected, first-priority security interest in a non-voting 28% economic membership interest in Lakeland.
Amendments to Officers Employment Agreements
On February 19, 2026, with the approval of its Board, the Company entered into (i) an Amendment (the “CEO Amendment”) to the Amended and Restated Employment Agreement, dated November 12, 2025, with Joseph La Rosa, the Company’s Chief Executive Officer (the “CEO”), and (ii) an Amendment (the “COO Amendment”) to the Employment Agreement, dated January 31, 2024 (the “COO Employment Agreement”), with Deana La Rosa, the Company’s Chief Operating Officer (“COO”).
Under the CEO Amendment, Mr. La Rosa agreed to a reduction in his base salary from $500,000 to $200,000 per annum, in consideration of which the Company agreed to revise certain provisions of the Confidential Information and Invention Assignment Agreement dated April 12, 2022 (the “CIA Agreement”), between Mr. La Rosa and the Company so that Mr. La Rosa’s non-competition restrictions were effective only during the term of his employment with the Company. In addition, the period of non-solicitation restrictions under the CIA Agreement was reduced from twenty-four (24) to twelve (12) months post-employment. These changes became effective on March 15, 2026.
Under the COO Amendment, Mrs. La Rosa agreed to a reduction in her base salary from $250,000 to $100,000 per annum, in consideration of which the Company agreed to revise certain restrictive covenants of the COO Employment Agreement so that Mrs. La Rosa’s non-competition restrictions were effective only during the term of her employment with the Company, and the period of non-solicitation restriction was reduced from twenty-four (24) to twelve (12) post-employment. These changes became effective on March 15, 2026.
Land Purchase Agreement
In February 2026, the Company entered into a contract to acquire a strategically located parcel of land in Osceola County, one of the fastest-growing regions in Central Florida. Upon completion, this acquisition is expected to represent a key milestone in the Company’s expansion strategy and support the development of a Tier III Artificial Intelligence (“AI”) data center designed to address increasing demand for high-performance computing infrastructure. The planned facility is expected to span up to 10,000 square feet and support an estimated IT load of approximately 1,500 kW, positioning it to serve enterprise, cloud, and AI-driven workloads.
Series C Preferred Stock Financing
On March 4, 2026, the Company and an institutional investor (the “Investor”) entered into a securities purchase agreement pursuant to which the Company issued the Investor 100 shares of the Company’s Series C Convertible Preferred Stock, par value $0.0001 per share (“Series C Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed respective Certificate of Designation of Rights and Preferences of the Series C Preferred Stock with the Secretary of State of the State of Nevada.
Potential Acquisition of Consensus Core Technologies, Inc
In March 2026, the Company entered into a non-binding letter of intent to acquire 100% of the issued and outstanding equity interests of Consensus Core Technologies, Inc. (“Consensus”), along with certain of its affiliates and subsidiaries. Consensus is a provider of critical infrastructure solutions for AI and high-performance computing. The proposed acquisition is intended to position the Company at the forefront of the AI infrastructure ecosystem and provide a scalable platform to capitalize on the growing demand for AI compute capacity. The consummation of this transaction is subject to, and contingent upon, the execution of a definitive agreement and other related transaction documents by the parties, corporate approval and customary closing conditions. There can be no assurances that such transaction will be consummated.
Acquisition of Remaining Interest in Orlando
On April 3, 2026, the Company, La Rosa Realty Orlando LLC, a majority owned subsidiary of the Company (the “Orlando”), and two selling members of Orlando (collectively, the “Sellers”), entered into a settlement agreement (“Settlement Agreement”), pursuant to which, each of the Sellers sold their 24.5% membership interests (collectively, the “Interests”) in Orlando to the Company, and the Company agreed to (i) forgive the amount of $106,447 allegedly owed by one of the Sellers to Orlando, (ii) forgive the alleged $152,295 franchise fee obligation under one of the Seller’s personal guaranty, (iii) pay one of the Sellers the amount of $10,000, and (iv) dismiss without prejudice the civil suit of La Rosa Realty Corp., La Rosa Realty Orlando LLC v. Reinaldo Zapata, Viviana Figueroa, pending in the Circuit Court of Orange County, Florida. As a result of this transaction, Orlando became a wholly-owned subsidiary of the Company.
Nasdaq Notice Regarding Filing Deficiencies
On April 16, 2026, the Company received a notice (the “10-K Notice”) from the Nasdaq Listing Qualifications Department (the “Staff”) that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to timely file its Comprehensive Form 10-K for the fiscal year ended December 31, 2025 (the “Initial Delinquent Filing”) with the SEC. The Staff informed the Company that, under Nasdaq rules, the Company has 60 calendar days, or until June 15, 2026 to submit a plan to regain compliance, and if the Staff accepts such plan, they can grant an exception of up to 180 calendar days from the Initial Delinquent Filing’s due date (or until October 12, 2026) to regain compliance.
On May 21, 2026, the Company also received a notice (the “10-Q Notice,” and together with the 10-K Notice, the “Notices”) from the Staff indicating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file its Quarterly Report on Form 10-Q for the period ended March 31, 2026, and noting that the Company also remains delinquent in filing its Initial Delinquent Filing. The 10-Q Notice further states that, in accordance with Nasdaq rules and as previously communicated in the 10-K Notice, the Company has until June 15, 2026 to submit a plan to regain compliance, and if the Staff accepts such plan, any exception granted will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or until October 12, 2026, to regain compliance.
The Notices have no immediate effect on the listing or trading of the Common Stock, which will continue to trade on The Nasdaq Capital Market under the symbol “LRHC.” The Company intends to regain compliance with Nasdaq Listing Rule 5250(c)(1) by filing the delinquent reports and/or submit the plan with Nasdaq by June 15, 2026.
April 2026 Reverse Stock Split
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. Unless noted otherwise, all share and the price per share information for all periods presented in this report have been retroactively adjusted for April 2026 Reverse Stock Split.
Series D Preferred Stock Financing
On May 27, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor 250 shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (“Series D Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed respective Certificate of Designation of Rights and Preferences of the Series D Preferred Stock with the Secretary of State of the State of Nevada. Pursuant to the agreement, the remaining 250 shares of Series D Preferred Stock may become issuable by the Company to the Investor at its sole option upon the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Our Organization
La Rosa Holdings Corp. was incorporated in the State of Nevada on June 14, 2021 by its founder, Mr. Joseph La Rosa, to become the holding company for five Florida limited liability companies in which Mr. La Rosa held or controlled a one hundred percent ownership interest: (i) La Rosa Coaching, LLC ( “Coaching”); (ii) La Rosa CRE, LLC (“CRE”); (iii) La Rosa Franchising, LLC (“Franchising”); (iv) La Rosa Property Management, LLC (“Property Management”); and (v) La Rosa Realty, LLC (“Realty”). Coaching, CRE, Franchising, Property Management and Realty became direct, wholly owned subsidiaries of the Company as a result of the closing of the Reorganization Agreement and Plan of Share Exchange dated July 22, 2021, which was effective on August 4, 2021. Pursuant to the Reorganization Agreement, each LLC exchanged 100% of their limited liability company membership interests for one share of the Common Stock, which share was automatically redeemed for nominal consideration upon the closing of the transaction, resulting in each LLC becoming the direct, wholly owned subsidiary of the Company.
The Company conducts its operations through its 21 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. (formerly, La Rosa Realty Lake Nona Inc.) 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; |
| ● | BF Prime, LLC is engaged mostly in the residential real estate brokerage business; |
| ● | FPG Title Group, LLC (formerly, 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; |
| ● | LR Realty Spain S.L. 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. |
We are a “controlled company” as defined under the corporate governance rules of Nasdaq because our Founder, Mr. Joseph La Rosa, as of June 3, 2026, controls 91.81% of the total voting power of our Common Stock based on his ownership of Common Stock and the 18,000 votes provided by his Series X Preferred Stock, that votes with the Common Stock, with respect to director elections and other matters.
Our Business
We operate primarily in the United States residential real estate market which totaled $55.1 trillion at June 30, 2025 versus $49.7 trillion at the end of 2024 reflecting a half year gain of $5.4 trillion due to sufficient number of buyers competing over a relatively small number of listings, according to Redfin Corp1.
The Company is the holding company for its direct, majority owned subsidiaries, and has no other operations.
Realty was a traditional residential real estate brokerage firm founded in 2004 by Mr. La Rosa to serve the Florida market. In 2011, Realty shifted to an agent-centric real estate brokerage format, offering agents more tools and value while offering experienced agents a 100% commission split. Newly licensed and agents still in training operate on a New Agent Coaching (NAC) 70% to agent / 30% commission split (7% to Coaching, 14% to the La Rosa individual coach, 6% to the brokerage office who engaged the new agent, and 3% to the Director of Coaching who is employed by the Company). 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 (7% to Coaching, 14% to the La Rosa individual coach, 6% to the brokerage office who engaged the new agent, and 3% to the Director of Coaching who is employed by the Company). Realty has expanded its geographic footprint over the years by integrating technology into its operations and creating a brokerage that provides its agents with the tools to handle their transactions, accounting, marketing, social media and customer relations. Realty’s full service, high touch engagement with its clients assists them with navigating the complexity of the home purchase/sale transaction through their intimate knowledge of the local market, guiding them on the right pricing for their sale or purchase, assisting in the negotiation of the sales contract, overseeing the home inspections and possible repairs, reviewing the financial details of the transaction to assure that there are no errors and attending the closing of the sale to ensure that there are no last minute surprises. Realty believes that its services build referrals and repeat clients who appreciate the expertise and personal relationships that they develop with our agents.
| 1 | https://zillow.mediaroom.com/2025-09-08-US-housing-market-reaches-record-55-1-trillion |
In 2018, Mr. La Rosa organized Franchising to study the potential to expand nationally by means of creating a franchise model that would be easily duplicable. 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. Franchising uses the typical model for licensing the use of our two brands together with our proprietary business methodology, technology, tools, and training. Our franchisees own their own brokerage businesses, are solely responsible for their operations and risks, and are able to retain the substantial upside of their business if they are profitable. Our franchisees use our successful and well-known brands, our systems and technology, training and personal assistance and guidance to help run their businesses more efficiently and, we believe, more successfully than other branded real estate franchisees. Our franchisees pay us an initial licensing fee, a royalty fee based on their gross commissions, an annual membership fee, a coaching fee payable to Coaching for coaching services, a commercial royalty fee payable to CRE for all commercial real estate transactions, a training fee for its administrative personnel and a fee to use our proprietary software. Because our franchise “product” has been developed over the years and is delivered in a “package” format, our fixed costs are low, and our franchising gross margins are relatively higher than our more labor intensive businesses. While we intend to continue the franchise arm of the business, 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. Each agent in coaching is assigned an experienced real estate agent/coach who assists and advises the new agent for, at a minimum, their first three sales transactions and the successful completion of our exclusive core competency courses and examinations. Brokers compensate us for the courses and mentoring by splitting their commissions with us when they are involved in the sale and purchase of a property for which we receive thirty percent (30%) of their share of the real estate brokerage commission. Our franchisee brokers also take the in-house course and ongoing coaching that cover topics, including but not limited to local real estate brokerage law, lead generation, recruiting, business management, industry trends, and leadership. 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.
Unlike most other residential real estate brokerage companies, we encourage our sales agents to seek out property management business. Property Management, which was organized in 2014, trains our sales agents to provide residential property management services to owners of single-family residential properties and provides our agents with the tools to service those property owners. These tools include management, marketing, accounting and financial services. Our agents generally charge the homeowners between eight to twelve percent (8-12%) of the monthly rental. Our agents pay Property Management to be the point of contact for the property owner and their tenants, handle all tenant screenings, applications, contracts, forms and documents, and deal with attorneys if necessary to enforce the agreements. 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 December 31, 2025, we have provided property management services for approximately 630 properties across Florida, including single-family residences, condominiums, townhouses, and other types of residential real estate. Consistent with industry custom, management contract terms typically range from one to three years, although some contracts can be terminated at will at any time following a short notice period, usually 30 to 120 days, as is typical in the industry. Property Management has recently added a division to directly manage properties in Florida and to expand those services to our other offices in other states in the future.
Unlike many other real estate brokerages, we encourage our sales agents to seek out commercial real estate business. CRE was organized in 2014 originally to provide “residential-commercial” real estate advisory services such as helping sales agents’ customers lease office space. CRE now assists agents who have customers who wish to purchase multifamily, office, storage, mixed use and apartment properties. We provide, on a fee basis, training to sales agents who wish to work in the commercial real estate space, and advise customers with respect to office leasing, multi-family property sales and leasing, and land and subdivision development. Our customers come primarily from referrals from our Realty brokers who are asked by their clients to assist them in various commercial real estate property transactions. In January 2025, the Company hired a leader for this division who possesses vast experience in commercial real estate. We expect stronger growth of this segment of our business in 2026 and beyond. During 2025, CRE restructured the division by focusing on training and education, as well as providing the agents with pertinent tools to be successful in the commercial practice. CRE invested in a platform as the standard to prepare listings, financial analysis, marketing materials and offering memorandums among other features. As of April 30, 2026, CRE operated with 76 certified commercial agents and, moving forward, recruiting will be focused on hiring seasoned commercial real estate agents who can bring their expertise to enrich our level of experience.
For our title insurance and settlement services segment, we operate under the brand FPG Title Group which provides comprehensive title insurance and settlement services to protect real estate transactions for residential, commercial, agency, home builders, and vacation ownership properties. Providing these services, we aim to ensure that both homeowners and lenders are safeguarded against potential legal claims or disputes related to property ownership. Key services include title insurance services, which help to protect against risks such as undisclosed heirs, errors in public records, forgery or fraud in previous ownership documents, and outstanding liens or unpaid taxes, and settlement services, which help to facilitate smooth and secure property transactions, in compliance with industry regulations. We believe that FPG Title Group is positioned as a trusted partner in Florida, offering tailored solutions for local banks, national lenders, and mortgage servicers. Our expertise allows us to close loans quickly, accurately, and in full compliance with industry standards. Our goal is to provide flexible and customizable services to meet the specific requirements of various lenders and demonstrate our commitment to client satisfaction through our comprehensive service offerings and dedicated team.
We have 23 La Rosa Realty corporate real estate brokerage offices and branches located in Florida, California, Texas, Georgia, and Puerto Rico. The Company also has 5 La Rosa Realty franchised real estate brokerage offices and branches and 3 affiliated real estate brokerage offices, that pay us fees in 7 states of the United States and Puerto Rico. We also have LR Realty Spain, which is a full-service brokerage office located primarily in Malaga, Spain. Additionally, the Company has a full-service escrow settlement and title company in Florida and a company offering a commission advancement program exclusively for La Rosa agents.
We also have a number of affiliated companies that are wholly, or majority owned by Mr. 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.
In the last quarter of 2025, we initiated a strategic repositioning toward expansion into the AI ecosystem, through strategic acquisitions, partnerships, and development of next-generation data center infrastructure for AI computing. As demand for high-performance computing and Artificial Intelligence (AI)-driven applications continues to accelerate, the Company is positioning itself to capitalize on the growing need for purpose-built infrastructure. The Company intends to leverage its real estate platform to identify, develop, and manage high-quality data center assets in key markets where demand for AI infrastructure is rapidly increasing.
In February 2026, we have entered into a contract to acquire a strategically located parcel of land in Osceola County, one of the fastest-growing regions in Central Florida. Upon completion, this acquisition is expected to represent a key milestone in the Company’s expansion strategy and support the development of a Tier III AI data center designed to address increasing demand for high-performance computing infrastructure. The planned facility is expected to span up to 10,000 square feet and support an estimated IT load of approximately 1,500 kW, positioning it to serve enterprise, cloud, and AI-driven workloads. The project is designed to balance scale and flexibility, enabling the Company to target both enterprise and regional demand while maintaining operational agility.
In March 2026, the Company entered into a non-binding letter of intent to acquire 100% of the issued and outstanding equity interests of Consensus Core Technologies, Inc. (“Consensus”), along with certain of its affiliates and subsidiaries. Consensus is a provider of critical infrastructure solutions for artificial intelligence and high-performance computing. The proposed acquisition is intended to position the Company at the forefront of the AI infrastructure ecosystem and provide a scalable platform to capitalize on the growing demand for AI compute capacity. The consummation of this transaction is subject to, and contingent upon, the execution of a definitive agreement and other related transaction documents by the parties, corporate approval and customary closing conditions. There can be no assurances that such transaction will be consummated.
Our Focus
Our Mission Statement is that “we are here to support, empower and elevate those who we serve with integrity.” We are committed to excellence in all we do and are respectful, compassionate, trustworthy, responsible, joyful, inspiring and adaptive. 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 agents because of their individual marketing prowess, professionalism, and personality. 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 customers’ needs. The purchase of a home is likely the most expensive purchase a consumer will make in his or her lifetime. Many first-time home buyers are young and require knowledgeable, experienced guidance from our agents and our franchisor’s agents. Home sellers need the market ken and potential buyer reach that our agents and our franchisees’ agents provide. Our agents and our franchisees’ agents build lasting relationships with their clients that result in repeat business and referral business. Notwithstanding claims of the internet-only brokerages that homes are a commodity that can be bought and sold like a can of beans, this consumer need is borne out in reality. The research conducted by the National Association of Realtors (the “NAR”)2 in 2025 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 50%; |
| ● | 92% of home buyers are satisfied with the buying process. |
| ● | 91% of sellers sold with the assistance of a real estate agent, up from 90% last year, and only 5% were FSBO sales, an all-time low; |
We believe that our agents’ training, knowledge of the market, access to public and non-public data related to transactions, and experience with past transactions gives them a unique insight to provide our home buyer clients with invaluable advice and judgement. 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. We understand that the housing market will change over time and are focusing on how to prepare for that change. 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
| 2 | 2025-profile-of-home-buyers-and-sellers-highlights-11-04-2025.pdf |
| 3 | https://www.urban.org/urban-wire/2040-us-will-experience-modest-homeownership-declines-black-households-impact-will-be-dramatic |
As the market slows slightly in out years, we continue to increase the use of our technological tools to make our agents more efficient and productive.
Our People
Our people are our most important asset. We spend significant time and effort in attracting and retaining talented people for our businesses. Many agents contact us after hearing of or experiencing Mr. La Rosa’s personal and business growth seminars, his book or his podcasts. 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 new agents and agents still in training. Experienced agents can participate in three plans: our Ultimate Plan Business Builder with a 90%/10% split, our Ultimate Plan and our Premier Plan, both with 100% commission and low annual and monthly dues. In our UPBB plan, an agent can potentially 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. But, most importantly, we believe it is the training, education and ongoing support that we provide to our agents that gives them an edge in a very competitive and crowded real estate brokerage marketplace.
Our businesses emphasize diversity and inclusion in the workplace and the value of home ownership. We strive to create a workplace that is inclusive of everyone, where every person can be authentic, and where that authenticity is celebrated as a strength. Management works diligently to make the Company a desirable place to work by creating learning experiences, programs, compensation, and benefits that attract, develop, train, engage, motivate, reward, and retain the best talent. With a focus on teamwork, collaboration, and diversity and inclusion, we aspire to be a company where the best people want to work and are engaged every day. 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.
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. When an agent is on-boarded, they are required to take our monthly Foundations Series which covers the use of our proprietary applications. Through our websites, we provide buyers, sellers, landlords, and tenants with access to all of the available properties for sale or lease on the multiple listing service (“MLS”), in each of the markets in which we operate. We provide each of our Company franchisees and their agents with their own personal website that they can modify to match their personal branding. Our website also gives consumers access to our network of professional real estate agents and vendors. Additionally, the websites we provide use AI integrated Client Relationship Management (“CRM”) software to enhance the consumers’ internet experience and assist our agents with lead generation and lead capture through the AI features. For example, our CRM software, which is integrated into our websites, uses artificial intelligence to generate marketing leads for our agents by sending marketing materials to potential buyers and sellers automatically without any agent involvement. Our technology platform also provides unique automated blogging and comprehensive social media marketing campaigns for our agents to create top of mind public awareness of our brand.
In October 2023, we launched our proprietary technology system – JAEME, part of “My Agent Account,” our proprietary platform built entirely in-house by our technology team. JAEME is a real estate AI assistant created to support and inspire our agents with personalized content to drive marketing, efficiency, and sales. This advanced technology can help agents to provide services to their clients in a more efficient way – even from their mobile devices. Through JAEME, La Rosa’s agents can easily create:
| - | Compelling property descriptions |
| - | Effective email campaigns |
| - | Detailed business plans |
| - | Innovative video scripts |
| - | High-conversion newsletter campaigns |
| - | Exclusive lead generation ideas |
As of July 1, 2025, we launched My Agent Account Version 4.0, a major enhancement to the Company’s proprietary agent platform and officially transitioned to a new, upgraded process designed to better support our agents with a simpler and more efficient way to manage transactions and onboarding tasks. With this central hub, agents no longer need to log into multiple systems, allowing for a more seamless experience. The new process enables automation of key workflows, increases productivity, and strengthens our ability to operate more effectively as a company.
Our proprietary technology and third-party services and platforms provide our agents and franchisees with commission management and accounting systems, an internal agent “intranet” application, customer relationship management applications, a transaction management solution, and automated marketing and social media applications and privacy and identity protections. The combination of our brands, proprietary technology, services, data, lead generation, and marketing tools gives our agents the power to offer best-in-class service to their clients. The new version features a fully integrated Transaction Management module that is intended to deliver significant cost savings to the Company by improving efficiency, reducing manual processes, and eliminating reliance on expensive third-party systems.
Internally, we use our technology to provide our Company agents, employees and franchisees with the means to find and develop new business, manage their relationships both externally with their clients and internally with the Company or their franchisor, develop better skills and knowledge in their areas of endeavor and, we believe, enhance their earning potential. While no one can predict the ups and downs of the real estate market, we believe that the “weapons” we provide to our Company agents, employees and franchisees help them fight the adverse economic conditions, a volatile market and the competition.
While our offices and our franchisees’ 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 franchisees’ agents what we believe to be a reasonable monthly fee for the use of our suite of tools.
Our Intellectual Property
It is important that we protect our technology and intellectual property. We rely upon a combination of trademarks, trade secrets, copyrights, patents, confidentiality procedures, contractual commitments, domain names, and other legal rights to establish and protect our intellectual property. 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 June 3, 2026, we have a service mark registration in the United States for our LR logo. Additionally, we are the registered holder of a number of domain names, including “larosarealty.com” and “larosaholdings.com”.
We continually review our development efforts to assess the existence and patentability of new intellectual property. 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 to be beneficial for our business.
Our Markets
Our primary market is in the United States. As of June 3, 2026, we have 23 La Rosa Realty corporate real estate brokerage offices and branches located in Florida, California, Texas, Georgia, and Puerto Rico. The Company also has 5 La Rosa Realty franchised real estate brokerage offices and branches and 3 affiliated real estate brokerage offices in the United States and Puerto Rico. Additionally, the Company has a full-service escrow settlement and title company in Florida. In April 2025, we also formed LR Agent Advance, LLC in Florida, offering a commission advancement program exclusively for La Rosa agents. We also have LR Realty Spain, which is a full-service brokerage office located primarily in Malaga, Spain.
Our Revenue Streams
Our financial results are driven by the total number of sales agents in our Company, the number of sales agents closing commercial real estate transactions, the number of sales agents utilizing our coaching services, and the number of agents who work with our franchisees. Since founding our business in 2024, we grew our total agent count to 2,842 agents as of May 31, 2026.
The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers. We have multiple revenue streams, with the majority of our revenue derived from commissions paid by consumers who transact business with our and our franchisees’ agents, royalties paid by our franchisees, dues and technology fees paid by our sales agents, our franchisees and our franchisees’ agents. Our major revenue streams come from such sources as: (i) residential real estate brokerage revenue, (ii) revenue from our property management services, (iii) franchise royalty fees, (iv) fees from the sale or renewal of franchises and other franchise revenue, (v) coaching, training and assistance fees, (vi) brokerage revenue generated transactionally on commercial real estate, (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 2025 REVENUE |
PERCENT OF TOTAL 2024 REVENUE |
|||||||
| Brokerage Revenue | Percentage fees paid on agent-generated residential real estate transactions. Other revenues recognized monthly (annual and monthly dues charged to our agents). | 97 | % | 97 | % | |||||
| Property Management Revenue | Management fees earned from property owners. | * | % | * | % | |||||
| Franchise Sales and Other Franchise Revenues | One-time fee payable upon signing of the franchise agreement. Other revenues recognized monthly (annual membership, technology, interest, late fees, renewal, transfer, successor, accounting, other related fees). Per agent per closed transaction; payable monthly. | * | % | * | % | |||||
| Coaching/Training/Assistance Revenue | Based on real estate commissions earned by the sales agent. Event fees and break-out sessions. | * | % | 1 | % | |||||
| Commercial Real Estate Revenue | 10% of every real estate commission earned by the sales agent. Other revenues recognized monthly (monthly dues charged to our agents). | 1 | % | * | ||||||
| Title Settlement and Insurance | Fees paid by customers for comprehensive title and settlement services | * | * | |||||||
| TOTAL | 100 | % | 100 | % | ||||||
| * | Less than 1%. |
Our Industry
The residential real estate industry is cyclical in nature but has shown strong historical long-term growth. 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. |
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. Mortgage rates dipped from 20-year highs in early 2023 but have risen again and sales have resumed an extended period of declines. The NAR reported that for February 2026 (the seasonally adjusted annual rate) there were 4.09 million existing home sales, an increase of 1.7% over January 2026 but a decrease of 1.4% from the prior year. Total housing inventory at the end of February 2026 was 1.29 million units, up 2.4% from January 2026 and 4.9% from one year ago. There was a 3.8 months unsold inventory supply in February 2026, identical to January 2026 but up from 3.6 months in February 2025. The median existing-home sales price increased to $398,000, an increase of 0.3% from February 2025 ($396,800). Properties typically remained on the market 47 days in February 2026, down from 46 days in January 2026 and up from 42 days in February 2025.
Realtors continue to be an integral part of the home buying process. According to NAR:5
| ● | 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 50%; |
| ● | 92% of home buyers are satisfied with the buying process; |
| ● | 91% of sellers sold with the assistance of a real estate agent, up from 90% last year, and only 5% were FSBO sales, an all-time low. |
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. 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. Moreover, with the impact of climate change, we expect more business disruptions in the coming years, many of which could be unpredictable and extreme.
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.
| 5 | https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers |
In addition, the residential real estate market and the real estate industry in general is cyclical, characterized by “bubbles” that reflect faster-than-usual housing price increases, heavy demand for single-family homes, interest rate fluctuations, easy credit standards and lax government housing policies on the one hand, and protracted periods of depressed home values, lower buyer demand, inflated rates of foreclosure and often changing regulatory or underwriting standards applicable to mortgages on the other hand. It is unclear as to whether the U.S. is currently experiencing a “bursting bubble” from the unusual pent-up demand and move to remote work created by the Covid-19 pandemic followed by the rapid and extreme mortgage rate hikes that has slowed the market in recent months. The best example of the bubble bursting was the significant downturn in the U.S. residential real estate market between 2005 and 2011. While we believe we are well-positioned to compete during a downturn, our business is affected by these cycles in the residential real estate market, which can make it difficult to compare or analyze our financial performance effectively across successive periods.
Competition
The real estate brokerage business is highly competitive. We primarily compete against other independent real estate brokerage agencies in our local markets as well as the international and national real estate brokerage franchisors seeking to grow their franchise system. We compete against other brokerages to attract transactional clients based on our personalized service with experienced brokers who know the local market, the number and quality of listings, our brand and reputation and our marketing efforts. We also compete to attract real estate professionals based on our brand and reputation, the quality of our training and coaching, our marketing efforts, our generous 100% commission “split” for experienced brokers and our technology tools that make the brokers more efficient and productive.
Our largest national franchise competitors in the U.S. include RE/MAX, Realogy Holdings Corp. (which operates several brands including Century 21 and Coldwell Banker), Fathom Holdings Inc., and eXp World Holdings Inc. We believe that competition in the real estate brokerage franchise business is based principally upon the reputational strength of the brand, the quality of the services offered to franchisees, and the amount of franchise-related fees to be paid by franchisees.
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. These companies do not provide the same personalized brokerage services that we do and emphasize low price and a do-it-yourself philosophy.
FPG Title Group operates in a competitive landscape, facing significant competition from other title insurance and settlement service providers in Florida. Key competitors include First American Title Insurance Company, Fidelity National Title Group, and Old Republic National Title Insurance Company. These companies offer similar services, such as title insurance and escrow services, and have established strong market positions through extensive networks and robust client relationships. To differentiate itself, FPG Title Group focuses on providing customizable solutions tailored to the specific needs of local banks, national lenders, and mortgage servicers. Additionally, FPG Title Group emphasizes client satisfaction through dedicated service teams and streamlined transaction processes, aiming to close loans quickly and accurately while maintaining full compliance with industry standards. This strategic approach helps FPG Title Group maintain a competitive edge in the market.
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. While most of our property management business comes from referrals in our local market, we compete on price and our ability to be on the ground and available to handle day-to-day matters for our clients.
Our real estate coaching business competes against other in-house training services operated by independent real estate brokerage agencies and the international and national franchisors named above, as well as online providers including The Mike Ferry Organization, Keller Williams Mega Agent Production Systems, Buffini and Co., Tony Robbins Coaching, Craig Proctor Coaching, and Tom Ferry Coaching. We compete on the basis of personalized instruction, our mentorship program that provides a neophyte agent with an experienced coach to guide her and answer questions on an on-going basis after the classroom instruction has ended.
Many of our existing and potential competitors have substantial competitive advantages, including a larger national and international footprint and more recognizable brand, greater financial resources, longer operating histories, a greater breadth of marketing coverage, more extensive relationships in the residential and commercial real estate industry with brokers, agents, service providers and advertisers, stronger relationships with third party data providers such as multiple listing services and listing aggregators, maintain their own in-house software development, have access to larger user bases and greater intellectual property portfolios.
Government Regulation
Overview
The residential real estate industry is regulated by federal, state and local authorities as well as private associations or state sponsored associations or organizations. We must comply with federal, state, and local laws, as well as private governing bodies’ regulations, which, when combined, results in a highly regulated industry.
We are also subject to federal and state regulations relating to employment, contractors, and compensation practices. Except for our employed Company agents, all agents in our brokerage operations have been retained as independent contractors, either directly or indirectly through our franchisors. With respect to these independent contractors, like most brokerage firms, we are subject to the Internal Revenue Service regulations and applicable state law guidelines regarding independent contractor classification. These regulations and guidelines are subject to judicial and agency interpretation.
Federal Regulation
The Real Estate Settlement Procedures Act of 1974, as amended (“RESPA”), became effective on June 20, 1975. RESPA requires lenders, mortgage agents, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process. RESPA also protects borrowers against certain abusive practices, such as kickbacks, and places limitations upon the use of escrow accounts. RESPA also requires detailed disclosures concerning the transfer, sale, or assignment of mortgage servicing, as well as disclosures for mortgage escrow accounts. RESPA is administered and enforced by Consumer Financial Protection Bureau (the “CFPB”). We are also subject to the Fair Housing Act of 1968 (the “FHA”) which prohibits discrimination in the purchase or sale of homes and applies to real estate brokers and agents, among others. The FHA prohibits expressing any preference or discrimination based on race, religion, sex, handicap, and certain other protected characteristics, and applies broadly to many forms of advertising and communications. Other federal laws and regulations applicable to our business include (i) the Federal Truth in Lending Act of 1969; (ii) the Federal Equal Credit Opportunity Act; (iii) the Federal Fair Credit Reporting Act; (iv) the Home Mortgage Disclosure Act; (v) the Gramm-Leach-Bliley Act; (vi) the Consumer Financial Protection Act; (vii) the Fair and Accurate Credit Transactions Act; and (viii) the Do Not Call/Do Not Fax Act and other federal and state laws pertaining to the privacy rights of consumers, our collection, use, and disclosure of data collected from our website and mobile users, and the manner and circumstances under which we or third parties may market and advertise our services to consumer which affects our opportunities to solicit new clients.
Our business is also subject to various antitrust and competition laws, including the Sherman Antitrust Act, the Federal Trade Commission Act, the Clayton Act, and other related federal, state, and provincial laws in the jurisdictions in which we operate. These laws prevent anti-competitive behaviors such as price-fixing and other conduct that unreasonably restrains trade and competition. In 2021, the Department of Justice (“DOJ”) withdrew its consent to a November 2020 proposed settlement with NAR concerning alleged anti-competitive practices in real estate. While the DOJ dismissed its lawsuit against NAR in July 2021, it indicated a broader investigation into NAR’s activities. In November 2021, NAR modified its rules to implement most of the changes the DOJ settlement sought. In January 2023, a court set aside the DOJ’s new investigative demand related to NAR. The indirect and direct effects, if any, of this action upon the real estate industry are not yet clear.
While anti-competition enforcement has intensified across industries, there is a unique focus on the real estate industry in the United States and Canada. For example, the White House issued an Executive Order in July 2021 identifying real estate brokerages and listings as an area of focus. 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.
Beginning in March 2019, lawsuits were filed against the NAR and a number of large real estate brokers around the country alleging antitrust violations. We were not named as a defendant in any antitrust litigation.
On March 15, 2024, the NAR announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. This settlement resolves claims against NAR and nearly every NAR member; all state, territorial and local REALTOR® associations; all association-owned MLSs; and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below and is subject to court approval. The settlement makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service cooperative compensation model rule (the MLS Model Rule) that was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation. Under the terms of the agreement, NAR would pay $418 million over approximately four years (the “NAR Settlement”). 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. On November 26, 2024, the NAR Settlement was granted over objections. Some class members objected to the settlement and appealed to the Eighth Circuit Court of Appeals. The appeals are still pending, and the settlement cannot become final or distribute benefits until they are resolved. If the NAR Settlement is sustained on appeal, it is expected to resolve claims against the NAR and certain companies related to this matter. However, the direct and indirect effects, if any, of the judgment upon the real estate industry are not yet entirely clear.
These lawsuits, together with similar lawsuits against other businesses in our industry, have prompted discussion of regulatory changes to rules established by local or state real estate boards or MLSs. At this time, we do not believe to be negatively affected by such lawsuits due to flexibility of our agent-centric commission model, creating multiple revenue streams for our agents, and due to our consumer-centric technology model. However, the resolution of the antitrust litigation and/or other regulatory changes may require changes to our or our brokers’ business models, including changes in agent and broker compensation. This could reduce the fees we receive from our affiliated real estate professionals, which, in turn, could adversely affect our financial condition and results of operations.
Internationally, our operations are also subject to laws against improper payments, including the U.S. Foreign Corrupt Practices Act and similar global regulations.
State and Local Regulation
We are subject to state real estate and brokerage licensing laws and requirements that vary from state to state. In general, all individuals and entities lawfully conducting businesses as real estate agents or sales associates must be licensed in the state in which they carry on business and must at all times be in compliance.
Real estate brokers are required to be employed by the brokerage firm or as an independent contractor and the broker may work for another broker conducting business on behalf of the sponsoring broker. Generally, attorneys may act as brokers in some states without being separately licensed.
States may require a person licensed as a real estate agent, sales associate or salesperson, to be affiliated with a broker, as either an employee or an independent contractor, in order to engage in licensed real estate brokerage activities or allow the agent, sales associate or salesperson to work for another agent, sales associate or salesperson conducting business on behalf of the sponsoring agent, sales associate or salesperson.
Engaging in the real estate brokerage business requires obtaining a real estate broker license (although in some states the licenses are personal to individual agents). In order to obtain this license, most jurisdictions require that a member or manager be licensed individually as a real estate broker in that jurisdiction. If applicable, this member or manager is responsible for supervising the licensees and the entity’s real estate brokerage activities within the state.
Real estate licensees, whether they are salespersons, individuals, agents or entities, must follow the state’s real estate licensing laws and regulations. These laws and regulations generally specify minimum duties and obligations of these licensees to their clients and the public, as well as standards for the conduct of business, including contract and disclosure requirements, record keeping requirements, requirements for local offices, escrow trust fund management, agency representation, advertising regulations and fair housing requirements. Our Company’s management and our franchisors provide oversight with respect to the observance of the statutes and regulations set forth in each state where we or our franchisors, respectively, operate.
Many jurisdictions have local county or city regulations that govern the conduct of the real estate brokerage business. Local regulations generally require additional disclosures by the parties to a real estate transaction or their agents, or the receipt of reports or certifications, often from the local governmental authority, prior to the closing or settlement of a real estate transaction as well as prescribed review and approval periods for documentation and broker conditions for review and approval.
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 MLS and homeowners’ associations that have rules governing the sale of properties within their neighborhoods. Each third-party organization generally has prescribed policies, bylaws, codes of ethics or conduct, and fees and rules governing the actions of members in dealings with other members, clients and the public, as well as how the third-party organization’s brand and services may or might not be deployed or displayed.
Human Capital Resources
As of May 31, 2026, we had 43 full-time employees in our Company and our majority owned subsidiaries, and 2,842 real estate agents that are independent contractors with Realty and other subsidiaries of the Company. Our operations are overseen directly by our management. 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.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our Company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
Available Information
Our website address is www.larosaholdings.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, any amendments to those reports, proxy and registration statements filed or furnished with the SEC, are available free of charge through our website. We make these materials available through our website as soon as reasonably practicable after we electronically file such materials with, or furnish such materials to, the SEC. The reports filed with the SEC by our executive officers and directors pursuant to Section 16 under the Exchange Act are also made available, free of charge on our website, as soon as reasonably practicable after copies of those filings are provided to us by those persons. These materials can be accessed through the “Financial Filings” section of our website. The information contained in, or that can be accessed through, our website is not part of this Comprehensive Form 10-K.
Item 1A. Risk Factors.
Our business is subject to many risks and uncertainties, which may affect our future financial performance. If any of the events or circumstances described below occur, our business and financial performance could be adversely affected, our actual results could differ materially from our expectations, and the price of our stock could decline. The risks and uncertainties discussed below are not the only ones we face. There may be additional risks and uncertainties not currently known to us or that we currently do not believe are material that may adversely affect our business and financial performance. You should carefully consider the risks described below, together with all other information included in this report including our financial statements and related notes, before making an investment decision. The statements contained in this report that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our Common Stock could decline, and investors in our securities may lose all or part of their investment.
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 $30,410,422 for the year ended December 31, 2025, compared to $14,349,996 for the year ended December 31, 2024 and the Company’s operations have not provided net positive cash flows in the year ended December 31, 2025. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate positive cash flows from operations and to secure additional sources of equity and/or debt financing. 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.
Our independent auditors have included an explanatory paragraph in their audit report, included in this Comprehensive Form 10-K, regarding the Company’s ability to continue as a going concern. This going concern risk may materially limit our ability to raise additional funds through the issuance of new debt or equity or may adversely affect the terms upon which such capital may be available. The inability to obtain sufficient financing on acceptable terms could have a material adverse effect on the Company’s financial condition, results of operations, and business prospects.
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. The failure to successfully address these going concern risks may materially and adversely affect the Company’s business, financial condition, and results of operations. Investors should consider the substantial risks and uncertainties inherent in the Company’s business before investing in the Company’s securities.
We have a limited operating history with financial results that may not be indicative of future performance, and our revenue growth rate is likely to slow down as our business matures and may slow down due to the recent antitrust litigation.
We began operations in 2021. As a result of our limited operating history, we have limited financial data that can be used to evaluate our current business, and such data may not be indicative of future performance. We have encountered, and expect to continue to encounter, risks and difficulties frequently experienced by growing companies, including challenges in financial forecasting accuracy, hiring of experienced personnel, hiring of technology employees, determining appropriate investments, developing new products and features, assessing legal and regulatory risks, among others. Any evaluation of our business and prospects should be considered in light of our limited operating history, and the risks and uncertainties inherent in investing in early-stage companies. In addition, recent settlements of litigation based on alleged violations of federal and state antitrust laws may have an adverse impact on our potential growth. See “Risk Factors - Adverse outcomes in litigation and regulatory actions against the NAR, other real estate brokerage companies and agents in our industry could adversely impact our financial results,” below.
Impairment of goodwill and intangible assets may adversely impact future results of operations.
An impairment in the carrying value of goodwill, trade names and other long-lived assets could negatively affect our consolidated results of operations and net worth.
Goodwill and indefinite-lived intangible assets, such as trade names, are recorded at fair value at the time of acquisition and are not amortized, but are reviewed for impairment at least annually or more frequently if impairment indicators arise. In evaluating the potential for impairment of goodwill and trade names, we make assumptions regarding future operating performance, business trends and market and economic conditions. Such analyses further require us to make certain assumptions about our sales, operating margins, growth rates and discount rates. There are inherent uncertainties related to these factors and in applying these factors to the assessment of goodwill and trade name recoverability. Goodwill reviews are prepared using estimates of the fair value of reporting units based on the estimated present value of future discounted cash flows. We could be required to evaluate the recoverability of goodwill or trade names prior to the annual assessment if we experience disruptions to the business, unexpected significant declines in operating results, a divestiture of a significant component of our business or market capitalization declines. For the year ended December 31, 2025, we conducted such a review and recorded an impairment of $6,911,770 related to goodwill and intangible assets.
We also continually evaluate whether events or circumstances have occurred that indicate the remaining estimated useful lives of our definite-lived intangible assets, such as franchise agreements, agent relationships, real estate listings, and non-compete agreements, and other long-lived assets may warrant revision or whether the remaining balance of such assets may not be recoverable. We use an estimate of the related undiscounted cash flow over the remaining life of the asset in measuring whether the asset is recoverable.
If we fail to raise additional capital, our ability to implement our business model and strategy could be compromised.
We have limited capital resources and operations. From time to time, we may seek additional financing to provide the capital required to expand the production of our business operation and development initiatives and/or working capital, as well as to repay outstanding loans if cash flow from operations is insufficient to do so. We cannot predict with certainty the timing or amount of any such capital requirements.
If we do not raise sufficient capital to fund our ongoing development activities, it is likely that we will be unable to carry out our business plans. We may not be able to obtain additional financing on terms acceptable, or at all. Even if we obtain financing for near-term operations, we may require additional capital beyond the near term. 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.
The residential real estate market tends to be cyclical and typically is affected by changes in general economic conditions which are beyond our control. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets, levels of unemployment, consumer confidence and the general condition of the U.S. and the global economy. The residential real estate market also depends upon the strength of financial institutions, which are sensitive to changes in the general macroeconomic environment. Lack of available credit or lack of confidence in the financial sector could impact the residential real estate market, which in turn could materially and adversely affect our business, financial condition and results of operations. 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 2022-2025 will remain at relatively higher levels than in years past and whether home prices will stabilize. The U.S. has experienced housing “bubbles” in the past which have burst, resulting in significant price declines, mortgage defaults and home foreclosures by lenders, the last one occurring in the early 2000s.
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. |
The lack of financing for homebuyers in the U.S. residential real estate market at favorable rates and on favorable terms has had a material adverse effect on our financial performance and results of operations.
Our business is significantly impacted by the availability of financing at favorable rates or on favorable terms for homebuyers, which may be affected by government regulations and policies. 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.
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. Policies of the Federal Reserve Board can affect interest rates available to potential homebuyers. Further, we will be adversely affected by any rising interest rate environment. Changes in the Federal Reserve Board’s policies, the interest rate environment and mortgage market are beyond our control, are difficult to predict and could restrict the availability of financing on reasonable terms for homebuyers, which could have a material adverse effect on our business, results of operations and financial condition. We review all aspects of the current state of legislation, regulations and policies affecting the domestic real estate market and cannot predict whether or not such legislation, regulation and policies may result in increased down payment requirements, increased mortgage costs, and result in increased costs and potential litigation for housing market participants, any of which could have a material adverse effect on our financial condition and results of operations.
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 0.3 percent in February 2026 seasonally adjusted, and rose 2.4 percent over the last 12 months ending January 2026, not seasonally adjusted.1 This increase was above the Federal Reserve System’s (the “Fed”) targeted inflation rate of 2.0%, The 2025 federal funds interest rate in late December decreased to a range of 3.50 to 3.75 primarily due to stubborn inflation and signs of a weakening labor market.2 Inflation continues to decline after a period of rising prices, which contributed to the decision. The Fed aims to provide financial relief to borrowers and continue to cool down an overheated economy. Fed funds rates impact interest rates on government bonds that have a correlated effect on mortgage interest rates, which, as of March 26, 2026, the average rate for a 30-year fixed rate mortgage was 6.38 according to Freddie Mac, the federally chartered home mortgage loan securitizer.3 Mortgage interest rates have continued to have an effect on the sale of existing homes, that include single-family homes, townhomes, condominiums and co-ops, with a year over year decrease of 1.4% in February 2026 to a seasonally adjusted annual rate of 4.09 million.4 The slowdown of home sales transactions resulted from many would-be buyers being priced out of homeownership while many homeowners with mortgage rates below 4.0% feeling stuck in place, since selling would mean taking on a mortgage with a significantly higher interest rate. 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, 2025. Thus, we expect these trends to continue to adversely affect our revenues in 2026. 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 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 2025. Tight inventory was reflected by the sustained high national median existing home sale price in February 2026 of $398,000, a slight increase of 0.3% from a year earlier. Homes usually go under contract a month or two before they close, so the February data is based on purchase decisions made in December 2025 and January 2026. The average rate for a 30-year fixed mortgage was 6.38% as of March 26, 2026, down from 6.65% during the most recent 52-week period, according to Freddie Mac. This combination of higher mortgage rates and higher sales prices has kept many sellers, who would have to relinquish a mortgage at 4.0% or less, from selling, and has pushed many prospective buyers, especially first-time home buyers, out of the market. Total housing inventory at the end of February 2026 was 1.29 million units, up 3.1% from January and up 7.9% from one year ago (1.24 million). There was an unsold inventory supply of 3.8-months at the current sales pace, 2.4% higher than January 2026 but only up from 0.1 month from February 2025. 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. 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.
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 intend to pursue a number of different strategies to grow our revenue and earnings. However, we may not be able to successfully execute these strategies. We intend to pursue a strategy of increasing our agent count by increasing our recruiting efforts. Recent history has shown that a strong real estate market brings in more realtors, some of whom have worked in the industry on a part-time basis. As the market continues to grow, we believe that will enable us to sell more franchises and recruit and retain higher numbers of agents, increasing our revenue and profitability. However, competition for qualified and effective agents is intense, and we may be unable to recruit and retain enough qualified and effective agents to satisfy our growth strategies. 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; |
| 1 | https://www.usinflationcalculator.com/inflation/current-inflation-rates/#:~:text=February%202024%20%7C%200.4%20%7C%203.2 |
| 2 | https://www.federalreserve.gov/newsevents/pressreleases/monetary20260128a.htm |
| 3 | https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-average-638 |
| 4 | https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-1-7-increase-in-february |
| ● | 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. |
If we do not effectively manage our growth, our brand could suffer. In order to successfully expand our business, we must effectively recruit, develop and motivate new franchisees and new agents and employees, and we must maintain the beneficial aspects of our “three pillars” philosophy. We may not be able to hire new agents or employees and our franchisees may not be able to recruit new agents necessary to manage our growth quickly enough to meet our needs. If we fail to effectively manage our hiring needs and successfully develop our franchisees, our franchisee, agent and employee morale, productivity and retention could suffer, and our brand and results of operations could be harmed. These improvements could require significant capital expenditures and place increasing demands on our management. We may not be successful in managing or expanding our operations or in maintaining adequate financial and operating systems and controls. If we do not successfully manage these processes, our results of operations, financial condition and prospects could be adversely affected.
The failure to attract and retain highly qualified franchisees and to acquire and open new corporate offices could compromise our ability to pursue our growth strategy.
The success of our franchisees depends largely on the efforts and abilities of franchisees and their agents, which are subject to numerous factors, including the fees or sales commissions they receive, and our ability to train and oversee their operations to ensure that they provide the quality service promoted by our brands. If our franchisees do not continue to believe in the value proposition we offer with our brand, believe that we are overcharging them for the services we provide, or, for other reasons decide not to renew their franchise agreements with us, our business may be materially adversely affected. 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.
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.
We might not be able to attract and retain additional qualified agents and other personnel.
In order to grow our business, we must attract and retain highly qualified agents and other personnel. In particular, we compete with both national and local real estate brokerages for qualified agents who manage our operations in each state and who are our on-the-ground representatives. With the evolving real estate brokerage market, we must find ways to attract and retain these people. And with the change in the way people work that has been accelerated by the COVID-19 pandemic, finding qualified agents and employees has become more difficult. We might have difficulty in finding, hiring and retaining highly skilled personnel with appropriate qualifications. Many of the companies with whom we compete for experienced personnel have greater resources than we do. In addition, in making decisions about where to work, in addition to cash compensation, people often consider the value of the stock options or other equity incentives they receive. We currently have an equity incentive plan to offer stock incentives to our employees and our agents that we believe is competitive with plans offered by other publicly traded real estate brokerage companies. However, if those plans fail to encourage new hires or to motivate our existing staff, we may fail to attract new personnel or fail to retain our current personnel which would severely harm our growth prospects. 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.
A significant adoption by consumers of alternatives to full-service agents or loan originators could have a material adverse effect on our business, prospects and results of operations.
A significant increase in consumer use of technology that eliminates or minimizes the role of the real estate agent could have a materially adverse effect on our business, prospects and results of operations. These options include cloud-based competitors such as direct-buyer companies that purchase directly from the seller, and online discounters who reduce the role of the agent in order to offer sellers a low commission or a flat fee while giving rebates to buyers. How consumers want to buy or sell houses will determine if these models reduce or replace the long-standing preference for full-service agents. In addition, advances in AI and related technology may accelerate the development of tools that diminish the perceived value of full-service real estate agents.
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. 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. While the national and international brands far exceed us in financial resources, geographic coverage, marketing ability and infrastructure, we believe that our “family-oriented” style of business, based on our “three pillars” philosophy, is a strong selling point. So, while competing franchisors may offer franchisees monthly ongoing fees that are lower than those we charge, or that are more attractive in particular market environments, we believe that our “high touch” approach is able to overcome many of the factors that competitors sell. Corporate-owned competitors compete primarily on the basis of commission payments to their agents. While we believe that we are competitive in that market, our brand is not as strong as competitors who have been in the market longer and have the financial wherewithal to promote themselves in the media. Our largest competitors in this industry in the U.S. include RE/MAX Holdings, Inc., Realogy Holdings, Corp. (which operates several brands including the Coldwell Banker and Century 21 brands), Fathom Holdings Inc., eXp World Holdings Inc., Real Brokerage Inc., among others.
Our Company owned brokerage business is subject to competitive pressures.
Our Company owned brokerage business, like that of our franchisees, is generally subject to intense competition. We compete with other national and independent real estate organizations including our franchisees and those of other national real estate franchisors, franchisees of local and regional real estate franchisors, regional independent real estate organizations, discount brokerages, internet-based brokerages and smaller niche companies competing in local areas. Competition is particularly intense in the densely populated metropolitan areas in which we operate. In addition, in the real estate brokerage industry, new participants face minimal barriers to entry into the market. We also compete for the services of qualified licensed agents as well as franchisees. 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.
Our financial results are affected directly by the operating results of franchisees and agents, over whom we do not have direct control.
Our real estate franchises generate revenue in the form of monthly ongoing royalties and fees, including monthly broker fees tied to gross commissions, training and technology fees charged to our franchisees. 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. If industry trends or economic conditions are not sustained or do not continue to improve, our franchisees’ and our agents’ financial results could worsen, and our revenue may decline. We may also have to terminate franchisees more frequently in the future due to non-reporting and non-payment. Further, if franchisees fail to renew their franchise agreements our revenue from ongoing monthly fees may decrease, and profitability may be lower than in the past due to reduced ongoing monthly fees.
We are dependent upon the truthfulness of our franchisees to provide accurate reports and accounting to us.
While we have significant insight into the business activity of our domestic and international regional franchisees and are able to observe their books and records in real time, the franchisees self-report their agent counts, agent commissions and fees due to us. Our tools to validate or verify these reports are not equipped to ferret out under or erroneous reporting, even if unintentional or intentional fraud. If any of those circumstances occur, we may not receive all of the annual agent dues or monthly ongoing fees due to us. 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.
Failing to develop and maintain a positive relationship with our franchisees, agents and loan originators could compromise our ability to maintain or expand or franchisee network.
Although we believe our relationships with our franchisees and their agents are strong, the nature of such relationships can give rise to conflict. For example, franchisees, or agents may become dissatisfied with the fees and dues owed to us, particularly in a period of economic downturn and uncertainty or in the event that we increase fees and dues. Affiliates may also disagree with certain network-wide policies and procedures, including policies dictating brand standards or affecting their marketing efforts. They may also be disappointed with other aspects of our value proposition including our marketing initiatives, technology offerings, or educational content. If we experience any conflicts with our franchisees on a large scale, our franchisees may decide not to renew their franchise agreements upon expiration or seek to disaffiliate with us, which could result in litigation. These events may, in turn, materially and adversely affect our business and operating results.
An organized franchisee association could also pose risks to our ability to set the terms of our franchise agreements and our pricing.
Our franchise model can be subject to particular litigation risks.
Litigation against a franchisee or its affiliated agents or loan originators, whether in the ordinary course of business or otherwise, may also include claims against us for liability by virtue of the franchise relationship. Franchisees may fail to obtain insurance that is required pursuant to the terms of our franchise agreements, naming the Company as an additional insured on such claims. Claims against us (including vicarious liability claims) could result in substantial costs, divert our management resources and could cause adverse publicity, which may materially and adversely affect us and our brand, regardless of whether such allegations are valid or whether we are liable.
In addition to claims over individual or isolated franchisee actions, third parties could attempt to hold us responsible for actions of our franchisees and their agents or loan originators in the aggregate. Our franchised business model is unlike a traditional, integrated corporation where company-owned outlets provide goods or services to consumers and the corporation has direct responsibility for operations at those outlets. Our franchised business model is also unlike many franchisors in other industries—such as the restaurant and hospitality industries—where franchisors may dictate many operational details of the franchisees’ businesses and the delivery of goods and services to consumers and thereby have some of the liability for those or other aspects of the franchisees’ operations. Because we franchise in professional service fields where licensure is required—real estate and mortgage brokerage—we do not dictate or control the day-to-day operations, or the advice provided by our franchisees or their affiliated agents or loan originators. Nonetheless, third parties may try to hold us liable for actions of our franchisees and their agents or loan originators, even when we have no involvement with those actions and they are beyond our control and, we believe, should not result in liability to us. As a franchisor, unlike an integrated corporation, we obtain only a small portion of the revenue of our franchisees, and as a result our capital is limited in comparison with the size of our entire franchise networks. Therefore, if third parties were successful in asserting liability for practices of our franchise network in its entirety, and in holding us vicariously responsible for that liability, the resulting damages could exceed our available capital, could materially affect our earnings, or even render us insolvent.
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. One such risk is that one of our franchisees could declare bankruptcy which could have a substantial negative impact on our ability to collect fees and dues owed under such franchisee’s franchise arrangements. In a franchisee bankruptcy, the bankruptcy trustee may reject its franchise contract pursuant to Section 365 under the U.S. Bankruptcy Code, in which case there would be no further payments for fees and dues from such franchisee. Other risks include the risk that our franchisees may be uninsured or underinsured against certain business hazards or that insurance may be unavailable, as was hurricane insurance in Florida for a number of years. Any casualty loss happening to our franchisees could put their entire business at risk and potentially result in its failure and the termination of our franchise agreement. Any such loss or delay in an insurance payment could have a material and adverse effect on a franchisee’s ability to satisfy its obligations under its franchise agreement with us, including its ability to make payments for contractual fees and dues or to indemnify us. Each franchise agreement is subject to termination by us in the event that the franchisee breaches its contract, generally after expiration of applicable cure periods, although under certain circumstances a franchise agreement may be terminated by us upon notice without an opportunity to cure. The default provisions under the franchise arrangements are drafted broadly and include, among other things, any failure to meet operating standards and actions that may threaten our brands. In addition, each franchise agreement eventually expires and upon expiration, we or the franchisee may or may not elect to renew the franchise arrangement. If our agreement is renewed, such renewal is generally contingent on the franchisee’s execution of the then-current form of franchise contract (which may include terms the franchisee deems to be more onerous than the prior franchise agreement), the satisfaction of certain conditions and the payment of a renewal fee. If a franchisee is unable or unwilling to satisfy any of the foregoing conditions, the expiring franchise agreement will terminate upon expiration of the term of the franchise arrangement.
Our operating results are subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult.
The residential real estate industry is subject to seasonality. Sales activity is typically stronger in the spring and summer months when school is not in session compared to the fall and winter seasons. This is true even in the Southeastern U.S. where weather patterns do not change significantly with the seasons. However, extreme weather does affect our business by keeping people focused on matters other than home buying. We have historically experienced lower revenues during the fall and winter seasons, as well as during periods of unseasonable weather, which reduces our operating income, net income, operating margins and cash flow. Real estate listings precede sales, and a period of poor listings activity will negatively impact revenue. Our revenue and operating margins each quarter will remain subject to seasonal fluctuations, which may make it difficult to compare or analyze our financial performance effectively across successive quarters.
A significant increase in private sales of residential property, including through the internet, could have a material adverse effect on our business, prospects and results of operations.
Although, as of 2025, 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.
The real estate brokerage business is highly regulated and any failure to comply with such regulations or any changes in such regulations could adversely affect our business.
Our Company owned real estate brokerage business and our franchising business are highly regulated and must comply with Federal and state requirements governing the licensing and conduct of real estate brokerage and brokerage-related businesses and franchising in the jurisdictions in which we and they do business. These laws and regulations contain general standards for and prohibitions on the conduct of real estate brokers and agents, including those relating to licensing of brokers and agents, fiduciary and agency duties, administration of trust funds, collection of commissions, advertising and consumer and franchising disclosures. 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”). RESPA and comparable state statutes, among other things, restrict payments which real estate brokers, agents and other settlement service providers may receive for the referral of business to other settlement service providers in connection with the closing of real estate transactions. Such laws may to some extent restrict preferred vendor arrangements involving our franchisees and our Company owned brokerage business. RESPA and similar state laws also require timely disclosure of certain relationships or financial interests that a broker has with providers of real estate settlement services. In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd Frank Act”) contains the Mortgage Reform and Anti-Predatory Lending Act (the “Mortgage Act”), which imposes a number of additional requirements on lenders and servicers of residential mortgage loans, by amending certain existing provisions and adding new sections to RESPA and other federal laws.
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. |
Federal, state and local regulatory authorities also have relatively broad discretion to grant, renew and revoke licenses and approvals and to implement regulations. Accordingly, such regulatory authorities could prevent or temporarily suspend our Company owned brokerages or our franchisees from carrying on some or all of our activities or otherwise penalize them if their financial condition or our practices were found not to comply with the then current regulatory or licensing requirements or any interpretation of such requirements by the regulatory authority. Our failure to comply with any of these requirements or interpretations could limit our ability to renew current franchisees or sign new franchisees or otherwise have a material adverse effect on our operations.
We might not be aware of all the laws, rules and regulations that govern our business, or be able to comply with all of them, given the rate of regulatory changes, ambiguities in regulations, contradictions in laws and regulations between jurisdictions, and the difficulties in achieving both Company-wide and region-specific knowledge and compliance. 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.
Adverse U.S. and global market, economic and political conditions, including the ongoing conflict between Ukraine and Russia, recent conflicts in the Middle East and other events or circumstances beyond our control could have a material adverse effect on us.
Another economic or financial crisis or rapid decline of the consumer economy, significant concerns over energy costs, geopolitical issues, including the ongoing armed conflicts between Ukraine and Russia, United States and Iran, as well as in Israel and the Gaza Strip, the availability and cost of credit, the U.S. mortgage market, or a declining real estate market in the U.S. can contribute to increased volatility, diminished expectations for the economy and the markets, and high levels of structural unemployment by historical standards.
Market, political and economic challenges, including dislocations and volatility in the credit markets, general global economic uncertainty, uncertainty or volatility from matters such as the implementation of the governing agenda of President Donald J. Trump, and changes in governmental policy on a variety of matters such as trade, tariffs and manufacturing policies may adversely affect the economy and financial markets, our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our Common Stock.
Climate change and environmental risks could increase our costs and subject us to liability.
Our operations are affected by federal, state and/or local environmental laws in the countries in which we operate, and we may face liability with respect to environmental issues occurring at properties we manage or occupy. We may face costs or liabilities under these laws as a brokerage company if our agents violate applicable disclosure laws and regulations or as a result of our agents’ role as a property manager. The impact of climate change presents a significant risk. Damage to assets caused by extreme weather events linked to climate change is becoming more evident, highlighting the fragility of global infrastructure. We believe that the effects of climate change will increasingly impact our own operations and those of properties we manage, especially when they are in coastal cities. The impact includes the relative desirability of locations and the cost of operating and insuring acquired properties. Due to residential property damages resulting from hurricanes in the past several years, many insurers have either raised premiums above the national average or ceased doing business in Florida, our main market area. 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.
We are subject to risks of operating in foreign countries.
In 2025, we commenced an expansion of our business in Europe, starting with engaging an area developer and establishing a subsidiary in Spain. Our international operations are 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. Those 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. |
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.
Our future success is largely dependent on the efforts and abilities of our Founder, Chief Executive Officer, Interim Chief Financial Officer and President, 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. 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. La Rosa or our other senior management and therefore their loss could make it more difficult to successfully operate our business and achieve our business goals. As a result, we may not be able to cover the financial loss we may incur in losing the services of any of these individuals.
Our ability to retain our employees is generally subject to numerous factors, including the compensation and benefits we pay, the mix between the fixed and variable compensation we pay our employees and prevailing compensation rates. As such, we could suffer significant attrition among our current key employees. Competition for qualified employees in the real estate brokerage and franchising industry is intense. We may be unable to retain existing employees that are important to our business or hire additional qualified employees. The process of locating employees with the combination of skills and attributes required to carry out our goals is often lengthy. 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 June 3, 2026, Mr. La Rosa beneficially owned approximately 0.19% of our outstanding Common Stock and all 1,800 shares of our Series X Preferred Stock that provides for 10,000 votes per share when voting with the Common Stock, representing 91.81% of the total voting power of our capital stock. Thus, Mr. La Rosa, our President, Chief Executive Officer, and Interim Chief Financial Officer, 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 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’s concentration of ownership could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which could cause the market price of our Common Stock to decline or prevent our stockholders from realizing a premium over the market price for their Common Stock. 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. La Rosa will control all matters that come before the stockholders for a vote and thus we are a “controlled company” within the meaning of the Nasdaq listing requirements and, as a result, the Company will qualify for exemptions from certain corporate governance requirements. If we take advantage of such exemptions, you will not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements.
Mr. Joseph La Rosa has voting control with respect to director elections and all other matters. Subject to any fiduciary duties owed to other stockholders under Nevada law, Mr. La Rosa controls all matters requiring approval by our stockholders, including the election and removal of directors and any proposed merger, acquisition, consolidation or sale of all or substantially all of our assets. In addition, due to his significant ownership stake and his service as our Chief Executive Officer, Director and Interim Chief Financial Officer, Mr. La Rosa controls the management of our business and affairs. Mr. La Rosa may have interests that are different than yours and may support proposals and actions with which you may disagree. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to our other stockholders and adversely affecting the market price of our Common Stock.
Because Mr. La Rosa controls, as of June 3, 2026, 91.81% 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. Nevertheless, we have a majority of independent directors who will serve on our Audit, Compensation and Nominating and Corporate Governance Committees. However, although we have no current plans to do so, for as long as we remain a controlled company, we could take advantage of such exemptions in the future.
Infringement, misappropriation, or dilution of our intellectual property could harm our business.
We regard our “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. 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. However, not all trademarks or service marks that we currently use have been registered in all of the countries in which we may do business in the future, and they may never be registered in all of those countries. 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.
We are not aware of any challenges to our right to use any of our brand names or trademarks. We are vigilant in enforcing our intellectual property and protecting our brands. Unauthorized uses or other infringement of our trademarks or service marks, including ones that are currently unknown to us, could diminish the value of our brands and may adversely affect our business. Effective intellectual property protection may not be available in every market in which we have franchised or intend to franchise. Failure to adequately protect our intellectual property rights could damage our brands and impair our ability to compete effectively. Even where we have effectively secured statutory protection for our trademarks and other intellectual property, our competitors may misappropriate our intellectual property. Defending or enforcing our trademark rights, branding practices and other intellectual property, and seeking an injunction and/or compensation for misappropriation of confidential information, could result in the expenditure of significant resources and divert the attention of management, which in turn may materially and adversely affect our business and operating results.
Although we monitor and restrict our franchisees’ activities through our franchise agreements, franchisees may refer to our brands improperly in writings or conversations, resulting in the dilution of our intellectual property. Franchisee noncompliance with the terms and conditions of our franchise agreements and our brand standards may reduce the overall goodwill of our brands, whether through the failure to meet the FTC guidelines or applicable state laws, or through the participation in improper or objectionable business practices. Moreover, unauthorized third parties may use our intellectual property to trade on the goodwill of our brand, resulting in consumer confusion or dilution. Any reduction of our brand’s goodwill, consumer confusion, or dilution is likely to impact sales, and could materially and adversely impact our business and operating results.
We are subject to certain risks related to litigation filed by or against us, and adverse results may harm our business and financial condition.
The real estate industry often involves litigation, ranging from individual lawsuits by brokerage clients, sales associates, employees and franchisees to large class actions and government investigations. We often are involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Such litigation and other proceedings have included, and may in the future include, but are not limited to, actions relating to breach of contract, employment matters, sales agent commissions, intellectual property, commercial arrangements, negligence and fiduciary duty claims arising from our brokerage operations, fraud or failure to disclose matters in our franchise documents or agreements, standard brokerage disputes like the failure to disclose hidden defects in a property such as mold, vicarious liability based upon the conduct of individuals or entities outside of our control, including our agents, third-party service or product providers, antitrust claims, general fraud claims, employment law claims, including claims challenging the classification of our agents as independent contractors and compliance with wage and hour regulations, and claims alleging violations of the Real Estate Settlement Procedures Act or state consumer fraud statutes.
Each lawsuit filed against or by us has factors that are unpredictable, including but not limited to, legal fees, insurance coverage, or the ultimate outcome of litigation and remedies or damage awards. Adverse results in such litigation and other proceedings may harm our business, our brands and our financial condition.
We have general liability and an errors and omissions insurance policy to help protect us against claims of inadequate work or negligent action. This insurance might not continue to be available to us on commercially reasonable terms or at all, or a claim otherwise covered by our insurance may exceed our coverage limits, or a claim might not be covered at all. We may be subject to errors or omissions claims that could have an adverse effect on us. Moreover, defending a suit, regardless of its merits, could entail substantial expense and require the time and attention of our senior management. Substantial financial judgments against us would have a material adverse effect on our business, brands, results of operations, financial condition and prospects.
Adverse outcomes in litigation and regulatory actions against the NAR, other real estate brokerage companies and agents in our industry could adversely impact our financial results.
Adverse outcomes in legal and regulatory actions against the NAR, other companies, brokers, and agents in the residential and commercial real estate industry may adversely impact our financial condition and our real estate brokers and agents when those matters relate to business practices shared by the Company, our real estate brokers and agents, or our industry at large. Such matters may include, without limitation, antitrust and anticompetition, RESPA, Telephone Consumer Protection Act of 1991 and state consumer protection law, and worker classification claims. 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.
As an example, in the matter of Burnett v. National Association of Realtors (U.S. District Court for the Western District of Missouri), a federal jury found the NAR and certain other remaining brokerage defendants liable for $1.8 billion in damages on claims that these companies conspired to artificially inflate brokerage commissions, which is in violation of federal antitrust law (the “Burnett Ruling”). The verdict was appealed on October 31, 2023. Additionally, certain other brokerage defendants settled with the plaintiffs, including both monetary and non-monetary settlement terms. That same day, the NAR, EXP World Holdings, Inc., Compass, Inc., Redfin Corporation, Weichert Realtors, United Real Estate, Howard Hann Real Estate Services, Douglas Elliman, Inc., The Keyes Company, Illustrated Properties, LLC, Baird & Warner, Inc., Real Estate One, Inc., and others were named as defendants in Gibson v. National Association of Realtors (U.S. District Court for the Western District of Missouri), alleging a similar fact pattern and antitrust violations. On or about March 15, 2024, NAR agreed to settle the Burnett Ruling, along with a sister litigation, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions. On November 26, 2024, the NAR Settlement was granted over objections, The final approval order is currently being appealed. If the NAR Settlement is sustained on appeal, it is expected to resolve claims against the NAR and certain companies related to this matter.
On March 22, 2024, real estate brokerage company Compass Inc. (“Compass”) announced that it will pay $57.5 million as part of a proposed settlement to resolve lawsuits over real estate commissions and agreed to change its business practices to ensure clients can more easily understand how brokers and agents are compensated for their services. Compass’s motion for final approval of the settlement agreement was granted on October 31, 2024 and the settlement agreement is now effective. The final approval ruling was appealed by certain class members that objected to the settlement and is now pending before the United States Circuit Court of Appeals for the Eighth Circuit. In the same litigation, the court granted final approval of multiple additional settlements, including (i) an $8.62 million settlement on June 25, 2025 involving The Keyes Company Illustrated Properties, LLC, Baird & Warner, Inc. Real Estate One, Inc. and other defendants, and (ii) a $42 million settlement on February 5, 2026 involving William Raveis Real Estate Inc., Hanna Holdings Inc., Windermere Real Estate Services Company Inc., Exit Realty Corp. International, Exit Realty Corp. USA, and William L. Lyon & Associates Inc.
While the Company was not named as a defendant in any of these actions, it is possible that it could be a litigant at some point in the future. These settlements can result in changes in the way real estate brokers are compensated for their services. Most notably, home sellers will no longer be required to pay buyer agent commissions which will result in lower buyer agent compensation. We cannot predict the full breadth of the outcome of these lawsuits but believe that they will result in a significant adverse effect on our financial condition and results of operations for the foreseeable future.
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. Our systems and operations, as well as the third-party applications that we license are vulnerable to security breaches, interruption or malfunction due to certain events beyond our control, including natural disasters, such as earthquakes, fire and flood, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events. 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. Any security breach, interruption, delay or failure in our systems and operations could substantially harm our franchisees and agents by interfering with their daily business routines, reducing their transaction volume, impairing the quality of the services we provide, increasing our costs, prompting litigation and other claims, and damaging our reputation, any of which could substantially harm our results of operations, financial condition and prospects.
If we attempt to, or acquire other complementary businesses, we will face certain risks inherent with such activities.
We may seek to acquire, and acquire, certain complementary businesses, including one or more of our affiliates. Any future growth through acquisitions will depend in part on the availability of suitable acquisition targets at favorable prices and with advantageous terms and conditions, which may not be available to us. In addition, we may take on debt to finance these acquisitions which will create new financial risks, or use our Common Stock as currency, which could dilute our then current stockholders. Acquisitions subject us to several significant risks, any of which may prevent us from realizing the anticipated benefits or synergies of the acquisition. The integration of companies is a complex and time-consuming process that could significantly disrupt our businesses and the business of the acquired company, including the diversion of management attention, failure to identify certain liabilities and issues during the due diligence process, the inability to retain personnel and clients of the acquired business and litigation. Any negative outcomes from acquisitions or attempted acquisitions could result in a material adverse effect on our financial condition, results of operations and prospects.
If we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”) as a result of our ownership of our subsidiaries, applicable restrictions could make it impractical for us to continue our business as contemplated and could have an adverse effect on our business.
Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if: (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment company,” as such term is defined in either of those sections of the 1940 Act and intend to conduct our operations so that we will not be deemed an investment company. 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.
Risks Related to Cryptocurrencies and Digital Assets
The continuing development and acceptance of digital assets and distributed ledger technology are subject to a variety of risks.
Cryptocurrencies, such as stablecoins, and the other types of digital assets in which we began investing and trading in 2026 involve a new and rapidly evolving industry of which blockchain technology is a prominent, but not unique, part. The growth of the digital asset industry in general, and distributed ledger technology that supports digital assets, is subject to a high degree of uncertainty. The factors affecting the further development of the digital asset industry, as well as distributed ledger technology, include:
| ● | continued worldwide growth in the adoption and use of digital assets; |
| ● | the limited operating histories of many cryptocurrency networks, which have not been validated in production and are still in the process of developing and making significant decisions that will affect the design, supply, issuance, functionality, and governance of their respective digital assets and underlying blockchain networks; |
| ● | government and quasi-government regulation of digital assets and their use, or restrictions on or regulation of access to and operation of applicable distributed ledger technology or systems that facilitate their issuance and secondary trading; |
| ● | the taxation, and tax-related reporting, of transactions involving digital assets by the United States and other jurisdictions; |
| ● | the maintenance and development of the open-source software protocols of certain blockchain networks used to support digital assets; |
| ● | quantum computing, which poses a critical technical challenge to the viability of current digital asset standards underpinning blockchain technology and digital assets, as sufficiently powerful quantum computers could potentially break widely used encryption algorithms; |
| ● | other advancements in technology, including computing power, that may adversely affect the respective cryptocurrency networks, render existing distributed ledger technology obsolete, inefficient, or fail to remediate or introduce new bugs and security risks; |
| ● | the use of the networks supporting digital assets for developing smart contracts and distributed applications; |
| ● | development of new technologies for mining and staking and the rewards and transaction fees for miners or validators on digital asset networks; |
| ● | changes in consumer demographics and public tastes and preferences; |
| ● | the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; and |
| ● | general economic conditions and the regulatory environment relating to digital assets. |
Many digital asset networks, including Bitcoin and Ethereum, operate on open-source protocols maintained by groups of core developers. The open-source structure of these network protocols means that certain core developers and other contributors may not be compensated, either directly or indirectly, for their contributions in maintaining and developing the network protocol. A failure to properly monitor and upgrade network protocol could damage digital asset networks. As these network protocols are not sold and their use does not generate revenues for development teams, core developers may not be directly compensated for maintaining and updating the network protocols. Consequently, developers may lack a financial incentive to maintain or develop the network, and the core developers may lack the resources to adequately address emerging issues with the networks. There can be no guarantee that developer support will continue or be sufficient in the future. To the extent that material issues arise with certain digital asset network protocols and the core developers and open-source contributors are unable or unwilling to address the issues adequately or in a timely manner, such digital asset networks, and any corresponding digital assets held may be adversely affected.
Digital assets represent a new and rapidly evolving industry, and the market price of our Common Stock may in the future be impacted by the acceptance of stablecoins and other digital assets.
Digital assets built on blockchain technology were only introduced in 2008 and remain in the early stages of development. The Bitcoin network was first launched in 2009 and bitcoins were the first cryptographic digital assets created to gain global adoption and critical mass. Cryptographic and algorithmic protocols governing the issuance of digital assets represent a new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. If we continue investing significant funds in stablecoins and other digital assets, our results of operations and the market price of our Common Stock may be closely correlated with the acceptance and perception of such digital assets. As a result, the realization of one or more of the following risks could materially adversely affect the market price of our Common Stock:
| ● | Bitcoins have only recently become selectively accepted as a means of payment by some retail and commercial outlets, and use of bitcoins by consumers to pay such retail and commercial outlets remains limited. Banks and other established financial institutions may refuse to process funds for bitcoin transactions; process wire transfers to or from digital asset trading platforms, bitcoin-related companies or service providers; or maintain accounts for persons or entities transacting in bitcoin. As a result, the prices of bitcoins are largely determined by speculators and miners, thus contributing to price volatility that makes retailers less likely to accept it as a form of payment in the future. |
| ● | Banks may choose to not provide banking services, or may choose to cut off banking services, to businesses that provide digital asset-related services or that accept digital assets as payment, which could dampen liquidity in the market and damage the public perception of digital assets generally or any one digital asset in particular, such as bitcoin, and their or its utility as a payment system, which could decrease the price of digital assets generally or individually. |
| ● | Some digital asset networks and digital asset trading platforms or businesses that facilitate transactions in digital assets (including bitcoin) may be at an increased risk of having banking services cut off if they introduce or use certain privacy-preserving features. This is due to concerns that such features could interfere with anti-money laundering duties and economic sanctions checks. |
| ● | Users, developers and miners may otherwise switch to or adopt certain digital assets at the expense of their engagement with other digital asset networks, which may negatively impact those networks. |
Digital assets are a new asset class and represent a technological innovation and they are subject to a high degree of uncertainty. The adoption of digital assets will require growth in usage and in the blockchain technology generally for various applications. Adoption of digital assets will also require greater regulatory clarity. A lack of expansion in use of digital assets and blockchain technologies would adversely affect our financial performance. In addition, there is no assurance that digital assets generally will maintain their value over the long term. The value of digital assets is subject to risks related to our use. If growth in the use of digital assets generally occurs in the near or medium term, there is no assurance that such use will continue to grow over the long term. A contraction in use of digital assets may result in increased volatility or a reduction in digital asset prices, which would materially and adversely affect our investment and trading strategies, the value of our assets and the value of any investment in us.
Due to a lack of familiarity and some negative publicity associated with digital asset trading platforms, existing and potential customers, counterparties and regulators may lose confidence in digital asset trading platforms.
Since the inception of the cryptoeconomy, numerous digital asset trading platforms have been sued, investigated, or shut down due to fraud, manipulative practices, business failure, and security breaches. In many of these instances, customers of these platforms were not compensated or made whole for their losses. Larger platforms are more appealing targets for hackers and malware, and may also be more likely to be targets of regulatory enforcement actions. For example, in 2022 and 2023, each of Celsius Networks, Voyager Digital, Three Arrows Capital, FTX and Genesis declared bankruptcy. In particular, in November 2022, FTX-which was at the time one of the world’s largest and most popular digital asset trading platforms-became insolvent, and it was revealed that the platform had been misusing customer assets. These events resulted in a loss of confidence in the broader cryptoeconomy, adverse reputational impact to digital asset platforms, increased negative publicity surrounding crypto more broadly, heightened scrutiny by regulators and lawmakers and a call for increased regulation of digital assets and digital asset platforms.
In addition, there have been reports that a significant amount of trading volume on digital asset trading platforms is fabricated and false in nature. Such reports may indicate that the market for digital asset trading platform activities is significantly smaller than otherwise understood.
Negative perception, a lack of stability and standardized regulation in the cryptoeconomy, and the closure or temporary shutdown of digital asset trading platforms due to fraud, business failure, hackers or malware, or government mandated regulation, and associated losses suffered by customers may reduce confidence in the cryptoeconomy and result in greater volatility of the prices of assets, including significant depreciation in value. If we continue investing significant funds into digital assets, any of these events could have an adverse impact on our financial condition and our business.
The foreign and U.S. tax treatment of transactions in digital assets is unclear.
Due to the new and evolving nature of digital assets and the absence of comprehensive guidance with respect to digital assets, many significant aspects of the foreign and U.S. federal income tax treatment of digital assets are uncertain. Our operations and dealings in or in connection with digital assets, as well as transactions in digital assets generally, could be subject to adverse tax consequences in the United States, including as a result of development of the legal regimes surrounding digital assets, and our operating results, as well as the price of digital assets, could be adversely affected thereby.
Many significant aspects of the U.S. federal income tax treatment of digital assets (including with respect to the amount, timing and character of income recognition) are uncertain. In 2014, the IRS released Notice 2014-21, discussing certain aspects of “virtual currency” for U.S. federal income tax purposes and, in particular, stating that such virtual currency (i) is “property,” (ii) is not “currency” for purposes of the rules relating to foreign currency gain or loss, and (iii) may be held as a capital asset. From time to time, the IRS has released other notices and rulings relating to the tax treatment of virtual currency or digital assets reflecting the IRS’s position on certain issues. The IRS has not addressed many other significant aspects of the U.S. federal income tax treatment of digital assets and related transactions.
There continues to be uncertainty with respect to the timing, character and amount of income inclusions for various digital asset transactions including, but not limited to, lending and borrowing digital assets, staking, and other digital asset products that we offer. Although we believe our treatment of digital asset transactions for federal income tax purposes is consistent with current public positions of the IRS and/or existing U.S. federal income tax principles, because of the rapidly evolving nature of digital asset innovations and the increasing variety and complexity of digital asset transactions and products, it is possible the IRS and various U.S. states may disagree with our treatment of certain digital asset offerings for U.S. tax purposes, which could adversely affect the vitality of our business. We do not intend to request a ruling from the IRS on these issues, and we will take positions on these and other U.S. federal income tax issues relating to digital assets that we believe to be reasonable.
There can be no assurance that the IRS, U.S. state revenue agencies, or other foreign tax authorities will not alter their respective positions with respect to digital assets in the future or that a court would uphold the treatment set forth in existing positions. It also is unclear what additional tax authority positions, regulations, or legislation may be issued in the future on the treatment of existing digital asset transactions and future digital asset innovations under U.S. federal, U.S. state, or foreign tax law. Any such developments could result in adverse tax consequences for holders of digital assets and could have an adverse effect on the value of digital assets and the broader digital assets markets. Future technological and operational developments that may arise with respect to digital assets may increase the uncertainty with respect to the treatment of digital assets for U.S. and foreign tax purposes. The uncertainty regarding tax treatment of digital asset transactions could impact our business, both domestically and abroad.
Blockchain networks, digital assets and the digital asset trading platforms on which these assets are traded are dependent on internet and other blockchain infrastructure, which are susceptible to system failures, security risks and rapid technological change.
The success of cryptocurrency-based blockchain and other digital asset platforms will depend on the continued development of a stable public infrastructure, with the necessary speed, data capacity and security, and the timely development of complementary products such as high-speed modems for providing reliable internet access and services. Digital assets have experienced, and are expected to continue to experience, significant growth in the number of users and amount of content. Blockchains will continue to be increasingly interconnected with other blockchains and real-world applications. As services and applications continue to be built on top of blockchains, they will place increased reliance on third-party infrastructure providers, including in connection with cross-chain bridges and messaging, liquidity providers, wallets, data feeds and oracles. Reliance on any of these third-parties introduces additional risks and points of failure. There is no assurance that the relevant digital asset infrastructure will continue to be able to support the demands placed on it by this continued growth or that the performance or reliability of the technology will not be adversely affected by this continued growth. There is also no assurance that the infrastructure or complementary products or services necessary to make digital assets a viable product for their intended use will be developed in a timely manner, or that such development will not result in the requirement of incurring substantial costs to adapt to changing technologies. The failure of these technologies or platforms or their development could materially and adversely affect our investment and trading strategies, the value of our assets and the value of any investment in us. Any number of anticipated or unforeseen technical changes, software upgrades, soft or hard forks, cybersecurity incidents or other changes to the underlying blockchain network may occur from time to time, causing incompatibility, technical issues, disruptions or security weaknesses to our systems. If our third-party providers are unable to identify, troubleshoot and resolve any such issues successfully, they may no longer be able to support certain cryptocurrencies or blockchain networks, our assets may be frozen or lost, the security of our hot or cold wallets may be compromised and their systems and technical infrastructure may be affected, all of which could adversely impact the success of our business, financial condition and results of operations. Cryptocurrencies are created, issued, transmitted, and stored according to protocols run by computers in the cryptocurrency network. It is possible these protocols have undiscovered flaws or could be subject to network scale attacks which could result in losses to us.
If we hold digital assets through custodial arrangements or otherwise rely on private keys in the future, the loss, theft, destruction, or compromise of such private keys could result in the loss of digital assets and other adverse consequences.
Access to and transfer of digital assets generally requires the use of private cryptographic keys associated with a digital asset wallet. If we hold digital assets directly or through one or more custodians in the future, the security and availability of those private keys would be critical to our ability to access, transfer, and safeguard our digital assets. If private keys are lost, destroyed, stolen, compromised, or otherwise become inaccessible, and any backup or recovery mechanisms are unavailable or ineffective, the associated digital assets may become permanently inaccessible or may be misappropriated by unauthorized parties.
In connection with any future digital asset activities, we may rely on third-party custodians, wallet providers, or other service providers to store, safeguard, or administer digital assets. Such service providers may experience cybersecurity incidents, hacking events, insider misconduct, operational failures, technological malfunctions, data loss, or other disruptions that could impair their ability to safeguard or provide access to digital assets. In addition, digital asset wallets, blockchain networks, smart contracts, and related technologies may be vulnerable to security breaches, software defects, coding errors, phishing attacks, private key compromises, or other malicious activities.
If any private keys associated with digital assets owned by us or held on our behalf are compromised, or if any custodian or service provider is unable to access or recover such private keys, we could lose access to some or all of our digital assets. Any such event could result in financial losses, litigation, regulatory investigations or enforcement actions, reputational harm, increased compliance costs, operational disruptions, and other adverse effects on our business, financial condition, and results of operations.
Furthermore, to the extent we expand our digital asset activities in the future to include customer-facing products or services, any loss of or inability to access digital assets could adversely affect our customers, expose us to contractual or legal liabilities, and damage our reputation and relationships with customers, counterparties, and regulators.
Risks Associated with Our Capital Stock
We are currently listed on The Nasdaq Capital Market. 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.
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. If, for any reason, Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the following may occur, each of which could materially adversely affect our stockholders.
If we violate Nasdaq’s listing requirements, or if we fail to meet any of Nasdaq’s listing standards, our Common Stock may be delisted. A delisting of our Common Stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our Common Stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our Common Stock. The delisting of our Common Stock could significantly impair our ability to raise capital and the value of your shares.
On June 3, 2026, the closing price of our Common Stock was $1.21. Pursuant to Nasdaq Rule 5810(c)(3)(A)(iii), if the closing price of our Common Stock is $0.10 or less for 10 consecutive trading days, we will be issued a Staff Delisting Determination by Nasdaq. If we receive a Staff Delisting Determination Letter resulting from our Common Stock trading at or below $0.10 for 10 consecutive trading days, we will have 7 calendar days to request a hearing before a Nasdaq hearings panel to review the Staff Delisting Determination, which will determine the delisting of our Common Stock by Nasdaq. A hearing would then take place within 45 days of the hearing request to determine whether or not our Common Stock would be delisted. 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.
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. While a listing on an over-the-counter exchange could maintain some degree of a market in our Common Stock, we could face substantial material adverse consequences, including, but not limited to, the following: limited availability for market quotations for our Common Stock; reduced liquidity with respect to and decreased trading prices of our Common Stock; a determination that shares of our Common Stock are “penny stock” under the Securities and Exchange Commission rules, subjecting brokers trading our Common Stock to more stringent rules on disclosure and the class of investors to which the broker may sell the Common Stock; limited news and analyst coverage for our Company, in part due to the “penny stock” rules; decreased ability to issue additional securities or obtain additional financing in the future; and potential breaches under or terminations of our agreements with current or prospective large stockholders, strategic investors and banks. 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.
Additionally, in January 2026, Nasdaq proposed a rule change that would require companies listed on the Nasdaq Global and Capital Markets to maintain a minimum market value of listed securities (“MVLS”) of at least $5 million. If adopted, this requirement would represent an additional continued listing standard applicable to our Common Stock. Under the proposed rule, if a company’s MVLS falls below $5 million for 30 consecutive business days, Nasdaq would immediately suspend trading and delist the company’s securities, with no compliance or cure period. Unlike some other Nasdaq listing deficiencies, the proposed rule would not provide an opportunity to regain compliance prior to suspension, and a hearing request would not stay the suspension of trading. As of the date of this report, the Company’s MVLS is below $5 million. In addition, the market value of our Common Stock may fluctuate significantly due to a number of factors, many of which are outside of our control, including market conditions, investor sentiment toward small-cap companies, our operating performance, and general economic conditions. As a result, we may be unable to maintain the required MVLS threshold at all times. If this proposed rule is approved and adopted, any sustained decline in our MVLS below $5 million could result in the immediate suspension and delisting of our Common Stock from Nasdaq.
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.
The market for our Common Stock is characterized by significant price volatility when compared to the shares of larger, more established companies that have large public floats, and we expect that our share prices will be more volatile than the shares of such larger, more established companies for the indefinite future, although such fluctuations may not reflect a material change to our financial condition or operations during any such period. Such volatility can be attributable to a number of factors. First, as noted above, our Common Stock will, compared to the shares of such larger, more established companies, likely be sporadically and thinly traded. The price for our Common Stock could, for example, decline precipitously in the event that a large number of our shares are sold on the market without commensurate demand. Secondly, we are a speculative or “risky” investment due to our minimal profits to date. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that has a large public float. Many of these factors are beyond our control and may decrease the market price of our Common Stock regardless of our operating performance.
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. |
There have recently been instances of extreme stock price run-ups followed by rapid price declines and stock price volatility seemingly unrelated to company performance following a number of recent initial public offerings, particularly among companies, like ours, that have had relatively smaller public floats. Such volatility, including any stock run-up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Common Stock.
If, for example, the market for real estate-related stocks or the stock market in general experiences loss of investor confidence, the trading price of our Common Stock could decline for reasons unrelated to our business, financial condition or operating results. 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.
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.
Certain shares previously issued and sold under our Third Amended and Restated La Rosa Holdings Corp. 2022 Agent Incentive Plan may have been sold in violation of federal and state securities laws and may be subject to rescission rights and other penalties, requiring us to repurchase shares sold thereunder.
During the period from December 31, 2024 to September 30, 2025, the Company mistakenly issued an aggregate 31 shares (as adjusted for the reverse stock split effected on July 7, 2025, January 26, 2026 and April 20, 2026) of restricted common stock to its contractors pursuant to Third Amended and Restated La Rosa Holdings Corp. 2022 Agent Incentive Plan (a part of the La Rosa Holdings Corp. 2022 Equity Incentive Plan, as amended), as free trading shares (the “Sales”). At the time of issuance of such securities, the Company mistakenly relied on the Registration Statement on Form S-8 (File No. 333-275118) filed by the Company with the SEC and declared effective upon such filing on October 20, 2023, while the shares issued in such Sales were not registered pursuant to such registration statement.
Because the registration statement did not cover the Sales, the Sales could be determined to be unregistered sales of securities and, in accordance with Section 5 of the Securities Act, direct purchasers in the Sales may have rescission rights pursuant to which they may be entitled to recover the amount paid for such shares, plus statutory interest, upon returning the shares to us within one year from the transaction date. In addition, we could be subject to enforcement actions or penalties and fines by federal and/or state regulatory authorities. We cannot predict the likelihood of any claims or actions being brought against us or the amount of any penalties or fines in connection with the Sales.
Future issuances of debt securities, which would rank senior to our Common Stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which could rank senior to our Common Stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our Securities.
In the future, we may attempt to increase our capital resources by offering debt securities. Upon bankruptcy or liquidation, holders of our debt securities, and lenders with respect to other borrowings we may make, would receive distributions of our available assets prior to any distributions being made to holders of our Common Stock. Moreover, if we issue preferred stock, the holders of such preferred stock could be entitled to preferences over holders of Common Stock in respect of the payment of dividends and the payment of liquidating distributions. Because our decision to issue debt or preferred stock in any future offering, or borrow money from lenders, will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings. 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.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 per share, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on Nasdaq or another national securities exchange and if the price of our securities is less than $5.00, our securities could be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore shareholders may have difficulty selling their Common Stock.
We may have violated Section 13(k) of the Exchange Act (implementing Section 402 of the Sarbanes-Oxley Act of 2002) and may be subject to sanctions as a result.
Section 13(k) of the Exchange Act provides that it is unlawful for a company that has a class of securities registered under Section 12 of the Exchange Act to, directly or indirectly, including through any subsidiary, extend or maintain credit in the form of a personal loan to or for any of its directors or executive officers. 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. La Rosa that are not permissible under Section 13(k) of the Exchange Act. Issuers that are found to have violated Section 13(k) of the Exchange Act may be subject to civil sanctions, including injunctive remedies and monetary penalties, as well as criminal sanctions. 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. 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.
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.
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. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our shares held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second quarter, in which case we would no longer be an emerging growth company as of the following fiscal year end. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected to avail ourselves of the extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K promulgated by the SEC. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our shares held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter. 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.
Because of the exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors, and it may be difficult for us to raise additional capital as and when we need it. 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.
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.
The trading market for our Common Stock depends in part on the research and reports that securities or industry analysts publish about us or our business. As of the date of this annual report, no analysts cover our stock. If we do not obtain analyst coverage or if one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
We do not expect to pay dividends in the future, and any return on investment may be limited to the value of our stock.
We currently intend to retain any future earnings to support the development of our business and do not anticipate paying cash dividends on our Common Stock in the foreseeable future. Our payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including, but not limited to, our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. In addition, our ability to pay dividends on our Common Stock may be limited by Nevada state law or any financial covenants to which we are bound by our debt obligations. Accordingly, investors must rely on sales of their Common Stock after price appreciation, which may never occur, as the only way to realize a return on their investment. Investors seeking cash dividends should not purchase our Common Stock.
Risks Relating to the Restatement of the Prior Financial Statements
We have concluded that certain of our previously issued financial statements should not be relied upon and have restated them, which was time-consuming, expensive and could expose us to additional risks that could have a negative effect on us.
As discussed in the Explanatory Note of this Comprehensive Form 10-K and in Note 2, “Restatement of Previously Issued Consolidated Financial Statements” under Item 8 of this Comprehensive Form 10-K, we have concluded that the Prior Financial Statements should not be relied upon. We have restated our previously issued (i) audited consolidated financial statements as of and for the fiscal year ended December 31, 2024, included in the 2024 10-K, and (ii) unaudited condensed consolidated financial statements for the quarterly periods ended March 31, 2024, through September 30, 2025, included in the Form 10-Qs. The restatement process was time-consuming and expensive and could expose us to additional risks that could have a negative effect on us. In particular, we incurred substantial unanticipated expenses and costs, including audit, legal and other professional fees, in connection with the restatement of the Prior Financial Statements and the ongoing remediation of material weaknesses in our internal control over financial reporting related to the restatement (see Part II, Item 9A, Controls and Procedures of this Comprehensive Form 10-K for a description of these remediation measures). To the extent our remediation actions are not successful, we could be required to incur additional time and expense. Our management’s attention was also diverted from some aspects of the operation of our business in connection with the restatement of the Prior Financial Statements and these ongoing remediation efforts. In addition, the restatement and related matters could impair our reputation and could cause our counterparties to lose confidence in us. Each of these occurrences could have an adverse effect on our business, results of operations, financial condition and stock price.
The restatement of the Prior Financial Statements may lead to future stockholder litigation.
Lawsuits may be commenced against the Company and its officers and directors based in part or whole on allegations related to the restatement of the Prior Financial Statements. As with any substantial litigation, the Company expects to devote significant time, attention and resources to the defense of the litigation, which may have a material adverse effect on the Company even if the litigation is resolved in a manner favorable to the Company, and cannot predict when or how the litigation will be resolved or estimate what the potential loss or range of loss would be, if any.
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.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the applicable listing standards of Nasdaq. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Based upon evaluation of our Chief Executive Officer and Interim Chief Financial Officer as of December 31, 2025, our disclosure controls and procedures are ineffective, as we are a smaller reporting company with limited resources in our finance department, and we are in the process of establishing our procedures around our disclosure controls. We are continuing to develop our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the applicable time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
In order to improve and maintain the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. In addition, changes in accounting principles or interpretations could also challenge our internal controls and require that we establish new business processes, systems and controls to accommodate such changes. We have limited experience with implementing the systems and controls necessary to operate as a public company, as well as adopting changes in accounting principles or interpretations mandated by the relevant regulatory bodies. Additionally, if these new systems, controls or standards and the associated process changes do not give rise to the benefits that we expect or do not operate as intended, it could adversely affect our financial reporting systems and processes, our ability to produce timely and accurate financial reports, or the effectiveness of internal control over financial reporting. Moreover, our business may be harmed if we experience problems with any new systems and controls that result in delays in their implementation or increased costs to correct any post-implementation issues that may arise.
Further, additional weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our business or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Common Stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
Section 404 of the Sarbanes-Oxley Act requires that we include a report from management on the effectiveness of our internal control over financial reporting in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Based on evaluation of our Chief Executive Officer and Interim Chief Financial Officer as of December 31, 2025, our management has identified material weaknesses primarily related to deficiencies in our overall control environment including limited accounting resources, inadequate segregation of duties, and the absence of formalized policies and procedures. In addition, the Company did not maintain effective controls over (i) significant accounting estimates and judgments, including the goodwill impairment assessment and the income tax provision prepared by external consultants, (ii) revenue recognition, including the determination of gross versus net presentation under ASC 606, which resulted in errors in previously issued financial statements and the restatement of the Prior Financial Statements, (iii) the preparation, review, and approval of its periodic SEC filings to ensure the completeness, accuracy, and consistency of financial disclosures, and (iv) controls and processes related to cybersecurity risk management. Management has therefore concluded that our internal controls over financial reporting are not effective at the reasonable assurance level.
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. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. 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.
General Risks
If we fail to protect the privacy of employees, independent contractors, or consumers or personal information that they share with us, our reputation and business could be significantly harmed.
Consumers, agents, independent contractors, and employees have shared personal information with us during the normal course of our business processing residential real estate transactions. This includes, but is not limited to, social security numbers, annual income amounts and sources, names, addresses, telephone and cell phone numbers, and email addresses.
The application, disclosure and safeguarding of this information is regulated by federal and state privacy laws. To comply with privacy laws, we invested resources and adopted a privacy policy outlining policies and procedures for the use of safeguarding personal information. This policy includes informing consumers, independent contractors and employees that we will not share their personal information with third parties without their consent unless required by law.
Privacy policies and compliance with federal and state privacy laws present risk, and we could incur legal liability for failing to maintain compliance. We might not become aware of all privacy laws, changes to privacy laws, or third-party privacy regulations governing the real estate business or be unable to comply with all of these regulations, given the rate of regulatory changes, ambiguities in regulations, contradictions in regulations between jurisdictions, and the difficulties in achieving both Company-wide and region-specific knowledge and compliance.
Our policy and safeguards could be deemed insufficient if third parties with whom we have shared personal information fail to protect the privacy of that information. Our legal liability could include significant defense costs, settlement costs, damages, and penalties, plus, damage our reputation with consumers, which could significantly damage our ability to attract and maintain customers. Any or all of these consequences would result in meaningful unfavorable impact on our brand, business model, revenue, expenses, income, and margins.
Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation and harm our business.
Cybersecurity threats and incidents directed at us could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures aimed at disrupting our business or gathering personal data of our customers. In the ordinary course of our business, we collect and store sensitive data, including proprietary business information and personal information about our customers. Our business, and particularly our cloud-based platform, is reliant on the uninterrupted functioning of our information technology systems. The secure processing, maintenance, and transmission of information are critical to our operations, especially the processing and closing of real estate transactions. 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. Any such compromises to our security could cause harm to our reputation, which could cause customers to lose trust and confidence in us or could cause agents to stop working for us. 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.
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.
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.
As permitted by Section 78.7502 of Chapter 78 of the Nevada Revised Statutes (the “NRS”), our amended and restated articles of incorporation limit the liability of our directors to the fullest extent permitted by law. In addition, as permitted by Section 78.7502 of the NRS, our amended and restated articles of incorporation and amended and restated bylaws provide that we shall indemnify, to the fullest extent authorized by the NRS, any person who is involved in any litigation or other proceeding because such person is or was a director or officer of ours or is or was serving as an officer or director of another entity at our request, against all expense, loss, or liability reasonably incurred or suffered in connection therewith. Our amended and restated articles of incorporation provide that indemnification includes the right to be paid expenses incurred in defending any proceeding in advance of its final disposition; provided, however, that such advance payment will only be made upon delivery to us of an undertaking, by or on behalf of the director or officer, to repay all amounts so advanced if it is ultimately determined that such director or officer is not entitled to indemnification.
Section 78.7502 of the NRS permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, except an action by or in the right of us, by reason of the fact that the person is or was a director, officer, employee, or agent of ours, or is or was serving at our request as a director, officer, employee, or agent of another company, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys’ fees, judgment, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit, or proceeding if the person is not liable under Section 78.138 of the NRS, or acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful.
The above limitations on liability and our indemnification obligations limit the personal liability of our directors and officers for monetary damages for breach of their fiduciary duty as directors by shifting the burden of such losses and expenses to us. Certain liabilities or expenses covered by our indemnification obligations may not be covered by our directors’ and officers’ insurance policy or the coverage limitation amounts may be exceeded. As a result, we may need to use a significant amount of our funds to satisfy our indemnification obligations, which could severely harm our business and financial condition and limit the funds available to stockholders who may choose to bring a claim against us.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to provisions of Nevada law, the Company has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable.
Anti-takeover provisions in our amended and restated articles of incorporation and bylaws, as well as provisions in Nevada law, might discourage, delay or prevent a change of control of our Company or changes in our management and, therefore, depress the trading price of our securities.
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. 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; |
| ● | 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. |
These provisions, alone or together, could delay hostile takeovers and changes in control or changes in our management.
As a Nevada corporation, we are also subject to provisions of Nevada corporate law, including NRS Section 78.411, et seq., which prohibits a publicly-held Nevada corporation from engaging in a business combination with an interested stockholder, generally a person who together with its affiliates owns, or within the last two years has owned, 10% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.
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. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
The Company acknowledges the increasing importance of cybersecurity in today’s digital and interconnected world. Cybersecurity threats pose significant risks to the integrity of our systems and data, potentially impacting our business operations, financial condition, and reputation.
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 to address the risk assessment and mitigation process.
Our Chief Technology Officer (“CTO”), reporting to the CEO, is primarily responsible for addressing cybersecurity risks. The Company adopted Technology Use Policy and Procedures, pursuant to which a chief technology officer is responsible for overseeing IT infrastructure, cloud systems, access controls, and data protection practices, including implementation of multi-factor authentication, password management, and backup and recovery processes. Our CTO has respective experience. The CEO provides executive oversight, ensuring appropriate prioritization, resources, and alignment of cybersecurity initiatives with the Company’s overall risk management strategy. The CTO and CEO monitor cybersecurity risks through established processes, including system monitoring and logging, a centralized support ticketing system for incident tracking, mandatory reporting of suspicious activity, annual user training, third-party audits, and the use of preventative controls. The CTO leads incident response efforts and keeps the CEO informed of material developments.
The CTO and CEO provide updates to the Board of Directors on cybersecurity risks. These updates include assessments of the Company’s cybersecurity risk profile, status of mitigation efforts, results of internal and third-party audits.
As a smaller reporting company, we are proactively leveraging AI and other resources to enhance our cybersecurity measures. 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. 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.
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. Our goal is to establish a full cybersecurity framework that is commensurate with our size, complexity, and the nature of our operations, thereby reducing our exposure to cybersecurity risks.
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. This 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. 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”.
Item 2. Properties.
We lease our principal executive office, which is located in the La Rosa Building at 1420 Celebration Boulevard, 2nd Floor, Celebration, Florida 34747. Our total office space at the principal executive office is approximately 3,000 square feet consisting of an open agent bullpen and technology and print resource area, private and group offices for staff, storage, a conference room, and several multi-purpose spaces including a media set, Zoom room, and a training / large conference room. During 2023, we began leasing additional office space for our subsidiary, La Rosa Realty, on the first floor of the La Rosa Building totaling 1,900 square feet. The Company leases this corporate office from an entity controlled by the Company’s Chief Executive Officer, Joseph La Rosa, and Michael La Rosa, a former Board member of the Company and Mr. La Rosa’s brother. There was a written lease, which included minimum monthly rent of $5,300, with a term that ended in June 2025. The parties have agreed to continue on a month-to-month basis.
Our business does not require significant property space. As 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 4,700 square feet, with relatively short terms, so as to minimize our rental expense given our ability to easily relocate. The aggregate rent expense of the Company for the years ending December 31, 2025 and December 31, 2024 was $181,929 and $139,200, respectively.
We believe our office space is adequate for at least the next 12 months.
In addition, in February 2026, we entered into a contract to acquire a strategically located parcel of land in Osceola County, one of the fastest-growing regions in Central Florida. There can be no assurances that such transaction will be consummated.
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. 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. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur.
On February 13, 2023, Mr. 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. Original mediation was scheduled for August 25, 2025, with a second mediation set for April 28, 2026. Discovery is proceeding and the trial is set for October 2026. The Company denies the merits of the claims and intends on vigorously defending the litigation.
On March 5, 2025, Joshua Epstein, our former employee and Chief Strategy Officer, filed a civil lawsuit in Osceola County, Florida Circuit Court alleging claims for breach of contract, promissory estoppel, conversion, unjust enrichment, breach of good faith and fair dealings, fraud in the inducement, and to recover alleged unpaid compensation in the amount of $100,000 from the Company. The Company strongly opposed and denied these claims. Original partial mediation occurred on September 5, 2025. A second mediation is expected to be set in the near future. The case trial is scheduled for April 2027. The Company denies the merits of the claims and intends on vigorously defending the litigation.
On June 5, 2025, an employee, who served as our Senior Human Resources and Payroll Specialist from July 10, 2024 to August 19, 2024, filed a civil lawsuit against the Company in the Circuit Court of Osceola County, Florida. The employee is seeking a jury trial claiming $50,000 in damages and that the Company terminated her employment in violation of SS 448.102(3). On July 9, 2025, the Company responded to the complaint with its answer and affirmative defenses, effectively denying all of the plaintiff’s claims. In March of 2026 discovery and depositions began. The case remains pending.
On January 13, 2026, Martin Scott CFO Consulting Services, Inc. filed a civil lawsuit against the Company and La Rosa Realty, LLC, in the Circuit Court of Palm Beach County for breach of contract, open account, account stated, and unjust enrichment. The plaintiff stated that he had a contract with the defendants and is owed unpaid fees of approximately $29,000 and legal expenses. The Company settled this lawsuit on April 20, 2026 for the amount of $22,000.
On January 30, 2026, the Company and La Rosa Realty Orlando LLC filed a civil lawsuit against Reinaldo Zapata and Viviana Figueroa in the Circuit Court of Orange County. The case involved an action for dissolution of La Rosa Realty Orlando LLC, action for conversion against Reinaldo Zapata, and an action for damage for breach of employment agreement against Reinaldo Zapata. The case was settled on April 4, 2026 as previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2026.
On February 1, 2026, Stacy-Ann Blair and Delroxry Blair filed a civil lawsuit against La Rosa Realty CW Properties, et. al. in the Circuit Court of Orange County, Florida, stating that La Rosa CW Properties failed to disclose a family relationship with one or more of its sellers, creating a material conflict of interest. The plaintiffs claim breach of contract, unjust enrichment, fraudulent and negligent misrepresentation, and civil theft and seeking damages of approximately $9,600. The Company filed a motion to dismiss, which was further amended. A case management conference is being scheduled for July-August 2026 and the mediation is set for July 2026. The Company denies the merits of the claims and intends on vigorously defending the litigation.
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. Other than as described above, we are not presently a party to any material pending or threatened legal proceedings.
The Company believes that the above claims are without merit, and it will vigorously defend against such claims. Moreover, these claims, in the aggregate, would not have a material adverse effect on the Company’s financial condition, business, or results of operations, should the Company’s defense not be successful in whole or in part. Except as stated herein, there is no other action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers, threatened against or affecting our Company or our officers or directors in their capacities as such.
Item 4. Mine Safety Disclosures.
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our Common Stock is currently listed on The Nasdaq Capital Market under the symbol “LRHC.” Trading in our Common Stock has historically lacked consistent volume, and the market price has been volatile.
On June 3, 2026, the closing price for our Common Stock as reported on The Nasdaq Capital Market was $1.21 per share.
Holders of Common Stock
On June 3, 2026, there were 362 holders of record of our Common Stock. We believe that the number of beneficial owners of our Common Stock is greater than the number of record holders, because a number of shares of our Common Stock is held through brokerage firms in “street name.”
Dividend Policy
We have never paid any cash dividends on our publicly traded Common Stock. We anticipate that we will retain funds and future earnings to support operations and to finance Common Stock. We anticipate that we will retain funds and future earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future following this offering. 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.
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, 2025 the Company issued the following equity securities which were not registered under the Securities Act:
The Company issued an aggregate of 1,581 shares of unregistered common stock to contractors pursuant to Third Amended and Restated La Rosa Holdings Corp. 2022 Agent Incentive Plan.
Unless otherwise noted, the securities above were issued pursuant to exemptions from 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.
Securities Authorized for Issuance under Equity Compensation Plans
We have adopted the 2022 Equity Incentive Plan (the “Original 2022 Plan”) that was approved by our stockholders and effective as of January 10, 2022. On September 19, 2024, our Compensation Committee and our Board of Directors approved Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (the “Amended 2022 Plan”). Our stockholders approved Amended 2022 Plan on November 19, 2025 and it replaced the Original 2022 Plan in its entirety. On July 9, 2025, our Compensation Committee, our Board of Directors, and the stockholders holding a majority of the voting power of the Company (by written consent in lieu of a stockholders’ meeting) approved the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan, as amended (the “2022 Plan”). The 2022 Plan became effective on August 11, 2025, replaced the Amended 2022 Plan in its entirety and was further amended on December 11, 2025.
The 2022 Plan governs equity awards to our employees, directors, officers, consultants and other eligible participants.
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, as of the date of this Comprehensive Form 10-K, the maximum aggregate number of shares of Common Stock which may be issued pursuant to awards under the 2022 Plan is 5,846 shares as adjusted for reverse stock splits, of which 3,720 shares are issued and outstanding and 2,126 are reserved for future issuance inclusive of annual increases. Such shares of Common Stock are made available from the authorized and unissued shares of the Company. 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 ten percent (10%) of the total number of shares of all classes of Common Stock 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.
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, 2025:
| 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 | 558 | $ | 11,673.68 | 610 | ||||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||
| Total | 558 | $ | 11,673.68 | 610 | ||||||||
Item 6. [Reserved]
Not applicable.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Prospective investors should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this annual report. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements and Industry Data.” This discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto included elsewhere in this report.
The discussion in this section has been impacted by the restatement described in the Explanatory Note at the beginning of this Comprehensive Form 10-K and in Note 2 and Note 3 of the consolidated financial statements of this Comprehensive Form 10-K. Certain of the financial and other information provided in this Management’s Discussion and Analysis of our Financial Condition and Results of Operations has been updated to reflect the restatement adjustments.
Business Overview
We operate primarily in the United States residential real estate market. 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. Moreover, we believe that our proprietary technology, training, and the support we provide to our agents at a minimal cost to them is one of the best offered in the industry. 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.
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. For example, all agents new to our Company are required to have a “coach” and to attend multi-day training sessions to learn the Company’s philosophy, technology, and business practices. Concurrently, the agent works with his or her coach in obtaining listings, working with consumers, and closing transactions. 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. 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, La Rosa CRE, LLC.
Our agent centric methodology, our advanced technology, and ancillary services, such as property management, will enable us to organically grow our agent base with virtually no incremental cost. In environments with increasing mortgage rates and declining sales transactions, we believe our model is more attractive to real estate agents, who retain more of their commission proceeds compared to traditional brokerage models. In fact, we have organically increased our agent count by just over 31 percent from December 31, 2022 to December 31, 2025.
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 maintain a competitive pricing structure within the industry while simultaneously providing the necessary tools, education and perpetual innovation.
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.
On October 12, 2023, we consummated our initial public offering (the “IPO”). Since then, we acquired majority ownership of the following franchisees of the Company: Nona Legacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.), Horeb Kissimmee Realty, LLC, La Rosa Realty Georgia LLC, La Rosa Realty California, and La Rosa Realty Success LLC and 100% ownership of the following franchisees of the Company: La Rosa Realty Orlando, LLC, La Rosa Realty Premier, LLC, La Rosa CW Properties, LLC, La Rosa Realty North Florida LLC, La Rosa Realty Winter Garden LLC, BF Prime LLC, FPG Title Group, LLC (formerly, Nona Title Agency LLC), La Rosa Realty Lakeland LLC (DBA La Rosa Realty Prestige), La Rosa Realty Beaches LLC, and Baxpi Holdings LLC. In December 2023, we also formed our majority owned subsidiary La Rosa Realty Texas LLC. In December 2024, we opened our first office and wholly owned subsidiary in North Carolina, La Rosa Realty NC LLC. In January 2025, we formed LR Luxury, LLC, engaged mostly in the residential real estate brokerage business. In April 2025, we formed LR Agent Advance, LLC, offering a commission advancement program exclusively for La Rosa agents. In 2025, we also formed LR Realty Spain, S.L., our wholly owned subsidiary in Spain.
During the fiscal year ended December 31, 2025, in an effort to simplify our corporate structure, we dissolved Baxpi Holdings LLC, which was non-operational, La Rosa Realty NC LLC, which was not profitable, and La Rosa Realty Success LLC, agents of which were moved to La Rosa CW Properties LLC. In February 2026, we also sold our majority interests in Horeb Kissimmee Realty, LLC to the minority member of that entity.
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. We grew our agent count by 18 percent from 2,581 as of December 31, 2024 to 3,050 as of December 31, 2025.
The majority of our revenue is derived from a stable set of fees paid by our brokers, franchisees, and consumers. We have multiple revenue streams, with the majority of our revenue derived from commissions paid by consumers who transact business with our franchisees’ agents, royalties paid by our franchisees, dues and technology fees paid by our sales agents, our franchisees, and our franchisees’ agents. Our major revenue streams come from such sources as: (i) residential real estate brokerage revenue, (ii) revenue from our property management services, (iii) franchise royalty fees, (iv) fees from the sale or renewal of franchises and other franchise revenue, (v) coaching, training and assistance fees, (vi) brokerage revenue generated transactionally on commercial real estate, (vii) fees generated from title services revenue and insurance and (viii) fees from our events and forums.
The majority of our revenue is derived from fees and dues based on the number of agents working under the La Rosa Realty brand. Due to the low fixed cost structure of both our Company and franchise models, the addition of new sales agents generally requires little incremental investment in capital or infrastructure. Accordingly, the number of commission producing sales agents in our Company and our franchisees is the most important factor affecting our results of operations and the addition of new agents can favorably impact our revenue and our earnings before interest, taxes, depreciation and amortization (“EBITDA”). Historically, the number of agents in the residential real estate industry has been highly correlated with overall home sale transaction activity. We believe that the number of agents and those that produce commissions in our network is the primary statistic that drives our revenue. Another major factor is the cyclicality of the real estate industry that has peaks and valleys depending on macroeconomic conditions that we cannot control. And finally, our revenues fluctuate based on the changes in the aggregate fee revenue per sales agent as a significant portion of our revenue is tied to various fees that are ultimately tied to the number of agents, including annual dues, continuing franchise fees, and certain transaction or service-based fees. Our revenue per agent also increases in other ways including when transaction sides and transaction sizes increase since a portion of our revenue comes from fees tied to the number and size of real estate transactions closed by our agents.
While the Company was not named as a defendant in any of the recent class action lawsuits alleging antitrust violations, it is possible that it could be a litigant at some point in the future. Several of these lawsuits have been settled (see “Risk Factors - Adverse outcomes in litigation and regulatory actions against the NAR, other real estate brokerage companies and agents in our industry could adversely impact our financial results). These settlements can result in changes in the way real estate brokers are compensated for their services. Most notably, home sellers will no longer be required to pay buyer agent commissions which will result in lower buyer agent compensation. We cannot predict the full breadth of the outcome of these lawsuits but believe that they will result in a significant adverse effect on our financial condition and results of operations for the foreseeable future.
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.
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. 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. Moreover, with the impact of climate change, we expect more business disruptions in the coming years, many of which could be unpredictable and extreme.
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.
Inflation and Market Interest Rates
The benchmark 30-year fixed conforming mortgage rate rose to a peak of about 8% during the second half of 2023, according to Freddie Mac data. That interest rate then retreated to between 6.08% and 7.22% during 2024 and between 6.15% to 7.04% during 2025. Consequently, housing demand remained soft, prices are rising, consumer sentiment has weakened, and home sales are declining. The U.S. Federal Reserve continues to take action intended to address inflation. The Federal Reserve Board maintained the federal funds rate at 533 basis points from August of 2023 through mid-September 2024, when it was reduced to 483 basis points. In February 2026, the federal funds rate was 364 basis points. The fluctuations impact interest rates, which significantly contribute to mortgage rate adjustments. In February 2026, the existing home sales market decreased 1.2% compared to February 2025 according to the NAR. This decline had an adverse impact on consumer demand for our services, as consumers weighed the financial implications of selling or purchasing a home. Continuing poor housing market conditions would adversely affect our operating performance and results of operations.
Recent Legal Challenges to Sales Agents’ Commission Structure
Recent developments in the real estate industry have seen increased scrutiny and legal challenges related to the structure of real estate agent commissions. Legal actions and regulatory inquiries have been initiated to examine the fairness, transparency, and potential anticompetitive practices associated with the traditional commission model. Courts and regulatory bodies may be increasingly focused on ensuring transparency in commission structures, potentially leading to reforms that impact the earnings and business models of real estate professionals. Changes in legislation or legal precedents could impact the standard practices of commission-sharing between listing agents and buyer’s agents and may adversely affect our business model and revenues.
On October 31, 2023, in the matter of Burnett v. National Association of Realtors (U.S. District Court for the Western District of Missouri), a federal jury found the NAR and certain other remaining brokerage defendants liable for $1.8 billion in damages on claims that these companies conspired to artificially inflate brokerage commissions, which is in violation of federal antitrust law (the “Burnett Ruling”). The verdict was appealed on October 31, 2023. Additionally, certain other brokerage defendants settled with the plaintiffs, including both monetary and non-monetary settlement terms. That same day, the NAR, EXP World Holdings, Inc., Compass, Inc., Redfin Corporation, Weichert Realtors, United Real Estate, Howard Hann Real Estate Services, Douglas Elliman, Inc., The Keyes Company, Illustrated Properties, LLC, Baird & Warner, Inc., Real Estate One, Inc., and others were named as defendants in Gibson v. National Association of Realtors (U.S. District Court for the Western District of Missouri), alleging a similar fact pattern and antitrust violations. On or about March 15, 2024, NAR agreed to settle the Burnett Ruling, along with a sister litigation, by agreeing to pay $418 million over approximately four years, and changing certain of its rules surrounding agent commissions. On November 26, 2024, the NAR Settlement was granted over objections, The final approval order is currently being appealed. If the NAR Settlement is sustained on appeal, it is expected to resolve claims against the NAR and certain companies related to this matter. The terms of the NAR Settlement provide that NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS, as well as adopt new rules requiring written agreements between buyers and buyers’ agents.
On March 22, 2024, real estate brokerage company Compass Inc. (“Compass”) announced that it will pay $57.5 million as part of a proposed settlement to resolve lawsuits over real estate commissions and agreed to change its business practices to ensure clients can more easily understand how brokers and agents are compensated for their services. Compass’s motion for final approval of the settlement agreement was granted on October 31, 2024 and the settlement agreement is now effective. The final approval ruling was appealed by certain class members that objected to the settlement and is now pending before the United States Circuit Court of Appeals for the Eighth Circuit. In the same litigation, the court granted final approval of multiple additional settlements, including (i) an $8.62 million settlement on June 25, 2025 involving The Keyes Company, Illustrated Properties, LLC, Baird & Warner, Inc., Real Estate One, Inc., and other defendants, and (ii) a $42 million settlement on February 5, 2026 involving William Raveis Real Estate Inc., Hanna Holdings Inc., Windermere Real Estate Services Company Inc., Exit Realty Corp. International, Exit Realty Corp. USA, and William L. Lyon & Associates Inc.
These settlements may result in changes in the way real estate brokers are compensated for their services. Most notably, home sellers may no longer be required to pay buyer agent commissions which would result in lower buyer agent compensation. We cannot predict the full breadth of the outcome of these lawsuits but believe that they may result in a significant adverse effect on our financial condition and results of operations for the foreseeable future.
The Company will continue to monitor ongoing and similar antitrust litigation against our competitors. However, the litigation and its ramifications could cause unforeseen turmoil in our industry, the impacts of which could have a negative effect on us as an industry participant.
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 Comprehensive Form 10-K.
Results of Operations
Revenue
| Year Ended December 31, | Change | |||||||||||||||
| 2025 | 2024 (restated) |
$ | % | |||||||||||||
| Real Estate Brokerage Services (Residential) | $ | 66,547,103 | $ | 57,024,911 | $ | 9,522,192 | 17 | % | ||||||||
| Franchising Services | 129,702 | 329,069 | (199,367 | ) | -61 | % | ||||||||||
| Coaching Services | 443,863 | 568,516 | (124,653 | ) | -22 | % | ||||||||||
| Property Management (1) | 395,291 | 348,721 | 46,570 | 13 | % | |||||||||||
| Real Estate Brokerage Services (Commercial) | 694,133 | 327,912 | 366,221 | 112 | % | |||||||||||
| Title Settlement and Insurance | 297,714 | 83,010 | 214,704 | 259 |
% | |||||||||||
| Total Revenue | $ | 68,507,806 | $ | 58,682,139 | $ | 9,825,667 | 17 | % | ||||||||
| (1) | Management identified that certain property management fee revenue for the year ended December 31, 2024 had been incorrectly recorded on a gross basis. Revenue should have been presented on a net basis reflecting only the fee retained by LRPM. See Note 2 Restatement of Previously Issued Consolidated Financial Statements. |
Real Estate Brokerage Services (Residential)
Residential real estate services revenue increased $9.5 million, or 17%, in the year ended December 31, 2025 against the comparable prior year period. The increase was primarily related to $9.8 million of revenue due to a full year of income from the seven acquisitions completed in fiscal year 2024.
Franchising Services
Franchising services revenue decreased $199 thousand, or 61%, in the year ended December 31, 2025 against the comparable prior year period. The decrease is primarily attributable to the six franchise acquisitions during fiscal year 2024, which no longer contribute to franchising royalty fees. Our remaining franchisees saw a slight increase in revenue due to market conditions in our residential services stabilizing in 2024, which partially offset the decline in franchising royalty fee revenue. Franchising royalties would be expected to decline as the acquisition of additional franchises continues.
Coaching Services
Coaching services revenue declined by $125 thousand, or 22%, in the year ended December 31, 2025 against the comparable prior year period. This is attributable to a shift in focus by management in the agent plans to focus on agent count growth that does not require coaching. This was done in anticipation of boosting transaction volume.
Property Management
Property management revenue increased $47 thousand, or 13%, in the year ended December 31, 2025 against the comparable prior year period primarily due to increases in application fees despite a reduction in total properties managed.
Real Estate Brokerage Services (Commercial)
Residential real estate services revenue increased $366 thousand, or 112%, in the year ended December 31, 2025 against the comparable prior year period. The increase was driven mostly organically due to a change in the segments management.
Title Settlement and Insurance
Revenues increased $215 thousand, or 259%, in the year ended December 31, 2025 against the comparable prior year period. The increase is due to reporting full year of revenue for the first time since this segment was acquired in August of 2024.
Gross Proft and Gross Margin
| Year Ended December 31, | Change | |||||||||||||||
| 2025 | 2024 | $ | % | |||||||||||||
| Real Estate Brokerage Services (Residential) | $ | 6,264,127 | $ | 5,340,029 | $ | 924,098 | 17 | % | ||||||||
| Gross Margin | 9.4 | % | 9.4 | % | 0.0 | % | ||||||||||
| Franchising Services | $ | (210,700 | ) | $ | (159,067 | ) | $ | (51,633 | ) | 32 | % | |||||
| Gross Margin | -162.4 | % | -48.3 | % | -114.1 | % | ||||||||||
| Coaching Services | $ | 175,781 | $ | 258,228 | $ | (82,447 | ) | -32 | % | |||||||
| Gross Margin | 39.6 | % | 45.4 | % | -5.8 | % | ||||||||||
| Property Management | $ | 318,316 | $ | 341,206 | $ | (22,890 | ) | -7 | % | |||||||
| Gross Margin | 80.5 | % | 3.1 | % | 77.5 | % | ||||||||||
| Real Estate Brokerage Services (Commercial) | $ | 123,151 | $ | 89,873 | $ | 33,278 | 37 | % | ||||||||
| Gross Margin | 17.7 | % | 27.4 | % | -9.7 | % | ||||||||||
| Title Settlement and Insurance | $ | 297,714 | $ | 83,010 | $ | 214,704 | 259 | % | ||||||||
| Gross Margin | 100.0 | % | 100.0 | % | 0.0 | % | ||||||||||
| Total Gross Profit | $ | 6,968,389 | $ | 5,953,279 | $ | 1,015,110 | 17 | % | ||||||||
| Total Gross Margin | 10.2 | % | 8.6 | % | 1.6 | % | ||||||||||
Real Estate Brokerage Services (Residential)
The percentage of gross margin remained the same year over year. Gross margin related to residential real estate brokerage services increased $924 thousand, or 17%, in the year ended December 31, 2025 against the comparable prior year period. The increase was driven in part by an increase in revenue of $9.5 million and a related cost of revenue increase of $8.6 million primarily from the seven acquisitions completed during fiscal year 2024. Therefore, gross margin remained relatively constant year-over-year.
Franchising Services
The percentage of gross margin declined by 114.1%. Gross margin related to franchising services declined by $52 thousand. The decline is attributable to the acquisitions of the seven acquisitions in 2024 related to franchises. As a result, this decreased the franchising revenues and costs though not necessarily proportionally due to changes in aspects of cost of sales.
Coaching Services
The percentage of gross margin declined by 5.8%. Gross margin related to coaching services declined by $82 thousand, primarily due to a change in operations which do not require the coaching services for certain plans, to expediate onboarding, therefore this resulted in the overall reduction of coaching revenues and cost of sales throughout 2025 as compared to 2024.
Property Management
The percentage of gross margin declined by 77.5%. Gross margin related to property management services declined by $23 thousand the year ended December 31, 2025 against the comparable prior year period. The increase in property management costs is related to fixed costs of sales that did not change while the number of properties under management declined.
Real Estate Brokerage Services (Commercial)
The percentage of gross margin declined year over year. Gross margin related to commercial real estate brokerage services increased $33 thousand, or 37%, in the year ended December 31, 2025, against the comparable prior year period. The change was driven in part by an increase in revenue of $366 thousand and a related cost of revenue increase of $333 thousand primarily from organic growth.
Title Settlement and Insurance
The percentage of gross margin increased by 259%. Gross margin related to title settlement and insurance increased by $215 thousand for the year ended December 31, 2025 against the comparable prior year period due to a full year of activity as this segment was acquired in August of 2024.
Selling, General and Administrative Expense
| Year Ended December 31, | Change | |||||||||||||||
| 2025 | 2024 | $ | % | |||||||||||||
| Sales and Marketing | $ | 1,542,680 | $ | 1,007,077 | $ | 535,603 | 53 | % | ||||||||
| Payroll and benefits | 6,087,560 | 4,339,402 | 1,748,158 | 40 | % | |||||||||||
| Rent and other | 1,542,322 | 1,070,708 | 471,614 | 44 | % | |||||||||||
| Professional fees | 3,231,891 | 1,594,262 | 1,637,629 | 103 | % | |||||||||||
| Office | 287,674 | 384,218 | (96,544 | ) | -25 | % | ||||||||||
| Technology | 710,319 | 372,010 | 338,309 | 91 | % | |||||||||||
| Insurance, training and other | 559,329 | 614,145 | (54,816 | ) | -9 | % | ||||||||||
| Public company costs | 761,838 | 1,231,872 | (470,034 | ) | -38 | % | ||||||||||
| Amortization and depreciation | 689,039 | 1,018,934 | (329,895 | ) | -32 | % | ||||||||||
| Total SG&A Expenses | $ | 15,412,652 | $ | 11,632,628 | $ | 3,780,024 | 32 | % | ||||||||
Selling, general and administrative costs increased $3.8 million, or 32%, in the year ended December 31, 2025 against the comparable prior year period. Sales and marketing costs increased as the Company worked to expand and grow the business.
Payroll and benefits increased $1.7 million or 40%, in the year ended December 31, 2025 against the comparable prior year period primarily due to benefits offered and headcount increases and certain one-time bonuses paid to our executives.
Rent and occupancy increased $472 thousand or 44% in the year ended December 31, 2025 against the comparable prior year period due to the seven acquisitions in 2024.
Professional fees increased $1.6 million, or 103%, in the year ended December 31, 2025 against the comparable prior year period. This increase was primarily due to professional and legal fees incurred related to financing transactions entered into in 2025.
Office and technology costs increased by $242 thousand, or 66%, in the year ended December 31, 2025 against the comparable prior year period. This is primarily due to one-time costs related to upgrading our accounting and internally developed customer resource applications.
Insurance, training and other costs decreased $54 thousand, or 9%, in the year ended December 31, 2025 against the comparable prior year period. This is due to new favorable contracts and using alternative less costly providers for trainings.
Public company costs decreased $470 thousand in the year ended December 31, 2025 against the comparable prior year period. This is due to a reduction in cost related to investor relations and cost related to acquisition activity.
Additionally, as part of total operating cost the Company recognized in December 31, 2025 and 2024, there were impairments of intangible and goodwill for $6,911,134 and $787,438, respectively, due to triggering conditions.
Stock-based compensation
We incurred stock-based compensation of $5.0 million in 2025 based mostly upon restricted stock units granted to consultants ($1.8), agents and employees ($0.5 million) and option grants and restricted Common Stock awards to our CEO pursuant to the terms of his employment agreement and 2022 Plan ($2.7 million).
We incurred stock-based compensation of $4.7 million in 2024 based upon restricted stock units granted to agents and employees ($0.8 million), consultants who provided various services to the company ($1.4 million), an option grant to our CEO pursuant to the terms of his employment agreement ($2.1 million) and an option grant to our COO pursuant to her employment agreement ($400,000).
Other Income (Expense), Net
Other expense, net for the year ended December 31, 2025 was $10.1 million compared to other expense, net of $3.2 million for the comparable prior year. The 2025 expense was mostly due to $15.4 million in expenses related to our convertible debt and associated warrants, partially off-set by a $4.0 million gain on the extinguishment of debt and a $0.9 million change in the fair value of derivative liabilities.
Liquidity and Capital Resources
On December 31, 2025 and 2024 we had cash of $3.1 million and $1.4 million, respectively, on hand.
On February 4, 2025, the Company and an institutional investor entered into the securities purchase agreement, pursuant to which the Company issued to the 2025 Investor: (i) the Initial Note in the original principal amount of $5,500,000 maturing on February 4, 2027; and (ii) sixteen (16) Incremental Warrants, each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note. The purchase price paid by the 2025 Investor under the agreement for the Initial Note and Incremental Warrants was $4,963,750, of which $910,250, $496,191 and $148,724 were used to assume or extinguish other debt for net proceeds of $3,408,585. Remaining funds from the offering were used by the Company to pay-off certain indebtedness of the Company, pay certain outstanding fees and expenses (including expenses of the offering, and fees payable to the placement agent and advisors), acquisitions and general corporate purposes. Of the proceeds from the offering, $354,450 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreements with Cedar Advance, LLC, $340,421 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreement with Arin Funding, LLC and $910,250 was paid to satisfy, in full, the remaining balance of the senior secured promissory notes with an accredited investor. On June 18, 2025, the Company and 2025 Investor entered into the Exchange Agreement, pursuant to which (among other things) the 2025 Investor surrendered and exchanged all of its Incremental Warrants in exchange for 6,000 shares of the Series B Preferred Stock. The 2025 Investor fully converted the Initial Note, and the Company issued the 2025 Investor 8,215 in 2025 and 750 shares in the first quarter of 2026 for an aggregate of 8,965 shares of Common Stock upon such conversion. See Note 8 – Borrowings to the accompanying consolidated financial statements for further disclosure.
In addition to the debt pay downs during the year ended December 31, 2025, the Company eliminated all warrants tied to the investor senior secured promissory notes outstanding as of December 31,2024. Two of the three warrants were exercised on a cashless basis, with the third warrant being bought back by the Company in the amount of $379,083, fully eliminating these unfavorable ratchet warrants.
During the year ended December 31, 2025, the Company received proceeds from the sale of 3,871 shares of Common Stock pursuant to its sales agreement with AGP (“ATM Agreement”) of $7,496,361. The Company paid the sales agent compensation with respect to sale of such shares in the amount of $105,885.
During the year ended December 31, 2025, the Company sold 500 shares of Common Stock pursuant to the Facility for aggregate proceeds of $111,902.
The Company is subject to the risks and challenges associated with companies at a similar stage of development. These include dependence on key individuals, successful development and marketing of its offerings, and competition with larger companies with greater financial, technical, and marketing resources. Furthermore, during the period required to achieve substantially higher revenue in order to become profitable, the Company will require additional funds that might not be readily available or might not be on terms that are acceptable to the Company. Until such time that the Company fully implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. As such, the Company anticipates that its existing working capital, including cash on hand, and cash generated from operations will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of the consolidated financial statements. The Company will be required to raise additional capital to service its promissory notes, to repay the principal balance of each of the notes, and to fund ongoing operations.
We have incurred recurring net losses, and our operations have not provided net positive cash flows. In view of these matters, there is substantial doubt about our ability to continue as a going concern. We plan on continuing to expand via acquisition, which will help achieve future profitability, and we have plans to raise capital from outside investors, as we have done in the past, to fund operating losses and to provide capital for further business acquisitions. We cannot provide any assurance that we can successfully raise the capital needed on favorable terms, if at all.
Summary of Cash Flows
| For
the year ended December 31, |
||||||||
| 2025 | 2024 | |||||||
| Net Cash Used in Operating Activities | $ | (7,528,859 | ) | $ | (2,997,307 | ) | ||
| Net Cash Used by Investing Activities | $ | — | $ | (68,625 | ) | |||
| Net Cash Provided by Financing Activities | $ | 8,852,524 | $ | 4,202,713 | ||||
Cash Flows Used in Operating Activities
For the year ended December 31, 2025, net cash used in operating activities was $7.5 million, which was primarily attributable to the net loss of $26.5 million, excluding stock-based compensation and changes in operating assets and liabilities. Non-cash provided primarily included: Loss on issuance of senior secured convertible note and warrants, change on fair value of convertible note and warrants, gain on settlement of incremental warrants, amortization and depreciation and debt discount, change in fair value of derivatives, impairment of goodwill and non-cash lease and other expenses totaling $19.0 million.
For the year ended December 31, 2024, net cash used in operating activities was $3.0 million, which was primarily attributable to the net loss of $8.2 million, excluding stock-based compensation and changes in operating assets and liabilities. Non-cash provided primarily included: amortization and depreciation and debt discount, change in fair value of derivatives, impairment of goodwill, loss on extinguishment of debt and non-cash lease and other expenses totaling $3.6 million.
Cash Flows Used in Investing Activities
For the year ended December 31, 2025, there was no cash impact from investing activities.
For the year ended December 31, 2024, net cash used in investing activities was $69 thousand. This was the result of the purchase of property and equipment and cash acquired through acquisitions.
Cash Flows Provided by Financing Activities
For the year ended December 31, 2025, net cash provided by financing activities was $8.9 million. This was driven by cash flows from debt and equity financing that provided $11.0 million in proceeds. These proceeds were offset by $2.2 million of payments and advances on debt and other financing instruments,
For the year ended December 31, 2024, net cash provided by financing activities was $4.2 million. This was driven by cash flows from debt and equity financing that provided $6.6 million in proceeds. These proceeds were offset by $2.4 of payments and advances on debt and other financing instruments, On December 31, 2025, 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.
Off-Balance Sheet Arrangements
Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities. 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.
Critical Accounting Estimates
A critical accounting estimate is one that is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgements, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Use of Estimates. The preparation of financial statements in accordance with generally accepted accounting principles in the U.S. requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The financial statements in this report include estimates based on currently available information and our judgment as to the outcome of future conditions and circumstances. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statements and actual results could differ from the estimates and assumptions. The Company’s significant estimates in these financial statements are listed below:
Revenue Recognition
The Company records revenue based upon the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct good or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. 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.
Goodwill and Intangible Assets
Goodwill is tested for impairment at least annually in the fourth quarter of our fiscal year. 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. 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. The facts and circumstances considered include the recoverability of the cost of other intangible assets from future undiscounted cash flows to be derived from the use of the asset or asset group. It is not possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude of any impairment. Intangible assets are subject to amortization over the expected period of economic benefit to us. We evaluate whether events or circumstances have occurred that warrant a revision to the remaining useful lives of intangible assets. In cases where a revision is deemed appropriate, the remaining carrying amounts of the intangible assets are amortized over the revised remaining useful life.
Business Combinations
The allocation of the purchase price for acquisitions requires use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired, including franchise agreements, agent relationships, existing real estate listings, and non-compete agreements and liabilities assumed based on their respective fair values. The estimates we make include expected cash flows, expected cost savings, and the appropriate weighted average cost of capital. We complete these assessments as soon as practical after the acquisition closing dates. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill.
Stock-Based Compensation
We use the fair value method of accounting for our stock options and restricted stock units (“RSUs”) granted to employees, contractors and consultants to measure the cost of services received in exchange for the stock-based awards. The fair value of stock option awards with only service conditions is estimated on the grant date using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the risk-free interest rate, expected term and expected volatility. These inputs are subjective and generally require significant judgment. The fair value of RSUs is measured on the grant date based on the prior day closing fair market value of our Common Stock. The resulting cost is recognized over the period during which an employee is required to provide service in exchange for the awards, usually the vesting period. Stock-based compensation expense is recognized on a straight-line basis, net of actual forfeitures in the period.
As we accumulate additional employee stock-based awards data over time and as we incorporate market data related to our Common Stock, we may calculate significantly different volatilities and expected lives, which could materially impact the valuation of our stock-based awards and the stock-based compensation expense that we will recognize in future periods.
Income Taxes
We are subject to taxes in the United States. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We make these estimates and judgments about our future taxable income that are based on assumptions that are consistent with our future plans. Tax laws, regulations and administrative practices may be subject to change due to economic or political conditions including fundamental changes to the tax laws. As of December 31, 2025, 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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We qualify as a smaller reporting company, as defined by SEC Rule 229.10(f)(1) and are not required to provide the information required by this Item 7A.
Item 8. Financial Statements and Supplementary Data.
LA ROSA HOLDINGS CORP.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
F-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of
La Rosa Holdings Corp. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of La Rosa Holdings Corp. and Subsidiaries (the “Company”) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred significant losses and its operations have not provided positive cash flows. The Company needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ CBIZ CPAs P.C.
CBIZ CPAs P.C.
We have served as the Company’s auditor since 2021 (such date takes into account the acquisition of the attest business of Marcum llp by CBIZ CPAs P.C. effective November 1, 2024).
Saddle
Brook, New Jersey
June 4, 2026
F-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
La Rosa Holdings Corp. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of La Rosa Holdings Corp. and Subsidiaries (the “Company”) as of December 31, 2024, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Restatement of Previously Issued Financial Statements
As described in Note 2 of the financial statements, the Company has restated its financial statements as of and for the year ended December 31, 2024 to correct misstatements.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum llp
Marcum llp
We have served as the Company’s auditor from 2021 to 2025.
New
York, NY
April 15, 2025, except for Note 2 and Note 3, as to which date is June 4, 2026.
F-
La Rosa Holdings Corp. and Subsidiaries
Consolidated Balance Sheets
| December 31, 2025 |
December 31, 2024 |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,086,770 | $ | 1,442,901 | ||||
| Restricted cash | 1,758,531 | 1,750,421 | ||||||
| Accounts receivable, net of allowance for credit losses of $179,643 and $166,504, respectively | 1,252,452 | 931,662 | ||||||
| Other current assets | 15,601 | 1,788 | ||||||
| Total current assets | 6,113,354 | 4,126,772 | ||||||
| Noncurrent assets: | ||||||||
| Restricted cash, net of current | 58,972 | 387,286 | ||||||
| Property and equipment, net | 6,094 | 9,411 | ||||||
| Right-of-use asset, net | 963,991 | 997,715 | ||||||
| Intangible assets, net | 4,425,042 | 5,840,080 | ||||||
| Goodwill | 1,831,197 | 8,012,331 | ||||||
| Other long-term assets | 44,867 | 33,831 | ||||||
| Total noncurrent assets | 7,330,163 | 15,280,654 | ||||||
| Total assets | $ | 13,443,517 | $ | 19,407,426 | ||||
| Liabilities, Series X Preferred Stock Subject to Redemption and Stockholders’ (Deficit) Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,895,861 | $ | 2,376,704 | ||||
| Accrued expenses | 83,876 | 738,065 | ||||||
| Contract liabilities | 171,100 | 7,747 | ||||||
| Security deposits and escrow payable | 1,758,531 | 1,750,421 | ||||||
| Line of credit | — | 148,976 | ||||||
| Derivative liability | — | 1,607,544 | ||||||
| Advances on future receipts | — | 618,681 | ||||||
| Accrued acquisition cash consideration | 30,000 | 381,404 | ||||||
| Notes payable, current | 148,757 | 2,187,673 | ||||||
| Lease liability, current | 486,481 | 473,733 | ||||||
| Total current liabilities | 5,574,606 | 10,290,948 | ||||||
| Noncurrent liabilities: | ||||||||
| Note payable, net of current | 7,143,803 | 1,475,064 | ||||||
| Security deposits and escrow payable, net of current | 58,972 | 387,286 | ||||||
| Lease liability, noncurrent | 514,388 | 545,759 | ||||||
| Other liabilities | — | 32,950 | ||||||
| Total non-current liabilities | 7,717,163 | 2,441,059 | ||||||
| Total liabilities | 13,291,769 | 12,732,007 | ||||||
| Commitments and contingencies (Note 16) | ||||||||
| Series X Preferred Stock Subject to Redemption: | ||||||||
| Preferred stock - $0.0001 par value; 50,000,000 shares authorized; 2,000 and 0 Series X Preferred Stock issued and outstanding at December 31, 2025 and December 31, 2024, respectively | 2,000,000 | — | ||||||
| Stockholders’ (Deficit) Equity: | ||||||||
| Preferred stock - $0.0001 par value; 50,000,000 shares authorized; 0 and 2,000 Series X shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively | — | — | ||||||
| Preferred stock - $0.0001 par value; 50,000,000 shares authorized; 6,000 and 0 Series B shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively | 1 | — | ||||||
| Common stock - $0.0001 par value; 2,000,000,000 shares authorized; 20,963 and 2,772 issued and outstanding at December 31, 2025 and December 31, 2024, respectively | 1 | — | ||||||
| Additional paid-in capital | 51,010,523 | 29,123,774 | ||||||
| Accumulated deficit | (57,099,883 | ) | (26,555,319 | ) | ||||
| Total stockholders’ (deficit) equity – La Rosa Holdings Corp. shareholders | (6,089,358 | ) | 2,568,455 | |||||
| Noncontrolling interest in subsidiaries | 4,241,106 | 4,106,964 | ||||||
| Total stockholders’ (deficit) equity | (1,848,252 | ) | 6,675,419 | |||||
| Total Liabilities, Series X Preferred Stock Subject to Redemption and Stockholders’ (Deficit) Equity | $ | 13,443,517 | $ | 19,407,426 | ||||
See notes to the consolidated financial statements.
F-
La Rosa Holdings Corp. and Subsidiaries
Consolidated Statements of Operations
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| (Restated) | ||||||||
| Revenue | $ | 68,507,806 | $ | 58,682,139 | ||||
| Cost of revenue | 61,539,417 | 52,728,860 | ||||||
| Gross profit | 6,968,389 | 5,953,279 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 1,542,680 | 1,007,077 | ||||||
| General and administrative | 13,869,972 | 10,625,551 | ||||||
| Stock-based compensation — general and administrative | 4,980,139 | 4,730,355 | ||||||
| Impairment of goodwill and intangibles | 6,911,770 | 787,438 | ||||||
| Total operating expenses | 27,304,561 | 17,150,421 | ||||||
| Loss from operations | (20,336,172 | ) | (11,197,142 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense, net | 243,825 | (403,397 | ) | |||||
| Gain (loss) on extinguishment of debt | 3,961,075 | (777,558 | ) | |||||
| Amortization of debt discount | (63,160 | ) | (649,138 | ) | ||||
| Change in fair value of derivative liability | 899,874 | (1,338,506 | ) | |||||
| Loss on issuance of senior secured convertible note and warrants | (128,836,250 | ) | — | |||||
| Change on fair value of convertible note and warrants | 31,163,415 | — | ||||||
| Gain on settlement of incremental warrants | 82,299,000 | — | ||||||
| Other income, net | 257,971 | 15,745 | ||||||
| Loss before income taxes | (30,410,422 | ) | (14,349,996 | ) | ||||
| Provision for income taxes | — | — | ||||||
| Net loss | (30,410,422 | ) | (14,349,996 | ) | ||||
| Less: Net income attributable to noncontrolling interests in subsidiaries | 134,142 | 97,567 | ||||||
| Net loss after noncontrolling interest in subsidiaries | (30,544,564 | ) | (14,447,563 | ) | ||||
| Less: Deemed dividend | 2,275,264 | 1,476,044 | ||||||
| Net loss attributable to common stockholders | $ | (32,819,828 | ) | $ | (15,923,607 | ) | ||
| Loss per share of common stock attributable to common stockholders | ||||||||
| Basic and diluted | $ | (3,531 | ) | $ | (7,844 | ) | ||
| Weighted average shares used in computing net loss per share of common stock attributable to common stockholders | ||||||||
| Basic and diluted | 9,296 | 2,030 | ||||||
See notes to the consolidated financial statements.
F-
La Rosa Holdings Corp. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
For the Years Ended December 31, 2025 and 2024
| Preferred
Stock Series X |
Preferred
Stock Series B |
Common Stock | Additional Paid—in |
Accumulated | Total Stockholders’ Equity |
Noncontrolling Interest In |
Total | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Par Value | Shares | Par Value | Capital | Deficit | (Deficit) | Subsidiaries | Equity | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 2,000 | $ | — | — | $ | — | 1,700 | $ | — | $ | 18,017,741 | $ | (12,107,756 | ) | $ | 5,909,985 | $ | 3,857,076 | $ | 9,767,061 | ||||||||||||||||||||||||
| Net loss | — | (14,447,563 | ) | (14,447,563 | ) | 97,567 | (14,349,996 | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock for acquisitions | 356 | — | 3,448,951 | 3,448,951 | 152,321 | 3,601,272 | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for Non—Controlling interest | 49 | — | 377,485 | 377,485 | — | 377,485 | ||||||||||||||||||||||||||||||||||||||
| Equity awards issued with debt issuance | 138 | — | 1,076,769 | 1,076,769 | 1,076,769 | |||||||||||||||||||||||||||||||||||||||
| Stock—based compensation | 189 | — | 4,730,355 | 4,730,355 | 4,730,355 | |||||||||||||||||||||||||||||||||||||||
| Proceeds from new investors and S—3 | 338 | — | 1,474,431 | 1,474,431 | 1,474,431 | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for equity awards, net of shares withheld for taxes | 2 | — | (1,958 | ) | (1,958 | ) | (1,958 | ) | ||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | 2,000 | $ | — | — | $ | — | 2,772 | $ | — | $ | 29,123,774 | $ | (26,555,319 | ) | $ | 2,568,455 | $ | 4,106,964 | $ | 6,675,419 | ||||||||||||||||||||||||
| Net loss | — | — | (30,544,564 | ) | (30,544,564 | ) | 134,142 | (30,410,422 | ) | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for consulting work | — | — | — | — | 1,903 | — | 1,831,338 | — | 1,831,338 | — | 1,831,338 | |||||||||||||||||||||||||||||||||
| Conversion of liabilities into common stock | — | — | — | — | 8,965 | 1 | 2,222,562 | — | 2,222,563 | — | 2,222,563 | |||||||||||||||||||||||||||||||||
| Equity awards issued with debt issuance | — | — | — | — | 282 | — | 812,153 | — | 812,153 | — | 812,153 | |||||||||||||||||||||||||||||||||
| Stock—based compensation | — | — | — | — | 2,682 | — | 3,140,901 | — | 3,140,901 | — | 3,140,901 | |||||||||||||||||||||||||||||||||
| Proceeds from new investors | — | — | — | — | 4,315 | — | 7,610,896 | — | 7,610,896 | — | 7,610,896 | |||||||||||||||||||||||||||||||||
| Issuance of series B preferred stock | 6,000 | 1 | — | — | 8,260,999 | 8,261,000 | 8,261,000 | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock for stock—based compensation equity awards, net of shares withheld for taxes | — | — | — | — | 44 | — | 7,900 | — | 7,900 | — | 7,900 | |||||||||||||||||||||||||||||||||
| Reclassification of non-contingent portion of Series X redemption | (2,000 | ) | — | — | — | — | — | (2,000,000 | ) | — | (2,000,000 | ) | — | (2,000,000 | ) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | — | $ | — | 6,000 | $ | 1 | 20,963 | $ | 1 | $ | 51,010,523 | $ | (57,099,883 | ) | $ | (6,089,358 | ) | $ | 4,241,106 | $ | (1,848,252 | ) | ||||||||||||||||||||||
See notes to the consolidated financial statements.
F-
La Rosa Holdings Corp. and Subsidiaries
Consolidated Statement of Cash Flows
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (30,410,422 | ) | $ | (14,349,996 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | 4,980,139 | 4,730,355 | ||||||
| Loss on issuance of senior secured convertible note and warrants | 128,836,250 | — | ||||||
| Change on fair value of convertible note and warrants | (31,163,415 | ) | — | |||||
| Gain on settlement of incremental warrants | (82,299,000 | ) | — | |||||
| Amortization and depreciation | 687,719 | 1,018,934 | ||||||
| Amortization of right-of-use assets | 588,914 | 561,654 | ||||||
| Change in fair value of derivatives | (899,874 | ) | 1,338,506 | |||||
| Amortization of debt discount and financing fees | 63,160 | 649,138 | ||||||
| (Gain) loss on extinguishment of debt | (3,961,075 | ) | 777,558 | |||||
| Impairment of goodwill and intangibles | 6,911,770 | 787,438 | ||||||
| Non-cash interest expense | 218,049 | 8,793 | ||||||
| Allowance for credit losses | 13,139 | 82,324 | ||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Accounts receivable | (333,929 | ) | (174,175 | ) | ||||
| Other assets | (24,849 | ) | 15,387 | |||||
| Accounts payable | 867,476 | 1,131,817 | ||||||
| Accrued expenses | (872,247 | ) | 459,952 | |||||
| Contract liabilities | 163,353 | 7,747 | ||||||
| Security deposits and escrow payable | (320,204 | ) | 524,854 | |||||
| Operating lease liabilities | (573,813 | ) | (567,593 | ) | ||||
| Net Cash Used in Operating Activities | (7,528,859 | ) | (2,997,307 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of property plant and equipment | — | (5,033 | ) | |||||
| Cash acquired through acquisition of businesses | — | (63,592 | ) | |||||
| Net Cash Provided by Investing Activities | — | (68,625 | ) | |||||
| Cash Flows from Financing Activities: | ||||||||
| Borrowings on bank line of credit | 6,898 | 300,508 | ||||||
| Payments on bank line of credit | (155,874 | ) | (151,532 | ) | ||||
| Proceeds from notes payable | 3,408,585 | 3,363,228 | ||||||
| Payments of deferred debt issuance costs | (138,895 | ) | (459,094 | ) | ||||
| Payments on notes payable | (420,778 | ) | (1,027,522 | ) | ||||
| Proceeds from advances on future receipts | — | 1,899,250 | ||||||
| Payments on advances on future receipts | (694,871 | ) | (1,121,368 | ) | ||||
| Payments on post-acquisition consideration | (384,354 | ) | (150,000 | ) | ||||
| Distributions to noncontrolling interest | — | (1,377,484 | ) | |||||
| Repurchase of derivative instruments issued | (379,083 | ) | — | |||||
| Proceeds from issuance of common stock | 7,610,896 | 2,928,685 | ||||||
| Withholding tax paid on behalf of employees on stock-based awards | — | (1,958 | ) | |||||
| Net Cash Provided by Financing Activities | 8,852,524 | 4,202,713 | ||||||
| Net Increase in Cash, Cash equivalents and Restricted Cash | 1,323,665 | 1,136,781 | ||||||
| Cash, Cash equivalents and Restricted Cash at Beginning of Period | 3,580,608 | 2,443,827 | ||||||
| Cash, Cash equivalents and Restricted Cash at End of Period | $ | 4,904,273 | $ | 3,580,608 | ||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Cash Paid During the Period for: | ||||||||
| Interest | $ | 291,566 | $ | 335,425 | ||||
| Non-Cash Activities | ||||||||
| Issuance of Series B in exchange of incremental warrants | $ | 8,261,000 | $ | — | ||||
| Issuance of new convertible note | $ | 8,364,000 | $ | — | ||||
| Issuance of 282 shares of common stock as part of the settlement of notes payable and warrants | $ | 812,153 | $ | — | ||||
| Issuance of 4,629 shares of common stock for services rendered | $ | 4,980,139 | $ | — | ||||
| Issuance of 8,965 shares of common stock for conversion of liabilities | $ | 2,222,563 | $ | — | ||||
| Right of use assets obtained in exchange for lease obligations | $ | 555,190 | $ | 883,652 | ||||
| Reclassification of non-contingent portion of Series X redemption price | $ | 2,000,000 | $ | — | ||||
| Derivative liability embedded in debt instruments | $ | — | $ | 269,038 | ||||
| Issuance of 356 shares of common stock as consideration of acquisitions of businesses | $ | — | $ | 3,601,272 | ||||
| Issuance of 49 shares of common stock as consideration of acquisitions of remaining non-controlling interest | $ | — | $ | 377,485 | ||||
| Issuance of 145 shares of common stock as part of the issuance of notes payable | $ | — | $ | 1,076,768 | ||||
| Issuance of 189 shares of common stock for services rendered | $ | — | $ | 4,730,355 | ||||
| Issuance of 30 shares of common stock for accounts payable | $ | — | $ | 150,000 | ||||
| Reconciliation of Cash, Cash equivalents and Restricted Cash | ||||||||
| Cash and Cash equivalents | $ | 3,086,770 | $ | 1,442,901 | ||||
| Restricted Cash | 1,817,503 | 2,137,707 | ||||||
| Cash, Cash equivalents and Restricted Cash | $ | 4,904,273 | $ | 3,580,608 | ||||
See notes to the consolidated financial statements.
F-
La Rosa Holdings Corp. and Subsidiaries
Notes to the Consolidated Financial Statements
Note 1 — Basis of Presentation and Summary of Significant Accounting Policies
Description of Business
La Rosa Holdings Corp. (the “Company”), incorporated in Nevada on June 14, 2021, is a holding company for six agent-centric, technology-integrated, cloud-based, multi-service real estate segments. The Company generates revenue primarily by providing person-to-person residential and commercial real estate brokerage services to the public. In addition, the Company cross sells ancillary technology-based products and services to sales agents and the sales agents associated with the Company’s franchisees. The business is organized based on the services provided internally to agents and to the public, which are residential and commercial real estate brokerages, franchising services, real estate brokerage education and coaching, and property management services.
Nasdaq Continued Listing Requirements
On October 10, 2024, the Company received a letter from the Nasdaq Listing Qualifications Department stating that, for the 30 consecutive business day period between August 28, 2024 through October 9, 2024, the Company’s 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”). On July 21, 2025, the Company received a letter from Nasdaq confirming that the Nasdaq Listing Qualifications Department has determined that for the 10 consecutive business days, from July 7 through July 18, 2025, the closing bid price of the Company’s common stock was at $1.00 per share or greater. Accordingly, the Company regained compliance with the Bid Price Rule, and the matter is now closed.
On May 30, 2025, the Company received a letter from Nasdaq indicating that, because the Company’s stockholders’ equity as reported in its Quarterly Report on Form 10-Q for the period ended March 31, 2025 was $(83,377,044), the Company was no longer in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on The Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing. On August 21, 2025, the Company received a letter from Nasdaq confirming that the Nasdaq Listing Qualifications Department has determined that the Company complies with Nasdaq Listing Rule 5550(b)(1) based on the Company’s Form 10-Q for the period ended June 30, 2025, evidencing stockholders’ equity of $7,595,799, and the matter is now closed.
Going Concern and Management’s Plans
On December 31, 2025, the Company had a cash balance of $3.1 million and working capital of $0.5 million.
On February 4, 2025 (“Closing Date”), the Company entered into the securities purchase agreement (the “SPA”) with an institutional investor (“2025 Investor”) pursuant to which it agreed to issue and sell to the 2025 Investor upon the terms and conditions set forth in the SPA on such date: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on the two-year anniversary of the Closing Date (the “Initial Note”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (Incremental Notes and together with the Initial Note, the “Notes”).
On August 4, 2025 (the “Original Agreement Date”), the Company entered into the Equity Purchase Facility Agreement (“Existing Facility Agreement”) with an institutional investor (“Facility Investor”), pursuant to which the Facility Investor committed to purchase, subject to certain conditions and limitations, up to $150,000,000 (the “Commitment Amount”) in newly issued shares of the common stock of the Company (the “Facility”). In connection with the Facility, on the Original Agreement Date the Company entered into a Registration Rights Agreement (the “Existing RRA”) with the Facility Investor.
On September 18, 2025 (“Amendment Date”), the Company and the Facility Investor entered into the Amended Facility Agreement, pursuant to which the parties agreed to increase the Commitment Amount under the Facility from $150 million to $1.0 billion in shares of common stock. The Amended Facility Agreement amends and restates the Existing Facility Agreement in its entirety.
The Company is subject to the risks and challenges associated with companies at a similar stage of development. These include dependence on key individuals, successful development and marketing of its offerings, and competition with larger companies with greater financial, technical, and marketing resources. Furthermore, during the period required to achieve substantially higher revenue in order to become profitable, the Company will require additional funds that might not be readily available or might not be on terms that are acceptable to the Company. Until such time that the Company fully implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. As such, the Company anticipates that its existing working capital, including cash on hand, and cash generated from operations will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of the consolidated financial statements. The Company will be required to raise additional capital to service the remaining note and to fund ongoing operations.
The Company has incurred recurring net losses, and the Company’s operations have not provided net positive cash flows. In view of these matters, there is substantial doubt about the Company’s ability to continue as a going concern. The Company plans on continuing to expand via acquisition, which will help achieve future profitability, and the Company has plans to raise capital from outside investors, as it has done in the past, to fund operating losses and to provide capital for further business acquisitions. There can be no assurance the Company can successfully raise the capital needed.
F-
During 2025, the Company received proceeds from the sales of shares pursuant to the ATM Agreement of $7,496,361, funds from the sale of shares pursuant to the Facility in 2025 of $111,902 and reverse split reclassifications for $2,633, for a total of $7,608,263 in additional financing from proceeds of sales of common stock.
Basis of Presentation and Consolidation
The Company prepares the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to the Company’s going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements include the financial statements of the Company, all entities that are wholly-owned by the Company, and all entities in which the Company has a controlling financial interest. All intercompany transactions and balances have been eliminated. Business combinations consummated during a reporting period are reflected in the Company’s results effective from the date of acquisition through the end of the reporting period.
A noncontrolling interest in a consolidated subsidiary represents the portion of the equity in a subsidiary not attributable, directly or indirectly, to the Company. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheets and the presentation of net income is modified to present earnings attributed to controlling and noncontrolling interests.
Reclassifications of Prior Year Presentation
During the preparation of the financial statements for the year ended December 31, 2025, the Company reclassified certain restricted cash balances at December 31, 2024 related to tenant deposits and escrow payable that had associated restrictions and obligations that extended beyond twelve months to restricted cash, net of current. Further, the Company reclassified certain non-current security deposits and escrow payable at December 31, 2024 to current security deposits and escrow payable. These reclassification were made to conform with current period presentation and have not changed the results of operations of prior periods nor affected the cash flows previously reported.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and related disclosures in the accompanying notes. The Company’s significant estimates relate to revenue recognition, business combinations, impairment of assets, stock-based compensation, and income taxes.
These estimates are based on management’s best estimates and judgment. Actual results may differ from these estimates. Estimates, judgments, and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions, judgments, and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Reverse Stock Splits
On July 7, 2025, the Company effected a 1-for-80 reverse stock split of the shares of the Company’s common stock, par value $0.0001 per share (the “July Reverse Stock Split”). The July Reverse Stock Split reduced the number of shares of common stock of the Company outstanding from 58,323,795 shares to 729,113 shares, when considering the rounding up to the nearest whole share adjustments. The number of authorized shares of common stock of the Company under its Articles of Incorporation remained unchanged at 2,000,000,000 shares and the par value of the common stock remained $0.0001 per share.
On January 21, 2026, the Company effected a 1-for-10 reverse stock split of the shares of the Company’s common stock, issued and outstanding, effective as of 12:01 a.m. EST on January 26, 2026, (the “January Reverse Stock Split”).
As a result of the January Reverse Stock Split, every ten 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 January 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 5,350,967 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.
On April 16, 2026, the Company effected a 1-for-10 reverse stock split of the shares of the Company’s common stock, issued and outstanding, effective as of 12:01 a.m. EST on April 20, 2026, (the “April Reverse Stock Split”).
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As a result of the April Reverse Stock Split, every ten 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 April Reverse Stock Split, fractional entitlements were rounded up to the next whole number. The April Reverse Stock Split reduced the number of shares of common stock outstanding from 10,505,123 shares to 1,050,594 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.
As a result of the Reverse Stock Splits, all historical share and per share amounts disclosed in the consolidated financial statements have been converted to the post-split share amounts.
Cash and Restricted Cash
Cash includes cash in banks, cash on hand, and sweep deposits.
Restricted cash consists of cash held by the Company for certain security deposits and rent collected by the Company as part of its property management business, which will be due to owners or tenants in the future. The Company recognizes a corresponding deposit liability until the funds are released. The Company reduces deposit liability when the associated restricted cash is transferred from escrow.
Accounts Receivable and Allowance for Credit Losses
The Company’s trade accounts receivable consist of balances due from agents, tenants, franchisees, and commissions for closings and are presented on the consolidated balance sheets net of the allowance for credit losses. The allowance is determined by a number of factors, including age of the receivable, current economic conditions, historical losses, and management’s assessment of the financial condition of the debtor. Receivables are written off once they are deemed uncollectible, which may arise when the debtor is deemed unable to pay the amounts owed to the Company. The allowance for credit losses was $179,643 and 166,504 as of December 31, 2025 and 2024, respectively. Estimates of uncollectible accounts receivable are recorded to general and administrative expense on the consolidated statements of operations.
| Balance at | Deductions | Balance at | |||||||||||||||
| Beginning of | Charged to | from the | End of | ||||||||||||||
| Period | Expenses | Allowance | Period | ||||||||||||||
| Twelve Months ended December 31, 2025 Allowance for Credit Losses | $ | 166,504 | $ | 509,963 | $ | (496,824 | ) | $ | 179,643 | ||||||||
| Twelve Months ended December 31, 2024 Allowance for Credit Losses | $ | 83,456 | $ | 79,573 | $ | 3,475 | $ | 166,504 | |||||||||
Contract Liabilities and Performance Obligations
Contract liabilities consist of unsatisfied performance obligations related to annual dues received at the start of the calendar year. As of December 31, 2025 and 2024, the Company has approximately $171,100 and $7,747, respectively, of remaining performance obligations, all of which are recognized into revenue by the end of the calendar year. The Company has elected to exclude disclosures regarding remaining performance obligations that have an original expected duration of one year or less.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash. The Company reduces credit risk by placing its cash and cash equivalents with major financial institutions with high credit ratings. The Company maintains certain bank accounts in excess of FDIC insured limits of $250,000.
Leases
In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 842, Leases, (“ASC 842”), the Company determines whether an arrangement is or contains a lease at contract inception. Right-of-use assets and lease liabilities, which are disclosed on the consolidated balance sheets, are recognized at the commencement date of the lease based on the present value of the lease payments over the lease term using the Company’s incremental borrowing rate on the lease commencement date. Since implicit rates within the Company’s operating leases are generally not determinable, the Company uses the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate for each lease using its estimated borrowing rate, adjusted for various factors including level of collateralization and term to align with the terms of the lease. Lease expense is recognized on a straight-line basis over the term of the lease. Short-term leases, defined as leases with an initial term of twelve months or less, are not recorded on the consolidated balance sheets.
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Property and Equipment, Net
Property and equipment, net is stated at cost less accumulated depreciation and accumulated impairment, if any. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon a disposition, the cost and related accumulated depreciation are removed from the accounts and any related gain or loss is reflected in earnings. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
| Computer Equipment | 3 years | |||
| Furniture and fixtures | 7 years |
Long-lived Assets Including Acquired Intangible Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the asset is not recoverable, its carrying amount would be adjusted down to its fair value. Impairment of long-lived assets for the year ended December 31, 2025 was approximately $0.7 million. There was no impairment charge recorded for the year ended December 31, 2024.
Intangible assets are stated at cost less accumulated amortization and accumulated impairment, if any. Amortization is calculated on a straight-line basis over the estimated useful lives of the definite-lived intangible assets, as follows:
| Useful Life | |||
| Franchise agreement | 10 to 11 years | ||
| Agent relationships | 8 to 11 years | ||
| Real estate listings | 1 year | ||
| Non-compete agreements | 4 years |
Business Combinations
The Company completed a number of acquisitions during 2024 and will acquire additional businesses in the future. The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. The Company allocates the purchase price, which is the sum of the consideration provided and may consist of cash, equity, or a combination of the two, in a business combination to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies.
To date, the assets acquired and liabilities assumed in the Company’s business combinations have primarily consisted of goodwill and finite-lived intangible assets, consisting primarily of franchise agreements, agent relationships, real estate listings, non-compete agreements, and right-of-use assets. The estimated fair values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of the acquired business, the nature of the business acquired, and the specific characteristics of the identified intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In connection with the determination of fair values, the Company engages independent appraisal firms to assist with the valuation of intangible assets acquired and certain assumed obligations.
Transaction costs associated with business combinations are expensed as incurred.
Goodwill
Goodwill is the excess of cost over the fair value of net assets acquired. Goodwill is not amortized but tested for impairment annually or more frequently if certain circumstances indicate a possible impairment may exist. The Company performed a qualitative assessment as of October 1, 2025 and determined it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment included, but is not limited to, market and macroeconomic conditions, cost factors, cash flows, changes in key management personnel, and the Company’s share price. The result of this assessment determines whether it is necessary to perform a quantitative goodwill impairment test. As a result of this assessment, the Company has determined an impairment of goodwill as for the year ended December 31, 2025 of approximately $6.2 million. The Company recorded an impairment of goodwill of approximately $0.8 million for the year ended December 31, 2024.
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Revenue Recognition
The Company applies the provision of FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company measures revenue within the scope of ASC 606 by applying the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception, the Company assesses the goods or services promised within each contract that falls under the scope of ASC 606, determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied. The application of these five steps necessitates the development of assumptions that require judgment.
The Company records revenue based upon the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct good or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. 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.
Real Estate Brokerage Services (Residential and Commercial)
The Company serves as a licensed broker in the areas in which it operates for the purpose of processing residential real estate transactions. Revenue from real estate brokerage services (residential) mainly consists of commissions generated from real estate brokerage services. The Company is contractually obligated to provide for the fulfillment of transfers of real estate between buyers and sellers. The Company provides these services itself and controls the services of its agents necessary to legally transfer the real estate. Consequently, the Company is defined as the principal in the transaction. The Company, as principal, satisfies its obligation upon the closing of a real estate transaction. The Company has concluded that agents are not employees of the Company, rather deemed to be independent contractors. Upon satisfaction of its obligation, the Company recognizes revenue in the gross amount of consideration it is entitled to receive. The transaction price is calculated by applying the Company’s portion of the agreed-upon commission rate to the property’s selling price. The Company may provide services to the buyer, seller, or both parties to a transaction. In instances in which the Company represents both the buyer and the seller in a transaction, it recognizes the full commission on the transaction. Commissions revenue contains a single performance obligation that is satisfied upon the closing of a real estate transaction, at which point the entire transaction price is earned. The Company’s customers remit payment for the Company’s services to the title company or attorney closing the sale of property at the time of closing. The Company is not entitled to any commission until the performance obligation is satisfied and is not owed any commission for unsuccessful transactions, even if services have been provided. In addition to commission, revenue from real estate brokerage services (residential) consists of annual and monthly dues charged to the agents for providing systems, accounting, marketing tools and compliance services. The annual and monthly dues are recognized each month as services are provided.
Franchising Services
The Company’s franchise agreements offer the following benefits to the franchisee: common use and promotion of La Rosa Realty trademark; distinctive sales and promotional materials; access to technology and training; and recommended procedures for operation of La Rosa Realty franchises. The Company concluded that these benefits are highly related and part of one performance obligation for each franchise agreement, a license of symbolic intellectual property that is billed through a variety of fees including (i) initial franchise fees, (ii) annual dues and (iii) royalty fees. Initial franchise fees consist of a fixed fee payable upon signing the franchise agreement. Annual dues are calculated at a fixed fee per agent (prorated for any partial year) payable annually before the 10th day of January or within 10 days after each agent commences their association with the franchise. Royalty fees are calculated as the greater of a (a) fixed percentage of gross commission income for the period which is made up of all commissions, transaction fees, property management fees, and monthly fees earned by the Franchisee and the Franchisee’s independent sales associates, agents, representatives, contractors, employees, partners, directors, officers, owners, or affiliates, regardless of whether or not such individuals or affiliates are entitled to retain all or part of such gross commission income, or (b) a fixed monthly fee.
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Coaching Services
The Company provides mandatory training and guidance to newly licensed agents for their first four sales transactions. For each of the four transactions the newly licensed agents completes, La Rosa Coaching earns 7% for the brokerage who sponsors the agent, which may be La Rosa Realty, earns 6% of the commission. Coaches also provide optional special education services throughout the year to agents.
Property Management
The Company provides property management services on a contractual basis for owners who lease their residential properties. These services include managing daily operations of the property, tenant background screening, overseeing the tenant application process, and accounting services. The Company is compensated for its services through a flat monthly management fee. At the option of the owner, the Company can also facilitate and account for repair and remodeling costs for properties under management. These costs are not included in the transaction price as the customer is the party paying and receiving these services. Property management services represent a series of distinct daily services rendered over time. Consistent with the transfer of control for distinct, daily services to the customer, revenue is recognized at the end of each period for the fees associated with the services performed.
The amount of revenue recognized is presented net reflecting only the fee retained by Property Management for any services provided by the Company.
Title Settlement and Insurance
The Company provides title services Revenue from title insurance premiums is recognized at the closing of the real estate transaction, when the title insurance policy is issued and the performance obligation is satisfied. Fees for title searches, escrow services, and other related services are recognized as the services are performed. Any advance payments received are recorded as deferred revenue until the related services are completed.
Segment Reporting
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the operating decision makers, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company operates six separate and distinct segments, as the Chief Operating Decision Maker (“CODM”) reviews financial performance for each and makes decisions on a consolidated basis.
Cost of Revenue
Cost of revenue consists primarily of agent commissions, less fees paid by the agents owed to the Company and the cost of interchange and other fees for credit card processing services.
Advertising
Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2025 and 2024 was $968,962 and $272,059, respectively, and included in sales and marketing expenses in the consolidated statements of operations.
Debt Discounts and Debt Issuance Costs
Debt discounts and costs incurred in connection with obtaining new debt financing are deferred and amortized over the life of the related financing. Debt discounts and deferred costs are recognized as a direct reduction in the carrying amount of the debt instrument on the consolidated balance sheets and are recognized on the consolidated statements of operations to amortization of financing fees over the term of the related debt using the effective interest method. For the years ended December 31, 2025 and 2024, the Company recorded amortization of debt discounts and debt issuance costs of $63,160 and 649,138, respectively. Upon abandonment of a pending financing transaction, the related deferred financing costs are charged to expense.
Deferred Offering Costs
The Company capitalized certain legal, accounting, and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity as a reduction of additional paid-in capital. Should the planned equity financing be abandoned, the deferred offering costs would be expensed immediately as a charge to operating expenses in the consolidated statement of operations. There were no deferred offering costs for the years ended December 31, 2025 or 2024.
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Income Taxes
The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse.
The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Such temporary differences result primarily from the differences in the carrying value of assets and liabilities. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. We evaluate, on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740-10, includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused.
The Company accounts for uncertainties in income taxes under the provisions of ASC 740 which clarify the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The standard prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
The Company adopted ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. This update related to improvements to income tax disclosures which the Company adopted prospectively this fiscal year beginning January 1, 2025. The additional disclosures have been included in Note 14 – Income Taxes.
Stock Based Compensation
The Company issues stock-based awards to employees, directors, and non-employees that are generally in the form of stock options, restricted shares, or restricted stock units (“RSUs”). Compensation cost for equity awards is measured at their grant-date fair value, and in the case of restricted shares and RSUs, fair value is determined based on the price of the Company’s underlying Common Stock. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the stock options.
The expense for awards is recognized over the requisite service period (generally the vesting period of the award). The Company has elected to treat awards with only service conditions and with graded vesting as one award. Consequently, the total compensation expense is recognized straight-line over the entire vesting period, so long as the compensation cost recognized at any date at least equals the portion of the grant date fair value of the award that is vested at that date. The Company recognizes forfeitures as they occur.
Recently Adopted Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. This update related to improvements to income tax disclosures. The amendments in this update require enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid. The amendments in this update are effective for fiscal years beginning after December 15, 2024. The Company adopted the guidance prospectively in the fiscal year beginning January 1, 2025 and additional disclosures have been included in Note 14 – Income Taxes.
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Recently Issued Accounting Standards Not Yet Adopted
In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock (“ASU 2026-01”). The guidance in ASU 2026-01 clarifies how issuers initially measure paid-in-kind (“PIK”) dividends on equity-classified preferred stock by requiring issuers to use the PIK dividend rate stated in the preferred stock agreement. ASU 2026-01 will be effective for the Company’s annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual periods, with early adoption permitted. Entities may apply the amendments on either a prospective basis or a modified retrospective basis for equity-classified preferred stock instruments that are outstanding as of the initial application date. The Company is currently evaluating the impact that adoption of ASU 2026-01 may have on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-7, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The amendments in this Update exclude from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40). The amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: 1. Management has authorized and committed to funding the software project. 2. It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to complete recognition threshold”). The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326). The amendments in this Update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The amendments in this Update require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements. A Variable Interest Entity (VIE) is a legal entity in which an investor holds a controlling interest that is not based on majority voting rights.
In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)- Clarifying the Effective Date. The amendment in this Update amends the effective date of Update 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements.
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Note 2 — Restatement of Previously Issued Consolidated Financial Statements
In connection with the preparation of our consolidated financial statements for the year ended December 31, 2025, the Company identified errors related to revenues and cost of revenue recognition in its previously issued (i) consolidated financial statements as of and for the year ended December 31, 2024 included in its Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Period”), and (ii) unaudited interim condensed consolidated financial statements for each quarterly and year-to-date period included in its Quarterly Reports on Form 10-Q for the interim periods ended March 31, 2024, June 30, 2024, September 30, 2024, March 31, 2025, June 30, 2025 and September 30, 2025 (the “Interim Periods”, which, together with the Annual Period, the “Affected Periods”).
During 2024, the Company incorrectly recorded certain property management fee revenue inclusive of tenant rent revenues on a gross basis. Upon review of the underlying contractual arrangements and evaluation under ASC 606, Revenue from Contracts with Customers, management concluded that the Company acted as an agent rather than as a principal for these arrangements. As a result, the Company has corrected revenues during the Affected Periods to reduce property management revenue to the fees received (the “Revenues Adjustment”).
Additionally, the Company has determined that costs of revenue should be reduced equivalently to the amount of the revenues restated. As a result, the Company has recorded an adjustment to its consolidated financial statements during the Affected Periods (together with the Revenues Adjustment, the “Restatement Adjustments”), as the Company was previously incorrectly presenting payments to property owners inclusive of tenant rent related to tenant revenues as cost of revenues.
The Company evaluated the materiality of these misstatements both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements in Current Year Financial Statements, and determined the effect of correcting these misstatements was material to the Affected Periods. As a result of the material misstatements, the Company has restated its consolidated financial statements for the Affected Periods in accordance with ASC 250, Accounting Changes and Error Corrections (the “Restated Consolidated Financial Statements”).
A reconciliation from the amounts previously reported for the Affected Periods to the restated amounts in the Restated Consolidated Financial Statements is provided for the impacted financial statement line items below for the consolidated statement of operations for the year ended December 31, 2024. The amounts labeled “Restatement Adjustments” represent the effects of the Restatement Adjustments.
The following tables present the effects of the Restatement Adjustments on the Company’s consolidated statements of operations for the year ended December 31, 2024:
| For the Year Ended | ||||||||||||
| December 31, 2024 | ||||||||||||
| As Previously | Restatement | As | ||||||||||
| Stated | Adjustments | Restated | ||||||||||
| Revenue | $ | 69,448,786 | $ | (10,766,647 | ) | $ | 58,682,139 | |||||
| Cost of revenue | $ | 63,495,507 | $ | (10,766,647 | ) | $ | 52,728,860 | |||||
Note 1 – Basis of Presentation and Summary of Significant Accounting policies and Note 15 – Segments have been updated and restated, as applicable, to reflect the impact of the Restatement Adjustments described above.
Refer to Note 3 Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements for details of the effect of Restatement Adjustments on the interim periods.
Note 3 — Restatement Of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements
The following tables present the effects of the Restatement Adjustments described in Note 2 - Restatement of Previously Issued Consolidated Financial Statements on the Company’s unaudited interim condensed consolidated financial statements for the periods indicated:
| For the Three Months Ended | ||||||||||||
| March 31, 2024 | ||||||||||||
| As Previously | Restatement | As | ||||||||||
| Stated | Adjustments | Restated | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Revenue | $ | 13,088,899 | $ | (2,452,365 | ) | $ | 10,636,534 | |||||
| Cost of revenue | $ | 11,926,902 | $ | (2,452,365 | ) | $ | 9,474,537 | |||||
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| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
| June 30, 2024 | June 30, 2024 | |||||||||||||||||||||||
| As Previously | Restatement | As | As Previously | Restatement | As | |||||||||||||||||||
| Stated | Adjustments | Restated | Stated | Adjustments | Restated | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Revenue | $ | 19,051,420 | $ | (2,685,430 | ) | $ | 16,365,990 | $ | 32,140,319 | $ | (5,137,795 | ) | $ | 27,002,524 | ||||||||||
| Cost of revenue | $ | 17,465,109 | $ | (2,685,430 | ) | $ | 14,779,679 | $ | 29,392,011 | $ | (5,137,795 | ) | $ | 24,254,216 | ||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||
| September 30, 2024 | September 30, 2024 | |||||||||||||||||||||||
| As Previously | Restatement | As | As Previously | Restatement | As | |||||||||||||||||||
| Stated | Adjustments | Restated | Stated | Adjustments | Restated | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Revenue | $ | 19,593,036 | $ | (2,760,573 | ) | $ | 16,832,463 | $ | 51,733,355 | $ | (7,898,368 | ) | $ | 43,834,987 | ||||||||||
| Cost of revenue | $ | 17,957,130 | $ | (2,760,573 | ) | $ | 15,196,557 | $ | 47,349,141 | $ | (7,898,368 | ) | $ | 39,450,773 | ||||||||||
| For the Three Months Ended | ||||||||||||
| March 31, 2025 | ||||||||||||
| As Previously | Restatement | As | ||||||||||
| Stated | Adjustments | Restated | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Revenue | $ | 17,514,394 | $ | (2,878,620 | ) | $ | 14,635,774 | |||||
| Cost of revenue | $ | 15,976,726 | $ | (2,878,620 | ) | $ | 13,098,106 | |||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
| June 30, 2025 | June 30, 2025 | |||||||||||||||||||||||
| As Previously | Restatement | As | As Previously | Restatement | As | |||||||||||||||||||
| Stated | Adjustments | Restated | Stated | Adjustments | Restated | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Revenue | $ | 23,214,218 | $ | (2,982,121 | ) | $ | 20,232,097 | $ | 40,728,612 | $ | (5,860,741 | ) | $ | 34,867,871 | ||||||||||
| Cost of revenue | $ | 21,361,990 | $ | (2,982,121 | ) | $ | 18,379,869 | $ | 37,338,716 | $ | (5,860,741 | ) | $ | 31,477,975 | ||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||
| September 30, 2025 | September 30, 2025 | |||||||||||||||||||||||
| As Previously | Restatement | As | As Previously | Restatement | As | |||||||||||||||||||
| Stated | Adjustments | Restated | Stated | Adjustments | Restated | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Revenue | $ | 20,216,143 | $ | (3,007,356 | ) | $ | 17,208,787 | $ | 60,944,755 | $ | (8,868,097 | ) | $ | 52,076,658 | ||||||||||
| Cost of revenue | $ | 18,507,962 | $ | (3,007,356 | ) | $ | 15,500,606 | $ | 55,846,678 | $ | (8,868,097 | ) | $ | 46,978,581 | ||||||||||
F-
Note 4 — Fair Value Measurements
Fair value is the price that would be received for an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company follows ASC 820, Fair Value Measurement, for financial assets and liabilities measured at fair value on a recurring basis. The Company uses the fair value hierarchy to categorize the financial instruments measured at fair value based on the available inputs to the valuation and the degree to which they are observable or not observable in the market.
The three levels of the fair value hierarchy are as follows:
| ● | Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; |
| ● | Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and |
| ● | Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company has evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions or estimation methodologies could have a significant effect on the estimated fair value amounts.
The carrying amounts of financial instruments, including cash, accounts receivable, accounts payable, and accrued expenses reflected in the consolidated financial statements approximate fair value due to their short-term maturities.
The Company determined that during the years ended December 31, 2025 and 2024, certain instruments qualified as derivative liabilities and were recorded at fair value on the date of issuance and re-measured at fair value each reporting period with the change reported in earnings. The fair value of these instruments was computed using the Black Scholes model, incorporating transaction details such as the assumed price of the Company’s Common Stock at an initial public offering, contractual terms, maturity and risk-free rates, as well as assumptions about future financings, volatility, and holder behavior.
There were no derivative liabilities recorded as of December 31, 2025. See Note 9 –Warrants for more information.
Securities Purchase Agreement
On February 4, 2025, the Company entered into an SPA with an investor (“2025 Investor”) for a Senior Secured Convertible Note (“Convertible Note”) with a face value of $5,500,000 and 16 Incremental Warrants exercisable for a face amount of $2,500,000 each. See Note 8 – Borrowings for further discussion.
F-
The purchase price paid by the Investor under the SPA for the Convertible Note and Incremental Warrants was $4,963,750 in gross proceeds of which $354,450 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreements with Cedar Advance, LLC, $340,421 was paid to satisfy, in full, the remaining balance of the standard merchant cash advance agreement with Arin Funding, LLC and $910,250 was paid to satisfy, in full, the remaining balance of the senior secured promissory notes with an accredited investor, leaving net proceeds remaining of $3,408,585. It was determined that the note and warrants within this transaction met the requirements for the Fair Value Option under ASC 825, which the Company elected. Using the fair value option, the Convertible Note is required to be recorded at initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the notes are recognized as gain/loss on fair value adjustment within other income (expenses) in the Company’s consolidated statements of operations.
As a result of applying the fair value option, direct costs and fees related to the Convertible Note were expensed as incurred and were not deferred.
On June 18, 2025, with the prior approval by the Company’s Board of Directors, the Company and the 2025 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”). The Convertible Note remained outstanding post-Exchange.
Pursuant to the terms of the Exchange Agreement, conversion of the Series B Preferred Stock into shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”) 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.
The Company determined the Exchange met the criteria for liability derecognition of the Incremental Warrants as the Exchange represented settlement of the liability through delivery of other financial assets. As the warrant was an equity contract classified as a liability at issuance, upon settlement, the equity contract was required to be marked to market. The Company recognized a change in fair value of $10,240,000 measured as the difference between the fair value of the Incremental Warrants at February 4, 2025, and their fair value of $90,560,000 immediately prior to the Exchange. The Series B Preferred Stock issued to the Investor in satisfaction of the Incremental Warrants in the Exchange had an issuance date fair value of $8,261,000 based on the following assumptions:
| June
18, 2025 |
||||
| Stated Value | $ | 6,000,000 | ||
| Dividend Rate | 0.0 | % | ||
| Conversion Price | $ | 20.00 | ||
| Alternate Conversion Amount | $ | 9.60 | ||
| Required Premium | 125.0 | % | ||
| Stock Price | $ | 10.40 | ||
| VWAP | $ | 10.40 | ||
At the closing of the Exchange, the Company recognized a gain on settlement of the Incremental Warrants of $82,299,000, measured as the difference between the adjusted fair value of the Incremental Warrants immediately prior to the Exchange and the fair value of the Series B Preferred Stock at issuance, net of par value. The Company evaluated the classification of its Series B Preferred Stock and concluded that it is more akin to equity than debt and accounted for as permanent equity. Accordingly, the Series B Preferred Stock is presented within permanent equity in the accompanying consolidated financial statements. The shares were issued at their par value (rounded to $1) with the remaining fair value of the Series B Preferred Stock in excess of par value, $8,260,999 being recorded to additional paid-in capital.
F-
The following tables provide the fair value and contractual principal balance outstanding on the Convertible Note and the Incremental Warrants accounted for under the fair value option as of December 31, 2025, June 18, 2025, June 26, 2025 and February 4, 2025:
| As of | As of | As of | ||||||||||
| December 31, | June 26, | February 4, | ||||||||||
| 2025 | 2025 | 2025 | ||||||||||
| Convertible Note fair value | 5,818,000 | 12,477,000 | 33,000,000 | |||||||||
| Convertible Note, contractual principal outstanding | 4,050,000 | 5,500,000 | 5,500,000 | |||||||||
| As of | As of | As of | ||||||||||
| December 31, | June 18, | February 4, | ||||||||||
| 2025 | 2025 | 2025 | ||||||||||
| Incremental Warrants | - | 90,560,000 | 100,800,000 | |||||||||
The fair value of the Convertible Note was calculated using a fair value analysis considering the following factors and assumptions:
| December 31, | June 26, 2025 Post |
June 26, 2025 Pre- |
February 4, | |||||||||||||
| 2025 | Amendment(2) | Amendment(2) | 2025(1) | |||||||||||||
| Stock Price | $ | 6.34 | $ | 116.00 | $ | 116.00 | $ | 3,200.00 | ||||||||
| Conversion Price | $ | 29,116.16 | $ | 363.90 | $ | 363.90 | $ | 3,600.00 | ||||||||
| Alternate Conversion Price | $ | 48.69 | $ | 94.40 | $ | 63.30 | $ | 633.00 | ||||||||
| Alternate Conversion Premium | 120.00 | % | 120.00 | % | 120.00 | % | 120.00 | % | ||||||||
| Redemption Premium | 120.00 | % | 120.00 | % | 120.00 | % | 120.00 | % | ||||||||
| Interest Rate | 12.00 | % | 12.00 | % | 12.00 | % | 12.00 | % | ||||||||
| (1) | The fair value analysis of the Convertible Note was performed under the assumption of immediate conversion as of the valuation date. The stock price, classified as a Level 1 input under the fair value hierarchy, was utilized in the analysis. Potential ownership limitations or conversion blockers were not incorporated into the valuation, as the analysis assumed full conversion in a single transaction without restriction. |
| (2) | The amendment to the Note on June 26, 2025, corrected the term of the Note from 1 year to 2 years and adjusted the alternate conversion price from the “lesser” of 95% VWAP and the floor price to the “greater” of. |
F-
The fair value of the Incremental Warrants were calculated using the Monte Carlo simulation with the following factors, assumptions and methodologies from February 4, 2025 when the Company entered into the agreement and right before the exchange on June 18, 2025:
| June 18, | February 4, | |||||||
| 2025(1) | 2025(1) | |||||||
| Face Value | $ | 2,500,000 | $ | 2,500,000 | ||||
| Exercise Price | $ | 2,256,250 | $ | 2,256,250 | ||||
| Stock Price | $ | 1,000.40 | $ | 3,200.00 | ||||
| Exercise Threshold | 20% of Min price | 20% of Min price | ||||||
| Valuation per Incremental Warrant upon exercise | $ | 11,320,000 | $ | 12,600,000 | ||||
| Discount Rate | 36.97 | % | 28.70 | % | ||||
| Risk Free Rate | 4.20 | % | 4.18 | % | ||||
| Annualized Volatility | 92.00 | % | 88.0 | % | ||||
| Forecast horizon (years) | 0.08 | 0.08 | ||||||
| (1) | The fair value analysis of the Incremental Warrants was performed under the assumption of immediate conversion as of the valuation date. The stock price, classified as a Level 1 input under the fair value hierarchy, was utilized in the analysis. Potential ownership limitations or conversion blockers were not incorporated into the valuation, as the analysis assumed full conversion in a single transaction without restriction. |
A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows:
| As of December 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | - | $ | - | $ | - | $ | - | ||||||||
| Convertible note | $ | - | $ | - | $ | 5,818,000 | $ | 5,818,000 | ||||||||
| As of December 31, 2024 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | - | $ | - | $ | 1,607,544 | $ | 1,607,544 | ||||||||
At December 31, 2024, the estimated fair value of the derivative liability tied to the three vested warrants held by an institutional investor and remeasured on a recurring basis amounted to $1,607,544.
As of December 31, 2025, warrants held by an institutional investor were eliminated through exercising and a redemption and cancellation agreement for $379,083. The Company recorded a derivative liability related to the Incremental Warrants issued in connection with the SPA dated February 4, 2025. The Incremental Warrants’ fair value at date of issuance was $100,800,000 and were settled by June 30, 2025, with a gain recorded of $82,299,000. The initial analysis assumes immediate conversion upon issuance and does not incorporate ownership limitations or conversion blockers that could otherwise restrict full exercise or conversion. On June 26, 2025, the Company determined that modifications of the existing Senior Secured Convertible Note during the year qualified as an extinguishment.
F-
The following tables provide a summary of changes in fair value associated with the Level 3 liabilities for the years ended December 31, 2025 and 2024:
Derivative liabilities
| 2025 | 2024 | |||||||
| Balance – January 1, | $ | 1,607,544 | $ | - | ||||
| Issuance of derivative liability | 100,800,000 | 269,038 | ||||||
| Cash paid to settle derivative liability | (379,083 | ) | - | |||||
| Issuance of cashless shares for exercising warrants | (328,587 | ) | - | |||||
| Extinguishment of derivative liability | (90,831,585 | ) | - | |||||
| Change in fair market value - extinguished warrants | 8,571,711 | 1,338,506 | ||||||
| Change in fair market value - new warrants | (19,440,000 | ) | - | |||||
| Balance – December 31, | $ | - | $ | 1,607,544 | ||||
Convertible Note
| Balance – January 1, 2025 | $ | - | ||
| Issuance of Convertible Note | 41,364,000 | |||
| Change in fair value of Convertible Note | (21,195,000 | ) | ||
| Conversion to equity | (1,874,000 | ) | ||
| Extinguishment of Convertible Note | (12,477,000 | ) | ||
| Balance – December 31, 2025 | $ | 5,818,000 |
The fair value of the derivative liability related to the three eliminated Warrants, was computed using the Black-Scholes model both when issued and on the balance sheet date. To determine the fair value, the Company incorporated transaction details such as the price of the Company’s common stock, contractual terms, maturity, and risk-free rates, as well as assumptions about future financings, volatility, probability of contingencies, and holder behavior. The fair value of the derivative liability on the issuance date and the balance sheet date and the assumptions used in the Black-Scholes model are set forth in the table below.
| December 31, | ||||
| 2024 | ||||
| Weighted average fair value | $ | 0.87 | ||
| Dividend yield | — | |||
| Expected volatility factor | 72.7 | % | ||
| Risk-free interest rate | 4.3 | % | ||
| Expected life (in years) | 5.5 | |||
F-
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 | ||||||||||||||||||
F-
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.
F-
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 | |||
Note 6 — Goodwill and Intangible Assets
Impairment test
During the fiscal fourth quarters of both 2025 and 2024, we determined that triggering events occurred as a result of additional decline in operational estimates for franchises acquired, along with uncertainty for projected cash flows, and also further decreases in our stock price. Therefore, we performed quantitative impairment tests as of the first day of fiscal fourth quarters of both 2025 and 2024 for our reporting units with remaining goodwill and intangibles.
The fair value of each reporting unit was estimated using a weighing of the income and market valuation approaches. The income approach applied a fair value methodology to each reporting unit based on discounted cash flows. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally developed forecasts of revenue and profitability, estimation of the long-term rate of growth for our business of 3% per year in revenues over a 10 year period, estimation of the useful life over which cash flows will occur, and determination of our carrying value of equity for the reporting unit being tested.
For the year ended 2025, the combined fair values for all reporting units were then reconciled to the aggregate market value of our shares of common stock on the date of testing. Based on our most recent impairment test, a total impairment charge of $6,911,770 was recorded, which included $6,181,134 for goodwill and $730,636 for intangible assets.
For the year ended 2024, a goodwill impairment charge of $787,438 was recorded. There was no impairment of intangibles recorded for the year ended December 31, 2024.
Additionally, following performance of the annual impairment test, we did not identify any events or conditions that make it more likely than not that an additional impairment may have occurred. Accordingly, no further impairment charges were recognized during the fiscal year ended December 31, 2025.
The gross carrying amount of goodwill as of December 31, 2025 and December 31, 2024 was $1,831,197 and $8,012,331, respectively.
F-
Changes in the carrying amount of goodwill are as follows:
| 2025 | 2024 | |||||||
| Balance January 1 | $ | 8,012,331 | $ | 5,702,612 | ||||
| Additions | - | 3,097,157 | ||||||
| Impairment | (6,181,134 | ) | (787,438 | ) | ||||
| Goodwill as of December 31 | $ | 1,831,197 | $ | 8,012,331 | ||||
The components of purchased intangible assets were as follows:
| Weighted | |||||||||||||||||||
| Average | |||||||||||||||||||
| Remaining | December 31, 2025 | ||||||||||||||||||
| Amortization | Gross | ||||||||||||||||||
| Period (in years) | Carrying Amount | Accumulated Amortization | Impairment | Net Amount | |||||||||||||||
| Franchise agreement | 8 | 5,249,482 | 904,018 | 729,932 | 3,615,532 | ||||||||||||||
| Agent relationships | 7 | 916,282 | 200,812 | - | 715,470 | ||||||||||||||
| Real estate listings | - | 564,756 | 564,756 | - | - | ||||||||||||||
| Non-compete agreements | 2 | 188,748 | 94,004 | 704 | 94,040 | ||||||||||||||
| Total | 8 | $ | 6,919,268 | $ | 1,763,590 | $ | 730,636 | $ | 4,425,042 | ||||||||||
| Weighted | |||||||||||||||
| Average | |||||||||||||||
| Remaining | December 31, 2024 | ||||||||||||||
| Amortization | Gross | ||||||||||||||
| Period (in years) |
Carrying Amount |
Accumulated Amortization |
Net Amount |
||||||||||||
| Franchise agreement | 9 | 5,249,482 | 467,138 | 4,782,344 | |||||||||||
| Agent relationships | 8 | 916,282 | 93,431 | 822,851 | |||||||||||
| Real estate listings | 0 | 564,756 | 472,543 | 92,213 | |||||||||||
| Non-compete agreements | 3 | 188,748 | 46,076 | 142,672 | |||||||||||
| Total | 9 | $ | 6,919,268 | $ | 1,079,188 | $ | 5,840,080 | ||||||||
The Company recorded $685,723 and $1,006,052 of amortization of the intangible assets during the years ended December 31, 2025 and December 31, 2024, respectively. The remaining estimated annual amortization expense is expected to be as follows:
| Amortization | ||||
| 2026 | $ | 580,300 | ||
| 2027 | 576,935 | |||
| 2028 | 534,930 | |||
| 2029 | 532,708 | |||
| 2030 | 532,708 | |||
| Thereafter | 1,667,461 | |||
| Total | $ | 4,425,042 | ||
| Useful Life | ||
| Franchise agreement | 10 to 11 years | |
| Agent relationships | 8 to 11 years | |
| Real estate listings | 1 year | |
| Non-compete agreements | 4 years |
F-
Note 7 — Leases
The Company has operating leases for office space in several states. Lease terms are negotiated on an individual basis. Generally, the leases have initial terms ranging from one to five years. Renewal options are typically not recognized as part of the right of use assets and lease liabilities as it is not reasonably certain at the lease commencement date that the Company will exercise these options to extend the leases.
The Company elected certain practical expedients under ASC 842 which allows the Company to combine lease and non-lease components of lease payments in determining right-of-use assets and related lease liabilities. The Company also elected the short-term lease exception. Leases with an initial term of twelve-months or less that do not include an option to purchase the underlying asset are not recorded on the consolidated balance sheets and are expensed on a straight-line basis over the lease term.
The Company leases its corporate office from an entity controlled by the Company’s CEO. The rent expense for the years ending December 31, 2025 and 2024 was $181,929 and $139,200, respectively. On July 1, 2023, the Company began leasing office space for its subsidiary, La Rosa Realty, from an entity owned by Joseph La Rosa, the Company’s CEO, and Michael La Rosa, a former Company’s Board member. There is a written lease, which includes minimum monthly rent of $5,300, with a term ending in June 2025. The parties have agreed to continue on a month-to-month basis. In addition, the Company rents various office spaces and has acquired leases as part of its acquisition strategy.
Lease costs for the years ended December 31, 2025 and 2024 were $935,587 and $905,825 respectively, and included in general and administrative expenses in the consolidated statements of operations.
Supplemental cash flow information related to leases is as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | 691,862 | $ | 665,416 | ||||
| Right-of-use assets obtained in exchange for lease obligations | $ | 555,190 | $ | 883,652 | ||||
During January 2025, the Company entered into a new lease for office space in Orlando, FL. The Orlando lease requires monthly payments of $5,170. The Orlando lease is initially for a five-year term, with no written option for renewal.
During July 2025, the Company renewed its lease of the corporate office space in Celebration, FL, which is owned by an entity controlled by our CEO. The Celebration lease requires monthly payments of $12,000. The Celebration lease is initially for a one-year term, with option for renewal.
During August 2025, the Company entered into a new lease for office space in Puerto Rico. The Puerto Rico lease requires monthly payments of $1,250. The Puerto Rico lease is initially for a five-year term, with no written option for renewal.
During the year ended December 31, 2024, the Company acquired seven franchisees and affiliates, of which five had remaining lease terms beyond twelve months, resulting in an increase of $417,228 in right-of-use assets and an increase in lease liabilities of $425,494.
F-
Supplemental balance sheet information related to leases is as follows:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets: | ||||||||
| Right-of-use assets | $ | 963,991 | $ | 997,715 | ||||
| Liabilities: | ||||||||
| Lease liability, current | 486,481 | 473,733 | ||||||
| Lease liability, noncurrent | 514,388 | 545,759 | ||||||
| $ | 1,000,869 | $ | 1,019,492 |
|||||
The Company’s leases do not provide a readily determinable implicit discount rate. The Company estimates its incremental borrowing rate as the discount rate based on the information available at lease commencement. The weighted average discount rate is 11%.
Future maturities on lease liabilities as of December 31, 2025 are as follows:
| December 31, | ||||
| 2025 | ||||
| 2026 | $ | 497,948 | ||
| 2027 | 340,858 | |||
| 2028 | 174,526 | |||
| 2029 | 119,061 | |||
| 2030 | 35,066 | |||
| Total minimum lease payments | 1,167,460 | |||
| Less: imputed interest | (166,591 | ) | ||
| Present value of lease obligations | 1,000,869 | |||
| Less: current portion | (486,481 | ) | ||
| Long-term portion of lease obligations | $ | 514,388 | ||
There were no leases with residual value guarantees.
Note 8 — Borrowings
Line of Credit
The Company has a line of credit with Regions Bank that allows for advances up to $150,000 with interest at the Prime Rate plus 4.75% with a floor of 4.75% and no maturity date. On December 31, 2025, the outstanding balance on the line of credit was $0 at a prime rate of 7.00% plus 4.50%, or 11.50%. On December 31, 2024, the outstanding balance on the line of credit was $148,976 at a prime rate of 7.75% plus 4.75%, or 12.50%. The line of credit is collateralized by Company assets.
Convertible Note Facility, Redemption Agreement, and Amendment to the Articles of Incorporation
On November 12, 2025, the Company and the Investors entered into the Securities Purchase Agreement, pursuant to which the Company agreed to, among other things, issue and sell, and the Investors agreed to purchase, in multiple closings, a new series of senior secured convertible notes of the Company in an aggregate original principal amount of up to $250,000,000, subject to the satisfaction or waiver of certain closing conditions.
Pursuant to the Purchase Agreement, on November 12, 2025, the Company issued a Token Right (the “Token Right”) to certain Investors, pursuant to which the holder will be entitled to receive upon exercise of the Token Right and for no further consideration an aggregate number of Right Tokens (as defined therein) equal to the sum of (i) fifty percent (50%) of any and all Tokens (as defined in the Token Right) purchased by the Company using the net proceeds of each Closing and (ii) twenty-five percent (25%) of any and all Tokens purchased by the Company using the net proceeds of any Other Financing (as defined therein). The Token Right can be exercised at any time beginning on the date that is the sixty (60) day anniversary of the issuance date of the Token Right and ending on the ten (10) year anniversary of the issuance date of the Token Right.
In connection with the Purchase Agreement, on November 12, 2025, the Company also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to file a registration statement on Form S-1 with SEC to register the resale of all of the Conversion Shares and shares of Common Stock otherwise issuable pursuant to the Notes. The Company subsequently received a waiver of this condition.
F-
In connection with the Purchase Agreement, on November 12, 2025, the Company and Mr. La Rosa entered into a redemption agreement (“Redemption Agreement”), pursuant to which, on the Initial Closing Date, the Company will redeem and immediately cancel and return to the status of “blank check” preferred stock of the Company, a number of Mr. La Rosa’s shares of Series X Preferred Stock such that, immediately after such redemption, he will own shares of Series X Preferred Stock representing not less than 80% of the total voting power of the Company for a redemption price of $2,000,000 payable on the Initial Closing Date, and $500,000 contingently payable upon the satisfaction by the Company of its SEC filing requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for four consecutive quarters and certain other four-quarter requirements set forth therein. Mr. La Rosa’s remaining shares of Series X Preferred Stock will be redeemed by the Company at a subsequent time determined by the Board or otherwise as set forth in the Redemption Agreement as described below, in each case for no additional consideration. These redemptions of the Series X Preferred Stock are conditioned upon stockholders’ approval and effectiveness of the Certificate of Amendment (as defined below).
The parties also agreed that in the event that the Company receives any notice from a prospective investor (including the Investors) that such prospective investor would provide, or commit to provide, equity or debt financing to the Company but for the existence of any then outstanding shares of Series X Preferred Stock, the Company will, within twenty-four (24) hours following receipt of such notice, redeem all remaining issued and outstanding shares of Series X Preferred Stock for no additional consideration.
In addition, under the Redemption Agreement, Mr. La Rosa agreed, subject to certain customary exceptions, not to sell, offer to sell, contract or agree to sell, pledge or otherwise dispose of, directly or indirectly, any of his shares of the Series X Preferred Stock during the term of the Redemption Agreement, without the consent of the Lead Buyer.
In accordance with the terms of the Securities Purchase Agreement, the stockholders of the Company holding a majority of the voting power approved (1) the issuance of all Notes and Conversion Shares in excess of 19.99% of the Company’s issued and outstanding common stock at a price less than the minimum price on November 12, 2025 by written consent in lieu of having a stockholders’ meeting; (2) the Certificate of Amendment, and (3) the Reverse Stock Split. On November 24, 2025, the Company filed a preliminary information statement on Schedule 14C with the SEC notifying stockholders of such written consent. On December 4, 2025, the Company filed a definitive information statement on Schedule 14C with the SEC and commenced mailing the same to the stockholders of record of the Company as of the close of business on November 12, 2025. On December 25, 2025, such approval became effective.
On January 8, 2026, the Company consummated the initial closing (the “Initial Closing”) under the Securities Purchase Agreement, pursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “Initial Note”), together with a previously issued Token Right (as defined in the Securities Purchase Agreement), for an aggregate purchase price of $9,900,000. The Initial Note is convertible into Conversion Shares, at an initial conversion price equal to $8.347, subject to adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the floor price of $7.78, which will be lowered pursuant to the terms of the Initial Note for the Initial Note and all other Notes upon the effectiveness of the stockholders’ approval of such reduction (the “Floor Price”). The Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears commencing on February 1, 2026, matures twenty-four (24) months from the date of issuance and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the Initial Note.
In connection with the Initial Closing on January 8, 2026, as contemplated under the Securities Purchase Agreement: (i) the Company and each of its subsidiaries (each, a “Grantor”), and a collateral agent (the “Collateral Agent”) for the benefit of the holders of Obligations (as defined in the Security Agreement), entered into a Security and Pledge Agreement (the “Security Agreement”) with respect to the Notes, pursuant to which each Grantor granted the Collateral Agent, for the benefit of the Secured Parties (as defined in the Security Agreement), a security interest in such Grantor’s right, title and interest in and to all or substantially all of its properties and assets, or in which or to which such Grantor has any rights, whether then owned or thereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”); (ii) each subsidiary of the Company also entered into a guarantee agreement (the “Subsidiary Guaranty”) whereby each Subsidiary of the Company guaranteed to the Investors the prompt and full payment and performance of the obligations of the Company and each Subsidiary under the Purchase Agreement and other Transaction Documents; and (iii) the Company and the Collateral Agent entered into an Intellectual Property Security Agreement (“Intellectual Property Security Agreement”), pursuant to which the Company granted to the Collateral Agent a lien and security interest in certain intellectual property of the Company.
As a condition to the Initial Closing as provided in the Securities Purchase Agreement: (i) on December 22, 2025, the Company filed the Certificate of Amendment, which became effective on December 26, 2025; and (ii) on January 5, 2026, the Company and the Collateral Agent also entered into that certain Account Control Agreement.
The Company received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to acquire Note Purchased Crypto (as defined in the Notes) as a digital asset for the Company’s balance sheet, (ii) $2,000,000 of the net proceeds to redeem a portion of the outstanding shares of the Series X Super Voting Preferred Stock pursuant to the Redemption Agreement (as defined in the Initial 8-K), (iii) $500,000 of the net proceeds will be kept in a controlled account to fund the redemption of remaining shares of the Series X Super Voting Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions.
F-
Curvature Securities LLC served as placement agent in connection with the offering described herein and will receive cash compensation not exceeding 7% of the gross proceeds of the Initial Closing.
On the Initial Closing, pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Super Voting Preferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company, and the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa a portion of the Fixed Redemption Price (as defined in the Redemption Agreement) equal to $1,700,000 immediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be agreed by the Company and Mr. La Rosa.
The Company entered into the Securities Purchase Agreement and transactions contemplated thereby to secure immediate and committed access to capital at a time when alternative financing sources were either unavailable or significantly more dilutive and restrictive. The facility was intended to provide critical liquidity to support ongoing operations, address going concern considerations, and preserve enterprise value. In addition, the Company sought to strengthen its balance sheet and position itself to deploy capital into strategic initiatives, including investments in stablecoins, A.I. infrastructure, and data center opportunities, which management believes have the potential to enhance long-term shareholder value. Unlike traditional financing, the structure allows the Company to draw capital incrementally, providing flexibility to align funding with operational needs and market conditions. While the transaction includes costs such as potential dilution and derivative liabilities, management determined that these were justified given the significant risk to the business if capital was not secured. The transaction was negotiated at arm’s length and, in management’s view, represents a reasonable and necessary financing solution under the circumstances.
Senior Secured Convertible Note
On February 4, 2025, the Company and an Investor entered into the SPA, pursuant to which the Company issued to the Investor on such date: (i) a Senior Secured Convertible Note in the original principal amount of $5,500,000 which matures on February 4, 2027 (the “Initial Note”); and (ii) sixteen (16) warrants (the “Incremental Warrants”), each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (the “Incremental Notes” and together with the Initial Note, the “Notes”). The purchase price paid by the Investor under the SPA for the Initial Note and Incremental Warrants was $4,963,750.
The Initial Note accrues interest at a rate of 12% per annum, calculated on the basis of a 360-day year. Interest is payable quarterly in arrears, meaning that payments are due at the end of each calendar quarter for interest accrued during that quarter. Interest is built into the fair value of the Note.
In connection with the closing of the Initial Note, the Company entered into a Registration Rights Agreement dated February 4, 2025, obligating the Company to file and maintain the effectiveness of one or more registration statements with the SEC covering the resale of the shares of common stock issuable upon conversion of the Notes and related instruments. The Company was required to file an initial registration statement with the SEC within 30 calendar days of the closing date and have it declared effective within 90 calendar days (or 120 days if subject to full SEC review). The Company successfully filed the registration statement on time per the agreed terms for the Initial Note. The Company is also subject to certain limitations on entering into conflicting registration rights agreements through the applicable date and must allocate available registration capacity pro rata among holders.
The Notes may be prepaid by the Company, in whole or in part, at its option with at least 30 calendar days’ notice to the holder, provided no Event of Default has occurred and is continuing. Voluntary prepayments are subject to a redemption premium equal to 120% of the outstanding principal, accrued interest, and any applicable charges being redeemed. The Company may not issue more than one redemption notice within any 20-trading-day period, and such notices are irrevocable once issued.
Certain mandatory redemptions, including those triggered by Events of Default, Bankruptcy Events, or Change of Control transactions, are contractually deemed voluntary prepayments and are also subject to the 120% redemption premium. The redemption price in such scenarios is the greater of (i) 120% of the outstanding amount or (ii) a formula based on the conversion rate and the highest closing price of the Company’s common stock during a specified period.
F-
Other redemptions, such as those triggered by subsequent placements or asset sales, are payable at 100% of the applicable amount and are not subject to a premium.
On May 23, 2025, the Company and the Investor holding the Initial Note and Incremental Warrants entered into a waiver agreement pursuant to which, effective as of May 20, 2025, through May 30, 2025, the holder waived all rights to default-related penalties, default interest, and acceleration of any amounts due under the Initial Note, as well as any other rights arising from an event of default under the SPA, the Initial Note, the Incremental Warrants, and the related transaction documents, specifically with respect to the Company’s untimely filing of its Quarterly Report on Form 10-Q. In addition, the Investor waived the requirement under the related Registration Rights Agreement to register for resale the shares of common stock issuable upon conversion of the Notes (other than the Initial Note) in the initial registration statement filed by the Company with the SEC on February 14, 2025, and all related rights to receive any Registration Delay Payments (as defined in the Registration Agreement). The Company agreed to file subsequent registration statements within thirty (30) calendar days following the issuance of any Incremental Notes pursuant to the exercise or call of an Incremental Warrant, registering for resale by the Investor all shares issuable upon the conversion of such notes.
On June 18, 2025, the Company and the Investor entered into an 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. The Initial Note remains outstanding post-Exchange. See Note 10 – Stockholder’s Equity for further discussion.
On June 26, 2025, the Company and the Investor entered into an Amendment No. 1 to the Initial Note to correct the maturity date to February 4, 2027 and amend the Alternate Conversion Price to be the greater of (i) 95% of the lowest VWAP of the common stock of the Company during the seven (7) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (as defined in the Initial Note) and (ii) the Floor Price (as defined in the Initial Note).
Upon the modification on June 26, 2025, the Company evaluated the debt modification guidance, including the troubled debt restructuring guidance, determining that the modification of this instrument for which the Company made a fair value option election pursuant to Subtopic 825-10 at inception, is not a troubled debt restructuring and rather, an extinguishment of the existing Initial Note. The Company recorded a gain on debt extinguishment of $4,113,000, which pursuant to ASC 470-50-40-2 for all extinguishments of debt, represents the difference between the reacquisition price (which includes any premium) and the net carrying amount of the debt being extinguished (which includes any deferred debt issuance costs) should be recognized as a gain or loss when the debt is extinguished. There were no deferred debt issuance costs as the Initial Note was accounted for under the fair value option at issuance, and regarding the amendment, the Company incurred approximately $2,000 in costs, which were expensed in the period incurred.
Pursuant to this agreement the Company has the right to convert the principal and accrued interest into shares of common stock at the Conversion Price or Alternate Conversion Price which is the greater of (i) 95% of the lowest VWAP of the Common Stock during the seven consecutive trading days immediately preceding the conversion. As of December 31, 2025 the Company converted $1,450,000 of principal and $112,000 of accrued interest at a conversion premium of 20% for $312,000 resulting in a total value of $1,874,000 converted into 8,215 shares of common stock.
Cash Advance Agreements
On February 5, 2025, the Company paid off their Standard Merchant Cash Advance Agreement (the “Cash Advance”) with Cedar Advance LLC (“Cedar”) in the amount of $354,450, resulting in a loss on extinguishment of debt of $83,310. The Company also paid off their other Standard Merchant Cash Advance Agreement (the “Arin Cash Advance Agreement”) with Arin Funding LLC (“Arin”) in the amount of $340,421, resulting in a loss on extinguishment of debt of $68,615.
During the years ended December 31, 2025 and 2024, non-cash interest expense of $63,160 and $391,836, respectively, was recorded from the amortization of the debt discount and the debt issuance costs related to these Cash Advances. As of December 31, 2024, the remaining gross balance of the Cash Advances was $833,766, with a remaining unamortized discount of $215,085, for a net balance of $618,861.
F-
On July 3, 2023, the Company entered into a Cash Advance Agreement with Cedar for the purchase and sale of future receipts pursuant to which the Company sold in the aggregate $764,150 in future receipts of the Company for $500,650. The Company recorded a debt discount in the amount of $237,150 based upon the difference between the amount of future receipts sold and the actual proceeds received by the Company and debt issuance costs of $26,350. The debt discount and debt issuance costs were reflected as a reduction on the outstanding liability and were being amortized as non-cash interest expense using the effective interest method over the term of the agreement. The Cash Advance was fully repaid in January 2024.
On May 20, 2024, the Company entered into another Standard Merchant Cash Advance Agreement (the “2024 Cash Advance”) with Cedar for the purchase and sale of future receipts pursuant to which the Company sold in the aggregate $761,250 in future receipts of the Company for $500,000. Future receipts include cash, check, credit or debit card, electronic transfer, or other form of monetary payment. Until the purchase price has been repaid, the Company agreed to pay Cedar $23,000 per week. In addition, the Company granted Cedar a security interest in all the Company’s accounts, including deposit accounts and accounts receivable and proceeds. The Company recorded a debt discount in the amount of $236,250 based upon the difference between the amount of future receipts sold and the actual proceeds received by the Company and debt issuance costs of $25,000. The debt discount and debt issuance costs were reflected as a reduction on the outstanding liability and were being amortized as non-cash interest expense using the effective interest method over the term of the agreement.
On October 7, 2024, the Company entered into a Standard Merchant Cash Advance Agreement (the “Cedar Cash Advance Agreement”) with Cedar pursuant to which the Company sold to Cedar $616,250 of its future receivables, including cash, check, credit or debit card, electronic transfer, or other form of monetary payments from third parties (the “Receivables Purchased Amount”), for a purchase price of $425,000 less underwriting fees and expenses paid, or for net funds of $403,750 to the Company. The parties agreed that a portion of the proceeds equal to $301,250 were to be paid by the Company to Cedar pursuant to the May 20, 2024 cash advance agreement discussed above. This payment was accounted for as an extinguishment of this May 20, 2024 cash advance agreement debt and the Company recorded a loss of $54,829 representing the remaining unamortized deferred financing costs and discount. Pursuant to the Cedar Cash Advance Agreement, Cedar was expected to withdraw $15,400 a week directly from the Company’s bank account until the Receivables Purchased Amount due to Cedar under the Cedar Cash Advance Agreement is paid in full. In the event of a default (as defined in the Cedar Cash Advance Agreement), Cedar, among other remedies, could demand payment in full of all amounts remaining due under the Cedar Cash Advance Agreement. To guarantee the Company’s satisfaction of its obligations under the Cedar Cash Advance Agreement, the Company granted Cedar a security interest in all its accounts, including deposit accounts and accounts receivable and proceeds.
On October 7, 2024, the Company, entered into a Standard Merchant Cash Advance Agreement (the “Arin Cash Advance Agreement”) with Arin Funding LLC (“Arin”) pursuant to which the Company sold to Arin $588,000 of its future receivables for the sale of its goods and services (the “Receivables Purchased Amount”), for a purchase price of $420,000 less fees and expenses paid, or for net funds of $400,000 to the Company. Pursuant to the Arin Cash Advance Agreement, Arin was expected to withdraw $15,474 a week directly from the Company’s bank account until the Receivables Purchased Amount due to Arin under the Arin Cash Advance Agreement was paid in full. In the event of a default (as defined in the Arin Cash Advance Agreement), Arin, among other remedies, could demand payment in full of all amounts remaining due under the Arin Cash Advance Agreement. To guarantee the Company’s satisfaction of its obligations under the Arin Cash Advance Agreement, the Company granted Arin a security interest in all its accounts, including, but not limited to, deposit accounts, accounts receivables, other receivables, chattel paper, documents, equipment, general intangibles, instruments and inventory.
Notes Payable-Senior Secured Promissory Notes
In connection with the execution of the SPA mentioned above, during the first quarter of 2025, the Company repaid the remaining principal and accrued interest of all three outstanding senior secured promissory notes issued in 2024 to an accredited investor thereby fully extinguishing the Company’s debt obligations under the 2024 note issuances discussed below.
In addition, the accredited investor elected to convert an aggregate principal and interest amount of $483,751 of the notes into 173 shares of the Company’s common stock in accordance with the terms of the applicable note agreements. The Company also settled all vested and outstanding warrants previously held by the investor. Two of the three warrants were exercised for a total of 110 shares of common stock. The remaining warrant was repurchased by the Company for $379,083 in cash on January 24, 2025, resulting in the elimination of all vested warrants held by the investor.
F-
Prior to extinguishment, on January 8, 2025, the Company and the accredited investor entered into that certain Waiver, waiving the Event of Default (as defined) under these senior secured promissory notes. The waiver included, among other provisions, waiving the rights to all default penalties, default interest, the acceleration of any amounts and waiving the restriction for the Company to enter into a variable rate transaction, of which the consummation could be considered an event of default, provided the proceeds from such financing are used to repay, in full, the notes described below.
Also prior to extinguishment, on January 22, 2025, the Company and the Holder signed an amendment No. 1 to the Waiver. Pursuant to the Amendment, the Company shall pay 100% of any cash proceeds raised by the Company from the sale of securities pursuant to its Registration Statement on Form S-3 to the Holder first towards the repayment of the Redemption Price until it is paid in full, and after that towards the repayment of the Notes. The Amendment also provides that, if the Redemption Agreement becomes null and void pursuant to the terms of the Redemption Agreement, then all Proceeds previously paid by the Company to the Holder pursuant to the Redemption Agreement shall instead be applied towards the repayment of the Notes.
The interest expense incurred for these senior secured promissory notes prior to being retired was $23,798 for the year ended December 31, 2025. The interest expense incurred for the senior secured promissory notes was $264,490 for the year ended December 31, 2024.
On February 20, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note with an aggregate principal amount of $1,052,632 with a maturity date twelve months from the issue date. The note had an original issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 8 shares of the Company’s common stock as a commitment fee, a warrant to purchase 15 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date, and a second warrant to purchase 12 shares of the Company’s common stock with an exercise price of $18,000. The second warrant would only become exercisable if the note was not fully paid on or before the maturity date, at which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant would be cancelled and extinguished if the note was fully paid on or before the note maturity date. The investor also had a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of all of the Company’s obligations under the note. The principal amount and interest under the note were convertible into shares of the Company’s common stock at a conversion price of $20,000 per share unless the Company failed to make an amortization payment when due, in which case the conversion price would be the lower of $20,000 or 85% of the lowest volume weighted average price (VWAP) of the shares prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes. In connection with this financing, the Company also issued to its placement agent, Alexander Capital L.P. (“Alexander Capital”), a 5-year warrant to purchase 3 shares of the Company’s common stock at an exercise price of $12,000 per share. During the year ended December 31, 2024, the investor converted $69,534 of accrued interest and $746,440 of principal to 110 shares of common stock.
On April 1, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note with an aggregate principal amount of $1,316,000 with a maturity date twelve months from the issue date. The note had an original issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 6 shares of the Company’s common stock as a commitment fee, a warrant to purchase 19 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date, and a second warrant to purchase 19 shares of the Company’s common stock with an exercise price of $18,000. The second warrant would only become exercisable if the note was not fully paid on or before the maturity date, at which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant would be cancelled and extinguished if the note is fully paid on or before the note maturity date. The investor also had a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of all of the Company’s obligations under the note. The principal amount and interest under the note were convertible into shares of the Company’s common stock at a conversion price of $20,000 per share unless the Company fails to make an amortization payment when due, in which case the conversion price would be the lower of $20,000 or 85% of the lowest VWAP of the shares prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes. During the year ended December 31, 2024, the investor converted $71,713 of accrued interest to 7 shares of common stock.
F-
On July 16, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note with an aggregate principal amount of $444,600 with a maturity date twelve months from the issue date. The note had an original issue discount of 5% and a coupon rate of 13% per annum. In addition, the Company issued 4 shares of the Company’s common stock as a commitment fee, a warrant to purchase 7 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date, and a second warrant to purchase 7 shares of the Company’s common stock with an exercise price of $18,000. The second warrant only became exercisable if the note was not fully paid on or before the maturity date, at which point the warrant was exercisable until the five-year anniversary of the vesting date. The second warrant would be cancelled and extinguished if the note was fully paid on or before the note maturity date. The investor also had a security interest in certain property of the Company and its subsidiaries to secure the prompt payment, performance, and discharge in full of all of the Company’s obligations under the note. The principal amount and interest under the note were convertible into shares of the Company’s common stock at a conversion price of $20,000 per share unless the Company failed to make an amortization payment when due, in which case the conversion price would be the lower of $20,000 or 85% of the lowest VWAP of the shares prior to five days of the conversion. The proceeds of the note were used for business development and general working capital purposes.
The Company evaluated the terms of the securities purchase agreements and determined that the commitment shares and the first warrants were freestanding instruments. The Company determined the commitment shares were to be classified as equity, which are initially recorded at fair value with no subsequent remeasurement. The Company determined that the first warrants were classified as a derivative liability, which were initially recorded at fair value with changes in fair value recorded in earnings. The second warrants and certain terms within the debt notes were contingent upon certain possible events that were within the Company’s control. The Company determined that the contingencies were not probable and, as such, were not recorded as contingent liabilities.
The Company incurred issuance costs that were directly attributable to issuing the debt instruments in the amount of $346,248, which included placement fees of $202,518 paid to Alexander Capital. Of the debt issuance costs, $326,879 was paid in cash and the remainder was the value of a warrant issued to Alexander Capital. The Company determined that the warrant issued to Alexander Capital was classified as equity. The issuance costs were not specifically related to any instrument within the transactions and, as such, were allocated in the same proportion as the proceeds were allocated to each of the debt transactions, the committed shares, and the warrants.
On September 25, 2024, the Company entered into an agreement to amend the three Senior Secured Promissory Notes entered into in February, April, and July of 2024. The amendment extended the maturity date for all three notes to August 1, 2025, and delayed payments until February 1, 2025. In lieu of all payments required under the original notes, $250,000 per month was to be paid beginning February 1 and each month after, until all three notes were paid in full. In addition, $200,000 was paid on September 30, 2024 and applied to the February note. This amendment was accounted for as an extinguishment of debt, and the Company recorded a loss of $722,558. The Company had accrued interest on the notes totaling $264,490 as of December 31, 2024.
Notes Payable-Promissory Note
On September 27, 2024, the Company entered into a promissory note payable whereby the Company borrowed $200,000 bearing interest at 12.5% per annum. The note was payable in three-monthly installments of $75,000. The proceeds of the note were used to pay down the senior secured promissory note entered into in February 2024. The remaining balance on the note as of December 31, 2024 was $148,725. This note was fully repaid in February 2025. The interest expense incurred for the promissory note was $1,276 for the year ended December 31, 2025.
Notes Payable-Economic Injury Disaster Loans
On June 1, 2020, the Company received net proceeds from Economic Injury Disaster Loans (the “EIDL Loans”) from the Small Business Administration (“SBA”) in the aggregate amount of $365,300. After processing fees, the net proceeds were $365,100 under the terms. The EIDL Loans, which are in the form of promissory notes, mature in May 2050 and bear interest at a rate of 3.75% per annum. Payments are to be made monthly, and each payment is applied first to the interest accrued to the date of receipt of each payment and any remaining payment is applied to principal. The loan terms provide for a collateral interest for the SBA and limits the use of proceeds to working capital to alleviate the effects of COVID-19 on the Company’s economic condition.
During the fourth quarter of 2023, the Company acquired two franchisees that had outstanding Economic Injury Disaster Loans (the “EIDL Loans”) in the aggregate of $263,000. During the first quarter of 2024, the Company acquired a franchise that had an outstanding EIDL Loan in the aggregate of $34,100. The Company acquired the EIDL Loans, and the EIDL loans have terms similar to the Company’s existing EIDL loans. The EIDL Loans mature in 2050 and bear interest at a rate of 3.75% per annum.
F-
Future maturities of Economic Injury Disaster Loans as of December 31, 2025, were as follows:
| December 31, | ||||
| Economic Injury Disaster Loans-Future Maturities | 2025 | |||
| 2026 | $ | 5,900 | ||
| 2027 | 5,900 | |||
| 2028 | 5,900 | |||
| 2029 | 5,900 | |||
| 2030 | 5,900 | |||
| 2031 | 5,900 | |||
| Thereafter | 605,827 | |||
| Total | $ | 641,227 | ||
Acquisition Settlement Agreement
One October 18, 2024, the Company entered into a mediated settlement agreement to purchase the remaining 49% of the non-controlling interest of the subsidiary Nona Legacy Powered By La Rosa Realty, Inc. for a total of $1,000,000 paid in equal monthly installments of $11,905 over a period of seven years with the first payment due on November 1, 2024. The settlement agreement releases the Company of any further claims and bears no interest.
Notes payable as of December 31, 2025 and December 31, 2024 were as follows:
| December 31, | December 31, | |||||||
| Notes Payable | 2025 | 2024 | ||||||
| Senior secured promissory note (SSPN) #1 | $ | 106,192 | ||||||
| Senior secured promissory note #2 | 1,316,000 | |||||||
| Senior secured promissory note #3 | 468,000 | |||||||
| Promissory note payable | 148,724 | |||||||
| Senior secured convertible note | 5,818,000 | - | ||||||
| Economic injury disaster loans (EIDL) | 641,227 | 647,630 | ||||||
| Acquisition Settlement Agreement | 833,333 | 976,190 | ||||||
| Total notes payable | $ | 7,292,560 | $ | 3,662,736 | ||||
| Current portion: | ||||||||
| Less: current portion-SSPNs | (1,890,192 | ) | ||||||
| Less: current portion-Promissory note payable | (148,724 | ) | ||||||
| Less: current portion-EIDL | (5,900 | ) | (5,900 | ) | ||||
| Acquisition Settlement Agreement | (142,857 | ) | (142,857 | ) | ||||
| Notes payable, net of current | $ | 7,143,803 |
$ | 1,475,064 | ||||
Note 9 — Warrants
Warrants are issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s Common Stock at a fixed price. The strike price of warrants granted in 2022 were set when the Company completed the IPO pricing agreement with the Company’s underwriters on October 9, 2023, which was $5.00.
July 2025 Warrant Exchange Agreements
During July 2025, the Company entered into two warrant exchange agreements (the “Exchange Agreements”) with two holders of previously issued equity classified warrants to purchase shares of the Company’s Common Stock (one Exchange Agreement was entered into with the Company’s Chief Executive Officer. The terms of the Exchange Agreement provided each holder with 750 newly issued shares of the Company’s Common Stock, in exchange for the settlement and cancellation of their outstanding warrants. As of the dates of the Exchange Agreements, the outstanding warrants provided the holders with the right to purchase an aggregate of 3,703,704 shares of the Company’s Common Stock at a per share exercise price of $0.135.
F-
Upon the respective settlement dates in July 2025, the Company measured the fair value of the newly issued shares of the Company’s Common Stock issued as consideration to be approximately $1.1 million. Just prior to their settlement and cancellation, the Company estimated the fair value of the Warrants to be approximately $28.0 million. The fair value of the Warrants prior to cancellation was estimated using the Black-Scholes valuation model with the following inputs: Company stock prices of $7.40 to $7.99; exercise prices of $0.135, remaining term to maturity of 2.3 to 2.4 years, risk-free rates of 3.9% and stock
price volatility of 65.0%.
As the difference between the fair value of the Warrants settled ($28.0 million) and the fair value of the shares of Common Stock issued ($1.1 million) was favorable to the Company, no recognition of this change is required in the Company’s consolidated financial statements.
Warrants are issued to consultants as compensation or as part of certain capital raises which entitle the holder to purchase shares of the Company’s common stock at a fixed price. As of December 31, 2025, the Company’s stock price was $6.34.
2022 Warrant Exchange Agreements
Warrants issued to two investors who loaned money to the Company, Emmis Capital II, LLC and the Company’s CEO, Joseph La Rosa, on November 14, 2022 and December 2, 2022, respectively, included full ratchet antidilutive protections. The original warrants each covered 50,000 shares at a strike price of $5.00. By the end of 2024, due to various debt and equity transactions the new strike price on these warrants became $0.37, resulting in the number of shares covered by each warrant to increase to 667,913 and a 2024 deemed dividend of $1,476,044.
In the first half of 2025, the warrants were revalued due to equity transactions triggering the ratchet antidilutive protections bringing the strike price of these warrants down to $0.14 resulting in the number of shares covered by each warrant to increase to 1,851,852, and a 2025 deemed dividend of $275,264. In addition, on August 7, 2024, the Company, entered into a securities purchase agreement with an institutional accredited investor, Brown Stone Capital Ltd., pursuant to which the Company agreed to issue up to 3,051,336 shares of the Company’s common stock, and/or pre-funded warrants to purchase shares of common stock, at $0.59 per share. The discount related to the shares purchased by Brown Stone resulted in a deemed dividend of $434,163. Pursuant to this agreement, on August 12, 2024, the Company issued 95 shares of common stock. In accordance with the full ratchet antidilutive terms tied to Emmis Capital II, LLC and Joseph La Rosa’s warrants, the warrants were adjusted to reflect the strike price of the common stock issued to Brown Stone Capital Ltd., and the number of shares covered by each of the warrants increased to 847,458, in the aggregate. The difference in the fair value between each warrant immediately before and after the trigger was, in aggregate, $485,876, which is considered a deemed dividend. These two transactions increased the basic net loss per share for common stockholders for the year ended December 31, 2024.
At December 31, 2025, warrants outstanding that have vested and are expected to vest are as follows:
| Weighted | ||||||||||||||||
| Average | ||||||||||||||||
| Weighted | Remaining | |||||||||||||||
| Number | Average | Contractual | Aggregate | |||||||||||||
| of | Exercise | Life | Intrinsic | |||||||||||||
| Shares | Price | (in years) | Value | |||||||||||||
| Vested | 14 | $ | 77,965 | 2.0 | $ | - | ||||||||||
| Expected to vest | — | — | — | — | ||||||||||||
| Total | 14 | $ | 77,965 | 2.0 | $ | - | ||||||||||
Additional information with respect to warrant activity:
| Weighted | ||||||||
| Number | Average | |||||||
| of | Exercise | |||||||
| Shares | Price | |||||||
| Balance — December 31, 2024 | 3,930,282 | $ | 0.66 | |||||
| Granted/ Increase to existing warrants | 2,367,878 | 0.14 | ||||||
| Exercised | (1,392,198 | ) | 0.37 | |||||
| Expired or forfeited | (4,905,948 | ) | 0.14 | |||||
| Balance — December 31, 2025 | 14 | $ | 77,965.08 | |||||
F-
During 2023 the Company issued warrants to purchase 6 shares of Common Stock to the Company’s underwriter as compensation for providing services to complete the Company’s IPO. The warrants vested on April 2, 2024 and have a term of five years from the grant date with an exercise price of $44,000. The warrants are freestanding instruments in a bundled transaction with the IPO and are accounted for separately. The Company determined that the warrants are classified as equity.
Warrants related to 2024 Senior Secured Notes Payable
On February 20, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note. As part of the transaction, the Company issued two warrants, the first gave the investor the option to purchase 15 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date.
On April 1, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note. As part of the transaction, the Company issued two warrants, the first gives the investor the option to purchase 19 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date.
On July 15, 2024, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a senior secured promissory note. As part of the transaction, the Company issued two warrants, the first gives the investor the option to purchase 7 shares of the Company’s common stock with an exercise price of $24,000, exercisable until the five-year anniversary of the closing date.
During the first half of 2025, the Company settled all vested and outstanding warrants previously held by the accredited investor holding the three senior secured notes payable from 2024 mentioned above. Two of the three warrants were exercised on a cashless basis for a total of 2 shares of common stock which represented 1,392,198 warrants. The remaining warrant was repurchased by the Company for $379,083 in cash on January 24, 2025, resulting in the elimination of all vested warrants (1,202,244 warrants) held by the investor as of March 31, 2025.
Under an agreement between the Company and the Company’s underwriter, Alexander Capital, the Company issued a warrant to Alexander Capital as a result of the issuance of the promissory note on February 20, 2024. The holder of the warrant had the right to purchase 3 shares of the Company’s common stock with an exercise price of $12,000, exercisable until the five-year anniversary of the grant date.
During the fiscal years ended December 31, 2025 and 2024, there was no unrecognized expense related to warrants. There was no unrecognized amortization of financing fees related to warrants in 2025 or 2024.
The valuation methodology used to determine the fair value of the warrants was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the warrant.
Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s estimated volatility is an average of the historical volatility of peer entities over the shorter of i) the period equal to the expected life of the award or ii) the period over which the peer company was publicly traded. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price.
The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the award at the grant date.
The weighted average fair value of warrants granted and the assumptions used in the Black-Scholes model are set forth in the table below.
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Weighted average fair value | $ | 0.06 | $ | 0.87 | ||||
| Dividend yield | — | — | ||||||
| Expected volatility factor | 66.3 | % | 72.7 | % | ||||
| Risk-free interest rate | 3.7 | % | 4.3 | % | ||||
| Expected life (in years) | 2.4 | 5.5 | ||||||
F-
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”).
F-
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.
| December 31, 2025 | ||||||||||||||||||||||
| Shares Authorized |
Shares Issued and Outstanding |
Carrying Value |
Original Issue Price |
Conversion Price |
Common Shares Upon Conversion |
|||||||||||||||||
| 6,000 | 6,000 | $ | 8,261,000 | $ | 0.0001 | $ | 960.00 | 7,944 | ||||||||||||||
F-
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.
F-
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.
F-
Note 11 — Series X Preferred Stock Subject to Redemption
Redemption Agreement
In connection with the Purchase Agreement, on November 12, 2025, the Company and Mr. La Rosa entered into a redemption agreement (“Redemption Agreement”), pursuant to which, on the Initial Closing Date, the Company will redeem and immediately cancel and return to the status of “blank check” preferred stock of the Company, a number of Mr. La Rosa’s shares of Series X Preferred Stock such that, immediately after such redemption, he will own shares of Series X Preferred Stock representing not less than 80% of the total voting power of the Company for a redemption price of $2,000,000 which is recognized as a deemed dividend on the statement of operations payable on the Initial Closing Date, and $500,000 contingently payable upon the satisfaction by the Company of its SEC filing requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for four consecutive quarters and certain other four-quarter requirements set forth therein. Mr. La Rosa’s remaining shares of Series X Preferred Stock will be redeemed by the Company at a subsequent time determined by the Board or otherwise as set forth in the Redemption Agreement as described below, in each case for no additional consideration. These redemptions of the Series X Preferred Stock are conditioned upon stockholders’ approval and effectiveness of the Certificate of Amendment (as defined below).
The parties also agreed that in the event that the Company receives any notice from a prospective investor (including the Investors) that such prospective investor would provide, or commit to provide, equity or debt financing to the Company but for the existence of any then outstanding shares of Series X Preferred Stock, the Company will, within twenty-four (24) hours following receipt of such notice, redeem all remaining issued and outstanding shares of Series X Preferred Stock for no additional consideration.
In addition, under the Redemption Agreement, Mr. La Rosa agreed, subject to certain customary exceptions, not to sell, offer to sell, contract or agree to sell, pledge or otherwise dispose of, directly or indirectly, any of his shares of the Series X Preferred Stock during the term of the Redemption Agreement, without the consent of the Lead Buyer.
On December 22, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation, pursuant to which effective as of December 26, 2026 the shares of the Series X Preferred Stock may be redeemed from time to time and at any time in whole or in part upon such terms and conditions as may be approved by the Board of Directors and agreed to by the holder(s) thereof. As a result, the Company reassessed the classification of the Series X Preferred Stock after the modification, in relation to the potential redeemability of the shares and the permanent equity versus temporary equity classification and determined the Series X Preferred Stock should be reclassified to temporary equity as of the effective date of the amendment.
Note 12 — Equity Incentive Plan
On January 10, 2022, the Company adopted the La Rosa Holdings Corp. 2022 Equity Incentive Plan (the “2022 Plan”) pursuant to which a maximum of 625 shares of Common Stock of the Company were authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), performance units and performance shares. Persons eligible to receive awards under the 2022 Plan include employees, consultants, and directors of the Company. The plan is administered by the Compensation Committee of the Board of Directors. On October 20, 2023, the Company filed a Form S-8 to register the securities in the 2022 Plan. As of December 31, 2025, there are 819 shares available for issuance after reserving an additional 568 shares under the plan through the end of 2025.
Stock Option Awards
Stock options are awards issued to employees and directors that entitle the holder to purchase Common Stock of the Company at a fixed price.
The Company recorded stock-based compensation related to options of $200,076 and $3,267,088 for the years ended December 31, 2025 and 2024, respectively. The Company did not realize any tax benefits associated with share-based compensation for the years ended December 31, 2025 and 2024, as the Company recorded a valuation allowance on all deferred tax assets.
At December 31, 2025, options outstanding that have vested and are expected to vest are as follows:
| Weighted | ||||||||||||||||
| Average | ||||||||||||||||
| Weighted | Remaining | |||||||||||||||
| Number | Average | Contractual | Aggregate | |||||||||||||
| of | Exercise | Life | Intrinsic | |||||||||||||
| Shares | Price | (in years) | Value | |||||||||||||
| Vested | 503 | $ | 12,264.19 | 8.22 | $ | - | ||||||||||
| Expected to vest | 41 | 4,429.74 | 8.97 | - | ||||||||||||
| Total | 544 | $ | 11,673.68 | 8.28 | $ | - | ||||||||||
F-
Additional information with respect to stock option activity:
| Weighted | ||||||||
| Number | Average | |||||||
| of | Exercise | |||||||
| Shares | Price | |||||||
| Balance — December 31, 2024 | 490 | $ | 12,462.71 | |||||
| Granted | 54 | 5,539.30 | ||||||
| Balance — December 31, 2025 | 544 | $ | 11,673.68 | |||||
The weighted average fair value and the assumptions used in calculating the stock options granted during fiscal year 2025 and 2024 were based on estimates at the date of grant as follows:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Weighted average fair value | $ | 4,154.33 |
$ | 831.45 |
||||
| Dividend yield | — | — | ||||||
| Expected volatility factor | 68.5 | % | 68.5 | % | ||||
| Risk-free interest rate | 4.5 | % | 4.1 | % | ||||
| Expected life (in years) | 9.0 | 9.6 | ||||||
For the years ended December 31, 2025 and 2024, the Company recorded stock-based compensation for employees awards of $3,148,801 and $3,292,291, respectively. The Company did not realize any tax benefits associated with share-based compensation for these periods, as the Company recorded a valuation allowance on all deferred tax assets.
As of December 31, 2025 and 2024, unrecognized compensation expense related to stock option awards totaled $75,126 and $92,892, respectively.
Restricted Stock Units (RSUs)
A restricted stock unit covering 1 share of Common Stock issued to the Company’s Chief Technology Officer (CTO) vested on February 1, 2024. In addition, the CTO received a grant of 1 restricted stock unit on February 1, 2025, which was issued under the 2022 Plan.
For the years ending December 31, 2025 and 2024, the Company recorded $51,345 and $23,144, respectively, of share-based compensation expense related to the RSUs. For the years ending December 31, 2025 and 2024, unrecognized compensation expense related to the awards was $229,952.16 and $86,722, respectively.
The Company did not realize any tax benefits associated with share-based compensation for the years ending December 31, 2025 and 2024, as the Company recorded a valuation allowance on all deferred tax assets.
Note 13 — Earnings Per Share
Basic loss per share of common stock attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share of common stock attributable to common stockholders is computed by giving effect to all potential shares of common stock, including those related to the Company’s outstanding warrants and the 2022 Plan, to the extent dilutive. For all periods presented, these potential shares were excluded from the calculation of diluted loss per share because their inclusion would be anti-dilutive. As a result, diluted loss per common share is the same as basic loss per common share for all periods presented.
The following table sets forth common stock equivalents that have been excluded from the computation of dilutive weighted average shares outstanding as their inclusion would have been antidilutive:
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Warrants | 14 | 737 | ||||||
| Options | 544 | 488 | ||||||
| Restricted stock units | 76 | 12 | ||||||
Series B Preferred Stock conversions |
7,944 | — | ||||||
| Total | 8,578 | 1,232 | ||||||
F-
Note 14 — Income Taxes
Our income before provision for (benefit from) income taxes for the years ended December 31, 2025 and 2024 was as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Income (loss) before income taxes | ||||||||
| Domestic | $ | (30,016,549 | ) | $ | (14,318,644 | ) | ||
| Foreign | (393,873 | ) | (31,352 | ) | ||||
| Income (loss) before income taxes | $ | (30,410,422 | ) | $ | (14,349,996 | ) | ||
The benefit from income taxes was as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Current | ||||||||
| U.S. Federal | $ | - | $ | - | ||||
| State and local | - | - | ||||||
| Foreign | - | - | ||||||
| $ | - | $ | - | |||||
| Deferred | ||||||||
| U.S. Federal | $ | (963,436 | ) | $ | (2,423,582 | ) | ||
| State and local | (301,873 | ) | (695,810 | ) | ||||
| Foreign | (89,657 | ) | - | |||||
| (1,354,966 | ) | (3,119,392 | ) | |||||
| Valuation Allowance | 1,354,966 | 3,119,392 | ||||||
| $ | - | $ | - | |||||
| Total | ||||||||
| U.S. Federal | $ | - | $ | - | ||||
| State and local | - | - | ||||||
| Foreign | - | - | ||||||
| $ | - | $ | - | |||||
Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows:
| December
31, 2025 |
||||||||
| $ | % | |||||||
| U.S. federal statutory tax rate | (6,386,189 | ) | 21.00 | % | ||||
| State and local tax effect | - | 0.00 | % | |||||
| Foreign tax effects | ||||||||
| Spain | 51,875 | -0.17 | % | |||||
| Puerto Rico | 30,838 | -0.10 | % | |||||
| Effect of changes in tax laws or rates | ||||||||
| Effect of cross-border tax laws | ||||||||
| Tax Credits | ||||||||
| Changes in valuation allowances | 1,026,553 | -3.38 | % | |||||
| Nontaxable or nondeductible items | ||||||||
| Permanent items | ||||||||
| Change in fair value of warrants and convertible notes | 3,228,505 | -10.62 | % | |||||
| Goodwill impairment | 1,298,038 | -4.27 | % | |||||
| Non-controlling interest | (28,170 | ) | 0.09 | % | ||||
| Deferred NOL true-up | 1,455,051 | -4.78 | % | |||||
| Deferred basis true-up | (669,205 | ) | 2.20 | % | ||||
| Other | (7,296 | ) | 0.03 | % | ||||
| Effective Tax Rate | - | 0.00 | % | |||||
F-
A reconciliation of the provision for income taxes with the amounts computed by applying the Federal income tax rate to income from operations before the provision for income taxes is as follows for the years ended December 31, 2024:
| December 31, | ||||
| 2024 | ||||
| U.S. federal statutory rate | 21.00 | % | ||
| State taxes, net of federal benefit | 4.51 | % | ||
| Permanent items | -1.97 | % | ||
| Deferred true-Up | 0.00 | % | ||
| Valuation allowance | -21.74 | % | ||
| Foreign tax | 0.00 | % | ||
| Other | -1.80 | % | ||
| Effective income tax rate | 0.00 | % | ||
There was no cash paid for income taxes, net of refunds, during the years ended December 31, 2025 and 2024, respectively.
The components of deferred tax assets (liabilities) were as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | $ | 3,181,291 | $ | 3,085,132 | ||||
| Stock compensation | 3,813,065 | 2,550,588 | ||||||
| Lease liability | 253,720 | 258,441 | ||||||
| Goodwill | - | 51,036 | ||||||
| Allowance for bad debts | 45,539 | 33,356 | ||||||
| Charitable contributions | 19,031 | 14,126 | ||||||
| Total deferred assets | 7,312,646 | 5,992,679 | ||||||
| Deferred tax liabilities | ||||||||
| Basis adjustment on acquired assets | (1,121,748 | ) | (1,157,639 | ) | ||||
| Right of use asset | (244,372 | ) | (252,920 | ) | ||||
| Other | (9,440 | ) | - | |||||
| Total deferred liabilities | (1,375,560 | ) | (1,410,559 | ) | ||||
| Deferred tax assets (liabilities) | 5,937,086 | 4,582,120 | ||||||
| Deferred tax liabilities, net of valuation allowance | (5,937,086 | ) | (4,582,120 | ) | ||||
| Deferred tax assets (liabilities, net of valuation allowance | $ | - | $ | - | ||||
As of December 31, 2025, the Company has federal net operating loss carryforwards of approximately $11.9 million and state net operating loss carryforwards of approximately $13.4 million which can be carried forward indefinitely. As of December 31, 2024, the Company had federal net operating loss carryforwards of approximately $12.0 million and state net operating loss carryforwards of approximately $12.9 million. The valuation allowance on our net deferred tax assets increased by $1.4 million and $3.1 million during the years ended December 31, 2025 and 2024, respectively. The changes in valuation allowances during the years ended December 31, 2025 and 2024 were primarily due to the net operating losses generated by the Company and stock compensation awarded. Deferred tax assets for net operating loss carryforwards are fully offset by a valuation allowance.
We have taken current and potential future expirations into consideration when evaluating the need for valuation allowances against these deferred tax assets. A valuation allowance for deferred tax assets is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal of federal tax liabilities during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which our deferred tax assets are deductible, we believe it is more likely than not that we will not realize the benefits of these deductible differences. We have recorded a valuation allowance for deferred tax assets of $5,937,086 and $4,582,120 as of December 31, 2025 and 2024.
F-
The Company applies the FASB’s provisions for uncertain tax positions. The Company utilizes the two-step process to determine the amount of recognized tax benefit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.
The Company recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense. As of December 31, 2025 and 2024 we have not accrued for any interest and penalties on our unrecognized tax benefits.
We file income tax returns in the U.S., Florida and foreign jurisdictions. We are currently not under examination by the Internal Revenue Service (“IRS”). All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and state income tax purposes. Our returns for 2021 and subsequent tax years remain subject to examination in U.S. and Florida jurisdictions. Our returns for 2023 and subsequent tax years remain subject to examination in foreign jurisdictions.
As of December 31, 2025, management does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its financial statements. The Company will continue to evaluate its uncertain tax positions in future periods to determine if measurement and recognition in its financial statements is necessary. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year.
Note 15 — Segments
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and annually regarding significant and material aspects regarding revenue, related cost of revenue and general and administrative expense. All material operating sub-units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics and nature of services.
The Company has determined that the assets of the reporting segments, which consist primarily of cash, accounts receivable and intangible assets, do not provide operationally significant information due to the service nature of the business segments.
The Company’s business is organized into six material reportable segments which aggregate 100% of revenue:
| 1) | Real Estate Brokerage Services (Residential) |
| 2) | Franchising Services |
| 3) | Coaching Services |
| 4) | Property Management |
| 5) | Real Estate Brokerage Services (Commercial) |
| 6) | Title Settlement and Insurance |
F-
The reporting segments follow the same accounting policies used in the preparation of the Company’s consolidated financial statements. The following represents the information for the Company’s reportable segments for the years ended December 31, 2025 and 2024, respectively.
| 2025 | 2024 (as restated) |
|||||||
| Revenue by segment | ||||||||
| Real Estate Brokerage Services (Residential) | $ | 66,547,103 | $ | 57,024,911 | ||||
| Franchising Services | 129,702 | 329,069 | ||||||
| Coaching Services | 443,863 | 568,516 | ||||||
| Property Management | 395,291 | 348,721 | ||||||
| Real Estate Brokerage Services (Commercial) | 694,133 | 327,912 | ||||||
| Title Settlement and Insurance | 297,714 | 83,010 | ||||||
| $ | 68,507,806 | $ | 58,682,139 | |||||
| Cost of revenue by segment | ||||||||
| Real Estate Brokerage Services (Residential) | $ | 60,282,976 | $ | 51,684,882 | ||||
| Franchising Services | 340,402 | 488,136 | ||||||
| Coaching Services | 268,082 | 310,288 | ||||||
| Property Management | 76,975 | 7,515 | ||||||
| Real Estate Brokerage Services (Commercial) | 570,982 | 238,039 | ||||||
| Title Settlement and Insurance | - | - | ||||||
| $ | 61,539,417 | $ | 52,728,860 | |||||
| Gross profit (loss) by segment | ||||||||
| Real Estate Brokerage Services (Residential) | $ | 6,264,127 | $ | 5,340,029 | ||||
| Franchising Services | (210,700 | ) | (159,067 | ) | ||||
| Coaching Services | 175,781 | 258,228 | ||||||
| Property Management | 318,316 | 341,206 | ||||||
| Real Estate Brokerage Services (Commercial) | 123,151 | 89,873 | ||||||
| Title Settlement and Insurance | 297,714 | 83,010 | ||||||
| $ | 6,968,389 | $ | 5,953,279 | |||||
| G&A by segment | ||||||||
| Real Estate Brokerage Services (Residential) | $ | 13,006,946 | $ | 10,414,191 | ||||
| Franchising Services | 114,961 | 20,112 | ||||||
| Coaching Services | 138,331 | 1,625 | ||||||
| Property Management | 207,741 | 52,264 | ||||||
| Real Estate Brokerage Services (Commercial) | 163,336 | 51,717 | ||||||
| Title Settlement and Insurance | 238,657 | 85,642 | ||||||
| $ | 13,869,972 | $ | 10,625,551 | |||||
In addition to the expenses from these segments corporate expenses were $23,508,839 and $9,677,724, which resulted in the net loss of $30,410,422 and $14,349,996 for the years ended December 31, 2025 and 2024, respectively.
The following table disaggregates the Company’s revenue based on the type of sale or service and the timing of satisfaction of performance obligations for the years ended December 31:
| 2025 | 2024 (as restated) |
|||||||
| Performance obligations satisfied at a point in time | $ | 66,035,359 | $ | 56,169,461 | ||||
| Performance obligations satisfied over time | 2,472,447 | 2,512,678 | ||||||
| Revenue | $ | 68,507,806 | $ | 58,682,139 | ||||
F-
Note 16 — Commitments and Contingencies
The Company has entered into indemnification agreements with the Company’s officers and directors for certain events or occurrences. The Company maintains a directors and officers insurance policy to provide coverage in the event of a claim against an officer or director.
Nasdaq Listing Rule
On October 10, 2024, the Company received a letter from Nasdaq notifying the Company that it was no longer in compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq under the Bid Price Rule. Nasdaq has granted the Company 180 calendar days, or until April 8, 2025, to regain compliance with the Bid Price Rule. On April 9, 2025, Nasdaq notified the Company that Nasdaq’s Staff has determined that the Company is eligible for an additional 180 calendar day period, or until October 6, 2025, to regain compliance. The Company implemented an 80-for-1 reverse stock split effective July 7, 2025, which increased the trading price of its common stock. Following the reverse split, the Company regained compliance with the Nasdaq Bid Price Rule by maintaining a closing bid price of at least $1.00 per share for the required ten consecutive trading days. Nasdaq formally confirmed that the Company had regained compliance on July 21, 2025.
Legal Proceedings
From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include, but are not limited to, actions relating to employment law and misclassification, 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. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur.
On February 13, 2023, Mr. 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. Original mediation was scheduled for August 25, 2025, with a second mediation set for April 28, 2026. Discovery is proceeding and the trial is set for October 2026. The Company denies the merits of the claims and intends on vigorously defending the litigation.
On March 5, 2025, Joshua Epstein, our former employee and Chief Strategy Officer, filed a civil lawsuit in Osceola County, Florida Circuit Court alleging claims for breach of contract, promissory estoppel, conversion, unjust enrichment, breach of good faith and fair dealings, fraud in the inducement, and to recover alleged unpaid compensation in the amount of $100,000 from the Company. The Company strongly opposed and denied these claims. Original partial mediation occurred on September 5, 2025. A second mediation is expected to be set in the near future. The case trial is scheduled for April 2027. The Company denies the merits of the claims and intends on vigorously defending the litigation.
On June 5, 2025, an employee, who served as our Senior Human Resources and Payroll Specialist from July 10, 2024 to August 19, 2024, filed a civil lawsuit against the Company in the Circuit Court of Osceola County, Florida. The employee is seeking a jury trial claiming $50,000 in damages and that the Company terminated her employment in violation of SS 448.102(3). On July 9, 2025, the Company responded to the complaint with its answer and affirmative defenses, effectively denying all of the plaintiff’s claims. In March of 2026 discovery and depositions began. The case remains pending.
F-
On January 13, 2026, Martin Scott CFO Consulting Services, Inc. filed a civil lawsuit against the Company and La Rosa Realty, LLC, in the Circuit Court of Palm Beach County for breach of contract, open account, account stated, and unjust enrichment. The plaintiff stated that he had a contract with the defendants and is owed unpaid fees of approximately $29,000 and legal expenses. The Company settled this lawsuit on April 20, 2026 for the amount of $22,000.
On January 30, 2026, La Rosa Holdings Corp. and La Rosa Realty Orlando LLC filed a civil lawsuit against Reinaldo Zapata and Viviana Figueroa in the Circuit Court of Orange County. The case involved an action for dissolution of La Rosa Realty Orlando, action for conversion against Reinaldo Zapata, and an action for damage for breach of employment agreement against Reinaldo Zapata. The case was settled on April 4, 2026.
On February 1, 2026, Stacy-Ann Blair and Delroxry Blair filed a civil lawsuit against La Rosa Realty CW Properties, et. al. in the Circuit Court of Orange County, Florida, stating that La Rosa CW Properties failed to disclose a family relationship with one or more of its sellers, creating a material conflict of interest. The plaintiffs claim breach of contract, unjust enrichment, fraudulent and negligent misrepresentation, and civil theft and seeking damages of approximately $9,600. The Company filed a motion to dismiss, which was further amended. A case management conference is being scheduled for July-August 2026 and the mediation is set for July 2026. The Company denies the merits of the claims and intends on vigorously defending the litigation.
The Company believes that the above claims are without merit, and it will vigorously defend against such claims. Moreover, these claims, in the aggregate, would not have a material adverse effect on the Company’s financial condition, business, or results of operations, should the Company’s defense not be successful in whole or in part. Except as stated herein, there is no other action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers, threatened against or affecting our Company or our officers or directors in their capacities as such.
Note 17 — Related Party Transactions
The Company leases its corporate office from an entity controlled by the Company’s CEO. The rent expense for the years ending December 31, 2025 and 2024 were $147,600 and $142,602, respectively. There are no future minimum rental payments, and the lease may be cancelled at any time by either party.
On July 1, 2023, the Company began leasing office space for its subsidiary, La Rosa Realty, from an entity owned by Joseph La Rosa, the Company’s CEO, and Michael La Rosa, the Company’s former member of the Board. There was a written lease, which included a minimum monthly rent of $4,593, with a term that ended in June 2025. As of the date of this Report, that agreement continues on a month-to-month basis under its original terms.
Note 18 — Subsequent Events
November 2025 Securities Purchase Agreement Initial Closing
On January 8, 2026, the Company consummated the Initial Closing under the Purchase Agreement dated November 12, 2025, pursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “January 2026 Initial Note”), for an aggregate purchase price of $9,900,000. The January 2026 Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears which commenced on February 1, 2026, matures twenty-four (24) months from the date of issuance (January 8, 2028) and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the January 2026 Initial Note. As long as certain conditions specified in the January 2026 Initial Note are met, the Company has the right to pay interest in cash, shares of the Company’s Common Stock or any combination thereof. If the Company elects to pay interest in shares of the Company’s Common Stock, the number of shares will be determined based on a conversion price equal to the lower of (a) the conversion price then in effect (initially $0.8347) and (b) the greater of the Floor Price (initially $0.778) and 90% of the lowest daily VWAP of the Company’s Common Stock during the 10 trading days immediately preceding the delivery of the interest payment notice.
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The Initial Note is convertible at the Investors’ option into the Conversion Shares of the Company’s Common Stock, par value $0.0001 per share, at an initial conversion price equal to the lower of (a) $0.8347, subject to adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the Floor Price of $0.778, and (b) 90% of the lowest daily VWAP of the Company’s Common Stock during the 10 trading days immediately preceding the Conversion Date. In addition, the Investors’ may elect an Alternate Conversion at any time, based on the Alternate Conversion Price equal to the lower of (a) the conversion price then in effect (initially $0.8347) and (b) the greater of the Floor Price (initially $0.778) and 90% of the lowest daily VWAP of the Company’s Common Stock during the 10 trading days immediately preceding the Conversion Date. If an Alternate Conversion is elected, and the Conversion Floor Price Condition (as defined in the Purchase Agreement) is met, the Company will also deliver to the Investors cash equal to (a) the VWAP of the Common Stock on the trading day immediately preceding the conversion multiplied by (b) the difference between the number of shares actually received by the Investors in the conversion and the number of shares that would have been received by the Investors if the Floor Price had not been in effect.
The January 2026 Initial Note also provides the Investors with the right to redeem all or a portion of the January 2026 Initial Note (either optionally or automatically) upon the occurrence of certain specified events, at a redemption price which includes a 120% premium. The Company also has the right to call the January 2026 Initial Note at any time, with the redemption price also including the 120% premium.
The Company received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to acquire Note Purchased Crypto as a digital asset for the Company’s balance sheet, (ii) $2,000,000 of the net proceeds to redeem a portion of the outstanding shares of the Series X Super Voting Preferred Stock pursuant to the Redemption Agreement, (iii) $500,000 of the net proceeds will be kept in a controlled account to fund the redemption of remaining shares of the Series X Super Voting Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions.
The Company has performed an assessment of the accounting impact of the January 2026 Initial Note, which will be more fully disclosed in the Company’s Form 10-Q for the quarter ended March 31, 2026. After evaluating the embedded features of the January 2026 Initial Note, the Company made an election to account for the Note under the fair value option. The Company’s preliminary estimate of the fair value of the January 2026 Initial Note is $15,100,000 as of its issuance date. Further, as noted above, $500,000 in net proceeds were utilized to acquire Note Purchased Crypto, initially consisting of certain ‘stablecoin’ crypto assets which are designed to maintain a 1:1 pricing relationship with one U.S. Dollar. Subject to the Token Rights Agreement, 50% of the tokens acquired using the $7,500,000 in net proceeds can be requested to be delivered to the Investors with no further consideration required (with the number of tokens acquired equating to 3,750,000). The Company has determined that the obligations under the Token Rights Agreement represent a derivative financial instrument, and have preliminarily estimated the fair value of such obligation to be approximately $3,750,000 upon the Initial Closing. In order to recognize both the January 2026 Initial Note and the obligation under the Token Rights Agreement derivative liability at their respective fair values at issuance (and in relation to the net proceeds received), the Company recorded a loss on issuance of the instruments, preliminarily estimated to be approximately $9,200,000.
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Redemption of Series X Super Voting Preferred Stock
On January 8, 2026, concurrent the Initial Closing and pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Super Voting Preferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company. Of the initial $2,000,000 Fixed Redemption Price described in the Redemption Agreement, the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa $1,700,000 in cash immediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be agreed by the Company and Mr. La Rosa. The remaining $500,000 Contingent Redemption Price associated with the repurchase remains subject to the satisfaction of the conditions outlined in the Redemption Agreement.
November 2025 Securities Purchase Agreement and Token Rights Agreement Amendments
On March 24, 2026, the Company and the Investor entered into an amendment to the Purchase Agreement. The primary purpose of this amendment was to revise the allocation or utilization of net proceeds obtained by the Company from any further equity line of credit, equity purchase facility, or at-the-market offering, such that the net proceeds shall be allocated as follows: (i) until such time as the Company has paid to its placement agent and financial advisor (together, the “Advisors”) an aggregate of $751,221 in deferred fees (1) 20% to pay any outstanding deferred fees due to the Advisors, (2) 40% to acquire Note Purchased Crypto (as defined in the SPA) as a digital asset for the Company’s balance sheet, and (3) the remaining 40% for general corporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing), and (ii) thereafter (1) 50% of the net proceeds shall be used to acquire Note Purchased Crypto as a digital asset for the Company’s balance sheet and (2) the remaining 50% of the net proceeds shall be used for general corporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing), including payment of an additional $77,000 in deferred fees to the Advisors due and payable not earlier than December 31, 2026. The amendment to the Purchase Agreement did not have any effect on the terms of the January 2026 Initial Note described above.
On March 24, 2026, the Company and the Investor entered into an amendment to the Token Rights Agreement, under which the Investor will be entitled to receive an aggregate number of Right Tokens equal to the sum of (i) fifty percent (50%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of each closing under the Purchase Agreement and (ii) fifty six and one quarter percent (56.25%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of any Other Financing (as defined in the Token Right). The amendment to the Token Rights Agreement did not have any additional effect on the terms of the Token Rights Agreement and obligations described above.
Securities Purchase Agreement Initial Closing
On January 8, 2026, the Company consummated the initial closing (the “Initial Closing”) under the Purchase Agreement dated November 12, 2025, pursuant to which it issued to the Investors a senior secured convertible note in the principal amount of $11,000,000 (the “Initial Note”), together with a previously issued Token Right (as defined in the Initial 8-K), for an aggregate purchase price of $9,900,000.
The Initial Note is convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), at an initial conversion price equal to $0.8347, subject to adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the floor price of $0.778 (the “Floor Price”). The Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears which commenced on February 1, 2026, matures twenty-four (24) months from the date of issuance and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the Initial Note.
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As a condition to the Initial Closing as provided in the Purchase Agreement: (i) on December 22, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation in order to expressly permit the Company to redeem shares of its Series X Super Voting Preferred Stock as described in the Initial 8-K, which became effective on December 26, 2025; and (ii) on January 5, 2026, the Company and the Collateral Agent also entered into that certain Account Control Agreement as described in the Initial 8-K.
The Company received $9,635,000 in net proceeds from the Initial Closing, that will be used as follows: (i) $7,000,000 of net proceeds to acquire Note Purchased Crypto (as defined in the Notes) as a digital asset for the Company’s balance sheet, (ii) $2,000,000 of the net proceeds to redeem a portion of the outstanding shares of the Series X Super Voting Preferred Stock pursuant to the Redemption Agreement (as defined in the Initial 8-K), (iii) $500,000 of the net proceeds will be kept in a controlled account to fund the redemption of remaining shares of the Series X Super Voting Preferred Stock in accordance with the terms of the Redemption Agreement, and (iv) any remaining proceeds, for general corporate purposes, working capital, acquisitions and other strategic transactions.
On the Initial Closing, pursuant to the terms of the Redemption Agreement, the Company redeemed 200 shares of the Series X Super Voting Preferred Stock held by Mr. Joseph La Rosa, the Chief Executive Officer of the Company, and the Company and Mr. La Rosa agreed that the Company will pay Mr. La Rosa a portion of the Fixed Redemption Price (as defined in the Redemption Agreement) equal to $1,700,000 immediately after the Initial Closing and the remaining $300,000 of the Fixed Redemption Price will be paid to Mr. La Rosa at a later date to be agreed by the Company and Mr. La Rosa.
Land Purchase
On February 4, 2026 , the Company entered into an agreement (the “Agreement”) with Veras Nova, LLC, a Florida corporation (“Seller”), pursuant to which, the Company agreed to purchase and the Seller agreed to sell a parcel of land located at 2570 AmeraTrails Lot 6D Saint Cloud, FL 34772 (the “Property”). The Company intends to develop a Tier III AI data center at the Property.
The purchase price of the Property is $675,000, which includes an initial earnest money deposit of $10,000 (the “Earnest Money”). The Company and the Seller have agreed to consummate the transactions contemplated by the Agreement on June 15, 2026, subject to the closing conditions set forth in the Agreement, including the determination by the Company, in its sole discretion, that the Property is suitable for the Company.
The Agreement contains representations, warranties, and closing conditions that are customary for transactions of this type. The Agreement provides for a customary inspection period ending on 75th day after the Effective Date (the “Due Diligence Period”), and the Company has the right to terminate the Agreement upon written notice to the Seller within the Due Diligence Period. In the event of such termination by the Company, the Earnest Money will be returned to the Company.
The foregoing description of the Agreement is not complete and is qualified in its entirety by reference to the full text of the form of the Agreement which is filed as Exhibit 10.142 to this Current Report on Form 8-K and incorporated herein by reference.
Disposition of Membership Interest in LR Kissimmee
On January 19, 2026, the Company entered into waiver agreements with certain accredited investors (the “Investors”) party to that certain SPA with the Company, dated as of February, 4, 2025, as amended, or that certain Purchase Agreement with the Company, dated as of November 12, 2025, as amended, in connection with the Company’s proposed sale of its 51% interest (the “Company’s LR Kissimmee Interest”) in Horeb Kissimmee Realty LLC, a Florida limited liability company (“LR Kissimmee”), to the owner of the remaining 49% interest (the “Purchaser”).
On February 4, 2026, the Company entered into and closed the transaction (the “Transaction”) provided for under a Membership Interest Purchase Agreement (the “Sale Agreement”) by and among the Company, the Purchaser and LR Kissimmee. Under the Sale Agreement, the Company will receive from the Purchaser aggregate cash consideration for the Interest of $500,000, payable in twelve (12) equal monthly installments of $41,666.67, which commenced on February 28, 2026. In addition, the Purchaser agreed to pay the Company $61,200, representing the Company’s pro rata share of an outstanding loan previously made by LR Kissimmee to the Purchaser, payable in four (4) equal quarterly installments of $15,300 commencing on the same date.
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The sale is subject to customary conditions, including receipt of the Investors’ waivers of the rights under the SPAs and related transaction documents. As a result of the closing of the Transaction, the Company fully withdrew as a member of LR Kissimmee and has no continuing ownership interest therein.
Acquisition of Membership Interest in LR Lakeland
On February 10, 2026, the Company entered into a waiver agreement with certain accredited investors (the “Investors”) party to that certain securities purchase agreement with the Company, dated as of November 12, 2025, as amended, in connection with the proposed acquisition by the Company of the remaining 49% interest (the “Interest”) in its 51% subsidiary, La Rosa Realty Lakeland LLC, a Florida limited liability company (“LR Lakeland”), that it did not own from the holder thereof (the “Seller”).
On February 11, 2026, the Company entered into and closed the transaction (the “Transaction”) provided for under a Membership Interest Purchase Agreement (the “Purchase Agreement”) and a Settlement Agreement (the “Settlement Agreement”, and together with the Purchase Agreement, the “Agreements”) by and among the Company, Joseph La Rosa, the Chief Executive Officer of the Company, the selling member (the “Seller”) of La Rosa Realty Lakeland LLC, a Florida limited liability company (“Lakeland”), and Lakeland.
Pursuant to the Agreements, the Company acquired from the Seller all of his 49% membership interest in Lakeland for aggregate cash consideration of $350,000 (the “Purchase Price”), consisting of (i) an initial payment of $150,000 paid within ten (10) days following the closing, and (ii) installment payments totaling $200,000, payable in twelve (12) equal monthly installments of $16,666.67 which commenced on March 1, 2026. As a result of the closing of the Transaction, Lakeland became a wholly owned subsidiary of the Company. The Agreements contain customary representations, warranties, covenants and mutual releases.
In addition, under the Settlement Agreement, the Seller agreed not to sell more than 5,000 shares of the Company’s common stock per calendar month prior to the earlier of (i) receipt by the Seller of the full Purchase Price, and (ii) such date as the Company’s common stock has a closing price of $5.00 or more for twenty (20) consecutive trading days, as reported by the Nasdaq Stock Market.
As part of the closing of the Transaction, on February 11, 2026, the Company and the Seller also entered into a Pledge Agreement (the “Pledge Agreement”) pursuant to which, as a security for the unpaid portion of the Purchase Price, the Company granted the Seller a perfected, first-priority security interest in a non-voting 28% economic membership interest in Lakeland.
Securities Purchase Agreement
On March 4, 2026, the Company, and an institutional investor (the “Investor”) entered into a securities purchase agreement pursuant to which the Company issued to the Investor 100 shares of the Company’s Series C Convertible Preferred Stock, par value $0.0001 per share (“Series C Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series C Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada.
Series C Preferred Stock
No Dividends; Voting Rights
The Series C Preferred Stock bears no dividends. The Series C Preferred Stock has no voting rights except as required by Nevada law and except if the Company proposes to: (a) amend or repeal any provision of, or add any provision to, its articles of incorporation (the “Certificate of Incorporation”) or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit of the Series C Preferred Stock, regardless of whether any such action shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of shares of Series C Convertible Preferred Stock; (c) create or authorize (by reclassification or otherwise) any new class or series of Senior Preferred Stock or Parity Stock (as each term is defined in the Certificate of Designation); (d) purchase, repurchase or redeem any shares of Junior Stock (as defined in the Certificate of Designation) (other than pursuant to the terms of the Company’s equity incentive plans and options and other equity awards granted under such plans (that have in good faith been approved by the Company’s board of directors)); (e) pay dividends or make any other distribution on any shares of any Junior Stock; (f) issue any additional shares of Series C Preferred Stock; or (g) whether or not prohibited by the terms of the Series C Preferred Stock, circumvent a right of such shares under the Certificate of Designation.
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Conversion Rights
Subject to the Maximum Percentage (as hereinafter defined), holders of outstanding shares of Series C Preferred Stock are entitled to convert any portion of the outstanding and unpaid Conversion Amount (as hereinafter defined) thereof into shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) at the Conversion Rate (as hereinafter defined). For such purpose: (i) “Conversion Amount” means the stated value thereof and any other unpaid amounts owed to such holder(s) under the Transaction Documents (as defined in the Securities Purchase Agreement); (ii) “Conversion Rate” means the amount determined by dividing (x) such Conversion Amount by (y) the Conversion Price; and (iii) “Conversion Price”, as of any date of determination and subject to adjustment as provided therein (if any), at the option of the converting holder(s), either: (A) $1.176 per share (subject to adjustment), or (B) the “Alternate Conversion Price”. As used herein, “Alternate Conversion Price” means the lowest of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) the greater of (x) the “Floor Price” of $0.196 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (y) 90% of the lowest VWAP (as defined in the Certificate of Designation) of the Common Stock during the ten (10) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice. In the event the holder elects to convert the Series C Preferred Stock at the Alternate Conversion Price, the Conversion Amount shall be multiplied by (i) if in connection with a Change of Control (as defined in the Certificate of Designation), 105% or (ii) otherwise, 125%.
A holder of Series C Preferred Stock shall not have the right to convert any portion of their Series C Preferred Stock to the extent that, after giving effect to such conversion, the holder (together with its affiliates) would beneficially own in excess of 9.99% (the “Maximum Percentage”).
Subject to certain exceptions outlined in the Certificate of Designation, including, but not limited to, equity issuances in connection with its equity incentive plan and certain strategic acquisitions, if the Company sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock or any other securities that are at any time convertible into, or exercisable or exchangeable for, or otherwise entitle the holder thereof to receive, Common Stock, at an effective price per share less than the Conversion Price of the Series C Preferred Stock then in effect, the Conversion Price of the Series C Preferred Stock will be reduced to equal the effective price per share in such dilutive issuance.
Company Optional Redemption Rights
Under the Certificate of Designation, the Company has the right to redeem all, but not less than all, of the then outstanding shares of Series C Preferred Stock at a price equal to the greater of (i) the Conversion Amount being redeemed and (ii) the product of (1) the Conversion Rate with respect to the Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price (as defined therein) of the Common Stock on any trading day during the period commencing on the date immediately preceding the date of the Company’s notice to the holder(s) of Series C Preferred Stock of such redemption and ending on the trading day immediately prior to the date the Company makes the entire redemption payment required to be made under the Certificate of Designation.
Departure and Appointment of the Board Members
On February 5, 2026, Michael La Rosa resigned from the Board, and upon recommendation of the Nominating Committee, on February 10, 2026, the Board appointed Mr. Jaime Cosculluela as a member of the Board.
Amendments to CEO and COO Employment Agreements
On February 19, 2026, with the approval of its Board, the Company entered into (i) an Amendment (the “CEO Amendment”) to its Amended and Restated Employment Agreement, dated November 12, 2025, between the Company and Joseph La Rosa, the Company’s Chief Executive Officer, and (ii) an Amendment (the “COO Amendment”) to its Employment Agreement, dated January 31, 2024 (the “COO Employment Agreement”), between the Company and Deana La Rosa, the Company’s Chief Operating Officer.
Under the CEO Amendment, Mr. La Rosa agreed to a reduction in his base salary from $500,000 to $200,000 per annum, in consideration of which the Company agreed to revise certain provisions of the Confidential Information and Invention Assignment Agreement dated April 12, 2022 (the “CIA Agreement”), between Mr. La Rosa and the Company so that Mr. La Rosa’s non-competition restrictions were effective only during the term of his employment with the Company. In addition, the period of non-solicitation restrictions under the CIA Agreement was reduced from twenty-four (24) to twelve (12) months post-employment. These changes became effective on March 15, 2026.
Under the COO Amendment, the COO agreed to a reduction in her base salary from $250,000 to $100,000 per annum, in consideration of which the Company agreed to revise certain restrictive covenants of the COO Employment Agreement so that Mrs. La Rosa’s non-competition restrictions were effective only during the term of her employment with the Company, and the period of non-solicitation restriction was reduced from twenty-four (24) to twelve (12) post-employment. These changes became effective on March 15, 2026.
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Acquisition of Remaining Interest in Orlando
On April 3, 2026, the Company, La Rosa Realty Orlando LLC, a majority owned subsidiary of the Company (the “Orlando”), and two selling members of Orlando (collectively, the “Sellers”), entered into a settlement agreement (“Settlement Agreement”), pursuant to which, each of the Sellers sold their 24.5% membership interests (collectively, the “Interests”) in Orlando to the Company, and the Company agreed to (i) forgive the amount of $106,447 allegedly owed by one of the Sellers to Orlando, (ii) forgive the alleged $152,295 franchise fee obligation under one of the Seller’s personal guaranty, (iii) pay one of the Sellers the amount of $10,000, and (iv) dismiss without prejudice the civil suit of La Rosa Realty Corp., La Rosa Realty Orlando LLC v. Reinaldo Zapata, Viviana Figueroa, pending in the Circuit Court of Orange County, Florida. As a result of this transaction, Orlando became a wholly-owned subsidiary of the Company.
Equity Issuances
From January 29, 2026 through February 5, 2026, the holder of our Senior Secured Convertible Note converted out the remaining principal, interest and premium on the Note in exchange for 104,321 shares at a weighted average price of $51.25 per share.
From January 9, 2026, through the date of filing, the holder of the Series B preferred shares converted 5,721 of their preferred shares for a total of 956,042 common shares representing a total value of $6,644,609 at a weighted average share price of $6.95.
From January 9, 2026 through the date of filing the Company utilized their Equity Purchase Facility and sold 531,180 shares of common stock for a weighted average price of $8.61 raising a total of $4,574,237. The capital raised was allocated in line with the Purchase Agreement in place as well as the amendment to the Purchase agreement respectively for each draw. The capital was allocated with $3,522,191 going to the crypto wallet, $814,197 being brought into the business for working capital uses, and $237,849 being utilized to pay down placement agent payables.
On February 17, 2026, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 3,500 shares of the Company’s common stock for services rendered.
The remaining 75 shares were made up of small quantity transactions that are not material enough to disclose separately, a portion of these are shares that have vested from RSU’s grants.
Nasdaq Notice Regarding Filing Deficiencies
On April 16, 2026, the Company received a notice (the “10-K Notice”) from the Nasdaq Listing Qualifications Department (the “Staff”) that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to timely file its Comprehensive Form 10-K for the fiscal year ended December 31, 2025 (the “Initial Delinquent Filing”) with the SEC. The Staff informed the Company that, under Nasdaq rules, the Company has 60 calendar days, or until June 15, 2026 to submit a plan to regain compliance, and if the Staff accepts such plan, they can grant an exception of up to 180 calendar days from the Initial Delinquent Filing’s due date (or until October 12, 2026) to regain compliance.
On May 21, 2026, the Company also received a notice (the “10-Q Notice,” and together with the 10-K Notice, the “Notices”) from the Staff indicating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file its Quarterly Report on Form 10-Q for the period ended March 31, 2026, and noting that the Company also remains delinquent in filing its Initial Delinquent Filing. The 10-Q Notice further states that, in accordance with Nasdaq rules and as previously communicated in the 10-K Notice, the Company has until June 15, 2026 to submit a plan to regain compliance, and if the Staff accepts such plan, any exception granted will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or until October 12, 2026, to regain compliance.
The Notices have no immediate effect on the listing or trading of the Common Stock, which will continue to trade on The Nasdaq Capital Market under the symbol “LRHC.” The Company intends to regain compliance with Nasdaq Listing Rule 5250(c)(1) by filing the delinquent reports and/or submit the plan with Nasdaq by June 15, 2026.
Series D Preferred Stock Financing
On May 27, 2026, the Company and the Investor entered into a securities purchase agreement pursuant to which the Company issued the Investor 250 shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (“Series D Preferred Stock”), for a purchase price of $1,000 per share. On the same date, the Company filed respective Certificate of Designation of Rights and Preferences of the Series D Preferred Stock with the Secretary of State of the State of Nevada. Pursuant to the agreement, the remaining 250 shares of Series D Preferred Stock may become issuable by the Company to the Investor at its sole option upon the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures.
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As of December 31, 2025, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Interim Chief Financial Officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures are ineffective, as we are a smaller reporting company with limited resources in our finance department, and we are in the process of establishing our procedures around our disclosure controls.
Management’s Annual Report on Internal Controls over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Management, including Mr. La Rosa, our Chief Executive Officer and our Interim Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to conduct an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025. In our assessment we determined that the Company’s internal control over financial reporting was not effective as of December 31, 2025 due to the material weaknesses described below.
The Company identified material weaknesses in its internal control over financial reporting primarily related to deficiencies in its overall control environment, including limited accounting resources, inadequate segregation of duties, and the absence of formalized policies and procedures. In addition, the Company did not maintain effective controls over (i) significant accounting estimates and judgments, including the goodwill impairment assessment and the income tax provision prepared by external consultants, (ii) revenue recognition, including the determination of gross versus net presentation under ASC 606, which resulted in errors in previously issued financial statements and the restatement of the Company’s consolidated financial statements, (iii) the preparation, review, and approval of its periodic SEC filings to ensure the completeness, accuracy, and consistency of financial disclosures, and (iv) controls and processes related to cybersecurity risk management.
Remediation Plan
The Company is in the process of designing and implementing remediation measures, including enhanced review procedures, hiring additional personnel with technical accounting expertise and SEC reporting expertise, formalizing documentation standards, and strengthening oversight of third-party services providers and specialists.
Changes in Internal Control over Financial Reporting
Other than the identification of the material weaknesses described above, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the three months ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Item 10. Directors, Executive Officers, and Corporate Governance.
Directors and Executive Officers
The names, positions and ages of our non-independent directors and executive officers as of June 3, 2026 are as follows:
| Name | Age | Position | Director Since | |||
| Joseph La Rosa | 48 | President and Chief Executive Officer (Principal Executive Officer), Interim- Chief Financial Officer (Principal Financial and Accounting Officer) | August 2021 | |||
| Deana La Rosa | 55 | Chief Operating Officer | — | |||
| Alex Santos | 43 | Chief Technology Officer | — | |||
| Jaime Cosculluela | 48 | Independent Director | February 2026 | |||
| Lourdes Felix* | 58 | Independent Director | April 2024 | |||
| Ned L. Siegel* | 74 | Independent Director | February 2022 | |||
| Nicholas Adler* | 50 | Independent Director and Chairman of the Board of Directors | December 2025 |
| * | Member of the Audit Committee, of the Compensation Committee and of the Nominating and Corporate Governance Committee. |
A brief description of the background and business experience of our executive officers and directors for the past five years is as follows:
Joseph La Rosa is the Company’s Founder and has been serving as the Company’s President, Chief Executive Officer since August 2021 and of its original five subsidiaries (La Rosa Realty, LLC, La Rosa Property Management, LLC, La Rosa CRE LLC, La Rosa Coaching, LLC and La Rosa Franchising, LLC) since their inception. Since October 2025, Mr. La Rosa also serves as our Interim Chief Financial Officer. From August 2021 to December 2025 Mr. La Rosa served as a Chairman of the Board. A former police officer in Orlando, Florida, Mr. La Rosa entered his family’s commercial and residential real estate development business in 2001 and became President of La Rosa Development, Corp., a position he holds today. From 2008 to 2010, as President of the Casa Latino group of companies, he co-developed the first Latino real estate franchise throughout the United States, which in 2010 was ranked by the National Association of Realtors as one of the Fastest Growing Real Estate Franchises in the U.S. In 2004, Mr. La Rosa founded La Rosa Realty, LLC and is responsible for its past and current growth into a customer-oriented, agent-centric model of real estate brokerage powered by AI based technology tools. In addition to being home to almost 3,000 real estate professionals and being one of the top three brokerages in the State of Florida and in the top 20 brokerages in the National Association of Realtors, La Rosa Realty has continued its growth and expansion into supporting auxiliary services such as La Rosa Property Management, LLC, La Rosa CRE LLC (commercial), La Rosa Coaching, LLC and La Rosa Franchising, LLC. From October 2023, Mr. La Rosa serves as a Chief Executive Officer of Nona Legacy Powered By La Rosa Realty, Inc., a majority owned subsidiary of the Company. From December 2023 to date, Mr. La Rosa serves as the Manager of La Rosa Realty CW Properties, LLC, La Rosa Realty North Florida LLC, La Rosa Realty Orlando, LLC, and La Rosa Realty Premier, LLC, all majority owned subsidiaries of the Company. From February 2024 to date, Mr. La Rosa serves as the Manager of La Rosa Realty Winter Garden LLC, majority owned subsidiary of the Company. From February 2024 to February 2026, Mr. La Rosa served as the Manager of Horeb Kissimmee Realty LLC, former subsidiary of the Company. From March 2024 to date, Mr. La Rosa serves as the Chief Executive Officer and a member of the Board of Directors of La Rosa Realty California, a subsidiary of the Company. From April 2024 to date, Mr. La Rosa serves as the Manager of La Rosa Realty Lakeland LLC, a majority owned subsidiary of the Company. From May 2024 to September 2025, Mr. La Rosa served as the Manager of La Rosa Realty Success LLC, former subsidiary of the Company. From August 2024 to date, Mr. La Rosa serves as the Manager of two wholly-owned subsidiaries of the Company: BF Prime LLC and FPG Title Group, LLC. From December 2024 to date, Mr. La Rosa serves as the Manager of La Rosa Realty Beaches LLC, a wholly owned subsidiary of the Company. From January 2025 to December 2025, Mr. La Rosa served as the Co-Manager of La Rosa Realty NC LLC. From January 2025 to date, Mr. La Rosa serves as the Manager LR Luxury LLC, a wholly owned subsidiary of the Company. From April 2025 to date, Mr. La Rosa also serves as the Manager of LR Agent Advance, LLC, a wholly owned subsidiary of the Company. From April 2024 to date, Mr. La Rosa graduated from Florida International University with a Bachelor of Science degree in criminal justice. We believe that Mr. La Rosa’s entrepreneurial, real estate, investment and leadership experience makes him well qualified to serve as a director of our Board.
Deana La Rosa was appointed the Chief Operating Officer of the Company in February 2024. Mrs. La Rosa brings over 30 years of expertise in finance and real estate to the Company. Mrs. La Rosa joined the Company as a Director of Operations in September 2023. Prior to that she served as the CEO of Lighthouse Mortgage Solutions from June 2022 through August 2023 and held key positions in management at Union Home Mortgage Corp. from January 2019 through June 2022 and The Federal Savings Bank from July 2015 through January 2019 as an SVP, where Mrs. La Rosa consistently led her teams to top producer status. With almost two decades as a licensed mortgage broker, she has excelled as an owner, sales manager, and operations manager. Notably, Mrs. La Rosa played a pivotal role in coaching loan officers and realtors to achieve top-tier performance. Her educational background includes business management and accounting studies at Adelphi University, complemented by a certification in equities and bond market trading from the NY Institute of Finance. Mrs. La Rosa’s extensive experience and commitment to excellence underscore her as a distinguished professional in finance and real estate. Mrs. La Rosa is the spouse of our Chief Executive Officer, Joseph La Rosa.
Alex Sincler Santos joined the Company in February 2022, initially serving as the Director of Technology before assuming the role of Chief Technology Officer in August 2022. With over 28 years of experience in leadership and software development, Mr. Santos stands as a driving force of technological innovation, consistently delivering transformative solutions that yield substantial business value. Before joining La Rosa Holdings, Mr. Santos served as the Application Development Manager at COLAMCO, Inc., where he adeptly led a team of software developers to achieve a series of successful projects. From 1996 to 2013, Mr. Santos held pivotal roles in technology, including serving as a Senior Software Developer for AmeriBen/IEC Group, Senior Developer/Manager for Finance Express Mortgage, among other esteemed positions. In his current capacity as Chief Technology Officer, Mr. Santos spearheads the technological initiatives of the company, leveraging his expertise to drive innovation and growth focused on a high-tech high-touch approach. Mr. Santos’ dynamic leadership fosters a culture of excellence and collaboration within the technology team, propelling the company forward in a competitive market landscape. Mr. Santos’ educational background includes a bachelor’s degree in software engineering from PUC-PR and continuing education from Harvard University. Throughout his career, Mr. Santos has exemplified a relentless commitment to technological innovation and excellence, making significant contributions to the organizations he has served.
Jaime Cosculluela was appointed to serve as a member of the Company’s Board effective as of February 2026. Mr. Cosculluela is a strategic growth advisor and entrepreneur with more than 15 years of experience in the entertainment and digital marketing world. In February 2023, Mr. Cosculluela founded The Content Marketing Agency, helping artists to promote their music on digital platforms, which he owns and operates to date. In 2019, Mr. Cosculluela founded a recording studio, Jungl Studios, and a record label, Jungl LLC, both of which he owns and operates to date. From January 2018 to September 2021, Mr. Cosculluela acted as a co-founder of ShowKings LLC, a production company and ticketing platform. Prior to that, Mr. Cosculluela worked as a Senior Director – Investments at Oppenheimer & Co. Inc. (from June 2014 to March 2017). He also served as a First Vice President at UBS Financial Services of Puerto Rico (from February 2007 to June 2014), and a financial advisor at Popular Securities (from November 2001 to February 2007). Mr. Cosculluela completed coursework in Business Administration at the University of Cincinnati, where he was also a member of the university’s tennis team, and earned a Bachelor’s degree in Business Administration from Universidad del Sagrado Corazón (Puerto Rico). The Board believes that Mr. Cosculluela’s business development and entrepreneurial background as well as his experience in a financing industry make him qualified to serve on our Board.
Nicholas H. Adler was appointed to serve as a Chairman of the Board effective as of December 2025. Mr. Adler is a licensed attorney in Nashville, Tennessee specializing in defense litigation, bankruptcy, foreclosure, and real estate matters. He has been a partner at Brock & Scott PLLC since 2012. After his graduation from law school, Mr. Adler practiced with a large international firm in New York specializing in securities regulation. Since 2005, his practice has focused on the representation of national and regional credit grantors in Tennessee. He is also active in real estate development and asset management in Nashville as a principal of Q&A Developments, LLC which specializes in multi-family and mixed-use projects. Since September 2020, Mr. Adler also serves as Chairman of the Board of Directors of Freight Technologies, Inc. (Nasdaq: FRGT) a technology company offering a portfolio of proprietary platform solutions across the supply chain process. Since November 2025, Mr. Adler serves as a director of Aero Velocity Inc., a specialized drone technology company. He earned his B.A. in political science from Vanderbilt University and his J.D. from The Washington and Lee University School of Law. The Board believes that Mr. Adler is qualified to serve as a Chairman of the Board and as an independent member of the Board’s committees because of his legal, real estate development and asset management experience.
Ambassador Ned L. Siegel was appointed to serve as a member of the Company’s Board effective February 2022. Ambassador Siegel is the President of The Siegel Group, a multi-disciplined international business management advisory firm he founded in 1997 in Boca Raton, Florida, specializing in real estate, energy, utilities, infrastructure, financial services, oil and gas and cyber and secure technology. Ambassador Siegel has served since 2013 as Of Counsel to the law firm of Wildes & Weinberg, P.C. From October 2007 until January 2009, he served as the United States Ambassador to the Commonwealth of The Bahamas. Prior to his Ambassadorship, in 2006, he served with Ambassador John R. Bolton at the United Nations in New York, as the Senior Advisor to the U.S. Mission and as the United States Representative to the 61st Session of the United Nations General Assembly. From 2003 to 2007, Ambassador Siegel served on the Board of Directors of the Overseas Private Investment Corporation (“OPIC”), which was established to help U.S. businesses invest overseas, fostering economic development in new and emerging markets, complementing the private sector in managing the risk associated with foreign direct investment and supporting U.S. foreign policy. Appointed by Governor Jeb Bush, Ambassador Siegel served as a Member of the Board of Directors of Enterprise Florida, Inc. (“EFI”) from 1999-2004. EFI is the state of Florida’s primary organization promoting statewide economic development through its public-private partnership. From February 2011 to April 2019, Ambassador Siegel served on the Board of Directors of PositiveID Corporation (OTCQB: PSID). From April 2014 to March 2020, Ambassador Siegel served as a director of the Board of Notis Global Inc. (OTC: NGBL). Ambassador Siegel served as a director and a member of the Board committees of Vocodia Holdings Corp., (CBOE: VHAI) (from January 2023 to January 2025), and a director, Chairman of a compensation committee, and member of audit committee of Bannix Acquisition Corp. (Nasdaq: BNIX) (from October 2022 to July 2025). Ambassador Siegel presently serves on the Board of Directors of the following companies: Janover Inc. (Nasdaq: JNVR)(from July 2023), Worksport Ltd, (Nasdaq: WKSP) (from August 2021). He also presently serves in an advisory capacity to the U.S. Medical Glove Company. Ambassador Siegel received a B.A. from the University of Connecticut in 1973 and a J.D. from the Dickinson School of Law in 1976. In December 2014, he received an honorary degree of Doctor of Business Administration from the University of South Carolina. The Board believes that Ambassador Siegel’s vast professional experience, education, and professional credentials qualify him to serve as a member of the Company’s Board, and as an independent member of the Board’s committees.
Lourdes Felix was appointed to serve as a member of the Company’s Board effective April 2024. Ms. Felix is an entrepreneur and corporate finance executive with 30 years of combined experience in capital markets, public accounting and in the private sector. She currently serves as Chief Executive Officer, Chief Financial Officer, and a member of the board of directors of BioCorRx Inc. (OTCQB: BICX), a company focused on addiction treatment solutions and related disorders. She has been with BioCorRx since October 2012. Ms. Felix is one of the founders and President of BioCorRx Pharmaceuticals Inc., a majority owned subsidiary of BioCorRx Inc. Prior to joining BioCorRx, her experience was in the private sector and public accounting. From October 2021 to October 2025, Ms. Felix served as a member of the Board of Directors of Siyata Mobile, Inc. (Nasdaq: CHAI), as an independent director, a chairperson of the Audit Committee, and a member of Compensation Committee and Nominating and Corporate Governance Committee. Since January 9, 2023, Ms. Felix has also been serving as a member of the Board of Directors of Avalon GloboCare Corp. (Nasdaq: ALBT), as an independent director and the Chair of the Compensation Committee. Ms. Felix has expertise in finance, accounting, company-wide operations, budgeting, and internal control principles including GAAP, SEC, and Sarbanes-Oxley Act compliance. She has a thorough knowledge of federal and state regulations and has successfully managed and produced SEC regulatory filings. She also has extensive experience in developing and managing financial operations. Ms. Felix holds a Bachelor of Science in Accounting from the University of Phoenix. She is also an MBA candidate at D’Amore-McKim School of Business, Northeastern University. The Board believes that Ms. Felix is qualified to serve as a director of the Board of the Company because of her extensive investment and executive-level management experience, financial expertise, and extensive experience serving as a board member of public companies.
Corporate Governance
The business and affairs of our Company are managed under the direction of the Board.
Term of Office
Directors serve until the next annual meeting of stockholders and their respective successors are elected and qualified, subject to the earlier of their death, resignation or removal. Our executive officers are elected by, and serve at the discretion of, our Board, subject to the terms of any employment or other agreements.
Our Controlled Company Status
Because, as of June 3, 2026, Mr. La Rosa beneficially owns 3,237 shares of our Common Stock and 1,800 shares of our Series X Preferred Stock which has 10,000 votes per share when voting together with the Common Stock, which will represent in the aggregate 18,003,237 votes, he can elect all of our directors and decide all other matters. Accordingly, we are a “controlled company” under the Nasdaq rules. A controlled company is not required to have a majority of independent directors or form an independent compensation or nominating and corporate governance committee.
However, we have a majority of independent directors on our Board and do not currently intend to utilize the exemptions provided by the Nasdaq rules. Nevertheless, for as long as we remain a “controlled company,” we could take advantage of these exemptions at any time. In the event that we cease to be a “controlled company,” we will be required to comply with these provisions within the transition periods specified in the Nasdaq Rules.
Director Independence
We use the definition of “independence” of The Nasdaq Stock Market LLC (“Nasdaq”) to make this determination. Nasdaq Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of our Company or any other individual having a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq rules provide that a director cannot be considered independent if:
| ● | the director is, or at any time during the past three years was, an employee of our Company; |
| ● | the director or a family member of the director accepted any compensation from our Company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for Board or Board committee service); |
| ● | a family member of the director is, or at any time during the past three years was, an executive officer of our Company; |
| ● | the director or a family member of the director is a partner in, controlling shareholder of, or an executive officer of an entity to which our Company made, or from which our Company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions); |
| ● | the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of our Company served on the Compensation Committee of such other entity; or |
| ● | the director or a family member of the director is a current partner of our Company’s outside auditor, or at any time during the past three years was a partner or employee of our Company’s outside auditor, and who worked on our Company’s audit. |
Our Board has determined that four directors, Mr. Adler, Mr. Siegel, Ms. Lourdes, and Mr. Cosculluela, are independent directors as defined in the Nasdaq listing rules and under Rule 10-A-3(b)(1) of the Exchange Act and applicable SEC rules. Under such rules, Mr. Joseph La Rosa is not independent due to his position as our Chief Executive Officer and Interim Chief Financial Officer.
Family Relationships
Except for our Chief Operating Officer, Ms. Deana La Rosa, who is the spouse of our Chief Executive Officer and Interim Chief Financial Officer, Joseph La Rosa, there are no family relationships among any of our officers or directors. Mr. Michael A. La Rosa, former director of the Board, and a brother of Joseph La Rosa, resigned on February 5, 2026. His resignation was not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers have, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
Code of Business Conduct and Ethics
We have adopted a written Code of Business Conduct and Ethics (the “Code”) that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the Code on our website, www.larosaholdings.com. In addition, we will post on our website all disclosures that are required by law or the listing standards of Nasdaq concerning any amendments to, or waivers from, any provision of the Code. The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this Comprehensive Form 10-K.
Clawback Policy
In November 2023, the Board of Directors adopted the La Rosa Holdings Corp. Clawback Policy for the recovery of erroneously awarded incentive-based compensation (the “Clawback Policy”), with an effective date of November 29, 2023, in order to comply with Section 10D of the Exchange Act, Rule 10D-1 of the Exchange Act (“Rule 10D-1”), and the listing rules adopted by The Nasdaq Stock Market, LLC (collectively, the “Final Clawback Rules”). The Board was designated as the administrator of the Clawback Policy.
The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from current and former executive officers as defined in Rule 10D-1 (“Covered Officers”) of the Company in the event that the Company is required to prepare an accounting restatement, in accordance with the Final Clawback Rules. The recovery of such compensation applies regardless of whether a Covered Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. Under the Clawback Policy, the Company may recoup from the Covered Officers erroneously awarded incentive-based compensation received within a lookback period of the three completed fiscal years preceding the date on which the Company is required to prepare an accounting restatement.
Since the adoption of the Clawback Policy, we have had a restatement to our financial statements. However, this did not result in any difference in performance measures or any erroneously awarded compensation pursuant to our policy and there was no balance of erroneously awarded compensation to be recovered as of December 31, 2025.
Insider Trading Policy
In June 2024, we adopted our amended and restated insider trading policy and in October 2025, we adopted our second amended and restated insider trading policy (“Insider Trading Policy”). Our Insider Trading Policy governs the purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees, to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards applicable to us. The Insider Trading Policy, among other things, prohibits our directors, officers, and employees from holding our securities in a margin account or pledging our securities as collateral for a loan. In addition, it prohibits employees, officers, and directors from engaging in put or call options, short selling, or similar hedging activities involving our stock.
Board Committees
Our Board has an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee, each comprised entirely of independent directors.
Audit Committee
Our Audit Committee consists of three independent directors: Mr. Adler, Mr. Siegel and Ms. Felix. Ms. Felix is the Chairman of the Audit Committee. The Audit Committee will have at all times at least one “independent director” who is “financially literate” as defined under the Nasdaq listing standards. The Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. In addition, we must certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. Our Board has determined that Ms. Felix. qualifies as an “Audit Committee financial expert,” as defined under rules and regulations of the SEC. Currently, all members of our Audit Committee meet the applicable independence requirements under Nasdaq Rules and Rule 10A-3 of the Exchange Act.
The responsibilities of the Audit Committee are included in a written charter. The Audit Committee acts on behalf of our Board in fulfilling our Board’s oversight responsibilities with respect to our accounting and financial reporting processes, the systems of internal control over financial reporting and audits of financial statements and reports and also assists our Board of Directors in its oversight of the quality and integrity of our financial statements and reports and the qualifications, independence and performance of our independent registered public accounting firm. For this purpose, the Audit Committee performs several functions. The Audit Committee’s responsibilities include, among others, the following:
| ● | reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our annual disclosure report; |
| ● | discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; |
| ● | discussing with management major risk assessment and risk management policies; |
| ● | monitoring the independence of the independent auditor; |
| ● | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
| ● | reviewing and approving all related-party transactions; |
| ● | inquiring and discussing with management our compliance with applicable laws and regulations; |
| ● | pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; |
| ● | appointing or replacing the independent auditor; |
| ● | determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
| ● | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and |
| ● | approving reimbursement of expenses incurred by our management team in identifying potential target businesses. |
Compensation Committee
Our Compensation Committee is comprised of three individuals: Mr. Adler, Ms. Felix, and Mr. Siegel, each of whom is an independent director. Mr. Adler serves as the Chairman of the committee.
The Compensation Committee acts on behalf of our Board of Directors to fulfill our Board of Directors’ responsibilities in overseeing our compensation policies, plans and programs; and in reviewing and determining the compensation to be paid to our executive officers and non-employee directors. The responsibilities of the Compensation Committee are included in its written charter. The Compensation Committee’s responsibilities include, among others:
| ● | reviewing, modifying and approving and making recommendations to our Board of Directors regarding our overall compensation strategy and policies, and reviewing, modifying and approving corporate performance goals and objectives relevant to the compensation of our executive officers and other senior management; |
| ● | determining and approving (or, if it deems appropriate, recommending to our Board of Directors for determination and approval) the compensation and terms of employment of our Chief Executive Officer, including seeking to achieve an appropriate level of risk and reward in determining the long-term incentive component of the Chief Executive Officer’s compensation; |
| ● | determining and approving (or, if it deems appropriate, recommending to our Board of Directors for determination and approval) the compensation and terms of employment of our executive officers and other members of senior management; |
| ● | reviewing and approving (or, if it deems appropriate, making recommendations to our Board of Directors regarding) the terms of employment agreements, severance agreements, change-of-control protections and other compensatory arrangements for our executive officers and other senior management; |
| ● | conducting periodic reviews of the base compensation levels of all of our employees generally; |
| ● | reviewing and approving the type and amount of compensation to be paid or awarded to non-employee directors; |
| ● | reviewing and approving the adoption, amendment and termination of our stock option plans, stock appreciation rights plans, pension and profit sharing plans, incentive plans, stock bonus plans, stock purchase plans, bonus plans, deferred compensation plans, 401(k) plans, supplemental retirement plans and similar programs, if any; and administering all such plans, establishing guidelines, interpreting plan documents, selecting participants, approving grants and awards and exercising such other power and authority as may be permitted or required under such plans; and |
| ● | reviewing our incentive compensation arrangements to determine whether such arrangements encourage excessive risk-taking, reviewing and discussing at least annually the relationship between our risk management policies and practices and compensation and evaluating compensation policies and practices that could mitigate any such risk. |
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee (“Nominating Committee”) is comprised of three individuals: Ms. Felix, Mr. Adler, and Mr. Siegel, each of whom is an independent director. Mr. Siegel serves as the Chairman of the committee. The responsibilities of the Nominating Committee are included in its written charter, which is available on the Company’s website, www.larosaholdings.com. The Nominating Committee acts on behalf of our Board of Directors to fulfill our Board of Directors’ responsibilities in overseeing all aspects of our nominating and corporate governance functions. The responsibilities of the Nominating Committee include, among others:
| ● | making recommendations to our Board of Directors regarding corporate governance issues; |
| ● | identifying, reviewing and evaluating candidates to serve as directors (consistent with criteria approved by our Board of Directors); |
| ● | determining the minimum qualifications for service on our Board of Directors; |
| ● | reviewing and evaluating incumbent directors; |
| ● | instituting and overseeing director orientation and director continuing education programs; |
| ● | serving as a focal point for communication between candidates, non-committee directors and our management; |
| ● | recommending to our Board of Directors for selection candidates to serve as nominees for director for the annual meeting of stockholders; |
| ● | making other recommendations to our Board of Directors regarding matters relating to the directors; |
| ● | reviewing succession plans for our Chief Executive Officer and our other executive officers; |
| ● | reviewing and overseeing matters of corporate responsibility and sustainability, including potential long- and short-term trends and impacts to our business of environmental, social, and governance issues, and our public reporting on these topics; and |
| ● | considering any recommendations for nominees and proposals submitted by stockholders. |
In making nominations, the Nominating Committee intends to submit candidates who have high personal and professional integrity, who have demonstrated exceptional ability and judgment and who are effective, in conjunction with the other nominees to the Board, in collectively serving the long-term interests of the stockholders. In evaluating nominees, the Nominating Committee intends to take into consideration attributes such as leadership, independence, interpersonal skills, financial acumen, business experiences and industry knowledge.
One of the primary responsibilities of the Nominating Committee is to make appropriate recommendations to the Board for the appointment or re-appointment of directors. The Company seeks to have directors who, in addition to relevant commercial and business expertise, meet the highest standards of character and personal integrity, judgment and critical thinking, who have an inquiring mind, vision, a willingness to ask hard questions and the ability to work well with others, who are free of any conflict of interest that would interfere with proper performance of their responsibilities, who are willing and able to devote sufficient time to the affairs of the Company, and have the capacity and desire to represent the best interests of the stockholders of the Company as a whole. In recommending appointments to the Board, the Nominating Committee is mindful of the overall balance of the skills, knowledge and experience of Board members against the current and future requirements of the Company and of the benefits of diversity. The Company recognizes the importance of diversity at all levels of the Company as well as on the Board and considers overall Board balance and diversity when appointing new directors.
Our Nominating Committee seeks members from diverse professional backgrounds who combine a solid professional reputation and knowledge of our business and industry with a reputation for integrity. Diversity of experience, expertise, and viewpoints is one of many factors the Nominating Committee considers when recommending director nominees to our Board. Further, our Nominating Committee is committed to actively seeking highly qualified women and individuals from minority groups and the LGBTQ+ community to include in the pool from which new candidates are selected. Our Nominating Committee also seeks members that have experience in positions with a high degree of responsibility or are, or have been, leaders in the companies or institutions with which they are, or were, affiliated, but may seek other members with different backgrounds, based upon the contributions they can make to our Company.
The Company employs multiple strategies in identifying director nominees, including the obtaining of recommendations from security holders, from current directors, and from the Company’s corporate advisors. The Company also intends to utilize professional recruitment firms, as may be required, in seeking qualified director nominees. The qualifications of director nominees are evaluated by the Nominating Committee to determine if the director nominees have the requisite expertise to maintain a proper balance of skills required by the Board. The Nominating Committee does not have a formal policy with respect to the consideration of director candidates recommended by stockholders, however, there are no differences in the evaluation of director nominees recommended by security holders. Director nominees are interviewed in depth by the Nominating Committee and the Board to further qualify the director nominees and evaluate the personal integrity and character of the candidate.
Since the date of our most recent periodic report, there were no changes to the procedure by which our security holders may recommend nominees to our Board.
Meetings of the Board of Directors
During its fiscal year ended December 31, 2025, the Board formally met a total of five times and our Audit Committee met four times in 2025. The Board also acted by written consent on numerous occasions.
Indemnification and Limitation on Liability of Directors
Our Articles of Incorporation limit the liability of our directors to the fullest extent permitted by Nevada law. Nothing contained in the provisions will be construed to deprive any director of his right to all defenses ordinarily available to the director nor will anything herein be construed to deprive any director of any right he may have for contribution from any other director or other person.
At present, there is no pending litigation or proceeding involving any of our directors, officers, employees or agents where indemnification will be required or permitted. Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Board Leadership Structure
Our Board of Directors recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide effective oversight of management. Our Board of Directors currently believes that our existing leadership structure, under which Mr. La Rosa serves as our Chief Executive Officer and director, and Mr. Adler serves as a Chairman of the Board, is effective, provides the appropriate balance of authority between independent and non-independent directors, and achieves the optimal governance model for us and for our stockholders.
Role of Board in the Risk Oversight Process
Our Board as a whole has responsibility for risk oversight. Our Board exercises this risk oversight responsibility directly and through its committees. The risk oversight responsibility of our Board and its committees are informed by reports from our management teams to provide visibility to our Board about the identification, assessment, and management of key risks and our management’s risk mitigation strategies. Our Board has primary responsibility for evaluating strategic and operational risks, including those related to significant transactions. Our Audit Committee has primary responsibility for overseeing our major financial and accounting risk exposures and, among other things, discusses guidelines and policies with respect to assessing and managing risk with management and our independent auditor. Our Compensation Committee has responsibility for evaluating risks arising from our compensation and people policies and practices. Our Nominating Committee has responsibility for evaluating risks relating to our corporate governance practices. Our committees and management provide reports to our Board on these matters.
In its governance role, and particularly in exercising its duty of care and diligence, our Board is responsible for ensuring that appropriate risk management policies and procedures are in place to protect the Company’s assets and business. Our Board has broad and ultimate oversight responsibility for our risk management processes and programs, and executive management is responsible for the day-to-day evaluation and management of risks to the Company. We do not have a policy as to whether our Chairman and Chief Executive Officer’s roles should be separate. Instead, our Board makes this determination based on what best serves our Company’s needs at any given time.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our outstanding shares of Common Stock (“Ten Percent Holders”) to file with the SEC reports of their share ownership and changes in their share ownership of our Common Stock. Directors, executive officers and Ten Percent Holders are also required to furnish us with copies of all ownership reports they file with the SEC. To our knowledge, based solely on a review of the copies of such reports furnished to us, the following directors, executive officers and Ten Percent Holders did not comply with all Section 16(a) filing requirements in the fiscal year ended on December 31, 2025 as follows:
| (i) | Mr. Santos, our Chief Technology Officer, filed his form 4 regarding one transaction as of February 7, 2025, late in July 2025; |
| (ii) | Mr. Alavi, our former member of the Board, filed his form 4 regarding one transaction as of August 11, 2025, late in August 2025; |
| (iii) | Ms. Felix filed his form 4 regarding one transaction as of August 11, 2025, late in August 2025; |
| (iv) | Mr. Michael La Rosa, our former member of the Board, filed his form 4 regarding one transaction as of August 11, 2025, late in August 2025; |
| (v) | Ambassador Siegel, a member of our Board, filed his form 4 regarding one transaction as of August 11, 2025, late in August 2025; |
| (vi) | Mr. Joseph La Rosa and Mrs. La Rosa filed their joint form 4 regarding two transactions as of August 11, 2025, late in August 2025; |
| (vii) | Mr. Joseph La Rosa and Mrs. La Rosa filed their joint form 4 regarding one transaction as of November 6, 2025, late in January 2026. |
Item 11. Executive Compensation.
The following table summarizes compensation for the years ended December 31, 2025 and 2024 for our “named executive officers” (the “NEOs”), namely our (i) principal executive officer (PEO); (ii) our two other most highly compensated executive officers, other than PEO, whose total compensation exceeded $100,000 for the fiscal year ended December 31, 2025; and (iii) up to two additional individuals for whom disclosure would have been provided pursuant to Item 402(m)(2)(ii) of Regulation S-K but for the fact that the individual was not serving as an executive officer of the Company at the end of the last completed fiscal year.
| Stock | Option | All other | ||||||||||||||||||||||||||
| Fiscal | Salary | Bonus | awards | awards | compensation | Total | ||||||||||||||||||||||
| Name and principal position | Year | ($)(1) | ($) | ($) | ($)(2) | ($) | ($) | |||||||||||||||||||||
| Joseph La Rosa, Founder, President, | 2024 | $ | 500,000 | $ | 49,800 | $ | - | $ | 2,370,306 | $ | - | $ | 2,920,106 | |||||||||||||||
| Chief Executive Officer (PEO) and Interim Chief Financial Officer | 2025 | $ | 500,000 | $ | 418,000 | $ | 2,556,570 | $ | 128,000 | $ | - | $ | 3,602,570 | |||||||||||||||
| Kent Metzroth, Executive Vice President and Chief Financial Officer (3) | 2024 | $ | 247,500 | $ | 25,000 | $ | - | $ | - | $ | - | $ | 272,500 | |||||||||||||||
| 2025 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
| Deana La Rosa, Chief Operating Officer (4) | 2024 | $ | 250,000 | $ | - | $ | - | $ | 399,000 | $ | - | $ | 649,000 | |||||||||||||||
| 2025 | $ | 268,000 | $ | 41,667 | $ | 101,256 | $ | - | $ | - | $ | 410,923 | ||||||||||||||||
| Alex Santos, Chief Technology Officer | 2024 | $ | 180,000 | $ | 16,000 | $ | 6,933 | $ | - | $ | - | $ | 202,933 | |||||||||||||||
| 2025 | $ | 192,000 | $ | 15,000 | $ | 1,030 | $ | - | $ | - | $ | 208,030 | ||||||||||||||||
| (1) | Reflects base salary earned during the fiscal year covered. |
| (2) | The dollar amounts in this column reflect the aggregate grant date fair value of all stock options granted during the indicated fiscal year computed in accordance with accounting standards. |
| (3) | Mr. Metzroth resigned effective September 30, 2024. On October 1, 2024, Mr. La Rosa was appointed Interim Chief Executive Officer of the Company. |
| (4) | Mrs. La Rosa was appointed to serve as the Chief Operating Officer of the Company on February 1, 2024. Mrs. La Rosa served as Director of Operations from September 2023 through January 2024. |
Employment and Related Agreements
We executed the following employment agreements with our NEOs, the material terms of which are summarized below. The below summaries are not complete descriptions of all provisions of the employment agreements and are qualified in their entirety by reference to the written employment agreements, each filed as an exhibit to this Comprehensive Form 10-K.
Joseph La Rosa
On April 29, 2022, we entered into an amended and restated employment agreement with Mr. Joseph La Rosa to serve as our Chief Executive Officer, which was further amended on May 17, 2023, on December 7, 2023, on September 19, 2024 and on February 3, 2025 (as amended, the “Initial CEO Agreement”). On November 12, 2025, we entered into an amended and restated employment agreement with Mr. La Rosa, which replaced the Initial CEO Agreement and was amended effective as of March 15, 2026 (as amended, the “CEO Agreement”). Pursuant to the CEO Agreement, Mr. La Rosa is employed by the Company for an initial term starting November 12, 2025 and ending December 31, 2027, with automatic renewals for successive one-year periods thereafter unless prior to 45 days before the end of the initial term or the anniversary date, either party notifies the other that it will not extend the agreement for another year. The Company shall pay Mr. La Rosa an annual base salary of $200,000 during the term of the CEO Agreement, which may be reviewed by the Board at least annually and maybe increased but not decreased by the Board. During the term of his employment with the Company, Mr. La Rosa may be eligible to receive a bonus with respect to a calendar year in the amount and based on terms approved by the Compensation Committee in its sole and exclusive discretion and consistent with the uses of cash agreed to by the Company.
Mr. La Rosa is also entitled to receive fringe benefits and perquisites consistent with those provided to similarly situated executives of the Company, including a corporate car and cellular telephone, and to participate in all employee benefit plans. Mr. La Rosa shall be entitled to 40 days of annual paid vacation per calendar year and shall be reimbursed for his out-of-pocket business, entertainment, and travel expenses incurred in connection with the performance of his duties under the CEO Agreements in accordance with the Company’s expense reimbursement policies and procedures, approved by the Board. Any amounts payable under the CEO Agreement are subject to any policy established by the Company providing for claw back or recovery of amounts that were paid to Mr. La Rosa. The Compensation Committee will make any determination for claw back or recovery in its sole discretion and in accordance with any applicable law or regulation.
Mr. La Rosa’s employment may be terminated by him or the Company at any time and for any or no reason with least 45 days advance written notice from the terminating party. If Mr. La Rosa’s employment is terminated by the Company for “cause” (as defined in the CEO Agreement), Mr. La Rosa will be entitled only to accrued and unpaid base salary through the date of termination. If Mr. La Rosa’s employment is terminated by his failure to renew his agreement, or by Mr. La Rosa without “good reason” (as defined in the CEO Agreement), then he will be entitled to receive: (i) a sum equal to 60 days’ of base salary (“Lump Sum Payment”), paid in a lump sum no later than one week after the end of the Release Execution and Recission Period (as defined in the CEO Agreement); (ii) any accrued but unpaid base salary and accrued but unused paid time off; (iii) reimbursement for unreimbursed business expenses properly incurred; and (iv) such equity compensation and employee benefits, if any, to which he may be entitled under the Company’s equity compensation and employee benefit plans as of the date of termination (items (ii) and (iv) are collectively referred to as the “Accrued Amounts”). If Mr. La Rosa’s employment is terminated due to non-renewal of his employment agreement by the Company or if he terminates his employment for good reason, or if the Company terminates his employment without cause, he will receive from the Company (i) the Accrued Amounts, (ii) the Lump Sum Payment, and (iii) under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) payment, or reimbursement for 100% of the cost of medical, dental, and vision coverage for Mr. La Rosa and his dependents for up to 18 months after the termination of employment.
If Mr. La Rosa’s employment is terminated by his death or disability, the Company will pay him or his estate an amount equal to the Accrued Amounts.
The Company has agreed to indemnify Mr. La Rosa to the fullest extent permitted by applicable law, the Company’s Articles of Incorporation, and the Company’s bylaws. As a condition of his employment with the Company, Mr. La Rosa also executed Confidential Information and Invention Assignment Agreement dated April 12, 2022, which was amended effective as of March 15, 2026 (as amended, the “CIA Agreement”), pursuant to which Mr. La Rosa agreed to non-competition restriction during the term of his employment with the Company and non-solicitation of Company clients or employees during his term of employment and for twelve months thereafter.
Mr. La Rosa also serves as a director of the Board. In addition, since October 1, 2024, Mr. La Rosa assumed the role of Interim Chief Financial Officer upon the departure of Kent Metzroth on September 1, 2024. Mr. La Rosa does not receive any additional compensation in respect of his appointment as a director or Interim Chief Financial Officer of Company.
Alex Santos
On January 10, 2022, we entered into an employment agreement with Mr. Alex Santos, to serve as our Chief Technology Officer as of February 1, 2022. The term of the agreement shall continue until it is terminated by either the Company or Mr. Santos upon 60 days prior written notice. In consideration of his services, the Company is to pay Mr. Santos an annual salary of $180,000. Following the end of each calendar year beginning with the 2022 calendar year, Mr. Santos is eligible to receive an annual bonus. Mr. Santos’ minimum guaranteed annual bonus shall be $15,000 payable in quarterly installments. The Company granted Mr. Santos 1 share of restricted Common Stock, which vested on the one-year anniversary of the effective date of the agreement. On each year thereafter, on the annual anniversary of the date of the effective date of the agreement, the Company shall grant Mr. Santos an additional 1 share of restricted Common Stock which shall vest on the one-year anniversary of issuance.
Mr. Santos is also entitled to receive other benefits generally available to other Company employees and he will be reimbursed for his documented and approved expenses related to and for promoting the business of the Company. Mr. Santos is entitled to three weeks paid vacation per year.
The employment agreement contains covenants of Mr. Santos concerning: (i) the confidentiality of Company information; (ii) the assignment of his work product to the Company; (iii) his non-solicitation of Company clients or employees during his term of employment and for three years thereafter; and (iv) his non-disparagement of the Company or its directors, officers and employees. If his employment is terminated under any circumstances other than a termination by the Company without cause or a termination by him for good reason (including a voluntary termination by Mr. Santos without good reason or a termination by the Company for cause or due to Mr. Santos’ death or disability), the Company’s obligations under the employment agreement will immediately cease and Mr. Santos will only be entitled to receive: (i) the Salary that has accrued and is unpaid and to which Mr. Santos is entitled as of the effective date of such termination and to the extent consistent with general Company policy; (ii) unreimbursed business expenses; (iii) any bonus earned and approved by the Board but not yet paid; (iv) any amounts or benefits to which he is then entitled under the terms of the benefit plans then-sponsored by the Company. If Mr. Santos employment is terminated by the Company without cause or in the event of change in control of the Company (whether or not Mr. Santos is retained by a successor entity), the Company shall pay Mr. Santos in a single lump sum an amount of $100,000.
Deana La Rosa
On January 31, 2024, we entered into an employment agreement with Mrs. Deana La Rosa to act as our Chief Operating Officer as of the February 1, 2024, the effective date of the agreement, which was amended effective as of March 15, 2026 (as amended, the “COO Employment Agreement”). The COO Employment Agreement was for an initial term of one year and shall be automatically extended thereafter, upon the same terms and conditions, for successive periods of one (1) year, unless and until either party provides written notice of its intention not to extend the term of the agreement at least 45 days prior to the applicable renewal date.
Mrs. La Rosa receives a base salary of $100,000 per year (the “Salary”). In addition, Mrs. La Rosa is eligible, following the end of each calendar year beginning with the 2024 calendar year, to receive an annual performance bonus targeted of up to 50% of the her Salary based upon periodic assessments of her performance as well as the achievement of specific individual and corporate objectives determined by the Board of Directors or the Compensation Committee after consultation with Mrs. La Rosa and provided to her in writing no later than the end of the first calendar quarter of the applicable bonus year. The target bonus must be approved by the Compensation Committee. No amount of target bonus is guaranteed, and Mrs. La Rosa must be an employee on December 31 of the applicable bonus year in order to be eligible for any annual bonus for such year.
Pursuant to her employment agreement, on February 1, 2024, Mrs. La Rosa was granted a non-qualified stock option to purchase 38 shares of the Common Stock, which vested immediately and is exercisable (including by cashless exercise) for 10 years at the exercise price per share equal to the Nasdaq Official Closing Price as of January 31, 2024. In addition, Mrs. La Rosa may be entitled to receive equity incentive awards inside or outside of any established equity plan of the Company in the amounts, within the timeframes and under the terms set by the Compensation Committee in its sole discretion. Mrs. La Rosa will be reimbursed for her reasonable, documented and approved expenses related to and for promoting the business of the Company. Mrs. La Rosa is entitled to five weeks’ vacation per year.
The employment agreement contains covenants of Mrs. La Rosa concerning: (i) the confidentiality of Company information; (ii) the assignment of her work product to the Company; (iii) non-competition restriction during the term of her employment with the Company, (iv) her non-solicitation of Company clients or employees during her term of employment and for twelve months thereafter; and (v) her non-disparagement of the Company or its directors, officers and employees.
If her employment is terminated under any circumstances other than a termination by the Company without cause or a termination by him for good reason (including a voluntary termination by Mrs. La Rosa without good reason or a termination by the Company for cause or due to Mrs. La Rosa’s death or disability), the Company’s obligations under the employment agreement will immediately cease and Mrs. La Rosa will only be entitled to receive: (i) the Salary that has accrued and is unpaid and to which Mrs. La Rosa is entitled as of the effective date of such termination and to the extent consistent with general Company policy; (ii) unreimbursed business expenses for which expenses Mrs. La Rosa has timely submitted appropriate documentation; (iii) any target bonus earned and approved by the Board but not yet paid; (iv) any amounts or benefits to which she is then entitled under the terms of the benefit plans then-sponsored by the Company; and (v) any other payments required by applicable law.
If Mrs. La Rosa’s employment is terminated by the Company without cause or by her with good reason, the Company shall: (i) continue to pay her Salary for a period of six months, and (ii) pay her, in a single lump sum all Accrued Obligations (as defined in the employment agreement).
Outstanding Equity Awards at Fiscal Year-End
Outstanding equity awards held by the NEOs of the Company as of December 31, 2025 consist of options and restricted stock units as described in the table below.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||||||
| Equity | incentive | |||||||||||||||||||||||||||||||||||
| incentive | plan | |||||||||||||||||||||||||||||||||||
| plan | awards: | |||||||||||||||||||||||||||||||||||
| Market | awards: | market | ||||||||||||||||||||||||||||||||||
| value | number | or payout | ||||||||||||||||||||||||||||||||||
| Equity | of | of | value of | |||||||||||||||||||||||||||||||||
| incentive | shares | unearned | unearned | |||||||||||||||||||||||||||||||||
| plan | Number | or | shares, | shares, | ||||||||||||||||||||||||||||||||
| awards: | of shares | units of | units or | units or | ||||||||||||||||||||||||||||||||
| Number of | Number of | Number of | or units | stock | other | other | ||||||||||||||||||||||||||||||
| securities | securities | securities | of stock | that | rights | rights | ||||||||||||||||||||||||||||||
| underlying | underlying | underlying | that have | have | that have | that have | ||||||||||||||||||||||||||||||
| unexercised | unexercised | unexercised | Option | Option | not | not | not | not | ||||||||||||||||||||||||||||
| options (#) | options (#) | unearned | exercise | expiration | vested | vested | vested | vested | ||||||||||||||||||||||||||||
| Name | exercisable | unexercisable | options (#) | price ($) | date | (#) | (#) | (#) | ($) | |||||||||||||||||||||||||||
| Joseph La Rosa, CEO | 430(1 | ) | - | - | (1) | (1) | - | - | - | - | ||||||||||||||||||||||||||
| Deana La Rosa, COO | 38(2 | ) | - | - | $ | 13,865 | 2/1/2034 | - | - | - | - | |||||||||||||||||||||||||
| Alex Santos, CTO | - | - | - | - | - | 1(3 | ) | 1,030 | 1 | 1,030 | ||||||||||||||||||||||||||
| (1) | Represents the following non-qualified stock option grants to Mr. La Rosa pursuant to 2022 Plan, which fully vested on the grant date: (i) a stock option to purchase 113 shares of Common Stock at an exercise price of $16,710, granted on December 7, 2023 and expiring on December 7, 2033; (ii) a stock option to purchase 100 shares of Common Stock at an exercise price of $12,000 granted on January 2, 2024 and expiring on January 2, 2034; (iii)a stock option to purchase 17 shares of Common Stock at an exercise price of $13,866 granted on February 1, 2024 and expiring on February 1, 2034; (iv) a stock option to purchase 75 shares of Common Stock at an exercise price of $13,920 granted on March 15, 2024 and expiring on March 15, 2034; (v)a stock option to purchase 25 shares of Common Stock at an exercise price of $8,320, granted on June 18, 2024 and expiring on June 18, 2034; (vi) a stock option to purchase 75 shares of Common Stock at the exercise price of $5,359, granted on December 4, 2024 and expiring on December 4, 2034; and (vii) a stock option to purchase 25 shares of Common Stock at the exercise price of $6,755, granted on January 2, 2025 and expiring on January 2, 2035. |
| (2) | On February 1, 2024, we granted Mrs. La Rosa a non-qualified stock option to purchase 38 shares of Common Stock at an exercise price $13,865 under the 2022 Plan, which fully vested on the grant date and expires on February 1, 2034. |
| (3) | On February 1, 2025, we granted Mr. Santos 1 RSU, which vested and automatically converted into the shares of Common Stock on February 1, 2026. |
2022 Equity Incentive Plan
We have adopted the 2022 Equity Incentive Plan (the “Original 2022 Plan”) that was approved by our stockholders and effective as of January 10, 2022. On September 19, 2024, our Compensation Committee and our Board of Directors approved Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (the “Amended 2022 Plan”). Our stockholders approved Amended 2022 Plan on November 19, 2024, and it replaced the Original 2022 Plan in its entirety.
On July 9, 2025, our Compensation Committee, our Board of Directors, and the stockholders holding a majority of the voting power of the Company (by written consent in lieu of a stockholders’ meeting) approved the Second Amended and Restated La Rosa Holdings 2022 Equity Incentive Plan (as further amended, the “2022 Plan”). The 2022 Plan became effective on August 11, 2025, replaced the Amended 2022 Plan in its entirety and was further amended on December 11, 2025.
The material features of the 2022 Plan are outlined below. The below summary is qualified in its entirety by reference to the 2022 Plan and its amendment which are filed as exhibits to this report.
Purpose. The 2022 Plan is intended to secure for the Company the benefits arising from ownership of the Company’s Common Stock by the employees, officers, directors, and consultants of the Company, all of whom are responsible for the Company’s future growth. The Plan is designed to attract and retain qualified personnel, reward employees, officers, directors, and consultants for their services to the Company, and motivate such individuals through added incentives to further contribute to the Company’s success.
Eligibility. The 2022 Plan provides an opportunity for any employee, officer, director, or consultant of the Company (which may include agents of the Company), subject to any limitations provided by federal or state securities laws, to receive incentive stock options (to eligible employees only), non-qualified stock options, restricted stock awards, other stock awards, or any combination of the foregoing. In making such determinations, the Compensation Committee may take into account the nature of the services rendered by such person, his or her present and potential future contribution to the Company’s success, and such other factors as the Compensation Committee in its discretion shall deem relevant. Incentive stock options granted under the 2022 Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986 (the “Code”). Non-qualified (non-statutory stock options) granted under the 2022 Plan are not intended to qualify as incentive stock options under the Code. No awards can be issued to any person in consideration for services rendered where such services are in connection with the offer or sale of securities in a capital-raising transaction, or they directly or indirectly promote or maintain a market for the Company’s securities.
No incentive stock option may be granted under the 2022 Plan to any person who, at the time of the grant, owns (or is deemed to own) stock possessing more than 10% of the total combined voting power of our Company or any affiliate of our Company unless the exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and the term of the option does not exceed five years from the date of grant.
Administration. The Plan is administered by the Compensation Committee of the Board of Directors. The Compensation Committee has the exclusive right to interpret and construe the 2022 Plan, to select the eligible persons who shall receive an award, and to act in all matters pertaining to the grant of an award and the determination and interpretation of the provisions of the related award agreement, including, without limitation, the determination of the number of shares subject to stock options and the option period(s) and option price(s) thereof, the number of shares of restricted stock or shares subject to stock awards or performance shares subject to an award, the vesting periods (if any) and the form, terms, conditions and duration of each award, and any amendment thereof consistent with the provisions of the 2022 Plan.
Shares Subject to the 2022 Plan. Under the Original 2022 Plan, 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 Common Stock, the maximum aggregate number of shares of Common Stock which may be issued pursuant to awards under the plan was 625 shares. This number was increased to 1,500 shares as of November 19, 2024 pursuant to the Amended 2022 Plan and to 1,563 shares as of January 1, 2025 due to the automatic share reserve increase provision of the plan. It was further increased to 3,750 shares pursuant to the 2022 Plan as of August 11, 2025 and to 5,846 shares as of January 1, 2026 due to the automatic share reserve increase provision of the plan.
As of the date of this report, the maximum aggregate number of shares which may be issued under the 2022 Plan is 5,846 shares, which is subject to an automatic annual share reserve increase in an amount equal to the least of (a) 500,000 shares, (b) a number of shares equal to ten percent (10%) 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. Such shares of common stock are made available from the authorized and unissued shares of the Company.
If shares of Common Stock subject to an option or performance award granted under the 2022 Plan expire or otherwise terminate without being exercised (or exercised in full), such shares will become available again for grants under the 2022 Plan. If shares of restricted stock awarded under the 2022 Plan are forfeited to us or repurchased by us, the number of shares forfeited or repurchased shall not again be available under the 2022 Plan. Similarly, any shares cancelled in cashless exercises are not available for re-issuance under the 2022 Plan.
The Company cannot determine the amounts of awards that will be granted or allocated under the 2022 Plan or the benefits of any awards to the executive officers and directors of the Company or employees who are not executive officers as a group. Under the terms of the 2022 Plan, the number of awards to be granted is within the discretion of the Compensation Committee. The Compensation Committee may issue options, shares of restricted stock, restricted stock units or other awards under the 2022 Plan for such consideration as determined in their sole discretion, subject to applicable law.
Since the date the 2022 Plan was originally approved by the Board of Directors and the sole stockholder, we have issued 624 stock options, 3,043 shares of restricted stock, and 53 restricted stock units to certain of our agents, consultants and employees.
Pricing; Vesting; Expiration. The Compensation Committee, in its sole discretion, will determine the exercise price of any options granted under the 2022 Plan which exercise price will be outlined in an agreement evidencing the option, provided, however, that at no time will the exercise price be less than the par value per share of the Company’s Common Stock. Also, the exercise price of incentive stock options may not be less than the fair market value of the Common Stock subject to the option on the date of the grant and, in some cases, may not be less than 110% of such fair market value. The exercise price of non-statutory options may not be less than the Common Stock’s fair market value on the grant date. The exercise price of options granted under the 2022 Plan must be paid either in cash at the time the option is exercised or, at the discretion of the Compensation Committee: (i) by delivery of already-owned shares of our Common Stock, (ii) pursuant to a deferred payment arrangement, (iii) pursuant to a net exercise arrangement, or (iv) pursuant to a cashless exercise as permitted under applicable rules and regulations of the SEC.
Options and other Awards granted under the 2022 Plan may be exercisable in cumulative increments, or “vest,” as determined by the Compensation Committee. The Compensation Committee has the power to accelerate the time as of which an option may vest or be exercised. Shares of restricted stock acquired under a restricted stock purchase or grant agreement may, but need not, be subject to forfeiture to us or other restrictions that will lapse in accordance with a vesting schedule to be determined by the Compensation Committee. In the event a recipient’s employment or service with our Company terminates, any or all of the shares of Common Stock held by such recipient that have not vested as of the date of termination under the terms of the restricted stock agreement may be forfeited to our Company in accordance with such restricted stock agreement.
The Compensation Committee will determine the expiration date of options and other awards granted under the 2022 Plan. The maximum term of options and performance shares under the 2022 Plan is ten years, except that the maximum term is five years in certain cases.
Adjustments. Upon the occurrence of: (i) the adoption of a plan of merger or consolidation of the Company with any other corporation or association as a result of which the holders of the voting capital stock of the Company as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation; (ii) the approval by the Board of Directors of an agreement providing for the sale or transfer (other than as security for obligations of the Company) of substantially all of the assets of the Company; or (iii) in the absence of a prior expression of approval by the Board of Directors, the acquisition of more than 20% of the Company’s voting capital stock by any person within the meaning of Rule 13d-3 under the Exchange Act (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company); and unless otherwise provided in the award agreement with respect to a particular award, all outstanding stock options will become immediately exercisable in full, subject to any appropriate adjustments, and will remain exercisable for the remaining option period, regardless of any provision in the related award agreement limiting the ability to exercise such stock option or any portion thereof for any length of time. All outstanding performance shares with respect to which the applicable performance period has not been completed will be paid out as soon as practicable, and all outstanding shares of restricted stock with respect to which the restrictions have not lapsed will be deemed vested, and all such restrictions shall be deemed lapsed and the restriction period ended.
Additionally, after the merger of one or more corporations into the Company, any merger of the Company into another corporation, any consolidation of the Company and one or more corporations, or any other corporate reorganization of any form involving the Company as a party thereto and involving any exchange, conversion, adjustment or other modification of the outstanding shares of the Common Stock, each participant shall, at no additional cost, be entitled, upon any exercise of such participant’s stock option, to receive, in lieu of the number of shares as to which such stock option shall then be so exercised, the number and class of shares of stock or other securities or such other property to which such participant would have been entitled to pursuant to the terms of the agreement of merger or consolidation or reorganization, if at the time of such merger or consolidation or reorganization, such participant had been a holder of record of a number of shares of Common Stock equal to the number of shares as to which such stock option shall then be so exercised.
Modification of Awards. The Compensation Committee may reprice any stock option without the approval of the stockholders of the Company. For this purpose, “reprice” means: (i) any of the following or any other action that has the same effect: (A) lowering the exercise price of a stock option after it is granted, (B) any other action that is treated as a repricing under U.S. generally accepted accounting principles, or (C) cancelling a stock option at a time when its exercise price exceeds the fair market value of the underlying Common Stock, in exchange for another stock option, restricted stock or other equity, unless the cancelation and exchange occur in connection with a merger, acquisition, spin-off or other similar corporate transaction; and (ii) any other action that is considered to be a repricing under formal or informal guidance issued by the exchange or market on which the Company’s Common Stock then trades or is quoted. In addition to, and without limiting the above, the Compensation Committee may permit the voluntary surrender of all or a portion of any stock option granted under the 2022 Plan to be conditioned upon the granting to the participant of a new stock option for the same or a different number of shares of Common Stock as the stock option surrendered, or may require such voluntary surrender as a condition precedent to a grant of a new stock option to such participant. Subject to the provisions of the 2022 Plan, such new stock option will be exercisable at such option price, during such option period and on such other terms and conditions as are specified by the Compensation Committee at the time the new stock option is granted. Upon surrender, the stock options surrendered will be cancelled, and the shares of Common Stock previously subject to them will be available for the grant of other stock options.
Termination of Employment or Consulting. The incentive stock options will lapse and cease to be exercisable upon the termination of service of an employee or director as defined in the 2022 Plan, or within such period following termination of service as determined by the Compensation Committee and set forth in the related award agreement; provided, further, that such period will not exceed the period of time ending on the date three (3) months following termination of service. Non-incentive stock options are governed by the related award agreements.
Tax Withholding. To the extent provided by the terms of an option or other award, a participant may satisfy any federal, state or local tax withholding obligation relating to the exercise of such option, or award by a cash payment upon exercise, or in the discretion of the Compensation Committee, by authorizing our Company to withhold a portion of the stock otherwise issuable to the participant, by delivering already-owned shares of our Common Stock or by a combination of these means.
Federal Tax Consequences. The following is a summary of the principal United States federal income tax consequences to the recipient and our Company with respect to participation in the 2022 Plan. This summary is not intended to be exhaustive and does not discuss the income tax laws of any city, state, or foreign jurisdiction in which a participant may reside.
Incentive Stock Options. There will be no federal income tax consequences to either the recipient upon the grant of an incentive stock option or us. Upon exercise of the option, the excess of the stock’s fair market value over the exercise price, or the “spread,” will be added to the alternative minimum tax base of the recipient unless a disqualifying disposition is made in the year of exercise. A disqualifying disposition is the stock sale before the expiration of two years from the date of grant and one year from the date of exercise. If the shares of Common Stock are disposed of in a disqualifying disposition, the recipient will realize taxable ordinary income in an amount equal to the spread at the time of exercise, and will be entitled (subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting obligation) to a federal income tax deduction equal to such amount. If the recipient sells the shares of Common Stock after the specified periods, the gain or loss on the shares’ sale will be long-term capital gain or loss and will not be entitled to a federal income tax deduction.
Non-statutory Stock Options and Restricted Stock Awards. Non-statutory stock options and restricted stock awards granted under the 2022 Plan generally have the following federal income tax consequences.
There are no tax consequences to the participant or us because of the grant. Upon acquiring the stock, the recipient will recognize taxable ordinary income equal to the excess, if any, of the stock’s fair market value on the acquisition date over the purchase price. However, to the extent the stock is subject to “a substantial risk of forfeiture” (as defined in Section 83 of the Code), the taxable event will be delayed until the forfeiture provision lapses unless the recipient elects to be taxed on receipt of the stock by making a Section 83(b) election within 30 days of receipt of the stock. If such an election is not made, the recipient will generally recognize income as and when the forfeiture provision lapses, and the income recognized will be based on the stock’s fair market value on such a future date. On that date, the recipient’s holding period for purposes of determining the long-term or short-term nature of any capital gain or loss recognized on a subsequent disposition of the stock will begin. If a recipient makes a Section 83(b) election, the recipient will recognize ordinary income equal to the difference between the stock’s fair market value and the purchase price, if any, as of the date of receipt and the holding period for purposes of characterizing as long-term or short-term any subsequent gain or loss will begin at the date of receipt.
With respect to employees, we are generally required to withhold from regular wages or supplemental wage payments an amount based on the ordinary income recognized. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting obligation, we will generally be entitled to a business expense deduction equal to the taxable ordinary income realized by the participant.
Upon disposition of the stock, the recipient will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for such stock plus any amount recognized as ordinary income with respect to the stock. Such gain or loss will be long-term or short-term, depending on whether the stock has been held for more than one year.
Section 162(m) of the Code denies a deduction to any publicly held corporation for compensation paid to certain senior executives of our Company (referred to as a covered employee) in a taxable year to the extent that compensation to such employees exceeds $1,000,000. It is possible that compensation attributable to awards, when combined with all other types of compensation received by a covered employee from our Company, may cause this limitation to be exceeded in any particular year.
Modification; Amendment; Termination. The Compensation Committee may adopt, establish, amend and rescind such rules, regulations, and procedures as it may deem appropriate for the proper administration of the 2022 Plan, make all other determinations which are, in the Compensation Committee’s judgment, necessary or desirable for the proper administration of the 2022 Plan, amend the 2022 Plan or a stock award as provided under the 2022 Plan, or terminate or suspend the 2022 Plan as provided therein. The Compensation Committee may also amend the 2022 Plan at any time and from time to time. However, except for adjustments upon changes in Common Stock, no amendment will be effective unless approved by our stockholders to the extent that stockholder approval is necessary to preserve incentive stock option treatment for federal income tax purposes. The Compensation Committee may submit any other amendment to the 2022 Plan for stockholder approval if it concludes that stockholder approval is otherwise advisable.
Unless sooner terminated, the 2022 Plan will terminate ten years from the date of its initial adoption by our Board of Directors, or on January 10, 2032.
Agent Incentive Program
Amended Agent Plan
In March 2022, we adopted, as an adjunct to the 2022 Plan, our 2022 Agent Incentive Plan and Participation Election Form (“Original Agent Plan”), which was further amended in April 2022. In March 2024, the Compensation Committee of the Board has approved an Amended and Restated 2022 Agent Incentive Plan (the “Amended Agent Plan”), which replaced the Original Agent Plan in its entirety.
Pursuant to the Amended Agent Plan, all participation in this Agent Plan is voluntary and no agent or broker will be penalized for not participating in the plan. The Company may sell, and may, in the Compensation Committee’s absolute discretion, grant, shares of the Company’s Common Stock or RSUs to all agents and brokers in good standing with the Company, including each of the Company’s majority owned subsidiaries (the “Majority Subsidiaries”), who are defined as “consultants” under the 2022 Plan (“Participants”) as a part of their, or as additional, compensation.
All agents and brokers in good standing with the Company and each of the Company’s Majority Subsidiaries (as described in that certain independent contractor agreement signed by such agent and the Company or its Majority Subsidiary) are eligible to participate in the Amended Agent Plan unless they are licensed brokers, holding an equity interest in brokerage businesses, in which the Company also holds an equity interest. In addition, employees or independent contractors hired by the Company as team leaders whose job description specifically includes recruitment functions are precluded from participating in the recruiting portion of the Agent Equity Program of the plan. Only individuals who provide their social security number to the Company’s Stock Plan Administrator software are eligible. No business entities can participate in the Amended Agent Plan.
The Amended Agent Plan had two components:
| (1) | Agent Equity Program: The Company’s Agent Equity Program (the “Agent Equity Program”) includes the following two components: |
| a. | Blue Diamond: Participants in the Agent Equity Program who: (i) close more than 20 sale transactions or make more than $6,000,000 gross sales volume in verified listing or buy-side transactions (the “Milestones,” and each a “Milestone”) with the Company and its Majority Subsidiaries in a given fiscal year, and (ii) remain with the Company for at least 12 consecutive months thereafter, will receive RSUs equivalent to $2,000 based on the prior 30-day volume weighted average closing price (“VWAP”) of the Company’s Common Stock on the Nasdaq Stock Market as of the last trading day prior to the Grant Date (as defined below), rounded down to a whole share. Awards will be granted to qualifying Participants on the last trading day of the month of the first anniversary of the date the Company verifies a Milestone has been achieved (the “Grant Date”). For example, if the Company verifies a Milestone has been achieved on April 12, 2024, the Company will grant the Participate RSUs on April 30, 2025. RSUs will vest in 24 equal installments starting the month following the Grant Date, with any remainder, if any, added to the last month of the vesting schedule. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested RSUs. If the Participant does not pay his or her annual or monthly dues pursuant to that certain independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested RSUs will be forfeited. |
| b. | Recruiting: |
| 1. | Participant will receive RSUs that will have a value of $200 per agent recruited based on the prior 30-day VWAP of the Company’s Common Stock on the Nasdaq Stock Market as of the last trading day prior to the date of the grant, rounded down to a whole share if such Participant: (i) recruits agents who become agents of the Company and remain agents of the Company for at least 12 consecutive months, and (ii) remains with the Company for at least 12 consecutive months. Such RSUs shall be granted for every agent recruited by a Participant. The Company will grant the awards of RSUs to the qualifying Participant on the last trading day of the month of the first anniversary of the date that the Company verifies that a recruited agent has been with the Company for one year. Such RSUs will vest equally over the 24-month period starting the month after the RSUs are issued, with any remainder added to the last month of the vesting schedule. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested shares. If the Participant does not pay his or her annual or monthly dues (pursuant to that certain independent contractor agreement signed by such agent and the Company or its Majority Subsidiary) within 60 days of the due date, all remaining unvested shares will be forfeited. |
| 2. | A Participant will receive RSUs that will have a value of $8,000 based on the prior 30-day VWAP of the Company’s Common Stock on the Nasdaq Stock Market as of the last trading day prior to the date of the grant, rounded down to a whole share if such a Participant: (i) recruits ten (10) agents in one fiscal year who become agents of the Company and remain agents of the Company for at least 12 consecutive months, and (ii) remains with the Company for at least 12 consecutive months. A Participant will receive an additional award under the same terms and qualifications for every multiple of ten (10) agents recruited in one fiscal year. The Company will grant the awards of RSUs to the qualifying Participant on the last trading day of the month of the first anniversary of the date that the Company verifies that the requisite number of recruited agents have been with the Company for one year. Such RSUs will vest equally over the 24 month period starting the month after the RSUs are issued, with any remainder added to the last month of the vesting schedule. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested shares. If the Participant does not pay his or her annual or monthly dues pursuant to that certain independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested shares will be forfeited. |
| (2) | Discretionary Bonus Program: All Participants in the Discretionary Bonus Program (the “Bonus Program”) are to be eligible for a grant of RSUs in the Compensation Committee’s discretion. The Compensation Committee or its designee may, from time to time, review the performance of Participants who achieve outstanding results in their endeavors for the Company and may grant RSUs to such Participant without payment by such Participant. All RSUs granted under the Bonus Program will vest equally over the 36-month period starting the month after the award is granted, with any remainder added to the last month of the vesting schedule. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested shares. If the Participant does not pay his or her annual or monthly dues pursuant to that certain independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested shares will be forfeited. |
Second Amended Agent Plan
In September 2024, the Compensation Committee of the Board approved the Second Amended and Restated La Rosa Holdings 2022 Agent Incentive Plan (“Second Amended Agent Plan”), that became effective upon approval by the stockholders of the Company on November 19, 2024. The Second Amended Agent Plan replaced the Amended Agent Plan in its entirety.
The Second Amended Agent Plan had three components:
| (1) | Agent Equity Program. The Company’s Agent Equity Program (the “Agent Equity Program”) includes the following two components: |
| a. | Blue Diamond: Participants in the Agent Equity Program will be eligible to receive an RSU who: (i) close more than 20 sale transactions or make more than $6,000,000 gross sales volume in verified listing or buy-side transactions (the “Milestones,” and each a “Milestone”) with the Company and its Majority Subsidiaries in a given calendar year, and (ii) remain with the Company for at least 12 consecutive months thereafter. Such RSUs will be granted to qualifying Participants on the last day of the month of the one-year anniversary of the date the Company verifies a Milestone has been achieved (the “Blue Diamond Grant Date”). The RSU will be equivalent to $2,000 on the Blue Diamond Grant Date, and the RSU value will be converted into shares of the Company’s Common Stock based on the volume weighted average closing price (“VWAP”) of the month of the Blue Diamond Grant Date based on the Company’s Common Stock on the Nasdaq Stock Market, rounded down to a whole share. For example, if the Company verifies a Milestone has been achieved on April 12, 2024, the Company will grant the Participant’s RSU on April 30, 2025. RSUs will vest in 24 ratable installments in whole shares starting the month following the Blue Diamond Grant Date. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested RSUs. If the Participant is required upon the commission plan on which they are enrolled, but does not pay his or her annual or monthly dues pursuant to that certain independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested RSUs will be forfeited. The Blue Diamond program shall be effective as of January 1, 2023, meaning agents who meet the Milestones in the calendar year 2023, and each year thereafter, are eligible to receive an RSU. |
| b. | Ultimate Plan Cap. |
Participants in the Agent Equity Program who enroll or renew under the Ultimate Plan 90-10 commission plan or the Ultimate Plan Business Builder commission plan (the “Profit Share Plans”), both of which have terms of 12 months from the agent start date, will be eligible to receive an RSU (i) once they cap their 10% portion of their commission in accordance with the terms of the Profit Share Plans and (ii) remain with the Company for at least 12 consecutive months thereafter. Such RSUs will be granted to qualifying Participants on the last day of the month of the one-year anniversary of the date the Company verifies the agent achieved their cap (the “UP Cap Grant Date”). The RSU will be equivalent to $10,000 on the UP Cap Grant Date, and the RSU value will be converted into shares based on the VWAP of the month of the UP Cap Grant Date based on the Company’s Common Stock on the Nasdaq Stock Market, rounded down to a whole share. For example, if the Company verifies the agent capped their 10% commission in accordance with the terms of the Profit Share Plans on May 15, 2024, the Company will grant the Participant’s RSU on May 31, 2025. RSUs will vest in 24 ratable installments in whole shares starting the month following the UP Cap Grant Date. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested RSUs. If the Participant is required upon the terms of the Profit Share Plans, but does not pay his or her annual or monthly dues pursuant to the independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested RSUs will be forfeited. The Ultimate Plan Cap program shall be effective as of January 1, 2024, meaning agents who enroll or renew under the Profit Share Plans on or after January 1, 2024 and meet other requirements of this program, will be eligible to receive an RSU.
| c. | Recruiting: |
| I. | Participants in the Agent Equity Program will be eligible to receive an RSU if they (i) recruit agents who become agents of the Company and remain agents of the Company for at least 12 consecutive months, and (ii) remain with the Company for at least 12 consecutive months. Such RSU will be granted to a qualifying Participant on the last day of the month of the one-year anniversary of the date the Company verifies the such Participant recruited the agent and is still with the Company (the “Recruitment Grant Date”). The RSU will be equivalent to $200 on the Recruitment Grant Date for each agent recruited, and the RSU value will be converted into shares based on the VWAP of the month of the Recruitment Grant Date based on the Company’s Common Stock on the Nasdaq Stock Market, rounded down to a whole share. For example, if the Company verifies a Participant recruited an agent on June 20, 2024 and that agent is still with the Company one year later, the Company will grant the Participant’s RSU on June 30, 2025. RSUs will vest in 24 ratable installments in whole shares starting the month following the Recruitment Grant Date. Such RSUs shall be granted for every agent recruited by a Participant that meet the eligibility criteria. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested RSUs. If the Participant is required upon the terms of the commission plan on which they are enrolled, but does not pay his or her annual or monthly dues pursuant to the independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested RSUs will be forfeited. The Recruiting program shall be effective as of January 1, 2024, meaning agents who recruit agents on or after January 1, 2024 will be eligible to receive an RSU. |
| II. | A Participant who (i) recruits ten (10) agents in one calendar year who become agents of the Company and remain agents of the Company for at least 12 consecutive months, and (ii) remains with the Company for at least 12 consecutive months after the last agent was recruited by this Participant, will receive an additional value of $8,000 on the tenth RSU. All terms will be applied pursuant to Section I. above. If such Participant continues to recruit additional agents in the same year, every multiple of ten (10) agents recruited in one fiscal year will be enhanced with the $8,000 additional value on an RSU. |
| (2) | Discretionary Bonus Program. All Participants in the Discretionary Bonus Program (the “Bonus Program”) are to be eligible for a grant of an equity award in the Compensation Committee’s discretion. The Compensation Committee or its designee may, from time to time, review the performance of Participants who achieve outstanding results in their endeavors for the Company and may grant an equity award to such Participant without payment by such Participant. All equity awards granted under the Bonus Program will vest based on the terms of the grant certificate. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested equity awards. If the Participant is required upon the terms of the commission plan on which the Participant is enrolled, but does not pay his or her annual or monthly dues pursuant to the agreement signed by such Participant and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested equity awards will be forfeited. |
Third Amended Agent Plan
On February 4, 2025, the Compensation Committee, our Board of Directors, and the Majority Stockholders approved the Third Amended and Restated La Rosa Holdings 2022 Agent Incentive Plan (“Third Amended Agent Plan”), which became effective on March 28, 2025.
The purpose of adoption of the Third Amended Agent Plan was to revise the vesting terms of the grants under Agent Equity Program and to add new terms allowing the participants to authorize the Company to set aside 5% of their agent net commissions on transactions in their name to purchase shares of the Common Stock at a 20% discount from the prior 30 day volume weighted average closing price of the Common Stock on Nasdaq.
The Third Amended Agent Plan replaced the Second Amended Agent Plan in its entirety.
Pursuant to the Third Amended Agent Plan, all participation in the plan is voluntary and no agent or broker will be penalized for not participating in the plan. The Company may sell, and may, in the Compensation Committee’s absolute discretion, grant, shares of the Company’s Common Stock or restricted stock units (the “RSUs”) to all agents and brokers in good standing with the Company, including each of the Company’s majority owned subsidiaries (the “Majority Subsidiaries”), who are defined as “consultants” under the Company’s 2022 Equity Incentive Plan (“Participants”) as a part of their, or as additional, compensation.
All agents and brokers in good standing with the Company and each of the Company’s Majority Subsidiaries (as described in that certain independent contractor agreement signed by such agent and the Company or its Majority Subsidiary) are eligible to participate in the Third Amended Agent Plan unless they are licensed brokers, holding an equity interest in brokerage businesses, in which the Company also holds an equity interest. In addition, employees or independent contractors hired by the Company as team leaders whose job description specifically includes recruitment functions are precluded from participating in the recruiting portion of the Agent Equity Program of the plan. Only individuals who provide their social security number to the Company’s Stock Plan Administrator software are eligible. No business entities can participate in the Third Amended Agent Plan.
The Third Amended Agent Plan has three components:
| (1) | Agent Equity Program. The Company’s Agent Equity Program (the “Agent Equity Program”) includes the following three components: |
| a. | Blue Diamond: Participants in the Agent Equity Program will be eligible to receive an RSU who: (i) close more than 20 sale transactions or make more than $6,000,000 gross sales volume in verified listing or buy-side transactions (the “Milestones,” and each a “Milestone”) with the Company and its Majority Subsidiaries in a given calendar year, and (ii) remain with the Company for at least 12 consecutive months thereafter. Such RSUs will be granted to qualifying Participants on the last day of the month of the one-year anniversary of the date the Company verifies a Milestone has been achieved (the “Blue Diamond Grant Date”). The RSU will be equivalent to $2,000 on the Blue Diamond Grant Date, and the RSU value will be converted into shares of the Company’s Common Stock based on the volume weighted average closing price (“VWAP”) of the month of the Blue Diamond Grant Date based on the Company’s Common Stock on the Nasdaq Stock Market, rounded down to a whole share. For example, if the Company verifies a Milestone has been achieved on April 12, 2024, the Company will grant the Participant’s RSU on April 30, 2025. RSUs will vest in 3 ratable installments in whole shares: 1/3 at the time of the Blue Diamond Grant Date, and 1/3 at each of the next two anniversaries of such grant date. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested RSUs. If the Participant is required upon the commission plan on which they are enrolled, but does not pay his or her annual or monthly dues pursuant to that certain independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested RSUs will be forfeited. The Blue Diamond program shall be effective as of January 1, 2023, meaning agents who meet the Milestones in the calendar year 2023, and each year thereafter, are eligible to receive an RSU. |
| b. | Ultimate Plan Cap. |
Participants in the Agent Equity Program who enroll or renew under the Ultimate Plan 90-10 commission plan or the Ultimate Plan Business Builder commission plan (the “Profit Share Plans”), both of which have terms of 12 months from the agent start date, will be eligible to receive an RSU (i) once they cap their 10% portion of their commission in accordance with the terms of the Profit Share Plans and (ii) remain with the Company for at least 12 consecutive months thereafter. Such RSUs will be granted to qualifying Participants on the last day of the month of the one-year anniversary of the date the Company verifies the agent achieved their cap (the “UP Cap Grant Date”). The RSU will be equivalent to $10,000 on the UP Cap Grant Date, and the RSU value will be converted into shares based on the VWAP of the month of the UP Cap Grant Date based on the Company’s Common Stock on the Nasdaq Stock Market, rounded down to a whole share. For example, if the Company verifies the agent capped their 10% commission in accordance with the terms of the Profit Share Plans on May 15, 2024, the Company will grant the Participant’s RSU on May 31, 2025. RSUs will vest in 3 ratable installments in whole shares: 1/3 at the time of the UP Cap Grant Date, and 1/3 at each of the next two anniversaries of such grant date. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested RSUs. If the Participant is required upon the terms of the Profit Share Plans, but does not pay his or her annual or monthly dues pursuant to the independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested RSUs will be forfeited. The Ultimate Plan Cap program shall be effective as of January 1, 2024, meaning agents who enroll or renew under the Profit Share Plans on or after January 1, 2024 and meet other requirements of this program, will be eligible to receive an RSU.
| c. | Recruiting: |
| I. | Participants in the Agent Equity Program will be eligible to receive an RSU if they (i) recruit agents who become agents of the Company and remain agents of the Company for at least 12 consecutive months, and (ii) remain with the Company for at least 12 consecutive months. Such RSU will be granted to a qualifying Participant on the last day of the month of the one-year anniversary of the date the Company verifies the such Participant recruited the agent and is still with the Company (the “Recruitment Grant Date”). The RSU will be equivalent to $200 on the Recruitment Grant Date for each agent recruited, and the RSU value will be converted into shares based on the VWAP of the month of the Recruitment Grant Date based on the Company’s Common Stock on the Nasdaq Stock Market, rounded down to a whole share. For example, if the Company verifies a Participant recruited an agent on June 20, 2024 and that agent is still with the Company one year later, the Company will grant the Participant’s RSU on June 30, 2025. RSUs will vest in 3 ratable installments in whole shares: 1/3 at the time of the Recruitment Grant Date, and 1/3 at each of the next two anniversaries of such grant date. Such RSUs shall be granted for every agent recruited by a Participant that meet the eligibility criteria. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested RSUs. If the Participant is required upon the terms of the commission plan on which they are enrolled, but does not pay his or her annual or monthly dues pursuant to the independent contractor agreement signed by such agent and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested RSUs will be forfeited. The Recruiting program shall be effective as of January 1, 2024, meaning agents who recruit agents on or after January 1, 2024 will be eligible to receive an RSU. |
| II. | A Participant who (i) recruits ten (10) agents in one calendar year who become agents of the Company and remain agents of the Company for at least 12 consecutive months, and (ii) remains with the Company for at least 12 consecutive months after the last agent was recruited by this Participant, will receive an additional value of $8,000 on the tenth RSU. All terms will be applied pursuant to Section I. above. If such Participant continues to recruit additional agents in the same year, every multiple of ten (10) agents recruited in one fiscal year will be enhanced with the $8,000 additional value on an RSU. |
| (2) | Discretionary Bonus Program. All Participants in the Discretionary Bonus Program (the “Bonus Program”) are to be eligible for a grant of an equity award in the Compensation Committee’s discretion. The Compensation Committee or its designee may, from time to time, review the performance of Participants who achieve outstanding results in their endeavors for the Company and may grant an equity award to such Participant without payment by such Participant. All equity awards granted under the Bonus Program will vest based on the terms of the grant certificate. Participants who terminate their relationship with the Company during the vesting period will forfeit any unvested equity awards. If the Participant is required upon the terms of the commission plan on which the Participant is enrolled, but does not pay his or her annual or monthly dues pursuant to the agreement signed by such Participant and the Company or its Majority Subsidiary within 60 days of the due date, all remaining unvested equity awards will be forfeited. |
| (3) | Contribution of Commission as Payment for Shares: Participants, by submitting filled out Form of Election, authorize the Company to set aside five percent (5%) of their agent net commission (after splits and fees) (“Contribution for Payment”) on transactions which close in their name to purchase shares of the Company’s Common Stock commencing with transactions closing 30 days after the receipt of the Form of Election by the Company (“Commission Program”). Such Common Stock will be sold to the Participant at a 20% discount from the prior 30 day volume weighted average closing price of the Company’s Common Stock on the Nasdaq Stock Market as of the market trading day on the Purchase Date (as defined below). Shares of Common Stock under the Commission Program shall be purchased on the last trading day of the month during which the closing on the sale of any property from which a Contribution for Payment has been authorized (“Purchase Date”). All shares of Common Stock purchased under the Commission Program will vest immediately in the name of the Participant. Any Participant may cancel his or her participation in the Commission Program by providing email notification of cancellation to the Company not less than 30 calendar days prior to the next scheduled Purchase Date. |
Death of Participant. Any distribution or delivery to be made to Participant under the plan, if Participant is then deceased, will be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate.
Restricted Stock Units. Each RSU grant under the Third Amended Agent Plan will be evidenced by an agreement that will specify the terms and conditions of the grant. Upon vesting each one RSU shall automatically convert into one share of Common Stock.
Associated Costs. Participants are responsible for all associated costs related to ownership of RSUs or underlying shares of Common Stock purchased or granted under the Third Amended Agent Plan.
No Guarantee of Continued Service. The vesting of the RSUs pursuant to the vesting schedule described in the plan is earned only by continuing as an agent or broker through the applicable vesting date(s), which unless provided otherwise under applicable laws is at the will of the applicable service recipient and not through the act of being hired, being granted the RSU or acquiring shares.
Termination. The Third Amended Agent Plan is subject to termination at the discretion of the Compensation Committee at any time.
Starting on July 14, 2025, the Compensation Committee suspended issuance of any grants under the Third Amended Agent Plan until a later date to be determined by the Compensation Committee.
Director Compensation
Our directors who are employed by us do not receive any additional compensation for serving on our Board.
Each non-employee director receives a retainer between $12,000 - $15,000 per quarter in cash compensation. In addition, we pay the Audit Committee Chairman a quarterly cash fee of $3,750, and we pay the Chairman of the Nominating and Corporate Governance Committee and Chairman of the Compensation Committee a quarterly cash fee of $3,000 for each quarter they serve in such position.
The Compensation Committee establishes and reevaluates if it deems necessary or prudent in its discretion, the cash and equity awards (amount and manner or method of payment) to be made to non-employee directors for such fiscal year. In making this determination, the Compensation Committee may utilize such market standard metrics as it deems appropriate, including, without limitation, an analysis of cash compensation paid to our peer group’s independent directors.
The Compensation Committee has the power and discretion to determine in the future whether non-employee directors should receive annual or other grants of options to purchase shares of common stock or other equity incentive awards in such amounts and under such policies as the Compensation Committee may determine utilizing such market standard metrics as it deems appropriate, including, without limitation, an analysis of equity awards granted to independent directors of our peer group.
None of our executive officers serve as a member of the Compensation Committee of our Board of Directors (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.
The following table sets forth, for the year ended December 31, 2025 information with respect to the compensation for services in all capacities to us and our subsidiaries earned by our directors, who are not officers, who served during the year ended December 31, 2025.
Director Compensation
As of December 31, 2025
| Name | Fees
Earned or Paid in Cash ($) |
Stock
Awards ($)(6) |
Option
Awards ($) |
Non-Equity
Incentive Plan Compensation ($) |
All
Other Compensation ($) |
Total
($) |
||||||||||||||||||
| Michael La Rosa(1) | 48,000 | 3,036 | — | — | — | 51,036 | ||||||||||||||||||
| Lourdes Felix | 63,000 | 3,036 | — | — | — | 66,036 | ||||||||||||||||||
| Siamack Alavi(2) | 60,000 | 3,036 | — | — | — | 63,036 | ||||||||||||||||||
| Ned Siegal | 60,000 | 3,036 | — | — | — | 63,036 | ||||||||||||||||||
| Nicolas Adler(3) | — | — | — | — | 7,903 | (4) | 7,903 | |||||||||||||||||
| Jaime Cosculluela(5) | — | — | — | — | — | — | ||||||||||||||||||
| (1) | Mr. La Rosa resigned from the Board effective February 5, 2026 |
| (2) | Mr. Alavi resigned from the Board and the Board’s committees effective December 29, 2025 |
| (3) | Mr. Adler joined the Board as Chairman of the Board, the Chairman of the Compensation Committee of the Board and as a member of Board’s Audit and Nominating Committees, effective December 29, 2025. |
| (4) | Represents compensation for consulting services paid to Mr. Adler by the Company in 2025 prior to Mr. Adler joining the Board. |
| (5) | Mr. Cosculluela joined the Board as the member of the Board effective February 10, 2026. |
| (6) | This column includes fully vested grants of restricted common stock as of August 11, 2025 to directors of the Company pursuant to the 2022 Plan. The dollar amounts in this column reflect the aggregate grant date fair value of all restricted common stock granted during the indicated fiscal year computed in accordance with accounting standards. |
Compensation Committee Interlocks and Insider Participation
None of our executive officers serve as a member of the Compensation Committee of our Board of Directors (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.
Policies and practices for granting certain equity awards.
The Company’s policies and practices regarding the granting of equity awards are carefully designed to ensure compliance with applicable securities laws and to maintain the integrity of our executive compensation program. The Compensation Committee of the Board of Directors is responsible for the timing and terms of equity awards to executives and other eligible employees.
The timing of equity award grants is determined with consideration to a variety of factors, including but not limited to, the achievement of pre-established performance targets, market conditions, and internal milestones. The Company does not follow a predetermined schedule for the granting of equity awards; instead, each grant is considered on a case-by-case basis to align with the Company’s strategic objectives and to ensure the competitiveness of our compensation packages.
In determining the timing and terms of an equity award, the Board of Directors or Compensation Committee may consider material nonpublic information to ensure that such grants are made in compliance with applicable laws and regulations. The Board of Directors or Compensation Committee’s procedures to prevent the improper use of material nonpublic information in connection with the granting of equity awards include oversight by legal counsel and, where appropriate, delaying the grant of equity awards until the public disclosure of such material nonpublic information.
The Company is committed to maintaining transparency in its executive compensation practices and to making equity awards in a manner that is not influenced by the timing of the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The Company regularly reviews its policies and practices related to equity awards to ensure they meet the evolving standards of corporate governance and continue to serve the best interests of the Company and its shareholders.
There were no stock options issued to the NEOs during the year ended December 31, 2025 during any period beginning four business days before the filing of a periodic report on Form 10-K or Form 10-Q, or the filing or furnishing of a current report on Form 8-K that discloses material nonpublic information (other than a Form 8-K disclosing a new material option award) and ending one business day after the filing or furnishing of such report with the SEC.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Security Ownership of Certain Beneficial Owners and Management
This table presents information about our Common Stock’s beneficial ownership as of June 3, 2026, for (i) each named executive officer and director; (ii) all named executive officers and directors as a group; and (iii) each other stockholder known to us owning more than 5% of our outstanding Common Stock.
Beneficial ownership complies with SEC rules, generally including voting or investment power over securities. A person or group is deemed to have “beneficial ownership” of any shares they can acquire within sixty (60) days. For percentage calculations, any shares that a person can acquire within sixty days are considered issued and outstanding for that person but not for others. This table does not imply beneficial ownership admission by anyone listed.
| Name and Address of Beneficial Owner(1) | Common Stock |
Percentage of Common Stock(2) |
Series
X Super Voting Preferred Stock(3) |
Percentage
of Series X Super Voting Preferred Stock |
||||||||||||
| Officers and Directors | ||||||||||||||||
| Joseph
La Rosa (President, CEO, interim CFO ) |
3,505 | (4) | * | 1,800 | 100 | % | ||||||||||
| Deana
La Rosa (Chief Operating Officer) |
238 | (5) | * | - | - | |||||||||||
| Alex
Santos (Chief Technology Officer) |
3 | * | - | - | ||||||||||||
| Jaime
Cosculluela (Director) |
50 | * | - | - | ||||||||||||
| Ned
L. Siegel (Director) |
23 | (6) | * | - | - | |||||||||||
| Nicholas
Adler (Chairman) |
- | - | - | - | ||||||||||||
| Lourdes
Felix (Director) |
6 | * | - | - | ||||||||||||
| All Officers and Directors as a group (7 persons) | 3,825 | * | 1,800 | 100 | % | |||||||||||
| * | Less than 1%. |
| (1) | Unless otherwise indicated, the principal address of the executive officers, directors and 5% stockholders of the Company is c/o 1420 Celebration Boulevard, 2nd Floor, Celebration, Florida 34747. |
| (2) | Based on 1,616,081 shares of Common Stock issued and outstanding as of June 3, 2026 and the shares of Common Stock owner has the right to acquire within 60 days of June 3, 2026. |
| (3) | Based on 1,800 shares of Series X Super Voting Preferred Stock outstanding on June 3, 2026. Each share of Series X Preferred Stock votes together with the Common Stock unless prohibited by law and has 10,000 votes per share. |
| (4) | Includes (i) 2,553 shares of Common Stock owned by La Rosa Capital, LLC, an entity owned and controlled by Mr. La Rosa and Mrs. La Rosa. The address of Celebration Office Condos, LLC is 1420 Celebration Blvd, 200 Celebration, Florida 34747, (ii) 1 share of Common Stock owned by Celebration Office Condos, LLC, an entity owned and controlled by Mr. La Rosa. The address of Celebration Office Condos, LLC is 1420 Celebration Blvd, 100 Celebration, Florida 34747; (iii) 475 shares of Common Stock owned by JLR-JCCLT1 Land Trust owned and controlled by Mr. La Rosa; (iv) 8 shares of Common Stock held by Mr. La Rosa’s adult children living in his household, which Mr. La Rosa is deemed to beneficially own; (v) a 10-year fully vested stock option to purchase 17 shares of Common Stock at $13,865.60 per share granted to Mr. La Rosa on February 1, 2024; (vi) a 10-year fully vested stock option to purchase 100 shares of Common Stock at $12,000.80 per share granted to Mr. La Rosa on January 2, 2024; (vii) a 10-year fully vested stock option to purchase 113 shares of Common Stock at $16,720.00 per share granted to Mr. La Rosa on December 7, 2023; (viii) a 10-year fully vested stock option to purchase 75 shares of Common Stock at $13,920.00 per share granted to Mr. La Rosa on March 15, 2024, (ix) a 10-year fully vested stock option to purchase 25 shares of Common Stock at $8,320.00 per share granted to Mr. La Rosa on June 18, 2024, (x) a 10-year fully vested stock option to purchase 75 shares of Common Stock at $5,359.20 per share granted to Mr. La Rosa on December 4, 2024, (xi) a 10-year fully vested stock option to purchase 25 shares of Common Stock at $6,755.20 per share granted to Mr. La Rosa on January 2, 2025, and (xii) a 10-year fully vested stock option to purchase 38 shares of Common Stock at $13,865.60 per share granted to Deana La Rosa on February 1, 2024. Joseph La Rosa is the spouse of Deana La Rosa and is deemed to beneficially own the shares of Common Stock beneficially owned by Deana La Rosa. |
| (5) | Represents a 10-year fully vested stock option to purchase 38 shares of Common Stock at $13,865.60 per share granted to Mrs. La Rosa on February 1, 2024. Deana La Rosa is the spouse of Joseph La Rosa and is deemed to beneficially own the shares of Common Stock and other securities beneficially owned by Joseph La Rosa. |
| (6) | Includes (i) a fully vested stock option to purchase 3 shares of Common Stock at $40,000 per share granted on March 17, 2022, and expiring on February 15, 2032; and (ii) a 10-year fully vested stock option to purchase 14 shares of Common Stock at $10,240 per share granted on November 1, 2023. |
Securities Authorized for Issuance under Equity Compensation Plans
See Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities —Securities Authorized for Issuance under Equity Compensation Plans” and “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Equity Compensation Plan Information” of this Comprehensive Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Related Party Transactions
Set forth below is a description of certain relationships and related person transactions since January 1, 2024, between us or our subsidiaries, and our directors, executive officers and holders of more than 5% of our voting securities, for which the amount involved exceeds the lesser of $120,000 or 1% of the average of total assets in the last two fiscal years. We believe that all of the following transactions were entered into with terms as favorable as could have been obtained from unaffiliated third parties.
The Company leases its corporate office from an entity controlled by the Company’s CEO. The rent expense for the years ending December 31, 2025 and 2024 were approximately $148,000 and $143,000, respectively. There is no written agreement, and the rent is determined on a month-to-month basis. There are no future minimum rental payments, and the lease may be cancelled at any time by either party.
On July 1, 2023, the Company began leasing office space for its subsidiary, La Rosa Realty, from an entity owned by Joseph La Rosa, the Company’s CEO, and Michael La Rosa, the Company’s former member of the Board. There was a written lease, which included minimum monthly rent of $5,300, with a term that ended in June 2025. As of the date of this report, that lease continues on a month-to-month basis under its original terms.
On July 8, 2024, the Company entered into a Consulting Agreement with LRS ASSOCIATE PARTNERS LLC, owned and controlled by the Company’s former director, Michael La Rosa. This agreement has been terminated as of the end of 2024.
On February 1, 2024, the Company entered into an employment agreement with Ms. Deana La Rosa, a spouse of Mr. Joseph La Rosa, which was further amended on February 19, 2026. Pursuant to the employment agreement, the Company pays to Mrs. La Rosa an annual base salary of $250,000. Following the end of each calendar year beginning with the 2024 calendar year, Mrs. La Rosa shall be eligible to receive an annual performance bonus targeted of up to 50% of her base salary, based on periodic assessments of her performance and upon approval of the Compensation Committee of the Board. The Company also issued to Mrs. La Rosa a non-qualified stock option to purchase 36 shares of Common Stock for $1.7332 per share (the closing price of the Common Stock on January 31, 2024) pursuant to the Company’s equity incentive plan. Under the amendment to the employment agreement signed by the Company and Mrs. La Rosa on February 19, 2026, Mrs. La Rosa’s annual salary was reduced from $250,000 to $100,000, in consideration of which the Company agreed to revise certain restrictive covenants of the employment agreement so that Mrs. La Rosa’s non-competition restrictions were effective only during the term of her employment with the Company, and the period of non-solicitation restriction was reduced from twenty-four (24) to twelve (12) post-employment. These changes became effective on March 15, 2026.
On August 21, 2024, the Company consummated its acquisition of 100% of the membership interests of Nona Title Agency LLC, a Florida limited liability company (“Nona Title”), and an affiliate of Mr. Joseph La Rosa. In that transaction, Mr. La Rosa sold 49% of the membership interests of Nona Title to the Company for a cash payment in the amount of approximately $161,000 and issuance of 153,718 unregistered shares of the Company’s Common Stock.
On July 17, 2025, with the approval of its Board of Directors, the Company entered into an exchange agreement (the “La Rosa Exchange Agreement”) with Joseph La Rosa, its Chief Executive Officer, with respect to a common stock purchase warrant (the “La Rosa Warrant”) to purchase 1,851,852 shares of Common Stock (as adjusted per La Rosa Warrant terms), at $0.135 per share (as adjusted per La Rosa Warrant terms), issued by the Company to Mr. La Rosa on December 2, 2022. Pursuant to the La Rosa Exchange Agreement, Mr. La Rosa agreed to surrender the La Rosa Warrant for cancellation and the Company agreed, in exchange, to issue an aggregate of 750 shares of Common Stock to the Holder (the “La Rosa Exchange Shares”). On July 17, 2025, the Company issued Mr. La Rosa the La Rosa Exchange Shares, and the La Rosa Warrant was surrendered and cancelled. The La Rosa Exchange Shares were issued pursuant to the exemption from the registration requirements of the Securities Act, provided by Section 3(a)(9) of the Securities Act.
On November 12, 2025, the Company and Mr. La Rosa entered into the Redemption Agreement, pursuant to which, on the initial closing date of the Purchase Agreement, the Company agreed to redeem and immediately cancel and return to the status of “blank check” preferred stock of the Company, certain number of Mr. La Rosa’s shares of Series X Preferred Stock such that, immediately after such redemption, he will own shares of Series X Preferred Stock representing not less than 80% of the total voting power of the Company for a redemption price of $2,000,000 payable upon such redemption, and $500,000 contingently payable upon the satisfaction of certain conditions. Mr. La Rosa’s remaining shares of Series X Preferred Stock will be redeemable by the Company at a subsequent time determined by the Board or otherwise as set forth in the Redemption Agreement for no additional consideration. These redemptions of the Series X Preferred Stock were conditioned upon stockholders’ approval and effectiveness of Series X Certificate of Amendment to provide that the shares of the Series X Preferred Stock may be redeemed from time to time and at any time in whole or in part upon such terms and conditions as may be approved by the Board and agreed to by the holder(s) thereof. Upon effectiveness of respective stockholders’ approval on December 25, 2025, such Series X Certificate of Amendment was effective as of December 26, 2026, and on January 8, 2026 the Company redeemed 200 shares of Series X Preferred Stock held by Mr. La Rosa.
On November 12, 2025, following the approval of the Board and in connection with the Securities Purchase Agreement, the Company and Mr. La Rosa, entered into an Amended and Restated Employment Agreement (the “Amended Employment Agreement”), amending and restating that certain Amended and Restated Employment Agreement between the Company and Mr. La Rosa, dated April 29, 2022, as amended, in its entirety. Pursuant to the Amended Employment Agreement, Mr. La Rosa’s compensation structure and severance package were changed as described in the agreement.
On February 19, 2026, with the approval of its Board, the Company entered into an Amendment (the “CEO Amendment”) to its Amended and Restated Employment Agreement, dated November 12, 2025, with Joseph La Rosa, the Company’s Chief Executive Officer. Under the CEO Amendment, Mr. La Rosa agreed to a reduction in his base salary from $500,000 to $200,000 per annum, in consideration of which the Company agreed to revise certain provisions of the Confidential Information and Invention Assignment Agreement dated April 12, 2022 (the “CIA Agreement”), between Mr. La Rosa and the Company so that Mr. La Rosa’s non-competition restrictions were effective only during the term of his employment with the Company. In addition, the period of non-solicitation restrictions under the CIA Agreement was reduced from twenty-four (24) to twelve (12) months post-employment. These changes became effective on March 15, 2026.
Due to related party (term loans)
Certain companies owned by Mr. La Rosa have from time-to-time loaned money to one or more of the Company’s subsidiaries, affiliates or franchisees with balances that, in the aggregate, were less than $120,000 or 1% of the Company’s average of total assets at December 31, 2025 and 2024.
Independence of the Board of Directors
Our Board of Directors has determined that a majority of the members of our Board of Directors, including Lourdes Felix, Nicholas Adler, Jaime Cosculluela, and Ned Siegel are “independent” as that term is defined under applicable SEC rules and regulations.
In addition, each of the members of each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee are independent, as determined in accordance with the applicable independence requirements for each of such committee.
Item 14. Principal Accountant Fees and Services.
During the years ended December 31, 2025 and 2024, we engaged Marcum LLP (“Marcum”) and CBIZ CPAs P.C. (“CBIZ”) as our independent registered accounting firm. On November 1, 2024, CBIZ acquired the attest business of Marcum. On April 29, 2025, with the approval of the Audit Committee of the Board of Directors, Marcum resigned as auditors of the Company and CBIZ was engaged as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2025.
The following is a summary of the fees billed to us by CBIZ and Marcum for professional services rendered to the Company in the years ended December 31, 2025 and 2024:
| Fiscal Year Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Audit Fees | $ | 776,139 | $ | 469,456 | ||||
| Audit-Related Fees | $ | — | $ | — | ||||
| Tax Fees | $ | — | $ | — | ||||
| All Other Fees | $ | — | $ | — | ||||
| Total | $ | 776,139 | $ | 469,456 | ||||
In the above table “Audit Fees” relate to professional services rendered in connection with the audit of the Company’s annual financial statements, quarterly reviews of financial statements and audit services provided in connection with other statutory and regulatory filings.
Audit Committee Pre-Approval Policies
The charter of our Audit Committee provides that the duties and responsibilities of our Audit Committee include the pre-approval of all audit and non-audit services permitted by law or applicable SEC regulations (including fee and terms of engagement) to be performed by our external auditor.
All of the services provided above under the caption “Audit-Related Fees” were approved by our Board of Directors or by our Audit Committee pursuant to our Audit Committee’s pre-approval policies.
PART IV
Item 15. Exhibits and Financial Statement Schedules
The following documents are filed as part of this Comprehensive Form 10-K:
| 1. | Financial Statements: The following Financial Statements and Supplementary Data of La Rosa Holdings Corp and the Report of Independent Registered Public Accounting Firm included in Part II, Item 8: |
| ● | Balance Sheets at December 31, 2025 and 2024; |
| ● | Statements of Operations for the years ended December 31, 2025 and 2024; |
| ● | Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2025 and 2024; |
| ● | Statements of Cash Flows for the years ended December 31, 2025 and 2024; and |
| ● | Notes to Financial Statements. |
| 2. | Exhibits: |
The following exhibits are included herein or incorporated by reference.
| * | Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. |
| # | Management contracts or compensatory plans, contracts or arrangements. |
Item 16. Form 10-K Summary.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LA ROSA HOLDINGS CORP. | |
| Dated: June 4, 2026 | /s/ Joseph La Rosa |
| Joseph La Rosa | |
| President, Chief Executive Officer, Interim Chief Financial Officer and Director (Principal Executive Officer and Chief Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Joseph La Rosa | Founder, President, Chief Executive Officer, Interim Chief Financial | June 4, 2026 | ||
| Joseph La Rosa | Officer and Director (Principal Executive Officer and Chief Accounting Officer) | |||
| /s/ Jaime Cosculluela | Director | June 4, 2026 | ||
| Jaime Cosculluela | ||||
| /s/ Ned L. Siegel | Director | June 4, 2026 | ||
| Ned L. Siegel | ||||
| /s/ Nicholas Adler | Director | June 4, 2026 | ||
| Nicholas Adler | ||||
| /s/ Lourdes Felix | Director | June 4, 2026 | ||
| Lourdes Felix |
Exhibit 4.19
DESCRIPTION OF REGISTRANT’S SECURITIES REGISTERED UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
The following description sets forth certain material terms and provisions of the common stock of La Rosa Holdings Corp., a Nevada corporation which are registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This description also summarizes relevant provisions of the Nevada Revised Statutes (“NRS”). The following description is a summary and does not purport to be complete. It is subject to, and qualified in its entirety by reference to, the relevant provisions of the NRS, and to our Amended and Restated Articles of Incorporation, as amended, (the “Articles of Incorporation”), and our Bylaws (the “Bylaws”), which are filed as exhibits to the Company’s Annual Report (the “Annual Report”) on Form 10-K for the fiscal year ended December 31, 2025, of which this Exhibit is a part, and are incorporated by reference herein. We encourage you to read the Company’s Articles of Incorporation and the Bylaws, and the relevant provisions of the NRS for additional information. Unless the context requires otherwise, all references to “we,” “us,” “our” and the “Company” in this Exhibit 4.19 refer solely to La Rosa Holdings Corp.
Authorized Capital Stock
Our authorized capital stock presently consists of 2,000,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of “blank check” preferred stock, par value $0.0001 per share, 2,000 shares of which are designated as “Series X Super Voting Preferred Stock,” 11,000 shares of which are designated as “Series A Convertible Preferred Stock,” 6,000 shares of which are designated as “Series B Convertible Preferred Stock,” 100 shares of which are designated “Series C Convertible Preferred Stock,” and 500 shares of which are designated “Series D Convertible Preferred Stock”.
Common Stock
Voting
Holders of shares of the common stock are entitled to one vote for each share held of record on matters properly submitted to a vote of our stockholders. Stockholders are not entitled to vote cumulatively for the election of directors.
Dividends
Subject to the dividend rights of the holders of any outstanding series of preferred stock, holders of shares of common stock will be entitled to receive ratably such dividends, if any, when, as, and if declared by our Board of Directors (“Board”) out of the Company’s assets or funds legally available for such dividends or distributions.
Liquidation and Distribution
In the event of any liquidation, dissolution, or winding up of the Company’s affairs, holders of the common stock would be entitled to share ratably in the Company’s assets that are legally available for distribution to its stockholders. If the Company has any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution preferences, liquidation preferences, or both. In such case, the Company must pay the applicable distributions to the holders of its preferred stock before it may pay distributions to the holders of common stock.
Conversion, Redemption, and Preemptive Rights
Holders of the common stock have no preemptive, subscription, redemption or conversion rights.
Sinking Fund Provisions
There are no sinking fund provisions applicable to the common stock.
PREFERRED STOCK
Series X Super Voting Preferred Stock
On July 29, 2021, we filed an Amended and Restated Articles of Incorporation with the Secretary of State of Nevada authorizing 50,000,000 shares of “blank check” preferred stock and designating 2,000 shares of the authorized preferred stock as “Series X Super Voting Preferred Stock” and issued 100% of the Super X Super Voting Preferred Stock to Mr. Joseph La Rosa, our Chief Executive Officer, President and Chairman, 1,800 of which remain outstanding.
The holder of our Series X Super Voting Preferred Stock is entitled to the following rights:
| ● | Voting Rights. Each share of our Series X Super Voting Preferred Stock entitles its holder to 10,000 votes per share and votes with our common stock as a single class on all matters to be voted or consented upon by the stockholders. |
| ● | Conversion The Series X Super Voting Preferred Stock is not convertible into common stock or any other securities of the Company. |
| ● | Dividend Rights. The holders of our Series X Super Voting Preferred Stock are not entitled to any dividend rights or to participate in dividends paid on the Company’s common stock. |
| ● | Liquidation Rights. The holders of the Series X Super Voting Preferred Stock are not entitled to any liquidation preference. |
Series A Convertible Preferred Stock
On February 13, 2023, the Company filed with the Secretary of State of Nevada a Certificate of Designations, Preferences and Rights of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”), designating 11,000 shares of the authorized preferred stock as the “Series A Convertible Preferred Stock.” All shares of Series A Preferred Stock were automatically convertible into shares of the Company’s common stock on the closing date of the Company’s initial public offering (the “IPO”). The Company previously issued 3,436 shares of Series A Preferred Stock, all of which automatically converted into the common stock of the Company upon the closing of the IPO. As of the date of the Annual Report, none of Series A Convertible Preferred Stock are outstanding.
Series B Convertible Preferred Stock
No Dividends; Voting Rights
The Series B Convertible Preferred Stock (“Series B Preferred Stock”) bears no dividends.
Holders of shares of Series B Preferred Stock are entitled to vote with the holders of outstanding shares of common stock of the Company, voting together as a single class, with respect to any and all matters presented to the stockholders of the Company for their action or consideration (whether at a meeting or stockholders of the Company, by written action of stockholders in lieu of a meeting or otherwise). In any such vote, each share of Series B Preferred Stock will be entitled to a number of votes equal to the lesser of (a) the number of shares of common stock into which such shares of Series B Preferred Stock are convertible as of the record date for such vote or written consent or, if there is no specified record date, as of the date of such vote or written consent and (b) 4.99% of the shares of the Company’s common stock outstanding immediately after giving effect to such a conversion (the “Maximum Percentage”).
Conversion Rights
Subject to the Maximum Percentage, holders of outstanding shares of Series B Preferred Stock are entitled to convert any portion of the outstanding and unpaid Series B Conversion Amount (as hereinafter defined) thereof into shares of common stock at the Conversion Rate (as hereinafter defined). For such purpose: (i) “Series B Conversion Amount” means the stated value thereof and any other unpaid amounts owed to such holder(s) under the Exchange Documents (as defined in the Exchange Agreement); (ii) “Series B Conversion Rate” means the amount determined by dividing (x) such Series B Conversion Amount by (y) the Series B Conversion Price; and (iii) “Series B Conversion Price”, as of any date of determination and subject to adjustment as provided therein (if any), at the option of the converting holder(s), either: (A) $0.25 per share (subject to adjustment), or (B) the “Series B Alternate Conversion Price”. As used in this paragraph, “Series B Alternate Conversion Price” means the lower of (x) the “Floor Price” of $0.082 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (y) 95% of the lowest VWAP (as defined in the Certificate of Designation of Rights and Preferences of the Company’s Series B Convertible Preferred Stock, or Series B Certificate of Designation) of the common stock during the seven (7) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice. In the event the holder elects to convert the Series B Preferred Stock at the Series B Alternate Conversion Price, the Series B Conversion Amount shall be multiplied by (i) if in connection with a Change of Control (as defined in the Series B Certificate of Designation, 105% or (ii) otherwise, 125%, A holder of Series B Preferred Stock will not have the right to convert any portion of their shares thereof to the extent that, after giving effect to such conversion, the holder (together with its affiliates) would beneficially own in excess of the Maximum Percentage.
Such Maximum Percentage may be raised or lowered to any other percentage not in excess of 9.99%, at the option of the holder upon 61 days’ prior written notice to the Company.
Subject to certain exceptions outlined in the Series B Certificate of Designation, including, but not limited to, equity issuances in connection with its equity incentive plan and certain strategic acquisitions, if the Company sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition) any shares of common stock or any other securities that are at any time convertible into, or exercisable or exchangeable for, or otherwise entitle the holder thereof to receive, common stock, at an effective price per share less than the Series B Conversion Price of the Series B Preferred Stock then in effect, the Series B Conversion Price of the Series B Preferred Stock will be reduced to equal the effective price per share in such dilutive issuance.
Company Optional Redemption Rights
Under the Series B Certificate of Designation, the Company has the right to redeem all, but not less than all, of the then outstanding shares of Series B Preferred Stock at a price equal to the greater of (i) the Series B Conversion Amount being redeemed and (ii) the product of (1) the Series B Conversion Rate with respect to the Series B Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price (as defined therein) of the common stock on any trading day during the period commencing on the date immediately preceding the date of the Company’s notice to the holder(s) of Series B Preferred Stock of such redemption and ending on the trading day immediately prior to the date the Company makes the entire redemption payment required to be made under the Series B Certificate of Designation.
Series C Convertible Preferred Stock
No Dividends; Voting Rights
The Series C Convertible Preferred Stock (“Series C Preferred Stock”) bears no dividends. The Series C Preferred Stock has no voting rights except as required by Nevada law and except if the Company proposes to: (a) amend or repeal any provision of, or add any provision to, its articles of incorporation (the “Series C Certificate of Incorporation”) or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit of the Series C Preferred Stock, regardless of whether any such action shall be by means of amendment to the Series C Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of shares of Series C Convertible Preferred Stock; (c) create or authorize (by reclassification or otherwise) any new class or series of Senior Preferred Stock or Parity Stock (as each term is defined in the Series C Certificate of Designation of Rights and Preferences of the Company’s Series C Convertible Preferred Stock, or Series C Certificate of Designation); (d) purchase, repurchase or redeem any shares of Junior Stock (as defined in the Series C Certificate of Designation) (other than pursuant to the terms of the Company’s equity incentive plans and options and other equity awards granted under such plans (that have in good faith been approved by the Company’s board of directors)); (e) pay dividends or make any other distribution on any shares of any Junior Stock; (f) issue any additional shares of Series C Preferred Stock; or (g) whether or not prohibited by the terms of the Series C Preferred Stock, circumvent a right of such shares under the Series C Certificate of Designation.
Conversion Rights
Subject to the Maximum Percentage, holders of outstanding shares of Series C Preferred Stock are entitled to convert any portion of the outstanding and unpaid Series C Conversion Amount (as hereinafter defined) thereof into shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) at the Series C Conversion Rate (as hereinafter defined). For such purpose: (i) “Series C Conversion Amount” means the stated value thereof and any other unpaid amounts owed to such holder(s) under the Transaction Documents (as defined in the securities purchase agreement between the Company and accredited investor, as of March 4, 2026); (ii) “Series C Conversion Rate” means the amount determined by dividing (x) such Series C Conversion Amount by (y) the Series C Conversion Price; and (iii) “Series C Conversion Price”, as of any date of determination and subject to adjustment as provided therein (if any), at the option of the converting holder(s), either: (A) $1.176 per share (subject to adjustment), or (B) the “Series C Alternate Conversion Price”. As used herein, “Series C Alternate Conversion Price” means the lowest of (i) the applicable Series C Conversion Price as in effect on the applicable Series C Conversion Date of the applicable Series C Alternate Conversion, and (ii) the greater of (x) the “Series C Floor Price” of $0.196 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (y) 90% of the lowest VWAP (as defined in the Series C Certificate of Designation) of the common stock during the ten (10) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice. In the event the holder elects to convert the Series C Preferred Stock at the Series C Alternate Conversion Price, the Series C Conversion Amount shall be multiplied by (i) if in connection with a Change of Control (as defined in the Series C Certificate of Designation), 105% or (ii) otherwise, 125%.
A holder of Series C Preferred Stock shall not have the right to convert any portion of their Series C Preferred Stock to the extent that, after giving effect to such conversion, the holder (together with its affiliates) would beneficially own in excess of 9.99% (the “Maximum Percentage”).
Subject to certain exceptions outlined in the Series C Certificate of Designation, including, but not limited to, equity issuances in connection with its equity incentive plan and certain strategic acquisitions, if the Company sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition) any shares of common stock or any other securities that are at any time convertible into, or exercisable or exchangeable for, or otherwise entitle the holder thereof to receive, common stock, at an effective price per share less than the Series C Conversion Price of the Series C Preferred Stock then in effect, the Conversion Price of the Series C Preferred Stock will be reduced to equal the effective price per share in such dilutive issuance.
Company Optional Redemption Rights
Under the Series C Certificate of Designation, the Company has the right to redeem all, but not less than all, of the then outstanding shares of Series C Preferred Stock at a price equal to the greater of (i) the Series C Conversion Amount being redeemed and (ii) the product of (1) the Series C Conversion Rate with respect to the Series C Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price (as defined therein) of the Common Stock on any trading day during the period commencing on the date immediately preceding the date of the Company’s notice to the holder(s) of Series C Preferred Stock of such redemption and ending on the trading day immediately prior to the date the Company makes the entire redemption payment required to be made under the Series C Certificate of Designation.
Series D Preferred Stock
No Dividends; Voting Rights
The Series D Preferred Stock (“Series D Preferred Stock”) bears no dividends. The Series D Preferred Stock has no voting rights except as required by Nevada law and except if the Company proposes to: (a) amend or repeal any provision of, or add any provision to, its articles of incorporation (the “Series D Certificate of Incorporation”) or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit of the Series D Preferred Stock, regardless of whether any such action shall be by means of amendment to the Series D Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of shares of Series D Convertible Preferred Stock; (c) create or authorize (by reclassification or otherwise) any new class or series of Senior Preferred Stock or Parity Stock (as each term is defined in the Certificate of Designation, or Series D Certificate of Designation); (d) purchase, repurchase or redeem any shares of Junior Stock (as defined in the Series D Certificate of Designation) (other than pursuant to the terms of the Company’s equity incentive plans and options and other equity awards granted under such plans (that have in good faith been approved by the Company’s board of directors)); (e) pay dividends or make any other distribution on any shares of any Junior Stock; (f) issue any additional shares of Series D Preferred Stock; or (g) whether or not prohibited by the terms of the Series D Preferred Stock, circumvent a right of such shares under the Series D Certificate of Designation.
Conversion Rights
Subject to the Maximum Percentage, holders of outstanding shares of Series D Preferred Stock are entitled to convert any portion of the outstanding and unpaid Series D Conversion Amount (as hereinafter defined) thereof into shares of the Company’s Company Stock at the Series D Conversion Rate (as hereinafter defined). For such purpose: (i) “Series D Conversion Amount” means the stated value thereof and any other unpaid amounts owed to such holder(s) under the Transaction Documents (as defined in the securities purchase agreement, between the Company and an institutional investor, as of May 27, 2026; (ii) “Series D Conversion Rate” means the amount determined by dividing (x) such Series D Conversion Amount by (y) the Series D Conversion Price; and (iii) “Series D Conversion Price”, as of any date of determination and subject to adjustment as provided therein (if any), at the option of the converting holder(s), either: (A) $1.58 (subject to adjustment), or (B) the “Series D Alternate Conversion Price”. As used herein, “Series D Alternate Conversion Price” means the lowest of (i) the applicable Series D Conversion Price as in effect on the applicable Series D Conversion Date of the applicable Series D Alternate Conversion, and (ii) the greater of (x) the “Series D Floor Price” of $0.26 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (y) 90% of the lowest VWAP (as defined in the Series D Certificate of Designation) of the Common Stock during the ten (10) consecutive trading day period ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable conversion notice. In the event the holder elects to convert the Series D Preferred Stock at the Series D Alternate Conversion Price, the Series D Conversion Amount shall be multiplied by (i) if in connection with a Change of Control (as defined in the Series D Certificate of Designation), 105% or (ii) otherwise, 125%.
A holder of Series D Preferred Stock shall not have the right to convert any portion of their Series D Preferred Stock to the extent that, after giving effect to such conversion, the holder (together with its affiliates) would beneficially own in excess of 9.99%.
Subject to certain exceptions outlined in the Series D Certificate of Designation, including, but not limited to, equity issuances in connection with its equity incentive plan and certain strategic acquisitions, if the Company sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock or any other securities that are at any time convertible into, or exercisable or exchangeable for, or otherwise entitle the holder thereof to receive, Common Stock, at an effective price per share less than the Series D Conversion Price of the Series D Preferred Stock then in effect, the Series D Conversion Price of the Series D Preferred Stock will be reduced to equal the effective price per share in such dilutive issuance.
Company Optional Redemption Rights
Under the Series D Certificate of Designation, the Company has the right to redeem all, but not less than all, of the then outstanding shares of Series D Preferred Stock at a price equal to the greater of (i) the Series D Conversion Amount being redeemed and (ii) the product of (1) the Series D Conversion Rate with respect to the Series D Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price (as defined therein) of the Common Stock on any trading day during the period commencing on the date immediately preceding the date of the Company’s notice to the holder(s) of Series D Preferred Stock of such redemption and ending on the trading day immediately prior to the date the Company makes the entire redemption payment required to be made under the Series D Certificate of Designation.
Listing
Our common stock is listed on The Nasdaq Capital Market under the symbols “LRHC”, respectively.
Transfer Agent and Registrar
Our transfer agent and registrar for all securities registered under Section 12 of the Exchange Act is Vstock Transfer, LLC located at 18 Lafayette Place, Woodmere, NY 11598. Their telephone number is (212) 828-8436.
Anti-Takeover Effects of Nevada Law and the Articles of Incorporation and Bylaws
Certain provisions of the Articles of Incorporation and Bylaws, and certain provisions of the NRS could make our acquisition by a third party, a change in our incumbent management, or a similar change of control more difficult. These provisions, which are summarized below, are likely to reduce our vulnerability to an unsolicited proposal for the restructuring or sale of all or substantially all of our assets or an unsolicited takeover attempt. The summary of the provisions set forth below does not purport to be complete and is qualified in its entirety by reference to the Articles of Incorporation and the Bylaws and the relevant provisions of the NRS.
Authorized but Unissued Shares
Our authorized but unissued shares of common stock and preferred stock are available for future issuance. These additional shares may be used for a variety of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could make it more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Our authorized capital includes “blank check.” Our Board has the authority to issue preferred stock in one or more class or series and determine the price, designation, rights, preferences, privileges, restrictions and conditions, including voting and dividend rights, of those shares without any further vote or action by stockholders. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future. The issuance of additional preferred stock, while providing desirable flexibility in connection with possible financings and acquisitions and other corporate purposes, could make it more difficult for a third party to acquire a majority of the voting power of our outstanding voting securities, which could deprive our holders of common stock of a premium that they might otherwise realize in connection with a proposed acquisition of our Company.
Action by Written Consent
Our Bylaws provide that any action required or permitted by law, the Articles of Incorporation, or Bylaws to be taken at a meeting of the stockholders of the Company may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by stockholders holding at least a majority of the voting power; provided that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required.
Advance Notice Requirements
Stockholders wishing to nominate persons for election to our Board at a meeting or to propose any business to be considered by our stockholders at a meeting must comply with certain advance notice and other requirements set forth in our Bylaws and Rule 14a-8 of the Exchange Act.
Special Meetings
Our Bylaws provide that special meetings of stockholders may be called for any purpose or purposes by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, (iii) Board of Directors pursuant to a resolution adopted by directors representing a quorum of the Board of Directors, or (iv) the holders of shares entitled to cast not less than 33 1/3% of the votes at the meeting. Business transacted at all special meetings shall be confined to the purposes stated in the notice of the meeting.
Board Vacancies
Our Bylaws provide that any vacancy on our Board, howsoever resulting, shall be filled only by the affirmative vote of a majority of the remaining directors, unless the Board determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders.
Removal of Directors
Our Bylaws provide that any director may be removed either for or without cause at any special meeting of stockholders by the affirmative vote of at least two-thirds of the voting power of the issued and outstanding stock entitled to vote; provided, however, that notice of intention to act upon such matter shall have been given in the notice calling such meeting.
Right to Alter, Amend or Repeal Bylaws
Our Bylaws provide that they may be altered, amended or repealed at any meeting of the Board at which a quorum is present, by the affirmative vote of a majority of the directors present at such meeting.
Indemnification of Officers and Directors and Insurance
Our Bylaws provide for limitation of liability of our directors and for indemnification of our directors and officers to the fullest extent permitted under Nevada law. Our directors and officers may be liable for a breach or failure to perform their duties in accordance with Nevada law only if their breach or failure to perform constitutes gross negligence, willful misconduct or intentional harm on our Company or our stockholders. Our directors may not be personally liable for monetary damages for action taken or failure to take action as a director except in specific instances established by Nevada law.
In accordance with Nevada law, we may generally indemnify a director or officer against liability incurred in a proceeding if he or she acted in good faith, and believed that his or her conduct was in our best interest and that he or she had no reason to believe his or her conduct was unlawful. We may not indemnify a director or officer if the person was adjudged liable to us or in the event it is adjudicated that the director or officer received an improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the U.S. Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Nevada Anti-Takeover Statutes
The NRS contains provisions restricting the ability of a Nevada corporation to engage in business combinations with an interested stockholder. Under the NRS, except under certain circumstances, business combinations with interested stockholders are not permitted for a period of two years following the date such stockholder becomes an interested stockholder. The NRS defines an interested stockholder, generally, as a person who is the beneficial owner, directly or indirectly, of 10% or more of the outstanding shares of a Nevada corporation. In addition, the NRS generally disallows the exercise of voting rights with respect to “control shares” of an “issuing corporation” held by an “acquiring person,” unless such voting rights are conferred by a majority vote of the disinterested stockholders as a special or annual meeting. “Control shares” are those outstanding voting shares of an issuing corporation which an acquiring person and those persons acting in association with an acquiring person (i) acquire or offer to acquire in an acquisition of a controlling interest and (ii) acquire within 90 days immediately preceding the date when the acquiring person became an acquiring person. An “issuing corporation” is a corporation organized in Nevada which has two hundred or more stockholders, at least one hundred of whom are stockholders of record and residents of Nevada, and which does business in Nevada directly or through an affiliated corporation. The NRS also permits directors to resist a change or potential change in control of the corporation if the directors determine that the change or potential change is opposed to or not in the best interest of the corporation.
Exhibit 10.66
LEASE EXTENSION
This Lease extension is entered into this 8 day of February 2026, between G&L Mast LLC as Landlord, and La Rosa Realty as Tenant. The Landlord does hereby extend the lease dated 2-8-24 to Tenant for the herein described premises upon the ter1ns and conditions set forth in the original Lease:
| 1. | Lease Premises: The premises leased hereunder are described as 3407 Magic Oak Lane, Sarasota, Florida (“Premises’’). In addition, Tenant shall have the nonexclusive right to use the common parking lot area located in common with the owners and tenants of other properties located on Magic Oak Lane, Sarasota, Florida. |
| 2. | Term: The Term of this Lease extension shall be for 1 year commencing March 1st, 2026, and terminating February 28th, 2027 unless sooner termination or renew as provided in the original lease. |
| 3. | Rent: Tenants monthly base rent hereunder is the sum of $2,491.00 without sales tax. The state of Florida currently has no required sales tax on rental of this property. Tenant agrees that if during the period of this lease that any governmental agency requires a tax on the rental fee that the monthly rent will increase to include that tax. The payment schedule for the remittance of the monthly rent is to continue under the same terms as the original lease. |
| 4. | Renewal of Lease: Tenant shall have the option to extend the Term of this Lease for an additional one-year period by giving the Landlord notice of such election at least 60 days prior to the applicable termination date. Rental rate increases for this optional extension shall be a maximum of 33/o. |
| Signed: | ||||||
| G&L Mast LLC as Landlord | ||||||
| Signed: | Date: | Print Name: | ||||
| LaRosa Realty Sarasota as Tenant | ||||||
| Signed: | Date: | Print Name: | ||||
Exhibit 10.72
MODIFICATION AND RATIFICATION
This Modification and Ratification of Lease Agreement is made and entered into between Baymeadows Properties LLC. (“Lessor”) and _(“Lessee”) La Rosa Realty Florida North LLC for and in consideration of One Dollar ($1.00) and other good and valuable consideration, receipt of which is hereby acknowledged.
WITNESSETH:
| I. | Lessor and Lessee hereby confirm and ratify, except as modified below, all the terms, conditions and covenants in that certain written Lease Agreement dated October 1, 2020, for 1,005 s.f. Suite 230 and ending 30th of October 2025 between Lessor and Lessee, for the rental of the following described property: |
Suite# 230
9250 Baymeadows Rd
Jacksonville. FL 32256
| 2. | The term shall be extended by three years from October 10/1/2025 to October 10/31/2028. |
| Rental Period· | Base Rent | Total | ||||||
| 11/1 2025-10/30/26 | $ | 1,651.07 | $ | 1,651.07 | ||||
| 11/1/2026-10/30/27 | $ | 1,700.07 | $ | 1,700.07 | ||||
| 11/1/2027-10/30/28 | $ | 1,751.62 | $ | 1,751.62 | ||||
Signed at Jacksonville, Florid
| LESSOR: | |||
| Baymeadows Properties LLC | |||
| Witness | |||
| Lessee: | |||
| Witness |
Exhibit 10.149
| To: | La Rosa Holdings Corp. |
| 1420 Celebration Blvd., 2nd Floor | |
| Celebration, Florida 34747 |
| Attention: | Joseph La Rosa |
| Chief Executive Officer |
January 9, 2026
Re: Amendment to Securities Purchase Agreement, dated as of November 12, 2025
Dear Mr. La Rosa:
Reference is made to the Securities Purchase Agreement, dated as of November 12, 2025 (the “Purchase Agreement”), by and among La Rosa Holdings Corp., a Nevada corporation (together with its successors and permitted assigns, the “Company”), and ATW AI Infrastructure III LLC and ATW AI Infrastructure IIIB LLC (together, the “Purchasers”). Capitalized terms used but not defined herein are used as defined in the Purchase Agreement.
Subject to the terms and conditions set forth herein, the Purchase Agreement is hereby amended as follows:
| ● | Section 3(rr) is hereby amended and restated in its entirety to read as follows: |
Other Covered Persons. The Company is not aware of any Person (other than Curvature Securities LLC acting as a placement agent to the Company) that has been or will be paid (directly or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.
| ● | Section 3(zz) is hereby amended and restated in its entirety to read as follows: |
Placement Agent’s Fees. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by the Buyers or their investment advisors) relating to or arising out of the transactions contemplated hereby in connection with the sale of the Securities. The Company shall pay, and hold the Buyers harmless against, any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. Neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the offer or sale of the Securities other than Curvature Securities LLC, acting as placement agent to the Company.
This amendment shall be a “Transaction Document” and is limited as written.
As of the date first written above, each reference in the Purchase Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the other Transaction Documents to the Purchase Agreement (including, without limitation, by means of words like “thereunder,” “thereof” and words of like import), shall refer to the Purchase Agreement as modified thereby, and the provisions in this amendment amending the Purchase Agreement shall be read together and construed as a single agreement with the Purchase Agreement. The execution, delivery and effectiveness of this amendment shall not, except as expressly provided herein, (A) waive or modify any Default or Event of Default (whether or not existing on the date hereof), right, power or remedy under, or any other provision of, any Transaction Document (in each case, other than any failure to comply with any provision of a Transaction Document amended hereby that would not have been a failure if such Transaction Document had been amended as provided herein prior to the date hereof) or (B) commit or otherwise obligate the Purchasers to enter into or consider entering into any other consent, waiver or modification of any Transaction Document or make any further purchases or other advances pursuant to any Transaction Documents.
Each of the Company and the Purchasers hereby agrees that the terms hereof shall not affect in any way its respective obligations and liabilities, as expressly modified hereby, under the Transaction Documents. Each of the Company and the Purchasers hereby reaffirms all of its respective obligations and liabilities under the Transaction Documents as modified hereby, and agrees that such obligations and liabilities shall remain in full force and effect.
In addition, without limitation, Section 9 of the Purchase Agreement provides that this amendment shall be governed by and construed in accordance with the laws of the State of Nevada and that proceedings in respect hereto shall be brought exclusively in the Nevada state courts sitting in Las Vegas, Nevada or federal courts sitting in Las Vegas, Nevada. The parties hereto hereby reaffirm all of these and all other provisions of the Transaction Documents applying to the Transaction Documents as applying to this amendment, all of which are hereby incorporated herein by reference.
[Signature Pages Follow]
This amendment may be executed in counterparts, which may be effectively transmitted by fax or e-mail (in each case return receipt requested and obtained) and which, together, shall constitute one and the same instrument.
| Very truly yours, | |||
| ATW AI INFRASTRUCTURE III LLC | |||
| By: | |||
| Name: | |||
| Title: | |||
| ATW AI INFRASTRUCTURE IIIB LLC | |||
| By: | |||
| Name: | |||
| Title: | |||
| Accepted and Agreed | |||
| As of the Date First Written Above: | |||
| LA ROSA HOLDINGS CORP., | |||
| as Company | |||
| By: | |||
| Name: | Joseph LaRosa | ||
| Title: | Chief Executive Officer | ||
Exhibit 10.155
Certain information has been redacted in accordance with Item 601(b)(10)(iv) of Regulation S-K because such information (i) is not material and (ii) is the type of information the registrant treats as private or confidential. Information that has been so redacted from this exhibit has been marked with “[***]” to indicate the omission.
COMMERCIAL LEASE
This lease agreement (the “Lease”) is made and dated as of November 1, 2025 by and between the Landlord and Tenant named below.
| I. I | Landlord: Bard Properties. LLC (referred to as “Landlord”) |
| 1.2 | Tenant:La Rosa Holdings Corp (referred to as “Tenant”) |
| 1.3 | Building: The Building having an address of 650 Pope Ave NW, Winter Haven. FL 33881 in Polk County, Florida. The Building and the Land upon which the Building is located are collectively referred to herein as the “Property”. The Tenant has agreed to lease a certain part of the Building consisting of 1450 sq. ft. with a physical address of 650 Pope Ave NW, Winter Haven. FL 33881, which is herein referred to as the “Leased Premises”. |
| 1.4 | Lease Term: Month to Month. commencing on November 1, 2025 and automatically extending each subsequent month until either party terminates this lease as provided in Section 1.47. The expiration time shall be 11:59 PM EST on the last day of the tenancy. The Term “Commencement Date” referred in Section 1.5 shall constitute the commencement of the term of this Lease for all purposes, whether or not Tenant has actually taken possession. |
| 1.5 | Lease Commencement Date: November 1, 2025 |
| 1.6 | (A) Base Rent: The base rent is $2,000.00 per month, plus applicable sales tax, and as applicable by Law. The applicable sales tax for Polk County at the time of this Lease creation is 0% for a total of $Q per month. The total monthly rent payment, including base rent and sales tax, shall be $2.000.00 per month. |
| (B) | Common Area Maintenance (CAM): |
| (a) | Landlord shall be responsible for Common Area Maintenance Costs, as defined in the next subsection. |
| (b) | The Property’s “Common Area Maintenance Cost” shall be the total of all costs and expenses incurred in operating, managing, equipping, protecting, policing, lighting, repairing, replacing and maintaining the Common Area and its facilities (less any insurance proceeds collected with respect to any such repair or replacement) including, but not limited to, all costs and expenses of ( l) maintaining and repairing the Common Areas as shall be required in Landlord’s judgment to preserve the utility and condition of the Common Areas in substantially the same condition and status as the Common Areas were in as of the Commencement Date; (2) security, fire detection and protection and traffic direction and control; (3) cleaning and removal of rubbish, dirt, debris, and water; (4) planting, re-planting and replacing landscaping; (5) maintaining and repairing water, drainage and sewerage facilities; (6) supplies; (7) utility services and lighting; (8) patching, repairing, resurfacing, and marking of all parking and drive areas; (9) the charges of a Management Company, if any, employed to manage the property; (I 0) repainting exterior Building walls and signs (excluding the signs of individual tenants);(11) any costs of complying with any law, rnle, regulation, statute, ol’ order with respect to Common Areas; (12) all property expenses, including without limitation all real estate property taxes, tangible property taxes and insurance expenses; and (13) any other expense or charge, whether or not hereinbefore mentioned, which in accordance with generally accepted accounting and management principles, would be considered as an expense of operating, maintaining or repairing the Common Areas. |
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| 1.7 | Limitations of Warmntics: Landlord and Tenant expressly agree that there are no and shall be no implied warranties of Merchantability, Habitability, or Fitness for a Particular Purpose beyond those expressly set forth in this Lease. |
| 1.8 | Real Property Taxes: Landlord shall be responsible for payment of the Real Property Taxes. |
| 1.9 | Base Rent and Additional Rent: The Tenant shall pay all sales, rental, and use taxes from time to time imposed by any governmental authority in connection with rents paid by the Tenant under this Lease. Any such payment of sales, rental, or use (ax shall be paid concurrently with the payment of the rent, additional rent, or other charge upon which the tax is based. |
| 1.10 | Security Deposit: No security deposit is required to be paid by Tenant. |
| 1.11 | Late Payment Charges: Other remedies for nonpayment of rent notwithstanding, if any monthly rental payment is not received by Landlord on or before the fifth (5th) day of the month for which the rent is due, a late payment charge of ten (I 0%) percent of such past due amount shall become due and payable in addition to such amounts owed under this Lease. If Tenant chooses to pay the rent by personal or business check, and the same is returned by the bank for any reason, a fee of I 0% of the face value of the check or $200.00 shall be charged, whichever is greater. The Landlord reserves the rights to accept payments by personal or business check. |
| 1.12 | Sign or Advertising: It is hereby understood and agreed that any signs or advertising to be used, including awnings, in connection with the Property leased hereunder shall be first submitted to the Landlord for approval before installation of same, and shall have all government permits, if required. The taxes and/or government fees for the sign shall be prorated between the tenants, and payable with the rent of the month when the fees are assessed. |
| 1.13 | First Month Advance Rent: The Tenant shall pay to the Landlord the first month rent of $2,000.00, plus sales tax of $_Q, for a total of $2,000.00. Payment must be received by Landlord within 5 days of signing this Lease. All moneys are due and payable before Tenant takes possession of Leased Premises. |
| 1.14 | Use of Premises: The Tenant shall use and occupy the Property for use as a real estate office. The premises shall be used for not other purpose, unless expressly agreed upon in writing by the Tenant and Landlord. |
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| 1.15 | Notices: All notices provided for in this Lease shall be sent or delivered by registered or certified mail to the parties and emailed, to the addresses set forth below or at such other addresses as the parties shall designate to each other in writing: |
| Landlord: | Attn: | Veronica Bard | |
| Email: | [***] | ||
| Mail: | 650 Pope Ave NW | ||
| Winter Haven, FL 33881 |
| Tenant: | Attn: | ||
| Email: | |||
| Mail: | |||
The rent payable by the Tenant hereunder shall be paid to the Landlord at the same place where a notice to Landlord is hereby required to be directed.
| 1.16 | Tmde, Fixture, Machine1y, and Equipment: Landlord shall furnish Tenant with a list of all trade fixtures, machinery, equipment, furniture, or other personal property kept or installed on the Prope1ty by Landlord and Tenant agrees that such property shall not become the property of the Tenant. The Tenant shall make all repairs as shall be reasonably necessary to keep said trade fixtures, machinery, equipment, furniture, or other personal property of the Landlord in good condition and repair. |
| 1.17 | Lien on Property: Except as herein provided, Tenant shall have no authority to create or place any lien or encumbrance of any kind whatsoever upon the Property or in any manner to bind the interest of the Landlord in the Property, and Tenant covenants and agrees promptly to pay all swns legally due and payable by it on account of any labor performed on the demised premises upon which any lien is or could be asserted upon the Property or the improvement s thereon, No permanent work or alteration to the leased premises shall be performed without written consent from the Landlord. A violation of this clause shall be interpreted as a default under the terms of the agreement. |
| I.18 | Repairs: Tenant, during the term of this Lease or any extension or renewal of this Lease, shall take all reasonably actions necessary to keep the Property in good condition and repair. Tenant further agrees that all damage or injury done on the Property by Tenant or by any person who may be in or upon the premises, except Landlord, Landlord’s agents, servants, and employees, shall be repaired by Tenant at its expense. Tenant agrees at the expiration of this Lease or upon the earlier termination thereof, to quit and surrender said Property in good condition and repair, reasonable wear and tear excepted. |
| 1.19 | Maintenance: Landlord shall be responsible for and shall pay all costs and expenses relating to the interior and exterior maintenance, repair and operation of the Property including air conditioning equipment, plumbing, and all mechanical equipment. Landlord shall also be responsible for all utilities. |
| 1.20 | Utilities and Services: Landlord agrees to pay for all water, fuel, gas oil, heat, electricity, power, materials, and services which may be furnished to it in or about the Property. Tenant agrees to keep said Property free and clear of any lien or encumbrances of any kind whatsoever created by Tenant’s act or omission. |
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| 1.21 | Theft or Burglary: Landlord shall not be liable to Tenant for losses to Tenant’s property or personal injury caused by criminal acts or entry by any person or persons into the Property. |
| 1.22 | Damage by Fire or Other Casualty: If the Property of a portion thereof at any time during the Term of the Lease or any extension thereof, is damaged by fire or other casualty, this Lease shall terminate. |
| 1.23 | Radon Gas: Radon gas is a naturally occurring radioactive gas that, when it has. accumulated in a building in sufficient quantities, may present health risk to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your County Public Health Unit. |
| 1.24 | Insurance: Tenant hereby covenants and agrees that at all times during the term hereof, at Tenant’s own cost and expense, to obtain and maintain and keep in force comprehensive general public liability insurance in companies approved by the Landlord, adequate to protect against the claims for personal injury, death, or property damage occurring in, on or about the Property or on an occurrence basis with aggregate single limit coverage in an amount no less than $1,000,000.00 for each person injured, $1,000,000.00 for any one accident, and $1,000,000.00 for property damage. |
The full cost and expense of the described insurance shall be paid by the Tenant.
The insurance policies shall provide and require that the insurers give the Landlord at least twenty (20) days notice prior to cancellation. Tenant shall not violate or permit to be violated any condition of the insurance policies and shall perform and satisfy all requirements of the insurers. A violation of this clause shall be interpreted as a default under the contract terms.
If the Lease Premises or any other part of the Building is damaged by fire or other casualty resulting from any act or negligence of Tenant or any of Tenant’s agents, employees or invitees, rent shall not be diminished or abated while such damages are under repair, and Tenant, shall be responsible for the cost of repairs not covered by the insurance.
Landlord shall maintain fire and extended coverage insurance on the building and the Leased Premises in such amounts as Landlord shall deem appropriate. Tenant shall be responsible, at its own expense, for fire and extended coverage insurance on all personal property, including removable fixtures, located in the Leased Premises.
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| 1.25 | Indemnification: Landlord shall not be liable to Tenant for any injury or damage to any person or property in or about the Leased Property from any cause whatsoever, and the Tenant will indemnify and save harmless the Landlord and its agents from and against any and all liability, claims, demands, damages, expenses, fees, fines, penalties, suits, proceedings, actions and costs of actions of any kind and nature, including attorneys’ fees, for injury (including deaths) to persons or damage to property or property rights: |
| (a) | Occurring in, on or about the Prnperty or any part thereof, or |
| (b) | Occurring in, on or about the Property, or any part thereof (including without limiting the generality of the foregoing: passageways or hallways, driveways, ramps and parking areas), when any such injmy or damage shall be caused or result in whole or in part by any act, negligence, or fault of omission of any duty by the Tenant, its agents, servants, employees, or licensees 01· invites, or by any person under the control or direction of the Tenant. |
The Tenant will further indemnify and save harmless the Landlord for all liability, claims and other items above mentioned, arising, or growing out of or connected with any breach, violation, nonperformance, or failure to abide by any covenant, condition, agreement, or provision contained in this Lease on the part of the Tenant to be kept, performed, complied with, or abide by.
| 1.26 | Bankruptcy: If the Tenant shall become insolvent or if Bankruptcy Proceedings shall be begun by or against the Tenant, before the end of the term, the Landlord is hereby irrevocably authorized, at its option, to forthwith cancel this Lease. Landlord may elect to accept rent from such receiver, trustee, or other judicial officer during the term of their occupancy in their fiduciary capacity without affecting Tenant’s right as contained in the Agreement, but no receiver, trustee or other judicial officer shall ever have any right, title or interest in or to the above described property by virtue of this Agreement. |
| 1.27 | Compliance with Laws: Tenant will promptly comply with all applicable and valid laws, ordinance and regulations of Federal, State, County, Municipal or other lawful authority pertaining to the use and occupancy of the Property. |
| 1.28 | Attorney’s Fees: If suit is brought to enforce any covenant of this Lease or for the breach of any covenant or condition herein contained, the parties hereto agree that the losing party shall reimburse the prevailing party all attorney’s fees, which shall be fixed by the Court, and Comt costs. |
| 1.29 | Remedies Cumulative: All rights and remedies of Landlord herein or existing at law or in equity are cumulative and the exercise of one or more rights or remedies shall not be taken to exclude or waive the right to the exercise of any other. |
| 1.30 | Act of God: Landlord shall not be required to perform any covenant or obligation in this Lease, or be liable in damages to Tenant, so long as the performance or nonperformance of the covenant or obligation is delayed, caused, or prevented by an act of God or by the Tenant. |
| 1.31 | Offset of Rent: Tenant shall not have the right to withhold or to offset rent or terminate Lease, except as expressly provided herein. Tenant waives and releases any and all statutory liens and offset right. |
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| 1.32 | Interpretation: The captions appearing in the Lease are for convenience only and in no way define, limit, construct or describe the scope or intent of any Section. Grammatical changes required to make the provision of this Lease apply I) in the plural sense where there is more than one tenant and (2) either corporations, associations, partnerships or individuals, males or females, shall in all instances be assume das through in each case fully expressed. The laws of the State of Florida shall govem the validity, performance, and enforcement of this Lease. |
This Lease shall not be constrned more or less favorably with respect to either party as a consequence of the Lease or various prnvision hereof having been drafted by one of the parties hereto.
| 1.33 | Waiver: Failme of the Landlord to declare an event of default immediately upon its occurrence, or delay in taking any action against any event of default, shall not constitute a waiver of the default, but Landlord shall have the right to declare the default at any time and take such action as is lawful or authorized under this Lease. Failure by Landlord to enforce one or more of the remedies provided hereunder or at law, upon any event of default, shall not be deemed or constrned to constitute a waiver of the default or of any other violation or breach of any of the terms provisions and covenants contained in this Lease. Landlord may collect and receive rent due from Tenant without waiving or affecting any rights or remedies that Landlord may have at law or equity or by virtue of this Lease at the time of such payments. |
| 1.34 | Landlord’s Access to Property: Landlord or its representative, successors or assigns, shall have reasonable rights of access to the Prnperty for the ptupose of inspecting the condition thereof from time to time thrnughout the term of this Lease and any renewal thereof. Landlord shall also have the right during the last three (3) months of the Lease term or any renewal thereof to show the Property to any pmspective tenant at a reasonable times during business hours and to place upon the Pmperty any usual “to Let” or “For Lease” or “For Sale” signs. |
| 1.35 | Holding Over: If Tenant does not vacate the Prnperty upon the expiration or earlier termination of this Lease, Tenant shall be a tenant at sufferance for the holdover period and all of the terms and provisions of this Lease shall be applicable during that period, except that Tenant shall pay Landlord TWICE the amount described in Section 1.6 (without waiver of Landlord’s right to recover damages as permitted by law). Upon the expiration or earlier termination of this Lease, Tenant agrees to vacate and deliver the Pmperty, and all keys thereto, to Landlord upon delivery to Tenant to notice from Landlord to vacate. The rent payable during the holdover period shall be payable to Landlord on demand. No holding over by Tenant, whether with or without the consent of Landlord, shall operate to extend the term of this Lease. Tenant shall indemnify Landlord against all claims made by any Tenant against Landlord resulting from delay by Landlord in delivering possession of the Property to such other tenant or prospective tenant. |
| 1.36 | Sublease and Assignment: Tenant shall have the right to assign this Lease to a corporation with which Tenant may merge or consolidate, to any subsidiary of Tenant, to any corporation under common control with Tenant, or to purchaser of substantially all of Tenant’s assets. Except as set forth above, Tenant shall not sublease all or any part of the Leased Premises, 01· assign this Lease in whole or in part without Landlord’s consent, such consent not to be unreasonably withheld or delayed. The Tenant to whom the Property is sub-let shall be subject to all of the conditions of this Lease. |
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| 1.37 | Severability: If any provision of this Lease or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Lease and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. Each covenant and agreement contained in this Lease shall be construed to be a separate and independent covenant and agreement, and the breach of any such covenant or agreement by Landlord shall not discharge or relieve Tenant from Tenant’s obligation to perform each and every covenant and agreement of this Lease that is to be performed by Tenant. |
| 1.38 | Invalidity Provision: If any term, covenant, condition or provision of this Lease or the application thereof to any person or circumstance shall, at any time, or to any extent, be invalid or unenforceable, the remainder of this Lease or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant, condition and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. |
| 1.39 | Captions: The captions appearing in this lease are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or intent of such Paragraphs of this Lease or in any way affect this Lease. |
| I.40 | Time is of Essence: It is understood and agreed between the parties hereto that time is of the essence of this Lease and this applies to all terms and conditions contained herein. |
| 1.41 | Cumulative Remedies: All of the rights, power and privileges conferred by this Lease upon the parties should be cumulative and in addition to those otherwise provided by law and shall not be deemed to preclude those rights and remedies provided by law. |
| 1.42 | Entire Agreement and Modification: This Lease contains the entire agreement of the parties, supersedes all prior agreements including letters of intent, and no representations, inducements, promises or agreements, oral or otherwise between the parties not embodied in this instrument shall be of any force or effect. No amendment, modification, or variation of this Lease or any of its terms or provisions shall be effectual, binding, or valid unless and until the same is reduced to writing and executed by the parties. No failure of the Landlord to exercise any power given the Landlord by this instrument, or to insist upon strict compliance by the Tenant of any obligation hereunder, and no custom or practice of the parties at variance with the terms hereof shall constitute a waiver of the Landlord’s right to demand exact compliance with the terms of this Lease. |
| 1.43 | No Estate In Land: This Lease creates the relationship of Landlord and Tenant. No estate shall pass out of the Landlord and the Tenant relationship. The Tenant has only a right of use which is not subject to levy and sale. |
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| 1.44 | Pal’king: The parking lot is common and shared area for the use Tenant and Tenant’s business use purpose patrons. Violators shall be towed at their expense. No sales of merchandise or vehicles of any kind shall be allowed in the parking area. A violation of this clause shall be interpreted as a default under the terms of the agreement. |
| 1.45 | Sidewalk: No sales or usage of the sidewalks as showroom will be allowed without written consent of the landlord. Violation of this clause shall be viewed as a breach of the lease agreement. |
| 1.46 | Option to Renew: This lease is month to month, and automatically renews each month unless a party terminates as provided in Section 1.47 or a party defaults on this agreement. |
| 1.47 | Tel’mination: Landlord or Tenant may terminate this Lease at any time with a minimum of a thirty (30) day notice to the other party. If Landlord or Tenant exercises its right to termination, the Lease termination date and move out date will be the last day of the following month, provided that the last day of the following mmith is at least thirty (30) days after notice has been provided. If the last day of the following month is not thirty (30) days after notice has been provided, then the termination date and move out date will be the last day of the next following month. |
| 1.48 | Quiet Possession: Landlord covenants and warrants that upon performance by Tenant of its obligations hereunder, Landlord will keep and maintain Tenant in exclusive, quiet, peaceable, and undisturbed and unintermpted possession of the Lease Premises during the term of this Lease. |
| 1.49 | Condemnation: If any legally, constituted authority condemns the Building or such part thereof which shall make the Leased Premises unsuitable for leasing, this Lease shall cease when the public authority takes possession, and Landlord and Tenant shall account for rental as of that date. Such termination shall be without prejudice to the rights of either party to recover compensation from the condemning authority for any loss or damage caused by the condemnation. Neither party shall have any rights in or to any award made to the other by the condemning party. |
| 1.50 | Subordination: Tenant accepts this Lease subject and subordinate to any mortgage, deed of tmst or other lien presently existing or hereafter arising upon the Leased Premises, or upon the Building and to any renewals, refinancing and extensions thereof, but Tenant agrees that any such mortgage shall have the right at any time to subordinate such mortgage, deed of tmst or other lien to this Lease on such terms and subject to such conditions as such mortgagee may deem appropriate in its discretion. Landlord is hereby irrevocably vested with full power and authority to subordinate this Lease to any mortgage, deed of trust or other lien now existing or hereafter placed upon the Leased Premises of the Building, and Tenant agrees upon demand to execute such further instmments subordinating this Lease or attorning to the holder of any such liens as Landlord may request. In the event that Tenant should fail to execute any instrument of subordination herein required to be executed by tenant promptly as requested, Tenant hereby irrevocably constitutes Landlord as its attorney-in-fact to execute such instt’llment in Tenant’s name, place and stead, it being agreed that such power is one coupled with an interest. Tenant agrees that it will from time to time upon request a statement in recordable form certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as so modified), stating the dates to which rent and other charges payable under this Lease have been paid, stating that Landlord is not in default hereunder (or if Tenant alleges a default stating the nature of such alleged default) and further stating such other matters as Landlord shall reasonably require. |
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| 1.5I | Successors: The provisions of this Lease shall extend to and be binding upon Landlord and Tenant and their respective legal representatives, successors, and assigns. |
| 1.52 | Performance: If there is a default with respect to any of Landlord’s covenants, warranties or representation under this Lease, and if the default continues more than thirty (30) days after notice in writing from Tenant to Landlord specifying the default, Tenant may at its option and without affecting any other remedy hereunder, cure such default and deduct the cost thereof from the next acct’lling installment or installments of rent payable hereunder until Tenant shall have been fully reimbursed for such expenditures. Prior to exercise of this remedy and prior to any repairs made, Tenant shall notify Landlord in writing, of its intent to make the repairs and deduct the cost from the rent payment. If this Lease terminates prior to Tenant’s receiving full reimbursement, Landlord shall pay the unreimbursed balance plus accrued interest to Tenant on demand. |
This Lease consisting of nine (9) pages was signed by the Landlord and Tenant in the presence of the undersigned witnesses on the 7th day of November, 2025.
| TENANT: | LANDLORD: | |
| La Rosa Holdings Corp | Bard Properties, LLC |
| By: | /s/ Joseph La Rosa | ||
| Print Name: Joseph La Rosa | |||
| Title: CEO | |||
| By: | /s/ Veronica Bard | ||
| Print Name: Veronica Bard | |||
| Title: Manager | |||
Page 9 of 9
Exhibit 10.156
Certain information has been redacted in accordance with Item 601(b)(10)(iv) of Regulation S-K because such information (i) is not material and (ii) is the type of information the registrant treats as private or confidential. Information that has been so redacted from this exhibit has been marked with “[***]” to indicate the omission.
TCOLONIAL SQUARE PROPERTIES, LLC.
FORM OF COMMERCIAL OFFICE LEASE
This Lease (hereinafter referred to as the “Lease”) is made and entered into this 20th of April by and between Landlord and Tenant, as hereinafter set forth.
WITNESSETH:
That Landlord, in consideration of the rents, covenants and agreements hereafter promised and agreed by Tenant to be paid and performed, does hereby lease, demise and let to Tenant, and Tenant does hereby lease of and from Landlord, the Premises hereinafter described, SUBJECT TO THE TERMS AND CONDITIONS OF THE GENERAL CONDITIONS OF LEASE AND RIDER, IF ANY, ATTACHED HERETO AND MADE A PART HEREOF. As used in the General Conditions of Lease and elsewhere in this Lease the following terms shall be interpreted and evaluated as follows:
| “Landlord” | Colonial Square Properties, LLC | |
| “Landlord’s Address” | 123 South Tennessee Ave., Suite 2, Lakeland, FL 33801 | |
| “Tenant” | La Rosa Realty Lakeland, LLC | |
| “Tenant’s Address” | [***] | |
| “Premises” | Annex Building, 123 South Tennessee Avenue, Lakeland, FL 33801, Suite B-2. As shown on Exhibit “B” consisting of approximately 2,118 rentable square feet. | |
| “Building” | The structure of which the Premises is a part and all other related structures and facilities. | |
| “Permitted Uses” | Professional Offices | |
| “Commencement Date” | May 1, 2022 | |
| “Term” | : 62 months beginning on the Commencement Date | |
| “Base Rent” (includes CAM) |
The sum of $0 per month for the first two (2) months, thence; The sum of $4,059.50 per month for the next 12 months, thence; The sum of $4,059.50 per month for the next 12 months, thence: The sum of $4,059.50 per month for the next 12 months, thence: The sum of$4,059.50 per month for the next 12 months, thence; and The sum of $4,059.50 per month for the next 12 months. |
|
| “Security Deposit” | : $4,059.50 | |
| “Landlord Utilities” | Electrical Power, Water and Sewer (Included in Base Rent) | |
| “Common Area Maintenance” | Included in Base Rent. | |
| “Florida State Tax” | Current tax at time of payment (currently .065% of Base Rent; subject to change.) | |
| “Total Monthly Rent” |
The sum of $0 for the first two (2) months, thence. The sum of $4.323.37 per month for the next 12 months, thence: The sum of $4,323.37 per month for the next 12 months, thence; The sum of$4,323.37 per month for the next 12 months, thence; The sum of $4,323.37 per month for the next 12 months, thence; and The sum of$4,323.37 per month for the next 12 months. |
PROVIDED ALWAYS that this Lease is made and accepted upon the following terms and conditions, all of which the Landlord and Tenant hereto covenant and agree to keep and perform:
| 1. | REPAIRS: At Tenant’s expense, Tenant may repaint walls mutually agreeable to Landlord and Tenant. Landlord agrees, at his expense, during the terms of this Lease, to make all necessary repairs to the premises (including but not limited to the air conditioning, heating and electrical services) and outside of the building now located thereon. Except as above stated, all alterations required by Tenant shall be made at the expense of the Tenant unless otherwise agreed by Landlord and Tenant. Tenant, who hereby agrees to take good care of said premises and to surrender the same at the end of said term in as good condition as the reasonable use and ordinary wear and tear thereof will permit; provided, however, that Tenant shall not be liable for any damages or required to make any replacement or repairs, except as they are occasioned or made necessary directly and proximately by Tenant’s neglect or misuse of said premises. |
| 2. | ALTERATIONS: No structural alterations, additions or improvements on said building shall be made without the written consent of Landlord. Any improvements made by the Tenant, except as removable partitions, counters, shelving or trade fixtures, shall become the property of the Landlord at the expiration of the term of said Lease, unless otherwise agreed upon in writing. |
| 3. | DESTRUCTION OF PREMISES: If, during the term of this Lease, the building thereon is destroyed or is damaged to the extent that it will be unfit for occupancy by Tenant for a period of one hundred eighty (180) days, the rental herein provided for shall immediately be suspended, and the lease may thereupon be terminated by either party by notice in writing given to the other party; however, should said building be repaired and the Tenant resumes operation of its business therein, this Lease shall be continued in force and effect for an additional term equivalent to the time the same was suspended because of damage to the said building. |
| 4. | USE: Tenant shall occupy and use said premises in connection with the business usually and customarily carried on by it and for no other purpose, and said Tenant further covenants and agrees that it will not make any unlawful or offensive use of the premises. Tenant’s business is the operation of a mortgage office. |
| 5. | SERVICE EQUIPMENT: Public utility service connections into said premises shall be provided by Landlord. Landlord shall pay all public utility commodities consumed and used on the premises during the term thereof. |
| 6. | INSPECTION: Landlord shall have the right to enter into and upon said premises, or any part thereof at all reasonable hours for the purpose of inspection and making repairs, but Landlord agrees not to exercise said right in such a way as to unreasonably interfere with the business of the Tenant. |
| 7. | DEFAULTS: If default be made by Tenant in payment of said rent, or any part thereof, and such default shall continue for three (3) days, or in the performance of the conditions or covenants of this Lease other than the payment of rent, and such default shall continue for fifteen (15) days after written notice thereof from Landlord to Tenant, Landlord shall have the right to re-enter said premises and remove said Tenant and all other persons therefrom, and shall have the option of canceling this lease, without being liable to indictment, prosecution or damages (see 18-X). |
| 8. | PEACEABLE ENJOYMENT: If Tenant shall perform all covenants herein agreed to be performed by it, Landlord (including Landlord’s heirs, executors, administrators, successors or assigns) shall warrant and defend Tenant in the enjoyment and peaceful possession of said premises during the term aforesaid. |
| 9. | SUBLETTING AND ASSIGNMENT: No portion of the property or premises hereby covered may be sublet or this Lease assigned without the prior written consent of Landlord being obtained by Tenant. If requested, Landlord will provide written consent for Tenant to sublet to any its agents or business partners. |
| I0. | DAMAGE TO PREMISES: Tenant shall pay for costs of repair for any damage to the premises done or caused by Tenant, its invitees, employees, customers or guests. (See 18-III). |
| 11. | STORAGE: There shall be no external storage of any goods or materials on the leased premises without written permission of the Landlord. |
| 12. | PARKING: Parking is on a first come, first served basis. Tenant shall be entitled to joint use of the parking area provided by Landlord, along with other tenants, as necessary for the normal business purposes of lease. NO abandoned or wrecked vehicles shall be left on the premises by Tenant. Tenant will not exceed use of more parking spaces than 3.0 spaces per 1,000 square feet of rentable space. |
| 13. | SIDEWALK AND COMMON AREAS: Tenant agrees not to obstruct the sidewalk or common parking area in front of the building or the area in the rear of the building. |
| 14. | INSURANCE: Landlord shall pay for fire and extended coverage for the premises (not contents) and Tenant shall pay for personal property coverage for Tenant’s personal property. (See 18-VI). In addition, Tenant shall carry during the term of this Lease, an occurrence form commercial general liability policy of insurance providing coverage against liability for personal and bodily injury, death and property damage having limits of not less than ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) per occurrence and TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) in the aggregate. |
| 15. | AIR CONDITIONING: Landlord is responsible for providing and maintaining air conditioning and heating equipment and hereby warrants that such equipment is in good operating condition on date Tenant assumes occupancy. |
| 16. | ENVIRONMENTAL PROVISIONS: The Tenant represents and warrants to the Landlord as follows: |
| 1. | The Tenant is and has been in full compliance with such environmental law, regulation or ordinance, and the Tenant has not received notice in any form of such an action, or of a possible action. |
| ii. | There are no pending or threatened actions against the Tenant under any environmental law, regulation or ordinance, and the Tenant has not received notice in any form of such an action, or of a possible action. |
| iii. | The Tenant has not caused any past or current releases of hazardous substance on, over, at, from, into, or onto any facility at the property, as those terms are understood under the “Comprehensive Environmental Response, Compensation and Liability Act” (“CERCLA”). |
| iv. | The Tenant is not aware of any environmental condition, situation, or incident on, at, or concerning the property specifically referred to in the lease agreement between Landlord and the Tenant, that could possibly give rise to an action or to liability under any law, rule, ordinance or common law theory. |
| 17. | TERMINATION OPTION: None |
| 18. | ADDITIONAL PROVISIONS |
| L | Landlord shall be responsible for maintaining and replacing light bulbs for lights in offices. |
| IL | Landlord to be responsible for landscape maintenance. |
| III. | Upon execution of lease, Tenant will pay Landlord the last month’s rent, which will be held by Landlord as a security deposit. At the expiration of the Lease, Landlord will inspect the damage to the Premises to determine how much of the Security Deposit will be allocated to repair damage and how much will be applied to the last month’s rent. |
| IV. | ABANDONMENT OR DEBTOR PROCEEDINGS: It shall be considered a default on the part of Tenant, and Landlord shall be entitled to avail itself of any of the remedies set forth in paragraph 7 above, without any notice to Tenant, in the event the demised premises become and remain deserted and abandoned for a period of ten (10) days or if any general assignment for the benefit of creditors is made by Tenant. |
| V. | Except as otherwise provided in this Lease, the Rent shall be paid to Landlord without notice or demand on the first day of each calendar month during the term of this Lease, and without counterclaim, offset, deduction, abatement, suspension, deferment, diminution or reduction, for any circumstance or occurrence. |
| VI. | Tenant agrees to pay, in addition to the base rent and sales tax provided for above, that portion, if any, of the Landlord’s insurance premium which represents an increase to Landlord of said premium by reason of Tenant’s presence and/or business activities on the premises. |
| VII. | A $20.00 “RETURN CHECK CHARGE”, in addition to all bank charges, will be charged to Tenant for checks returned to Landlord. |
| VIII. | Rent not paid by the 10th day following the due date will be assessed$ 10.00 per 1,000 sq. ft. late charge for every day thereafter until paid. |
| IX. | If Tenant shall default in the performance of any one of the terms, conditions or covenants of this Lease, and if said default is not cured within fifteen (15) days from the date of written notice of such default to Tenant, the Landlord may, at its option, relet the demised Premises or any part thereof for the balance of the lease term as agent for the Tenant and receive rents therefor and apply the same first to the payment of the expenses of reasonable redecorating and making necessary repairs to the Premises, attorney’s fees, broker’s commission, advertising all other reasonable expenses of the Landlord in re-entering the Premises and reletting the same; and second, to the payment of rent due hereunder. Tenant shall be responsible for all costs, including attorney’s fees, incurred by Landlord in enforcing any of the terms and provisions of this Lease Agreement. |
In addition and in connection with the reletting of the demised Premises for the account of lessee as hereinabove provided, Landlord shall have the right to declare all monthly installment of rental for the balance of the lease term to be immediately due and payable and to proceed to obtain a judgment therefore against Tenant. Thereafter, all sums collected from the reletting of the Premises, less costs in connection therewith, shall be applied on said judgment, or if the judgment has been paid, turned over to Tenant.
Further, in the event of default on the part of Tenant, the Landlord shall have the right to pursue any legal remedy available to it, and Landlord shall have the right to bring distress proceedings without in any way affecting its right to accelerate the balance of rental due and to bring an action therefor.
| X. | Should Tenant hold over and remain in possession of the Premises at the expiration of the Term, the Tenant shall become a tenant by the month at a rate of the last monthly installment of rent plus 50% (fifty percent). The Tenant shall continue to be subject to all conditions and covenants of this Lease. Tenant shall give to Landlord at least thirty (30) days written notice of any intention to remove from the Premises, and shall be entitled to fifteen (15) days notice from Landlord in the event Landlord desires possession of the Premises. |
| XI. | Tenant shall have the option to lease Suite 2, consisting of approximately 1,021 rentable square feet, located in the same building as the Premises. To exercise this option, Tenant shall provide Landlord written notice of its intent to add Suite 2 to the lease. This notice shall be provided by Tenant to Landlord on or before 90 days prior to its intended occupancy (Commencement Date) of Suite 2. Upon the Commencement Date of adding Suite 2 to the lease, Base Rent and Total Monthly rent will be adjusted to an overall rate of $22 per rentable square foot for the combined rentable square feet of Suite 1 and Suite 2 (totaling 3,266 rentable square feet). |
| 19. | TENANT REMEDIES: If Landlord shall fail to perform its duties or obligations as set forth in this Lease, and any breach is not cured within thirty (30) days from the date of written notice of the existence and nature of such breach to Landlord from Tenant, Tenant shall have the right to either cure such default and to deduct the costs of such curing from rent payments thereafter due, except however to the extent such breach is not capable of being cured within such thirty (30) day period. such breach shall not constitute an event of default hereunder so long as Landlord shall have undertaken affirmative acts to cure such breach within said thirty (30) day period and shall thereafter diligently and continuously prosecute the same to completion. |
| 20. | OPTION TO RENEW: Tenant, shall have one (1) five (5) year option to renew by providing Landlord six (6) months advanced written notice. Landlord and Tenant may agree to renew at the then prevailing market rate for comparable spaces in the market trade area. |
| 21. | SIGNAGE: Tenant, at Tenant’s expense, may add signage to the Annex Building upon receiving the consent of the Landlord to the signage plan. All signage is subject to local City of Lakeland code and any LDDA restrictions. |
| 22. | SPECIAL PROVISIONS: Tenant shall at all time observe and obey the Rules attached herein as Exhibit “A”. |
| 23. | INDEMNIFICATION OF LANDLORD: Tenant shall defend, indemnify and save and hold Landlord harmless from and against any and all liabilities, obligations, losses, damages, injunctions, suits, actions, fines, penalties, claims, demands, costs and expenses of every kind or nature, including reasonable attorneys’ fees and court costs, incurred by Landlord, arising directly from or out of: (a) any failure by Tenant to perform any of the terms or conditions of this Lease on Tenant’s part to be performed; (b) any accident, injury or damage which shall happen at, in or upon the Premises caused by Tenant’s negligence, recklessness, or intentional act; (c) any matter or thing growing out of the condition, occupation, use, or operation by any person of the premises, or any part thereof, or the operation of the business contemplated by this Lease to be conducted thereon, thereat, therein, or therefrom; (d) any failure of Tenant to comply with any laws, ordinances, requirements, orders, directions, rules or regulations of any governmental authority; (e) any contamination of the premises, or the groundwaters thereof, arising on or after the date Tenant takes possession of the premises and occasioned by the use, transportation, storage, spillage or discharge thereon, therein or therefrom of any Hazardous Materials, whether by Tenant or by any agent or invitee of Tenant; (t) any discharge of Hazardous Materials from the premises into any septic facility or sanitary sewer system serving the premises arising on or after the date Tenant takes possession of the premises, whether by Tenant or by any agent of Tenant; or (g) any other act or omission of Tenant, its employees, agents, invitees, customers, licensees or contractors. Tenant’s indemnity obligations under this Article and elsewhere in this Lease arising prior to the expiration, or earlier termination, or assignment of this Lease shall survive any such expiration, termination or assignment. |
| 24. | NOTICES: Any notice required or permitted to be given under this Lease must be given only by one of the following: (a) United States registered or certified mail, postage prepaid, return receipt requested, (b) facsimile with confirmation notice or (c) reputable overnight courier service which provides written evidence of delivery, or (d) personal delivery; and addressed to the address of the parties shoen on the first page of this Leased, or such other address as may be designated by either party by written notice to the other. Except as otherwise provided in this Lease, every notice, demand, request or other communication shall be deemed to have been given or served upon actual receipt thereof. Notwithstanding the foregoing, any notice mailed to the last designated address of any person or party to which a notice may be or is required to be delivered pursuant to this Lease shall not be deemed ineffective if actual delivery cannot be made due to a change of address of the person or party to which the notice is directed or the failure or refusal of such person or party to accept delivery of the notice. |
| 25. | RADON GAS: Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health department. |
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the day and year above written:
Signed, sealed and delivered in the presence of:
| COLONIAL SQUARE PROPERTIES, LLC. | ||
| Witness | Landlord | |
| Witness | ||
| LA ROSA REALTY LAKELAND, LLC | ||
| Witness | Tenant | |
| Witness |
EXHIBIT “A”
THE RULES
[OMMITTED]
EXHIBIT “B”
FLOOR PLAN
[OMMITTED]
8
Exhibit 10.157
2700 Cypress Modified Gross Lease
THIS LEASE (“Lease”) made as of this 8th day of March, 2021 by and between TMT Properties, Inc., a Florida Corporation (“Landlord”) and Baxpi Holdings LLC d/b/a La Rosa Realty Greater Fort Lauderdale, a Florida limited liability company (“Tenant”).
In consideration of the rents, covenants and agreements set forth below, the parties agree as follows:
ARTICLE 1
INFORMATION PROVISIONS
Section 1.1. Landlord: TMT Properties, Inc.
Section 1.2. Address and Telephone# of Landlord:.
Section 1.3. Tenant: Baxpi Holdings LLC d/b/a La Rosa Realty Greater Fort Lauderdale
Section 1.4. Premises: 2700 West Cypress Creek Road 0100-0101, Fort Lauderdale FI 33309
Section 1.5. Mailing Address of Tenant:
Phone:
Phone 2:
Email:
Section 1.6. Tenant’s Trade Name:
Section 1.7. Commencement Date: May 1, 2021
Section 1.8. Lease Term: Thirty-Six (36) Months
Section 1.9. Gross Leasable Area of the Premises: Approximately 2,000 square feet. The Gross Leasable Area of the Premises will be deemed for all pw-poses to be as set forth in thi Section 1.9.
Section 1.10. Gross Leasable Area of the Center on the Commencement Date: Approximately 70,795 square feet. With respect to the Center, as herein defined, the Gross Leasable Area will be the total constructed gross leasable area of the building(s) available for the exclusive use and occupancy ofretail tenants, whether or not actually rented or open for business, as the same exists from time to time.
Section 1.11. Permitted Use of the Premises: General Office Use
Section 1.12. Tenant Payments: Minimum Rent, Additional Rent plus sales tax.
Section 1.13. Minimum Rent:
| May 1, 2021 - April 30, 2022 | $3,079.08 + sales tax | |
| May I, 2022 - April 30, 2023 | $3,171.45 + sales tax | |
| May I, 2023 - April 30, 2024 | $3,266.59 + sales tax |
Section 1.14. Additional Rent: This is a Modified gross lease, and it is the intention that all additional costs, except for directly billed Utilities, are covered in the minimum rent. In adjustment years the gross rent will increase by the proportionate share increase in Taxes, Insurance and Ground Lease after the initial year. The initial year “base year” will be the first full year of the lease and adjustment years will be in years 2 & 3. Please refer to sections 5,6 & 7
Section 1.15. Guarantor(s) (Please insert all)
Carrie Pietrowski
Section 1.16. Address of Guarantor(s): (Please insert all)
Section 1.17. Security Deposit: $3,279.22 (First Month’s Rent)+ $3,478.92 (Last Month’s Security)+ $3,279.22 (Security Deposit)= $10,037.361Current deposit on file at Suite #D134 totaling $2,727.52 will be transferred to this space leaving a balance due of$7,309.84
Section 1.18. Improvements: Prior to commencement date the landlord will perform a general light cleaning of the space, replace damaged or unsightly ceiling tiles, lights and change locks. All electrical and mechanical items will be checked for proper working condition. Landlord will also perform all work shown in Exhibit “C” at no out of pocket cost to Tenant.
ARTICLE 2
PREMlSES AND TERM
Section 2.1. Premises. In consideration of the rents, covenants and agreements to be perfonned by Tenant, Landlord does hereby lease to Tenant and Tenant hereby takes from Landlord the space known as Suite #D100-D101 described in Section 1.4 (the “Premises”), which Landlord and Tenant agree that it is and shall be conclusively presumed for purposes of calculating rent, additional rent and any other matter of this Lease to contain the square footage area set forth in Section 1.9.
The Premises is located on a parcel of land in Broward County, Florida, which comprises that certain commercial complex known as Cypress Creek Executive Court.
The Premises does not include the roof or exterior walls of the building of which the Premises are a part. Landlord reserves the right to place in the Premises utility lines, pipes, HVAC systems, electrical wiring, and anything Landlord deems necessary to provide services to the Center and other tenants or to serve tenant spaces other than the Premises, and to replace, maintain and repair those items in, over, under and upon the Premises as may have been installed in the building.
Section 2.2. Term. The term of this Lease shall be for the time period set forth in Section 1.8 from the commencement date set forth in Section 1.7 hereof.
ARTICLE 3
RENT
Section 3.1. Tenant Payments and Minimum Rent. During the term of the Lease, Tenant covenants to pay to Landlord at the office of Landlord, or at such other place as Landlord may designate in writing, Tenant Payments set forth in Section 1.12 of this Lease, including Minimum Rent, on or before the first ( Ist) of each month in advance, without prior demand there for, without notice, deduction or setoff of any kind, for the Premises as follows:
Minimum Rent shall mean that certain rent payable by Tenant in accordance with Section 1.13 hereof. The first month’s rent shall be due upon execution of this Lease; subsequent rental payments shall be due on the first day of each calendar month following Commencement Date. Should the tem1 of this Lease and Tenant’s obligation to pay rent commence on a day other than the first of the month, for the purposes of the preceding Section only, the tenn of this Lease shall commence on the first day of the following month. Tenant shall pay rent for the fractional month preceding the Commencement Date, if the Commencement Date commences on a day other than the first day of a month on a per diem basis (calculated on the basis of a thirty [30]-day month) payable on the Commencement Date. Any rental payment hereunder for any other fractional month shall likewise be calculated and paid on such per diem basis. After the initial Base year the rent will increase 3%.
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Section 3.2. Additional Rent. Any and all other sums of money or charges required to be paid by Tenant pursuant to the provisions of any Section of this Lease, whether or not the same be so designated, shaJI be considered as “Additional Rent.” If such amounts or charges are not paid at the time provided in this Lease, they shall nevertheless, be collectible as Additional Rent with the next installment of Minimum Rent thereafter falling due hereunder, but nothing herein contained shall be deemed to suspend or delay the payment of any amount of money or charges as the same become due and payable hereunder or limit any other remedy of Landlord.
In the event of disagreement between the Landlord and the Tenant with regard to the manner of calculation or amount payable as Additional Rent pursuant to Articles 5, 6 and1 of this Lease, the Tenant will make payment in accordance with any notice given by the Landlord, but the disagreement shall immediately be referred by the Landlord for detennination by one or more of the Landlord=s accountants, architect, insurance broker or other professional consultant (such as may be, in the reasonable opinion of the Landlord, best infonned and qualified to detem1ine the difference on a basis equitable to both parties) who shall be deemed to be acting as experts and not arbitrators, and a determination signed by the selected expert(s) shall be final and binding upon the Landlord and Tenant. Any adjustment required to any previous payment made by the Tenant by reason of any such detennination shall be made within 14 days thereof. Expenses incurred for said consultants by Landlord shall be the responsibility of the Tenant should it be determined that no adjustment be made to the Additional Rent in the Tenants favor.
If any rent or Additional Rent set forth hereunder is not paid on or before the due date on two (2) separate occasions, then at Landlord’s option, Landlord may demand thereafter that all rent and Additional Rent be paid quarterly in advance. Nothing shall be construed herein as requiring Landlord to accept any rent or Additional Rent as rendered after the due date.
Section 3.3. Past due Minimum Rent and Additional Rent. If Tenant shall fail to pay within 10 days any Minimum Rent or other charges designated as Additional Rent in Section 3.2, Tenant shall pay to Landlord on demand a late charge of five percent (5%) of the late amount. Failure to pay such late charge will be an event of default and such unpaid amounts shall bear interest from the due date thereof to the date of payment at the highest no usurious rate permitted by applicable law. In addition, if any payment made by Tenant in the form of a check is dishonored by the bank upon which it is written for any reason, then a charge of FlITY AND NO/100 DOLLARS ($50.00) for each dishonored check will be charged to Tenant, together with late charges and interest as above so described. Further, if checks from Tenant are dishonored on any two separate occasions, Landlord shall have the right to demand that all future payments required pursuant to this Lease be made in cash or by certified funds. Nothing shall be construed herein as requiring Landlord to accept any rent or Additional Rent as rendered after the due date.
Section 3.4. Net Lease. Intentionally omitted
ARTICLE4
USE OF PREMISES
Section 4.1. Use. During the entire term of this Lease, Tenant shall use the Premises solely for the purpose of conducting business in accordance with Section 1.11 hereof. Tenant shall occupy the Premises without delay on the Commencement Date and shall continuously conduct the above stated business therein. Tenant shall not use, pennit or suffer the use of the Premises for any other business or purpose. Tenant shall not sell, display or advertise any merchandise not specifically permitted by this Section. Tenant further agrees to conduct its business in the Premises under the name of or trade name as set forth in Section 1.06 hereof and under no other name or trade name except such as may be first approved by Landlord in writing.
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Section 4.2. Continued Use. Tenant covenants to operate the business described above during the entire term of this Lease, continuously, in one hundred percent (100%) of the Premises during each hour of the entire Lease tenn when Tenant is required under this Lease to be open for business with due diligence and efficiency. Tenant’s business will be conducted with a full staff. Failure of Tenant to strictly adhere to the provisions of this Section will result in damages to Landlord, including, but not limited to, diminished salability, mortgage ability and economic value. Accordingly, if such noncompliance continues for a period of five (5) or more days, it shall be, at Landlord’s option, an “Event of Default” (as defined in Section 17.1 hereof) and Landlord shall have the right to undertake any remedy provided in this Lease. Tenant shall not perform any acts or carry on any practices which damage the Center or its customers, employees or invitees, or which will result in an increase to casualty insurance premiums.
Section 4.3. Compliance with Laws and Regulations. Tenant shall, at Tenant’s sole cost and expense, comply with all laws, statutes, ordinances, rules and regulations (including orders concerning enviromnental protection) of all federal, state, county, municipal, and other applicable governmental authorities, now in force, or which may hereafter be in force, pertaining to Tenant or its use of the Premises (collectively the “Regulations’’), and shall observe all. Tenant shall indemnify, defend and save Landlord harmless against any and all claims, penalties, fines, costs, expenses or damages including reasonable attorneys’ fees which Landlord may hereafter be liable for, suffer, incur, or pay arising out of any act, activity or violation of any applicable laws, false or breached warranty and representation on the part of Tenant, its agents, employees or assigns, resulting from Tenant’s failure to observe, keep and pcrfonn the Regulations and obligations in this Section including those arising out of any handling, storage, treatment, transportation, disposal, release or threat of release of hazardous waste or hazardous substances from or on the Premises.
In addition, Tenant’s obligations to comply with all Regulations also includes observance, compliance and execution of all laws, rules, requirements, orders, directives, guidelines, ordinances and any regulations dealing with handicap accessibility, such as the Americans with Disability Act {“ADA”}, Florida Americans with Disabilities Accessibility Implementation Act (“FADA”) and dealing with employee safety, such as the Occupational Safety and Health Act (“OSHA”).
Section 4.4. Affirmative Covenants of Tenant Relative to Use of the Premises.
A. Tenant covenants to comply with the following:
1. No auction, fire, bankruptcy, going-out-of-business, relocation, or other distress sales may be conducted in the Premises without the prior written consent of Landlord, and Tenant shall warehouse, store or stock in the Premises only such goods, wares and merchandise as Tenant intends to offer for sale at retail in, at, from or upon the Premises, and Tenant’s necessary equipment and supplies.
2. Tenant will keep all mechanical apparatus free of vibration and noise which may be transmitted beyond the confines of the Premises. Tenant will not permit or suffer any conduct, noise or nuisance on or about the Premises which may annoy or disturb any persons occupying adjacent premises. This covenant shall restrict Tenant from utilization of any advertising medium which can be heard or experienced outside of the Premises, including, without limiting the generality of the foregoing, flashing lights, search lights, loudspeakers, phonographs, radios or televisions. No radio, television or other communication antenna equipment or device is to be mounted, attached or secured to any part of the roof, exterior surface or anywhere outside the Premises unless Landlord has given its prior written consent.
3. Tenant will keep the Premises and the outside areas adjoining the Premises, free from all insects, rodents, vermin and other pests, litter, dirt and obstruction and not display or sell merchandise on sidewalks, malls or other Common Areas without the prior written consent of Landlord.
4. All store floor area of Tenant, including vestibules, outside docks, entrances and exits, doors, fixtures, storefront windows, storefront window areas and plate glass shall be maintained in a safe, neat and clean condition.
5. Tenant will not permit or suffer the Premises, or the walls or floors thereof, to be endangered by overloading.
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6. Tractor trailers are to be removed from the loading areas after unloading. No parking or storing of such trailers will be pennitted in the Center.
7. Except for small parcel packages, no deliveries will be pennitted through the front entrance of the Premises unless Tenant does not have a rear service door. In such event, prior arrangements must be made with the resident Center supervisor for delivery at the Premises. Merchandise being received shall immediately be moved into the storage area of Tenant’s Premises and not be left in the service corridors or receiving areas. At no time will deliveries be temporarily stored in the Common Areas.
8. Neither Tenant nor Tenant’s agents or employees shall, in or on any part of the Common Area, except with approval of Landlord;
i. Vend, peddle or solicit orders for sale or distribution of any merchandise, device, service, periodical, book, pamphlet or other matter whatsoever;
11. Exhibit any sign, placard, banner, notice or other written material, except as approved in writing by Landlord;
111. Distribute any circular, booklet, handbill, placard or other advertising material;
1v. Solicit membership in any organization, group or association or contribution for any purpose;
v. Create a nuisance, nor take any action in the exclusive judgment of Landlord that would constitute a nuisance or would disturb or endanger other tenants of the Center, or unreasonably interfere with their use of their respective premises, nor do anything which would tend to injure the reputation of the Center;
vi. Use any Common Area for any purpose when none of the other retail establishments within the Center are open for business;
vii. Throw, discard or deposit any paper, glass or extraneous matter of any kind, except in designated receptacles, or create litter or hazards of any kind;
vm. Deface, damage or demolish any sign, light standard or fixture, landscaping materials or other improvement within the Center, or the property of customers, business invitees or employees situated within the Center.
9. All garbage and refuse shall be kept in the kind of containers designated by Landlord and shall be placed outside the Premises within said containers prepared for collection in such manner and at such times and places specified by Landlord. The cost of such removal shall be borne by Tenant, and should Landlord detem1ine to provide a service for picking up garbage and refuse, Tenant shall use and pay for it in the manner described by Landlord. Tenant shall be subject to fines ofup to FIFTY AND NOil 00 DOLLARS ($50.00) per occurrence for not disposing trash in the manner so described by Landlord.
10. All deliveries of goods and fixtures for use in the Premises shall be done only at such times, in the areas, and through the entrances designated for such purpose by Landlord.
B. Landlord reserves the right from time to time to suspend, amend or supplement the foregoing rules and regulations, and to adopt and promulgate additional rules and regulations applicable to the Premises. Notice of such rules and regulations and amendments and supplements thereto, if any, shall be given to Tenant.
C. Tenant agrees to comply with all additional, amended and supplemental rules and regulations upon notice of same from Landlord.
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ARTICLES
COMMON AREAS
Section 5.1. Control. Landlord shall have the exclusive control and management of all Common Areas within the Center, including parking areas/structures, access roads, truck ways, driveways, loading dock and areas, delivery areas, elevators, escalators, service corridors, pedestrian sidewalks, malls, courts and ramps, landscaped areas, retaining walls, docks, boardwalks, stairways, lighting facilities and other areas and improvements provided by Landlord for the general use in common of tenants and their customers and stores in the Center. Landlord shall have the full right and authority to employ all personnel and from time to time to establish, modify and enforce reasonable rules and regulations with respect to the operation and maintenance of all Common Areas.
Landlord shall have the right from time to time to: change the sizes, locations, shapes and arrangements of parking areas and other Common Areas; restrict parking by employees to designated areas; construct, surface, subsurface or elevated parking areas and facilities; establish and from time to time change the level or grade of parking surfaces; enforce parking charges (by meters or otherwise) with appropriate provisions for ticket validating; organize and operate promotions, entertainment or any other activity in the Common Areas; permit temporary and permanent retail kiosks in the Common Areas, or from time to time change the location of such kiosks; and do and perform such other acts in and to said areas and improvements as Landlord, in its sole discretion, reasonably applied, deems advisable for the use thereof by tenants and their customers. Tenant agrees to cooperate with Landlord, permitting Landlord to accomplish any such maintenance, repairs, alterations, additions or construction.
Section 5.2. Use of Common Areas. Tenant and its business invitees, employees and customers shall have the non-exclusive right, in common with Landlord and all others to whom Landlord has granted or may hereafter grant rights, to use the Common Areas subject to such reasonable regulations as Landlord may from time to time impose and the rights of Landlord set forth above. Tenant shall abide by all rules and regulations and cause its concessionaires, officers, employees, agents, customers and invitees to abide thereby. Landlord may at any time close temporarily any Common Areas to make repairs or changes, prevent the acquisition of public rights therein, discourage non-customer parking, or for other reasonable purposes and such action shall not entitle Tenant to any compensation or diminution or abatement of Minimum Rent or any Additional Rent hereunder, nor shall such diminution of such area be deemed constructive or actual eviction. Tenant shall furnish Landlord license numbers and descriptions of cars used by Tenant and its concessionaires, officers and employees. Tenant shall not interfere with Landlord’s or other tenants’ rights to use any part of the Common Areas.
Section 5.3. Expense of Operating, Maintaining and Repairing the Business Center and Common Areas. “Operating Costs”, for the purpose of this Lease, shall be and mean the total costs and expenses of operating, managing, repairing and maintaining the Center and the Common Areas and all improvements thereon and appurtenances thereto, including, without limitation, such maintenance and repair as shall be required in Landlord’s judgment to preserve such areas in the same condition and status as they were at the time of completion of the original construction and installation; pedestrian traffic direction and control (including maintenance and repair of any stairs, elevators or escalators); costs and expenses of planting, maintaining, replanting and replacing flowers, plants and landscaping; cost and expenses of pest control and extermination services for the Center; cost and expenses of maintenance, repair, replacement of the heating, ventilation and air conditioning systems servicing the Center including the Premises and other premises within the Business Center; water and sewer charges; interior and exterior painting; required licenses and permits; costs and expenses of supplies; costs of seasonal holiday decorations; the operation ofloudspeakers and any other equipment supplying music; exterior illumination of the Center and the outside area and maintenance of fixtures and the cost of light bulbs for both the interior and exterior lighting; illumination, maintenance, replacement and rental of signs, whether or not such signs are located on the Center; repairs, maintenance and replacement of lifting and other equipment and sanitary control facilities; parking lot resurfacing and line restriping; removal of trash, rubbish, garbage and other refuse; all costs and expenses of fire protection and sprinkler maintenance; security costs, traffic control and policing; depreciation of the capital cost of and rents for the leasing of any machinery, equipment (including lighting) and vehicles used in connection with operation, management or maintenance; repair and replacement of water lines, sanitary and stom1sewer lines; all charges for utilities services (including the cost of heating, cooling, ventilating, water and sewer and lighting of the mall area); management and professional fees and the cost of management ersonnel and supervision (including property manager, promotion director, staff and office expenses and rents, wages, benefits, unemployment and social security taxes) special assessments; fees for audits, permits and licenses; any and all governmental impositions and surcharges; and administrative charges equal to fifteen percent (15%) of the total costs of operating (operating costs include real estate taxes and insurance), managing and maintaining the Center and the Common Areas and all other associated items of maintenance, capital repairs and/or improvements, repairs and operation.
Section 5.4. Tenant’s Additional Rent. This is a gross lease and the “normal” operating costs are included in the Minimum rent, except if the Tenant as a direct result of the activities or clients of the tenant increase the costs, than the Tenant shall be billed accordingly.
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ARTICLE 6
TAXES
Section 6.1. Tenant’s Additional Rent.Tenant’s proportion of Real Estate taxes is included in the Minimum rent. In the event any governmental authority having jurisdiction shall levy any additional assessment against the real estate which is now or hereafter becomes a part of the Center for public bettern1ents or improvements, Tenant shall also pay to Landlord as Additional Rent its proportionate share of such assessment which proportionate share shall be calculated by multiplying the total assessment by the same fraction as stated in the preceding sentence. Landlord shall have the option to take the benefit of any statute or ordinance permitting any such assessment for public betterments or improvements to be paid over a period of time in which case Tenant shall be obligated to pay only the said fraction of the installments of any such assessments which shall become due and payable during the tenn of this Lease.
In the adjushnent years the minimum rent will be adjusted for the Tenants portion of the increase in Real Estate taxes in excess of the Base year of 2021. This will be billed monthly in the minimum rent.
Section 6.2. Other Taxes. Tenant shall pay its proportionate share, as defined in this Article 6, of all sales, use and other taxes imposed by any governmental authorities upon the manufacture, sale, use, transmission, distribution or other process necessary or incidental to the furnishing of sewer, water, electricity, and domestic water or other services to the Premises. Tenant shall pay before delinquency all personal property taxes and assessments on the furniture, fixtures, equipment, and other property of Tenant located in the Premises and on additions and improvements in the Premises belonging to Tenant. Tenant shall also pay, as Additional Rent, all sales tax assessed against the rent stated herein by governmental authority, even though the taxing statute or ordinance may purport to impose such sales tax against Landlord. The payment of sales tax shall be made by Tenant on a monthly basis, concurrently with payment of the Minimum Rent.
ARTICLE 7
INSURANCE
Section 7.1. Insurance Coverage by Landlord. Landlord shall maintain during the tenn of this Lease public liability insurance on the Common Areas providing coverage of not less than ONE MILLION AND NO/I00 DOLLARS ($1,000,000.00) for personal injury or death arising out of any one occurrence, and property damage liability insurance ofnot less than ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00); Landlord shall also maintain during the tenn insurance for fire, extended coverage, flood, windstonn, vandalism and malicious mischief, insuring the improvements located on the Center, including the Premises and all appurtenances thereto (excluding wall covering, floor covering and drapes). Landlord may also maintain (i) rent loss insurance with respect to all tenants in the Center against loss of tenant payments in the aggregate amount equal to not more than twenty-four (24) times the sum of the average monthly amount estimated from time to time by Landlord to be payable by such tenants as tenant payments pursuant to the leases of such tenants in the Center; and (ii) such other insurance as Landlord deems reasonably necessary or desirable to protect the Center against loss.
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Section 7.2. Tenant’s Additional Rent. Tenant’s proportionate share of such insurance premiums are included in the minimum rent.
In the adjustment years, the minimum rent will be adjusted for the Tenants portion of the increase in Insurance in excess of the Base year of 2021. This will be billed monthly in the minimum rent.
Section 7.3. Insurance Coverage by Tenant. Tenant agrees to carry and keep in full force and effect, during the entire term hereof, bodily injury, public liability insurance on and adjacent to the Premises during the tem1for limits of not less than:
$1M Each Occurrence; $2M Products and Completed Operations and $2M General Aggregate. property damage insurance in an amount not less than ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($150,000.00); and workers compensation insurance in the maximum amount pennitted under Florida law. Tenant further agrees to carry insurance against fire; flood and such other risks as are, from time to time, included in standard extended coverage insurance, including insurance against sprinkler damage, vandalism and malicious mischief. The proceeds of such insurance, so long as this Lease remains in effect, shall be used to repair or replace the fixture and equipment so insured for the full replacement value (without provision for coinsurance) of all of Tenant’s merchandise, trade fixtures, fumisliings, wall coverings, carpeting, drapes, equipment and all other items of personal property of Tenant located on or within the Premises. The replacement of any plate glass damaged or broken from any cause whatsoever in and about the Premises shall be Tenant’s responsibility. Tenant shall, during the entire term hereof, keep in full force and effect a policy of plate glass insurance covering all the plate glass of the Premises, in amounts satisfactory to Landlord. All policies shall name Landlord, any person, firms, or corporations designated by Landlord, and Tenant as insured, and shall contain a clause that the insurer will not cancel or change the insurance without first giving Landlord ten ( I0) days prior written notice. The insurance carrier providing the insurance as required hereunder shall be satisfactory to Landlord in Landlord’s sole discretion and licensed in the State of Florida. Such insurance carrier shall at all times during the te1m of this Lease have the policyholder’s rating of not less than “A+/7” in the most current edition of Best’s Insurance Reports. Tenant shall provide Landlord with copies of the policies or certificates evidencing that such insurance is in full force and effect and stating the terms thereof. The limits of such insurance shall not, under any circumstances, limit the liability of Tenant hereunder. If any insurance required of Tenant under this Lease is furnished by Tenant under a blanket policy carried by Tenant, such blanket policy shall contain an endorsement that (i) names Landlord as an additional insured; (ii) references the Premises; and (iii) guarantees a minimum limit available for the Premises equal to the insurance amounts required in this Lease. In the event Tenant fails to procure, maintain and/or pay for the insurance required by this Lease, at the times and for the durations specified in this Lease, Landlord shall have the right, but not the obligation, at any tin1e and from time to time, and without notice to Tenant, to procure such insurance and/or pay for the premiums for such insurance in which event Tenant shall repay Landlord immediately upon demand by Landlord as Additional Rent hereunder, all sums so paid by Landlord together with the interest thereon and any costs or expenses incurred by Landlord in connection therewith, without prejudice to any other rights and remedies of the Landlord under this Lease. Each policy evidencing the insurance to be carried by Tenant pursuant to this Lease shall contain a clause that such policy and the coverage evidenced thereby shall be primary with respect to any policies carried by Landlord and that any coverage carried by Landlord shall be excess insurance.
Section 7.4. Waiver of Subrogation. Landlord and Tenant waive, unless said waiver should invalidate any such insurance, their right to recover damages against each other for any reason whatsoever to the extent the damaged property owner recovers indemnity from its insurance carrier. Any insurance policy procured by either Tenant or Landlord which does not name the other as a named insured shall, if obtainable, contain an express waiver of any right of subrogation by the insurance company, including but not limited to, Tenant’s worker’s compensation carrier, against Landlord or Tenant, whichever the case may be. All public liability and property damage policies shall contain an endorsement that Landlord, although named as an insured, shall nevertheless be entitled to recover the damages caused by the negligence of Tenant.
Section 7.5. Tenant’s Contractor’s Insurance. Tenant shall require any contractor of Tenant performing work on the Premises to carry and maintain, at no expense to Landlord:
A. Comprehensive general liability insurance, including contractor’s liability coverage, contractual liability coverage, completed operations coverage, broad form property damage endorsement and contractor’s protective liability coverage to afford protection, with limits for each occurrence of not less than TWO MILLION AND NO/I00 DOLLARS ($2,000,000.00) with respect to personal injury or death, and ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) with respect to property damage; and B. Workers’ compensation or similar insurance in form and amounts required by law.
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Section 7.6. Increase in Fire Insurance Premium. Tenant agrees that it will not keep, use, sell or offer for sale in or upon the Premises any article which may be prohibited by the standard form of fire and extended risk insurance policy. Tenant agrees to pay any increase in premiums for fire and extended coverage insurance that may be charged during the term of this Lease on the amount of such insurance which may be carried by Landlord on the Premises or the building of which they are a part, resulting from the type of merchandise sold by Tenant in the Premises or resulting from Tenant’s use of the Premises, whether or not Landlord has consented to the same. In determining whether increased premiums are the result of Tenant’s use of the Premises, a schedule issued by the organization making the insurance rate on the Premises, showing the various components of such rate, shall be conclusive evidence of the several items and charges which make up the fire insurance rate on the Premises. Tenant agrees to promptly make, at Tenant’s cost, any repairs, alterations, changes and/or improvements to equipment in the Premises required by the company issuing Landlord’s fire insurance so as to avoid the cancellation of or the increase in premiums on said insurance.
In the event Tenant’s occupation and use of the Premises causes any increase of premiwn for the fire, boiler and/or casualty rates on the Premises or any part thereof above the rate for the least hazardous type of occupancy legally permitted in the Premises, Tenant shall pay the additional premium on the fire, boiler and/or casualty insurance policies by reason thereof. Tenant also shall pay in such event, any additional premium on the rent insurance policy that may be carried by Landlord for its protection against rent loss through fire. Bills for such additional premiums shall be rendered by Landlord to Tenant at such times as Landlord may elect and shall be due from, and payable by, Tenant when rendered, and the amount thereof shall be deemed to be Additional Rent.
ARTICLES
MAINTENANCE AND REPAIR
Section 8.1. By Landlord. Landlord agrees to keep in good order, condition and repair (ordinary wear and tear excepted) the exterior foundations and structural portions ofthc Premises (except doors, plate glass and windows), including gutters, down spouts, storm water drainage, all electric & plumbing and other service pipes, lines and mains leading to and from the Premises, except for any damage to any of the foregoing caused by any act or negligence of Tenant, its employees, agents, customers, invitees, licensees or contractors. Landlord shall not be responsible to make any plumbing or electrical repairs or replacements or other improvements or repairs of any kind within the Premises, except as may be expressly set forth in this Lease. Landlord shall repair and replace HVAC units as needed. In the event that the Premises need repairs required to be made by Landlord as provided for in this Section 8.1, Tenant agrees to notify Landlord immediately in writing of such need. Then Landlord will, in a reasonable amount of time, initiate and complete said repairs. Landlord shall have no liability for (i) any damage or injury arising out of any condition or occurrence causing a need for such repairs; (ii) damages or injuries arising from the failure to make such repairs; and (iii) damages or injuries arising from defective workmanship or materials in making any such repairs. Any such repair and maintenance obligations of Landlord shall be included in the “Operating Costs”described in Section 5.3 hereinabove.
Section 8.2. By Tenant.
A. Tenant agrees that from and after the date that possession of the Premises is delivered to Tenant and until the end of the term, Tenant will be responsible for all repairs, maintenance and replacements to the Premises other than those specifically required to be performed by Landlord in Section 8.1, including, but not limited to, the interior and exterior portions of all doors, windows, plate glass and showcases surrounding the Premises; the mechanical, plumbing, heating and electrical equipment and s stems servicing the Premises, whether located in, on or adjacent to the Premises; partitions and all other fixtures, appliances, grease traps and facilities furnished by Tenant or Landlord. Tenant shall not, however, be responsible for repair of any damage caused by any act or negligence of Landlord, its employees or agents. Tenant shall be required to make structural repairs or alterations where such repair or alteration is the result of the business operation maintained by Tenant in the Premises and which may be required by governmental rules, orders or regulations. Landlord, without notice, may, but shall not be obligated to, perform Tenant’s obligations and add the cost of such work to the next installment of Minimum Rent due hereunder.
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B. Tenant will not install any equipment which exceeds the capacity of the utility lines leading into the Premises or the building of which the Premises constitute a portion.
C. Tenant, its employees, or agents, shall not mark, paint, drill or in any way deface any walls, ceilings, partitions, floors, wood, stone or ironwork without Landlord’s written consent.
D. Tenant shall give Landlord prompt written notice of any accident, fire or damage occurring on or to the Premises.
E. Neither Landlord nor Landlord’s agents or servants shall be liable for any damages caused by or growing out of any breakage, leakage, or defective condition of the electric wiring, air conditioning or heating pipes and equipment, closets, plumbing, appljances, sprinklers, other equipment, or other facilities, serving the Premises. Neither Landlord nor Landlord’s agents or servants shall be liable for any damages caused by, or growing out of any defect in the Center or any part thereof, or in said building or any part thereof, or in said Premises or any part thereof for fire, rain, wind or other cause.
F. All property belonging to Tenant or any occupant of the Premises or the Center shall be there at the risk of Tenant or such other person only, and Landlord shall not be liable for damage thereto or theft or misappropriation thereof.
G. Tenant shall not transmit, receive, or permit to be transmitted or received any electromagnetic, microwave or other raruation which is harmful or hazardous to any person or property in, on or about the Premises, or anywhere else or which interferes with the operation of any electrical, electronic, telephonic or other equipment wherever located, whether on the Premises or anywhere else.
Section 8.3. Damage to Premises. Tenant will repair promptly at its expense any damage to the Premises and, upon demand, shall reimburse Landlord (as Additional Rent) for the cost of the repair of any damage elsewhere in the Center, caused by or arising from the installation or removal of property in or from the Premises, regardless of fault or by whom such damage shall be caused (unless caused by Landlord, its agents, employees or contractors). If Tenant shall fail to commence such repairs within five (5) days after notice to do so, Landlord may make or cause the same to be made and Tenant agrees to pay to Landlord promptly upon Landlord’s demand, as Additional Rent, the cost thereof with interest thereon at the rate set forth in Section 2.8.
Section 8.4. Surrender of Premises. At the expiration of the term of this Lease, Tenant shall (i) surrender the Premises in the same condition as existed upon the completion of all Tenant improvements as set forth in Section 3.2. ordinary wear and tear excepted, and (ii) deliver all keys for and all combinations on locks, safes and vaults in the Premises to Landlord at Landlord’s notice address.
ARTICLE 9
FIXTURES, PERSONAL PROPERTY AND SIGNS
Section 9.1. Fixtures and Personal Property. Any trade fixtures, signs and other personal property of Tenant not permanently affixed to the Premises shall remain the property of Tenant, and Landlord agrees that Tenant shall have the right, provided Tenant is not in default under the terms of this Lease, at any time and from time to time, to remove any and all of its trade fixtures. signs and other personal property which it may have stored or installed in the Premises, including, but not limited to, counters, shelving, showcases, mirrors and other movable personal property. Nothing contained in this Article shall be deemed or construed to permit or allow Tenant to remove so much of such personal property, without the immediate replacement thereof with similar personal property of comparable or better quality, as to render the Premises unsuitable for conducting the type of business for which the Premises were leased. Tenant, at its expense, shall immediately repair any damage occasioned to the Premises by reason ofremoval of any such trade fixtures, signs and other personal property, and upon the last day of the Lease term or a date of earlier termination of this Lease, shall leave the Premises in a neat and broom-clean condition, free of debris. All trade fixtures, signs and other personal property installed in or attached to the Premises by Tenant must be new or completely reconditioned when so installed or attached.
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Tenant hereby conveys to Landlord a security interest in and to all of Tenant’s inventory, equipment, fixtures, general intangibles, instruments, goods, documents, chattel paper and accounts now or hereafter located at the Leased Premises or otherwise. Tenant agrees to execute such financing statements evidencing the foregoing upon request of Landlord. However, Tenant hereby irrevocably appoints Landlord as Attorney in Fact for Tenant, with full power and authority to execute and deliver, in the name of Tenant, any financing statements or other instruments required by Landlord.
All improvements to the Premises by Tenant, including, but not limited to, light fixtures, floor coverings and partitions, but excluding trade fixtures and signs, shall become the property of Landlord upon the expiration or earlier termination of this Lease.
Section 9.2. Signs. Tenant will not place or permit to be placed or maintained on any exterior door, wall or window of the Premises any sign, awning or canopy, or advertising matter or other thing of any kind, and will not place or maintain any decoration, letter or advertising matter on the glass of any window or door, nor will any illuminated sign be placed in the window display area of the Premises without first obtaining Landlord’s written approval and consent, which may be arbitrarily withheld.
Tenant shall promptly erect a sign within the area designated by Landlord, which sign shall be subject to the prior written approval of Landlord. Tenant further agrees that such signs, awning, canopy, decoration, lettering, advertising matter or other thing as may be approved shall be maintained in good condition and repair at all times and shall conform to the criteria established from time to time by Landlord for the section of the Center within which the Premises is located.
ARTICLE 10
UTILITIES
Section 10.1. Utility Services.
A. Tenant shall be solely responsible for and promptly and timely pay all charges for use or consumption of all utility services used or consumed within the Premises. If any such charges are not paid when due, Landlord may, at its option, pay the same (but Landlord shall have not obligation to pay same), and any amount so paid by Landlord shall thereupon become due to Landlord from Tenant as Additional Rent. If the Premises have separate meters for gas and electricity, Tenant will be the responsible party on the utility bill. Landlord reserves the right to install flow meters on the water lines and charge Tenant accordingly for its use of water. In no event shall Landlord be liable for an interruption or failure in the supply of any such utilities to the Premises, including any interruption resulting from Tenant=s failure to pay Landlord or the utility provider for the service to the Premises, it being acknowledged by Tenant that Landlord is under no obligation to advance such cost for Tenant in the event Tenant fails to pay same. Tenant shall also be required prior to taking possession of the Premises to pay to Landlord any and all water connection charges, any metering charges and all other utility fees and utility allocation expenses for the Premises if Landlord has been required by the governing municipality to pay these charges. In the event Landlord bears any responsibility to the utility provider for service being provided to the Premises, Tenant shall be required to deliver to Landlord a sum of money equal to the estimated cost of two month=s service or an amount equal to the deposit normally required by the utility provider for a similar space as determined by Landlord, which amount Landlord shall hold as an additional security deposit and which Landlord shall deliver to Tenant at the end of the Lease Term provided Tenant has paid in full all utility service to the Premises.
B. In the event of imposition of any government controls, rules, regulations, or restrictions on the use or consumption of energy or other utilities during the term of this Lease, both Landlord and Tenant shall be bound thereby. In the event of a difference in interpretation by Landlord and Tenant of any such controls, Landlord’s interpretation shall prevail, and Landlord shall have the right to enforce compliance therewith, including, without limitation, the right of entry into the Premises to effect compliance.
C. The parties acknowledge that safety and security devices, services, and programs provided by Landlord, if any, while intended to deter crime and ensure safety, may not in given instances prevent theft or other criminal acts or ensure safety of persons or property. The risk that any safety or security device, service, or program may not be effective, or may malfunction, or be circumvented by a criminal, is assumed by Tenant with respect to Tenant’s property and interests; and Tenant shall obtain insurance coverage to the extent Tenant desires protection against such criminal acts and other losses. Tenant agrees to cooperate in any reasonable safety or security program developed by Landlord or required by Law.
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ARTICLE 11
ASSIGNING, MORTGAGING, SUBLETTING, CHANGE IN OWNERSHIP
Section 11.1. Consent Required. Tenant shall not sell, transfer, assign, sublet, enter into license or concession agreements, change ownership, pledge, and mortgage or hypothecate this Lease or Tenant’s interest in and to the Premises (hereafter “Disposition”) without the prior written consent of Landlord. Any Disposition without Landlord’s written consent shall be void and confer no rights upon any third person. Without in any way limiting Landlord’s right to refuse to give such consent for any other reason or reasons, Landlord reserves the right to refuse to give such consent if Tenant is in default or if in Landlord’s reasonable business judgment the quality of merchandising operation on the Premises is or may be in any way adversely affected during the term of the Lease or the financial worth of the proposed new tenant is less than that of Tenant or of Tenant’s guarantor, as the case may be. Nothing in this Section shall relieve Tenant and any guarantor from its covenants and obligations for the term of this Lease. Upon any request to assign or sublet, Tenant will pay to Landlord an Assignment/Subletting Fee of$750.00 plus, on demand, a sum equal to all of Landlord’s costs, including attorney’s and paralegal fees, incurred in investigating and considering any proposed or purported assignment or pledge of this Lease or sublease of any of the Premises, regardless of whether Landlord shall consent to, refuse consent, or determine that Landlord’s consent is not required for, such assignment, pledge or sublease. No interest in this Lease shall pass to any trustee or receiver in bankruptcy, to any estate of Tenant, to any assignee of Tenant for the benefit of creditors or to any other party by operation of law or otherwise without Landlord’s written consent. If this Lease is assigned, or if the Premises or any part thereof is underlet or occupied by any party other than Tenant, Landlord may collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the rent herein reserved, but no such assignment, underletting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupant as Tenant, or a resale of Tenant from the further perfonnance by Tenant of the covenants on the part of Tenant herein contained. This prohibition against assignment or subletting shall be construed to include prohibition against any assignment or subleasing by operation of law, legal process, receivership, bankruptcy or otherwise, whether voluntary or involuntary and a prohibition against any encumbrance of all and any part of Tenant’s leasehold interest. Notwithstanding any assignment or sublease, Tenant shall remain fully liable on this Lease and shall not be released from performing any of the tenns, covenants and conditions hereof, and said sub lessee if consented to by Landlord, shall stringently comply with all Lease tenns and conditions.
Section 11.2. Required Documentation. Each Disposition to which there has been consent shall be by an instrument in writing in form satisfactory to Landlord, and shall be executed by the transferor, assignor, sub lessor, licensor, concessionaire, pledgor, hypothocator or mortgagor in each instance as the case may be; and each transferee, assignee, sub lessee, licensee, concessionaire, pledgee or mortgagee shall agree in writing for the benefit of Landlord to assume, to be bound by and to perform the tem1s, covenants and conditions of this Lease to be done, kept and perfonned by Tenant, including the payment directly to Landlord of all amounts due or to become due under this Lease. Failure to obtain in writing Landlord’s consent or failure to comply with the provisions of this Article shall operate to prevent any such Disposition from becoming effective.
Section 11.3. Change in Ownership. If Tenant is a corporation, an unincorporatedassociation or partnership, the transfer, assignment or hypothecation of any stock or interest in such corporation, association or partnership in the aggregate in excess of twenty-five percent (25%) shall be deemed an assignment within the meaning and provisions of this Article and shall be an Event of Default unless Tenant first obtains Landlord’s written consent.
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ARTICLE 12
QUIET ENJOYMENT
Section 12.1. Landlord’s Covenant. Provided Tenant pays in a timely manner the Rents and other amounts required by this Lease, and observes and performs all the covenants, terms and conditions of this Lease, Tenant shall peaceably and quietly hold and enjoy the Premises for the Lease term without interruption by Landlord or any person or persons claiming by, through or under Landlord, subject, nevertheless, to the terms and conditions of this Lease.
ARTICLE 13
DAMAGE AND DESTRUCTION
Section 13.1. Damage to Premises. If the Premises are damaged or destroyed or rendered partially untenantable for their accustomed use, without fault of Tenant, by fire or other casualty insured under the coverage which Landlord is obligated to carry pursuant to Section 7.1 hereof, Landlord shall promptly repair the same to substantially the condition they were in immediately prior to the happening of such casualty (excluding Tenant’s stock in trade, fixtures, furniture, furnishings, carpeting, wall covering, floor covering and drapes); to the extent insurance proceeds are available. If insurance proceeds are unavailable for any reason, Landlord may terminate this Lease by written notice to Tenant within thirty (30) days after it determines that such insurance proceeds are not available for repairs and restoration. From the date of such casualty until the Premises are so repaired and restored, the Minimum Rent shall abate in such proportion as the part of said Premises destroyed or rendered untenantable bears to the total Premises. If Landlord repairs or restores the Premises, then Tenant shall repair and replace its merchandise, trade fixtures, furnishings, equipment, carpeting, wall covering, floor covering and drapes in a manner and to at least a condition equal to that prior to its damage or destruction, said repairs and replacement shall be completed within sixty (60) days after Landlord completes its repairs. Except as expressly provided to the contrary, this Lease shall not terminate nor shall there be any abatement of Minimum Rent or other charges or items of Additional Rent as the result of a fire or other casualty.
Section 13.2. Destruction of Center. ln the event that fifty percent (50%) or more of the gross leasable area of the Center shall be damaged or destroyed by fire or other cause, notwithstandingany other provision contained herein and that the Premises may be unaffected by such fire or other cause, Landlord shall have the right, to be exercised by notice in writing delivered to Tenant within one hundred twenty (120) days after said occurrence, to elect to cancel and terminate this Lease.
Upon the giving of such notice to Tenant, the term of this Lease shall expire by lapse of time upon the third day after such notice is given, and Tenant shall vacate the Premises and surrender the same to Landlord.
ARTICLE 14
EMINENT DOMAIN
Section 14.1. Condemnation. In the event the entire Premises shall be appropriated or taken under the power of eminent domain by any public or quasi-public authority, this Lease shall terminate and expire as of the date of such taking, and both Landlord and Tenant shall thereupon be released from any further liability and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease. In the event more than fifty percent (50%) of the square footage of floor area of the Premises is taken under the power of eminent domain by any public or quasi-public authority, or if by reason of any appropriation or taking, regardless of the amount so taken, the remainder of the Premises is not usable for the purposes for which the Premises were leased, then either Landlord or Tenant shall have the right to terminate this Lease as of the date Tenant is required to vacate a portion of the Premises so taken upon giving notice to the other in writing of such election with sixty (60) days after the date of such taking. In the event of such tennination, both Landlord and Tenant shall thereupon be released from any further liability to one another.
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Section 14.2. Damages. Whether or not this Lease is terminated, Landlord shall be entitled to the entire award or compensation in any condemnation proceedings, but nothing herein shall be deemed to affect Tenant’s right to pursue from the condemning authority, but not from Landlord, compensation or damages for its fixtures and personal property. If this Lease is tenninated as provided above, all items of Minimum Rent, Additional Rent and other charges for the last month of Tenant’s occupancy shall be prorated, and Landlord agrees to refund to Tenant any Minimwn Rent, Additional Rent or other charges paid in advance.
Section 14.3. Restoration. If this Lease is not terminated, Tenant shall remain in that portion of the Premises which shall not have been appropriated or taken, and Landlord agrees, at Landlord’s cost and expense, as soon as reasonably possible, to restore the remaining portion of the Premises to a complete unit of similar quality and character as existed prior to such appropriation or taking; thereafter, the Minimum Rent provided for in Article 3 shall be adjusted on an equitable basis, taking into account the relative value of the portion taken as compared to the portion remaining. For the purpose of this Article, a voluntary sale or conveyance in lieu of condemnation, but under threat of condemnation, shall be deemed an appropriation or taking under the power of eminent domain.
ARTICLE 15
RELOCATION OF PREMISES
Section IS.I Relocation. If the Premises contain less than 10,000 square feet, Landlord shall have the right to relocate the Premises to another part of the Center in accordance with the following: (i) Landlord shall give Tenant at least thirty (30) days’ notice of Landlord’s intention to relocate the Premises; (ii) the new premises shall be substantially the same in size, dimensions, configuration, and decor as the Premises and, if the relocation occurs after the Commencement Date, shall be placed in that condition by Landlord at its cost; (iii) upon completion of such relocation, the new premises shall become the “Premises” under this Lease; (iv) all reasonable out of pocket costs incurred by Tenant as a result of the relocation shall be paid by Landlord; (v) if the new premises are smaller than the Premises as they existed before the relocation, the Minimum Rent and Additional Rent shall be reduced proportionately; and (vi) the parties hereto shall immediately execute an amendment to this Lease setting forth the relocation of the Premises and the reduction of the Minimum Rent and Additional Rent, if any. Tenant hereby waives any claim against Landlord for loss of business on account of any relocation.
ARTICLE 16
LIENS AND ALTERATIONS
Section 16.1. Liens. Nothing contained in this Lease shall be construed as consent on the part of Landlord to subject the estate of Landlord to liability under the Mechanics’ Lien Law of the State of Florida, it being expressly understood that Landlord’s estate shall not be subject to such liability. Tenant shall strictly comply with the Mechanics’ Lien Law of the State of Florida as set forth in Florida Statutes 713. In the event that a mechanics’ claim of lien is filed against the property in connection with any work performed by or on behalf of Tenant, Tenant shall satisfy such claim, or shall transfer same to security, within ten ( I0) days from the date of filing. In the event that Tenant fails to satisfy or transfer such claim within said ten ( l 0) day period, Landlord may do so and thereafter charge Tenant, as Additional Rent, all costs incurred by Landlord in connection with satisfaction or transfer of such claim, including attorneys’ fees. Further, Tenant agrees to indemnify, defend and save Landlord harmless from and against any damage or loss incurred by Landlord as a result of any such mechanics’ claims of lien. Ifso requested by Landlord, Tenant shall execute a short fonn or memorandum of this Lease, which may, in Landlord’s discretion be recorded in the Public Records for the purpose of protecting Landlord’s estate from mechanics’ claims of lien, as provided in Florida Statutes Section 713.10. In the event such short fonn or memorandum oflease is executed, Tenant shall sinmltaneously execute and deliver to Landlord an instrument terminating Tenant’s interest in the real prope1ty upon which the Premises are located which instrument may be recorded by Landlord at the expiration of the term of this Lease, or such earlier termination hereof. The security deposit paid by Tenant may be used by Landlord for the satisfaction or transfer of any mechanics’ claim of lien, as provided in this Section. This Section shall survive the tennination of this Lease.
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Section 16.2. Alterations by Tenant. Tenant will not make any alterations, renovations, improvements or other installations in or to any part of the Premises (including, without limitation, any alterations of the storefront, signs, structural alterations, or any cutting or drilling into any part of the Premises or any securing of any fixture, apparatus or equipment of any kind to any part of the Premises), unless and until Tenant shall have caused plans and specifications therefor to have been prepared, at Tenant’s expense, by an architect or other duly qualified person and shall have obtained Landlord’s written approval thereof. If such approval is granted, Tenant shall cause the work described in such plans and specifications to be performed, at its expense, promptly, efficiently, competently and in a good and workmanlike manner by duly qualified or licensed persons or entities, without interference with or disruption to the operations of tenants or other occupants of the Center. All such work shall comply with all applicable codes, rules, regulations and ordinances.
ARTICLE 17
DEFAULT
Section 17.1. Events of Default. The occurrence of any one or more of the following events shall constitute an “Event of Default” and breach of this Lease by Tenant:
A. If Tenant abandons or vacates the Premises; or
B. If Tenant fails to pay any Minimum Rent, Additional Rent or any other Additional Rent or other charge required to be paid by Tenant under this Lease; or
C. If Tenant fails to promptly and fully perform any other covenant, condition, rule, regulation or agreement contained in this Lease or perform within the time periods set forth in this Lease and such failure continues for fifteen (15) days; or
D. Ifa writ of attachment or execution is levied on this Lease or on any of Tenant’s or any Guarantor’s property; or
E. If Tenant or any Guarantor makes a general assignment for the benefit of creditors, or provides for an arrangement, composition, extension or adjustment with its creditors or is generally insolvent or unable to pay its obligations as they come due; or
F. If Tenant or any Guarantor files a voluntary petition for relief or if a petition against Tenant or any Guarantor in a proceeding under the federal bankruptcy laws or other insolvency laws is filed and not withdrawn or dismissed within forty-five (45) days thereafter, or if under the provisions of any law providing for reorganization or winding up of corporations, any court of competent jurisdiction assumes jurisdiction, custody or control of Tenant or any Guarantor or any substantial part of their property and such jurisdiction, custody or control remains in force unrelinquished, unstayed or unterminated for a period of forty-five (45) days or if Tenant or any Guarantor is adjudged a bankrupt; or
G. If in any proceeding or action in which Tenant or any Guarantor is a party, a trustee, receiver, agent or custodian is appointed to take charge of the Premises, or Tenant’s or any Guarantor’s property (or has the authority to do so) for the purpose of enforcing a lien against the Premises or Tenant’s or any Guarantor’s property; or
H. If Landlord discovers that any financial statement delivered to Landlord by Tenant or any Guarantor is false; or
I. In the event Tenant removes, attempts to remove, or permits to be removed from the Premises, except in the usual course of trade, the goods, furniture, effects or other property of Tenant brought thereon; or
J. In the event Tenant, before the expiration of said term, and without the written consent of Landlord, vacates said premises or abandons the possession thereof, or uses the same for purposes other than the purposes for which the same are hereby leased, or ceases to use the Premises for the purposes herein expressed; or
K. In the event an execution or other legal process is levied upon the goods, furniture, effects or other property of Tenant brought on said Premises or upon the interest of Tenant in this Lease, and the same is not satisfied within ten (1O) days from such levy.
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Section 17.2. Landlord’s Remedies. If any Event of Default occurs, then, in addition to any other rights or remedies Landlord may have under any law, Landlord shall have the right, at Landlord’s option, without further notice or demand of any kind to do any or all of the following:
A. Landlord may tern1inate this Lease and the Tenn created hereby, in which event Landlord may forthwith repossess the Premises and bring an action in damages to recover all Rent due and payable plus any other sum of money and damages owed by Tenant to Landlord which may accrue through judgment.
B. Landlord may elect not to tern1inate this Lease or the Tenn created hereby and not repossess the Premises, and accelerate and declare that all Rent reserved for the remainder of the Term plus any other sums of money and damages owed by Tenant to Landlord shall be immediately due and payable. Landlord may immediately enforce all claims for accelerated rent (reduced to present dollar values using an assumed interest rate of eight percent [8%]) and all other sums of money and damages in any court of competent jurisdiction and may execute, forthwith, on any judgment entered in favor of Landlord and against Tenant. Additionally, in the event Landlord later elects to tenninate Tenant’s right of possession or in the event Tenant abandons or otherwise relinquishes possession, Landlord shall have the right to immediately reenter and relet the Premises for the benefit of the Tenant, as provided in Paragraph C below.
C. Landlord may tern1inate Tenant’s right of possession, without tenninating the Lease, by any and all actions for possession available under Florida law, by taking peaceful possession or otherwise, and repossess the Premises, in which event Landlord may accelerate and declare that all Rent reserved for the remainder of the Tern1 plus any other sum of money and damages owed by Tenant to Landlord shall be immediately due and payable. Landlord may immediately enforce all claims for accelerated rent (reduced to present dollar values using an assumed interest rate of eight percent [8%]) and all other sums of money and damages in any court of competent jurisdiction and may execute, forthwith, any judgment entered in favor of Landlord and against Tenant. Landlord shall use reasonable efforts to mitigate Landlord’s damages and relet the Premises for the bene.fit of Tenant, for such rent and upon such terms as shall be satisfactory to Landlord if mitigation of damages is required by applicable law. If Landlord relets the Premises for the tenant’s account, he shall provide Tenant with an accounting at the end of the Lease Term to offset from the accelerated Rents any amount actually received in reletting. For purposes of providing Tenant with a remedy of accounting, Tenant agrees that his right to an offset is preserved by the Court retaining jurisdiction in any judgment for accelerated rent entered in favor of Landlord, which provides Tenant with the right of an accounting at the end of the Lease Term. (The obligation to pursue and enforce an accounting, and the burden of proof of any offsets shall be borne by the Tenant.) For the purpose of such reletting, Landlord is authorized to decorate, to make any repairs to the Premises and/or to subdivide or restructure the Leased Premises as Landlord sees fit (“Tenancy Repairs and Modifications”). Further, Landlord is authorized to enter into new leases in which the lease term or other terms and conditions are different from this Lease (“Lease Modifications”). Concerning any Tenancy Repairs and Modifications and any Lease Modifications, Tenant agrees that such Tenancy Repairs and Modifications and Lease Modifications are being performed for the purpose of reletting and mitigating Tenant’s damages, and, as such are done for the benefit of the Tenant and are valid costs ofreletting. Alternatively, Landlord may elect not to accelerate Rents under this Provision but instead, recover, at the end of the Term or as such sums become due, all Rents and other sums due and payable. lfthe Premises are relet and a sufficient sum shall not be realized from such reletting after paying all of the costs and expenses of such reletting including, without limitation, costs of decorations, repairs, changes, alterations and additions, including, but not limited to, advertising and brokerage commissions, and of tbe collection of the rent accruing therefrom to satisfy the Rent provided for in this Lease, Tenant shall satisfy and pay any such deficiency in an accounting at the end of the Term or such other period as Landlord may elect. If Landlord shall fail to relet the Premises during the remainder of the base term, the parties agree that Tenant shall pay to Landlord as damages a sum equal to the amount of the total stipulated Rent reserved in this Lease for the balance of the Tenn. Notwithstanding, Landlord shall have no duty to account to tenant for any surplus rent received through reletting. Further, notwithstandingany of the above, Tenant agrees that Landlord may file suit to recover any sums which because due under the terms of this Section from time to time and that no suit or recovery of any portion due Landlord hereunder shall be any defense to any subsequent action brought for any amount not theretofore reduced to judgment in favor of Landlord. Notwithstanding anything contained herein, no re-entry or the taking of possession of the Premises shall be construed as an election on Landlord’s part to tenninate this Lease unless a written notice of such intention to tenninate this Lease is given to Tenant. Notwithstanding any such re-entry or taking of possession, Landlord may, at any time thereafter, elect to terminate this Lease, in which case the provisions of this Article 17 governing tennination shall apply.
D. In addition to the remedies set forth above, in the event of Tenant’s bankruptcy or insolvency, the remedies, rights and obligations set forth in Article 18 shall apply.
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Section 17.3. Remedies Non-Cumulative. The remedies given to Landlord in this Article shall be in addition and supplemental to all other rights or remedies which Landlord may have under law or in equity.
Section 17.4. Non-Waiver. The waiver by Landlord of any breach of any term, covenant or condition of this Lease shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition. The subsequent acceptance of rent by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any tenn, covenant or condition of this Lease other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such rent. No covenants, term or condition of this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by Landlord.
Section 17.S. Rental Pavments Under Default. In the event ofa default of any rental payment or any other payment due under this Lease, Landlord may in Landlord’s notice to Tenant of such default require Tenant’s payment to cure the default be in cash, cashier’s check, and/or certified check. Landlord and Tenant agree that should Landlord so elect to require payment by cash, cashier’s check or certified check in Landlord’s notice to Tenant, a tender of money to cure the default which is not in the form requested by Landlord shall be deemed a failure to cure the default. Nothing contained in this Article shall in any way diminish or be construed as waiving any of Landlord’s other remedies as provided elsewhere in this Lease, or by law or in equity.
Section 17.6. Expenses of Enforcement. In the event any payment due Landlord under this Lease shall not be paid on the due date, said payment shall bear interest at the lesser of a rate of eighteen percent (18%) per annum or the highest nonusurious rate permitted by applicable law from the due date until paid unless otherwise specifically provided herein, but the payment of such interest shall not excuse or cure any default by Tenant under this Lease. In the event that it shall be necessary for Landlord to give more than one (1) written notice to Tenant of any violation of this Lease, Landlord shall be entitled to make an administrative charge to Tenant of TWENTY-FIVE AND NO/l00 DOLLARS ($25.00) for each such notice. Tenant recognizes and agrees that the charges which Landlord is entitled to make upon the conditions stated in this Section represent, at the time this Lease is made, a fair and reasonable estimate and liquidation of the costs of Landlord in the administration of the Center resulting from the events described which costs are not contemplated or included in any other rental or charges provided to be paid by Tenant to Landlord in this Lease. Any charges becoming due under this Section of this Lease shall be added and become due with the next ensuing monthly payment of Minimum Rent and shall be collectible as a part thereof.
ARTICLE 18
BANKRUPTCY OR INSOLVENCY
Section 18.1. Bankruptcy. lf Tenant shall not pay rent or any other monies due hereunder at the time and in the manner stated, or shall fail to keep and perform any other condition, stipulation or agreement herein contained on the part of Tenant to be kept and performed, or if Tenant shall suffer to be filed against Tenant an involuntary petition in bankruptcy or shall be adjudged a voluntary or involuntary bankrupt, or make an assignment for the benefit of creditors, or should there be appointed a receiver to take charge of the Premises either in the state courts or in the federal courts, then, in any of such events, Landlord may, at Landlord’s option, declare this Lease in default, and in such event, Landlord shall have all remedies by law available to Landlord based upon such default, including court costs and attorneys’ fees, including appellate attorneys’ fees and court costs.
In the event a petition is filed by or against Tenant under the Bankruptcy Code, Tenant, as debtor and debtor in possession, and any trustee who may be appointed agree to adequately protect Landlord as follows:
(a) to pay monthly in advance on the first day of each month as reasonable compensation for use and occupancy of the Premises an amount equal to all rent due pursuant to this Lease; (b) to perfonn each and every obligation of Tenant under this Lease until such time as this Lease is either rejected or assumed by order of a court of competent jurisdiction;
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(c) to determine within sixty (60) days after the filing of such petition whether to assume or reject this Lease;
(d) to give Landlord at least thirty (30) days’ prior notice, unless a shorter period is agreed to in writing by the parties, of any proceeding relating to any assumption of this Lease;
(e) to give at least thirty (30) days’ prior notice of any vacation or abandonment of the Premises, any such vacation or abandonment to be deemed a rejection of this Lease; and
(f) to do all other things to benefit to Landlord otherwise required under the Bankruptcy Code.
This Lease shall be deemed rejected in the event of the failure to comply with any of the above.
Section 18.2. Right to Terminate. At its option, Landlord may terminate this Lease and all of Tenant’s rights under this Lease by giving Tenant written notice if any of the following events occur:
A. Tenant’s estate created by this Lease is taken in execution or by other process of law;
B. Tenant or any guarantor of Tenant’s obligations under this Lease is insolvent pursuant to the provisions of any present or future insolvency law or the common law of any state having jmisdiction or is unable to pay its debts as they become due;
C. Any proceedings are filed by or against Tenant or any guarantor under the Bankruptcy Code or any similar provisions of any future federal bankruptcy law;
D. A receiver or trustee of the property of Tenant or any guarantor is appointed under state law by reason of Tenant’s or the guarantor’s insolvency or inability to pay its debts as they become due or otherwise; or
E. Any assignment for the benefit of creditors is made of Tenant’s or Guarantor’s property under state law.
ARTICLE 19
SECURITY DEPOSIT
Section 19.1. Amount of Deposit. Upon the execution of this Lease, Tenant deposited with Landlord a security deposit in the amount set forth in Section 1.17 hereof (“Security Deposit”). The Security Deposit shall serve as security for the prompt, full and faithful perfonnance by Tenant of the terms and provisions of this Lease. In the event that Tenant is in Default hereunder or in the event that Tenant owes any amounts to Landlord upon the expiration of this Lease, Landlord may use or apply the whole or any part of the Security Deposit for the payment of Tenant’s obligations hereunder. The use or application of the Security Deposit or any portion thereof shall not prevent Landlord from exercising any other right or remedy provided hereunder or under any Law and shall not be construed as liquidated damages. In the event the Security Deposit is reduced by such use or application, Tenant shall deposit with Landlord within ten (10) days after written notice, an amount sufficient to restore the full amount of the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from Landlord’s general funds or pay interest on the Security Deposit. Any remaining portion of the Security Deposit shall be returned to Tenant within sixty (60) days after Tenant has vacated the Premises in accordance with this Lease or as required by applicable law. If the Premises shall be expanded at any time, or if the Term shall be extended at an increased rate of Rent, the Security Deposit shall thereupon be proportionately increased.
Landlord may deliver the funds deposited hereunder to any purchaser of or successor to Landlord’s interest in this Lease or the Premises, and thereupon Landlord shall be discharged from all liability with respect to such deposit.
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ARTICLE 20
SUBORDINATION AND ATTORNMENT AND ESTOPPEL
Section 20.1. Subordination. Tenant hereby subordinates its rights hereunder to the lien of any mortgage or mortgages or the lien resulting from any other method of financing or refinancing, now or hereafter in force against the land and buildings of which the Premises arc a part or upon any buildings hereafter placed upon the land of which the Premises are a part, and to all advances made or hereafter to be made upon the security thereof. This shall be self-operative and no further instrument of subordination shall be required by any mortgagee. However, Tenant, upon request of any party in interest, shall execute promptly such instrument or certificates to carry out the intent hereof as shall be required by Landlord. Tenant hereby irrevocably appoints Landlord as Attorney in Fact for Tenant, with full power and authority to execute and deliver, in the name of Tenant, any such instrument or certificates. lf, ten (I 0) days after the date of a written request by Landlord to execute such instruments, Tenant shall not have executed the same, Landlord may, at its option, cancel this Lease without incurring any liability on account thereof and the tem1 hereby granted is expressly limited accordingly.
Section 20.2. Attornment. Tenant shall, in the event of a sale or assignment of Landlord’s interest in whole or in part in the Premises or the Center, or if the Premises or such building comes into the hands of a mortgagee, ground lessor or any other person, whether because of a mo1igage foreclosure, exercise of a power of sale under a mortgage, termination of the ground lease or otherwise, attom to the purchaser or such mortgagee or other person and recognize the same as Landlord hereunder.
Tenant shaJI execute, at Landlord’s request, any attomment agreement required by any mortgagee, ground lessor or other such person to be executed, containing such provisions as such mortgagee, ground lessor or other person requires. Within ten (10) days after written request therefor by Landlord, or in the event that upon any sale, assignment, mortgage or hypothecation of the Premises or the Center by Landlord. an offset or estoppel statement shall be required from Tenant, Tenant agrees to deliver a certificate addressed to any such proposed mortgagee or purchaser or to Landlord in form acceptable to such mortgagee or purchaser certifying, among other things reasonably requested by such mortgagee or purchaser, that this Lease is in full force and effect (if such be the case) and there arc no defenses or offsets thereto or stating those claimed by Tenant.
Section 20.3. Financing Agreements. Tenant shall not enter into, execute or deliver any financing agreement that can be considered as a priority to any mortgage or deed of trust that Landlord may have placed upon the Premises.
Section 20.4 Estoppel Certificate. Within ten ( I0) Days after written request from Landlord, Tenant shall execute and deliver to Landlord, or Landlord’s designee, a written statement certifying (a) that this Lease is unmodified and in full force and effect or is in full force and effect as modified and stating the modifications; (b) the amount of Minimum Rent and the date to which Minimum Rent and Additional Rent have been paid in advance; (c) the amount of any security deposit with Landlord; (d) that Landlord is not in default hereunder or, if Landlord is claimed to be in default, stating the nature of any claimed default; and (e) such other matters as may be requested. Any such statement may be relied upon by a purchaser, assignee, or Mortgagee. Tenant’s failure to execute and deliver such statement within the time required shall be conclusive against Tenant (l) that this Lease is in full force and effect and has not been modified except as represented by Landlord; (2) that there are no uncured defaults in Landlord’s perfonnance and that Tenant has no right of offset, counterclaim, or deduction against Rent; (3) not more than one (I) month’s Rent has been paid in advance; and (4) as to the truth and accuracy of any other matters set forth in the statement as submitted to Tenant.
Section 20.5 Notice and Cure Rights. Tenant agrees to notify any Mortgagee whose address has been furnished to Tenant, of any notice of default served by Tenant on Landlord. If Landlord fails to cure such default within the time provided for in this Lease, such Mortgagee shall have an additional thirty (30) days to cure such default; provided that, if such default cannot reasonably be cured within that thirty (30) day period, then such Mortgagee shall have such additional time to cure the default as is reasonably necessary under the circumstances.
Section 20.6 Changes Requested by Mortgagee. Tenant shall not unreasonably withhold its consent to changes or amendments to this Lease requested by a Mortgagee, so long as such changes do not alter the basic business tenns of this Lease or otherwise materially diminish any rights or materially increase any obligations of Tenant.
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ARTICLE 21
LIABILITY AND INDEMNITY
Section 21.1. Limitations of Landlord’s Liability; Indemnity. Landlord shall not be liable or in any way responsible to Tenant or any other person for any loss, injury or damage suffered by Tenant or others in respect of (a) property of Tenant or others stolen or damaged, (b) injury or damage to persons or property resulting from fire, explosion, falling plaster, escaping liquid or gas, electricity, water, rain or leaks from any part of the Center or from any pipes, appliances or plumbing work therein, or from dampness, (c) damage caused by other tenants, occupants or persons in the Premises or other premises in the Center or the public, or caused by operations in the construction of any private or public work, (d) failure of any other tenant in the Center to operate its business, (e) loss or damage, however caused, other than loss or damage directly caused by the fault of Land.lord and which is not otherwise excluded by the provisions of this Section 21.1. Tenant shall look solely to the estate and property of Landlord in the land and building comprising the Center for the collection of any judgment, or in connection with any other judicial process, requiring the payment of money by Landlord in the event of any default or breach by Landlord with respect to any of the tenns, covenants and conditions of this Lease to be observed and performed by Landlord and no other property or estates of Landlord shall be subject to levy, execution or other enforcement procedures for the satisfaction of Tenant’s remedies and rights under this Lease.
Tenant has inspected the Premises, or has had an opportunity to do so, and agrees to accept the same “as is” “where is”without any agreements, representations, understandings or obligations on the part of Landlord whatsoever to perform any alterations, repairs or improvements except as expressly provided in any separate agreement that may be signed by the parties.
Section 21.2. Indemnity. Tenant shall indemnify and hold harmless Landlord against any and all damages or expenses arising out of or in connection with any accident or other occurrence on or about the Premises, and from all costs, liabilities, claims, charges, injuries, damages or expenses, including, without limitation, attorneys’ or other professionals’ fees and court costs, due to, arising out of or in connection with loss of life, personal injury, damage to property or any work done by, or act or omission of Tenant or its officers, partners, agents, servants, employees, customers, contractors, invitees, concessionaires or licensees in and about the Center, or due to, arising out of or in connection with Tenant’s use or occupancy of the Premises or any breach by Tenant of any provision of this Lease. In case Landlord shall be made a party to any litigation commenced by or against Tenant, then Tenant shall protect and hold Landlord ham1less and pay all cost and attorneys’ fees incurred by Landlord in connection with such litigation, and any appeals thereof.
Section 21.3. Notice by Tenant. Tenant shall give immediate notice to Landlord in case of fire or accidents in the Premises or in the building of which the Premises are a part or of defects therein or in any fixtures or equipment.
ARTICLE 22
WASTE, ENVIRONMENTAL, GOVERNMENTAL REGULATIONS
Section 22.1. Waste or Nuisance. Tenant shall not commit or suffer to be committed any waste upon the Premises or any nuisance or other act or thing which may disturb the quiet enjoyment of any other tenant in the Center, or which may adversely affect Landlord’s fee interest in the Premises or in the Center.
Section 22.2. Environmental Provisions. Tenant expressly warrants and represents to Landlord that Tenant will not use or employ Landlord’s and/or Center’s property, facilities, equipment or services to handle, transport, store, treat or dispose of any hazardous waste or hazardous substance, whether or not it was generated or produced on the Premises; and Tenant further expressly warrants and represents that any activity on or relating to the Premises shall be conducted in full compliance with all applicable laws.
Tenant shall give written notice to Land.lord at least seven (7) days prior to any production, generation, handling, storage, treatment, transportation, disposal, release or removal of hazardous waste or hazardous substances from or on the Premises, and of any arrangements for transport, disposal, storage or treatment of hazardous waste or hazardous substances from or on the Premises.
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Tenant hereby indemnifies Landlord and Landlord’s successors and assigns against, and agrees to protect, save and keep harmless Landlord from any and all liabilities, obligations, charters, losses, damages, penalties, claims, actions, suits, costs and expenses and disbursements of any kind or nature whatsoever, imposed on, incurred by or asserted against any such indemnified party, in any way relating to, arising out of, or in connection with any production, generation, handling, storage, transportation, disposal, release or removal of hazardous waste or hazardous substances.
In the event that Tenant violates or breaches any provision of this Section 22.2, Landlord shall have the right to terminate this Lease and reclaim the Premises immediately upon notice to Tenant.
ARTICLE 23
MISCELLANEOUS
Section 23.1. First-Class Operation. Tenant, recognizing that the Center is being developed and maintained by Landlord as a location for an outstanding type of business occupancy, and as a further inducement to Landlord to enter into this Lease, covenants and agrees that at all times the business to be conducted at, through and from the Premises and the kind and quality of services to be offered in the conduct thereof will be first-class in every respect; and the business methods employed in said business, as well as all other elements of advertising, will be dignified and in conformity with the highest standards of practice obtained among others conducting a similar business in the Fort Lauderdale area.
Section 23.2. Accord and Satisfaction. Landlord is entitled to accept, receive and cash or deposit any payment made by Tenant for any reason or purpose or in any amount whatsoever and apply such payment at Landlord’s option to any obligation of Tenant; any such payment shall not constitute payment of any amount owed except that to which Landlord has applied it. No endorsement or statement on any check or letter of Tenant shall be deemed an accord and satisfaction or otheiwise recognized for any purpose whatsoever. The acceptance of any such check or payment shall be without prejudice to Landlord’s right to recover any and all amounts owed by Tenant and Landlord’s right to pursue any other available remedy.
Section 23.3. Attorneys’ Fees.. In the event that it shall become necessary for Landlord to collect any sums due to it under this Lease or to employ the services of an attorney to enforce any of its rights under this Lease or to remedy the breach of any covenant of this Lease on the part of Tenant to be kept or performed, regardless of whether suit be brought, Tenant shall pay to Landlord such reasonable fee as shall be charged by Landlord’s attorney or collection agency for such services. Should suit be brought for the recovery of possession of the Premises, or for rent or any other sum due Landlord under this Lease, or because of the breach of any of Tenant’s covenants under this Lease, Tenant shall pay to Landlord all expenses of such suit andany appeal thereof, including a reasonable attorneys’ fees and costs.
Section 23.4. Entire Agreement. It is understood and agreed by Tenant that Landlord and Landlord’s agents have made no representations or promises with respect to the Premises or this Lease, except as expressly set forth in this Lease, and that no claim or liability or cause for termination shall be asserted by Tenant against Landlord for, and Landlord shall not be liable by reason of, the breach of any representations or promises not expressly stated in this Lease. This Lease supersedes all prior agreements, written or verbal, with respect to the Premises, including, without limitation, any Jett.er of intent.
Section 23.5. Interpretation. The parties agree that it is their intention to create only the relationship of Landlord and Tenant, and no provision hereof or act of either party shall be construed as creating the relationship of principal and agent, or a partnership, joint venture or enterprise between the parties.
Section 23.6. Force Majeure. If either party shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor trouble, inability to procure material, failure of power, restrictive governmental laws or regulations, riots, insurrection, terrorism, war or other reason of a like nature not the fault of the party delayed in performing work or doing acts required under this Lease, the period for the performance of any such act shall be extended for a period equivalent to the period of such delay.
Notwithstanding the foregoing, the provisions of this Section shall at no time operate to excuse Tenant from any obligations for payment of Minimum Rent, Additional Rent, or any other payments required by the terms of this Lease when due, and all such amounts shall be paid when due.
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Section 23.7. Notices. All notices from Tenant to Landlord required or pennittcd by any provision of this Lease shall be directed to Landlord by certified mail, return receipt requested, at the address set forth in Article 1 hereof or at such other address as Landlord may designate by written notice.
All notices from Landlord to Tenant required or permitted shall be directed to Tenant by certified mail postage prepaid, hand delivery or by Federal Express or other nationally recognized courier service at the address set forth in Article 1 hereof or at such other address as Tenant may designate by written notice.
Notice given as described above shall be sufficient service and shall be deemed given as of the date received as evidenced by the return receipt of the registered or certified mail or the refusal of acceptance of such notice or after one (I) business day if by hand delivery or overnight courier service.
Section 23.8. Captions and Section Numbers. This Lease shall be construed without reference to titles of articles and Sections, which are inserted only for the convenience of reference.
Section 23.9. Number and Gender. The use herein of a singular term shall include the plural and use of the masculine, feminine or neuter genders shall include all others.
Section 23.10. Broker’s Commission. Tenant represents and warrants that it has caused or incurred no claims for brokerage commissions or finders’ fees in connection with the execution of this Lease and Tenant shall indemnify and hold Landlord harmless against and from all liabilities arising from any such claims caused or incurred by Landlord (including, without limitation, the cost of attorneys’ fees in connection therewith).
Section 23.11. Partial Invalidity. If any provision of this Lease or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Lease or the application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable shall not be affected thereby, and each provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.
Section 23.12. Recording. Tenant shall not record this Lease or any memorandum or short form thereof and any such recordation shall constitute a default hereunder.
Section 23.13. Governing Law. This Lease shall be governed exclusively by the provisions hereof and by the laws of Florida; venue shall be exclusively in Broward County, Florida.
Section 23.14. Holding Over. If Tenant holds over or occupies the Premises beyond the Lease term (it being agreed there shall be no such holding over or occupancy without Landlord’s prior written consent), Tenant shall pay Landlord (a) twice the monthly Minimum Rent for each month or any portion of a month, of such holding over, and (b) a pro rata portion of all other amounts which Tenant would have been required to pay hereunder had this Lease been in effect. If Tenant holds over with or without Landlord’s written consent, Tenant shall occupy the Premises on a tenancy from day-to-day, and all other terms and provisions of this Lease shall be applicable to such period.
Section 23.15. Provisions Binding. Except as otherwise expressly provided, the terms oftbis Lease shall be binding upon and shall inure to the benefit of the successors, legal representatives and assigns, respectively, of Landlord and Tenant. Each term and each provision of this Lease to be performed by Tenant shall be construed to be both a covenant and a condition. The reference contained to successors and assigns of Tenant is not intended to constitute consent to assignment by Tenant which is controlled by the provisions of Section 11.l.
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Section 23.16. Corporate Tenant. If Tenant is a corporation, the parties executing this Lease or any other documents related to this Lease on behalf of Tenant hereby covenant and warrant that Tenant is a duly qualified corporation in good standing and all steps have been taken prior to execution to qualify Tenant to do business in Florida; that the undersigned are authorized to execute this Lease on Tenant’s behalf; all franchise and corporate taxes have been paid to date; and all future forms, reports, fees and other documents necessary to comply with applicable laws will be filed when due. Tenant shall, at Landlord’s request, deliver a certified copy of a resolution of its board of directors, if Tenant is a corporation, or other satisfactory documentation, if Tenant is another type of entity, authorizing execution of this Lease.
Section 23.17. Amendments or Modifications. No amendment or modification of this Lease or any consents or permissions of Landlord required under this Lease shall be valid or binding unless reduced to writing and executed by the party against whom enforcement is sought.
Section 23.18. Easements. Landlord reserves the right to grant any easements on, over, under and above the property on which the Center is located for such purposes as Landlord determines in its sole discretion, provided that such easement will not materially adversely interfere with Tenant’s business.
Section 23.19. Financial Statements. Tenant and any guarantors of Tenant’s obligations under this Lease shall deliver to Landlord their most recent financial statements, including statements of income and expense and statements of net worth and their sales tax reports for the period covered by the financial statement, within fifteen (15) days following the written request of Landlord. Landlord may request such statements annually, and they shall be verified as being true and correct.
Section 23.20. Right of Entry. Landlord and Landlord’s agents shall have the right to enter the Premises at all times to examine the same, and to show them to prospective purchasers or lessees of the Center, and to make such repairs, maintenance, servicing, alterations, improvements or additions as Landlord may deem necessary or desirable, and Landlord shall be allowed to take all material into and upon the Premises that may be required therefore without the same constituting an eviction of Tenant in whole or in part and the Minimum Rent reserved shall in no wise abate while said repairs, alterations, improvements, or additions are being made unless Tenant is prevented from operating in the Premises in whole or in part, in which event Minimum Rent shall be proportionately abated during said period. During the six (6) months prior to the expiration of the tem1 of this Lease or any renewal term, Landlord may exhibit the Premises to prospective lessees or purchasers, and place upon the Premises the usual notice “To Let” or “For Sale”, or similar notice, which notices Tenant shall permit to remain thereon without molestation. If Tenant shall not be personally present to open and permit entry into the Premises, at any time, when for any reason and entry therein shall be necessary or permissible, Landlord or Landlord’s agents may enter the same without in any manner affecting the obligations and covenants of this Lease. Landlord shall have the right, in any event, to constantly have keys to the Premises. Nothing herein contained, however, shall be deemed and construed to impose upon Landlord any obligations, responsibility or liability whatsoever, for the care, maintenance or repair of the building or any part thereof, except as otherwise herein specifically provided.
Section 23.21. Joint and Several Liability. If two or more individuals, corporations, partnerships or other business associations or any combination thereof shall sign this Lease as Tenant or as Guarantors, the liability of each such individual, corporation, partnership or other business association to pay rent and perform all other obligations under this Lease shall be deemed to be joint and several, and all notices, payments, and agreements given or made by, with or to any one of such individuals, corporations, partnerships or other business associations shall be deemed to have been given or made by, with or to all of them. If Tenant is a partnership or other business association the members of which are by virtue of statute or federal law subject to personal liability, the liability of each such member shall be joint and several.
Section 23.22. No Discrimination. Tenant will not discriminate in the conduct and operation of its business in the Center against any person or group of persons, including, but not limited to, because of the race, handicap, creed, color, sex, national origin or ancestry of such person or group of persons.
Section 23.23. Material Change in Tenant’s Financial Status. Landlord, at Landlord’s option, shall have the right to terminate this Lease if Landlord has reasonable evidence of: (i) an adverse material change in Tenant’s financial position from the date Tenant executes this Lease through the Commencement Date and/or (ii) a misrepresentation by Tenant as to Tenant’s financial net worth or Tenant’s credit worthiness.
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Section 23.24. Time of Essence. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.
Section 23.25. Waiver of a Jury Trial. LANDLORD AND TENANT HEREBY MUTUALLY WAIVE ANY AND ALL RIGHTS ONLY PERTAINING TO LANDLORD AND TENANT WITH REGARD TO THIS LEASE WHICH EITHER MAY HAVE TO REQUEST A JURY TRIAL IN ANY PROCEEDING AT LAW OR I EQUITY IN ANY COURT OF COMPETENT JURISDICTION.
Section 23.26. Radon Gas. Radon is naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional infonnation regarding radon and radon testing may be obtained from your county public health unit.
Section 23.27. Hurricane Preparation.Tenant shall have full responsibility for protecting the Premises and the property located therein from adverse weather conditions, such as tropical storms and hurricanes. Tenant agrees that it will implement a voluntary hurricane preparation and other natural disaster readiness program for the Premises. By entering into this Lease, Tenant shall be deemed to have assumed the risks associated with stom1s and 11llrricanes and except for Landlord’s insurance obligations provided for herein, Tenant shall have released Landlord and its agents from any and all liability resulting from stom1s and hurricanes.
Section 23.28 Mold. Given the climate and humid conditions in Florida, molds, mildew, spores, fungi and/or other toxins may exist and/or develop at and within the Premises. Tenant is hereby advised that certain molds, mildew, spores, fungi and/or toxins may be, or if allowed to remain for a sufficient period may become, toxic and potentially pose a health risk. By entering into this Lease, Tenant shall be deemed to have assumed the risks associated with molds, mildew, spores, fungi and/or other toxins and to have released Landlord and its agents from any and all liability resulting from the same. Furthermore, Tenant acknowledges that it is necessary for Tenant to provide appropriate climate control, keep the Premises clean, and take other measures to retard and prevent mold and mildew from accumulating in the Premises. Tenant agrees to clean and dust the Premises on a regular basis and to remove visible moisture accumulation on windows, walls, floors, ceilings and other surfaces as soon as reasonably possible. Tenant agrees not to block or cover any of the heating, ventilation or air-conditioningducts in the Premises.
Section 23.29 OFAC Compliance. As used herein “Blocked Party” shall mean any party or nation that (a) is listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, Department of the U.S. Treasury (“OFAC”) pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) or other similar requirements contained in the rules and regulations of OFAC (the “Order”) or in any enabling legislation or other Executive Orders in respect thereof (the Order and such other rules, regulations, legislation, or orders are collectively called the “Orders”) or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Orders (such lists arc collectively referred to as the “Lists”); or (b) has been detennined by competent authority to be subject to the prohibitions contained in the Orders.
As a material inducement for Landlord entering into this Lease, Tenant warrants and represents that none of Tenant, any Affiliate of Tenant, any partner, member or stockholder in Tenant or any Affiliate of Tenant, or any beneficial owner of Tenant, any Affiliate of Tenant or any such partner, member or stockholder of Tenant (collectively, a “Tenant Owner”): (a) is a Blocked Party; (b) is owned or controlled by, or is acting, directly or indirectly, for or on behalf of, any Blocked Party; or (c) has instigated, negotiated, facilitated, executed or otherwise engaged in this Lease, directly or indirectly, on behalfof any Blocked Party. Tenant shall immediately notify Landlord if any of the foregoing warranties and representations becomes untrue during the term of this Lease.
Tenant shall not: (a) transfer or pennit the transfer of any interest in Tenant or any Tenant Owner to any Blocked Party; or (b) make a Transfer to any Blocked Party or party who is engaged in illegal activities. If at any time during the term of this Lease (a),..J..E=tll,..l;ll’ any Tenant Owner becomes a Blocked Party or is convicted, pleads nolo contendere, or is indicted, arraigned, or custodially detained on charges involving money laundering or predicate crimes to money laundering; (b) any of the representations or warranties set forth in this Section become untrue; or (c) Tenant breaches any of the covenants set forth in this Section, the same shall constitute an Event of Default. ln addition to any other remedies to which Landlord may be entitled on account of such Event of Default, Landlord may immediately tenninate this Lease.
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Section 23.30 Confidentiality. Tenant acknowledges that the content of this Lease and any related documents are confidential infonnation. Tenant shall keep such confidential infonnation strictly confidential and shall not disclose such confidential information to any person or entity other than Tenant’s financial, legal, and space planning consultants. ln addition to any other remedies to which Landlord may be entitled if Tenant breaches the foregoing covenant, Landlord shall have the right to increase the rent to then current market rent for the Center.
Section 23.31 Consent. Unless otherwise expressly set forth herein, all consents and decisions required or permitted of Landlord hereunder shall be granted, withheld and made in Landlord’s sole discretion. Tenant shall have no claim and hereby waives the right to any claim against Landlord for money damages by reason of any refusal, withholding, or delaying by Landlord of any consent, approval, statement, or satisfaction that Landlord has agreed shall be subject to a standard of reasonableness. In such event, Tenant’s only remedy therefor shall be an action for specific perfommnce, injunction, or declaratory judgment to enforce any right to such consent, approval, statement, or satisfaction.
Section 23.32 Offer. The submission and negotiation of this Lease shall not be deemed an offer to enter the same by Landlord but the solicitation of such an offer by Tenant. Tenant agrees that its execution of this Lease constitutes a firm offer to enter the same which may not be withdrawn. During such period and in reliance on the foregoing, Landlord may, at Landlord’s option, proceed with any plans, specifications, alterations, or improvements, and permit Tenant to enter the Premises; but such acts shall not be deemed an acceptance of Tenant’s offer to enter this Lease, and such acceptance shall be evidenced only by Landlord’s signing and delivering this Lease to Tenant.
Section 23.33 No Discrimination. Tenant covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through Tenant, and this Lease is made and accepted upon and subject to the condition that there shaJI be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, sex, religion, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, or enjoyment of the Premises, nor shall Tenant itself, or any person claiming under or through Tenant, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the Premises.
Section 23.34 No Surrender. No act or conduct of Landlord, including, without limitation, the acceptance of keys to the Premises, shall constitute an acceptance of the surrender of the Premises by Tenant before the expiration of the term of this Lease. Only a written notice from Landlord to Tenant shall constitute acceptance of the surrender of the Premises and accomplish a termination of the Lease before the expiration of the Term.
Section 23.35 No Other Inducements. It is expressly warranted by each of the undersigned parties that no promise or inducement has been offered except as herein set forth and that this Lease is executed without reliance upon any statement or representation of any person or party released or its representatives concerning the nature and extent of damages, costs and/or legal liability therefor.
Section 23.36 Right to Lease. Landlord reserves the absolute right to create such other tenancies in the Center as Landlord shall determine to best promote the interests of the Center. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the term of this Lease, occupy any space in the Center.
Section 23.37 Survival. All indemnity and other unsatisfied obligations set forth in this Lease shall survive the termination or expiration hereof.
Section 23.38 Guaranty of Lease. In connection with the execution and delivery of this Lease by Tenant to Landlord and as an expressed condition of Landlord entering set forth into this Lease, Tenant shall arrange for the execution and delivery to Landlord of the Guaranty of Lease in the form of attached Exhibit”A” hereto by each Guarantor.
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lN WITNESS WHEREOF, Landlord and Tenant have signed this Lease as of the date set forth above.
| LANDLORD: | |
| TMT PROPERTIES, INC. | |
| Title: | |
| Date: |
| Sign Name: | Title: | |||
| Print Name: | Date: |
| Tenant: | |
| Baxpi Holdings LLC |
| Sign Name: | Title: | |||
| Print Name: | Date: |
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Exhibit “A”
FORM OF GUARANTEE OF LEASE
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Exhibit “B”
Tenant and Landlord Responsibilities
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Exhibit “C”
Landlord’s Work & Budget
-29-
Exhibit 10.158
FIRST AMENDMENT TO LEASE AGREEMENT
This FIRST AMENDEMENT to the LEASE AGREEMENT is entered into as of April 4, 2024 by and Between P & S PROPERTY INVESTMENTS, LLC (“Landlord”), Baxpi Holdings LLC d/b/a La Rosa Realty Greater Fort Lauderdale, a Florida limited liability (“Tenant”)
W I T N E S S E T H:
WHEREAS, TMT Properties, Inc. a Florida corporation and Tenant entered into a Lease dated March 8, 2021 wherein Landlord agreed to lease Tenant, and Tenant agreed to lease from Landlord, the Premises;
WHEREAS, Landlord and Tenant seek to modify the lease to update the corporation and lease term as herein after set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows:
1. Section 1.8: Lease Term: This lease is hereby extended by Twelve (12) Months, commencing on May 1, 2024 and expiring on April 30, 2025
2. Section 1.13: Minimum Rent:
| May 1, 2024 – April 30, 2025 | $3,429.92/month + sales tax |
3. All other terms and conditions of the lease and subsequent amendments shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this agreement the day and year first above written.
| LANDLORD: | Assignor: | ||||
| P & S PROPERTY INVESTMENTS, LLC | Baxpi Holdings LLC | ||||
| By: | /s/ Joseph Maas | By: | /s/ Carrie Pietrowski | ||
| Name: | Joseph Maas | Name: | Carrie Pietrowski | ||
| Title: | General Manager | Title: | Owner | ||
| Date: | 4/17/2024 | Date: | 4/11/2024 | ||
Exhibit 10.159
SECOND AMENDMENT TO LEASE AGREEMENT
This SECOND AMENDEMENT to the LEASE AGREEMENT is entered into as of May 7, 2025 by and Between P & S PROPERTY INVESTMENTS, LLC (“Landlord”), La Rosa Holdings, Corp., a Florida Corporation (“Tenant”)
W I T N E S S E T H:
WHEREAS, TMT Properties, Inc. a Florida corporation and Tenant entered into a Lease dated March 8, 2021 wherein Landlord agreed to lease Tenant, and Tenant agreed to lease from Landlord, the Premises;
WHEREAS, Landlord and Tenant entered into an Assignment and Assumption of Lease on April 4th, 2024;
WHEREAS, Landlord and Tenant seek to modify the lease to update the corporation and lease term as herein after set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows:
| 1. | Section 1.8: Lease Term: This lease is hereby extended by Twelve (12) Months, commencing on May 1, 2025, and expiring on April 30, 2026 |
| 2. | Section 1.13: Minimum Rent: |
| May 1, 2025 – April 30, 2026 | $3,532.81/month + sales tax |
| 3. | All other terms and conditions of the lease and subsequent amendments shall remain in full force and effect. |
IN WITNESS WHEREOF, the parties have executed this agreement the day and year first above written.
| Landlord: | Tenant: | ||||
| P & S PROPERTY INVESTMENTS, LLC | La Rosa Holdings, Corp. | ||||
| By: | /s/ Joseph Mass | By: | /s/ Joseph La Rosa | ||
| Name: | Joseph Maas | Name: | Joseph La Rosa | ||
| Title: | General Manager | Title: | CEO | ||
| Date: 6/12/2025 | Date: 6/12/2025 | ||||
Exhibit 10.160
LEASE AGREEMENT RENEWAL
by and between
LESSOR:
OFFICE RENTALS 506 LLC
And
LESSEE:
Dwight Anderson
and LaRosa Realty Jacksonville LLC
12627 San Jose Blvd, Unit 506
Jacksonville, FL 32223
Tax ID#
Inclusive Dates of Lease
February 1, 2025 through January 31, 2026
12627 San Jose Blvd, Unit 506
Jacksonville, FL 32223
| Lessor Initials | 1 | Lessee’s |
LESSEE should review lease completely. 10/11/2024
LEASE RENEWAL AGREEMENT
by and between
RANDALL N. SMITH and DWIGHT
ANDERSON
AND LAROSA REALTY JACKSONVILLE LLC
This LEASE, made as of this, by and between OFFICE RENTALS 506 LLC, whose address for hereunder is P.O. Box 54593, Jacksonville, Florida 32245 “LESSOR”), and 1LaRosa Realty Jacksonville LLC, whose address is 12627 San Jose Blvd, Unit 506, Jacksonville, (“LESSEE”).
This LEASE RENEWAL continues all provision of the prior Lease or Lease Renewal with Office Rentals 506 LLC, with the following exceptions:
Paragraph 2. LEASE TERMS AND RENT COMMENCEMENT DATE
The terms of this LEASE RENEWAL (the “LEASE Term”) shall commence on February 1, 2025, the Renewal Start Date, and shall expire on January 31, 2026, renewal termination date. LESSEE shall be in continuous use and occupancy and shall not vacate nor abandon the Premises during the LEASE term.
Paragraph 9: BASE RENT
LESSEE shall pay in full to LESSOR, at the address of LESSOR, without notice, demand, deduction or set-of whatsoever, in lawful United States currency, the following rentals as Base Rent, together with any sales, use or other taxes assessed thereon, on or before the first day of each calendar month during the LEASE Term:
| Rent Start Date | Rent | Sales Tax at Start Date | Total Rent at Start Date | ||||||
| February 1, 2025 | $ | 1838.55 | $ | 64.35 | $ | 1902.90 | |||
| through January 31, 2026 | Eighteen Hundred Thirty-Eight and 55/100 dollars | Sixty four and 35/100 dollars | Nineteen Hundred Two 90/100 dollars | ||||||
(The remainder of this paragraph remains unchanged.)
Paragraph 66. OPTION TO RENEW
So long as LESSEE is not in Default under any of the terms and conditions contained within this LEASE, LESSOR grants to LESSEE an option to renew this LEASE by written request, with return receipt, sent to LESSOR at the address defined and specified at the beginning of this Lease Agreement. This option is granted by LESSOR to LESSEE as the sole and exclusive responsibility of the LESSEE. The request must be submitted by LESSEE to LESSOR, no later than ninety {90) days prior to expiration of the Lease. The Option to Renew will be for one (1) additional One (I) year term, and negotiated in good faith, and in a timely manner based upon at-that-time, current market terms and conditions. Negotiations conducted in this manner must be completed, to both parties mutual consent no later than sixty (60) days prior to expiration of the Lease, as defined and specified in the Rent Schedule. Should either one(!) or both parties (2) be absent or refrain from mutual consent to Option to Renew, or be absent or refrain from mutual consent to agreed upon market terms and conditions, then the Terms and Conditions of this LEASE as executed, pursuant to the date of signature as identified below, will remain in full force and effect until the end of said Lease Term as defined and specified in the Rent Schedule. Ergo, LESSEE must give LESSOR written notice of the “Option to Renew” on or before the last day of October 2025.
IN WITNESS WHEREOF, the parties hereto have signed and sealed this LEASE as of the day and year first above written.
| Lessor Initials ☐ | 2 | Lessee’s |
LESSEE should review lease completely. 10/11/2024
Lease Renewal Agreement
by and between
RanDALL N. SMITH and DWIGHT ANDERSON
AND LAROSA REALTY JACKSONVILLE LLC
| LESSOR | OFFICE RENTALS 506 LL | LESSEE #1 | ||
| Social Security Number or Tax ID Number | ||||
| By: | Signature | |||
| Title | Title: | |||
| Date | Date | |||
| LESSEE #2 | ||||
| Social Security Number or Tax ID Number | ||||
| Signature | ||||
| Title: |
| Witness 1 Signature | ||
| Print Name: | ||
| Witness 2 Signature | ||
| Print Name: |
LESSEE should review lease completely. 10/11/2024
Exhibit 10.161
LEASE AGREEMENT
Dated as of the date set forth below Landlord’s signature
By and Between
Platinum Eagles 2011, LLC,
a Florida limited liability company,
Landlord
and
LA ROSA REALTY SUCCESS LLC
a Florida limited liability company
Tenant
LEASE INDEX
| ARTICLE I GRANT AND TERM | 1 | ||
| SECTION 1.01. | Basic Lease Provisions | 1 | |
| SECTION 1.02. | Enumeration of Exhibits | 3 | |
| SECTION 1.03. | Leased Premises | 3 | |
| SECTION 1.04. | Term | 3 | |
| SECTION 1.05. | Calendar Year | 4 | |
| SECTION 1.06. | Security Deposit | 4 | |
| ARTICLE II RENT | 4 | ||
| SECTION 2.01. | Minimum Rent and Additional Rent | 4 | |
| SECTION 2.02. | Real Estate Taxes | 6 | |
| ARTICLE III TENANT’S GROSS SALES | 6 | ||
| SECTION 3.01. | Tenant’s Gross Sales | 6 | |
| ARTICLE IV CONDITION OF PREMISES | 6 | ||
| SECTION 4.01. | Condition of Premises | 6 | |
| ARTICLE V CONDUCT OF BUSINESS BY TENANT | 7 | ||
| SECTION 5.01. | Use of Premises | 7 | |
| SECTION 5.02. | Operation of Business | 7 | |
| SECTION 5.03. | Rules & Regulations | 8 | |
| ARTICLE VI COMMON AREAS AND FACILITIES; SIDEWALKS | 9 | ||
| SECTION 6.01. | Control of Common Areas by Landlord | 9 | |
| SECTION 6.02. | License for Use of Common Areas | 10 | |
| SECTION 6.03. | Sidewalk and Loading Area Clearance; Trash and Debris | 10 | |
| ARTICLE VII COST OF MAINTENANCE OF COMMON AREAS | 10 | ||
| SECTION 7.01. | Tenant to Pay Proportionate Share of Expenses | 10 | |
| SECTION 7.02. | Increased Maintenance Costs | 11 | |
| ARTICLE VIII FIXTURES AND ALTERATIONS; SIGNAGE | 11 | ||
| SECTION 8.01. | Tenant Installation of Improvements | 11 | |
| SECTION 8.02. | Tenant Contractors; Ownership of Improvements; Liens; Roof | 12 | |
| SECTION 8.03. | Removal of Tenant Improvements and Restoration of Premises | 12 | |
| SECTION 8.04. | Signs, Awnings and Canopies | 12 | |
| SECTION 8.05. | Discharge and Non-Attachment of Liens; General Disclaimer | 13 | |
| ARTICLE IX MAINTENANCE OF LEASED PREMISES | 14 | ||
| SECTION 9.01. | Maintenance Responsibilities | 14 | |
| SECTION 9.02. | Condition upon Surrender of Premises | 15 | |
| ARTICLE X INSURANCE AND INDEMNITY | 16 | ||
| SECTION 10.01. | Tenant’s Insurance | 16 | |
| SECTION 10.02. | Landlord’s Insurance | 17 | |
| SECTION 10.03. | Indemnification | 18 | |
| SECTION 10.04. | Plate Glass, Burglary, Vandalism, Malicious Mischief, Doors | 18 | |
| ARTICLE XI UTILITIES | 19 | ||
| SECTION 11.01. | Utilities Generally | 19 | |
| SECTION 11.02. | Utilities Switchover | 19 | |
| ARTICLE XII ASSIGNMENT AND SUBLETTING | 20 | ||
| SECTION 12.01. | Assignment and Subletting | 20 | |
| SECTION 12.02. | Administrative Fee and Reimbursement of Legal Fees for Lease Assignment | 20 | |
LEASE INDEX
| SECTION 12.03. | Transfer of Landlord’s Interest | ||
| ARTICLE XIII SANITATION, GOVERNMENTAL REGULATIONS | 21 | ||
| SECTION 13.01. | Sanitation | 21 | |
| SECTION 13.02. | Governmental Regulations; ADA | 21 | |
| ARTICLE XIV SUBORDINATION, MODIFICATION, ATTORNMENT, EXCULPATION | 22 | ||
| SECTION 14.01. | Mortgage Subordination | 22 | |
| SECTION 14.02. | EstoppeJ Certificates | 22 | |
| SECTION 14.03. | Attornment | 23 | |
| SECTION 14.04. | Exculpation | 23 | |
| ARTICLE XV DESTRUCTION OF LEASED PREMISES | 23 | ||
| SECTION 15.01. | Total or Partial Destruction of Premises | 23 | |
| SECTION 15.02. | Destruction of Shopping Center Rentable Area | 24 | |
| ARTICLE XVI CONDEMNATION | 24 | ||
| SECTION 16.01. | Condemnation Award | 24 | |
| SECTION 16.02. | Total Condemnation of Premises | 24 | |
| SECTION 16.03. | Partial Condemnation of Premises | 24 | |
| SECTION 16.04. | Partial Condemnation of Parking Area | 25 | |
| ARTICLE XVII DEFAULT BY TENANT | 25 | ||
| SECTION 17.01. | Event of Default Defined | 25 | |
| SECTION 17.02. | Landlord’s Remedies | 26 | |
| SECTION 17.03. | Overhead Charge; Interest on Late Payments | 27 | |
| SECTION 17.04. | Bankruptcy | 28 | |
| SECTION 17.05. | Remedies Cumulative | 28 | |
| SECTION 17.06. | Legal Expenses | 29 | |
| SECTION 17.07. | Waiver of Jury Trial and Counterclaims | 29 | |
| SECTION 17.08. | Venue; Service of Process | 29 | |
| ARTICLE XVIII ACCESS BY OWNER | 29 | ||
| SECTION 18.01. | Landlord’s Rights of Access | 29 | |
| ARTICLE XIX TENANT’S PROPERTY | 30 | ||
| SECTION 19.01. | Taxes and Insurance on Tenant Property | 30 | |
| SECTION 19.02. | Landlord’s Non-liability | 30 | |
| ARTICLE XX HOLDING OVER, SUCCESSORS | 30 | ||
| SECTION 20.01. | Holding Over | 30 | |
| ARTICLE XXI QUIET ENJOYMENT & TENANT’S RIGHT TO CONTEST | 31 | ||
| SECTION 21.01. | Quiet Enjoyment | 31 | |
| SECTION 21.02. | Tenant’s Right to Contest | 31 | |
| ARTICLE XXII MISCELLANEOUS | 32 | ||
| SECTION 22.01. | Waiver | 32 | |
| SECTION 22.02. | Accord and Satisfaction | 32 | |
| SECTION 22.03. | Titles, Entire Agreement; Modifications; Severability; Binding Obligation | 32 | |
| SECTION 22.04. | No Representations; “As-ls” Basis; Miscellaneous | 33 | |
| SECTION 22.05. | Acts Beyond Control of Landlord | 33 | |
| SECTION 22.06. | Interpretation; Governing Law | 33 | |
| SECTION 22.07. | Notices | 33 | |
| SECTION 22.08. | Recording | 34 | |
| SECTION 22.09. | Submission of Lease | 34 | |
| SECTION 22.10. | Broker’s Commission | 34 | |
| SECTION 22.11. | Extension Option | 34 | |
| SECTION 22.12. | Intentionally Deleted | 34 | |
LEASE INDEX
| SECTION 22.13. | Intentionally Deleted | 34 | |
| SECTION 22.14. | Prohibited Uses | 34 | |
| SECTION 22.15. | Sales Tax | 34 | |
| SECTION 22.16. | Radon Gas | 35 | |
| SECTION 22.17. | Environmental Compliance | 35 | |
| SECTION 22.19. | Anti-Terrorism Representation | 36 | |
| SECTION 22.20. | Time is of the Essence | 36 | |
| SECTION 22.21. | Joint and Several Liability |
LEASE AGREEMENT
TIDS LEASE AGREEMENT (this “Lease”), is made and entered into as of the Date of this Lease, by and between Landlord and Tenant, all as defined below.
ARTICLE I GRANT AND TERM
SECTION 1.01. Basic Lease Provisions.
| (A) | DATE OF LEASE: As of the date set forth below Landlord’s signature. |
| (B) | PARTIES AND ADDRESS FOR NOTICES AND PAYMENTS: |
| Landlord: | Platinum Eagles 2011, LLC | |
| With a copy to: | ||
| Sarah Gulati, Esq. | ||
| Gulati Law, P.L. |
| Tenant: | LA ROSA REALTY SUCCESS LLC | |
| (C) | EXCUSIVE USE (Section 5.01): Tenant shall be granted the following limited and qualified permitted use for the Center. Tenant shall be entitled to operate a real estate brokerage bearing the trade name La Rosa Realty Success (the “Permitted Use”). For purposes of absolute clarity, Tenant’s exclusive use right shall be limited only to the operation of real estate brokerage office. If during the Term of the Lease Tenant should cease operating as a real estate brokerage office or should Tenant be in default of any term or condition in the Lease, any exclusive rights shall immediately and automatically terminate. For purposes of this Lease, a “Real Estate Brokerage” is defined as an operation which advertises or holds out to the public by any oral or printed solicitation or representation that the operation is engaged in the business of buying, selling, exchanging, leasing, or renting real property. |
| In no event will Tenant request to operate or operate in any manner which would violate any other Exclusive or Primary Uses or any Prohibited Uses in the Shopping Center. |
| (D) | TENANT’S TRADE NAME (Section 5.01): “La Rosa Realty Success” |
| (E) | SHOPPING CENTER: Wekiva Corners (the “Shopping Center”), located in Orange County, Florida. |
| (F) | PREMISES (Section 1.03): Suite 2244, having a mailing address of 2200 E. Semoran Blvd, Suite 2244, Apopka, Florida 32703, and containing a leasable area of approximately 1,150 leasable square feet. |
| (G) | TERM (SECTION 1.04): Commencing on the date of execution of this Lease (the “Co1mnencement Date”), as defined in Section l.04(a) and ending on the “Expiration Date”, as defined in Section 1.04(a). |
| (H) | MINIMUM/BASE RENT (Section 2.01): See attached Exhibit “A”. |
| (I) | INITIAL ESTIMATED COMMON AREA MAINTENANCE PAYMENT (Section 7.01): $4.50 per leasable sq. ft per year, plus applicable sales tax. Controllable CAM charges shall not exceed, on a cumulative basis, more than five (5%) per annum. Non-controllable expenses will be billed at the actual amounts. Non-controllable expenses are defined as real estate taxes and the cost of all insurance relating to the Premises. Tenant shall additionally pay all applicable sales tax. |
| (J) | INITIAL ESTIMATED REAL ESTATE TAX EXPENSE (Section 2.02) AND INSURANCE PAYMENT (Section 10.02): Included in the Common Area Maintenance Payment, Section 1.01 |
| (K) | ESTIMATED PROPORTIONATE SHARE: Tenant’s estimated proportionate share is subject to change upon an increase or decrease in the Shopping Center or Premises square footage. |
| (L) | SECURITY DEPOSIT (Section 1.06): Tenant shall deposit FIVE THOUSAND and 00/100 Dollars ($5,000.00) with Landlord upon execution of the Lease. If Tenant fails to pay the Base Rent, or otherwise defaults under the Lease, Landlord may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due to Landlord |
| (M) | GUARANTOR(S): Frank Delesline Ill |
| (N) | Intentionally Deleted. |
| (O) | OPERATING HOURS (Section 5.02): From at least o’clock a.m. to o’clock p.m. of each business day, Monday through Friday. Tenant shall operate on Saturday and Sunday from at least a.m. to p.m. |
| (P) | BROKER(S): Tenant represents and warrants that it neither consulted nor negotiated with any broker or finder regarding the Premises, except the Landlord’s Broker, Anthony Bernabe of Equity, LLC and Tenant’s Broker Frank Delesline of La Rosa Realty Downtown Orlando, LLC. Tenant shall indemnify, defend and hold Landlord harmless from and against any claims for commissions from any real estate broker other than the Landlords Broker and the Tenants Broker with whom it has dealt in connection with this Lease. Landlord shall pay Landlord’s Broker who is responsible for commissions due to the Tenant’s Broker in connection with this lease pursuant to the terms of separate agreements between Landlord and Landlord’s Broker. This provision shall survive the expiration or earlier termination of this Lease. |
| (Q) | TENANT’S PROPORTIONATE SHARE: The term “Tenant’s Proportionate Share” of a given expense shall mean the sum derived by multiplying the amount of the expense by a fraction, the numerator of which shall be the gross leasable floor area of the Premises, and the denominator of which shall be the gross leasable floor area of the Shopping Center. |
These Basic Lease Provisions are incorporated herein by this reference. In the event there are any inconsistencies between the Basic Lease Provisions and the following sections of this Lease, the following sections shall control.
SECTION 1.02. Enumeration of Exhibits.
The following Exhibits and Addenda are attached to this Lease and incorporated herein by this reference.
| Exhibit “A” - | Rent Schedule |
| Exhibit “B” - | Landlord’s Work |
| Exhibit “B-1” - | Contractor Requirements |
| Exhibit “C” - | Sign Criteria |
| Exhibit “D” - | Guaranty Agreement |
| Exhibit ’‘E” - | Shopping Center Rules and Regulations |
| Exhibit “F” | Memorandum of Rent Commencement |
| Exhibit “G” | Disbursement of Tenant Improvement Allowance |
| Exhibit“A” | does not constitute a covenant or warranty that the present layout of the Shopping Center will be maintained throughout the Term. |
SECTION 1.03. Leased Premises.
Landlord, in consideration of the rents to be paid and the covenants and agreements to be performed by Tenant, hereby leases the Premises to Tenant for the Term.
SECTION 1.04. Term.
(a) The term of this Lease (the “Tenn”) shall commence on October 1, 2020 (the “Commencement Date”). The payment of Rent shall commence upon the earlier of the following: 1) Ninety (90) days after Landlord has notified Tenant in writing that Landlord’s work has been substantially complete; or 2) upon Tenant’s opening for business (the “Rent Commencement Date”). The initial lease tenn shall commence on the Rent C01mnencement Date and continue for five (5) years after the Rent Commencement Date, however, if the Rent Commencement Date is a day other than the first (1st) day of the calendar month, then the first (!51) Lease Year shall begin on the Rent Commencement Date and end on the last day of the twelfth (12th) full calendar month thereafter and each subsequent Lease Year shall begin on the first (l st) day of the calendar month following the end of the preceding Lease Year and shall continue for twelve (12) consecutive calendar months thereafter (each a “Lease Year”) and the last day of the last Lease Year shall be deemed to be the expiration of the Lease Term (the “Expiration Date).
(2) Landlord shall deliver keys to the Premises to Tenant following Landlord’s completion of Landlord’s Work in all material respects, whereupon Tenant may finish out the interior of the Premises at Tenant’s cost in accordance with the provisions of Article VIII hereof. Tenant shall provide Landlord with copies of certificates of insurance complying in all respects with the tenns of this Lease for all insurance required to be provided hereunder prior to entering the Premises. Tenant agrees that Tenant’s entry into the Premises prior to the Rent Commencement Date shall be governed by and subject to all terms, covenants, conditions and obligations of this Lease during the period between the date keys to the Premises are delivered to Tenant and the Rent Commencement Date, other than the payment of Rent, which shall commence on the Rent Commencement Date.
SECTION 1.05. Calendar Year.
(a) Calendar Year. “Calendar Year” or “calendar year”, for the purpose of this Lease, shall mean each successive January 1 to December 31 period falling within the Term. The periods from the Commencement Date to the end of the Calendar Year in which commencement occurs, and from January 1st of the Calendar Year in which the Term ends until the date on which the Te1m ends, shall be considered “Fractional Calendar Years”, except to the extent the Term may commence on Janua1y 1 or end on a December 31. Unless the context clearly requires otherwise the words “Calendar Year” or “calendar year” shall be deemed wherever used to include any Fractional Calendar Years which may fall within the Term.
SECTION 1.06. Security Deposit.
Simultaneously with the execution and delivery to Landlord of this Lease by Tenant, Tenant shall deposit with Landlord as a Security Deposit the sum shown in Section l.Ol(L) of this Lease. Landlord may apply all or part of the Security Deposit to any unpaid Rent or other charges due from Tenant or to cure any other defaults of Tenant, or otherwise as permitted by law or in equity. If Landlord uses any pa.it of the Security Deposit, Tenant shall restore the Security Deposit to its full amount within ten (10) days after Landlord’s written request. Tenant’s failure to do so shall be a material default under this Lease. No interest shall be paid on the Security Deposit, and Landlord may commingle the Security Deposit with other funds of Landlord.
ARTICLE II
RENT
SECTION 2.01. Minimum Rent and Additional Rent.
(a) In consideration of the leasing to Tenant of the Premises and the covenants and agreements herein contained, beginning on the Rent Commencement Date, Tenant hereby covenants and agrees to pay to Landlord throughout the Tenn, in addition to all other sums payable from time to time hereunder, without demand and without any deductions, offsets, or counterclaims whatsoever, at Landlord’s offices or such other place as Landlord may from time to time designate, as the Minimum Rent for the Premises (“Minimum Rent”), the sums set forth in Section l.Ol(H) above, plus applicable sales or use tax thereon along with “Additional Rent”, as defined in Section 2.0l(b), plus applicable sales or use tax thereon.
(b) The term “Additional Rent” shall mean all sums other than Minimum Rent payable under this Lease, including, without limitation, Tenant’s Proportionate Share of Common Area Maintenance expenses, Real Estate Taxes and Landlord’s insurance, estimated at $4.50 per square foot, with annual reconciliation. Controllable CAM charges not to exceed, on a cumulative basis, more than five (5%) percent per annum. Any and all sums payable by Tenant to Landlord under this Lease, however designated, shall be considered Rent or Additional Rent, whether or not specifically so identified. The term “Rent” or “Rents” when used herein shall mean all monies due from Tenant to Landlord hereunder, or whatever type, or any particular type of money so payable, including any sales tax assessed thereon by the State of Florida or other governmental auth01ity. Non-controllable expenses will be billed at the actual amounts. Non-controllable expenses are defined as Real Estate Taxes and the cost of all Insurance Premiums relating to the property.
(c) In the event of a partial calendar month, a prorated installment of Minimum Rent and Additional Rent shall be calculated and payable at the rates then applicable under this Lease. Tenant will pay Landlord as prorated rent, an amount equal to the base monthly rent multiplied by the following fraction: the number of days from the Commencement Date to the first day of the following month divided by the number of days in the month in which this lease commences. The prorated rent is due on or before the Rent Commencement Date.
(d) This Lease shall be deemed and construed to be a “totally net lease” except as otherwise specifically provided herein, and Landlord shall receive all Rent and other payments to be made by Tenant hereunder free from any and all charges, assessments, sales or use taxes, impositions, expenses or deductions of any kind or nature whatsoever. However, nothing contained herein shall be construed to obligate Tenant to pay any franchise, corporation, transfer, estate, inheritance or income tax imposed upon Landlord.
(e) All Rent is due commencing on the Rent Commencement Date, unless abatement stated below and thereafter on the first day of each calendar month during the Term. All sums due under this Lease shall be payable only in United States cun-ency. All checks rendered as payment must be good on presentation to the bank upon which drawn. Landlord shall have the right to impose a bad check fee if any check tendered by Tenant is returned for insufficient funds, and also thereafter to require payment by cashier’s check, money order, wire transfer, or automated monthly transfer from Tenant’s bank account.
(f) Abatement of Rent. For so long as there is no event of Default beyond any notice and cure period, no Base Rent nor Shared Expenses shall be due for ninety (90) days beginning on the Rent Commencement Date, which shall constitute the Abatement Period. Tenant shall pay all other charges due under this Lease, including full CAM and any other costs incurred for the Premises during the Abatement Period, including but not limited to, any utilities or required Tenant Insurance or other costs incurred for the Premises or due to the operation of Tenant’s business. In the event of a Default by Tenant beyond any notice and cure period, at any time during the term of the Lease or any renewal period, the entire minimum guaranteed rent and shared expenses and any other amounts of rent abated during the Abatement Period and otherwise due and payable for the Abatement Period shall become immediately due and payable by Tenant.
If the Tenant fails to pay any Fixed Rent Payment, Additional Rent Payment, Applicable Sales Taxes, or any other swn of money or charge payable to Landlord under the tem1s of the lease by the 3rd of each month, then Landlord shall assess against Tenant and Tenant shall within five (5) days’ pay to Landlord a late payment penalty of five percent (5%) of said amount per occurrence.
SECTION 2.02. Real Estate Taxes.
Landlord shall pay or cause to have paid all taxes and assessments, special or otherwise, which may be assessed against the land and improvements constituting the realty of the Premises and Shopping Center (“Real Estate Taxes”). Tenant shall, as Additional Rent, pay Tenant’s Proportionate Share of Landlord’s cost of Real Estate Taxes, less any contributions by Anchor Stores and outparcels (Tenant’s initial estimate set forth in Section 1.0I(J) above), to be paid in equal monthly installments due on the first ( Ist) day of each calendar month commencing on the Rent Commencement Date. Such amount shall be adjusted from time to time at least annually after the tax bills are revised, whether by reason of an increase in either the tax rate or the assessed valuation, or by reason of the levy, assessment, or imposition of any tax or assessment of any kind on real estate or rentals, not now levied, assessed or imposed, or for any other reason, and in such an event Tenant shall pay to Landlord within thirty (30) days after invoice, as Additional Rent for the tax year in question, the amount of such excess.
Tenant at all times shall be responsible for and shall pay, before delinquency, all municipal, county, state or federal taxes assessed against any leasehold interest or any fixtures, furnishings, equipment, stock-in-trade or other personal property of any kind owned, installed or used in or on the Premises.
ARTICLE Ill
TENANT’S FINANCIAL STATEMENTS
SECTION 3.01. Tenants Financial Statements
Tenant will, within 60-days of each calendar year-end, submit P&L statements to the Landlord for review.
ARTICLE IV
CONDITION OF PREMISES
SECTION 4.01. Condition of Premises.
(a) Tenant acknowledges that Landlord has made no representation or promise as to the condition of the Premises, nor shall Landlord be required to construct any improvement, alteration or addition to the Premises, except as provided herein. Prior to the Commencement Date, Landlord, at Landlord’s sole cost, shall perfonn the work set forth in Exhibit “B” attached hereto and made a part hereof (“Landlord’s Work”). Tenant expressly acknowledges that it has inspected the Premises and is fully familiar with the condition thereof, and Tenant agrees to accept the Premises in its “AS-IS WHERE-IS” condition, subject to Landlord’s Work to be performed by Landlord in accordance with this Section. Landlord shall have no obligation to perfonn any work therein and shall not be obligated to reimburse Tenant or provide an allowance for any costs related to the demolition of construction of improvements therein. Tenant’s taking possession of the Premises shall be deemed conclusive evidence that, as of the date of taking possession, the Premises were in good order and satisfactory condition. No promise of Landlord to alter, remodel, repair, or improve the Premises or the Shopping Center, and no representation, express or implied, respecting any matter or thing relating to the Premises, the Shopping Center or this Lease (including, without limitation, the condition thereof) have been made to Tenant by Landlord, other than as may be expressly contained in this Lease. Promptly following the Commencement Date Tenant shall perform the Work to the Premises as Described in the “Work Letter”.
(b) Tenant may, at Tenant’s option, build out the interior of the Premises (the “Tenant Improvements”), provided that Tenant has first submitted to Landlord a proposal and plans for the contemplated Tenant Improvements, and received Landlord’s written approval of same. All Tenapt Improvements performed by Tenant or Tenant’s contractors shall be completed in a good and workmanlike manner and in conformance with all applicable federal, state, and local laws, ordinances, rules and regulations and all building, health, safety, fire and envirom11ental codes. Tenant shall be solely responsible for all costs of the Tenant Improvements. The planning, performance and installation of the Tenant Improvements contemplated herein by Tenant shall be further subject to all applicable provisions of this Lease including, without limitation, the provisions of Articles VIII, X and XIII. Tenant shall indemnify and hold harmless Landlord, Landlord’s officers, directors, employees, agents, successors and assigns from and against any loss, cost, damage, liability or expense (including attorneys’ fees and disbursements) arising by reason of the nonpayment, late payment or shortage in the payment of any sales tax on the cost of the Tenant Improvements. The foregoing covenants and indemnity shall survive the expiration or any termination of this Lease.
ARTICLEV
CONDUCT OF BUSINESS BY TENANT
SECTION 5.01. Use of Premises.
The Premises are to be used under this Lease as specified in Section 1.0l(C) and under the Trade Name specified in Section 1.01(D) and for no other purpose and under no other trade name whatsoever without the prior written consent of Landlord. Tenant agrees to occupy the Premises and open its doors for business promptly upon the commencement of the initial Term and thereafter continuously during the Term to actively conduct business with the public in the Premises, subject to the provisions of Section 5.02(h) below.
If Tenant violates the foregoing and does not cease such violation within five (5) days following written notice of such violation from Landlord, in addition to other remedies available to Landlord in this Lease or in law, (i) Tenant shall pay to Landlord a fine in the amount of $1,000.00 for each day of such violation, (ii) Tenant hereby consents to any injunctive relief requested by Landlord, and (iii) Tenant shall pay all expenses, including, without limitation, reasonable attorney’s fees and court costs, incurred by Landlord in the enforcement of the rights set forth in this Section 5.01. If Tenant fails to reimburse Landlord upon demand for any amount paid by Landlord hereunder within thirty (30) days after receipt from Landlord of bills or written notice of claim for reimbursement, said amount shall accrue interest at the maximum rate permitted by law.
SECTION 5.02. Operation of Business.
(a) Tenant agrees to staff the Premises fully and adequately with sufficient employees as is reasonably required for Tenant’s business therein and not for any other business locations of Tenant.
(b) Tenant shall keep the Premises continuously open for business with the public at least during the Operating Hours set forth in Section 1.01(0). Tenant shall, except as may be controlled under a Shopping Center master switch, keep any lighting or signage (if any) underneath the front canopy and the storefront signs upon the Premises illuminated from dusk until at least 11:00 o’clock p.m., local time each day.
(c) Tenant shall not conduct any auction, fire, bankruptcy, liquidation, going out of business, or close-out sales, nor shall it operate a “wholesale”, “outlet” or “surplus” store, or utilize any unethical or disreputable method of business operation. This provision shall not preclude the conduct of periodic promotional, seasonal, or clearance sales.
(d) Tenant shall use and maintain the Premises consistent with present reasonable standards of operation of a first class shopping center and Tenant shall not pennit solicitation, demonstrations, itinerant vending, loitering or any other activities inconsistent with such standards, and shall not use or permit the Premises to be used for any unlawful, disreputable or immoral purpose, or which in any way will injure the reputation of the Shopping Center, or be a nuisance to other tenants of the Shopping Ce“nter.
(e) No pool tables, video games or the like shall be installed by Tenant in the Premises without the prior written consent of Landlord, which consent may be withheld in the sole unfettered discretion of Landlord.
(f) Tenant is required to provide, at its sole cost and expense, adequate security detail (marked and unmarked) as is necessary to maintain the safety and secmity of Tenant’s patrons upon and around the Premises, as determined by Landlord. In addition, Landlord shall not be required to provide any type of security for Tenant’s employees and customers upon and around the Premises, such risks and obligations are expressly assumed by Tenant. Tenant’s insurance and indemnity obligations otherwise contained in this Lease shall apply to the activities of Tenant’s security company and to the safety of Tenant’s employees and patrons upon and around the Premises.
(g) Tenant shall not allow excessive noise from crowds or activities in the Premises to occur and shall not use or permit the use of any radio, Muzak, stereo system, loudspeaker, or other sound-producing or transmitting apparatus or any musical instrument in such manner that the sound shall be audible beyond the interior of the Premises. In addition, Tenant shall not cause or permit objectionable odors to emanate from the Premises.
(h) In the event Tenant (i) shall fail to take possession and open for business in the Premises fully fixture, stocked and staffed prior to the Rent Commencement Date, or (ii) shall vacate, abandon or desert the Premises, or (iii) shall cease operating Tenant’s business therein (except where the Premises are rendered untenantable by reason of fire, casualty or other causes beyond Tenant’s control not resulting from the negligent acts or omissions of Tenant or Tenant’s employees, agents, contractors, licensees, concessionaires or invitees), such “failure to do business” shall be a default under the terms of this Lease.
SECTION 5.03. Rules & Regulations.
Landlord reserves the right to make such other and further non-discriminatory, rules and regulations as Landlord deems necessary or desirable for the orderly use, reputation, safety, care, and cleanliness of the Premises and Shopping Center and for the preservation of any property therein, and the comfort, quiet and convenience of other occupants of the Shopping Center. Any failure by Landlord for any period or in any instance to enforce any rules and regulations against Tenant or any other tenants of the Shopping Center shall not constitute a waiver of such rule or regulation or prevent Landlord from subsequently requiring compliance therewith. Tenant shall be obligated to cause its employees, invitees, customers and agents to likewise observe such rules and regulations and any violation of such rules and regulations by any such person shall be regarded as a violation by Tenant. See attached Exhibit “E” hereto.
ARTICLE VI
COMMON AREAS AND FACILITIES; SIDEWALKS
SECTION 6.01. Control of Common Areas by Landlord.
(a) Definition. Tenant and its customers shall have, together with Landlord and other tenants and their customers, the joint use, for their intended purposes, of the common areas and facilities of the Shopping Center, which shall include, without limitation, parking areas, driveways, service driveways, sidewalks restrooms, elevators and other facilities as shall from time to time be designated by Landlord to be for common use (collectively, the “Common Areas”). Such use shall be subject to such reasonable rules and regulations as Landlord may from time to time adopt governing the same. Landlord shall, at all times, have full control over the layout and extent of said Common Areas and facilities, and the right, at any time, to change the location, shape, height and size of buildings, or to construct additional buildings and improvements on the site, including without limitation future outparcel buildings.
(b) Parking Areas and Regulations. Tenant agrees that all persons employed in the Premises shall park their vehicles only in parking areas designated by Landlord for employee parking, and that it shall not allow its employees to park their cars outside said areas. Any areas which may be currently so designated for employee parking are shown on Exhibit “A”. Landlord shall have the right from time to time to change the area, level, location and arrangement of parking areas and other facilities and to restrict parking by tenants, their officers, agents and employees to employee parking areas. In the event that any vehicle owned or operated by Tenant shall be parked in any pa1i of the Shopping Center other than the designated employee parking areas, Tenant shall pay Landlord an amount equal to the uniform daily rate theretofore established by Landlord for the Shopping Center (such rate presently being ten dollars ($10.00) per day, which amount Landlord may in its sole discretion adjust from time to time), for each such vehicle for each day, or part thereof, such vehicle is so parked, and Landlord may tow any vehicle which is so parked at the expense of Tenant or of the owner of the car which was towed. Upon Landlord’s request, Tenant shall furnish Landlord the license plate numbers of all employees of Tenant. The parking areas shall not be used for the storage or servicing of vehicles. No vehicle whatsoever, including without limitation vehicles owned or controlled by Tenant or any officer, agent or employee of Tenant, shall be parked in the parking facilities or other Common Areas for more than twenty-four (24) hours consecutively. Landlord may tow any vehicle which is so parked at the expense of the owner of such vehicle, or at Tenant’s expense if such vehicle is owned by Tenant. Landlord shall have the right to temporarily close any and all portions of the parking areas to such extent as may, in the opinion of Landlord’s legal counsel, be legally necessary to prevent a dedication thereof or the accrual of any rights to any person or to the public therein or to temporarily close, if necessary, any part of the parking area or areas in order to discourage noncustomer parking or for repairs, so long as access and visibility is not substantially impaired. Tenant shall prevent the parking or standing in drive lanes and fire lanes outside the front of the Premises of trucks, tr·ailers or other vehicles or equipment engaged in making deliveries to or from the Premises. Landlord may, in addition to any other remedies, including towing such vehicles, levy a fee of Twenty Dollars ($20.00) per violation of this provision. Landlord may have any vehicle which is parked or standing in a drive lane or fire lane, and any vehicle which without Landlord’s written consent has been parked anywhere in the Shopping Center for more than twenty-four (24) hours consecutively, towed without warning at the expense of the owner of such vehicle.
(c) Alterations and Additions. Landlord hereby reserves the right, at any time, to make alterations or additions to and to build additional stories on the Shopping Center and to build above, adjacent to or adjoining the same. Landlord also reserves the right to construct other buildings or improvements at the Shopping Center from time to time and to make alterations thereof or additions thereto and to build additional stories on any such building or buildings and to build adjacent to or adjoining same and to construct double-deck or elevated parking facilities. Landlord reserves the right, at any time, to construct additional buildings and/or relocate, reconfigure or change the size of the various buildings, automobile parking areas, and other Common Areas shown on said site plan. If Landlord subsequently develops any land adjoining the Shopping Center for similar retail use, whether or not such land is now owned by Landlord, or if Landlord subsequently acquires any land adjoining the Shopping Center which at the time of acquisition has already been developed for similar retail use, Landlord shall have the option in its sole discretion of treating or not treating such land as part of the Shopping Center for all purposes of this Lease or for such purposes hereof as it may determine are appropriate. Notwithstanding the above, Landlord shall not have any obligation to make any alterations or additions, and in the event that it does, it shall not be liable to Tenant for any reduction or abatement of Rent, diminution in value of the Premises or claims of constructive or actual eviction resulting from such activities.
SECTION 6.02. License for Use of Common Areas.
All of Tenant’s rights to use Common Areas and facilities not within the Premises as stated in this Lease shall be considered to be in the nature of a license for the Term, which license shall be considered partially revocable to the extent and in the sense that if the amount of such areas shall be diminished or altered at any time or from time to time during the Term, Landlord shall not be subject to any liability nor shall Tenant be entitled to any compensation or diminution or abatement of Rent, nor shall such diminution of such areas be deemed constructive or actual eviction.
SECTION 6.03. Sidewalk and Loading Area Clearance; Trash and Debris.
(a) Sidewalk Clearance. Tenant shall at all times keep the entire sidewalk area in front of the Premises (for the entire depth of the sidewall<, along the entire front of the Premises), and the loading area to the rear of Premises, clean and free of litter and all other hazards, hindrances and obstructions.
(b) No Exterior Sales. Tenant is prohibited from using all or any part of the sidewalk area in front of the Premises, or of the drive lanes, parking areas, or any Common Areas or any courtyard areas, or any other areas of the Shopping Center outside of the Premises, for the sale, display, or placement of merchandise, display tables, display cases, signboards, and the like, or for any other promotional or selling activities, including vehicles with Tenant’s name affixed thereon parked so as to serve as a promotional device.
(c) Definition. For purposes of this Section and any other Sections of the Lease concerning or addressing sidewalks, the term “sidewalk area in front of the Premises” and any like or similar term shall be deemed to include the entire depth of the sidewalk from outside curb face to building face, along the entire front of the Premises, and shall include any segment of sidewalk which may wrap around any comer and/or run along any side wall of the Premises, for the entire width and length of such segment of sidewalk, and shall further include any handicap ramps lying within or connected to such front and/or side segments of such sidewalks.
ARTICLE VII
COST OF MAINTENANCE OF COMMON AREAS
SECTION 7.01. Tenant to Pay Proportionate Share of Expenses.
In addition to the Minimum Rent and all other payments required herein, Tenant shall pay as Additional Rent to Landlord Tenant’s Proportionate Share of the costs required to maintain the Common Areas (the “Common Area Maintenance” expenses), less any contributions by Anchor Stores and outparcels (Tenant’s initial estimate set forth in Section 1.0l(I) above), to be paid in equal monthly installments due on the first (1st day of each calendar month commencing on the Rent Commencement Date. The purpose for or manner in which said payments shall be used shall be within the sole control of Landlord. Upon Tenant’s request, Landlord shall provide Tenant with an annual summary statement of expenses. Landlord may expend Common Area Maintenance funds and incur Common Area Maintenance expenses in such proportions as it may in its sole discretion determine in order to: (1) operate, maintain, repair, clean, landscape, and/or mow the Common Areas and any landscaping thereon; (2) operate, maintain and repair any retention or detention ponds; (3) maintain or repair drainage systems and any other utility systems; (4) maintain, resurface, seal, repair or stripe parking lots, parking lot lighting and service driveways; (5) maintain, repair or light the parking lot, sidewalks, service drives or any other Common Areas; (6) identify the Shopping Center and/or construct or maintain any Shopping Center directory; (7) pay any utility costs and any governmental assessments or surcharges on or relating to the Common Areas and facilities; (8) maintain and/or repair any roof or down spouts in the Shopping Center; (9) maintain and/or repair, awnings, if any, in the Shopping Center; (10) provide personnel for security and on-and off-site traffic control; (11) operate, maintain, repair, and clean the exterior of the buildings comprising the Shopping Center; (12) collect, as a Cmmnon Area Maintenance cost, an administrative fee not in excess of 15% of all Common Area Maintenance expenses other than such fee; (13) collect, as a Common Area Maintenance cost, a property management fee of no more than five percent (5%) of Landlord’s gross revenues of the Shopping Center (which fee may be imputed if Landlord has internalized management or otherwise acts as its own property manager); and (14) generally maintain the Common Areas and facilities of the Shopping Center in whatever manner Landlord sees fit.
SECTION 7.02. Increased Maintenance Costs.
In the event that Tenant’s Proportionate Share of Common Area Maintenance expenses incurred exceeds the estimate set forth in Section 1.01(1) above, Tenant shall pay this additional cost to Landlord upon demand. Landlord may adjust the Common Area Maintenance expenses from time to time, and Tenant’s Proportionate Share of san1e shall be adjusted accordingly.
ARTICLE VIII
FIXTURES AND ALTERATIONS; SIGNAGE
SECTION 8.01. Tenant Work; Utilities.
(a) Tenants Work: Tenant shall perform, at its own cost and expense, all work required by Tenant to fully fixture and operate its business at the Leased Premises (“Tenants Work”). All fixtures installed by Tenant in or about the Leased Premises shall be new or in first class condition. Within fourteen (14) days after Lease commencement, Tenant shall furnish to Landlord two (2) complete sets of plans and specifications for Tenant’s Work (signed and sealed by a registered Florida architect, if required by applicable zoning laws). Such plans and specifications shall show the layout, fixturing, interior finish and storefront plans for the Leased Premises and any other work or equipment to be done or installed by Tenant affecting any structural, mechanical or electrical component of the Leased Premises or the Center. Tenant shall not commence the construction of any portion of the Tenant’s Work, until such time as Landlord has approved in writing such plans and specifications for Tenants Work. All of Tenants Work shall be performed in a good and workmanlike manner and shall be free from all defects in workmanship and materials. Any work on the Shopping Center or on the Premises by the Tenant or Tenant’s contractors in connection with improvements shall be subject to contractor Requirements set forth in Exhibit B-1, including without limitation, the insurance requirements relating to Tenant’s contractors.
Promptly following Landlord’s written approval of the Tenant’s Work, Tenant’s selection of Tenant’s contractor, and the receipt of all bids from subcontractors, Tenant will prepare a construction schedule outlining the major milestones of planned progress of construction and of the Tenant Improvements (the “Construction Schedule”) and deliver a copy of the Construction Schedule to Landlord.
(b) Tenant Improvement Allowance. So long as Tenant is not in default of any provision or obligation under the Lease, Landlord will provide a Tenant Improvement Allowance, not to exceed Five Thousand and 00/100 Dollars ($5,000.00), further described in Exhibit “G”. The allowance shall be equal to the actual cost, not to exceed $5,000.00, and any unused portion of the Tenant Improvement Allowance upon completion of the Tenant Improvements will not be refunded to Tenant or be available to Tenant as a credit against any obligations of Tenant under the Lease.
(c) Utility Usage. Tenant shall be solely responsible for, and shall promptly pay for, all public utility and private services rendered, or furnished to or for the benefit of Tenant and to the Premises during the Te1m including heat, water, gas, electricity and sewer rental, together with all taxes, levies or other charges based on use of such utilities, together with applicable sales or use tax thereon. Should any such services be furnished by Landlord, Tenant agrees to pay Landlord for same. The rates charged shall not exceed those of a public utility company furnishing similar service in the area. All billings by Landlord for any such service shall be paid within fifteen (15) days of billing, or among Landlord’s other remedies, such services may be discontinued. Landlord shall not be liable for the quality, quantity or interruptions of such services.
(d) Fire Codes and Prevention. Tenant shall observe all applicable fire codes. If, during the Term, any public authority requires that the Premises (because of the Pennitted Use) be provided with a sprinkler fire protection system, Tenant agrees, at Tenant’s sole cost and expense, to install such a system in the Premises. Tenant shall supply and maintain, at its sole cost and expense, any and all fire prevention and fire extinguishing equipment, supplies and facilities, including but not limited to fire extinguishers and smoke detectors, which may be recommended or required by Landlord’s insurer or applicable public authorities. If there is a cooking facility within the Premises, Tenant shall provide an “Underwriters Laboratories Approved Fire Extinguishing System” which shall include a filter type grease guard mounted upon the roof installed according to the requirements of the local Insurance Service Office. In addition, each of said systems shall be equipped by Tenant with an automatic fuel cut-off device, which provides for shut down of fuel lines when the extinguishing system is activated. Tenant shall also provide a service contract which shall provide for semi-annual inspection and maintenance of the said systems, copies of which shall be furnished to Landlord for its approval.
(e) Noise or Heat-Generating Equipment. Tenant shall not install, keep or operate in the Premises machines or mechanical equipment which cause noise or vibration which may be transmitted to such a degree as to be objectionable to Landlord or other tenants without Landlord’s prior written consent and in the event such consent is given Tenant shall place or maintain the same on vibration eliminators or other devices sufficient to eliminate noise and vibration to Landlord’s satisfaction. Machines or equipment which generate heat or otherwise affect the air conditioning system in the Premises sufficiently to cause overloading of the air conditioning system shall not be allowed, except with Landlord’s prior written approval, which Landlord may condition upon Tenant’s installation of supplementary air conditioning equipment at Tenant’s expense.
(f) Impact Fees. Should the Tenant’s alterations to the Premises cause the City to assess impact fees, Tenant shall be solely responsible for paying the same.
SECTION 8.02. Roof.
Tenant is expressly prohibited from doing anything to or on the roof of the Premises without Landlord’s p1ior written approval. Tenant shall not be permitted to penetrate the roof in conjunction with the installation or operation of satellite dishes. The contractor selected by Tenant for any roof alteration shall be subject to the prior written approval of Landlord and any such alteration shall be conducted in a manner that will not void any warranties applicable to such roof. Any roof repairs required due directly or indirectly to the actions of Tenant or Tenant’s equipment and any extra expense incurred in re-roofing or repai1ing the roof, due directly or indirectly to any installation or alteration made by Tenant, shall be at Tenant’s expense.
SECTION 8.03. Removal of Tenant Improvements and Restoration of Premises.
At or before the time of surrender of the Premises to Landlord, Tenant may remove any trade equipment owned by Tenant which can be removed without damaging or defacing the Premises, provided that all Rents and charges stipulated to be paid by Tenant have been paid in full and further provided that any damage to the Premises, whether caused by the removal of such trade equipment or otherwise, has been repaired. With the exception of the removal of Tenant’s trade equipment, any alteration, improvement or installation shall be subject to Section 9.02 and shall remain the property of Landlord.
Any fixtures, personally, or other property not removed by Tenant upon Lease expiration or termination (whether by default or otherwise) shall at Landlord’s option be considered abandoned, and Landlord may dispose of such property as it deems expedient, without notice, without liability for trespass, and without liability for any damage to such property. Tenant shall, upon demand, reimburse Landlord for any expenses (including storage and cleaning) incurred by Landlord in connection with such property disposition.
SECTION 8.04. Signs, Awnings and Canopies.
Tenant, at Tenant’s expense, shall be permitted to place one (1) exterior sign on the front fascia of the Premises in accordance with the sign criteria set forth in the unified sign plan to be approved by Orange County, Florida, a draft of which is attached hereto as Exhibit “C’’ attached hereto, and the provisions of this Section, but Tenant shall not place, suffer or erect signs, awnings, canopies, advertising matter, decoration, or lettering on the interior or the exterior of any door, window, marquee, roof or walls of the Premises without the prior written approval of Landlord. Landlord shall reimburse Tenant for the Installation of the sign on the front exterior of the Premises for hard costs only. When so approved, such sign shall contain only the name and business of Tenant and Tenant agrees to maintain such sign in good condition and repair, and save and defend Landlord free of all expense, loss, costs (including attorneys’ fees) or damage which may result from the erection, maintenance, existence or removal of the same. Upon vacating the Premises, Tenant agrees to remove all signs on the Premises and to repair all damage caused or resulting from such removal. This Section and the Sign Criteria hereto attached as Exhibit “C” are intended to permit reasonable scope for individuality in signs and to assist in maintaining the high architectural and business character of the Shopping Center. The parties acknowledge that the Signage Criteria attached hereto as Exhibit “C” are preliminary in nature, and as such,may be modified by Landlord with the approval of Orange County, Florida. Tenant will, at its sole cost and expense, maintain such signage, banners, decoration, lettering, adve1tising matter or other thing as may be permitted on the Premises in good condition and repair at all times. Tenant shall submit to Landlord for approval drawings showing all proposed sign work to be erected in connection with the Premises. All signs shall conform to the sign criteria as outlined in the Sign Criteria attached hereto in Exhibit “C” and other such criteria as Landlord may, from time to time, establish for the Shopping Center, and shall comply with the Declaration (defined below) and all applicable laws, codes, rules and ordinances. Drawings submitted for approval shall clearly show color graphics as well as construction and attachment details of all signs including all signage dimensions, electrical load requirement, and brightness of foot-candles. Erection of any sign is prohibited unless approved in advance in writing by Landlord. No advertising medium or display within the Premises employing moving or flashing lights shall be permitted. Tenant’s rights in respect of signs shall not be transferable. Display windows and store signs shall be well lighted during hours when the Shopping Center is open. Upon expiration or termination of the Lease, the Tenant shall, in Tenant’s sole expense, remove and properly dispose of any exterior signage.
SECTION 8.05. Discharge and Non-Attachment of Liens; General Disclaimer.
(a) Mechanics’ Liens. Tenant shall not suffer or pennit any mechanic’s lien to be filed against Landlord’s fee simple interest in the Premises. Any mechanic’s lien for labor and materials furnished to or at the request of Tenant shall attach only to Tenant’s leasehold interest and shall not attach to or affect Landlord’s fee simple or remainder interest in the Premises. Tenant shall cause the release of record of any such lien, by payment, successful defense, or placement of payment bond or deposit, within sixty (60) days of the date such lien was filed, and Landlord may, if Tenant fails to comply with this covenant within such time period, pay or discharge the same and Tenant shall pay all costs thereof including attorneys’ fees to Landlord upon demand.
(b) Non-Attachment of Liens from Tenant Work. The interest of Landlord in the Premises shall not be subject in any way to any liens, including construction liens, for improvements to or other work performed with respect to the Premises by or on behalf of Tenant. Tenant shall have no power or authority to create any lien or permit any lien to attach to the present estate, reversion, or other estate of Landlord in the Premises or in the Property and all mechanics, material, contractors, artisans, and other parties contracting with Tenant or its representatives or privies with respect to the Premises or any part of the Premises are hereby charged with notice that they must look to Tenant to secure payment of any bill for work done or material furnished or for any other purpose during the term of this Lease. Without limiting the generality of the foregoing, Tenant agrees to obtain and deliver to Landlord written and unconditional waivers of construction liens upon the Premises and the Property, for all work or materials to be furnished to the Premises at the request or direction of Tenant signed by all architects, engineers, designers, contractors, subcontractors, materialmen, and laborers who become involved in such work. Notwithstanding the foregoing, Tenant, at its expense, shall cause any lien filed against the Premises or the Property, for work or materials claimed to have been furnished to Tenant, to be discharged of record or properly transferred to a bond pursuant to Section 713.24, Florida Statutes, within 30 days after notice thereof to Tenant. If Tenant shall fail to so discharge such lien or transfer it to a bond as required above, then, in addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated to discharge or transfer the same to a bond. Any amount paid by Landlord for any of the aforesaid purposes, including reasonable attorneys’ fees (if and to the extent permitted by Law) shall be paid by Tenant to Landlord on demand as Additional Rent. Landlord shall have the right to post and keep posted on the Premises any notices that may be provided by Law or which Landlord may deem to be proper for the protection of Landlord, the Premises and the Building from such liens. Tenant shall notify every contractor making improvements to the Premises that the interest of Landlord in the Premises shall not be subject to liens for improvements to the Premises or for other work performed with respect to the Premises by or on behalf of Tenant. Upon request from Landlord, Tenant shall execute, acknowledge and deliver without charge a memorandum of lease or notice in recordable form containing a confirmation that the interest of Landlord in the Premises and Property shall not be subject to liens for improvements to the Premises or for other work performed with respect to the Premises by or on behalf of Tenant.
(c) Landlord not Liable for Plan Approvals. No approval given by Landlord at any time with respect to any plans, specifications, materials, or contractors of Tenant shall create or be regarded as grounds for any liability on Landlord’s part (a) to any contractor, subcontractor, laborer, materialman, or vendor performing work on or furnishing materials for the Premises for Tenant’s account; (b) to any governmental agency for any legal or code violations or use of improper materials or the like; or (c) to any third party sustaining an injury due to poor workmanship, improper design or improper materials. It is agreed and understood that Landlord’s review of any plans, specifications or contractor of Tenant is for a very.limited purpose and that Landlord undertakes absolutely no responsibility as to the safety or compliance with laws and codes of any improvements made by Tenant nor for the payment of persons working on or supplying materials for such improvements. No approval by Landlord of any of Tenant’s plans, specifications, building mate1ials, drawings or the like constitutes a representation, warranty or opinion as to the compliance thereof with applicable building, health, environmental, or safety codes or other applicable state, federal or local laws, codes or regulations including the Americans with Disabilities Act, and the entire responsibility to see to it that Tenant’s plans, specifications, drawings and improvements so comply shall lie with Tenant.
ARTICLE IX
MAINTENANCE OF LEASED PREMISES
SECTION 9.01. Maintenance Responsibilities.
(a) Tenant. Except as otherwise specifically stated herein, Tenant shall maintain in a good and workmanlike manner, and make all necessary repairs and replacements, nonstructural, foreseen or unforeseen, ordinary or extraordinary, to the interior of the Premises, including but not limited to the heating, air conditioning, sprinkler, electrical, plumbing and sewer systems (including free flow up to the main sewer line), exterior doors, door frames, door hardware, and door openers, windows and window frames, and plate glass. If necessary, or if required by governmental authority, Tenant shall make modifications or replacements thereto, and shall, at the expiration or termination of this Lease, return the property to Landlord in good, clean condition, and in as good order and state of repair as the same are now, ordinary wear and tear excepted, and loss by fire or other casualty (if such loss by fire or other casualty is reimbursed by Landlord’s insurance company). Tenant, at its sole cost and expense, repair and replace when necessary all HVAC equipment which services only the Premises, and shall keep the Premises in first class order, and shall make all replacements necessary to keep the Premises in such condition. All replacements shall be of a quality equal to or exceeding that of the original. Should Tenant fail to make these repairs and replacements or otherwise so maintain the Premises for a period of three (3) days after written demand by Landlord, Landlord may enter the Premises and make such repairs or replacements without liability to Tenant for any loss or damage that may occur to Tenant’s stock or business, and Tenant shall pay to Landlord the costs incurred by Landlord in making such repairs or replacements together with interest thereon at the maximum rate permitted by law from the date of commencement of the work until repaid. Tenant, at its expense, shall repair promptly any damage to the Building or the Entire Premises caused by Tenant or its agents or employees or caused by the installation or removal of Tenant’s personal property. Tenant shall contract with a service company licensed and experienced in servicing HVAC equipment and approved by Landlord for the quarterly maintenance of the HVAC equipment serving the Premises and shall provide Landlord with a copy of the service contract within ten (10) days following its execution. If Tenant fails to timely deliver a copy of the service contract, Landlord may impose a late charge in the amount of $250.00 per month until the copy is delivered. The sum so billed to Tenant shall become immediately due to Landlord as additional rent. Landlord, at its option, may contract with a service company of its own choosing, or provide such service itself, for the maintenance of the HVAC equipment, and bill Tenant for the cost of same.
Tenant shall maintain any sanitary and sewer lines in the Premises which exclusively serve the Premises, if any, and shall not misuse plumbing facilities or dispose of any foreign substances therein. Tenant shall take reasonable steps to not permit any food, waste, chemical, chemical waste, chemical by-product, or other such material or other foreign substances to be disposed of, thrown or drawn into the pipes. Tenant will be responsible for all expenses, losses, and damages incUITed by Landlord by reason of Tenant’s use, misuse, or negligent or careless operations which result in the obstruction of drains, waste, and sewer pipes and mains in or servicing the Premises or any part thereof. Tenant shall be responsible to verify if any special sewer discharge needs are required due to tenants operating requirements with local governing agencies. Any upgrades to Landlord’s system as a result of Tenant’s needs, shall be at Tenant’s sole cost and expense and subject to Landlord’s approval.
(b) Landlord. Landlord shall be responsible, except as hereinafter stated, at its expense to maintain exterior structural walls (excluding plate glass), the roof, and any utility lines running through the Premises (other than utility lines specifically intended for service within the Premises, the maintenance repair and replacement of which shall be Tenant’s responsibility) and Landlord shall maintain the Common Areas in good condition and repair. Notwithstanding the foregoing, to the extent that any repair or replacement is needed to the roof or any other element of the Premises which is otherwise Landlord’s responsibility on account of the negligence, actions, or fault of Tenant, including, without limitation, on account of any alterations or modifications made by Tenant to the Premises (whether or not consented to or approved by Landlord) the cost thereof shall be paid by Tenant. Prior to Lease Commencement, Landlord will inspect and bring to good working order all HVAC units at the Premises, after which the Tenant shall become fully responsible for and maintenance, repair, and keeping the HVAC in good working order/condition.
(c) Requirement to Notify Landlord. Tenant shall report all maintenance or repair responsibility of Landlord to Landlord’s office for performance by Landlord’s personnel or contractors, and Landlord shall have no liability for maintenance or repair work, even if otherwise within its scope of responsibility, if Tenant shall proceed in some other manner.
Tenant hereby waives and relinquishes any right to make any repairs at Landlord’s expense under applicable laws now or hereafter in effect.
SECTION 9.02. Condition upon Surrender of Premises.
Tenant shall sun-ender the Premises upon the expiration or termination of this Lease, in as good condition and repair, clean, orderly free of debris and in compliance with all governmental orders, rules, regulations and statutes, as the same shall have been upon the delivery of possession to Tenant (with only ordinary wear and tear and loss by fire or other insured casualty excepted), and shall deliver the keys and inform Landlord of all combinations on locks, safes, vaults, if any, at the office of Landlord or Landlord’s agent. In the event that the foregoing covenant and other covenants of this Lease regarding Tenant’s repair obligations are not complied with at the tern1ination of this Lease, Tenant hereby expressly authorizes Landlord (as Tenant’s agent) to remove such debris and make such changes and repairs as may be necessary to restore the Premises to such condition, at Tenant’s expense, without notice to Tenant. Damages suffered by Landlord through the breach of this Section shall survive the termination of this Lease. Tenant’s obligations under this Section are supplemental to those it may have under any other Section hereof.
ARTICLEX
INSURANCE AND INDEMNITY
SECTION 10.01. Tenant’s Insurance
(a) Liability Coverage. At all times on and after the date Landlord delivers possession of the Premises to Tenant, Tenant will carry and maintain, at its expense, a non-deductible:
| (1) | Commercial General liability insurance in its standard form against claims for bodily injury or death or property damage occurring in or upon the Premises, effective from the date Tenant enters into possession of the Premises having a combined single limit amount of not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate, with Five Million Dollars ($5,000,000) in excess liability insurance per injury to one person in one accident, occurrence or casualty, or for injuries to more than one person in one accident, occurrence or casualty; and |
| (2) | Comprehensive Automobile liability insurance for vehicles owned or hired by Tenant, having a limit of One Million Dollars ($1,000,000) per occurrence and One Million Dollars ($1,000,000) in the aggregate; and |
| (3) | any other fonn of insurance which Landlord or any mortgagee of the Premises shall reasonably require from time to time, in form, in amounts and for risks against which a prudent tenant would insure. |
(b) Contents Policy. Tenant shall bear the entire risk of loss for all of its property, furniture, fixtures, carpets, machinery, equipment, inventory, stock in trade and goods placed in the Premises. Tenant shall be obligated to insure the same with an all-risk extended coverage form of commercial renter’s insurance policy at replacement value, which policy shall include, without limitation, fire legal liability with extended coverage, business intem1ption coverage with limit of liability representing loss of at least approximately eighteen (18) months of income, and coverage for vandalism, burglary, malicious mischief, sprinkler damage, wind/hail and/or hurricane, flood, and water damage, and the same shall include a waiver of subrogation against Landlord as to loss or damage covered by such policy. It is agreed and understood that the casualty coverage to be maintained by Landlord under the following Section 10.02(a) covers only the realty.
(c) Policy Requirements; Proof of Coverage. All insurance policies required herein (a) shall be in a fo1m satisfactory to Landlord, (b) shall name Tenant as insured and shall name Landlord, its designated property management firm, its lender (if any) as additional insured parties as their interest may appear, (c) shall be issued by an insurer approved by Landlord which has policyholder ratings not lower than “A-” and financial ratings not lower than “VII” in Best’s Insurance Guide (latest edition in effect as of the Date of Lease and subsequently in effect as of the date of renewal of the required policies), and (d) shall include a waiver of subrogation endorsement in favor of Landlord. Tenant shall deposit the aforesaid policies (or certificates thereof) with Landlord prior to the date of occupancy by Tenant. Should Tenant fail to carry such insurance, Landlord may, at its option, but shall not be required to, cause such insurance to be issued and in such event Tenant agrees to pay 110% of the cost of the premium for such insurance promptly upon demand. Such policies shall bear endorsement to the effect that the insurer agrees to notify Landlord in writing not less than thirty (30) days in advance of the modification or cancellation thereof. In addition, Tenant shall provide to Landlord immediate written notice in the event Tenant receives notice of cancellation of any of its insurance required by this Lease. Tenant shall provide updated certificates to Landlord of the foregoing insurance coverages annually within thirty (30) days of each respective policy anniversary date. All such insurance policies or certificates submitted by Tenant shall clearly indicate an obligation on the insurer’s part to provide Landlord with at least thirty (30) days prior written notice of intent to cancel or not renew the coverage of Tenant in question.
(d) Workers’ Compensation Coverage. Tenant shall also carry at all times such workers’ compensation insurance for its employees as may be required of it under Florida law, together with employer’s liability insurance with a limit of $500,000.00 bodily injury per accident, and Tenant shall provide Landlord evidence of such coverages within ten (10) days of any request by Landlord therefor. Any and all injuries or claimed injuries to Tenant’s employees occurring on or around the Premises or Shopping Center within the scope of employees’ duties shall be regarded as a worker’s compensation matter, to be adjusted through the workers’ compensation system, and in the event any such employee shall claim that his or her injury is of a nature allowing pursuit of a claim in addition to or in lieu of a workers’ compensation claim, such matter shall be handled by Tenant solely as an employer/employee matter, without the involvement of Landlord and Tenant shall indemnify, defend and hold Landlord harmless from any and all such claims.
(e) Periodic Increases. Not less often than every third (Yd) anniversary of the Rent Commencement Date, Landlord may review the insurance coverage amounts required to be maintained by Tenant under this Lease, and such amounts may be increased by such reasonable amounts as Landlord may deem necessary to compensate for inflation since the date of execution of the Lease or the date of the last such adjustment, whichever may apply.
SECTION 10.02. Landlord’s Insurance
(a) Building and Liability Coverages: Tenant Payments Towards Cost. Landlord will pay and maintain or cause to have paid all premiums for fire, windstorm, and extended coverage all-risk casualty (replacement cost) insurance upon the realty of the Premises and Shopping Center (including without limitation flood coverage, in areas where such coverage is required, and loss of rents coverage) and for commercial general liability insurance for the Common Areas of the Shopping Center. Tenant shall have no 1ights in said policy or policies and shall not be entitled to be named insured thereof. Tenant shall, as Additional Rent, pay to Landlord Tenant’s Proportionate Share of the cost for the aforesaid insurance coverages, less any contributions by Anchor Stores and outparcels (Tenant’s initial estimate set forth in Section 1.0l(K) above), to be paid in advance as Additional Rent in equal monthly installments due on the first (1st) day of each calendar month commencing on the Rent Commencement Date. In the event that in any Calendar Year, this cost increases, the amount of Tenant’s Proportionate Share of such increase shall be paid to Landlord within twenty (20) days after demand therefor by Landlord.
(b) Directly Traceable Premium Increases. Tenant will not do, or permit anything to be done, in or upon the Premises or bring or keep or permit anything to be brought into or kept on the Premises, or fail to comply with the terms of this Lease, which in any manner which shall constitute a fire hazard or which shall increase the premiums for fire and extended coverage insurance on the building of which the Premises or a part or on the property on which it is located. Tenant shall pay any such increased cost of insurance, including increases brought about by increased replacement cost of the building, that may result from any such act or omission of Tenant. In the event the nature of Tenant’s occupancy, even though permitted by this Lease, results in the payment of any deductible or causes any increase of premium for the property or casualty insurance rates on the Premises and the building in which it is located above the rate for the least hazardous type of occupancy legally permitted therein, Tenant shall pay Landlord upon demand such deductible or additional premiums on said fire or casualty insurance policies incurred by reason thereof.
(c) Insurance Rating and Insurance Recommendations. In determining the insurance premiums, a schedule issued by the organization determining the insurance rate on the Premises or the building of which it is a part, showing the various components of such rate, shall be conclusive evidence of the several items and charges which make up the relevant insurance rate. Tenant will comply with all recommendations of Landlord’s insurance canier and any other organization or public body, the compliance with which may have an effect on the insurance rates obtainable or payable with respect to the Premises or the Shopping Center.
SECTION 10.03. Indemnification.
Tenant shall at all times indemnify, defend, and hold Landlord and Landlord’s officers, directors, employees, agents, successors and assigns (collectively, “Landlord’s Indemnitees”) harmless from any and all loss, costs, damages, claims, liability, suits, judgments, expenses, attorneys’ fees, penalties and fines of any kind or nature whatsoever which may be incurred by Landlord or be claimed, brought, obtained, or pursued against Landlord, by any person or persons, for any damages to persons or property of whatever kind arising directly or indirectly: (i) from the use or occupancy of the Premises and the sidewalks adjoining same and the adjoining service area in the rear by Tenant; (ii) by reason of any breach, violation or nonperformance of any covenant, or condition of this Lease on the part of Tenant to be performed; (iii) consequent upon or arising from any neglect or fault of Tenant, or the agents, employees, and invitees of Tenant, in the use and occupancy of the Premises and the sidewalks adjoining same and the adjoining service area in the rear; (iv) consequent upon or arising from any failure by Tenant to comply and conform with any and all building, health, safety, environmental or other laws, ordinances, codes and regulations applicable to Tenant’s use and occupancy of the Premises or the compliance with which is otherwise required of Tenant by this Lease; (v) out of any failure of the Premises to comply with the Americans with Disabilities Act; (vi) from Tenant’s use of the Common Areas; or (vii) the enforcement of any exclusive use provision, if any, granted to Tenant, provided that such subsequent tenant in the Shopping Center has been provided notice of Tenant’s exclusive use.
Notwithstanding any provision of this Lease to the contrary, if either party hereto suffers a loss or damages, and such loss or damages would typically be covered under any policy of insurance that such party actually maintains or is required to maintain pursuant to this Lease, then such party hereby releases the other party to and from any and all liability for each such loss or damage, notwithstanding that such loss, damage or liability may arise out of the negligent or intentionally tortious act or omission of the other party, its agent, officers or employees. The foregoing release shall be effective only so long as it is possible to obtain the insurance policies required to be maintained pursuant to this Lease with provisions in such policies to the effect that such release shall not impair the effectiveness of such policy or the insured’s ability to recover thereunder.
SECTION 10.04. Plate Glass, Burglary, Vandalism, Malicious Mischief, Doors.
Tenant assumes all risk of loss from, and will repair all damage (other than structural) due to burglary, vandalism or malicious mischief, and Landlord shall have no obligation to maintain insurance for Tenant’s benefit against burglary, vandalism or malicious mischief. In addition, notwithstanding anything in this Lease to the contrary, all costs of repair or replacement of plate glass, or of repairs to or replacement of front or rear doors, door frames, door closers and door hardware at the Premises, however caused, shall be Tenant’s.
ARTICLE XI
UTILITIES
SECTION 11.01. Utilities Generally.
Tenant shall throughout the Term and any holdover period be solely responsible for entering service contracts, and shall promptly pay all charges (including applicable deposits), for heat, water, gas, electricity, sewer, garbage collection, sprinklers, air conditioning or any other utility or service used or consumed in or with regard to the Premises and shall not permit any lien or claim to be filed against Landlord by reason of such charges. Tenant shall at all times keep the Premises at a temperature sufficiently high to prevent freezing of water in pipes and fixtures. Tenant shall not, in the absence of Landlord’s prior written consent or direction, have any utility service discontinued in its name prior to the last day of the Term or any later date on which any holding over by it (whether welcome or unwelcome) shall end. Landlord shall have the option to pay any past due amounts owed by Tenant to any utility provider and Tenant shall reimburse Landlord for any such amount as Additional Rent within ten (10) days of demand. Should Landlord elect to directly supply any such utility or service used or consumed in the Premises, Tenant agrees to pay or reimburse Landlord (at a rate not exceeding Landlord’s cost of providing the same) on a monthly or quarterly basis upon invoice, and all such payments shall be due Landlord or any submetering service retained by Landlord, whichever the invoice therefor may specify, within fifteen (15) days of the mailing of said invoice to Tenant. In no event shall Landlord be responsible or liable for the quality or quantity, or any interruption or failure in the supply of any utility to the Premises. Landlord reserves the right to cut off and discontinue, without notice to Tenant, said utilities, or any other services, whenever and during any period for which bills for same are not promptly paid by Tenant or Tenant has failed to timely pay Rent or is otherwise in default under this Lease. In the event Landlord pays any costs referred to in this Section, such costs shall become due and payable from Tenant to Landlord as Additional Rent, regardless of whether or not they are billed, or payment demanded.
SECTION 11.02. Utilities Switchover
Tenant shall pay for all utilities consumed in the Premises through the end of the Term and beginning with the date of first entry into the Premises by it or its agents, employees or contractors for purposes of installation of Tenant Work or the delivery of materials therefor and Tenant shall see in advance to the switch over of accounts with the applicable utilities so as to be effective from such date. In the event that Tenant shall fail to timely cause the utilities to be switched over to its account Landlord may charge to Tenant, in addition to the cost of the utilities so used by Tenant but billed to Landlord, the sum of Twenty-Five Dollars ($25.00) per day as a fee for Landlord’s cost of overhead, administrative and staff time in such matter and Landlord shall be deemed by this Lease to have power of attorney to make such switchover on Tenant’s behalf.
ARTICLE XII
ASSIGNMENT AND SUBLETTING
SECTION 12.01. Assignment and Subletting.
Tenant shall not sell, assign, mortgage or transfer this Lease, in whole or in part, or sublet the Premises or any part thereof without in each case first obtaining the written consent of Landlord on Landlord’s standard form, which consent shall not be unreasonably withheld and provided further that any assignment, subleasing or associated proposed change in the use of the Premises from that specified in Section 5.01: (i) shall require Landlord’s separate consent, (ii) shall, at a minimum, not conflict with any then existing exclusive use given to another tenant of the Shopping Center, and (iii) shall otherwise meet with Landlord’s approval, and further provided that Tenant is not in default of this Lease, and the proposed assignee or subtenant is acceptable to Landlord in its sole discretion. If Tenant desires at any time to assign this Lease or to sublet the Premises or any portion thereof, it shall first notify Landlord of its desire to do so and shall submit in writing to Landlord all pertinent information relating to the proposed assignee or sublessee, all pertinent information relating to the proposed assignment or sublease, and all such financial information as Landlord may reasonably request concerning Tenant and proposed assignee or subtenant. At any time within thirty (30) days after Landlord’s receipt of the request and information specified in the preceding sentence, Landlord may by written notice to Tenant elect to terminate this Lease as to the portion of the Premises so proposed to be subleased or assigned (which may include all of the Premises), with a proportionate abatement in the Rent payable hereunder. If Tenant is a corporation, partnership, limited liability company, or other non-personal entity, any change in control and/or ownership of Tenant by merger, consolidation, liquidation, sales of shares or interests, changes in composition, withdrawals of partners, or otherwise, shall constitute an assignment for purposes of this Lease and shall require the prior written consent of Landlord. Any consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity of Landlord’s consent to any subsequent assignment or subletting. Any transfer by operation of law of Tenant’s interest in the Premises shall be regarded as an assignment or sublease requiring Landlord’s prior consent in the manner provided above. Each assignee or transferee shall assume and be deemed to have assumed this Lease and shall be and remain liable jointly and severally with Tenant for the payment of the Minimum Rent, Additional Rent and adjustments of Rent, and for the performance of all the terms, covenants, conditions and agreements herein contained on Tenant’s part to be paid or performed. No assignment shall be binding on Landlord unless, in addition to all other requirements, such assignee or Tenant shall deliver to Landlord a counterpart of such assignment and an instrument in recordable form which contains a covenant of assumption by the assignee, but any failure or refusal of an assignee to execute an instrument of assumption shall not release or discharge the assignee from its liability as set forth above. Acceptance by Landlord of Rent or other monies from a purported sublessee or assignee as to whom Landlord’s written consent has not been obtained shall not be deemed to imply Landlord’s acceptance of or consent to such assignment or subletting (regardless of the number of occasions on which such monies are so accepted), and any monies so paid shall be deemed to have been paid on behalf of or by Tenant for Tenant’s account. Landlord’s consent to any sale, assignment, mortgage, transfer or sublease shall not constitute a waiver of the future applicability of the provisions of this Section, or a release of Tenant from the full performance by it of its covenants under this Lease. It shall be a condition to approval of any proposed assignment or sublease that if Tenant reserves the right to receive from the assignee or sublessee rent, and/or other periodical payments not so named but attributable to the right to occupy and use the Premises, in excess of the Rent to be paid by Tenant to Landlord hereunder, then Tenant shall pay to Landlord 100% of such sums in excess of the Rent due hereunder within ten (10) days following receipt thereof by Tenant. Tenant shall not enter into any agreement whatsoever which will have the effect of negating this provision.
SECTION 12.02. Transfer of Landlord’s Interest.
Tenant agrees that if Landlord should sell or otherwise transfer its interest in the Premises, that upon an undertaking by the purchaser or transferee to be responsible for all of the covenants and undertakings of Landlord hereunder, that the transferor Landlord thereafter shall have no liability to Tenant under this Lease or any modifications, amendments or extensions thereof, except for such liabilities as might have accrued prior to the date of such sale or transfer, and that Tenant shall recognize and attom to such purchaser or transferee as its new Landlord hereunder. Tenant expressly agrees that the covenant of quiet enjoyment and all other covenants in this Lease on the part of Landlord are not personal covenants but shall transfer with the ownership of the land.
ARTICLE XIII
SANITATION, GOVERNMENTAL REGULATIONS
SECTION 13.01. Sanitation.
Tenant shall use, occupy and keep the Premises in a reasonably careful, safe, clean and proper manner and condition in accordance with local ordinances and lawful direction of proper public officers. Unless otherwise provided by Landlord, Tenant shall arrange for daily pick-up of rubbish, debris and garbage and shall not permit the same to accumulate or a fire hazard to exist in or around the Premises and contiguous sidewalks. Unless otherwise provided by Landlord, all trash dumpsters are to be provided by Tenant and must be located in areas designated by Landlord. For any dumpsters provided by Tenant, Tenant shall provide any dumpster enclosures required by applicable codes, subject to Landlord’s prior approval of the plans therefor. Tenant shall not permit garbage in said dumpsters to accumulate or overflow. Dumpsters shall be maintained in a reasonably clean condition. Landlord shall not be obligated but shall have the right to remove any rubbish, debris, and garbage generated by Tenant if Tenant fails to do so, and the costs thereof shall be paid by Tenant upon demand. Tenant will keep the entry, the inside and the outside of all doors and windows clean, will not place or maintain articles in the vestibule or entry areas of the Premises, on the sidewalks adjacent thereto, or the exterior thereof, will not block any fire exits, and will maintain all said areas and entries and exits at its own expense in a clean, secure, orderly, sanitary, and safe condition, free of insects, rodents, termites, vermin and other pests, and of trash, including but not limited to paper, wrappers, and glass. Tenant shall furnish exterior waste receptacles for the sidewalk in front of the Premises if required by Landlord, the same to be of a type and appearance satisfactory to Landlord. Landlord shall keep the Common Areas in a reasonably careful, safe, clean and proper manner and condition in accordance with local ordinance and lawful direction of proper public offices. If Landlord elects to provide a dumpster or other trash receptacle for Tenant’s use (either alone or in common with other tenants), Landlord shall so notify Tenant. Tenant shall pay to Landlord, as part of its Common Area Maintenance Payment, its allocated share of the expenses associated with providing such dumpster or other trash receptacle. Landlord may allocate such expenses according to anticipated usage, based on square footage, or in some other equitable fashion.
SECTION 13.02. Governmental Regulations; ADA.
(a) Governmental Regulations. Tenant shall, at Tenant’s sole expense, comply with, and Tenant shall indemnify, defend and hold Landlord harmless from, any and all loss, liability, costs, damages, fines and expenses (including attorneys’ fees) associated with, any actual or alleged violation by Tenant of any and all past, present or future laws, ordinances, orders, rules, regulations and statutes of any federal, state, county or municipal authorities, or of any agency or office or officer thereof, with respect to the use, occupancy, or maintenance of the Premises by Tenant, including without limitation all building, zoning, fire, health and safety codes, and all federal, state or local environmental laws, rules and regulations, including without limitation those concerning trash disposal, waste disposal and the use, storage, transport, and disposal of toxic or hazardous wastes, materials, and substances. Tenant shall keep the Premises equipped with all fire and safety appliances, devices, equipment and applications so required, including, but not limited to, smoke and fire alarms, sprinkler system and approved fire extinguishers of the type and number recommended to procure any licenses and permits required.
Tenant shall, at its own expense, procure each and every permit, license, certificate, or other authorization and any renewals, extensions, or continuances of the same required in connection with the lawful and proper use of the Premises and the Building. Neither Tenant’s failure to procure such permit, license, certificate, or other authorization, nor the revocation of the same, shall in any way affect Tenant’s liability for the payment of Rent or the performance or observance of any of the covenants or conditions contained in the lease which Tenant is required to perform and observe. Tenant shall immediately discontinue any use of the Premises that is declared by any governmental authority having jurisdiction to be a violation of law.
(b) Americans with Disabilities Act. Tenant shall have the sole and complete responsibility, as between itself and Landlord, for all compliance with the Americans with Disabilities Act (the “ADA”) (including any modifications or alterations required thereby) within the Premises and with respect to the sidewalk in front thereof and the loading dock and loading area to the rear and its dumpster pad, and Landlord shall have the sole and complete responsibility, as between itself and Tenant, for all compliance with the ADA (including any modifications or alterations required thereby) in the Common Areas of the Shopping Center. Nothing in the preceding sentence shall, however, be construed to prevent Landlord from allocating ADA compliance responsibilities to other tenants of the Shopping Center with respect to each such tenant’s premises, sidewalks, and rear delivery, service and dumpster areas. Tenant hereby covenants and agrees to indemnify, defend, and hold Landlord harmless from any and all costs, damages, claims, liability, judgments, expenses, attorneys’ fees, and penalties which may arise out of any actual or alleged violations of the ADA with respect to Tenant’s area of ADA compliance responsibility. If Landlord provides a dumpster or other trash receptacle, as provided in Section 13.01, Landlord shall be responsible for ADA compliance with regard thereto.
ARTICLE XIV
SUBORDINATION, MODIFICATION, ATTORNMENT, EXCULPATION
SECTION 14.01. Mortgage Subordination
This Lease is and shall be, subject, subordinate and inferior in lien with respect to any and all mortgages which may now or hereafter be placed on all or part of the Shopping Center by a bank, trust company, insurance company or other lender, and any and all renewals, modifications, consolidations, replacements and extensions thereof without regard to the date of recordation. Tenant shall, upon demand and without cost to Landlord, execute any instrument necessary to effectuate or confirm the subordination of this Lease to any such mortgage, provided the subordination agreement does not modify the existing lease, and if Tenant fails to do so within ten (10) business days after submission of such instrument, Landlord may execute the same as attorney in fact for Tenant, under a power of attorney, coupled with an interest, or may terminate this Lease provided that Landlord provides three (3) business days prior written notice to Tenant of such failure.
If there is a current mortgage, and so Landlord will deliver to Tenant a commercially reasonable subordination, non-disturbance and attornment agreement (“SNDA”) executed by CUITent holder at lease execution.
SECTION 14.02. Estoppel Certificates.
Tenant agrees, at any time, and from time to time, not later than ten (10) business days following notice from Landlord, to execute, acknowledge and deliver to Landlord, and/or any lender or potential lender on, or purchaser or potential purchaser of all or a part of the Shopping Center, a statement in writing (hereafter, an “Estoppel Certificate”) certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the Lease is in full force and effect as modified and stating the modifications), and the dates to which the Minimum Rent, Additional Rent and other charges have been paid, and attesting as to the status of any other matters reasonably pertinent to the status of this Lease and the performance of the parties thereunder. Landlord shall have the option to terminate this Lease on three (3) business day’s prior written notice, or shall have power of attorney, coupled with an interest, to execute such certificate on Tenant’s behalf, if a requested Estoppel Certificate is not executed by Tenant within the aforesaid time limits.
As a condition to Tenant’s obligation to issue any estoppel certificate, each request by Landlord for an estoppel certificate from Tenant shall be reimbursable up to the cost to obtain the certificate.
SECTION 14.03. Attornment
In the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under any mortgage made by Landlord covering the Premises, Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as landlord under this Lease.
SECTION 14.04. Exculpation.
Notwithstanding anything else whatsoever in this Lease, at law, or in equity to the contrary, Tenant agrees that it shall look to and shall have recourse solely to the estate and property of Landlord in the land and buildings comprising the deed parcel of real estate of which the Premises are a part, for the collection of any judgment (or any other judicial process) requiring the payment of money by Landlord in the event of any default or breach by Landlord with respect to any of the terms, covenants and conditions of this Lease to be observed and/or performed by Landlord, or in the event of any other judgment or judicial process obtained by Tenant in any way arising directly or indirectly out of or under this Lease or the performance hereof or out of the relationship of Landlord or Tenant established hereunder, and no other real or personal property of Landlord, tangible or intangible, shall be subject to levy, execution or other enforcement procedures for the satisfaction of Tenant’s remedies. In the event of the sale of any of Landlord’s right, title and interest in the Shopping Center, Landlord shall be released from all liabilities and obligations under this Lease after the sale.
ARTICLE XV
DESTRUCTION OF LEASED PREMISES
SECTION 15.01. Total or Partial Destruction of Premises.
(a) Rebuilding vs. Terminations. If at any time after the execution hereof the Premises are destroyed or damaged in whole or in part by fire, the elements, or casualty, this Lease shall not terminate and Tenant shall notify Landlord in writing of such damage or destruction and Landlord shall, if permitted by all public authorities, replace the real property of the Premises giving to Tenant space equal to the present leased space and of the same general type of construction or better, the same to be done as soon as possible after the completion of insurance adjustments, but in no event later than nine (9) months from the date of the receipt of said insurance adjustment in the case of total destruction of the Premises and within one hundred twenty (120) days of receipt of the insurance adjustment in the case of partial damage or destruction; except that if said incident shall occur at a time when there are fewer than two (2) years remaining in the term hereof, then Landlord shall have the option to rebuild as above stated or of terminating this Lease. No penalty shall accrue for reasonable delay in commencing rebuilding on the part of Landlord which may arise by reason of delays in the adjustment of insurance. Landlord’s obligation to repair or rebuild the Premises shall be limited to the base building. The responsibility of insuring and replacing Tenant’s leasehold improvements, furnishings, merchandise, inventory and equipment shall lie with Tenant.
(b) Effect on Rent. In the event of total destruction to the Premises, Tenant’s Rent shall completely abate from the date of such destruction until possession of the rebuilt Premises is delivered to Tenant. In the event of partial destruction (Tenant’s being deprived of a portion of the Premises), a proportionate reduction shall be made in the Minimum Rent during such period. If such total or partial damage is due to the fault or neglect of Tenant, its employees, agents, visitors or licensees, then without prejudice to any other rights and remedies of Landlord and without prejudice to the rights of subrogation of Landlord’s insurer, the damage shall be repaired by Tenant and there shall be no abatement of Rent, otherwise Landlord shall proceed diligently to rebuild said Premises and to repair the damage thereto as hereinabove stated.
SECTION 15.02. Destruction of Shopping Center Rentable Area.
In the event that Twenty-Five Percent (25%) or more of the rentable area of the Shopping Center shall be damaged or destroyed by fire or other cause, whether or not the Premises itself shall have been so affected, Landlord at its option may terminate this Lease by giving to Tenant thirty (30) days’ prior written notice of its election to do so, which notice shall be given, if at all, by not later than the sixtieth (60th) day following the date of said occurrence. Tenant shall be given her Security Deposit back in full, unless such damage was caused by the Tenant and/or by any of their employees and/or invitees. The preceding sentence only relates to Paragraph 15.02.
ARTICLE XVI
CONDEMNATION
SECTION 16.01. Condemnation Award.
In the event the Premises or any pai1 thereof shall be taken or condemned either permanently or temporarily by any competent authority in appropriation proceedings or by any right of eminent domain or by settlement in lieu thereof, the entire compensatory award therefor, for all estates in the realty shall belong to Landlord without any deduction therefrom for any present or future estate of Tenant and Tenant hereby assigns to Landlord all of its right, title and interest, if any to any such award; provided that Tenant shall be entitled to the portion of any award which is made with respect to any property of Tenant constructed as Tenant’s Work, any replacements thereof, Tenant’s furniture, fixtures and equipment and any other alterations to the Premises made by Tenant. In addition, Tenant shall be entitled to claim, prove and receive in such condemnation proceedings such awards as may be allowed for moving expenses and loss of business goodwill but only if such award shall be in addition to an award for the land and building containing the Premises and does not reduce such award.
SECTION 16.02. Total Condemnation of Premises.
If the entire Premises shall be taken, then this Lease shall terminate and shall become null and void from the time possession thereof is required for public use, and from that date on Landlord and Tenant shall accrue no further obligation hereunder.
SECTION 16.03. Partial Condemnation of Premises.
If less than Thirty Percent (30%) of the Premises shall be taken or condemned, then Landlord, at its own expense, shall repair and restore the portion not affected by the taking and thereafter the Minimum Rent and Additional Rent to be paid by Tenant shall be equitably and proportionately adjusted. If Thirty Percent (30%) or more of the Premises shall be so taken (a) Landlord, at its option, may give Tenant written notice of its decision not to rebuild and this Lease shall be deemed canceled, or (b) Tenant, at its option, may give Landlord written notice of its decision to terminate the Lease and the Lease shall be deemed canceled. No such appropnat10n or condemnation proceeding shall be deemed to be or constitute an eviction of Tenant or a breach of Landlord’s covenant of quiet enjoyment.
SECTION 16.04. Partial Condemnation of Parking Area.
If any part of the parking area shall be acquired or condemned as aforesaid, and if, as the result thereof, the ratio of parking spaces to gross leasable square feet in the Shopping Center is reduced to a ratio below minimum acceptable local code requirements, then the Term shall cease and terminate upon the vesting of title in the condemning authority in such proceeding, unless Landlord shall give Tenant notice to the contrary, and if Landlord gives such notice it shall take immediate steps toward restoring the parking ratio within a reasonable time. If such ratio is restored, this Lease shall continue in existence without any reduction or abatement of Rent.
ARTICLE XVII
DEFAULT BY TENANT
SECTION 17.01. Event of Default Defined.
Upon the occurrence of one or more of the events set forth in clauses (1) to (6) below (any of which is referred to herein as an “Event of Default”), Landlord shall have any and all rights and remedies hereinafter set forth:
| (1) | Tenant shall fail, neglect or refuse to pay any installment of Minimum Rent or Additional Rent at the times and in the amounts provided in this Lease after three days notice and opportunity to cure, or to pay any other monies agreed by it to be paid when and as the same shall become due and payable under the terms hereof; or, |
| (2) | Tenant shall fail to move into and take possession of the Premises and open for business on or before the Rent Commencement Date; or, |
| (3) | Tenant shall become insolvent or shall make an assignment for the benefit of creditors or if the interest of Tenant in the Premises shall be sold under execution or other legal process; or, |
| (4) | Tenant shall file for bankruptcy or be adjudged a bankrupt or if a receiver or trustee shall be appointed for Tenant by any court; or, |
| (5) | Tenant shall abandon or vacate the Premises or fail to keep the Premises continuously and unintem1ptedly open for business each business day; or |
| (6) |
Tenant shall fail, neglect or refuse to keep and perform any of the other covenants, conditions, stipulations or agreements herein contained and covenanted and agreed to be kept and performed by it, and in the event any such failure, neglect, or refusal shall continue for a period of more than ten (10) days after notice thereof is given in writing to Tenant by Landlord (provided, however, that if the cause for giving such notice involves the making of repairs or other matters reasonably requiring a longer period of time than ten (10) days, Tenant shall be deemed to have complied with such notice so long as it has commenced to comply with said notice within the period set forth in the notice and is diligently prosecuting compliance of said notice or has taken proper steps or proceedings under the circumstances to prevent the seizure, destruction, alteration or other interference with the Premises by reason of noncompliance with the requirements of any law or ordinance or with the rules, regulations, or directions of any governmental authority as the case may be). |
SECTION 17.02. Landlord’s Remedies.
If any Event of Default occurs, Landlord shall have the right, at Landlord’s option, to exercise any or all of the following remedies:
(a) Declare the entire balance of all forms of Rent due hereunder for the remainder of the Term to be due and payable and may collect the same by distress or otherwise whether or not Landlord terminates this Lease; or
(b) Terminate this Lease and any right of renewal thereof, and retake possession of the Premises; or
(c) Without terminating this Lease or forfeiting the Rents to be paid or Landlord’s right to enforce the covenants, agreements and conditions to be kept and performed by Tenant hereunder during the residue of the Term, Landlord may re-enter and re-let the Premises, or any part thereof, with or without legal process, as the agent and for the account of Tenant, upon such terms and conditions as Landlord may deem advisable or satisfactory, in which event the rents received from such re-letting shall be applied first to the expenses of such re-letting and collection including, but not limited to, all costs incurred to restore the Premises to the same condition as original condition, ordinary wear and tear excepted, or to remodel the same for the purpose of such re-letting, all reasonable attorney’s fees incurred by Landlord to repossess the Premises and recover sums due hereunder and any real estate commissions paid, and thereafter toward payment of all sums due or to become due Landlord hereunder, and if a sufficient sum shall not be thus realized or secured to pay such sums and other charges, (1) at Landlord’s option, Tenant shall pay Landlord any deficiency immediately upon demand therefor, notwithstanding Landlord may have received periodic Rent in excess of the periodic Rent stipulated in this Lease in previous or subsequent rental periods, and Landlord may bring an action therefor as such deficiency shall arise without being obligated to await the end of the Term for the final determination of Tenant’s account, or (2) at Landlord’s option, the entire deficiency which is subject to ascertainment for the remaining Term shall be immediately due and payable by Tenant. Nothing herein, however, shall be construed to require Landlord to re-enter and re-let in any event. Landlord shall not, in any event, be required to pay Tenant any surplus of any sums received by Landlord on a re-letting of the Premises in excess of the Rent provided in this Lease. No such re-entry or taking possession of the Premises by Landlord shall be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such intention is given to Tenant. Notwithstanding any such re-letting without termination, Landlord may at all times thereafter elect to terminate this Lease for such previous Event of Default. Any such re-entry shall be allowed by Tenant without hindrance, and Landlord shall not be liable in damages for any such re-entry, or guilty of trespass or forcible entry.
(d) If any Event of Default occurs, Landlord, in addition to other rights and remedies it may have, shall have the right to remove all or any part of Tenant’s property from the Premises and any property removed may be stored in any public warehouse or elsewhere at the cost of, and for the account of Tenant and Landlord shall not be responsible for the care or safekeeping thereof whether in transport, storage or otherwise, and Tenant hereby waives any and all claims against Landlord for loss, destruction and/or damage or injury which may be occasioned by any of the aforesaid acts.
(e) In the event of a breach or threatened breach of any covenant of this Lease, Landlord shall have the right of injunction.
(f) If Tenant shall default in the performance of any provision of this Lease on Tenant’s part to be performed, Landlord may perform the same for the account of Tenant and Tenant shall promptly reimburse Landlord for any expense incurred therefor, which expenses shall be deemed to be Additional Rent.
(g) It is expressly agreed that the forbearance on the part of Landlord in the institution of any suit or entry of judgment for any part of the Rent herein reserved to Landlord, shall in no way serve as a defense against nor prejudice a subsequent action for such Rent. Tenant hereby expressly waives Tenant’s right to claim a merger or waiver of such subsequent action in any previous suit or in the judgment entered therein. Furthermore, it is expressly agreed that claims for liquidated Rent may be regarded by Landlord, if it so elects, as separate and independent claims capable of being separately assigned.
SECTION 17.03. Overhead Charge; Interest on Late Payments.
If Tenant shall, at any time, fail to pay on or by the applicable due date any installment of Minimum Rent, Additional Rent, taxes, assessments, insurance premiums, utility charges, liens, or to timely make any other payment required by this Lease to be made by Tenant, Landlord, without waiving or releasing Tenant from any obligation or default under this Lease, may assess an overhead charge in the amount of Five Percent (5%) of the delinquent amount; in addition, interest on the delinquency shall accrue at a rate of Five Percent (5%) above the prime lending rate as reported in the Wall Street Journal. In addition, if Tenant fails to pay any monies it is obligated to pay to third parties under the terms of this Lease, including but not limited to utility charges, insurance charges, or repair charges, then Landlord shall have the option of paying same. In such event, Landlord may collect such amount and any related costs incurred by Landlord from Tenant, together with an overhead charge and interest at the rates set out above assessable on and from the date of Landlord’s payment of such amount. The interest and overhead charges set forth above shall constitute Additional Rent payable by Tenant under this Lease and shall be due and payable without demand. All late charges and overhead charges shall be retroactive to the first (1st) day any payment due hereunder becomes due and payable and not paid. All payments shall be applied in the following order: oldest outstanding account balance, real estate taxes, Common Area Maintenance, insurance, miscellaneous charges, overhead charges, late charges and current Rent.
Nothing herein contained shall be construed or so operate as to require Tenant, or any Guarantor to pay interest in an amount or at a rate greater than the highest rate permissible under applicable law. Should any interest or other charges paid by Tenant, or any Guarantor result in the computation or earning of interest in excess of the highest rate pem1issible under applicable law, then any and all such excess shall be and the same is hereby waived by Landlord, and all such excess shall be automatically credited against and in reduction of the outstanding balance owed Landlord, and any portion of said excess which exceeds the outstanding balance owed Landlord shall be paid by Landlord to Tenant and any Guarantor, it being the intent of the parties hereto that under no circumstances shall Tenant or any Guarantor be required to pay interest in excess of the highest rate permissible under applicable law.
SECTION 17.04. Bankruptcy.
If Landlord shall not be permitted, Section 17.01 notwithstanding, to terminate this Lease in the event of Tenant’s filing for bankruptcy or being adjudged a bankrupt because of the provisions of the United States Code relating to bankruptcy, as amended previously or hereafter, and any successor law (collectively, the “Bankruptcy Code”), then Tenant as a debtor-in-possession or any bankruptcy trustee for Tenant shall promptly, and in any event within no more than fifteen (15) days upon motion by Landlord to the Bankruptcy Comi, elect either to assume or reject this Lease, and Tenant on behalf of itself and any trustee agrees not to seek or request any extension or adjournment as to any application to compel assumption or rejection this Lease filed by Landlord with such Court, nor shall Tenant seek or obtain without Landlord’s written consent any extension to the statutory time limit for assumption or rejection. Tenant or any trustee for Tenant may only assume this Lease if it: (a) cures immediately or provides adequate assurance that it will promptly (within not more than 10 days from the date of assumption) cure any monetary default hereunder as to both pre- and post-petition Rent, (b) compensates or provides adequate assurance that Landlord will be promptly compensated for any other actual pecuniary loss resulting from Tenant’s defaults and for any attorneys’ fees and other expenses incurred by Landlord in proceedings against Tenant or in connection with Tenant’s bankruptcy filing and all proceedings associated therewith or following therefrom, and (c) provides adequate assurance of performance during the fully stated Tenn hereof of all of the terms, covenants, and provisions of this Lease to be performed by Tenant. In no event after the assumption of this Lease shall any then-existing default remain uncured for a period in excess of ten (10) days from the date of assumption. Adequate assurance of performance of this Lease, as set forth hereinabove, shall include, without limitation, adequate assurance (1) of the source of the Rent reserved under this Lease, and (2) that the assumption of this Lease will not breach any provision of this Lease. In the event that any tendered assurance of the source of Rents shall fail to include evidence of a reasonable amount of immediately available cash, such assurance shall be rebuttably presumed to be inadequate. In the event of a filing by or against Tenant of a petition under the Bankruptcy Code, Landlord shall have no obligation to provide Tenant with any services or utilities as herein required, unless Tenant shall have paid and is current in all payments for Common Area Maintenance, utilities or other charges therefor. In the event that Tenant shall ever file or have filed against it a bankruptcy proceeding to which this Lease is subject, and the venue of such proceeding is other than the U.S. Bankruptcy Court sitting in the jurisdiction where the Shopping Center is located, Landlord shall be entitled to an immediate release of stay and/or change of venue upon application or motion to the court in which such action was filed, and Tenant shall not oppose any such application or motion. Tenant hereby represents and warrants that it is presently solvent, is not the subject of any bankruptcy proceeding, and has no present intention to make any bankruptcy filing within the next twelve (12) months. If Tenant shall make a bankruptcy filing within such twelve (12) month period, such filing shall be presumed to be abusive, and Landlord shall in any event be entitled upon application or motion to the court in question to an immediate release of stay and Tenant shall not oppose such motion or application. The parties agree that no bankruptcy court or trustee may or shall without Landlord’s prior written consent authorize the Premises to be used for any use or under any other trade name other than those permitted by Section 5.01 hereof.
SECTION 17.05. Remedies Cumulative.
The various rights, remedies, powers and elections of Landlord, reserved, expressed or contained in this Lease are cumulative, and no one of them shall be deemed exclusive of the others or of such other rights, remedies, powers, options or elections as are now or may hereafter be conferred upon Landlord by law or in equity.
SECTION 17.06. Legal Expenses.
In the event that it shall become necessary for Landlord to employ the services of an attorney to enforce any of its right under this Lease or to collect any sums due to it under this Lease or to remedy the breach of any covenant of this Lease on the part of Tenant to be kept or performed, regardless of whether suit be brought, Tenant shall pay to Landlord such reasonable fee as shall be charged by Landlord’s attorney for such services. Should suit be brought for the recovery of possession of the Premises, or for Rent or any other sum due Landlord under this Lease, or because of the default of any of Tenant’s covenants under this Lease, Tenant shall pay to Landlord all expenses of such suit and any appeal thereof, including a reasonable attorney’s fee.
SECTION 17.07. Waiver of Jury Trial and Counterclaims.
Acknowledging the commercial nature of this transaction, the parties hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use or occupancy of the Premises, and/or any claim of injury or damage. In the event Landlord commences any proceedings, Tenant waives its right to and will not interpose any cow1terclaim in such proceedings other than those which are compulsory under the applicable venue, if at all.
SECTION 17.08. Venue; Service of Process.
Landlord and Tenant hereby stipulate and agree that in any litigation arising out of this Lease, venue and jurisdiction over the subject matter and the parties involved shall be proper only in the Courts of Orange County, Florida. Service of process upon Tenant in any such action may be affected by certified mail or personal service upon Tenant at the address contained in Section l.0l(B) or at the Premises, or in any other manner authorized under the Florida Rules of Civil Procedure.
ARTICLE XVIII
ACCESS BY OWNER
SECTION 18.01. Landlord’s Rights of Access.
Landlord or its agents shall have free access to the Premises during normal business hours and upon prior notice to Tenant, except in emergency situations, to examine the Premises or to show same to prospective purchasers or mortgagees; to make repairs; or during the last six months of the term or at any time that this Lease is being terminated for any reason, for the purpose of exhibiting the Premises to prospective tenants. Landlord shall have immediate and unobstructed access to the Premises in the case of an emergency. During or after any time Tenant abandons, vacates or ceases to actively operate its business in the Premises or is otherwise in default hereunder, Landlord may enter the Premises, without such entry being deemed a taking of possession, in order to decorate, remodel, repair, alter or otherwise prepare the Premises for occupancy, to secure the Premises against vandalism or burglary, and to take reasonable measures to preserve the good image of the Shopping Center. Landlord shall have the right at any time to install or place upon, or affix to the roof and exterior walls of the Premises equipment, signs, displays, antennas, and any other objects or structures of any kind provided the same shall not materially affect the structural integrity of the building. The exercise of any right of access reserved in this article or elsewhere in this Lease by Landlord or its agents shall not be deemed an eviction or disturbance of Tenant, and Tenant shall not be allowed any abatement of Rent or damages for any injury or inconvenience or loss of or interruption of business occasioned thereby to Tenant or to any other person.
ARTICLE XIX
TENANT’S PROPERTY
SECTION 19.01. Taxes and Insurance on Tenant Property.
Tenant covenants and agrees to pay promptly when due all taxes and insurance costs assessed against Tenant’s fixtures, furnishings, equipment, stock-in-trade, leasehold improvements, or personal property of any kind owned by or placed in, upon, or about the Premises during the Term. In the event the taxing authorities or Landlord’s casualty insurer shall ever, in calculating the overall real estate taxes or casualty insurance costs for the real estate of which the Premises is a part, include the value of improvements, replacements, alterations and additions made by Tenant or the value of any machinery, equipment, fixtures, tools, stock- in-trade, inventory, or other assets of Tenant in a mam1er or to an extent not customary in the county in which the Premises is located, then and in that event Tenant shall upon notice from Landlord pay all of the additional real estate taxes or insurance costs allocable to such items.
SECTION 19.02. Landlord’s Non-liability.
Landlord shall have no liability whether direct, indirect, or consequential, to Tenant or any other person for any expense, damage or injury: (a) done or occasioned by or from (or by leakage or odors from) any electrical, gas, water, steam, heating, air conditioning, plumbing, sprinkler and sewer lines and systems located in, upon or about the Premises or the building in which the Premises is located; (b) occasioned by water, snow, ice, or dampness being upon or coming into the Premises through the roof, walls, floors, windows, doors, sewers, or otherwise, regardless of the source; (c) arising from acts of negligence or omissions of Tenant, its employees, or invitees; (d) arising from the acts or omissions of adjoining tenants or of any owners or occupants of adjoining or contiguous property; (e) for any expense, damage or injury incurred by reason of forced entry by any person or by any attempt thereof; (f) arising from acts by the public or caused by operations or construction of any private, public or quasi-public work; or (g) for any latent defect in the Premises or in the building of which it forms a part or for any change or modification thereof. Landlord shall not be liable for any expense, damage or injury occasioned by reason of failure to make repairs as required on its part under this Lease unless written notice of the need for repairs has been given Landlord and a reasonable time has elapsed. In no event shall Landlord be liable for any expense or damage to Tenant’s leasehold improvements, fixtures, carpets, personal property, or merchandise resulting from fire, water damage or other insurable hazards, regardless of the cause thereof, and Tenant hereby releases Landlord from all liability for such damage, such release including a release of all subrogation claims by Tenant’s insurance carrier. Anything to the contrary notwithstanding, in the event of Landlord’s gross negligence, Landlord shall not be relieved of liability.
ARTICLE XX
HOLDING OVER, SUCCESSORS
SECTION 20.01. Holding Over.
(a) Consent Required. Tenant must obtain Landlord’s written consent prior to the last day of the Term in the event it shall propose to remain in possession after such date. In the absence of such consent any holding over shall be considered unwelcome.
(b) Without Landlord’s Consent. In the event Tenant shall continue in occupancy without Landlord’s prior written consent after the expiration or tennination of this Lease, Tenant shall be regarded as an unwelcome holdover and shall vacate inimediately at any time upon Landlord’s demand and in addition to any other rights Landlord may have shall pay to Landlord, two hundred percent (200%) of Rent plus the highest per diem amount of Minimum Rent and Additional Rent previously payable under this Lease, for each day Tenant retains possession of the Premises.
(c) With Landlord’s Consent. Should, however, Tenant bold over in the Premises after the expiration of this Lease with Landlord’s prior written consent, such occupancy and payment shall be construed as an extension of this Lease on a month-to-month basis from the date of such expiration, unless other terms are agreed to by the parties in writing. In the event either Landlord or Tenant desires to terminate such a month-to-month occupancy at the end of any calendar month after the termination of this Lease, the party so desiring to terminate the same shall give the other party at least thirty (30) days prior written notice to that effect. Any failure on the part of Tenant to timely give such notice shall obligate it to pay Rent for an additional calendar month, whether or not it occupies during such period.
ARTICLEXXI
QUIET ENJOYMENT & TENANT’S RIGHT TO CONTEST
SECTION 21.01. Quiet Enjoyment.
Landlord hereby covenants and agrees that if Tenant shall timely pay all Rents when due and shall faithfully and timely perform and observe all the other terms, covenants, conditions, rules and regulations and agreements herein stipulated to be performed on Tenant’s part, Tenant shall at all times during the continuance hereof, have the peaceable and quiet enjoyment and possession of the Premises without any manner of hindrance from Landlord or person or persons lawfully claiming the Premises through Landlord, subject to the conditions and terms of this Lease, mortgages and encumbrances as herein further set forth.
SECTION 21.02. Tenant’s Right to Contest.
Subject to Landlord’s prior written consent in each instance, Tenant may contest, by appropriate proceedings diligently conducted, the validity or applicability, as the case may be, of any:
| (a) | existing or proposed law or requirement of any governmental authority; or |
| (b) | tax, assessment or other governmental charge; |
which, during the Tenn or any renewal thereof, shall be levied, assessed, imposed or demanded by any governmental authority or insurance canier in connection with the possession, occupation, alteration, maintenance, repair, improvement or use of the Premises or any part thereof. Tenant shall indemnify and save Landlord hannless from and against any and all loss, cost, damage, penalty or liability whatsoever resulting from any failure to pay any contested tax, assessment or charge when due or to discharge or comply with any such contested law or requirement. Tenant shall post any escrow, bond or guaranty which may be required by law in connection with the pursuit of any such contest. Any such contest shall be at Tenant’s sole cost and expense. In the event of a recovery of taxes, such proceeds shall first be used to pay Tenant’s costs for such appeal and second to reduce Tenant’s pro-rata share of its real estate taxes.
ARTICLE XXII
MISCELLANEOUS
SECTION 22.01. Waiver.
No waiver of any condition, covenant, or legal right or remedy shall be implied by failure or delay of Landlord·to declare a default or forfeiture in any instance, nor by any other means other than through a writing signed by Landlord. No waiver by Landlord in respect to one tenant of the Shopping Center shall forbid Landlord’s enforcement of the same condition or covenant against any other tenant. No failure by Landlord to insist on strict compliance with any provision of this Lease, for whatever duration, shall estop or prevent Landlord from later insisting on strict compliance in the future and on the prompt performance of any past obligations previously forbore. The mention in this Lease of any specific right or remedy shall not preclude Landlord from exercising any other right nor from having any other remedy nor from maintaining any action to which it may be otherwise entitled either at law or in equity; and for the purpose of any suit by Landlord brought or based on this Lease, it is further agreed that the failure to include in any such suit or action any particular sum whether or not then matured shall not be a bar to the maintenance of any subsequent suit or action for the recovery of said sum.
SECTION 22.02. Accord and Satisfaction.
No payment by Tenant or receipt by Landlord of a lesser amount than the monthly Rent herein stipulated shall be deemed to be other than on account of the earliest stipulated Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed to work an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or to pursue any other applicable remedy whether provided in this Lease or otherwise.
Every demand for Rent due wherever and whenever made shall have the same effect as if made at the time the Rent fell due. Landlord may receive and collect all or part of any Rent due, notwithstanding its having commenced any suit to collect or any judgment having been rendered in any such suit, and such collection or receipt shall not operate as a waiver nor affect such notice, suit or judgment. Nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy in this Lease provided.
SECTION 22.03. Titles, Entire Agreement; Modifications; Severability; Binding Obligation.
All marginal titles are for reference and convenience only and do not form a part of this Lease. This Lease contains the entire agreement between Landlord and Tenant, and all prior communications and negotiations, whether written or oral, are deemed merged herein, and any agreement hereafter made shall be ineffective to change, modify, or discharge this Lease in whole or in part unless such agreement is in writing and signed by both parties, and duly delivered between them. This Lease may not be modified by oral agreement, usage, course of conduct, estoppel, partial performance, performance based on a writing not signed by both parties, nor in any other manner, other than in a writing which has been signed by both parties and has been duly delivered between them. This Lease and all rights and duties hereunder shall inure to the benefit of and shall be binding upon Landlord and Tenant and their respective personal representatives or Guarantors, administrators, executors, heirs, successors and assigns. If more than one person is identified as Tenant herein, their obligations under this Lease shall be the joint and several obligation of each such person.
SECTION 22.04. No Representations; “As-Is” Basis; Miscellaneous.
This Lease is made without representations, promises or warranties of any kind, express or implied, by Landlord as to the order, repair or condition of the Premises, the building or buildings of which it forms a part, or of any appurtenances thereto, or as to the fitness of the Premises or its appurtenances for any use or purpose, or as to any of the tem1s or conditions of this Lease. It is understood and agreed that the Premises are being taken by Tenant on an “AS-IS” basis, except as may be specifically provided otherwise in this Lease. Tenant shall make no claims on account of representations, promises or assurances whatsoever, whether made orally or in writing by any renting agent, broker, partner, attorney, officer or other representative of Landlord relating to the Premises, or the Shopping Center or any other tenants therein, or otherwise, unless the same is specifically set forth in this Lease. In and by taking occupancy of the Premises, Tenant agrees (i) that Landlord has satisfactorily completed all improvements, if any, to the Premises on Landlord’s part to be performed, and (ii) that as it relates to the condition of the Premises, and the fitness thereof generally and for Tenant’s specific use, Tenant is relying on its own inspections, investigations and observations, and not on any representations alleged to have been made (whether expressly or impliedly) by Landlord or its agents, except for any representations expressly stated in this Lease. Upon Tenant’s taking possession of the Premises any unexpired or unwaived contingency or cancellation provisions rnnning to Tenant’s benefit in this Lease shall thereby become void notwithstanding any time periods to the contrary in any such provision. Nothing in the foregoing is intended to create any implied contingency rights on Tenant’s behalf.
SECTION 22.05. Acts Beyond Control of Landlord.
In the event that Landlord shall be delayed or hindered in or prevented from the performance of any act required on its part hereunder by any reason not the fault of or not within the reasonable control of Landlord, including, without limitation, strikes, lockouts, labor troubles, materials shortages, power failures, restrictive laws or regulations, riots, insurrection, war, and other reasons of like nature, then Landlord’s performance of such act shall be excused for the period of the delay and for a reasonable cure period after the end of such delay. This provision shall not operate to excuse Tenant from the prompt payment of Minimum Rent, Additional Rent or any other payments required by the terms of this Lease.
SECTION 22.06. Interpretation; Governing Law.
Wherever the word “Landlord” or “Tenant” is used in this Lease, it shall be considered to be in the plural as necessary, and when the singular and/or neuter pronouns are used herein, the same shall be constmed as including all persons, firms, partnerships, associations and corporations designated respectively as Landlord or Tenant in the heading of this instrument wherever the context requires. In all contexts, the word “Tenant” shall include Tenant’s agents, licensees, customers, employees, invitees, and aJl other persons in or on the Premises at Tenant’s invitation or with Tenant’s consent. Where multiple persons have signed this Lease as Tenant, their liability hereunder shall be regarded to be joint and several. This Lease shall be governed by and construed under the laws of the State of Florida.
SECTION 22.07. Notices.
Notices to Tenant under this Lease will be in writing addressed to Tenant and mailed, sent by overnight delivery using a nationally recognized overnight delivery service or personally delivered to the address specified in Section 1.0l(B). Notices to Landlord under this Lease will be in writing addressed to Landlord (and its agents and mortgagee, as applicable) and mailed, sent by overnight delivery using a nationally recognized overnight delivery service or delivered to the address specified in Section 1.01(B). Notices mailed will be given by registered or certified mail, return receipt requested. Notices delivered personally will be deemed to have been given as of the date of delivery, notices given by mail will be deemed to have been given forty-eight (48) hours after the time said properly addressed notice is placed in the mail and notices sent by overnight delivery service will be deemed given on the next business day after delivery to the courier in time sufficient to permit the courier to complete such next business day service. Each party may change its address from time to time by written notice given to the other as specified above.
SECTION 22.08. Recording.
Neither this Lease nor any memorandum thereof shall be recorded by Tenant.
SECTION 22.09. Submission of Lease.
The submission of this Lease, unsigned, for Tenant’s examination or signature does not constitute an offer to lease. This Lease shall become effective only upon the full execution hereof by both Landlord and Tenant, with such witnesses and acknowledgment as may be required by the laws of Florida or other state in which signed, and the mutual delivery and receipt between them of at least one fully executed counterpart hereof for each party.
SECTION 22.10. Broker’s Commission.
Tenant and Landlord each represent to the other that, except for Landlord’s Broker representing Landlord Anthony Bernabe of Equity, LLC each has not dealt with any real estate broker, sales person or finder in connection with this Lease, and no such person initiated or participated in the negotiation of this Lease. Landlord shall be responsible for the payment of any and all commissions due to Landlord’s Broker pursuant to a separate agreement. Tenant agrees to indemnify, defend and save Landlord harmless from and against any claims for fees or commissions from anyone other than Landlord’s Broker with whom the Tenant has dealt in connection with this Lease including, without limitation, any attorney’s fees incurred by the indemnified party in connection with said claims.
SECTION 22.11. Intentionally Deleted
SECTION 22.12. Guaranty.
The payment of all rents and charges, and the performance of all covenants of Tenant, required by this Lease are guaranteed by the Guarantor specified in Section l.0l(M) of this Lease, pursuant to that certain Guaranty Agreement, a copy of which is attached hereto as Exhibit “D” and made a part hereof, an original executed copy of which shall be delivered to Landlord by Tenant along with Tenant’s delivery of this Lease fully executed by Tenant.
SECTION 22.13. Intentionally Deleted.
SECTION 22.14. Prohibited Uses.
Tenant acknowledges and agrees that Landlord may record in the public records of Orange County, Florida a Declaration of Restrictive Covenants with respect to the Shopping Center (the “Declaration”). As a material inducement to Landlord entering into this Lease with Tenant, Tenant shall at all times comply with the terms of the Declaration including, without limitation, building restrictions, prohibited uses, and parking restrictions. Tenant acknowledges and agrees that the terms of the Declaration may restrict the rights granted to Tenant hereunder and Tenant hereby agrees the terms of this Lease are subject to modifications that Landlord deems necessary to comply with, or avoid violation of, the Declaration; provided, however, that in the event the Declaration prohibits Tenant from using the Premises for the Permitted Use, as specified in Section l.0l(C), then this Lease shall be terminated upon Tenant’s receipt of a letter notice from Landlord to Tenant with respect to same. In the event of any termination of this Lease pursuant to this Section, neither party shall have any further liability hereunder.
SECTION 22.15. Sales Tax.
Tenant shall be responsible for and shall pay before delinquency all municipal, county or state taxes, levies and fees of every kind and nature including but not limited to general or special assessments assessed during the Tenn against any personal property of any kind, owned by or placed in the Premises by Tenant and taxes assessed on the basis of Tenant’s occupancy thereof, including, but not limited to, taxes measured by all Rents and payments due hereunder from Tenant to Landlord.
Tenant understands that there is a Florida sales tax on the payments of Rent and Additional Rent to be made by Tenant to Landlord hereunder, which sales tax is presently at the rate of (_%). Tenant agrees to pay to Landlord each month with the Rent Florida sales tax thereon. Should any governmental taxing authority acting under any present or future law, ordinance or regulation, increase the sales tax rate or levy or assess or impose a tax, excise and/or assessment (other than an income or franchise tax) upon or against the Rent payable by Tenant to Landlord, either by way of substitution for or in addition to the sales tax or any existing tax on land and buildings or otherwise, Tenant shall be responsible for and shall pay such tax, excise and/or assessment to Landlord or directly to the governmental taxing authority if such direct payment is mandated.
SECTION 22.16. Radon Gas.
Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional info1mation regarding radon and radon testing may be obtained from your county health depa1tm.ent. This notice is provided pursuant to s. 404.056 (5), Florida Statutes.
SECTION 22.17. Environmental Compliance.
(a) Prohibition of Storage. As used herein, “Hazardous Mate1ials Laws” means all federal, state and local laws, statutes, ordinances and regulations, rules, rulings, policies, orders and administrative actions and orders relating to industrial hygiene, environmental protection or the use, analysis, generation, manufacture, storage, disposal or transportation of any oil, flammable explosives, asbestos, urea formaldehyde, radioactive materials or waste, infectious waste, or other hazardous, toxic, contaminated or polluting materials, substances or wastes, including, without limitation, any “hazardous substances, ” “hazardous wastes,” “hazardous materials” or “toxic substances” under any such laws, ordinances or regulations (collectively, “Hazardous Materials”). Tenant shall, at its own expense, at all times and in all respects: (i) comply with all Hazardous Materials Laws regarding Hazardous Materials introduced in or about the Shopping Center and the Premises by or at the direction of Tenant or in connection with Tenant’s use of the Premises (“Tenant’s Hazardous Materials”); and (ii) procure, maintain in effect and comply with all conditions of any and all permits, licenses and other governmental and regulatory approvals relating to Tenant’s Hazardous Materials within, on, under or about the Shopping Center in conformity with all applicable Hazardous Materials Laws and prudent industry practices regarding management of such Hazardous Materials. Landlord recognizes and agrees that Tenant may use Tenant’s Hazardous Materials in normal quantities that are applicable to the use specified in Section l.0l(C), and that such use by Tenant shall not be deemed a violation of this Section, so long as the levels are not in violation of any Hazardous Materials Laws. Upon termination or expiration of the Lease, Tenant shall, at its own expense, cause all of Tenant’s Hazardous Materials to be removed from the Premises and Common Areas and transported for use, storage or disposal in accordance and compliance with all applicable Hazardous Materials Laws. Landlord acknowledges that it is not the intent of this Article to prohibit Tenant from operating its business as described in this Lease. Tenant may operate its business according to the custom of the industry so long as the use or presence of Tenant’s Hazardous Materials is strictly and properly monitored according to all applicable governmental requirements. Tenant shall indemnify, protect, defend (by counsel reasonably acceptable to Landlord), and hold Landlord and Landlord’s Indemnitees free and harmless from and against any and all claims, liabilities, penalties, forfeitures, losses and expenses (including attorneys’ fees) for death or injury to any person or damage to any property whatsoever, including, without limitation, the Common Areas, arising from or caused in whole or in part, directly or indirectly, by the presence in or about the Shopping Center of any of Tenant’s Hazardous Materials or by Tenant’s failure to comply with any Hazardous Materials Law regarding Tenant’s Hazardous Materials or in connection with any removal, remediation, clean up, disposal, restoration and materials required hereunder to return the Premises and any other property of whatever nature to their condition existing prior to the appearance of Tenant’s Hazardous Materials.
(b) Disclosure Warning and Notice Obligations. Tenant shall comply with all laws, ordinances and regulations in the State where the Premises is located regarding the disclosure of the presence or danger of Tenant’s Hazardous Materials. Tenant acknowledges and agrees that all reporting and warning obligations required under the Environmental Laws with respect to Tenant’s Hazardous Materials are the sole responsibility of Tenant, whether or not such Environmental Laws pem1it or require Landlord to provide such reporting or warnings, and Tenant shall be solely responsible for complying with such Environmental Laws regarding the disclosure of, the presence or danger of Tenant’s Hazardous Materials. Tenant shall immediately notify Landlord, in writing, of any complaints, notices, warnings, reports or asserted violations of which Tenant becomes aware relating to Hazardous Materials on or about the Premises. Tenant shall also immediately notify Landlord if Tenant knows or has reason to believe Tenant’s Hazardous Materials have or will be released in or about the Shopping Center.
(c) Environmental Tests and Audits. Tenant shall not perform or cause to be performed, any Hazardous Materials surveys, studies, reports or inspection, relating to the Premises without obtaining Landlord’s advance written consent, which consent may be withheld in Landlord’s sole discretion. At any time prior to the expiration of the Term, Landlord shall have the right to enter upon the Premises in order to conduct appropriate tests and to deliver to Tenant the results of such tests to demonstrate that levels of any Hazardous Materials in excess of permissible levels has occurred as a result of Tenant’s use of the Premises.
(d) Survival/Tenant’s Obligations. The respective rights and obligations of Landlord and Tenant under this Article and in Section 13.02 shall survive the expiration or termination of this Lease.
The provisions of this Section shall be in addition to the provisions of any other Section hereof.
SECTION 22.18. Relocation
If during the Term Landlord decides to: (a) add a new tenant; (b) relocate or expand a then existing tenant; or (c) otherwise remodel, expand or reconfigure the Shopping Center, and such addition, relocation, expansion, remodeling or reconfiguration involves the Premises, Landlord shall have the right to relocate Tenant to other available, mutually acceptable space in the Shopping Center. Upon receipt of notice from Landlord that Landlord wishes to relocate Tenant (which notice shall include a designation of the space to which Landlord desires to relocate Tenant), Landlord and Tenant shall attempt in good faith to agree upon the space to which Tenant shall be relocated, the configuration and improvements to be provided by Landlord in the agreed space and the rental and additional charges to be paid by Tenant for same. If Landlord and Tenant are unable to agree within thirty (30) days after the date of Landlord’s notice on the space to which Tenant shall be relocated or the improvements therein to be provided by Landlord or the rental and other charges to.be paid by Tenant for same, then Landlord shall have the right to terminate this Lease upon notice to Tenant specifying the effective date of such termination (which date shall be not earlier than ninety (90) days after the date of such notice).
If Landlord and Tenant agree upon the above described items within such thirty (30) day period, Landlord and Tenant shall execute a new Lease or an amendment to this Lease evidencing such agreement and containing or continuing all other provisions of this Lease. Thereafter Landlord shall pay all costs to move Tenant’s then existing equipment, trade fixtures, inventory and personal property to the new location together with the cost of any improvements to the new location agreed upon by Landlord and Tenant and the unamortized balance (computed on a straight line basis over the Lease Term), if any, of any leasehold improvement to the Premises which was paid for by Tenant but not able to be moved to the new location.
If Landlord terminates this Lease pursuant to this Section 22.18, on the effective date for the termination Tenant shall pay Landlord all amounts due Landlord through such effective date.
SECTION 22.19. Anti-Terrorism Representation.
Tenant (which for this purpose includes its partners, members, principal stockholders and any other constituent entities) (i) has not been designated as a “specifically designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, <http://www.treas.gov/ofac/tl1 sdn.pdf> or at any replacement website or other replacement official publication of such list; (ii) is currently in compliance with and will at all times during the Term (including any extension thereof) remain in compliance with the regulations of the Office of Foreign Asset Control of the Department of the Treasury and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Te1Torism), or other governmental action relating thereto; and (iii) has not used and will not use funds from illegal activities for any payment made under this Lease.
SECTION 22.20. Time is of the Essence.
Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.
[Signatures are on the next pages.]
IN TESTIMONY WHEREOF, Landlord and Tenant have caused this Lease to be signed, in duplicate, effective as of the date set forth below Landlord’s signature.
| TENANT: | ||||
| Signed in the presence of: | ||||
| 1)__________________________ | ||||
| 2)__________________________ | ||||
| Name: | ||||
| Title: | ||||
| Name: | ||||
| Signed in the presence of: | ||||
| 1) | By: | |||
| Name: | Name: | |||
| 2) | Title: | |||
| Name: | ||||
| LANDLORD: | ||||
| Signed in the presence of: | ||||
| 1)__________________________ | ||||
| 2)__________________________ | ||||
| Name: | ||||
| Title: | ||||
| Date: | ||||
EXHIBIT “A”
RENT SCHEDULE
EXHIBIT
“B”
LANDLORD’S WORK
EXHIBIT
“B-1”
CONTRACTOR REQUIREMENTS
EXHIBIT
“B-2”
WORK LETTER
EXIDBIT
“C”
SIGN CRITERIA
EXHIBIT “D”
GUARANTY AGREEMENT
EXHIBIT “E”
WEKIVA CORNERS RULES AND REGULATIONS
EXHIBIT “F”
MEMORANDUM OF RENT COMMENCEMENT
EXHIBIT “G”
DISBURSEMENT OF TENANT IMPROVEMENT ALLOWANCE
Exhibit 10.162
FIRST ADDENDUM TO LEASE AGREEMENT
This FIRST ADDENDUM TO LEASE AGREEMENT, dated this _ day of ___, 2024 (“Addendum”) shall be attached to and made a part of that certain lease agreement dated ________ by and between PLATINUM EAGLES 2011, LLC, a Florida limited liability company (“Lessor”) whose address is P.O. Box 829, Windermere, FL 34786 and LA ROSA REALTY SUCCESS LLC, a Florida limited liability company (“Lessee”) whose address is 2200 E. Semoran Blvd, Suite 2244, Apopka, Florida 32703 for the property located at 2200 E. Semoran Blvd, Suite 2244, Apopka, Florida 32703 (collectively the “Lease”). In the event of any contradiction or inconsistency between the terms of this Addendum and the terms of the Lease, the terms of this Addendum shall control. All defined terms not specifically defined in this Addendum shall be given the meanings ascribed to them in the Lease.
RECITALS
A. Lessor has requested, and Lessee has agreed, to amend the Lease to include the requirements set forth below.
WITNESSESTH
WHEREAS, Lessor is the fee simple owner of the certain real property located in Orange County, Florida, more particularly described as: 2200 E. Semoran Blvd, Suite 2244, Apopka, Florida 32703 and
WHEREAS, Lessee acknowledges that there are certain provisions in the Lease to which Lessee shall continue to be bound; and
WHEREAS, Lessee acknowledges that there are certain Covenants and Restrictions in the complex and that Lessee shall continue to abide by all such terms, which were previously provided upon the execution of the Lease.
NOW THEREFORE, in consideration of the Premises hereof and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. APPROVAL OF ASSIGNMENT OF INTEREST OF LESSEE. Landlord hereby approves the assignment of fifty-one percent (51%) of the interest in Lessee to LA ROSA HOLDINGS CORP., a Florida corporation on the condition that LA ROSA HOLDINGS CORP., a Florida corporation execute a corporate guarantee attached hereto as Exhibit A. Lessee and any current guarantors shall remain jointly and severally liable.
2. SEVERABILITY. If any provision of this Addendum or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Addendum nor the application of the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law.
Except as hereby amended, all other terms and provisions of the Lease Agreement and Amendments and adjoining Guaranty of Lease, if any, shall remain in full force and effect.
IN WITNESS WHEREOF, the _parties hereto have executed this Addendum on the date and year first written above.
| LESSOR: | ||
| PLATINUM EAGLES 2011, LLC | ||
| A Florida limited liability company | ||
| By: | ||
| Name: | ||
| Title: | ||
| LESSEE: | ||
| LA ROSA REALTY SUCCESS LLC | ||
| By: | ||
| Name: | ||
| as Manager | ||
EXHIBIT A
CORPORATE GUARANTY AGREEMENT
Exhibit 10.163
COMMERCIAL LEASE AGREEMENT
THIS COMMERCIAL LEASE AGREEMENT (hereinafter referred to as the “Lease”) made and entered into on December l, 2024 by and between Horeb Legacy Investments LLC, a Florida limited liability company (hereinafter referred to as the “Landlord”), and La Rosa Realty Kissimmee, a Florida corporation (hereinafter referred to as the “Tenant”)
WITNESSETH:
In consideration of the rents, covenants and agreements herein, Landlord does hereby lease to Tenant and Tenant hereby leases from Landlord upon terms, provisions and conditions herein, the real property hereinafter described.
ARTICLE I
DESCRIPTION OF PROPERTY, TERMS, AND USE
1.1 Description of Property. Landlord leases to Tenant a 2,450.00 square foot space, hereinafter referred to as the (“Leased Premises”), as shown on the plan attached hereto as Exhibit “A” and incorporated by reference: located within the building known as as 3040 Loopdale Lane, Kissimmee, FL 34741, Parcel #05-25-29-1597-0001-0027, together with the shared improvements located thereon (hereinafter referred to as the “Common Areas”) situated in Osceola County, Florida, more particularly described as follows (hereinafter referred to as “Land”):
A portion of Lot 1 Loop Medical and Professional Park, as recorded in Plat Book 27 at Pages 96-97 of the Public Records of Osceola County, Florida, being a portion of Section 5, Township 25 South, Range 29 East, Osceola County, Florida, being more particularly described as follows:
Commencing at the most northeasterly corner of said Lot 1, said point being on the westerly right of way line of Ball Park Road, as shown on the Plat of Osceola Village, according to the plat thereof, recorded in Plat Book 21, Pages 17-18, Public Records of Osceola County, Florida; thence go S89°59’25“W along the north line of said Lot 1, a distance of 126.63 feet; thence departing said north line of Lot 1 go S26°25’46“E, a distance of 173.85 feet to the Point of Beginning; thence continue S26°25’46“W, a distance of 73.67 feet; thence N63°34’14“E, a distance of 53.00 feet to the Point of Beginning.
Page
1.2 Condition of Leased Premises. Tenant accepts the Leased Premises in its “As Is, Where Is” condition. Tenant acknowledges that Landlord has not made any representations or warranties with respect to the condition of the Leased Premises and neither Landlord nor any assignee of Landlord shall be liable for any latent or patent defect(s) therein. Tenant has inspected the Property and is familiar and satisfied with its present condition. The taking of possession of the Property by Tenant shall be conclusive evidence that the Property was in good and satisfact01y condition at the time such possession was taken.
1.3 Term. Tenant is to have the Leased Premises herein described, subject to the terms and conditions hereof for a term of Twelve (12) months (the “Term”), commencing on December 1, 2024, (the “Commencement Date”) and ending on November 30, 2025 unless earlier terminated by Landlord in accordance with the provisions hereof.
1.5. Use. The Leased Premises shall be used and occupied by Tenant for the operation of Real Estate services, and Property Management Business (the “Business”) and no other purposes unless otherwise authorized in writing by Landlord, to the extent such operation is authorized under governmental laws, ordinances, and regulations.
1.5.1. Prohibited Use. The Tenant is only allowed to engage in Real Estate related services, such as real estate sales, leasing or property management. No repair or servicing of any motorized vehicle, equipment or machinery shall be allowed in the Leased Premises, in any parking or loading areas, roadways or service areas within the complex. No vehicle abandoned or disabled or in a state of non-operation or disrepair shall be left upon the property of the Landlord, and Tenant shall enforce this restriction against Tenant’s employees, agents, visitors, licensees, invitees, contractors and customers. Should Landlord determine that a violation of this restriction has occurred, Landlord shall have the right to cause the offending vehicle, equipment, trailer or machinery to be removed from Landlord’s property, and all costs of such removal shall be the obligation of the Tenant responsible for such vehicle under the terms of the lease and shall be reimbursed to the Landlord by Tenant within ten (10) days of written notice to Tenant 2.1 Rent.
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Tenant covenants to comply with the provisions of all recorded covenants, conditions and restrictions and all building, zoning, fire and other governmental laws, ordinances and regulations, rules applicable to the Leased Premises and all requirements of the carriers of insurance covering the Leased Premises. Tenant shall not do or permit anything to be done in or about the Leased Premises or bring or keep anything on the Leased Premises that may increase any insurance premium upon the Leased Premises; that may injure the Leased Premises; that may constitute waste; or that may be a nuisance, public or private, or, without limiting the generality of the foregoing, Tenant shall not allow said Leased Premises to be used for any improper, immoral, unlawful or objectionable purpose; provided that the ordinary operation of the Business shall not, alone, constitute a violation of the foregoing. Tenant agrees that it has determined to Tenant’s satisfaction that the Leased Premises can be used for the purpose for which it is leased and waives any right to terminate this Lease in the event the Leased Premises cannot be used for such purpose.
1.6. Compliance with Condominium Association Rules. The Leased Property consists of a Condominium Unit in the Loop Medical & Professional Park (the “Condominium”). Tenant’s right to use and occupy the Leased Premises shall be subject and subordinate in all respects to the provisions of the Condominium Bylaws, the Condominium association’s Rules and Regulations, and any other document referred to those documents that affect the rights and obligations of an owner or occupant in the Condominium (collectively, the “Condominium Documents”). Failure by Tenant, or any person on the Leased Premises or Condominium as a result of Tenant’s occupancy, to comply with the provisions of the Condominium Documents shall constitute a material breach of the Lease.
ARTICLE II
RENT AND SECURITY DEPOSIT
Tenant shall pay to Landlord as Rent during the Term of the Lease payable in advance and without notice in monthly installments of Six Thousand and Eight Hundred Seventy-tvo Dollars and 67/100 ($6,872.67) (the “Base Rent”) together with additional rent charges listed in Sections 2.2, 2.4, and 2.5, beginning on the Commencement Date until November 30, 2023. Commencing on December I, 2023, the monthly Base Rent installments shall increase by Three Percent (3%) for each additional 12-month period thereafter without notice or demand and without any deduction, off-set or abatement to the Landlord at the address stated herein for notice or to such other persons or such other places as the Landlord may designate to Tenant in writing. All payments are to be made to Landlord via check or such other manner that Landlord may from time to time designate in writing. Tenants shall make the monthly installment payments of rent on the first day of each and every month during the term of this Lease beginning on the Commencement Date. Should the Lease commence on a day other than the first day of a month or end on a day other than the last day of a month, then the rent shall be appropriately prorated.
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2.2. Late Charge. If the Tenant defaults in the payment of rent and the rent remains unpaid for five (5) calendar days after it becomes due, the Tenant shall pay to Landlord a late charge of Three Hundred and 00/100 Dollars ($300.00), in addition to the monthly rental payment, to compensate for the extra expense of handling late payments. An additional fee of $20.00 per day shall be assessed for each additional day Rent is late, until Rent is paid in full. Additionally, any Rent (including any Additional Rent) due to Landlord that is not paid when due shall bear interest, from the date due, at a rate of eighteen percent (18%) per annum. All late fees and interest shall be deemed additional rent payable by Tenant.
2.3. Security Deposit. Concurrent with Tenant’s execution of this Lease, Tenant shall deposit with the Landlord a security deposit (the “Security Deposit”) in the amount of Seven Thousand and 00/100 Dollars ($7,000.00). The Security Deposit shall be held by the Landlord as security for the faithful performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the Lease Tenn. If Tenant defaults with respect to any provisions of this Lease, including, but not limited to, the provisions relating to the payment of Rent, Landlord may, but shall not be required to, use, apply or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in default, or for the payment of any amount that Landlord may spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant’s default. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit, or any balance thereof, shall be returned to Tenant, or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder, within thirty (30) days following the expiration of the Lease Tenn. Tenant shall not be entitled to any interest on the Security Deposit.
2.4. Additional Rent Charges. Tenant shall include to each monthly rental installment provided in Section 2.1, as additional rent:
(a) The respective applicable Florida Sales Tax due; and
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(b) Tenant’s proportional share of the property taxes, association dues and routine common area maintenance and operational costs of maintaining and operating the Common Areas that serve the Condominium Association. Said payment, hereinafter referred to as “Common Area Maintenance Payment,” shall begin at the base rate of ($5.13) per square foot of Tenant’s Leased Premises per year, payable at the rate of $1,047.33 per month. Landlords reserve the right to make annual adjustments as and if required to reflect actual costs. The term “Common Area Maintenance” used in this Lease Agreement includes, but is not limited to, routine cleaning and maintenance of the exterior of the Leased Premises to include periodic window cleaning; the cleaning, maintenance and sweeping of the parking lot and sidewalks; the care and maintenance of the landscaping and landscaped areas to include the retention pond areas; common area security lighting and other power charges, if any; water and sewer charges and assessments, if any; routine rnbbish collection, and any other costs customarily considered as a common area maintenance expense and the property taxes for the Leased Premises. The Common Area Maintenance charges shall not include depreciation on any improvement; any capital expense or improvements; moving or relocation costs; legal or collection costs; remodeling costs; repairs or maintenance to the roof or structural components, real estate commissions and management fees; or executive salaries.
2.5. Taxes, Insurance, and Assessments. During the Tenn, Tenant shall be solely responsible for the payment of: (a) all real estate property taxes and assessments which shall accrue during the Term hereof and which shall be imposed by any governmental or public authority on, or become a lien in respect to the Leased Premises or any structure thereon or appurtenant thereto; (b) pro rata share of the Landlord’s fire and casualty insurance premiums that become due during the Term for coverage of the Leased Premises; and (c) all Condominium assessments issued for the Leased Premises that becomes due during the Term. The charges reflected herein above are included in the Common Area Maintenance Payments outlined in section 2.4 (b) above, subject to annual adjustment. Tenant shall be solely responsible for the payment of all Tenant’s general liability insurance premiums that become due during the Tenn of the Lease, all personal property taxes levied on any personal property located on the Leased Premises during the Tenn, and for all taxes, charges, license fees, or similar fees imposed by reason of the use of the Leased Premises by Tenant. Tenant shall have the right to pay any such tax, assessment or charge under protest and contest the validity or amount of such tax, assessment, or charge with the governmental authority which imposed it; provided, however, that Tenant may not undertake any such contest if it has not paid such tax, assessment, or charge. Upon Tenant’s contest, Landlord shall have no obligation to take part therein or to contribute toward the expenses thereof. In the event of either (a) the real estate property taxes and assessments which shall accrue during the Term hereof exceed $8,673.00 per year; (b) Landlord’s insurance premiums that become due during the Term for the Leased Premises and its building exceed $2,322.00 per year; or (c) the Condominium Assessment for the Leased Premises that becomes due during the Term exceed $2.57 per square foot for the Leased Premises, then, upon Landlord’s notice, Tenant shall be responsible to reimburse Landlord the difference of the prorate share of the costs actually incurred by Landlord.
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2.6. Utilities. Tenants shall make all arrangements to connect and pay for all water, gas, heat, light, power, telephone and other utility services supplied to the Leased Premises together with any taxes thereon and for all co1rnection charges. Tenant, at its sole expense, shall be liable for and shall timely pay any and all charges for the application, connection and use of any and all utilities, water, sewer, gas, electricity, telephone service and similar charges affecting the Leased Premises and all such services and utilities shall be in the name of Tenant only. Landlords shall not be required to furnish any services or facilities to, or to make any repairs to or replacements or alterations of the Leased Premises. Tenant hereby waives any and all claims of any kind, nature or description against Landlord, arising out of the failure of the Landlord from time to time to furnish any of the services contemplated hereunder including, without limitation, air conditioning, heat, electricity, telephone and plumbing. As for water utility services, Tenant shall be directly billed by the Condominium association for the water usage on the Leased Premises. The Landlord shall invoice the water bill to the Tenant monthly. The invoice needs to be paid separately.
2.7. If Tenant shall refuse, neglect, or otherwise fail or omit to make any of the payments herein required, then the Landlord may, at its option, but without being obligated to do so, pay the same and the amount or amounts of money so paid, including reasonable attorneys’ fees and expenses which may have been incurred together with interest on all such amounts at the highest lawful rate permitted under the laws of the State of Florida, shall be considered as rent immediately due and payable. The payment of such rent may be collected or enforced by Landlord in the same manner as though it were an installment of rent specifically required by the terms of this Lease to be paid by Tenant to Landlord.
ARTICLE III
REPAIR AND MAINTENANCE OF LEASED PREMISES
3.1 Except as othe1wise set forth herein, Tenant shall at its sole cost and expense keep and maintain the interior of the Leased Premises (non-structural only) in good condition and repair, normal wear and tear excepted, including, but not by way of limitation, necessary replacements of the interior painting, mechanical equipment, fire protection devices, doors, and floors.
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3.2 Landlords shall not furnish any services whatsoever to the Leased Premises for the non-structural maintenance of the interior of the Leased Premises. Tenant shall be solely responsible for all operating expenses necessa1y for the proper and efficient operation and non structural maintenance of the interior of the Leased Premises.
ARTICLE IV
HOLDING OVER
If Tenant should remain in possession of the Leased Premises after the termination or expiration of the Term, without the execution by Landlord and Tenant of a new lease, then Tenant shall be deemed to be occupying the Leased Premises as a tenant at sufferance, subject to all the covenants and obligations of this Lease and at a daily rental of twice the per day rent in effect immediately prior to such expiration or termination, computed on the basis of a thirty (30) day month, but such holding over shall not extend the Term set herein.
ARTICLE V
ALTERATIONS, ADDITIONS, IMPROVEMENTS
Tenant will make no alteration, change, improvements or addition to the Leased Premises without the prior written consent of Landlord. Landlord will not unreasonably withhold or delay its approval for such items after first reviewing the plans and specifications depicting the improvements. The Tenant may, without the written consent of the Landlord, but at the sole cost and expense of the Tenant and in a good and workmanlike manner, erect and alter shelves, movable partitions, and trade fixtures and equipment as the Tenant may deem advisable so long as such activity does not alter the basic character of the building or improvements, and in each case complying with all applicable governmental laws, ordinances, regulations and other applicable requirements. Tenant may remove its trade fixtures, office supplies, and moveable office furniture and equipment not attached to the Leased Premises provided such removal is made prior to the termination or expiration of the term, Tenant is not then in default in the timely performance of any obligation or covenant under this Lease, and Tenant promptly repairs all damage caused by such removal. All other property at the Leased Premises and any alteration or addition to the Leased Premises (including, but not limited to, wall-to-wall carpeting, drywall partitions, paneling or other wall covering) and any other article attached or affixed to the floor, wall or ceiling of the Leased Premises shall become the property of the Landlord and shall be surrendered with the Leased Premises as part thereof at the termination of this Lease, without payment or compensation therefore. If, however, Landlord so requests in writing, Tenant will prior to vacating the premises upon the termination or expiration of this Lease, remove any and all alterations, additions, fixtures, equipment and property placed or installed by it in the Leased Premises and will repair any damage caused by such removal.
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ARTICLE VI
ASSIGNMENT AND SUBLETTING
6.1 Tenant shall not assign this Lease nor any rights hereunder, nor let or sublet all or any part of the Leased Premises, nor suffer or permit any person or entity to use any part of the Leased Premises, without first obtaining the express written consent of Landlord, which consent shall not be unreasonably withheld. Should Landlord consent to such assignment of the Lease, or to a sublease of all or any part of the Leased Premises, Tenant does hereby guarantee payment of all rent herein reserved until the expiration of the term hereof, sublessee, or assignees shall become directly liable to Landlord for all obligations of Tenant hereunder, and no failure of Landlord to promptly collect from any assignee or sublessee, or any extension of the time for payment of such rent, shall release or relieve Tenant from its guaranty or obligation of payment of such rent. Any assignment or sublet approved by Landlord shall not relieve Tenant of its obligations hereunder. Tenant shall reimburse Landlord for all of the reasonable and necessa1y legal, accounting and other direct costs incurred due to Tenant’s sublet or assignment. In determining whether or not to grant consent to the Tenant’s sublet or assignment request, Landlord may consider any reasonable factor. Landlord and Tenant agree that any one of the following factors, or any other reasonable factor, will be reasonable grounds upon which Landlord may approve or deny the Tenant’s request:
(a) Financial strength of the proposed subtenant/assignee must be at least equal to that of the existing Tenant at the time of the Lease commenced;
(b) Business reputation of the proposed subtenant/assignee must be in accordance with generally acceptable commercial standards;
(c) Use of the Leased Premises by the proposed subtenant/assignee will not violate or create any potential violation of any laws, covenants, or other agreements affecting the Leased Premises.
6.2 Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations hereunder, and in the Leased Premises referred to herein, and upon any such transfer or assignment, no further liability or obligation shall thereafter accrue against Landlord hereunder (except to the extent of any retained Landlord’s interest by Landlord upon any partial assignment of its interest in this Lease).
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6.3 Should Tenant be a corporation, any transfer of this Lease by merger, consolidation or liquidation or any change in the ownership of or power to vote a majority of its outstanding voting stock shall constitute an assignment. Such an assignment shall require Landlord’s consent if by one or more sales or transfers, by operation of law or othe1wise or by creation of new stock, an aggregate of more than fifty percent (50%) of Tenant’s stock shall become vested in a party or parties who are not stockholders of Tenant as of the Commencement Date of this Lease. An assignment to a subsidiary or parent corporation of the corporate Tenant shall not require Landlord’s consent, but Tenant shall remain liable for Tenant’s obligations hereunder. Should Tenant be a partnership, trust, or other association or entity having transferable ownership interests, any transfer of more than fifty percent (50%) of such ownership interests to a party or parties who are not holders of such ownership interest at the Commencement Date shall constitute an assignment hereunder which shall require Landlord’s consent.
ARTICLE VII
INSURANCE
7.1 At all times during the term of this Lease, Tenant shall purchase and maintain, at its sole cost and expense, the following insurance in the name of Landlord:
(a) Fire and Extended Coverage Casualty Insurance upon the Leased Premises in an amount equal to the full replacement value of the improvements on the Leased Premises. The value of the improvements will exclude the costs of foundation, underground piping and/or wiring, outside paving and landscaping. Such insurance shall include the “Inflation Guard Endorsement” or shall be adjusted annually to reflect the then current construction costs.
(b) Rent loss insurance on an “All Risk” basis in an amount equal to the annual rent plus the sum of the annual taxes on the rent and premiums on insurance required to be carried under this Section 7.1.
(c) Comprehensive General Liability Insurance covering both bodily injury liability and property damage liability with a combined single limit of $1,000,000.00 for each occurrence.
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(d) Other insurance. Tenant shall provide and keep in force other insurance in amounts that may from time to time be reasonably required by Landlord against other insurable hazards as are commonly insured against for the type of business activity that Tenant will conduct.
7.2 The insurance to be maintained under this Article VII also will be subject to the requirements of any mortgagee, including, but not limited to, federal Flood Insurance. This insurance will be maintained with insurance companies licensed and qualified to do business in the State of Florida and having a general policy holders’ rating of A or A+ and a financial rating of Class X as established by A.M. Best Company of Oldwick, New Jersey or an equivalent rating assigned by a similar rating agency acceptable to Landlord, or otherwise acceptable to Landlord.
7.3 To the extent that a loss is covered by insurance in force and recovery is made for such loss, Landlord and Tenant hereby mutually release each other from liability and waive all right of recovery against each other for any loss from perils insured against under their respective policies. Landlord and Tenant also agree to obtain a waiver of subrogation from their insurance carriers permitting this waiver.
7.4 The original of each such policy of insurance or certified duplicate thereof issued by the insurance or insuring organization shall be delivered by Tenant to Landlord prior to commencement of the Lease term and ten (10) days prior to the expiration or termination of any existing policy. Any mortgagee of Landlord shall be named as an additional insured under such insurance and such insurance shall be prima1y and noncontributing with any insurance carried by Landlord. The insurance policies shall contain endorsements requiring thirty (30) days written notice to Landlord prior to any cancellation or any reduction in amount of coverage. Tenant shall deliver to Landlord as a condition precedent to its maintaining occupancy of the Leased Premises (but not to its obligation to pay rent) a certificate evidencing each renewal of such insurance and shall maintain such insurance in effect throughout the term of this Lease. Tenant shall promptly notify Landlord of any accident or injury occurring on the Leased Premises.
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ARTICLE VIII
HOLD HARMLESS
Except for loss, damage or claims arising from the Landlord’s negligent acts, omissions or breaches of this Lease, Landlord shall not be liable to Tenant for any injury or damage to any person or property in or about the Leased Premises from any cause whatsoever. Tenant shall indemnify and hold harmless the Landlord, its partners, shareholders, members, employees, officers, directors, agents, and their respective successors and assigns from and against any and all liability, claims, demands, damages, expenses, fees, fines, penalties, suits, proceedings, actions and costs of actions of any kind and nature, including attorneys’ fees, for injury or death to persons or damage to property or property rights (a) occurring in, on or about the Leased Premises or any part thereof, or (b) occurring in, on or about the Leased Premises or any part thereof, when any such injury or damage shall be caused or result in whole or in part by any act, negligence, or fault or omission of any duty by the Tenant, its agents, servants, employees, licensees or invitees, or by any person under the control or direction of Tenant, except to the extent arising or growing out of or connected with Landlord’s negligent acts, omissions or breaches of this Lease. Tenant will further indemnify and save harmless the Landlord for all liability, claims and other items above mentioned, arising or growing out of or connected with any breach, violation, non-performance or failure to abide by any covenant, condition, agreement or provisions contained in this Lease or in the Condominium Documents on the part of the Tenant to be kept, performed, complied with or abided by as an occupant of the Leased Premises, except to the extent arising or growing out of or connected with Landlord’s negligent acts, omissions or breaches of this Lease. If it becomes necessa1y for the Landlord to defend any action seeking to impose any such liability, the Tenant will pay the Landlord all costs of court and reasonable attorneys’ fees incurred by Landlord in such defense, in addition to any other sums which said Landlord may be called upon to pay by reason of the entry of a judgment or decree against the Landlord in the litigation in which such claim is asserted.
ARTICLE IX
DESTRUCTION OR DAMAGE BY FIRE OR OTHER CASUALTY
In the event of a fire or other casualty on the Leased Premises, Tenant shall promptly give notice thereof to Landlord. Within thirty (30) days from Tenant’s notice herein, Landlord shall notify Tenant whether the damage or destruction is such that in the reasonable opinion of Landlord it cannot be repaired with reasonable diligence within one hundred eighty (180) days from the date of such casualty. Within ten (10) days of Tenant’s receipt of Landlord’s opinion, either Landlord or Tenant may terminate this Lease by giving to the other written notice of such termination. Should this Lease be so terminated, then all rent owed up to the date of such casualty shall be paid by Tenant to Landlord and this Lease shall then terminate. In the event that neither Landlord nor Tenant so terminates this Lease, then Landlord shall repair said improvements with all reasonable speed and rent shall be proportionately abated with respect to any portion of the Leased Premises rendered unusable until such time as the Leased Premises is repaired.
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If the damage or destruction is such that in the reasonable opinion of Landlord it can be repaired with reasonable diligence within thirty (30) days from the date of such casualty, then the rent hereby reserved shall abate from the date of such casualty until the damage has been repaired and Landlord shall repair the damage with all reasonable speed. Landlord shall provide his opinion in writing and to Tenant within thirty (30) days after said casualty. Notwithstanding the giving of such opinion by Landlord, Landlord shall not be liable to Tenant if Landlord shall not actually repair such damage within said thirty (30) day period if Landlord shall proceed diligently with such repair work.
If in the reasonable opinion of Landlord the damage can be repaired within one hundred eighty (180) days of the date of casualty and the damage is such that the Leased Premises is capable of being partially used by Tenant, then until such damage has been repaired the rent shall proportionately abate as to the portion of the Leased Premises rendered untenantable until such time as the Leased Premises is repaired. Landlord shall provide his opinion in writing and to Tenant within thirty (30) days after said casualty.
ARTJCLE X
CONDEMNATION
If the Leased Premises or any part thereof shall be taken or condemned for any public purpose (or conveyed in lieu or in settlement thereof) to such an extent as to render the remainder of the Leased Premises, in the reasonable opinion of Landlord, not reasonably suitable for occupancy, this Lease shall, at the option of either party, forthwith cease and terminate, and all proceeds from any taking or condemnation of the Leased Premises shall belong to and be paid to Landlord. Tenant shall be entitled to maintain an independent claim against any condemning authority for damages suffered by Tenant. If this Lease is not so terminated, Landlord shall repair any damage resulting from such taking, to the extent and in the manner provided in Article IX and rental hereunder shall be abated proportionately to the extent the Leased Premises is rendered untenantable during the period of repair, and thereafter be adjusted on an equitable basis considering the areas of the Leased Premises taken and remaining.
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ARTICLE XI
SIGNS
Tenant may erect signs on the Leased Premises with respect to the Tenant’s business. During the term of this Lease, Tenant shall have the right to maintain those signs or signs of equivalent size and quality in such locations as may be in compliance with local laws, ordinances, regulations, and Condominium Documents. Any additional signs or changes to existing signs shall require the written consent of Landlord.
ARTICLE XII
DEFAULT
12.1 Each of the following shall be an “Event of Default”:
(a) Tenant shall fail to pay within ten (10) days after the date such payment is due any monthly installment of rent or any other charge or payment required of Tenant hereunder.
(b) Tenant shall violate or fail to perform any of the other conditions, covenants or agreements herein made by Tenant and such violation or failure shall continue for a period of fifteen (15) days after written notice thereof to Tenant from Landlord.
(c) Tenant shall make a general assignment for the benefit of its creditors or shall file a petition for bankruptcy or other reorganization, liquidation, dissolution or similar relief.
(d) A proceeding is filed against Tenant seeking any relief mentioned in (c) above.
(e) A trustee, receiver, or liquidator shall be appointed for Tenant or a substantial part of its property.
(f) Tenant shall vacate or abandon the Leased Premises (an absence of substantial activity by Tenant in the Leased Premises for more than thirty (30) consecutive days shall constitute such abandonment).
(g) Tenant shall mortgage, assign, or otherwise encumber its leasehold interest except as otherwise permitted hereunder.
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12.2 If any such Event of Default occurs, Landlord may, without further notice, immediately or at any time thereafter do one or more of the following:
(a) Re-enter and repossess the Leased Premises and remove any property therein and store the same elsewhere at Tenant’s expense without relieving Tenant from any liability or obligation hereunder.
(b) Relet the Leased Premises or any part thereof for Tenant’s account, but without obligation to do so and without relieving Tenant from any liability or obligation hereunder. Any amount received by Landlord from reletting will apply first to all reasonable costs and expenses incurred by Landlord in reletting (including, without limitation, broker’s comm1ss10ns, advertising expenses, cleaning and remodeling expenses).
(c) Bring an action then or thereafter against Tenant to recover the amount of any payment owing by Tenant to Landlord as the same is due, becomes due or accumulates.
(d) Terminate this Lease by giving Tenant written notice thereof, without relieving Tenant from any liability or obligation for payments theretofore becoming due or for present and prospective damages resulting from tenant’s default.
(e) Accelerate the entire amount of rent due under this Lease for the entire term of this Lease, which amount shall be immediately due and payable.
(f) Pursue any other remedy provided by law.
12.3 If Tenant fails to pay Landlord any amount that Tenant is obligated to pay, Tenant shall pay Landlord interest thereon at the rate of eighteen percent (18%) per anum on the amount of the delinquency or deficiency from the date due until the date paid. Landlord’s remedies set forth in this Lease are cumulative and not in limitation to any remedies given by law.
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12.4 If, upon default by Tenant or termination of this Lease, Landlord shall enter or take possession of the Leased Premises, Landlord shall have the right but not the obligation to remove from the Leased Premises all personal property, fixtures, furnishings and other property located therein, and to store such property in any place selected by Landlord, including, but not limited to, a public warehouse, at the expense and risk of the owners thereof, with the right to sell such stored property, without notice to Tenant, after it has been stored for a period of thirty (30) days or more, or as otherwise provided by law. The proceeds of such sale shall be applied first to the cost of such sale, second to the payment of the charges for storage, if any, and third to the payment of any other sums of money which may then be due from Tenant to Landlord under any of the terms hereof, the balance, if any, to be paid to Tenant.
12.5 If Tenant asserts that Landlord has failed to meet its obligations under this Lease, Tenant shall give written notice to Landlord specifying the alleged failure to perform. If Landlord has not begun and pursued with reasonable diligence the cure of any failure of the Landlord to meet its obligations under this Lease within thirty (30) days of receipt of the notice, then Landlord shall be in default. In no event shall Tenant have the right to terminate or rescind this Lease as a result of Landlord’s default as to any covenant or agreement contained herein. Tenant hereby waives such remedy of termination and rescission and hereby agrees that Tenant’s remedy for default hereunder by Landlord shall be limited to a suit for damages or for an injunction or both. Landlord’s liability for a default by Landlord under this Lease shall, in all events, be limited to its interest in the Leased Premises.
ARTICLE XIII
SUBORDINATION, ATTORNMENT. AND NON-DISTURBANCE
This Lease and all rights of the Tenant hereunder are subject and subordinate to any mortgage or other security instrument which does now or hereafter encumber the Leased Premises or any interest of Landlord therein and to any and all advances made on the security thereof, and to any and all increased, renewals, modifications, consolidations, and extension of any such mortgage or security instrument. No further writing from Tenant shall be necessary to evidence such subordination, however, within fifteen (15) days after written request from Landlord, Tenant agrees to execute any instrument which may be deemed necessary or desirable by Landlord to further effect the subordination of this Lease to any mortgage. Should Tenant fail to respond to such request, Tenant hereby irrevocably appoints Landlord as attorney-in-fact of Tenant at any time for Tenant, and in Tenant’s name, to execute proper subordination agreements to this effect. If the interest of Landlord in the Leased Premises is transferred to any person or entity by reason of foreclosure or other proceedings for enforcement of any mortgage or security interest or by delivery of a deed in lieu of foreclosure or other proceedings, Tenant shall immediately and automatically attorn to such person or entity.
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In the event of such transfer, this Lease and Tenant’s rights hereunder shall continue undisturbed so long as Tenant is not in default.
ARTICLE XIV
ACCESS BY LANDLORD
Tenant shall permit Landlord or its agents or representatives to enter into and upon any part of the Leased Premises at all reasonable hours to inspect same; to clean; to make repairs, alterations or additions thereto, as Landlord may deem necessary or desirable, or for any other purpose deemed reasonable by Landlord. Landlords shall use reasonable efforts to minimize any interference with Tenant’s normal business operations.
ARTICLE XV
ESTOPPEL
Within three (3) days after request therefore by Landlord, its agents, successors or assigns, Tenant shall deliver, in recordable form, a certificate to any proposed mortgagee or purchaser or to Landlord, together with a true and correct copy of this Lease, certifying (if such be the case) the following:
(a) That this Lease is in full force and effect without modification or, if modified, confirming the terms of such modification.
(b) The amount of rent currently being paid and the amount, if any, of prepaid rent and security deposit paid by Tenant to Landlord.
(c) That Landlord has performed all of its obligations due to be performed under this Lease and that there are no defenses, counterclaims, deductions, offsets outstanding or other excuses for Tenant’s performance under this Lease.
(d) That Tenant is occupying the Leased Premises and has accepted same.
(e) Any other fact reasonably requested by Landlord or such proposed mortgagee or purchaser.
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Tenant’s failure to timely deliver the above-described certificate shall be conclusive upon
Tenant that the above statements are true, that no more than one month’s rent has been paid in advance and that the amount of the security deposit held by Landlord is as represented by Landlord.
ARTICLE XVI
QUIET ENJOYMENT
Landlord covenants that so long as Tenant pays the rent reserved in this Lease and performs its agreements hereunder, Tenant shall have the right to quietly enjoy and use the Leased Premises for the term hereof, subject only to the provisions of this Lease.
ARTICLE XVII
TENANT FORBIDDEN TO ENCUMBER LANDLORD’S INTEREST
It is expressly agreed and understood between the parties hereto that nothing in this Lease shall ever be consumed as empowering the Tenant to encumber or cause to be encumbered the title or interest of Landlord in the Leased Premises in any manner whatsoever. In the event that regardless of this prohibition any person, furnishing or claiming to have furnished labor or materials at the request of the Tenant or of any person claiming by, through or under the Tenant shall file a lien against Landlord’s interest therein, Tenant, within thirty (30) days after being notified thereof, shall cause said lien to be satisfied of record or the Leased Premises released therefrom by the posting of a bond or other security as prescribed by law, or shall cause same to be discharged as a lien against Landlord’s interest in the Leased Premises by an order of a court having jurisdiction to discharge such lien. Accordingly, the parties shall execute a memorandum of lease of even date herewith to be recorded in the public record in the county where the Leased Premises is located.
ARTICLE XVIII
APPLICABLE LAW, VENUE, AND WAIVER OF JURY TRIAL
This Lease is entered into in the State of Florida and shall be governed by the applicable law of said state. Venue for any and all actions or proceedings which arise from this Lease shall be Osceola County, Florida. The parties hereto hereby waive trial by jury with respect to any and all proceedings maintained regarding this Lease.
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ARTICLE XIX
RECOVERY OF LITIGATION EXPENSE
In the event either party requires the services of an attorney in connection with enforcing the terms of this Lease or in the event suit is brought for the recovery of any rents due under this Lease or for the breach of any covenant or condition of this Lease or for the restitution of the Leased Premises to Landlord and/or eviction of Tenant, the party prevailing in such legal action shall be entitled to an award of all legal costs and expenses, including a reasonable sum for attorneys’ fees and costs incurred by Landlord (including appellate and bankruptcy proceedings) enforcing the terms of this Lease when such enforcement is settled by the parties without entry of a final judgment.
ARTICLE
XX
NOTICES
All notices required by the law and this Lease to be given by one party to the other shall be in writing, and the same shall be served by Certified Mail, Return Receipt Requested, in postage prepaid envelopes addressed to the following addresses or such other addresses as may be by one party to the other designated in writing:
As to Landlord: Horeb Legacy Investments LLC
Attn.: Anderson Correa
As to Tenant: La Rosa Realty Kissimmee
Attn.: Maria L. Correa
Such notice shall be deemed to be received within forty-eight (48) hours from the time of mailing, if mailed as provided for in this paragraph.
ARTICLE XXI
WATVE
R
No assent or consent to changes in or waiver of any part of this Lease shall be deemed or taken as made, unless the same be done in writing and attached hereto and endorsed by Landlord. No covenant or term of this Lease stipulated in favor of Landlord shall be waived except by express written consent of Landlord, whose forbearance or indulgence in any regard whatsoever shall not constitute a waiver of the covenant, term or condition to be performed by Tenant. Until complete performance by the Tenant of said covenant, term or condition, the Landlord shall be entitled to invoke any remedy available under this Lease or by law despite such forbearance or indulgence.
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ARTICLE XXII
RADON GAS
Radon is a naturally occurring radioactive gas which, when accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit.
ARTICLE XXIII
HAZARDOUS WASTE
23.1 Hazardous Substances. The term “Hazardous Substances,” as used in this lease, shall include without limitation, flammables, explosives, radioactive materials, asbestos, polychlorinated biphenyls (PCBs), chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic substances or related materials, petroleum and petroleum products, to the extent such substances are declared to be hazardous or toxic under any law or regulation now or hereafter enacted or promulgated by any governmental authority.
23.2 Tenant’s Restrictions. Tenant shall not cause or permit to occur:
(a) Any violation of any federal, state or local law, ordinance, or regulation now or hereafter enacted, related to environmental conditions on, under or about the Leased Premises, arising from Tenant’s use or occupancy of the Leased Premises, including but not limited to, soil and ground water conditions; or
(b) The use, generation, release, manufacture, refining, production, processing, storage, or disposal of any Hazardous Substances on, under, or about the Leased Premises or the transportation to or from the Leased Premises of any Hazardous Substances, except as may be permitted by applicable law and regulation.
23.3 Environmental Clean-Up.
(a) Tenant shall, at Tenant’s own expense, comply with all laws regulating the use, generation, storage, transportation, or disposal of Hazardous Substances (“Laws”) arising as a result of Tenant’s use of the Leased Premises.
(b) During Tenant’s occupancy, Tenant shall, at Tenant’s own expense, make all submissions to provide all information required by, and comply with all requirements of all governmental authorities (the “Authorities”) under the Laws.
(c) Should any Authority demand that a clean-up plan be prepared and that a clean-up be undertaken because of any deposit, spill, discharge, or other release of Hazardous Substances that occurs during the term of this Lease, at or from the Leased Premises which arises at any time from Tenant’s use or occupancy of the Leased Premises, then Tenant shall, at Tenant’s own expense, prepare and submit the required plans and all related bonds and other financial assurances; and Tenant shall cany out all such clean-up plans.
(d) Tenant shall promptly provide all information regarding the use, generation, storage, transportation, or disposal of Hazardous Substances that is reasonably requested by Landlord. If Tenant fails to fulfill any duty imposed under this Section within a reasonable time after notice, Landlord may do so; and in such case, Tenant shall cooperate with Landlord in order to prepare all documents Landlord deems necessa1y or appropriate to determine the applicability of the Laws to the Leased Premises and Tenant’s use thereof, and for compliance therewith, and Tenant shall execute all documents promptly upon Landlord’s request. No such action by Landlord and no attempt made by Landlord to mitigate damages under any Law shall constitute a waiver of any of Tenant’s obligations under this Section.
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(e) Tenant’s obligations and liabilities under this Section shall survive the expiration of this Lease.
(f) As of the date of this Lease, Landlord has not received written notice from any Authorities and does not otherwise have knowledge that the Leased Premises contains Hazardous Substances or of any other violation of Laws with respect to the Leased Premises.
23.4 Tenant’s Indemnity.
(a) Tenant shall indemnify, defend, and hold harmless Landlord from all fines, suits, procedures, claims, and actions of every kind, and all costs associated therewith (including attorneys’ fees) arising out of or in any way connected with any deposit, spill, discharge, or other release of Hazardous Substances that occurs during the term of this Lease at or from the Leased Premises that are caused by the Tenant’s use of the Leased Premises and did not exist as of the date of this Lease, or which arises at any time during the term of this Lease as a result of Tenant’s use or occupancy of the Leased Premises, or from Tenant’s failure to provide all information, make all submissions, and take all steps required by the Authorities under the Laws and all other environmental laws with respect to same.
(b) Tenant’s obligations and liabilities under this Section shall survive the expiration of this Lease.
ARTICLE XXIV
MISCELLANEOUS
24.1 No Smoking. Tenant acknowledges that smoking is NOT permitted on the Leased Premises. Tenant agrees that smoke related damages should in no way be considered ordinary wear and tear. Smoking is only permitted outside the Leased Premises. If the Leased Premises is damaged in any way due to smoke, Tenant agrees that it shall be fully responsible for eradication of smoke-related odors and/or repair of damage due to smoke.
24.2. No pets. Tenant shall not keep any animal or pet in or around the Leased Premises or allow any pet to enter the Leased Premises without Landlord’s prior written approval. If a pet of any kind is found in the Leased Premises without written permission, either temporarily or permanently, Tenant will be in breach of this agreement and security deposit will be forfeiture.
24.3. Time. Time is of the essence of this Lease and of each and eve1y provision hereof.
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24.4. Captions: Construction: Gender. The captions, headings and titles in this Lease are solely for convenience of reference and shall not affect any interpretation hereof. This Lease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Lease to be drafted. Each covenant, agreement, obligation, or other provision of this Lease on Tenant’s part to be performed, shall be deemed and construed as a separate and independent covenant of Tenant, not dependent on any other provision of this Lease, and time shall be of the essence with respect thereto. All terms and words used in this Lease, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require.
24.5. Brokers. Landlord and Tenant each represent to one another that each has had no dealings with any brokers or finders in connection with this Lease and each party hereby indemnifies and holds the other harmless from any and all liabilities, costs, damages, claims and/or expenses (including, without limitation, reasonable attorney’s fees and costs through all levels) arising from its breach of the representation made pursuant to this Section.
24.6. No Recordation. Neither this Lease, nor any memorandum hereof, shall be recorded by Tenant in the Public Records of Osceola County, Florida or in any other place. Any attempted recordation by Tenant shall render this Lease null and void and entitle Landlord to the remedies provided for by Tenant’s default.
24.7 Counterparts: Facsimile Signature. This Lease may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. A facsimile of a signature to this Lease shall be deemed an original signature.
ARTICLE XXIV
ENTIRE AGREEMENT, BINDING EFFECT, AND SEVERABILITY
This Lease and any written addenda and all exhibits hereto (which are expressly incorporated herein by this reference) shall constitute the entire agreement between Landlord and Tenant; no prior written or prior or contemporaneous oral promises or representations shall be binding. This Lease shall not be amended, changed or extended except by written instrument signed by both parties hereto. Except for the amount and terms of payment of rent due hereunder, Tenant agrees to approve and accept reasonable revisions to the terms and conditions of this Lease required by any lender providing financing for the development of the Leased Premises or other property of Landlord adjacent thereto, provided that no changes will be made which materially diminish Tenant’s rights or increase Tenant’s obligations hereunder. The provisions of this Lease shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties, but this provision shall in no way alter the restrictions on assignment and subletting applicable to Tenant hereunder. Time is of the essence in the performance of the obligations of the parties hereto. If any provision of this Lease or the application thereof to any person or circumstance shall at any time or to any extent be held invalid or unenforceable, and the basis of the bargain between the parties hereto is not destroyed or rendered ineffective thereby, the remainder of this Lease or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affect thereby.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written.
| LANDLORD: Horeb Legacy Investments LLC | |
| Print: By: | |
| TENANT: La Rosa Realty Kissimmee | |
| Print: By: |
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Exhibit 10.164
COMMERCIAL LEASE AGREEMENT
THIS COMMERCIAL LEASE AGREEMENT (hereinafter referred to as the “Lease”) made and entered into on December 1, 2025 by and between Horeb Legacy Investments LLC, a Florida limited liability company (hereinafter referred to as the “Landlord”), and La Rosa Realty Kissimmee, a Florida corporation (hereinafter referred to as the “Tenant”)
WITNESSETH:
In consideration of the rents, covenants and agreements herein, Landlord does hereby lease to Tenant and Tenant hereby leases from Landlord upon terms, provisions and conditions herein, the real property hereinafter described.
ARTICLE I
DESCRIPTION OF PROPERTY, TERMS, AND USE
1.1 Description of Property. Landlord leases to Tenant a 2,450.00 square foot space, hereinafter referred to as the (“Leased Premises”), as shown on the plan attached hereto as Exhibit “A” and incorporated by reference: located within the building known as as 3040 Loopdale Lane, Kissimmee, FL 34741, Parcel #05-25-29-1597-0001-0027, together with the shared improvements located thereon (hereinafter referred to as the “Common Areas”) situated in Osceola County, Florida, more particularly described as follows (hereinafter referred to as “Land”):
A portion of Lot 1 Loop Medical and Professional Park, as recorded in Plat Book 27 at Pages 96-97 of the Public Records of Osceola County, Florida, being a portion of Section 5, Township 25 South, Range 29 East, Osceola County, Florida, being more particularly described as follows:
Commencing at the most northeasterly corner of said Lot 1, said point being on the westerly right of way line of Ball Park Road, as shown on the Plat of Osceola Village, according to the plat thereof, recorded in Plat Book 21, Pages 17-18, Public Records of Osceola County, Florida; thence go S89°59’25”W along the north line of said Lot 1, a distance of 126.63 feet; thence departing said north line of Lot 1 go S26°25’46”E, a distance of 173.85 feet to the Point of Beginning; thence continue S26°25’46”W, a distance of 73.67 feet; thence N63°34’14”E, a distance of 53.00 feet to the Point of Beginning.
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1.2 Condition of Leased Premises. Tenant accepts the Leased Premises in its “As Is, Where Is” condition. Tenant acknowledges that Landlord has not made any representations or warranties with respect to the condition of the Leased Premises and neither Landlord nor any assignee of Landlord shall be liable for any latent or patent defect(s) therein. Tenant has inspected the Property and is familiar and satisfied with its present condition. The taking of possession of the Property by Tenant shall be conclusive evidence that the Property was in good and satisfactory condition at the time such possession was taken.
1.3 Term. Tenant is to have the Leased Premises herein described, subject to the terms and conditions hereof for a term of Twelve (12) months (the “Term”), commencing on December 1, 2025, (the “Commencement Date”) and ending on November 30, 2026 unless earlier terminated by Landlord in accordance with the provisions hereof.
1.5. Use. The Leased Premises shall be used and occupied by Tenant for the operation of Real Estate services, and Property Management Business (the “Business”) and no other purposes unless othe1wise authorized in writing by Landlord, to the extent such operation is authorized under governmental laws, ordinances, and regulations.
1.5.1. Prohibited Use. The tenant is only allowed to engage in Real Estate related se1vices, such as real estate sales, leasing or property management. No repair or se1vicing of any motorized vehicle, equipment or machine1y shall be allowed in the Leased Premises, in any parking or loading areas, roadways or se1vice areas within the complex. No vehicle abandoned or disabled or in a state of non-operation or disrepair shall be left upon the property of the Landlord, and Tenant shall enforce this restriction against Tenant’s employees, agents, visitors, licensees, invitees, contractors and customers. Should Landlord determine that a violation of this restriction has occurred, Landlord shall have the right to cause the offending vehicle, equipment, trailer or machine1y to be removed from Landlord’s property, and all costs of such removal shall be the obligation of the Tenant responsible for such vehicle under the terms of the lease and shall be reimbursed to the Landlord by Tenant within ten (10) days of written notice to Tenant 2.1 Rent.
Tenant covenants to comply with the provisions of all recorded covenants, conditions and restrictions and all building, zoning, fire and other governmental laws, ordinances and regulations, rules applicable to the Leased Premises and all requirements of the carriers of insurance covering the Leased Premises. Tenant shall not do or permit anything to be done in or about the Leased Premises or bring or keep anything on the Leased Premises that may increase any insurance premium upon the Leased Premises; that may injure the Leased Premises; that may constitute waste; or that may be a nuisance, public or private, or, without limiting the generality of the foregoing, Tenant shall not allow said Leased Premises to be used for any improper, immoral, unlawful or objectionable purpose; provided that the ordinary operation of the Business shall not, alone, constitute a violation of the foregoing. Tenant agrees that it has determined to Tenant’s satisfaction that the Leased Premises can be used for the purpose for which it is leased and waives any right to terminate this Lease in the event the Leased Premises cannot be used for such purpose.
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1.6. Compliance with Condominium Association Rules. The Leased Property consists of a Condominium Unit in the Loop Medical & Professional Park (the “Condominium”). Tenant’s right to use and occupy the Leased Premises shall be subject and subordinate in all respects to the provisions of the Condominium Bylaws, the Condominium association’s Rules and Regulations, and any other document referred to those documents that affect the rights and obligations of an owner or occupant in the Condominium (collectively, the “Condominium Documents”). Failure by Tenant, or any person on the Leased Premises or Condominium as a result of Tenant’s occupancy, to comply with the provisions of the Condominium Documents shall constitute a material breach of the Lease.
ARTICLE II
RENT AND SECURITY DEPOSIT
Tenant shall pay to Landlord as Rent during the Term of the Lease payable in advance and without notice in monthly installments of Six Thousand and Nine Hundred Fifty-1\vo Dollars and 67/100 ($6,952.67) (the “Base Rent”) together with additional rent charges listed in Sections 2.2, 2.4, and 2.5, beginning on the Commencement Date until November 30, 2023. Commencing on December 1, 2023, the monthly Base Rent installments shall increase by Three Percent (3%) for each additional 12-month period thereafter without notice or demand and without any deduction, off-set or abatement to the Landlord at the address stated herein for notice or to such other persons or such other places as the Landlord may designate to Tenant in writing. All payments are to be made to Landlord via check or such other manner that Landlord may from time to time designate in writing. Tenants shall make the monthly installment payments of rent on the first day of each and eve1y month during the term of this Lease beginning on the Commencement Date. Should the Lease commence on a day other than the first day of a month or end on a day other than the last day of a month, then the rent shall be appropriately prorated.
2.2. Late Charge. If the Tenant defaults in the payment of rent and the rent remains unpaid for five (5) calendar days after it becomes due, the Tenant shall pay to Landlord a late charge of Three Hundred and 00/100 Dollars ($300.00), in addition to the monthly rental payment, to compensate for the extra expense of handling late payments. An additional fee of $20.00 per day shall be assessed for each additional day Rent is late, until Rent is paid in full. Additionally, any Rent (including any Additional Rent) due to Landlord that is not paid when due shall bear interest, from the date due, at a rate of eighteen percent (18%) per annum. All late fees and interest shall be deemed additional rent payable by Tenant.
2.3. Security Deposit. Concurrent with Tenant’s execution of this Lease, Tenant shall deposit with the Landlord a security deposit (the “Security Deposit”) in the amount of Seven Thousand and 00/100 Dollars ($7,000.00). The Security Deposit shall be held by the Landlord as security for the faithful performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the Lease Term. If Tenant defaults with respect to any provisions of this Lease, including, but not limited to, the provisions relating to the payment of Rent, Landlord may, but shall not be required to, use, apply or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in default, or for the payment of any amount that Landlord may spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant’s default. If Tenant shall fully and faithfully perform eve1y provision of this Lease to be performed by it, the Security Deposit, or any balance thereof, shall be returned to Tenant, or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder, within thirty (30) days following the expiration of the Lease Term. Tenant shall not be entitled to any interest on the Security Deposit.
2.4. Additional Rent Charges. Tenant shall include to each monthly rental installment provided in Section 2.1, as additional rent:
(a) The respective applicable Florida Sales Tax due; and
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(b) Tenant’s proportional share of the property taxes, association dues and routine common area maintenance and operational costs of maintaining and operating the Common Areas that se1ve the Condominium Association. Said payment, hereinafter referred to as “Common Area Maintenance Payment,” shall begin at the base rate of ($5.13) per square foot of Tenant’s Leased Premises per year, payable at the rate of $1,047.33 per month. Landlords reserve the right to make annual adjustments as and if required to reflect actual costs. The term “Common Area Maintenance” used in this Lease Agreement includes, but is not limited to, routine cleaning and maintenance of the exterior of the Leased Premises to include periodic window cleaning; the cleaning, maintenance and sweeping of the parking lot and sidewalks; the care and maintenance of the landscaping and landscaped areas to include the retention pond areas; common area security lighting and other power charges, if any; water and sewer charges and assessments, if any; routine rubbish collection, and any other costs customarily considered as a common area maintenance expense and the property taxes for the Leased Premises. The Common Area Maintenance charges shall not include depreciation on any improvement; any capital expense or improvements; moving or relocation costs; legal or collection costs; remodeling costs; repairs or maintenance to the roof or stmctural components, real estate commissions and management fees; or executive salaries.
2.5. Taxes, Insurance, and Assessments. During the Term, Tenant shall be solely responsible for the payment of: (a) all real estate property taxes and assessments which shall accrue during the Term hereof and which shall be imposed by any governmental or public authority on, or become a lien in respect to the Leased Premises or any structure thereon or appurtenant thereto; (b) pro rata share of the Landlord’s fire and casualty insurance premiums that become due during the Term for coverage of the Leased Premises; and (c) all Condominium assessments issued for the Leased Premises that becomes due during the Term. The charges reflected herein above are included in the Common Area Maintenance Payments outlined in section 2.4 (b) above, subject to annual adjustment. Tenant shall be solely responsible for the payment of all Tenant’s general liability insurance premiums that become due during the Term of the Lease, all personal property taxes levied on any personal property located on the Leased Premises during the Term, and for all taxes, charges, license fees, or similar fees imposed by reason of the use of the Leased Premises by Tenant. Tenant shall have the right to pay any such tax, assessment or charge under protest and contest the validity or amount of such tax, assessment, or charge with the governmental authority which imposed it; provided, however, that Tenant may not undertake any such contest if it has not paid such tax, assessment, or charge. Upon Tenant’s contest, Landlord shall have no obligation to take part therein or to contribute toward the expenses thereof. In the event of either (a) the real estate property taxes and assessments which shall accrue during the Term hereof exceed $8,673.00 per year; (b) Landlord’s insurance premiums that become due during the Term for the Leased Premises and its building exceed $2,322.00 per year; or (c) the Condominium Assessment for the Leased Premises that becomes due during the Te1m exceed $2.57 per square foot for the Leased Premises, then, upon Landlord’s notice, Tenant shall be responsible to reimburse Landlord the difference of the prorate share of the costs actually incurred by Landlord.
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2.6. Utilities. Tenants shall make all arrangements to connect and pay for all water, gas, heat, light, power, telephone and other utility services supplied to the Leased Premises together with any taxes thereon and for all connection charges. Tenant, at its sole expense, shall be liable for and shall timely pay any and all charges for the application, connection and use of any and all utilities, water, sewer, gas, electricity, telephone service and similar charges affecting the Leased Premises and all such services and utilities shall be in the name of Tenant only. Landlords shall not be required to furnish any services or facilities to, or to make any repairs to or replacements or alterations of the Leased Premises. Tenant hereby waives any and all claims of any kind, nature or description against Landlord, arising out of the failure of the Landlord from time to time to furnish any of the se1vices contemplated hereunder including, without limitation, air conditioning, heat, electricity, telephone and plumbing. As for water utility se1vices, Tenant shall be directly billed by the Condominium association for the water usage on the Leased Premises. The Landlord shall invoice the water bill to the Tenant monthly. The invoice needs to be paid separately.
2.7. If Tenant shall refuse, neglect, or otherwise fail or omit to make any of the payments herein required, then the Landlord may, at its option, but without being obligated to do so, pay the same and the amount or amounts of money so paid, including reasonable attorneys’ fees and expenses which may have been incurred together with interest on all such amounts at the highest lawful rate permitted under the laws of the State of Florida, shall be considered as rent immediately due and payable. The payment of such rent may be collected or enforced by Landlord in the same manner as though it were an installment of rent specifically required by the terms of this Lease to be paid by Tenant to Landlord.
ARTICLE III
REPAIR AND MAINTENANCE OF LEASED PREMISES
3.1 Except as othe1wise set forth herein, Tenant shall at its sole cost and expense keep and maintain the interior of the Leased Premises (non-structural only) in good condition and repair, normal wear and tear excepted, including, but not by way of limitation, necessa1y replacements of the interior painting, mechanical equipment, fire protection devices, doors, and floors.
3.2 Landlords shall not furnish any se1vices whatsoever to the Leased Premises for the non-structural maintenance of the interior of the Leased Premises. Tenant shall be solely responsible for all operating expenses necessa1y for the proper and efficient operation and non structural maintenance of the interior of the Leased Premises.
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ARTICLE
IV
HOLDING OVER
If Tenant should remain in possession of the Leased Premises after the te1mination or expiration of the Term, without the execution by Landlord and Tenant of a new lease, then Tenant shall be deemed to be occupying the Leased Premises as a tenant at sufferance, subject to all the covenants and obligations of this Lease and at a daily rental of twice the per day rent in effect immediately prior to such expiration or termination, computed on the basis of a thirty (30) day month, but such holding over shall not extend the Term set herein.
ARTICLE V
ALTERATIONS, ADDITIONS, IMPROVEMENTS
Tenant will make no alteration, change, improvements or addition to the Leased Premises without the prior written consent of Landlord. Landlord will not unreasonably withhold or delay its approval for such items after first reviewing the plans and specifications depicting the improvements. The Tenant may, without the written consent of the Landlord, but at the sole cost and expense of the Tenant and in a good and workmanlike manner, erect and alter shelves, movable partitions, and trade fixtures and equipment as the Tenant may deem advisable so long as such activity does not alter the basic character of the building or improvements, and in each case complying with all applicable governmental laws, ordinances, regulations and other applicable requirements. Tenant may remove its trade fixtures, office supplies, and moveable office furniture and equipment not attached to the Leased Premises provided such removal is made prior to the termination or expiration of the term, Tenant is not then in default in the timely performance of any obligation or covenant under this Lease, and Tenant promptly repairs all damage caused by such removal. All other property at the Leased Premises and any alteration or addition to the Leased Premises (including, but not limited to, wall-to-wall carpeting, d1ywall pa1titions, paneling or other wall covering) and any other a1ticle attached or affixed to the floor, wall or ceiling of the Leased Premises shall become the property of the Landlord and shall be surrendered with the Leased Premises as part thereof at the termination of this Lease, without payment or compensation therefore. If, however, Landlord so requests in writing, Tenant will prior to vacating the premises upon the termination or expiration of this Lease, remove any and all alterations, additions, fixtures, equipment and property placed or installed by it in the Leased Premises and will repair any damage caused by such removal.
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ARTICLE VI
ASSIGNMENT AND SUBLETTING
6.1 Tenant shall not assign this Lease nor any rights hereunder, nor let or sublet all or any part of the Leased Premises, nor suffer or permit any person or entity to use any part of the Leased Premises, without first obtaining the express written consent of Landlord, which consent shall not be unreasonably withheld. Should Landlord consent to such assignment of the Lease, or to a sublease of all or any part of the Leased Premises, Tenant does hereby guarantee payment of all rent herein reserved until the expiration of the term hereof, sublessee, or assignees shall become directly liable to Landlord for all obligations of Tenant hereunder, and no failure of Landlord to promptly collect from any assignee or sublessee, or any extension of the time for payment of such rent, shall release or relieve Tenant from its guaranty or obligation of payment of such rent. Any assignment or sublet approved by Landlord shall not relieve Tenant of its obligations hereunder. Tenant shall reimburse Landlord for all of the reasonable and necessary legal, accounting and other direct costs incurred due to Tenant’s sublet or assignment. In determining whether or not to grant consent to the Tenant’s sublet or assignment request, Landlord may consider any reasonable factor. Landlord and Tenant agree that any one of the following factors, or any other reasonable factor, will be reasonable grounds upon which Landlord may approve or deny the Tenant’s request:
(a) Financial strength of the proposed subtenant/assignee must be at least equal to that of the existing Tenant at the time of the Lease commenced;
(b) Business reputation of the proposed subtenant/assignee must be in accordance with generally acceptable commercial standards;
(c) Use of the Leased Premises by the proposed subtenant/assignee will not violate or create any potential violation of any laws, covenants, or other agreements affecting the Leased Premises.
6.2 Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations hereunder, and in the Leased Premises referred to herein, and upon any such transfer or assignment, no further liability or obligation shall thereafter accrue against Landlord hereunder (except to the extent of any retained Landlord’s interest by Landlord upon any partial assignment of its interest in this Lease).
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6.3 Should Tenant be a corporation, any transfer of this Lease by merger, consolidation or liquidation or any change in the ownership of or power to vote a majority of its outstanding voting stock shall constitute an assignment. Such an assignment shall require Landlord’s consent if by one or more sales or transfers, by operation of law or othe1wise or by creation of new stock, an aggregate of more than fifty percent (50%) of Tenant’s stock shall become vested in a party or parties who are not stockholders of Tenant as of the Commencement Date of this Lease. An assignment to a subsidia1y or parent corporation of the corporate Tenant shall not require Landlord’s consent, but Tenant shall remain liable for Tenant’s obligations hereunder. Should Tenant be a partnership, trust, or other association or entity having transferable ownership interests, any transfer of more than fifty percent (50%) of such ownership interests to a party or parties who are not holders of such ownership interest at the Commencement Date shall constitute an assignment hereunder which shall require Landlord’s consent.
ARTICLE
VII
INSURANCE
7.1 At all times during the term of this Lease, Tenant shall purchase and maintain, at its sole cost and expense, the following insurance in the name of Landlord:
(a) Fire and Extended Coverage Casualty Insurance upon the Leased Premises in an amount equal to the full replacement value of the improvements on the Leased Premises. The value of the improvements will exclude the costs of foundation, underground piping and/or wiring, outside paving and landscaping. Such insurance shall include the “Inflation Guard Endorsement” or shall be adjusted annually to reflect the then current construction costs.
(b) Rent loss insurance on an “All Risk” basis in an amount equal to the annual rent plus the sum of the annual taxes on the rent and premiums on insurance required to be carried under this Section 7.1.
(c) Comprehensive General Liability Insurance covering both bodily injury liability and prope1ty damage liability with a combined single limit of $1,000,000.00 for each occurrence.
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(d) Other insurance. Tenant shall provide and keep in force other insurance in amounts that may from time to time be reasonably required by Landlord against other insurable hazards as are commonly insured against for the type of business activity that Tenant will conduct.
7.2 The insurance to be maintained under this Article VII also will be subject to the requirements of any mortgagee, including, but not limited to, federal Flood Insurance. This insurance will be maintained with insurance companies licensed and qualified to do business in the State of Florida and having a general policy holders’ rating of A or A+ and a financial rating of Class X as established by A.M. Best Company of Oldwick, New Jersey or an equivalent rating assigned by a similar rating agency acceptable to Landlord, or othe1wise acceptable to Landlord.
7.3 To the extent that a loss is covered by insurance in force and recove1y is made for such loss, Landlord and Tenant hereby mutually release each other from liability and waive all right of recove1y against each other for any loss from perils insured against under their respective policies. Landlord and Tenant also agree to obtain a waiver of subrogation from their insurance carriers permitting this waiver.
7.4 The original of each such policy of insurance or certified duplicate thereof issued by the insurance or insuring organization shall be delivered by Tenant to Landlord prior to commencement of the Lease term and ten (10) days prior to the expiration or termination of any existing policy. Any mortgagee of Landlord shall be named as an additional insured under such insurance and such insurance shall be primary and noncontributing with any insurance carried by Landlord. The insurance policies shall contain endorsements requiring thirty (30) days written notice to Landlord prior to any cancellation or any reduction in amount of coverage. Tenant shall deliver to Landlord as a condition precedent to its maintaining occupancy of the Leased Premises (but not to its obligation to pay rent) a certificate evidencing each renewal of such insurance and shall maintain such insurance in effect throughout the term of this Lease. Tenant shall promptly notify Landlord of any accident or injury occurring on the Leased Premises.
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ARTICLE
VIII
HOLD HARMLESS
Except for loss, damage or claims arising from the Landlord’s negligent acts, omissions or breaches of this Lease, Landlord shall not be liable to Tenant for any injury or damage to any person or property in or about the Leased Premises from any cause whatsoever. Tenant shall indemnify and hold harmless the Landlord, its partners, shareholders, members, employees, officers, directors, agents, and their respective successors and assigns from and against any and all liability, claims, demands, damages, expenses, fees, fines, penalties, suits, proceedings, actions and costs of actions of any kind and nature, including attorneys’ fees, for injury or death to persons or damage to property or property rights (a) occurring in, on or about the Leased Premises or any part thereof, or (b) occurring in, on or about the Leased Premises or any part thereof, when any such injury or damage shall be caused or result in whole or in part by any act, negligence, or fault or omission of any duty by the Tenant, its agents, se1vants, employees, licensees or invitees, or by any person under the control or direction of Tenant, except to the extent arising or growing out of or connected with Landlord’s negligent acts, omissions or breaches of this Lease. Tenant will further indemnify and save harmless the Landlord for all liability, claims and other items above mentioned, arising or growing out of or connected with any breach, violation, non-performance or failure to abide by any covenant, condition, agreement or provisions contained in this Lease or in the Condominium Documents on the part of the Tenant to be kept, performed, complied with or abided by as an occupant of the Leased Premises, except to the extent arising or growing out of or connected with Landlord’s negligent acts, omissions or breaches of this Lease. If it becomes necessary for the Landlord to defend any action seeking to impose any such liability, the Tenant will pay the Landlord all costs of court and reasonable attorneys’ fees incurred by Landlord in such defense, in addition to any other sums which said Landlord may be called upon to pay by reason of the entty of a judgment or decree against the Landlord in the litigation in which such claim is asserted.
ARTICLE IX
DESTRUCTION OR DAMAGE BY FIRE OR OTHER CASUALTY
In the event of a fire or other casualty on the Leased Premises, Tenant shall promptly give notice thereof to Landlord. Within thirty (30) days from Tenant’s notice herein, Landlord shall notify Tenant whether the damage or destruction is such that in the reasonable opinion of Landlord it cannot be repaired with reasonable diligence within one hundred eighty (180) days from the date of such casualty. Within ten (10) days of Tenant’s receipt of Landlord’s opinion, either Landlord or Tenant may terminate this Lease by giving to the other written notice of such termination. Should this Lease be so terminated, then all rent owed up to the date of such casualty shall be paid by Tenant to Landlord and this Lease shall then terminate. In the event that neither Landlord nor Tenant so terminates this Lease, then Landlord shall repair said improvements with all reasonable speed and rent shall be proportionately abated with respect to any portion of the Leased Premises rendered unusable until such time as the Leased Premises is repaired.
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If the damage or destruction is such that in the reasonable opinion of Landlord it can be repaired with reasonable diligence within thirty (30) days from the date of such casualty, then the rent hereby reserved shall abate from the date of such casualty until the damage has been repaired and Landlord shall repair the damage with all reasonable speed. Landlord shall provide his opinion in writing and to Tenant within thirty (30) days after said casualty. Notwithstanding the giving of such opinion by Landlord, Landlord shall not be liable to Tenant if Landlord shall not actually repair such damage within said thirty (30) day period if Landlord shall proceed diligently with such repair work.
If in the reasonable opinion of Landlord the damage can be repaired within one hundred eighty (180) days of the date of casualty and the damage is such that the Leased Premises is capable of being partially used by Tenant, then until such damage has been repaired the rent shall proportionately abate as to the portion of the Leased Premises rendered untenantable until such time as the Leased Premises is repaired. Landlord shall provide his opinion in writing and to Tenant within thirty (30) days after said casualty.
ARTICLE
X
CONDEMNATION
If the Leased Premises or any part thereof shall be taken or condemned for any public purpose (or conveyed in lieu or in settlement thereof) to such an extent as to render the remainder of the Leased Premises, in the reasonable opinion of Landlord, not reasonably suitable for occupancy, this Lease shall, at the option of either party, forthwith cease and terminate, and all proceeds from any taking or condemnation of the Leased Premises shall belong to and be paid to Landlord. Tenant shall be entitled to maintain an independent claim against any condemning authority for damages suffered by Tenant. If this Lease is not so terminated, Landlord shall repair any damage resulting from such taking, to the extent and in the manner provided in Article IX and rental hereunder shall be abated proportionately to the extent the Leased Premises is rendered untenantable during the period of repair, and thereafter be adjusted on an equitable basis considering the areas of the Leased Premises taken and remaining.
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ARTICLE
XI
SIGNS
Tenant may erect signs on the Leased Premises with respect to the Tenant’s business. During the term of this Lease, Tenant shall have the right to maintain those signs or signs of equivalent size and quality in such locations as may be in compliance with local laws, ordinances, regulations, and Condominium Documents. Any additional signs or changes to existing signs shall require the written consent of Landlord.
ARTICLE
XII
DEFAULT
12.l Each of the following shall be an “Event of Default”:
(a) Tenant shall fail to pay within ten (10) days after the date such payment is due any monthly installment of rent or any other charge or payment required of Tenant hereunder.
(b) Tenant shall violate or fail to perform any of the other conditions, covenants or agreements herein made by Tenant and such violation or failure shall continue for a period of fifteen (15) days after written notice thereof to Tenant from Landlord.
(c) Tenant shall make a general assignment for the benefit of its creditors or shall file a petition for bankruptcy or other reorganization, liquidation, dissolution or similar relief.
(d) A proceeding is filed against Tenant seeking any relief mentioned in (c) above.
(e) A trustee, receiver, or liquidator shall be appointed for Tenant or a substantial part of its property.
(f) Tenant shall vacate or abandon the Leased Premises (an absence of substantial activity by Tenant in the Leased Premises for more than thirty (30) consecutive days shall constitute such abandonment).
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(g) Tenant shall mortgage, assign, or othe1wise encumber its leasehold interest except as othe1wise permitted hereunder.
12.2 If any such Event of Default occurs, Landlord may, without further notice, immediately or at any time thereafter do one or more of the following:
(a) Re-enter and repossess the Leased Premises and remove any property therein and store the same elsewhere at Tenant’s expense without relieving Tenant from any liability or obligation hereunder.
(b) Relet the Leased Premises or any part thereof for Tenant’s account, but without obligation to do so and without relieving Tenant from any liability or obligation hereunder. Any amount received by Landlord from reletting will apply first to all reasonable costs and expenses incurred by Landlord in reletting (including, without limitation, broker’s commissions, advertising expenses, cleaning and remodeling expenses).
(c) Bring an action then or thereafter against Tenant to recover the amount of any payment owing by Tenant to Landlord as the same is due, becomes due or accumulates.
(d) Terminate this Lease by giving Tenant written notice thereof, without relieving Tenant from any liability or obligation for payments theretofore becoming due or for present and prospective damages resulting from tenant’s default.
(e) Accelerate the entire amount of rent due under this Lease for the entire term of this Lease, which amount shall be immediately due and payable.
(f) Pursue any other remedy provided by law.
12.3 If Tenant fails to pay Landlord any amount that Tenant is obligated to pay, Tenant shall pay Landlord interest thereon at the rate of eighteen percent (18%) per annum on the amount of the delinquency or deficiency from the date due until the date paid. Landlord’s remedies set forth in this Lease are cumulative and not in limitation to any remedies given by law.
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12.4 If, upon default by Tenant or termination of this Lease, Landlord shall enter or take possession of the Leased Premises, Landlord shall have the right but not the obligation to remove from the Leased Premises all personal property, fixtures, furnishings and other property located therein, and to store such property in any place selected by Landlord, including, but not limited to, a public warehouse, at the expense and risk of the owners thereof, with the right to sell such stored property, without notice to Tenant, after it has been stored for a period of thirty (30) days or more, or as othe1wise provided by law. The proceeds of such sale shall be applied first to the cost of such sale, second to the payment of the charges for storage, if any, and third to the payment of any other sums of money which may then be due from Tenant to Landlord under any of the terms hereof, the balance, if any, to be paid to Tenant.
12.5 If Tenant asserts that Landlord has failed to meet its obligations under this Lease, Tenant shall give written notice to Landlord specifying the alleged failure to perform. If Landlord has not begun and pursued with reasonable diligence the cure of any failure of the Landlord to meet its obligations under this Lease within thirty (30) days of receipt of the notice, then Landlord shall be in default. In no event shall Tenant have the right to terminate or rescind this Lease as a result of Landlord’s default as to any covenant or agreement contained herein. Tenant hereby waives such remedy of termination and rescission and hereby agrees that Tenant’s remedy for default hereunder by Landlord shall be limited to a suit for damages or for an injunction or both. Landlord’s liability for a default by Landlord under this Lease shall, in all events, be limited to its interest in the Leased Premises.
ARTICLE XIII
SUBORDINATION, ATTORNMENT, AND NON-DISTURBANCE
This Lease and all rights of the Tenant hereunder are subject and subordinate to any mortgage or other security instrument which does now or hereafter encumber the Leased Premises or any interest of Landlord therein and to any and all advances made on the security thereof, and to any and all increased, renewals, modifications, consolidations, and extension of any such mortgage or security instrument. No further writing from Tenant shall be necessa1y to evidence such subordination, however, within fifteen (15) days after written request from Landlord, Tenant agrees to execute any instrument which may be deemed necessa1y or desirable by Landlord to further effect the subordination of this Lease to any mortgage. Should Tenant fail to respond to such request, Tenant hereby irrevocably appoints Landlord as attorney-in-fact of Tenant at any time for Tenant, and in Tenant’s name, to execute proper subordination agreements to this effect. If the interest of Landlord in the Leased Premises is transferred to any person or entity by reason of foreclosure or other proceedings for enforcement of any mortgage or security interest or by delive1y of a deed in lieu of foreclosure or other proceedings, Tenant shall immediately and automatically attorn to such person or entity.
In the event of such transfer, this Lease and Tenant’s rights hereunder shall continue undisturbed so long as Tenant is not in default.
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ARTICLE
XIV
ACCESS BY LANDLORD
Tenant shall permit Landlord or its agents or representatives to enter into and upon any part of the Leased Premises at all reasonable hours to inspect same; to clean; to make repairs, alterations or additions thereto, as Landlord may deem necessary or desirable, or for any other purpose deemed reasonable by Landlord. Landlords shall use reasonable efforts to minimize any interference with Tenant’s normal business operations.
ARTICLE
XV
ESTOPPEL
Within three (3) days after request therefore by Landlord, its agents, successors or assigns, Tenant shall deliver, in recordable form, a certificate to any proposed mortgagee or purchaser or to Landlord, together with a true and correct copy of this Lease, ce1tifying (if such be the case) the following:
(a) That this Lease is in full force and effect without modification or, if modified, confirming the terms of such modification.
(b) The amount of rent currently being paid and the amount, if any, of prepaid rent and security deposit paid by Tenant to Landlord.
(c) That Landlord has performed all of its obligations due to be performed under this Lease and that there are no defenses, counterclaims, deductions, offsets outstanding or other excuses for Tenant’s performance under this Lease.
(d) That Tenant is occupying the Leased Premises and has accepted same.
(e) Any other fact reasonably requested by Landlord or such proposed mortgagee or purchaser.
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Tenant’s failure to timely deliver the above-described certificate shall be conclusive upon Tenant that the above statements are true, that no more than one month’s rent has been paid in advance and that the amount of the security deposit held by Landlord is as represented by Landlord.
ARTICLE
XVI
QUIET ENJOYMENT
Landlord covenants that so long as Tenant pays the rent reserved in this Lease and performs its agreements hereunder, Tenant shall have the right to quietly enjoy and use the Leased Premises for the term hereof, subject only to the provisions of this Lease.
ARTICLE XVII
TENANT FORBIDDEN TO ENCUMBER LANDLORD’S INTEREST
It is expressly agreed and understood between the parties hereto that nothing in this Lease shall ever be construed as empowering the Tenant to encumber or cause to be encumbered the title or interest of Landlord in the Leased Premises in any manner whatsoever. In the event that regardless of this prohibition any person, furnishing or claiming to have furnished labor or materials at the request of the Tenant or of any person claiming by, through or under the Tenant shall file a lien against Landlord’s interest therein, Tenant, within thirty (30) days after being notified thereof, shall cause said lien to be satisfied of record or the Leased Premises released therefrom by the posting of a bond or other security as prescribed by law, or shall cause same to be discharged as a lien against Landlord’s interest in the Leased Premises by an order of a court having jurisdiction to discharge such lien. Accordingly, the parties shall execute a memorandum of lease of even date herewith to be recorded in the public record in the county where the Leased Premises is located.
ARTICLE XVIII
This Lease is entered into in the State of Florida and shall be governed by the applicable law of said state. Venue for any and all actions or proceedings which arise from this Lease shall be Osceola County, Florida. The parties hereto hereby waive trial by jury with respect to any and all proceedings maintained regarding this Lease.
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ARTICLE XIX
RECOVERY OF LITIGATION EXPENSE
APPLICABLE LAW, VENUE, AND WAIVER OFWRY TRIAL In the event either party requires the services of an attorney in connection with enforcing the terms of this Lease or in the event suit is brought for the recove1y of any rents due under this Lease or for the breach of any covenant or condition of this Lease or for the restitution of the Leased Premises to Landlord and/or eviction of Tenant, the party prevailing in such legal action shall be entitled to an award of all legal costs and expenses, including a reasonable sum for attorneys’ fees and costs incurred by Landlord (including appellate and bankruptcy proceedings) enforcing the terms of this Lease when such enforcement is settled by the parties without entity of a final judgment.
ARTICLE
XX
NOTICES
All notices required by the law and this Lease to be given by one party to the other shall be in writing, and the same shall be served by Certified Mail, Return Receipt Requested, in postage prepaid envelopes addressed to the following addresses or such other addresses as may be by one party to the other designated in writing:
As to Landlord: Horeb Legacy Investments LLC
Attn.: Anderson Correa
As to Tenant: La Rosa Realty Kissimmee
Attn.: Maria L. Correa
Such notice shall be deemed to be received within forty-eight (48) hours from the time of mailing, if mailed as provided for in this paragraph.
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ARTICLEXXI
WAIVER
No assent or consent to changes in or waiver of any part of this Lease shall be deemed or taken as made, unless the same be done in writing and attached hereto and endorsed by Landlord. No covenant or term of this Lease stipulated in favor of Landlord shall be waived except by express written consent of Landlord, whose forbearance or indulgence in any regard whatsoever shall not constitute a waiver of the covenant, term or condition to be performed by Tenant. Until complete performance by the Tenant of said covenant, term or condition, the Landlord shall be entitled to invoke any remedy available under this Lease or by law despite such forbearance or indulgence.
ARTICLE
XXII
RADON GAS
Radon is a naturally occurring radioactive gas which, when accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit.
ARTICLE
XXIII
HAZARDOUS WASTE
23.1 Hazardous Substances. The term “Hazardous Substances,” as used in this lease, shall include without limitation, flammables, explosives, radioactive materials, asbestos, polychlorinated biphenyls (PCBs), chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic substances or related materials, petroleum and petroleum products, to the extent such substances are declared to be hazardous or toxic under any law or regulation now or hereafter enacted or promulgated by any governmental authority.
23.2 Tenant’s Restrictions. Tenant shall not cause or permit to occur:
(a) Any violation of any federal, state or local law, ordinance, or regulation now or hereafter enacted, related to environmental conditions on, under or about the Leased Premises, arising from Tenant’s use or occupancy of the Leased Premises, including but not limited to, soil and ground water conditions; or
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(b) The use, generation, release, manufacture, refining, production, processing, storage, or disposal of any Hazardous Substances on, under, or about the Leased Premises or the transportation to or from the Leased Premises of any Hazardous Substances, except as may be permitted by applicable law and regulation.
23.3 Environmental Clean-Up.
(a) Tenant shall, at Tenant’s own expense, comply with all laws regulating the use, generation, storage, transportation, or disposal of Hazardous Substances (“Laws”) arising as a result of Tenant’s use of the Leased Premises.
(b) During Tenant’s occupancy, Tenant shall, at Tenant’s own expense, make all submissions to provide all information required by, and comply with all requirements of all governmental authorities (the “Authorities”) under the Laws.
(c) Should any Authority demand that a clean-up plan be prepared and that a clean-up be undertaken because of any deposit, spill, discharge, or other release of Hazardous Substances that occurs during the term of this Lease, at or from the Leased Premises which arises at any time from Tenant’s use or occupancy of the Leased Premises, then Tenant shall, at Tenant’s own expense, prepare and submit the required plans and all related bonds and other financial assurances; and Tenant shall cany out all such clean-up plans.
(d) Tenant shall promptly provide all information regarding the use, generation, storage, transportation, or disposal of Hazardous Substances that is reasonably requested by Landlord. If Tenant fails to fulfill any duty imposed under this Section within a reasonable time after notice, Landlord may do so; and in such case, Tenant shall cooperate with Landlord in order to prepare all documents Landlord deems necessa1y or appropriate to determine the applicability of the Laws to the Leased Premises and Tenant’s use thereof, and for compliance therewith, and Tenant shall execute all documents promptly upon Landlord’s request. No such action by Landlord and no attempt made by Landlord to mitigate damages under any Law shall constitute a waiver of any of Tenant’s obligations under this Section.
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(e) Tenant's obligations and liabilities under this Section shall survive the expiration of this Lease.
(f) As of the date of this Lease, Landlord has not received written notice from any Authorities and does not othe1wise have knowledge that the Leased Premises contains Hazardous Substances or of any other violation of Laws with respect to the Leased Premises.
23.4 Tenant’s Indemnity.
(a) Tenant shall indemnify, defend, and hold harmless Landlord from all fines, suits, procedures, claims, and actions of every kind, and all costs associated therewith (including attorneys’ fees) arising out of or in any way connected with any deposit, spill, discharge, or other release of Hazardous Substances that occurs during the term of this Lease at or from the Leased Premises that are caused by the Tenant’s use of the Leased Premises and did not exist as of the date of this Lease, or which arises at any time during the term of this Lease as a result of Tenant’s use or occupancy of the Leased Premises, or from Tenant’s failure to provide all information, make all submissions, and take all steps required by the Authorities under the Laws and all other environmental laws with respect to same.
(b) Tenant’s obligations and liabilities under this Section shall survive the expiration of this Lease.
ARTICLE XXIV
MISCELLANEOUS
24.1 No Smoking. Tenant acknowledges that smoking is NOT permitted on the Leased Premises. Tenant agrees that smoke related damages should in no way be considered ordinary wear and tear. Smoking is only permitted outside the Leased Premises. If the Leased Premises is damaged in any way due to smoke, Tenant agrees that it shall be fully responsible for eradication of smoke-related odors and/or repair of damage due to smoke.
24.2. No pets. Tenant shall not keep any animal or pet in or around the Leased Premises or allow any pet to enter the Leased Premises without Landlord’s prior written approval. If a pet of any kind is found in the Leased Premises without written permission, either temporarily or permanently, Tenant will be in breach of this agreement and security deposit will be forfeiture.
24.3. Time. Time is of the essence of this Lease and of each and eve1y provision hereof.
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24.4. Captions: Constrnction: Gender. The captions, headings and titles in this Lease are solely for convenience of reference and shall not affect any interpretation hereof. This Lease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Lease to be drafted. Each covenant, agreement, obligation, or other provision of this Lease on Tenant's part to be performed, shall be deemed and construed as a separate and independent covenant of Tenant, not dependent on any other provision of this Lease, and time shall be of the essence with respect thereto. All terms and words used in this Lease, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require.
24.5. Brokers. Landlord and Tenant each represent to one another that each has had no dealings with any brokers or finders in connection with this Lease and each party hereby indemnifies and holds the other harmless from any and all liabilities, costs, damages, claims and/or expenses (including, without limitation, reasonable attorney’s fees and costs through all levels) arising from its breach of the representation made pursuant to this Section.
24.6. No Recordation. Neither this Lease, nor any memorandum hereof, shall be recorded by Tenant in the Public Records of Osceola County, Florida or in any other place. Any attempted recordation by Tenant shall render this Lease null and void and entitle Landlord to the remedies provided for by Tenant’s default.
24,7 Counterparts: Facsimile Signature. This Lease may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. A facsimile of a signature to this Lease shall be deemed an original signature.
ARTICLE XXIV
ENTIRE AGREEMENT, BINDING EFFECT, AND SEVERABILITY
This Lease and any written addenda and all exhibits hereto (which are expressly incorporated herein by this reference) shall constitute the entire agreement between Landlord and Tenant; no prior written or prior or contemporaneous oral promises or representations shall be binding. This Lease shall not be amended, changed or extended except by written instrument signed by both parties hereto. Except for the amount and terms of payment of rent due hereunder, Tenant agrees to approve and accept reasonable revisions to the terms and conditions of this Lease required by any lender providing financing for the development of the Leased Premises or other property of Landlord adjacent thereto, provided that no changes will be made which materially diminish Tenant’s rights or increase Tenant’s obligations hereunder. The provisions of this Lease shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties, but this provision shall in no way alter the restrictions on assignment and subletting applicable to Tenant hereunder. Time is of the essence in the performance of the obligations of the parties hereto. If any provision of this Lease or the application thereof to any person or circumstance shall at any time or to any extent be held invalid or unenforceable, and the basis of the bargain between the parties hereto is not destroyed or rendered ineffective thereby, the remainder of this Lease or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affect thereby.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written.
LANDLORD: Horeb Legacy Investments LLC
Print By:
TENANT: La Rosa Realty Kissimmee
Print: By:
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Exhibit 10.165
COMMERCIAL LEASE
THIS LEASE is as of this, between Chancellor Square Acquisition LLC, a Florida limited liability company (“Landlord”) with offices at 2937 SW 27 Ave Suite 202, Coconut Grove, FL 33133 and La Rosa Holdings LLC, a Florida limited liability company and Evolution Network, Jose Couvertie (“Tenants”) with offices at 2400 Sand Lake Road, Suite 777, Orlando, FL 32809.
1. PREMISES
Landlord leases to Tenants and Tenant leases from Landlord Suite 777 with approximately 9,544 rentable square feet of office/warehouse space (“the Premises”) located in the building known as 2400 Sand Lake Road, Orlando, Florida 32809 (the “Building”), as indicated as Exhibit A.
Tenants accepts the Premises “as is”, “where is”, and “with all faults”, and wi1hout express or implied representation or warranty of any kind by the Landlord regarding the state or condition of the Premises.
2. RENT
| (a) | Tenants La Rosa Holdings, LLC agrees to pay 50% of total rent and Evolution Network agrees to pay 50% of total rent to Landlord at: |
Chancellor Square Acquisition LLC
2937 SW 27 Ave Suite 202
Coconut Grove, FL 33133
or at such other place as Landlord may designate in writing. Rent shall be payable without notice or demand, without abatement, deduction or setoff. Rent for any portion of a month shall be pro-rated.
(b) Base Rent shall be as follows:
| Period | Annual Base Rent Per Aoorox. Souare Foot | Annual Total (*) | Monthly Base Rent(*) | |||||||||
| Month 1- Month 3 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||
| Month 4 - Month 15 | $ | 13.00 | $ | 124 072.00 | $ | 10.339.33 | ||||||
| Month 16 - Month 27 | $ | 14.00 | $ | 133,616.00 | $ | 11,134.67 | ||||||
| Month 28 - Month 39 | $ | 15.00 | $ | 143,160.00 | $ | 11,930.00 | ||||||
| Month 40 - Month 51 | $ | 16.00 | $ | 152,704.00 | $ | 12,725.33 | ||||||
| Month 52 - Month 63 | $ | 17.00 | $ | 162,248.00 | $ | 13,520.67 | ||||||
| (*) | Does not include Florida State Sales Tax in Orange County. |
| (**) | Tenant shall be responsible for 100% of Additional Rent payment during the reduced rent period. |
Base Rent is due on the first day of the month and shall incur a late charge of 10% of the amount due if paid more than 5 days late from the date due and after written notice to Tenant of such delinquency. Tenant shall be responsible for all applicable state and local taxes due on rent payments, and the costs of its own janitorial service and utilities (inclusive of electric and water service) for the Premises.
(c). Additional Rent:
(i) Tenant shall pay, as additional rent (“Additional Rent”), its pro rata share of all taxes, assessments and governmental charges of any kind now or subsequently levied or assessed against the Building, and all other costs or charges Landlord incurs in connection with the operation, maintenance, servicing and repair of the Building (adjusted to 95% occupancy), including, without limitation, all fees, wages, salaries, benefits and other compensation paid to employees performing setvices in connection with the management, operation and/or maintenance of the Building; premiums and other charges incurred by Landlord with respect to insurance maintained by Landlord as required or pennitted herein; common area utilities; HVAC maintenance; maintenance and repairs; and common area maintenance expenses related to the Common Areas of the Building, including, without limitation, landscaping, site maintenance, taxes and service payments related to such common areas (collectively, the “CAM Expenses”). All of the foregoing taxes, charges and expenses related to the Building plus CAM Expenses may be collectively referred to herein as “Operating Expenses”; provided, however, Operating Expenses shall exclude any payments of any indebtedness incurred by Landlord and secured by a mortgage of the Building, costs of Landlord in leasing or releasing any space in the Building, and costs charged to another tenant. Notwithstanding the foregoing, Tenant shall be responsible for its own janitorial service and utilities (inclusive of electric and water service) for the Premises. Landlord’s good faith estimate for the Operating Expenses for the Premises for 2024 is $4.80 per rentable square foot annually, or $3,817.60 monthly.
(ii) Prior to the Commencement Date and prior to each calendar year during the term of this Lease, Landlord shall notify Tenant of the amount of Operating Expenses that Landlord estimates it may incur during the forthcoming calendar year or portion thereof. Tenant shall pay as Additional Rent on the first day of each month an amount equal to amortize Tenant’s pro rata share of Landlord’s estimate of Operating Expenses it may incur during such calendar year or portion thereof in equal installments on the first day of each month of such calendar year. If Landlord determines its estimate may be erroneous, Landlord may adjust its estimate of Operating Expenses as of the first day of a given calendar mon1h and the amount of the payment required of Tenant for its pro rata share of estimated Operating Expenses shall be adjusted accordingly. If Landlord fails to notify Tenant of an estimate of the Operating Expenses that it may occur in a particular calendar year, Tenant shall continue to make the Additional Rent installment payments based on the last estimate provided by Landlord to Tenant. At the end of every calendar year, Landlord shall compare the actual Operating Expenses for the year with the payments for estimated Operating Expenses and shall determine if Tenant is due a reimbursement or owes Additional Rent for any difference.
3. TERM.
The term of this Lease shall commence on December 1, 2024. Tenant shall have access to the space starting on the Effective Date, for purposes of moving and installation of FF&E and IT wiring. The term of this Lease shall continue from the commencement date fora period of 63 months(the “Initial Term’). If Tenant does not yield up the Premises at the termination of the lease without a renewal, the holding over lease rate shall be at the Base Rent plus fifty percent (50%).
4. BROKERAGE.
Landlord and Tenant have not dealt with any real estate agent or broker in connection with this Lease other than Avison Young representing the Landlord and La Rosa Realty Orlando representing 1he Tenant (“the Brokers”). Landlord and Tenant indemnify each other from any claims arising from other real estate agents or brokers related to this transaction. Landlord shall be solely responsible to compensate the Brokers in accordance with Landlord’s agreement with the Brokers.
5. NOTICES.
Any notice required or permitted to be given hereunder must be in writing and may be given by personal delivery, facsimile transmission, Email, or by mail, and if given by mail shall be deemed sufficiently given if sent by registered or certified mail or overnight mail to the following addresses:
If to Landlord:
If to Tenant:
Either party may by written notice to the other specify a different address for notice purposes.
6. USE.
The Premises shall be used for Tenant’s general office, storage, receiving and distribution and wholesale sales. Tenant may not conduct retail sales from this facility to the general public. Tenant shall ensure that use shall conform to all local, state and federal laws. Tenant agrees to abide by the rules and regulations enforced by the Landlord attached as Exhibit B. Tenant shall not cause or permit hazardous materials to be brought into the Premises.
7. PARKING AND SIGNAGE.
Landlord shall not be liable for the interruption, curtailment, stoppage or suspension of services and utilities under this section when necessary by reason of accident or emergency or suspension of utility services or when necessary for repairs, alterations, replacements or improvements desirable or necessary in the reasonable judgment of the Landlord or for any cause beyond the control of the Landlord.
Landlord shall provide 3.0/1,000 parking spaces to Tenant on an unreserved non-exclusive basis at no additional cost located adjacent to the Building.
Tenant may install signage only on the main door or adjacent to the main door leading into the Premises, at Tenant’s cost and with Landlord’s prior review and approval. Tenant is obligated to post Real Estate Signage on the main door per the NAR and DBPR rules and regulations.
8. REPAIRS.
Tenant shall maintain and repair the interior of the Premises and keep the same in a neat and orderly condition. Notwithstanding the foregoing provisions of this Section, if any HVAC unit which exclusively serves the Premises needs to be replaced as the result of normal wear and tear, then, provided Tenant has maintained the HVAC unit in accordance with its obligations under this Lease, Landlord shalt cause the unit to be replaced and Tenant shall contribute to the cost of replacement. Tenant’s share of the cost of replacement shall be equal to that percentage obtained by dividing the number of months remaining in the Term (or extension term, as the case may be) by the number of months reasonably expected to be the useful life of the HVAC unit as determined by the manufacturer. Tenant shall pay its share of the cost upon written demand, including invoices demonstrating actual cost to the Landlord. Inspection of HVAC units exclusively serving the Premises will be performed by a Landlord’s approved contractor, at Tenants expense, outlining the units life expectancy prior to move in.
9. YIELD-UP AND FIXTURES.
Tenant shall at the termination of this Lease, peaceably yield up the Premises and Tenant’s improvements and permitted alterations in good order, repair and condition, fire or unavoidable casualty and reasonable use and wear excepted. In addition Tenant shall before the termination of this Lease remove all furniture, fixtures and personal property of Tenant from the Premises. Tenant shall pay the Landlord for any and all damages to the Premises resulting in the removal of furniture, fixtures and personal Building of the Tenant. Tenant agrees that any personal property of the Tenant not removed after 5 business days after the termination of the Lease is abandoned by the Tenant and may thereafter be disposed of by Landlord in Landlord’s sole and absolute discretion.
10. CHANGES AND ALTERATIONS.
Tenant shall not make any changes or alterations to the Premises without Landlord’s prior written consent, provided that such consent shall not be unreasonably withheld with respect to non-structural alterations. Tenant, at its expense and as required, shall obtain all necessary governmental permits and certificates for the commencement and prosecution of alterations and for final approval thereof upon completion, and shall cause alterations to be performed in compliance therewith and with all applicable law and requirements of public authorities and with all applicable requirements of insurance bodies. Alterations shall be diligently performed in a good and workmanlike manner, using new materials and equipment at least equal in quality and class to the original installations of the Building and shall not interfere with or delay in Landlord’s operation, repair or maintenance of the Building.
Tenant shall provide Landlord with further specifications of alterations for review and approval including but not limited to electrical, plumbing, venting and roof penetrations. Tenant shalt install roof penetrations so as not to void the roof warranty, and shall only use approved roofing contractors and plans.
Tenant, at its expense, shall carry or cause to be carried, worker’s compensation insurance in statutory limits, employer’s liability in a minimum amount of one hundred thousand dollars($ I 00,000), comprehensive general liability insurance, including completed operation endorsement, and broad from general liability endorsement, including owned, non-owned and hired vehicles, for any occurrence in or about the Building in such limits as Landlord may reasonably require, with insurers licensed in the State of Florida and have a Best’s Insurance Guide rating of B+ or better.
11. INDEMNITY AND INSURANCE.
(a) The Tenant shall hold the Landlord harmless against any liability arising from the Tenant’s use of the Premises or conduct of business therein, including, without limitation, any claim arising from any environmental condition or contamination caused by the Tenant unless such liability arises out of Landlord’s negligent or intentional act. Tenant shalt at Tenant’s expense, obtain and keep in force at all times during the term of this Lease comprehensive general liability insurance of not less than $1,000,000 per occurrence, and $2,000,000 in aggregate, including broad form general liability endorsement and contractual liability and property insurance insuring Tenant’s personal property. Insurance required of Tenant shall be in companies licensed in the State of Florida and have a Best’s Insurance Guide rating of B+ or better. Tenant will provide a reporting endorsement that names Landlord for periods after any such coverage ceases, and, to the extent any such reporting endorsement is not in effect, Tenant shall indemnify and hold Landlord harmless from and against any loss, liability, or damage that would have been covered by such policies if they were on an occurrence basis; the aforesaid indemnity shall survive the termination of this Lease. All policies of insurance maintained by Tenant shall be in form acceptable to Landlord, with satisfactory evidence that all premiums have been paid. Tenant agrees not to knowingly violate or permit to be violated any of the conditions or provisions of the insurance policies required to be furnished hereunder, and agree to promptly notify the Landlord of any fire or other casualty.
Tenant shall be responsible for the wellbeing and storage of their furniture, equipment and goods, and it is specifically understood that the Landlord shall not be liable for any losses suffered by Tenant during the Term of the Lease.
(b) Landlord shall, at al! times during the term of this Lease, carry and maintain Building damage (replacement cost coverage) and comprehensive general liability insurance. In no event shall Landlord’s general liability coverage be less than one million dollars ($1,000,000) per occurrence.
(c) All fire and extended coverage insurance maintained by Landlord and Tenant on the Premises and the Building shall include a waiver by the insurer of all right of recovery against the Landlord or Tenant in connection with any loss or damage by fire or peril included within fire and extended coverage insurance and neither party shall be liable to the other for loss or damage resulting from such included peril and further, Landlord and Tenant each release the other from any and all claims with respect to any such loss to the extent of the insurance proceeds paid with respect thereto.
12. TRANSFER AND SUBLET.
Tenant covenants and agrees that neither this Lease nor the estate hereby granted, nor any interest herein or therein, shall be mortgaged, pledged, encumbered or otherwise transferred, by direct transfer by Tenant or any indirect transfer by the sale or transfer of any interest in Tenant, or otherwise. Any attempt at any such transfer, without the express prior written approval of Landlord, which approval may be withheld by Landlord, in Landlord’s sole and absolute discretion, is void and shall be considered a default under this Lease. Landlord acknowledges that Tenant will be sharing space with another professional on a regular basis and will be responsible for their conduct.
13. ACCESS.
(a) Landlord’s agents, employees, contractors, prospective purchasers and prospective tenants shall have the right to enter the Premises at reasonable hours upon notice to the Tenant for the purpose of inspecting the same, and Landlord, its employees, agents and contractors shall have the right to enter the Premises at any time for the purpose of making repairs thereto and to the Building and its mechanical systems.
(b) Landlord shall, whenever possible, except in the event of a nemergency, give Tenant at least forty-eight (48) hours’ notice (which may be oral) of any scheduled repair or maintenance in the Premises. Landlord shall give Tenant reasonable notice (which may be oral) of any walk-through of the Premises. All entries shall be coordinated with Tenant to minimize interference with the Tenant’s business.
14. DEFAULT.
(a) In the event of failure of Tenant to pay the rent by the 5th day after receiving written notice from Landlord in accordance with Section 5 that rent has not been timely paid on the 5th day of the mon1h, or violates or fails to perform any of the other covenants or agreements herein made by Tenant, and such violation or failure shall continue for thirty (30) days after written notice thereof to Tenant by Landlord in acconlance with Section 5, or abandons the Premises without making the necessary rental payments as they become due and without complying with Tenant’s other lease obligations, then Landlord, at its option, may terminate1his Lease without further notice. In the event of a termination of this Lease, Landlord shall be entitled to recover from Tenant, as liquidated damages, the amount, discounted to present value using the Prime Rate as 1he discount rate, by which the sum of (a) rent and additional rent payable for the remainder of the term of1his Lease, and (b) all reasonable expenses of Landlord incurred in recovering possession and reletting including costs of repair and renovating the Premises, management agents’ commissions and fees, court costs and reasonable attorneys’ fees, exceed the fair rental value of the Premises.
(b) In the event any or all of Tenant’s interest in the Premises is transferred by law to any trustee, receiver (the “Grantor”) for assignment, conveyance, lease, or other disposition to a person, firm or entity other than Landlord, (each such transaction being hereinafter referred to as a “Disposition”), Landlord has and shall have a right of first refusal to purchase, take, or otherwise acquire the same upon the same terms and conditions as the Grantor thereof shall accept upon such Disposition to such other person, firm, or entity, and as to each such Disposition the Grantor shall give written notice to Landlord in reasonable detail of all of1he terms and conditions of such Disposition within twenty (20) days next following its determination to accept the same but prior to accepting the same, and it shall not make the Disposition until and unless Landlord has failed or refused to accept such right of first refusal as to the Disposition.
15. LIMITATION OF LIABILITY.
Anything in this Lease to the contrary notwithstanding, Tenant agrees that it shall look solely to 1he estate of Landlord in the Building, and subject to the prior rights of any mortgagee of the Building, for1he collection of any judgment (or other judicial process) requiring the payment of money by Landlord in 1he event of any default or breach by Landlord with respect to any of the terms, covenants and conditions of 1his Lease to be observed and/or performed by Landlord, and no other assets of Landlord or its partners shall be subject to levy, execution or other procedures for the satisfaction of Tenant’s remedies.
16. FORCE MAJEURE.
Landlord and Tenant shall each be excused for the period of any delay in the performance of any obligations hereunder, when prevented from so doing by cause or causes beyond each party’s control which shall include, without limitation, all labor disputes, civil commotion, war, war-like operations, invasion, rebellion, hostilities, military or usurped power, sabotage, governmental regulations or controls, fire or o1her casualty, inability to obtain any material or services, or through acts of God. Provided:
(a) nothing contained in this Section or elsewhere in this Lease shall be deemed to excuse or permit any delay in the payment of any sums of money required hereunder, or any delay in the cure of any default which may be cured by the payment of money except for an abatement of prorated rent due during a period of uninhabitability;
(b) no reliance by Tenant upon this Section shall limit or restrict in any way Landlord right under Section 22: and
(c) Neither party shall be entitled to rely upon this Section unless it shall advise the o1her party in writing, of the existence of any force majeure preventing the performance of an obligation of said party within a reasonable time after the commencement of the force majeure.
17. FIRE OR OTHER CASUALTY
If (i) the Premises should be damaged as a result of risk which is not covered by Landlord’s insurance, or (ii) the Building should be damaged to the extent of fifty percent (50%) or more of the then monetary value thereof, or if any or all of the Building or the common areas thereof are damaged to the extent that the Building cannot, in the sole and reasonable judgment of Landlord, be operated as an integral unit, Landlord may either elect to repair the damage or may cancel this Lease by notice of cancellation within sixty (60) days after such event and thereupon this Lease shall expire, and Tenant shall vacate and surrender the Premises to Landlord within thirty (30) days of such notice. If Landlord elects to repair or restore, Landlord shall notify Tenant within sixty (60) days of the casualty of the estimated time to complete such work. In the event that Landlord estimates that the Premises cannot be restored within ninety days (90) days after the casualty, then Tenant shall have the right to terminate this Lease within thirty (30) days from the date of notice from Landlord. If Tenant elects not to terminate this Lease, Rent shall be abated during such time that Tenant is unable to occupy the Premises and shall resume upon receipt by Tenant of a certificate of occupancy, if required. Should such casualty occur during the last year of the term of this lease, either party may terminate this Lease with thirty (30) days prior written notice to the other. If the repair exceeds 120 days (through no fault of the Tenant), Tenant shall have the right to terminate this Lease upon an additional 30 days prior written notice and the Lease will terminate pursuant to such notice unless Landlord shall complete the restoration within said 30 days.
18. CONDEMNATION
If the whole of the Building shall be lawfully taken by condemnation or in any other matter for any public or quasi-public use or purpose, this Lease and the term and estate hereby granted shall terminate as of the date of vesting of title in such condensing authority, and the rents shall be prorated and adjusted as of such date.
If any material part of the Building shall be so taken, this Lease shall be unaffected, except that (i) Landlord may, at its option, terminate this Lease by giving notice within forty-five (45)days after the date of the taking, and (ii) if twenty percent (20%) or more of the Premises shall be so taken, Tenant may terminate this Lease by giving Landlord notice within forty-five (45) days after the date of the taking.
19. ESTOPPEL CERTIFICATES.
Tenant shall, within five (5) business days of request by Landlord, execute and deliver to Landlord a written declaration in recordable form: (1) ratifying this Lease; (2) expressing the commencement and termination dates thereof; (3) certifying that this Lease is in full force and effect and has not been assigned, modified, supplemented or amended (except by such writings as shall be stated), (4) that all conditions under this Lease to be performed by Landlord have been satisfied (or specifying those conditions that have not been satisfied); (5) that there are no defenses or offsets against the enforcement of this Lease by Landlord, or stating those claimed by Tenant, (6) the amount of advance rental, if any, (or none if such is the case) paid by Tenant, (7) the date to which rental has been paid; and (8) the amount of security deposited with Landlord. Such declaration shall be executed and delivered by Tenant from time to time as may be requested by Landlord. Landlord’s mortgage lenders or purchasers shall be entitled to rely upon same. Landlord shall be responsible for producing any documents under this Section.
20. MECHANICS LIENS.
Tenant shall not permit any mechanic’s or other lien or charge to be filed against the Premises or the Building, by reason of any act of Tenant or anyone holding the Premises through o runder Tenant. If any such mechanics’ or other lien or charge shall at any time be filed against the Premises or the Building, Tenant shall immediately cause the same to be discharged of record (which may be through provision of adequate bond), in default of which Landlord may, on 30 days’ notice to Tenant, discharge the same, and all costs and expenses, including attorneys’ fees, incurred by Landlord in procuring such discharge shall be payable by Tenant to Landlord as additional rent upon demand, provided that if, within said 30 day period, Landlord shall so request, Tenant shall indemnify Landlord, Landlord’s mortgagee, a buyer of the Building from Landlord, or any of their title insurance companies, against the underlying liabilities which is the basis for such mechanics’ lien.
21. SUBORDINATION.
The Lease and Tenant’s rights hereunder are and shall be subject and subordinate to the lien, operation and effect of any mortgages or other security instruments constituting a lien upon the Premises, and to any and all advances to be made thereunder, and to the interest thereon, and al renewals, replacements and extensions thereof, whether the same shall be in existence at the date of this Lease or created hereafter. Tenant’s acknowledgement and instrument of subordination as provided for herein shall be self-operative and no further instrument of subordination shall be required; provided, however, Tenant agrees (within 20 days of request) to execute and deliver such further instruments evidencing or confining such subordination as may be requested from time to time by Landlord or any mortgagee provided that the mortgagee agrees not to disturb the rights of the Tenant as long as Tenant is not in default under this Lease. Notwithstanding the foregoing, Tenant agrees that any mortgagee may elect by written instrument to have this Lease be prior to such mortgage, whether or not this Lease is dated prior or subsequent thereto.
22. LANDLORD’S RIGHT TO CURE BREACH.
In the event of any breach of this Lease by Tenant, and following the Landlord’s satisfaction of any notice obligations, and the expiration of any cure periods, applicable thereto, Landlord may, at Landlord’s sole option, at any time, without notice, cure such breach for the account and the expense of Tenant If Landlord so elects to cure any such breach, the reasonable sums so paid and costs expended by Landlord shall be paid by Tenant to Landlord with interest at the rate of Prime Rate plus five percent(5%) per annum, not to exceed a total of 12% as Additional Rent, upon written demand.
23. RECORDING.
Tenant shall not record this Lease nor a notice or memorandum of this Lease. Any such recording shall constitute a default under this Lease.
24. ENTIRE AGREEMENT.
(a) This Lease and the Exhibits set forth the entire agreement between the parties. Any prior conversations or writings concerning the Premises are merged herein and extinguished. No subsequent amendment to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by both Landlord and Tenant. Submission of this Lease for examination does not constitute an option for the Premises and becomes effective as a lease only upon execution and delivery thereof by Landlord to Tenant The failure of Landlord to insist in any one or more instances upon the strict performance of any one or more of Tenant’s obligations under this Lease, or to exercise any election herein contained, shall not be construed as a waiver or relinquishment for the future of the performance of such one or more obligations of this Lease or of the right to exercise such elections.
(b) No payment by Tenant, or acceptance by Landlord, of a lesser amount than shall be due from Tenant to Landlord shall be treated otherwise than as a payment on account. The acceptance by Landlord of a check for a lesser amount with an endorsement or statement thereon, or upon any letter accompanying such check, that such lesser amount is payment in full, shall be given no effect, and Landlord may accept such check without prejudice to any other rights or remedies which Landlord may have against Tenant. Landlord agrees to notify Tenant if Tenant fails to pay the full amount of any payment due to Landlord, but no such notice, nor failure by Landlord to give such a notice, shall affect any late fees payable by Tenant as a result of such failure.
25. HEIRS, ASSIGNS, NUMBER AND GENDER.
This agreement shall be binding upon the parties hereto and their heirs, administrators, executors, successors and assigns. The use of the neuter singular pronoun to refer to Tenant shall be deemed a proper reference even though Tenant may be an individual, partnership, a corporation or a group of two (2) or more individuals or corporations. The necessary grammatical changes required to make the provisions of this Lease apply in the plural number where there is more than one Tenant and to either corporations, associations, partnerships or individuals, males or females, shall in all instances be assumed as though in each case fully expressed.
26. REPRESENTATIONS.
Tenant hereby represents and warrants that Tenant is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida with full power and authority to conduct its business as now conducted and to enter into this Lease and perform its obligations hereunder. This Lease has been duly authorized, executed, and delivered by Tenant and Tenant knows of no state of facts, after due inquiry, that would prevent this Lease from constituting a valid and binding obligation of Tenant, enforceable against it in accordance with its terms.
27. IMPROVEMENTS.
Landlord will provide Tenant with a Tenant Improvement allowance of $167,500.00, with new building standard finishes based upon a mutually agreed upon proposed plan to be determined - See exhibit B. Landlord shall deliver Tenant space in “AS IS” condition. The cost of any additional work or finishes shall be the sole responsibility of the Tenant.
Landlord is not required to perform any additional improvements in the Premises. Tenant or its agents on Tenant’s behalf has inspected the Premises and the Building and is thoroughly acquainted with their condition and takes the Premises “AS IS”, and the taking of possession of the Premises by Tenant shall be conclusive evidence that the Premises and the Building were in good and satisfactory condition at the time possession was taken by Tenant except to all latent defects or those defects which could not be discovered upon reasonable inspection by tenant. Neither Landlord nor Landlord’s agents have made any representations or promises with respect to the condition of the Building, the Premises, the land upon which the Building is constructed, or any other matter or thing affecting or related to the Building or the premises, except as herein expressly set forth, and no rights, easements or licenses are acquired by Tenant by implication or otherwise except as expressly set forth in this Lease.
28. LEGAL/JURY.
(a) Time is of the essence with regard to this Lease.
(b) This Lease is governed by the laws of the state of Florida.
(c) If the services of an attorney are required by any party to secure the performance under the Lease or otherwise upon the breach or default of the other party to the Lease, each party shall be responsible for its own legal fees. If a judicial remedy is necessary to enforce or interpret any provision of the Lease, the prevailing party shall be entitled to reasonable attorney’s fees, costs and other expenses, in addition to any other relief to which the prevailing party may be entitled. Landlord and Tenant each hereby waives all right to trial by jury in anyclaim,action, proceeding or counterclaim byeither party against theotheron any matters arisingoutoforinanywayconnectedwiththisLease,therelationshipofLandlordandTenantand/orTenant’s use or occupancy of the Premises.
(d) This Lease may be executed in counterparts, each of which shall be deemed an original.
29. SECURITY DEPOSIT
Upon execution of this Lease, Tenant shall deposit with Landlord the payment for Security Deposit of $12,000.00 (the “Security Deposit”) and prepaid base rent and operating expenses (inclusive of sales tax) for Month 4 (March 2025) equal to $14,510.86, for a collective total of $26,510.86. During the lease term, Landlord may apply such Security Deposit towards any amounts delinquent and owed by the Tenant to 1he Landlord under this lease. Provided that the Security Deposit has not been so appliedand provided that Tenant has not been in default under this Lease, Landlord shall return the Security Deposit to Tenant no later1han 60 days after the end of the lease term.
30. RADON GAS
Radon isa naturally occurring radioactive gas that, when ithas accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceeded federal and state guidelines have been found in buildings in Florida Additional information regarding radon and radon testing may be obtained from the county public health unit.
31. HAZARDOUS MATERIALS
Tenant shall not cause or permit any Hazardous Material (as defined herein) to be brought, kept or used in or about the Building by Tenant its agents, employees, contractors or invitees, except those typically used for standard office functions and limited to quantities appropriate for such standard office functions. Tenant hereby indemnifies Landlord from and against any breach by Tenant of the obligations stated in the preceding sentence, and agrees to defend and hold Landlord harmless from and against any and all loss, damage, cost and/or expenses (including, without limitation, damages for the loss or restriction on use of rentable or usable space or of any amenity of the Building, and sums paid in settlement of claims, reasonable attorneys’ fees, consultant fees, and expert fees) which arise during or after the term of this Lease as a result of such breach. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal, or restoration work required by any federal, state, or local governmental agency or political subdivision because of Hazardous Material present in the soil or ground water on or under the Building which results from such a breach. Without limiting1he foregoing, if the presence of any Hazardous Material in the Building caused or permitted by Tenant results in any contamination of the Building, Tenant shall promptly take all actions at its sole expense as are necessary to return the Building to the conditions existing prior to the introduction of such Hazardous Material to1he Building; provided that the Landlord’s approval of such actions, and the contractors to be used by Tenant in connection therewith, shall first be obtained, which approval sha1l not be unreasonably withheld, conditioned or delayed.
As used herein, the term “Hazardous Material” means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority or the United States Government. The term ‘Hazardous Material” includes, without limitation, any material or substance which is (i) defined as a “hazardous waste”, “extremely hazardous waste”, or “restricted hazardous waste” or similar term under the law of the jurisdiction where the property is located, or (ii) designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. Section 1317), (iii) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 47 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903),or (iv) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601).
32. LANDLORD’S LIEN
Tenant hereby grants to Landlord a security interest in the personal property of Tenant now or hereafter located on the Premises as security for the performance of Tenant’s obligations hereunder. Tenant shall upon request of Landlord execute financing statements as reasonably require by landlord to perfect the security interest granted hereby.
33. COUNTERPARTS
This Lease may be executed in mutual counterparts and all such executed counterparts together shall constitute one original document.
34. ATTACHMENTS TO LEASE
The following Exhibits are attached the Lease Agreement: Exhibit A - “Premises”; Exhibit B - “Tenant Improvements”; Exhibit C- “Rules and Regulations”; Exhibit D - “Verification Letter”.
36. THOROUGH REVIEW
LANDLORD AND TENANT ACKNOWLEOOE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THEPARTIESHEREBY AGREETHAT,ATTHETIMETHISLEASEISEXECUTED,1HE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES. TENANT ACKNOWLEOOES THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD’S AGENT AND SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE PREMISES. THIS LEASE SHALL BECOME BINDING UPON LANDLORD AND TENANT ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED COUNTERPART OF THIS LEASE TO TENANT.
Date and Signatures immediately follows.
| Agreed to: | ||
| LANDLORD: Chancellor Square Acquisition, LLC | ||
| B&L Management Group, Corp its Manager | ||
| Name, Position | Date | |
| TENANT: La Rosa Holdings, LLC | ||
| Its: | ||
| Name:· | ||
| Its: | ||
| Date | ||
| Federal Tax ID Number: |
EXHIBIT A
PREMISES
EXHIBIT B
WORK LETTER
SCHEDULE B-1
APPROVED SCOPE
EXHIBIT C
RULES AND REGULATIONS
EXHIBIT D
VERIFICATION LETTER
Exhibit 10.166
LEASE AGREEMENT
This lease made at San Juan, Puerto Rico, this between JLR HOLDINGS, LLC with Employee 5 Identification Number (EIN) [*] a Puerto Rico Limited Liability Corporation (Landlord), and BF PRIME, LLC with Employee Identification Number (EIN) [*] a Puerto Rico Limited Liability Company (Tenant) . Also, on behalf of the Tenant, to provide his personal guarantee, Mr. Joseph La Rosa and Deana La Rosa, both of legal age, married to each other, executives and with residence in Celebration, Florida, USA (“Personal Guarantor”).
Landlord hereby leases to Tenant and Tenant hereby rents from Landlord the Premises (as defined in section 1.01), subject to the following terms and conditions:
ARTICLE I. LEASE SCHEDULE
The following definitions shall apply to the various provisions of this Lease:
Section 1.01 Premises: Landlord, for and in consideration of the covenants contained in this Lease and made on the part of Tenant, does hereby demise and lease into Tenant, and Tenant does hereby lease from Landlord, the space more particularly described in Exhibit “A” (Floor Plan) of approximately 1,906.50 square feet identified as Suite 218, located on the second floor of Isla Verde Mall and defined to include a concrete built facility (shell) comprising finished (pulido) floor, walls, rough concrete ceiling, electrical pipes to the premises and sanitary and water piping installations, together with all of Landlord’s easement rights and appurtenances thereto, and all necessary easements and appurtenances in Landlord’s adjoining and adjacent land, highways, roads, streets, lanes, whether plic or private, reasonably required for the installation, maintenance, operation and service of sewer, water, gas, drainage, electricity and other utilities and for driveways and approaches to and from abutting highways, for the use and benefit of the above described parcel of real estate, including the improvements to be erected on the property (collectively referred to as “the premises” or “Demised Premises”).
Section 1.02: Expiration Date: The anniversary of the last Day of the month during which the Term of this Lease commences.
Section 1.03: Rent:
Minimum Rent. Minimum Rent Shall be payable at the annual rate $35,079.60 payable in monthly installments of $2,923.30 on the first day of each month for the Term, on the basis of approximately 1,906.50 square feet rentable area Suite 218. For the Extention Term Minimum Rent Shall be payable at the annual rate $40,341.54 payable in monthly installments of $3,361.80 on the first day of each month for the Extended Term. Also rent includes Common Area Maintenance Cost, Property Taxes, Waste Disposal and five (5) Free Parking Spaces.
Real Estate taxes pertaining to the Premises, including but not limited to equipment, machinery, goods, furniture and/or inventory, are not included in the Minimum Rent and shall be payable by Tenant.
Section 1.04: Rent increase: as set forth in Section 5.02.
Section 1.05: Taxes. (See Section 5.04).
Section 1.06: Common Area Charge. (See Section 11.04).
Section 1.07: Plans and Specifications. The Landlord’s and Tenant’s Plans and Specifications and Tenant itemized construction cost shall be considered as part of this Lease. (See Section 3.01-3.02-3.05). Tenant’s aforesaid documents will be submitted to Landlord not later than sixty (60) days from the date-._a f execution of this contract.
Section 1.08: Outside Date. (See Section 4.04).
Section 1.09 Use:
(a) Permitted Use: Tenant shall use and occupy the Premises for the operation of Proffessiona Offices. Tenant agrees not to use or permit the use of the Premises for any other purpose which conflicts with the permitted use Clause of any other lessee without prior written consent of Landlord, which consent shall not be unreasonably withheld.
(See Section 9.01 and 10.01).
(b) Tenant’s Mode of Operation. (See Section 9.02)
(c) Tenant’s Business Name
Real Estate
Section 1.10: Shopping Mall
(a) Name. “ISLA VERDE MALL”
(b) Location. Ave. Los Gobernadores, Esq. Calle Dalia, Isla Verde, Carolina, PR 00979
Section 1.11: Notice Addresses
Landlord’s Notice Address:
P.O. Box 29185
San Juan PR 00929-0185
(b) Landlord’s Notice Copy Address: As may be requested by notice duly given.
(c) Tenant’s Notice Address:
1420 Celebration Blvd.
Suite 200
Celebration, Florida, 34747
(d) Tenant’s Notice Copy Address: As may be requested by notice duly given.
ARTICLE II. DEFINITIONS
As used in this Lease, the following terms have the following meanings:
Common Area. The entire Shopping Center, except the portions thereof upon which lessees’ buildings, structures, or other improvements have been or are to be erected.
Section 2.02: Expiration Date.
If the Term has been extended or if this Lease has been renewed, the Expiration Date shall be the last day of the Term as so extended or renewed. If this Lease is canceled or terminated prior to the originally fixed Expiration Date, then the Expiration Date shall be the date on which this Lease is so canceled or terminated. But if this Lease is canceled or terminated prior to the originally fixed Expiration Date by reason of Tenant’s Default, Tenant’s liability under this Lease shall continue as provided in Section 15.02 hereof.
Section 2.03: Landlord’s Work. The construction and other work designated as Landlord’s work in the Plans and Specifications.
Section 2.04: Mortgage. Any mortgage, deed to secure debt, or deed of trust which may now or later encumber or be a lien upon the Premises, the Shopping Mall, the real property of which the Shopping Mall forms a part, or Landlord’s interest in any of them; and extension of any instrument referred to in this Section.
Section 2.05: Mortgagee. The holder of any Mortgage.
Section 2.06: Parking Area. The Portions of the Shopping Center which are designated as such by Landlord from time to time, subject to the provisions of Article XI.
Section 2.07: Person. An individual, fiduciary, estate, trust, partnership, firm, association, corporation, or other organization, or a government, governmental authority.
Section 2.08: Pro Rata Share. The proportion that the governmental agency or floor area of the premises bears to the total Floor Area of all the leased space of the buildings situated in the Shopping Mall.
Section 2.09: Repair. Includes the words “Replacement and restoration”, “Replacement or restoration”, “replace and restore”, or “replace or restore”, as the case may be.
Section 2.10: Tenant’s Agents. Includes Tenant’s employees, servants, licensees, tenants, subtenants, assignees, contractors, heirs, successors, legatees, and devisees.
Section 2.11: Tenant’s Work. Any construction, installation or other work designated as Tenant’s Work in the Plans and Specifications.
ARTICLE III. Landlord’s and Tenant’s Work.
Section 3.01: Landlord’s Work. Landlord has constructed and installed all common areas and facilities of the Shopping Mall, as shown in the Plans and Specifications, at its sole cost and expense. The same shall include, but not be limited to, any walls, fences and gates surrounding the Shopping Mall, all rain water drainage systems, all blacktopping and line painting of parking areas up to the perimeter of the space reserved for the Premises, landscaping, the provision of primary electrical, water supply and sewage lines (excluding meters) to the perimeter of the space reserved for the Premises.
Section 3.02: Landlord’s Duty to Construct.
(a) All work required as Landlord work has been done and all permits from the government agencies have been obtained for the Shopping Mall.
(b) Within a reasonable time after this Lease has been executed and delivered, Landlord will supply the Use Permit of the Shopping Mall to Tenant.
Section 3.03: Delivery of Possession:
(a) Delivery of possession shall be deemed to have occurred when (i) Landlord shall have tendered possession of the Space to Tenant.
Section 3.04: Rights of Entry.
Upon delivery of Possession, Tenant may enter the premises and shall begin to perform Tenant’s Work and prosecute the same diligently and in a workmanlike manner in order to open Tenant’s store to the public. All entry to premises by Tenant, and all of Tenant’s Work shall be done at Tenant’s sole risk and expense. All of Tenant’s work shall be performed in accordance with good construction practices and applicable legal requirements. Tenants shall comply with all of Landlord’s reasonable construction and labor regulations, and with the insurance requirements. Landlord shall not unreasonably interfere with any work being performed or to be performed by Tenant. Before commencing any work, Tenant will submit to Landlord all the insurance required and the plans and specifications of the work to be performed at its store, such work must be approved by Landlord.
Section 3.05: Tenant’s Work. Tenant shall obtain the construction permit for its store and shall construct and install a store (hereinafter referred to as the “Store”) in the configuration, dimensions, and specifications shown in the Plans and Specifications delivered to Landlord and stock the store for store opening. and decorate, equip Tenant shal1 have the right to install and erect such other temporary and permanent structures within, above, and beneath, the Premises as it may prefer from time to time. In each and every case, Tenant shall do all work at its own cost, and shall indemnify and hold Landlord harmless by reason of work men and/or materialmen’s claims and from any other claims arising from the performance of Tenant’s Work. Except where otherwise specified, all work to be performed within the periphery of the Premises shall be presumed to be a part of Tenant’s Work, and all work to be performed outside the periphery of the Premises shall be presumed to be a part of Landlord’s Work, or other lessee’s Work.
Section 3.06: Title to Building. Excepting the distinctive characteristics of Tenant’s business and Tenants trade fixtures; all other property installed in the premises leased to Tenant shall be vested to Landlord free and clear of any lien, mortgage or debts.
Section 3.07: Acceptance of Possession.
Within a seven-day period after Delivery of Possession, Tenant shall give Landlord notice of any contended defects in Landlord’s work from the requirements of this Lease. Any defect or variance, other than hidden construction defect, not so set forth shall be deemed waived by tenant. If Tenant shall fail to give such notice, it shall waive all rights with respect to such defects or variances. Upon the expiration of the period, the Premises shall be conclusively deemed to accepted by Tenant unless Tenant shall give the notice. If Tenant shall notify Landlord of any defects during the seven-day period, the Premises seven-day have been aforesaid contended shall be conclusively deemed accepted by Tenant subject to repair and correction of the defects or variances set forth in the notice. At any time after the expiration of the seven-day period, upon request of Landlord, Tenant shall execute a certificate certifying that the Premises were accepted in accordance with the foregoing.
ARTICLE IV. TERM.
Section 4.01: Commencement of Term.
Tenant shall have and hold the Demised Premises for a term of five (5) years, commencing on January 1st, 2025 and ending on December 31st, 2029. When the term of this Lease is ascertainable and specifically fixed, Landlord and Tenant shall enter into a supplement agreement which shall specify the actual date for the expiration of the original term of this Lease and the commencement of accrual of rent payable by Tenant.
Section 4.02: Recording of Lease. Upon request of Tenant, Landlord shall join in the execution of a Deed of Ratification of Lease in recordable form and substance to which shall be attached a fully executed counterpart original of this Lease. All expenses and fees of execution and recording of the Deed of Ratification, if required by Register of Property shall be paid by Tenant. The Deed shall be executed before a Notary selected by Tenant.
Section 4.03: Extension of Term. Tenant shall have the option to extend the term for one (1) additional period of five (5) years, commencing on the date following the originally fixed expiration date. The tenancy resulting form the exercise of said option shall be upon the same terms and conditions set forth in this Lease, except for the Minimum Rent which is hereby fixed as stated in Section 5.02. The option may be exercised only upon written notice thereof by Tenant to Landlord at least six (6) months prior to the Expiration Date as then constituted. If (i) Tenant shall fail to exercise the option during the period when the option is available, or (ii) this Lease is no longer in full force and effect for any reason, the option shall be void. Upon expiration of such additional period, Tenant shall have no further option to extend the Term.
Section 4.04: Outside Date. If Delivery of Possession shall not occur prior to or on the Outside Date designated in Section 1.08, Tenant shall have the right to cancel this Lease by giving sixty (60) days notice of cancellation to Landlord. If Delivery of Possession shall occur after the giving of the notice but prior to the expiration of the sixty-day period, such notice shall be deemed null and the validity of this Lease shall be reinstated. Tenant’s right to cancel this Lease in accordance with the foregoing shall be Tenant’s sole remedy with respect to failure of Landlord to deliver possession on or before the Outside Date or to perform Landlord’s Work.
ARTICLE V. RENT, TAXES.
Section 5.01: Minimum Rent. During the Term, Tenant shall pay Minimum Rent to Landlord without notice or demand thereof at the annual rate set forth in Subsection 1.03. Except for the first installment, Minimum Rent shall be paid in equal monthly installments in advance. The first monthly installment shall be due on the Commencement Date. Each subsequent installment shall be due on the first (1st) day of each month next ensuing after the Commencement Date during the Term. If the Commencement Date is not the first day of any month, Minimum Rent for the first month shall be one-thirtieth of a normal monthly rent installment for each day of the period from the Commencement Date to and including the last day of the month in which the Commencement Date occurs. If the Expiration Date shall not be the last day of a month, Minimum Rent for the month in which the Expiration Date occurs shall be one-thirtieth of a normal rent installment for each day of the period from the first day of that month to and including the Expiration Date.
Section 5.02: Increase of Minimum Rent: The minimum rent fixed in Section 5.01 to be in force starting on the Commencement Date shall increase as follows, for the periods hereinafter set forth:
| Yearly Rent | ||||||
| a) | Commencement date to 5th year anniversary: | $ | 35,079.60 | |||
| OPTION: | ||||||
| b) | pt day of 6th year to 10th year anniversary: | $ | 40,341.54 | |||
Section 5.03: Lease Year. The first Lease Year shall commence on the Commencement Date and shall end on the last day of the month in which the Commencement Date occurs. Each Lease Year other than the first lease Year shall commence on the date next following the expiration of the previous Lease Year and shall continue for a period of one full year therefrom except the last Lease Year, which shall end on the Expiration Date.
Section 5.04: Taxes.
(a) For the purposes of this Section 5.04, the word “taxes” shall include all taxes attributable to improvements now or hereafter made to the Shopping Center or any part thereof or attributable to the present or future installation in the Shopping Center or any part thereof of fixtures, machinery or equipment, all real estate taxes, assessments, water and sewer and other governmental impositions and charges of every kind and nature whatsoever, nonrecurring as well as recurring, special or extraordinary as well as ordinary, foreseen or unforeseen and each and every installment thereof, which shall or may during the term of this Lease be levied, assessed or imposed, or become due and payable or become liens upon, or arise in connection with the use, occupancy or possession of, or any interest in the Shopping Center or any part thereof, of any land, buildings or other improvements therein. The word “taxes” shall not include any charge, such as water, electricity and sewer charged by the different agencies of the government and are paid directly to the government by the Tenant.
(b) Real Estate Taxes. Landlord shall be under a duty to pay promptly in the first instance all real estate taxes which may be levied or assessed against the land of the Shopping Center. Tenant shall, within thirty (30) days after notice from Landlord enclosing a copy of proof of payment, reimburse to Landlord Tenant’s Pro Rata Share of the discounted real estate taxes so paid by Landlord. Real Estate Taxes shall not be included in the cost of maintenance of the common areas of the Shopping Center.
Tenant shall pay all real estate taxes pertaining to the Premises and shall do so within five (5) days of the date of commencement of each fiscal year (July One (1.). Landlord, at its option may exercise its right to pay these taxes as provided in Section 5.04 (b).
(c) Other Taxes. Other taxes shall mean and include taxes (other than real estate taxes) and assessments imposed or levied upon the Shopping Center during any tax year, whether general or special, ordinary or extraordinary, foreseen or unforeseen, but shall not include interest and penalties by reason of late or installment payments nor any inheritance, estate, succession, gift, corporation, income or profit tax or capital levy imposed upon or payable by landlord. Other Taxes shall be included in the cost of maintenance of the common areas of the Shopping Center.
(d) If Landlord must pay any real estate taxes levied against the Shopping Mall it shall do so and Tenant agrees to pay Landlord, as additional rent, tenant’s proportionate share of real property taxes levied against the Shopping Center. Landlord will submit to Tenant a copy of the real property tax bill which shall be sufficient evidence of the amount of real property taxes assessed or levied against the Shopping Center and Tenant agrees to pay Landlord within ten (10) days of receipt of such real property tax bill his proportionate share as defined in Section 2.07. Property taxes shall not be included in the cost of maintenance of the common areas of Shopping Center.
Section 5.05: Additional Rent. Wherever it is provided in this Lease that Tenant is required to make any payment to Landlord, such payment shall be deemed to be additional rent and all remedies applicable to the non-payment of rent shall be applicable thereto.
Section 5.06: No Offset.
Rent and Additional Rent shall be paid without any demand therefor and without any counterclaims, setoffs, deductions or defenses whatsoever.
ARTICLE VI. ALTERATIONS BY TENANT.
Section 6.01: Alterations by Tenant.
{a) Tenant may make alterations to the Premises from time to time without reducing the usable area of the Building and provided that such alterations shall be performed in a good and workmanlike manner in accordance with all applicable legal requirements and Insurance Requirements.
(b) Tenant may make non-structural alterations to the interior portions of the Premises as long as the alterations do not impair the safety or the value of the Premises. Alterations to the plumbing, electrical and air conditioning systems of the Premises shall be deemed to be non-structural alterations as long as these alterations do not adversely affect the roof, exterior walls, columns, beams, or foundation of the Premises.
{c) To perform any alteration, Tenant will submit to Landlord a detailed plan with the proposed alteration or modification and shall obtain Landlord approval, in writing, before commencing the work.
Section 6.02: Mechanics’ Liens. If any mechanic’s or materialman’s lien is filed against the Premises or the Shopping Mall as a result of any work or act of Tenant, Tenant shall bond or discharge the lien within thirty (30) days after the filing of the lien.
Section 6.03: Signs. Subject to Landlord’s prior written approval as to design and location which approval shall not be unreasonably withheld, Tenant shall have the right to install and maintain its signs affixed to the exterior of the premises, but not on transparent portions of Tenant’s store front in a way that prevents visibility of the store premises from the outside. All signs shall be subject to applicable legal requirements and Insurance Requirements. Tenant shall pay for all permits and licenses required in connection with its signs.
ARTICLE VII. REPAIRS, COMPLIANCE, SURRENDER
Section 7.01: Repairs by Landlord.
(a) Landlord shall clean, maintain, paint and make all necessary repairs to all of the Common Areas, including all utilities passing through or under the same, all parking areas, all lighting, and walls and fences enclosing the Shopping Mall.
(b) Landlord shall make necessary repairs to Landlord’s Work whenever the need therefor arises throughout the Term, including repairs to utility lines up to the point of their entry into the Premises. Landlord shall not be required to begin to perform any such repair until a reasonable time (not to exceed fifteen (15) days) after Tenant notifies Landlord of the need for a repair.
Section 7.02: Repairs by Tenant. Tenant shall clean, maintain, paint and make all necessary repairs to the Premises which are necessary to keep the Premises clean and sanitary, in good order and repair, in a safe, dry and tenantable condition. In the event Landlord requires Tenant to perform such repairs, Tenant will commence to perform them within a reasonable period not to exceed fifteen (15) days.
Section 7.03: Compliance. Tenant shall observe and comply promptly with all present and future legal requirements and Insurance Requirements relating to or affecting the Premises, the use and occupancy thereof, and any sign of Tenant.
Section 7.04: Electrical Lines. If Tenant installs any electrical equipment that overloads the lines of the Premises or the Shopping Mall, Landlord may require Tenant to make whatever changes may be necessary immediately to avoid such overload. The foregoing shall not apply to any overloading of lines resulting from Landlord’s failure to perform Landlord’s Work in accordance with the Plans and Specifications.
Section 7.05: Emergency Repairs.
(a) If, in an emergency, it shall become necessary to make promptly any repairs or replacements required to be made by Tenant, Landlord may re-enter the Premises and Proceed forthwith to have the repairs or replacements made and pay the cost thereof. Within thirty (30) days after Landlord renders a bill therefor, Tenant shall reimburse Landlord for the cost of making the repairs.
(b) If Landlord shall make an emergency repair on behalf of Tenant, and Tenant fails to pay the bill rendered, the amount of the bill shall be deemed additional rent.
Section 7.06: Surrender of Premises. On the Expiration Date, Tenant shall quit and surrender the Premises broom clean and in good condition and repair, except for reasonable wear and tear. All alterations, fixtures, installations, additions and improvements which are attached in any way to the Premises shall become the property of Landlord without charge to Landlord and clear of any lien, mortgage or debt and shall remain upon and be surrendered with the Premises as a part thereof, except that Tenant shall have a right to remove its signs and other distinctive characteristics of its business and shall also have a right to remove its trade fixtures, furniture, equipment and shelving not attached and that can be removed without damaging the premises.
Section 7.07: Ownership or Improvements.
(a) All betterments and improvements in or upon the Demised Premises, made by either party (except Tenant’s personal property, furniture and furnishings, signs and trade fixtures) including all affixed lighting fixtures, heating, ventilating and air conditioning equipment, and all pipes, ducts, conduits, wiring, paneling, partitions, railing, mezzanine floors, galleries and the like shall become the property of Landlord and shall remain upon and be surrendered with the Demised Premises at the expiration date or at the cancellation of this lease if sooner than the original expiration date.
(b) Tenant shall not assign, lien, encumber, chattel mortgage or create a security interest in and to or upon the Demised Premises or to any equipment that will be vested to Landlord without first obtaining in each and every instance the prior written consent of Landlord. Any consent by Landlord to such security interest shall be held to apply only the specific transaction thereby authorized and shall constitute a waiver of the necessity for such consent to any subsequent transaction. Any violation of the terms of this provision by Tenant shall be without force and effect and shall but be binding upon Landlord.
Section 7.08: Right to Terminate.
Permits: Tenants has entered into this Lease in the expectation of obtaining, after expiration of all applicable appeal periods, all permits, licenses, permissions and/or other authorizations (collectively called “permits”) necessary for the construction upon the Demised Premises of a complete facility, including Tenant’s signs built according to Tenant’s plans and specifications (including sewer disposal system ( s) in connection with the facility deemed necessary or desirable by Tenant) and for the operation of the facility upon the Demised Premises, seven (7) days a week. Tenant agrees to apply for permits without unreasonable delay after execution of this Lease and Landlord agrees to execute such document, make such appearances and do such other things as Tenant may reasonably request. Subject to the Commencement Date schedule, Tenant or Landlord may (but shall not be obligated to) cancel this Lease if, after first application, permits are denied or are not obtained within One Hundred Twenty (120) days. If Landlord elects to cancel this Lease as provided herein, Tenant shall have ten (10) days after receiving Landlord’s written notice of cancellation to waive, in writing, the permit contingency. If Tenant does not waive the permit contingency, this Lease will terminate and be of no further force and effect, ten (10) days after Tenant’s receipt of the notice.
ARTICLE VIII. SERVICES AND UTILITIES
Section 8.01: Electric Services: Tenant shall cause an electric meter to be installed for the Premises. Tenant shall pay for all electricity consumed at the Premises directly to the electric power authority.
Section 8.02: Hot Water, Air Conditioning. Tenant shall supply its own requirements of hot water and air-conditioning equipment with respect to the premises, including maintenance and utility expenses of such equipment. Tenant is obligated to operate the air conditioning unit (s) uninterruptedly during the store is opened for business.
Section 8.03: Water Meter. Tenant shall cause to be installed a water meter at the Premises. Tenant shall pay for water consumed at the Premises as shown on the meter. In addition, Tenant shall pay any sewer rent or charge; or any other tax, rent, levy or charge imposed in connection with Tenant Is, use consumption or supply of water, water system or sewerage connection or system. If any sewer or water rent, charge, tax or levy is imposed against the Shopping Mall, Tenant shall pay its Pro Rata share thereof.
Section 8.04: Payment for Utility Services. The payments Tenant is required to make under Section 8.01, 8.02 and 8.03 shall be made within ten (10) days after a bill is rendered with respect thereto.
Section 8.05: Electrical Substation
Landlord has installed the electrical substation for the Shopping Mall.
Section 8.06: Grease-Trap
Tenant if required, shall install a grease trap and connect same to the public sewer line in accordance with the rules and regulation of A A A before commencing operation and shall obtain the necessary approval from government agency. Tenant shall clean same as many times as necessary and as required by government’s agency.
Section 8.07: Sprinkler system
Landlord will supply the main line. The distribution of its premises, pertain to Tenant, as approved by the Governments Agency and as shown on the plans. Tenant shall obtain the approval of the “Departamento de Bomberos de Puerto Rico” and of any other Government Agency.
ARTICLE IX. USE AND OPERATION
section 9.01: Use. Tenant shall use the _Premises for the uses designated as Permitted uses in subsection 1.09 (a} subject to applicable legal requirements and for no other purpose.
Section 9.02: Continuous Operation.
(a} Tenant shall conduct its business in the Premises continuously on all days and at all hours during which the Shopping Mall’ is open.
(b) Tenant shall keep its store continuously, fully stocked with high-quality, salable merchandise.
(c) Tenant shall keep its store fully staffed with employees.
(d) Tenant shall operate its store as a typical operation designated as Tenant’s operation in subsection 1.09 (b) as presently conducted in a majority of its stores in Puerto Rico.
(e) Tenant shall use its best efforts to achieve a maximum sales volume in the Premises.
(f) Tenant shall conduct its business under the name designated as Tenant’s Business Name in subsection 1.09 (c).
(g) Notwithstanding anything to the contrary, to the extent permitted pursuant to legal requirements, Tenant may keep its store open for business on any day on which it is legal to do business.
(h) Tenant shall not be obliged to comply with subsections (a), (b), (c), and (e) of Section 9.02 in each of the following circumstances:
(i) When prevented from doing so by reason of Force Majeure, and
(ii) during reasonable periods in which it is making major repairs or alterations to the Premises.
Section 9.03: Store Operations.
(a) Window display lights. Tenant shall keep the display windows in the Premises electrically lighted during such reasonable periods of time as may be prescribed by Landlord.
(b) Non-selling space. Tenant shall use for office, clerical or other non-selling purposes only such space in the Premises as is reasonably required for Tenant’s business therein and shall not perform any office or clerical function in the Premises for any other store.
(c) Keeping Premises Clean. Tenant shall keep the Premises (including exterior and interior portions of all windows, doors and all other glass) in a neat and clean condition, pursuant to Landlord’s requirements.
(d) Paying Taxes. Tenant shall pay before delinquency any and all taxes, assessments and public charges levied, assessed or imposed upon Tenant’s business or upon Tenant’s fixtures, furnishing or equipment in the Premises.
(e) Paying License Fees. Tenant shall pay when and as due all license fees, permit fees and charges of a similar nature for the conduct by Tenant or any subtenant of any business or undertaking authorized hereunder to be conducted in the Premises.
(f) Exclusive Delivery Facilities. Tenant shall keep and maintain in good order, condition and repair any loading platform, truck dock and/or truck maneuvering space thereof which is used by Tenant notwithstanding the fact that the same may be deemed to be a portion of the Common Area.
(g) Garbage. Landlord will supply a compactor for the disposition of garbage and Tenants agree to deposit its garbage in such sealed container. Your store will pay a monthly charge of $0.00 per square foot. Any increase that may be imposed will be paid in the same proportion. Tenant agrees not to permit the accumulation (unless in concealed metal containers) or burning of any rubbish or garbage in, on or about any part of the Shopping Mall.
(h) Rules and Regulations. Tenant shall observe all rules and regulations established by Landlord from time to time for the Shopping Mall.
(i) Restrictive covenants. Tenant agrees that it will comply with and observe all restrictive covenants which affect or are applicable to the Premises and the Common Area.
Section 9.04: Restrictions on Tenant’s Activities at Shopping Mall
(a) Sidewalk use. Tenant shall not use the sidewalk adjacent to or any other space outside the Premises for display, sale or any other similar undertaking.
(b) Loudspeaker Use. Tenant shall not use any advertising medium which may be heard outside the Premises.
(c) Vending Machines. No coin or token-operated amusement devices may be operated in the Premises, unless approved by Landlord.
(d} Delivery of Merchandise. Delivery of merchandise will be permitted up to 11:00 a.m. everyday. After that time, no truck, car or delivery vehicle of any kind will be allowed to enter the parking or the common area of the Shopping Mall.
ARTICLE X. TRANSFER OF INTEREST, PRIORITY OF LIEN
Section 10.01: Assignment of Sublet.
{a) Tenant shall not transfer or assign this Lease or sublet the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Any attempted transfer, assignment or subletting without such consent shall be void and confer no rights upon any third person. No assignment or subletting shall relieve Tenant of any obligations under this Lease and the consent by Landlord to any transfer, assignment or subletting shall not release Tenant of any obligations under this Lease. The consent by Landlord to any transfer, assignment or subletting shall not be deemed to be a waiver on the part of Landlord of any prohibition against any future transfer, assignment or subletting.
(b) If Landlord consents to any transfer, assignment or subletting, that consent shall not be effective unless and until Tenant gives notice of the assignment and a copy of the assignment agreement or sublease to Landlord, and the transferee, assignee or sublessee delivers to Landlord a written agreement in form and substance satisfactory to Landlord pursuant to which such transferee, assignee or sublessee assumes all of the obligations and liabilities of Tenant under this Lease.
(c) Tenant will not, without Landlord’s written consent assign this Lease to any parent, subsidiary or affiliated corporation of Tenant; to any corporation to which Tenant sells substantially all of its assets; or to any corporation with which Tenant merges or consolidates, or to which substantially all of its shares of stock are sold. Landlord consent will not be unreasonably denied insofar Tenant assigns this Lease or sublet the Premises to a reputable and responsible chain store company having a net worth comparable to or exceeding that of Tenant. Any assignment of this Lease pursuant to this subsection shall not release Tenant of its obligations under this Lease.
(d) Tenant, in this act, requested the Landlord permission to sub-lease some of the units out, based on a month to month. Sub-lease is granted.
Section 10.02: Subordination.
(a) At Landlord’s election, this Lease may be made subordinate to the lien of any present or future mortgage in favor of an institutional lender irrespective of the time of execution or the time of recording such Mortgage. If Landlord shall elect that this Lease shall be subordinate to the lien of any such Mortgage, Landlord’s election shall be effective only if the applicable Mortgagee shall enter into a recordable non-disturbance agreement with Tenant which shall be recorded at Landlord’s sole cost, all in accordance with subsection (b).
(b} A nondisturbance clause shall provide that in the event of foreclosure or other action taken under a Mortgage, this Lease and the rights of Tenant under this Lease shall not be disturbed, but shall continue in full force and effect as long as Tenant shall not be in Default under this Lease beyond the applicable cure period.
(c} Tenant shall execute any appropriate instrument in recordable form promptly in order to confirm that this Lease is a subordinate lien to any institutional mortgage.
Section 10.03: Attornment.
(a) If the Shopping Mall is encumbered by a Mortgage, and the Mortgage is foreclosed, or if the Shopping Mall is sold pursuant to foreclosure or by reason of default under a Mortgage the following shall apply notwithstanding the foreclosure, the sale, or the default: (i) Tenant shall not disaffirm this Lease or any of its obligations under this Lease. (ii) At the request of the applicable Mortgagee or purchaser at the foreclosure or sale, Tenant shall attorn to the Mortgagee or purchaser.
Section 10.04: Transfer of Landlord’s Interest.
(al The term “Landlord” as used in this Lease means only the owner for the time being or the Mortgagee in possession for the time being of the Shopping Mall. Each time the Shopping Mall is sold, the selling Landlord shall be entirely released of all obligations and liability under this Lease accruing from the date immediately following the date of sale.
(b) Notwithstanding subsection {a), a Landlord who shall intend to sell the Shopping Mall or any part thereof, shall be under a duty to require of, and enforce against a prospective purchaser, that it assume, recognize , and agree to a non-disturbance clause in favor of Tenant as a condition precedent of such sale.
Section 10.05: Mortgagee’s Rights. If Landlord shall notify Tenant that the Premises or the Shopping Mall is encumbered by a Mortgage, and shall notify Tenant of the name and address of the Mortgagee, the following shall apply, notwithstanding anything to the contrary: Upon election by Landlord, duly notified to Tenant, notice intended for Landlord shall not be deemed properly given unless a copy thereof is simultaneously sent to the Mortgagee by certified mail, return receipt requested. If any Mortgage shall perform any obligation that Landlord is required to perform under this Lease, the performance by the Mortgagee shall be deemed to be performed on behalf of Landlord insofar as Tenant is concerned, and then performance shall be accepted by Tenant as if performed by the Landlord.
ARTICLE XI. COMMON AREA AND SHOPPING MALL
Section 11.01: Use of Common Areas. Landlord hereby grants to Tenant the following privileges to use portions of the Common Area during the term of this Lease. These privileges may be exercised in common with Landlord and any designee of Landlord, and subject to Landlord’s·rules and regulations:
(a) Tenant is hereby granted the nonexclusive license to permit its customers to use the sidewalks and customer Parking Areas designated by Landlord from time to time. Tenant is hereby granted the nonexclusive license to permit its employees to use the sidewalks and employee Parking Areas designated by Landlord from time to time and if they are available. The rights to the use of the Parking Areas by Tenant’s customer and employees shall be limited to the right to pass by foot and to parking passage and maneuvering of vehicles. The rights to the use of the sidewalks shall be limited to the right to pass by foot.
{b) Tenant is hereby granted the nonexclusive privilege to permit its employees and customers to use the entrance and exit ways designate by Landlord from time to time for access to the Premises from a public street or highway adjacent to the Shopping Mall through appropriate entrances and exits designate by Landlord.
Section 11.02: Landlord’s Rights and Limitations.
Notwithstanding anything to the contrary, Landlord shall have the following rights and limitations with respect to the Common Areas:
(a) Landlord may close all or any portion of the Common Areas including the parking area to such extent as may be necessary in the opinion of Landlord’s counsel to avoid a dedication of the Common Area or a portion of the Common Area, or to avoid the creation of any rights of the public in the Common Area.
(b) Landlord may close all or any portion of the Common Area temporarily to discourage non-customer use.
(C) Landlord may temporarily, but not permanently, prohibit parking or passage of motor vehicles in areas previously designated for parking or passage.
(d) Landlord may erect additional building on the Common Area or change the location of building or other structures.
(e) Landlord may erect kiosks, carts etc., in the common area or in any other section of the Shopping Mall at any time and for any length of time at its sole discretion.
Section 11.03: License Numbers.
(a) In order to restrict the use by Tenant’s employees of Parking Areas designated or which may be designated by Landlord as customer parking areas, Tenant shall furnish Landlord with the license numbers of any vehicle of Tenant and Tenant’s employees immediately after each request thereof by Landlord.
(b) Tenants agree not to permit its employees to park in areas designated as customers parking.
Section 11.04: Tenant’s Common Area Contribution.
(a) Landlord, at its expense (subject to the reimbursement provisions hereinafter set forth) will operate and maintain the Common Areas in a first-class condition. For the purpose of this Article, Landlord’s Operating Costs shall be those of operating and maintaining the Common Areas in a manner deemed by Landlord reasonable and appropriate and for the best interest of the lessees of the Shopping Mall, including, without limitation, all costs and expenses of operating, repairing, lighting, cleaning, painting and striping, Christmas decoration, Security, Equipment, insurance (excluding public liability, fire, extended coverage and earthquake insurance) workmen’s compensation, removing debris and garbage; inspection and depreciation of machinery and equipment used to the extent used in the operation of the Common Areas; costs and expenses, other than those of a capital nature, of maintaining and replacing paving, curbs, walkways, landscaping, drainage and lighting facilities; security; and actual and direct office, supervision, and administration expenses. Other than as specifically stated hereinabove, Landlord’s operating Expenses shall not include depreciation.
(b) Tenant’s Common Area Contribution as defined in Section 2.07 shall be payable in equal monthly installments. Each installment shall be payable in advance together with the Rent Payment. The first installment shall be payable on the Commencement Date.
(c)
Tenant’s Common Area Contribution will be estimated at the rate of t
e
dellars aali fiftee11 @e11tss ( $2.Hi) per square foot of space per annum.
If Tenant requests within one hundred twenty (120) days following the end of each Calendar Year, Landlord will make available to Tenant
a detailed statement of Landlord’s Operating Expenses incurred during the preceding Lease Year and of Tenant’s Pro-rata share
thereof. If Tenant’s Common Area Contribution for the preceding Lease Year was not sufficient to cover Tenant’s Pro-rata
Share of Landlord’s Operating Expenses, Tenant will pay, as additional rent, to Landlord the deficiency within twenty (20) days
after receiving Landlord’s statement. If Tenant Pro-rata Share of Landlord’s Operating Expenses is greater than Tenant’s
Common Area contribution made during the preceding Lease Year, Tenant shall take a credit to be applied only to Tenant’s Common
Area contribution for the then-current Lease Year.
(d) This Lease is net lease. Therefore the Lessee shall pay, in addition to all rents, insurance, utilities and taxes as provided in this Lease, all costs connected with or arising out of the ownership or operation of the leased premises, and all other expenses of every nature whatsoever, including but not limited to all repairs, it being the intent of the parties that Landlord is to receive all rentals provided for in this Lease net and clear of all costs and charges arising from or relating to the leased premises and that Tenant is to pay any and all charges and expenses of the leased premises and its appurtenances in any manner during the term of this lease.
Section 11.05: Landlord’s obligation with Respect to Common Area. Landlord shall keep the Common Area properly paved and in good order and repair throughout the Term. Landlord shall keep the lights on in the Parking Area from sunset until sunrise. Landlord shall keep the Common Area properly drained and shall provide painted stripes to designated parking spaces.
Section 11.06: Promotional Fund. Landlord, at its sole discretion, shall create and Tenant shall join a “Promotional Fund’ to be solely utilized to advertise and promote the Shopping Mall facilities. This fund shall be created and supported with the payment by each Tenant of $1.00 (one dollar) per square foot per annum of the Demised Premises to be paid on a monthly basis as part and in addition to its monthly rental installment. At least three publications will be produced to advertise the Tenants and the products they offer. Failure of Tenant promotional events Tenant’s monthly to cover the payment will cause Landlord to rental payment for the required for these add such cost to following monthly installment to be paid on the due date for such installment.
Section 11.07: Apportionment of Charges. If the first and/or last months of the term of this Lease consist of less than full calendar months, then the installment of Common Area contributions payable under section 11.04 for these months shall be apportioned on the basis of the number of days of these months that occur during the Term.
ARTICLE XII INSURANCE
Section 12.01: Liability Insurance.
(a) Tenant shall provide and maintain a comprehensive policy of liability insurance with respect to the Premises. Landlord and any designee of Landlord shall be named as additional insureds. The liability insurance policy shall protect Landlord, Tenant and any designee of Landlord against any liability which arises from any occurrence on or about the Premise or any appurtenance of the Premises, or which arises from any of the Claims indicated in Section 12.03 against which Tenant is required to indemnify Landlord.
(b) The policy is to be written by a reputable and solvent insurance company authorized to do business in Puerto Rico. The coverage limits of the policy shall be at least One Million Dollars ($1,000,000.00) Combine Single Limit to any one accident.
| (C) | (i) | Landlord shall provide and maintain a comprehensive policy of liability insurance with respect to the Common Area. |
| (ii) | The policy shall be written by a reputable and solvent insurance company authorized to do business in Puerto Rico. |
| (iii) | The coverage limits shall be at least One Million Dollars {$1,000,000.00} Combine Single Interest to any one accident. |
(d) Tenant shall comply with all Insurance Requirements relating to or affecting the Premises. If the insurance premiums applicable to the Shopping Mall exceed the rate that would have been applicable for the Permitted Use as a result of any failure by Tenant to comply with all Insurance Requirements, Tenant shall reimburse to Landlord the excess. The reimbursement shall be made within ten (10) days after Landlord renders a bill thereof. For the rating purpose of this Section, any finding or schedule of a fire insurance organization having jurisdiction over the Premises or the Shopping Mall shall be deemed to be conclusive.
Tenant’s liability for increased insurance premiums under this section shall be limited to premiums which relate to policies actually carried by Landlord. Tenant will pay Landlord the Pro-Rata share of the Landlord Liability Insurance of the Common Area.
Section 12.02: Plate Glass Insurance. Tenant shall keep all plate glasses of the Premises insured against all risks for the benefit of Landlord and Tenant in amount equal to the cost of same with a reputable and solvent insurance company authorized to do business in Puerto Rico.
Section 12.03: _I_n_d_e_m_n_i_’_ty_. (�H_O_L D HARML_E_S_S--’-)
a) “Claims” means any claims, suits, proceeding, actions, causes of action, responsibility, liability, demands, judgments, and executions by third parties.
b) Tenant hereby indemnifies and agrees to save Landlord harmless from and against all claims, which either (i) arise from or are in connection with Tenant’s possession, use, occupation, management, repair, maintenance or control of the Premises or any portion thereof; (ii) arise from or are in connection with any act or omission of Tenant or Tenant’s Agents; (iii) result from any default, breach, violation or non-performance of this Lease or any provision of this Lease by Tenant; or (iv) result in injury to person or property tangible or intangible or loss of life sustained in or about the Premises. Tenant shall defend any claims against Landlord with respect to the foregoing or in which Landlord may be impleaded. Tenant shall pay, satisfy and discharge any judgments, orders and decrees which may be recovered against Landlord in connection with the foregoing.
(c) The indemnification and hold harmless shall include reasonable attorney’s fees and costs incurred by either party in the defense of the Claim.
Section 12.04: General Provisions with respect to Insurance.
(a) On or before Tenant enters the premises for any reason, and before any insurance policy shall expire, Tenant shall deliver to Landlord the policy or a renewal thereof, as the case may be, together with evidence of payment of applicable premiums. Any insurance required to be carried under this Lease may be carried under a blanket policy covering the Premises and other locations of Tenant. If Tenant includes the Premises in blanket coverage, Tenant may deliver to Landlord a duplicate original of the blanket insurance policy or a certificate evidencing such insurance instead of the original of the policy.
(b) All insurance policies required to be carried under this Lease by or on behalf of Tenant shall provide (and any certificate evidencing the existence of any insurance policies, shall certify) that: Landlord shall be given thirty (30) days written notice before any cancellation, alteration, change or failure to renew. As used in this Lease, the term “insurance policy shall include any extensions or renewals of any insurance policy.
Section 12.05: Non-Liability of Landlord. Landlord shall not be responsible or liable to Tenant for any loss or damage resulting to Tenant or its property from water, gas, or steam, or the bursting, stoppage or leakage of pipes, or interruption in the utilities services.
Section 12.06: Inability to Perform
(a) If Landlord fails to perform any of its obligations under this Lease as a result of Force Majeure, Landlord shall not be liable for loss or damage for the failure and Tenant shall not be released from any of its obligations under this Lease.
(b) If Landlord is delayed or prevented from performing any of its obligations as a result of Force Majeure, the period of delay or prevention shall be added to the time herein provided of the performance of any such obligation.
(c) If Tenant is delayed or prevented from performing any of its obligations under this Lease, other than obligation to pay rent or any other charges, as a result of Force Majeure, the period of delay or prevention shall be added to the time provided for the performance of the obligation.
(d) Lack of funds shall not be deemed to be a cause beyond the control of either party.
Section 12.07: Rental Insurance Coverage
Tenant will carry Rental Insurance coverage which guarantees to Landlord full payment of the rent during at least six (6) months under any circumstances in which Tenant claims the right to abate rental payments under this contract. Within a reasonable time before the Commencement Date, Tenant shal1 deposit with Landlord a certificate evidencing the insurance. The certificate shall name Tenant, Landlord, and any party designated by Landlord as insureds as their interest may appear, and shall provide in effect that the related insurance policy shall not be canceled, transferred, altered by the insurer unless it gives Tenant and Landlord at least a thirty (30) day notice of cancellation prior to the cancellation date.
Section 12.08: Fire and Extended Coverage Insurance.
(a) Landlord shall carry fire insurance with standard extended coverage endorsement (including vandalism and malicious mischief) and earthquake insurance with respect to the Building. The amount of fire insurance shall not be less than 100% of the sound insurable value of the Building except for footing and foundations. foundations. Earthquake insurance shall include footings and Insurance shall be carried with solvent and responsible companies authorized to do business in Puerto Rico. Tenant will pay to Landlord the premium of this insurance in a Pro-rata share. If the Building is damaged by fire, earthquake or any other calamity in such a way that the operation of Tenant is not suitable, Landlord may cancel the contract without penalty and no claims by either party will be established.
Section 12.09: Obligation to Rebuild.
If any portion of the Premises is damaged by fire or other casualty insurable under a standard fire insurance policy with standard extended coverage endorsement, and this Lease is not terminated, Tenant shall repair or rebuild the Premises or such portion to the condition existing immediately prior to the occurrence. The repair or rebuilding shall be commenced within ten (10) days after the occurrence and be reconstructed and restored within: (x} one hundred twenty {120) days in all cases except earthquake; (y) one hundred fifty (150} days in case of earthquake, and (z) in any case if demolition of the structure is required the period shall be increased by thirty (30} days. In any event Tenant shall restore the premises and reopen to the public as speedily as circumstances permit. Each reference to “standard extended coverage endorsement” shall also refer to vandalism and malicious mischief endorsements.
Section 12.10: Waiver of Subrogation.
Landlord and Tenant hereby release each other and each other’s officers, directors, employees and agents, from liability or responsibility for any loss or damage to property covered by valid and collectively fire insurance with standard extended coverage endorsement. This release shall apply not only to liability and responsibility of the parties to each other but shall also extend to liability and responsibility for anyone claiming through or under the parties by way of subrogation or otherwise. This release shall apply even if the fire or other casualty shall have been caused by the fault or negligence of a party or anyone for whom a party may be responsible. However, this release shall apply only with respect to loss or damage actually recovered from an insurance company. This release shall not apply to loss or damage of property of a party unless the loss or damage occurs during the time the fire or extended coverage insurance policies of a party contain a clause or endorsement to the effect that any release shall not adversely affect or impair the policies or prejudice the right of the party to recover thereunder. Landlord and Tenant each agree that any fire and extended coverage insurance policies covering the Premises or their contents shall include this clause or endorsement as long as the same shall be obtainable without extra cost, or , if extra cost shall be charged therefor, so long as the other party pays the extra cost. If extra cost shall be chargeable, the party whose policy is subject to the extra cost shall advise the other thereof, and of the amount of the extra cost.
Section 12.11: Insurance Coverage (Face Amount).
The minimum amount of Liability Insurance established in Section 12.01 will be revised every three (3) years and if necessary, Landlord will notify Tenant of any increase for the following three (3) year period. This will cover Tenant and Landlord alike.
Section 12.12: Rent Abatement.
(a) Abatement. If all or any portion of the Premises is damaged by fire or earthquake and this Lease is not terminated pursuant to any provisions of this Lease, the following shall apply: Rent shall abate from the date of the occurrence in the proportion that the area or the portion of the Premises rendered unusable for the· Permitted Use bears to the entire area of the Premises. The abatement shall continue until the earlier to occur of (i) the tenth (10th) day next following the completion of the repair of the damage, or (ii) the first day on which Tenant uses the portion of the Premises so damaged for the sale of merchandise.
(b) Abatement of Other Charges. If Minimum Rent abates in accordance with this Section 12.12, every other charge payable by Tenant to Landlord shall abate in the same proportion.
ARTICLE XIII. CONDEMNATION
Section 13.01. Definition. As used in this Lease, the following words have the following meanings:
(a) Award: means the award for all proceeds of any Taking less all expenses in connection therewith including attorney’s reasonable fees.
(b) Taken: means the taking of, or damage to, the Premises or the Shopping Mall or any portion thereof, as the case may be, as the result of the exercise of any power of eminent domain, condemnation, or purchase under threat thereof or in lieu thereof.
(C) Taking Date: means the date on which the condemning authority shall have the right to possession of the Premises or the Shopping Mall or any portion thereof as the case may be.
Section 13.02. Total or Substantial Taking of Premises.
(a) If all of the Premises shall be taken, except for a Taking for temporary use, this Lease shall be canceled automatically as of the Taking Date. If 25% or more of the Premises shall be Taken, Tenant shall have the option to cancel this Lease. The option to cancel may be exercised within six months of the Taking Date by giving Landlord notice that the option has been exercised.
(b) If this Lease is canceled in accordance with this Article XIII, any rent which shall have been paid on or before the date of cancellation that is allocable to a period after the date of cancellation shall be refunded. If any rent shall have been paid with respect to a period after the date of cancellation, that rent shall be prorated in accordance with section 5.01.
Section 13.03. Abatement and Restoration. If all or a portion of the Premises shall be Taken, except for a Taking for temporary use, and this Lease shall not be canceled under section 13.02, the following shall apply: Minimum Rent shall be reduced in the proportion that the area so taken bears to the entire area of the Premises. Tenant shall restore the remaining portion of the Premises, to the extent practical, to render it reasonably suitable for the Permitted Uses. Tenant shall not be obligated to spend an amount greater than the award for the restoration.
Section 13.04. Taking for Temporary Use. If there is a Taking of the Premises for temporary use, this Lease shall continue in full force and effect, and Tenant shall continue to comply with Tenant’s obligations under this Lease, except to the extent compliance shall be rendered impossible or impractical by reason of the Taking. If all of the Premises shall be Taken for temporary use, rent shall abate during the course of the Taking. If part of the Premises shall be taken for temporary use, rent shall abate until the end of the Taking in the same proportion as in the case of a permanent Taking. If the duration of a Taking for temporary use exceeds one (1) year, and if it is unreasonable to expect Tenant to operate its business from any portion of the Premises not so Taken during that period, Tenant shall have the option to cancel this Lease. The option may be exercised only by giving notice thereof to Landlord within the sixty (60) days following the expiration of such one-year period.
Section 13.05. Disposition of Awards.
(a) All condemnation awards for a total or partial taking of the land of the Premises shall belong to and be the property of Landlord.
(b) If all or any portion of the land and buildings of then Premises shall be taken, Landlord and Tenant shall agree upon and appraiser within the thirty (30) days following the taking or shall select an impartial third party who will within ten (10) days select an appraiser. Said appraiser shall appraise the land of the Premises only at market value, and the difference between said land appraisal and the final award for both land and buildings shall be conclusively deemed to be the stipulated value of the award for the building.
(c) Tenant shall have the right to make a separate claim in condemnation proceedings for the value of its trade fixtures removal expenses, and relocation expenses.
ARTICLE XIV. LANDLORD’S COVENANTS
Section 14.01. Covenant and Quiet Enjoyment.
Landlord covenants that if Tenant pays the rent and all other charges provided for in this Lease, performs all of its obligations provided for under this Lease, and observes all of the other provisions of this Lease, Tenant shall peaceably and quietly enjoy the Premises in accordance with the terms of this Lease without any interruption or disturbance form Landlord or persons claiming through or under Landlord.
ARTICLE XV. DEFAULT, REMEDIES
Section 15.01: Tenant’s Default.
(a) Tenant shall be in 11Default11 under this Lease if anyone of the following events shall occur:
(i) If Tenant shall fail to pay Minimum Rent or Additional rent when due. No notice by Landlord to Tenant on its failure to pay is necessary for Tenant to incur in said default.
(ii) If Tenant shall fail to perform any of its other obligations under this lease and the failure shall continue for a twenty (20) day period after Landlord shall have given Tenant written notice of its initial failure to perform.
Section 15.02. Landlord’s Remedies. If tenant shall be in Default Under this Lease, Landlord may exercise any remedy specified in subsection (a), (b), (c) (d) or any combination thereof as follows:
(a) Commence legal action under the laws of Puerto Rico to evict Tenant or request specific performance.
(b) Landlord may give Tenant a written notice of Landlords intention to end the term of this Lease at the expiration of the ten (10) day period after the notice of cancellation is given. Unless the Default is cured before the expiration of the ten day period, this Lease shall be canceled, and all of the obligations and responsibilities of the parties under this Lease shall terminate except for accrued liabilities and except that Tenant shall surrender the premises to the Landlord in accordance with the Section 7.06.
(c) Landlord at any time and without notice may, but shall not be obligated to, cure Tenant’s Default for the account and at the expense of Tenant, including without limitation, reasonable attorney’s fees.
(d) (i) Landlord will notify Tenant that its rights under this Lease shall terminate on a date specified in the written notice, and Tenant’s rights under this Lease shall terminate on the date so specified except as provided in this subsection {c). Notwithstanding the termination, Tenant’s liability for its failure to comply with the provisions of this Lease shall continue. repossess Landlord may reenter the Premises; Landlord may the Premises (by judicial summary proceedings, ejectment or otherwise); Landlord may dispossess Tenant; and Landlord may remove Tenant from the Premises. Tenant waives any right to the service of any notice of the Landlord’s intention to reenter provided for by any present or future law and any right to reenter the premises or restore the operation of this Lease {other than rights set forth in this Lease). Landlord may relet the premises in whole or in part. The reletting may be for a period that is longer or shorter than the Term of this Lease. Landlord shall make reasonable effort to relet the premises at its fair rental value.
{ii) Tenant shall pay as liquidated and agreed current damages to Landlord a sum equal to one-year minimum rent plus all additional rents due hereunder plus reasonable Landlord’s expense of reentering, repossessing, reletting, altering and repairing the Premises including Landlord’s attorney’s fees and brokerage commissions, for such relettings.
(iii) In order to further secure compliance of Tenant’s obligation, Tenant deposits with Landlord the equivalent of one month’s Minimum Rent as referred in Section 1.03, in addition to its first payment in advance. This deposit will be given on the day this contract is signed, if for any reason Tenant decides to cancel this contrac.t before the expiration date the deposit will be vested into Landlord. Said deposit will not be utilized by Tenant in lieu of, or for the purpose of paying any monthly rental payment and will be reimbursed to Tenant by Landlord upon expiration and Tenant’s compliance of all its obligations under this contract.
Section 15.03. Landlord Default. If Landlord shall fail to perform any substantial obligation and the failure to perform shall continue for thirty days (30) without Landlord having commenced to remedy the default after Tenant shall have given Landlord written notice thereof, Landlord shall be in Default under this Lease.
If Landlord is in default with respect to any obligation under this Lease, Tenant may perform the obligation on behalf and at the expense of Landlord, pay any sum necessary for the performance, and claim from Landlord the cost thereof, including without limitation, reasonable attorney’s fees and expenses.
Section 15.04. Prerequisites to the Exercise of Remedies
a} Neither the Landlord nor the Tenant shall have any rights arising from a failure to perform or remedy against the other unless a Default shall have occurred.
b) No default shall be deemed to have occurred if and so long as Tenant or Landlord, as the case may be, shall be delayed in, or prevented from, performing by Force Majeure. This clause shall not apply to the Tenant’s duty to pay Minimum and Additional Rent.
Section 15.05. Performance Under Protest.
a} If a dispute shall arise between the parties as to the performance of any obligation, excluding the payment as fixed Minimum Rent or Additional Rent, a party contending that an obligation is the other party1s duty may perform the obligation under protest. The performance of and obligation under protest shall not be regarded as voluntary performance. A party which shall have performed an obligation under protest shall have the right to bring suit for the recovery of the cost and expenses of performance. If it shall be determined that the other party was required to perform the obligation, the other party shall reimburse the party that shall have performed the obligation under protest for the cost and expenses of performance, plus its expense of litigation.
b) If Tenant is required to reimburse Landlord under subsection (a} and an invoice for reimbursement is not paid within thirty (30) days after it is rendered, the amount of the invoice shall be added to the next installment of Minimum Rent.
Section 15.06. Interest. If Tenant shall fail to pay any Rent and /or other charges when the same become due and payable, such amounts shall bear interest beginning on the first day after disbursement should have been made by Tenant and until payment thereof, at one percent (1%) over the prime rate charged by Citibank at its New York City offices. Such interest shall be deemed additional rent.
ARTICLE XVI. OVERAGE
Section 16.01. Unless otherwise agreed upon by the parties, there will be no percentage rent for overage application to this Lease.
ARTICLE XVII. RIGHT OF ACCESS
Section 17.01. Entry. During any reasonable time before and after the Commencement Date, Landlord may enter upon the Premises, any portion thereof and any appurtenance thereto (with men and materials, if required) for any of the following purposes:
a) inspecting the Premises; b) making any repairs replacement or alteration which Landlord may be required to perform under this Lease; and c) showing the Premises to prospective purchasers or lessees.
Section 17.02 Mode. Landlord may exercise its rights under section 17.01 only after giving reasonable notice or such other notice required in this Lease for any particular action and during reasonable hours, except in the event of an emergency. In connection with the exercise of any of these rights, Landlord agrees that, to the extent practicable, Landlord will not unreasonably interfere with the operation of Tenant’s business in the Premises. Landlord’s rights to show the Premises to prospective lessees may be exercised only during the last six (6) months of the term.
ARTICLE XVIII INTERPRETATION, NOTICES, MISCELLANEOUS
Section 18.01: Holding Over: Should Tenant hold over in possession of the demised premises after the expiration of the term hereof without the execution of a new Lease Agreement of extension or Renewal Agreement, Tenant, at the option of Landlord, shall be deemed to be occupying the demised premises from month to month, subject to such occupancy being terminated by either party upon at least thirty (30} days written notice, at one hundred fifty percent (150%) of the rental including, but not limited to, Fixed Minimum Rent, Percentage Rent, Tax Rent, Tenant’s proportionate share of Operating Cost, the Utility Charge, Promotion Charge, and additional rent provided herein, all calculated, from time to time, as though the term of this Lease had continued and otherwise subject to all of the other terms, covenants and conditions of the Lease insofar as the same may be applicable to a month to month tenancy.
Section 18.02: Interpretation:
a) Exhibits ‘A’ (Landlord’s Plans and Specifications) and 1B’ (Tenant’s Plans and Specifications and Tenant’s Itemized Construction Costs) are considered a part of this Lease, and delivered simultaneously with the execution of this Lease duly initialed by both parties, but are not physically attached to this Lease.
b) Any references in this Lease to “subtenants” or “licensees” shall not be deemed to imply that any subtenants or licensees are permitted under this Lease.
c) If any provision of this Lease or the application of any provision of this Lease to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Lease, or the application of such provision to person or circumstances other than those of which it is invalid or unenforceable, shall not be affected thereby; and each provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.
d) The captions and headings use throughout this Lease are for convenience of reference only and shall not affect the interpretation of this Lease.
(i) Any provision of this Lease which permits or requires a party to take any particular action shall be deemed to permit or require, as the case may be, the party to take such action or cause such action to be taken.
(ii) Any provision of this Lease which requires any party not to take any particular action shall also be deemed to require the party not to permit such action to be taken by any person or by operation of law.
e) This Lease has been executed in several counterparts, and each of said counterparts shall constitute an original contract for all legal purposes.
f) Wherever a requirement is imposed on any party to this Lease, it shall be deemed that party shall be required to perform the requirement at its own expense unless it is specifically provided to the contrary.
g) The singular includes the plural and the plural includes the singular.
Section 18.03. Construing Various Words and Phrases.
a) Wherever it is provided in this Lease that a party may perform an act or do anything, it shall be construed that party may, but shall not be obligated to, so perform or so do.
b) The words, “re-enter” and “re-entry”, as used in this Lease are not restricted to their technical legal meaning.
c) The following words and phrases shall be construed as follows:
(i) “At any time” shall be construed as “at any time or from” “time to time”.
(ii) “Any” shall be construed as “any and all”.
(iii) “Inc1uding” shal1 be construed as 11inc1uded but not limited to”.
Section 18.04. Entire Agreement, Etc.:
(a) This Lease, including Exhibits and Riders, if any attached hereto, sets forth the entire agreement between the parties.
(b) All prior conversations or writings between the parties hereto or their representatives are merged herein and extinguished.
(c) This Lease shall not be modified except by a writing subscribed to by the party to be charged, nor may this Lease be canceled by Tenant or the Demised Premises surrendered except with the written express authorization of Landlord, unless otherwise specifically provided herein.
(d) The submission by Landlord to Tenant of this Lease in draft form shall be deemed submitted solely for Tenant’s consideration and not for acceptance and execution. Such submission shall have no binding force and effect, shall not constitute an option for the leasing of the premises herein described, and shall not confer any rights or impose any obligations upon either party. The submission by Landlord of this Lease for execution by Tenant and the actual execution and delivery thereof by Tenant to Landlord shall similarly have no binding force and effect unless and until Landlord shall have executed this Lease and a counterpart thereof shall have been delivered to Tenant.
e) If any provision contained in any Rider or Exhibit hereto is inconsistent or in conflict with any printed provisions of this Lease, the provision contained in such Rider or Exhibit shall supersede said printed provision and shall be paramount and superior.
Section 18.05. Communications: No notice, request, consent, approval, waiver or other communication under this Lease shall be effective unless the same is in writing and is mailed by certified mail, postage prepaid, addressed as follows:
a) If intended for Landlord, a communication shall be effective if mailed to the address designated as Landlord’s Notice Address in Section 1.11 or to such other address as Landlord designates by giving notice to Tenant, with a copy to the address designate as Landlord’s Notice copy Address in Section 1.11. or to such other person or party as Landlord shall designate by notice to Tenant, and
b) If intended for Tenant, a communication shall be effective if mailed to the address designated as Tenant’s Notice Address in Section 1.11 or to such other address as Tenant shall designated by giving notice thereof to Landlord with a copy to the address designated as Tenant’s Notice copy Address in Section 1.11, or to such other person or party as Tenant shall designate by giving a notice thereof to Landlord.
Section 18.06. Method of Payment. Except as may be provided otherwise in this Lease, all amounts payable under this Lease shall be payable in coin or currency of the United States of America which at the time of payment is legal tender for public and private debts.
Section 18.07. Successors and Assigns: Except as otherwise provided, this Lease shall bind and inure to the benefit of the parties and their respective successors, legal representatives, heirs and assigns.
Section 18.08. Responsibility of Tenant: Any restriction or requirement imposed upon Tenant under this Lease shall be deemed to extend to Tenant’s subtenants, concessionaires and licensees; and it shall be Tenant’s to obligation to cause the foregoing persons to comply with restrictions and requirements.
Section 18.09. Authority to Sign: No employee or agent of Tenant or Tenant’s broker, if any, has authority to make a lease or any other warranty, representation, agreement or undertaking. The submission or this document for examination and negotiation does not constitute an offer to lease or a reservation of or option for the Demised Premises and this document will become effective and binding only upon execution and delivery by Landlord and an authorized officer of Tenant. All negotiations, considerations, representations and understanding between the parties are incorporated in this document and may be modified or altered only by agreement in writing between the parties, and no act or omission of any employee or agent of the parties or any broker, if any, shall alter, change or modify any of the provisions of this Lease.
Section 18.10. Addenda and Exhibits: This Lease includes the following Rider (s) and/or Exhibits, which shall take precedence over conflicting provisions (if any) of this Lease and are made an integral part of this Lease and fully incorporated by reference.
Exhibit “A” Landlord’s Plans and Specifications
Exhibit “B" Tenant’s Plans & Specifications and Tenant’s Itemized Construction Cost.
Exhibit “C” List of Documents required by Landlord.
Exhibit “D” Early Termination Clause.
Section 18.11: Failure strictly and promptly to enforce the conditions set forth above shall not operate as a waiver of Landlord’s rights. Landlord expressly reserves the right always to enforce prompt payment of rent and to treat the failure to pay rent in accordance with this Lease as a default, regardless of any indulgences or extensions previously granted. The acceptance of rent by Landlord shall not waive any preceding breach by Tenant of any term or condition of this Lease, other that the failure of Tenant to pay the particular rental so accepted, regardless of Landlord’s knowledge of the preceding breach at the time of the acceptance of such rent. Landlord’s acceptance of any rent in arrears, or after notice of institution of any suit for possession or for cancellation of this Lease, will not be considered as a waiver of such notice or of the suit, or of any of the other rights of Landlord. The waiver by Landlord or Tenant of any breach of this Lease shall not be deemed a waiver of any subsequent breach of the same or any other term or condition of this Lease. No term or condition of this Lease shall be deemed to have been waived by Landlord or Tenant unless such waiver is in writing and signed by Landlord or Tenant.
Section 18.12: If an attorney is employed to enforce or protect any claim of Landlord arising from this Lease, Tenant shall pay, as the fee of that attorney, an additional sum amounting to 25% of the amount of the first $2,500.00 of the amount of the claim and 15% of the amount of the claim in excess of $2,500.00, or, if the claim is not for money, Tenant will pay Landlord the actual attorney’s fees expended, together with all costs, charges and expenses; the minimum fee in any event to be $350.00.
ARTICLE XIX: BROKERAGE
Section 19.01: Brokerage Fee: Fees payable to brokers instrumental in consummating this Lease in behalf of Landlord will be paid by Landlord. Tenant represents that no broker in its behalf was instrumental thereof.
ARTICLE XX: PERSONAL GUARANTY
Section 20.01: The Personal Guarantor, absolutely, unconditionally and irrevocably guarantees, as primary obliger and not merely as surety, the punctual payment, when due, whether at stated maturity, by acceleration or otherwise, of all present and future obligations, liabilities, covenants and agreements required to be observed, performed, or paid by the Tenant whether for principal, interest (including interest accrued after the commencement of any insolvency, bankruptcy or reorganization of the Tenant), costs, expenses and fees and agrees to pay any and all reasonable costs, fees and expenses incurred by the Landlord in any way related to the enforcement or protection of the Lender’s rights hereunder.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute this Lease at San Juan, Puerto Rico, on the date stated at the top of page one (1) hereof.
| JLR HOLDINGS, LLC | BF PRIME, LLC | |
| (Landlord) | (Tenant) | |
| JLR HOLDINGS, LLC | BF PRIME, LLC | |
| (Landlord) | (Tenant) | |
| PERSONAL GUARANTOR |
Aff. Num. _________________
Acknowledged and subscribed before of executive and resident of identified on behalf of BF PRIME, LLC; and RUBEN FRANCISCO IRIZARRY ALCARAZ, of legal age, married, executive, and resident of Trujillo Alto, Puerto Rico, personally known to me, on behalf of JLR Holdings, LLC.
In San Juan, Puerto Rico on January , 2025
Aff. Num.____________
Acknowledged and subscribed before me by Joseph La Rosa and Deana La Rosa, both of legal age, married to each other, executives, and residents of Celebration, Florida, USA identified
In two thousand twenty five (2025). My Commission Expires on (Please attach County Clerk Certificate Notarial Authentication or Apostille, as Applicable)
Aff. Num.
Acknowledge and subscribed before me by RUBEN FRANCISCO IRIZARRY ALCARAZ of legal age, married, executive, and resident of Trujillo Alto, Puerto Rico, personally known to me, on behalf of JLR Holdings, LLC.
In San Juan, Puerto Rico, 2025.
EXHIBIT A
FLOOR PLAN
EXHIBIT D
“EARLY TERMINATION CLAUSE”
JLR HOLDINGS, LLC will be in disposition of rescinding the Lease Agreement provided that BF Prime, LLC meet the following requirements:
| 1. | Submit financial statements of the corporation showing the company’s insolvency. |
| 2. | Rent payment shall be on time with no outstanding balances. |
| 3. | Tenant is not in violation of any clause(s) of the Lease Agreement. |
| 4. | Tenant shall be in Business for, at least, twelve (12) months of uninterrupted operations. |
| 5. | Provide a sixty (60) days previous written notice. |
| 6. | Penalty for early termination will be two (2) months of the prevailing monthly rent. |
In WITHNESS WHEREOF, the parties hereunto set their hands and seals on the date set forth below.
Exhibit 19.2
LA ROSA HOLDINGS CORP.
SECOND AMENDED AND RESTATED INSIDER TRADING POLICY
Dated: October 14, 2025
Purpose
This Second Amended and Restated Insider Trading Policy dated October 14, 2025, (the “Policy”) provides guidelines with respect to transactions in the securities of La Rosa Holdings Corp., a Nevada corporation (the “Company”) and the handling of confidential information about the Company and the companies with which the Company does business.
The Policy was approved and adopted by the Board of Directors of the Company by written consent on October 14, 2025. As a result, the Policy was authorized and adopted in accordance with the Nevada Revised Statutes.
The Company’s Board of Directors has adopted this Policy to promote compliance with federal, state and foreign securities laws that prohibit certain persons who are aware of material nonpublic information about a company from: (i) trading in securities of that company; or (ii) providing material nonpublic information to other persons who may trade on the basis of that information.
Persons Subject to the Policy
This Policy applies to all officers of the Company and its subsidiaries, all members of the Company’s Board of Directors and all employees of the Company and its subsidiaries.
The Company may also determine that other persons should be subject to this Policy, such as contractors or consultants who have access to material nonpublic information.
This Policy also applies to family members, other members of a person’s household and entities controlled by a person covered by this Policy, as described below.
Transactions Subject to the Policy
This Policy applies to transactions in the Company’s securities (collectively referred to in this Policy as “Company Securities”), including the Company’s common stock, options to purchase common stock, or any other type of securities that the Company may issue, including (but not limited to) preferred stock, convertible debentures and warrants, as well as derivative securities that are not issued by the Company, such as exchange-traded put or call options or swaps relating to the Company’s Securities.
Individual Responsibility
Persons subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about the Company and to not engage in transactions in Company Securities while in possession of material nonpublic information.
Persons subject to this Policy must not engage in illegal trading and must avoid the appearance of improper trading.
Each individual is responsible for making sure that he or she complies with this Policy, and that any family member, household member or entity whose transactions are subject to this Policy, as discussed below, also comply with this Policy.
In all cases, the responsibility for determining whether an individual is in possession of material nonpublic information rests with that individual, and any action on the part of the Company, the Compliance Officer or any other employee or director pursuant to this Policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws.
You could be subject to severe legal penalties and disciplinary action by the Company for any conduct prohibited by this Policy or applicable securities laws, as described below in more detail under the heading “Consequences of Violations.”
Administration of the Policy
Mr. Korey Alberts shall serve as the Compliance Officer for the purposes of this Policy, and in his absence, Mr. Joseph La Rosa or another employee designated by the Compliance Officer shall be responsible for administration of this Policy. The Compliance Officer is authorized to consult with the Company’s securities counsel without notice and at such times as he may deem necessary or appropriate at the expense of the Company. All determinations and interpretations by the Compliance Officer shall be final and not subject to further review.
Statement of Policy
It is the policy of the Company that no director, officer or other employee of the Company (or any other person designated by this Policy or by the Compliance Officer as subject to this Policy) who is aware of material nonpublic information relating to the Company may, directly, or indirectly through family members or other persons or entities:
1. Engage in transactions in Company Securities, except as otherwise specified in this Policy under the headings “Transactions Under Company Plans,” “Transactions Not Involving a Purchase or Sale” and “Rule 10b5-1 Plans;”
2. Recommend the purchase or sale of any Company Securities;
3. Disclose material nonpublic information to persons within the Company whose jobs do not require them to have that information, or outside of the Company to other persons, including, but not limited to, family, friends, business associates, investors and expert consulting firms, unless any such disclosure is made in accordance with the Company’s policies regarding the protection or authorized external disclosure of information regarding the Company; or,
4. Assist anyone engaged in the above activities.
In addition, it is the policy of the Company that no director, officer or other employee of the Company (or any other person designated as subject to this Policy) who, in the course of working for the Company, learns of material nonpublic information about a company with which the Company does business, including a customer or supplier of the Company, may trade in that company’s securities until the information becomes public or is no longer material.
There are no exceptions to this Policy, except as specifically noted herein. Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure), or small transactions, are not excepted from this Policy. The securities laws do not recognize any mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct.
Definition of Material Nonpublic Information
Material Information. Information is considered “material” if a reasonable investor would consider that information important in making a decision to buy, hold or sell securities. Any information that could be expected to affect a company’s stock price, whether it is positive or negative, should be considered material. There is no bright-line standard for assessing materiality; rather, materiality is based on an assessment of all of the facts and circumstances and is often evaluated by enforcement authorities with the benefit of hindsight. While it is not possible to define all categories of material information, some examples of information that ordinarily would be regarded as material are:
| ● | Projections of future earnings or losses, or other earnings guidance; |
| ● | Changes to previously announced earnings guidance, or decisions to suspend earnings guidance; |
| ● | A pending or proposed merger, acquisition or tender offer; |
| ● | A pending or proposed acquisition or disposition of a significant asset; |
| ● | A pending or proposed joint venture; |
| ● | A Company restructuring; |
| ● | Significant related party transactions; |
| ● | A change in dividend policy, the declaration of a stock split or an offering of additional securities; |
| ● | Bank borrowings or other financing transactions out of the ordinary course of business; |
| ● | The establishment of a repurchase program for Company Securities; |
| ● | A change in the Company’s pricing or cost structure; |
| ● | Major marketing changes; |
| ● | A change in management; |
| ● | A change in auditors or notification that the auditor’s report may no longer be relied upon; |
| ● | Development of a significant new product, process or service; |
| ● | Pending or threatened significant litigation, or the resolution of such litigation; |
| ● | Impending bankruptcy or the existence of severe liquidity problems; |
| ● | The gain or loss of a significant customer or supplier; |
| ● | The results of clinical trials or testing of the Company’s products or services; |
| ● | A significant cybersecurity incident, such as a data breach, or any other significant disruption in the Company’s operations or loss, potential loss, breach or unauthorized access of its property or assets, whether at its facilities or through its information technology infrastructure; or |
| ● | The imposition of an event-specific restriction on trading in the Company’s Securities or the securities of another company or the extension or termination of such restriction. |
When Information is Considered Public. Information that has not been disclosed to the public is generally considered to be nonpublic information. In order to establish that the information has been disclosed to the public, it may be necessary to demonstrate that the information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed through the Dow Jones “broad tape,” newswire services, Nasdaq Market Watch, a broadcast on widely-available radio or television programs, publication in a widely-available newspaper, magazine or news website, or public disclosure documents filed with the SEC that are available on the SEC’s website, or subject to the Compliance Officer’s determination, disclosure on the Company’s website or through a social media.
By contrast, information would likely not be considered widely disseminated if it is available only to the Company’s employees, or if it is only available to a select group of analysts, brokers and institutional investors.
Once information is widely disseminated, it is still necessary to provide the investing public with sufficient time to absorb the information. As a general rule, information should not be considered fully absorbed by the marketplace until after the second business day after the day on which the information is released. If, for example, the Company were to make an announcement on a Monday, you should not trade in Company Securities until Thursday. Depending on the particular circumstances, the Company may determine that a longer or shorter period should apply to the release of specific material nonpublic information. For purposes of this Policy, a “business day” is any day that the Nasdaq Capital Market is open for regular way day trading.
Transactions by Family Members and Others
This Policy applies to your family members who reside with you (including a spouse, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else who lives in your household, and any family members who do not live in your household but whose transactions in Company Securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in Company Securities (collectively referred to as “Family Members”).
You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in Company Securities, and you should treat all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were for your own account.
This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made by a third party not controlled by, influenced by or related to you or your Family Members.
Transactions by Entities that You Influence or Control
This Policy applies to any entities that you influence or control, including any corporations, partnerships or trusts (collectively referred to as “Controlled Entities”), and transactions by these Controlled Entities should be treated for the purposes of this Policy and applicable securities laws as if they were for your own account.
Transactions Under Company Plans
This Policy does not apply in the case of the following transactions, if currently applicable, except as specifically noted:
Stock Option Exercises. This Policy does not apply to the exercise of an employee stock option acquired pursuant to the Company’s plans, or to the exercise of a tax withholding right pursuant to which a person has elected to have the Company withhold shares subject to an option to satisfy tax withholding requirements. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.
Restricted Stock Awards. This Policy does not apply to the vesting of restricted stock, or the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock. The Policy does apply, however, to any market sale of restricted stock.
401(k) Plan. This Policy does not apply to purchases of Company Securities in the Company’s 401(k) plan resulting from your periodic contribution of money to the plan pursuant to your payroll deduction election.
This Policy does apply, however, to certain elections you may make under the 401(k) plan, including: (a) an election to increase or decrease the percentage of your periodic contributions that will be allocated to the Company stock fund; (b) an election to make an intra-plan transfer of an existing account balance into or out of the Company stock fund; (c) an election to borrow money against your 401(k) plan account if the loan will result in a liquidation of some or all of your Company stock fund balance; and (d) an election to pre-pay a plan loan if the pre-payment will result in allocation of loan proceeds to the Company stock fund. It should be noted that sales of Company Securities from a 401(k) account are also subject to Rule 144, and therefore affiliates should ensure that a Form 144 is filed when required.
Employee Stock Purchase Plan. This Policy does not apply to purchases of Company Securities in the employee stock purchase plan resulting from your periodic contribution of money to the plan pursuant to the election you made at the time of your enrollment in the plan. This Policy also does not apply to purchases of Company Securities resulting from lump sum contributions to the plan, provided that you elected to participate by lump sum payment at the beginning of the applicable enrollment period.
This Policy does apply, however, to your election to participate in the plan for any enrollment period, and to your sales of Company Securities purchased pursuant to the plan.
Dividend Reinvestment Plan. This Policy does not apply to purchases of Company Securities under the Company’s dividend reinvestment plan resulting from your reinvestment of dividends paid on Company Securities.
This Policy does apply, however, to voluntary purchases of Company Securities resulting from additional contributions you choose to make to the dividend reinvestment plan, and to your election to participate in the plan or increase your level of participation in the plan. This Policy also applies to your sale of any Company Securities purchased pursuant to the plan.
Other Similar Transactions. Any other purchase of Company Securities from the Company or sales of Company Securities to the Company are not subject to this Policy.
Transactions Not Involving a Purchase or Sale
Bona fide gifts are not transactions subject to this Policy, unless the person making the gift has reason to believe that the recipient intends to sell the Company Securities while the officer, employee or director is aware of material nonpublic information, or the person making the gift is subject to the trading restrictions specified below under the heading “Additional Procedures” and the sales by the recipient of the Company Securities occur during a blackout period.
Further, transactions in mutual funds that are invested in Company Securities are not transactions subject to this Policy.
Special and Prohibited Transactions
Certain transactions are of concern not only because of insider trading considerations, but also because of the appearance created by the transaction and the potential repercussions that the transaction may have with investors, regulators and others.
Accordingly, the Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. It therefore is the Company’s policy that any persons covered by this Policy may not engage in any of the following transactions, or should otherwise consider the Company’s preferences as described below:
Short-Term Trading. Short-term trading of Company Securities may be distracting to the person and may unduly focus the person on the Company’s short-term stock market performance instead of the Company’s long-term business objectives. For these reasons, any director, officer or other employee of the Company who purchases Company Securities in the open market may not sell any Company Securities of the same class during the six months following the purchase (or vice versa). Directors and officers should note the short-term trading restrictions of Section 16(b) of the Securities Exchange Act of 1934 (“Exchange Act”).
Short Sales. Short sales of Company Securities (i.e., the sale of a security that the seller does not own) may evidence an expectation on the part of the seller that the securities will decline in value, and therefore have the potential to signal to the market that the seller lacks confidence in the Company’s prospects. In addition, short sales may reduce a seller’s incentive to seek to improve the Company’s performance. For these reasons, short sales of Company Securities are prohibited. In addition, Section 16(c) of the Exchange Act prohibits officers and directors from engaging in short sales. (Short sales arising from certain types of hedging transactions are governed by the paragraph below captioned “Hedging Transactions.”)
Publicly-Traded Options. Given the relatively short term of publicly-traded options, transactions in options may create the appearance that a director, officer or employee is trading based on material nonpublic information and focus a director’s, officer’s or other employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in put options, call options or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the next paragraph below.)
Hedging Transactions. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such transactions may permit a director, officer or employee to continue to own Company Securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as the Company’s other shareholders. Therefore, directors, officers and employees are prohibited from engaging in any such transactions.
Margin Accounts and Pledged Securities. Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company Securities, directors, officers and other employees are prohibited from holding Company Securities in a margin account and are strongly discouraged from pledging Company Securities as collateral for a loan. Any person wishing to enter into a legitimate loan pledge arrangement must first submit the proposed transaction in writing for approval by the Compliance Officer at least two weeks prior to the proposed execution of documents evidencing the proposed transaction and must set forth a justification for the proposed transaction and clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities. The person making the request shall have no other contact with the Compliance Officer on that matter and the Compliance Officer’s decision shall be final and binding. (Pledges of Company Securities arising from certain types of hedging transactions are governed by the paragraph above captioned “Hedging Transactions.”)
Standing and Limit Orders. Standing and limit orders (except standing and limit orders under approved Rule 10b5-1 Plans, as described below) create heightened risks for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a director, officer or other employee is in possession of material nonpublic information. The Company therefore discourages placing standing or limit orders on Company Securities. If a person subject to this Policy determines that they must use a standing order or limit order, the order should be limited to short duration and should otherwise comply with the restrictions and procedures outlined below under the heading “Additional Procedures.”
Additional Procedures
The Company has established additional procedures in order to assist the Company in the administration of this Policy, to facilitate compliance with laws prohibiting insider trading while in possession of material nonpublic information, and to avoid the appearance of any impropriety. These additional procedures are applicable only to those individuals described below.
Pre-Clearance Procedures. The persons designated by the Compliance Officer as being subject to these procedures, as well as the Family Members and Controlled Entities of such persons, may not engage in any transaction in Company Securities without first obtaining pre-clearance of the transaction from the Compliance Officer.
A written request for pre-clearance should be submitted to the Compliance Officer at least two business days in advance of the proposed transaction. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance, and may determine not to permit the transaction. If a person seeks preclearance and permission to engage in the transaction is denied, then he or she should refrain from initiating any transaction in Company Securities, and should not inform any other person of the restriction.
When a request for pre-clearance is made, the requestor should carefully consider whether he or she may be aware of any material nonpublic information about the Company, and should describe fully those circumstances to the Compliance Officer. The requestor should also indicate whether he or she has effected any non-exempt “opposite-way” transactions within the past six months, and should be prepared to report the proposed transaction on an appropriate Form 4 or Form 5. The requestor should also be prepared to comply with SEC Rule 144 and file Form 144, if necessary, at the time of any sale.
All pre-cleared trades must be effected within five business days of receipt of pre-clearance unless an exception is granted. Transactions not effected within the time limit are subject to pre-clearance again.
Within three business days after the execution of the transaction, the requestor shall notify the Compliance Officer of the date and size of the transaction.
Quarterly Trading Restrictions. All officers of the Company, members of the Company’s Board of Directors and any other persons designated by the Compliance Officer as subject to this restriction, as well as their Family Members or Controlled Entities, may not conduct any transactions involving the Company’s Securities (other than as specified by this Policy), during a “Blackout Period”. For the purposes of this Policy a “Blackout Period” is defined as the period beginning at the close of the market on the 15th calendar day of the last month of each fiscal quarter and ending at the close of business on the second trading day following the date the Company's financial results are publicly disclosed and a quarterly report on Form 10-Q or annual report on Form 10-K, as applicable, is filed. In other words, these persons may only conduct transactions in Company Securities during the “Window Period” beginning on the third business day following the public release of the Company’s quarterly earnings for a quarter and ending on the 14th calendar day of the last month of the next fiscal quarter.
Under certain very limited circumstances, a person subject to this restriction may be permitted to trade during a Blackout Period, but only if the Compliance Officer, with the advice of securities counsel if requested by the Compliance Officer, concludes that the person does not, in fact, possess material nonpublic information and may otherwise trade. Persons wishing to trade during a Blackout Period must make such request in writing to the Compliance Officer for approval at least three business days in advance of any proposed transaction involving Company Securities. All such trades are subject to the pre-clearance procedures set forth above under “Pre-Clearance Procedures.”
Event-Specific Trading Restriction Periods. From time to time, an event may occur that is material to the Company and is known by only a few directors, officers and/or employees. The involved directors or officers shall promptly notify the Compliance Officer of such event. So long as the event remains material and nonpublic, the persons designated by the Compliance Officer may not trade Company Securities.
In addition, the Company’s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, designated persons should refrain from trading in Company Securities even sooner than the typical Blackout Period described above.
In either event, the Compliance Officer may notify these persons that they should not trade in the Company’s Securities, without disclosing the reason for the restriction. The existence of an event-specific trading restriction period or extension of a Blackout Period will not be announced to the Company as a whole, and should not be communicated to any other person. If you know of the event, then even if the Compliance Officer has not designated you as a person who should not trade due to an event-specific restriction, you should not trade while you are aware of material nonpublic information. Exceptions will not be granted during an event-specific trading restriction period.
Exceptions. The quarterly trading restrictions and event-specific trading restrictions do not apply to those transactions to which this Policy does not apply, as described above under the headings “Transactions Under Company Plans” and “Transactions Not Involving a Purchase or Sale.” Further, the requirement for pre-clearance, the quarterly trading restrictions and event-specific trading restrictions do not apply to transactions conducted pursuant to approved Rule 10b5-1 plans, described under the heading “Rule 10b5-1 Plans.”
Rule 10b5-1 Plans
Rule 10b5-1 under the Exchange Act provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on this defense, a person subject to this Policy must enter into a Rule 10b5-1 plan for transactions in Company Securities that meets certain conditions specified in the Rule (a “Rule 10b5-1 Plan”). If the plan meets the requirements of Rule 10b5-1, Company Securities may be purchased or sold without regard to certain insider trading restrictions.
To comply with the Policy, a Rule 10b5-1 Plan must be approved by the Compliance Officer and meet the requirements of Rule 10b5-1 and the Company’s “Guidelines for Rule 10b5-1 Plans,” which may be obtained from the Compliance Officer. In general, a Rule 10b5-1 Plan must be entered into at a time when the person entering into the plan is not aware of material nonpublic information. Once the plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The plan must either specify the amount, pricing and timing of transactions in advance or delegate discretion on these matters to an independent third party.
Any Rule 10b5-1 Plan must be submitted in writing for approval by the Compliance Officer no less than five business days prior to the entry into the Rule 10b5-1 Plan. No further pre-approval of transactions conducted pursuant to the Rule 10b5-1 Plan will be required.
Post-Termination Transactions
This Policy continues to apply to transactions in Company Securities even after termination of service to the Company. If an individual is in possession of material nonpublic information when his or her service terminates, that individual may not trade in Company Securities until that information has become public or is no longer material.
Consequences of Violations
The purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to others who then trade in the Company’s Securities, is prohibited by the federal and state laws. Insider trading violations are pursued vigorously by the Securities and Exchange Commission (“SEC”), U.S. Attorneys and state enforcement authorities as well as the laws of foreign jurisdictions.
Punishment for insider trading violations is severe and could include significant fines and imprisonment. While the regulatory authorities concentrate their efforts on the individuals who trade, or who tip inside information to others who trade, the federal securities laws also impose potential liability on companies and other “controlling persons” if they fail to take reasonable steps to prevent insider trading by company personnel.
In addition, an individual’s failure to comply with this Policy may subject the individual to Company-imposed sanctions, including dismissal for cause, whether or not the employee’s failure to comply results in a violation of law. Needless to say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish a person’s reputation and irreparably damage a career.
Company Assistance
Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the Compliance Officer, who can be reached by telephone at 954-849-4909 or via e-mail at korey@larosarealtycorp.com.
Certification
All persons subject to this Policy must certify their understanding of, and intent to comply with, this Policy.
CERTIFICATION
I certify that:
1. I have read and understand the Second Amended and Restated Insider Trading Policy of La Rosa Holdings Corp. (the “Policy”).
2. Since the date the Policy became effective, or such shorter period of time that I have been an employee/officer/director/individual contractor of the Company and its subsidiaries, I have complied with the Policy.
3. I will continue to comply with the Policy for as long as I am subject to the Policy.
Print Name: _______________________________
Signature: _________________________________
Date: _____________________________________
Exhibit 21.1
List of Subsidiaries of La Rosa Holdings Corp.
| 1. | La Rosa Realty, LLC |
| 2. | La Rosa Coaching, LLC |
| 3. | La Rosa CRE, LLC |
| 4. | La Rosa Franchising, LLC |
| 5. | La Rosa Property Management, LLC |
| 6. | La Rosa Realty Premier, LLC |
| 7. | La Rosa Realty CW Properties, LLC |
| 8. | La Rosa Realty North Florida, LLC |
| 9. | La Rosa Realty Orlando, LLC |
| 10. | Nona Legacy Powered By La Rosa Realty, Inc. (formerly, La Rosa Realty Lake Nona Inc.) |
| 11. | La Rosa Realty Winter Garden, LLC |
| 12. | La Rosa Realty Texas, LLC |
| 13. | La Rosa Realty Georgia, LLC |
| 14. | La Rosa Realty California |
| 15. | La Rosa Realty Lakeland LLC |
| 16. | BF Prime LLC |
| 17. | FPG Title Group, LLC (formerly, Nona Title Agency LLC) |
| 18. | La Rosa Realty Beaches LLC |
| 19. | LR Luxury, LLC |
| 20. | LR Agent Advance, LLC |
| 21. | LR Realty Spain, S.L. |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements on Form S-8 (No.’s 333-275118, 333-289503, and 333-292636), Form S-3 (No. 333-283423) and Form S-1 (No.’s 333-295510, 333-289503, and 333-264372) of our report dated April 15, 2025, except for Note 2 and Note 3, as to which date is June 4, 2026, with respect to the consolidated financial statements of La Rosa Holdings Corp. included in this Annual Report on Form 10-K for the year ended December 31, 2025.
/s/ Marcum LLP
New York, NY
June 4, 2026
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements on Form S-8 (No.’s 333-275118, 333-289503, and 333-292636), Form S-3 (No. 333-283423) and Form S-1 (No.’s 333-295510, 333-289503, and 333-264372) of our report dated June 4, 2026, with respect to the consolidated financial statements of La Rosa Holdings Corp. and Subsidiaries included in this Annual Report on Form 10-K for the year ended December 31, 2025.
/s/ CBIZ CPAs P.C.
Saddle Brook, New Jersey
June 4, 2026
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Joseph La Rosa, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2025 of La Rosa Holdings Corp. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: June 4, 2026 | By: | /s/ Joseph La Rosa |
| Name: | Joseph La Rosa | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Joseph La Rosa, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of for the year ended December 31, 2025 of La Rosa Holdings Corp. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: June 4, 2026 | By: | /s/ Joseph La Rosa |
| Name: | Joseph La Rosa | |
| Title: | Interim Chief Financial Officer | |
| (Principal Financial Officer) | ||
| (Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Joseph La Rosa, the Chief Executive Officer of La Rosa Holdings Corp. (the “Company”), hereby certify, that, to my knowledge:
| 1. | The Annual Report on Form 10-K for the period ended December 31, 2025 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: June 4, 2026 | By: | /s/ Joseph La Rosa |
| Name: | Joseph La Rosa | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Joseph La Rosa, the Interim Chief Financial Officer of La Rosa Holdings Corp. (the “Company”), hereby certify, that, to my knowledge:
| 1. | The Annual Report on Form 10-K for the period ended December 31, 2025 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: June 4, 2026 | By: | /s/ Joseph La Rosa |
| Name: | Joseph La Rosa | |
| Title: | Interim Chief Financial Officer | |
| (Principal Financial Officer) | ||
| (Principal Accounting Officer) |