La Rosa Holdings SRTM
La Rosa Holdings: securities offering (amended)
- Form
- S-1/A
- Filed
- Importance
- Routine
- Accession
- 0001575872-22-000712
- Document
- S-1/A
- Exhibit 10.63
- Material contract
- Exhibit 10.64
- Material contract
- Exhibit 10.65
- Material contract
- Exhibit 10.66
- Material contract
- Exhibit 10.67
- Material contract
- Exhibit 10.68
- Material contract
- Exhibit 10.69
- Material contract
- Exhibit 10.70
- Material contract
Not explained yet; the original is on EDGAR.
Securities offering (amended)
What changed since the last draft
21 changes since the S-1/A filed Jun 14, 2022
Compared with the S-1/A 0001575872-22-000540, filed Jun 14, 2022.
Underwriters changed (3 named)
The cover adds The date of this p rospectus.
From the filings
Before
Sole Book-Running Manager, Maxim Group LLCNow
Sole Book-Running Manager, Maxim Group LLC, The date of this p rospectusNew section: Selling stockholders
prospectus covers the possible resale by the Selling Stockholders identified in the table below of up to 1,056,525 shares of our Common Stock.
From the filings
Now
prospectus covers the possible resale by the Selling Stockholders identified in the table below of up to 1,056,525 shares of our Common Stock. The Selling Stockholder Shares include: (i) 1,004,525 shares of Common Stock issued to 126 Selling Stockholders; and (ii) 42,000 shares of Common Stock issuable upon exercise of the Representative's Warrant, at an assumed exercise price of $11.00 per share. Certain Selling Stockholders acquired the Selling Stockholder Shares pursuant to a private placement of securities.of a substantial number of shares of our Common Stock in the public markets, including sales by the Selling…
We cannot predict the effect that future sales of our Common Stock would have on the market price of our Common Stock.
From the filings
Now
of a substantial number of shares of our Common Stock in the public markets, including sales by the Selling Stockholders, could depress the market price of our Common Stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our Common Stock would have on the market price of our Common Stock. Based upon the number of shares of Common Stock outstanding as of July 29, 2022, up to 4,300,065 shares of Common Stock (or 4,405,065 shares if the underwriters exercise their Over-Allotment Option) will be eligible for sale in the public market. None of these additional shares are held by directors, executive officers or other affiliates. In addition, we have agreed to issue additional shares to CGB-TRUST-1001-01-13-22 and ELG-TRUST-1004-09-01-13 equally as assignees of consultant Bonilla Opportunity Fund I, Ltd. to obtain a 4.0% ownership interest in our Common Stock immediately after this Offering if such entities do not own such percentage, in the aggregate, at such time. Moreover, shares of Common Stock that are either subject to employment or other agreements, or reserved for future issuance under our existing equity compensation plan will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act. If these additional shares of Common Stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our Common Stock could decline. Group, LLC (with respect to the Representative's Warrant) who hold our Common Stock or securities convertible or exercisable for our Common Stock and that are being registered in the registration statement of which this prospectus is a part, no holders of our Common Stock or any securities convertible into or exercisable for our Common Stock have the right to have their shares registered…the COVID-19 pandemic have caused and will likely continue to cause significant disruption to our real…
Adds "totalling"; drops "received Federal government grants ("Economic".
From the filings
Before
the COVID-19 pandemic have caused and will likely continue to cause significant disruption to our real estate market, and the severity and duration of these impacts on future financial performance and results of operations remain uncertain. The COVID-19 pandemic has spread across the globe and is impacting economic activity worldwide. The pandemic poses significant risks to our business and our employees, franchisees and agents. The COVID-19 pandemic negatively impacted our business and that of our franchisees in 2020. The pandemic poses the risk of an extended disruption to our business, that of our franchisees and other business partners, and the housing market generally, due to the impact of the disease itself, actions intended to limit or slow its spread, and other factors. These include government-imposed lockdowns, restrictions on travel or transportation, social distancing requirements, limitations on the size of gatherings, policies that ban or severely limit in-person showings of properties, closures of work facilities, schools, public buildings and businesses, cancellation of events, curtailing other activities and quarantines. the pandemic resulted in a significant slowing of residential real estate listings and sales as the population in our market areas endured business shutdowns, work from home requirements, shortages of consumer staples and a general retreat from normal day-to-day social interactions. This slow down, however, reversed in mid-2020, resulting in a substantial increase in listings and sales, which has continued through the date of this prospectus due to a large migration of home buyers from other states. received Federal government grants ("Economic Injury Disaster Loan Advances") totaling $12,000, Economic Injury Disaster Loan's totaling $365,100, and received loans totaling $209,200 under the Federal Government's Paycheck Protection Program. We are currently applying for forgiveness on the Paycheck Protection Program loans but cannot…Now
the COVID-19 pandemic have caused and will likely continue to cause significant disruption to our real estate market, and the severity and duration of these impacts on future financial performance and results of operations remain uncertain. The COVID-19 pandemic has spread across the globe and is impacting economic activity worldwide. The pandemic poses significant risks to our business and our employees, franchisees and agents. The COVID-19 pandemic negatively impacted our business and that of our franchisees in 2020. The pandemic poses the risk of an extended disruption to our business, that of our franchisees and other business partners, and the housing market generally, due to the impact of the disease itself, actions intended to limit or slow its spread, and other factors. These include government-imposed lockdowns, restrictions on travel or transportation, social distancing requirements, limitations on the size of gatherings, policies that ban or severely limit in-person showings of properties, closures of work facilities, schools, public buildings and businesses, cancellation of events, curtailing other activities and quarantines. the pandemic resulted in a significant slowing of residential real estate listings and sales as the population in our market areas endured business shutdowns, work from home requirements, shortages of consumer staples and a general retreat from normal day-to-day social interactions. This slow down, however, reversed in mid-2020, resulting in a substantial increase in listings and sales, which has continued through the date of this prospectus due to a large migration of home buyers from other states. Injury Disaster Loan Advances") totalling $12,000, Economic Injury Disaster Loan's totalling $365,100, and received loans totalling $209,200 under the Federal Government's Paycheck Protection Program. We are currently applying for forgiveness on the Paycheck Protection Program loans but cannot be assured that such loans will be…on our Founder, Joseph La Rosa, and the loss of any our senior management or other key employees or the…
Adds "assuming that the Selling Stockholders sell all of their shares, no shares are issued…"; drops "of this".
From the filings
Before
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. is largely dependent on the efforts and abilities of our Founder, Chief Executive Officer, President and Chairman, Joseph La Rosa, our senior management and other key employees. The loss of the services of Mr. La Rosa and other senior management would have a significant detrimental effect on the Company as its brand is tied to his name, image and personality. We do not maintain key employee life insurance policies on Mr. La Rosa 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 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 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. of ownership of our voting stock by Mr. La Rosa will prevent new investors from influencing significant corporate decisions. Stock outstanding as of March 31, 2022 and including the shares to be sold in this Offering, upon the closing of this Offering, Mr. La Rosa will, in the aggregate, beneficially own approximately 87%…Now
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. is largely dependent on the efforts and abilities of our Founder, Chief Executive Officer, President and Chairman, Joseph La Rosa, our senior management and other key employees. The loss of the services of Mr. La Rosa and other senior management would have a significant detrimental effect on the Company as its brand is tied to his name, image and personality. We do not maintain key employee life insurance policies on Mr. La Rosa 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 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 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. of ownership of our voting stock by Mr. La Rosa will prevent new investors from influencing significant corporate decisions. Stock outstanding as of March 31, 2022 and including the shares to be sold in this Offering, upon the closing of this Offering, Mr. La Rosa will, in the aggregate, beneficially own approximately 87%…number of shares of our Common Stock in the public markets, or the perception that such sales could occur…
Drops "number of shares of our Common Stock in the public markets could depress the market…".
From the filings
Before
number of shares of our Common Stock in the public markets, or the perception that such sales could occur, could depress the market price of our Common Stock. number of shares of our Common Stock in the public markets could depress the market price of our Common Stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our Common Stock would have on the market price of our Common Stock.Now
number of shares of our Common Stock in the public markets, or the perception that such sales could occur, could depress the market price of our Common Stock.or together, could delay hostile takeovers and changes in control or changes in our management.
Adds "As a Nevada corporation,"; drops "$12,800,000".
From the filings
Before
or together, could delay hostile takeovers and changes in control or changes in our management. 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. 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. your own independent tax advisor regarding any tax matters arising with respect to the securities offered in connection with this Offering. Offering could result in various tax-related consequences for investors. All prospective purchasers of our Units are advised to consult their own independent tax advisors regarding the U.S. federal, state, local and non-U.S. tax consequences relevant to the purchase, ownership and disposition of the resold securities in their particular situations. COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE, WE INFORM YOU THAT ANY U.S. TAX ADVICE CONTAINED HEREIN (INCLUDING ANY ATTACHMENTS) IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING PENALTIES UNDER THE INTERNAL REVENUE CODE. IN ADDITION, ANY U.S. TAX ADVICE CONTAINED HEREIN (INCLUDING ANY ATTACHMENTS) IS WRITTEN TO SUPPORT THE "PROMOTION OR MARKETING" OF THE MATTER(S) ADDRESSED HEREIN. YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM YOUR OWN INDEPENDENT TAX ADVISOR…Now
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. 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. your own independent tax advisor regarding any tax matters arising with respect to the securities offered in connection with this Offering. Offering could result in various tax-related consequences for investors. All prospective purchasers of our Units are advised to consult their own independent tax advisors regarding the U.S. federal, state, local and non-U.S. tax consequences relevant to the purchase, ownership and disposition of the resold securities in their particular situations. COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE, WE INFORM YOU THAT ANY U.S. TAX ADVICE CONTAINED HEREIN (INCLUDING ANY ATTACHMENTS) IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING PENALTIES UNDER THE INTERNAL REVENUE CODE. IN ADDITION, ANY U.S. TAX ADVICE CONTAINED HEREIN (INCLUDING ANY ATTACHMENTS) IS WRITTEN TO SUPPORT THE "PROMOTION OR MARKETING" OF THE MATTER(S) ADDRESSED HEREIN. YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM YOUR OWN…The number of shares of Common Stock to be outstanding immediately following this Offering excludes:
New paragraph in Summary of the offering.
From the filings
Now
The number of shares of Common Stock to be outstanding immediately following this Offering excludes:The number of shares of Common Stock to be outstanding immediately following this Offering excludes:
New paragraph in Capitalization.
From the filings
Now
The number of shares of Common Stock to be outstanding immediately following this Offering excludes:We calculate net tangible book value per share by dividing the net tangible book value (tangible assets less…
Drops "Units in this Offering, your interest in our Common Stock will be diluted to the extent…".
From the filings
Before
Units in this Offering, your interest in our Common Stock will be diluted to the extent of the difference between the initial public offering price per share of our Common Stock and the pro forma as adjusted net tangible book value per share of our Common Stock after this Offering. We calculate net tangible book value per share by dividing the net tangible book value (tangible assets less total liabilities) by the number of outstanding shares of our Common Stock.Now
We calculate net tangible book value per share by dividing the net tangible book value (tangible assets less total liabilities) by the number of outstanding shares of our Common Stock.We also have outstanding 2,000 shares of Series X Super Voting Preferred Stock held by Mr.
Adds "We also have outstanding"; drops "and ● $516,000 of convertible promissory notes and $49,162 of accrued interest which…".
From the filings
Before
2,000 shares of Series X Super Voting Preferred Stock held by Mr. La Rosa, our principal executive officer; and ● $516,000 of convertible promissory notes and $49,162 of accrued interest which convert into 70,656 shares of our Common Stock at the closing of this initial public Offering (based on the assumed initial public offering price of $10.00 per Unit).Now
We also have outstanding 2,000 shares of Series X Super Voting Preferred Stock held by Mr. La Rosa, our principal executive officer that provides to Mr. La Rosa 10,000 votes per share when voting with the Common Stock.Reflects the repayment of $656,268 of promissory notes issued to Mr.
New paragraph in Unaudited pro forma financial statements.
From the filings
Now
Reflects the repayment of $656,268 of promissory notes issued to Mr. Joseph La Rosa, the Company's Chief Executive Officer.
and 9 more, in the redline below
Show the redline
Section by section. Added words and removed words against the earlier filing.
Cover page 42 changes
Exchange Commission o n June 14, 2022
As filed with the U.S. Securities and Exchange Commi ssion
49 unchanged paragraphs
Completion, Dated June 14, 2022
The information in this prospectus is not complete
in this prospectus is not complete and may be changed. Neither we nor the securities selling stockholders may not be sold sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion,
Dated August 3, 2022
4 unchanged paragraphs
Following the completion
One Warrant to Purchase One Share of Common
This is the initial public offering
public offering by La Rosa Holdings Corp., a Nevada corporation (the "Company"). of We are offering: an assumed 1,500,000 700,000 units (the "Units"
and each a "Unit"), with each Unit consisting of one share of common stock, $0.0001 par value per share (the "Common
Stock"), and one warrant (the "Warrant") to purchase one share of Common Stock at an assumed exercise price of
"Units" and each a "Unit"), with each Unit consisting of one share of common stock, $0.0001 par value per share (the "Common Stock"), and a warrant (the "Warrant") to purchase one share of Common Stock at an assumed exercise price of $11.00 per share, or 110% of the price of each Unit sold in the (collectively, the "Securities"), in a firm commitment underwritten public offering (this "Offering"). The Warrants offered hereby may be exercised from time to time beginning on the date of issuance and will expire five years from the date of issuance. Our Units have no stand-alone rights and will not be certificated or issued as stand-alone securities. The shares of our Common Stock and the Warrants comprising our Units are immediately separable and will be issued separately in this Offering.
We anticipate that the initial public
offering price of our Units will be between $9.00 and $11.00 per share. The number of Units and the number of shares of Common
the initial public offering price of our Units will be between $9.00 and $11.00 per share. The number of Units and the number of shares of Common Stock and Warrants offered in this prospectus and all other applicable information has been determined based on an assumed public offering price of $10.00 per Unit. The actual public offering price for the Units will be determined between the underwriters and the Company at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the actual public offering price for our Common Stock and the Warrants and the assumed number of Units may change accordingly.
have also registered for public sale: (i) 42,000 shares of our Common Stock issuable to the representative of the underwriters ("Representative") upon the exercise of a warrant to be issued to the representative of the underwriters; and (ii)
1,046,525 shares of common stock held by 127 selling stockholders (the representative of the underwriters and the selling stockholders referred to herein as the "Selling Stockholders"). We will not receive any of the proceeds from the sale of Common
Stock by the Selling Stockholders. However, upon any exercise of the warrant held by the Representative (the "Representative's
Warrant"), we will receive cash proceeds per share equal to the exercise price of such warrant. The shares to be sold by the Selling Stockholders (the "Selling Stockholder Shares") will not be purchased by the underwriters or otherwise included in the underwritten offering of our Units in this initial public offering. The Selling Stockholders may sell or otherwise dispose of their shares in a number of different ways and at varying prices, but will not sell any Selling Stockholder
Shares until after the closing of this offering. See "Selling Stockholders-Plan of Distribution." We will pay all expenses (other than discounts, concessions, commissions and similar selling expenses, if any) relating to the registration of the Selling Stockholders' shares of Common Stock with the Securities and Exchange Commission.
No public market currently exists
exists for our Common Stock or our Warrants. We have applied to list the Common Stock on the Nasdaq Capital Market ("Nasdaq"), under the symbol "LRHC" and to list the Warrants under the symbol "LRHCW". We will not consummate the Offering unless until or unless we receive approval from Nasdaq to list our Common Stock.
Following the completion of this Offering, our Founder, Chairman of the board of directors and Chief Executive Officer, Mr. Joseph La Rosa, will control approximately 95.8 % of the voting power of our voting capital stock with respect to director elections and other matters (or approximately 89.5 % of the voting power if the underwriters exercise in full their 45-day option to purchase additional shares of our Common Stock to cover over-allotments, if any, but excluding the sale of the Selling Stockholder Shares). Although we are a "controlled company"
[*]% of the voting power if the underwriters exercise in full their 45-day option to purchase additional shares of our Common Stock to cover over-allotments, if any). Although we are a "controlled company" under the rules of the Nasdaq Capital Market, our board of directors will be composed of a majority of independent directors and we will not take advantage of the "controlled company" exemptions provided under such rules. Please see "Security Ownership of Certain Beneficial Owners and Management."
5 unchanged paragraphs
(2) The amount of offering proceeds
underwritten on a firm commitment basis. We have granted a 45-day option to the underwriters, exercisable one or more times in whole or in part, to purchase up to an additional fifteen percent (15%) of the shares of Common Stock and/or fifteen percent (15%)
The underwriters expect
(1) The underwriting discount is seven percent (7%) of the public offering price. The column does not include additional compensation payable to the underwriter. We have agreed to reimburse the underwriter for certain accountable expenses incurred relating to this Offering and to pay its non-accountable expenses in the amount equal to one percent (1%) of the public offering price we receive. In addition, we will issue to the underwriter a warrant to purchase up to six percent (6%) of the number of shares of Common Stock issued in this Offering. See "Underwriting" for additional information regarding underwriting compensation.
(2) The amount of offering proceeds to us presented in this table does not give effect to our offering expenses of approximately $1,000,000 and any exercise of the: (i) over-allotment option we have granted to the underwriters as described below, (ii) the exercise of the Warrants being issued as a part of the Units, (iii) the exercise of the warrants being issued to the Representative in this Offering, or (v) the exercise of the warrants we have issued in private placements prior to this initial public offering as described in more detail in this prospectus. In addition, we will receive no proceeds from the sale of any Selling Stockholder Shares.
This Offering is being underwritten on a firm commitment basis.
We have granted a 45-day option to the underwriters, exercisable one or more times in whole or in part, to purchase up to an additional fifteen percent (15%) of the shares of Common Stock and/or fifteen percent (15%) of the Warrants offered hereby at the public offering price per share of Common Stock equal to the public offering price per Unit minus $0.01 per share and $0.01 per Warrant, respectively, less, in each case, the underwriting discounts payable by us, solely to cover overallotments, if any. (the "Over-Allotment Option").
The underwriters expect to deliver the Securities against payment to the investors in this Offering on or about [ [*], 2022.
1 unchanged paragraph
The date of this prospectus is June p rospectus
8 unchanged paragraphs
SELLING STOCKHOLDERS
8 unchanged paragraphs
For investors outside
No person is authorized in connection with this prospectus to give any information or to make any representations about us, the Securities offered hereby, or any matter discussed in this prospectus, other than the information and representations contained in this prospectus. If any other information or representation is given or made, such information or representation may not be relied upon as having been authorized by us.
For investors outside the United States: Neither we, the Selling
the United States: Neither we Stockholders nor any of the underwriters have done anything that would permit this Offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the Offering of the Securities and the distribution of this prospectus outside of the United States.
United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the Offering of the Securities and the distribution of this prospectus outside of the United States.
We are responsible for the information contained in this prospectus and in any free-writing prospectus we prepare or authorize. We have not, the Selling Stockholders have not, and the underwriters have not, authorized anyone to provide you with different information, and we take no, the Selling Stockholders take no, and the underwriters take no, responsibility for any other information others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, the Selling Stockholders are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
22 unchanged paragraphs
Prospectus summary 5 changes
4 unchanged paragraphs
in the U.S. residential real estate market, which, according to Zillow Research 1 , totaled totalled $43.4 trillion in 2021 up by a record $6.9 trillion since 2020 and more than double the level from a decade ago.
53 unchanged paragraphs
The convertible promissory notes rank on a parity with the Company's other existing debt and mature on the earlier of the date that the Company's Common Stock becomes listed for trading on a national securities exchange or one year from the date of issue of each such note. Prior to the maturity date, the convertible promissory notes will convert the outstanding principal and accrued interest automatically into shares of the Company's Common Stock on the date of the closing of this Offering at a price per share equal to the product of the public offering price of the Units multiplied by 0.80. All of the convertible promissory notes are prepayable, in whole or in part, at any time prior to maturity without penalty or premium.
In a private placement conducted from July 2021 through February
conducted from July 2021 through February 2022, we entered into Convertible Note Purchase Agreements pursuant to which we issued unsecured convertible promissory notes to certain "accredited investors" under an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of that Act and/or Rule 506(b) of Regulation D promulgated thereunder. In accordance with such purchase agreements, we issued convertible promissory notes in the aggregate principal amount of $516,000 that we used to pay the expenses of our organization and reorganization and for other general corporate purposes. Interest accrues on the principal amount of fourteen of the convertible promissory notes at 2.5% with a default rate of 3.0% per annum, and interest accrues on the principal amount of seven of the convertible promissory notes at 18.0%, with a default interest rate of 20.0% per annum. The convertible promissory notes rank on a parity with the Company's other existing debt and mature on the earlier of the date that the Company's Common Stock becomes listed for trading on a national securities exchange or one year from the date of issue of each such note. Prior to the maturity date, the convertible promissory notes will convert the outstanding principal and accrued interest automatically into shares of the Company's Common Stock on the date of the closing of this Offering at a price per share equal to the product of the public offering price of the Units multiplied by 0.80. The holders of the convertible notes are Selling Stockholders in this Offering. All of the convertible promissory notes are prepayable, in whole or in part, at any time prior to maturity without penalty or premium.
7 unchanged paragraphs
On June 29, 2022, the Company issued to Joseph La Rosa an unsecured subordinated promissory note in the principal amount of $350,000 that we used for our general corporate purposes. Interest accrues on the principal amount at 2.93% per annum with a default interest rate of 3% per annum. The payment of all or any portion of the outstanding principal balance of the note and all interest thereon shall be pari passu in right of payment and in all other respects to the other unsecured subordinated promissory notes issued and all other trade debt and other obligations of the Company ranking similar to the note.
29 unchanged paragraphs
Summary of the offering 54 changes
1 unchanged paragraph
Securities offered by us:
We are offering 1,500,000 700,000 Units (subject to adjustment as noted herein), each consisting of one share of our Common Stock and one Warrant to purchase one share of our Common Stock (together with the shares of Common Stock underlying such Warrants). The actual number of Units we offer will be determined based on the actual public offering price of the Units such that we will offer and sell up to $15,000,000 $7,000,000 of the Units hereby.
Common Stock offered
by the Selling Stockholders:
Up to a maximum of 1,046,525 shares. See "Selling Stockholders"
for a description of how we calculate the number of shares offered by the Selling Stockholders.
1 unchanged paragraph
We will offer the Units in a price range of between $9.00 and $11.00 $ 11.00 per Unit. The actual offering price of the Units will be determined between the underwriters and the Company at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business. Therefore, the assumed public offering price used throughout this prospectus of $10.00 per Unit (the midpoint of the price range for the Units) may not be indicative of the actual public offering price of the Units at the closing of this Offering.
1 unchanged paragraph
Each Unit Warrant is exercisable for one share of Common Stock, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our Common Stock as described herein. The exercise price of the Warrant is $11 $11.00 per share (110% of the public offering price per Unit). A holder may not exercise any portion of a Warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99% of the outstanding Common Stock after exercise, as such percentage ownership is determined in accordance with the terms of the Warrants, except that upon notice from the holder to us, the holder may waive such limitation up to a percentage, not in excess of 9.99%. Each Warrant will be exercisable immediately upon issuance and will expire five years after the initial issuance date. The terms of the Warrant will be governed by a Warrant Agency Agreement, dated as of the effective date of this Offering, between us and Vstock Transfer LLC, as the warrant agent (the "Warrant Agent"). This prospectus also relates to the offering of the shares of Common Stock issuable upon exercise of the Warrants. For more information regarding the Warrants, you should carefully read the section titled "Description of the Securities - Warrants Issued in This Offering" in this prospectus.
1 unchanged paragraph
We have granted the underwriters an option, exercisable for 45 days after the date of this prospectus, to purchase up to an additional 225,000 105,000 shares of Common Stock and/or up to an additional 1,500,000 105,000 Warrants, in any combination thereof, at the public offering price per share of Common Stock equal to the public offering price per Unit minus $0.01 and a price per Warrant of $0.01, respectively, less, in each case, the underwriting discounts payable by us, in any combination solely to cover over-allotments, if any (the "Over-Allotment Option").
Shares of capital stock outstanding immediately before the Offering (1) :
3,600,065 shares of Common Stock; and
1 unchanged paragraph
Shares of capital stock outstanding immediately after the Offering (2) (1) :
4,300,065 shares of Common Stock issued and outstanding based on an assumed offering of 700,000 Units (or 4,405,065 shares of Common Stock issued and outstanding if the underwriters exercise their Over-Allotment Option assuming the sale of 1,500,000 700,000 Units at $10.00 per Unit (the midpoint of the price range of the Units offered hereby)); and shares of Series X Super Voting Preferred Stock having 10,000 votes per share, when voting together with the Common Stock, all of which are owned by Mr. La Rosa.
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Our Founder, Chief Executive Officer, President and Chairman, Joseph La Rosa, currently holds 100% 83.3% of the outstanding Common Stock of the Company and all 2,000 shares of Series X Super Voting Preferred Stock having 10,000 votes per share when voting together with the Common Stock. Mr. La Rosa will maintain control of the Company after this Offering, including the election of our directors and the approval of any change in control transaction. See the sections titled, "Security Ownership of Certain Beneficial Owners and Management" and "Description of the Securities - Preferred Stock" for additional information.
We estimate that we will receive net proceeds of approximately $12,800,000 $5,440,000 from our sale of the Units in this Offering, after deducting underwriting discounts and estimated offering expenses payable by us. We intend to use the net proceeds we receive from this Offering for general corporate purposes, which may include financing our growth by acquiring more agents at a faster pace (10%), repayment of all the Company's obligations under the four unsecured promissory notes issued to Mr. Joseph La Rosa (25%), developing new services (10%), funding capital expenditures (20%), (5%), acquisitions of controlling interest in a number of our franchisees (10%), (35%), the acquisition of other independent real estate brokerages, title insurance agencies, mortgage brokerages and other complementary businesses (30%), (10%), and the purchase and acquisition of proprietary technology (20%). (15%). We will not receive any proceeds from the sale of the Selling Stockholder Shares by the Selling Stockholders, if any, except for the exercise price paid by the Representative upon exercise of the Representative's Warrant. See "Use of Proceeds" for more information.
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The registration statement of which this prospectus is a part also registers for sale warrants (the "Representative's Warrants") to purchase up to six percent (6.0%) of the shares of our Common Stock sold in this Offering to Maxim Group LLC (the "Representative"), as a portion of the underwriting compensation in connection with this Offering. The Representative's Warrants will be exercisable at any time, and from time to time, in whole or in part, during the period commencing 180 days from the first day of the sales of the public equity securities and expiring five years from the effective date of the Offering at an exercise price of $ [*] (110% of the public offering price per Unit). Please see "Underwriting - Representative's Warrants" on page 110 of this prospectus for a description of these Warrants.
The Representative's Warrants will be exercisable at any time, and from time to time, in whole or in part, during the period commencing 180 days from the first day of the sales of the public equity securities and expiring five years from the effective date of the Offering at an exercise price of $11.00 (110% of the public offering price per Unit). Please see "Underwriting - Representative's Warrants" on page 110 of this prospectus for a description of these Warrants.
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(1) The number of shares of Common
Stock to be outstanding immediately before this Offering excludes any shares of Common Stock issuable upon the mandatory conversion of the Convertible Promissory Notes issued by us to a number of investors in a private placement between July 2021 and February 2022 at a conversion price equal to eighty percent (80%) of the initial offering price of a Unit.
(2) The number of shares of Common
The number of shares of Common Stock to be outstanding immediately following this Offering excludes:
225,000 ● 105,000 shares of Common Stock issuable upon the exercise of the Over-Allotment Option;
Over-Allotment Option;
90,000 ● 42,000 shares of Common Stock issuable upon the exercise of the Representative's Warrants;
Representative's Warrants;
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115,500 shares of Common Stock issuable upon the closing of this Offering to Exchange Listing, LLC, a consultant to the Company for services provided in connection with this Offering (based on an assumed sale of 1,500,000 Units) (the "Exchange Listing Shares");
1 unchanged paragraph
conversions of $516,000 of convertible notes and $49,162 of interest into 70,656 shares of Common Stock based on an assumed offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus);
upon the closing of this Offering to Mr. Brad Wolfe, the Company's Chief Financial Officer (based on an assumed sale of 1,500,000 Units) ("CFO Shares");
50,000 shares of Common Stock issuable upon the closing of this Offering to Mr. Josh Epstein, the Company's Chief Strategy Officer (based on an assumed sale of 1,500,000 Units) ("CSO Shares"); and ● 221,362 shares of Common Stock issuable upon the closing of this Offering to Bonilla Opportunity Fund I, Ltd., a consultant to the Company for services provided in connection with this Offering (based on an assumed sale of 1,500,000 Units), which were assigned by Bonilla Opportunity Fund I, Ltd. to CGB-TRUST-1001-01-13-22 and ELG-TRUST-1004-09-01-13 equally (the "Bonilla Shares").
165,000 ● 2,000 shares of Common Stock issuable to our Chief Technology
2,000 shares of Common Stock issued to our Chief Technology Officer that will vest on February 1, 2023 ("Vesting Shares");
● 1,451,099 shares of Common Stock to be issued to the owners of real estate brokerage businesses that we intend to acquire immediately after prior to the closing of this Offering;
92,400 ● 250,000 shares of Common Stock underlying the stock options to be granted upon the closing of this Offering to Mr. Mark Gracy, Joseph La Rosa, the Company's Chief Operating Executive Officer (based on an assumed sale of 1,500,000 Units) ("COO (the "CEO Shares");
92,400 ● 94,048 shares of Common Stock issuable to be granted upon the closing of this Offering to Mr. Mark Gracy, the Company's Chief Operating Officer (based on an assumed sale of 1,500,000 700,000 Units) ("COO Shares"); and ● 23,331 shares of Common Stock to be granted upon the closing of this Offering to Mr. Josh Epstein, the Company's Chief Strategy Officer (based on an assumed sale of 700,000 Units) ("CSO Shares").
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no issuance of the Exchange Listing Shares;
no issuance of the CFO Shares;
no issuance of the CSO Shares;
no issuance of the Bonilla CEO Shares;
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The Unaudited Pro Forma Condensed Combined
Statement of Operations contained herein reflect the La Rosa Holding Corp. weighted average basic and diluted shares outstanding of 3,106,667 on March 31, 2022. The 3,106,667 weighted average shares at March 31, 2022 reflects the 3,000,000 shares held by Joseph La Rosa at December 31, 2021 (and at March 31, 2022) and the weighted average shares held of 120,000 shares issued in connection with consulting services in January, 2022.
The weighted average basic and diluted shares
outstanding of 6,788,017, reflected in the Unaudited Pro Forma Condensed Combined Statement of Operations assuming an offering date of May 25, 2022 included in this offering, include the 3,120,000 total shares outstanding at March 31, 2022, 1,500,000 shares of this offering, 1,451,099 shares issued for the acquisition of controlling interest in a number of franchisees described in this offering, 336,862 of shares to be granted under consulting agreements, 309,400 shares unvested and restricted shares to be granted under employment agreements, and 70,656 shares related to the convertible notes.
The pro forma information included herein reflects
the impact of the shares the Company is contractually obligated to issue upon closing of the Offering. The adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet and Statement of Operations related to shares in the Offering and contractually obligated shares is reflected in the table below.
Pro Forma Adjustments related to shares
Pro Forma Balance Sheet
Pro Forma Statement of Operations
Noncontrolling interest
Shares to purchase franchisees
Shares to be granted under consulting agreements
Shares to be granted under employment agreements
Shares granted to convert debt
The following securities were excluded from
the weighted average diluted shares outstanding in the earnings per share calculation in the Unaudited Pro Forma Condensed Combined Statement of Operations: 1,500,000 shares related to warrants in the Offering, 225,000 shares underlying the over-allotment options, 132,400 shares underlying options to be issued under employment and directors agreements, and 110,000 shares related to warrants issued to service providers associated with the Offering.
Summary financial data 6 changes
Our historical results are not necessarily indicative of the results that should be expected in the future and the results for the year ended December 31, 2021, are not necessarily indicative of the results to be expected for the full year ending December 31, 2022, or any other future period.
the following selected financial data together with our financial statements and the related notes thereto included elsewhere in this prospectus and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" Section of this prospectus. We have derived the statement of operations data for the three months ended March 31, 2022, and the balance sheet data as of March 31, 2022, from our unaudited financial statements included elsewhere in this prospectus. We have derived the statement of operations data for the years ended December 31, 2021, and 2020 and the balance sheet data as of December 31, 2021, and 2020 from our audited financial statements included elsewhere in this prospectus. The share and per share amounts for all periods reflect the completion of the Reverse Stock Split, which was effective on March 21, 2022. Our historical results are not necessarily indicative of the results that should be expected in the future and the results for the three months ended March 31, 2022, are not necessarily indicative of the results to be expected for the full year ending December 31, 2022, or any other future period.
8 unchanged paragraphs
as of March 31, 2022
as of March 31, 2022
1 unchanged paragraph
Total stockholders' equity (deficit) before non-controlling interest (977,768 ) 23,292,747 3,818,517 The pro forma column in the balance sheet data above gives effect to (1) the sale of Securities for cash in this Offering at the assumed public offering price of $10.00 per Unit, after deducting underwriting discounts and commissions and estimated offering expenses payable by us (the seven percent (7%) underwriters' discount, one percent (1%) non-accountable expense, accountable expenses of $125,000 and $1,000,000 of estimated offering costs to be paid in cash of which $515,394 $183,208 was included in deferred offering costs as of March 31, 2022), in the total amount of $2,200,000, $ 1,560,000 , as if the sale of the Units had occurred on January 1, 2022, and (2) the mandatory conversion of the convertible notes and accrued interest in the amount of $481,971, $521,478, net of unamortized discount of $34,029 $34,149 and the elimination of the derivative liability of $163,511 due to the embedded conversion feature of the convertible notes, and (3) the repayment of $656,268 of promissory notes to Mr. Joseph La Rosa, our Chief Executive Officer.
$1.00 increase in the assumed public offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus), would increase our stockholders' equity, as adjusted, after this Offering by approximately $1.4 $1.3 million, assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each $1.00 decrease in the assumed public offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus), would decrease our stockholders' equity, as adjusted, after this Offering by approximately $1.4 $0.0 million, assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase of 100,000 Units in the number of Units offered by us at the assumed initial public offering price per share of $10.00 per Unit would increase the pro forma as adjusted amount of each of cash and cash equivalents, additional paid in capital, total stockholders' equity and total capitalization by approximately $900,000. $0.7 million. Each decrease of 100,000 Units in the number of Units offered by us at the assumed initial public offering price per share of $10.00 per Unit would decrease the pro forma as adjusted amount of each of cash and cash equivalents, additional paid in capital, total stockholders' equity and total capitalization by approximately $900,000. $0.6 million.
Forward-looking statements 2 changes
19 unchanged paragraphs
other factors discussed elsewhere in this prospectus.
sales of our Common Stock by us or our stockholders, including the Selling Stockholders, which may result in increased volatility in our stock price; and other factors discussed elsewhere in this prospectus.
4 unchanged paragraphs
Risk factors 25 changes
8 unchanged paragraphs
received Federal government grants ("Economic Injury Disaster Loan Advances") totaling $12,000, Economic Injury Disaster Loan's totaling $365,100, and received loans totaling $209,200 under the Federal Government's Paycheck Protection Program.
We applied for and received Federal government grants ("Economic
Injury Disaster Loan Advances") totalling $12,000, Economic Injury Disaster Loan's totalling $365,100, and received loans totalling $209,200 under the Federal Government's Paycheck Protection Program. We are currently applying for forgiveness on the Paycheck Protection Program loans but cannot be assured that such loans will be forgiven by the U.S. Small Business Administration. None of those funds were provided to our sales agents or franchisees.
None of those funds were provided to our sales agents or franchisees.
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of 2021, NAR estimated that nine in ten home sellers worked with a real estate agent to sell their home, which was consistent across all age groups [5] and 6.1million 6.1 million existing homes were sold in in 2021, up from 5.6 million in 2020 according to Statista Research (February 22, 2022). Although the NAR survey indicates that the percentage of sales using agents has increased in recent years, 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.
52 unchanged paragraphs
Following the completion of this
of this Offering, Mr. Joseph La Rosa, assuming that the Selling Stockholders sell all of their shares, no shares are issued under the Company's 2022 Equity Incentive Plan, the directors do not exercise their options, the Representative's Warrant is not exercised, the Over-Allotment Option is not exercised, the Consultant Warrant is not exercised, the CSO, CEO, and Vesting shares are not issued, will control approximately [*]% 86.7% of the voting power of our Common Stock (which includes his right to vote shares of the Series X Super Voting Preferred Stock) with respect to director elections and other matters (or approximately [*]% 86.4% of the voting power with respect to director elections if the underwriters exercise in full their option to purchase additional shares of our Common Stock). Subject to any fiduciary duties owed to other stockholders under Nevada law, Mr. La Rosa will be able to control 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 Chairman of the Board of directors and Chief Executive 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.
In addition, due to his significant ownership stake and his service as our Chairman of the Board of directors and Chief Executive 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.
42 unchanged paragraphs
The initial public offering
price will be substantially higher than the net tangible book value of each outstanding share of Common Stock immediately after this Offering. If you purchase common stock as part of the Units in this Offering, you will suffer immediate and substantial dilution.
The initial public offering price will be substantially higher than the net tangible book value of each outstanding share of Common Stock immediately after this Offering. If you purchase common stock as part of the Units in this Offering, you will suffer immediate and substantial dilution. At an assumed initial public offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus) with net proceeds to us of $12.8 $5.4 million, after deducting estimated underwriting discounts and commissions and estimated offering expenses, investors who purchase Units in this Offering will have contributed approximately 100% of the total amount of funding we have received to date, but will only hold less than 1% of the total voting rights (based on the number of shares of Common Stock purchased in the Units). The dilution will be $7.45 $9.00 per share in the net tangible book value of the Common Stock from the assumed initial public offering price. In addition, if shares exercisable or convertible into our Common Stock are exercised and converted, and if options to purchase shares of our Common Stock under our 2022 Equity Incentive Plan are granted and exercised, there could be further dilution. For more information refer to "Dilution".
5 unchanged paragraphs
Sales of a substantial
of a substantial number of shares of our Common Stock in the public markets, including sales by the Selling Stockholders, could depress the market price of our Common Stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our Common Stock would have on the market price of our Common Stock.
We cannot predict the effect that future sales of our Common Stock would have on the market price of our Common Stock. Based upon the number of shares of Common Stock outstanding as of July 29, 2022, up to 4,300,065 shares of Common Stock (or 4,405,065 shares if the underwriters exercise their Over-Allotment Option) will be eligible for sale in the public market. None of these additional shares are held by directors, executive officers or other affiliates. In addition, we have agreed to issue additional shares to CGB-TRUST-1001-01-13-22 and ELG-TRUST-1004-09-01-13 equally as assignees of consultant Bonilla Opportunity Fund I, Ltd. to obtain a 4.0% ownership interest in our Common Stock immediately after this Offering if such entities do not own such percentage, in the aggregate, at such time. Moreover, shares of Common Stock that are either subject to employment or other agreements, or reserved for future issuance under our existing equity compensation plan will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act. If these additional shares of Common Stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our Common Stock could decline.
After this Offering, other than the Selling Stockholders and Maxim
Group, LLC (with respect to the Representative's Warrant) who hold our Common Stock or securities convertible or exercisable for our Common Stock and that are being registered in the registration statement of which this prospectus is a part, no holders of our Common Stock or any securities convertible into or exercisable for our Common Stock have the right to have their shares registered under the Securities Act. Should any such shares be registered under the Securities Act, such registration would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by affiliates, as defined in Rule 144 under the Securities Act. Any sale of securities by such securityholders, the Selling Stockholders or Maxim Group, LLC, could have a material adverse effect on the trading price of our Common Stock.
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for five years from the date of initial issuance and currently have an exercise price of $[*] $11 per share. There can be no assurance that the market price of our shares of Common Stock will equal or exceed the exercise price of the Warrants. In the event that the stock price of our shares of Common Stock does not exceed the exercise price of the Warrants during the period when the Warrants are held and exercisable, the Warrants may not have any value to their holders.
14 unchanged paragraphs
Our articles of incorporation authorize
authorize us to issue up to 50,000,000 shares of blank check preferred stock of which 50,000 2,000 shares are currently authorized for issuance. Any preferred stock that we issue in the future may rank ahead of our other securities in terms of dividend priority or liquidation premiums and may have greater voting rights than our securities. In addition, such preferred stock may contain provisions allowing those shares to be converted into shares of Common Stock, which could dilute the value of our securities to current stockholders and could adversely affect the market price, if any, of our securities. In addition, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our Company. We have issued 2,000 shares of our Series X Super Voting Preferred Stock to our Founder, Mr. Joseph La Rosa, that provides him with 10,000 votes per share when voting with the Common Stock. Although we have no present intention to issue any additional shares of authorized preferred stock, there can be no assurance that we will not do so in the future.
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As a Nevada corporation,
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.
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We intend to use the
ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY MANAGEMENT. IN REVIEWING THIS PROSPECTUS, POTENTIAL INVESTORS SHOULD KEEP IN MIND THAT OTHER POSSIBLE RISKS MAY ADVERSELY IMPACT THE COMPANY'S BUSINESS OPERATIONS AND THE VALUE OF THE COMPANY'S estimate that the net proceeds to us from the sale of the Units offered by us will be approximately $12,800,000 $5.4 million based on an assumed initial public offering price of $10.00 per unit (the midpoint of the price range set forth on the cover page of this prospectus) and after deducting estimated underwriting discounts and commissions and estimated offering expenses. If the underwriters' option to purchase additional shares of Common Stock (but not Warrants) in this Offering is exercised in full, we estimate that our net proceeds will be approximately $14.9 $6.4 million. A $1.00 increase in the assumed initial public offering price We will not receive any of $10.00 per Unit would increase the net proceeds to us from this Offering by $1.4 million, assuming the number sale of Units offered our Common Stock by us, as indicated on the cover page of this prospectus, remains Selling Stockholders or the same and after deducting Representative with respect to the estimated underwriting discounts and commissions and estimated offering expenses payable by us. A $1.00 decrease in Common Stock issuable upon exercise of the assumed initial public offering price Representative's Warrant. However, upon any exercise of $10.00 per Unit would decrease the net Representative's Warrant, we will receive cash proceeds per share equal to us from this Offering by $1.4 million, assuming the number exercise price of Units offered by us, as indicated on the cover page Representative's Warrant which is $11.00 (110% of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated public offering expenses payable by us. price per Unit). If all 42,000 shares of Common Stock exercisable under the Representative's Warrant are exercised, the aggregate gross proceeds from the Representative's Warrant exercise price would be approximately $462,000.
$1.00 increase in the assumed initial public offering price of $10.00 per Unit would increase the net proceeds to us from this Offering by $1.3 million, assuming the number of Units offered by us, as indicated on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. A $1.00 decrease in the assumed initial public offering price of $10.00 per Unit would decrease the net proceeds to us from this Offering by $0.0 million, assuming the number of Units offered by us, as indicated on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
intend to use the net proceeds we receive from this Offering for general corporate purposes, which may include financing our growth by engaging more agents at a faster pace (10%), repayment of all of the Company's obligations under the four unsecured promissory notes issued to Mr. Joseph La Rosa (10%), developing new services (10%), funding capital expenditures (20%), (15%), acquisitions of a controlling interest in a number of our franchisees (10%), the acquisition of other independent real estate brokerages, title insurance agencies, mortgage brokers and other complementary businesses (30%), (25%), and the purchase and acquisition of proprietary technology (20%).
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Capitalization 23 changes
1 unchanged paragraph
on a pro forma basis, to reflect (1) the mandatory conversions of convertible notes and accrued interest in the amount of $481,851, $521,478, net of unamortized discount and deferred financing fees of $34,149 and the elimination of the derivative liability of $163,511 due to the embedded conversion feature of the convertible notes 70,665 69,453 shares of Common Stock based on an assumed offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus);
on a pro forma as adjusted basis to give effect to (1) our assumed sale of 1,500,000 700,000 Units in this Offering at an assumed initial public offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus) after deducting underwriting discounts and commissions and estimated offering expenses payable by us and the application of the net proceeds as described under "Use of Proceeds" and not reflecting the exercise of the underwriters' Over-Allotment Option or the exercise of the Warrants that are part of the Units, and (2) the repayment of $656,268 of promissory notes due to Mr. Joseph La Rosa, our Chief Executive Officer.
2 unchanged paragraphs
Convertible debt and accrued interest net of discounts of $34,149
1 unchanged paragraph
Notes payable, stockholder
1 unchanged paragraph
(2) The number of shares of Common
Preferred stock, $0.0001 par value, 50,000,000 shares authorized, and 2,000 shares of Series X Super Voting Preferred Stock issued and outstanding, actual; 2,000 shares of Series X Super Voting Preferred Stock issued and outstanding pro forma and pro forma as adjusted - - - Common stock, $0.0001 par value per share, 250,000,000 shares authorized, 3,120,000 shares issued and outstanding, actual; 4,620,000 3,189,453 shares issued and outstanding, pro forma, and 4,606,667 4,689,453 shares pro forma as adjusted $ - - - Additional paid-in capital $ 1,145 1,145 30,823 1,864 7,304 Accumulated deficit $ (2,123 ) (1,946 (2,158 ) (7,532 (2,158 ) Total stockholders' equity (deficit) $ (978 ) (801 (294 ) 23,293 5,147 Total capitalization $ (105 ) 35,543 $ $ 5,147 The table above and discussion above assumes no exercise of the Warrants offered and sold in this Offering as part of the Units.
The number of shares of Common Stock to be outstanding immediately following this Offering excludes:
225,000 105,000 shares of Common Stock issuable upon the exercise of the Over-Allotment Option;
90,000 42,000 shares of Common Stock issuable upon the exercise of the Representative's Warrants;
1 unchanged paragraph
115,500 shares of Common Stock issuable upon the closing of this Offering to Exchange Listing, LLC, a consultant to the Company for services provided in connection with this Offering (based on an assumed sale of 1,500,000 Units) (the "Exchange Listing Shares");
2,000 shares of Common Stock issued to our Chief Technology Officer that will vest on February 1, 2023;
1 unchanged paragraph
conversions of $516,000 of convertible notes and $49,162 of interest into 70,656 shares of Common Stock based on an assumed offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus);
165,000 CFO Shares of Common Stock issuable upon the closing of this Offering to Mr. Brad Wolfe, the Company's Chief Financial Officer (based on an assumed sale of 1,500,000 Units);
50,000 CSO of Common Stock issuable upon the closing of this Offering to Mr. Josh Epstein, the Company's Chief Strategy Officer (based on an assumed sale of 1,500,000 Units); and ● 221,362 Bonilla Shares of Common Stock issuable upon the closing of this Offering to CGB-TRUST-1001-01-13-22 and ELG-TRUST-1004-09-01-13 equally as assignees of Bonilla Opportunity Fund I, Ltd., a consultant to the Company for services provided in connection with this Offering (based on an assumed sale of 1,500,000 Units).
2,000 shares of Common Stock issuable to our Chief Technology Officer that will vest on February 1, 2023 ("Vesting Shares");
1,451,099 shares of Common Stock to be issued to the owners of real estate brokerage businesses that we intend to acquire immediately after prior to the closing of this Offering;
92,400 250,000 shares of Common Stock underlying the stock options to be granted upon the closing of this Offering to Mr. Mark Gracy, Joseph La Rosa, the Company's Chief Operating Executive Officer (based on an assumed sale of 1,500,000 Units) ("COO ("CEO Shares");
92,400 COO 94,048 shares issuable of Common Stock to be granted upon the closing of this Offering to Mr. Mark Gracy, the Company's Chief Operating Officer (based on an assumed sale of 1,500,000 700,000 Units) ("COO Shares"); and ● 23,331 shares of Common Stock to be granted upon the closing of this Offering to Mr. Josh Epstein, the Company's Chief Strategy Officer (based on an assumed sale of 700,000 Units) ("CSO Shares").
Each $1.00 increase in the assumed initial
assumed initial public offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus) would increase the pro forma as adjusted amount of each of cash and cash equivalents, additional paid in capital, total stockholders' equity and total capitalization by approximately $1.4 $1.3 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each $1.00 decrease in the assumed initial public offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus) would decrease the pro forma as adjusted amount of each of cash and cash equivalents, additional paid in capital, total stockholders' equity and total capitalization by approximately $1.4 $0.0 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase of 100,000 Units in the number of Units offered by us at the assumed initial public offering price per share of $10.00 per Unit would increase the pro forma as adjusted amount of each of cash and cash equivalents, additional paid in capital, total stockholders' equity and total capitalization by approximately $900,000. $0.7 million. Each decrease of 100,000 Units in the number of Units offered by us at the assumed initial public offering price per share of $10.00 per Unit would decrease the pro forma as adjusted amount of each of cash and cash equivalents, additional paid in capital, total stockholders' equity and total capitalization by approximately $900,000. $0.6 million.
The share and per share amounts
The share and per share amounts for all periods set forth in this prospectus reflect the completion of the Reverse Stock Split, which was effective on March 21, 2022.The number of shares of our Common Stock outstanding in the table above excludes 2,500,000 shares of Common Stock available for future issuance under our 2022. Equity Incentive Plan as of the date of this prospectus.
The number of shares of our Common Stock outstanding in the table above excludes 2,500,000 shares of Common Stock available for future issuance under our 2022 Equity Incentive Plan as of the date of this prospectus.
Dilution 37 changes
If you invest in our Units
Units in this Offering, your interest in our Common Stock will be diluted to the extent of the difference between the initial public offering price per share of our Common Stock and the pro forma as adjusted net tangible book value per share of our Common Stock after this Offering. We calculate net tangible book value per share by dividing the net tangible book value (tangible assets less total liabilities) by the number of outstanding shares of our Common Stock.
We calculate net tangible book value per share by dividing the net tangible book value (tangible assets less total liabilities) by the number of outstanding shares of our Common Stock.
1 unchanged paragraph
book value (deficit) as of March 31, 2022, was ($2,244,559) or ($0.72) per share of Common Stock, based on 3,120,000 shares of our Common Stock outstanding.
After giving effect to
book value (deficit) as of March 31, 2022, was ($2,306,472) or ($0.74) per share of Common Stock, based on 3,120,000 shares of our Common (1) our sale of 1,500,000 700,000 shares of our Common Stock by us in this Unit Offering at an assumed initial public offering price of $9.99 $10.00 per share (the midpoint of the price range set forth on the cover page of this prospectus), less $0.01), less the estimated underwriting discounts and commissions and the estimated offering expenses, and (2) the mandatory conversion of convertible notes and accrued interest in the amount of $481,851, $521,477, net of unamortized discount of $34,149 and the elimination of the derivative liability of $163,511 due to the embedded conversion feature of the convertible notes, our pro forma as adjusted net tangible book value as of March 31, 2022, would be $11,200,803, $3,818,517, or $2.42 $1.00 per share. This represents an immediate increase in the pro forma as adjusted net tangible book value of $3.14 $1.74 per share to existing stockholders and an immediate dilution of $7.58 $9.00 per share to investors purchasing shares in this Offering.
The following table illustrates
illustrates this the per share dilution (1) :
1 unchanged paragraph
● 20,000 shares of Common Stock issuable upon exercise
of the Consultant Warrants;
115,500 Exchange Listing Shares issuable upon the closing of this Offering to maintain a 2.5% ownership interest to Exchange Listing, LLC, a consultant to the Company as a result of the anti-dilution feature in its consulting agreement (based on an assumed offering of 1,500,000 Units);
92,400 COO Shares issuable upon the closing of this Offering to Mr. Mark Gracy, the Company's Chief Operating Officer (based on an assumed sale of 1,500,000 Units);
92,400 shares of Common Stock underlying the stock options to be granted upon the closing of this Offering to Mr. Mark Gracy, the Company's Chief Operating Officer (based on an assumed sale of 1,500,000 Units) ("COO Shares");
165,000 CFO Shares of Common Stock issuable upon the closing of this Offering to Mr. Brad Wolfe, the Company's Chief Financial Officer (based on an assumed sale of 1,500,000 Units);
50,000 CSO shares of Common Stock issuable upon the closing of this Offering to Mr. Josh Epstein, the Company's Chief Strategy Officer (based on an assumed sale of 1,500,000 Units);
221,362 Bonilla Shares stock issuable upon the closing of this Offering to maintain a 4.0% ownership interest to CGB-TRUST-1001-01-13-22 and ELG-TRUST-1004-09-01-13 equally as assignees of Bonilla Opportunity Fund I, Ltd., a consultant to the Company as a result of the anti-dilution feature in its consulting agreement (based on an assumed offering of 1,500,000 Units); and ● 2,000 shares of Common Stock issued to our Chief Technology Officer that will vest on February 1, 2023;
Historical net tangible book value per share as of March 31, 2022 (0.72 (0.74 ) Increase in net tangible book value per share attributable to new investors $ 3.14 1.74 Pro forma as adjusted net tangible book value per share after the Offering $ 2.42 1.00 Dilution per share to new investors $ 7.58 9.00 (1) Does not include: The per share dilution calculation excludes the following:
● 90,000 105,000 shares of Common Stock issuable upon the exercise of the
of the Over-Allotment Option;
● 225,000 42,000 shares of Common Stock issuable upon the exercise of the
of the Representative's Warrants;
● 20,000 shares of Common Stock issuable upon the exercise of the warrants granted to Exchange Listing, LLC, a consultant to the Company (the "Consultant Warrants");
1 unchanged paragraph
conversions of $516,000 of convertible notes and $49,162 of interest into 70,656 shares of Common Stock based on an assumed offering price of $10.00 per Unit (the midpoint of the price range set forth on the cover page of this prospectus);
If the underwriters exercise
● 2,000 shares of Common Stock issuable to our Chief Technology
Officer that will vest on February 1, 2023 ("Vesting Shares");
● 1,451,099 shares of Common Stock to be issued to the owners of real estate brokerage businesses that we intend to acquire immediately after prior to the closing of this Offering;
● 250,000 shares of Common Stock to be granted upon the closing of this Offering to Mr. Joseph La Rosa, the Company's Chief Executive Officer (based on an assumed sale of 200,000 Units) ("CEO Shares");
● 94,048 shares of Common Stock to be granted upon the closing of this Offering to Mr. Mark Gracy, the Company's Chief Operating Officer (based on an assumed sale of 700,000 Units) ("COO Shares"); and ● 23,331 shares of Common Stock to be granted upon the closing of this Offering to Mr. Josh Epstein, the Company's Chief Strategy Officer (based on an assumed sale of 700,000 Units) ("CSO Shares").
The share and per share amounts for all periods reflect the
reflect the completion of the 10-for-1 Reverse Stock Split, which was effective on March 21, 2022.
If the underwriters exercise their option in full, the pro forma as adjusted net tangible book value per share as of March 31, 2022, after giving effect to this Offering would be $2.74 $1.22 per share, and the dilution in net tangible book value per share to investors in this Offering would be $7.26 $8.78 per share.
The following table shows,
The following table shows, as of March 31, 2022, the difference between the number of shares of Common Stock purchased from us (as a part of the Units in the public offering), the total consideration paid to us, and the average price paid per share by existing stockholders and by investors purchasing shares of our Common Stock as part of the Units in this Offering:
2 unchanged paragraphs
option is exercised in full, sales by us in this Offering will reduce the percentage of shares held by existing stockholders to 64% 79% and will increase the number of shares held by new investors to 36%, or plus 4%. 21%.
Each $1.00 increase (decrease)
(decrease) in the assumed public offering price per Unit would increase (decrease) the pro forma as adjusted net tangible book value by $0.30 $0.17 per share (assuming no exercise of the underwriters' option to purchase additional shares) and the net tangible book value dilution to investors in this Offering by $0.70 $0.83 per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.
Dividend policy 12 changes
We have not paid any cash
cash dividends on our Common Stock to date, and our board of directors intends to continue a policy of retaining earnings, if any, for use in our operations. We are organized under the Nevada Revised Statutes, which prohibits the payment of a dividend if, after giving it effect, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved, to satisfy the preferential rights upon dissolution of any preferred stockholders. Any determination by our board to pay dividends in the future to stockholders will be dependent upon our operational results, financial condition, capital requirements, business projections, general business conditions, any debt related financial covenants, statutory and regulatory restrictions and any other factors deemed appropriate by our board.
1 unchanged paragraph
As of June 11, 2022, 3,120,000
We also have outstanding:
2,000 shares of Series X Super Voting Preferred Stock held by Mr. La Rosa, our principal executive officer; and ● $516,000 of convertible promissory notes and $49,162 of accrued interest which convert into 70,656 shares of our Common Stock at the closing of this initial public Offering (based on the assumed initial public offering price of $10.00 per Unit).
Prior to this Offering, our
our Common Stock has not been listed on any stock exchange or quoted on any over-the-counter market or quotation system and there has been no public market for our Common Stock or our Warrants. We have applied to have our Common Stock listed on the Nasdaq Capital Market under the symbol "LRHC" and our Warrants listed under the symbol "LRHCW" which listing is a condition to this Offering. For more information see the section " Risk Factors ."
For more information see the section " Risk Factors ."
of July 29, 2022, 4,005,065 shares of Common Stock are issued and outstanding and held by two 128 stockholders of record.
We also have outstanding 2,000 shares of Series X Super Voting Preferred Stock held by Mr. La Rosa, our principal executive officer that provides to Mr. La Rosa 10,000 votes per share when voting with the Common Stock.
3 unchanged paragraphs
We have reserved 2,500,000
We have reserved 2,500,000 shares of Common Stock issuable under the 2022 Plan as adjusted for the 10-for-1 Reverse Stock Split on March 21, 2022. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization.
6 unchanged paragraphs
MD&A 37 changes
8 unchanged paragraphs
We issued 3,000,000 4,620,000 shares of our Common Stock and all 2,000 shares of the Series X Super Voting Preferred Stock were issued to Mr. La Rosa in consideration of his past services to the combined entities. We refer to this reorganization as the Exchange Transactions.
2 unchanged paragraphs
are not necessarily indicative of results we expect in future periods, and results of interim periods are not necessarily indicative of results for the entire year. The data presented should be read in conjunction with, and are qualified in their entirety by reference to, "Risk Factors", "Special Note Regarding Forward-Looking Statements", and our consolidated financial statements and the notes thereto included elsewhere in this prospectus. The Risk Factors and Special Note Regarding Forward-Looking Statements describes the circumstances that management believes could impact market conditions, future earnings, and cash flows.
High demand, low housing
inventory and low interest rates created a strong sellers' market leading to escalating home sale prices during 2021. Home prices are predicted to continue to climb through the remainder of 2022 as the demand for housing continues to be stronger than usual but is moderating somewhat. Rising mortgage rates are expected to negatively impact existing home sales over the remainder of the year. The Pending Home Sales Index (www.nar.realtor/pending-home-sales), a forward-looking indicator of national home sales based on contract signings, slid 3.9% in April, with year-over-year, transactions falling 9.1%.
As the economy moves
to a more normalized housing market and potentially into a buyers' market with six months or more of active inventory for sale, we could experience a decrease in transaction volume. As we have during similar historical market environments, we expect to experience a substantial agent migration to our 100% commission model as agents look to maximize revenue and cut their expenses.
While transactions per agent may decrease, we expect to see a proportional increase in agent count which could assist the Company to capitalize on growth and expansion goals.
We have increased training
and education specific to this trending market shift to better prepare existing and incoming agents to maximize their revenue in the anticipated near term market. Additionally, the Company's property management segment could experience growth as rental rates increase due to the homeownership affordability challenges in the market.
We continue to evaluate
opportunities to drive our near-term and long-term growth. 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.
37 unchanged paragraphs
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 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 fulfilment 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. When the Company provides services to the seller in a transaction, it recognizes revenue for its portion of the commission, which is calculated as the sales price multiplied by the commission rate for the "buy" side of the 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 receives payment upon close of property within days of the closing of a transaction.
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 receives payment upon close of property within days of the closing of a transaction. 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 our agents for providing systems, accounting, marketing tools and compliance services. The annual and monthly dues are recognized each month as services are provided.
The annual and monthly dues are recognized each month as services are provided.
9 unchanged paragraphs
The Company serves as a licensed broker in the areas in which it operates for the purpose of processing commercial real estate transactions. This portion of revenue consists of commissions generated from real estate brokerage services. The Company is contractually obligated to provide for the fulfillment fulfilment 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. Correspondingly, the Company is defined as the principal. 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. When the Company provides services to the seller in a transaction, it recognizes revenue for its portion of the commission, which is calculated as the sales prices multiplied by the commission rate for the "buy" side of the 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.
When the Company provides services to the seller in a transaction, it recognizes revenue for its portion of the commission, which is calculated as the sales prices multiplied by the commission rate for the "buy" side of the 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 receives payment upon close of property within days of the closing of a transaction at a rate of 10% of the gross commission income. 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. The Company also charges customers a fixed monthly membership fee.
34 unchanged paragraphs
Total Revenue increased $.2 $0.2 million (3%) in
2 unchanged paragraphs
Revenues totaled $29 million
Revenues totalled $29 million
19 unchanged paragraphs
Cost of Sales totaled totalled
5 unchanged paragraphs
real estate brokerage services increased $.2 $0.2 million (4%) from $3.7 million in the period ending March 31, 2021 to $3.9 million in the period ending March 31, 2022. Costs related to coaching and property management had slight period over period increases.
3 unchanged paragraphs
Cost of Sales totaled totalled
6 unchanged paragraphs
Selling, general and administrative expenses
2 unchanged paragraphs
expenses totaled totalled $1.1 million and $.8 $0.8 million for the three months ended March 31, 2022 and 2021, respectively. The following table summarizes the changes in our selling, general and administrative expenses:
4 unchanged paragraphs
Selling, general and administrative expenses
2 unchanged paragraphs
expenses totaled totalled $3.5 million and $3.0 million for the years ended December 31, 2021 and 2020, respectively. The following table summarizes the changes in our selling, general and administrative expenses:
4 unchanged paragraphs
Income from operations for the three
Income (loss) from operations
for the three months ended March 31, 2022 and 2021
44 unchanged paragraphs
31, 2021, the Company provided cash of $0.4 million in operating activities, which was primarily attributable to an increase in accounts payable, accrued expenses, landlord deposits and income taxes payable totaling totalling $1.1 million plus our net income of $0.1 million reduced by debt forgiveness, change in fair market value of derivative and increases in accounts receivable and prepaid expenses of $0.8 million.
1 unchanged paragraph
31, 2020, the Company used cash of $0.3 million in operating activities which was primarily attributable to the receipt of landlord deposits of $0.7 million plus our net income of $0.1 million reduced by payments of accounts payable and accrued expenses totaling totalling $0.5 million.
3 unchanged paragraphs
ended March 31, 2022, the Company used cash of $0.1 million in financing activities, which was attributable to distributions and payments to related parties of $.1 $0.1 million.
During the three monts months
4 unchanged paragraphs
31, 2021, the Company provided cash of $0.1 million from financing activities, primarily the result of net proceeds from convertible debt and notes payable totaling totalling $0.7 million reduced by distribution payments of $0.6 million.
During the year ended December 31, 2020, the Company was provided cash of $0.2 million from financing activities, primarily the result of net debt proceeds, line of credit borrowings and related party advances totaling totalling $0.8 million reduced by distribution payments of $0.6 million.
Unaudited pro forma financial statements 130 changes
20 unchanged paragraphs
In July 2021, we entered
In July 2021, we entered into an engagement agreement with Maxim Group LLC, related to the Offering of an assumed 1,500,000 700,000 Units, with each Unit consisting of one share of our Common Stock and one Warrant to purchase one share of our Common Stock at an assumed public offering price of $10.00 per Unit (the midpoint of the price range of the Units offered hereby). The Units are expected to be offered and sold by us pursuant to a registration statement on Form S-1, as amended, which was filed with the Securities and Exchange Commission and is yet to be declared effective. We expect to receive net proceeds of approximately $13.5 $5.4 million from the sale of the assumed number of Units at the assumed offering price per Unit. The pro forma information assumes we will the proceeds to fund the planned acquisitions referred to above and for repayment of the unsecured promissory notes issued to Mr. Joseph La Rosa, our Chief Executive Officer. The pro forma information assumes no exercise by the underwriters of the option to purchase up to an additional 15% of the number of Units sold in the Offering. with the initial public offering all of our convertible debt is expected to be converted into shares of our Common Stock at the per Unit offering price. The Offering takes into account the prior a Reverse Stock Split of our Common Stock on a 10-for-1 basis pursuant to which every 10 shares of outstanding Common Stock was decreased to 1 share as of March 21, 2022.
immediately before our initial public offering:
of our convertible debt will be converted into shares of our Common Stock at a 20% discount to the per Unit offering price;
payable in the amount of $367,356 will be converted into 274,897 shares of our Common Stock;
will issue 205,000 shares of our Common Stock to our agents as compensation; and will issue 333,040 shares of our Common Stock to consultants account the prior Reverse Stock Split of our Common Stock on a 10-for-1 basis pursuant to which every 10 shares of outstanding Common Stock was decreased to 1 share as of March 21, 2022.
15 unchanged paragraphs
condensed combined balance sheet as of March 31, 2022 gives effect to the Transactions as if they have occurred on March 31, 2022.
The unaudited pro forma condensed combined balance sheet as of March
31, 2022 gives effect to the Transactions as if they have occurred on March 31, 2022. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2021 gives effect to the Transactions as if they occurred on January 1, 2021. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2022 gives effect to the Transactions as if they occurred on January 1, 2021. The historical information for the unaudited pro forma condensed combined balance sheet as of March 31, 2022 is based on the unaudited interim consolidated balance sheet of La Rosa Holdings Corp and the interim unaudited balance sheets of CW, North Florida, Elite, Kissimmee, Lake Nona and Lakeland. The historical information for the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2021 is based on La Rosa Holdings Corp.'s audited consolidated financial statements and the audited financial statements of CW, North Florida, Elite, Kissimmee, Lake Nona and Lakeland for the year ended December 31, 2021. The historical information for the unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2022 is based on La Rosa Holdings Corp's unaudited interim consolidated financial statements and the unaudited interim financial statements of CW, North Florida, Elite, Kissimmee, Lake Nona and Lakeland for the three months ended March 31, 2022.
8 unchanged paragraphs
CW's historical audited unaudited financial statements as of and for the three months ended March 31, 2022 and 2021;
1 unchanged paragraph
North Florida's historical audited unaudited financial statements as of and for the three months ended March 31, 2022 and 2021;
1 unchanged paragraph
Elite's historical audited unaudited financial statements as of and for the three months ended March 31, 2022 and 2021;
1 unchanged paragraph
Kissimmee's historical audited unaudited financial statements as of and for the three months ended March 31, 2022 and 2021;
1 unchanged paragraph
Lake Nona's historical audited unaudited financial statements as of and for the three months ended March 31, 2022 and 2021;
1 unchanged paragraph
Lakeland's historical audited unaudited financial statements as of and for the three months ended March 31, 2022 and 2021; and Lakeland's historical audited financial statements as of and for the years ended December 31, 2021 and 2020.
1 unchanged paragraph
financial statements are included in this prospectus. The pro forma financial information should also be read in junction conjunction with the risk factors described in the section entitled "Risk Factors" elsewhere in this prospectus.
3 unchanged paragraphs
The pro forma information included herein reflects
the impact of the shares the Company is contractually obligated to issue upon closing of the Offering. The adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet and Statement of Operations related to shares in the Offering and contractually obligated shares is reflected in the table below.
Forma Adjustments related to shares
Shares to purchase franchisees
Shares to be granted under
consulting agreements
Shares to be granted under
employment agreements
granted to convert debt
3 unchanged paragraphs
based compensation liability
stock - $0.0001 par value; 50,000,000 shares authorized; none issued and outstanding at March 31, 2022 - - - - - - - - Preferred stock, Series X - $0.0001 par value; 2,000 shares authorized; 2,000 issued and outstanding at March 31, 2022 - - - - - - - - Common stock - $0.0001 par value; 250,000,000 shares authorized; 3,120,000 issued and outstanding at March 31, 2022 - - - - - - 1,280 a 2,087 b d f g Additional paid-in capital 1,145,304 - - - - - - 12,798,720 a 30,823,022 (1,266,791 ) a 14,510,830 b 477,791 d 163,511 d 3,093,691 f (100,034 ) g Accumulated deficit (2,123,384 ) (3,520 ) 252,938 (144,836 ) 31,307 27,734 13,642 (166,423 ) b (7,532,362 ) 43,680 d (5,463,500 ) f Equity (Deficit) of La Rosa Holdings Inc. ( 977,768 ) (3,520 ) 252,938 (144,836 ) 31,307 27,734 13,642 24,093,250 23,292,747 Noncontrolling interest - - - - - - - 11,416,873 b 11,416,873 Total Equity (977,768 ) (3,520 ) 252,938 (144,836 ) 31,307 27,734 13,642 35,510,123 34,709,620 Total Liabilities and Equity (Deficit) $ 3,195,379 $ 122,074 $ 689,773 $ 240,580 $ 163,244 $ 128,407 $ 62,916 $ 34,785,352 $ 39,387,725 La Rosa Holdings Corp. Unaudited Pro Forma Condensed Combined Statements of Operations For the three months ended March 31, 2022 LHC CW Kissimmee Lake Nona North Florida Elite Lakeland Adjustments Notes Proforma Revenue $ 6,639,152 $ 910,556 $ 2,885,024 $ 1,894,334 $ 827,693 $ 1,096,147 $ 1,196,804 $ (180,179 ) cc $ 15,269,531 Cost of revenue 5,686,805 816,419 2,631,139 1,653,721 767,768 1,003,874 1,094,348 13,654,074 Gross Profit 952,346 94,137 253,885 240,613 59,925 92,273 102,456 (180,179 ) 1,615,456 Operating Expenses General and administrative expenses 1,019,714 106,823 165,864 166,394 95,471 98,578 82,640 (180,179 ) cc 5,463,500 ff 7,018,805 Sales and marketing expenses 117,257 2,433 12,728 8,896 4,163 3,352 6,178 155,007 Total Operating Expenses 1,136,971 109,256 178,592 175,290 99,634 101,930 88,818 5,283,321 7,173,812 Income (Loss) From Operations (184,625 ) (15,119 ) 75,293 65,323 (39,709 ) (9,657 ) 13,638 (5,463,500 ) (5,558,356 ) Other Income (Expense) Forgiveness of debt - - - - - - - - Amortization of financing fees (70,027 ) - - - - - - 4,053 dd (65,974 ) Other Income 6,526 - (1,319 ) (1 ) - 1,814 7,092 Change in fair market value of derivative liability (21,839 ) - - - - - - (21,839 ) Interest expense (23,199 ) (309 ) (1,406 ) (1,059 ) - - - 43,680 dd 17,708 Other Income (Expense) (108,539 ) (309 ) (2,725 ) (1,060 ) - 1,814 47,733 (63,013 ) Income Before Income Taxes (293,163 ) (15,428 ) 72,568 64,263 (39,709 ) (7,843 ) 13,710 (5,415,767 ) (5,621,369 ) Provision for income taxes - - - - - - - - Income Before Controlling Interest (293,163 ) (15,428 ) 72,568 64,263 (39,709 ) (7,843 ) 13,710 (5,621,369 ) Noncontrolling interest in subsidiaries - - 35,558 31,489 - (3,843 ) 6,718 69,922 Net Income Attributable to La Rosa Holdings Corp. $ (293,163 ) $ (15,428 ) $ 37,010 $ 32,774 $ (39,709 ) $ (4,000 ) $ 6,992 $ (5,691,291 ) Earnings per share, basic $ (0.09 ) $ (0.84 ) Earnings per share, diluted $ (0.09 ) $ (0.84 ) Weighted average shares outstanding, basic 3,106,667 6,788,017 Weighted average shares outstanding, diluted 3,106,667 6,788,017 La Rosa Holdings Corp. Unaudited Pro Forma Condensed Combined Statements of Operations For the Year Ended December 31, 2021 Transaction LHC CW Kissimmee Lake Nona North Florida Elite Lakeland Adjustments Notes Proforma Revenue $ 28,797,531 $ 4,559,702 $ 11,744,940 $ 10,478,475 $ 3,753,527 $ 4,465,425 $ 3,981,931 $ (500,580 ) cc $ 67,280,951 Cost of revenue 25,283,775 4,175,070 10,693,293 9,480,249 3,500,054 4,143,581 3,643,256 60,919,278 Gross Profit 3,513,756 384,632 1,051,647 998,226 253,473 321,844 338,675 (500,580 ) 6,361,673 Operating Expenses General and administrative expenses 3,196,379 305,612 524,157 582,576 184,511 314,362 226,744 (500,580 ) cc 2,139,500 ff 6,973,261 Sales and marketing expenses 254,453 7,419 43,386 47,547 19,918 9,758 15,381 397,862 Total Operating Expenses 3,450,832 313,031 567,543 630,123 204,429 324,120 242,125 1,638,920 7,371,123 Income From Operations 62,924 71,601 484,104 368,103 49,044 (2,276 ) 96,550 (2,139,500 ) (1,009,450 ) Other Income (Expense) Forgiveness of debt 271,700 3,852 25,692 11,700 - - - 312,944 Amortization of financing fees (8,789 ) - - - - - - (8,789 ) Other Income 4,268 (942 ) 11,027 (785 ) - 5,425 3,281 22,274 Change in fair market value of derivative liability 31,985 - - - - - - (31,985 ) bb - Interest expense (113,890 ) - - - (475 ) - - (31,963 ) bb (146,328 ) Other Income (Expense) 185,274 2,910 36,719 10,915 (475 ) 5,425 3,281 (63,948 ) 180,101 Income Before Income Taxes 248,198 74,511 520,823 379,018 48,569 3,149 99,831 (2,203,448 ) (829,349 ) Provision for income taxes 150,000 150,000 Income Before Controlling Interest 98,198 74,511 520,823 379,018 48,569 3,149 99,831 (2,203,448 ) (979,349 ) Noncontrolling interest in subsidiaries - - 255,203 185,719 - 1,543 48,917 491,382 Net Income Attributable to La Rosa Holdings Corp. $ 98,198 $ 74,511 $ 265,620 $ 193,299 $ 48,569 $ 1,606 $ 50,914 (2,203,448 ) $ (1, 470,731 ) Earnings per share, basic and diluted $ 0.03 gg $ (0.24 ) Weighted average shares outstanding, basic and diluted 3,000,000 3,015,994 hh 6,015,994 Notes to Unaudited Pro Forma Condensed Combined Financial Information Note 1. Basis of Pro Forma Presentation The unaudited pro forma condensed combined financial information set forth herein is based upon the financial statements of La Rosa Holdings Corp. and the planned acquisitions of CW, North Florida, Elite, Kissimmee, Lake Nona and Lakeland. The unaudited pro forma condensed combined financial information is presented as if the Transactions had been completed on January 1, 2022 with respect to the unaudited pro forma condensed combined statements of operations for three months ended March 31, 2022 and on March 31, 2022 with respect to the unaudited pro forma condensed combined balance sheet.
Pro forma transaction
accounting adjustments reflected in the unaudited pro forma condensed combined balance sheet are based on items that are factually supportable and directly attributable to the Transactions. Pro forma adjustments reflected in the pro forma condensed combined statements of income are based on items that are factually supportable, directly attributable to the Transactions and expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial information does not reflect the cost of any integration activities or benefits from the entities planned to be acquired, including potential synergies that may be generated in future periods.
Note 2. Adjustments and Assumptions
Accounts receivable, net
Other current assets
Due from related party
Total Current Assets
Excess purchase price to be allocated
Fixed assets, net of accumulated depreciation
Liabilities and Stockholder's Equity (Deficit)
Income taxes payable
Due to related party
Derivative liability
Convertible notes payable, net
Notes payable, current
Total Current Liabilities
Notes payable, net of current
Security deposits payable
Commitments and contingencies
Stockholders' Equity (Deficit)
Preferred stock, Series X
Additional paid-in capital
Equity (Deficit) of La Rosa Holdings Inc.
Noncontrolling interest
Total Liabilities and Equity (Deficit)
See accompanying Notes to the Unaudited Pro
Forma Condensed Combined Financial Information
La Rosa Holdings Corp.
The Unaudited Pro Forma Condensed Combined Statements
For the three months ended March 31,
General and administrative expenses
Sales and marketing expenses
Total Operating Expenses
Income (Loss) From Operations
Other Income (Expense)
Amortization of financing fees
Change in fair market value of derivative liability
Other Income (Expense)
Income Before Income Taxes
Provision for income taxes
Income Before Controlling Interest
Noncontrolling interest in subsidiaries
Net Income Attributable to La Rosa Holdings
Earnings per share, basic
Earnings per share, diluted
Weighted average shares outstanding, basic
Weighted average shares outstanding, diluted
See accompanying Notes to the Unaudited Pro
Forma Condensed Combined Financial Information
La Rosa Holdings Corp.
to the Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2021.
Statements of Operations
For the Year Ended December 31, 2021
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and 50 more changes in the filing
Business 8 changes
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the U.S. residential real estate market, which, according to Zillow Research 2 , totaled totalled $43.4 trillion in December 2021.
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Our agent count continues to grow organically which can be attributed the positive culture created in our Company. By creating a custom solution and a unique experience, our agents are able to guide their clients seamlessly through what may their most expensive lifetime purchase.
focus on the interaction between our in-person agents and their clients is a strong weapon against the internet-only commodity websites and the low touch discount brokerages who compete with us. By creating a custom solution offering a unique experience, our agents are able to guide their clients seamlessly through what may be the most expensive purchase of their lifetime.
Our business stands on
on three pillars: Family, Passion and Growth. We believe that our support and philosophy has 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 his or her clients is a strong weapon against the internet-only commodity websites and the low touch discount brokerages. Our agent count continues to grow organically which can be attributed the positive culture created in our Company. By creating a custom solution and a unique experience, our agents are able to guide their clients seamlessly through what may be their most expensive lifetime purchase.
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the U.S. residential real estate market, which, according to Zillow Research 3 , totaled totalled $43.4 trillion in December 2021.
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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 experience experienced realtors and a 70% / 30% commission split with our new and inexperienced agents and low monthly dues. Our agents can also receive advanced commissions through an affiliated commission advance company subject that charges a percentage fee to the agent. Our agents are also eligible to participate in different types of compensation plans including New Agent Commission Plan, Premier Plan, Blue Plan, Ultimate Plan, which provides for 90% / 10% commission split. In Ultimate Plan an agent can participate in the Company's Revenue Share Plan rewarding an agent for recruitment of other agents and for the agents these recruited agents are recruiting. And, after the closing of this Offering, we intend to commence an Agent Incentive Plan by which agents can earn restricted shares of our Common Stock through their outstanding performance. But, most important, we believe, is the training, education and ongoing support that we provide giving our agents the edge in a very competitive and crowded real estate brokerage marketplace.
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Census Bureau stated were 1.60 million, a 15.6% gain over the 1.38 million total from 2020. Single-family starts in 2021 totaled totalled 1.12 million, up 13.4% from the previous year 7 ; and a continuation of the current low rate of annual inflation and the maintenance of a low interest rate environment by the Federal Reserve Board to encourage economic growth in the United States.
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Management 6 changes
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President, Chief Executive Officer, and Chairman of the board of directors (Principal Executive Officer) (Principal Financial and Accounting) 2021 Mark Gracy Chief Operating Officer - Brad Wolfe Douglas L. Hein Chief Financial Officer (1) - Josh Epstein Chief Strategy Officer Michael A. La Rosa Director 2022 Jodi R. White Independent Director 2022 Ned L. Siegel Independent Director 2022 Thomas Stringer Independent Director 2022 Joseph La Rosa (1) On July 16, 2022, Mr. Hein succeeded Mr. Brad Wolfe who served from February 14, 2022 to June 15, 2022 when he voluntarily resigned from his position as the Company's Chief is our Founder and has been serving as the Company's President, Chief Executive Officer and the Chairman of the board of directors since its inception in 2004. 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, LLC, 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 over 2,000 real estate professionals internationally 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, La Rosa CRE (commercial), La Rosa Coaching and La Rosa Franchising. 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 Chairman of our board of directors.
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been the Company's Executive Vice President, Chief Financial Officer and Treasurer since February 2022. Prior to joining the Company, Mr. Wolfe had numerous Chief Financial officer roles and served as Chief Financial Officer, Executive Vice President and Treasurer for Falconstor Software (OTCQB: FALC) from April 2018 to February 2022 and prior to that as Chief Financial Officer for Asure Software (NASDAQ: ASUR) from October 2014 to July 2017. Prior to joining Asure Software, Mr. Wolfe spent most of the previous 14 years with DCI Group and their related entities and investments, a private equity and investment organization, where he served in consulting, office and executive finance and operational roles for the firm's subsidiary and portfolio companies to promote their growth and profitability. Before that, he was Chief Financial Officer and Executive Vice President at AON Corporation, a Fortune 200 company. He holds an MBA degree from Northwestern University's Kellogg School of Business, a J.D. degree from the Kent Law School executive program, and a B.B.A. degree in accounting and information systems from Southern Methodist University.
is our Chief Financial Officer. Mr. Hein joined the La Rosa Holdings Corp.'s executive management team in July 2022. Mr. Hein has over 35 years of experience in financial and operations management. From 2018 through July 2020, he served as the Chief Financial Officer and Chief Operating Officer for Gordon Pointe Acquisition Corp (GPAQ), a publicly traded company which raised $125 million in its initial public offering. Gordon Pointe was a special purpose acquisition corp and merged with another company in July 2022. Mr. Hein is Chief Financial Officer and Executive Vice President of a family owned and operated private equity firm where he is responsible for the overall fiscal management, accounting, financial, tax, banking, risk management, investor relations, human resources, and administrative functions of the company's portfolio companies, including acting as CEO and CFO of selected companies. He is also the Founder and President of Heritage Corporate Advisors, a company that advises privately held business, strategically invests capital, and offers alternative financing solutions. Mr. Hein co-founded and was CFO of Access Data Corp., a SaaS company providing data management and sales related analytics to the mutual fund industry, from 1997 until it was sold in 2009 to Broadridge Financial Solutions, Inc. (NYSE: BR). He also served as Chief Operating Officer and Senior Vice President at Federated Administrative Services, a subsidiary of Federated Investors (NYSE: FII), from 1992 to 1997. Mr. Hein worked at KPMG from 1979 to 1992 providing audit and consulting services specializing in the financial services industry and technology audit services. Mr. Hein received a B.S. degree in Business Administration from Clarion University of Pennsylvania.
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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.
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 state wide economic development through its public-private partnership Ambassador Siegel presently serves on the Board of Directors of the following companies: CIM City, U.S. Medical Glove Company, Global Supply Team, Moveo, LLC and the Caribbean Israel Leadership Coalition, Caribbean Israel Venture Services, Inc. He also presently serves on the following Advisory Boards: Usecrypt, Brand Labs International, Elminda Ltd., Findings, and Sol Chip Ltd and Maridose, LLC. 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. We believe that Ambassador Siegel's vast professional experience, education, and professional credentials qualify him to serve as a member of the Company's board directors, and as an independent member of the board's committees.
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Mr. La Rosa will control 3,000,000 shares of our Common Stock and 2,000 shares of our Series X Super Voting Preferred Stock which has 10,000 votes per share when voting together with the Common Stock, which will represent in the aggregate approximately [*% 83.6% of the voting power with respect to director elections and other matters immediately after the closing of this Offering (or approximately [*] % 82.9% of the voting power if the Over-Allotment Option is exercised but excluding the Representative's Warrants, the Consultant Warrants, the Exchange Listing CEO Shares, the COO Shares, the Vesting Shares and the Bonilla Selling Stockholder Shares), we expect to be a "controlled company" as of the completion of this Offering 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.
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Executive and director compensation 12 changes
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We entered into an "at will" employment agreement
with Mr. Wolfe on January 10, 2022, and he became a full-time employee working as the Company's Chief Financial Officer and Treasurer as of February 14, 2022. Mr. Wolfe works remotely from his home office in Austin, Texas, and will visit the Company's headquarters once a month for a week at a time. We have agreed to pay Mr. Wolfe a base salary of $249,000 per year which will increase to $300,000 per year on the first to occur of: (x) January 10, 2024 or the date of the Company's initial public offering, and at any time so that his salary is equal so that he continues to be the second highest paid employee of the Company. He will receive an annual bonus of $120,000 that will be paid quarterly, which amount will increase to $150,000 whenever his base salary increases for the first time. In addition, he may be entitled to receive a bonus based on his agreed-upon performance on an annual basis which bonus must be approved by the audit and compensation committees. Mr. Wolfe will be granted 165,000 shares of restricted Common Stock as of the date that the Common Stock is listed for trading on a national securities exchange, which shares shall be subject to a monthly vesting schedule and vest evenly over a 24-month period, commencing on the date of the closing of this Offering.
He Mr. Wolfe has agreed, for one year, not to (i) offer, pledge, sell, contract to sell, grant, lend or otherwise transfer or dispose of, directly or indirectly, any of such shares; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such shares; (iii) make any demand for or exercise any right with respect to the registration of such shares; or (iv) publicly disclose an intention to do any of the above, except that he may transfer vested shares with 10 days prior notice to the Company, and only in compliance with the Company's insider trading policy and subject to the rules of the SEC: (x) as a bona gift, by will or intestacy, to a family member or trust for a family member;
or (y) to any charity or educational institution, as long as the transferee agrees to the same restrictions, and each party is not required to make any filing or public announcement of the transfer prior to the end of the lock-up period. Mr. Wolfe is entitled to be reimbursed for his business expenses and to participate in all of the other Company benefits that are generally available to other employees, and he will have three weeks of paid vacation each year, the unused portion of which may be carried over to the next year. The employment agreement is terminable by his death or disability, if he voluntarily resigns after giving two months' notice, if he is terminated by the Company for "cause" as defined in the agreement, or if he resigns for "good reason" due to a material diminution of his authority, a reduction in his base salary, a material change in his work location or due to a breach of the agreement by the Company. If he is terminated without cause or resigns for good reason, he will be paid the lump sum of $350,000 plus 100% of the bonus that he would have received at the end of the Company's fiscal year. The Company has agreed to indemnify Mr. Wolfe to the maximum extent permitted by law in connection with performing his duties for the Company.
He has agreed to maintain the confidentiality of Company confidential information, assign his work product to the Company, and for two years after his termination, not to compete with the portions of the Company's business in which he actively participated and not to solicit any Company clients or employees.
employment is terminated by his death or disability, the Company will pay him or his estate an amount equal to the sum of: (i) the Accrued Amounts; and (ii) a payment equal to the product of (i) the Target Bonus and (ii) a fraction, the numerator of which is the number of days the he was employed by the Company during the year of termination and the denominator of which is the number of days in such year (the "Pro Rata Bonus"). If Mr. La Rosa's employment is terminated other than for cause, non-renewal of his employment agreement by the Company or if he terminates the agreement for good reason, he will receive from the Company: (i) a lump sum payment of $2,500,000; (ii) the Accrued Amount; (iii) Company reimbursement health insurance continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (" COBRA ") until the earliest of: (a) the eighteen month anniversary of the date of his termination of employment; (b) the date that he is no longer eligible to receive COBRA continuation coverage; and (c) the date on which he receives substantially similar coverage from another employer or other source; and (iv) the treatment of any outstanding equity awards shall be determined in accordance with the terms of the to indemnify Mr. La Rosa to the fullest extent permitted by applicable law and the Company's bylaws. As a condition of his employment with the Company, he has agreed to enter into and abide by the Company's employee non-compete agreement.
Mr. Hein has been engaged
through his company Heritage Corporate Advisors ("HCA") to act as our interim part-time Chief Financial Officer until we hire a full time Chief Financial Officer. HCA will provide us with oversight and management of the financial information and reporting for this registration statement and for our periodic reports after our offering has been completed. It will also work with our legal counsel, tax advisors and tax preparers, independent auditors and financial consultants during the offering and thereafter. HCA has been hired as an independent consultant and Mr. Hein is not an employee of La Rosa Holdings Corp. or any of its affiliates. Our agreement with HCA commenced on July 16, 2022 and terminates on October 16, 2022. We will pay HCA a fee of $17,500 per month plus all reasonable out-of-pocket expenses. Either party may terminate the agreement upon 30 days prior notice.
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we entered into an employment agreement with Mr. Josh Epstein to act as our Chief Strategy Officer as of June 1, 2022. The employment agreement will be for an initial term of three years and will renew automatically for one-year periods thereafter unless prior to 60 days before the anniversary date, either party notices the other that it will not extend the agreement for another year. Mr. Epstein will receive a base salary of $250,000 for the first year and on the second anniversary date of the agreement and each anniversary date thereafter his base salary will rise automatically to the greater of: (i) the base salary being paid to any other "C" level executive of the Company other than the Chief Executive Officer, the Chief Financial Officer, and Chief Operating Officer, or (ii) the base salary approved by the board of directors or its Compensation Committee (if such Committee has the power to set salaries without the need for board approval) (the "Salary"). In addition, Mr. Epstein will be eligible, following the end of each calendar year beginning with the 2022 calendar year, to receive an annual bonus which shall be equal to 50% of the his Salary and based upon periodic assessments of his annual performance as well as the achievement of 20% capture rate of all ancillary services on specific targeted offices within the Company identified by the Company from time to time as well as the achievement of other specific individual and corporate objectives determined by the Board or a committee thereof after consultation with Mr. Epstein and provided to Mr. Epstein in writing no later than the end of the first calendar quarter of the applicable year. The bonus must be approved by the audit and compensation committee. No amount of annual bonus is guaranteed, and Mr. Epstein must be an employee on December 31 of the applicable bonus year in order to be eligible for any annual bonus for such year. In addition, effective as of the closing date of this Offering, the board or a committee thereof will grant to Mr. Epstein: (a) 50,000 "restricted" shares of the Company's Common Stock based on an assumed sale of 1,500,000 700,000 units by the Company (or 3.333% of the number of Units actually issued in the Offering), and (b) annual equity award equal to a number of shares of "restricted" shares of the Company's Common Stock at the closing price of the common stock as of the last day of trading on the Nasdaq Capital Market of that calendar year, equal to the difference between (x) 3% of gross purchase price paid by the Company in any acquisition of a business by the Company and (y) any commission paid to a Company employee or third party broker for such a transaction. Both of these equity awards will be subject to a monthly vesting schedule and vest evenly over a 24-months period commencing on the issuance date. Mr. Epstein will also be entitled to receive other benefits generally available to other Company employees and will be reimbursed for his documented and approved expenses related to the business of the Company. The employment agreement contains covenants of Mr. Epstein 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. Epstein without good reason or a termination by the Company for cause or due to Mr. Epstein's death or disability), the Company's obligations under the employment agreement will immediately cease and Executive will only be entitled to receive: (i) the Salary that has accrued and is unpaid and to which Executive 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. Epstein's employment is terminated by the Company without cause or by him for good reason or in the event of a Change in Control of the Company, he will be entitled to the payments in the preceding sentence. In addition, the Company will: (i) continue to pay his Salary for a period of twelve months following the effective date of his termination of employment, and (ii) pay him, in a single lump sum an amount in cash equal to the pro-rated amount of any annual bonus for the number of days from the last anniversary date of the agreement to the date of termination.
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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 canceled cancelled in cashless exercises are not available for re-issuance under the 2022 Plan.
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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) canceling 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 canceled, cancelled, and the shares of Common Stock previously subject to them will be available for the grant of other stock options.
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Transactions with related persons 2 changes
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On June 29, 2022, the Company
issued to Joseph La Rosa an unsecured subordinated promissory note in the principal amount of $350,000 that we used for our general corporate purposes. Interest accrues on the principal amount at 2.93% per annum with a default interest rate of 3% per annum. The payment of all or any portion of the outstanding principal balance of the note and all interest thereon shall be pari passu in right of payment and in all other respects to the other unsecured subordinated promissory notes issued and all other trade debt and other obligations of the Company ranking similar to the note.
Principal stockholders 17 changes
The following table sets forth certain information, as of June
knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our Common Stock beneficially owned by such person, except to the extent such power may be shared with a spouse.
14, following table sets forth certain information, as of July 29, 2022, with respect to the holdings of: (i) each person who is the beneficial owner of more than 5% of Company voting stock, (ii) each of our directors, (iii) each executive officer, and (iv) all of our current directors and executive officers as a group.
Beneficial ownership of
Beneficial ownership of the voting stock is determined in accordance with the rules of the SEC and includes any shares of Company voting stock over which a person exercises sole or shared voting or investment power, or of which a person has a right to acquire ownership at any time within 60 days. Except as otherwise indicated, we believe that the persons named in this table have sole voting and investment power with respect to all shares of voting stock held by them. Applicable percentage ownership in the following table is based on 3,120,000 [*] shares of Common Stock issued and outstanding May 18, July 29, 2022 and 4,620,000 shares of Common Stock after the Offering assuming an offering of 1,500,000 700,000 Units that would consist of 1,500,000 700,000 shares of Common Stock (excluding 225,000 105,000 shares which may be sold upon exercise of the underwriters' Over-Allotment Option, $516,000 of convertible promissory notes which convert into 70,656 42,000 shares of our Common Stock (based on an assumed initial offering price of $10.00 per Unit), issuable upon the issuance of 115,500 exercise of the Exchange Listing Representative Warrants, 20,000 shares (based on an assumed initial offering price of $10.00 per Unit), Common Stock issuable upon the issuance exercise of 92,400 COO Consultant Warrants, 1,451,099 shares of Common Stock to be issued to the issuance owners of 165,000 CFO Shares, the issuance real estate brokerage businesses that we intend to acquire immediately prior to the closing of 50,000 CSO shares and this Offering, the issuance of 221,362 of the Bonilla 2,000 Vesting Shares, at and the closing of this initial public offering), Selling Stockholder Shares), plus, for each individual, any securities that individual has the right to acquire within 60 days of May 18, July 29, 2022.
To the best of our knowledge,
except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our Common Stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is no arrangement, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.
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Michael A. La Rosa (4)
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(3) Based on [*] shares of Common
(1) Unless otherwise indicated, the principal address
principal address of the executive officers, directors and 5% stockholders of the Company is c/o 1420 Celebration Boulevard, Suite 200, Celebration, (2) Based on [*] 3,600,065 shares of Common Stock issued and outstanding and all shares of Common Stock the beneficial owner has the right to acquire within the proceeding 60 days.
(3) Based on 6,523,003
shares of Common Stock issued and outstanding upon the closing of this Offering (excluding shares of Common Stock issuable upon the exercise the Over-Allotment Option and the exercise of the Representative's Warrant, the exercise of the Consultant Warrants, the issuance of the Exchange Listing Shares, the issuance of the COO Vesting Shares and the issuance of the Bonilla Selling Stockholder Shares) and all shares of Common Stock the beneficial owner has the right to acquire within the proceeding 60 days.
(4) Represents options granted to the
directors that vest equally over the course of twelve months with the first tranche of options vesting thirty (30) days after the effective date of the registration statement of which this prospectus is a part.
(4) (5) Mr. La Rosa also owns 2,000 shares
shares of Series X Super Voting Preferred Stock that has 10,000 votes per share and votes together as a class with our Common Stock.
Description of the securities 52 changes
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On July 29, 2021, we filed an Amended
filed an Amended and Restated Articles of Incorporation with the Secretary of State of Nevada authorizing 50,000 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. The holder of our Series X Super Voting Preferred Stock is entitled to the following rights:
The holder of our Series X Super Voting Preferred Stock is entitled to the following rights:
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Each of the [*] Units
Each of the 700,000 Units we are
we are offering (subject to adjustment) consist of one share of our Common Stock and one five-year Warrant to purchase one share of our Common Stock. Each Unit will be sold at a an assumed purchase price of $[*] $10.00 per Unit. Units will not be issued or certificated.
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The Warrants are exercisable immediately upon issuance and will thereafter remain exercisable at any time up to five years from the date of original issuance. The Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares purchased upon such exercise (except in the case of a cashless exercise as discussed below).
Each Warrant represents the right to purchase one share of Common Stock at an exercise price of $11.00 per share (equal to 110% of the public offering price of the Unit), assuming an initial public offering price of $10.00 per unit (which is the midpoint of the estimated range of the initial public offering price shown on the cover page of this prospectus). The exercise price is subject to appropriate adjustment in the event of certain share dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our shares of Common Stock and also upon any distributions of assets, including cash, stock or other property to our shareholders. The Warrant exercise price is also subject to anti-dilution adjustments under certain circumstances.
Form . The Warrants will be
will be issued under a warrant agency agreement between us and Vstock Transfer, LLC, as warrant agent. The material terms and provisions of the Warrants offered hereby are summarized below. The following description is subject to, and qualified in its entirety by, the form of warrant agency agreement and accompanying form of Warrant, which is filed as an exhibit to the registration statement of which this prospectus is a part. You should review a copy of the form of warrant agency agreement and accompanying form of Warrant for a complete description of the terms and conditions applicable to the Warrants.
Exercisability . The
Warrants are exercisable immediately upon issuance and at any time up to the date that is five years from the date of issuance. The Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of Common Stock purchased upon such exercise. Each Warrant entitles the holder thereof to purchase one share of Common Stock. Warrants are not exercisable for a fraction of a share and may only be exercised into whole numbers of shares. In lieu of fractional shares, we will round up to the nearest whole share. Unless otherwise specified in the Warrant, the holder will not have the right to exercise the Warrants, in whole or in part, if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or 9.99% at the holder's election) (the "Beneficial Ownership Limitation") of the number of our shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage is determined in accordance with the terms of the Warrant. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon at least 61 days' prior notice from the holder to us.
Exercise Price . Each Warrant represents
the right to purchase one share of Common Stock at an exercise price of $11.00 per share (equal to 110% of the public offering price of the Unit), assuming an initial public offering price of $10.00 per unit (which is the midpoint of the estimated range of the initial public offering price shown on the cover page of this prospectus), and is subject to adjustments for stock splits, reclassifications, subdivisions, and other similar transactions. In addition to the exercise price per share of Common Stock, and other applicable charges and taxes are due and payable upon exercise. Subject to certain exemptions outlined in the Warrant, for a period of two years from the date of issuance of the Warrant, if the Company shall sell, enter into an agreement to sell, or grant any option to purchase, or sell, enter into an agreement to sell, or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock or Convertible Security (as defined in the Warrant), at an effective price per share less than the exercise price of the Warrant then in effect, the exercise price of the Warrant shall be reduced to equal the effective price per share in such dilutive issuance; provided, however, in no event shall the exercise price of the Warrant be reduced to an exercise price lower than 50% of public offering price per Unit in this Offering. In addition, on the ninety (90) day anniversary of the issuance date of the Warrants, the exercise price of the Warrants will adjust to be equal to the greater of $ [*] per share (which shall equal 50% of the exercise price of the Warrants on the issuance date) and 100% of the last volume weighted average price per share of Common Stock immediately preceding the 90 th day following the issuance date of the Warrant, provided that such value is less than the exercise price in effect on that date.
If, at any time during the term of the Warrants, the issuance of shares of Common Stock upon exercise of the Warrants is not covered by an effective registration statement, the holder is permitted to effect a cashless exercise of the Warrants (in whole or in part) by having the holder deliver to us a duly executed exercise notice, canceling a portion of in which case the Win payment holder would receive upon such exercise the net number of shares of Common Stock determined according to the purchase price payable formula set forth in respect of the number of Warrant. No fractional shares of Common Stock purchased upon such will be issued in connection with the exercise of a Warrant.
Failure to Timely Deliver
Deliver Shares . If we fail for any reason to deliver to the holder the shares subject to an exercise by the date that is the earlier of (i) two (2) trading days and (ii) the number of trading days that is the standard settlement period on our primary trading market as in effect on the date of delivery of the exercise notice, we must pay to the holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of shares subject to such exercise (based on the daily volume weighted average price of our shares of Common Stock on the date of the applicable exercise notice), $10.00 per trading day (increasing to $20.00 per trading day on the fifth trading day after such liquidated damages begin to accrue) for each trading day after such date until such shares are delivered or the holder rescinds such exercise. In addition, if after such date the holder is required by its broker to purchase (in an open market transaction or otherwise) or the holder's brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the holder of the shares which the holder anticipated receiving upon such exercise, then we shall (a) pay in cash to the holder the amount, if any, by which (x) the holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of shares that we were required to deliver to the holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the holder, either reinstate the portion of the Warrant and equivalent number of shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the holder the number of shares of Common Stock that would have been issued had we timely complied with our exercise and delivery obligations.
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exercise price and the number of shares underlying the Warrants are subject to appropriate adjustment in the event of stock splits, stock dividends on our shares of common stock, stock combinations or similar events affecting our shares of Common Stock. In addition, in the event we consummate a merger or consolidation with or into another person or other reorganization event in which our shares of Common Stock are converted or exchanged for securities, cash or other property, or we sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of our assets or we or another person acquire 50% or more of our outstanding shares of common stock (each, a "Fundamental Transaction"), then following such Fundamental Transaction the holders of the Warrants will be entitled to receive upon exercise of the Warrants the same kind and amount of securities, cash or property which the holders would have received had they exercised the Warrants immediately prior to such Fundamental Transaction. Any successor to us or surviving entity will assume the obligations under the Warrants.
If at any time after
the issuance of the Warrant we grant, issue or sell any options, warrants or other securities convertible into or exercisable for shares of our Common Stock to the holders of our Common Stock (the "Purchase Rights"), then the holders of our Warrants will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Warrant holders could have acquired if they had held 50% of the number of shares of Common Stock acquirable upon complete exercise of their Warrants provided, however, that, to the extent that the Warrant holder's right to participate in any such Purchase Right would result in that holder exceeding the Beneficial Ownership Limitation, then the holder will not be entitled to participate in such Purchase Right to such extent and until such time, if ever, as its right thereto would not result in the holder exceeding the Beneficial Ownership Limitation.
Participation Rights .
From the date of the issuance of the Warrant until the second anniversary thereof, we will not, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of any equity security or any equity-linked or related security, any securities convertible into or exercisable for shares, any debt, any preferred shares or any purchase rights (the "Offered Securities") unless we give prior notice to and offer to issue and sell to or exchange with our Qualified Holders (defined below), in accordance with the terms of the Offered Securities, such Qualified Holder's pro rata portion of 50% of the Offered Securities. We have granted this right to participate in the Offered Securities separately to each Warrant holder who, as of the time of such proposed issuance), is the owner of at least 70,000 Warrants.
Global Certificate; Warrant Agent . The
Warrants will be issued in registered form under a warrant agency agreement between the warrant agent and us. The Warrants will initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
The name, address and telephone number of the warrant
agent is Vstock Transfer, LLC, 18 Lafayette Pl, Woodmere, New York 11598, (212) 828-8436.
Warrants are callable by us in certain circumstances. Subject to certain exceptions, if, after 13 months from the initial exercise date of the Warrants, (i) the volume weighted average price of our shares of Common Stock for 10 consecutive trading days (the "Measurement Period"), which Measurement Period shall not have commenced until 13 months after the initial exercise date of the Warrants, exceeds the greater of 300% of the initial exercise price and 400% of the then exercise price, (ii) the average daily trading volume of our shares of Common Stock for such Measurement Period exceeds $1,000,000 per trading day, and (iii) the holders of the Warrants are not in possession of any information that constitutes or might constitute, material non-public information which was provided by us, then we may, within one trading day of the end of such Measurement Period, upon notice to the holders of the Warrants (a "Call Notice"), call for cancellation of all of the Warrants for which a notice of exercise has not yet been delivered (a "Call"), for consideration equal to $0.001 per Warrant share. Any portion of a Warrant subject to such Call Notice for which a notice of exercise shall not have been received by us on the date of the Call will be cancelled at 6:30 p.m. (New York City time) on the thirtieth day after the date the Call Notice is received by the holder (such date and time, the "Call Date"). Our right to call the Warrants will be exercised with respect to all of the then issued and outstanding Warrants.
Exchange Listing . We
We have filed an application for the listing of the Warrants offered in this Offering on the Nasdaq Capital Market under the symbol "LRHCW."
However, without an active trading market, the liquidity of the Warrants will be limited. We intend to have the Warrants issued in registered form under the warrant agency agreement between us and the warrant agent. Subject to applicable laws, the Warrants may be transferred at the option of the holders upon surrender of the Warrants to the warrant agent, together with the appropriate instruments of transfer.
2 unchanged paragraphs
Governing Law and Jurisdiction .
Jurisdiction . The warrant agency agreement and Warrant provide that the validity, interpretation, and performance of the warrant agency agreement and the Warrants will be governed by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. In addition, the warrant agency agreement and Warrant provide that any action, proceeding or claim against any party arising out of or relating to the warrant agency agreement or the Warrants must be brought and enforced in the state and federal courts sitting in the City of New York, Borough of Manhattan. Investors in this Offering will be bound by these provisions. With respect to any complaint asserting a cause of action arising under the Securities Act or the rules and regulations promulgated thereunder, we note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Furthermore, notwithstanding the foregoing, these provisions of the warrant agency agreement and Warrant will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.
1 unchanged paragraph
6 unchanged paragraphs
5 unchanged paragraphs
19 unchanged paragraphs
3 unchanged paragraphs
and 20 more changes in the filing
Shares eligible for future sale 7 changes
8 unchanged paragraphs
and 7 more changes in the filing
Plan of distribution 11 changes
1 unchanged paragraph
3 unchanged paragraphs
3 unchanged paragraphs
3 unchanged paragraphs
1 unchanged paragraph
77 unchanged paragraphs
and 11 more changes in the filing
Experts 1 change
2 unchanged paragraphs
and 1 more change in the filing
Legal matters 1 change
1 unchanged paragraph
and 1 more change in the filing
Index to the financial statements 572 changes
and 572 more changes in the filing
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1 change
10 unchanged paragraphs
21 unchanged paragraphs
and 1 more change in the filing
Note 5: COMMITMENTS AND CONTINGENCIES 2 changes
2 unchanged paragraphs
1 unchanged paragraph
and 2 more changes in the filing
Note 6: DEBT (continued) 1 change
5 unchanged paragraphs
1 unchanged paragraph
and 1 more change in the filing
Note 10: SUBSEQUENT EVENTS 6 changes
4 unchanged paragraphs
1 unchanged paragraph
59 unchanged paragraphs
and 6 more changes in the filing
Financial statements 6 changes
114 unchanged paragraphs
76 unchanged paragraphs
80 unchanged paragraphs
185 unchanged paragraphs
92 unchanged paragraphs
15 unchanged paragraphs
and 6 more changes in the filing
Other Expenses of Issuance and 3 changes
5 unchanged paragraphs
and 3 more changes in the filing
Recent Sales of Unregistered Securities 11 changes
1 unchanged paragraph
and 11 more changes in the filing
Exhibits 8 changes
4 unchanged paragraphs
2 unchanged paragraphs
4 unchanged paragraphs
and 8 more changes in the filing
Undertakings 11 changes
25 unchanged paragraphs
4 unchanged paragraphs
and 11 more changes in the filing
Unchanged: Material u.s. federal income tax considerations, Where you can find more information, Notes to the financial statements, Note 1: DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS, Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Note 3: CONCENTRATIONS OF BUSINESS AND CREDIT RISK, Note 4: RELATED PARTY TRANSACTIONS, Note 6: DEBT, Note 7: EQUITY, Note 7: EQUITY (continued), Note 8: SEGMENTS, Note 5: Real Estate Brokerage Services (Commercial), Note 8: SEGMENTS (continued), Note 9: INCOME TAXES, Legal proceedings, Indemnification of Directors and
Only in this filing: Selling stockholders
Compared by code from the two drafts’ text: offering terms first, then sections and risk factors added or removed, numbers that moved, and rewording. No model wrote this list. Not investment advice.
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