La Rosa Holdings Corp.

Company Overview

Business Model: LA ROSA HOLDINGS CORP. is a holding company that operates six agent-centric, technology-integrated, cloud-based, multi-service real estate segments. The Company provides person-to-person residential and commercial real estate brokerage services and cross-sells ancillary technology-based products and services primarily to its sales agents and franchisee agents. Its segments include residential and commercial real estate brokerage, franchising, real estate brokerage education and coaching, property management, and title services, primarily operating under the trade name La Rosa Realty. The business model is agent-centric, offering sales agents higher net commissions and reduced rates for training, mentorship, and proprietary technology. Revenue generation is also driven by requiring agents to utilize provided business services.

Market Position: The Company operates in the U.S. residential real estate market, which totaled $49.7 trillion at the end of 2024. As of March 31, 2025, the Company staffed 2,769 licensed real estate brokers and sales associates. Agent count grew 6% from 2,434 at December 31, 2023, to 2,581 at December 31, 2024, and organically increased by over 11% from December 31, 2022, to December 31, 2024. The real estate brokerage business is highly competitive, facing independent brokerages, national/international franchisors (e.g., RE/MAX, Realogy Holdings Corp., Fathom Holdings Inc., eXp World Holdings Inc.), internet-based brokers (e.g., Realtor.com, Redfin.com, Zillow.com), and discount/flat fee brokers (e.g., Simple Showing Holdings, Inc., Homie Technology, Inc.). The Company differentiates itself through its agent-centric commission model and proprietary technology.

Recent Strategic Developments:

• October 12, 2023: Consummated initial public offering (IPO).
• 2023 Acquisitions: Acquired majority ownership of Nona Legacy Powered By La Rosa Realty, Inc., Horeb Kissimmee Realty, LLC, La Rosa Realty Premier, LLC, La Rosa Realty Orlando, LLC. Acquired 100% ownership of La Rosa CW Properties, LLC and La Rosa Realty North Florida LLC.
• December 2023: Formed majority owned subsidiary La Rosa Realty Texas LLC.
• February 2023: Launched proprietary technology system JAEME, a real estate AI assistant, integrated into “My Agent Account.”
• October 2024: Launched My Agent Account version 3.0, including a new module for property management disbursements.
• March 2024: Launched a partnership with Final Offer, an online platform for bidding offers, available in Florida, California, and Georgia.
• June 2024: Recruited high-performing team leaders in Florida who closed over 425 transactions and achieved sales exceeding $100 million in their prior 12 months.
• December 2024: Opened its first office and wholly owned subsidiary in North Carolina, La Rosa Realty NC LLC.
• December 2024: Announced offering Bitcoin and other cryptocurrencies as a payment option for its network of agents.
• 2024 Acquisitions: Acquired majority ownership of La Rosa Realty Georgia LLC, La Rosa Realty California, La Rosa Realty Lakeland LLC DBA La Rosa Realty Prestige, and La Rosa Realty Success LLC. Acquired 100% ownership of La Rosa Realty Winter Garden LLC, BF Prime LLC, Nona Title Agency LLC, La Rosa Realty Beaches LLC, and Baxpi Holdings. Acquired remaining non-controlling interests in Nona Legacy Powered By La Rosa Realty, Inc. and La Rosa Realty Premier, LLC.
• April 2025: Formed LR Agent Advance, LLC, offering a commission advancement program exclusively for La Rosa agents.
• Future Initiatives: Anticipates acquiring other complementary businesses, such as insurance agencies and a mortgage brokerage. Re-commenced expansion in Europe, starting with an area developer in Spain.

Geographic Footprint: The Company operates 26 La Rosa Realty corporate real estate brokerage offices and branches in Florida, California, Texas, Georgia, North Carolina, and Puerto Rico. It also has 6 La Rosa Realty franchised real estate brokerage offices and branches and 3 affiliated real estate brokerage offices in 7 states and Puerto Rico. A full-service escrow settlement and title company, Nona Title Agency, LLC, operates in Florida. The Company has re-commenced expansion in Europe, starting with an area developer in Spain.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 8.6% (2024) vs. 8.9% (2023)
• Operating Margin: -16.1% (2024)
• Net Margin: -20.7% (2024)

Investment in Growth:

• Technology Expenditure: $372,010 (0.54% of revenue) in 2024.
• Capital Expenditures: $(68,625)$ (Net Cash Used in Investing Activities) in 2024.
• Strategic Investments: Total purchase price for 8 acquisitions in 2024 was $3,789,421. Total purchase price for 6 acquisitions in 2023 was $6,351,105.

Business Segment Analysis

Real Estate Brokerage Services (Residential)

Financial Performance:

• Revenue: $57,024,911 (+179% YoY) in 2024.
• Gross Margin: 9.4% (2024).
• Key Growth Drivers: Agent count growth and strategic acquisitions, including La Rosa Realty Winter Garden LLC, La Rosa Realty Georgia LLC, La Rosa Realty California, La Rosa Realty Lakeland LLC DBA La Rosa Realty Prestige, La Rosa Realty Success LLC, La Rosa Realty Beaches LLC, Baxpi Holdings, Nona Legacy Powered By La Rosa Realty, Inc., Horeb Kissimmee Realty, LLC, La Rosa CW Properties, LLC, La Rosa Realty Premier, LLC, La Rosa Realty Orlando, LLC, and La Rosa Realty North Florida LLC. Revenue from acquisitions contributed $9,872,020 in 2024.

Product Portfolio:

• Person-to-person residential real estate brokerage services.
• Agent-centric commission model with 100% commission split for experienced agents and a 70%/30% split for new agents.
• Agent Incentive Plan offering restricted stock units for high-performing agents, capping commissions, and recruiting.
• "Contribution of Commission as Payment for Shares" program allowing agents to purchase Common Stock at a 20% discount.

Market Dynamics:

• Operates in the cyclical U.S. residential real estate market, influenced by interest rates, housing inventory, and median home prices. The median existing-home sales price increased 3.8% year-over-year to $398,400 in February 2025. Total housing inventory was up 17% year-over-year in February 2025. The segment is subject to competitive pressures from various brokerage models and the impact of the NAR antitrust litigation settlement.

Property Management

Financial Performance:

• Revenue: $11,115,368 (+15% YoY) in 2024.
• Gross Margin: 3.1% (2024).
• Key Growth Drivers: Managed approximately 650 properties across Florida as of March 31, 2025.

Product Portfolio:

• Property management services for homeowners, with agents charging 8-12% of monthly rental. Agents pay Property Management $55.00 per agent, per property, per month.
• Management contract terms typically range from one to three years.
• My Agent Account version 3.0, launched in October 2024, includes a new module for property management disbursements.

Market Dynamics:

• Competes with independent local companies and major national/international commercial real estate property managers.

Franchising Services

Financial Performance:

• Revenue: $329,069 (-63% YoY) in 2024.
• Gross Margin: -48.3% (2024).
• Key Growth Drivers: Organized in 2018, began franchising in 2019. The Company has 6 franchised and 3 affiliated real estate brokerage offices in 7 states and Puerto Rico.

Product Portfolio:

• Franchisees pay an initial licensing fee, a royalty fee based on gross commissions, an annual membership fee, a coaching fee, a commercial royalty fee, a training fee for administrative personnel, and a proprietary software fee.

Coaching Services

Financial Performance:

• Revenue: $568,516 (-10% YoY) in 2024.
• Gross Margin: 45.4% (2024).
• Key Growth Drivers: Mandatory for new agents for their first three sales transactions and core competency courses. Brokers compensate by splitting commissions (30% of their share). A second tier of coaching was added in 2021. All new agents are required to have a coach and attend multi-day training sessions through La Rosa Coaching, LLC.

Market Dynamics:

• Competes with other in-house training services and online providers.

Real Estate Brokerage Services (Commercial)

Financial Performance:

• Revenue: $327,912 (+183% YoY) in 2024.
• Gross Margin: 27.4% (2024).
• Key Growth Drivers: Hired a leader for this division in January 2024. Sales agents are encouraged to pursue commercial real estate transactions.

Title Settlement and Insurance

Financial Performance:

• Revenue: $83,010 (new segment in 2024).
• Gross Margin: 100.0% (2024).
• Key Growth Drivers: Nona Title Agency, LLC was 100% acquired in 2024. Provides comprehensive title insurance and settlement services in Florida.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Not disclosed.
• Dividend Payments: The Company has never paid cash dividends and does not expect to in the foreseeable future.
• Dividend Yield: Not applicable.
• Future Capital Return Commitments: Not disclosed.

Balance Sheet Position:

• Cash and Equivalents: $1,442,901 at December 31, 2024.
• Total Debt: $5,078,022 (including notes payable, line of credit, advances on future receipts, and EIDL loans) at December 31, 2024.
• Net Cash Position: $(3,635,121)$ at December 31, 2024.
• Credit Rating: Not disclosed.
• Debt Maturity Profile (as of December 31, 2024):
  • Notes payable: $2,187,673 due in less than 1 year, $297,714 due in 1-3 years, $297,714 due in 3-5 years, and $879,634 due after 5 years.
  • Advances on future receipts: $618,681 due in less than 1 year.
  • EIDL loans: $5,900 annually from 2025-2030, with $612,230 due thereafter.

Cash Flow Generation:

• Operating Cash Flow: $(2,997,307)$ in 2024.
• Free Cash Flow: $(3,065,932)$ in 2024.
• Cash Conversion Metrics: The Company had negative working capital of $4,026,469 at December 31, 2024.

Operational Excellence

Production & Service Model: The Company provides cloud-based real estate brokerage services through an agent-centric model, supporting independent contractor agents with technology, training, and support. This includes person-to-person residential and commercial real estate brokerage, franchising, property management, title services, and mandatory coaching for new agents.

Supply Chain Architecture: Key Suppliers & Partners:

• Technology Partners: Final Offer (online bidding platform).
• Financing Partners: Cedar Advance LLC, Arin Funding LLC (cash advance agreements).
• Placement Agent: Alexander Capital L.P. (for certain financings).

Facility Network:

• Principal Executive Office: Leased at 1420 Celebration Boulevard, 2nd Floor, Celebration, Florida 34747 (approximately 3,000 square feet, month-to-month).
• La Rosa Realty Office: Leased at 1420 Celebration Boulevard, 1st Floor, Celebration, Florida 34747 (approximately 1,900 square feet, lease ends June 2025).
• Subsidiary Office Spaces: Range from 360 to 4,700 square feet across its geographic footprint.
• Distribution: Operates through 26 corporate offices and 9 franchised/affiliated offices across 7 states and Puerto Rico.

Operational Metrics:

• Agent count: 2,581 independent contractor real estate agents as of December 31, 2024.
• Properties managed: Approximately 650 properties across Florida as of March 31, 2025.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Leverages its network of independent contractor agents for direct customer relationships.
• Channel Partners: Expands through franchised offices, including La Rosa Realty Bayamón LLC, La Rosa Realty Internacional, LLC, La Rosa Realty Central Florida, LLC, La Rosa Realty Jacksonville, LLC, La Rosa Realty Kendall, LLC, and The Realty Experience Powered By LRR LLC.
• Digital Platforms: Utilizes consumer-facing websites (www.larosarealty.com) and proprietary technology like My Agent Account and the JAEME AI assistant for lead generation, automated blogging, and social media marketing. Partnership with Final Offer enhances digital bidding capabilities.

Customer Portfolio: Enterprise Customers: The Company's primary "customers" are its independent real estate agents, for whom it provides a platform and services.

• Strategic Partnerships: Final Offer.

Geographic Revenue Distribution:

• United States: Primary revenue generation from Florida, California, Texas, Georgia, and North Carolina.
• Puerto Rico: Contributes to revenue.
• Growth Markets: Re-commenced expansion in Europe, starting with an area developer in Spain.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The U.S. residential real estate market is cyclical, valued at $49.7 trillion at the end of 2024. Long-term demand is driven by economic health, local supply/demand, and demographic shifts. The industry is highly fragmented, with over 360,000 brokerage firms and 1.5 million licensees. Recent legal changes from the NAR antitrust litigation settlement, effective mid-July 2024, will prohibit offers of compensation on the MLS and require written buyer/buyer's agent agreements, potentially reshaping commission structures.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• National/International Franchisors: RE/MAX, Realogy Holdings Corp., Fathom Holdings Inc., eXp World Holdings Inc.
• Corporate-owned Competitors: Compass Holdings, Inc., Fathom Holdings, Inc.
• Internet-based Brokers: Realtor.com, Redfin.com, Zillow.com.
• Discount/Flat Fee Brokers: Simple Showing Holdings, Inc., Homie Technology, Inc.
• Title Services: First American Title Insurance Company, Fidelity National Title Group, Old Republic National Title Insurance Company.
• Property Management: Independent local companies and major national/international commercial real estate property managers.
• Real Estate Coaching: The Mike Ferry Organization, Keller Williams Mega Agent Production Systems.

Emerging Competitive Threats: New entrants, disruptive technologies, and evolving regulatory landscapes (e.g., NAR settlement implications) pose ongoing competitive challenges.

Competitive Response Strategy: The Company's strategy includes maintaining its agent-centric model, investing in proprietary technology, pursuing strategic acquisitions to expand its footprint and service offerings, and diversifying into ancillary services.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: The Company's business is highly sensitive to the cyclical nature of the residential real estate market, including fluctuations in economic health, local supply/demand, and mortgage interest rates. Higher mortgage rates and increasing home prices have had a material adverse effect. Technology Disruption: Rapid technological advancements could render the Company's proprietary technology less competitive or obsolete. Customer Concentration: The business model relies heavily on attracting and retaining independent contractor agents, posing a risk if agent recruitment or retention falters. NAR Antitrust Litigation: While not a named defendant, the NAR settlement's new rules, effective mid-July 2024, could significantly impact industry-wide commission structures and agent compensation models.

Operational & Execution Risks

Supply Chain Vulnerabilities: As a service-based company, reliance on technology providers and third-party service partners could pose operational risks. Geographic Concentration: Significant operations in Florida make the Company susceptible to regional economic downturns or natural disasters. Capacity Constraints: Sustained agent growth requires scalable support infrastructure, technology, and coaching resources to avoid bottlenecks.

Financial & Regulatory Risks

Market & Financial Risks: The Company's recurring net losses ($14,349,996 in 2024) and negative cash flows from operations in 2024 raise substantial doubt about its ability to continue as a going concern, necessitating additional capital. The Company faces a Nasdaq delisting risk due to non-compliance with the $1.00 minimum bid price rule, with an extension until October 6, 2025. The business is subject to demand volatility due to seasonality (higher sales in spring/summer, lower in fall/winter) and external factors like weather, holidays, and mortgage rates. The Company also recorded a significant loss from the change in fair value of derivative liability of $1,338,506 in 2024. Regulatory & Compliance Risks: The real estate industry is highly regulated by federal, state, and local authorities, including RESPA, FHA, Truth in Lending, antitrust laws, and state licensing laws. The Company has identified ineffective disclosure controls and procedures and a material weakness due to a lack of segregation of duties as of December 31, 2024. There is a historical instance of providing interest-free advances to a company controlled by the CEO, which may have violated Section 13(k) of the Exchange Act. Cybersecurity Risks: The Company does not have a dedicated cybersecurity team or fully formalized protocols, relying on AI and developing measures, which presents a risk of cybersecurity incidents.

Geopolitical & External Risks

Geopolitical Exposure: Operations in Puerto Rico and re-commenced expansion in Spain could expose the Company to regional political or economic instability.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Artificial Intelligence: JAEME, a real estate AI assistant, launched in February 2023 and updated in October 2023, assists agents with property descriptions, email campaigns, business plans, video scripts, newsletter campaigns, and lead generation.
• Cloud-based Platforms: "My Agent Account" (version 3.0 launched October 2024) provides a comprehensive platform for agents, including a new module for property management disbursements.
• Client Relationship Management (CRM): AI-integrated CRM software is provided for lead generation.
• Digital Marketing Tools: Offers automated blogging and social media marketing capabilities. Innovation Pipeline: The Company is actively developing new practices and leveraging AI to enhance cybersecurity measures.

Intellectual Property Portfolio:

• Service Mark Strategy: Holds U.S. service mark registrations for “LR La Rosa Realty” and the LR logo, with additional trademark/service mark registrations and applications in foreign jurisdictions.
• Domain Names: Owns “larosarealty.com” and “larosaholdings.com”.

Technology Partnerships:

• Strategic Alliances: Partnership with Final Offer, an online platform for bidding offers, launched in March 2024.

Leadership & Governance

Executive Leadership Team