La Rosa Holdings Corp. (LRHC) Enters Material Securities Purchase Agreement and Creates Series C Convertible Preferred Stock

Key Highlights

• On March 4, 2026, La Rosa Holdings Corp. (“the Company”) entered into a Securities Purchase Agreement (“SPA”) with an institutional investor.
• The Board of Directors approved, and the Company filed, a Certificate of Designation for Series C Convertible Preferred Stock, designating 100 shares as Series C Preferred.
• \$309,000 was released to the Company from a custodial account established under a prior Account Control Agreement.
• The Series C Preferred Stock is issued under Rule 506(b) of Regulation D, exempting it from SEC registration requirements.

Details of the Series C Preferred Stock

• No Dividends: Series C Preferred Stock does not bear dividends.
• Voting Rights: No voting rights except as required by Nevada law and if the Company proposes to amend its articles of incorporation or affect the Series C holders’ rights.
• Conversion Rights: Series C holders may convert to common stock but are limited to beneficially owning no more than 9.99% of the outstanding common stock after conversion (“Maximum Percentage”).
• Anti-Dilution Protection: If the Company issues shares or convertible securities at an effective price below the current Conversion Price, the Conversion Price of Series C Preferred Stock will be reduced to match the lower price. This is subject to exceptions such as the Company’s equity incentive plan and certain strategic acquisitions.
• Conversion Price: The initial Conversion Price is set at \$1.176 per share, subject to adjustment.
• Floor Price: The minimum Conversion Price is \$0.196, subject to adjustments for stock splits, dividends, combinations, recapitalizations, and as mutually agreed by the Company and holders.
• Optional Redemption: The Company may redeem all Series C Preferred Shares outstanding at any time, at a price equal to the greater of the Conversion Amount being redeemed and the product of the Conversion Rate and the closing price of common stock.
• Liquidation Preference: In the event of a liquidation, Series C holders are entitled to receive the greater of 125% of the Conversion Amount or the amount receivable if converted to common stock, ahead of junior stockholders but pari passu with parity stock.
• Rights Upon Fundamental Transactions: In a merger, sale, or similar fundamental transaction, the successor entity must assume the Company’s obligations to the Series C holders, ensuring their conversion rights and protections remain intact.
• Transferability: Holders may sell or transfer Series C Preferred Shares without Company consent, subject only to provisions of the SPA.
• Disclosure Requirements: Upon all material actions or adjustments (including conversion price), Company must promptly inform Series C holders and the public.
• Absence of Trading Restrictions: Series C holders are not subject to any trading or confidentiality restrictions unless a written non-disclosure agreement is executed.

Regulatory and Shareholder Impact

• The creation of Series C Preferred Stock and the institutional investment is a significant corporate event. The anti-dilution provision, especially the automatic reduction of the conversion price upon issuance of lower-priced securities, could increase the number of shares issued to Series C holders and dilute existing shareholders.
• Shareholders should note the floor price protection and mandatory notification for any trigger events, which include trading suspension, conversion failures, or material adverse effects. These events may lead to redemption at premium prices and could significantly impact the Company’s financial position and share structure.
• The Company must maintain sufficient authorized common stock to allow for conversion of Series C Preferred Shares. Failure to do so triggers requirements to increase authorized shares and may affect the Company’s capital structure.
• Series C holders have priority in liquidation and significant protections in mergers and asset sales. These could affect the value and rights of common stockholders, especially in the event of corporate restructuring or sale.
• The SPA and associated agreements were filed as exhibits, with personal information omitted and schedules available upon SEC request.

Potential Price-Sensitive Information

• Anti-dilution and floor price provisions: These are highly significant for shareholders, as they may result in substantial dilution if the Company issues shares below conversion price.
• Redemption and liquidation rights: Series C holders’ priority could impact common stockholders in adverse corporate events.
• Disclosure and trading freedoms: Series C holders are not restricted from trading based on information received unless bound by a written agreement, potentially affecting market dynamics.
• Emerging Growth Company Status: The Company is classified as an emerging growth company and has not elected to forego extended transition periods for new accounting standards.
• Release of \$309,000: The Company received \$309,000 from a custodial account, which may affect its near-term liquidity.

Conclusion

The creation and sale of Series C Convertible Preferred Stock, with robust anti-dilution and conversion protections, the priority in liquidation, and the flexibility for institutional holders to convert and trade, represent significant developments for La Rosa Holdings Corp. Shareholders should closely monitor subsequent equity issuances, changes in conversion price, and any trigger events, as these may materially affect share value, dilution, and corporate control.

Disclaimer: This article is based on publicly filed documents and is intended for informational purposes only. It does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. The Company’s filings may contain additional details and risks not fully covered here.

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