La Rosa Holdings Cleans Up Capital Structure with Elimination of $5.5 Million in Convertible Debt

Rhea-AI Summary

La Rosa Holdings (NASDAQ: LRHC) eliminated $5.5 million of outstanding convertible debenture from a February 2025 institutional note by converting the debt into common shares, and substantially all converted shares have since been sold.

The company says this removes the debenture balance, simplifies the capital structure, and strengthens the balance sheet. Management expects reduced cash burn and improvement in Q1 2026 as higher-margin initiatives scale. La Rosa plans to buy land for a Tier III AI data center using existing cash and does not anticipate raising additional capital.

Positive

• Eliminated $5.5M convertible debenture
• No remaining debentures from February 2025 financing
• Company expects reduced cash burn and improved Q1 2026 results
• Planned Tier III AI data center land purchase funded with existing cash

Negative

• Converted shares were substantially sold post-conversion, increasing share supply
• No quantified cost savings or timeline beyond a general Q1 2026 improvement

Key Figures

Eliminated debenture: $5.5 million Price change: 5.33%

2 metrics

Eliminated debenture $5.5 million Outstanding debenture from February 2025 institutional convertible note financing

Price change 5.33% Pre-news 24h move for LRHC

Market Reality Check

Price: $1.53 Vol: Volume 204,275 is well be...

low vol

$1.53 Last Close

Volume Volume 204,275 is well below 20-day average of 2,369,819 (0.09x), suggesting limited participation pre-news. low

Technical Shares at $1.58 are trading well below the $59.96 200-day MA, reflecting a heavily depressed longer-term trend.

Peers on Argus

LRHC was up 5.33% while only one peer in the momentum scanner (DUO) showed an up...

1 Up

LRHC was up 5.33% while only one peer in the momentum scanner (DUO) showed an upside move and others had mixed or minimal changes, indicating a largely stock-specific reaction to this balance sheet news.

Historical Context

5 past events · Latest: Feb 05 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 05	AI site contract	Positive	-13.8%	Contract to acquire land for Tier III AI data center development.
Jan 26	Cash burn update	Positive	-5.3%	Reported ~25% reduction in cash burn versus 2025 average levels.
Jan 23	Revenue update	Positive	-9.0%	Preliminary 2025 revenue of ~$79M with 14% organic year-over-year growth.
Jan 22	Reverse stock split	Negative	-16.8%	Announced 1-for-10 reverse stock split to maintain Nasdaq compliance.
Jan 09	AI note financing	Positive	+20.0%	Initial $11M senior secured convertible note for AI infrastructure strategy.

Pattern Detected

Recent corporate and strategic updates, even when seemingly positive, have often been met with negative price reactions, except for the AI financing announcement which saw a strong gain.

Recent Company History

Over the past month, La Rosa has reported several notable developments, including preliminary 2025 revenue growth, a proactive 1-for-10 reverse split, reduced cash burn, and contracts to advance its Tier III AI data center strategy. Most of these announcements were followed by declines of 5–17%, while the January $11,000,000 AI note financing coincided with a 20% gain. Today’s elimination of $5.5 million in convertible debenture fits the broader effort to simplify the capital structure and improve financial flexibility.

Market Pulse Summary

This announcement removes $5.5 million in convertible debenture linked to a February 2025 financing,...

Analysis

This announcement removes $5.5 million in convertible debenture linked to a February 2025 financing, leaving no debentures outstanding from that deal and simplifying La Rosa’s capital structure. It fits alongside recent steps to cut cash burn, report 2025 revenue growth, and advance an AI data center strategy. Investors may focus on how these actions translate into sustained balance sheet strength, progress on the planned Tier III facility, and further updates on cash flow and operating discipline.

Key Terms

convertible note, debenture, ai data center, tier iii data center

4 terms

convertible note financial

"related to an institutional investor convertible note financing completed in February 2025"

A convertible note is a type of loan that a company gets from investors, which can later be turned into company shares instead of being paid back in cash. It matters because it helps startups raise money quickly without setting a fixed value for the company right away, making it easier to grow and attract investors.

debenture financial

"it has eliminated $5.5 million in outstanding debenture related to an institutional investor"

A debenture is a type of loan a company issues to raise money, where the company promises to pay back the borrowed amount with regular interest but typically does not pledge specific assets as collateral. Think of it like an IOU backed by the borrower’s overall creditworthiness rather than a particular physical asset; it matters to investors because it offers predictable income but carries the risk that repayment depends on the company’s financial health, affecting yield and safety compared with secured debt or equity.

ai data center technical

"advancing our AI data center strategy through the planned acquisition of land"

An AI data center is a specialized facility that houses powerful computers, networking gear, and cooling systems designed specifically to run and store artificial intelligence workloads, like training large models and serving real-time AI applications. Investors care because these centers are capital-intensive infrastructure that enable companies to offer advanced AI services, drive recurring revenue, and create competitive advantages, much like a factory that determines how quickly and cheaply a business can produce its product.

tier iii data center technical

"to develop a state-of-the-art Tier III data center"

A Tier III data center is a high-reliability facility built so critical systems can keep running even during equipment failures or planned maintenance, using multiple independent power and cooling paths with redundant components. For investors, this matters because it reduces the risk of costly downtime and supports continuous operations for tenants—similar to a hospital having duplicate life-support systems—affecting revenue stability, insurance exposure, and the value of companies that depend on or operate such facilities.

AI-generated analysis. Not financial advice.

Celebration, FL, Feb. 09, 2026 (GLOBE NEWSWIRE) -- La Rosa Holdings Corp. (NASDAQ: LRHC) (“La Rosa” or the “Company”), a real estate and PropTech enterprise, today announced that it has eliminated $5.5 million in outstanding debenture related to an institutional investor convertible note financing completed in February 2025. The note was converted into shares of the Company’s common stock in accordance with its terms, and substantially all such shares have since been sold. As a result, La Rosa no longer has any debentures outstanding from the February 2025 financing, further strengthening its balance sheet and simplifying its capital structure.

Joe La Rosa, CEO of La Rosa, commented, “The elimination of this debenture significantly strengthens La Rosa’s capital structure and marks a key step in our ongoing balance sheet optimization. We are executing against a clear plan to reduce cash burn, with continued improvement expected in the first quarter of 2026 and beyond as higher-margin initiatives implemented late last year scale, and operating discipline remains firmly in place. We recently announced that we are advancing our AI data center strategy through the planned acquisition of land to develop a state-of-the-art Tier III data center. The land purchase is expected to be funded with existing cash on hand, and we do not anticipate the need for additional capital. We believe that with a cleaner balance sheet and a more efficient cost structure, the Company is well positioned to enhance financial flexibility, support sustainable growth, and create long-term value for its shareholders.”

About La Rosa Holdings Corp.

La Rosa Holdings Corp. (Nasdaq: LRHC) intends to transform the real estate industry by providing agents with flexible compensation options, including a revenue-sharing model or a fee-based structure with 100% commission. Powered by its proprietary technology platform, La Rosa aims to equip agents and franchisees with the tools they need to deliver exceptional service.

The Company offers both residential and commercial real estate brokerage services, as well as technology-driven products and support for its agents and franchise partners. Its business model includes internal services for agents and external offerings for the public, spanning real estate brokerage, franchising, education and coaching, and property management.

La Rosa operates 24 corporate-owned brokerage offices across Florida, California, Texas, Georgia, and Puerto Rico. La Rosa also started its expansion into Europe, beginning with Spain. Additionally, the Company has five franchised offices and branches and three affiliated brokerage locations in the U.S. and Puerto Rico. The Company also operates a full-service escrow settlement and title company in Florida.

For more information, please visit: https://www.larosaholdings.com.

Stay connected with La Rosa, sign up for news alerts here: larosaholdings.com/email-alerts.

Forward-Looking Statements

This press release contains forward-looking statements regarding the Company’s current expectations that are subject to various risks and uncertainties. Such statements include statements regarding the Company’s ability to grow its business and other statements that are not historical facts, including statements which may be accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including without limitation, the Company’s ability to achieve profitable operations, customer acceptance of new services, the demand for the Company’s services and the Company’s customers' economic condition, the impact of competitive services and pricing, general economic conditions, the successful integration of the Company’s past and future acquired brokerages, the effect of the recent National Association of Realtors' landmark settlement on our business operations, and other risk factors detailed in the Company's filings with the United States Securities and Exchange Commission (the "SEC”). You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and other reports and documents that we file from time to time with the SEC. Forward-looking statements contained in this press release are made only as of the date of this press release, and La Rosa does not undertake any responsibility to update any forward-looking statements in this release, except as may be required by applicable law. References and links to websites have been provided as a convenience, and the information contained on such websites has not been incorporated by reference into this press release.

For more information, contact: info@larosaholdings.com.

Investor Relations Contact:
Crescendo Communications, LLC
David Waldman/Natalya Rudman
Tel: (212) 671-1020
Email: LRHC@crescendo-ir.com

FAQ

What did La Rosa Holdings (LRHC) announce about the $5.5 million convertible debenture?

La Rosa eliminated the $5.5 million convertible debenture by converting it into common shares, which were then largely sold. According to the company, this removes the debenture liability and simplifies the company's capital structure, strengthening the balance sheet.

How does the elimination of the debenture affect LRHC's balance sheet and capital structure?

The action is intended to simplify the capital structure and reduce liabilities from the February 2025 note. According to the company, removing the debenture improves financial flexibility and supports longer-term growth and operational discipline.

Will La Rosa (LRHC) need to raise additional capital for its AI data center land purchase?

No additional capital is anticipated for the land purchase, which the company says will be funded with existing cash on hand. According to the company, the planned acquisition will not require new financing.

Did the conversion of the convertible note cause share dilution for LRHC shareholders?

Yes; the convertible note was converted into common shares and most of those shares were sold, increasing share supply. According to the company, conversions were in accordance with the note terms, though the announcement does not quantify dilution percentage.

What near-term financial outlook did La Rosa (LRHC) provide after the debenture elimination?

Management expects reduced cash burn and improvement in the first quarter of 2026 as higher-margin initiatives scale. According to the company, operating discipline remains in place and improvement is expected in Q1 2026 and beyond.