EXHIBIT 99.1

HANOVER FAMILY BUILDERS, LLC AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

CONTENTS

INDEPENDENT AUDITOR’S REPORT

To the Board of Managers of

Hanover Family Builders, LLC and Subsidiaries

Opinion

We have audited the accompanying consolidated financial statements of Hanover Family Builders, LLC and Subsidiaries (a Florida Limited Liability Company) (collectively the “Company”), which comprise the consolidated balance sheets as of December 31, 2021 and 2020 and the related consolidated statements of income, equity and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Subsequent Sale of Hanover Family Builders, LLC

As discussed in Note 12 to the consolidated financial statements, in January 2022, all of the interests in Hanover Family Builders, LLC were sold to Landsea Homes of Florida, LLC. Our opinion is not modified with respect to that matter.

To the Board of Managers of

Hanover Family Builders, LLC and Subsidiaries

Page 2

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

Auditor’s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Winter Park, Florida

March 3, 2022

1560 Orange Avenue, Suite 600, Winter Park, Florida 32789 | 407.998.9000 | Fax 407.998.9010

HANOVER FAMILY BUILDERS, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2021 AND 2020

See accompanying notes to consolidated financial statements.

HANOVER FAMILY BUILDERS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

See accompanying notes to consolidated financial statements.

HANOVER FAMILY BUILDERS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

See accompanying notes to consolidated financial statements.

HANOVER FAMILY BUILDERS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

See accompanying notes to consolidated financial statements.

HANOVER FAMILY BUILDERS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

1 SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Business

Hanover Family Builders, LLC (“HFB”) is a limited liability company organized under the laws of the State of Florida on April 25, 2017, pursuant to an operating agreement dated August 21, 2017. The Company acquires developed lots in subdivisions and builds single family homes on them under fixed-price contracts and on a speculative basis in the Greater Orlando, Florida area.

Basis of Consolidation

The Company’s consolidated financial statements include the accounts of Hanover Family Builders, LLC and its majority-owned subsidiary limited liability companies (collectively the “Company”), after elimination of all material intercompany accounts, transactions, and profits.

The financial statements also include the assets, liabilities and results of operations of partnerships for which the Company is the primary beneficiary. The other equity holders’ interests are reflected in “Noncontrolling interest” in the consolidated balance sheets and “Net income attributable to noncontrolling interests” in the consolidated statements of income.

At December 31, 2021, HFB owned a 51% interest in Cloud Development Partners, LLC (“CDP”). CDP had approximately $320,000 in cash and cash equivalents, $6,280,000 in inventory, $1,300,000 in accounts payable, and $2,600,000 in bank lines of credit, which is net of $70,000 in loan origination costs, included in the consolidated balance sheet as of December 31, 2021. CDP had no revenues or expenses included in the consolidated statement of income for the year ended December 31, 2021.

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less at acquisition as cash and cash equivalents in the accompanying consolidated financial statements.

Inventory

Inventory, consisting of developed lots, model homes and homes under construction, is carried at the lower of cost (based on a specific identification basis) or net realizable value. Cost includes lot costs, construction costs, capitalized interest and indirect costs. Lot costs are transferred to houses under construction from finished lot costs when construction commences.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized, and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes.

Estimated useful lives range as follows:

Deferred Financing Costs

Costs relating to obtaining debt are capitalized and amortized over the term of the related debt using the straight-line method, which approximates the effective interest method. When the debt is paid in full, any unamortized financing costs are removed from the related accounts and charged to operations. Deferred financing costs totaled $665,295 and 257,918, net of

$1,540,773 and $1,148,731 of accumulated amortization, as of December 31, 2021 and 2020, respectively. Amortization of deferred financing costs totaled $392,042 and $295,758 for 2021 and 2020, respectively.

Revenue and Cost of Revenue

The Company recognizes revenue when the sale of the related home is closed. The Company’s performance obligation, to deliver the agreed-upon home, is generally satisfied in less than one year from the original contract date. During the construction period, costs of direct material and labor and indirect costs of acquisition and construction, including interest, are capitalized and customer deposits are recorded as liabilities.

At closing, capitalized costs are charged to cost of revenues and customer deposits are applied to the home’s purchase price. When a customer defaults on a home purchase agreement, the customer deposit is recognized as revenue in the period of the default. Costs incurred for selling, general and administrative functions and costs associated with completed homes are expensed as incurred.

The Company periodically elects to sell parcels of land to third parties if the assets no longer fit the Company’s strategic operating plans. Land sales are generally outright sales of specified land parcels with cash consideration due on the closing date, which is generally when performance obligations are satisfied.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense totaled $186,717 and $212,188 for 2021 and 2020, respectively, and are included in sales and marketing expense in the accompanying consolidated financial statements.

Income Taxes

As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership. Therefore, no provision or liability for income taxes has been included in the consolidated financial statements.

Financial Instruments and Concentration of Credit Risk

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, lines of credit and note payable. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. The recorded values of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values based on their short-term nature. The recorded values of the lines of credit and the note payable approximate their fair values, as interest approximates market rates.

Financial instruments which potentially expose the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company deposits its cash with major banks. Deposits totaling approximately $8,676,000 were not fully guaranteed by the FDIC as of December 31, 2021. The Company has historically not experienced losses on its bank cash deposits.

Use of Estimates

Preparing the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Subsequent Events

The Company has evaluated subsequent events through March 3, 2022, the date these consolidated financial statements were available to be issued.

Recently Issued Accounting Pronouncement

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842). The main difference between previous Generally Accepted Accounting Principles (“GAAP”) and Topic 842 is the recognition of lease assets and lease liabilities by lessors for those leases classified as operating leases under previous GAAP. The new standard is effective for 2022. Lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. The Company is currently evaluating the effect that implementation of the new standard will have on its financial position, results of operations and cash flows.

2 INVENTORY

Inventory consists of the following:

3 OTHER ASSETS

Other assets consist of the following:

Land deposits primarily consist of funds remitted to third parties as down payments to be used towards future purchases of developed lots the Company has the contractual rights to purchase and develop single family homes on. The deposits are used on a pro-rata basis towards the purchase price of acquired lots in accordance with the respective contracts’ terms and conditions.

4 PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

Depreciation expense totaled $23,205 and $25,107 for 2021 and 2020, respectively.

5 ACCRUED EXPENSES

Accrued expenses consist of the following:

6 COMMITMENTS AND CONTINGENT LIABILITIES

Operating Leases

The Company periodically sells model homes to customers at fair value then simultaneously leases the model homes from the buyers for a period of 24 months. There are no future minimum payments for these leases as of December 31, 2021.

Rent expense related to these leases, as well as other leases executed by the Company, totaled $68,620 and $160,409 for 2021 and 2020, respectively, and is included in sales and marketing expenses in the accompanying consolidated financial statements.

Residential Real Estate Purchase Commitments

The Company has entered into agreements to purchase a certain number of developed residential real estate lots over a specified period of time at established prices. The remaining minimum future purchase obligations under these agreements as of December 31, 2021 are as follows:

Development Cost Overages

In conjunction with raw land the Company sold to a land developer in September 2019, the Company agreed to reimburse the purchaser for development cost overages, which are payable when the Company takes down finished lots. It is not practicable for the Company to reasonably estimate the amount of its obligation for development cost overages; accordingly, no liability for these costs has been recorded in the accompanying consolidated financial statements. The Company’s policy is to recognize these costs at the earlier of the date they become reasonably estimable or the date they are paid. No amounts were recorded in 2021 related to these cost overages.

Guarantee of Related Party Indebtedness

As of December 31, 2021, the Company is contingently liable as guarantor with respect to

$7,000,000 of indebtedness of a related party. Should the related party be delinquent on its debt payments, the Company will be obligated to perform under the guarantee by primarily making the required payments, including late fees and penalties. Because the fair value of the debt’s collateral exceeds the amount of the debt obligation, significant losses are not anticipated.

Employee Benefit Plan

Effective January 2021, the Company participates in a 401(k) plan (‘‘Plan’’) sponsored by one of its members to provide retirement benefits for its employees. Employees may contribute a portion of their annual compensation to the Plan, limited to a maximum annual amount as set periodically by the Internal Revenue Service. The Company matches employee contributions up to 100% of the first 3% of compensation deferred, plus 50% of the next 2% of compensation deferred. In addition, the Plan provides for discretionary contributions as determined by the sponsor. Such contributions to the Plan are allocated among eligible participants in the proportion of their salaries to the total salaries of all participants. The Company contributions to the Plan totaled $185,865 and $0 for 2021 and 2020, respectively.

Uncertainty

The extent of the impact and effects of the outbreak of the coronavirus on the operation and financial performance of the Company’s business will depend on future developments, including the duration and spread of the outbreak, related travel advisories and restrictions and the recovery time of disrupted customers, all of which are highly uncertain and cannot be predicted. While the Company has not seen a significant impact on its operations due to the virus to date, if the virus causes significant negative impacts to economic conditions or consumer confidence, the Company’s operations may be adversely affected.

7 LINES OF CREDIT

Lines of credit consist of the following:

Maturities of the lines of credit are as follows as of December 31, 2021:

The Company’s interest expense for 2021 and 2020 is included in the accompanying consolidated financial statements as follows:

8 NOTE PAYABLE

In February 2021, the Company entered into a note payable agreement with the seller according to a land purchase agreement for 39 acres totaling $3,592,000. The note requires principal payments of $300,000 each February and August, with a balloon payment due at maturity. It also requires monthly interest payments of $12,259 at an interest rate of 4.5% as of December 31, 2021. The note matures in August 2023. Outstanding borrowings were

$3,292,000 and $0 as of December 31, 2021 and 2020, respectively. Future maturities for this note payable are: $600,000 in 2022 and $2,692,000 in 2023.

9 PPP NOTE PAYABLE

In May 2020, the Company entered into a note payable agreement pursuant to the Coronavirus Aid, Relief, and Economic Security Act’s (“CARES Act”) Paycheck Protection Program (“PPP”) totaling $973,212. The note required monthly principal and interest payments for two years at an interest rate of 1%. In January 2021, the loan was forgiven. The income from the forgiveness of this note payable is included in other miscellaneous income in the consolidated statement of income.

10 EQUITY

As provided in the operating agreement, profits, losses and distribution of net cash flows of Hanover Family Builders, LLC are allocated between the equity members (the “Members”) as follows:

Allocation of Profits

Profits of the Company for each fiscal year or part thereof shall be allocated to the Members in the following manner and order of priority:

First, to the Members, in proportion to the aggregate losses, if any, previously allocated to the Members pursuant to section 4.3(b) for all prior fiscal years, until each Member has been allocated aggregate profits pursuant to section 4.2(a) for all fiscal years equal to the aggregate losses previously allocated to each Member pursuant to section 4.3(b) for all prior fiscal years.

Second, to the Members, in proportion to the aggregate losses, if any, previously allocated to the Members pursuant to section 4.3(a) for all prior fiscal years, until each Member has been allocated aggregate profits pursuant to section 4.2(b) for all fiscal years equal to the aggregate losses previously allocated to each Member pursuant to section 4.3(a) for all prior fiscal years.

The balance, if any, to the Members in proportion to their respective percentage interests.

Allocation of Losses

Losses for each fiscal year or part thereof shall be allocated to the Members in the following manner and order of priority:

First, to the Members to the extent of and in proportion to their respective positive capital account balances until all positive capital account balances are reduced to zero.

The balance, if any, to the Members in proportion to their respective percentage interests.

Distributions of Net Cash Flow

Net Cash Flow shall be distributed at such times and in such amounts as the board of managers (the “Board”) shall determine in its reasonable discretion, and may be withheld in the Board’s reasonable discretion to fund the ongoing cash needs of the Company. When distributed, such net cash flow shall be distributed in the following manner and order of priority:

First, the Board will use its reasonably best efforts to cause tax distributions for any fiscal year to be made to the Members calculated based on the Company’s net taxable income for such fiscal year. The distributions, if any, shall be apportioned among and distributed to the Members in the same proportions as the aggregate amount of the net taxable income of the Company for such fiscal year will be allocated to the Members under section 4.2, with respect to such fiscal year.

Second, to Edge Creek Ventures, LLC (“Edge Creek”), until such time as Edge Creek shall have received distributions in an aggregate amount so as to reduce Edge Creek’s aggregate unreturned capital contributions so that the ratio of SAM Building Partners, LLC’s unreturned capital contributions to Edge Creek’s unreturned capital contributions is equal to the percentage interests of the Members, taking into account, in each case, the aggregate amount of all capital contributions made by the Members to the Company through and including such date.

The balance, if any, to the Members pro rata in proportion to their respective percentage interests.

As of December 31, 2021, the Members’ respective percentage interests are:

In January 2022, Landsea Homes of Florida, LLC became the 100% owner of HFB.

11 RELATED PARTY TRANSACTIONS

The Company uses office space and purchases developed lots from various entities owned, in part or in full, by one of the Company’s Members. These transactions are summarized as follows:

Related Party Note Payable

In July 2021, the Company entered into a note payable agreement with a related party for the takedown of 97 lots with down payments between $1,000 - $21,000 per lot to obtain the title of the lots. The Company would be allowed to continue permitting the houses and start construction. Repayment of the note is due on the last day of the month, of which the house starts at a rolling 6% escalator from the date of the original transfer of title. Outstanding borrowings were $5,691,026 and $0 as of December 31, 2021, and 2020, respectively. Interest due on the note was accrued into the cost of the lots in inventory on December 31, 2021.

12 SUBSEQUENT EVENTS

In January 2022, Landsea Homes of Florida, LLC acquired all of the equity interests in HFB. Approximately $69,330,000 of liabilities including lines of credit and notes payable were paid off with the proceeds of this sale in January 2022. Approximately $25,000,000 of inventory and approximately $11,350,000 in liabilities were excluded from the acquisition and transferred to an entity owned by the common ownership of HFB preceding the acquisition.

In January 2022, CDP, a 51% owned subsidiary, was liquidated. This event included $2,700,000 of original investment and approximately $300,000 in required earnings being paid to the three minority owners. The remaining assets and liabilities of CDP were transferred to an entity with common ownership of HFB preceding the acquisition described above.

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