On December 31, 2018, SeD Maryland Development, LLC entered into the Third Amendment to the Lot Purchase Agreement for Ballenger Run with NVR, Inc. Through certain subsidiaries, SeD Intelligent Home Inc. owns 83.55% of SeD Maryland. SeD Maryland is the owner of Ballenger project, a land sub-division development consisting of 197 acres. This property is currently zoned for 443 entitled residential lots, 210 entitled multi-family units and 200 entitled continuing care retirement community units. SeD Maryland is a party to a series of Lot Purchase Agreements by which NVR has agreed to purchase subdivided lots from SeD Maryland. NVR is a home builder engaged in the construction and sale of single-family detached homes, townhouses and condominium buildings. Under the Lot Purchase Agreements (as amended in 2015 and 2017), NVR provided SeD Home with an upfront deposit and has agreed to purchase the lots at a range of prices. There are five different types of Lot Purchase Agreements, which have generally the same terms except for the price and unit details for each type of lot. Pursuant to the Third Amendment, SeD Maryland and NVR have agreed that the number of certain lots that SeD Maryland will sell to NVR (the 28 feet wide villa lots) will be increased from the previously agreed 85 lots to a total of 121 lots. SeD Maryland will pursue the required zoning approval to change the number of such lots from 85 to 121. It is the parties’ intent that the additional 36 lots will be located at the portion of the Ballenger Run project presently zoned for use as a continuing care retirement community. SeD Maryland and NVR agreed that NVR would pay SeD Maryland an amount representing an increase in the current deposit for the purchase of lots within 5 business days of the Third amendment, and that an additional increase in the deposit will be made once the needed approvals are received. SeD Maryland is required to use its best efforts to seek government approval for this change in lots within 240 days; should it fail to do so, SeD Maryland will be required to return to NVR the amounts NVR has paid to increase the deposit pursuant to the Third Amendment.