Affinity Energy & Health Limited has been approved to establish a medicinal cannabis cultivation and manufacturing facility in the Republic of Malta. The Company has executed a Letter of Intent (LOI) with Malta Enterprise (the Republic of Malta's Investment Body), approving the Company's application to establish a fully automated, controlled environment hydroponic cultivation, manufacturing and distribution facility. As previously announced the Company's submission to Malta Enterprise was submitted during the September quarter. The Company is one of only a handful of entities, including Aurora Cannabis Inc., to be issued with a LOI by Malta Enterprise. Under the terms of the LOI the Company will be allocated industrial land, ca. 2,200m2, by Malta Industrial Parks Ltd. (a Malta Government body) (MIPL) to construct and operate a facility for the cultivation and subsequent processing into finished doses of medicinal cannabis, including cannabis oil, cannabis plants or seeds or derivatives of cannabis. Malta, a member of the Commonwealth, joined the European Union in 2004 and provides a gateway to the enormous population (+500 million) with 23 of the 28 member countries having legalized medicinal cannabis (including the United Kingdom as of November 1, 2018). The Company has selected a fully automated, modular hydroponic cultivation, growing and harvesting process developed and utilised in Canada, with the final engineering and design layout to be completed upon allocation of the land by MIPL. The facility will be built to meet European Union GMP standards. The initial planning details that, over a three year period, the Company will expand the facility from an initial 15 units to a total of 175. The initial build out will be funded through internal resources and expansions through cash generation. An initial 200,000 (circa AUD 310,000) will be invested directly by AEB in a 100% owned subsidiary company incorporated in Malta, and a further 3,400,000 (circa AUD 5.3 million) is expected to be invested in this company over the following 3 years to achieve the above production levels. Initial funding for the construction of phase 1 in Malta will be sourced from available facilities and cash reserves, with expansions funded by cash flow. In addition the Company is working with Austrade and ProColombia (Colombian Government enterprise) and submitting a license application for the cultivation, manufacture and sale (internally and export) in Colombia. It is anticipated that the license will be issued during H1C19. The Company has deliberately implemented a global strategy, carefully selecting countries that support and promote medicinal cannabis and have access to the large individual and collective markets:Malta ­ European Union /Commonwealth countries; Colombia ­ South and North America (NAFTA); Australia ­ Australia /Asia and Africa.