FRLI Frlii Inc (CE)

Securities Purchase Agreement

Frelii, Inc., a Nevada corporation (the “Company”), entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) whereby an investor (the “Investor”) purchased from the Company, for a purchase price of $203,000 (the “Purchase Price”), a Convertible Redeemable Promissory Note, in the principal amount of $243,600 (the “Note”). The Purchase Price was funded on January 10, 2020.

The Securities Purchase Agreement contains such representations, warranties and covenants as are typical for a transaction of this nature.

Convertible Redeemable Promissory Note

The Note is due and payable on January 9, 2021 (the “Maturity Date”) and entitles the holder to 10% interest per annum (the “Interest Rate”). The Note may be converted into shares of the Company’s common stock at a 20% discount to the average of the two lowest closing bid price of the Common Stock during the 20 trading days immediately prior to the delivery of a notice of conversion; provided, however, such conversion shall not be effected to the extent that the Investor together with any of its affiliates would beneficially own in excess of 4.99%. The Company may redeem the Note prior to July 8, 2020, as follows: (i) if the redemption occurs within the first 60 days then an amount equal to 100% of the outstanding principal amount of each Note plus any accrued interest and any default interest, (ii) if the redemption occurs after the 61st day but on or before the 90th day following the issuance of the Note, then an amount equal to 105% of the outstanding principal amount of each Note plus any accrued interest and any default interest, (iii) if the redemption occurs after the 91st day but on or before the 120th day following the issuance of the Note, then an amount equal to 110% of the outstanding principal amount of each Note plus any accrued interest and any default interest, (iv) if the redemption occurs after the 121st day but on or before the 150th day following the issuance of the Note, then an amount equal to 115% of the outstanding principal amount of each Note plus any accrued interest and any default interest, (v) if the redemption occurs after the 151st day but on or before the 180th day following the issuance of the Note, then an amount equal to 120% of the outstanding principal amount of each Note plus any accrued interest and any default interest.

In the event of a default, without demand, presentment or notice, the Note shall become immediately due and payable.

The foregoing provides only a brief description of the material terms of the Securities Purchase Agreement and the Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are qualified in their entirety by reference to the full text of the forms of Securities Purchase Agreement and the Note, respectively, filed as exhibits to this Current Report on Form 8-K, and are incorporated herein by reference.