Item 1.01 Entry into a Material Definitive Agreement.






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.

Item 2.03 Creation of Direct Financial Obligation or an Obligation under an


          Off-Balance Sheet Arrangement of a Registrant.

The disclosure provided under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

The applicable information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.02. The issuance of the securities set forth herein (the "Securities") was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act for the offer and sale of securities not involving a public offering. The Company's reliance upon Section 4(a)(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the Securities was an isolated private transaction by us which did not involve a public offering; (b) there were a small number of recipients; (c) there were no subsequent or contemporaneous public offerings of the Securities by the Company; (d) the Securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the Securities took place directly between the individuals and the Company; and (f) each recipient of the Securities is an accredited investor.

Item 9.01. Financial Statements and Exhibits.






Exhibit No.   Description
    4.1         Form of Convertible Redeemable Promissory Note*
   10.1         Form of Securities Purchase Agreement *

* filed herewith

© Edgar Online, source Glimpses