UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-Q



(Mark
One)



|[X] | ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------



For
the quarter ended June 30, 2019



|[  ] | TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | --------------------------------------------------------------------------------------------



For
the transition period from ____ to ____



Commission
File No. 333-107179 & 000-51210



FRÉLII,
INC.

(Exact
name of registrant as specified in its charter)



|Nevada                                                                                 |  | 980380519                                                                                                        
|-------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------
|(State
        or other jurisdiction of
        incorporation
        or organization) |  | (I.R.S. Employer
                                                                             Identification No.)



2701
North Thanksgiving Way, Suite 100

Lehi,
UT 84043

(Address
of principal executive offices, including Zip Code)



(833)
437-3544

(Registrant’s
telephone number, including area code)



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [  ] No



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [  ] Yes [X] No



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.



|Large
    accelerated filer [  ] | Accelerated
    filer [  ]       
|-------------------------------- | ---------------------------------
|Non-accelerated
    filer [  ]   | Smaller
    reporting company [X]



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [  ] Yes [X] No



APPLICABLE
ONLY TO CORPORATE ISSUERS:



Indicate
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



|Class                                      |  | Outstanding
    as of August 9, 2019
|------------------------------------------ |  | ------------------------------------
|Class
    B Common stock, $0.001 par value |  | 42,780,901                          
|Class
A Common stock, $0.001 par value     |  | -0-                                 


















FRéLLI,
INC.



TABLE
OF CONTENTS



|PART I       |                                                                                       |   
|------------ | ------------------------------------------------------------------------------------- | --
|             |                                                                                       |   
|Item
    1.  | Financial Statements                                                                  | 3 
|Item
    2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 13
|Item
    3.  | Quantitative and Qualitative Disclosures About Market Risk                            | 19
|Item
    4.  | Controls and Procedures                                                               | 20
|             |                                                                                       |   
|PART II      |                                                                                       |   
|             |                                                                                       |   
|Item
    1.  | Legal Proceedings                                                                     | 21
|Item
    1A. | Risk Factors                                                                          | 21
|Item
    2.  | Unregistered Sales of Equity Securities and Use of Proceeds                           | 21
|Item
    3.  | Default upon Senior Securities                                                        | 21
|Item
    4.  | Mine Safety Disclosures                                                               | 21
|Item
    5.  | Other Information                                                                     | 21
|Item
    6.  | Exhibits                                                                              | 21
|SIGNATURES   | 22                                                                                   



2







PART
I



ITEM
1. FINANCIAL STATEMENTS



FRÉLII,
INC.

CONSOLIDATED
BALANCE SHEETS

(Expressed
in US dollars)



|                                                                                                                  |  | June 30, 2019 |             |   | December 31, 2018 |  
|----------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ----------------- | -
|                                                                                                                  |  | (unaudited)   |             |   |                   |  
|ASSETS                                                                                                            |  |               |             |   |                   |  
|Current assets                                                                                                    |  |               |             |   |                   |  
|Cash and cash equivalents                                                                                         |  | $             | 74,864      |   |                   | $
|Common stock subscription receivable                                                                              |  |               | 25,000      |   |                   |  
|Inventory                                                                                                         |  |               | 50,243      |   |                   |  
|Prepaid expenses                                                                                                  |  |               | -           |   |                   |  
|Note receivable                                                                                                   |  |               | 23,630      |   |                   |  
|Interest receivable                                                                                               |  |               | 1,536       |   |                   |  
|Total current assets                                                                                              |  |               | 175,273     |   |                   |  
|Software, less accumulated amortization of $105,342 and $44,404 respectively                                      |  |               | 1,629,033   |   |                   |  
|Total assets                                                                                                      |  | $             | 1,804,306   |   |                   | $
|LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)                                                                    |  |               |             |   |                   |  
|Current liabilities                                                                                               |  |               |             |   |                   |  
|Accounts payable and accrued liabilities                                                                          |  | $             | 44,868      |   |                   | $
|Accrued salaries and related expenses                                                                             |  |               | 25,404      |   |                   |  
|Deferred Revenue                                                                                                  |  |               | 39,583      |   |                   |  
|Settlement amount due to former related party                                                                     |  |               | 126,654     |   |                   |  
|Total liabilities                                                                                                 |  |               | 236,509     |   |                   |  
|Shareholders’ equity (deficit)                                                                                    |  |               |             |   |                   |  
|Preferred Stock, $0.001 par value; 20,000,000 shares authorized:                                                  |  |               |             |   |                   |  
|Series A Preferred Stock, $0.001 par value; 0 (December 31, 2018 - 0) shares issued and outstanding               |  |               | -           |   |                   |  
|Common Stock, $0.001 par value; 2,000,000,000 shares authorized:                                                  |  |               |             |   |                   |  
|                                                                                                                  |  |               |             |   |                   |  
|Class B Common Stock, $0.001 par value; 41,356,440 (December 31, 2018 – 39,074,107) shares issued and outstanding |  |               | 41,356      |   |                   |  
|Additional paid in capital                                                                                        |  |               | 11,987,184  |   |                   |  
|Accumulated deficit                                                                                               |  |               | (10,460,743 | ) |                   |  
|Total shareholders’ equity (deficit)                                                                              |  |               | 1,567,797   |   |                   |  
|Total liabilities and shareholders’ equity (deficit)                                                              |  | $             | 1,804,306   |   |                   | $



See
accompanying notes to the consolidated financial statements



3







FRÉLII,
INC.

CONSOLIDATED
STATEMENTS OF OPERATIONS

(Expressed
in US dollars)



|                                                                                                                                   |  | Three Months      |            |   | Three Months      |   |            | Six Months        |  |   | Six Months        |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ---------- | - | ----------------- | - | ---------- | ----------------- |  | - | ----------------- | -
|                                                                                                                                   |  | Ended             |            |   | Ended             |   |            | Ended             |  |   | Ended             |  
|                                                                                                                                   |  | June
    30, 2019 |            |   | June
    30, 2018 |   |            | June
    30, 2019 |  |   | June
    30, 2018 |  
|                                                                                                                                   |  | (Unaudited)       |            |   | (Unaudited)       |   |            | (Unaudited)       |  |   | (Unaudited)       |  
|                                                                                                                                   |  |                   |            |   |                   |   |            |                   |  |   |                   |  
|Revenue                                                                                                                            |  | $                 | 22,604     |   |                   | $ | 3,291      |                   |  | $ | 39,547            |  
|Cost of goods sold                                                                                                                 |  |                   | 4,175      |   |                   |   | -          |                   |  |   | 9,341             |  
|Gross profit (loss)                                                                                                                |  |                   | 18,429     |   |                   |   | 3,291      |                   |  |   | 30,206            |  
|Operating expenses                                                                                                                 |  |                   |            |   |                   |   |            |                   |  |   |                   |  
|Compensation and consulting fees (including stock-based compensation of $843,000, $1,750,000, $843,000 and $2,351,562 respectively |  |                   | 1,306,821  |   |                   |   | 1,903,709  |                   |  |   | 1,528,054         |  
|Settlement with former related party                                                                                               |  |                   | -          |   |                   |   | 133,320    |                   |  |   | -                 |  
|Marketing and advertising                                                                                                          |  |                   | 10,950     |   |                   |   | 118,496    |                   |  |   | 37,144            |  
|Professional fees                                                                                                                  |  |                   | 20,322     |   |                   |   | 14,625     |                   |  |   | 59,473            |  
|Amortization of software                                                                                                           |  |                   | 49,219     |   |                   |   | 11,719     |                   |  |   | 60,938            |  
|Other                                                                                                                              |  |                   | 68,089     |   |                   |   | 45,305     |                   |  |   | 128,366           |  
|                                                                                                                                   |  |                   |            |   |                   |   |            |                   |  |   |                   |  
|Total Operating Expenses                                                                                                           |  |                   | 1,455,401  |   |                   |   | 2,227,174  |                   |  |   | 1,813,975         |  
|(Loss) from operations                                                                                                             |  |                   | (1,436,972 | ) |                   |   | (2,223,883 | )                 |  |   | (1,783,769        | )
|Other Income (expense)                                                                                                             |  |                   |            |   |                   |   |            |                   |  |   |                   |  
|Interest income                                                                                                                    |  |                   | 251        |   |                   |   | 578        |                   |  |   | 489               |  
|Interest expense                                                                                                                   |  |                   | (883       | ) |                   |   | -          |                   |  |   | (1,808            | )
|Total other income (expense) - net                                                                                                 |  |                   | (632       | ) |                   |   | 578        |                   |  |   | (1,319            | )
|                                                                                                                                   |  |                   |            |   |                   |   |            |                   |  |   |                   |  
|Income (loss) before income taxes                                                                                                  |  |                   | (1,437,604 | ) |                   |   | (2,223,305 | )                 |  |   | (1,785,088        | )
|Income tax expense                                                                                                                 |  |                   | -          |   |                   |   | -          |                   |  |   | -                 |  
|Net Loss                                                                                                                           |  | $                 | (1,437,604 | ) |                   | $ | (2,223,305 | )                 |  | $ | (1,785,088        | )
|Basic and Diluted (Loss) Per Share                                                                                                 |  |                   |            |   |                   |   |            |                   |  |   |                   |  
|                                                                                                                                   |  | $                 | (0.04      | ) |                   | $ | (0.06      | )                 |  | $ | (0.04             | )
|Weighted average number of Common Shares Outstanding                                                                               |  |                   |            |   |                   |   |            |                   |  |   |                   |  
|Basic and Diluted                                                                                                                  |  |                   | 40,475,980 |   |                   |   | 36,264,954 |                   |  |   | 39,822,984        |  



See
accompanying notes to the consolidated financial statements



4







FRÉLII,
INC.

CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE
AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(Expressed
in US dollars)



|                                                                        |  | Series
    A 
Preferred Stock |      |   | Class
    B
 Common Stock |   |   |               |  |  |            |   |  |             |       
|----------------------------------------------------------------------- |  | ----------------------------- | ---- | - | ------------------------- | - | - | ------------- |  |  | ---------- | - |  | ----------- | ------
|                                                                        |  | Number
    of                 |      |   |                           |   |   | Number
    of |  |  |            |   |  | Additional  |       
|                                                                        |  | Shares                        |      |   |                           |   |   | Shares        |  |  |            |   |  | Paid
    In |       
|                                                                        |  | Issued                        |      |   | Amount                    |   |   | Issued        |  |  | Amount     |   |  | Capital     |       
|                                                                        |  |                               |      |   |                           |   |   |               |  |  |            |   |  |             |       
|Six
    Months Ended June 30, 2019                                      |  |                               |      |   |                           |   |   |               |  |  |            |   |  |             |       
|                                                                        |  |                               |      |   |                           |   |   |               |  |  |            |   |  |             |       
|Balance,
    January 1, 2019                                            |  |                               | -    |   |                           | $ | - |               |  |  | 39,074,107 |   |  | $           | 39,074
|Sales of common stock
    and warrants                                  |  |                               | -    |   |                           |   | - |               |  |  | 230,000    |   |  |             | 230   
|Net
    loss                                                            |  |                               | -    |   |                           |   | - |               |  |  | -          |   |  |             | -     
|Balance, March 31,
    2019                                             |  |                               | -    |   |                           |   | - |               |  |  | 39,304,107 |   |  |             | 39,304
|Issuance of common
    stock in connection with acquisition of software |  |                               | -    |   |                           |   | - |               |  |  | 1,200,000  |   |  |             | 1,200 
|Issuance of common
    stock for services                               |  |                               | -    |   |                           |   | - |               |  |  | 550,000    |   |  |             | 550   
|Sale of common stock
    and warrants                                   |  |                               | -    |   |                           |   | - |               |  |  | 302,333    |   |  |             | 302   
|Net
    loss                                                            |  |                               | -    |   |                           |   | - |               |  |  | -          |   |  |             | -     
|Balance
    June 30, 2019                                               |  |                               | -    |   |                           | $ | - |               |  |  | 41,356,440 |   |  | $           | 41,356
|                                                                        |  |                               |      |   |                           |   |   |               |  |  |            |   |  |             |       
|Six
    Months Ended June 30, 2018                                      |  |                               |      |   |                           |   |   |               |  |  |            |   |  |             |       
|                                                                        |  |                               |      |   |                           |   |   |               |  |  |            |   |  |             |       
|Balance, January 1,
    2018                                            |  |                               | 100  |   |                           | $ | - |               |  |  | 10,441,107 |   |  | $           | 10,441
|Cancellation of shares                                                  |  |                               | (100 | ) |                           |   | - |               |  |  | (1,830,000 | ) |  |             | (1,830
|Issuance of common
    stock                                            |  |                               | -    |   |                           |   | - |               |  |  | 7,500,000  |   |  |             | 7,500 
|Issuance of common
    stock for services                               |  |                               | -    |   |                           |   | - |               |  |  | 19,250,000 |   |  |             | 19,250
|Sale of common stock                                                    |  |                               | -    |   |                           |   | - |               |  |  | 150,000    |   |  |             | 150   
|Net
    loss                                                            |  |                               | -    |   |                           |   | - |               |  |  | -          |   |  |             | -     
|Balance, March 31,
    2018                                             |  |                               | -    |   |                           |   | - |               |  |  | 35,511,107 |   |  |             | 35,511
|Issuance of common
    stock for services                               |  |                               | -    |   |                           |   | - |               |  |  | 1,400,000  |   |  |             | 1,400 
|Net
    Loss                                                            |  |                               | -    |   |                           |   | - |               |  |  | -          |   |  |             | -     
|Balance,
    June 30, 2018                                              |  |                               | -    |   |                           | $ | - |               |  |  | 36,911,107 |   |  | $           | 36,911



See
accompanying notes to the consolidated financial statements



5







FRÉLII,
INC.

CONSOLIDATED
STATEMENTS OF CASH FLOWS

(Expressed
in US dollars)



|                                                                                     |  | Six Months    |            |   | Six Months    |  
|------------------------------------------------------------------------------------ |  | ------------- | ---------- | - | ------------- | -
|                                                                                     |  | Ended         |            |   | Ended         |  
|                                                                                     |  | June 30, 2019 |            |   | June 30, 2018 |  
|                                                                                     |  | (Unaudited)   |            |   | (Unaudited)   |  
|Cash Flows From Operating Activities                                                 |  |               |            |   |               |  
|Net (loss)                                                                           |  | $             | (1,785,088 | ) |               | $
|Adjustments to reconcile net income (loss) to net cash used by operating activities: |  |               |            |   |               |  
|Stock based compensation                                                             |  |               | 843,000    |   |               |  
|Amortization of software                                                             |  |               | 60,938     |   |               |  
|Changes in operating assets and liabilities:                                         |  |               |            |   |               |  
|Accounts Receivable                                                                  |  |               | -          |   |               |  
|Inventory                                                                            |  |               | (27,719    | ) |               |  
|Prepaid Expenses                                                                     |  |               | 8,426      |   |               |  
|Interest receivable                                                                  |  |               | (476       | ) |               |  
|Accounts payable and accrued liabilities                                             |  |               | (10,189    | ) |               |  
|Accrued salaries and related expenses                                                |  |               | 1,831      |   |               |  
|Deferred Revenue                                                                     |  |               | 39,583     |   |               |  
|Settlement amount due to former related party                                        |  |               | -          |   |               |  
|Net cash used in operating activities                                                |  |               | (869,694   | ) |               |  
|Cash Flows From Investing Activities:                                                |  |               |            |   |               |  
|Collections of note receivable                                                       |  |               | -          |   |               |  
|Net cash provided by investing activities                                            |  |               | -          |   |               |  
|Cash flows from financing activities:                                                |  |               |            |   |               |  
|Sale of Class B common stock                                                         |  |               | 755,500    |   |               |  
|Collection of common stock subscription receivable                                   |  |               | 130,500    |   |               |  
|Advances from former related parties                                                 |  |               | -          |   |               |  
|Net cash provided by financing activities                                            |  |               | 886,000    |   |               |  
|Increase in cash and and cash equivalents                                            |  |               | 16,306     |   |               |  
|Cash and cash equivalents, beginning of period                                       |  |               | 58,558     |   |               |  
|Cash and cash equivalents, end of period                                             |  | $             | 74,864     |   |               | $
|Supplemental disclosures of cash flow information:                                   |  |               |            |   |               |  
|Cash payments for:                                                                   |  |               |            |   |               |  
|Interest paid                                                                        |  | $             | 925        |   |               | $
|Income taxes paid                                                                    |  | $             | -          |   |               | $
|Non-cash investing and financing activities:                                         |  |               |            |   |               |  
|Stock issued for software                                                            |  | $             | 1,500,000  |   |               | $
|Issuance of Common Stock in exchange for common stock subscription receivable        |  | $             | 25,000     |   |               | $
|Issuance of Common Stock in exchange for satisfaction of accounts payable            |  | $             | 18,000     |   |               | $
|Issuance of Common Stock to various employees and consultants for services rendered  |  | $             | 825,000    |   |               | $



See
accompanying notes to the consolidated financial statements



6







FRéLII,
INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

THREE
MONTHS AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(Expressed
in US dollars)

(Unaudited)



NOTE
1 – Description of Business



The
Company incorporated in the State of Nevada on September 5, 2002, under the name “Bayview Corporation.” On April 7,
2005, the Company changed its name to Xpention Genetics, Inc. concurrent with a change in its business to researching and developing
cancer treatment drugs. On September 17, 2008, the Company changed its name to Cancer Detection Corporation. On August 13, 2009,
the Company again changed its name to Tremont Fair, Inc. From July 2009 until May 2011, the Company operated as a real estate
services firm, seeking to capitalize on the real estate opportunities resulting from the dislocation in the credit markets, and
by extension, the multifamily housing market, by acquiring, rehabilitating, stabilizing and selling distressed multifamily properties
in the southern United States, predominantly in Texas. On May 26, 2011, the Company changed its name to Vican Resources, Inc.,
and changed its business model when it sold the real estate services division and acquired all of the outstanding shares of Vican
Trading, Inc., a Montreal-based purchaser and seller of metals, ores, and other commodities (hereafter, “Vican Trading”).
Upon the acquisition of Vican Trading, there was an implied option for either party to rescind the original acquisition. During
2011, that rescission option was exercised and on December 20, 2011, the Company again changed its business when it unwound the
acquisition of Vican Trading and acquired all of the assets of Med Ex Direct, Inc., a Florida-based provider of management services
in respect of the distribution of diabetic supplies, principally to Hispanic patients (hereafter, “Med Ex Florida”).
On March 22, 2012, the Company again changed its business to become an oil & gas exploration, development, and distribution
company, unwound the purchase of the assets of Med Ex Florida, and acquired an interest in two oil & gas wells located in
Jefferson County, Mississippi.



In
April 2017, the Company underwent a change of control whereby our current Chief Executive Officer Ian Jenkins acquired a controlling
interest in the Company’s capital stock and was appointed our sole officer and director. On April 11, 2017, the Company
executed a Share Exchange Agreement with Unprescribed, LLC, later amended to include Cornerstone Medical Center LLC, whereby the
Company, among other terms, agreed to exchange shares with the ownership units of those two entities for 25,000,000 shares of
the Company’s Common Stock. The Share Exchange Agreement, as amended, terminated by its own terms on December 31, 2017.
Following the termination of the Share Exchange Agreement, the Company modified its business plan to acquire certain intellectual
property assets and to engage a new management team to effectuate the new business plan.



Effective
March 9, 2018, the Company changed its name to Frélii, Inc. From March 2018 to December 2018, the Company operated a web-based
subscription service providing personalized nutrition and wellness plans. The current business plan uses Artificial Intelligence
& whole genome analysis to increase patient outcomes and lower direct costs.



On
May 9, 2019, the Company formed a subsidiary named Frelii Canada Inc.



The
Company’s core business strategy is utilizing its proprietary DNA profiling artificial intelligence (AI) to meet the growing
demands of targeted market segments. Specifically, to provide precision medicine recommendations including medical cannabis use
analysis, consumer wellness, nutraceutical analysis, and in due course pharmaceuticals. This will be delivered through telehealth,
managed care facilities and hospital systems.



7







NOTE
2 — BASIS OF PRESENTATION OF UNAUDITED CONDENSED FINANCIAL INFORMATION



The
unaudited condensed financial statements of the Company for the three and six month periods ended June 30, 2019 and 2018 have
been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial
information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all
the information and footnotes required by accounting principles generally accepted in the United States of America for complete
financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments),
which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations.
Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance
sheet information as of December 31, 2018 was derived from the audited financial statements included in the Company’s financial
statements as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with
the Securities and Exchange Commission (the “SEC”). These financial statements should be read in conjunction with
that report.



Recently
Issued Accounting Pronouncements



Between
May 2014 and December 2016, the FASB issued several ASU’s on Revenue from Contracts with Customers (Topic 606). The core
principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the
consideration to which an entity expects to be entitled for those goods or services. A five-step process has been defined to achieve
this core principle, and, in doing so, more judgment and estimates may be required within the revenue recognition process than
are required under former U.S. GAAP. The standards are effective for annual periods beginning after December 15, 2017, and interim
periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application
of the standards in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective
approach with the cumulative effect of initially adopting the standards recognized at the date of adoption (which includes additional
footnote disclosures). The adoption of these new standards has not had a material impact on the Company’s financial statements.



Certain
other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective
and have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from
adoption of these standards is not expected to be material



NOTE
3 - GOING CONCERN UNCERTAINTY



The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates
the realization of assets and satisfaction of liabilities in the normal course of business. The Company has sustained net losses
which have resulted in an accumulated deficit at June 30, 2019, and negative cash flows from operations, all of which raise substantial
doubt regarding the Company’s ability to continue as a going concern.



The
Company believes these conditions have resulted from the inherent risks associated with small companies. Such risks include, but
are not limited to, the ability to (i) generate revenues and sales of its products and services at levels sufficient to cover
its costs and provide a return for investors, (ii) attract additional capital in order to finance growth, (iii) further develop
and successfully market commercial products and services, and (iv) successfully compete with other comparable companies having
financial, production and marketing resources significantly greater than those of the Company.



We
expect to be dependent on additional debt and equity financing to develop our new business but we cannot assure you that any such
financings will be available or will otherwise be made on terms acceptable to us, or that our present shareholders might suffer
substantial dilution as a result.



The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.



These
financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that it
will be able to realize its assets and discharge its liabilities in the normal course of business as they come due. These financial
statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance
sheet classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a
going concern in the normal course of operations. Such adjustments could be material.



NOTE
4 – PROMISSORY NOTE RECEIVABLE FROM RELATED PARTY



On
April 11, 2017, pursuant to a Security Agreement dated April 11, 2017, the Company paid $495,000 to Cornerstone Medical Center
LLC (“Cornerstone”). In exchange, the Company received a $500,000 Secured Promissory Note from Cornerstone (the “Promissory
Note”), dated April 11, 2017. The Promissory Note bears interest at 4% per annum, or 18% in the event of a default under
the Promissory Note. The principal and interest was due on December 31, 2017. The Promissory Note is secured by all the assets
of Cornerstone.



8







Cornerstone
is owned by Gregory Mongeon, who served as a former officer and director of the Company from January 17, 2018 to May 15, 2018.



NOTE
5 – SOFTWARE



At
June 30, 2019 and December 31, 2018, software, net, consisted of:



|                                                                                                                                                                                                   |  | June 30, 2019 |           |   | December 31, 2018 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | --------- | - | ----------------- | -
|Software and intellectual property acquired from Christopher Dean pursuant to Tech Assignment Agreement on January 18, 2018 in exchange for 7,500,000 shares of Class B Common Stock (see Note 7). |  | $             | 234,375   |   |                   | $
|Software and intellectual property acquired from IrisMind LLC pursuant to Technology Assignment Agreement on May 15, 2019 in exchange for 1,200,000 shares of Class B Common Stock (see Note 7).   |  |               | 1,500,000 |   |                   |  
|Total                                                                                                                                                                                              |  |               | 1,734,375 |   |                   |  
|Less accumulated amortization                                                                                                                                                                      |  |               | (105,342  | ) |                   |  
|Net                                                                                                                                                                                                |  | $             | 1,629,053 |   |                   | $



The
acquired software is being amortized using the straight-line method over their estimated economic life of 5 years. Expected future
amortization expense for the acquired software as of June 30, 2019 follows:



|Year ending December 31, |  | Amount |          
|------------------------ |  | ------ | ---------
|                         |  |        |          
|2019                     |  | $      | 173,437  
|2020                     |  |        | 346,875  
|2021                     |  |        | 346,875  
|2022                     |  |        | 346,875  
|2023                     |  |        | 302,471  
|2024                     |  |        | 112,500  
|                         |  |        |          
|Total                    |  | $      | 1,629,033



NOTE
6 – SETTLEMENT AMOUNT DUE TO FORMER RELATED PARTY



On
June 1, 2018, the Company and Gregory Mongeon (see Note 4 above) executed a Separation and Release Agreement. The agreement provides
for the Company to make 20 monthly cash payments of $6,666 each to Mr. Mongeon from June 5, 2018 to January 5, 2020 (total $133,320).
The agreement also provides for limits on future sales of 7,500,000 shares of Class B Common Stock owned by Mr. Mongeon. At June
30, 2019, the remaining amount due Mr. Mongeon pursuant to the Separation and Release Agreement was $126,654. The Company failed
to make the required monthly payments from July 2018 to June 2019.



9







NOTE
7 - COMMON STOCK AND PREFERRED STOCK TRANSACTIONS



On
January 18, 2018, the Company entered into a technology assignment agreement (the “Tech Assignment Agreement”) whereby
the Company acquired certain intellectual property consisting of advanced computer programming software, source code, proprietary
designs, plans, processes, test procedures, and other technical data and information (the “Technology”) from Christopher
Dean in exchange for 7,500,000 shares of Class B Common Stock of the Company. Christopher Dean was the Chief Technology Officer
and a director of the Company from January 17, 2018 to March 27, 2018.



The
$234,375 estimated fair value of the 7,500,000 shares of Class B Common Stock was capitalized as software. As the trading market
of the Company’s Class B Common Stock was inactive, the fair value of the Class B Common Stock was based on the $0.03125
per share price derived from the $250,000 purchase price of the Exchange Note, which was converted to 8,000,000 shares of Class
B Common Stock on December 14, 2017.



On
January 19, 2018, the Company entered into employment agreements with Ian Jenkins (Chief Executive Officer and Chief Financial
Officer), Christopher Dean (former Chief Technology Officer), Dr. Gregory Mongeon (former Chief Medical Officer), Seth Jones (Chief
Marketing Officer), and Julia Kline (former Chief Operating Officer). The agreements all have a term of five years and provide
for annual base salaries totaling, in the aggregate, $400,000. All of the agreements may be terminated by the Company at any time
without cause by providing written notice to the respective employee for which termination is effective 30 days therefrom. On
January 31, 2018, pursuant to the employment agreements, the Company issued a total of 17,450,000 shares of Class B Common Stock
of the Company to these five officers.



The
$545,312 estimated fair value of the 17,450,000 shares of Class B Common Stock using the $0.03125 per share price described in
the second preceding paragraph was expensed as compensation in the three months ended March 31, 2018.



On
January 21, 2018 and January 26, 2018, the Company’s Chief Executive Officer returned 100 shares of Series A Preferred Stock
and 1,830,000 shares of Class B Common Stock to the Company’s treasury that were cancelled by the Company.



On
January 31, 2018, the Company issued a total of 1,800,000 shares of Class B Common Stock of the Company to 6 service providers
(including 800,000 shares issued to two relatives of the Company’s Chief Executive Officer and 600,000 shares to two independent
directors of the Company) for services rendered.



The
$56,250 estimated fair value of the 1,800,000 shares of Class B Common Stock (using the $0.03125 per share as described in the
fifth preceding paragraph) was expensed as compensation in the three months ended March 31, 2018.



On
March 23, 2018, the Company sold 150,000 shares of Class B Common Stock to an investor at a price of $1.25 per share for $187,500
cash proceeds.



On
May 8, 2018, the Company issued 600,000 shares of Class B Common Stock of the Company to Dr. Hans Jenkins in connection with an
employment agreement signed between Dr. Jenkins and the Company on the same date. The $750,000 estimated fair value of the 600,000
shares of Class B Common Stock (based on the $1.25 per share price of the March 23, 2018 sale of 150,000 shares of Class B Common
Stock) was expensed as compensation in the three months ended June 30, 2018.



On
May 15, 2018, the Company issued a total of 800,000 shares of Class B Common Stock of the Company to 6 employees and consultants
for services rendered pursuant to the Company’s 2018 Incentive Stock Option Plan. The $1,000,000 estimated fair value of
the 800,000 shares of Class B Common Stock (based on the $1.25 per shares price of the March 23, 2018 sale of 150,000 of Class
B Common Stock) was expensed as compensation in the three months ended June 30, 2018.



On
July 6, 2018, the Company issued a total of 600,000 shares of Class B Stock to its two outside directors (300,000 shares each)
for services rendered. The $750,000 estimated fair value of the 600,000 shares of Class B Common Stock (based on the $1.25 per
share price of the March 23, 2018 sale of 150,000 shares of Class B Common Stock) was expensed as compensation in the three months
ended September 30, 2018.



10









On
July 6, 2018, the Company settled an outstanding debt of $91,220 for professional fees incurred and operating expenses paid on
the behalf of the Company owed to Kline Law Group, P.C. and its principal Scott Kline. Mr. Kline and Kline Law Group agreed to
waive all outstanding amounts due as of July 6, 2018, in exchange for 1,000,000 Class B Common Stock shares. The $1,158,780 excess
the $1,250,000 estimated fair value of the 1,000,000 shares of Class B Common Stock (using the $1.25 per share prices described
in the preceding paragraph) over the $91,220 debt settled was expensed as loss on settlement of debt in the three months ended
September 30, 2018.



On
July 20, 2018, the company sold 100,000 shares of Class B Common Stock (and a three-year warrant to purchase up to 100,000 shares
of Class B Common Stock at $1.50 per share) to an investor at a price of $1.25 per share for $125,000 cash proceeds.



On
July 31, 2018, the Company entered into an Asset Purchase Agreement with Kingdom Life Sciences, LLC, a Utah limited liability
company (“KLS”), and its equity holders whereby the Company agreed to purchase certain inventory and related intellectual
property of KLS in exchange for assumption of a liability of KLS in the amount of $19,133 and 20,000 Class B Common Stock shares
of the Company. KLS is controlled by Ian Jenkins, Company Chief Executive Officer, and Gregory Mongeon and Christopher Dean, former
officers and directors of the Company. Pursuant to ASC 805-50 relating to transactions between entities under common control,
the inventory was recorded at KLS’s historical carrying amount of $32,055 and the increase in stockholders’ equity
was recorded at $12,922 (the $32,055 inventory acquired less the $19,133 liability assumed).



From
August 17, 2018 to August 31, 2018, the Company sold a total of 130,000 shares of Class B Common Stock (and three year warrants
to purchase up to a total of 200,000 shares of Class B Common Stock at $1.50 per share) at prices of $1.00 and $1.25 per share
to four investors for total cash proceeds of $140,000.



On
August 31, 2018, the Company issued a total of 110,000 shares of Class B Common Stock to two consultants for services rendered.
The $137,500 estimated fair value of the 110,000 shares of Class B Common Stock (using the $1.25 per share price described in
the preceding paragraph) was expensed as compensation in the three months ended September 30, 2018.



On
October 9, 2018, the Company sold 116,000 shares of Class B Common Stock (and a three-year warrant to purchase up to a total of
116,000 shares of Class B Common Stock at $1.50 per share) at $1.25 per share to an investor for $145,000 cash proceeds.



On
December 29, 2018, the Company sold 87,000 shares of Class B Common Stock to an investor of a price of $1.50 per share for $130,500
cash proceeds (which was collected January 9, 2019).



From
February 19, 2019 to March 6, 2019, the Company sold 230,000 shares of Class B Common Stock at $1.50 per share to 8 shareholders
for $345,000 cash proceeds.



Effective
May 15, 2019, the Company executed a Technology Assignment Agreement with IrisMind, LLC (“IrisMind”), an entity owned
and controlled by Jayson Uffens, the Company’s Chief Technology Officer and a Board member. Pursuant to the Technology Agreement,
the Company acquired an exclusive license to use certain intellectual property (including a software product named the “Rapport
Platform” from IrisMind in exchange for the issuance of 1,200,000 shares of the Company Class B Common Stock (with a fair
value of $1,500,000 based on the valuation date of May 15, 2019)



From
April 26 to May 10, 2019 the Company sold 302,333 shares of Class B Common Stock at $1.50 per share to 10 investors for $410,500
cash proceeds, $18,000 for settlement of services provided, and common stock subscription receivable of $25,000.



11







On
May 8, 2019, the Company issued 200,000 Class B shares to Leslie Norris, 200,000 Class B shares to Sandeep Uppal and 150,000 Class
B shares to Yvan Aubin for services. The $825,000 fair value of the 550,000 shares of Class B Common Stock on May 8, 2019 was
charged to compensation expense in the three months ended June 30, 2019.



At
June 30, 2019, there are warrants outstanding to purchase a total of 416,000 shares of Class B Common Stock at $1.50 per share.



NOTE
8 – COMMITMENTS AND CONTINGENCIES



Effective
April 12, 2019, the Company entered into a Master License and Services Agreement (the “MLSA”) with Optivida Health.
The MLSA provides for the Company’s grant to Optivida of a non-exclusive non-transferable license to use the Company’s
DNA Kit and associated proprietary technology required to produce an “individual-specific” set of recommendations
for customers’ health and wellness. The MLSA also provides for Optivida’s payment of an annual licensing agreement
fee to the Company, which has been paid as of the date of issuance of the accompanying financial statements. The MLSA also provides
for the Company to retain a percentage of revenue from customers referred to our website by Optivida and to receive a percentage
of the profits on products designed by the Company and marketed by Optivida. The initial term of the MLSA is three years.



On
April 15, 2019, the Company entered into a Collaboration Agreement with Orn Health Inc. (“Orn”), a company controlled
by Dr. Hans Jenkins, the Company’s Chief Medical Officer and a Board member. The Collaboration Agreement provides for the
Company’s grant to Orn certain rights to act as the Company’s independent and non-exclusive sales representative and
to directly sublicense products related to the Company’s software platforms on a non-exclusive basis. The Collaboration
Agreement also provides that Gross Revenue generated by Orn and all Approved Operating Expenses incurred by Orn or the Company
will be shared equally by the parties. The initial term of the Collaboration Agreement is 5 years.



NOTE
9 – SUBSEQUENT EVENTS



Effective
July 1, 2019, Frelii Canada Inc. (the “Tenant”) entered into a Commercial Lease Agreement to rent certain premises
in Ontario Canada. The lease provides for Base Rent of CAD 3,000 (approximately $2,300) per month for a term of one year expiring
June 30, 2020. The lease also provides the Tenant the right to renew the lease for an additional term at a rent equal to the Base
Rent increased by 3%. The lease also provides the Tenant the right to pay amounts due under the lease with shares of Frelii Common
Stock using an exchange rate of 1.30 CAD:$1.00 and a price of $0.30 per share of Frelii Common Stock.



On
July 11, 2019, the Company entered into a License Agreement (the “Agreement”) with GATC Canna Inc. (“GATC”)
of Newport Beach, CA. The Agreement provides GATC an exclusive non-transferable license to use the Company’s GATC branded
DNA Kit and the co-developed technology to produce an “individual-specific” set of Cannabis recommendations for customers’
health and wellness. The Agreement also provides the Company a reciprocal exclusive license of the co-developed authored work.
The Agreement also provides GATC a non-exclusive right to DNA Sequencing, AI processing, Individual customized Health & Wellness
Recommendations, Medical Test Recommendations, Whole Genome search and reference tool, and Psychotropic Analysis Test. The Agreement
provides for GATC’s payment of an annual licensing agreement fee to the Company, which has not yet been paid as of the date
of issuance of the accompanying financial statements. The Agreement also provides for the Company to retain a percentage of revenue
from customers referred to a co-developed website. The Agreement terminates automatically on December 31, 2119.



Effective
August 7, 2019, the Company issued a total of 1,424,461 shares of Class B common stock to:



|                                                                                                         |  | Shares |           |  | Agreed Value |  
|-------------------------------------------------------------------------------------------------------- |  | ------ | --------- |  | ------------ | -
|Ontario, Canada office space landlord for leasehold improvements ($16,154) and first year rent ($27,692) |  |        | 146,154   |  |              | $
|Officers and directors for services and expenses                                                         |  |        | 341,717   |  |              |  
|Consultants pursuant to various consulting agreements                                                    |  |        | 936,590   |  |              |  
|Totals                                                                                                   |  |        | 1,424,461 |  |              | $



12







ITEM
2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Special
Note Regarding Forward Looking Statements



This
Quarterly Report on Form 10-Q, including the following “Management’s Discussion and Analysis of Financial Condition
and Results of Operations”, contains forward-looking statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, among others,
those concerning our expected financial performance and strategic and operational plans, as well as all assumptions, expectations,
predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees
of future performance and that a number of risks and uncertainties could cause actual results of the Company to differ materially
from those anticipated, expressed or implied in the forward-looking statements. The words “believe”, “expect”,
“anticipate”, “project”, “targets”, “optimistic”, “intend”, “aim”,
“will” or similar expressions are intended to identify forward-looking statements. All statements other than statements
of historical fact are statements that could be deemed forward-looking statements. Risks and uncertainties that could cause actual
results to differ materially from those anticipated include risks related to our potential inability to raise additional capital;
changes in domestic and foreign laws, regulations and taxes; uncertainties related to China’s legal system and economic,
political and social events in China; Securities and Exchange Commission regulations which affect trading in the securities of
“penny stocks”; changes in economic conditions, including a general economic downturn or a downturn in the securities
markets; and any of the factors and risks mentioned in the “Risk Factors” sections of our Annual Report on Form 10-K
for fiscal year ended December 31, 2016 and subsequent SEC filings. The Company assumes no obligation and does not intend to update
any forward-looking statements, except as required by law.



Our
History



The
Company incorporated in Nevada September 5, 2002 as “Bayview Corporation.” Since 2002, the Company changed control
and its name and business plan numerous times. In April 2017, our current Chief Executive Officer acquired a controlling interest
in the Company, and in January 2018, the Company commenced its current operations, which consist of providing personalized health
and nutrition plans based on genetics and our artificial intelligence-driven computer algorithm. On March 9, 2018, the Company
changed its name to Frélii, Inc. and its ticker symbol to “FRLI” to coincide with its new business plan as
disclosed on Form 8-K filed the same date.



On
May 9, 2019, the Company formed a subsidiary named Frelii Canada Inc.



Overview
of Our Business and Strategy



The
Company’s core business strategy utilizes its proprietary DNA profiling artificial intelligence (AI) to meet the growing
demands of targeted market segments. Specifically, to provide precision medicine recommendations including medical cannabis use
analysis, consumer wellness, nutraceutical analysis, and in due course pharmaceuticals. This will be delivered through telehealth,
managed care facilities and hospital systems.



Frelii
continues to develop and grow its patented AI technology named “NAVII”, leveraging base code and large data sets gathered
from public and private partnerships. Frelii’s predictive capacity with its precision medicine and health and wellness AI
has increased from 84% to 98.5%. The flagship high-efficiency Genetic Sequencing and analysis using Frelii’s proprietary
technology has increased to greater than 99% and 99.999% accuracy on whole genome and exome sequencing, respectively. Current
competitive solutions analyze approximately 400 thousand data points, generating approximately 384 outcomes, such as diet suggestions
or identification of potential health risks. The Frelii AI technology has dramatically increased the data points analyzed to over
3.2 billion, yielding more than 60 million outcomes.



13







Due
to this continued expansion of its AI and market segment specific UI, Frelii has been able to create negotiations with institutions
and organizations in each target market segment that will allow the Company to maximize its business development, strategic growth
and revenue for the foreseeable future. The Company’s unique technology is particularly attractive to these select segments
because of the fundamentally different approach Frelii takes using AI to interpret DNA testing results. This will allow each roadmap
market segment to have much greater insight and decision-making perspective than what is currently available, creating greater
competitive advantage for each partner and alliance within their own respective markets.



Attention
will still be given to the company’s consumer offerings; however, the consistently expanding and growing capabilities make
Frelii’s offerings significant to expanded markets in the following ways:



Precision
Medicine and Health Prediction



| | ● | Because
    Frelii conducts whole-genome sequencing, its technology can be leveraged to advance precision medicine when used for disease
    treatment and prevention by taking into consideration an individual patient’s complete genome with more than 60 million
    outcomes. Medical professionals and researchers will be able to more accurately predict and provide treatment strategies.
    This includes:
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ○ | Precision
    Medicine for Medical Cannabis Use. In states where medical cannabis is legal and in Canada, the application of NAVII can be
    used to help medical professionals determine the best or most appropriate plant genetics and dose to use with patients based
    on the patient’s genetic information. The Frelii technology has the potential to optimize and improve how patients are
    treated with medical cannabis. Making it safer and more effective.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ○ | Precision
    Medicine and the Frelii DNA Wallet: Our web platform will provide doctors a more comprehensive pharmacogenetics search and
    reference tool with both dose and time safety protocols. This reduces the risk to both the patient and doctor while improving
    the patient outcomes and quality of care. This tool also provides doctors and patients an individualized health analysis that
    identifies their most significant health priorities and generates preventative action plans based on the Frelii Whole Genome
    Discovery tool. Once the patient has enrolled in the DNA wallet experience they will be able to deliver their whole genome
    results to a doctor who will then have the ability to import useful information and begin using precision medicine. This gives
    any doctor they choose, the ability to recommend further testing and diagnostic tools more accurately by using predictive
    analytics and established health baselines.
| | ○ | Consumer
    Wellness: Our personalized wellness programs feature nutrition and fitness plans, supplement recommendations, downloadable
    menus, recipes, and shopping lists, and virtual personal training. Subscribers will have the opportunity to enhance their
    personalized wellness plans by uploading their 23andMe or Ancestry.com raw genetic data, or by ordering lab diagnostic kits
    for more comprehensive health testing and analysis. Customers can also order premium nutritional and vitamin supplements from
    our channel partners via our online health marketplace. We plan to generate revenues through user subscriptions, lab diagnostic
    kit purchases, sales of compounding pharmacy products, and nutritional supplements. Frelii plans to offer corporate wellness
    organizations the opportunity to enhance their personalized wellness plans by ordering lab diagnostic kits for more comprehensive
    blood testing and analysis.           



| | ● | Distribution
    will be focused on various Medical Systems. The Company’s technology and its application to diagnostic, health risk
    identification and precision medicine could improve health care and lower costs of health providers. Health providers will
    use the Company’s technology to identify risks before symptoms or complaints arise, when such health issues could be
    addressed more efficiently and potentially more cost-effectively. This will include Managed Care Facilities and Hospital Networks
    delivered face to face or within telemedicine.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In
connection with the foregoing:



(1)
We signed a Memorandum of Understanding (MOU) in March 2019 with, Mercator Biologic, Inc. of Centerville, Utah; True DNA Story,
LLC of Centerville, Utah, and Verdant Inc of Toronto, Ontario, Canada. The purpose of the MOUs are to build a cooperative ventures
capable of leveraging the strengths of each company to enhance and further the science of genetics, markets and potential clients’
quality of life. It also includes mutual cooperation in expanding and improving on the established product portfolios and future
plans. The parties in the MOU also have agreed that there is an opportunity to participate in a pilot research initiative which
is of mutual interest and may present an opportunity for each entity to validate its technology and provide a means to significantly
advance each other’s commercial capabilities. If enacted, this initiative will be finalized in a statement of work that
will define the phases of the initiative and the roles of each participant. The MOU with Verdant Inc, has since expired.



14







(2)
Effective April 12, 2019, the company entered into a Master License and Services Agreement (the “MLSA”) with Optivida
Health. The MLSA provides for the Company’s grant to Optivida of a non-exclusive non-transferable license to use the Company’s
DNA Kit and associated proprietary technology required to produce an “individual-specific” set of recommendations
for customers’ health and wellness. The MLSA also provides for Optivida’s payment of an annual licensing agreement
fee to the Company, which has been paid as of the date of issuance of the accompanying financial statements. The MLSA also provides
for the Company to retain a percentage of revenue from customers referred to our website by Optivida and to receive a percentage
of the profits on products designed by the Company and marketed by Optivida. The initial term of the MLSA is three years.



(3)
On April 15, 2019, the Company entered into a Collaboration Agreement with Orn Health Inc. (“Orn”), a company controlled
by Dr. Hans Jenkins, the Company’s Chief Medical Officer and a Board member. The Collaboration Agreement provides for the
Company’s grant to Orn certain rights to act as the Company’s independent and non-exclusive sales representative and
to directly sublicense products related to the Company’s software platforms on a non-exclusive basis. The Collaboration
Agreement also provides that Gross Revenue generated by Orn and all Approved Operating Expenses incurred by Orn or the Company
will be shared equally by the parties. The initial term of the Collaboration Agreement is 5 years.



(4)
On May 9, 2019, the Company incorporated a Canadian subsidiary, Frelii Canada Inc. with offices to be located in Mississauga,
Ontario.



(5)
On July 11, 2019, the Company entered into a License Agreement (the “Agreement”) with GATC Canna Inc. (“GATC”)
of Newport Beach, CA. The Agreement provides GATC an exclusive non-transferable license to use the Company’s GATC branded
DNA Kit and the co-developed technology to produce an “individual-specific” set of Cannabis recommendations for customers’
health and wellness. The Agreement also provides the a reciprocal exclusive license of the co-developed authored work. The Agreement
also provides GATC a non-exclusive right to DNA Sequencing, AI processing, Individual customized Health & Wellness Recommendations,
Medical Test Recommendations, Whole Genome search and reference tool, and Psychotropic Analysis Test. The Agreement provides for
GATC’s payment of an annual licensing agreement fee to the Company, which has not yet been paid as of the date of issuance
of the accompanying financial statements. The Agreement also provides for the Company to retain a percentage of revenue from customers
referred to a co-developed website. The Agreement terminates automatically on December 31, 2199.



We
are currently doing business under the name “Frélii.” Effective March 9, 2018, the Company changed its name
to “Frélii, Inc.” and its trading symbol to “FRLI.” Frelii (OTCQB: FRLI) trades on the #OTCQB Venture
Market for early stage and developing U.S. and international companies.



Our
executive offices are located at 2701 North Thanksgiving Way, Suite 100, Lehi, UT 84043. You can also contact us by telephone
at (833) 437-3544.



We
are subject to the disclosure requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith, file
reports, information statements and other information, including annual and quarterly reports on Form 10-K and 10-Q, respectively,
with the Securities and Exchange Commission (the “SEC”). Reports and other information filed by the Company
can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington,
DC 20549. Copies of such material can also be obtained upon written request addressed to the SEC, Public Reference Section, 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the SEC maintains a web site on the Internet (http://www.sec.gov)
that contains reports, information statements and other information regarding issuers that file electronically with the SEC through
the Electronic Data Gathering, Analysis and Retrieval System.



15







Our
Management Team



The
Company’s Board of Directors is comprised of experienced professionals in multiple areas of importance to the Company’s
business strategy:



| | ● | Alternative
    Health Care – Our Chief Executive Officer and Chairman Ian Jenkins has over 10 years of experience as a senior executive
    in the health and supplement industry, and an extensive background in physiology, technology startups, and supplement product
    research and development; Our director James Spallino has over 35 years of experience in the integrative medical and dental
    industry as both an entrepreneur and consultant;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Medical
    – Our director and Chief Medical Officer Dr. Hans Jenkins is a board-certified physician specializing in preventive
    health education, medical screenings, and lifestyle modifications to obtain optimal health;                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Digital
    Marketing – Our Chief Marketing Officer Seth Jones is a marketing strategist and digital media expert, produced and
    distributed digital content that generated more than 4.5 million subscribers and over 915 million views on YouTube and over
    3.2 million subscribers and over a billion views on Facebook for an extreme sports and adventure video production company;                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | International
    Trade – Our director Tarek Mango has been involved in international trade and business development for over 20 years,
    and has successfully consulted for, built, and introduced U.S. health care-related brands into Middle Eastern, Asian, and
    European markets;                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ● | Digital
        Technology – Our director and Chief Technology Officer Jayson Uffens is a senior technology architect with over
        two decades of executive experience at high-growth technology firms like GrubHub, Northrop Grumman, and GoDaddy.                                                                                                                                                                                                       
| | ● | Administration
        – Our Chief Administrative Officer, Sandeep Uppal, MBA has decades of experience as CFO for various insurance companies,
        and is has extensive experience in strategic planning, mergers and acquisitions, contract negotiations, and business development                                                                                                                                                                       
| | ● | Finance
    – Our Executive Vice-President of Finance, Yvan Aubin, CPA, CA (Canada) has over 20 years of senior finance experience
    spanning the Oil & Gas and Insurance industries. He has extensive experience in mergers & acquisitions, lending activities,
    risk management, and treasury.                                                                                                                                                          



The
Company’s Scientific Advisory Committee is comprised of experienced medical professionals:



| | ● | Dr.
    Anthony R. Torres, is an independent researcher studying immune genes in autism and helping companies solve their biochemical
    problems in industry. Dr Torres holds several patents for novel inventions in the genetics field. Dr Torres attended University
    of Utah Medical School and Yale for his Residency. He is a senior scientist at the center for persons with disabilities. Dr
    Torres has extensive publications in genetic research.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ● | Dr.
        Susan Morelli, is a board Certified Geneticist and Neonatologist in Provo, Utah. Dr Morelli received her BA from Harvard,
        her medical degree from University of Connecticut School of Medicine and has been in practice for more than 20 years.
        She is a member of the American Academy of Pediatrics, American Board of Pediatrics, and the American Society of Human
        Genetics, American Board of Medical Genetics and Genomics . She is Board Certified as AM BD MEDICAL GENETICS CLINICAL
        GENETICS (MD/DO). Dr Morelli is a published lead author in several medical studies.                                                                                                                                                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ● | Shannon
        Jenkins, D.O. is a practicing medical doctor with over two decades of research experience and teaching. He has published
        innovative research articles in respected journals from Universities such as UCLA, the University of Arizona and the University
        of Utah. He specializes in developmental biology and translational research. He has won many research awards such as the
        UCLA STAR Outstanding Achievement Research Scholar Award, the Human and Molecular Development Research Award and the Human
        Research Development Award. He is also an outstanding teacher and humanitarian having received awards such as the Frist
        Humanitarian Award and the Pediatric Resident Teaching Award. He graduated Summa Cum Laude from Medical School and is
        a member of the Sigma Sigma Phi Medical Honor Society. Additionally, he is board certified in Perinatal and Neonatal Medicine
        and completed a fellowship at UCLA Medical Center in Developmental Biology and Neonatology.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ● | Shayne
        Morris, is a PhD biochemist and genetic researcher. His early work laid the foundation for many novel cancer interventions
        using genetic testing such as the flagship research he conducted for Huntsman Cancer Institute. As chairman and founder
        of the genetics and cell biology research center, Nutri-Biome Research, he has advanced the body of research is in human
        epigenetic response to preventive and precision intervention. Dr. Morris’ research is chronicled in a series of
        Research Reports, Patents and published works available to health professionals.                                                                                                                                                                                                                                                                                                                                                                                                                                 



16







Our
Marketing Plans/Launch Schedule



We
have planned a comprehensive digital marketing campaign that includes Facebook and Twitter ads, a media affiliate program, and
other social media digital advertising.



Our
Future Development Plans



In
addition to the new licensing model described above, the Company is currently developing, either alone or in cooperation with
development partners, and will distribute a series of innovative and proprietary functional food and alternative healthcare/supplement/health
and beauty products. We believe that several of these products have the potential of being highly disruptive to existing product
offering currently in the market, or wholly revolutionary. We believe that these products are the natural and organic extension
of our plan to provide a full suite of personalized health assessments and action plans to our customers.



We
signed a Memorandum of Understanding (MOU) in March 2019 with; Mercator Biologic, Inc. of Centerville, Utah; True DNA Story, LLC
of Centerville, Utah, and Verdant Inc of Toronto, Ontario, Canada. The purpose of these MOUs are to build a cooperative venture
capable of leveraging the strengths of each company to enhance and further the science of genetics, markets and potential clients’
quality of life. It also includes mutual cooperation in expanding and improving on the established product portfolios and future
plans. The parties in the MOU also have agreed that there is an opportunity to participate in a pilot research initiative which
is of mutual interest and may present an opportunity for each entity to validate its technology and provide a means to significantly
advance each other’s commercial capabilities. If enacted, this initiative will be finalized in a statement of work that
will define the phases of the initiative and the roles of each participant. The MOU with Verdant Inc, has since expired.



Effective
April 12, 2019, the company entered into a Master License and Services Agreement (the “MLSA”) with Optivida Health.
The MLSA provides for the Company’s grant to Optivida of a non-exclusive non-transferable license to use the Company’s
DNA Kit and associated proprietary technology required to produce an “individual-specific” set of recommendations
for customers’ health and wellness. The MLSA also provides for Optivida’s payment of an annual licensing agreement
fee to the Company, which has been paid as of the date of issuance of the accompanying financial statements. The MLSA also provides
for the Company to retain a percentage of revenue from customers referred to our website by Optivida and to receive a percentage
of the profits on products designed by the Company and marketed by Optivida. The initial term of the MLSA is three years.



On
April 15, 2019, the Company entered into a Collaboration Agreement with Orn Health Inc. (“Orn”), a company controlled
by Dr. Hans Jenkins, the Company’s Chief Medical Officer and a Board member. The Collaboration Agreement provides for the
Company’s grant to Orn certain rights to act as the Company’s independent and non-exclusive sales representative and
to directly sublicense products related to the Company’s software platforms on a non-exclusive basis. The Collaboration
Agreement also provides that Gross Revenue generated by Orn and all Approved Operating Expenses incurred by Orn or the Company
will be shared equally by the parties. The initial term of the Collaboration Agreement is 5 years.



On
May 9, 2019, the Company incorporated a Canadian subsidiary, Frelii Canada Inc. with offices to be located in Mississauga, Ontario.



17







On
July 11, 2019, the Company entered into a License Agreement (the “Agreement”) with GATC Canna Inc. (“GATC”)
of Newport Beach, CA. The Agreement provides GATC an exclusive non-transferable license to use the Company’s GATC branded
DNA Kit and the co-developed technology to produce an “individual-specific” set of Cannabis recommendations for customers’
health and wellness. The Agreement also provides the Company a reciprocal exclusive license of the co-developed authored work.
The Agreement also provides GATC a non-exclusive right to DNA Sequencing, AI processing, Individual customized Health & Wellness
Recommendations, Medical Test Recommendations, Whole Genome search and reference tool, and Psychotropic Analysis Test. The Agreement
provides for GATC’s payment of an annual licensing agreement fee to the Company, which has not yet been paid as of the date
of issuance of the accompanying financial statements. The Agreement also provides for the Company to retain a percentage of revenue
from customers referred to a co-developed website. The Agreement terminates automatically on December 31, 2119.



Our
Offices



Our
executive offices are located at 2701 North Thanksgiving Way, Suite 100 Lehi, UT 84043. You can also contact our customer service
department by telephone at (833) 4FRELII.



Liquidity
and Capital Resources



Operations
for the three months ended June 30, 2019 was primarily funded through sales of Class B common stock.



Subject
to the launch of the pipeline of revenue streams, there is no certainty that we will be successful in generating sufficient cash
flow from operations or achieving and maintaining profitable operations in the future to enable us to meet our obligations as
they come due and consequently continue as a going concern. The Company may require additional funds to further develop our expanded
business plan. The Company may require additional financing this year to fund our operations and is examining possible sources
of funding beyond the existing cash generated from operations. Sales of additional equity securities would result in the dilution
of the interests of existing stockholders. There can be no assurance that financing will be available when required. In the event
that the necessary additional financing is not obtained, the Company would reduce its discretionary overhead costs substantially,
or otherwise curtail operations.



The
Company expects the forgoing, or a combination thereof, to meet our anticipated cash requirements for the next 12 months; however,
these conditions raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements
do not include any adjustments to reflect the possible future effects on recoverability and reclassification of assets or the
amounts and classification of liabilities that may result from the outcome of this uncertainty.



Results
of operations for the three months ended June 30, 2019 and 2018.



Revenues.
For the three months ended June 30, 2019 and 2018, revenues were $22,604 and $3,291 respectively.



Operating
expenses.Operating expenses for the three months ended June 30, 2019 was $1,455,401 compared to $2,227,174 for the three
months ended June 30, 2018. The decrease in operating expenses was mainly due to higher compensation expenses, including stock-based
compensation expenses reported in the three months ended June 30, 2018.



Other
Income (Expenses).Other expense-net for the three months ended June 30, 2019, was a loss of $632 compared with other income-net
of $578 for the three months ended June 30, 2018, The other income and other expenses represent interest income and interest expense.



Net
loss for the three months ended June 30, 2019 was $1,437,604 compared to a net loss of $2,223,305 for the three months ended June
30, 2018. The decrease in net loss was a result of the higher compensation expenses, including stock-based compensation expenses
reported in the three months ended June 30, 2018.



Off-Balance
Sheet Arrangements



We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital
resources that is material to investors.



18







Personnel



Frélii
has ten full-time employees, but utilizes other contract personnel to carry out our business. We utilize contract personnel on
a continuous basis, primarily in connection with building our technology platform.



Critical
Accounting Policies



Cash
and Cash Equivalents



Cash
Equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition.



Estimates



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



Derivative
financial instruments



The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.



The
Company reviews the terms of equity instruments and other financing arrangements, if any, to determine whether there are embedded
derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately
as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding
options or warrants to employees and non-employees in connection with consulting or other services. These options or warrants
may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.



Advertising



The
Company follows the policy of charging the costs of advertising to expense as incurred. Advertising expense is included in operating
expenses in the statements of operations. Advertising and marketing expense for the three months ended June 30, 2019 and 2018
was $10,950 and $118,496, respectively



Basic
and Diluted Net Income (Loss) Per Share



The
Company follows ASC Topic 260 to account for the earnings per share. Basic earnings (loss) per common share (“EPS”)
calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding
during the year. Diluted earnings (loss) per common share calculations are determined by dividing net income (loss) by the weighted
average number of common shares and dilutive common share equivalents (if dilutive) outstanding.



Income
Taxes



The
Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities
are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against
deferred tax assets is recorded, when it is more likely than not that such tax benefits will not be realized.



ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Not
applicable to smaller reporting companies



19







ITEM
4. CONTROLS AND PROCEDURES



Our
management is responsible for establishing and maintaining a system of disclosure controls and procedures designed to ensure that
information required to be disclosed by us in the reports it files or submitted under the Securities Exchange Act of 1934, as
amended (Exchange Act), is recorded, processed, summarized, and reported within the time periods specified in the rules and forms
of the SEC. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports it files or submitted under the Exchange Act is accumulated and communicated
to management, including the principal executive officer and principal financial officer, or persons performing similar functions,
as appropriate, to allow timely decisions regarding required disclosure. Because of inherent limitations, disclosure controls
and procedures, as well as internal control over financial reporting, may not prevent or detect all inaccurate statements or omissions.



Our
management, with the supervision and participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures as of June 30, 2019, were effective such that the information required
to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management to
allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives
of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within a company have been detected.



Inherent
Limitations Over Internal Controls



Our
internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles
(“GAAP”). Our internal control over financial reporting includes those policies and procedures that:



(i)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of our assets;



(ii)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of the our management
and directors; and



(iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our
assets that could have a material effect on the financial statements.



Management,
including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent or
detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of
the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control
issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods
are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that
the degree of compliance with the policies or procedures may deteriorate.



Changes
in Internal Control over Financial Reporting



There
have been no significant changes in our internal controls over financial reporting that occurred during the quarter ended June
30, 2019 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.



20







PART
II- OTHER INFORMATION



ITEM
1. LEGAL PROCEEDINGS



From
time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time
to time that may harm our business.



ITEM
1A. RISK FACTORS



Not
applicable to smaller reporting companies.



ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.



From
April 26, 2019 to May 18, 2019, the company sold 302,333 shares of Class B Common Stock at $1.50 per share to 10 investors for
$410,500 cash proceeds, settlement for services of $18,000 and a common stock subscription receivable of $25,000.



On
May 18, 2019, the company issued 550,000 shares of Class B Common Stock valued at $1.50 per share to three service providers as
compensation.



On
May 15, 2019, the company issued 1,200,000 shares of Class B Common Stock valued at $1.25 per share to an entity controlled by
a Frelii director for certain software assets.



Exemption
from Registration Claimed



All
of the sales by the Company of its unregistered securities were made by the Company in reliance upon Section 4(2) of the Securities
Act of 1933, as amended (the “1933 Act”). All of the individuals and/or entities listed above that purchased the unregistered
securities were all known to the Company and its management, through pre-existing business relationships. All purchasers were
provided access to all material information, which they requested, and all information necessary to verify such information and
were afforded access to management of the Company in connection with their purchases. All purchasers of the unregistered securities
acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company. All
certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer
of the certificates or agreements representing such securities, without such securities either being first registered or otherwise
exempt from registration in any further resale or disposition.



ITEM
3. DEFAULTS UPON SENIOR SECURITIES.



Not
applicable.



ITEM
4. MINE SAFETY DISCLOSURES.



Not
applicable.



ITEM
5. OTHER INFORMATION.



None



Item
6. Exhibits.



The
following exhibits are filed with or incorporated by reference in this report:



|Item
    No. |  | Description                                                                             
|------------ |  | ----------------------------------------------------------------------------------------
|31.1*        |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Ian Jenkins.
|32.1*        |  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Ian Jenkins.



*
filed herewith



21







SIGNATURES



In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on August 13, 2019.



|                       | FRÉLII,
INC.
|---------------------- | ------------
|                       |             
|Dated:
August 13, 2019 | By:         
|                       |             



22