10. STOCKHOLDERS' DEFICIT	9 Months Ended
Oct. 31, 2018
Notes
10. STOCKHOLDERS' DEFICIT	NOTE 10 - STOCKHOLDERS’ DEFICIT *Common Shares* The Company entered into an agreement with Triton Funds LLC to provide equity funding to the Company under a registered offering. The Company has asked counsel to prepare the necessary S-1 for the $600,000 funding commitment at $0.01 per share. The Company issued 5,000,000 to Triton Fund LLC as a donation; the donation supports the initiative founded by undergraduates from the University of California, San Diego (UC San Diego) and provided a press release accordingly on April 30, 2018. The share issuance was recorded as deferred offering cost and valued at $21,000. During the three months ending April 30, 2018 the Company issued 10,000,000 shares to settle $5,000 in convertible notes payable. During the three months ending July 31, 2018 the Company issued 5,928,854 shares to settle $15,000 in convertible notes payable. During the three months ending October 31, 2018 the Company issued 56,419,951 shares to settle $144,894 in convertible notes payable and accrued interest. On August 22, 2018 the Company sent an Amendment to the APT SYSTEMS 10B-18 STOCK REPURCHASE PLAN. The company (Apt Systems Inc) and the broker dealer (Wilson Davis and Co. Inc) agreed to suspend the stock repurchase plan until December 1, 2018 after which the repurchase plan is once again effective. This amendment was voluntarily entered into by both parties. The company intends to return shares currently in the account to Treasury. *Preferred Shares* The directors signed a resolution to restructure the preferred shares and created Series B preferred shares with a par value of $0.001 and 1,000,000 shares authorized. The Series B Preferred Stock bears dividends (interest) at an annual rate of six percent (6%) payable annually and is convertible into shares of the Company’s common stock at a conversion price of 90% of the average closing sale price for the Company’s common stock for the two trading days prior to conversion. If insufficient shares are available the Company is required to redeem the shares for cash. The cash redemption price for Series B preferred shares will be face value plus 6% plus accrued dividends. The Series B Preferred Stock may be redeemed by the Company at any time prior to conversion at its face amount plus accrued but unpaid dividends. The Series B Preferred Stock has a liquidation preference equal to the greater of (a) the value of the common shares into which it could be converted or (b) its face amount plus accrued but unpaid dividends. The Series B Preferred Stock is without voting rights except as required by the Delaware General Corporation Law. The directors signed a resolution to restructure the preferred shares and created Series C preferred shares with a par value of $0.001 and 750,000 shares authorized. The Series C Preferred Stock bears dividends (interest) at an annual rate of twelve percent (12%) payable annually and is convertible into shares of the Company’s common stock following the first anniversary of the issuance, at a conversion price of 70% of the average closing sale price for the Company’s common stock for the two trading days prior to conversion. If insufficient shares are available the Company is required to redeem the shares for cash. The cash redemption price for Series C preferred shares will be face value plus 12% plus accrued dividends. The Series C Preferred Stock may be redeemed by the Company at any time prior to conversion at its face amount plus accrued but unpaid dividends. The Series C Preferred Stock has a liquidation preference equal to the greater of (a) the value of the common shares into which it could be converted or (b) its face amount plus accrued but unpaid dividends. The Series C Preferred Stock is without voting rights except as required by the Delaware General Corporation Law. As of January 31, 2018 the Company sold 65,000 shares of Series B preferred shares and 32,500 shares of Series C preferred shares all at $1 per share. No shares were sold during the nine months ended October 31, 2018. On August 28, 2018 the company entered into an advertising agreement with Cicero Consulting Group for a combination of payments including $75,000 note and issuance of $75,000 worth of preferred shares. The preferred shares were valued at $1 per shares and issued as fully vested at the beginning of the service period. The Company recognized expense during the nine months ended October 31, 2018 of $55,435 related to this issuance. The remaining value will be recognized in the fourth quarter of fiscal 2019 and is currently recorded as $19,565 in prepaid expenses related to the note payable issuance and $75,000 as a contra-equity account related to the preferred shares issued. For the nine months ended October 31, 2018 and 2017, total dividends applicable to Series B and C Preferred Stock was $5,707 and $4,939 respectively. The Company did not declare or pay any dividends in fiscal 2019. Although no dividends have been declared, the cumulative total of preferred stock dividends due to these stockholders upon declaration was $10,646 as of October 31, 2018. For the nine months ended October 31, 2018, the carrying value of the Series B and Series C was increased $3,900 and $4,939, respectively to reflect the possible cash redemption value to reflect accrued dividends (even if undeclared) and the cash redemption premium. The carrying value of the Series B preferred shares was $74,607 and $65,000 as of October 31, 2018 and January 31, 2018. The carrying value of the Series C preferred shares was $42,378 and $32,500 as of October 31, 2018 and January 31, 2018. The Company evaluated the Series B and C Preferred Stock and concluded that the redemption features qualify for temporary equity presentation in accordance with ASC 480-10-S99. *Stock Options* The Company adopted the 2013 Equity Incentive Plan (the “Plan”) on January 31, 2012, reserving 5,500,000 shares for future issuances, of which a maximum of 2,500,000 may be issued as incentive stock options. The Plan provides for the issuance of non- statutory stock options or restricted stock to officers and employees, with an exercise price that is at least equal to the fair market value of the Company’s common stock on the date of grant. Vesting terms and the lives of the options are to be determined by the Board of Directors upon grant. As of October 31, 2018 no options have been issued under this Plan.

10. STOCKHOLDERS' DEFICIT

9 Months Ended

Oct. 31, 2018

NOTE 10 - STOCKHOLDERS’ DEFICIT

Common Shares

The Company entered into an agreement with Triton Funds LLC to provide equity funding to the Company under a registered offering. The Company has asked counsel to prepare the necessary S-1 for the $600,000 funding commitment at $0.01 per share.

The Company issued 5,000,000 to Triton Fund LLC as a donation; the donation supports the initiative founded by undergraduates from the University of California, San Diego (UC San Diego) and provided a press release accordingly on April 30, 2018. The share issuance was recorded as deferred offering cost and valued at $21,000.

During the three months ending April 30, 2018 the Company issued 10,000,000 shares to settle $5,000 in convertible notes payable.

During the three months ending July 31, 2018 the Company issued 5,928,854 shares to settle $15,000 in convertible notes payable.

During the three months ending October 31, 2018 the Company issued 56,419,951 shares to settle $144,894 in convertible notes payable and accrued interest.

On August 22, 2018 the Company sent an Amendment to the APT SYSTEMS 10B-18 STOCK REPURCHASE PLAN. The company (Apt Systems Inc) and the broker dealer (Wilson Davis and Co. Inc) agreed to suspend the stock repurchase plan until December 1, 2018 after which the repurchase plan is once again effective. This amendment was voluntarily entered into by both parties. The company intends to return shares currently in the account to Treasury.

Preferred Shares

The directors signed a resolution to restructure the preferred shares and created Series B preferred shares with a par value of $0.001 and 1,000,000 shares authorized. The Series B Preferred Stock bears dividends (interest) at an annual rate of six percent (6%) payable annually and is convertible into shares of the Company’s common stock at a conversion price of 90% of the average closing sale price for the Company’s common stock for the two trading days prior to conversion. If insufficient shares are available the Company is required to redeem the shares for cash. The cash redemption price for Series B preferred shares will be face value plus 6% plus accrued dividends. The Series B Preferred Stock may be redeemed by the Company at any time prior to conversion at its face amount plus accrued but unpaid dividends. The Series B Preferred Stock has a liquidation preference equal to the greater of (a) the value of the common shares into which it could be converted or (b) its face amount plus accrued but unpaid dividends. The Series B Preferred Stock is without voting rights except as required by the Delaware General Corporation Law.

The directors signed a resolution to restructure the preferred shares and created Series C preferred shares with a par value of $0.001 and 750,000 shares authorized. The Series C Preferred Stock bears dividends (interest) at an annual rate of twelve percent (12%) payable annually and is convertible into shares of the Company’s common stock following the first anniversary of the issuance, at a conversion price of 70% of the average closing sale price for the Company’s common stock for the two trading days prior to conversion. If insufficient shares are available the Company is required to redeem the shares for cash. The cash redemption price for Series C preferred shares will be face value plus 12% plus accrued dividends. The Series C Preferred Stock may be redeemed by the Company at any time prior to conversion at its face amount plus accrued but unpaid dividends. The Series C Preferred Stock has a liquidation preference equal to the greater of (a) the value of the common shares into which it could be converted or (b) its face amount plus accrued but unpaid dividends. The Series C Preferred Stock is without voting rights except as required by the Delaware General Corporation Law.

As of January 31, 2018 the Company sold 65,000 shares of Series B preferred shares and 32,500 shares of Series C preferred shares all at $1 per share. No shares were sold during the nine months ended October 31, 2018.

On August 28, 2018 the company entered into an advertising agreement with Cicero Consulting Group for a combination of payments including $75,000 note and issuance of $75,000 worth of preferred shares. The preferred shares were valued at $1 per shares and issued as fully vested at the beginning of the service period. The Company recognized expense during the nine months ended October 31, 2018 of $55,435 related to this issuance. The remaining value will be recognized in the fourth quarter of fiscal 2019 and is currently recorded as $19,565 in prepaid expenses related to the note payable issuance and $75,000 as a contra-equity account related to the preferred shares issued.

For the nine months ended October 31, 2018 and 2017, total dividends applicable to Series B and C Preferred Stock was $5,707 and $4,939 respectively. The Company did not declare or pay any dividends in fiscal 2019. Although no dividends have been declared, the cumulative total of preferred stock dividends due to these stockholders upon declaration was $10,646 as of October 31, 2018.

For the nine months ended October 31, 2018, the carrying value of the Series B and Series C was increased $3,900 and $4,939, respectively to reflect the possible cash redemption value to reflect accrued dividends (even if undeclared) and the cash redemption premium. The carrying value of the Series B preferred shares was $74,607 and $65,000 as of October 31, 2018 and January 31, 2018. The carrying value of the Series C preferred shares was $42,378 and $32,500 as of October 31, 2018 and January 31, 2018.

The Company evaluated the Series B and C Preferred Stock and concluded that the redemption features qualify for temporary equity presentation in accordance with ASC 480-10-S99.

Stock Options

The Company adopted the 2013 Equity Incentive Plan (the “Plan”) on January 31, 2012, reserving 5,500,000 shares for future issuances, of which a maximum of 2,500,000 may be issued as incentive stock options. The Plan provides for the issuance of non- statutory stock options or restricted stock to officers and employees, with an exercise price that is at least equal to the fair market value of the Company’s common stock on the date of grant. Vesting terms and the lives of the options are to be determined by the Board of Directors upon grant. As of October 31, 2018 no options have been issued under this Plan.