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Item 1.03 Bankruptcy or Receivership.

Chapter 11 Reorganization Background and Developments

Background. On August 28, 2020, IronClad Encryption Corporation ("IronClad" orthe "Company") filed a voluntary petition for reorganization under Chapter 11 ofthe United States Bankruptcy Code, case number 20-34332 (the "Chapter 11 Case")in the United States Bankruptcy Court for the Southern District of Texas,Houston Division (the "Bankruptcy Court").

The bankruptcy petition and other subsequent documents filed by IronClad asdebtor and other parties-in-interest are available at the court's Internet homepage http://www.txs.uscourts.gov/ or at the Clerk's Office, United StatesBankruptcy Court, P. O. Box 61010, Houston, Texas 77208. If attempting toaccess the court's records, one will need to have a PACER subscription.

Recent developments. On March 17, 2021, at a hearing conducted by theBankruptcy Court, IronClad's Second Amended Combined Plan of Reorganization andDisclosure Statement (the "Plan"), as modified, was confirmed by order of theBankruptcy Court with a scheduled effective date of April 1, 2021. The courtorder confirming the Plan and a copy of the Plan are presented in full detail inExhibits 2.1 and 2.2 and are incorporated by reference into this Item 1.03.

Summary points. Features of the Plan provide for the treatment of six classesfor the claims and interests of creditors and equity holders. The pointssummarized below are not intended to be and are not a complete description ofthe Plan, and it is qualified in its entirety by reference to the full text ofthe Plan and related documents in the Exhibits.

Class 1: The Internal Revenue Service

oClaim to be paid in cash if allowed.

Class 2: Unsecured Creditors, Convenience Class

oClaims to be paid as allowed.

Class 3: General Class of Unsecured Claims

oClaims to be paid by promissory note as allowed (see discussion below).

Class 4: Allowed Unsecured Claims of the Lerner Class

oClaim to be paid in cash and promissory note (see below).

Class 5: Allowed Interests of Holders of Classes A and B of Common Stock

oShareholder interests and stock certificates are cancelled (see below).

Class 6: Allowed Interests of Holders of Preferred Stock, Series A

oShareholder interest and stock certificates are cancelled (see below).

Claims are deemed to be allowed unless a party-in-interest files an objection toa particular claim in which case a court order would be necessary to allow theclaim.

Class 3. Each creditor shall receive a Class 3 Plan Note (the "Note"; see formof the note in Exhibit 10.1). The principal amount of each Note will be 50% ofthe amount of the underlying claim and as allowed by a final court order (the"Principal").

Each Note is non-interest bearing, unsecured, and payable in quarterlyinstallments of 1/20th of the original Principal with the first quarterlypayment due on the first business day of the thirteenth month after the date ofthe Note. At its option, IronClad may prepay each Note and by so electing would

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be entitled to take advantage of defined prepayment discounts ranging from 50%to 10% depending on the timing and election of any prepayment by IronClad.

Class 4. Proofs of claims were filed by a set of individuals referred to as theLerner Parties. IronClad and the Lerner Parties mediated several disputes thatwere settled by a Mediated Settlement Agreement dated February 11, 2021 (a copyof which is included as Exhibit 9 within the Plan).

In exchange for assigning to IronClad the portfolio of patents granted andapplied for since its inception, the Lerner Parties will receive $500,000 incash and a note payable in the amount of $242,000 (the "Lerner Note"). TheLerner Note is secured by the patent portfolio, has an interest rate of zeropercent, and is payable in twelve monthly installments beginning on the last dayof the first month following the closing date of the Plan. IronClad, at itssole election, has the option to pay $142,000 of the loan Lerner Note withinninety days of the date of the note resulting in a waiver of any future paymentsand the loan deemed and marked as "paid in full".

Class 5. The interests of holders of IronClad's Class A and Class B CommonStock (which includes stock holdings, holdings of options and warrants, et al.)will be deemed cancelled. The Class A Common Stock will no longer exist andthus no longer be registered with the Securities and Exchange Commission ortradable on any stock exchange.

Class 6. The interests of the holder of IronClad's Preferred Stock, Series Awill be deemed cancelled.

Important. On the effective date of the Plan, all rights and interests of theholders of any common or preferred stock will be terminated and those holderswill not receive or retain any property or interest in property based on theirholding of any common or preferred stock.

On the effective date, IronClad will become a private company and will no longermaintain an obligation to be registered with the Securities and ExchangeCommission or to list the equity interest of the reorganized Company with anysecurities exchange.

Item 8.01 Other Events

Cautionary Note about Trading in IronClad's Common Stock

The Company has previously cautioned and continues to caution that trading inits securities during the pendency of the Bankruptcy Petitions is highlyspeculative and poses substantial risks.

IronClad's equity holders will experience a complete loss of the value of theirinvestment due to the complete cancellation of IronClad's Classes A and B of itsCommon Stock.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No. Description

2.1 * Order Confirming Second Amended Plan of Reorganization andApproving Disclosure as filed, heard and confirmed by the court onMarch 17, 2021 in the United States Bankruptcy Court for theSouthern District of Texas, Houston Division, Case Number 20-34332,Document 72 (including its Exhibits A, B and C; total pages: 69)2.2 * Second Amended Combined Plan of Reorganization and DisclosureStatement filed on February 15, 2021 in the United StatesBankruptcy Court for the Southern District of Texas, HoustonDivision, Case Number 20-34332, Document 44 (total pages: 231)2.3 * Order Granting Debtor's Motion to Approve Compromise ofControversies with Lerner Parties as filed and confirmed March 17,2017 in the United States Bankruptcy Court for the Southern Districtof Texas, Houston Division, Case Number 20-34332, Document 73(including its Exhibit 1 with sub-Exhibits A, B, C, and D; totalpages: 42)2.4 * Debtor IronClad Encryption Corporation's Motion to ApproveCompromise of Controversies with Lerner Parties , dated February11, 2021, and filed February 15, 2021 with The United StatesBankruptcy Court for the Southern District of Texas, HoustonDivision, Case Number 20-34332, Document 45 and eventually approvedby the court on March 17, 2021 (total pages: 56)10.1 * Form of Promissory Note to be issued to creditors in Class 3 .General Class of Allowed Unsecured Claims

* Filed with this Form 8-K.

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IRONCLAD ENCRYPTION CORP : Bankruptcy or Receivership, Other Events, Financial Statements and Exhibits (form 8-K) - marketscreener.com