Ironclad Encryption Corporation (OTCPK:IRNC) announced that it has entered into security purchase agreement for a private placement of 9% convertible notes for the gross proceeds of $157,500 on July 19, 2018. The company issued first note for gross proceeds of $157,500. The company intended to issue back end note for gross proceeds of $157,500. The notes are issued at par. The notes carry coupon rate of 9% per annum until maturity and 24% per annum after maturity date, if not repaid. The notes are convertible into common shares of the company at a fixed conversion price of $1 per share for six months and thereafter at a variable price equal to 65% of lowest trading price for the company’s shares during fifteen trading days period ending on the last trading day prior to exercising the conversion right. The conversion period will start after 180 days of the date of issuance. The company will issue securities pursuant to exemption provided under Section 4(2) of Regulation D. The company paid issuance expenses of $15,000, including attorneys' fees of $7,500. The mote will mature on July 19, 2019. On January 25, 2019, the company cancelled the issue of back end note.