IRONCLAD ENCRYPTION (IRNC) 10-Q 21 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 10, 2017
Entity Registrant Name	Ironclad Encryption Corp
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Entity Central Index Key	1,455,926
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		66,008,195
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Trading Symbol	irnc

IRONCLAD ENCRYPTION CORPORATION

IRONCLAD ENCRYPTION CORPORATION AND SUBSIDIARY (Previously named Butte Highlands Mining Company) CONDENSED CONSOLIDATED BALANCE SHEETS (Interim period unaudited.) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 250,000	$ 50,682
Prepaid expenses and deposits	25,000
Total current assets	275,000	50,682
Other assets
Patents, net	79,786	68
Total assets	354,786	50,750
Current liabilities
Accounts payable	60,284
Accrued interest	103	4,142
Accrued liabilities	177,367	12,539
Advances payable to related party		10,662
Total current liabilities	237,754	27,343
Other liabilities
Convertible debt		210,000
Total liabilities	237,754	237,343
Commitments and contingencies	0	0
Stockholders' equity (deficit)
Common stock, Class A, $0.001 par value, 500,000,000 shares authorized; 66,008,195 and 56,655,891shares issued and outstanding, respectively	66,008	56,656
Common stock, Class B, $0.001 par value, 1,707,093 shares authorized; 1,538,872 and 0 shares issued and outstanding, respectively	1,539
Additional paid-in capital	4,604,676	31,900
Subscriptions receivable		(81,481)
Accumulated deficit	(4,555,191)	(193,668)
Total stockholders' equity (deficit)	117,032	(186,593)
Total liabilities and stockholders' equity (deficit)	$ 354,786	$ 50,750

Statement of Financial Position

Statement of Financial Position - Parenthetical - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Statement of financial position
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	20,000,000	20,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Class A, Par Value	$ 0.001	$ 0.001
Common Stock, Class A, Shares Authorized	500,000,000	500,000,000
Common Stock, Class A, Shares Issued	66,008,195	56,655,891
Common Stock, Class A, Shares Outstanding	66,008,195	56,655,891
Common Stock, Class B, Par Value	$ 0.01	$ 0.01
Common Stock, Class B, Shares Authorized	1,707,093	1,707,093
Common Stock, Class B, Shares Issued	1,538,872	1,538,872
Common Stock, Class B, Shares Outstanding	1,538,872	1,538,872

IRONCLAD ENCRYPTION CORPORATIO4

IRONCLAD ENCRYPTION CORPORATION AND SUBSIDIARY (Previously named Butte Highlands Mining Company) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income statement
Revenues	$ 0	$ 0	$ 0	$ 0
Operating expenses
Product development costs	327,749		332,842
General and administrative	294,856	6,690	1,579,661	9,234
Officer and director fees	901,684		1,569,730
Investor relations	519,409		759,050
Professional fees	79,573		118,261
Amortization	7	8	15	15
Total operating expenses	2,123,278	6,698	4,359,559
Loss from operations	(2,123,278)	(6,698)	(4,359,559)	(9,249)
Other income (expense)
Interest income	232		112
Interest expense			(2,076)
Total other income (expense)	232		(1,964)
Loss before taxes	(2,123,046)	(6,698)	(4,361,523)	(9,249)
Income taxes
Income tax benefit	0	0	0	0
Income tax expense			0	0
Total income tax	0	0	0	0
Net loss	$ (2,123,046)	$ (6,698)	$ (4,361,523)	$ (9,249)
Net loss per commons share, basic and diluted	$ (0.03)	$ (6.70)	$ (0.07)	$ (9.25)
Weighted average number of common stock shares (in 2017) or member units (in 2016) outstanding, basic and diluted	67,488,739	1,000	65,682,253	1,000

IRONCLAD ENCRYPTION CORPORATIO5

IRONCLAD ENCRYPTION CORPORATION AND SUBSIDIARY (Previously named Butte Highlands Mining Company) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities
Net loss	$ (4,361,523)	$ (9,249)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Amortization expense	15	15
Common stock issued for services, investor relations	236,250
Stock options issued for services, development	65,092
Stock options issued for services, general and administrative	1,258,648
Stock options issued for officers and directors	1,458,730
Stock options issued for services, investor relations	390,170
Changes in assets and liabilities:
Increase in prepaid expenses and deposits	(25,000)
Increase in accounts payable	60,284	8,592
Increase in accrued liabilities	164,828
Decrease in accrued interest	(4,039)
Net cash used by operating activities	(756,545)	(642)
Cash flows from investing activities
Patent applications	(79,733)
Net cash used by investing activities	(79,733)
Cash flows from financing activities
Advances payable to related party	(227)	700
Proceeds from issuances of common stock	983,693
Conversion of options	3,750
Cash received from merger	48,380
Net cash provided by financing activities	1,035,596	700
Increase in cash and cash equivalents	199,318	58
Cash, beginning of period	50,682
Supplemental Cash Flow Information
Interest paid	6,115
Income taxes paid	0	$ 0
Common stock issued to retire convertible debt	$ 210,000

Note 1 - Organization, Recent H

Note 1 - Organization, Recent History, and Description of Businesses-past and Present	6 Months Ended
	Jun. 30, 2017
Notes
Note 1 - Organization, Recent History, and Description of Businesses-past and Present	Note 1 – Organization, Recent History, and Description of Businesses-Past and Present History and Recent Transaction The “Company” is the term used in these statements and notes to refer to the entity originally incorporated in the State of Delaware back in 1929 and recently reincorporated to the State of Nevada. The registered name of the Company until early in 2017 was Butte Highlands Mining Company (“Butte”). The name of the Company has been changed to IronClad Encryption Corporation (“IronClad”). Butte was formed to explore and mine primarily for gold in the Butte Highlands’ “Only Chance” mine, south of Butte, Montana. The Company was reorganized in October 1996 for the purpose of acquiring and developing additional mineral properties. At the time of the 1996 reorganization, stockholders representing approximately 76% of the outstanding capital stock could not be located. In order to obtain the quorum necessary for the special meetings of shareholders to authorize the reorganization, Butte obtained an order from the Superior Court of Spokane County, Washington appointing a trustee for the benefit of those stockholders who could not be located. By May 17, 2007, eleven years after the reorganization and very limited results from its mining activities, the Company had disposed of all of its historical mineral properties or claims and eventually became a “shell company” under the rules of the Securities and Exchange Commission (“SEC”). Now, following ten years of being a shell company with only nominal activity and limited cash or other assets, the business focus of Butte changed early in 2017. Most notably the Company raised significant capital to implement its new business and financial plans to further develop the licensing and commercial use of its patented encryption software. The change caused Butte’ to lose its previous shell company status. The Company also changed its legal name of registration and state of incorporation to more appropriately reflect the fundamental change of its business to developing cyber encryption technology and away from its historical mining activities. The terms “Company”, “IronClad” and “Butte” all refer to the same individual corporate entity, but the uses of the IronClad and Butte names are used to refer to different eras of the Company’s long history. The historical eras generally coincide with the changes in business focus before and after the first weeks of 2017. The business changes are a result of a common stock exchange transaction, accounted for as a “reverse merger”, between Butte and the owners of InterLok Key Management, Inc. (“InterLok”; at the time an independent and privately-held Texas corporation) whereby InterLok became a wholly-owned subsidiary of Butte. Butte issued shares of its common stock in exchange for acquiring all of the common stock of InterLok. At present, InterLok is the one and only subsidiary of the Company and InterLok’s patents and line of business now become the main basis of the business of the Company on a consolidated basis. Along with the Company’s change of business came the Company’s adoption of IronClad Encryption Corporation (and the discontinuance of using the Butte name) as the name of what is now the parent corporation and the change of the state of incorporation to Nevada from Delaware. The Company also has changed its stock market ticker symbol to “IRNC” from “BTHI” on one of the OTC Markets Group over-the-counter markets, OTC QB, where the Company’s shares have been and continue to be traded. Description of Businesses—Present and Past InterLok Key Management, Inc. (formerly InterLok Key Management, LLC) is a company in the business of developing and licensing the use of cyber software technology that encrypts data files and electronic communications. Electronic file information and data transmissions are safeguarded from unauthorized access and their use is securely protected by perpetual authentication through the use of a single-key, dynamic synchronization of authentications keys. InterLok was formed in Texas on June 12, 2006 and incorporated ten years later on June 16, 2016. On January 6, 2017 InterLok entered into a Share Exchange Agreement ("Share Exchange") with Butte Highlands Mining Company. Under the terms of the agreement, the shareholders of InterLok Key Management, Inc. exchanged all 56,655,891 outstanding shares of InterLok’s common stock for 56,655,891 shares of Class “A” common stock of Butte Highlands Mining Company. The Share Exchange was treated as a “reverse merger” with InterLok Key Management, Inc. which is deemed--for accounting recognition purposes—as the accounting acquirer and Butte Highlands Mining Company deemed the accounting acquiree under the acquisition method of accounting. The reverse merger is deemed a recapitalization and the consolidated financial statements represent the substantive continuation of the operations and thus the financial statements of its subsidiary InterLok Key Management, Inc., while the capital structure (in terms of authorized preferred and common stock) of Butte Highlands Mining Company remains intact. Principles of consolidation The accompanying unaudited consolidated financial statements include the accounts of IronClad and its one subsidiary which is wholly-owned. All intercompany accounts and transactions have been eliminated in consolidation. The above unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, these unaudited interim consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements and the rules of the SEC. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2016. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. Operating results for the six month period ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

Note 2 - Summary of Significant

Note 2 - Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
Notes
Note 2 - Summary of Significant Accounting Policies	Note 2 – Summary of Significant Accounting Policies This summary of significant accounting policies is presented to assist in understanding the Company’s interim consolidated financial statements. The financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements. Going Concern As shown in the accompanying financial statements, the Company has incurred cumulative operating losses since inception. As of June 30, 2017, the Company has limited financial resources with which to achieve its objectives and attain profitability and positive cash flows from operations. As shown in the accompanying balance sheets and statements of operations, the Company has an accumulated deficit of $4,555,191. The Company's working capital (current assets minus current liabilities) is $37,246. Achievement of the Company's objectives will depend on its ability to obtain additional financing, to generate revenue from current and planned business operations, and to effectively manage product and software development, operating and capital costs. The Company is in a development stage and has generated no operating revenue, profits or positive cash flows from operations. The Company plans to fund its future operations by potential sales of its common stock or by issuing debt securities. However, there is no assurance that IronClad will be able to achieve these objectives, therefore substantial doubt about its ability to continue as a going concern exists. The financial statements do not include adjustments relating to the recoverability of recorded assets nor the implication of associated bankruptcy costs should IronClad be unable to continue as a going concern. Fair Value Measures The Company's financial instruments, as defined by the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 825-10-50 Financial Instruments—Overall (and subtopics) The standards under ASC 820 Fair Value Measurement · · · The Company did not have any assets measured at fair value other than cash and deposits at June 30, 2017 and at December 31, 2016. Provision for Income Taxes Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition ASC 740-10-25-5 Capitalization of Patent and Trademark Costs The Company capitalizes its legal, patent agent and related filing fees and costs associated with the patents it holds and is developing. The amounts are carried as an intangible asset in the financial statements. The costs of the patents or trademarks are written off ratably (expensed) over the expected useful technological or economic life of the individual assets. The legal life of a patent is typically about 17 years. See Note 3. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified to provide greater line item detail for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. This change in classification has no effect on previously reported cash flows in the Condensed Consolidated Statement of Cash Flows, and had no effect on the previously reported Condensed Consolidated Statement of Operation for any period New Accounting Requirements and Disclosures A ccounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Note 3 - Patents

Note 3 - Patents	6 Months Ended
	Jun. 30, 2017
Notes
Note 3 - Patents	Note 3 – Patents Patents and trademarks are as follows: June 30, 2017 June 30, 2016 Patents and trademarks under development $ 79,733 $ - Patents issued 398 398 Less accumulated amortization (345) (315) 53 83 $ 79,786 $ 83 Amortization expense for intangible assets during the six month periods ended June 30, 2017 and 2016 was $7 and $8, respectively. Three patents expire in 2017, 2018 and 2021, respectively. Costs totaling $79,733 for new patents and trademarks under development (but as yet not awarded) are capitalized at June 30, 2017. The patents and trademarks under development will not be amortized until formally issued.

Note 4 - Concentration of Credi

Note 4 - Concentration of Credit Risk	6 Months Ended
	Jun. 30, 2017
Notes
Note 4 - Concentration of Credit Risk	Note 4 – Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At June 30, 2017 and 2016, the Company had no amounts on deposit in excess of the FDIC insured limit.

Note 5 - Related Party Transact

Note 5 - Related Party Transaction	6 Months Ended
	Jun. 30, 2017
Notes
Note 5 - Related Party Transaction	Note 5 – Related Party Transactions The Company paid $15,249 in consulting fees during 2016 to Eagle Mountain 21, LLC, an entity owned by an officer of the Company. At December 31, 2016 the Company owed an additional $10,662 amount to that same officer for operating costs incurred and submitted for reimbursement during 2016. Reimbursement to the officer was made at the start of the quarter ended June 30, 2017.

Note 6 - Convertible Notes Paya

Note 6 - Convertible Notes Payable	6 Months Ended
	Jun. 30, 2017
Notes
Note 6 - Convertible Notes Payable	Note 6 – Convertible Notes Payable On June 26, 2017 IronClad entered into a Securities Purchase Agreement to issue a 12% convertible note payable for an aggregate principal amount of $78,500 with the intent of meeting certain conditions precedent to closing and funding on or before July 7, 2017. The closing conditions were met prior to that date and the convertible note payable was closed and funded on July 6, 2017. The Company received cash proceeds of $75,000 net of transaction costs of $3,500. See also Note 11. On August 8, 2016, InterLok issued two 5% convertible senior promissory notes for a principal amount of $30,000 each and, on August 16, 2016, issued one 5% convertible senior promissory note for $150,000 for an aggregate principal amount of $210,000. Interest costs accrued on the unpaid principal balances at five percent (5%) annually until the principal amount and all interest accrued thereon was paid at the earlier of 1) the maturity date two years later on August 8, 2018 or August 16, 2018, respectively, or 2) on the conversion of the notes into shares of common stock at a price equal to a conversion price of $0.15 per share. The notes automatically converted into shares of common stock at a conversion price of $0.15 per share, subject to adjustment under certain circumstances in the event of an acquisition transaction or a public offering event. The Company could not enter into an acquisition or public offering event without the prior written approval of any of the note holders. If any holder declined to provide approval for an acquisition transaction or public offering, the Company could have immediately prepaid the entire outstanding principal amounts and accrued interest amounts on the notes. Two of the notes contained the option to purchase additional shares of common stock. During the period ended March 31, 2017, the principal balances of all three 5% convertible senior promissory notes were converted into 1,400,000 shares of IronClad Class A common stock. Accrued interest of $6,115 on the notes was paid in cash during the quarter ended June 30, 2017.

Note 7 - Common Stock

Note 7 - Common Stock	6 Months Ended
	Jun. 30, 2017
Notes
Note 7 - Common Stock	Note 7 – Common Stock During the three month period ended March 31, 2017, i) the Company issued 5,843,954 shares of its Class A common stock at $0.15 per share for cash in the amount of $876,597 ($35,343 of which was only subscribed and still receivable at December 31, 2016), and ii) 75,000 shares at $0.15 per share for investment banking services in the amount of $11,250. Additionally, i) the three convertible note holders converted $210,000 into 1,400,000 shares of Class A common stock, and ii) 250,000 shares were issued pursuant to the Share Exchange Agreement at $0.03 per share. Also, iii) subscriptions receivable that were outstanding at December 31, 2016 in the amount of $81,481 were collected. During the three month period ended June 30, 2017, the Company issued i) 240,333 shares of Class A common stock at $0.15 per share for cash in the amount of $36,050 pursuant to a Section 4(a)2 private placement offering, ii) 25,000 shares at $0.15 per share for the conversion of stock options (see Note 10), and iii) 75,000 shares at $2.90 per share for investment banking services valued at $217,500.

Note 8 - Income Taxes

Note 8 - Income Taxes	6 Months Ended
	Jun. 30, 2017
Notes
Note 8 - Income Taxes	Note 8 – Income Taxes Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes. Significant components of the deferred tax asset amounts at an anticipated tax rate of 35% for the periods ended June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Net operating loss carryforwards $ 1,397,919 $ 193,668 Deferred tax asset $ 489,271 $ 67,780 Valuation allowance for deferred asset (489,271) (67,780) Net deferred tax asset $ 0 $ 0 At June 30, 2017, the Company has net operating loss carryforwards of approximately $1,397,919 which will begin to expire in the year 2033. The increase in the allowance account amount (and also in the deferred tax asset amount) from December 31, 2016 to June 30, 2017 was $421,491. IronClad is subject to federal level income taxes under the jurisdiction of the US, but is not subject to income taxes at any state level. Tax periods that may still be subject to review by the Internal Revenue Service are the years 2014, 2015, and 2016. The Company has not identified any aggressive tax positions.

Note 9 - Share Exchange Agreeme

Note 9 - Share Exchange Agreement	6 Months Ended
	Jun. 30, 2017
Notes
Note 9 - Share Exchange Agreement	Note 9 – Share Exchange Agreement On January 6, 2017, the Company entered into a Share Exchange Agreement with InterLok Key Management, Inc. wherein Butte agreed to issue 56,655,891 restricted shares of Butte’s common stock in exchange for 100% of the outstanding shares of InterLok Key Management, Inc. common stock. InterLok Key Management, Inc. is engaged in the business of developing and licensing its patented key-based encryption methods. On January 6, 2017, Butte completed its Share Exchange Agreement with the owners of InterLok, and issued 56,655,891 restricted shares of Butte’s common stock to 29 persons and entities in exchange for all of the outstanding shares of InterLok Key Management, Inc.’s common stock. Immediately following completion of the share exchange agreement the Company’s new board of directors elected, through a series of board resolutions and regulatory filings, to change the Company’s name to IronClad Encryption Corporation from Butte, to move the Company to Nevada from Delaware, and to change its stock trading symbol to IRNC from BTHI. The Share Exchange was treated as a reverse merger with InterLok Key Management, Inc. deemed, for accounting recognition purposes, the accounting acquirer and Butte Highlands Mining Company deemed the accounting acquiree under the acquisition method of accounting. The reverse merger is deemed a recapitalization and the unaudited pro forma consolidated financial statements represent the substantive continuation of the operations and thus the financial statements of InterLok Key Management, Inc., while the capital structure (with respect to authorized, issued and outstanding shares of preferred and common stock) of Butte Highlands Mining Company--now using the name IronClad--remains intact.

Note 10 - Stock Options

Note 10 - Stock Options	6 Months Ended
	Jun. 30, 2017
Notes
Note 10 - Stock Options	Note 10 – Stock Options During the three month period ended March 31, 2017, the Company awarded 1,145,000 stock options for services and conversions of convertible notes valued at $1,305,565 and 9,000,000 stock options to officers of IronClad valued at $622,045. Of the total 10,145,000 options awarded, 1,045,000 vested immediately and received full expense recognition in the three month period ended March 31, 2017. The remaining 9,883,470 options vest periodically over the subsequent three years and will be expensed as they periodically vest. In addition, 25,000 stock options that were awarded during the three month period ending March 31, 2017 were exercised for cash in the amount of $3,750. During the three month period ended June 30, 2017, the Company awarded 2,945,000 stock options for services valued at $4,657,850 (using the Black-Scholes option pricing model) and 500,000 stock options to an officer of IronClad valued at $731,659 (using the Black-Scholes option pricing model). Of the total 3,445,000 options awarded during the period 85,000 vested immediately and received full expense recognition during the three month period ended June 30, 2017. The remaining 3,360,000 options vest periodically over the next two to four years and will be expensed as they periodically vest. The fair value of stock options is estimated on the date of each award using the Black-Scholes option pricing model to value the stock option based on its terms and conditions. The table below summarizes the assumptions used to estimate the fair values of the options: Number of Options Date Issued Exercise Price Risk-free Interest Rate Volatility Life of Option in years 75,000 01/16/17 $0.75 1.54% 226.01% 3.00 6,000,000 01/20/17 $0.15 1.54% 220.00% 3.00 3,000,000 01/20/17 $0.15 1.54% 220.00% 4.00 350,000 01/31/17 $0.15 1.19% 132.84% 1.93 100,000 02/01/17 $0.15 1.22% 134.90% 2.00 100,000 03/13/17 $0.15 1.40% 144.84% 2.00 500,000 03/15/17 $0.15 1.02% 114.94% 1.40 20,000 03/21/17 $0.15 1.54% 233.07% 3.00 1,700,000 05/05/17 $1.47 1.71% 565.34% 4.00 1,000,000 05/05/17 $1.47 1.32% 202.99% 2.00 80,000 05/31/17 $0.75 1.44% 196.06% 3.00 660,000 06/12/17 $2.50 1.64% 589.85% 4.00 5,000 06/30/17 $3.49 1.55% 197.13% 3.00 13,590,000

Note 11 - Subsequent Events

Note 11 - Subsequent Events	6 Months Ended
	Jun. 30, 2017
Notes
Note 11 - Subsequent Events	Note 11 – Subsequent Events On July 6, 2017 IronClad closed and funded on an agreement to issue a 12% convertible note payable. IronClad entered into the Securities Purchase Agreement on June 26, 2017 to issue the note payable for an aggregate principal amount of $78,500 with the intent of subsequently meeting certain conditions precedent to closing and funding on or before July 7, 2017. The closing conditions precedent were met prior to that date and the convertible note payable was closed, issued and funded on July 6, 2017. The Company received cash proceeds of $75,000 net of transaction costs of $3,500. The note matures on March 30, 2018 and interest costs accrue on the unpaid principal balance at 12% annually until March 30, 2018, and after that interest accrues annually at 22% until the principal amount and all interest accrued and unpaid are paid. The holder of the note, at his sole election, may convert the note into shares of common stock of the Company at any time during the period beginning on the date which is one hundred and eighty days following the date of the note (dated June 26, 2017) and ending on the later of i) the maturity date, or ii) the date of payment of a default amount, if any. The shares to be issued are a function of a variable conversion price which is 65% of a market price defined to be the lowest one trading price for the Company’s common stock during the fifteen day trading period ending on the last trading day prior to exercising the conversion right. The company will keep available authorized shares reserved, initially 289,846 shares, but in any event authorized shares equal to six times the number of shares that would be issuable upon full conversion of the note from time to time.

Note 2 - Summary of Significa17

Note 2 - Summary of Significant Accounting Policies: Going Concern (Policies)	6 Months Ended
	Jun. 30, 2017
Policies
Going Concern	Going Concern As shown in the accompanying financial statements, the Company has incurred cumulative operating losses since inception. As of June 30, 2017, the Company has limited financial resources with which to achieve its objectives and attain profitability and positive cash flows from operations. As shown in the accompanying balance sheets and statements of operations, the Company has an accumulated deficit of $4,555,191. The Company's working capital (current assets minus current liabilities) is $37,246. Achievement of the Company's objectives will depend on its ability to obtain additional financing, to generate revenue from current and planned business operations, and to effectively manage product and software development, operating and capital costs. The Company is in a development stage and has generated no operating revenue, profits or positive cash flows from operations. The Company plans to fund its future operations by potential sales of its common stock or by issuing debt securities. However, there is no assurance that IronClad will be able to achieve these objectives, therefore substantial doubt about its ability to continue as a going concern exists. The financial statements do not include adjustments relating to the recoverability of recorded assets nor the implication of associated bankruptcy costs should IronClad be unable to continue as a going concern.

Note 2 - Summary of Significa18

Note 2 - Summary of Significant Accounting Policies: Fair Value Measures (Policies)	6 Months Ended
	Jun. 30, 2017
Policies
Fair Value Measures	Fair Value Measures The Company's financial instruments, as defined by the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 825-10-50 Financial Instruments—Overall (and subtopics) The standards under ASC 820 Fair Value Measurement · · · The Company did not have any assets measured at fair value other than cash and deposits at June 30, 2017 and at December 31, 2016.

Note 2 - Summary of Significa19

Note 2 - Summary of Significant Accounting Policies: Provision For Income Taxes (Policies)	6 Months Ended
	Jun. 30, 2017
Policies
Provision For Income Taxes	Provision for Income Taxes Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition ASC 740-10-25-5

Note 2 - Summary of Significa20

Note 2 - Summary of Significant Accounting Policies: Capitalization of Internal Costs, Policy (Policies)	6 Months Ended
	Jun. 30, 2017
Policies
Capitalization of Internal Costs, Policy	Capitalization of Patent and Trademark Costs The Company capitalizes its legal, patent agent and related filing fees and costs associated with the patents it holds and is developing. The amounts are carried as an intangible asset in the financial statements. The costs of the patents or trademarks are written off ratably (expensed) over the expected useful technological or economic life of the individual assets. The legal life of a patent is typically about 17 years. See Note 3.

Note 2 - Summary of Significa21

Note 2 - Summary of Significant Accounting Policies: Reclassifications (Policies)	6 Months Ended
	Jun. 30, 2017
Policies
Reclassifications	Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified to provide greater line item detail for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. This change in classification has no effect on previously reported cash flows in the Condensed Consolidated Statement of Cash Flows, and had no effect on the previously reported Condensed Consolidated Statement of Operation for any period

Note 2 - Summary of Significa22

Note 2 - Summary of Significant Accounting Policies: New Accounting Pronouncements, Policy (Policies)	6 Months Ended
	Jun. 30, 2017
Policies
New Accounting Pronouncements, Policy	New Accounting Requirements and Disclosures A ccounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Note 3 - Patents_ Schedule of I

Note 3 - Patents: Schedule of Indefinite-Lived Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2017
Tables/Schedules
Schedule of Indefinite-Lived Intangible Assets	June 30, 2017 June 30, 2016 Patents and trademarks under development $ 79,733 $ - Patents issued 398 398 Less accumulated amortization (345) (315) 53 83 $ 79,786 $ 83

Note 8 - Income Taxes_ Signific

Note 8 - Income Taxes: Significant Components of The Deferred Tax Asset Amounts At An Anticipated Tax Rate of 35% For The Periods Ended June 30, 2017 and December 31, 2016 Are As Follows (Tables)	6 Months Ended
	Jun. 30, 2017
Tables/Schedules
Significant Components of The Deferred Tax Asset Amounts At An Anticipated Tax Rate of 35% For The Periods Ended June 30, 2017 and December 31, 2016 Are As Follows:	Significant components of the deferred tax asset amounts at an anticipated tax rate of 35% for the periods ended June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Net operating loss carryforwards $ 1,397,919 $ 193,668 Deferred tax asset $ 489,271 $ 67,780 Valuation allowance for deferred asset (489,271) (67,780) Net deferred tax asset $ 0 $ 0

Note 10 - Stock Options_ Schedu

Note 10 - Stock Options: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables)	6 Months Ended
	Jun. 30, 2017
Tables/Schedules
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	Number of Options Date Issued Exercise Price Risk-free Interest Rate Volatility Life of Option in years 75,000 01/16/17 $0.75 1.54% 226.01% 3.00 6,000,000 01/20/17 $0.15 1.54% 220.00% 3.00 3,000,000 01/20/17 $0.15 1.54% 220.00% 4.00 350,000 01/31/17 $0.15 1.19% 132.84% 1.93 100,000 02/01/17 $0.15 1.22% 134.90% 2.00 100,000 03/13/17 $0.15 1.40% 144.84% 2.00 500,000 03/15/17 $0.15 1.02% 114.94% 1.40 20,000 03/21/17 $0.15 1.54% 233.07% 3.00 1,700,000 05/05/17 $1.47 1.71% 565.34% 4.00 1,000,000 05/05/17 $1.47 1.32% 202.99% 2.00 80,000 05/31/17 $0.75 1.44% 196.06% 3.00 660,000 06/12/17 $2.50 1.64% 589.85% 4.00 5,000 06/30/17 $3.49 1.55% 197.13% 3.00 13,590,000

Note 1 - Organization, Recent26

Note 1 - Organization, Recent History, and Description of Businesses-past and Present (Details)	6 Months Ended
	Jun. 30, 2017
Details
Consolidation, Policy	Principles of consolidation The accompanying unaudited consolidated financial statements include the accounts of IronClad and its one subsidiary which is wholly-owned. All intercompany accounts and transactions have been eliminated in consolidation. The above unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, these unaudited interim consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements and the rules of the SEC. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2016. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. Operating results for the six month period ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

Note 3 - Patents_ Schedule of27

Note 3 - Patents: Schedule of Indefinite-Lived Intangible Assets (Details) - USD ($)	Jun. 30, 2017	Jun. 30, 2016
Details
Other Intangible Assets, Net	$ 79,733
Finite-Lived Intangible Assets, Gross	398
Finite-Lived Intangible Assets, Accumulated Amortization	(345)	$ (315)
Finite-Lived Intangible Assets, Net	$ 83

Note 3 - Patents (Details)

Note 3 - Patents (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Details
Amortization of Intangible Assets	$ 7	$ 8
Other Intangible Assets, Net	$ 79,733

Note 5 - Related Party Transa29

Note 5 - Related Party Transaction (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2016
Details
Payments for Other Fees	$ 15,249
Operating costs incurred and reimbursed to related party		$ 10,662

Note 6 - Convertible Notes Pa30

Note 6 - Convertible Notes Payable (Details) - USD ($)	Jun. 26, 2017	Mar. 31, 2017	Jun. 30, 2017	Dec. 31, 2016	Aug. 16, 2016	Aug. 08, 2016
Details
Securities Purchase Agreement Aggregate Principal	$ 78,500
Convertible Notes Payable, Noncurrent					$ 150,000	$ 3,000,060,000
Convertible debt		$ 210,000		$ 210,000	$ 210,000
CommonStockIssuedForConvertibleDebtStockIssued		1,400,000
Interest paid			$ 6,115

Note 7 - Common Stock (Details)

Note 7 - Common Stock (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2017	Dec. 31, 2016	Aug. 16, 2016
Details
Stock Issued During Period, Shares, New Issues	240,333	5,843,954
Stock Issued During Period, Value, New Issues	$ 36,050	$ 876,597
Common Stock, Shares Subscribed but Unissued		35,343
Stock Issued During Period, Shares, Issued for Services		75,000
Common stock issued for services			$ 236,250
Convertible debt		$ 210,000		$ 210,000	$ 210,000
Stock Issued During Period, Shares, Other	75,000	1,400,000
Subscriptions receivable collected		$ 81,481
Stock Issued During Period, Shares, Conversion of Convertible Securities	25,000
Stock Issued During Period, Shares, Other	75,000	1,400,000
Common stock issued to retire convertible debt			$ 210,000

Note 8 - Income Taxes_ Signif32

Note 8 - Income Taxes: Significant Components of The Deferred Tax Asset Amounts At An Anticipated Tax Rate of 35% For The Periods Ended June 30, 2017 and December 31, 2016 Are As Follows (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Details
Deferred Tax Assets, Operating Loss Carryforwards	$ 1,397,919	$ 193,668
Deferred Tax Assets, Gross	489,271	67,780
Deferred Tax Assets, Valuation Allowance	(489,271)	(67,780)
Deferred Tax Assets, Net of Valuation Allowance	$ 0	$ 0

Note 8 - Income Taxes (Details)

Note 8 - Income Taxes (Details)	6 Months Ended
	Jun. 30, 2017USD ($)
Details
Operating Loss Carryforwards	$ 1,397,919
Valuation Allowances and Reserves, Period Increase (Decrease)	$ 421,491

Note 9 - Share Exchange Agree34

Note 9 - Share Exchange Agreement (Details)	Jan. 06, 2017
Details
Business Acquisition, Name of Acquired Entity	InterLok Key Management, Inc.
Business Acquisition, Pro Forma Information, Description	The Share Exchange was treated as a reverse merger with InterLok Key Management, Inc. deemed, for accounting recognition purposes, the accounting acquirer and Butte Highlands Mining Company deemed the accounting acquiree under the acquisition method of accounting. The reverse merger is deemed a recapitalization and the unaudited pro forma consolidated financial statements represent the substantive continuation of the operations and thus the financial statements of InterLok Key Management, Inc., while the capital structure (with respect to authorized, issued and outstanding shares of preferred and common stock) of Butte Highlands Mining Company--now using the name IronClad--remains intact.

Note 10 - Stock Options (Detail

Note 10 - Stock Options (Details) - shares	3 Months Ended
	Jun. 30, 2017	Mar. 31, 2017
Details
Stock options for services, and contractual obligations associated with the conversion of senior convertible notes, shares	2,945,000	1,145,000
Stock options for services, and contractual obligations associated with the conversion of senior convertible notes, value	4,657,850	1,305,565
Stock options to officers, shares	500,000	9,000,000
Stock options to officers, value	731,659	622,045
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	3,445,000	10,145,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares	85,000	1,045,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares	3,360,000	9,883,470

Note 10 - Stock Options_ Sche36

Note 10 - Stock Options: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares	Jun. 30, 2017	Jun. 12, 2017	May 31, 2017	May 05, 2017	Mar. 21, 2017	Mar. 15, 2017	Mar. 13, 2017	Feb. 01, 2017	Jan. 31, 2017	Jan. 20, 2017	Jan. 16, 2017
Details
Fair Value Assumptions, Exercise Price	$ 3.49	$ 2.50	$ 0.75	$ 1.47	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.75
Fair Value Assumptions, Risk Free Interest Rate	1.55%	1.64%	1.44%	1.71%	1.54%	1.02%	1.40%	1.22%	1.19%	1.54%	1.54%
Fair Value Assumptions, Expected Volatility Rate	197.13%	589.85%	196.06%	565.34%	233.07%	114.94%	144.84%	134.90%	132.84%	220.00%	226.01%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	3 years	4 years	3 years	4 years	3 years	1 year 4 months 24 days	2 years	2 years	1 year 11 months 5 days	3 years	3 years
Number of options issued				1.47						0.15
Number of options issued				1.32						1.54
Measure of dispersion, in percentage terms (for instance, the standard deviation or variance), for a given stock price, additional items				202.99%						220.00%
Number of options issued				2						4

Note 11 - Subsequent Events (De

Note 11 - Subsequent Events (Details)	Jul. 06, 2017
Details
Subsequent Event, Description	On July 6, 2017 IronClad closed and funded on an agreement to issue a 12% convertible note payable. IronClad entered into the Securities Purchase Agreement on June 26, 2017 to issue the note payable for an aggregate principal amount of $78,500 with the intent of subsequently meeting certain conditions precedent to closing and funding on or before July 7, 2017. The closing conditions precedent were met prior to that date and the convertible note payable was closed, issued and funded on July 6, 2017. The Company received cash proceeds of $75,000 net of transaction costs of $3,500.