Hello Stan,
This is very natural – we can’t go back in time and change old applications, so while AxCrypt 2 can open all files including AxCrypt 1-files, AxCrypt 1 can’t open AxCrypt 2 files. (We could of course do an update to AxCrypt 1 for this, but it’s a *lot* of work, and we’re not actively supporting AxCrypt 1 any more).
The solution, if you really wish to downgrade AxCrypt, is to decrypt the file with AxCrypt 2 and then re-encrypt with AxCrypt 1. The easiest way to do this is to use the portable / standalone version of AxCrypt 2 which does not require installation and can thus co-exist with version 1. You’ll find it on the download page.