Storyline 1 files converted to Storyline 2

My client and I have decided to update their Storyline 1 courses into Storyline 2. Everything I've read has said that this is possible and it seems easy enough. In fact, I have already updated a course as a test. However, when I go to open this client's course, I get the window that asks me if I would like to upgrade. Upon selecting "Upgrade", it saves a new "backup" file, but then flashes the error as follows:

"This project is invalid or corrupt and cannot be opened. It may have been created in an earlier version of Storyline."

Why am I receiving this error? I am still able to open this same file in Storyline 1, so I know it is not corrupt. 

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