SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
x   ANNUAL REPORT UNDER SECTION 13 OR 15(d ) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 20092011

xo   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-12346

IRONSTONE GROUP, INC.
(Name of Registrant as specified in its charter)
 
Delaware95-2829956
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)

Pier 1, Bay 3, San Francisco, California 94111
(Address of principal executive offices, including zip code)

(415) 551-3260
(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.01 par value

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes [  ]    No[X]

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes [  ]    No[X]

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes [X]    No[  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    [X]

Indicate by check mark whether the Registrant is an accelerated filer as defined in Rule 12b-2 of the Act.
       Large accelerated filer  [  ]     Accelerated filer  [  ]     Non- accelerated filer  [  ]     Smaller reporting company  [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)             Yes [ X ]    No[  ]

The approximate aggregate market value of voting stock held by non-affiliates of the Registrant was $111,909$49,083 as of December 31, 20092011 based on the closing bid price on December 31, 2009.2011.  Shares of voting stock held by each officer and director and by each person who owns 5% or more of the outstanding voting stock have been excluded in that such persons may be deemed to be affiliates.  This determination of affiliate status is not necessarily conclusive.

Check whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.    Yes [X]    No[  ]

As of March 30, 2010,December 31, 2011, 742,108 shares of Common Stock, $0.01 par value, were outstanding.

TABLE OF CONTENTS
 
Page
PART I: 
Page

PART I:

Item 1.      Description of Business3
Item 1A.Risk Factors3
Item 1B.    Unresolved Staff Comments3
Item 2.Description of Property3
Item 3.Legal Proceedings3
Item 4.Submission of Matters to a Vote of Security Holders3

PART II:

Item 5.Market for Registrant’s Common Equity and Related Stockholder Matters4
Item 6.6       Selected Consolidated Financial Data4
Item 7.Management’s Discussion and Analysis of Financial Condition and Result of Operation5-6
Item 7A.   Quantitative and Qualitative Disclosures about Market Risk6
Item 8.      Financial Statements and Supplementary Data6
Item 9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure18
Item 9A.9A    Controls and Procedures19
Item 9B.Other Information19

PART III:

Item 10.    Directors and Executive Officers of the Registrant20
Item 11.    Executive Compensation21-22
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters23
Item 13.    Certain Relationships and Related Transactions23
Item 14.Principal Accountant Fees and Services24

PART IV
 
Item 15.Exhibits, Financial Statement Schedules24
 
SIGNATURES25

2

PART 1

ITEM 1.  DESCRIPTION OF BUSINESS

BACKGROUND

Ironstone Group, Inc, (“Ironstone”) a Delaware corporation, was incorporated in 1972.  Since 1986, a majority of Ironstone’s outstanding shares has been owned by Hambrecht & Quist Group, a San Francisco-based investment banking and venture capital firm, and its affiliates (collectively “H&Q”).  In September 2003, Ironstone repurchased all of these shares.  Such repurchased shares are currently being held as treasury stock.  The Hambrecht 1980 Revocable Trust presently owns over 50% of Ironstone’s outstanding voting shares.

BUSINESS STRATEGY

Currently, the Company is reviewing options and new business opportunities.  At December 31, 2009,2011, the Company had $11,700$7,800 in marketable securities, $7,7705,154 in cash, an investment in Salon Media Group, Inc. valued at $92,297$46,148 and tax loss carry-forwards at its disposal.

There can be no assurance that the Company will acquire businesses, form additional alliances, or expand its existing services.  Failure to expand the scope of services provided by the Company may have an adverse effect on the Company’s results of operations.

EMPLOYEES

As of December 31, 2009,2011, the Company had one part-time employee.  This employee received no compensation and is not subject to a collective bargaining agreement.

ITEM 1A.  RISK FACTORS

The company’s main asset is an investment in Salon Media Group, Inc. whose December 31, 2009 market value has dropped 71% as compared to December 31, 2008. There can be no assurance that a market will continue to exist for either the Series C Preferred Stock or the common stock of Salon.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None

ITEM 2.  DESCRIPTION OF PROPERTY

The Company’s principal executive offices are located at Pier 1, Bay 3, San Francisco, California 94111 and its telephone number is (415) 551-3260.

ITEM 3.  LEGAL PROCEEDINGS

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of stockholders during 2009.2011.

3

PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Information regarding the recent trading activity of the Company‘s Common Stock is reported on the OTC Bulletin Board and the Company is not aware of any recent material trading activity in shares of its Common Stock. As of December 31, 2009,2011, there were approximately 500 holders of record of the Company’s Common Stock.  The Company has not paid cash dividends on its Common Stock since its inception and does not intend to pay cash dividends on its Common Stock in the foreseeable future.
 
ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA
ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA
 
Year Ended December 31 2009  2008  2011  2010 
            
Net revenues $-  $-       
              
Net loss $175,607  $656,642  $80,756  $71,854 
                
Unrealized gain (loss) on holdings $(223,722) $(1,183,353) $(49,269) $(780)
                
Comprehensive income (loss) $(310,687) $(1,327,174)
Comprehensive gain (loss) $(130,025) $(72,634)
                
Cash and cash equivalents $7,770  $5,008  $5,154  $1,566 
                
Marketable securities $11,700  $4,680  $7,800  $10,920 
                
Non-marketable securities $92,297  $323,039  $46,148  $92,297 
                
Total assets $111,767  $332,727  $59,102  $104,783 

4
ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATION

CRITICAL ACCOUNTING POLICIES

While the Company continues to evaluate business opportunities, its sole source of revenue is from the sale of marketable securities.  Management has classified these marketable securities, in accordance with ASC 320, as available for sale.  These securities are recorded at fair market value, and any unrealized gains and losses are reported as a separate component of shareholders’ equity.  For marketable securities for which there is an other-than-temporary impairment, an impairment loss is recognized as a realized loss.

Ironstone’s primary expenses are generated from maintaining regulatory reporting compliance, such as quarterly review and annual audit of the financial statements, seeking legal counsel when appropriate, and consulting fees.

RESULTS OF OPERATIONS

Year ended December 31, 20092011
 
Costs and Operating expenses for 20092011 totaled $49,804$34,287, a decreasean increase of $65,0374,308 or 56.6%14.4% as compared to 2008.2010. The decreaseincrease was primarily due to a decreaseincrease in professional fees of $49,533$6,390 and a decrease in state filing fees of $15,583.$1,932. Interest expense for 20092011 totaled $37,162,$46,469, an increase of $8,172$4,594 or 28.2%11.0% as compared to 2008.2010. The increase was due to an increase in borrowings.

5
LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $76,063$61,412 for the year ended December 31, 2009,2011, and $127,433$57,704 for the year ended December 31, 2008.2010.

The Company has a line of credit arrangement with First Republic Bank with a borrowing limit of $350,000 with interest based upon the lender’s prime rate. Interest is payable monthly at 7.75%. The line is guaranteed by William R. Hambrecht, Chief Executive Officer, Director and Robert H. Hambrecht, Secretary, Director. The line of credit is due September 11, 2010.on demand and is secured by all of the Company’s business assets. At December 31, 2009,2011, the outstanding balance under the line was $350,000.

On March 24,The Company borrowed from Mr. William R Hambrecht $214,500 with interest at 7.75% per annum in the years 2008, with2009 and 2010. During the approval of the Board of Directors, William R. Hambrecht agreed to lend $100,000 to the Company. Subsequently on May 6, 2008,year 2011 the Company borrowed the $100,000from Mr. William R Hambrecht $65,000 with interest at 7.75% per annum. On March 23, 2009, withAt December 31, 2011 the approval of the Board of Directors,total borrowed from Mr. William R.R Hambrecht agreed to lend $100,000 to the Company. Subsequently during 2009, the Company borrowed $63,000 with interest at 7.75% per annum.was $279,500.
 
The Company may obtain additional equity or working capital through additional bank borrowings and public or private sales of equity securities and exercises of outstanding stock options. The Company may also borrow additional funds from Mr. William R. Hambrecht. There can be no assurance, however, that such additional financing will be available on terms favorable to the Company, or at all.

While the Company explores new business opportunities, the primary capital resource of the Company is 843 shares of Series C Preferred Stock of Salon Media Group, Inc. (“Salon”). These shares were converted on December 31, 2003 from Convertible Promissory Notes purchased by the Company and are convertible to common stock at any time.  The Series C Preferred Stock is convertible into common stock of Salon at the conversion rate determined by dividing the Series C Preferred Stock per share price of $800 by the Series C Conversion Price of $0.80, or at the rate of one share of Series C Preferred Stock to 1,000 shares of common stock. If converted, the Company’s shares of Series C Preferred Stock represent 843,000 shares or 7.0%6.7% of Salon’s common stock outstanding as of December 31, 2009.2011. The investment in Salon is valued at the converted common stock value of $.10$.05 per share, or $84,300,$42,150, at December 31, 20092011.

In conjunction with making the investment in Salon, the Company received warrants to purchase common stock in Salon.  In 2006, the Company exercised its warrants to purchase a total of 79,970 shares of common stock of Salon. The investment in common shares of Salon is valued at $.10$.05 per share, or $7,997,$3,998, at December 31, 2009.2011. Additionally, the Company has an investment in another available for sale security with a fair value of $11,700$7,800 at December 31, 2009.2011.

As of March 29, 2010,January 30, 2012, Salon’s common stock was trading at $.08$.05 per share.  There can be no assurance that a market will continue to exist for either the Series C Preferred Stock or the common stock of Salon.

ITEM  7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
 
ITEM  8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
 Page
  
Reports of Independent Registered Public Accounting Firms7
  
Consolidated balance sheets at December 31, 20092011 and 200820108
  
Consolidated statements of operations and comprehensive (loss) for the years ended December 31, 20092011 and 20082010
9
  
Consolidated statements of shareholders’stockholders’ equity for the years ended December 31, 20092011 and 2008 2010
10
  
Consolidated statements of cash flows for the years ended December 31, 20092011 and 20082010
11
  
Notes to Consolidated Financial Statements12
 
6
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and
Stockholders of Ironstone Group, Inc. and Subsidiaries
 
We have audited the accompanying consolidated balance sheets of Ironstone Group, Inc. and Subsidiaries (the Company) as of December 31, 20092011 and 2008,2010, and the related consolidated statements of operations and comprehensive loss, stockholders'stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2009.2011. The Company'sCompany’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.audits.
 
We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Companycompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company'scompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Ironstone Group, Inc. and Subsidiaries as of December 31, 20092011 and 2008,2010, and the consolidated results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2009,2011 in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company does not have the necessary working capital for its planned activity, which raises substantial doubt about its ability to continue as a going concern. Management'sManagement’s plans in regard to these matters are described in Note 8the notes to the consolidated financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
/s/ Madsen & Associates CPA's,CPA’s, Inc.
Salt Lake City,
Murray, Utah
April 14, 2010March 26, 2012

7
IRONSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 December 31, 2011
IRONSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 December 31, 2009

  2009  2008 
       
ASSETS:      
Current assets:      
  Cash $7,770  $5,008 
  Marketable securities available for sale, at fair value  11,700   4,680 
  Salon Media Group, Inc. common stock, at fair value  7,997   27,989 
  Salon Media Group, Inc. Series C Preferred, at fair value  84,300   295,050 
         
    Total assets $111,767  $332,727 
         
         
LIABILITIES AND SHAREHOLDERS' EQUITY:        
  Current liabilities:        
    Line of credit borrowings $350,000  $334,175 
    Note payable to related party  163,000   100,000 
    Accounts payable  49,940   39,038 
         
    Total liabilities  562,940   473,213 
         
         
Shareholders' equity:        
  Preferred stock,$0.01 par value, 5,000,000 shares authorized        
     of which there are no issued and outstanding shares        
  Common stock,$0.01 par value, 25,000,000 shares authorized        
    of which 1,487,644 shares are issued and 742,108 shares are outstanding  14,878   14,878 
  Additional paid-in capital  21,170,385   21,170,385 
  Accumulated deficit  (21,116,592)  (20,940,985)
  Accumulated other comprehensive income  2,730   137,810 
   71,401   382,088 
  Less: Treasury Stock, 745,536 shares, at cost  (522,574)  (522,574)
         
      Total shareholders' equity  (451,173)  (140,486)
         
      Total liabilities and shareholders' equity $111,767  $332,727 

The accompanying notes are an integral part of these consolidated financial statements.

8
IRONSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
Years Ended December 31, 2009, and 2008
  2009  2008 
       
Costs and expenses:      
  Legal and other professional fees $43,250  $92,783 
  State filing fee  5,785   21,368 
  Miscellaneous expenses  769   690 
    Total costs and expenses  49,804   114,841 
         
Loss from operations  (49,804)  (114,841)
         
Other income (expense):        
  Interest expense, net        
  of $1 in 2009 and $10 in 2008  (37,161)  (28,980)
  Loss on other than temporary impairment of available for sale securities  (88,642)  (512,821)
         
         
Net (loss) $(175,607) $(656,642)
         
         
COMPREHENSIVE (LOSS),  NET OF TAX:        
   Net (loss) $(175,607) $(656,642)
   Unrealized holding (loss) arising during the year  (223,722)  (1,183,353)
   Reclasification adjustment for other than temporary impairment        
    on available for sale securities  88,642   512,821 
   Comprehensive (loss) $(310,687) $(1,327,174)
         
         
         
Basic and diluted loss per share:        
   Net loss per share $(0.24) $(0.88)
   Weighted average shares  742,108   742,108 
  2011  2010 
       
       
ASSETS:      
Current assets:      
Cash $5,154  $1,566 
Marketable securities available for sale, at fair value  7,800   10,920 
Salon Media Group, Inc. common stock, at fair value  3,998   7,997 
Salon Media Group, Inc. Series C Preferred, at fair value  42,150   84,300 
         
Total assets $59,102  $104,783 
         
         
LIABILITIES AND SHAREHOLDERS' EQUITY:        
Current liabilities:        
Line of credit borrowings $350,000  $350,000 
Note payable to related party  279,500   214,500 
Accounts payable and accrued expenses  83,434   64,090 
         
Total liabilities  712,934   628,590 
         
         
Stockholders' equity:        
Preferred stock, $0.01 par value, 5,000,000 shares authorized of which there are no issued and outstanding shares        
Common stock, $0.01 par value, 25,000,000 shares authorized of which 1,487,644 shares are issued and 742,108 shares are outstanding    14,878   14,878 
Additional paid-in capital  21,170,385   21,170,385 
Accumulated deficit  (21,269,202)  (21,188,446)
Accumulated other comprehensive income  (47,319)  1,950 
   (131,258)  (1,233)
Less: Treasury Stock, 745,536 shares, at cost  (522,574)  (522,574)
         
Total stockholders' equity  (653,832)  (523,807)
         
Total liabilities and stockholders' equity $59,102  $104,783 
 
The accompanying notes are an integral part of these consolidated financial statements.

98
IRONSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years Ended December 31, 2009 and 2008
              Accumulated          
        Additional     Other          
  Common Stock  Paid-In  Accumulated  Comprehensive  Treasury Stock    
  Shares  Amount  Capital  Deficit  Income (Loss)  Shares  Amount  Total 
                         
Balances,                        
   January 1, 2008  1,487,644  $14,878  $21,170,385  $(20,284,343) $808,342   745,536  $(521,875) $1,187,387 
                                 
Other comprehensive                             
    loss                  (1,183,353)          (1,183,353)
Reclassification adjustment                             
for other than temporary                             
impairment on available                             
   for sale securities                  512,821           512,821 
 Net (loss)              (656,642)              (656,642)
 Cash Payment on                                
   Fractional Shares                          (699)  (699)
                                 
 Balances,                                
   December 31, 2008  1,487,644   14,878   21,170,385   (20,940,985)  137,810   745,536   (522,574)  (140,486)
                                 
                                 
Other comprehensive                             
    loss                  (223,722)          (223,722)
Reclassification adjustment                             
for other than temporary                             
impairment on available                             
   for sale securities                  88,642           88,642 
 Net (loss)              (175,607)              (175,607)
 Balances,                                
   December 31, 2009  1,487,644  $14,878  $21,170,385  $(21,116,592) $2,730   745,536  $(522,574) $(451,173)
 
IRONSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
Years Ended December 31, 2011, and 2010
  2011  2010 
       
       
Operating expenses:      
Legal and other professional fees $31,570  $25,180 
State filing fee  2,037   3,969 
Miscellaneous expenses  680   830 
Total operating expenses  34,287   29,979 
         
Loss from operations  (34,287)  (29,979)
         
Other income (expense):        
Interest expense  (46,469)  (41,875)
         
Net (loss) $(80,756) $(71,854)
         
COMPREHENSIVE (LOSS),  NET OF TAX:        
Net (loss) $(80,756) $(71,854)
Unrealized holding (loss) arising during the year  (49,269)  (780)
         
Comprehensive (loss) $(130,025) $(72,634)
         
Basic and diluted loss per share:        
Net loss per share $(0.11) $(0.10)
Weighted average shares  742,108   742,108 
The accompanying notes are an integral part of these consolidated financial statements.

109
IRONSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 2011 and 2010
IRONSTONE GROUP, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended Decenber 31, 2009 and 2008
           Accumulated          
     Additional     Other          
  Common Stock  Paid-In  Accumulated  Comprehensive  Treasury Stock    
  Shares  Amount  Capital  Deficit  Income (Loss)  Shares  Amount  Total 
                         
Balances, January 1, 2010   
  1,487,644  $14,878  $21,170,385  $(21,116,592) $2,730   745,536  $(522,574) $(451,173)
                                 
Unrealized Loss                  (780)          (780)
                                 
Net (loss)              (71,854)              (71,854)
                                 
Balances, December 31, 2010     1,487,644   14,878   21,170,385   (21,188,446)  1,950   745,536   (522,574)  (523,807)
                                 
Unrealized Loss                  (49,269)          (49,269)
                                 
Net (loss)              (80,756)              (80,756)
Balances, December 31, 2011
  1,487,644  $14,878  $21,170,385  $(21,269,202) $(47,319)  745,536  $(522,574) $(653,832)
 
  2009  2008 
       
CASH FLOWS FROM OPERATING ACTIVITIES:      
  Net (loss) $(175,607) $(656,642)
  Adjustments to reconcile net loss to net cash used in        
    operating activities:        
    Loss on other than temporary impairment on available        
    for sale securities  88,642   512,821 
    Changes in operating assets and liabilities:        
      Accounts payable  10,902   16,388 
          Net cash used in operating activities  (76,063)  (127,433)
         
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
  Cash payments for fractional treasury shares      (699)
  Proceeds from line of credit  15,825   127,000 
   63,000     
          Net cash provided by financing activities  78,825   126,301 
         
Net increase (decrease) in cash  2,762   (1,132)
         
Cash at beginning of year  5,008   6,140 
         
Cash at end of year $7,770  $5,008 
         
Supplemental disclosure of cash flow information        
   Cash paid during the year for interest $37,162  $28,990 

The accompanying notes are an integral part of these consolidated financial statements.

10
IRONSTONE GROUP, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended Decenber 31, 2011 and 2010
  2011  2010 
       
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net (loss) $(80,756) $(71,854)
Changes in operating assets and liabilities:        
Accounts payable  19,344   14,150 
Net cash used in operating activities  (61,412)  (57,704)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from line of credit        
Note payable to related party  65,000   51,500 
Net cash provided by financing activities  65,000   51,500 
         
Net increase (decrease) in cash  3,588   (6,204)
         
Cash at beginning of year  1,566   7,770 
         
Cash at end of year $5,154  $1,566 
         
Supplemental disclosure of cash flow information        
Cash paid during the year for interest $27,125  $27,200 
The accompanying notes are an integral part of these consolidated financial statements.

11

IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Business Activities

Ironstone Group, Inc. and subsidiaries have no operations but are seeking appropriate business combination opportunities.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Ironstone Group, Inc. and its subsidiaries, AcadiEnergy, Inc., Belt Perry Associates, Inc., DeMoss Corporation, and TaxNet, Inc. (collectively the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Marketable Securities

Marketable securities have been classified by management as available for sale in accordance with ASC 320, marketable securities are recorded at fair value and any unrealized gains and losses are excluded from earnings and reported as a separate component of shareholders’ equity until realized.  The fair value of the Company’s marketable securities and investments at December 31, 20092011 is based on quoted market prices. For the purpose of computing realized gains and losses, cost is identified on a specific identification basis.  For marketable securities for which there is an other-than-temporary impairment, an impairment loss is recognized as a realized loss.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Income Taxes

The Company and its wholly owned subsidiaries file a consolidated federal income tax return.  Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred income taxes.  Deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future.  Deferred income taxes are also recognized for net operating loss carryforwards that are available to offset future taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
+
12

IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings (Loss) per share

Basic earnings (loss) per share (“EPS”) excludes dilution and is computed by dividing net income (loss) applicable to common shareholders by the weighted average number of common shares actually outstanding during the period.  Diluted EPS reflects the potential dilution from potentially dilutive securities, except where inclusion of potentially dilutive securities would have an anti-dilutive effect, using the average stock price during the period in the computation.

Stock Based Compensation

The Company has not offered any equity-based compensation to any of its employees or officers for the years ended December 31, 20092011 and 2008.2010.  Additionally, there are no outstanding options.

Recent Accounting Pronouncements

We do not expect the adoption of any recent accounting pronouncements will have a material impact on the Company’s consolidated results of operations or financial position.

2. FAIR VALUE OF FINANCIAL INSTRUMENTS

Due to the short maturity of cash, accounts payable, the line of credit, and the note payable, the carrying amount reported in the consolidated balance sheets approximates fair market value.

Effective January 1, 2008, the Company adopted ASC 820, “Fair Value Measurement and Disclosures”. ASC 820 defines fair value, establishes a framework for measuring fair value under accounting principles generally accepted in the United States of America and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on three levels of inputs of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1     
Level 1Quoted prices in active markets for identical assets or liabilities.
Level 2Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
13

Level 2     Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices forIRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are
2. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
 observable or can be corroborated by observable market data for substantially the full term of the
    assets or liabilities.

Level 3     Unobservable inputs that are supported by little or no market activity and that are significant to
    the fair value of the assets or liabilities.

In addition to using the guidelines set forth in ASC 820 for valuing fixed income securities, each company is also required

13
IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

to disclose information that enables users of its financial statements to assess the inputs used to develop those valuations.
Market values were determined for each security in the investment portfolio based on quoted market prices and quoted market prices for similar securities.
 
Total Carrying Value In The Total Carrying Value In the
Quoted Market Prices Significant OtherConsolidatedQuoted Market Prices Significant OtherConsolidated
In Active MarketsObservable InputBalance Sheet atIn Active MarketsObservable Input Balance Sheet at
Description(Level 1) (Level 2)December 31, 2009(Level 1)(Level 2)December 31, 2011
  
Securities available for sale$19,697$84,300$103,997$11,798$42,150$53,948
 
 
 Total Carrying Value In the 
Quoted Market Prices Significant Other Consolidated 
In Active Markets Observable Input Balance Sheet at 
Description (Level 1) (Level 2) December 31, 2010 
  
Securities available for sale  $18,917 $84,300 $103,217 
                                                                        

14

IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. INVESTMENT IN INVESTMENTS

SALON MEDIA GROUP, INC.

The Company owns 843 shares of Series C Preferred Stock of Salon Media Group, Inc. (“Salon”). These shares resulted from the December 31, 2003 conversion of Convertible Promissory Notes purchased by the Company and are convertible to common stock at any time. The Series C Preferred Stock is convertible into common stock of Salon at the conversion rate determined by dividing the Series C Preferred Stock per share price of $800 by the Series C Conversion Price of $0.80, or at the rate of one share of Series C Preferred Stock to 1,000 shares of common stock. If converted, the Company’s shares of Series C Preferred Stock represent 843,000 common shares of Salon or 7.0%6.7% of Salon’s common stock outstanding as of December 31, 2009.2011. The investment in Series C Preferred Stock of Salon is valued at the converted common stock value of $.10$.05 and $.35$.10 per share, or $84,300$42,150 and $295,050$84,300 at December 31, 20092011 and 2008,2010, respectively

Additionally, in conjunction with making the investment in Salon, the Company received warrants to purchase common stock in Salon. In 2006, the Company exercised its warrants to purchase a total of 79,970 shares of common stock of Salon. The investment in common shares of Salon is valued at $.10$.05 and $.35$.10 per share, or $7,997$3,998 and $27,989$7,997 at December 31, 20092011 and 2008,2010, respectively.

FLEXI INTERNATIONAL

The Company owns 78,000 shares of Flexi International Software stock and accounts for this investment as an available-for-sale security on its balance sheet. During the year ended December 31, 2011, the quoted market price of this stock declined from $.14 to $.10 per share. Accordingly, a related unrealized loss of $3,120 has been recorded during the year ended December 31, 2011 (an unrealized loss of $780 was recorded during the year ended December 31, 2010).

4. RELATED PARTY TRANSACTIONS

A Director and a former President and Chief Executive Officer of Salon is the sister of a member of the Board of Directors and the daughter of the Chief Executive Officer.

Mr. William R Hambrecht, Chief Executive Officer is a minority shareholder in Salon Media Group.

On March 23 2009To meet its cash needs during the year 2011, the Company borrowed $100,000$65,000 from Mr. William R Hambrecht, Chief Executive Officer, at the same interest rate charged by First Republic Bank on its line of credit. Interest is payable to Mr. Hambrecht monthly. The unsecured note matured on March 22, 2010. This note was extended to mature on March 22, 2011

On May 6 2008December 31, 2011, the Company borrowed $100,000 fromcombined all the various notes payable, which were issued at various times to Mr. William RR. Hambrecht, Chief Executive Officer,to one note for $279,500 at the same7.75% interest, rate charged by First Republic Bank on its line of credit. Interest is payable to Mr. Hambrecht monthly. The unsecured note matured on May 5, 2009. This note was extended to mature on May 5, 2010with a December 31, 2012 maturity.

5. LINE OF CREDIT ARRANGEMENT

The Company has a line of credit arrangement with First Republic Bank (the “lender”) with a borrowing limit of $350,000 with interest based upon the lender’s prime rate. Interest is payable monthly at 7.75% at December 31, 2009.2011. The line is guaranteed by William R. Hambrecht, Chief Executive Officer, Director and Robert H. Hambrecht, Secretary, Director. The line of credit is due September 2010.on demand and is secured by all of the Company’s business assets. At December 31, 2009,2011, the outstanding balance under the line was $350,000.

15

IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. INCOME TAXES

ASC 740, “Income Taxes” requires the recognition of deferred tax assets and liabilities for the expected future consequences of events that have been recognized in the financial statements or tax returns.  Deferred income taxes reflect the net tax effects of (i) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (ii) operating loss and tax credit carryforwards.  The tax effects of significant items comprising the Company's deferred income taxes at December 31, 20092011 and 20082010 are as follows:

 2009  2008  2011  2010 
Deferred tax assets:            
Operating loss carryforward $709,000  $666,000  $726,000  $711,000 
Unrealized loss on marketable securities  295,000   204,000   314,000   295,000 
Less valuation allowance  (1,004,000)  (870,000)  (1,040,000)  (1,006,000)
Deferred tax assets – net  -       -     
Deferred tax liability – unrealized gain on marketable securities  -       -     
Deferred income taxes – net $-  $-  $-  $- 

The reasons for the difference between the amount computed by applying the statutory federal income tax rate to losses before income tax benefit and the actual income tax benefit for the years ended December 31, 20092011 and 20082010 are as follows:
 
 2009  2008  2011  2010 
Expected income tax benefit $60,000  $223,000  $27,400  $24,400 
State income tax benefit, net of federal tax  9,000   38,000   4,000   3,600 
Total before valuation allowance  (69,000)  ( 261,000)  (31,400)  ( 28,000)
Change in valuation allowance  69,000   261,000   31,400   28,000 
Income tax benefit $-  $-  $-  $- 

The overall increase in valuation allowance for the year ended December 31, 20092011 of $134,000$34,000 includes an increase of $91,000 from unrealized$31,000 for 2011 operating losses, on marketable securities, an increase of $58,000$19,000 for 2009 operating losses,unrealized loss offset by a decrease of $15,000$16,000 due to the expiration of net operating loss carryforwardscarryforwards.
 
Section 382 of the Internal Revenue Code of 1986, as amended, imposes an annual limitation on the availability of net operating loss carryforwards to offset taxable income when an ownership change occurs. Due to the redemption of shares of common stock in 2003, the Company underwent such an “ownership change.” Therefore, the Company’s use of losses incurred through the date of the “ownership change” will be limited to approximately $49,000 per year.
 
In the opinion of management, based on the uncertainty that the Company will be able to generate taxable income in the future, the realization of the loss carryforwards is not likely and, accordingly, a valuation allowance has been recorded to offset such amount in its entirety.

The Company is subject to taxation in the U.S. and the state of California. All tax years are subject to examination by the U.S. and California tax authorities due to the carryforward of unutilized net operating losses. The Company had no accrual for interest or penalties on the balance sheet at December 31, 20092011 and 2008.2010.

16

IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
7. SHAREHOLDERS’ EQUITY

Treasury Stock – On September 15, 2003, the Board of Directors authorized the Company to purchase 745,536 shares of Company common stock at $0.70 per share for an aggregate purchase price of $521,875. The repurchase represented 50.11% of the issued and outstanding shares of the Company. During the year ended December 31, 2008, the Company paid $699 for fractional Treasury shares. As of December 31, 2009,2011, the treasury shares are held by the Company.
 
Preferred Stock – The Company is authorized to issue up to five million shares of preferred stock without further shareholder approval; the rights, preferences and privileges of which would be determined at the time of issuance.  No shares have ever been issued.

Stock Option Plans -- The Company has adopted a 1989 Equity Incentive Plan, a 1993 Non-Employee Directors' Stock Option Plan and a 1994 Equity Incentive Plan (collectively, the "Plans").  In March 1994, the 1989 Equity Incentive Plan was amended to reduce the number of shares reserved there under and the Board of Directors determined that no further grants would be made under this plan. As of December 31, 20092011 and 2008,2010, 331,680 shares were available for grant under the Plans. The Plans provide for incentive stock options to be granted at times and prices determined by the Company’s Board of Directors, to be granted at not less than 100% of the fair value of the Company’s common stock on the date of grant. Options are generally subject to a three or four-year vesting schedule. Options issued under the Plans expire at the earlier of the end of the exercise period of no more than ten years from the date of grant or 90 days following the grantee’s end of service to the Company.

At December 31, 2009,2011, there is no unrecognized employee compensation relating to options that is expected to be recognized in future periods.

17
IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. GOING CONCERN

As reflected in the accompanying financial statements the Company has net losses and has a negative cash flow from operations. This raises substantial doubt about the Company’s ability to continue as a going concern. If necessary the Company may seek to sell additional debt or equity securities or enter into new credit facilities to meet its cash needs. The Company cannot make assurances that it will be able to complete any financing or liquidity transaction, that such financing or liquidity transaction will be adequate for the Company’s needs, or that a financing or liquidity transaction will be completed in a timely manner.

9. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through April 14, 2010, which is the date the financial statements were filed.
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

1817

IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ITEM 9A
ITEM 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
 
We have established disclosure controls and procedures to ensure that material information relating to the Company is made known to the officers who certify the financial statements and to other members of senior management and the Board of Directors.
 
We conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation our chief executive officer and chief financial officer have concluded that, as of December 31, 2009,2011, our disclosure controls and procedures are effective.
 
Changes in Internal Control Over Financial Reporting
 
There have been no changes in our internal controls over financial reporting for the three-months ended December 31, 20092011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
Management’s Report on Internal Controls over Financial Reporting
 
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.
 
All internal controls over financial reporting, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention or overriding of controls. Therefore, even effective internal control over financial reporting can provide only reasonable, and not absolute, assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal controls over financial reporting may vary over time.
 
Our management, including our chief executive officer and chief financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2009.2011. In making its assessment of internal control over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on our evaluation, management concluded that, as of December 31, 2009,2011, our internal control over financial reporting was not effective based on those criteria because of the existence of the following material weaknesses.
 
 1)The Company does not have an adequate number of independent board members nor therefore an independent audit committee.
 
 2)Our limited number of employees results in the Company’s inability to have a sufficient segregation of duties within its accounting and financial reporting activities.
 
These absences constitute material weaknesses in the Company’s corporate governance structure.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

ITEM 9B.    OTHER INFORMATION

None

None.

1918

PART III

ITEM 10.  DIRECTORS, AND EXECUTIVE OFFICERS OF THE REGISTRANTS

DIRECTORS

Name Age Director SinceAgeDirector Since
Edmund H. Shea, Jr.
 
 
78
 
 
1993
  
William R. Hambrecht
 
 
74
 
 
2003
762003
  
Robert H. Hambrecht
 
 
43
 
 
2003
452003
 
Edmund H. Shea, Jr. has served as director of the Company since October 1993.  He is a co-founder of J. F. Shea Co., Inc., a diversified construction, land development and venture capital investment company, and has served as its Executive Vice President and a director since 1954.  He holds a B. S. degree from Massachusetts Institute of Technology.

William R. Hambrecht is the Chairman and Co-Chief Executive Officer of WR Hambrecht + Co which he founded in January 1998.  He was co-founder of Hambrecht & Quist in 1968 where he held various executive management positions until he resigned in December 1997.  He holds a B.S. degree from Princeton University.

Robert H. Hambrecht was a founding partner of W.R. Hambrecht + Co., an investment banking firm, founded in January 1998, and is presently a Managing Director.1998.  From 1996 through January 1998, Mr. Hambrecht was Vice President of H&Q Venture Partners, a venture capital firm.  From 1994 to 1996, Mr. Hambrecht was employed by Unterberg Harris, an investment banking firm.  Mr. Hambrecht earned a master’s degree in public administration from Columbia University in 1993.

EXECUTIVE OFFICERS

The following table sets forth the names, ages and positions of the Company’s executive officers as of December 31, 2008.2011.  A summary of the background and experience of each of these individuals is set forth after the table.
 
Name AgePosition
 Position
William R. Hambrecht 
 76 Chief Executive Officer 
 
74
Robert H. Hambrecht  45 Secretary 
 
Chief Executive Officer
Robert H. Hambrecht
43
Secretary
Quock Q. Fong 
 77 
75
Chief Financial Officer
                                                                                                  
Code of Ethics

The Company has adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all of the Company’s employees (including its executive officers) and directors.  The Company shall provide to any person without charge, upon request, a copy of the Code.  Any such request must be made in writing to the Company, c/o William R. Hambrecht,
Pier 1, Bay 3 San Francisco, CA 94111.

2019

ITEM 11.  EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

Each non-employee director of the Company is entitled to receive a fee for each meeting attended in person (plus $500 for each committee meeting attended by committee members on a day other than a Board meeting date).  The members of the Board of Directors are also eligible for reimbursement for their expenses incurred in connection with attendance at Board meetings in accordance with Company policy.

Outside directors may also receive stock option grants under the Company’s 1993 Non-Employee Directors’ Stock Option Plan (the “Directors’ Plan”). Only non-employee directors of the Company or an affiliate of such directors (as defined in the Internal Revenue Code of 1986, as amended from time to time, hereinafter the “Code”) are eligible to receive options under the Directors’ Plan. Options granted under the Directors’ Plan are not intended to qualify as incentive stock options under the Code.

Options under the Directors’ Plan have a ten-year term; however, each option will terminate prior to the expiration date if the optionee’s service as a non-employee director, or, subsequently, as an employee, of the Company terminates.  The exercise price of each option under the Directors’ Plan must be equal to the fair market value of the Common Stock on the date of grant.  All  options issued pursuant to the Directors’ Plan vest at a rate of 1/36 per month for 36 months following the date of the grant of the option, or in the event the grant was delayed pending compliance by the Company with certain securities law requirements, the date from which the grant was delayed.

2120
COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY OF COMPENSATION

The following table shows that, for the fiscal year ended December 31, 2009,2011, no compensation was awarded or paid to, or earned by, the Company’s Chief Executive Officer or the Company’s Chief Financial Officer.

NAME AND
PRINCIPAL POSITION
YEAR
SALARY
SALARY ($)
BONUS
OPTION
BONUSAWARDS
NON-EQUITY
OPTION AWARDSINCENTIVE PLAN
NON-EQUITY INCENTIVE PLAN
OTHER
COMPENSATION ($)
TOTAL
 
William R. Hambrecht
 
20092011
 
--
 
--
 
-
 
--
 
-
 
--
Chief Executive Officer and Secretary
 
       
Quock Q. Fong20092011----------
Chief Financial Officer
        

STOCK OPTION GRANTS AND EXERCISES

The 1994 Equity Incentive Plan (the “Plan”) provides for the grant of (i) both incentive and non-statutory stock options and (ii) rights to purchase restricted stock, together “Stock Awards”, to the Company’s directors, officers and employees.  Directors who are not salaried employees of or consultants to the Company or to any affiliate of the Company are not eligible to participate in the Plan.  As of December 31, 2009,2011, no options were outstanding under the Plan, no shares had been purchased pursuant to the Plan and 331,680 shares remained available for future issuance there under.

The Plan is administered by the Board of Directors of the Company.  The Board has the power to construe and interpret the Plan and, subject to the provisions of the Plan, to determine the number of persons to whom and the dates on which Stock Awards will be granted, the number of shares that may be exercised, the type or types of such Stock Awards to be granted, the exercise price of such Stock Award when appropriate and other terms of the Stock Award.

The maximum term of options under the Plan is typically ten years; however, in the event that an optionee’s service to the Company terminates, that optionee’s options will expire 90 days after the optionee’s service to the Company terminates.  Option grants under the Plan typically vest over a five-year period at the rate of 1/10 on the date six months after the date of grant and 1/60 per month thereafter.  The exercise price of non-statutory options may not be less than 85% of the fair market value of the Common Stock subject to the option on the date of grant; the exercise price of incentive options may not be less than 100% of the fair market value of the Common Stock subject to the option on the date of the grant.

No options or rights to purchase restricted stock were granted to the Company’s executive officer during the fiscal year ended December 31, 2009.2011.

2221
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding the ownership of the Company’s Common Stock as of December 31, 20092011 by:  (i) each director and nominee for director;  (ii) all officers and directors of the Company as a group; and (iii) all those known by the Company to be beneficial owners of more than five percent of its Common Stock.

BENEFICIAL OWNERSHIP (1)
 
BENEFICIAL OWNER
 
NUMBER OF SHARES
OF COMMON STOCK
  PERCENT TOTAL (2) NUMBER OF SHARES OF COMMON STOCKPERCENT TOTAL (2)
        
William R. Hambrecht  432,604   58.3 432,60458.3
Pier 1, Bay 3          
San Francisco, CA 94111          
          
Edmund H. Shea, Jr. and related entities  113,173   15.2 
Edmund H. Shea, Jr. (deceased) and related entities113,17315.2
655 Brea Canyon Road          
Walnut, CA 91789          
          
        
All executive officers and directors
as a group (2 persons)
  545,777   73.5 545,77773.5
.......................................

(1)This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13D and 13G, if any, filed with the Securities and Exchange Commission (the “SEC”).  Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.

(2)Applicable percentages are based on 742,108 shares outstanding on December 31, 20092011 adjusted as required by rules promulgated by the SEC.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Commencing February 11, 2003, the Company executed a series of convertible promissory notes with Salon Media Group that converted to 843 shares of Series C Preferred Stock on December 30, 2003.  In April 2003 Salon announced the appointment of Elizabeth Hambrecht as its Chief Financial Officer, Treasurer and Secretary.  In October 2003 she was appointed President of Salon Media Group and in February 2004 she was appointed Chief Executive Officer. In May 2009 she resigned as the Company’s Chief Executive Officer. Ms. Hambrecht is the daughter of William R. Hambrecht and the sister of Robert H. Hambrecht.

2322

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate audit fees billed by our independent registered accountant for the years ended December 31, 20082010 and December 31, 20092011 were $70,345$15,500 and $33,275$16,100 respectively. There were no tax fees or other fees paid to our independent registered accountant in the last two fiscal years.

Since the Board of Directors does not have an audit committee, the principal auditor is engaged by the Chief Executive Officer and the Chief Financial Officer on behalf of the Company’s Board of Directors.
 
ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 
 1.Financial Statements

The information concerning Ironstone financial statements and the Report of Madsen & Associates CPA, Inc., Ironstone’s independent auditors required by this item are incorporated by reference herein to the section of this Report in Item 8, entitle “Financial Statements and Supplementary Data”

 2.Financial Statement Schedules

None

 3.Exhibits

The following Exhibits are filed as part of, or incorporated by reference into, this Report.

Exhibit
Number                                Description

Exhibit
21.1 Subsidiaries of Ironstone Group, Inc. 
31.1 Section 302 - Principal Executive Officer Certification 
31.2 Section 302 - Principal Financial Officer Certification
32.1 Section 1350 – Certification – Chief Executive Officer 
32.2 Section 1350 – Certification – Chief Financial Officer 
 21.1                      Subsidiaries of Ironstone Group, Inc.
101.INS*XBRL Instance Document.
101.SCH*XBRL Taxonomy Extension Schema Document.
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document.
*Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates such information by reference.
                                                                                                                  31.1                      Section 302 - Principal Executive Officer Certification
  31.2                      Section 302 - Principal Financial Officer Certification
  32.1                      Section 1350 – Certification – Chief Executive Officer
  32.2                      Section 1350 – Certification – Chief Financial Officer

2423

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
 
IRONSTONE GROUP, INC.
a Delaware corporation

Date:           April 14, 2010                                                                           By:  /s/  William R. Hambrecht
       William R. Hambrecht
       Chief Executive Officer
a Delaware corporation
Date:   March 26, 2012By:/s/ William R. Hambrecht
William R. Hambrecht
Chief Executive Officer

 
Date:           April 14, 2010                                                                           By:  /s/  Quock Q. Fong
Date:   March 26, 2012By:/s/ Quock Q. Fong
Quock Q. Fong
Chief Financial Officer
 Quock Q. Fong
       Chief Financial Officer
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
SignatureTitleDate
   
/s/ William R. HambrechtDirector, Chief Executive Officer,April 14, 2010March 26, 2012
William R. Hambrecht
(Principal Executive Officer)
 
   
/s/ Quock Q. FongChief Financial Officer,    April 14, 2010March 26, 2012
Quock Q. Fong (Principal Financial Officer)
/s/ Edmund H. Shea, Jr.DirectorApril 14, 2010
Edmund H. Shea, Jr.  
   
/s/ Robert H. Hambrecht
 Director, and SecretaryApril 14, 2010March 26, 2012
Robert H. Hambrecht
  
 
25
24