Annual Report (10-k)

Share Name	Share Symbol	Market	Type
Ironstone Group Inc (CE)	USOTC:IRNS	OTCMarkets	Common Stock

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT UNDER SECTION 13 OR 15(d ) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014

☐	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)

Delaware	95-2829956
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

909 Montgomery Street, San Francisco, California 94133

(Address of principal executive offices, including zip code)

(415) 551-8600

(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

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 [ ] No [X]

The approximate aggregate market value of voting stock held by non-affiliates of the Registrant was $974,964 as of December 31, 2014 based on the closing bid price on December 31, 2014. 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 [ ] No [X]

As of March 25, 2015, 2,191,689 shares of Common Stock, $0.01 par value, were outstanding.

TABLE OF CONTENTS

PART I:		Page

Item 1.	Business		3
Item 1A.	Risk Factors		3
Item 1B.	Unresolved Staff Comments		3
Item 2.	Properties		3
Item 3.	Legal Proceedings		3
Item 4.	Mine Safety Disclosures		3

PART II:

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		4
Item 6	Selected Consolidated Financial Data		5
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		5 - 7
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		7
Item 8.	Financial Statements and Supplementary Data		7 - 22
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		23
Item 9A	Controls and Procedures		23
Item 9B.	Other Information		24

PART III:

Item 10.	Directors and Executive Officers and Corporate Governance		24
Item 11.	Executive Compensation		25
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		28
Item 13.	Certain Relationships, Related Transactions, and Director Independence		29
Item 14.	Principal Accountant Fees and Services		29

PART IV:

Item 15.	Exhibits, Financial Statement Schedules		29

SIGNATURES			30

PART I

ITEM 1. BUSINESS

BACKGROUND

Ironstone Group, Inc, (“Ironstone” or the “Company”) 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. William R. Hambrecht, Director and Chief Executive Officer, owns approximately 61.07% of Ironstone’s outstanding voting shares as of December 31, 2014.

BUSINESS STRATEGY

Currently, the Company is reviewing options and new business opportunities. At December 31, 2014, the Company had $312,287 in marketable securities, $25,817 in cash, and $2,674,677 in non-marketable investments, and $885,000 in tax loss carry-forwards at its disposal. The Company's gross net operating loss carry forwards for federal and state purposes totaled to $2,428,094 and $1,196,195 as of December 31, 2014, respectively.

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, 2014, the Company had five part-time employees. The employees received no cash compensation for the years ended December 31, 2014 and 2013, and are not subject to a collective bargaining agreement.

ITEM 1A. RISK FACTORS

The Company’s main assets are investments in non-marketable securities of TangoMe Inc., Arcimoto Inc. and marketable securities of Salon Media Group Inc., Truett-Hurst Inc., and FlexiInternational Software Inc. There can be no assurance that a market will continue to exist for these investments.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Company’s principal executive offices are located at 909 Montgomery Street, San Francisco, California 94133, in office space leased by its Chief Executive Officer.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES

Our common stock trades on the OTC Markets under the trading symbol IRNS. The table below sets forth, for the fiscal quarters indicated, the reported high and low sale prices of our common stock, as reported by the OTC Markets. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. Also, due to the very limited and sporadic nature of trading in our common stock, we believe there is not an established public trading market in our common stock, and there can be no assurance that such a trading market will develop. The following table sets forth the range of high and low closing sale prices for our common stock for each period indicated:

2013	High		Low

Quarter 1	$	0.48	$	0.20
Quarter 2		1.23		0.48
Quarter 3		1.20		0.55
Quarter 4		3.00		0.55

2014	High		Low

Quarter 1	$	7.10	$	3.00
Quarter 2		5.75		2.00
Quarter 3		6.99		3.90
Quarter 4		6.99		2.50

Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) impose sales practice and disclosure requirements on certain brokers-dealers who engage in transactions involving a “penny stock.” The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. We believe that the penny stock rules may discourage investor interest in and limit the marketability of our common shares.

As of December 31, 2014, 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.

On January 30, 2013 the Company granted 70,000 stock options to directors and officers of the Company. On August 20, 2013, the Company granted an additional 100,000 stock options to an employee of the Company. The option grants were intended as compensation for services provided to the Company. The options will vest over four years and have a 10 year term. The exercise price of the stock options granted in January 2013 is $0.20 per share and for those granted in August 2013 is $1.20 per share. The stock options were issued in reliance on the exception from registration provided by Section 4(a) (2) of the Securities Act of 1933.

Item 6. SELECTED CONSOLIDATED FINANCIAL DATA

Year ended December 31	2014			2013

Net revenues	$	-		$	-

Net loss	$	258,753		$	169,747

Unrealized gain (loss)	$	(72,220	)	$	1,830,518

Comprehensive gain (loss)	$	(330,973	)	$	1,660,771

Cash	$	25,817		$	242,443

Marketable securities	$	312,287		$	957,252

Non-marketable securities	$	2,674,677		$	2,001,919

Total assets	$	3,012,781		$	3,201,614

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 and non-marketable securities. Management has classified these securities as available for sale in accordance with ASC Topic 320, “Investments – Debt and Equity Securities.” These securities are recorded at fair value, and any unrealized gains and losses are reported as other comprehensive income. For 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.

Fair Value Measurements

The accounting principles general accepted in the United States of America (“GAAP”) defines fair value, establishes a framework that the Company uses to measure fair value and provides for certain disclosures about the fair value measurements included in the Company's financial statements. Refer to Note 2 in the Notes to Financial Statements for these disclosures. Fair value is defined by GAAP 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 willing market participants on the measurement date.

In determining fair value, the Company uses various valuation approaches. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company’s management. Unobservable inputs are inputs that reflect management’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows:

Level 1–Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2–Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3–Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The availability of observable inputs can vary from product to product and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the management in determining fair value is greatest for instruments categorized in Level 3.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that the Company believes market participants would use in pricing the asset or liability at the measurement date.

RESULTS OF OPERATIONS

Years ended December 31, 2014 and December 31, 2013

Operating expenses for 2014 totaled $122,809, an increase of $75,825 or 161.4% as compared to 2013. The increase was primarily due to an increase in professional fees of $32,116 and stock compensation expense of $17,678. Interest expense for fiscal year 2014 totaled $135,944, an increase of $13,181 or 10.7% as compared to fiscal year 2013, which is attributed to an increase in the Company's notes payable. Operating expenses for 2013 totaled $46,984, an increase of $1,689 or 3.7% as compared to 2012. The increase was primarily due to an increase in professional fees of $4,021, state taxes of $18,841, and stock compensation expense of $10,326. Interest expense for fiscal year 2013 totaled $122,763, an increase of $26,666 or 27.8% as compared to fiscal year 2012. The increase was due to an increase in borrowings.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $116,616 and $164,434 for the years ended December 31, 2014 and 2013, respectively. The decrease over fiscal year 2013 is attributed to a decrease in cash used for accounts payable and accrued expenses. Net cash used in investing activities was $100,011 and $37,002 for the years ended December 31, 2014 and 2013, respectively. The increase is due to a investment made in non-marketable securities by the Company in fiscal year 2014. Net cash provided by financing activities was $1 and $440,501 for the years ended December 31, 2014 and 2013, respectively. The decrease in cash provided by financing activities is due less cash needed from financing activities to support investing activities in fiscal year 2014 compared to fiscal year 2013.

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 plus 4.5%. Interest is payable monthly at 7.75%. The line is guaranteed by William R. Hambrecht, Chief Executive Officer, Director and Robert H. Hambrecht, Director. The line of credit is due on demand and is secured by all of the Company’s business assets. At December 31, 2014, the outstanding balance under the line was $350,000.

At December 31, 2014, the outstanding balance the Company borrowed from related party Mr. William R. Hambrecht was $182,000 with interest at 7.75% per annum. Additionally, the Company has a note payable due to an unrelated party of $1,208,416 as of December 31, 2014. The note payable due to the unrelated third party includes loan principle of $1,000,000 and pay-in-kind interest of $243,710, offset by discount of $35,294 relating to warrants issued in connection with the note.

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 relates to the March 30, 2012 purchase of 468,121 shares of non-marketable investment TangoMe, Inc. The investment in TangoMe, Inc. shares is valued at $2,574,666 and $2,001,919 for the years ended December 31, 2014 and 2013, respectively, For the year ended December 31, 2014, the Company recorded an unrealized gain of $572,746 on the investment. Given that the investment in TangoMe, Inc. does not have a readily determinable fair value, the Company exerts significant judgment in estimating the fair value using various pricing models and the information available to the Company that it deems most relevant.

Another capital resource of the Company is 1,926,857 shares of Common Stock of Salon Media Group, Inc. These shares resulted from the April 24, 2013 exchange of 843 shares of Series C Preferred Stock of Salon Media Group Inc. The investment in common shares of Salon is valued at $250,491 and $867,086 at December 31, 2014 and December 31, 2013 respectively. For the year ended December 31, 2014 the company recorded a related unrealized loss of $616,595 on the investment.

Additionally, in conjunction with making the investment in Salon Media Group, Inc., 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. This investment in common shares of Salon is valued at $10,396 and $35,987 as of December 31, 2014 and December 31, 2013, respectively. For the year ended December 31, 2014, the Company recorded an unrealized loss of $25,591 on the investment.

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 Firms	8

Consolidated balance sheets at December 31, 2014 and 2013	9

Consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2014 and 2013	10

Consolidated statements of stockholders’ equity for the years ended December 31, 2014 and 2013	11

Consolidated statements of cash flows for the years ended December 31, 2014 and 2013	12

Notes to consolidated Financial Statements	13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Ironstone Group, Inc.

We have audited the accompanying consolidated balance sheets of Ironstone Group, Inc. and its subsidiaries (the “Company”) as of December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2014. Ironstone Group, Inc.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits 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 Company 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’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 financial position of Ironstone Group, Inc. as of December 31, 2014 and 2013, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has recurring net losses and negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Burr Pilger Mayer, Inc.

San Francisco, California

April 15, 2015

IRONSTONE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,2014			December 31, 2013

ASSETS:
Cash	$	25,817		$	242,443
Investments:
Marketable securities		51,400			12,480
Marketable securities - related party		260,887			944,772
Non-marketable securities		2,674,677			2,001,919

Total assets	$	3,012,781		$	3,201,614


LIABILITIES AND STOCKHOLDERS' EQUITY:
Line of credit borrowings	$	350,000		$	350,000
Accounts payable and accrued expenses		12,089			17,895
Interest payable - related party		24,225			10,120
Advances for future stock issuance		-			230,000
Note payable, net of discount		1,208,416			1,102,580
Note payable - related party		182,000			182,000

Total liabilities		1,776,730			1,892,595


Stockholders' equity
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $0.01 par value, 25,000,000 shares authorized, of which 2,618,500 shares are issued and outstanding as of December 31, 2013; 2,937,225 shares are issued and outstanding as of December 31, 2014		29,372			26,185
Additional paid-in capital		21,819,668			21,564,850
Accumulated deficit		(21,839,094	)		(21,580,341	)
Accumulated other comprehensive income		1,748,679			1,820,899
		1,758,625			1,831,593
Less: Treasury Stock, 745,536 shares, at cost		(522,574	)		(522,574	)

Total stockholders' equity		1,236,051			1,309,019

Total liabilities and stockholders' equity	$	3,012,781		$	3,201,614

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

IRONSTONE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	Year Ended
	December 31,
	2014			2013


Operating expenses:
Professional fees	$	73,524		$	41,408
State filing fee		9,616			21,562
Amortization		11,120			5,560
General and administrative		28,549			11,290
Other expenses		-			(32,836	)
Total operating expenses		122,809			46,984

Loss from operations		(122,809	)		(46,984	)

Other expense:
Interest expense		(121,839	)		(112,643	)
Interest expense to related party		(14,105	)		(10,120	)


Net loss	$	(258,753	)	$	(169,747	)


COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Net loss	$	(258,753	)	$	(169,747	)
Unrealized holding gain (loss) arising during the period		(72,220	)		1,830,518

Comprehensive (loss) income	$	(330,973	)	$	1,660,771



Basic and diluted loss per share
Net loss per share	$	(0.12	)	$	(0.09	)
Weighted average shares outstanding		2,189,889			1,872,964

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

IRONSTONE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Years ended December 31,2014 and 2013

											Accumulated
	Common				Additional						Other			Treasury
	Stock				Paid-In			Accumulated			Comprehensive			Stock
	Shares		Amount		Capital			Deficit			Income (Loss)			Shares			Amount			Total


Balances, January 1, 2013		2,618,500	$	26,185	$	21,554,524		$	(21,410,594	)	$	(9,619	)		(745,536	)	$	(522,574	)	$	(362,078	)

Stock-based compensation						10,326															10,326

Unrealized gain												1,830,518									1,830,518

Net loss									(169,747	)											(169,747	)

Balances, December 31, 2013		2,618,500		26,185		21,564,850			(21,580,341	)		1,820,899			(745,536	)		(522,574	)		1,309,019

Stock-based compensation						28,004															28,004

Issuance of common stock		131,429		1,314		228,686															230,000
Warrant exercise		187,296		1,873		(1,872	)														1

Unrealized loss												(72,220	)								(72,220	)

Net loss									(258,753	)											(258,753	)

Balances, December 31, 2014		2,937,225	$	29,372	$	21,819,668		$	(21,839,094	)	$	1,748,679			(745,536	)	$	(522,574	)	$	1,236,051

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

IRONSTONE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended
	December 31
	2014			2013

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(258,753	)	$	(169,747	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of discount on notes payable		11,120			5,560
Stock-based compensation amortization		28,004			10,326
Pay-in-kind interest added to principal		94,714			-
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		(5,806	)		(18,709	)
Interest payable - related party		14,105			8,136
Net cash used in operating activities		(116,616	)		(164,434	)


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities - related party		-			(37,002	)
Purchase of non-marketable securities		(100,011	)		-
Net cash used in investing activities		(100,011	)		(37,002	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of note payable to related party		-			123,000
Proceeds from issuance of note payable		-			87,501
Proceeds for future common stock share purchase		-			230,000
Proceeds from exercise of warrant		1			-
Net cash provided from financing activities		1			440,501

Net (decrease) increase in cash		(216,626	)		239,065

Cash at beginning of period		242,443			3,378

Cash at end of period	$	25,817		$	242,443

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	25,125		$	25,862

Cash paid during the period for taxes	$	9,616		$	21,562


Supplemental noncash investing and financing activities:
Net unrealized loss on marketable and non-marketable investments, net of tax	$	(72,220	)	$	-
Conversion of advance to common stock	$	230,000		$	-

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

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. Ironstone Group, Inc, (“Ironstone” or the “Company”) a Delaware corporation, was incorporated in 1972.

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 and Non-Marketable Securities

Marketable and non-marketable securities have been classified by management as available for sale in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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, 2014 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, and related adjustments are not made for recovery in value.

Securities determined to be non-marketable by the Company do not have readily determinable fair values. The Company estimates the fair value of these instruments using various pricing models and the information available to the Company that it deems most relevant. Among the factors considered by the Company in determining the fair value of financial instruments are discounted anticipated cash flows, the cost, terms and liquidity of the instrument, the financial condition, operating results and credit ratings of the issuer or underlying company, the quoted market price of publicly traded securities with similar duration and yield, the Black-Scholes Options Valuation methodology adjusted for active market, the share price of recent round of financings by an outsider, and other considerations on a case-by-case basis and other factors generally pertinent to the valuation of financial instruments.

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. Significant estimates made in the financial statements relate to the valuation of the Company’s non-marketable investments. 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.

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Ironstone follows the authoritative guidance on accounting for and disclosure of uncertainty in tax positions, which requires the Company to determine whether a tax position of Ironstone is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Company has determined that there is no effect on the financial statements from this authoritative guidance.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state, local, and foreign jurisdictions, where applicable. As of December 31, 2014, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2011 forward for Federal and 2010 forward for California (with limited exceptions).

During the year ended December 31, 2014 and 2013, the Company did not recognize any interest or penalties related to income taxes in its statement of operations.

Stock-Based Compensation

Ironstone recognizes the fair value of stock options granted on a straight-line basis over the requisite service period of the option grant, which is the standard vesting term of four years. The Company estimates the fair value of employee stock options and the right to purchase shares under the employee stock purchase plan using the Black-Scholes option-pricing model, in accordance with ASC Topic 718, “Stock-based Compensation”.

The full impact of stock-based compensation in the future is dependent upon, among other things, the total number of stock options granted, the fair value of the stock options at the time of grant and the tax benefit that Ironstone may or may not receive from stock-based expenses. Additionally, stock-based compensation requires the use of an option-pricing model to determine the fair value of stock option awards. This determination of fair value is affected by Ironstone’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, Ironstone’s expected stock price volatility over the term of the awards.

Basic and Diluted Loss per Share

Basic 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 dilution from potentially dilutive securities, except where inclusion of such potentially dilutive securities would have an anti-dilutive effect, using the average stock price during the period in the computation and because of the net loss for the periods presented.

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Recent Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 introduces an explicit requirement for management to assess and provide certain disclosures if there is substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 is effective for the annual period ending after December 15, 2016. The Company is currently evaluating the impact that the adoption of ASU 2014-15 will have on the Company’s consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation - Stock Compensation" ("ASU 2014-12"). ASU 2014-12 is intended to resolve diverse accounting treatment for share based awards in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The standard is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 and may be applied prospectively or retrospectively. The Company does not expect adoption of this standard will have a significant impact on the Company's consolidated financial statements.

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”) to provide guidance on the presentation of unrecognized tax benefits. ASU 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 was effective for the Company in the first quarter of fiscal 2014 and its adoption did not have an impact on the Company’s consolidated financial statements in the quarter ended September 30, 2014

In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis, which requires an entity to evaluate whether they should consolidate certain legal entities. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015 For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. The Company is reviewing the applicability of this amendment.

Liquidity

As reflected in the accompanying financial statements the Company has net losses and has a negative cash flow from operations. 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. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recovery and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

2. FAIR VALUE MEASUREMENTS

Fair value is defined under the Financial Accounting Standards Board (“FASB”) Accounting Standards Board (“ASC”) 820, “Fair Value Measurement and Disclosures”. ASC 820 defines fair value, establishes a framework for measuring fair value under U.S. GAAP 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 as follows:

Level 2–Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3–Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement.

The carrying value of cash, accounts payable, accrued expenses, and interest payable approximate fair value given their short-term nature. The carrying value of the Company's notes payable approximate fair value based on time to maturity and prevailing interest rates.

The following tables provide information about the Company’s financial instruments measured at fair value on a recurring basis as of December 31 by the fair value hierarchy:

							Balance as of
							December 31,
	Level 1		Level 2		Level 3		2014

Investments:
Publicly traded common stock	$	312,287	$	-	$	-	$	312,287
Private company preferred stock		-		-		2,674,677		2,674,677
Total	$	312,287	$	-	$	2,674,677	$	2,986,964

							Balance as of
							December 31,
	Level 1		Level 2		Level 3		2013

Investments:
Publicly traded common stock	$	957,252	$	-	$	-	$	957,252
Private company preferred stock		-		-		2,001,919		2,001,919
Total	$	957,252	$	-	$	2,001,919	$	2,959,171

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following tables presents the Company’s investments measured at fair value using significant unobservable inputs (Level 3), including the valuation technique and unobservable inputs used to measure the fair value of those financial instruments:

	Fair Value as of
	December 31,
	2014		Valuation Technique	Unobservable Inputs

Private Company Preferred Stock	$	2,574,666	Market approach	Third party transaction
Private Company Preferred Stock	$	100,011	A recent round of financing	Third party transaction

	Fair Value as of
	December 31,
	2013		Valuation Technique	Unobservable Inputs

Private Company Preferred Stock	$	2,001,919	A recent round of financing	Third party transaction

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table presents additional information about Level 3 assets measured at fair value on a recurring basis for fiscal years 2014 and 2013. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, unrealized gains or (losses) during the period for assets and liabilities within the Level 3 category presented in the tables below may include changes in fair value during the period that were attributable to both observable and unobservable inputs.

	Investments

Balance as of January 1, 2013	$	1,000,000
Unrealized gain on investments		1,001,919

Balance as of December 31, 2013		2,001,919
Purchases of investments		100,011

Unrealized gain on investments		572,747

Balance as of December 31, 2014	$	2,674,677

Transfers of financial instruments occur when there are changes in pricing observability levels. Transfers of financial instruments among the levels occur at the beginning of the reporting period. Transfers into Level 3 for fiscal year 2014 are attributed to the lack of observable inputs available for these securities beginning January 1, 2014.

3. INVESTMENTS

TangoMe, Inc.

On March 30, 2012, the Company purchased 468,121 shares of Series A Preferred stock from related party William R. Hambrecht at $2.14 per share, resulting in a total investment of $1,000,000. The value of this transaction was determined using the fair value of similar securities sold to unrelated third parties and was determined by management to be the best estimate of fair value as of December 31, 2012. For the year ended December 31, 2013, the Company recorded an unrealized gain of $1,001,919, bringing the total value of the investment in TangoMe, Inc. to $2,001,919 as of December 31, 2013. For the year ended December 31, 2014, the Company recorded an unrealized gain of $572,747, bringing the total value of the investment in TangoMe, Inc. to $2,574,666 as of December 31, 2014. The fair value as of December 31, 2014 is based on a third party transaction, which is the primary significant unobservable input used in the fair value measurement of the Company's investment. Significant increases (decreases) in any subsequent transactions would result in a significantly higher (lower) fair value measurement.

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Salon Media Group, Inc.

The Company owns 1,926,857 shares of Common Stock of Salon Media Group, Inc. These shares resulted from the April 24, 2013 exchange of 843 shares of Series C Preferred Stock of Salon Media Group Inc. This investment in common shares of Salon is valued at $0.45 per share, or $867,086, as of December 31, 2013. For the year ended December 31, 2013 the Company recorded a related unrealized gain of $791,216 on the investment. This investment in common shares of Salon is valued at $0.13 per share, or $250,491, as of December 31, 2014. For the year ended December 31, 2014 the Company recorded a related unrealized loss of $616,596 on the investment.

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. This investment in common shares of Salon is valued at $0.45 per share, or $35,987, at December 31, 2013. For the year ended December 31, 2013, the Company recorded a related unrealized gain of $28,789 on the investment. This investment in common shares of Salon is valued at $0.13 per share, or $10,396, at December 31, 2014. For the year ended December 31, 2014, the Company recorded a related unrealized loss of $25,591 on the investment.

FlexiInternational Software, Inc.

The Company owns 78,000 shares of Flexi International Software stock. The investment in common shares of Flexi is valued at $0.15 and $0.16 per share, or $11,700 and $12,480 at December 31, 2014 and 2013, respectively. For the year ended December 31, 2014 the Company recorded a related unrealized loss of $780, and for the year ended December 31, 2013 an unrealized gain of $3,900.

Truett-Hurst, Inc.

During fiscal year 2013 the Company purchased 10,000 shares of Truett-Hurst common stock. For the year ended December 31, 2014, the Company recorded a related unrealized loss of $2,000 on the investment. For the year ended December 31, 2013, the Company recorded an unrealized gain of $4,694.

Arcimoto, Inc.

During fiscal year 2014 the Company purchased 37,000 shares of Arcimoto, Inc. series A-1 preferred stock. For the year ended December 31, 2014, the Company valued this investment at its cost of $100,011.

4. RELATED PARTY TRANSACTIONS

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

Ms. Elizabeth Hambrecht, Director, is currently the interim Chief Financial Officer of Salon Media Group, Inc. Ms. Hambrecht formerly served as former President and Chief Executive Officer of Salon Media Group, Inc. Ms. Hambrecht is also the sister of a member of the Board of Directors, and is the daughter of the Chief Executive Officer.

On December 31, 2014 the Company combined all the various notes payable, which were issued at various times to Mr. William R. Hambrecht, to one note for $182,000 at 7.75% interest, with a December 31, 2015 maturity.

The Company received $230,000 from certain new investors and certain of its existing investors, including related parties, pursuant to a stock purchase agreement. Under the stock purchase agreement of December 31, 2013, 131,429 shares of Ironstone’s Common Stock were sold at a share price of $1.75. Although dated in fiscal 2013, the purchase was finalized in fiscal 2014. The $230,000 received in fiscal 2013 was included in Advances for stock issuance in the Company's consolidated balance sheet as of December 31, 2013.

5. NOTE PAYABLE

On March 31, 2012, the Company received $1,000,000 from an unrelated third party and issued a related promissory note. The note carries an 8% interest rate, per annum, and has a maturity date of March 31, 2017. Interest accrues on the balance and converts to separate notes payable on a quarterly basis. The total amounts due under this agreement, including the notes related to accrued interest, are due in full at the end of the term. The note is secured by all of the assets of the Company through an accompanying security agreement. If the Company defaults on the note or security agreement, interest would accrue at 10% per annum. The gross amounts payable under the agreement as of December 31, 2014 were $1,243,708.

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In connection with the note agreement, the Company also issued warrants to this third party to purchase 187,296 shares of the Company’s common stock, for total consideration of $1. The warrants were separately valued using the Black-Scholes model, and it was determined the fair value of the warrants at March 31, 2012 was $56,188. This amount has been recorded as a discount on the $1,000,000 note payable and will be amortized over the 5 year term of the note. For the year ended December 31, 2014, accretion of the note payable discount was $11,120 and the remaining unamortized balance was $35,294. On May 21, 2014 , the warrant for 187,296 shares was exercised and shares were issued.

Furthermore, during the year the Company extended the maturity date with a related party, William R. Hambrecht. This note carries a 7.75% interest rate per annum and has a maturity date of December 31, 2015. The note payable carried a principal balance of $182,000 as of December 31, 2014 and 2013 with additional accrued interest of $24,225 and $10,120 respectively.

The scheduled maturities of notes payable outstanding as of December 31, 2014 are as follows:

	2015		2016		2017		Total

Notes payable	$	-	$	-	$	1,243,708	$	1,243,708

Notes payable - related party		182,000		-		-		182,000

Total	$	182,000	$	-	$	1,243,708	$	1,425,708

The scheduled maturities of notes payable outstanding as of December 31, 2013 are as follows:

	2014		2015		2016		2017		Total

Notes payable	$	-	$	-	$	-	$	1,148,994	$	1,148,994

Notes payable - related party		182,000		-		-		-		182,000

Total	$	182,000	$	-	$	-	$	1,148,994	$	1,330,994

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

6. 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 plus 4.5% and is payable monthly. At December 31, 2014 and 2013, interest was being paid at a rate of 7.75%. The line is guaranteed by both William R. Hambrecht, Director and Chief Executive Officer, and Robert H. Hambrecht, Director. The line of credit is due on demand and is secured by all of the Company’s business assets. At December 31, 2014 and 2013, the outstanding balance under the line was $350,000. The total recorded interest expense on this note for the years ended December 31, 2014 and December 31 2013 was $27,125 and $27,125 respectively. The line of credit is pending renew with a proposed maturity date of February 17, 2020.

7. 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, 2014 and 2013 are as follows:

	2014			2013

Deferred tax asset - Operating loss carryforward	$	885,000		$	809,000
Deferred tax liability – unrealized gain on marketable and non-marketable securities		(390,000	)		(415,000	)
Less valuation allowance		(495,000	)		(394,000	)
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, 2014 and 2013 are as follows:

	2014			2013
Expected Federal income tax benefit	$	88,000		$	58,000
State income tax benefit, net of federal tax		13,000			9,000
Total before valuation allowance		(101,000	)		( 67,000	)
Change in valuation allowance		101,000			67,000
Income tax benefit	$	-		$	-

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. As of December 31, 2014, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2011 forward for Federal and 2010 forward for California (with limited exceptions).

At December 31, 2014, the Company had approximately $2,428,094 of federal and $1,196,195 of state net operating loss carryforwards. It is possible that subsequent ownership changes may limit the utilization of these tax attributes. The federal net operating loss carryforwards will expire in year 2017 through 2034, whole the and California net operating loss carryforwards will expire in year 2015 through 2034.

The valuation allowance was $495,000 and $394,000 as of December 31, 2014 and December 31, 2013, respectively. The change in valuation allowance in fiscal 2014 and 2013 was an increase of $101,000 and a decrease of $667,000, respectively.

IRONSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

8. STOCKHOLDERS’ EQUITY

Common Stock

On January 2, 2014, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with new investors and existing investors (each, a “Share Purchaser” and, collectively, the “Share Purchasers”), pursuant to which, the Company issued and sold to such Share Purchasers 131,429 shares of the Company’s Common Stock, representing approximately 7% of Ironstone’s outstanding equity securities on the date of purchase, for an aggregate purchase price of $230,000.

On May 1, 2014, a third party exercised warrants for 187,296 shares of the Company’s Common Stock. As of September 30, 2014, the Company issued 187,296 shares from the warrant exercise to the third party.

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, 2014 and 2013, 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 been issued as of December 31, 2014 and 2013.

Stock-Based Compensation

Ironstone recognized stock-based compensation expense of $28,004 during the year ended December 31, 2014. As of December 31, 2014, Ironstone had an aggregate of $64,126 of stock-based compensation remaining to be amortized to expense over the remaining requisite service period of the underlying options. Ironstone currently expects this stock-based compensation balance to be amortized as follows; $25,884 during fiscal year 2015; $25,884 during fiscal year 2016 and $12,358 during fiscal year 2017.

Stock Option Plans

The Company has adopted a 2013 Equity Incentive Plan. As of January 30, 2013, 187,296 shares were available for grant under the Plan. The plan provides for incentive stock options to be granted at times and prices determined by the Company’s Board of Directors. The stock options are to be granted to directors, officers and employees of the Company, as well as certain consultants and other persons providing services to the Company.

70,000 stock options were granted on January 30, 2013. The fair value of these options granted under the Plan were estimated using the Black-Scholes model with the following price and assumptions: Stock Price $.20, Exercise Price $.20, Time to Maturity 6.33 years, Risk-free Interest Rate 4%, Annualized Volatility 121%.

An additional 100,000 stock options were granted on August 20, 2013. The fair value of these options granted under the Plan were estimated using the Black-Scholes model with following price and assumptions: Stock Price $1.20, Exercise Price $1.20, Time to Maturity 4.0 years, Risk-free Interest Rate 1.1%, Annualized Volatility 93%.

For the year ended December 31, 2014 the Company recorded share based compensation expense related to stock options in the amount of $1,282 on the 70,000 stock options issued January 30, 2013 and $26,772 on the stock options issued August 20, 2013.

9. NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and dilutive potential common shares outstanding during the period, if dilutive. Potentially dilutive common equivalent shares are composed of the incremental common shares issuable upon the exercise of stock options. The following is the computations of the basic and diluted net income per share and the anti-dilutive common stock equivalents excluded from the computations for the periods presented:

	Years Ended
	December 31, 2014			December 31, 2013
Numerator:
Net loss	$	(258,753	)	$	(169,747	)
Denominator:
Weighted average shares outstanding - basic		2,189,889			1,872,964
Effect of dilutive potential shares		-			-
Weighted average shares outstanding - diluted		2,189,889			1,872,964
Net loss per share basic	$	(0.12	)	$	(0.09	)
Net loss per share - diluted	$	(0.12	)	$	(0.09	)
Anti-dilutive stock options and awards not included in net loss per share calculation		170,000			170,000

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Exchange Act Rules 13a-15(e) as of December 31, 2014 in connection with the filing of this Annual Report on Form 10K. Based on that evaluation our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2014, in light of the material weakness described below, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in rules and forms of the SEC and is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

Notwithstanding the material weakness, our Company’s financial statements in this Form 10K fairly present in all material respects, the financial condition, results of operations and cash flows of our company as of and for the periods presented in accordance with generally accepted accounting principles in the United States.

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, 2014 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, 2014. 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, 2014, our internal control over financial reporting was not effective based on those criteria because of the existence of the following material weaknesses:

The Company does not have an adequate number of independent board members nor therefore an independent audit committee.

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 because the Company is a smaller reporting company.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

DIRECTORS

Name	Age	Director Since
William R. Hambrecht	79	2007
Robert H. Hambrecht	48	2003
Denis T. Rice	82	2012
Elizabeth Hambrecht	51	2014
Thomas Thurston	37	2014

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. 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.

Denis T. Rice is Senior Counsel with the law firm of Arnold & Porter LLP in San Francisco, which combined in 2012 with the Howard Rice law firm of which Mr. Rice was a founding partner. The California State Bar bestowed its annual Lifetime Achievement Award in Business Law on Mr. Rice in 2009. He has an A.B. degree from the Woodrow Wilson School of Public and International Affairs at Princeton University.

Elizabeth Hambrecht is the CEO at Salon Media Group, which operates the popular Salon.com website. Before Salon, Elizabeth was a co-founder of Asiacontent.com, a pioneer in Asia’s Internet industry, and helped fund and launch Boom.com, Hong Kong’s first electronic brokerage. Prior to Boom.com, Elizabeth was an equities analyst covering emerging markets at Goldman Sachs (Hong Kong) and before that at Baring Securities. Elizabeth has served as a director of Salon Media Group, and as a Trustee of the San Francisco Friends School, the Asian Art Museum of SF and Northern California Public Broadcast (NCPB). She graduated with a B.A. degree from Vassar College and studied Mandarin at the Taipei Language Institute.

Thomas Thurston is CEO and Founder of Growth Science, a data science think-tank that uses algorithms to predict disruptive innovation. Formerly, he used data science to guide growth investments and innovation at Intel Corporation. He was Managing Partner at Rottura Capital, an algorithm-based long-short hedge fund. He also helped found a high performance computing business that was acquired in 2008. A former Fellow at Harvard Business School, Mr. Thurston holds a BA, MBA, and JD.

EXECUTIVE OFFICERS

The following table sets forth the names, ages and positions of the Company’s executive officers as of December 31, 2014. A summary of the background and experience of each of these individuals is set forth after the table.

Name	Age	Position	Held Since

William R. Hambrecht	79	Chief Executive Officer	2007

Eugene Yates	51	Chief Financial Officer	2014

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,

909 Montgomery Street, San Francisco, CA 94133.

PART III – (Continued)

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

Outside directors may also receive stock option grants under the Company’s 2013 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 1/48 per month for 48 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.

The table below shows the compensation paid to the Company’s non employee directors during 2014.

Director Compensation

Name

Fees earned or

Option

paid in cash

($)

awards

($)

Total
($)

William R. Hambrecht

Robert H. Hambrecht

Denis T. Rice

Elizabeth Hambrecht

Thomas Thurston

(1)

See note 8 to the Company audited Consolidated Financial statements included in Item 8 to this report for a description of the assumption underlying the calculation of grant date fair value. The options have a term of ten years, however the optionee’s options will expire 90 days after the optionee’s service to the Company terminates. The option vest over a four-year period at the rate of 1/10 on the date six months after the date of grant and 1/48 per month thereafter. The exercise price of stock 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.

(2)

Mr Thurston was appointed as the Company’s Director effective January 1, 2014

(3)

Ms. Hambrecht was appointed as the Company’s Director effective September 12, 2014

PART III – (Continued)

COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY OF COMPENSATION

The following table shows that, for the fiscal year ended December 31, 2014, 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 ($)	BONUS	OPTION AWARDS	NON-EQUITY INCENTIVE PLAN	OTHER COMPENSATION ($)	TOTAL
William R. Hambrecht Chief Executive Officer	2014	--	--	-	--	-	--

Eugene Yates Chief Financial Officer (2)	2014	--	--	-	--	-	--

(1)

(2)

Mr. Yates was appointed as the Company’s Chief Financial Officer effective September 12, 2014

PART III – (Continued)

Outstanding Equity Awards at Fiscal Year-End

Option Awards

Name

Number of

Option

securities

exercise

expiration

unexercised

price

date

options (#)

exercicisable

unexercicisable

(a)

(b)

( c )

(e)

(f)

William R. Hambrecht

Eugene Yates

See the Summary Compensation Table for information regarding vesting.

Additional Equity Compensation Plan Information

The following table summarizes information regarding shares of common stock that may be issued upon exercise of stock options under the Company's 2013 Equity Incentive Plan as of December 31, 2014, which was the only plan or arrangement under which equity compensation was outstanding or could be awarded at that date.

Plan Category	A. Number of securities to be issued upon exercise of outstanding options, warrants, and rights		B. Weighted-average exercise price of outstanding options, warrants, and rights		C.Number of securities remaining available for future issuance inder equity compensation plans (excluding securities) reflectd in column A)
Equity compensation plans approved by stockholders		170,000	$	0.7882		17,296

Equity compensation plans or arragements not approved by stockholders		0

Total		170,000				17,296

PART III – (Continued)

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 March 31, 2015 by: (i) each director; (ii) each named executive officer; 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

William R. Hambrecht
909 Montgomery Street San Francisco, CA 94133		1,338,373		59.5

Elizabeth Hambrecht
909 Montgomery Street San Francisco, CA 94133		167,143		7.4

Robert Hambrecht
909 Montgomery Street San Francisco, CA 94133		16,429		*

Denis Rice
909 Montgomery Street San Francisco, CA 94133		7,500		*

Thomas Thurston
909 Montgomery Street San Francisco, CA 94133		140,714		6.3

Edmund H. Shea, Jr. (deceased and related entities)
655 Brea Canyon Road Walnut, CA 91789		113,173		5.0

Shea Ventures
655 Brea Canyon Road Walnut, CA 917		187,296		8.3

All executive officers and directors
As a group (7person)		1,970,628		87.6
*Less than 1 percent

(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)	In Company Stock options exercisable currently or within 60 days after March 31, 2015, as follows: Ms. Hambrecht, 10,000 shares; Robert Hambrecht 5,000 shares; Mr. Rice 7,500 shares; and Mr. Thurston, 35,000 shares.

(3)	Applicable percentages are based on 2,249,189 shares outstanding on March 31, 2015.

PART III – (Continued)

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Mr. William R Hambrecht, Chief Executive Officer, is a shareholder in Salon Media Group, Inc. owning 22.6%.

Prior to December 31, 2013, the Company received $230,000 from certain new investors and certain of its existing investors, including related parties, pursuant to a stock purchase agreement. Under the stock purchase agreement, 131,429 shares of Ironstone’s Common Stock was sold at a share price of $1.75 .

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate audit fees billed by our independent registered accountant for the years ended December 31, 2013 and December 31, 2014 were $22,650 and $29,843 respectively. There were no non-audit audit- related fees, 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

Financial Statements

The information concerning Ironstone financial statements and the Report of Burr Pilger Mayer, 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”

Financial Statement Schedules

None

Exhibits

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

Exhibit

Number Description

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

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.

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 15, 2015	By: /s/ William R. Hambrecht
		William R. Hambrecht Chief Executive Officer



Date: April 15, 2015	By: /s/ Eugene Yates
		Eugene Yates 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.

Signature	Title	Date

/s/ William R. Hambrecht	Director, Chief Executive Officer,	April 15, 2015
William R. Hambrecht	(Principal Executive Officer)

/s/ Eugene Yates	Chief Financial Officer,	April 15, 2015
Eugene Yates	(Principal Financial Officer)

/s/ Denis T. Rice	Director	April 15, 2015
Denis T. Rice

/s/ Robert H. Hambrecht	Director	April 15, 2015
Robert H. Hambrecht

/s/ Elizabeth Hambrecht	Director	April 15, 2015
Elizabeth Hambrecht

/s/ Thomas Thurston	Director	April 15, 2015
Thomas Thurston

EXHIBIT 21.1

SUBSIDIARIES OF IRONSTONE GROUP, INC.

AcadiEnergy, Inc., a Delaware corporation, is a 100%-owned subsidiary of the Company.

Belt Perry Associates, Inc., an Arizona corporation, (“BPA”) is a 100%-owned subsidiary of the Company.

Belt Perry Associates, Inc., a California corporation, is 83.33% owned by BPA and 16.67% owned by the Company.

DeMoss Corporation, a California corporation, is a 100%-owned subsidiary of the Company.

TaxNet, Inc., an Arizona corporation, is a 100%-owned subsidiary of BPA.

EXHIBIT 31.1

Certification

I, William R. Hambrecht, certify that:

1. I have reviewed this annual report on Form 10-K of Ironstone Group, Inc. for the year ended December 31, 2014;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Securities Exchange Act of 1934, as amended, Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Securities Exchange Act of 1934, as amended, Rules 13a-15(f) and 15d-15(f) for the registrant and have:

designed such disclosure controls and procedures, or cause such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting ; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the registrant’s board of directors (or persons performing the equivalent function):

all significant deficiencies and material weakness in the design or operation of internal control over financial reporting which reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

6. The registrant has indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:

April 15, 2015

/s/ William R. Hambrecht

William R. Hambrecht

Chief Executive Officer

EXHIBIT 31.2

Certification

I, Eugene Yates, certify that:

1. I have reviewed this annual report on Form 10-K of Ironstone Group, Inc. for the year ended December 31, 2014;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:

April 15, 2015

/s/ Eugene Yates

Eugene Yates

Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Ironstone Group, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: April 15, 2015

/s/ William R. Hambrecht

Name: William R. Hambrecht

Title: Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Ironstone Group, Inc. and will be retained by Ironstone Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: April 15, 2015

/s/ Eugene Yates

Name: Eugene Yates

Title: Chief Financial Officer

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