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,
2008





o
            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)




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 $215,964 as of December 31, 2008 based on the closing bid price
on December 31, 2008.  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 17, 2008, 742,108 shares of Common Stock, $0.01 par value, were
outstanding.










TABLE
OF CONTENTS





Page


PART
I:





Item
      1.      Description of
    Business
            3Item
      1A.    Risk Factors
            3Item
      1B.    Unresolved Staff Comments
            3Item
      2.      Description of
    Property
            3Item
      3.      Legal Proceedings
            3Item
      4.      Submission of Matters to a Vote of
      Security Holders
            3





PART
II:





Item
      5.      Market for Registrant’s Common
      Equity and Related Stockholder Matters
              4Item
      6       Selected Consolidated Financial
      Data
              4Item
      7.      Management’s Discussion and Analysis
      of Financial Condition and Result ofOperation
              5-6Item
      7A.   Quantitative and Qualitative Disclosures about Market
      Risk
              6Item
      8.      Financial Statements and
      Supplementary Data
              6Item
      9.      Changes in and Disagreements with
      Accountants on Accounting and FinancialDisclosure
              19Item
      9A    Controls and Procedures
              20Item
      9B.    Other Information
              20





PART
III:





Item
      10.    Directors and Executive Officers of the
      Registrant
                  21Item
      11.    Executive Compensation
                  22-23Item
      12.    Security Ownership of Certain Beneficial Owners
      and Management and RelatedStockholder
      Matters
                  24Item
      13.    Certain Relationships and Related
      Transactions
                  24Item
      14.    Principal Accountant Fees and
      Services
                  25





PART
IV




Item
      15.    Exhibits, Financial Statement
      Schedules
            25SIGNATURES
            26








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, 2008, the Company had $4,680in marketable
securities,$5,008 in
cash, an investment in Salon Media Group, Inc. valued at$323,039and taxloss 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, 2008, 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, 2008 market value has dropped 88% as compared to December 31, 2007. 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 2008.





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, 2008, 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




Year Ended December 31
                      
                      2008
                      
                      
                      2007Net
      revenues
                      
                      $
                      -
                      
                      
                      $
                      -Net
      loss
                      
                      $
                      656,642
                      
                      
                      $
                      98,553Unrealized
      gain (loss) on holdings
                      
                      $
                      (1,183,353
                      )
                      
                      $
                      (576,531
                      )Comprehensive
      income (loss)
                      
                      $
                      (1,327,174
                      )
                      
                      $
                      (675,084
                      )Cash
      and cash equivalents
                      
                      $
                      5,008
                      
                      
                      $
                      6,140Marketable
      securities
                      
                      $
                      4,680
                      
                      
                      $
                      34,320Non-marketable
      securities
                      
                      $
                      323,039
                      
                      
                      $
                      1,476,752Total
      assets
                      
                      $
                      332,727
                      
                      
                      $
                      1,517,212









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 Statement of Financial
Accounting Standards “SFAS” No. 115, 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, 2008




Costs and
expenses for 2008 totaled $114,841, a increase of $36,359 or 46.3%as compared to 2007. The
increase wasprimarily due to a
increase in professional fees of $23,308 and a increase in state filing fees of
$13,469. Interest expense for 2008 totaled $28,980, an increase of $8,909 or
44.4% as compared to 2007. The increase was due to an increase in the line of
credit borrowings compared to 2007.




5




LIQUIDITY
AND CAPITAL RESOURCES





Net cash
used in operating activities was $127,433 for the year ended December 31, 2008,
and $105,229 for the year ended December 31, 2007.





The
Company has a line of credit agreement with First Republic Bank which it will
use to meet its cash needs. On March 24, 2008, with the approval of the Board of
Directors, William R. Hambrecht agreed to lend $100,000 to the Company.
Subsequently on May 6, 2008, the Company borrowed the $100,000 with interest at
7.75% per annum and a maturity ofMay 5,
2009.




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 7.4% of Salon’s common stock outstanding as of
December 31, 2008. The investment in Salon is valued at the converted common
stock value of $.35 per share,or $295,050, at December 31, 2008.




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 $.35 per share, or $27,989, at December 31, 2008.
Additionally, the Company has an investment in another available for sale
security with a fair value of $4,680 at December 31, 2008.
 
 Market
conditions were such that as of December 31, 2008, management conducted an
analysis and determined the decline in the value of the Company’s available for
sale securities portfolio was other than temporary. As such the Company recorded
an other than temporary impairment loss of$512,821 in the
statement of operations.




As of
March 23, 2009, Salon’s common stock was trading at $.20 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




PageReports
      of Independent Registered Public Accounting Firms
                            7 -
      8Consolidated
      balance sheets at December 31, 2008 and 2007
                            9Consolidated
      statements of operations and comprehensive (loss) for the years
      endedDecember
      31, 2008 and 2007
                            10Consolidated
      statements of shareholders’ equity for the years endedDecember
      31, 2008 and 2007
                            11Consolidated
      statements of cash flows for the years endedDecember
      31, 2008 and 2007
                            12Notes
      to Consolidated Financial Statements
                            13





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 sheet of Ironstone Group, Inc. and
Subsidiaries (the Company) as of December 31, 2008, and the related statements
of operations and comprehensive loss, stockholders' equity and cash flows for
the year then ended. The Company'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.
  We
conducted our audit 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. and
Subsidiaries as of December 31, 2008, and the results of its operations and its
cash flows for the year then ended, 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's plans in regard to
these matters are described in Note 8 to the financial statements. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
  /s/ Madsen &
Associates CPA's, Inc.
  Madsen
& Associates CPA's, Inc.
 Salt Lake
City, Utah
 March 20,
2009






7




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














To the
Board of Directors and Shareholders of


Ironstone
Group, Inc.








We have
audited the accompanying consolidated balance sheet of Ironstone Group, Inc. and
Subsidiaries as of December 31, 2007, and the related consolidated
statements of operations and comprehensive loss, shareholders' equity and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audit.





We
conducted our audit 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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. and
Subsidiaries as of December 31, 2007, and their results of operations and cash
flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.





/s/ J.H.
Cohn LLP





San
Diego, California


March 27,
2008











8
 
  IRONSTONE
      GROUP, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSDecember
      31, 20082008
                              
                              
                              2007ASSETS:Current
      assets:Cash
                              
                              $
                              5,008
                              
                              
                              $
                              6,140Marketable
      securities available for sale, at fair value
                              
                              
                              4,680
                              
                              
                              
                              34,320Salon
      Media Group, Inc. common stock, at fair value
                              
                              
                              27,989
                              
                              
                              
                              127,952Salon
      Media Group, Inc. Series C Preferred, at fair value
                              
                              
                              295,050
                              
                              
                              
                              1,348,800Total
      assets
                              
                              $
                              332,727
                              
                              
                              $
                              1,517,212LIABILITIES
      AND SHAREHOLDERS' EQUITY:Current
      liabilities:Line
      of credit borrowings
                              
                              $
                              334,175
                              
                              
                              $
                              307,175Note
      payable to related party
                              
                              
                              100,000
                              
                              
                              
                              -Accounts
      payable
                              
                              
                              39,038
                              
                              
                              
                              22,650Total
      liabilities
                              
                              
                              473,213
                              
                              
                              
                              329,825Shareholders'
      equity:Preferred
      stock,$0.01 par value, 5,000,000 shares authorizedof
      which there are no issued and outstanding sharesCommon
      stock,$0.01 par value, 25,000,000 shares authorizedof
      which 1,487,644 shares are issued and 742,108 shares are
      outstanding
                              
                              
                              14,878
                              
                              
                              
                              14,878Additional
      paid-in capital
                              
                              
                              21,170,385
                              
                              
                              
                              21,170,385Accumulated
      deficit
                              
                              
                              (20,940,985
                              )
                              
                              
                              (20,284,343
                              )Accumulated
      other comprehensive income
                              
                              
                              137,810
                              
                              
                              
                              808,342382,088
                              
                              
                              
                              1,709,262Less:
      Treasury Stock, 745,536 shares, at cost
                              
                              
                              (522,574
                              )
                              
                              
                              (521,875
                              )Total
      shareholders' equity
                              
                              
                              (140,486
                              )
                              
                              
                              1,187,387Total
      liabilities and shareholders' equity
                              
                              $
                              332,727
                              
                              
                              $
                              1,517,212





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







9
 
  IRONSTONE
      GROUP, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)Years
      Ended December 31, 2008 and 20072008
                                  
                                  
                                  2007Costs
      and expenses:Legal
      and other professional fees
                                  
                                  $
                                  92,783
                                  
                                  
                                  $
                                  69,475State
      filing fee
                                  
                                  
                                  21,368
                                  
                                  
                                  
                                  7,899Miscellaneous
      expenses
                                  
                                  
                                  690
                                  
                                  
                                  
                                  1,108Total
      costs and expenses
                                  
                                  
                                  114,841
                                  
                                  
                                  
                                  78,482Loss
      from operations
                                  
                                  
                                  (114,841
                                  )
                                  
                                  
                                  (78,482
                                  )Other
      income (expense):Interest
      expense, net of $10 in 2008 and $18 in 2007
                                  
                                  
                                  (28,980
                                  )
                                  
                                  
                                  (20,071
                                  )Loss
      on other than temporary impairment of available for sale
      securities
                                  
                                  
                                  (512,821
                                  )Net
      (loss)
                                  
                                  $
                                  (656,642
                                  )
                                  
                                  $
                                  (98,553
                                  )COMPREHENSIVE
      (LOSS),  NET OF TAX:Net
      (loss)
                                  
                                  $
                                  (656,642
                                  )
                                  
                                  $
                                  (98,553
                                  )Unrealized
      holding (loss) arising during the year
                                  
                                  
                                  (1,183,353
                                  )
                                  
                                  
                                  (576,531
                                  )Reclassification
      adjustment for other than temporary impairmenton
      available for sale securities
                                  
                                  
                                  512,821Comprehensive
      (loss)
                                  
                                  $
                                  (1,327,174
                                  )
                                  
                                  $
                                  (675,084
                                  )Basic
      and diluted loss per share:Net
      loss per share
                                  
                                  $
                                  (0.88
                                  )
                                  
                                  $
                                  (0.13
                                  )Weighted
      average shares
                                  
                                  
                                  742,108
                                  
                                  
                                  
                                  742,108





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





10




IRONSTONE
      GROUP, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF SHAREHOLDERS' EQUITYYears
      Ended December 31, 2008 and 2007AccumulatedAdditional
                                                
                                                
                                                
                                                
                                                OtherCommon
      Stock
                                                
                                                
                                                Paid-In
                                                
                                                
                                                Accumulated
                                                
                                                
                                                Comprehensive
                                                
                                                
                                                Treasury
      StockShares
                                                
                                                
                                                Amount
                                                
                                                
                                                Capital
                                                
                                                
                                                Deficit
                                                
                                                
                                                Income
      (Loss)
                                                
                                                
                                                Shares
                                                
                                                
                                                Amount
                                                
                                                
                                                TotalBalances,January
      1, 2007
                                                
                                                
                                                1,487,644
                                                
                                                
                                                $
                                                14,878
                                                
                                                
                                                $
                                                21,170,385
                                                
                                                
                                                $
                                                (20,185,790
                                                )
                                                
                                                $
                                                1,384,873
                                                
                                                
                                                
                                                745,536
                                                
                                                
                                                $
                                                (521,875
                                                )
                                                
                                                $
                                                1,862,471Other
      comprehensiveloss
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (576,531
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (576,531
                                                )Net
      (loss)
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (98,553
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (98,553
                                                )Balances,December
      31, 2007
                                                
                                                
                                                1,487,644
                                                
                                                
                                                
                                                14,878
                                                
                                                
                                                
                                                21,170,385
                                                
                                                
                                                
                                                (20,284,343
                                                )
                                                
                                                
                                                808,342
                                                
                                                
                                                
                                                745,536
                                                
                                                
                                                
                                                (521,875
                                                )
                                                
                                                
                                                1,187,387Other
      comprehensiveloss
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (1,183,353
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (1,183,353
                                                )Reclassification
      adjustmentfor other than temporaryimpairment on availablefor sale securities
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                512,821
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                512,821Net
      (loss)
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (656,642
                                                )
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (656,642
                                                )Cash
      Payment onFractional
      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
                                                )







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





11




IRONSTONE
      GROUP, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWSYears
      Ended Decenber 31, 2008 and 20072008
                          
                          
                          2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      (loss)
                          
                          $
                          (656,642
                          )
                          
                          $
                          (98,553
                          )Adjustments
      to reconcile net loss to net cash used inoperating
      activities:Loss
      on other than temporary impairment on availablefor
      sale securities
                          
                          
                          512,821Changes
      in operating assets and liabilities:Accounts
      payable
                          
                          
                          16,388
                          
                          
                          
                          (6,676
                          )Net
      cash used in operating activities
                          
                          
                          (127,433
                          )
                          
                          
                          (105,229
                          )CASH
      FLOWS FROM FINANCING ACTIVITIES:Cash
      payments for fractional treasury shares
                          
                          
                          (699
                          )Net
      proceeds from line of credit
                          
                          
                          127,000
                          
                          
                          
                          109,000Net
      cash provided by financing activities
                          
                          
                          126,301
                          
                          
                          
                          109,000Net
      increase (decrease) in cash
                          
                          
                          (1,132
                          )
                          
                          
                          3,771Cash
      at beginning of year
                          
                          
                          6,140
                          
                          
                          
                          2,369Cash
      at end of year
                          
                          $
                          5,008
                          
                          
                          $
                          6,140Supplemental
      disclosure of cash flow informationCash
      paid during the year for interest
                          
                          $
                          28,990
                          
                          
                          $
                          20,089





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





12




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 Statement of Financial Accounting Standards No. 115, “Accounting
for Certain Investments in Debt and Equity Securities” (“SFAS No.
115”).  In accordance with SFAS No. 115, 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, 2008 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.





In July
2006, the Financial Accounting Standards Board (FASB) issued Interpretation No.
48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies
the accounting for uncertainty in income taxes recognized in an enterprise’s
financial statements in accordance with Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes” (“FAS 109”). This
interpretation prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition of tax benefits, classification on the balance sheet, interest and
penalties, accounting in interim periods, disclosure, and transition. The
Company adopted FIN 48 effective January 1, 2007. In accordance with FIN 48, the
Company has decided to classify interest and penalties as a component of tax
expense. The adoption of FIN 48 had no material effect on the
Company.





13




IRONSTONE
GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





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





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.




Options
to purchase 2,800 shares of the Company’s common stock were outstanding
during 2008 and 2007 respectively, but since there was a net loss for 2008
and 2007, they were not included in the computation of diluted EPS as their
effect would be anti-dilutive.




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, 2008 and
2007.  Additionally, all outstanding options are fully vested, and
therefore, SFAS 123R has no effect on the consolidated financial
statements.





Recent Accounting
Pronouncements





In
December 2007, the FASB issued SFAS No.141(R), “Business Combinations” (“SFAS
141(R)”). SFAS 141(R) will significantly change the accounting for and reporting
of business combination transactions in consolidated financial statements. SFAS
141(R) is effective for the first annual reporting period beginning on or after
December 15, 2008. Thus, the Company is required to adopt SFAS 141(R) on January
1, 2009. Earlier adoption is prohibited. We do not expect the adoption of SFAS
141(R) will have a material impact on the Company’s consolidated results of
operations or financial position.








14




IRONSTONE
GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





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 SFAS No. 157, “Fair Value
Measurements” (“SFAS 157”). SFAS 157 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 SFAS 157 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 SFAS 157 must maximize the use of
observable inputs and minimize the use of unobservable inputs. SFAS 157
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
            Quoted
      prices in active markets for identical assets or
    liabilities.





Level
      2
            Inputs
      other than Level 1 that are observable, either directly or indirectly,
      such as quoted prices forsimilar
      assets or liabilities; quoted prices in markets that are not active; or
      other inputs that areobservable
      or can be corroborated by observable market data for substantially the
      full term of theassets
      or liabilities.





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





In
addition to using the guidelines set forth in SFAS 157 for valuing fixed income
securities, each company is also required 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 TheQuoted
      Market Prices
                Significant
      Other
                ConsolidatedIn
      Active Markets
                Observable
      Input
                Balance
      Sheet atDescription
                (Level
      1)
                (Level
      2)
                December
      31, 2008Securities
      available for sale
                $32,669
                $295,050
                $327,719




Effective
January 1, 2008, the Company also adopted SFAS No. 159, “The Fair Value
Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159
allows an entity the irrevocable option to elect fair value for the initial and
subsequent measurement for specified financial assets and liabilities on a
contract-by-contract basis. If an entity elects the fair value option for an
eligible item, changes in the item’s fair value must be reported as unrealized
gains and losses in earnings at each subsequent reporting date. The Company did
not elect to adopt the fair value option under SFAS 159.





15




IRONSTONE
GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS







3.
INVESTMENT IN 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 7.4% of Salon’s common stock
outstanding as of December 31, 2008. The investment in Series C Preferred Stock
of Salon is valued at the converted common stock value of $.35 and $1.60 per
share, or $295,050 and $1,348,800 at December 31, 2008 and 2007,
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 $.35 and $1.60 per share,
or $27,989 and $127,952 at December 31,2008 and 2007,
respectively.





4.
RELATED PARTY TRANSACTIONS





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





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, 2008. The line is
guaranteed by Robert H. Hambrecht, Chief Executive Officer, and William R.
Hambrecht, Board Director. The line of credit is due September 2009. At December
31, 2008, the outstanding balance under the line was $334,175.











16




IRONSTONE
GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





6.
INCOME TAXES





SFAS No.
109, “Accounting for 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, 2008 and 2007 are as
follows:





2008
                    
                    
                    2007Deferred
      tax assets:Operating
      loss carryforward
                    
                    $
                    666,000
                    
                    
                    $
                    421,000Unrealized
      loss on marketable securities
                    
                    
                    204,000Less
      valuation allowance
                    
                    
                    (870,000
                    )
                    
                    
                    (154,000
                    )Deferred
      tax assets – net
                    
                    
                    -
                    
                    
                    
                    267,000Deferred
      tax liability – unrealized gain on marketable securities
                    
                    
                    -
                    
                    
                    
                    (267,000
                    )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, 2008 and 2007 are as
follows:




2008
                    
                    
                    2007Expected
      income tax benefit
                    
                    $
                    223,000
                    
                    
                    $
                    34,000State
      income tax benefit, net of federal tax
                    
                    
                    38,000
                    
                    
                    
                    4,000Total
      before valuation allowance
                    
                    
                    (261,000
                    )
                    
                    
                    (38,000
                    )Change
      in valuation allowance
                    
                    
                    261,000
                    
                    
                    
                    38,000Income
      tax benefit
                    
                    $
                    -
                    
                    
                    $
                    -




The
overall increase in valuation allowance for the year ended December 31, 2008 of
$716,000 includes an increase of $471,000 from unrealized losses on marketable
securities, an increase of $260,000 for 2008 operating losses, offset by a
decrease of $15,000  due to the expiration of net operating loss
carryforwards.
  The
overall decrease in valuation allowance for the year ended December 31, 2007 of
$8,509,000 includes a decrease in the valuation allowance of $2,033,000 due to
the expiration of net operating loss carryforwards, a decrease in the valuation
allowance of $6,744,000 due to the elimination of deferred tax assets related to
limitations on the use of the net operating losses, and an increase in the
valuation allowance of $230,000 due to change in the deferred tax liability
related to unrealized gains on marketable securities, which affects other
comprehensive income.
  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 adoption of FIN 48
did not materially impact the Company’s financial condition, results of
operations or cash flows. The Company had no accrual for interest or penalties
on the balance sheet at December 31, 2008 and 2007.







17




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, 2008, 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, 2008 and 2007, 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.





A summary
of the status of the options issued under the Plan for the years ended December
31, 2008 and 2007 is presented below:





Shares
                    
                    
                    Weighted
      Average
                      Exercise
      Price
                      per Share
                    
                    Weighted
      Average
                      Remaining
                      Contractual
      LifeOutstanding
      at January 1, 2007
                    
                    
                    6,000
                    
                    
                    
                    $.88
                    
                    .54 yearsExpired
                    
                    
                    (3,200
                    )
                    
                    
                    $.50Outstanding
      at December 31, 2007
                    
                    
                    2,800
                    
                    
                    
                    $1.31
                    
                    .01 yearsExercisable
      at December  31, 2007
                    
                    
                    2,800
                    
                    
                    
                    $1.31Expired
                    
                    
                    (2,800
                    )
                    
                    
                    $1.31Outstanding
      at December  31, 2008
                    
                    
                    0





At
December 31, 2008, there is no unrecognized employee compensation relating to
options that is expected to be recognized in future periods.








18




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





On March
23, 2009 the Board of Directors authorized William R. Hambrecht to lend the
Company $30,000.





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





None








19




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, 2008, 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, 2008 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, 2008. 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) inInternal Control—Integrated
Framework. Based on our evaluation, management concluded that, as of
December 31, 2008, 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





20


PART
III





ITEM
10.  DIRECTORS, AND EXECUTIVE OFFICERS OF THE REGISTRANTS





DIRECTORS





Name
                              Age
                              Director SinceEdmund
      H. Shea, Jr.
                              77
                              1993William
      R. Hambrecht
                              73
                              2003Robert
      H. Hambrecht
                              42
                              2003




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.  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.  Mr. Hambrecht also
serves on the Board of Directors of four privately-held companies and one public
company.





EXECUTIVE
OFFICERS





The
following table sets forth the names, ages and positions of the Company’s
executive officers as of December 31, 2008.  A summary of the
background and experience of each of these individuals is set forth after the
table.




Name
                                    Age
                                    PositionWilliam
      R. Hambrecht
                                    73
                                    Chief
      Executive OfficerRobert
      H. Hambrecht
                                    42
                                    SecretaryQuock
      Q. Fong
                                    74
                                    Chief
      Financial
Officer




On March
24, 2008 Mr. Robert H. Hambrecht resigned from this position as Chief Executive
Officer, while retaining the role as Secretary. Also on March 24, 2008, the
Board appointed Mr. William R. Hambrecht as Chief Executive
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.








21




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.








22




COMPENSATION
OF EXECUTIVE OFFICERS




SUMMARY
OF COMPENSATION





The
following table shows that, for the fiscal year ended December 31, 2008, 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
      ($)
            BONUS
            OPTION
      AWARDS
            NON-EQUITY
              INCENTIVE
              PLAN
            OTHER
      COMPENSATION ($)
            TOTALWilliam
      R. Hambrecht
            2008
            --
            --
            -
            --
            -
            --Chief
      Executive Officer and SecretaryQuock
      Q. Fong
            2008
            --
            --
            -
            --
            -
            --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, 2008, 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, 2008.








23




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, 2008 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)William
      R. Hambrecht
            432,604
            
            58.3Pier
      1, Bay 3San
      Francisco, CA  94111Edmund
      H. Shea, Jr. and related entities
            113,173
            
            15.2655
      Brea Canyon RoadWalnut,
      CA 91789All
      executive officers and directors
              as
      a group (2 persons)
            545,777
            
            73.5








(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, 2008
      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.  Ms. Hambrecht is the daughter of William R. Hambrecht and
the sister of Robert H. Hambrecht.








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ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES





The
aggregate audit fees billed by our independent registered accountant for the
years ended December 31, 2007 and December 31, 2008 were $56,500 and $70,345
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





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








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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 corporationDate:   March
      30, 2009
                                  By:
                                  /s/ William
      R. HambrechtWilliam
      R. Hambrecht

                                    Chief
      Executive OfficerDate:    March
      30, 2009
                                  By:
                                  /s/
      Quock Q. FongQuock
      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.




Signature
                  Title
                  Date/s/ William R. Hambrecht
                  Director,
      Chief Executive Officer,
                  March
      30, 2009(Principal Executive
      Officer)/s/ Quock Q. Fong
                  Chief
      Financial Officer,
                  March
      30, 2009Quock
      Q. Fong
                  (Principal Financial
      Officer)/s/ Edmund H. Shea, Jr.
                  Director
                  March
      30, 2009Edmund
      H. Shea, Jr./s/ Robert H. Hambrecht
                  Director,
      and Secretary
                  March
      30, 2009Robert
      H. Hambrecht


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