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SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB
  þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(d ) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 0-12346
 IRONSTONE GROUP, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    95-2829956
(IRS Employer Identification No.)
 Pier 1, Bay 3, San Francisco, California 94111
(
 (415) 551-3260
(
 None
 Common Stock, $0.01 par value
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 þ o
   þ o
  o þ




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TABLE OF CONTENTS
 PagePART I:Item 1.
    
    Description of Business
    
    3Item 2.
    
    Description of Property
    
    3Item 3.
    
    Legal Proceedings
    
    3Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    3PART II:Item 5.
    
    Market for Common Equity, Related Stockholder Matters and Small Business Issuer
Purchases of Equity Securities
    
    4Item 6.
    
    Managements Discussion and Analysis or Plan of Operation
    
    4-5Item 7.
    
    Financial Statements
    
    5Item 8.
    
    Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    5Item 8A(T)
    
    Controls and Procedures
    
    6Item 8B.
    
    Other Information
    
    6PART III:Item 9.
    
    Directors, Executive Officers, Promoters, Control Persons and Corporate
Governance; Compliance with Section 16(a) of the Exchange Act
    
    7Item 10.
    
    Executive Compensation
    
    8-9Item 11.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    10Item 12.
    
    Certain Relationships and Related Transactions, and Director IndependenceItem 13.
    
    Exhibits
    
    11Item 14.
    
    Principal Accountant Fees and Services
    
    11SIGNATURES
    
    12EXHIBIT 21.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  2




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PART
I
 
 ITEM 1. DESCRIPTION OF BUSINESS
 BACKGROUND
  BUSINESS STRATEGY
 , .
  EMPLOYEES
  
 ITEM 2. DESCRIPTION OF PROPERTY
  
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  3




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PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES
  
 ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
 CRITICAL ACCOUNTING POLICIES
   RESULTS OF OPERATIONS
  , $
  ,
 4




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LIQUIDITY AND CAPITAL RESOURCES
  .
      
 ITEM 7. FINANCIAL STATEMENTS
  
 ITEM 8.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  5




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ITEM 8A(T). CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  Managements Report on Internal Controls over Financial Reporting
   Internal
ControlIntegrated Framework.
 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.
   
 ITEM 8B.
    
    OTHER INFORMATION
  6




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PART III
 
 ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
 DIRECTORS
 Name
    
    Age
    
    Director SinceEdmund H. Shea, Jr.
    
    
    76
    
    
    
    1993William R. Hambrecht
    
    
    72
    
    
    
    2003Robert H. Hambrecht
    
    
    41
    
    
    
    2003
    EXECUTIVE OFFICERS
  Name
    
    Age
    
    PositionRobert H. Hambrecht
    
    41
    
    Chief Executive Officer and SecretaryQuock Q. Fong
    
    73
    
    Chief Financial Officer
  Code of Ethics
 
 7




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ITEM 10. EXECUTIVE COMPENSATION
     8




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NON-
    
    
    
    OTHEREQUITY
    
    
    
    COMPENNAME AND PRINCIPAL
    
    
    
    
    
    
    SALARY
    
    
    
    
    
    
    
    OPTION
    
    
    
    INCENTIVE
    
    
    
    SATIONPOSITION
    
    
    YEAR
    
    
    
    ($)
    
    
    
    BONUS
    
    
    
    AWARDS
    
    
    
    PLAN
    
    
    
    ($)
    
    
    
    TOTALRobert H. Hambrecht
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Chief Executive
Officer and SecretaryQuock Q. Fong
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Chief Financial Officer
      9




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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
   NUMBER OF SHARES
    
    PERCENTBENEFICIAL OWNER
    
    OF COMMON STOCK
    
    TOTAL (2)William R. Hambrecht
    
    
    432,604
    
    
    
    58.3539 Bryant Street

San Francisco, CA 94107Edmund H. Shea, Jr. and related entities
    
    
    113,173
    
    
    
    15.2655 Brea Canyon Road

Walnut, 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, 2007 adjusted
as required by rules promulgated by the SEC. 
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  10




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ITEM 13. EXHIBITS
 ExhibitNumber
    
    Description21.1
    
    Subsidiaries of Ironstone Group, Inc.31.1
    
    Section 302  Principal Executive Officer Certification31.2
    
    Section 302  Principal Financial Officer Certification32.1
    
    Section 1350 
Certification  Chief Executive Officer32.2
    
    Section 1350 
Certification  Chief Financial Officer
 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  2007
    
    
    2006Audit  Fees
    
    $
    56,500
    
    
    $
    49,690
  11




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SIGNATURES
  IRONSTONE GROUP, INC.a Delaware corporation
 Date: March 27, 2008
    
    By:
    
    /s/ William R. HambrechtWilliam R. HambrechtChief Executive OfficerDate: March 27, 2008
    
    By:
    
    /s/ Quock Q. FongQuock Q. FongChief Financial Officer
  Signature
    
    Title
    
    Date/s/ William R. Hambrecht
    
    Director, Chief Executive Officer,
(Principal Executive Officer)
    
    March 27, 2008/s/ Quock Q. Fong

Quock Q. Fong
    
    Chief Financial Officer,
(Principal Financial Officer)
    
    March 27, 2008/s/ Edmund H. Shea, Jr.

Edmund H. Shea, Jr.
    
    Director
    
    March 27, 2008/s/ Robert H. Hambrecht

Robert H. Hambrecht
    
    Director, and Secretary
    
    March 27, 2008
 12




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated balance sheet at December 31, 2007
    
    F-3Consolidated statements of operations and comprehensive (loss) for the years ended
December 31, 2007 and 2006
    
    F-4Consolidated statements of shareholders equity for the years ended
December 31, 2007 and 2006
    
    F-5Consolidated statements of cash flows for the years ended
December 31, 2007 and 2006
    
    F-6Notes to consolidated financial statements
    
    F-7 to F-11
 F-1




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F-2




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEET
 December 31, 2007
 ASSETS:Current assets:Cash
    
    $
    6,140Marketable securities available for sale, at fair value
    
    
    34,320Salon Media Group, Inc. common stock, at fair value
    
    
    127,952Salon Media Group, Inc. Series C Preferred, at fair value
    
    
    1,348,800Total assets
    
    $
    1,517,212LIABILITIES
AND SHAREHOLDERS EQUITY:Current liabilities:Line of credit borrowings
    
    $
    307,175Accounts payable
    
    
    22,650Total liabilities
    
    
    329,825Shareholders equity:Preferred stock,$0.01 par value, 5,000,000 shares authorized
of which there are no issued and outstanding sharesCommon stock,$0.01 par value, 25,000,000 shares authorized
of which 1,487,644 shares are issued
    
    
    14,878Additional paid-in capital
    
    
    21,170,385Accumulated deficit
    
    
    (20,284,343
    )Accumulated other comprehensive income
    
    
    808,3421,709,262Less: Treasury Stock, 745,536 shares, at cost
    
    
    (521,875
    )Total shareholders equity
    
    
    1,187,387Total liabilities and shareholders equity
    
    $
    1,517,212
  F-3




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
 Years Ended December 31, 2007 and 2006
 2007
    
    
    2006Costs and expenses:Legal and other professional fees
    
    $
    69,475
    
    
    $
    88,560State filing fee
    
    
    7,899
    
    
    
    11,910Miscellaneous expenses
    
    
    1,108
    
    
    
    300Total costs and expenses
    
    
    78,482
    
    
    
    100,770Loss from operations
    
    
    (78,482
    )
    
    
    (100,770
    )Other income (expense):Interest expense, net
of $18 in 2007 and $17 in 2006
    
    
    (20,071
    )
    
    
    (13,595
    )Net (loss)
    
    $
    (98,553
    )
    
    $
    (114,365
    )COMPREHENSIVE (LOSS), NET OF TAX:Net (loss)
    
    $
    (98,553
    )
    
    $
    (114,365
    )Unrealized holding (loss) arising during the year
    
    
    (576,531
    )
    
    
    (4,430,104
    )Comprehensive (loss)
    
    $
    (675,084
    )
    
    $
    (4,544,469
    )Basic and diluted loss per share:Net loss per share
    
    $
    (0.13
    )
    
    $
    (0.15
    )Weighted average shares
    
    
    742,108
    
    
    
    742,108
  F-4




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Years Ended December 31, 2007 and 2006
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Accumulated
    
    
    Comprehensive
    
    
    Treasury StockShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Income (Loss)
    
    
    Shares
    
    
    Amount
    
    
    TotalBalances, January 1, 2006
    
    
    1,487,644
    
    
    $
    14,878
    
    
    $
    21,170,385
    
    
    $
    (20,071,425
    )
    
    $
    5,814,977
    
    
    
    745,536
    
    
    $
    (521,875
    )
    
    $
    6,406,940Other comprehensive
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,430,104
    )
    
    
    
    
    
    
    
    
    
    
    (4,430,104
    )Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (114,365
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (114,365
    )Balances, December 31, 2006
    
    
    1,487,644
    
    
    
    14,878
    
    
    
    21,170,385
    
    
    
    (20,185,790
    )
    
    
    1,384,873
    
    
    
    745,536
    
    
    
    (521,875
    )
    
    
    1,862,471Other comprehensive
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (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
    )
    
    $
    1,187,387
  F-5




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31, 2007 and 2006
 2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss)
    
    $
    (98,553
    )
    
    $
    (114,365
    )Adjustments to reconcile net loss to net cash used in
operating activities:Changes in operating assets and liabilities:Accounts payable
    
    
    (6,676
    )
    
    
    3,313Net cash used in operating activities
    
    
    (105,229
    )
    
    
    (111,052
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net proceeds from line of credit
    
    
    109,000
    
    
    
    109,792Net cash provided by financing activities
    
    
    109,000
    
    
    
    109,792Net increase (decrease) in cash
    
    
    3,771
    
    
    
    (1,260
    )Cash at beginning of year
    
    
    2,369
    
    
    
    3,629Cash at end of year
    
    $
    6,140
    
    
    $
    2,369Supplemental disclosure of cash flow informationCash paid during the year for interest
    
    $
    20,089
    
    
    $
    13,612
  F-6




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Years Ended December 31, 2007 and 2006
 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Business Activities
  Principles of Consolidation
  Marketable Securities
  Use of Estimates
  Income Taxes
   F-7




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2007 and 2006
 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)
 Earnings (Loss) per share
  .
 Stock Based Compensation
    Recent Accounting Pronouncements
    F-8




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2007 and 2006
 2. INVESTMENT IN SALON MEDIA GROUP, INC.
  .
 3. RELATED PARTY TRANSACTIONS
  4. LINE OF CREDIT ARRANGEMENT
  F-9




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2007 and 2006
 5. INCOME TAXES
  2007
    
    
    2006Deferred tax assets:Operating loss carryforward
    
    $
    421,000
    
    
    $
    9,160,000Less valuation allowance
    
    
    (154,000
    )
    
    
    (8,663,000
    )Deferred tax assets  net
    
    
    267,000
    
    
    
    497,000Deferred tax liability  unrealized gain on marketable securities
    
    
    (267,000
    )
    
    
    (497,000
    )Deferred income taxes  net
    
    $
    
    
    
    $
    
  2007
    
    
    2006Expected income tax benefit
    
    $
    34,000
    
    
    $
    39,000State income tax benefit, net of federal tax
    
    
    4,000
    
    
    
    7,000Total before valuation allowance
    
    
    (38,000
    )
    
    
    (46,000
    )Change in valuation allowance
    
    
    38,000
    
    
    
    46,000Income tax benefit
    
    $
    
    
    
    $
    
    F-10




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IRONSTONE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2007 and 2006
 5. INCOME TAXES (concluded)
  6. SHAREHOLDERS EQUITY
 Treasury Stock
 Preferred Stock
 Stock Option Plans
   WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise Price
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    per Share
    
    
    Life
    
    
    ValueOutstanding at January 1, 2006
and January 1, 2007
    
    
    6,000
    
    
    $
    .88
    
    
    .54 yearsExpired
    
    
    (3,200
    )
    
    $
    .50Outstanding at December 31, 2007
    
    
    2,800
    
    
    $
    1.31
    
    
    .01 years
    
    $
    1,925Exercisable at December 31, 2007
    
    
    2,800
    
    
    $
    1.31
    
    
    .01 years
    
    $
    1,925
  7.
SUBSEQUENT EVENTS
   F-11