Ironstone Properties' Losses Mount, Cash Dwindles Amid Going Concern Warning

TL;DR

**IRONSTONE is a sinking ship, avoid at all costs; the going concern warning is a flashing red light.**

AI Summary

IRONSTONE PROPERTIES, INC. reported a net comprehensive loss of $244,173 for the nine months ended September 30, 2025, an increase from the $215,390 loss in the same period of 2024. The company's cash position significantly decreased to $6,167 as of September 30, 2025, down from $26,174 at December 31, 2024. Total assets slightly declined to $3,167,526 from $3,187,532, while total liabilities increased to $3,640,020 from $3,465,355. Interest expense rose to $179,244 for the nine months ended September 30, 2025, compared to $168,661 in the prior year. The company continues to operate with negative cash flows from operations, reporting a net cash outflow of $69,508 from operating activities for the nine months ended September 30, 2025. A significant portion of its assets, $3,161,359, is held in non-marketable securities, primarily private company common and preferred stock, valued using Level 3 inputs. The company explicitly states a going concern risk due to accumulated losses and reliance on related party loans, with a full valuation allowance recorded against deferred tax assets.

Why It Matters

For investors, the persistent net losses and dwindling cash balance of IRONSTONE PROPERTIES, INC. signal significant financial distress and a high-risk investment. The explicit 'going concern' warning in the filing, coupled with increasing liabilities and reliance on related-party loans, suggests a precarious financial future. Employees might face job insecurity if the company's financial health doesn't improve, while customers could see disruptions in service or product offerings. In a competitive market, IRONSTONE's inability to generate positive cash flow or profit puts it at a severe disadvantage against more stable real estate and investment firms, potentially leading to further market share erosion or eventual dissolution.

Risk Assessment

Risk Level: high — The company explicitly states a 'going concern' risk due to 'incurred losses and negative cash flows from operations over the last ten years' and 'on-going accrual of unpaid interest on external and related party debt.' Cash decreased from $26,174 to $6,167, and total liabilities increased to $3,640,020, exceeding total assets of $3,167,526, indicating severe financial instability.

Analyst Insight

Investors should immediately divest any holdings in IRONSTONE PROPERTIES, INC. given the explicit going concern warning, persistent losses, and negative cash flow. This filing provides clear evidence of severe financial distress, making it an unsuitable investment for any risk tolerance.

Financial Highlights

debt To Equity

N/A

revenue

N/A

operating Margin

N/A

total Assets

$3,167,526

total Debt

$3,640,020

net Income

-$244,173

eps

-$0.09

gross Margin

N/A

cash Position

$6,167

revenue Growth

N/A

Key Numbers

• $244,173 — Net Comprehensive Loss (Increased from $215,390 in 2024 for the nine months ended September 30)
• $6,167 — Cash at end of period (Significant decrease from $26,174 at December 31, 2024)
• $3,167,526 — Total Assets (Slightly decreased from $3,187,532 at December 31, 2024)
• $3,640,020 — Total Liabilities (Increased from $3,465,355 at December 31, 2024)
• $179,244 — Interest Expense (Increased from $168,661 for the nine months ended September 30, 2024)
• $69,508 — Net cash used in operating activities (Negative cash flow from operations for the nine months ended September 30, 2025)
• 49.8% — Ownership Stake (William R. Hambrecht's ownership of outstanding voting shares as of December 31, 2024)
• $3,161,359 — Non-marketable securities (Represents the majority of total assets, valued using Level 3 inputs)
• 3,472,491 — Common Stock Shares Outstanding (As of September 30, 2025)
• $0.09 — Net comprehensive loss per share (For the nine months ended September 30, 2025, consistent with 2024)

Key Players & Entities

• IRONSTONE PROPERTIES, INC. (company) — Registrant in 10-Q filing
• Hambrecht & Quist Group (company) — Former majority owner and investment banking/venture capital firm
• William R. Hambrecht (person) — Director and Chief Executive Officer, owns 49.8% of voting shares
• AcadiEnergy, Inc. (company) — Subsidiary of Ironstone Properties, Inc.
• Belt Perry Associates, Inc. (company) — Subsidiary of Ironstone Properties, Inc.
• DeMoss Corporation (company) — Subsidiary of Ironstone Properties, Inc.
• TaxNet, Inc. (company) — Subsidiary of Ironstone Properties, Inc.
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• Delaware (company) — State of incorporation for Ironstone Properties, Inc.

FAQ

Risk Factors

• Going Concern Risk [high — financial]: The company explicitly states a going concern risk due to accumulated losses and reliance on related party loans. The net comprehensive loss increased to $244,173 for the nine months ended September 30, 2025, from $215,390 in the prior year. The company continues to operate with negative cash flows from operations, reporting a net cash outflow of $69,508.
• Liquidity Concerns [high — financial]: Cash position significantly decreased to $6,167 as of September 30, 2025, down from $26,174 at December 31, 2024. Total liabilities increased to $3,640,020 from $3,465,355, while total assets slightly declined, indicating a worsening liquidity situation.
• High Interest Expense [medium — financial]: Interest expense rose to $179,244 for the nine months ended September 30, 2025, compared to $168,661 in the prior year. This increase in interest expense further strains the company's profitability and cash flow.
• Valuation of Non-Marketable Securities [medium — financial]: A significant portion of assets, $3,161,359, is held in non-marketable securities, valued using Level 3 inputs. These valuations are subjective and may not reflect true market value, posing a risk to asset valuation accuracy.
• Reliance on Related Party Loans [medium — financial]: The company's reliance on related party loans, as mentioned in the going concern disclosure, introduces potential conflicts of interest and dependence on specific lenders, which can be a risk if terms change or funding is withdrawn.
• Deferred Tax Asset Valuation Allowance [low — financial]: A full valuation allowance is recorded against deferred tax assets, indicating that the company does not expect to generate sufficient future taxable income to utilize these assets. This reinforces the negative outlook on future profitability.

Industry Context

Ironstone Properties, Inc. operates in a sector that often involves significant capital investment and long-term asset management. The current financial climate, characterized by rising interest rates and economic uncertainty, can put pressure on companies with substantial debt or illiquid assets. Companies in this space are increasingly focused on efficient operations and strategic asset allocation to navigate market volatility.

Regulatory Implications

As a publicly traded entity, Ironstone is subject to SEC regulations, including timely and accurate financial reporting. The company's disclosures regarding going concern risk and the valuation of non-marketable securities are critical for investor protection and regulatory compliance. Any misstatement or omission in these disclosures could lead to regulatory scrutiny.

What Investors Should Do

1. Monitor cash burn rate and liquidity.
2. Assess the valuation methodology for non-marketable securities.
3. Evaluate the sustainability of operations given the going concern warning.
4. Scrutinize related party transactions and loan terms.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported a net comprehensive loss of $244,173 and negative cash flow from operations of $69,508. Cash position decreased to $6,167.
• 2024-09-30: Nine months ended September 30, 2024 — Reported a net comprehensive loss of $215,390 and interest expense of $168,661.
• 2024-12-31: As of December 31, 2024 — Cash position was $26,174 and total liabilities were $3,465,355.

Glossary

Non-marketable securities

Investments that do not have readily determinable fair values, often in private companies. Their valuation relies on models and available information, making them subjective. (Represents the vast majority of Ironstone's assets ($3,161,359) and carries valuation risk due to the use of Level 3 inputs.)

Level 3 inputs

Unobservable inputs used in the valuation of assets or liabilities. These are based on the entity's own assumptions and are used when observable market prices are not available. (Indicates that the valuation of the company's significant non-marketable securities is based on subjective estimates, increasing uncertainty about their true value.)

Going Concern

An accounting principle that assumes a company will continue to operate for the foreseeable future. If there is substantial doubt about this ability, disclosures are required. (Ironstone explicitly states a going concern risk, highlighting significant financial challenges and potential inability to meet obligations.)

Valuation Allowance

A contra-asset account used to reduce the carrying amount of deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. (The full valuation allowance against deferred tax assets suggests the company anticipates no future taxable income to offset these potential tax benefits, reinforcing its weak financial outlook.)

Net Comprehensive Loss

The total loss of a company, including both net income/loss and other comprehensive income/loss items (like unrealized gains/losses on investments). (Ironstone reported a net comprehensive loss of $244,173 for the nine months ended September 30, 2025, indicating a decline in overall financial performance.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Ironstone Properties, Inc. has seen a deterioration in its financial performance, with a net comprehensive loss increasing from $215,390 to $244,173. Interest expenses have also risen, further pressuring profitability. The company's cash position has significantly weakened, dropping from $26,174 at the end of 2024 to $6,167 by September 30, 2025. While total assets have seen a slight decrease, total liabilities have increased, indicating a worsening leverage position and heightened financial risk.

Key Financial Figures

• $0.01 — (g) of the Exchange Act: Common Stock, $0.01 par value Indicate by check mark if t
• $2.25b — n Stock $ 2,960,797 Valuation range $2.25bn 9 Table of Contents IRONSTONE GROU

Filing Documents

• irns20250930_10q.htm (10-Q) — 562KB
• ex_876369.htm (EX-31.1) — 7KB
• ex_876370.htm (EX-31.2) — 7KB
• ex_876371.htm (EX-32.1) — 3KB
• ex_876372.htm (EX-32.2) — 3KB
• 0001437749-25-034139.txt ( ) — 3701KB
• irns-20250930.xsd (EX-101.SCH) — 36KB
• irns-20250930_def.xml (EX-101.DEF) — 282KB
• irns-20250930_lab.xml (EX-101.LAB) — 225KB
• irns-20250930_pre.xml (EX-101.PRE) — 292KB
• irns-20250930_cal.xml (EX-101.CAL) — 22KB
• irns20250930_10q_htm.xml (XML) — 483KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) Condensed consolidated balance sheets as of September 30, 2025, and December 31, 2024. 3 Condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2025, and September 30, 2024 4 Condensed consolidated statements of cash flows for the nine months ended September 30, 2025, and September 30, 2024 5 Notes to condensed consolidated financial statements 6 Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 15 - 16 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 16 Item 4.

Controls and Procedures

Controls and Procedures 16

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 18 Item 1A.

Risk Factors

Risk Factors 18 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18 Item 3. Defaults Upon Senior Securities 18 Item 4. Mine Safety Disclosures 18 Item 5. Other Information 18 Item 6. Exhibits 18

Signatures

Signatures 19 Exhibit Index 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION ITEM I – FINANCIAL STATEMENT IRONSTONE PROPERTIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) September 30, 2025 December 31, 2024 ASSETS: Cash $ 6,167 $ 26,174 Investments: Marketable securities 0 Non-marketable securities 3,161,359 3,161,359 Total Assets $ 3,167,526 $ 3,187,532 LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable and accrued expenses $ 58,099 $ 62,678 Line of credit borrowings 348,843 348,843 Interest payable line of credit 63,035 45,268 Note payable and accrued interest 3,170,043 3,008,566 Total liabilities $ 3,640,020 $ 3,465,355 Stockholders' equity Preferred stock, $ 0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding - Common stock, $ 0.01 par value, 25,000,000 shares authorized, of which 3,472,491 shares are issued and outstanding as of December 31, 2022 and 2,937,225 at December 31, 2021 34,725 34,725 Additional paid-in capital 22,860,000 22,860,000 Additional paid-in capital - stock options 900,872 818,642 Accumulated deficit ( 25,264,274 ) ( 24,664,972 ) Accumulated other comprehensive Income 1,518,757 1,196,357 Less: Treasury Stock, 745,536 shares, at cost ( 522,574 ) ( 522,574 ) Total stockholders' equity ( 472,494 ) ( 277,822 ) Total liabilities and stockholders' equity $ 3,167,526 $ 3,187,532 The accompanying notes are an integral part of these condensed consolidated financial statements 3 Table of Contents IRONSTONE PROPERTIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE PROFIT (unaudited) Three Months Ended September 30, Nine Months Ended September 30 2025 2024 2025 2024 Income Mark to Market Gain/(Loss) $ - $ ( 127 ) $ - $ ( 835 ) Realized Gain – Private Investments 11,663 Dividend Income $ - - - 75,687 Gain (loss) from operations - ( 127 ) - 86,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Activities Ironstone Properties, Inc., ("Ironstone" or the "Company") formerly named Ironstone Group, Inc. a Delaware corporation, was incorporated in 1972. Since 1986, a majority of Ironstone's outstanding shares has been owned by Hambrecht & Quist Group, a San Francisco-based investment banking and venture capital firm, and its affiliates (collectively "H&Q"). In September 2003, Ironstone repurchased all of these shares. Such repurchased shares are currently being held as treasury stock. William R. Hambrecht, Director and Chief Executive Officer, owns approximately 49.8% of Ironstone's outstanding voting shares as of December 31, 2024. During September 2021, Ironstone Group, Inc. changed its name to Ironstone Properties, Inc. Principles of Consolidation The accompanying unaudited condensed 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. Basis of Presentation The unaudited condensed consolidated financial statements included herein have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures, normally included in financial statements prepared in accordance with U.S. GAAP, have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Marketable and Non-Marketable Securities Marketable and non-marketable securities have been classified by management as available for sale in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 320, marketable securities are recorded at fair value and any unrealized gains and losses are excluded from earnings and reported as a separate component of stockholders' equity until realized. The fair value of the Company's marketable securities and investments at September 30, 2025 and December 31, 2024 are based on quoted market prices. For the purpose of computing realized gains and losses, cost is identified on a specific identification basis. For marketable securities for which there is an other-than-temporary impairment, an impairment loss is recognized as a realized loss, and related adjustments are not made for recovery in value. The Company has not realized any such impairment losses to date. Securities determined to be non-marketable by the Company do not have readily determinable fair values. The Company estimates the fair value of these instruments using various pricing models and the information available to the Company that it deems most relevant. Among the factors considered by the Company in determining the fair value of financial instruments are discounted anticipated cash flows, the cost, terms and liquidity of the instrument, the financial condition, operating results and credit ratings of the issuer or underlying company, the quoted market price of publicly traded securities with similar duration and yield, the Black-Scholes Options Valuation methodology adjusted for active market, the share price of recent round of financings by an outsider, and other considerations on a case-by-case basis and other factors generally pertinent to the valuation of financial instruments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded) Stock-Based Compensation Ironstone recognizes the fair value of stock options granted on a straight-line basis over the requisite service period of the option grant, which is the standard vesting term of three years. The full impact of stock-based compensation in the future is dependent upon, among other things, the total number of stock options granted, the fair value of the stock options at the time of grant and the tax benefit that Ironstone may or may not receive from stock-based expenses. Additionally, stock-based compensation requires the use of an option-pricing model to determine the fair value of stock option awards. This determination of fair value is affected by Ironstone's stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include but are not limited to Ironstone's expected stock price volatility over the term of the awards. Basic and Diluted Loss per Share Basic loss per share ("EPS") excludes dilution and is computed by dividing net income (loss) applicable to common shareholders by the weighted average number of common shares actually outstanding during the period. Diluted EPS reflects the dilution from potentially dilutive securities, except where inclusion of such potentially dilutive securities would have an anti-dilutive effect, using the average stock price during the period in the computation and because of the net loss for the periods presented. Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-15, " Disclosure of Uncertainties about an Entity ' s Ability to Continue as a Going Concern " ("ASU 2014-15"). ASU 2014-15 introduces an explicit requirement for management to assess and provide certain disclosures if there is substantial doubt about an entit

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (UNAUDITED) 2. FAIR VALUE MEASUREMENTS (continued) Level 1 –Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2 –Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 –Valuations based on inputs that are unobservable and significant to the overall fair value measurement. In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement. The Company's assets and liabilities that are measured at fair value on a non-recurring basis include cash, accounts payable, accrued expenses, and interest payable given their short-term nature. Furthermore, the fair value of the Company's notes payable are initially measured at fair value given that they are estimated based on current rates that would be available for debt of similar terms. The following tables provide information about the Company's financial instruments measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2023 by the fair value hierarchy: Level 1 Level 2 Level 3 Balance as of September 30, 2025 Publicly traded common stock $ - - $ - Publicly traded options - Private company common stock - 2,961,359 2,961,359 Private company preferred stock - 200,000 200,000 Total $ - - $ 3,161,359 $ 3,161,359 Level 1 Level 2 Level 3 Balance as of December 31, 2024 Publicly

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (UNAUDITED) 2. FAIR VALUE MEASUREMENTS (continued) Fair Value as of December 31, 2024 Valuation Technique Unobservable Inputs Private Company Preferred Stock $ 200,000 Purchase price June 2022 Private Company Common Stock $ 562 Price of Management Buyout Private Company Common Stock $ 2,960,797 Valuation range $2.25bn The following table presents additional information about Level 3 assets measured at fair value on a recurring basis for nine months ended September 30, 2025. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, unrealized gains or (losses) during the period for assets and liabilities within the Level 3 category presented in the tables below may include changes in fair value during the period that were attributable to both observable and unobservable inputs. Nine months ended September 30, 2025 Balance as of December 31, 2024 $ 3,161,359 Unrealized loss on investments 0 Purchase of investment 0 Realized Gain – return of capital 0 Balance as of September 30, 2025 $ 3,161,359 3. INVESTMENTS TangoMe, Inc. On March 30, 2012, the Company purchased 468,121 shares of Series A Preferred stock from related party William R. Hambrecht at $ 2.14 per share, resulting in a total investment of $ 1,000,000 . During 2018, TangoMe converted all Preferred stock to common stock. The Company's TangoMe position was valued at $ 4,303,369 at December 31, 2022. Utilizing a valuation system from Virtua, Inc. with current available market data from TangoMe, Inc., resulted in a company valuation of $2.25bn which translates to a valuation of $ 3,061,838 as of December 31, 2023, resulting in a mark-down loss of $ 1,241,118 for the twelve months ended December 31, 2023. These are the primary significant unobservable inputs used in the fair value measurement of the Co

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (UNAUDITED) 3. INVESTMENTS (continued) Arcimoto, Inc . During fiscal year 2014 the Company purchased 37,000 shares of Arcimoto, Inc. series A-1 preferred stock for $ 100,011 . The A-1 preferred stock was converted to common stock during 2017 prior to Arcimoto filing for its initial public offering. During 2017, prior to the initial public offering, there was a two for one stock split, increasing the shares held to 74,000 . On October 2, 2015 the Ironstone Group, Inc. was granted 2,500 Arcimoto options, strike price $ 4.121 per share, expiration October 2, 2025. Following the two for one stock split, the options held increased to 5,000 with a $ 2.0605 strike price per share. On September 17, 2017, Arcimoto listed on Nasdaq. The closing price on December 31, 2021 was $ 7.78 per share (pre-reverse split price), resulting in a stock holdings valuation of $ 575,720 and in-the-money options valuation of $ 28,598 at year-end 2021. During 2022 Arcimoto stock price declined throughout the year, from $ 7.78 on January 1, 2022 to $ 0.17 (pre-reverse stock split price) on December 31, 2022. On November 30, 2022, Arcimoto stock went through a 20:1 reverse stock split to enable the stock to continue trading on NASDAQ. Ironstone Properties sold its' holdings in Arcimoto to cover operating expenses during 2022. The Company holds 1,000 Arcimoto common shares post 20:1 reverse split, at $ 0.024 per share, for a total value of $ 24 at September 30, 2025. The 250 (post reverse split) Arcimoto stock options have zero value at September 30, 2025. Buoy Health, Inc. On March 17, 2021 the Company purchased 11,233 common shares of the private company Buoy Health, Inc. at $ 15.92 per share, totaling $ 178,824 . During 2022, the investment was marked down $ 17,882 for the year ended December 31, 2022 reflecting market conditions. The total value of the investment was $ 160,938 at December 31, 2022. In July, 2023, the Buoy Health

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