SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain of the statements in this document that are not historical facts, including, without limitation, statements of future expectations, projections of financial condition and results of operations, statements of future economic performance and other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from those contemplated in such forward-looking statements. In addition to the specific matters referred to herein, important factors which may cause actual results to differ from those contemplated in such forward-looking statements include (i) the results of the Company's efforts to implement its business strategy; (ii) actions of the Company's competitors and the Company's ability to respond to such actions; (iii) changes in governmental regulation, tax rates and similar matters; and (iv) other risks detailed in the Company's other filings with the SEC

USE OF ESTIMATES AND CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets and related disclosure. On an ongoing basis, we evaluate our estimates, including those related to non-marketable securities. We base our estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets that are not readily apparent from other sources. Actual results may differ from these estimates due to actual outcomes being different from those on which we based our assumptions. These estimates and judgments are reviewed by management on an ongoing basis and by our board of directors at the end of each quarter prior to the public release of our financial results.

As of the date of the filing of this quarterly report, we believe there have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 2022 compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 as filed with the SEC. Additional information about these critical accounting policies may be found in the "Management's Discussion & Analysis of Financial Condition and Results of Operations" section included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.


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                     IRONSTONE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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RESULTS OF OPERATIONS

Three months ended September 30, 2022 and September 30, 2021

Operating expenses for three months ended September 30, 2022 totaled $88,449 an increase of $16,066 or 22.2% as compared to the three months ended September 30, 2021. The increase was due to an increase of $7,779 in general and administrative expenses and $6,778 in state and local taxes. During the three months ended September 30, 2022, the company sold 7,000 shares of Arcimoto for a total of $17,264 at an average price of $2.47 per share, representing a realized gain over original cost ($1.35 per share) totaling $7,814.

Nine months ended September 30, 2022 and September 30, 2021

Operating expenses for nine months ended September 30, 2022 totaled $229,629 an increase of $92,749 or 67.8% as compared to the nine months ended September 30, 2021. The increase was due to a full nine months of officer incentive stock options amortization during 2022 vs. five months during 2021 as the plan was implemented on April 29, 2021.

LIQUIDITY AND CAPITAL RESOURCES

The Company has a line of credit arrangement with First Republic Bank with a borrowing limit of $350,000 with interest based upon the lender's prime rate plus 4.5%. Interest is currently payable monthly at 7.75%. The line is guaranteed by William R. Hambrecht, Chief Executive Officer, Director. The line of credit is due on demand and is secured by all of the Company's business assets. At September 30, 2022 the outstanding balance under the line was $348,843.

On May 27, 2022, the total outstanding balance of $824,269 the Company borrowed including unpaid accrued interest from related party William R. Hambrecht, CEO was converted to 404,054 Ironstone Properties common shares, retiring all outstanding related party debt and accrued interest. As of September 30, 2022, the total notes payable and related accrued interest to the third party was $2,509,411.

The Company may obtain additional equity or working capital through additional bank borrowings, debt conversion to common stock, and public or private sales of equity securities. The Company may also borrow additional funds from Mr. William R. Hambrecht. There can be no assurance, however, that such additional financing will be available on terms favorable to the Company, or at all.

While the Company explores new business opportunities, the primary capital resource of the Company relates to 62,000 Arcimoto common shares held valued at $225,630. During the Quarter ended September 30, 2022 the company sold 7,000 Arcimoto shares totaling $17,264 to fund ongoing operations. The 468,121 shares of non-marketable investment TangoMe, Inc. is also a primary capital resource. The investment in TangoMe, Inc. shares is valued at $4,302,956 for the three months ended September 30, 2022. Given the investment in TangoMe, Inc. does not have a readily determinable fair value, the Company exerts significant judgment in estimating the fair value using various pricing models and the information available to the Company that it deems most relevant.





Trends and Uncertainties

Termination of Historical Business Lines

Since winding down the Company's traditional lines of business, Management and the Board of Directors have been seeking appropriate business opportunities for the Company. The Company's cash assets are invested in corporate securities and demand deposit accounts. If the Company does not find an operating entity to combine with, and if its assets are not invested in certain types of securities (primarily government securities), it may be deemed to be an investment company under the terms of the Investment Company Act of 1940, as amended.


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                     IRONSTONE GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                  (UNAUDITED)

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