UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2016

☐   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ___________ to __________

Commission File No. 0-18958

Grote Molen, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Nevada
20-1282850
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
322 West Griffith Road
Pocatello, Idaho 83201
(Address of principal executive offices, including zip code)
   
(208) 234-9352
(Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ý   No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ý     No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
 
 
Large accelerated filer ☐   
Accelerated filer ☐   
 
Non-accelerated filer ☐
Smaller reporting company ý

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No  ý

As of November 14, 2016, there were 23,946,000 shares of the Registrant's common stock, $0.001 par value per share, outstanding.
GROTE MOLEN, INC. AND SUBSIDIARY
FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2016


PART I - Financial Information

Item 1.  Financial Statements  (Unaudited)
Page
     
 
Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015
2
     
 
Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2016 and 2015
3
     
 
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015
4
     
 
Notes to Condensed Consolidated Financial Statements
5
     
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations 
13
     
Item 3.  Quantitative and Qualitative Disclosures About Market Risk 
20
     
Item 4.  Controls and Procedures 
20
     
 PART II - Other Information   
     
Item 1.  Legal Proceedings 
20
     
Item 1A.  Risk Factors 
20
     
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds 
20
     
Item 3.  Defaults upon Senior Securities 
21
     
Item 4.  Mine Safety Disclosures 
21
     
Item 5.  Other Information 
21
     
Item 6.  Exhibits 
21
     
Signatures 
23


1
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
 
GROTE MOLEN, INC. AND SUBSIDIARY
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(UNAUDITED)
 
   
   
September 30,
2016
   
December 31,
2015
 
ASSETS
           
Current assets:
           
   Cash
 
$
54,687
   
$
9,251
 
   Accounts receivable
   
25,015
     
27,565
 
   Accounts receivable – related parties
   
18,787
     
11,365
 
   Inventories
   
950,117
     
708,893
 
   Deposits
   
20,000
     
64,685
 
   Prepaid expenses
   
402
     
356
 
   Total current assets
   
1,069,008
     
822,115
 
Property and equipment, net
   
127,064
     
139,688
 
Intangible assets, net
   
62,820
     
63,068
 
                 
   Total assets
 
$
1,258,892
   
$
1,024,871
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
         
Current liabilities:
               
   Accounts payable and accrued expenses
 
$
222,400
   
$
73,020
 
   Accounts payable – related parties
   
14,155
     
1,950
 
   Accrued interest payable – related parties
   
38,584
     
53,507
 
   Accrued interest payable
   
17,337
     
22,686
 
   Current portion of long-term debt – related party
   
-
     
2,943
 
   Notes payable – related parties
   
234,887
     
130,127
 
   Notes payable
   
118,000
     
136,100
 
   Total current liabilities
   
645,363
     
420,333
 
                 
Long-term debt:
               
   Note payable
   
144,436
     
145,139
 
   Total long-term debt
   
144,436
     
145,139
 
                 
   Total liabilities
   
789,799
     
565,472
 
                 
Stockholders' equity:
               
   Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued and outstanding
   
-
     
-
 
   Common stock, $.001 par value, 100,000,000 shares authorized, 23,891,000 shares issued and outstanding
   
23,891
     
22,200
 
   Additional paid-in capital
   
365,645
     
147,800
 
   Retained earnings
   
79,557
     
289,399
 
   Total stockholders' equity
   
469,093
     
459,399
 
                 
   Total liabilities and stockholders' equity
 
$
1,258,892
   
$
1,024,871
 

See notes to condensed consolidated financial statements
2
 
GROTE MOLEN, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2016
   
2015
   
2016
   
2015
 
                         
Revenues:
                       
   Sales
 
$
223,369
   
$
382,021
   
$
681,424
   
$
964,214
 
   Sales to related parties
   
17,330
     
34,615
     
33,910
     
60,661
 
                                 
   Total revenues
   
240,699
     
416,636
     
715,334
     
1,024,875
 
                                 
Cost of revenues:
                               
   Cost of sales
   
186,121
     
292,887
     
512,192
     
706,097
 
   Cost of related party sales
   
13,685
     
26,539
     
25,488
     
44,422
 
                                 
   Total cost of revenues
   
199,806
     
319,426
     
537,680
     
750,519
 
                                 
Gross profit
   
40,893
     
97,210
     
177,654
     
274,356
 
                                 
Operating costs and expenses:
                               
   Selling, general and administrative
   
118,994
     
108,579
     
347,433
     
331,009
 
   Depreciation and amortization
   
4,208
     
4,471
     
12,872
     
13,545
 
                                 
   Total operating costs and expenses
   
123,202
     
113,050
     
360,305
     
344,554
 
                                 
Loss from operations
   
(82,309
)
   
(15,840
)
   
(182,651
)
   
(70,198
)
                                 
Other expense:                                
   Interest expense – related parties
   
5,915
     
4,776
     
14,447
     
8,456
 
   Interest expense
   
4,219
     
2,819
     
12,712
     
12,816
 
                                 
  Total other expense
   
10,134
     
7,595
     
27,159
     
21,272
 
                                 
Loss before income taxes
   
(92,443
)
   
(23,435
)
   
(209,810
)
   
(91,470
)
                                 
Income tax (provision) benefit
   
(32
)
   
29,419
     
(32
)
   
29,385
 
                                 
Net income (loss)
 
$
(92,475
)
 
$
5,984
   
$
(209,842
)
 
$
(62,085
)
                                 
Net loss per common share -
                               
   Basic and diluted
 
$
(0.00
)
 
$
0.00
   
$
(0.01
)
 
$
(0.00
)
                                 
Weighted average shares outstanding -
                               
   Basic and diluted
   
22,405,977
     
22,200,000
     
22,269,158
     
22,200,000
 
 
See notes to condensed consolidated financial statements
 
3

GROTE MOLEN, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

   
Nine Months Ended
June 30,
 
   
2016
   
2015
 
             
Cash flows from operating activities:
           
   Net loss
 
$
(209,842
)
 
$
(62,085
)
   Adjustments to reconcile net loss to net cash used in operating activities:
               
      Depreciation and amortization
   
12,872
     
13,545
 
      Fees added to long-term note principal
   
156
     
-
 
      (Increase) decrease in:
               
         Accounts receivable
   
2,550
     
14,217
 
         Accounts receivable – related parties
   
(7,422
)
   
(13,077
)
         Inventories
   
(241,224
)
   
(140,112
)
         Deposits
   
44,685
     
109,865
 
         Prepaid expenses
   
(46
)
   
6,487
 
      Increase (decrease) in:
               
         Accounts payable and accrued expenses
   
149,380
     
9,066
 
         Accounts payable – related parties
   
12,205
     
1,350
 
         Accrued interest payable – related parties
   
(14,923
)
   
6,644
 
         Accrued interest payable
   
(4,913
)
   
7,410
 
                 
   Net cash used in operating activities
   
(256,522
)
   
(46,690
)
                 
Cash flows from investing activities
   
-
     
-
 
                 
   Net cash used in investing activities
   
-
     
-
 
                 
Cash flows from financing activities:
               
   Proceeds from long-term note payable
   
5,300
     
28,700
 
   Proceeds from notes payable – related parties
   
300,000
     
-
 
   Proceeds from notes payable
   
91,500
     
41,500
 
   Proceeds from sale of Units
   
169,100
     
-
 
   Repayment of notes payable – related parties
   
(195,240
)
   
(18,500
)
   Repayment of notes payable
   
(59,600
)
   
-
 
   Repayment of long-term debt – related party
   
(2,943
)
   
(34,031
)
   Repayment of long-term note payable
   
(6,159
)
   
(17,374
)
                 
   Net cash provided by financing activities
   
301,958
     
295
 
                 
Net increase (decrease) in cash
   
45,436
     
(46,395
)
                 
Cash, beginning of the period
   
9,251
     
60,808
 
                 
Cash, end of the period
 
$
54,687
   
$
14,413
 
 
See notes to condensed consolidated financial statements
4
 
GROTE MOLEN, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2016
(UNAUDITED)

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNICANT ACCOUNTING POLICIES

Organization

Grote Molen, Inc. ("Grote Molen") was incorporated under the laws of the State of Nevada on March 15, 2004.  BrownWick, LLC ("BrownWick"), a wholly owned subsidiary, was formed in the State of Idaho on June 5, 2005.  The principal business of Grote Molen and BrownWick is to distribute grain mills, kitchen mixers and related accessories for home use.

Grote Merger Co. ("Merger Corp."), a wholly owned subsidiary, was formed in the State of Delaware on August 23, 2016 to facilitate a proposed plan of reorganization and merger – See Note 7.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Grote Molen, BrownWick and Merger Corp. (collectively the "Company").  All significant inter-company balances and transactions have been eliminated.

Basis of Presentation

The accompanying condensed consolidated financial statements as of September 30, 2016 and for the three months and nine months ended September 30, 2016 and 2015 are unaudited.  In the opinion of management, all adjustments have been made, consisting of normal recurring items, that are necessary to present fairly the consolidated financial position as of September 30, 2016 as well as the consolidated results of operations for the three months and nine months ended September 30, 2016 and cash flows for the nine months ended September 30, 2016 and 2015 in accordance with U.S. generally accepted accounting principles.  The results of operations for any interim period are not necessarily indicative of the results expected for the full year.  The interim condensed consolidated financial statements and related notes thereto should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2015.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.

Earnings Per Share

The computation of basic earnings per common share is based on the weighted average number of shares outstanding during the period.

The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the common stock equivalents which would arise from the exercise of stock options and warrants outstanding using the treasury stock method and the average market price per share during the period.  Common stock equivalents are not included in the diluted earnings per share calculation when their effect is anti-dilutive.  Therefore, our basic earnings per share is the same as diluted earnings per share for the three months and nine months ended September 30, 2016 and 2015.
5

Comprehensive Income (Loss)

Comprehensive income (loss) is the same as net income (loss).

NOTE 2 – DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Accounts receivable consist of the following:

   
September 30,
2016
   
December 31,
2015
 
             
Trade accounts receivable – related parties
 
$
13,787
   
$
6,365
 
Employee advances
   
5,000
     
5,000
 
                 
Total accounts receivable – related parties
   
18,787
     
11,365
 
Trade accounts receivable
   
25,015
     
27,565
 
                 
   
$
43,802
   
$
38,930
 

Property and equipment consist of the following:

   
September 30,
2016
   
December 31,
2015
 
             
Office equipment
 
$
4,335
   
$
4,335
 
Warehouse equipment
   
16,927
     
16,927
 
Website development
   
2,000
     
2,000
 
Molds
   
150,615
     
150,615
 
                 
     
173,877
     
173,877
 
Accumulated depreciation
   
(46,813
)
   
(34,189
)
                 
   
$
127,064
   
$
139,688
 

6

Intangible assets consist of the following:

   
September 30,
2016
   
December 31,
2015
 
             
License – definite lived
 
$
10,500
   
$
10,500
 
License – indefinite lived
   
62,720
     
62,720
 
Patent
   
100
     
100
 
                 
     
73,320
     
73,320
 
Accumulated amortization
   
(10,500
)
   
(10,252
)
                 
   
$
62,820
   
$
63,068
 


NOTE 3 – RELATED PARTY DEBT

Notes payable – related parties are unsecured and are comprised of the following:

   
September 30,
2016
   
December 31,
2015
 
             
             
Note payable to a stockholder, due on demand, with interest at 6% per annum
 
$
-
   
$
30,000
 
                 
Note payable to a stockholder, due on demand, with interest at 6% per annum
   
3,500
     
3,500
 
                 
Note payable to a stockholder, due on demand, with interest at 6% per annum
   
38,000
     
38,000
 
                 
Note payable to a stockholder, due on demand, with interest at 6% per annum
   
10,000
     
10,000
 
                 
Note payable to a stockholder, due on demand, with interest at 6% per annum
   
5,000
     
5,000
 
                 
Note payable to a stockholder, due on demand, with interest at 8% per annum
   
9,000
     
9,000
 
                 
Note payable to a stockholder, due on demand, with interest at 8% per annum
   
-
     
15,000
 
                 
Note payable to a stockholder, due on demand, with interest at 8% per annum
   
-
     
10,500
 
                 
Note payable to a stockholder, due May 1, 2017, with interest at 18% per annum, payable in 12 monthly payments of $27,504
   
160,260
     
-
 
                 
Non-interest bearing advances from stockholders, with no formal repayment terms
   
9,127
     
9,127
 
                 
Total
 
$
234,887
   
$
130,127
 

7

Long-term debt – related party is comprised of the following:

   
September 30,
2016
   
December 31,
2015
 
             
             
Note payable to a stockholder, due in monthly installments of $4,000 through February 2016, with interest at 6.97 % per annum
 
$
-
   
$
2,943
 
Less current portion
   
-
     
(2,943
)
                 
Long-term portion
 
$
-
   
$
-
 

Interest expense on related party debt was $5,915 and $4,776 for the three months ended September 30, 2016 and 2015 and $14,447 and $8,456 for the nine months ended September 30, 2016 and 2015, respectively.  Accrued interest payable to related parties was $38,584 and $53,507 at September 30, 2016 and December 31, 2015, respectively.

NOTE 4 – NOTES PAYABLE

Short-term notes payable to non-related parties are unsecured and are comprised of the following:

   
September 30,
2016
   
December 31,
2015
 
             
Note payable, due on demand, with interest at 8% per annum
 
$
-
   
$
15,000
 
                 
Note payable, due on demand, with interest at 8% per annum
   
-
     
20,000
 
                 
Note payable, due on demand, with interest at 8% per annum
   
-
     
5,000
 
                 
Note payable, due on demand, with interest at 8% per annum
   
7,000
     
7,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
15,000
     
15,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
10,000
     
10,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
-
     
4,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
-
     
5,600
 
                 
Note payable, due on demand, with interest at 6% per annum
   
10,000
     
10,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
10,000
     
10,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
-
     
10,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
10,000
     
10,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
2,500
     
2,500
 
                 
Note payable, due on demand, with interest at 6% per annum
   
9,000
     
9,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
3,000
     
3,000
 
                 
Note payable, due on demand, with interest at 6% per annum
   
20,000
     
-
 
                 
Note payable, due on demand, with interest at 6% per annum
   
5,000
     
-
 
                 
Note payable, due on demand, with interest at 6% per annum
   
6,500
     
-
 
                 
Note payable, due on demand, with interest at 6% per annum
   
10,000
     
-
 
                 
Total
 
$
118,000
   
$
136,100
 

8
At September 30, 2016 and December 31, 2015, we had a long-term note payable to a bank with a principal balance of $144,436 and $145,139, respectively.  The long-term note payable is a line of credit promissory note bearing interest at an indexed rate plus 2% (4.50% at September 30, 2016), requiring monthly interest payments only, and maturing on May 16, 2021.  The note payable has a maximum line of credit of $150,000, and is secured by a deed of trust on certain real estate owned by one of the principal stockholders of the Company and by the Company's inventories, property and equipment, and intangible assets.

Accrued interest payable on notes payable was $17,337 and $22,686 at September 30, 2016 and December 31, 2015, respectively.

NOTE 5 – RELATED PARTY TRANSACTIONS

Pursuant to an agreement effective in February 2011, we pay a monthly management fee to a company owned by one of the major stockholders of the Company to manage our day-to-day business activities and to provide business space.  Historically we have paid monthly management fees in varying amounts to this related party pursuant to prior agreements approved by the stockholders of the Company.  The agreement is on a month-to-month basis and can be cancelled at any time by the vote of management.  The agreement was amended and restated on October 31, 2014 to increase the fee to $12,500 effective November 1, 2014.  Also included in management fees are monthly payments of $150 to another major stockholder of the Company for expense reimbursement.  Included in selling, general and administrative expenses were management fees totaling $37,950 for each of the three-month periods ended September 30, 2016 and 2015 and $113,850 for each of the nine-month periods ended September 30, 2016 and 2015.

Each of the two principal stockholders of the Company owns a company that is our customer.  Sales to these related parties totaled $17,330 and $34,615 for the three months ended September 30, 2016 and 2015, respectively, or approximately 7% and 8% of total sales, respectively.  Sales to these related parties totaled $33,910 and $60,661 for the nine months ended September 30, 2016 and 2015, respectively, or approximately 5% and 6% of total sales, respectively.  Accounts receivable from these related parties totaled $18,787 and $11,365 at September 30, 2016 and December 31, 2015, respectively.

Accounts payable to these related parties totaled $14,155 and $1,950 at September 30, 2016 and December 31, 2015, respectively.

See Note 3 for discussion of related party debt and interest expense.

NOTE 6 – CAPITAL STOCK

The Company's preferred stock may have such rights, preferences and designations and may be issued in such series as determined by our Board of Directors.  No shares of preferred stock were issued and outstanding at September 30, 2016 and December 31, 2015.

In connection with the Agreement and Plan of Reorganization discussed in Note 7, it is anticipated that the Board of Directors of Grote Molen will designate 5,000,000 shares of its authorized and unissued shares of preferred stock as Series A Preferred Stock.

During the three months ended September 30, 2016, Grote Molen sold 1,691,000 Units, each consisting of one share of common stock and one five-year common stock purchase warrant exercisable at $0.70 per share, in a private offering to accredited investors, at an offering price of $0.10 per Unit, for total proceeds of $169,100.

The Company estimated the grant date value of the five-year common stock purchase warrants included in the Units sold in the private placement at $0.01 per warrant, or a total of $16,910, using the Black-Scholes option pricing model, which value was recorded to additional paid-in capital.  The remaining $152,190 of the proceeds from the sale of the Units was allocated to the common stock included in the Units sold.

On September 7, 2016, Grote Molen issued warrants to purchase 5,000,000 shares of its common stock to an accredited investor in consideration for the conversion/cancellation of its $50,000 promissory note plus $436 of accrued interest payable to such investor.  The warrants are exercisable at $0.70 per share during the five-year period commencing September 1, 2018 and grant the holder "piggy back" registration rights.

The Company estimated the grant date value of the five-year common stock purchase warrants issued in consideration for the conversion/cancellation of the debt at $0.01 per warrant, or a total of $50,436, using the Black-Scholes option pricing model, which value was recorded to additional paid-in capital.
 

9
 
The significant assumptions used in the Black Scholes valuation of the warrants are as follows:

Stock price on the valuation date
 
$
0.09
 
Warrant exercise price
 
$
0.70
 
Dividend yield
   
0.00
%
Years to maturity
   
5.0
 
Risk free rate
   
1.12
%
Expected volatility
   
63.85
%
 
NOTE 7 – AGREEMENT AND PLAN OF REORGANIZATION

On September 6, 2016, Grote Molen, Merger Corp. and Blackridge Technology Holdings, Inc., ("Blackridge"), entered into an Agreement and Plan of Reorganization (the "Reorganization Agreement"), which generally provides for Grote Molen's acquisition of Blackridge in a reorganization in exchange for a controlling number of shares of Grote Molen's preferred and common stock pursuant to the merger of Merger Corp. with and into Blackridge, with Blackridge continuting as the surviving corporation.

The Reorganization Agreement provides that the closing of the transactions contemplated thereby is subject to several significant conditions precedent.  There can be no assurance that such conditions will be satisfied or waived or that the reorganization will be completed.

When and if completed, the transactions contemplated by the Reorganization Agreement will result in a change of control of Grote Molen and, following the consummation thereof, the Blackridge stockholders will be able to elect the directors and control the policies and practices of the Grote Molen.  It is anticipated that the transaction will be accounted for as a reverse acquisition for accounting purposes.
 
NOTE 8 – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION

During the nine months ended September 30, 2016  we had the following non-cash financing and investing activities:

We decreased notes payable by $50,000, decreased accrued interest payable by $436 and increased additional paid-in capital by $50,436 for the conversion of debt to common stock warrants.

During the nine months ended September 30, 2015, we had no non-cash financing and investing activities.

During the nine months ended September 30, 2016 and 2015, we paid cash for income taxes of $32 and $34, respectively.

During the nine months ended September 30, 2016 and 2015, we paid cash for interest of $46,756 and $4,707, respectively.

NOTE 9 – SIGNIFICANT CUSTOMERS

In addition to the sales to related parties discussed in Note 5, we had sales to one customer that accounted for approximately 11% and 9% of total sales for the nine months ended September 30, 2016 and 2015, respectively.
10

NOTE 10 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

There were no new accounting pronouncements issued during the nine months ended September 30, 2016 and through the date of this filing that we believe are applicable to or would have a material impact on the consolidated financial statements of the Company.

NOTE 11 – SUBSEQUENT EVENTS

We have evaluated events occurring after the date of our accompanying consolidated balance sheets through the date the financial statements were issued and have identified the following subsequent events that we believe require disclosure:

During October 2016, we sold an additional 55,000 Units to accredited investors in a private placement offering at an offering price of $0.10 per Unit for total proceeds of $5,500.

As previously disclosed, 0n September 6, 2016, Grote Molen, Merger Corp. and Blackridge entered into a Reorganization Agreement, which generally provides for Grote Molen's acquisition of Blackridge in a reorganization in exchange for a controlling number of shares of Grote Molen's preferred and common stock pursuant to the merger of Merger Corp. with and into Blackridge, with Blackridge continuting as the surviving corporation.

The Reorganization Agreement provides that the closing of the transactions contemplated thereby is subject to several significant conditions precedent.  As of the date of filing this report, we had not closed the Reorganization Agreement.  There can be no assurance that such conditions will be satisfied or waived or that the reorganization will be completed.
11
 
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements .   These statements reflect the Company's views with respect to future events based upon information available to it at this time.  These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from these statements.  These uncertainties and other factors include, but are not limited to the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2015 in Part I, Item 1A under the caption "Risk Factors."  The words "anticipates," "believes," "estimates," "expects," "plans," "projects," "targets" and similar expressions identify forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in assumptions, future events or otherwise.

You should read the following discussion in conjunction with our condensed consolidated financial statements, which are included elsewhere in this report.  The following information contains forward-looking statements. (See "Forward-Looking Statements" and "Risk Factors.")
General

Grote Molen, Inc. ("Grote Molen") was incorporated under the laws of the State of Nevada on March 15, 2004. BrownWick, LLC ("BrownWick"), a wholly owned subsidiary, was formed in the State of Idaho on June 5, 2005. The principal business of Grote Molen and BrownWick (collectively the "Company") is to distribute electrical and hand operated grain mills, kitchen mixers and related accessories for home use.

Proposed Reorganization

As previously reported in the current report on Form 8-K filed with the SEC on September 7, 2016, and as discussed in Note 7 to the Condensed Consolidated Financial Statements, on September 6, 2016, Grote Molen and a newly-formed, wholly-owned subsidiary, Grote Merger Co. ("Merger Corp."), and Blackridge Technology Holdings, Inc., a Delaware corporation ("Blackridge"), entered into an Agreement and Plan of Reorganization (the "Reorganization Agreement"), which generally provides for Grote Molen's acquisition of Blackridge in exchange for a controlling number of shares of Grote Molen's preferred and common stock pursuant to the merger (the "Merger") of Merger Corp. with and into Blackridge, with Blackridge continuing as the surviving corporation.

The Reorganization Agreement provides that the closing of the transactions contemplated thereby is subject to several significant conditions precedent.  There can be no assurance that such conditions will be satisfied or waived or that the reorganization will be completed.

When and if completed, the transactions contemplated by the Reorganization Agreement will result in a change of control of Grote Molen and, following the consummation thereof, the Blackridge stockholders will be able to elect the directors and control the policies and practices of the Grote Molen.  It is anticipated that the transaction will be accounted for as a reverse acquisition for accounting purposes.

The foregoing summary of selected provisions of the Reorganization Agreement does not purport to be complete and is qualified in its entirety by reference to the Reorganization Agreement, a copy of which is filed as an exhibit to this report and incorporated herein by reference.
12

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that require the more significant judgments and estimates in the preparation of financial statements, including the following:

Accounts Receivable

Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts. We determine the allowance for doubtful accounts by identifying potential troubled accounts and by using historical experience and future expectations applied to an aging of accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded as income when received. We determined that no allowance for doubtful accounts was required at September 30, 2016 and December 31, 2015.

Inventories

Inventories, consisting primarily of grain mills, kitchen mixers, parts and accessories, are stated at the lower of cost or market, with cost determined using primarily the first-in-first-out (FIFO) method. We purchase substantially all inventories from two foreign suppliers, and have been dependent on those suppliers for substantially all inventory purchases since we commenced operations.  We determined that no allowance for obsolete inventories was required at September 30, 2016 and December 31, 2015.

Deposits

At times, we are required to pay advance deposits toward the purchase of inventories from our principal suppliers. Such advance payments are recorded as deposits, a current asset in the accompanying consolidated financial statements.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets, which range from 3 to 10 years. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed and any resulting gain or loss is recognized in operations for the period. The cost of maintenance and repairs is charged to operations as incurred. Significant renewals and betterments are capitalized.

Intangible Assets

Intangible assets are recorded at cost, less accumulated amortization. Amortization of definitive lived intangible assets is computed using the straight-line method based on the estimated useful lives or contractual lives of the assets, which range from 10 to 30 years.

Impairment of Long-Lived Assets

We periodically review our long-lived assets, including intangible assets, for impairment when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. No events or changes in circumstances have occurred to indicate that the carrying amount of our long-lived assets may not be recoverable. Therefore, no impairment loss was recognized during the three months and nine months ended September 30, 2016 and 2015.
13

Revenue Recognition

We record revenue from the sales of grain mills, kitchen mixers and accessories in accordance with the underlying sales agreements when the products are shipped, the selling price is fixed and determinable, and collection is reasonably assured.

Warranties

We provide limited warranties to our customers for certain of our products sold.  We perform warranty work at our service center in Pocatello, Idaho or at other authorized service locations.   Warranty expenses have not been material to our consolidated financial statements.

Income Taxes

We account for income taxes in accordance with FASB ASC Topic 740, Income Taxes , using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

FASB ASC Topic 740, Income Taxes, requires us to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, we must measure the tax position to determine the amount to recognize in our consolidated financial statements. We performed a review of our material tax positions in accordance with recognition and measurement standards established by ASC Topic 740 and concluded we had no unrecognized tax benefit that would affect the effective tax rate if recognized for the three months and nine months ended September 30, 2016 and 2015.

We include interest and penalties arising from the underpayment of income taxes, if any, in our consolidated statements of operations in general and administrative expenses. As of September 30, 2016 and December 31, 2015, we had no accrued interest or penalties related to uncertain tax positions.

Fair Value of Financial Instruments

Our financial instruments consist of cash, accounts receivable, accounts payable and notes payable. The carrying amount of cash, accounts receivable and accounts payable approximates fair value because of the short-term nature of these items.  We believe the carrying amount of the notes payable approximates fair value because the interest rates on the notes approximate market rates of interest.

Estimated Value of Warrants

We estimate the grant date value of the common stock purchase warrants issued in Units sold and as consideration for the conversion/cancellation of debt using the Black-Scholes option pricing model.  The inputs used in this valuation are based on management's judgment and subject to significant market fluctuations.
 
Results of Operations

Sales

Our business is not seasonal; however, our quarterly sales, including sales to related parties, may fluctuate materially from period to period.  At times, we derive a significant portion of our revenues from sales to related parties.  Each of our two principal stockholders owns a company that may be a significant customer.  Our sales were comprised of the following:
14

   
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2016
   
2015
   
2016
   
2015
 
                         
Sales
 
$
223,369
   
$
382,021
   
$
681,424
   
$
964,214
 
Sales – related parties
   
17,330
     
34,615
     
33,910
     
60,661
 
 
                               
Total sales
 
$
240,699
   
$
416,636
   
$
715,334
   
$
1,024,875
 

Sales to related parties totaled approximately 7% and 8% of total sales for the three months ended September 30, 2016 and 2015, and approximately 5% and 6% of total sales for the nine months ended September 30, 2016 and 2015, respectively.

Our total sales decreased $175,937, or approximately 42%, during the three months ended September 30, 2016 compared to the three months ended September 30, 2015.  Our total sales decreased $309,541, or approximately 30%, during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015.  While we experienced an increase in sales in 2015 attributable to the successful introduction of our new WonderMix kitchen mixer, we believe year-to-date sales in 2016 were negatively impacted by a continuing overall slow-down in the preparedness market and a prolonged slow economic recovery in the United States.

Cost of Sales

Total cost of sales for the three months ended September 30, 2016 was $199,806, compared to $319,426 for the three months ended September 30, 2015, a decrease of $119,620, or approximately 37%.  Total cost of sales for the nine months ended September 30, 2016 was $537,680, compared to $750,519 for the nine months ended September 30, 2015, a decrease of $212,839, or approximately 28%. Our cost of sales consists of the purchase price of our products incurred to our suppliers plus inbound shipping costs.  We do not manufacture our own products.  Our costs to purchase products for resale remained relatively constant during the first nine months of 2016.  Therefore, the decrease in our cost of sales during the three and nine months ended September 30, 2016 compared to the three and nine months ended September 30, 2015 was primarily attributed to the decrease in sales volume.  Included in cost of sales were costs of related party sales of $13,685 and $26,539 for the three months ended September 30, 2016 and 2015, and $25,488 and $44,422 for the nine months ended September 30, 2016 and 2015, respectively.  Total cost of sales as a percentage of total sales was approximately 83% and 77% for the three months ended September 30, 2016 and 2015, and approximately 75% and 73% for the nine months ended September 30, 2016 and 2015, respectively.

Cost of sales as a percentage of sales may fluctuate from period to period, based on the mix of products sold during a particular period and pricing arrangements with our suppliers.  In addition, we purchase substantially all inventories from two foreign suppliers, and have been dependent on those suppliers for substantially all inventory purchases since we commenced operations.  International manufacturing is subject to factors that can have a material impact on our costs of sales, including: availability of labor at costs consistent with historical levels; changes in labor or other laws; instability of social, political and economic factors; freight costs, including domestic and international customs and tariffs; unexpected changes in regulatory environments; costs and availability of manufacturing materials; and other factors.
15

Selling, General and Administrative Expenses

Our selling, general and administrative expenses were $118,994 for the three months ended September 30, 2016, compared to $108,579 for the three months ended September 30, 2015, an increase of $10,415, or approximately 10%.  Our selling, general and administrative expenses were $347,433 for the nine months ended September 30, 2016, compared to $331,009 for the nine months ended September 30, 2015, an increase of $16,424, or approximately 5%.  The increase in selling, general and administrative expenses in the current year is primarily attributable to increases in professional fees incurred with the proposed reorganization and Unit offering and increases in advertising costs.

Pursuant to an agreement effective in February 2011, we pay a monthly management fee to a company owned by one of the major stockholders of the Company to manage our day-to-day business activities and to provide business space.  Historically we have paid monthly management fees in varying amounts to this related party pursuant to prior agreements.  The agreement is on a month-to-month basis and can be cancelled at any time by the vote of management.  The agreement was amended and restated on October 31, 2014 to increase the monthly fee to $12,500 effective November 1, 2014.  Also included in management fees are monthly payments of $150 to another major stockholder of the Company for expense reimbursement.  Included in selling, general and administrative expenses were management fees to related parties totaling $37,950 for each of the three-month periods ended September 30, 2016 and 2015 and $113,850 for each of the nine-month periods ended September 30, 2016 and 2015.

Depreciation and Amortization Expense

Depreciation and amortization expense remained fairly constant and was $4,208 and $4,471 for the three months ended September 30, 2016 and 2015, and $12,872 and $13,545 for the nine months ended September 30, 2016 and 2015, respectively.

Other Expense: Interest Expense

Other expense includes interest expense on our indebtedness, a significant portion of which is indebtedness to related parties.  Total interest expense – related parties was $5,915 and $4,776 for the three months ended September 30, 2016 and 2015, and $14,447 and $8,456 for the nine months ended September 30, 2016 and 2015, respectively.  The increase in interest expense in the current year was attributed primarily to a new 18%, $300,000 promissory note from a related party in April 2016, partially offset by a decrease resulting from the repayment in full of the long-term debt to related parties and a partial payment of notes payable – related parties.

Other expense also includes interest expense to non-related parties of $4,219 and $2,819 for the three months ended September 30, 2016 and 2015 and $12,712 and $12,816 for the nine months ended September 30, 2016 and 2015, respectively.  The increase in interest expense to non-related parties in the current year is primarily due to additional notes payable to non-related parties in 2015 and 2016.

Liquidity and Capital Resources

As of September 30, 2016, we had total current assets of $1,069,008, including cash of $54,687, and current liabilities of $645,363, resulting in working capital of $423,645.  Our current assets and working capital included inventories of $950,117 and deposits of $20,000.  Generally, we are required to pay significant advance deposits toward the purchase of inventories from our principal suppliers.

In addition, as of September 30, 2016, we had total stockholders' equity of $469,093.  We have financed our operations, the acquisition of inventories, and the payment of vendor deposits from our operations, short-term loans from our principal stockholders and non-related parties, a long-term note payable from a bank, and from the issuance of our common stock and warrants.
16

During the three months ended September 30, 2016, Grote Molen sold 1,691,000 Units, each consisting of one share of common stock and one five-year common stock purchase warrant exercisable at $0.70 per share, in a private offering to accredited investors, at an offering price of $0.10 per Unit, for total proceeds of $169,100.  During October 2016, Grote Molen sold an additional 55,000 Units for proceeds totaling $5,500.

For the nine months ended September 30, 2016, net cash used in operating activities was $256,522, as a result of our net loss of $209,842 and increases in accounts receivable – related parties of $7,422, inventories of $241,224, and prepaid expenses of $46, and decreases in accrued interest payable – related parties of $14,923 and accrued interest payable of $4,913, partially offset by non-cash expenses totaling $13,028, decreases in accounts receivable of $2,550 and deposits of $44,685, and increases in accounts payable and accrued expenses of $149,380 and accounts payable – related parties of $12,205.

By comparison, for the nine months ended September 30, 2015, net cash used in operating activities was $46,690, as a result of our net loss of $62,085 and increases in accounts receivable – related parties of $13,077 and inventories of $140,112, partially offset by non-cash expenses of $13,545, decreases in accounts receivable of $14,217, deposits of $109,865 and prepaid expenses of $6,487, and increases in accounts payable and accrued expenses of $9,066, accounts payable – related parties of $1,350, accrued interest payable – related parties of $6,644 and accrued interest payable of $7,410.

We had no net cash provided by or used in investing activities for the nine months ended September 30, 2016 and 2015.

For the nine months ended September 30, 2016, net cash provided by financing activities was $301,958, comprised of proceeds from long-term note payable of $5,300, proceeds from notes payable – related parties of $300,000, proceeds from notes payable of $91,500 and proceeds from the sale of Units of $169,100, partially offset by repayment of notes payable – related parties of $195,240, repayment of notes payable of $59,600, repayment of long-term debt – related party of $2,943 and repayment of long-term note payable of $6,159.

For the nine months ended September 30, 2015, net cash provided by financing activities was $295, comprised of proceeds from long-term note payable of $28,700 and proceeds from notes payable of $41,500, offset by repayment of notes payable – related parties of $18,500, repayment of long-term debt – related party of $34,031 and repayment of long-term note payable of $17,374.

At September 30, 2016, we had short-term notes payable – related parties totaling $234,887, which are payable to our principal stockholders, are unsecured, bear interest at rates ranging from 6% to 18% per annum and are generally due on demand.  In April 2016, we borrowed $300,000 from a principal stockholder.  The note bears interest at 18% and is payable in 12 monthly payments of $27,504 through May 2017.  The note is included in short-term notes payable – related parties and had a balance of $160,260 as of September 30, 2016.

In addition, at September 30, 2016, we had short-term notes payable to non-related parties totaling $118,000, which are unsecured, bear interest at rates ranging from 6% to 8% per annum and are due on demand.

17
At December 31, 2015, our long-term debt – related party was comprised of the remaining principal balance of $2,943 of a note payable to a principal stockholder.  The note was paid in full in February 2016.

At September 30, 2016, we had a long-term note payable to a bank with a principal balance of $144,436.  The long-term note payable is a line of credit promissory note bearing interest at an indexed rate plus 2% (4.5% at September 30, 2016), requiring monthly interest payments only and maturing on May 16, 2021.  For the past several months, we have made monthly payments of principal and interest in varying amounts.  The note payable has a maximum line of credit of $150,000 and is secured by a deed of trust on certain real estate owned by one of the principal stockholders of the Company and by the Company's inventories, property and equipment, and intangible assets.

Accrued interest payable – related parties was $38,584 and $53,507 at September 30, 2016 and December 31, 2015, respectively.  Accrued interest payable to non-related parties was $17,337 and $22,686 at September 30, 2016 and December 31, 2015, respectively.

In the event sales during the remainder of 2016 and into 2017 do not meet our expectations, we may require additional funding from the sale of our common stock, Units or debt in order to meet our obligations.  Depending on the requirement to pay advance deposits on orders from our suppliers, we estimate we may require $250,000 to $500,000 of additional funding in 2017.  No assurances can be given that, if required, such funding will be available to us on acceptable terms or at all.

Recent Accounting Pronouncements

There were no new accounting pronouncements issued during the nine months ended September 30, 2016 and through the date of this filing that we believe are applicable to or would have a material impact on the consolidated financial statements of the Company.

Off-Balance Sheet Arrangements

Pursuant to an agreement effective in February 2011, we pay a monthly management fee to a company owned by one of the major stockholders of the Company to manage our day-to-day business activities and to provide business space.  Historically we have paid monthly management fees in varying amounts to this related party pursuant to prior agreements.  The agreement is on a month-to-month basis and can be cancelled at any time by the vote of management.  The agreement was amended and restated on October 31, 2014 to increase the monthly fee to $12,500 effective November 1, 2014.  

Also included in management fees are monthly payments of $150 to another major stockholder of the Company for expense reimbursement.  
 
Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.  The Company is a "smaller reporting company."
 
Item 4.   Controls and Procedures

Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of our management, including our President and Treasurer who serves as our principal executive and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("the Exchange Act") as of September 30, 2016, the end of the period covered by this report.  Based upon that evaluation, our President and Treasurer concluded that our disclosure controls and procedures as of September 30, 2016 were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to our management, including our President and Treasurer, as appropriate to allow timely decisions regarding disclosure.  A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in internal controls over financial reporting.

There was no change in our internal control over financial reporting during the quarter ended September 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
18

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

We are not a party to any material pending legal proceedings.

Item 1A.  Risk Factors

See the risk factors described in Item 1A of the Company's 2015 annual report on Form 10-K filed with the SEC on March 30, 2016.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

On September 7, 2016, Grote Molen sold common stock purchase warrants to an accredited investor in consideration for the conversion/cancellation of its $50,000 promissory note to such investor.  The warrants entitle the investor to purchase up to 5,000,000 shares of the Registrant's common stock at an exercise price of $0.70 per share during the five-year period commencing September 1, 2018. 

During the three months ended September 30, 2016, Grote Molen sold 1,691,000 Units, each consisting of one share of common stock and one five-year common stock purchase warrant exercisable at $0.70 per share, in a private offering to accredited investors, at an offering price of $0.10 per Unit, for total proceeds of $169,100.

Each of the investors in the foregoing transactions represented that he, she or it was an "accredited investor" as defined in Rule 501 of Regulation D.  No underwriter was involved in any of the foregoing transactions and the securities were sold by Grote Molen directly to the investors.  The securities were sold without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on the exemption from such registration requirements provided by Section 4(2) of the Securities Act for transactions not involving any public offering.  The securities were sold without general advertising or solicitation, the investors acknowledged that they were purchasing restricted securities which had not been registered under the Securities Act and which were subject to certain restrictions on resale, and the certificates or agreements representing the securities were or will, when issued, be imprinted with the usual and customary restricted stock legend.Item 3.  Defaults upon Senior Securities

Not Applicable.

Item 4.  Mine Safety Disclosures

Not Applicable.

Item 5.  Other Information

Not Applicable.
19
Item 6:  Exhibits

The following exhibits are filed as part of this report:

Exhibit No .
Description of Exhibit  
   
3.1
Articles of Incorporation (1)
   
3.2
Bylaws (1)
   
4.1
Common Stock Purchase Warrant Agreement dated as of September 7, 2016*
   
4.2
Form of Five-Year Common Stock Purchase Warrant Included in Unit Offering*
   
10.1
Promissory Note dated July 15, 2016*
   
10.2
Promissory Note dated August 9, 2016*
   
10.3
Agreement and Plan of Reorganization dated as of September 6, 2016 (2)
   
10.4
Warrant Purchase Agreement dated as of September 7, 2016*
   
31.1
Section 302 Certification of Chief Executive and Chief Financial Officer*
   
32.1
Section 1350 Certification of Chief Executive Officer and Chief Financial Officer*
   
101 INS
XBRL Instance Document*
   
101SCH
XBRL Taxonomy Extension Schema*
   
101 CAL
XBRL Taxonomy Extension Calculation Linkbase*
   
101 DEF
XBRL Taxonomy Extension Definition Linkbase*
   
101 LAB
XBRL Taxonomy Extension Label Linkbase*
   
101 PRE
XBRL Taxonomy Extension Presentation Linkbase*

(1) Incorporated by reference to Exhibit Numbers 3.1 and 3.2 of the Company's registration statement on Form 10 filed with the SEC on May 14, 2010.
(2) Incorporated by reference to Exhibit Number 10.1 of the current report on Form 8-K filed with the SEC on September 7, 2016.
* Exhibits filed with this report.
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



 
Grote Molen, Inc.
   
   
Dated:  November 14, 2016
By /s/ John B. Hofman
 
John B. Hofman
 
President, Secretary and Treasurer
 
(Principal Executive and Accounting Officer)
 
 

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Exhibit 4.1
 

NEITHER THIS WARRANT NOR ANY SECURITIES ISSUED UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  NEITHER THIS WARRANT NOR ANY SECURITIES ISSUED UPON EXERCISE HEREOF MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATING TO SUCH TRANSACTION UNDER SAID ACT AND COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO GROTE MOLEN, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.  ALL SECURITIES ISSUED UPON EXERCISE HEREOF SHALL CONTAIN A LEGEND SUBSTANTIALLY IN THE FORM HEREOF.
Right to Purchase up to
5,000,000 Shares of
Common Stock
of Grote Molen, Inc.
No. W-001
GROTE MOLEN, INC.
Common Stock Purchase Warrant
This Warrant (the " Warrant ") is issued by Grote Molen, Inc., a Nevada corporation (the " Company "), to David N. Nemelka, an individual (the " Holder ").
The Company hereby certifies that, for value received, the Holder, or his successors or registered assigns, is entitled, subject to the conditions and other terms set forth below, at any time or from time to time during the five-year period commencing September 1, 2018 and expiring at 5:00 p.m., Mountain time, on the Expiration Date (as hereinafter defined), to purchase from the Company up to 5,000,000 fully paid and nonassessable shares of Common Stock , $ 0.001 par value per share (the " Common Stock "), of the Company (the " Warrant Shares "), at an exercise price of $0.70 per share (the " Purchase Price ").  The number of such shares of Common Stock and the Purchase Price are subject to adjustment as provided in this Warrant .
As used herein the following terms, unless the context otherwise requires, have the following respective meanings:
(a)   The term " Expiration Date " shall mean August 31, 2023.
(b)   The term " Issue Date " shall mean September 7, 2016.
1.   Exercise of Warrant .
(a)   Subject to the terms and conditions hereof, the Warrant is exercisable in whole or in part, on one or more occasions, by surrendering this Warrant (with the annexed Notice of Exercise at the end hereof duly executed), together with payment of the Purchase Price for the Warrant Shares purchased by certified check or money order payable to the order of the Company, to the Company at its offices (or such other place as may be the Company's principal offices from time to time) as set forth in the Notice of Exercise attached hereto, or at such other place as is designated in writing by the Company, and subject to satisfaction of the terms and conditions hereof, Holder shall be entitled to receive a certificate or certificates for the Warrant Shares so purchased.
(b)   The rights represented hereby are exercisable at the option of Holder, in whole or in part (but not as to fractional Warrant Shares), subject to the terms of this Warrant.  In the case of the purchase of less than all the Warrant Shares purchasable hereunder, the Company shall cancel this Warrant upon the surrender hereof and shall execute and deliver a new Warrant of like tenor for the balance of the Warrant Shares purchasable hereunder.  The Company may deem and treat the registered holder(s) hereof as the absolute owner(s) of this Warrant (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and of any distribution to the holder(s) hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary.
2.   Delivery of Stock Certificates on Exercise .   As soon as practicable after the exercise of this Warrant, and in any event within five business days thereafter, the Company at its expense (including the payment by it of any applicable issue or stamp taxes) will cause to be issued in the name of and delivered to the Holder, or as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of fully paid and nonassessable shares of Common Stock to which the Holder shall be entitled on such exercise, in such denominations as may be requested by the Holder, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash equal to such fraction multiplied by the then current market value (as determined in good faith by the Board of Directors), of one full share (less such fractional exercise price with respect to such shares), such exercise pursuant to Section 1 or otherwise.
3.   Adjustment for Reorganization, Reclassification, Consolidation, Merger Etc .
(a)   If any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or other property with respect to or in exchange for Common Stock, then, in each such case the Holder, on the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, reclassification, consolidation, merger or sale, as the case may be, shall receive, in lieu of the Common Stock (or other consideration) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which the Holder would have been entitled upon such consummation as the case may be, if the Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4.
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(b)   Upon any reorganization, reclassification, consolidation, merger or sale referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, reclassification, consolidation or merger, as the case may be, and shall be binding upon the issuer of any such stock or other securities.
4.   Adjustment for Extraordinary Events .   In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide or reclassify its outstanding shares of Common Stock, or (c) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, in each such event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Purchase Price then in effect.  The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4.  The Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive that number of shares of Common Stock determined by multiplying the number of shares of Common Stock which would be issuable on such exercise as of immediately prior to such issuance by a fraction of which (i) the numerator is the Purchase Price in effect immediately prior to such issuance and (ii) the denominator is the Purchase Price in effect on the date of such exercise.
5.   No Impairment .  The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, or any other similar voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment due to such event.  Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of stock receivable on the exercise of the Warrant above the amount payable therefor on such exercise , (b) will take all action that may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of stock, free from all taxes, liens and charges with respect to the issue thereof, on the exercise of the Warrant from time to time outstanding , and (c) will not consolidate with or merge into any other person or permit any such person to consolidate with or merge into the Company (if the Company is not the surviving person), unless such other person shall, pursuant to Section 4 hereof, expressly assume in writing and will be bound by all the terms of this Warrant (except where the consideration with respect to such merger is cash or publicly-listed securities) .
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6.   Chief Financial Officer's Certificate as to Adjustments .  In each case of any adjustment or readjustment in the shares of Common Stock issuable on the exercise of the Warrant, the Chief Financial Officer of the Company will promptly compute such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment, the Purchase Price resulting therefrom and the increase or decrease, if any, or the number of shares purchasable at such price upon exercise of the Warrant, and showing in detail the facts and computation upon which such adjustment or readjustment is based.  The Company will forthwith mail a copy of each such certificate to each registered holder of this Warrant, and will, on the written request at any time of the Holder, furnish to the Holder a like certificate setting forth the Purchase Price at the time in effect and showing how it was calculated.
7.   Notices of Record Date .   In the event of
(a)   any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend on, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or
(b)   any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to, or consolidation or merger of the Company with or into, any other person, or
(c)   any voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then and in each such event the Company will mail or deliver or cause to be mailed or delivered to the registered holder of this Warrant a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable on such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up, and (iii) the amount and character of any stock or other securities, or rights or options with respect thereto, proposed to be issued or granted, the date of such proposed issue or grant and the persons or class of persons to whom such proposed issue or grant is to be offered or made.  Such notice shall also state that the action in question or the record date is subject to the effectiveness of a registration statement under the Securities Act of 1933, as amended (the " Securities Act "), or a favorable vote of stockholders if either is required.  Such notice shall be mailed at least 15 days prior to the date specified in such notice on which any such action is to be taken or the record date, whichever is earlier.
8.   Reservation of Stock Issuable on Exercise of Warrant .   The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, all shares of Common Stock from time to time issuable on the exercise of this Warrant.
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9.   Transfer of Warrant .   Subject to applicable federal and state securities laws, the transfer of this Warrant and all rights hereunder, in whole or in part, is registrable at the office or agency of the Company referred to below by the Holder in person or by the Holder's duly authorized attorney, upon surrender of this Warrant properly endorsed.  Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that this Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder hereof, when this Warrant shall have been so endorsed, may be treated by the Company and all other persons dealing with this Warrant as the absolute owner and holder hereof for any purpose and as the person entitled to exercise the rights represented by this Warrant, or to the registration of transfer hereof on the books of the Company; and until due presentment for registration of transfer on such books the Company may treat the registered holder hereof as the owner and holder for all purposes, and the Company shall not be affected by notice to the contrary.
10.   Register of Warrant .   The Company shall maintain, at its principal office (or such other office as it may designate by notice to the Holder), a register for its warrants in which the Company shall record the name and address of the person in whose name a warrant has been issued, as well as the name and address of each transferee and each prior owner of such warrant.
11.   Exchange of Warrant .   This Warrant is exchangeable, upon the surrender hereof by the Holder at the office or agency of the Company referred to in Section 13, for one or more new Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder, each of such new Warrants to represent the right to subscribe for and purchase such number of shares as shall be designated by the Holder at the time of such surrender.
12.   Replacement of Warrant .   Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity  agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor; provided, however, if the registered holder of this Warrant is the original holder of this Warrant on the Issue Date, its nominee, or any of its officers, directors or general partners, and this Warrant is lost, stolen or destroyed, the affidavit of the President, a director or a general partner of the registered holder setting forth the circumstances with respect to such loss, theft or destruction shall be accepted as satisfactory evidence thereof, and no indemnity bond or other security shall be required as a condition to the execution and delivery by the Company of a new Warrant in replacement of such lost, stolen or destroyed Warrant other than the registered holder's written agreement to indemnify the Company.
13.   Warrant Agent .   The Company may, by written notice to the registered holder of this Warrant, appoint an agent having an office in the United States, for the purpose of issuing Common Stock on the exercise of the Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 11, and replacing this Warrant pursuant to Section 12, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.
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14.   Registration Rights .  If, at any time during the period commencing with the date hereof and continuing through the Expiration Date, the Company shall determine to prepare and file with the United States Securities and Exchange Commission (the " SEC ") a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company's stock option or other employee benefit plans, then the Company shall deliver to the Purchaser a written notice of such determination and, if within twenty (20) days after the date of the delivery of such notice, the Purchaser shall so request in writing, the Company shall at its expense include in such registration statement all or any part of the warrants represented by this Agreement (or the common stock acquired pursuant to exercise of such warrants) which the Purchaser requests to be registered; provided , however , that the Company shall not be required to register any Shares pursuant to this Section 14 that are eligible for resale pursuant to Rule 144 (without volume restrictions or current public information requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject of a then effective registration statement.
15.   Remedies .   The Company stipulates that the remedies at law of the Holder in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.
16.   Closing of Books .   The Company will at no time close its transfer books against the transfer of any Warrant or of any shares of Common Stock issued or issuable upon the exercise of any Warrant in any manner which interferes with the timely exercise of this Warrant.
17.   No Rights or Liabilities as a Stockholder .   This warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.  No provision of this Warrant, in the absence of affirmative action by the Holder to purchase Common Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Purchase Price or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
18.   Notices .   All notices and other communications from the Company to the registered holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, or delivered by a nationally-recognized overnight courier service, at the address of the Holder as shown on the books of the Company or such other address as may have been furnished to the Company in writing by the Holder.
19.   Representations of Holder .  Holder, by acceptance hereof, hereby represents and warrants to the Company that:
  (a)   This Warrant has been, and upon exercise the Warrant Shares will be, acquired for investment for the Purchaser's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Holder has no present intention of selling, granting any participation in, or otherwise distributing the same.  Holder further represents that Holder does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to this Warrant or any of the Warrant Shares.
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  (b)   Holder understands that this Warrant and the Warrant Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Holder's representations as expressed herein.  Holder understands that this Warrant and Warrant Shares are "restricted securities" under applicable U.S. federal and state securities laws and that, pursuant to these laws, Holder must hold this Warrant and the Warrant Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available.  Holder acknowledges that the Company has no obligation to register or qualify this Warrant or the Warrant Shares, or the stock into which they may be converted, for resale.  Holder further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for this Warrant and the Warrant Shares, and on requirements relating to the Company which are outside of Holder's control, and which the Company is under no obligation and may not be able to satisfy.
  (c)   Holder understands that the Warrant Shares and any securities issued in respect of or exchange for the Warrant Shares, may bear one or all of the following legends:
(i)  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
(ii)  Any legend required by the securities laws of any state to the extent such laws are applicable to the Shares represented by the certificate so legended.
20.   Miscellaneous .   This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.  This Warrant shall be governed by and construed in accordance with the general corporate laws of the State of Nevada.  The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
[Signatures appear on the following page]
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Dated as of [___________], 2016.
 
   
The Company:
GROTE MOLEN, INC.
 
 
 
By: /s/ John Hofman
  Name: John Hofman
  Title:   President and CEO
   
   
   
   
Holder: By: /s/ David N. Nemelka
  David N. Nemelka


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NOTICE OF EXERCISE
To:
Grote Molen, Inc.
________________________
________________________
The undersigned hereby elects to purchase ______________ shares of Common Stock of Grote Molen, Inc. pursuant to the terms of the attached Warrant and payment of the Purchase Price per share required under such Warrant accompanies this notice.
The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
__________________________________________
(Signature)
Name: ____________________________________


                              Address: __________________________________________

__________________________________________

Date: __________________


Name in which shares should be registered:

___________________________________

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FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto  ______________________________________ the right represented by the within Warrant to purchase ________________ shares of Common Stock of GROTE MOLEN, INC. to which the within Warrant relates, and appoints _________________________ Attorney to transfer such right on the books of GROTE MOLEN, INC. with full power of substitution in the premises.

Dated:
__________________________________________
(Signature must conform to name of holder as specified on the face of the Warrant)

___________________________________________


___________________________________________
(Address)

Signed in the presence of:

_____________________________

_____________________________


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Exhibit 4.2
 

NEITHER THIS WARRANT NOR ANY SECURITIES ISSUED UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  NEITHER THIS WARRANT NOR ANY SECURITIES ISSUED UPON EXERCISE HEREOF MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATING TO SUCH TRANSACTION UNDER SAID ACT AND COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO GROTE MOLEN, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.  ALL SECURITIES ISSUED UPON EXERCISE HEREOF SHALL CONTAIN A LEGEND SUBSTANTIALLY IN THE FORM HEREOF.
Right to Purchase up to
[________] Shares of
Common Stock
of Grote Molen, Inc.
No. W-[___]
GROTE MOLEN, INC.
Common Stock Purchase Warrant
This Warrant (the " Warrant ") is issued by Grote Molen, Inc., a Nevada corporation (the " Company "), to [___________], a [__________] (the " Holder ").
The Company hereby certifies that, for value received, the Holder, or his, her or its successors or registered assigns, is entitled, subject to the conditions and other terms set forth below, at any time or from time to time during the five-year period commencing December 1, 2016 and expiring at 5:00 p.m., Mountain time, on the Expiration Date (as hereinafter defined), to purchase from the Company up to [___________] fully paid and nonassessable shares of Common Stock , $ 0.001 par value per share (the " Common Stock "), of the Company (the " Warrant Shares "), at an exercise price of $0.70 per share (the " Purchase Price ").  The number of such shares of Common Stock and the Purchase Price are subject to adjustment as provided in this Warrant .
As used herein the following terms, unless the context otherwise requires, have the following respective meanings:
(a)   The term " Expiration Date " shall mean November 30, 2021.
(b)   The term " Issue Date " shall mean December 1, 2016.
1.   Exercise of Warrant .
(a)   Subject to the terms and conditions hereof, the Warrant is exercisable in whole or in part, on one or more occasions, by surrendering this Warrant (with the annexed Notice of Exercise at the end hereof duly executed), together with payment of the Purchase Price for the Warrant Shares purchased by certified check or money order payable to the order of the Company, to the Company at its offices (or such other place as may be the Company's principal offices from time to time) as set forth in the Notice of Exercise attached hereto, or at such other place as is designated in writing by the Company, and subject to satisfaction of the terms and conditions hereof, Holder shall be entitled to receive a certificate or certificates for the Warrant Shares so purchased.
(b)   The rights represented hereby are exercisable at the option of Holder, in whole or in part (but not as to fractional Warrant Shares), subject to the terms of this Warrant.  In the case of the purchase of less than all the Warrant Shares purchasable hereunder, the Company shall cancel this Warrant upon the surrender hereof and shall execute and deliver a new Warrant of like tenor for the balance of the Warrant Shares purchasable hereunder.  The Company may deem and treat the registered holder(s) hereof as the absolute owner(s) of this Warrant (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and of any distribution to the holder(s) hereof, and for all other purposes, and the Company shall not be affected by any notice to the contrary.
2.   Delivery of Stock Certificates on Exercise .   As soon as practicable after the exercise of this Warrant, and in any event within five business days thereafter, the Company at its expense (including the payment by it of any applicable issue or stamp taxes) will cause to be issued in the name of and delivered to the Holder, or as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of fully paid and nonassessable shares of Common Stock to which the Holder shall be entitled on such exercise, in such denominations as may be requested by the Holder, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash equal to such fraction multiplied by the then current market value (as determined in good faith by the Board of Directors), of one full share (less such fractional exercise price with respect to such shares), such exercise pursuant to Section 1 or otherwise.
3.   Adjustment for Reorganization, Reclassification, Consolidation, Merger Etc .
(a)   If any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or other property with respect to or in exchange for Common Stock, then, in each such case the Holder, on the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, reclassification, consolidation, merger or sale, as the case may be, shall receive, in lieu of the Common Stock (or other consideration) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which the Holder would have been entitled upon such consummation as the case may be, if the Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4.
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(b)   Upon any reorganization, reclassification, consolidation, merger or sale referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, reclassification, consolidation or merger, as the case may be, and shall be binding upon the issuer of any such stock or other securities.
4.   Adjustment for Extraordinary Events .   In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide or reclassify its outstanding shares of Common Stock, or (c) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, in each such event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Purchase Price then in effect.  The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4.  The Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive that number of shares of Common Stock determined by multiplying the number of shares of Common Stock which would be issuable on such exercise as of immediately prior to such issuance by a fraction of which (i) the numerator is the Purchase Price in effect immediately prior to such issuance and (ii) the denominator is the Purchase Price in effect on the date of such exercise.
5.   No Impairment .  The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, or any other similar voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment due to such event.  Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of stock receivable on the exercise of the Warrant above the amount payable therefor on such exercise , (b) will take all action that may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of stock, free from all taxes, liens and charges with respect to the issue thereof, on the exercise of the Warrant from time to time outstanding , and (c) will not consolidate with or merge into any other person or permit any such person to consolidate with or merge into the Company (if the Company is not the surviving person), unless such other person shall, pursuant to Section 4 hereof, expressly assume in writing and will be bound by all the terms of this Warrant (except where the consideration with respect to such merger is cash or publicly-listed securities) .
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6.   Chief Financial Officer's Certificate as to Adjustments .  In each case of any adjustment or readjustment in the shares of Common Stock issuable on the exercise of the Warrant, the Chief Financial Officer of the Company will promptly compute such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment, the Purchase Price resulting therefrom and the increase or decrease, if any, or the number of shares purchasable at such price upon exercise of the Warrant, and showing in detail the facts and computation upon which such adjustment or readjustment is based.  The Company will forthwith mail a copy of each such certificate to each registered holder of this Warrant, and will, on the written request at any time of the Holder, furnish to the Holder a like certificate setting forth the Purchase Price at the time in effect and showing how it was calculated.
7.   Notices of Record Date .   In the event of
(a)   any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend on, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or
(b)   any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to, or consolidation or merger of the Company with or into, any other person, or
(c)   any voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then and in each such event the Company will mail or deliver or cause to be mailed or delivered to the registered holder of this Warrant a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable on such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up, and (iii) the amount and character of any stock or other securities, or rights or options with respect thereto, proposed to be issued or granted, the date of such proposed issue or grant and the persons or class of persons to whom such proposed issue or grant is to be offered or made.  Such notice shall also state that the action in question or the record date is subject to the effectiveness of a registration statement under the Securities Act of 1933, as amended (the " Securities Act "), or a favorable vote of stockholders if either is required.  Such notice shall be mailed at least 15 days prior to the date specified in such notice on which any such action is to be taken or the record date, whichever is earlier.
8.   Reservation of Stock Issuable on Exercise of Warrant .   The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, all shares of Common Stock from time to time issuable on the exercise of this Warrant.
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9.   Transfer of Warrant .   Subject to applicable federal and state securities laws, the transfer of this Warrant and all rights hereunder, in whole or in part, is registrable at the office or agency of the Company referred to below by the Holder in person or by the Holder's duly authorized attorney, upon surrender of this Warrant properly endorsed.  Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that this Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder hereof, when this Warrant shall have been so endorsed, may be treated by the Company and all other persons dealing with this Warrant as the absolute owner and holder hereof for any purpose and as the person entitled to exercise the rights represented by this Warrant, or to the registration of transfer hereof on the books of the Company; and until due presentment for registration of transfer on such books the Company may treat the registered holder hereof as the owner and holder for all purposes, and the Company shall not be affected by notice to the contrary.
10.   Register of Warrant .   The Company shall maintain, at its principal office (or such other office as it may designate by notice to the Holder), a register for its warrants in which the Company shall record the name and address of the person in whose name a warrant has been issued, as well as the name and address of each transferee and each prior owner of such warrant.
11.   Exchange of Warrant .   This Warrant is exchangeable, upon the surrender hereof by the Holder at the office or agency of the Company referred to in Section 13, for one or more new Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder, each of such new Warrants to represent the right to subscribe for and purchase such number of shares as shall be designated by the Holder at the time of such surrender.
12.   Replacement of Warrant .   Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity  agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor; provided, however, if the registered holder of this Warrant is the original holder of this Warrant on the Issue Date, its nominee, or any of its officers, directors or general partners, and this Warrant is lost, stolen or destroyed, the affidavit of the President, a director or a general partner of the registered holder setting forth the circumstances with respect to such loss, theft or destruction shall be accepted as satisfactory evidence thereof, and no indemnity bond or other security shall be required as a condition to the execution and delivery by the Company of a new Warrant in replacement of such lost, stolen or destroyed Warrant other than the registered holder's written agreement to indemnify the Company.
13.   Warrant Agent .   The Company may, by written notice to the registered holder of this Warrant, appoint an agent having an office in the United States, for the purpose of issuing Common Stock on the exercise of the Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 11, and replacing this Warrant pursuant to Section 12, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.
5
14.   Registration Rights .  If, at any time during the period commencing with the date hereof and continuing through the Expiration Date, the Company shall determine to prepare and file with the United States Securities and Exchange Commission (the " SEC ") a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company's stock option or other employee benefit plans, then the Company shall deliver to the Purchaser a written notice of such determination and, if within twenty (20) days after the date of the delivery of such notice, the Purchaser shall so request in writing, the Company shall at its expense include in such registration statement all or any part of the warrants represented by this Agreement (or the common stock acquired pursuant to exercise of such warrants) which the Purchaser requests to be registered; provided , however , that the Company shall not be required to register any Shares pursuant to this Section 14 that are eligible for resale pursuant to Rule 144 (without volume restrictions or current public information requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject of a then effective registration statement.
15.   Remedies .   The Company stipulates that the remedies at law of the Holder in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.
16.   Closing of Books .   The Company will at no time close its transfer books against the transfer of any Warrant or of any shares of Common Stock issued or issuable upon the exercise of any Warrant in any manner which interferes with the timely exercise of this Warrant.
17.   No Rights or Liabilities as a Stockholder .   This warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.  No provision of this Warrant, in the absence of affirmative action by the Holder to purchase Common Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Purchase Price or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
18.   Notices .   All notices and other communications from the Company to the registered holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, or delivered by a nationally-recognized overnight courier service, at the address of the Holder as shown on the books of the Company or such other address as may have been furnished to the Company in writing by the Holder.
19.   Representations of Holder .  Holder, by acceptance hereof, hereby represents and warrants to the Company that:
  (a)   This Warrant has been, and upon exercise the Warrant Shares will be, acquired for investment for the Purchaser's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Holder has no present intention of selling, granting any participation in, or otherwise distributing the same.  Holder further represents that Holder does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to this Warrant or any of the Warrant Shares.
6
  (b)   Holder understands that this Warrant and the Warrant Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Holder's representations as expressed herein.  Holder understands that this Warrant and Warrant Shares are "restricted securities" under applicable U.S. federal and state securities laws and that, pursuant to these laws, Holder must hold this Warrant and the Warrant Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available.  Holder acknowledges that the Company has no obligation to register or qualify this Warrant or the Warrant Shares, or the stock into which they may be converted, for resale.  Holder further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for this Warrant and the Warrant Shares, and on requirements relating to the Company which are outside of Holder's control, and which the Company is under no obligation and may not be able to satisfy.
  (c)   Holder understands that the Warrant Shares and any securities issued in respect of or exchange for the Warrant Shares, may bear one or all of the following legends:
(i)  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
(ii)  Any legend required by the securities laws of any state to the extent such laws are applicable to the Shares represented by the certificate so legended.
20.   Miscellaneous .   This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.  This Warrant shall be governed by and construed in accordance with the general corporate laws of the State of Nevada.  The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
[Signatures appear on the following page]
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Dated as of [___________], 2016.
 
   
The Company:
GROTE MOLEN, INC.
 
 
 
By: __________________________________
  Name: John Hofman
  Title:   President and CEO
   
   
   
   
Holder: By: __________________________________
   


8
NOTICE OF EXERCISE
To:
Grote Molen, Inc.
________________________
________________________
The undersigned hereby elects to purchase ______________ shares of Common Stock of Grote Molen, Inc. pursuant to the terms of the attached Warrant and payment of the Purchase Price per share required under such Warrant accompanies this notice.
The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
__________________________________________
(Signature)
Name: ____________________________________


Address:                __________________________________________

__________________________________________

Date: __________________


Name in which shares should be registered:

___________________________________


9
FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto  ______________________________________ the right represented by the within Warrant to purchase ________________ shares of Common Stock of GROTE MOLEN, INC. to which the within Warrant relates, and appoints _________________________ Attorney to transfer such right on the books of GROTE MOLEN, INC. with full power of substitution in the premises.

Dated:
__________________________________________
(Signature must conform to name of holder as specified on the face of the Warrant)

___________________________________________


___________________________________________
(Address)

Signed in the presence of:

_____________________________

_____________________________

10
Exhibit 10.1
 
$50,000.00
July 15 , 2016


Promissory Note

As hereinafter agreed Grote Molen, Inc., jointly and severally, promises to pay to the order of David N. Nemelka Fifty Thousand Dollars ($50,000.00). And it is hereby agreed that the said amount ($50,000.00) shall be payable upon demand. Interest shall accrue at a rate of six percent (6%) per annum and will be charged on the unpaid balance until the whole amount of the principal and interest is paid. There shall be no penalty for early payment of this note.

Should default be made in the payment of the demand note then the whole unpaid amount shall become immediately due and payable; and in the event default is made and said note is placed in the hands of an attorney for collection or suit is brought on the same, then the undersigned agrees to pay all costs and attorney's fees that might be incurred. If there is a lawsuit, borrower agrees upon lender's request to submit to the jurisdiction of the county of Bannock County, the State of Idaho. This note shall be governed by and construed in accordance with the laws of the State of Idaho.

 
UNDERSIGNED:
   
   
 
 /s/ John B. Hofman
 
John B. Hofman, President
 
Grote Molen, Inc.

 
Exhibit 10.2
 
$10,000.00
Aug 9 , 2016


Promissory Note

As hereinafter agreed Grote Molen, Inc., jointly and severally, promises to pay to the order of David N. Nemelka  Ten Thousand Dollars ($10,000.00). And it is hereby agreed that the said amount ($10,000.00) shall be payable upon demand. Interest shall accrue at a rate of six percent (6%) per annum and will be charged on the unpaid balance until the whole amount of the principal and interest is paid. There shall be no penalty for early payment of this note.

Should default be made in the payment of the demand note then the whole unpaid amount shall become immediately due and payable; and in the event default is made and said note is placed in the hands of an attorney for collection or suit is brought on the same, then the undersigned agrees to pay all costs and attorney's fees that might be incurred.  If there is a lawsuit, borrower agrees upon lender's request to submit to the jurisdiction of the county of Bannock County, the State of Idaho. This note shall be governed by and construed in accordance with the laws of the State of Idaho.
 
 
UNDERSIGNED:
 
John B. Hofman
   
   
 
 /s/ John B. Hofman
 
John B. Hofman, President
 
Grote Molen, Inc.
 
 
 
Exhibit 10.4
 
Warrant Purchase Agreement

This Warrant Purchase Agreement (the "Agreement") is made and entered into as of September 7, 2016, by and between Grote Molen, Inc., a Nevada corporation (the "Company"), and David N. Nemelka ("Purchas-er").

RECITALS

WHEREAS, on July 15, 2016, the Company issued Purchaser that certain Promissory Note (the "Note") in the principal amount of $50,000, a copy of which is attached hereto as Exhibit A and incorporated herein by reference; and

WHEREAS, the Purchaser desires to convert/cancel the Note in consideration for the issuance by the Company to the Purchaser of a common stock purchase warrant of the Company on the terms and conditions described herein.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the Company and Purchaser agree as follows:

1.   Conversion/Cancellation of Debt .  Purchaser hereby irrevocably elects to convert the principal amount of the Note and all accrued and unpaid interest thereon, if any, into a common stock purchase warrant (the "Warrant") entitling the holder to acquire up to 5,000,000 shares of the Company's Common Stock at an exercise price of $0.70 per share during the five-year period commencing September 1, 2018.  The Warrant shall be represented by a warrant agreement in substantially the same form as that attached hereto as Exhibit "B."  Upon the execution of this Agreement, the Note shall be deemed to have been paid and satisfied in full and the Purchaser shall be deemed to have acquired the Warrant, all effective as of the date of this Agreement.

2.   Representations and Warranties of the Company .  The Company represents and warrants to Purchaser as follows:
(a)  The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated thereby (i) are within the power of the Company and (ii) have been duly authorized by all necessary actions on the part of the Company.
(b)  This Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.
(c)  The Warrant, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws and liens or encumbrances created by or imposed by Purchaser.  The Common Stock issuable upon exercise of the Warrant has been duly reserved for issuance, and upon issuance in accordance with the terms of the Warrant, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable federal securities laws and liens or encumbrances created by or imposed by Purchaser.

3.   Representations and Warranties of Purchaser .  The Purchaser represents and warrants to the Company as follows:

(a)  Purchaser is acquiring the Warrant for his own account, for investment and with no present intention of distributing, reselling or otherwise disposing of the Warrant.

(b)  Purchaser has been furnished with sufficient information about the Company, the management of the Company and the business operations of the Company to allow him to make an informed investment decision prior to pur-chasing the Warrant and Purchaser has been furnished access to any additional information requested by him.

(c)  Purchaser is an accredited investor within the meaning of Rule 502 of Regulation D promulgated under the Securities Act of 1933, as amended, has experience in business enterprises or investments entailing risks of a type or to a degree substantially similar to those entailed in an invest-ment in the Warrant.  In particular, Purchaser understands that by converting the Note to equity in the Company, he will no longer be a creditor of the Company and, accordingly, his rights in connection with the Warrant will be inferior to the rights he possessed pursuant to the Note.
(d)  Purchaser understands that the Warrant and the share of Common Stock issuable upon exercise thereof (the "Securities") may not be sold, transferred or otherwise disposed of in the absence of either an effective registration statement covering the Shares under the Securities Act of 1933, or an opinion of the Company's counsel that registration is not required.  Except as set forth in the Warrant with regard to "piggy-back" registration rights, the Company shall have no obligation to register the Securities.
(e)  Purchaser is not subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii) promulgated under the Securities Act.

(f)  Purchaser owns and has good and marketable title to the Note, free and clear of any liens, encumbrances or security interests and of any adverse claims.

(g)  Purchaser has full legal capacity, power and authority to execute and deliver this Agreement and to perform his obligations hereunder.  This Agreement constitutes the valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors' rights generally and general principles of equity.

4.  Legend on Agreements/Certificates .  The agreement/certificates evidencing the Securities to be issued in connection with this transaction shall be endorsed with a restricted legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS AGREEMENT/CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
2

5.   Entire Agreement .  This agreement constitutes the entire agreement of parties hereto relating to the subject matter hereof and correctly sets forth the rights, duties, and obligations of each to the other as of its date.  Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement shall be void and of no force or effect.

6.   Severability .  If any provision of this Agreement is or is deemed invalid, illegal or unenforceable in any jurisdiction, such provision shall be deemed amended to conform to applicable laws so as to be valid and enforceable or, if it cannot be so amended without materially altering the intention of the parties, it shall be stricken and the remainder of this Agreement shall remain in full force and effect.

7.   Binding Effect .  This Agreement shall bind and the benefits shall inure to the parties hereto and their respective heirs, legal representatives, successors and assigns.

8.   Counterparts .  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.  Facsimile or other electronically transmitted signatures shall be as effective as original signatures.
Dated effective as of the date first written above.
 
 
The Company:
Grote Molen, Inc.
   
A Nevada corporation
     
     
   
By /s/ John B. Hofman
   
John B. Hofman
   
President and CEO
     
   
The Purchaser:
     
     
   
 /s/ Davd N. Nemelka
   
Da vid N. Nemelka
 
3

Exhibit A

Attach hereto a copy of the Note.

 

Exhibit B

Attach hereto a copy of the Warrant Agreement.


 
Exhibit 31.1
 
 
I, John B. Hofman, certify that:

1.
I have reviewed this report on Form 10-Q of Grote Molen, Inc.;

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

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

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

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

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

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

d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

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


Date: November 14, 2016
/s/ John B. Hofman
 
John B. Hofman
 
President, Secretary and Treasurer
 
(Principal Executive Officer and
 
Principal Financial Officer)
 
 

Exhibit 32.1
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Grote Molen, Inc. (the "Company") on Form 10-Q for the quarter ended September 30, 2016 as filed with the Securities and Exchange Commission on or about the date hereof (the "Report"), I, John B. Hofman, President, Secretary and Treasurer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

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

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


November 14, 2016
/s/ John B. Hofman
 
John B. Hofman
 
President, Secretary and Treasurer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been furnished to Grote Molen, Inc. and will be retained by Grote Molen, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.