10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 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 May 20, 2016, there were 22,200,000 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 MARCH 31, 2016

PART I - Financial Information

Item 1.  Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 (unaudited)	2
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3.  Quantitative and Qualitative Disclosures About Market Risk		17
Item 4.  Controls and Procedures		17
PART II - Other Information
Item 1.  Legal Proceedings		18
Item 1A.  Risk Factors		18
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds		18
Item 3.  Defaults upon Senior Securities		18
Item 4.  Mine Safety Disclosures		18
Item 5.  Other Information		18
Item 6. Exhibits		19
Signatures		20

1

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

GROTE MOLEN, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
	March 31, 2016		December 31, 2015
ASSETS
Current assets:
Cash	$	10,263	$	9,251
Accounts receivable		14,381		27,565
Accounts receivable – related parties		5,000		11,365
Inventories		795,737		708,893
Deposits		108,400		64,685
Prepaid expenses		398		356
Total current assets		934,179		822,115
Property and equipment, net		135,480		139,688
Intangible assets, net		62,820		63,068
Total assets	$	1,132,479	$	1,024,871
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	225,682	$	73,020
Accounts payable – related parties		12,365		1,950
Accrued interest payable – related parties		55,463		53,507
Accrued interest payable		25,060		22,686
Current portion of long-term debt – related party		-		2,943
Notes payable – related parties		126,627		130,127
Notes payable		161,100		136,100
Total current liabilities		606,297		420,333
Long-term debt:
Note payable		148,100		145,139
Total long-term debt		148,100		145,139
Total liabilities		754,397		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, 22,200,000 shares issued and outstanding		22,200		22,200
Additional paid-in capital		147,800		147,800
Retained earnings		208,082		289,399
Total stockholders' equity		378,082		459,399
Total liabilities and stockholders' equity	$	1,132,479	$	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 March 31,
	2016			2015
Revenues:
Sales	$	168,672		$	302,176
Sales to related parties		3,620			14,589
Total revenues		172,292			316,765
Cost of revenues:
Cost of sales		122,461			214,843
Cost of related party sales		2,628			10,373
Total cost of revenues		125,089			225,216
Gross profit		47,203			91,549
Operating costs and expenses:
Selling, general and administrative		118,056			109,878
Depreciation and amortization		4,456			4,538
Total operating costs and expenses		122,512			114,416
Loss from operations		(75,309	)		(22,867	)
Other expense:
Interest expense – related parties		1,920			4,523
Interest expense		4,088			1,690
Total other expense		6,008			6,213
Loss before income taxes		(81,317	)		(29,080	)
Provision for income taxes		-			-
Net loss	$	(81,317	)	$	(29,080	)
Net loss per common share -
Basic and diluted	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding -
Basic and diluted		22,200,000			22,200,000

See notes to condensed consolidated financial statements

3

GROTE MOLEN, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2016			2015
Cash flows from operating activities:
Net loss	$	(81,317	)	$	(29,080	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		4,456			4,538
(Increase) decrease in:
Accounts receivable		13,184			24,134
Accounts receivable – related parties		6,365			(7,659	)
Inventories		(86,844	)		(142,472	)
Deposits		(43,715	)		142,405
Prepaid expenses		(42	)		10
Increase (decrease) in:
Accounts payable and accrued expenses		152,662			7,671
Accounts payable – related parties		10,415			450
Accrued interest payable – related parties		1,956			2,400
Accrued interest payable		2,374			1,814
Net cash provided by (used in) operating activities		(20,506	)		4,211
Cash flows from investing activities		-			-
Net cash used in investing activities		-			-
Cash flows from financing activities:
Proceeds from long-term note payable		5,300			22,000
Proceeds from notes payable		25,000			20,000
Repayment of notes payable – related parties		(3,500	)		(9,000	)
Repayment of long-term debt – related party		(2,943	)		(11,147	)
Repayment of long-term note payable		(2,339	)		(8,855	)
Net cash provided by financing activities		21,518			12,998
Net increase in cash		1,012			17,209
Cash, beginning of the period		9,251			60,808
Cash, end of the period	$	10,263		$	78,017

See notes to condensed consolidated financial statements

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GROTE MOLEN, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 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 (collectively the "Company") is to distribute grain mills, kitchen mixers and related accessories for home use.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Grote Molen and BrownWick.  All significant inter-company balances and transactions have been eliminated.

Basis of Presentation

The accompanying condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 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 March 31, 2016 as well as the consolidated results of operations and cash flows for the three months ended March 31, 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.  We have not granted any stock options or warrants since inception of the Company.  Therefore, our basic earnings per share is the same as diluted earnings per share for the three months ended March 31, 2016 and 2015.

Comprehensive Income (Loss)

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

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NOTE 2 – DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Accounts receivable consist of the following:

	March 31, 2016		December 31, 2015
Trade accounts receivable – related parties	$	-	$	6,365
Employee advances		5,000		5,000
Total accounts receivable – related parties		5,000		11,365
Trade accounts receivable		14,381		27,565
	$	19,381	$	38,930

Property and equipment consist of the following:

	March 31, 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		(38,397	)		(34,189	)
	$	135,480		$	139,688

Intangible assets consist of the following:

	March 31, 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

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NOTE 3 – RELATED PARTY DEBT

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

	March 31, 2016		December 31, 2015
Note payable to a stockholder, due on demand, with interest at 6% per annum	$	30,000	$	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		15,000
Note payable to a stockholder, due on demand, with interest at 8% per annum		7,000		10,500
Non-interest bearing advances from stockholders, with no formal repayment terms		9,127		9,127
Total	$	126,627	$	130,127

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

	March 31, 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 $1,920 and $4,523 for the three months ended March 31, 2016 and 2015.  Accrued interest payable to related parties was $55,463 and $53,507 at March 31, 2016 and December 31, 2015, respectively.

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NOTE 4 – NOTES PAYABLE

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

	March 31, 2016		December 31, 2015
Note payable, due on demand, with interest at 8% per annum	$	15,000	$	15,000
Note payable, due on demand, with interest at 8% per annum		20,000		20,000
Note payable, due on demand, with interest at 8% per annum		5,000		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		4,000
Note payable, due on demand, with interest at 6% per annum		5,600		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		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		-
Total	$	161,100	$	136,100

8

At March 31, 2016 and December 31, 2015, we had a long-term note payable to a bank with a principal balance of $148,100 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 March 31, 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 $25,060 and $22,686 at March 31, 20156 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 March, 31, 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 $3,620 and $14,589 for the three months ended March 31, 2016 and 2015, respectively, or approximately 2% and 5%, respectively.  Accounts receivable from these related parties totaled $0 and $6,365 at March 31, 2016 and December 31, 2015, respectively.

Accounts payable to these related parties totaled $12,365 and $1,950 at March 31, 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 March 31, 2016 and December 31, 2015.

NOTE 7 – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION

During the three months ended March 31, 2016 and 2015, we had no non-cash financing and investing activities.

During the three months ended March 31, 2016 and 2015, we paid no amounts for income taxes.

During the three months ended March 31, 2016 and 2015, we paid cash for interest of $1,678 and $1,998, respectively.

9

NOTE 8 – SIGNIFICANT CUSTOMERS

In addition to the sales to related parties discussed in Note 5, we had sales to one customer that accounted for approximately 18% and 10% of total sales for the three months ended March 31, 2016 and 2015, respectively.

NOTE 9 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

There were no new accounting pronouncements issued during the three months ended March 31, 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 10 – SUBSEQUENT EVENTS

We have evaluated events occurring after the date of our accompanying consolidated balance sheets through the date the financial statements were issued.  We have not identified any subsequent events that we believe require disclosure.

10

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.

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 March 31, 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.

11

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 ended March 31, 2016 and 2015.

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.

Research and Development Costs

Research and development costs are expensed as incurred in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification™ ("ASC") Topic 730, Research and Development. The costs of materials and other costs acquired for research and development activities are charged to expense as incurred. Salaries, wages, and other related costs of personnel, as well as other facility operating costs are allocated to research and development expense through management's estimate of the percentage of time spent by personnel in research and development activities. We had no material research and development costs for the three months ended March 31, 2016 and 2015.

12

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 ended March 31, 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 March 31, 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.

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:

	Three Months Ended March 31,
	2016		2015
Sales	$	168,672	$	302,176
Sales – related parties		3,620		14,589
Total sales	$	172,292	$	316,765

Sales to related parties totaled approximately 2% and 5% of total sales for the three months ended March 31, 2016 and 2015, respectively.

Our total sales decreased $144,473, or approximately 46%, during the three months ended March 31, 2016 compared to the three months ended March 31, 2015.  While we experienced an increase in sales in 2015 attributable to the successful introduction of our new WonderMix kitchen mixer, we believe sales for the first quarter of 2016 were negatively impacted by a continuing overall slow-down in the preparedness market and a prolonged slow economic recovery in the United States.  We believe sales of the Wondermix will also increase in 2016; however, there can be no assurance that we will be successful in these endeavors.

13

Cost of Sales

Total cost of sales for the three months ended March 31, 2016 was $125,089, compared to $225,216 for the three months ended March 31, 2015, a decrease of $100,127, or approximately 44%.  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 three months of 2016.  Therefore, the decrease in our cost of sales during the three months ended March 31, 2016 compared to the three months ended March 31, 2015 was primarily attributed to the decrease in sales volume.   Included in cost of sales were costs of related party sales of $2,628 and $10,373 for the three months ended March 31, 2016 and 2016, respectively.  Total cost of sales as a percentage of total sales was approximately 73% and 71% for the three months ended March 31, 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.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses were $118,056 for the three months ended March 31, 2016, compared to $109,878 for the three months ended March 31, 2015, an increase of $8,178, or approximately 7%.   The increase in selling, general and administrative expenses in the current year first quarter resulted primarily from higher levels of professional fees and advertising expenses.

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 March 31, 2016 and 2015.

Depreciation and Amortization Expense

Depreciation and amortization expense remained fairly constant and was $4,456 and $4,538 for the three months ended March 31, 2016 and 2015, respectively.

14

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 $1,920 and $4,523 for the three months ended March 31, 2016 and 2015, respectively.  The decrease in interest expense to related parties in the current year is due to the repayment in full of the long-term debt to related parties and a partial payment of notes payable – related parties during the three months ended March 31, 2016.

Other expense also includes interest expense to non-related parties of $4,088 and $1,690 for the three months ended March 31, 2016 and 2015, respectively.  The increase in interest expense to non-related parties in the first quarter of 2016 is primarily due to additional notes payable to non-related parties in 2015 and 2016.

Liquidity and Capital Resources

As of March 31, 2016, we had total current assets of $934,179, including cash of $10,263, and current liabilities of $606,297, resulting in working capital of $327,882.  Our current assets and working capital included inventories of $795,737 and deposits of $108,400.  Generally, we are required to pay significant advance deposits toward the purchase of inventories from our principal suppliers.

In addition, as of March 31, 2016, we had total stockholders' equity of $378,082.  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.

For the three months ended March 31, 2016, net cash used in operating activities was $20,506, as a result of our net loss of $81,317 and increases in inventories of $86,844, deposits of $43,715 and prepaid expenses of $42, partially offset by non-cash expenses of $4,456, decreases in accounts receivable of $13,184, and accounts receivable – related parties of $6,365, and increases in accounts payable and accrued expenses of $152,662, accounts payable – related parties of $10,415, accrued interest payable – related parties of $1,956 and accrued interest payable of $2,374.

By comparison, for the three months ended March 31, 2015, net cash provided by operating activities was $4,211, as a result of our net loss of $29,080 and increases in accounts receivable – related parties of $7,659 and inventories of $142,472, offset by non-cash expenses of $4,538, decreases in accounts receivable of $24,134, deposits of $142,405 and prepaid expenses of $10, and increases in accounts payable and accrued expenses of $7,671, accounts payable – related parties of $450, accrued interest payable – related parties of $2,400 and accrued interest payable of $1,814.

We had no net cash provided by or used in investing activities for the three months ended March 31, 2016 and 2015.

For the three months ended March 31, 2016, net cash provided by financing activities was $21,518, comprised of proceeds from long-term note payable of $5,300 and proceeds from notes payable of $25,000, partially offset by repayment of notes payable – related parties of $3,500, repayment of long-term debt – related party of $2,943 and repayment of long-term note payable of $2,339.

For the three months ended March 31, 2015, net cash provided by financing activities was $12,998, comprised of proceeds from long-term note payable of $22,000 and proceeds from notes payable of $20,000, partially offset by repayment of notes payable – related parties of $9,000, repayment of long-term debt – related party of $11,147 and repayment of long-term note payable of $8,855.

15

At March 31, 2016, we had short-term notes payable – related parties totaling $126,627, which are payable to our principal stockholders, are unsecured, bear interest at rates ranging from 6% to 8% per annum and are generally due on demand.  In addition, at March 31, 2016, we had short-term notes payable to non-related parties totaling $161,100, which are unsecured, bear interest at rates ranging from 6% to 8% per annum and are due on demand.

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 March 31, 2016, we had a long-term note payable to a bank with a principal balance of $148,100.  The long-term note payable is a line of credit promissory note bearing interest at an indexed rate plus 2% (4.5% at March 31, 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 $55,463 and $53,507 at March 31, 2016 and December 31, 2015, respectively.  Accrued interest payable to non-related parties was $25,060 and $22,686 at March 31, 2016 and December 31, 2015, respectively.

In the event sales during 2016 do not meet our expectations, we may require additional funding from the sale of our common stock 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 $50,000 to $100,000 of additional funding in 2016.  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 three months ended March 31, 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 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.  

16

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  March 31, 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 March 31, 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 March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

17

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

During the three months ended March 31, 2016 we had no unregistered sales of equity securities.

Item 3.  Defaults upon Senior Securities

Not Applicable.

Item 4.  Mine Safety Disclosures

Not Applicable.

Item 5.  Other Information

Not Applicable.

18

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)
10.1	Promissory Note dated March 4, 2016*
10.2	Promissory Note dated March 24, 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 from Exhibit Numbers 3.1 and 3.2 of the Company's registration statement on Form 10 filed with the SEC on May 14, 2010.

19

* Exhibits filed with this report.

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:  May 20, 2016	By /s/ John B. Hofman
	John B. Hofman
	President, Secretary and Treasurer
	(Principal Executive and Accounting Officer)

20

EX-10.1

Exhibit 10.1

EX-10.2

Exhibit 10.2

EX-31.1

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: May 20, 2016	/s/ John B. Hofman
	John B. Hofman
	President, Secretary and Treasurer
	(Principal Executive Officer and
	Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO18 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 March 31, 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.

May 20, 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.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 20, 2016
Document and Entity Information:
Entity Registrant Name	GROTE MOLEN INC
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Trading Symbol	grote
Amendment Flag	false
Entity Central Index Key	0001456212
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		22,200,000
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Entity Incorporation, State Country Name	Nevada
Entity Incorporation, Date of Incorporation	Mar. 15, 2004

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current Assets:
Cash	$ 10,263	$ 9,251
Accounts receivable	14,381	27,565
Accounts receivable - related parties	5,000	11,365
Inventories	795,737	708,893
Deposits	108,400	64,685
Prepaid expenses	398	356
Total current assets	934,179	822,115
Property and equipment, net	135,480	139,688
Intangible assets, net	62,820	63,068
Total Assets	1,132,479	1,024,871
Current Liabilities:
Accounts payable and accrued expenses	225,682	73,020
Accounts payable - related parties	12,365	1,950
Accrued interest payable - related parties	55,463	53,507
Accrued interest payable	25,060	22,686
Current portion of long-term debt - related party		2,943
Notes payable - related parties	126,627	130,127
Notes payable	161,100	136,100
Total current liabilities	606,297	420,333
Long-term debt:
Note payable	148,100	145,139
Total long-term debt	148,100	145,139
Total liabilities	$ 754,397	$ 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, 22,200,000 shares issued and outstanding	$ 22,200	$ 22,200
Additional paid-in capital	147,800	147,800
Retained earnings	208,082	289,399
Total stockholders' equity	378,082	459,399
Total liabilities and stockholders' equity	$ 1,132,479	$ 1,024,871

XML

CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICAL - $ / shares	Mar. 31, 2016	Dec. 31, 2015
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICAL
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	5,000,000	5,000,000
Preferred stock shares issued
Preferred stock shares outstanding
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	100,000,000	100,000,000
Common stock shares issued	22,200,000	22,200,000
Common stock shares outstanding	22,200,000	22,200,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues:
Sales	$ 168,672	$ 302,176
Sales to related parties	3,620	14,589
Total revenues	172,292	316,765
Cost of revenues:
Cost of sales	122,461	214,843
Cost of related party sales	2,628	10,373
Total cost of revenues	125,089	225,216
Gross profit	47,203	91,549
Operating costs and expenses:
Selling, general and administrative	118,056	109,878
Depreciation and amortization	4,456	4,538
Total operating costs and expenses	122,512	114,416
Loss from operations	(75,309)	(22,867)
Other expense:
Interest expense - related parties	1,920	4,523
Interest expense	4,088	1,690
Total other expense	6,008	6,213
Loss before income taxes	(81,317)	(29,080)
Net loss	$ (81,317)	$ (29,080)
Net loss per common share - Basic and diluted
Weighted average shares outstanding - Basic and diluted	22,200,000	22,200,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net loss	$ (81,317)	$ (29,080)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	4,456	4,538
(Increase) decrease in:
(Increase) Decrease in Accounts Receivable	13,184	24,134
(Increase) Decrease in Accounts Receivable - Related Parties	6,365	(7,659)
(Increase) Decrease in Inventories	(86,844)	(142,472)
(Increase) Decrease in Deposits	(43,715)	142,405
(Increase) Decrease in Prepaid Expenses	(42)	10
Increase (Decrease) in Accounts Payable and Accrued Expenses	152,662	7,671
Increase (Decrease) in Accounts Payable - Related Parties	10,415	450
Increase (Decrease) in Accrued Interest Payable - Related Parties	1,956	2,400
Increase (Decrease) in Accrued Interest Payable	2,374	1,814
Net cash provided by (used in) operating activities	$ (20,506)	$ 4,211
Cash flows from investing activities
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from long-term note payable	$ 5,300	$ 22,000
Proceeds from notes payable	25,000	20,000
Repayment of notes payable - related parties	(3,500)	(9,000)
Repayment of long-term debt - related party	(2,943)	(11,147)
Repayment of long-term note payable	(2,339)	(8,855)
Net cash provided by financing activities	21,518	12,998
Net increase in cash	1,012	17,209
Cash, beginning of the period	9,251	60,808
Cash, end of the period	$ 10,263	$ 78,017

XML

Note 1 - Organization and Summary of Signicant Accounting Policies

3 Months Ended

Mar. 31, 2016

Notes

Note 1 - Organization and Summary of Signicant Accounting Policies

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 (collectively the “Company”) is to distribute grain mills, kitchen mixers and related accessories for home use. 

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Grote Molen and BrownWick.  All significant inter-company balances and transactions have been eliminated.

Basis of Presentation

            The accompanying condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 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 March 31, 2016 as well as the consolidated results of operations and cash flows for the three months ended March 31, 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.  We have not granted any stock options or warrants since inception of the Company.  Therefore, our basic earnings per share is the same as diluted earnings per share for the three months ended March 31, 2016 and 2015.

Comprehensive Income (Loss)

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

XML

Note 2 - Detail of Certain Balance Sheet Accounts

3 Months Ended

Mar. 31, 2016

Notes

Note 2 - Detail of Certain Balance Sheet Accounts

NOTE 2 – DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Accounts receivable consist of the following:

	March 31, 2016	December 31, 2015
Trade accounts receivable – related parties	$                         -	$                  6,365
Employee advances	5,000	5,000
Total accounts receivable – related parties	5,000	11,365
Trade accounts receivable	14,381	27,565
	$                19,381	$                38,930

Property and equipment consist of the following:

	March 31, 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	(38,397)	(34,189)
	$            135,480	$          139,688

            Intangible assets consist of the following:

	March 31, 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

XML

Note 3 - Debt

3 Months Ended

Mar. 31, 2016

Notes

Note 3 - Debt

NOTE 3 – RELATED PARTY DEBT

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

	March 31, 2016	December 31, 2015
Note payable to a stockholder, due on demand, with interest at 6% per annum	$               30,000	$             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	15,000
Note payable to a stockholder, due on demand, with interest at 8% per annum	7,000	10,500
Non-interest bearing advances from stockholders, with no formal repayment terms	9,127	9,127
Total	$             126,627	$           130,127

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

	March 31, 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 $1,920 and $4,523 for the three months ended March 31, 2016 and 2015.  Accrued interest payable to related parties was $55,463 and $53,507 at March 31, 2016 and December 31, 2015, respectively.

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Note 4 - Notes Payable

3 Months Ended

Mar. 31, 2016

Notes

Note 4 - Notes Payable

NOTE 4 – NOTES PAYABLE

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

	March 31, 2016	December 31, 2015
Note payable, due on demand, with interest at 8% per annum	$            15,000	$            15,000
Note payable, due on demand, with interest at 8% per annum	20,000	20,000
Note payable, due on demand, with interest at 8% per annum	5,000	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	4,000
Note payable, due on demand, with interest at 6% per annum	5,600	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	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	-
Total	$           161,100	$           136,100

            At March 31, 2016 and December 31, 2015, we had a long-term note payable to a bank with a principal balance of $148,100 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 March 31, 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 $25,060 and $22,686 at March 31, 20156 and December 31, 2015, respectively.

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Note 5 - Related Party Transactions

3 Months Ended

Mar. 31, 2016

Notes

Note 5 - Related Party Transactions

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 March, 31, 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 $3,620 and $14,589 for the three months ended March 31, 2016 and 2015, respectively, or approximately 2% and 5%, respectively.  Accounts receivable from these related parties totaled $0 and $6,365 at March 31, 2016 and December 31, 2015, respectively. 

Accounts payable to these related parties totaled $12,365 and $1,950 at March 31, 2016 and December 31, 2015, respectively.

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

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Note 6 - Capital Stock

3 Months Ended

Mar. 31, 2016

Notes

Note 6 - Capital Stock

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 March 31, 2016 and December 31, 2015.

XML

Note 7 - Supplemental Statement of Cash Flows Information

3 Months Ended

Mar. 31, 2016

Notes

Note 7 - Supplemental Statement of Cash Flows Information

NOTE 7 – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION

During the three months ended March 31, 2016 and 2015, we had no non-cash financing and investing activities.

During the three months ended March 31, 2016 and 2015, we paid no amounts for income taxes.

During the three months ended March 31, 2016 and 2015, we paid cash for interest of $1,678 and $1,998, respectively.

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Note 8 - Significant Customers

3 Months Ended

Mar. 31, 2016

Notes

Note 8 - Significant Customers

NOTE 8 – SIGNIFICANT CUSTOMERS

In addition to the sales to related parties discussed in Note 5, we had sales to one customer that accounted for approximately 18% and 10% of total sales for the three months ended March 31, 2016 and 2015, respectively.

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Note 9 - Recently Issued Accounting Pronouncements

3 Months Ended

Mar. 31, 2016

Notes

Note 9 - Recently Issued Accounting Pronouncements

NOTE 9 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

There were no new accounting pronouncements issued during the three months ended March 31, 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.

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Note 10 - Subsequent Events

3 Months Ended

Mar. 31, 2016

Notes

Note 10 - Subsequent Events

NOTE 10 – SUBSEQUENT EVENTS

We have evaluated events occurring after the date of our accompanying consolidated balance sheets through the date the financial statements were issued.  We have not identified any subsequent events that we believe require disclosure.

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Note 1 - Organization and Summary of Signicant Accounting Policies: Principles of Consolidation (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Grote Molen and BrownWick.  All significant inter-company balances and transactions have been eliminated.

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Note 1 - Organization and Summary of Signicant Accounting Policies: Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Basis of Presentation

Basis of Presentation

            The accompanying condensed consolidated financial statements as of March 31, 2016 and for the three months ended March 31, 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 March 31, 2016 as well as the consolidated results of operations and cash flows for the three months ended March 31, 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.

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Note 1 - Organization and Summary of Signicant Accounting Policies: Use of Estimates in The Preparation of Financial Statements (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Use of Estimates in The Preparation of Financial Statements

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.

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Note 1 - Organization and Summary of Signicant Accounting Policies: Earnings Per Share (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Earnings Per Share

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.  We have not granted any stock options or warrants since inception of the Company.  Therefore, our basic earnings per share is the same as diluted earnings per share for the three months ended March 31, 2016 and 2015.

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Note 1 - Organization and Summary of Signicant Accounting Policies: Comprehensive Income (loss) (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Comprehensive Income (loss)

Comprehensive Income (Loss)

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

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Note 9 - Recently Issued Accounting Pronouncements: Recently Issued Accounting Pronouncements (Policies)

3 Months Ended

Mar. 31, 2016

Policies

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued during the three months ended March 31, 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.

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Note 2 - Detail of Certain Balance Sheet Accounts: Schedule of Accounts, Notes, Loans and Financing Receivable (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Accounts, Notes, Loans and Financing Receivable

	March 31, 2016	December 31, 2015
Trade accounts receivable – related parties	$                         -	$                  6,365
Employee advances	5,000	5,000
Total accounts receivable – related parties	5,000	11,365
Trade accounts receivable	14,381	27,565
	$                19,381	$                38,930

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Note 2 - Detail of Certain Balance Sheet Accounts: Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Property, Plant and Equipment

	March 31, 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	(38,397)	(34,189)
	$            135,480	$          139,688

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Note 2 - Detail of Certain Balance Sheet Accounts: Schedule of Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Intangible Assets

	March 31, 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

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Note 3 - Debt: Schedule Of Notes Payable To Related Parties (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule Of Notes Payable To Related Parties

	March 31, 2016	December 31, 2015
Note payable to a stockholder, due on demand, with interest at 6% per annum	$               30,000	$             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	15,000
Note payable to a stockholder, due on demand, with interest at 8% per annum	7,000	10,500
Non-interest bearing advances from stockholders, with no formal repayment terms	9,127	9,127
Total	$             126,627	$           130,127

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Note 3 - Debt: Schedule of Long-term Debt - Related Party (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Long-term Debt - Related Party

	March 31, 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	$                      -	$                    -

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Note 4 - Notes Payable: Schedule of Short-term Debt (Tables)

3 Months Ended

Mar. 31, 2016

Tables/Schedules

Schedule of Short-term Debt

	March 31, 2016	December 31, 2015
Note payable, due on demand, with interest at 8% per annum	$            15,000	$            15,000
Note payable, due on demand, with interest at 8% per annum	20,000	20,000
Note payable, due on demand, with interest at 8% per annum	5,000	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	4,000
Note payable, due on demand, with interest at 6% per annum	5,600	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	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	-
Total	$           161,100	$           136,100

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Note 1 - Organization and Summary of Signicant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2016
Details
Entity Incorporation, State Country Name	Nevada
Entity Incorporation, Date of Incorporation	Mar. 15, 2004

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Note 2 - Detail of Certain Balance Sheet Accounts: Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Accounts receivable - related parties	$ 5,000	$ 11,365
Accounts receivable	14,381	27,565
Trade Accounts Receivable - Related Parties
Accounts receivable - related parties		6,365
Employee Advances
Accounts receivable - related parties	5,000	5,000
Accounts Receivable, Net	19,381	38,930
Trade Accounts Receivable
Accounts receivable	$ 14,381	$ 27,565

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Note 2 - Detail of Certain Balance Sheet Accounts: Property, Plant and Equipment (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment, Gross	$ 173,877	$ 173,877
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(38,397)	(34,189)
Property and equipment, net	135,480	139,688
Office Equipment
Property, Plant and Equipment, Gross	4,335	4,335
Equipment
Property, Plant and Equipment, Gross	16,927	16,927
Software Development
Property, Plant and Equipment, Gross	2,000	2,000
Tools, Dies and Molds
Property, Plant and Equipment, Gross	$ 150,615	$ 150,615

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Note 2 - Detail of Certain Balance Sheet Accounts: Schedule of Intangible Assets (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets, Gross	$ 73,320	$ 73,320
Finite-Lived Intangible Assets, Accumulated Amortization	(10,500)	(10,252)
Finite Lived Intangible Assets Net	62,820	63,068
License - definitive life
Finite-Lived Intangible Assets, Gross	10,500	10,500
License - indefinitive life
Finite-Lived Intangible Assets, Gross	62,720	62,720
Patents
Finite-Lived Intangible Assets, Gross	$ 100	$ 100

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Note 3 - Debt: Schedule Of Notes Payable To Related Parties (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Notes payable - related parties	$ 126,627	$ 130,127
Note 1
Notes payable - related parties	30,000	30,000
Note 2
Notes payable - related parties	3,500	3,500
Note 3
Notes payable - related parties	38,000	38,000
Note 4
Notes payable - related parties	10,000	10,000
Note 5
Notes payable - related parties	5,000	5,000
Note 6
Notes payable - related parties	9,000	9,000
Note 7
Notes payable - related parties	15,000	15,000
Note 8
Notes payable - related parties	7,000	10,500
Note 9
Notes payable - related parties	$ 9,127	$ 9,127

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Note 3 - Debt: Schedule of Long-term Debt - Related Party (Details)	Dec. 31, 2015 USD ($)
Details
Due to Other Related Parties	$ 2,943	[1]
Current Portion of Long-Term Debt - Related Party	$ (2,943)

[1] Due in monthly installments of $4,000 through February 2016, with interest at 6.97 % per annum

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Note 3 - Debt (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Details
Interest expense - related parties	$ 1,920	$ 4,523
Accrued interest payable - related parties	$ 55,463		$ 53,507

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Note 4 - Notes Payable: Schedule of Short-term Debt (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Notes payable	$ 161,100	$ 136,100
Note 10
Notes payable	15,000	15,000
Note 11
Notes payable	20,000	20,000
Note 12
Notes payable	5,000	5,000
Note 13
Notes payable	7,000	7,000
Note 14
Notes payable	15,000	15,000
Note 15
Notes payable	10,000	10,000
Note 16
Notes payable	4,000	4,000
Note 17
Notes payable	5,600	5,600
Note 18
Notes payable	10,000	10,000
Note 19
Notes payable	10,000	10,000
Note 20
Notes payable	10,000	10,000
Note 21
Notes payable	10,000	10,000
Note 22
Notes payable	2,500	2,500
Note 23
Notes payable	9,000	9,000
Note 24
Notes payable	3,000	$ 3,000
Note 25
Notes payable	20,000
Note 26
Notes payable	$ 5,000

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Note 4 - Notes Payable (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Details
Notes Payable	$ 148,100	$ 145,139
Accrued interest payable	$ 25,060	$ 22,686

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Note 5 - Related Party Transactions (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Feb. 01, 2011
Details
Expense reimbursement to stockholder				$ 150
Management fee paid to related party	$ 37,950	$ 37,950
Sales to related parties	$ 3,620	$ 14,589
Percent of sales to related parties	2.00%	5.00%
Accounts receivable, related parties	$ 0		$ 6,365
Accounts payable - related parties	$ 12,365		$ 1,950

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Note 7 - Supplemental Statement of Cash Flows Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Details
InterestPaid	$ 1,678	$ 1,998

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Note 8 - Significant Customers (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Details
Concentration Risk, Customer	18%	10%