QWIKF Qwick Media Inc (CE)

---

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

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2014

Commission File Number: 000-32981

QWICK MEDIA INC.
(Translation of registrant's name into English)

3162 Thunderbird Crescent, Burnaby, BC V5A 3G1
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.    Form 20-F [X]   Form 40-F [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

---

- 2 -

SUBMITTED HEREWITH

Exhibits

99.1	Consolidated Financial Statements for the Three & Six Months Ended June 30, 2014 and 2013
99.2	Management’s Discussion and Analysis of Operations for the Three & Six Months Ended June 30, 2014
99.3	Form 52-109FV2 - Certification of Interim Filings - Venture Issuer Basic Certificate - CEO
99.4	Form 52-109FV2 - Certification of Interim Filings - Venture Issuer Basic Certificate – CFO

---

- 3 -

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.

	ROSS TOCHER
	(Registrant)
Date: August 27, 2014	By: /s/ Ross Tocher
	Ross Tocher
	Title: President & Chief Executive Officer

---

---

QWICK MEDIA INC.
(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2014 and 2013
(Unaudited)

(Stated in U.S. Dollars)

 

 

NOTICE OF NO AUDITOR REVIEW OF
INTERIM CONSOLIDATED FINANCIAL STATEMENTS

In accordance with National Instrument 51-102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these interim consolidated financial statements they must be accompanied by a notice indicating that these interim consolidated financial statements have not been reviewed by an auditor.

The accompanying unaudited interim consolidated financial statements of the Company for the period ended June 30, 2014 have been prepared in accordance with United States generally accepted accounting principles and are the responsibility of the Company’s management. The Company’s independent auditors have not performed an audit or review of these interim consolidated financial statements.

---

QWICK MEDIA INC.
(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)

		JUNE 30,			DECEMBER 31,
		2014			2013
		(Unaudited)
ASSETS
Current
Cash	$	255,910		$	241,327
Receivables		199,119			182,262
Inventory		217,471			230,593
Prepaid expenses		2,154			2,161
Total Current Assets		674,654			656,343
Property and Equipment		23,516			37,077
Total Assets	$	698,170		$	693,420
LIABILITIES
Current
Accounts payable and accrued liabilities	$	135,659		$	124,805
Due to related parties		5,708,319			4,529,913
Accrued dividends payable		530,599			430,035
Total Liabilities		6,374,577			5,084,753
Redeemable Preferred Stock		2,027,945			2,027,945
STOCKHOLDERS’ DEFICIENCY
Common Stock    Authorized:         400,000,000 common shares, $0.001 par value;         100,000,000 preferred shares, $0.001 par value, and series as                determined by directors.    Issued:         71,128,456 common shares at June 30, 2014 and December 31, 2013		71,128			71,128
Additional Paid-in Capital		4,864,161			4,835,551
Deficit Accumulated During The Development Stage		(12,639,641	)		(11,325,957	)
Total Stockholders’ Deficiency		(7,704,352	)		(6,419,278	)
Total Liabilities and Stockholders’ Deficiency	$	698,170		$	693,420

Going Concern, Commitments and Contractual Obligations (Notes 1 and 8)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

---

QWICK MEDIA INC.
(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

3

---

QWICK MEDIA INC.
(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
(Unaudited)

								PERIOD FROM DATE
								OF INCEPTION
		SIX MONTHS ENDED						(OCTOBER 5, 2000) TO
		JUNE 30,						JUNE 30,
		2014			2013			2014
Cash Flows (Used In) Provided By:
Operating Activities
Net loss for the period	$	(1,313,684	)	$	(1,240,763	)	$	(12,639,641	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		13,560			22,038			126,678
Foreign exchange on debt settlement		−			−			226,512
Stock-based compensation		28,610			8,366			314,639
Changes in operating assets and liabilities:
Receivables		(16,857	)		(30,290	)		(476,891	)
Prepaid expenses		7			48			(2,154	)
Inventory		13,122			(90,254	)		(217,471	)
Due to related parties		1,178,406			1,406,784			6,719,250
Accrued dividends payable		100,564			100,564			530,599
Accounts payable and accrued liabilities		10,855			(16,094	)		458,278
Net cash provided by (used in) operating activities		14,583			160,399			(4,960,201	)
Investing Activities
Subsidiary cash upon acquisition		−			−			15,465
Purchase of property and equipment		−			−			(138,434	)
Net cash (used in) investing activities		−			−			(122,969	)
Financing Activities
Proceeds from share issuances		−			−			2,678,002
Proceeds from notes payable		−			−			1,661,078
Proceeds from preferred shares		−			−			1,000,000
Net cash provided by financing activities		−			−			5,339,080
Net Increase In Cash		14,583			160,399			255,910
Cash, Beginning Of Period		241,327			143,280			−
Cash, End Of Period	$	255,910		$	303,679		$	255,910
Non-cash Financing Activities
Common stock issued to settle debt	$	−		$	−		$	984,841
Supplemental Disclosure of Cash Flow Information
Interest paid	$	−		$	−		$	−
Income taxes paid	$	−		$	−		$	−

The accompanying notes are an integral part of these consolidated financial statements.

4

---

QWICK MEDIA INC.
(A Development Stage Company)

Notes to the Consolidated Financial Statements

SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(Unaudited)
(Stated in U.S. Dollars)

1.	BASIS OF PRESENTATION

The unaudited interim consolidated financial statements as of June 30, 2014 included herein have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. It is suggested that these consolidated financial statements be read in conjunction with the December 31, 2013 audited consolidated financial statements and notes thereto. The operating results for the three months or the six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2014.

The unaudited interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), and are expressed in US dollars. These consolidated financial statements include the accounts of the Company and the accounts of the Company’s wholly owned subsidiaries, Qeyos Ad Systems Inc., incorporated in Canada, and Wuxi Xun Fu Information Technology Co., Ltd., incorporated in China. The Company’s fiscal year-end is December 31. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement. The interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2013.

The Company uses the same accounting policies and methods of computation as in the annual consolidated financial statements for the year ended December 31, 2013.

The preparation of financial statements in conformity with US GAAP 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 for the reporting period. Management evaluates estimates and judgments on an ongoing basis. Actual results could differ from these estimates. The significant areas requiring management’s estimates and assumptions include the fair value of shares issued to settle debt, stock based compensation, valuation of accounts receivable and inventory, estimated life, amortization rates and impairment of long-lived assets, valuation allowance for income tax purposes, and fair value measurement of financial instruments.

2.	NATURE OF OPERATIONS AND GOING CONCERN
	a)	Organization

Qwick Media Inc. (“the Company”) is governed by the corporate laws of the Cayman Islands. It is currently a reporting issuer in the Province of British Columbia, Canada. Principal executive offices are located in Vancouver, British Columbia, Canada. The registered office is in the Cayman Islands.

The Company was incorporated on October 5, 2000 under the laws of the State of Nevada. Effective June 26, 2006, it re-domiciled from the State of Nevada to the State of Washington. Effective July 7, 2009, it re-domiciled from the State of Washington to the State of Wyoming for the sole purpose of effecting a continuance to the Cayman Islands. Effective July 28, 2009, the Company re-domiciled to the Cayman Islands and became a foreign private issuer with the US Securities and Exchange Commission (“SEC”).

On October 6, 2009, the Company changed its name from “Tuscany Mineral, Ltd.” to “Tuscany Minerals Ltd.”. On June 22, 2010, the Company changed its name to “Qwick Media Inc.”

5

---

QWICK MEDIA INC.
(A Development Stage Company)

Notes to the Consolidated Financial Statements

SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(Unaudited)
(Stated in U.S. Dollars)

2.	NATURE OF OPERATIONS AND GOING CONCERN (Continued)

On January 28, 2011, the Company completed the acquisition of Qeyos Ad Systems Inc. (“Qeyos”), pursuant to which it acquired all of the issued and outstanding common shares of Qeyos from its shareholders in exchange for the issuance of a total of 4,789,035 shares of the Company’s common stock on the basis of one share of common stock for each common share of Qeyos. As a result of the acquisition of the Qeyos shares, the Company ceased to be a shell company and is now in the business of developing interactive proprietary software, intellectual property and hardware.

For accounting purposes, the acquisition was accounted for at historical carrying values in a manner similar to the pooling of interests method since the chief executive officer and controlling shareholder of the Company was also the chief executive officer and controlling shareholder of Qeyos. Transfers or exchanges of equity instruments between entities under common control are recorded at the carrying amount of the transferring entity at the date of transfer and fair value, goodwill or other intangible asset adjustments are not recorded. Our consolidated financial statements and reported results of operations reflect these carryover values, and our reported results of operations and stockholders’ equity have been retroactively restated for all periods presented to reflect the results of operations of Qeyos and the Company as if the acquisition had occurred on September 30, 2009, the date the Company and Qeyos commenced common control.

On April 19, 2011, the Company incorporated Wuxi Xun Fu Information Technology Co., Ltd. in China, a wholly-owned subsidiary of the Company.

For all periods presented, all significant inter-company accounts and transactions have been eliminated in the consolidated financial statements.

b)

Development Stage Activities

The Company had been in the exploration stage since its formation and had not realized any revenues during the exploration stage. The Company had previous exploration activities in the natural gas and oil business in 2003 and in the acquisition and exploration of mining properties prior to 2003. As at December 31, 2010, the Company was an inactive shell company.

On January 28, 2011, the Company acquired Qeyos Ad Systems Inc., which is in the business of developing and customizing software and hardware for use in digital media kiosks. Accordingly, the Company ceased to be an inactive shell company and became a development stage company.

c)

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

As shown in the accompanying consolidated financial statements, the Company has incurred accumulated losses of $12,639,641 for the period from October 5, 2000 (date of inception) to June 30, 2014. The future of the Company is dependent upon its ability to obtain adequate financing and upon future profitable operations. Management has plans to seek additional capital financing through private placement and a public offering of the Company’s common stock and from the issuance of promissory notes. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

6

---

QWICK MEDIA INC.
(A Development Stage Company)

Notes to the Consolidated Financial Statements

SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(Unaudited)
(Stated in U.S. Dollars)

2.	RECENT ACCOUNTING PRONOUNCEMENTS

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company’s January 1, 2014 adoption of the updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows.

In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The Company’s January 1, 2014 adoption of the updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows.

In March 2013, ASC guidance was issued related to Foreign Currency Matters to clarify the treatment of cumulative translation adjustments when a parent sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. The updated guidance also resolves the diversity in practice for the treatment of business combinations achieved in stages in a foreign entity. The update is effective prospectively for the Company’s fiscal year beginning January 1, 2014. The Company’s January 1, 2014 adoption of the updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows.

In July 2013, ASC guidance was issued related to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The updated guidance requires an entity to net its unrecognized tax benefits against the deferred tax assets for net operating loss carryforwards, similar tax losses, or tax credit carryforwards in the same jurisdiction. A gross presentation will be required only if such carryforwards are not available or would not be used by the entity to settle any additional income taxes resulting from disallowance of the uncertain tax position. The update is effective prospectively for the Company’s fiscal year beginning January 1, 2014. The Company’s January 1, 2014 adoption of the updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows.

7

---

QWICK MEDIA INC.
(A Development Stage Company)

Notes to the Consolidated Financial Statements

SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(Unaudited)
(Stated in U.S. Dollars)

3.

INVENTORY

			June 30,			December 31,
			2014			2013
	Computers	$	38,857		$	45,382
	Monitors		97,538			114,126
	Printers		13,597			15,880
	Parts and enclosures		27,506			31,426
	General		39,973			23,779
		$	217,471		$	230,593

4.	PROPERTY AND EQUIPMENT

						June 30,
						2014
						Accumulated			Net Book
			Cost			Amortization			Value
	Computer hardware	$	38,713		$	34,816		$	3,897
	Computer software		1,324			1,324			−
	Office furniture		21,012			15,778			5,234
	Equipment		41,882			29,363			12,519
	Leasehold improvements		47,628			45,762			1,866
		$	150,559		$	127,043		$	23,516

						December 31,
						2013
						Accumulated			Net Book
			Cost			Amortization			Value
	Computer hardware	$	38,713		$	30,524		$	8,189
	Computer software		1,324			1,286			38
	Office furniture		21,012			12,875			8,137
	Equipment		41,882			24,610			17,272
	Leasehold improvements		47,628			44,187			3,441
		$	150,559		$	113,482		$	37,077

---

QWICK MEDIA INC.
(A Development Stage Company)

Notes to the Consolidated Financial Statements

SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(Unaudited)
(Stated in U.S. Dollars)

5.	RELATED PARTY TRANSACTIONS AND AMOUNTS OWING

For the period ended June 30, 2014, the Company carried out a number of transactions with related parties in the normal course of business. These transactions were recorded at their exchange amount, which is the amount of consideration established and agreed to by the related parties.

The following are related party transactions and amounts owing at June 30, 2014 that are not otherwise disclosed elsewhere:

	a)	The Company paid management fees of $142,266 (2013 - $115,992) to companies controlled by officers for the six months ended June 30, 2014.
	b)	The Company recorded stock-based compensation of $28,602 (2013 - $3,972) as consulting fees incurred to directors and officers for the six months ended June 30, 2014.
	c)	As of, June 30, 2014, amounts owing to related parties consists of $5,708,319 (December 31, 2013 - $4,534,392) owed to a director and companies controlled by a director. At June 30, 2014, $9,840 (December 31, 2013 - $12,889) owed to a company controlled by an officer and $5,904 payable to a company controlled by the managing director (December 31, 2013 - $0) was included in accounts payable and accrued liabilities. The amounts owed are unsecured, non-interest bearing and due on demand.

6.	STOCK OPTIONS

The Company adopted a Stock Option Plan under which the Company can grant up to 6,620,230 shares of its common stock to the officers, directors, employees and consultants.

On April 29, 2014, the Company granted options to purchase 600,000 common shares of common stock to two directors.. The stock options will vest over a two year period: with one third vesting on the date of grant, one-third on the first anniversary date and one-third on the second anniversary date. The stock options have a five year term and allow the holder to purchase one common share of the Company at a price of $0.20 per share until April 30, 2019.

During the six months ended June 30, 2014, the Company recorded stock-based compensation of $28,610 (2013 - $8,366) as consulting expense related to the vesting of stock options. The Company did not grant any stock options during the six months ended June 30, 2013.

The weighted average assumptions used for each of the six months ended June 30, are as follows:

The following table summarizes the continuity of the Company’s stock options:

						Weighted			Weighted-Average
						Average			Remaining			Aggregate
			Number of			Exercise			Contractual Term			Intrinsic
			Options			Price			(years)			Value
	Outstanding, December 31, 2013		2,460,000		$	0.26			1.86		$	−
	Granted		600,000		$	0.20
	Expired		(435,000	)	$	0.32
	Outstanding, June 30, 2014		2,625,000		$	0.23			2.39		$	−
	Exercisable, June 30, 2014		2,225,000		$	0.24			1.73		$	−

9

---

QWICK MEDIA INC.
(A Development Stage Company)

Notes to the Consolidated Financial Statements

SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(Unaudited)
(Stated in U.S. Dollars)

6.	STOCK OPTIONS (Continued)

A summary of the status of the Company’s non-vested options and changes are presented below:

						Weighted
						Average
			Number of			Grant Date
			Options			Fair Value
	Non-vested at December 31, 2013		75,000		$	0.001
	Granted		600,000		$	0.11
	Vested		(275,000	)	$	0.08
	Non-vested at June 30, 2014		400,000		$	0.11

As at June 30, 2014, the following stock options were outstanding:

	Number of Options		Exercise Price			Expiry Date
	75,000	$	0.60			November 30, 2014
	75,000	$	0.60			February 28, 2015
	75,000	$	0.60			November 30, 2015
	1,800,000	$	0.20			December 29, 2015
	600,000	$	0.20			April 29, 2019
	2,625,000

As at June 30, 2014, there was $39,786 in total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of 1.83 years.

7.	REDEEMABLE PREFERRED STOCK

On November 15, 2011, the Company created one series of the 100,000,000 preferred shares it is authorized to issue, consisting of 25,000,000 shares, to be designated as Class A Preferred Shares. The principal terms of the Class A Preferred Shares are as follows:

Voting rights – The Class A Preferred Shares have voting rights (one vote per share) equal to those of the Company’s common stock.

Dividend rights – The Class A Preferred Shares carry a cumulative cash dividend of 10% per annum. The accrued dividends payable are classified as interest expense in the statements of operations.

Conversion rights – The holders of the Class A Preferred Shares have the right to convert the Class A Preferred Shares, from time to time, at the option of the holder, into one common share until July 31, 2015 at the following conversion prices:

i)   $0.60 per Common Share if converted at any time up to and including July 31, 2012;
ii)   $1.00 per Common Share if converted at any time between August 1, 2012 and July 31, 2013; and
iii)   $1.50 per Common Share if converted at any time between August 1, 2013 and July 31, 2015.

Redemption rights – At any time, the holders of the Class A Preferred Shares may elect to have the Company redeem the Class A Preferred Shares for an amount equal to $1.00 per share. At any time, the Company may redeem the Class A Preferred Shares for an amount equal to $1.00 per share.

The Company has classified the Class A Preferred Shares as liability because they are redeemable beyond the control of the issuer.

10

---

QWICK MEDIA INC.
(A Development Stage Company)

Notes to the Consolidated Financial Statements

SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(Unaudited)
(Stated in U.S. Dollars)

7.	REDEEMABLE PREFERRED STOCK (Continued)

During the year ended December 31, 2011, the Company completed a private placement with a company owned by the Company's President and Chief Executive Officer, consisting of the issuance of 1,000,000 Class A Preferred Shares at a price of $1.00 per Class A Share for gross proceeds of $1,000,000, and converted the principal amount of a debenture and accrued interest thereon to the related party, into an aggregate of 1,027,945 Class A Preferred Shares, at a conversion price of $1.00 per Class A Preferred Share. As at December 31, 2013, the holder of the Class A Preferred Shares had agreed to not exercise the retractable rights, to have the Company redeem the Class A Preferred Shares, for the next 2 years.

8.	COMMITMENTS AND CONTRACTUAL OBLIGATIONS
	The Company had no significant commitments or contractual obligations with any parties respecting executive compensation, consulting arrangements, or other matters. Management services provided are on a month-to- month basis.
9.	FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
	The following table presents information about the Company’s financial instruments that have been measured at fair value as of June 30, 2014, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair values:

JUNE 30, 2014

FAIR

VALUE

TOTAL

INPUT

HELD-FOR-

CARRYING

FAIR

LEVEL

TRADING

VALUE

VALUE

Financial assets

Cash

1

$

255,910

$

255,910

$

255,910

DECEMBER 31, 2013

FAIR

VALUE

TOTAL

INPUT

HELD-FOR-

CARRYING

FAIR

LEVEL

TRADING

VALUE

VALUE

Financial assets

Cash

1

$

241,327

$

241,327

$

241,327

	Due to the nature of cash, accounts payable and redeemable preferred stock, the fair value of these instruments approximated their carrying value.
10.	SEGMENTED INFORMATION
	The Company’s business is considered as operating in one segment being the development of software and hardware for use in digital media kiosks.

11

---

---

QWICK MEDIA INC.
(the “Company”)

Management’s Discussion and Analysis of Operations
for the three and six months ended June 30, 2014

August 27, 2014

INTRODUCTION

The following management’s discussion and analysis (“MD&A”) is a review of operations, current financial position and outlook for the Company and should be read in conjunction with the Company’s unaudited consolidated financial statements for the three and six months ended June 30, 2014 and the Company’s audited consolidated financial statements for the year ended December 31, 2013. Readers are encouraged to review the Company’s financial statements in conjunction with this document, copies of which are filed on the SEDAR website at www.sedar.com. The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States. All dollar figures included herein are quoted in U.S. dollars unless otherwise noted. This discussion and analysis is prepared as of August 27, 2014.

FORWARD-LOOKING INFORMATION

Certain statements in this MD&A are forward-looking statements, which reflect management’s expectations regarding the Company’s future growth, results of operations, performance and business prospects and opportunities. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward- looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management’s current views and are based on certain assumptions and speak only as of August 27, 2014. These assumptions, which include, management’s current expectations, estimates and assumptions about the global economic environment may prove to be incorrect. A number of risks and uncertainties could cause the Company’s actual results to differ materially from those expressed or implied by the forward-looking statements, including a renewed downturn in international economic conditions; any adverse occurrence with respect to the development or marketing of the Company’s technology; any adverse occurrence with respect to any of the Company’s licensing agreements; an inability to successfully bring products to market; product development or other initiatives by the Company’s competitors; fluctuations in the availability and cost of materials required to produce the Company’s products; any adverse occurrence with respect to distribution of the Company’s products; potential negative financial impact from claims, lawsuits and other legal proceedings or challenges; and other factors beyond the Company’s control. There is a significant risk that such forward-looking statements will not prove to be accurate. Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. Except as required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. There is a significant risk that such forward-looking statements will not prove to be accurate. Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results.

BUSINESS OF THE COMPANY

The Company is a development stage company engaged in the business of developing and customizing software and hardware for use in digital media kiosks. It was incorporated on October 5, 2000 under the laws of the state of Nevada. Effective June 26, 2006, the Company re-domiciled from the State of Nevada to the State of Washington. Effective July 7, 2009, the Company re-domiciled from the State of Washington to the State of Wyoming for the sole purpose of affecting a continuance to the Cayman Islands. Effective July 28, 2009, the Company re-domiciled to the Cayman Islands.

---

- 2 -

On January 28, 2011, the Company completed the acquisition of Qeyos Ad Systems Inc. (“Qeyos”), pursuant to which the Company acquired all of the issued and outstanding common shares of Qeyos from its shareholders in exchange for the issuance of a total of 4,789,035 common shares of the Company (each, a “Share”) on the basis of one Share for each share of Qeyos.

On April 19, 2011, Qeyos incorporated Wuxi Xun Fu Information Technology Co., Ltd. (“Wuxi”) under the laws of the People’s Republic of China (the “PRC”) as a wholly-owned foreign subsidiary of Qeyos, in order to facilitate the conduct of the Company’s operations in the PRC. Wuxi currently employees 10 people at an aggregate cost of approximately $20,000 per month, who provide the Company with software development services. The Company develops interactive proprietary software, know-how and hardware. Our content management touch screen software is built in C# programming language on a Windows® multi-touch platform. The software development architecture team in Burnaby, British Columbia, Canada provides technical and creative guidance for coders in Wuxi, China. This strategy leverages production outsourcing and high execution speed. We integrate hardware into custom designed enclosures to produce the physical product that acts as a point of service terminal for end users. Hardware manufacturing and development is managed from Nevada, Taiwan and also Shenzhen, China, thirty minutes west of Hong Kong.

The Company’s software and hardware is used in the interactive segment of the digital out-of-home (“DOOH”) advertising industry. Its principal business is to provide clients with advertising opportunities through self-service interactive smart boards and digital kiosks, interactive window displays, interactive transit displays and other interactive out-of-home advertising displays, such as digital wallscapes, spectaculars and mall displays that the Company offers in North American advertising markets. The Company’s business in China has been consolidated to software development via Wuxi.

OVERALL PERFORMANCE

As a development stage company, although the Company has had limited but increased revenue over the past two fiscal years, it has also incurred increased expenses over the past two fiscal years to fund final development of its proprietary software, and deployment of the results of that work on certain on-going U.S. and Canadian based proof of technology pilot projects commenced at the end of August 2012. These pilot projects were undertaken in lieu of pursuing other smaller scaled sales opportunities. Management expects the Company’s revenue to increase and its expenses to decrease while the Company commences the full scale market release of its product offering into established third party sales distribution channels using the Internet as an alternative to the past costs incurred to employ an internal sales staff in Burnaby, British Columbia. In addition, the Company is nearing the successful completion of its confidential technology pilot projects in the U.S. with the expectation of an opportunity to enter negotiations for definitive agreements that are expected to enable the Company to monetize new opportunities for advertisers to utilize the Company’s proprietary interactive touch screen technologies in the large retailer arena. While we have taken steps to reduce the size of our internal sales staff, we will maintain our current level of programming employees to oversee sales deployment of our completed software products. See “Business of the Company” for additional details regarding the Company’s business.

The Company’s future performance is largely tied to completing definitive agreements with end-users of its software product offering, and the overall financial markets. The Company’s future is also dependent upon its ability to obtain adequate financing and upon future profitable operations. Management has plans to seek additional capital financing through private placements and public offerings of the Company’s common stock and from the issuance of promissory notes. Uncertainty in credit markets has led to increased difficulties in raising and borrowing funds. As a result, the Company may have difficulties in completing equity or debt financings for the purposes of maintaining its current level of operations, and marketing its completed software products, without diluting the interests of current shareholders of the Company.

As at June 30, 2014, the Company had a working capital deficiency of $5,667,667 (December 31, 2013: working capital deficiency of $4,428,410), cash of $254,305 (December 31, 2013: $241,327) and accumulated losses of $12,578,783 for the period from inception on October 5, 2000 to June 30, 2014 (inception to December 31, 2013: $11,325,957). Management expects the Company to incur further losses in the development of the Company’s business, all of which casts substantial doubt on the Company’s ability to continue as a going concern.

---

- 3 -

The Company’s total revenue decreased by $41,400 to $8,051 for the three months ended June 30, 2014 (“Q2 2014”) compared to $49,451 for the three months ended June 30, 2013 (“Q2 2013”) and the Company’s total expenses increased by $46,270 to $691,407 for Q2 2014 from $645,137 for Q2 2013. This resulted in an increased net loss of $683,356 for Q2 2014 compared to a net loss of $595,686 for Q2 2013. The decreased revenue during Q2 2014 was mainly due to the Company pursing certain smaller deployments of its software products undertaken prior to commencing its U.S. and Canadian technology pilot projects. The expenses incurred during Q2 2014 were mainly attributable to salaries, wages and benefits, as well as office and administrative expenses, management fees, professional fees, interest and bank charges and rent. Management anticipates that expenses will continue to be high until the Company achieves profitable operations. Expenses incurred during Q2 2014 were higher than those during Q2 2013 primarily due to increases in: consulting fees (Q2 2014: $36,178; Q2 2013: $14,319); inventory costs (Q2 2014: 32,940; Q2 2013: nil); management fees (Q2 2014: $71,563; Q2 2013: $38,735); and office and administrative (Q2 2014: $79,364; Q2 2013: $58,370).

Management anticipates that the Company’s cash and cash equivalents will not be sufficient to meet its working capital requirements for the next twelve month period and that additional funds will need to be raised through equity or debt financings to fund product development and ongoing operations. Although the Company has secured financings in the past, there is no assurance that the Company will be able to do so in the future on terms that are favourable to the Company or at all. The Company may have difficulty raising additional funds as necessary due to a number of uncertainties and risk factors, including uncertainty in credit markets and general economic downturns. See “Results of Operations”, “Liquidity and Capital Resources” and “Risk Factors”.

As the Company has successfully concluded its software technology pilots in the U.S. on April 15, 2014, it will need to conclude definitive agreements with the potential end-users of its software previously engaged in such pilots. If the Company is unable to complete such definitive agreements on favourable terms, or at all, the Company will need to pursue alternate end-users and perhaps engage in further proof of technology pilot programs in such retailer markets. Therefore, until the Company concludes such definitive agreements its outlook for deriving revenue from its current product offering could be delayed by an estimated nine months from the commencement of its next fiscal year. Such delay could result in a reduction in enterprise value leading to increased dilution of its shareholders holding common shares in its capital stock in consequence of raising additional funds as discussed though equity or convertible debt financings.

SUMMARY OF QUARTERLY RESULTS

The following table sets out selected financial information for the Company for its eight most recent quarters:

(1)	The Company incurred negative revenue in the fourth quarter of 2013 due to adjustments and write-offs of previously invoiced revenues.
(2)	The Company incurred negative revenue in the fourth quarter of 2012 due to adjustments and write-offs of previously invoiced revenues.

---

- 4 -

DISCUSSION OF OPERATIONS

Three Months Ended June 30, 2014 Compared to the Three Months Ended June 30, 2013

The Company generated $8,051 in revenue during Q2 2014 compared to $49,451 during Q2 2013. The reason for the decrease in revenue was a decrease in fees earned for custom programming of kiosk applications.

The Company’s expenses increased from $645,137 during Q2 2013 to $691,407 during Q2 2014. The increase from Q2 2013 to Q2 2014 was mainly attributable to increases in consulting fees (Q2 2014: $36,178; Q2 2013: $14,319); inventory costs (Q2 2014: 32,940; Q2 2013: nil); management fees (Q2 2014: $71,563; Q2 2013: $38,735); and office and administrative (Q2 2014: $79,364; Q2 2013: $58,370), which were offset in part by decreases in salaries, wages and benefits (Q2 2014: $252,050; Q2 2013: $280,680), foreign exchange expenses (Q2 2014: $27,669; Q2 2013: $51,160); and travel expenses (Q2 2014: $17,545; Q2 2013: $26,783).

Net loss increased by $87,670 from $595,686 during Q2 2013 to $683,356 during Q2 2014. The increased net loss is due to decreases in revenue and an increase in expenses.

The Company’s total assets increased by $4,750 from $693,420 as at December 31, 2013 to $698,170 as at June 30, 2014. The increase in total assets is mainly due to an increase of $18,311 in total current assets from $656,343 as at December 31, 2013 to $674,654 as at June 30, 2014 due to increased cash (June 30, 2014: $255,910; December 31, 2013: $241,327), and accounts receivable (June 30, 2014: $199,119; December 31, 2013: $182,262) , offset by decreases in inventory (June 30, 2014: $217,471; December 31, 2013: $230,593), prepaid expenses (June 30, 2014: $2,154; December 31, 2013: $2,161) and property and equipment (June 30, 2014: $23,516; December 31, 2013: $37,077).

The Company’s increase in total assets was offset by the Company’s increase in total liabilities of $1,289,824 from $5,084,753 as at December 31, 2013 to $6,374,577 as at June 30, 2014. The increase in total liabilities was mainly due to an increase of $1,178,406 in amounts due to related parties from $4,529,913 as at December 31, 2013 to $5,708,319 as at June 30, 2014.

The tables set out under the heading “Additional Disclosure for Venture Issuers without Significant Revenue” set out the components of the Company’s expenses for the six months ended June 30, 2014.

Six Months Ended June 30, 2014 Compared to the Six Months Ended June 30, 2013

The Company generated $42,193 in revenue during the six months ended June 30, 2014 compared to $87,312 during the six months ended June 30, 2013. The reason for the decrease in revenue was a decrease in fees earned for custom programming of kiosk applications.

The Company’s expenses increased from $1,328,076 during the six months ended June 30, 2013 to $1,355,877 during the six months ended June 30, 2014. The increase from the six months ended June 30, 2013 to the six months ended June 30, 2014 was mainly due to increased expenses attributable to: consulting fees (2014: $37,636; 2013: $21,163); foreign exchange (2014: $112,085; 2013: $75,542); inventory costs (2014: $32,940; 2013: nil); management fees (2014: $142,266; 2013: $115,992); and rent (2014: $116,933; 2013: $106,880). These decreased expenses were offset in part by the following decreased expenses: salaries, wages and benefits (2014: $531,506; 2013: $605,821); travel expenses (2014: $32,914; 2013: $54,656); and amortization (2014: $13,902; 2013: $22,038).

Net loss increased by $72,920 from $1,240,764 during the six months ended June 30, 2013 to $1,313,684 during the six months ended June 30, 2014. The increased net loss is mainly due to decreased revenue during the six months ended June 30, 2014 compared to the six months ended June 30, 2013.

---

- 5 -

ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE

The Company has generated minimal revenues since incorporation and it does not have any real property interests. The following table sets out the components of the Company’s general and administrative expenses for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013:

LIQUIDITY AND CAPITAL RESOURCES

The following table sets out the components of the Company’s liquidity and capital resources at June 30, 2014 as compared to December 31, 2013:

The Company’s working capital decreased from a deficit of $4,428,410 at December 31, 2013 to a deficit of $5,699,923 at June 30, 2014 as a result of an increase in amounts due to related parties and accrued dividends payable.

Anticipated Cash Requirements

The Company anticipates that it will incur the following expenses over the next twelve months:

1.	$200,000 in connection with expansion of further or alternative technology pilots in the U.S.
2.	$100,000 in connection with locating, evaluating and negotiating potential business opportunities; and
3.	$1,700,000 for operating expenses.

The Company requires a minimum of approximately $2,000,000 to proceed with its plan of operation over the next twelve months, exclusive of any acquisition or development costs. This amount may also increase if the Company is required to carry out due diligence investigations in regards to any prospective investment or business opportunity or if the costs of negotiating an applicable transaction are greater than anticipated. The Company does not have sufficient working capital to enable it to carry out its stated plan of expanding operation over the next twelve months. As a result, the Company plans to complete private placement sales of its common stock in order to raise the funds necessary to pursue its plan of operation and to fund its working capital in order to enable it to carry out expansion of its operation. There is no assurance that we will be successful in completing any private placement financings.

---

- 6 -

Operating Activities

Operating activities provided cash of $14,583 during the six months ended June 30, 2014 as compared to $160,399 during the six months ended June 30, 2013. This decrease was primarily due to cash due to related parties of $1,406,784 during the six months ended June 30, 2013 compared to $1,178,406 during the six months ended June 30, 2014.

Investing Activities

During the six months ended June 30, 2014 and 2013, the Company did not use any cash in investing activities nor was it provided any cash from investing activities.

Financing Activities

During the six months ended June 30, 2014 and 2013, the Company did not use any cash in financing activities nor was it provided any cash from financing activities.

Commitments

The Company did not have any significant commitments or contractual obligations with any parties respecting executive compensation, consulting agreements, or other matters, other than as disclosed below, as at June 30, 2014. Management services are provided on a month-to-month basis. The Company’s future minimum payments under two month-to-month office leases are $10,835 during the year ended December 31, 2014. The Company expects to satisfy these commitments from working capital available to the Company. If the working capital is not sufficient for these purposes, the Company intends to raise additional funds through equity or debt financings. See “Going Concern” and “Risk Factors”.

The Company has received monthly funding of its working capital requirements from its largest shareholder and Chief Executive Officer, Mr. Ross J. Tocher, who has continued his commitment to support the development of the Company’s software product offering until it can be successfully brought to market. As of June 30, 2014, amounts owing to related parties consists of $5,708,319 (December 31, 2013: $4,534,392) owed to a director, Mr. Tocher, and companies controlled by him, $9,840 (December 31, 2013 - $12,889) owed to a company controlled by an officer, Mr. Kevin Kortje, and $5,904 payable to a company controlled by the managing director, Mr. Brian Petersen (December 31, 2013: nil). The amounts owed are unsecured, non-interest bearing and due on demand. Mr. Tocher has however subsequently agreed to not make demand on such indebtedness for a period of two years commencing January 1, 2014.

Going Concern

Due to the uncertainty of the Company’s ability to meet its current operating and capital expenses, in its report on the Company’s annual financial statements for the year ended December 31, 2013, the Company’s independent auditors included an explanatory paragraph regarding concerns about its ability to continue as a going concern.

The Company has incurred an accumulated deficit of $12,639,641 for the period from inception on October 5, 2000 to June 30, 2014, has a stockholders’ deficiency and has minimal revenues. The Company owed $5,708,319 to related parties as of June 30, 2014 which amount is unsecured, non-interest bearing and due on demand. There is a risk that the Company will not have the financial resources to satisfy this debt if and when payment is demanded. See “Related Party Transactions”. The future of the Company is dependent upon its ability to obtain adequate financing and upon future profitable operations from advertising sales. Management has plans to seek additional capital through private placements, public offering of any common stock, convertible debt and credit facilities.

---

- 7 -

There is substantial doubt about the Company’s ability to continue as a going concern, as the continuation of its business is dependent on the development of proprietary software, know-how and hardware. The issuance of additional equity securities by the Company could result in a significant dilution in the equity interests of its current shareholders. Obtaining commercial loans, assuming those loans would be available, will increase the Company’s liabilities and future cash commitments.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no significant off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on its financial condition, changes in financial position, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources that are material to shareholders.

RELATED PARTY TRANSACTIONS

As of June, 2014, amounts owing to related parties consists of $5,708,319 owed to Ross J. Tocher, a director of the Company, and companies controlled by Mr. Tocher, namely R.J. Tocher Holdings Ltd., $9,840 (December 31, 2013 - $12,889) owed to KII Management Inc., a company controlled by Kevin Kortje, the Chief Financial Officer of the Company, and $5,904 owed to BK Petersen Holdings Ltd., a company controlled by Brian Petersen, the managing director of the Company. The amounts owed are unsecured, non-interest bearing and due on demand. Mr. Tocher has however subsequently agreed to not make demand on the amount owing to R.J. Tocher Holdings Ltd. for a period of two years commencing January 1, 2014.

During the six months ended June 30, 2014, the Company carried out a number of transactions with related parties in the normal course of business. These transactions were recorded at their exchange amount, which is the amount of consideration established and agreed to by the related parties. In particular, the Company paid management fees of $142,266 (2013: $115,992) as follows: CDN$60,000 to Greg Dureault Personal Law Corporation, a company controlled by Greg Dureault, Vice President of the Company, CDN$30,000 to Lizete Dureault and CDN$30,000 to KII Management Inc. a company controlled by Kevin Kortje, the Chief Financial Officer of the Company. The Company recorded stock-based compensation of $28,610 as consulting fees paid to directors and officers during the six months ended June 30, 2014 (2013: $8,366),

PROPOSED TRANSACTIONS

The Company has no proposed transaction as of the date of this MD&A.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Presentation of Comprehensive Income” (“ASU No. 2011-05”), which improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in Other Comprehensive Income (“OCI”) by eliminating the option to present components of OCI as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Subsequently in December 2011, the FASB issued Accounting Standards Update No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income” (“ASU No. 2011-12”), which indefinitely defers the requirement in ASU No. 2011-05 to present on the face of the financial statements reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. The amendments in these standards do not change the items that must be reported in OCI, when an item of OCI must be reclassified to net income, or change the option for an entity to present components of OCI gross or net of the effect of income taxes. The amendments in ASU No. 2011-05 and ASU No. 2011-12 are effective for interim and annual periods beginning after December 15, 2011 and are to be applied retrospectively. The adoption of the provisions of ASU No. 2011-05 and ASU No. 2011-12 did not have a material impact on the Company’s consolidated financial position or results of operations.

---

- 8 -

In September 2011, the FASB issued Accounting Standards Update No. 2011-08, “Testing Goodwill for Impairment” (“ASU No. 2011-08”), which allows entities to use a qualitative approach to test goodwill for impairment. ASU No. 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. ASU No. 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of the provisions of ASU No. 2011-08 did not have a material impact on the Company’s consolidated financial position or results of operations.

RISK FACTORS

Much of the information included in this Management Discussion & Analysis includes or is based upon estimates, projections or other forward looking statements. Such forward looking statements include any projections and estimates made by the Company and its management in connection with its business operations. Such estimates, projections or other forward looking statements involve various risks and uncertainties as outlined below. The Company cautions the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward looking statements. For a discussion of additional risks that may affect the Company’s business or results of operations, please see the Company’s annual report on Form 20-F for the year ended December 31, 2013. In this section, references to “we”, “our” or “us” refers to the Company.

Our company currently does not generate revenue from its planned operations, and as a result, we face a high risk of business failure.

We have generated minimal revenues from our planned operations to date. As of June 30, 2014, we had accumulated $12,578,783 in losses since inception. Our ability to generate revenues from planned advertising sales depends largely on our ability to provide a large interactive network of digital kiosks and digital TV screens that show our programs in high traffic locations at trade-show exhibitions and large retail stores and shopping malls. This, in turn, requires that we obtain specialized broadcast interactive television (“micro-broadcast”) contracts or concession rights contracts in order to operate our business. As such, in order to generate significant revenues, we will incur substantial expenses in the development of our business. We therefore expect to incur significant losses in the foreseeable future. We recognize that if we are unable to generate significant revenues from our activities, our entire business may fail. There is no history upon which to base any assumption as to the likelihood that we will be successful in our plan of operation, and we can provide no assurance to investors that we will generate operating revenues or achieve profitable operations in the future.

If we are not able to effectively protect our intellectual property, our business may suffer a material negative impact and may fail.

The success of our company will be dependent on our ability to protect and develop our technology; however, we have not yet obtained any patents or trademarks other than our U.S. trade name “Qwick Media”. We completed our registration of the U.S. trade-name “Qwick Media”, which was issued on September 20, 2011 under number 4,029,739. In addition, on March 30, 2012, we applied under reference number 2065-100 for the Canadian trade name “Qwick Deal”, which application is still pending. If we are unable to secure trademark and patent protection for our intellectual property in the future or that protection is inadequate for future products, our business may be materially adversely affected. Further, there is no assurance that our interactive kiosks and displays or other aspects of our business do not or will not infringe upon patents, copyrights or other intellectual property rights held by third parties. Although we are not aware of any such claims, we may become subject to legal proceedings and claims from time to time relating to the intellectual property of others in the ordinary course of our business. If we are found to have violated the intellectual property rights of others, we may be enjoined from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives. In addition, we may incur substantial expenses and diversion of management time in defending against these third-party infringement claims, regardless of their merit. Successful infringement or licensing claims against us may result in substantial monetary liabilities, which may materially and adversely disrupt our business.

---

- 9 -

We have had negative cash flows from operations and if we are not able to obtain further financing, our business operations may fail.

We had cash in the amount of $254,305 and working capital deficiency of $5,667,667 as of June 30, 2014. If our current resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of convertible debt securities or additional equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition and could cause our business to fail.

Our limited operating history may not provide an adequate basis to judge our future prospects and results of operations.

Prior to our acquisition of Qeyos, we were a shell company. As such, our limited operating history may not provide a meaningful basis for readers to evaluate our business, financial performance and prospects. It is also difficult to evaluate the viability of our plan to implement an interactive digital media micro-broadcast network and other advertising media dedicated to the DOOH sector because we do not have sufficient experience to address the risks frequently encountered by early stage companies using new forms of advertising media and entering new and rapidly evolving markets. It may be difficult for readers to evaluate our senior management team and their effectiveness, on an individual or collective basis, and their ability to address future challenges to our business.

If advertisers or the viewing public do not accept, or lose interest in, our interactive digital media network, we may be unable to generate sufficient cash flow from our operating activities and our prospects and results of operations could be negatively affected.

The market for interactive digital media networks in North America is relatively new and its potential is uncertain. Our success depends on the acceptance of our interactive digital media network by advertising clients and agencies and their continuing and increased interest in this medium as a component of their advertising strategies. Interactive DOOH advertising is a new concept in North America. If we are not able to adequately track consumer responses to our programs, in particular tracking the demographics of consumers most receptive to interactive advertising, we will not be able to provide sufficient feedback and data to existing and potential advertising clients to help us generate demand and determine pricing. Without improved market research, advertising clients may reduce their use of interactive advertising and instead turn to more traditional forms of advertising that have more established and proven analytical methods of tracking effectiveness. If a substantial number of advertisers lose interest in advertising on our planned micro-broadcast digital media networks for these or other reasons, or become unwilling to purchase advertising time slots on our planned network, we will be unable to generate sufficient revenues and cash flow to operate our business, and our revenues, prospects and results of operations could be negatively affected.

We may depend on third-party program producers to provide the non-advertising content that we include in our interactive programs. Failure to obtain high-quality content on commercially reasonable terms could materially reduce the attractiveness of our Micro-broadcast network, harm our reputation and cause our planned revenues to be unrealized or to decline.

We are planning for the majority of our interactive digital kiosks and TV screens to mix advertising and non- advertising content. We do not produce or create any of the non-advertising content included in our programs. The advertisers will provide us with the advertising content that they do not retain us to produce. All of the non- advertising content is provided by third-party content providers such as various local television stations and television production companies. There is no assurance that we will be able to secure these contracts or obtain non-advertising content on satisfactory terms, or at all. If we fail to obtain a sufficient amount of high-quality content on a cost-effective basis, advertisers may find advertising on our Micro-broadcast networks unattractive and may not wish to purchase advertising time slots on our network, which would materially and adversely affect our ability to generate revenues from our advertising time slots and cause our revenues to decline and our business and prospects to deteriorate.

---

- 10 -

Because we may rely on third-party agencies to help source advertising clients, our failure to retain key third- party agencies or attract additional agencies on favorable terms could materially and adversely affect our revenue growth.

We plan to engage third-party agencies to assist us in sourcing advertising clients from time to time. We do not have any long-term or exclusive agreements with these agencies, including our key third-party agencies, and cannot assure that we will obtain or continue to maintain favorable relationships with them. If we fail to obtain and retain key third-party agencies or attract additional agencies, we may not be able to secure or retain advertising clients or attract new advertisers or advertising agency clients and our business and results of operations could be materially adversely affected.

Because we may be dependent on a limited number of customers for a significant portion of our revenues and this dependence may continue or reoccur in the future, we may be vulnerable to the loss of major customers or delays in payments from these customers.

Given our limited operating history and the rapid growth of our industry, we cannot assure that we will not be dependent on a small number of customers in the future. If we fail to sell our services to one or more key customers in any particular period, or if a large customer purchases less of our services or fails to purchase additional advertising time on our micro-broadcast networks, our revenues could be unrealized or could decline and our operating results could be adversely affected. In addition, the dependence on a small number of customers could leave us more vulnerable to delays in payments from these customers. If one of our larger customers is significantly delinquent with their payments, our financial condition may be materially and adversely affected.

We face significant competition in the global advertising industry, and if we do not compete successfully against new and existing competitors in North America and China, we may not realize or may lose our future market share, and our intended profitability may be adversely affected.

We face significant competition in the global advertising industry. We compete for advertising clients primarily on the basis of network size and coverage, location, price, the quality of our programs, the range of services that we offer and brand recognition. Significant competition could reduce our planned operating margins and profitability and result in a loss of intended market share. Some of our existing and potential competitors may have competitive advantages, such as significantly greater brand recognition, financial, marketing or other resources and may be able to mimic and adopt our business model. In addition, several of our competitors have significantly larger advertising networks than we do, which gives them an ability to reach a larger number of overall potential consumers and which make them less susceptible to downturns in particular sectors, such as the interactive sector. Moreover, significant competition will provide advertisers with a wider range of media and advertising service alternatives, which could lead to lower prices and decreased revenues, gross margins and profits. We cannot assure you that we will be able to successfully compete against new or existing competitors.

Future acquisitions may have an adverse effect on our ability to manage our business.

We may acquire businesses, technologies, services or products which are complementary to our core interactive digital media network business. Future acquisitions may expose us to potential risks, which could have a material and adverse effect on our ability to manage our business, our revenues and net income. Further, we may need to raise additional debt funding or sell additional equity securities to make such acquisitions. The raising of additional debt funding by us, if required, would result in increased debt service obligations and could result in additional operating and financing covenants, or liens on our assets, that would restrict our operations, and the sale of additional equity securities could result in additional dilution to our shareholders.

---

- 11 -

Our quarterly and annual operating results are difficult to predict and may fluctuate significantly from period to period in the future.

Our future plans for quarterly and annual operating results are difficult to predict and may fluctuate significantly, if realized, from period to period based on the seasonality of consumer spending and corresponding advertising trends in North America. In addition, DOOH and advertising spending in North America generally tends to increase during holidays and tends to decrease during the fourth quarter. DOOH and advertising spending in North America is also affected by certain special events and related government measures. As a result, period-to-period comparisons of our operating results may be unreliable as an indication of our future performance.

We may be subject to, and may expend significant resources in defending against, government actions and civil suits based on the content we provide through our interactive digital media network.

Civil claims may be filed against us for fraud, defamation, subversion, negligence, copyright or trademark infringement or other violations due to the nature and content of the information displayed on our network. If consumers find the content displayed on our network to be offensive, clientele may seek to hold us responsible for any consumer claims or may terminate their relationships with us. Offensive and objectionable content and legal standards for defamation and fraud are defined in North America, but we may not be able to properly screen out unlawful content. In addition, if the security of our content management system is breached and unauthorized images, text or audio sounds are displayed on our network, viewers or the government may find these images, text or audio sounds to be offensive, which may subject us to civil liability or government censure despite our efforts to ensure the security of our content management system. Any such event may also damage our reputation. If our advertising viewers do not believe our content is reliable or accurate, our business model may become less appealing to viewers in North America and our advertising clients may be less willing to place advertisements on our planned network.

We do not have any business liability, disruption or litigation insurance, and any business disruption or litigation we experience might result in our incurring substantial costs and the diversion of resources.

Insurance companies offer limited business insurance products and do not, to our knowledge, offer business liability insurance suitable to management. While business disruption insurance is available, we have determined that the risks of disruption, cost of such insurance and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, except for directors and fire insurance, we do not have any business liability, disruption or litigation insurance coverage for our development operations. Any business disruption or litigation may result in our incurring substantial costs and the diversion of resources.

Compliance with advertising laws and regulations may be difficult and could be costly, and failure to comply could subject us to government sanctions.

Advertising laws and regulations require advertisers, advertising operators and advertising distributors, including businesses such as ours, to ensure that the content of the advertisements they prepare or distribute are fair and accurate and are in full compliance with applicable laws. Violation of these laws or regulations may result in penalties, including fines, confiscation of advertising fees, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, government may revoke a violator’s license for advertising business operations.

We endeavor to comply with applicable laws, including by requesting relevant documents from the advertisers. However, we cannot assure the reader that each advertisement that an advertiser or advertising agency client provides to us and which we include in our micro-broadcast network programs is in compliance with relevant advertising laws and regulations or that the supporting documentation and government approvals provided to us by our advertising clients in connection with certain advertising content are complete. Although we review advertising content for compliance with relevant laws and regulations, we cannot assure the reader that we will be able to properly review the content to comply with the standards imposed on us with certainty.

---

- 12 -

Fluctuations in exchange rates may have a material adverse effect on your investment.

The reporting and functional currency of our company is the U.S. dollar. However, a substantial portion of the expected revenues and expenses of our consolidated operating subsidiaries and affiliate entities may be denominated in CAD and RMB. The value of these currencies against the U.S. dollar may fluctuate and is affected by, among other things, changes in the political and economic conditions in Canada and China where our software is developed in Wuxi. Fluctuations in exchange rates, primarily those involving the U.S. dollar, may affect the relative purchasing power of our working capital and our balance sheet and earnings per share in U.S. dollars. In addition, appreciation or depreciation in the value of the foreign currencies relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we may issue which will be exchanged into U.S. dollars, and earnings from, and the value of, any U.S. dollar-denominated investments we make in the future. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

Because our officers, directors and principal shareholders control a large percentage of our common stock, such insiders have the ability to influence matters affecting our shareholders.

Our officers and directors, in the aggregate, beneficially own 45% of the issued and outstanding common shares. As a result, they have the ability to influence matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because our officers, directors and principal shareholders control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. Because the influence by these insiders could result in management making decisions that are in the best interest of those insiders and not in the best interest of the investors, you may lose some or all of the value of your investment in our common shares.

Our business depends substantially on the continuing efforts of our senior executives, and our business may be severely disrupted if we lose their services.

Our future success heavily depends upon the continued services of our senior executives and other key employees. In particular, we rely on the expertise, financial assistance and experience of our chief executive officer, Ross J. Tocher. We rely on the industry expertise, experience in our business operations and sales and marketing, of our Vice-President of Operations, Alan Husejnagic, and Vice-President of Sales, Ted Cowie, and their working relationships with our employees, other major shareholders, advertising clients, micro-broadcast network sponsors and advertisers, and relevant government authorities. If one or more of our senior executives were unable or unwilling to continue in their present positions, we might not be able to replace them easily or at all. If any of our senior executives joins a competitor or forms a competing company, we may lose clients, suppliers, key professionals and staff members. Each of our executive officers has entered into an employment agreement with us, which contains non-competition provisions. However, if any dispute arises between our executive officers and us, we cannot assure you the extent to which any of these agreements could be enforced.

If our business is unsuccessful, our shareholders may lose their entire investment.

Although shareholders will not be bound by or be personally liable for our expenses, liabilities or obligations beyond their total original capital contributions, should we suffer a deficiency in funds with which to meet our obligations, the shareholders as a whole may lose their entire investment in our company.

Our common stock is illiquid and shareholders may be unable to sell their shares.

There is currently a limited market for our common stock and we can provide no assurance to investors that a market will develop. If a market for our common stock does not develop, our shareholders may not be able to re- sell the shares of our common stock that they have purchased and they may lose all of their investment. Public announcements regarding our company, changes in government regulations, conditions in our market segment and changes in earnings estimates by analysts may cause the price of our common shares to fluctuate substantially. In addition, the Pink Sheets and/or OTC Bulletin Board are not exchanges and, because trading of securities on the Pink Sheets or OTC Bulletin Board is often more sporadic than the trading of securities listed on an exchange, you may have difficulty reselling any of the shares you purchase from our shareholders.

---

- 13 -

Investors’ interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

Our constating documents currently authorize the issuance of 400,000,000 shares of common stock with a par value of $0.001 and 100,000,000 preferred shares with a par value of $0.001. If we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors’ interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control.

DISCLOSURE OF OUTSTANDING SHARE DATA

The Company’s shares are quoted for trading on the OTC Bulletin Board under the symbol “QWIKF”. As of August 27, 2014, the share capital of the Company was as follows:

(1)	25,000,000 preferred shares have been designated as Class A Preferred Shares. The holder of the outstanding Class A Preferred Shares has agreed not to exercise the retraction rights attached thereto for a period of two years commencing January 1, 2014.

Stock Option Plan

As at August 27, 2014, the following stock options were outstanding:

Note *1: On April 29, 2014 the Company announced the appointment of Messrs. William R. LeClair and Steven Koles to the Company’s Board of Directors and issued to them options to purchase 300,000 common shares each, subject to the terms of the Company’s stock option plan. The stock options will vest over a two year period: with one third vesting on the date of grant, one-third on the first anniversary date and one-third on the second anniversary date. The stock options have a five year term and allow the holder to purchase one common share of the Company at a price of $0.20 per share until April 30, 2019.

The Company has no outstanding warrants or other securities that are convertible into Shares, other than the Class A Preferred Shares.

ADDITIONAL INFORMATION

The Company files annual and other reports and other information with Canadian securities regulatory authorities and with the SEC in the United States. The documents filed with the SEC are available to the public from the SEC’s website at http://www.sec.gov. The documents filed with Canadian securities regulatory authorities are available to the public at http://www.sedar.com.

---

- 14 -

APPROVAL

The Board of Directors of Qwick Media Inc. has approved the disclosure contained in this interim Management Discussion and Analysis.

---

---

Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate

I, Ross Tocher, President and Chief Executive Officer, of Qwick Media Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Qwick Media Inc. (the “issuer”) for the interim period ended June 30, 2014.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Date: August 27, 2014
/s/ Ross Tocher
Ross Tocher
President and Chief Executive Officer

NOTE TO READER
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of
i)	controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
ii)	a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

1

---

---

Form 52-109FV2
Certification of Interim Filings
Venture Issuer Basic Certificate

I, Kevin R. Kortje, Chief Financial Officer, of Qwick Media Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Qwick Media Inc. (the “issuer”) for the interim period ended June 30, 2014.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Date: August 27, 2014
/s/ Kevin Kortje
Kevin R. Kortje
Chief Financial Officer

NOTE TO READER
In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of
i)	controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
ii)	a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

1

---