Report of Foreign Issuer (6-k)

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 November, 2014

Commission File Number: 000-32981

QWICK MEDIA INC.

(Translation of registrant's name into English)

8652 Commerce Court, Burnaby, BC V5A 4N6

(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 S 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.

SUBMITTED HEREWITH

Exhibits

99.1 Consolidated Financial Statements for the Three & Nine Months Ended September 30, 2014 and 2013

99.2 Management’s Discussion and Analysis for the Three & Nine Months Ended September 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

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.

Date: December 2, 2014

QWICK MEDIA INC.

(Registrant)

By: /s/ Ross Tocher

Ross J. Tocher

President and Chief Executive Officer

QWICK MEDIA INC.

CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 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 September 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.

CONSOLIDATED BALANCE SHEETS

(Stated in U.S. Dollars)

SEPTEMBER 30,				DECEMBER 31,
	2014			2013
	(Unaudited)
ASSETS

Current
Cash	$	161,120		$	241,327
Receivables		196,464			182,262
Loan receivable		32,607			–
Inventory		218,393			230,593
Prepaid expenses		36,927			2,161
Total Current Assets		645,511			656,343

Property and Equipment		13,722			37,077

Total Assets	$	659,233		$	693,420


LIABILITIES

Current
Accounts payable and accrued liabilities	$	153,998		$	124,805
Due to related parties		6,154,572			4,529,913
Accrued dividends payable		581,715			430,035
Total Liabilities		6,890,285			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 September 30, 2014 and December 31, 2013		71,128			71,128

Additional Paid-in Capital		4,872,776			4,835,551

Deficit Accumulated During The Development Stage		(13,202,901	)		(11,325,957	)
Total Stockholders’ Deficiency		(8,258,997	)		(6,419,278	)

Total Liabilities and Stockholders’ Deficiency	$	659,233		$	693,420

Going Concern, Commitments and Contractual Obligations (Notes 1 and 9)

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

QWICK MEDIA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Stated in U.S. Dollars)

(Unaudited)

	THREE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2014			2013			2014			2013

Revenue	$	4,936		$	24,369		$	47,129		$	111,681


Expenses
Advertising and promotion		5,578			10,669			8,171			13,152
Amortization		10,025			10,866			23,927			32,904
Consulting fees		8,637			717			46,273			21,880
Filing Fees		(372	)		394			4,606			7,783
Foreign Exchange		(3,911	)		(2,233	)		108,175			73,309
Interest and bank charges		52,490			52,252			156,355			155,456
Inventory costs		79			−			33,019			−
Management fees		71,628			57,810			213,894			173,802
Office and administrative		52,558			55,808			189,813			188,517
Professional fees		19,939			20,833			106,943			101,032
Rent		45,500			55,095			162,433			161,975
Salaries, wages and benefits		260,157			282,115			791,663			887,936
Travel		45,887			4,771			78,801			59,427
Total Expenses		568,195			549,097			1,924,073			1,877,173

Net Loss For The Period	$	(563,259	)	$	(524,728	)	$	(1,876,944	)	$	(1,765,492	)

Basic And Diluted Loss Per Common Share	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.02	)


Weighted Average Number Of Common Shares Outstanding		71,128,456			71,128,456			71,128,456			71,128,456

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

QWICK MEDIA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in U.S. Dollars)

(Unaudited)

	NINE MONTHS ENDED SEPTEMBER 30,
	2014			2013

Cash Flows (Used In) Provided By:
Operating Activities
Net loss for the period	$	(1,876,944	)	$	(1,765,492	)

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		23,927			32,904
Stock-based compensation		37,225			9,178

Changes in operating assets and liabilities:
Receivables		(14,202	)		(38,998	)
Prepaid expenses		(34,766	)		30
Inventory		12,200			(80,698	)
Due to related parties		1,624,659			1,774,137
Accrued dividends payable		151,680			151,679
Accounts payable and accrued liabilities		29,193			(68,394	)
Net cash provided by (used in) operating activities		(47,028	)		14,346

Investing Activities
Loan receivable		(32,607	)		–
Purchase of property and equipment		(572	)		−
Net cash (used in) investing activities		(33,179	)		−

Net (decrease) increase in cash		(80,207	)		14,346

Cash, Beginning Of Period		241,327			143,280

Cash, End Of Period	$	161,120		$	157,626



Supplemental Disclosure of Cash Flow Information
Interest paid	$	−		$	−
Income taxes paid	$	−		$	−

QWICK MEDIA INC.

Notes to the Consolidated Financial Statements

NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(Unaudited)

(Stated in U.S. Dollars)

1. BASIS OF PRESENTATION

The unaudited interim consolidated financial statements as of September 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 nine months ended September 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.”

QWICK MEDIA INC.

Notes to the Consolidated Financial Statements

NINE MONTHS ENDED SEPTEMBER 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) 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 $13,202,901 for the period from October 5, 2000 (date of inception) to September 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.

QWICK MEDIA INC.

Notes to the Consolidated Financial Statements

NINE MONTHS ENDED SEPTEMBER 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.

The Company is considered to be in the development stage. During the nine months ended September 30, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.

3. LOAN RECEIVABLE

During the nine months ended September 30, 2014, the Company advanced $32,607 pursuant to a loan agreement entered into on June 25, 2014. Pursuant to the loan agreement the Company will advance up to CAD$60,000. The loan will bear interest at 12% per annum and is due on July 1, 2015.

4. INVENTORY

	September 30, 2014		December 31, 2013

Computers	$	38,857	$	45,382
Monitors		97,538		114,126
Printers		13,597		15,880
Parts and enclosures		27,506		31,426
General		40,895		23,779
	$	218,393	$	230,593

5. PROPERTY AND EQUIPMENT

	September 30, 2014
	Cost		Accumulated Amortization		Net Book Value

Computer hardware	$	38,713	$	37,688	$	1,025
Computer software		1,896		1,505		391
Office furniture		21,012		17,734		3,278
Equipment		41,882		32,854		9,028
Leasehold improvements		47,628		47,628		-

	$	151,131	$	137,409	$	13,722

	December 31, 2013
	Cost		Accumulated Amortization		Net Book 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.

Notes to the Consolidated Financial Statements

NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(Unaudited)

(Stated in U.S. Dollars)

6. RELATED PARTY TRANSACTIONS AND AMOUNTS OWING

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

a)	The Company paid management fees of $172,768 (2013 - $173,802) to companies controlled by officers for the nine months ended September 30, 2014.

b)	The Company recorded stock-based compensation of $37,216 (2013 - $3,972) as consulting fees incurred to directors and officers for the nine months ended September 30, 2014.

As of September 30, 2014, amounts owing to related parties consists of $6,154,572 (December 31, 2013 - $4,534,392) owed to a director and companies controlled by a director. At September 30, 2014, $11,242 (December 31, 2013 - $12,889) owed to a company controlled by an officer and $4,684 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.

7. 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 nine months ended September 30, 2014, the Company recorded stock-based compensation of $37,225 (2013 - $8,366) as consulting expense related to the vesting of stock options. The Company did not grant any stock options during the nine months ended September 30, 2013.

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

	2014	2013
Expected dividend yield	0%	–
Risk-free interest rate	1.74%	–
Expected volatility	68%	–
Expected option life (in years)	5.00	–

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

	Number of Options			Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value

Outstanding, December 31, 2013		2,460,000		$	0.26		1.86	$	−

Granted		600,000		$	0.20
Expired		(435,000	)	$	0.32

Outstanding, September 30, 2014		2,625,000		$	0.23		2.11	$	−

Exercisable, September 30, 2014		2,225,000		$	0.24		1.48	$	−

QWICK MEDIA INC.

Notes to the Consolidated Financial Statements

NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(Unaudited)

(Stated in U.S. Dollars)

7. STOCK OPTIONS (Continued)

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

	Number of Options			Weighted Average Grant Date 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 September 30, 2014		400,000		$	0.11

As at September 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 September 30, 2014, there was $31,172 in total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of 1.58 years.

QWICK MEDIA INC.

Notes to the Consolidated Financial Statements

NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(Unaudited)

(Stated in U.S. Dollars)

8. 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.

8. 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.

9. 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.

10. 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 September 30, 2014, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair values:

SEPTEMBER 30, 2014	FAIR VALUE INPUT LEVEL		HELD-FOR- TRADING		TOTAL CARRYING VALUE		FAIR VALUE
Financial assets
Cash		1	$	161,120	$	161,120	$	161,120

DECEMBER 31, 2013	FAIR VALUE INPUT LEVEL		HELD-FOR- TRADING		TOTAL CARRYING VALUE		FAIR 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.

11. 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.

QWICK MEDIA INC.

(the “Company”)

Management’s Discussion and Analysis of Operations

for the three and nine months ended September 30, 2014

December 1, 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 nine months ended September 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 (“U.S. GAAP”). All dollar figures included herein are quoted in U.S. dollars unless otherwise noted. This discussion and analysis is prepared as of December 1, 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 the date of this MD&A. 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 engaged in the business of developing and customizing software and hardware for use in digital media kiosks through its wholly-owned subsidiaries, Qeyos Ad Systems Inc. (“Qeyos”) and Wuxi Xun Fu Information Technology Co., Ltd. (“Wuxi”). 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 develops interactive proprietary software, know-how and hardware. Its 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 provides technical and creative guidance for coders in Wuxi, China. The Company integrates hardware into custom designed enclosures to produce the physical digital kiosk product that acts as a point of service terminal for end users. Hardware manufacturing and development is managed from Nevada, Taiwan and Shenzhen, China, which is located thirty minutes west of Hong Kong.

OVERALL PERFORMANCE

The Company has had limited revenue over the past three fiscal years, but has also incurred increased expenses to fund final development of its proprietary software and deployment of the results of that work on a proof of technology pilot program that was undertaken at various locations of a large U.S. based retailer between August 2012 and April 2014. This pilot program was 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 addition, the Company, having reached successful completion of its technology pilot program in the U.S., must identify new opportunities to enter negotiations for definitive agreements that are expected to enable the Company to monetize such opportunities for advertisers to utilize its proprietary interactive touch screen technologies in the large retailer arena. While the Company has taken steps to reduce the size of its internal sales staff, it intends to maintain its current number of programming employees to oversee sales deployment of its 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 offerings, and the overall state of financial markets generally. The Company’s future is also dependent upon its ability to obtain adequate financing and to attain future profitable operations. Management has plans to seek additional capital financing through debt or equity financings. 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.

The Company has received monthly funding of its working capital requirements from its largest shareholder, President and CEO, 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 at September 30, 2014, the Company had a working capital deficiency of $6,244,774 (December 31, 2013: $4,428,410), cash of $161,120 (December 31, 2013: $241,327) and accumulated losses of $13,202,901 for the period from inception on October 5, 2000 to September 30, 2014 (inception to December 31, 2013: $11,325,957). Management expects the Company to incur further losses in the development of its business, which casts substantial doubt on the Company’s ability to continue as a going concern.

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 additional funds will need to be raised through equity or debt financings, including, if necessary, additional shareholder loans, to fund product development and ongoing operations. Although the Company has secured financing and shareholder loans in the past, there is no assurance that the Company will be able to do so in the future on terms that are favorable to the Company or at all. The Company may have difficulty raising needed funds due to a number of uncertainties and risk factors, including uncertainty with respect to credit markets and any general economic downturn. See “Results of Operations”, “Liquidity and Capital Resources” and “Risk Factors”.

From August 2012 to April 2014, the Company was engaged in a proof of technology pilot program involving a large retailer based in the United States, the terms of which were protected by a mutual non-disclosure contract. While the pilot program was undertaken, the Company ceased pursuit of similar business opportunities in the PRC, resulting in a modest reduction of its costs of operations. The Company successfully concluded the pilot program in April 2014. Although no agreement was entered into with the retailer upon completion of the pilot program, the Company intends to use the results of the pilot program to enter into agreements, or undertake new pilot programs, with other potential end-users of its software operating in retailer markets or otherwise. If the Company is unable to enter into, or generate revenue from, such agreements, it could result in a reduction in the Company’s enterprise value, leading to potential dilution for shareholders, particularly if the Company is required to raise additional funds though equity or debt financing, as discussed above.

SUMMARY OF QUARTERLY RESULTS

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

	September 30, 2014 ($)	June 30, 2014 ($)	March 31, 2014 ($)	December 31, 2013 ($)
Revenues	4,936	8,051	34,142	(1,128)(1)
Operating expenses	568,195	691,407	664,470	880,209
Net loss	563,259	683,356	630,328	881,337
Loss per Share (basic and diluted)	0.01	0.01	0.01	0.01
	September 30, 2013 ($)	June 30, 2013 ($)	March 31, 2013 ($)	December 31, 2012 ($)
Revenue	24,368	49,451	37,862	(1,464)(1)
Operating expenses	549,096	645,137	682,939	734,797
Net loss	524,728	595,686	645,077	736,261
Loss per Share (basic and diluted)	0.01	0.01	0.01	0.01

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

DISCUSSION OF OPERATIONS

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

The Company generated $4,936 in revenue during the third quarter of 2014 compared to $24,369 during the third quarter of 2013. The decrease in revenue was attributable to a decrease in fees earned for custom programming of kiosk applications.

The Company’s expenses increased from $549,097 during the third quarter of 2013 to $568,195 during the third quarter of 2014. The increase of $19,098 between periods was mainly attributable to increases in consulting fees (2014: $8,637; 2013: $717); management fees (2014: $71,628; 2013: $57,810); and travel (2014: $45,887; 2013: $4,771), which were offset in part by decreases in advertising and promotion (2014: $5,578; 2013: $10,669), amortization (2014: $10,025; 2013: $10,866); salaries, wages and benefits (2014: $260,157; 2013: $282,115); office and administrative expenses (2014: $52,558; 2013: $55,808); and rent (2014: $45,500; 2013: $55,095).

Net loss increased by $38,531 from $524,728 during the third quarter of 2013 to $563,259 during the third quarter of 2014. The increased net loss was due to decreases in revenue, resulting from the decrease in fees earned for custom programming of kiosk applications, and an increase in certain expenses, related to, among other things, increased travel related to the marketing of the Company’s products.

Nine Months Ended September 30, 2014 Compared to the Nine Months Ended September 30, 2013

The Company’s total assets decreased by $34,187, from $693,420 as at December 31, 2013 to $659,233 as at September 30, 2014, related primarily to a decrease in cash from $241,327 as at December 31, 2013 to $161,120 as at September 30, 2014. The Company’s liabilities also increased during the period, from $5,084,753 as at December 31, 2013 to $6,890,285 as at December 31, 2014. This increase was largely due to an increase of $1,624,659 due to related parties, related to shareholder loans provided by the Company’s President and Chief Executive Officer to further the Company’s operations.

The Company generated $47,129 in revenue during the nine months ended September 30, 2014 compared to $111,681 during the nine months ended September 30, 2013. The decrease in revenue was attributable to a decrease in fees earned for custom programming of kiosk applications.

The Company’s expenses increased from $1,877,173 during the nine months ended September 30, 2013 to $1,924,073 during the nine months ended September 30, 2014. The increase of $46,900 between periods was mainly due to increased expenses attributable to: consulting fees (2014: $46,273; 2013: $21,880); foreign exchange (2014: $108,175; 2013: $73,309); inventory costs (2014: $33,019; 2013: nil); management fees (2014: $213,894; 2013: $173,802); and travel (2014: $78,801; 2013: $59,427. These increased expenses were offset in part by decreased expenses related to: salaries, wages and benefits (2014: $791,663; 2013: $887,936); advertising and promotion (2014: $8,171; 2013: $13,152); filing fees (2014: $4,606; 2013: $7,783); and amortization (2014: $23,927; 2013: $32,904).

Net loss increased by $111,452 between periods, from $1,765,492 during the nine months ended September 30, 2013 to $1,876,944 during the nine months ended September 30, 2014. The increased net loss was due to decreases in revenue, resulting from the decrease in fees earned for custom programming of kiosk applications, and an increase in certain expenses, related to, among other things, increased travel related to the marketing of the Company’s products.

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

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 nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013:

	Nine months ended September 30, 2014 (unaudited) ($)	Nine months ended September 30, 2013 (unaudited) ($)
Advertising and promotion	8,171	13,152
Amortization	23,927	32,904
Consulting fees	46,273	21,880
Filing fees	4,606	7,783
Foreign exchange	108,175	73,309
Interest and bank charges	156,355	155,456
Inventory costs	33,019	−
Management fees	213,894	173,802
Office and administrative	189,813	188,517
Professional fees	106,943	101,032
Rent	162,433	161,975
Salaries, wages and benefits	791,663	887,936
Travel	78,801	59,427
Total Expenses	1,924,073	1,877,173

LIQUIDITY AND CAPITAL RESOURCES

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

	As at September 30, 2014 (unaudited) ($)			December 31, 2013 (audited) ($)
Cash		161,120			241,327
Working capital (deficit)		(6,244,774	)		(4,428,410	)
Total assets		659,233			693,420
Total liabilities		6,890,285			5,084,753

The Company’s working capital decreased from a deficit of $4,428,410 as at December 31, 2013 to a deficit of $6,244,774 as at September 30, 2014, as a result of an increase in amounts due to related parties and accrued dividends payable.

Anticipated Cash Requirements

The Company requires a minimum of approximately $2,000,000 to proceed with its proposed plan of operation over the next twelve months. 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 operation over the next twelve months. As a result, the Company plans to complete equity or debt financings in order to raise the funds necessary to pursue its plan of operation. There is no assurance that it will be successful in raising such needed equity on commercially reasonable terms, or at all.

Operating Activities

Operating activities used cash of $47,028 during the nine months ended September 30, 2014 as compared to providing cash of $14,346 during the nine months ended September 30, 2013. This decrease was primarily due to a decrease in cash due to related parties of $1,774,137 during the nine months ended September 30, 2013 compared to $1,624,659 during the nine months ended September 30, 2014, and an increase in stock based compensation from $9,178 during the nine months ended September 30, 2013 to $37,225 during the nine months ended September 30, 2014.

Investing Activities

During the nine months ended September 30, 2014, the Company used cash of $33,179 in investing activities as compared to $nil during the nine months ended September 30, 2013. The decrease was primarily due to loan receivable of ($32,607).

Financing Activities

During the nine months ended September 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 September 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, President 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 September 30, 2014, $6,154,572 (December 31, 2013: $4,534,392) was owed to Mr. Tocher and companies controlled by him, however, Mr. Tocher has agreed to not make demand on such indebtedness until January 1, 2016. In addition, $11,242 (December 31, 2013 - $12,889) owed to a company controlled by the Company’s Chief Financial Officer, Kevin Kortje, and $4,684 payable to a company controlled by a director of the Company, Mr. Brian Petersen (December 31, 2013: nil), were included in accounts payable and accrued liabilities. The amounts owed are 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.

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 $13,202,901 for the period from inception on October 5, 2000 to September 30, 2014, has a stockholders’ deficit of $8,258,997 as at September 30, 2014, and has minimal revenues. 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 debt or equity financings.

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 September 30, 2014, $6,154,572 (December 31, 2013: $4,534,392)was owed to Mr. Tocher and companies controlled by him, however, Mr. Tocher has agreed to not make demand on such indebtedness until January 1, 2016. In addition, $11,242 (December 31, 2013 - $12,889) owed to KII Management Inc., a company controlled by the Company’s Chief Financial Officer, Mr. Kortje, and $4,684 payable to BK Petersen Holdings Ltd., a company controlled by a director of the Company, Mr. Petersen (December 31, 2013: nil), were included in accounts payable and accrued liabilities. The amounts owed are 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.

During the nine months ended September 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 $172,768 (2013: $173,802), as follows: CDN$90,000 to Greg Dureault Personal Law Corporation, a company controlled by Greg Dureault, Vice President of the Company; CDN$54,000 to BK Petersen Holdings Ltd.; and CDN$45,000 to KII Management Inc. The Company recorded stock-based compensation of $37,216 as consulting fees paid to directors and officers during the nine months ended September 30, 2014 (2013: $3,972).

PROPOSED TRANSACTIONS

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

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 July 2013, 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. The Company is considered to be in the development stage. During the nine months ended September 30, 2014, the Company has elected to early adopt ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.

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 September 30, 2014, we had accumulated $13,202,901 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.

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 $161,120 and working capital deficiency of $6,244,774 as of September 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 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.

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.

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 President and CEO controls a large percentage of our voting securities, he has the ability to influence matters affecting our shareholders.

Our President and CEO, Ross Tocher, beneficially owns approximately 44% of our issued and outstanding voting securities. As a result, he has 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 securities. Because he controls such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated.

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 senior executives, 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 are unable or unwilling to continue in their present positions, we may 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.

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.

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 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 control of the Company.

DISCLOSURE OF OUTSTANDING SHARE DATA

The Company’s common shares are quoted for trading on the OTC Pink Sheets under the symbol “QWIKF”. As of December 1, 2014, the share capital of the Company was as follows:

Class of Shares	Par Value	Number Authorized	Number Issued
Common	$0.001	400,000,000	71,128,456
Class A Preferred Shares	$0.001	100,000,000	2,027,945(1)

(1)	Each Class A preferred share is convertible into one common share at a conversion price of $1.50 per share until July 31, 2015.

Stock Option Plan

As at December 1, 2014, the following stock options were outstanding:

Number Outstanding	Exercise Price	Expiry Date
75,000	$0.60	February 28, 2015
75,000	$0.60	November 30, 2015
1,800,000	$0.20	December 29, 2015
600,000(1)	$0.20	April 30, 2019
2,550,000

(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 each allows 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 Securities and Exchange Commission 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 on SEDAR at http://www.sedar.com.

APPROVAL

The Board of Directors of the Company has approved the disclosure contained in this MD&A.

Form 52-109FV2

Certification of Interim Filings

Venture Issuer Basic Certificate

I, Ross J. 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 September 30, 2014.

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.

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: December 1, 2014

“Ross Tocher”

Ross J. 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

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.

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 September 30, 2014.

Date: December 1, 2014

“Kevin Kortje”

Kevin R. Kortje

Chief Financial Officer

NOTE TO READER

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.

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