UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
  FORM 20-F
 (Mark One)
  o
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
  OR
  x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 2012
  OR
  o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
  o
For the transition period from ____________ to ____________________
  OR
  o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  Date of event requiring this shell company report:
  Commission file number 000-32981
  QWICK MEDIA INC.
 (Exact name of Registrant as specified in its charter)
  Not Applicable
 (Translation of Registrant’s name into English)
  The Cayman Islands
 (Jurisdiction of incorporation or organization)
  3162 Thunderbird Crescent
 Burnaby, British Columbia, Canada V5A 3G4
 (Address of principal executive offices)
  Ross Tocher, President
 Telephone: 778.370.1715
 Facsimile: 778-370-1720
 3162 Thunderbird Crescent
 Burnaby, British Columbia
 Canada, V5A 3G4
 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
  Securities registered or to be registered pursuant to Section 12(b) of the Act.
  Title of each class                                           Name of each exchange on which registered
 Not Applicable                                                                 Not Applicable
  
  Securities registered or to be registered pursuant to Section 12(g) of the Act.
  Common Shares Without Par Value
 (Title of Class)
  Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
  Not Applicable
 (Title of Class)
  Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 71,128,456 common shares as of December 31, 2012
  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
  YES  o  NO  x
  If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
  YES   oNO  x
  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 YES x  NO o
 
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 YES  x NO o
  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
  Large accelerated filer        o                                                                                                                     Accelerated filer                oNon-accelerated filer x
  Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
 U.S. GAAP    x
International Financial Reporting Standards as issued                            o

by the International Accounting Standards Board
Other                        o
  If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
  o  Item 17  o Item 18
  If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
  YES  o  NO  x
 2
 (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
  Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
  YES   o   NO  o
  3
  INTRODUCTION AND INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
  This annual report on Form 20-F contains forward-looking statements. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, or “continue”, or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” commencing on page 7, which may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.  These risks and uncertainties include: a renewed downturn in international economic conditions; any adverse occurrence with respect to the development or marketing of our technology; any adverse occurrence with respect to any of our licensing agreements; our ability to successfully bring products to market; product development or other initiatives by our competitors; fluctuations in the availability and cost of materials required to produce our products; any adverse occurrence with respect to distribution of our products; potential negative financial impact from claims, lawsuits and other legal proceedings or challenges; and other factors beyond our control.
  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of such factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
  In this Form 20-F, unless otherwise stated, references to “we”, “us”, “our” and “Qwick” refer to Qwick Media Inc., a Cayman Islands corporation, and include, where applicable, our wholly-owned subsidiary, Qeyos Ad Systems Inc. (“Qeyos”), a British Columbia corporation, and its wholly-owned subsidiary, Wuxi Xun Fu Information Technology Co., Ltd. (“Wuxi”), a company incorporated under the laws of the People’s Republic of China, through which the majority of our operations are conducted.  Unless otherwise stated, “$” refers to United States dollars.
  4
   PART I
  ITEM 1
Identity of Directors, Senior Management and Advisers
  Not applicable.
  ITEM 2
Offer Statistics and Expected Timetable
  Not applicable.
  ITEM 3
Key Information
  A.           Selected Financial Data
  The following financial data summarizes selected financial data for our company prepared in accordance with United States generally accepted accounting principles (“US GAAP”) for the five fiscal years ended December 31, 2012. The information presented below for the five year period ended December 31, 2012 is derived from our financial statements which were examined by our independent auditor.  The information set forth below should be read in conjunction with our audited financial statements and related notes included in this annual report, and with the information appearing under the heading “Item 5. Operating and Financial Review and Prospects”.  The data is presented in U.S. dollars.
  Selected Financial Data
  (Stated in U.S. Dollars - Calculated in accordance with US GAAP)
  Year ended

Dec. 31, 2012

(audited)


Year ended

Dec. 31, 2011

(audited)


Year ended Dec. 31, 2010

(audited)


Year ended Dec. 31, 2009

(audited)


Year ended Dec. 31, 2008

(audited)Revenue

$
146,619


$
84,185


$
2,718


$
-


$
-Total expenses


3,279,571



3,260,144



1,104,915



351,291



104,412Loss from operations and continuing   operations


3,132,952



3,175,999



1,102,197



351,291



104,412Net loss


3,132,952



3,175,999



1,102,197



351,291



104,412Basic and diluted loss per common share


0.04



0.05



0.02



0.02



0.01Total assets


721,637



1,542,848



1,088,360



1,433



659Total liabilities


2,475,594



245,031



458,101



297,030



650,962Total stockholders’ equity (deficiency)


(3,781,902
)


(730,128
)


630,259



(295,597
)


(650,303
)Capital stock


71,128



71,128



56,102



56,102



12,538Weighted average number of common

shares outstanding


71,128,000



61,940,000



56,102,000



22,312,000



12,538,000Number of common shares outstanding

as at period end


71,128,456



71,128,456



56,102,401



56,102,401



12,538,000Long-term debt


-



-



-



-



-Dividends per common share


-



-



-



-



-
 B.           Capitalization and Indebtedness
  Not applicable.
 5
 C.           Reasons for the Offer and Use of Proceeds
  Not applicable.
  D.           Risk Factors
  Much of the information included in this annual report includes or is based upon estimates, projections or other “forward-looking statements”.  Such forward-looking statements include any projections or estimates made by our company and our management in connection with our business operations.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below.  We caution 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.
  Our common shares are considered speculative.  You should carefully consider the following risks and uncertainties in addition to other information in this annual report in evaluating our company and our business before purchasing any shares of our company.  Our business, operating and financial condition could be harmed due to any of the following risks.
  Risks Relating to our Business
  Our company currently does not generate significant revenue from its operations, and as a result, we face a high risk of business failure.
  We have not generated significant revenues from our operations to date. As of December 31, 2012, we had accumulated $8,679,129 in losses since inception. As a result of the completion of the acquisition of the shares of Qeyos on January 28, 2011, our business is the development of proprietary software, know-how and hardware. Our software and hardware is planned to be used in the digital out-of-home (“DOOH”) media advertising industry. Therefore, our principal business plan is to provide our clients with advertising opportunities through self-service, interactive digital kiosks, interactive window displays, interactive transit displays and other interactive out-of-home advertising displays, such as digital wall-scapes, spectaculars and mall displays that we plan to own and operate in North American advertising market.  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. Our prior deployment of 80 locations in tire dealerships across Canada in cooperation with Yokohama (Canada) Inc. was terminated in or about May 2011. In addition, our pilot deployment of approximately 60 locations in the Greater Vancouver Region for Qwick DealsTM was terminated in or about November 2012. Since then the Company has been working on obtaining alternative high traffic locations, which is on-going and inconclusive to date. 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.
 6
 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”, and under application number 85739426 for the United States trade name, which applications remain pending in Canada and the United States respectively. 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 $143,280 and a working capital deficiency of $1,834,295 as of December 31, 2012.  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.
  In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:
  •           investors’ perception of, and demand for, securities of alternative advertising media companies;
  •           conditions of the U.S. and other capital markets in which we may seek to raise funds;
  •           our future results of operations, financial condition and cash flows;
  •           economic, political and other conditions in North America; and
  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.
  Qeyos was incorporated and began software development operations in January 2009.  Qeyos formed Wuxi as a 100% wholly owned foreign subsidiary company to conduct further software development operations in Wuxi, China, in April, 2011.  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.  Given our limited operating history, we may not be able to:
 7
 •           preserve our position in the interactive digital media markets in North America;
  •
manage our emerging relationships with large retailers and micro-broadcast sponsors to secure network broadcast and media management contracts or concession rights contracts and obtain such contracts or concession rights contracts to operate interactive digital media platforms in leading retail chains on commercially advantageous terms or at all;
  •           obtain and retain advertising clients;
  •           manage our emerging relationships with third-party non-advertising content providers;
  •           secure a sufficient amount of low-cost interactive digital kiosks and digital TV screens from our suppliers;
  •           manage our expanding operations, including the integration of any future acquisitions;
  •
increase and diversify our revenue sources by successfully expanding into other complimentary advertising media platforms and replacing third party light box displays to interactive digital frames;
  •           respond to competitive market conditions;
  •           maintain adequate control of our expenses; or
  •           attract, train, motivate and retain qualified personnel.
  If we are unsuccessful in addressing any of these risks, our business may be materially and adversely affected.
  If advertisers or the viewing public do not accept, or lose interest in, our planned 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 remains relatively new and its potential is uncertain. We compete for advertising spending with many forms of more established advertising media, such as television, print media, Internet and other types of out-of-home advertising. 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. Our success also depends on the viewing public continuing to be receptive to our interactive digital media network. Advertisers may elect not to use our services if they believe that consumers are not receptive to our micro-broadcast network or that our network does not provide sufficient value as an effective advertising medium. Likewise, if consumers find some element of our network to be disruptive or intrusive, large retailing companies may decide not to allow us to operate the interactive digital and interactive TV screens in stores or shopping malls or to place our programs in high traffic areas, and advertisers may view our micro-broadcast network as a less attractive advertising medium compared to other alternatives. In that event, advertisers may determine to decline spending on our micro-broadcast network and interactive advertising distribution channels.
  Interactive DOOH advertising is a new concept in North America and in the advertising industry generally. 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.
 8
 We plan to derive the majority of our revenues from the provision of advertising services. If there is a downturn in the advertising industry, we may not be able to diversify our revenue sources and our ability to generate revenues and our results of operations could be materially and adversely affected.
  We do not have any current plans to expand outside our existing sector and enter into more advertising segments to diversify our revenue sources. As a result, if there were a downturn our advertising sector for any reason, we may not be able to diversify our revenue sources and our ability to generate revenues and our results of operations could be materially and adversely affected.
  If we are unable to carry out our plan of operations as specified in proposed contracts or obtain new contracts or concession rights contracts on commercially advantageous terms or at all, we may be unable to maintain or expand our micro-broadcast network coverage and our costs may increase significantly in the future.
  Our ability to generate planned revenues from advertising sales depends largely upon our ability to provide a large interactive network of digital kiosks and digital TV screens that show our programs in high traffic locations of trade-show exhibitions, large retail stores and shopping malls. This, in turn, requires that we obtain micro-broadcast contracts or concession rights contracts to operate our business. There are no assurances that we will be able to carry out our operations in a manner as specified in such future contracts or that the typical terms of such contracts, ranging from three to five years, will be capable of including any automatic renewal provisions.
  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. For example, we have plans to include a variety of news and entertainment content provided by third parties on our micro-broadcast network, without charge, on the condition that their logo is displayed throughout the duration of the provided content. Certain third-party content providers also do not plan to charge us for their content.
  There is no assurance that we will be able to secure these contracts or obtain non-advertising content on satisfactory terms, or at all. In addition, some of the third-party content providers that currently do not charge us for their content may do so in the future. To make our programs more attractive, we must continue to secure contracts with these and other third-party content providers. If we fail to 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.
  If we are unable to attract advertisers to purchase advertising time on our micro-broadcast network, we will be unable to maintain or increase our advertising fees, which could negatively affect our ability to grow our profits.
  The fees we charge advertising clients and agencies for time slots on our network depend on the size and quality of our interactive network and the demand by advertisers for advertising time on our network. We believe advertisers will choose to advertise on our micro-broadcast network in part based on the intended size of our network, the desirability of the locations where we have placed our interactive kiosks and digital TV screens and the attractiveness of our network content. If we fail to establish sufficient critical mass, maintain or increase the number of our interactive displays, solidify our brand name and reputation as a quality interactive digital media provider, or obtain high-quality non-advertising content at commercially reasonable prices, advertisers may be unwilling to purchase time on our micro-broadcast network or to pay the levels of advertising fees we require to grow our profits.
 9
 Including non-advertising content in our programs may be deemed a form of broadcasting under applicable federal law. If so, we may be required to obtain certain approvals and/or authorizations, the failure of which may make us unable to continue to include non-advertising content in our programs, which may cause our revenues to decline and our business and prospects to deteriorate.
  Current laws and regulations in North America may prohibit any entities or individuals from broadcasting non-advertising content through television networks without the prior approval of the relevant authorities. Applicable laws and regulations do not, however, expressly classify the display of non-advertising content through digital media networks such as ours as a form of broadcasting. Although we believe we are in compliance with current laws and regulations in the jurisdictions in which we operate, we cannot assure you that the relevant authorities will reach the same conclusion.
  If we are in fact deemed to be engaged in the broadcasting of non-advertising content, we may be subject to monetary penalties or may be forced to eliminate non-advertising content from the programs included in our micro-broadcast digital TV screens, all of which could have a material and adverse effect on our business operations. In addition, if new laws or regulations are promulgated that characterize our business operations as engaging in the broadcasting of non-advertising content, we would be required to obtain additional approvals and/or authorizations. If we fail to obtain any required approvals and/or authorizations, we may not be able to continue to include non-advertising content in our programs and advertisers may find our network less attractive and be unwilling to purchase advertising time slots on our network, which may cause our revenues to decline and our business and prospects to deteriorate.
  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, 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.
  If we are unable to adapt to changing advertising trends and the technology needs of advertisers and consumers, we will not be able to compete effectively and we will be unable to realize, increase or maintain our revenues which may materially and adversely affect our business prospects and revenues.
  The market for interactive advertising requires us to continuously identify new advertising trends and the technological needs of both advertisers and consumers, which may require us to develop new formats, features and enhancements for our micro-broadcasting advertising network.We must be able to quickly and cost-effectively expand into additional advertising media and platforms beyond interactive kiosks and interactive digital TV screens if advertisers find other media and platforms, such as mobile applications, to be more attractive and cost-effective. In addition, as the advertising industry is highly competitive and fragmented, with many advertising agencies existing and emerging, we must closely monitor the trends in the advertising agency community. We must maintain strong relationships with leading advertising agencies to make certain that we are reaching the leading advertisers and are responsive to the needs of both the advertising agencies and the advertisers.
 10
 We currently plan to play advertisements in our network primarily through Internet VPN broadband and wireless 3G+ networking, and through digital players. In the future, we may be required to incur development and acquisition costs in order to keep pace with new technology needs but we may not have the financial resources necessary to fund and implement future technological innovations or to replace obsolete technology. Further, we may fail to respond to these changing technology needs. For example, if we fail to implement such changes on our network or fail to do so in a timely manner, our competitors or future entrants into the market who take advantage of such initiatives could gain a competitive advantage over us.
  If we cannot succeed in defining, developing and introducing new formats, features and technologies on a timely and cost-effective basis, advertising demand for our advertising network may decrease and we may not be able to compete effectively or attract advertising clients, which would have a material and adverse effect on our business prospects and revenues.
  We face significant competition in the global advertising industry, and if we do not compete successfully against new and existing competitors in North America, we may not realize our plan for implementation, or may lose, our future planned market share, and our intended profitability may be adversely affected.
  We face significant competition in our desire to enter the global advertising industry. We will in the future need to 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. We will seek to compete for overall advertising spending with other alternative advertising media companies, such as the Internet, street furniture, billboard and public transport advertising companies, and with traditional advertising media, such as newspapers, television, magazines and radio. We also seek to compete for advertising dollars spent in the passive display DOOH advertising industry. We must in the future compete with other media platforms of advertising for which we do not have exclusivity, including billboards, light boxes and print media. In addition, we may also face competition from new entrants into interactive advertising in the future.
  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, or 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 makes 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 enter these sectors or further compete against new or existing competitors.
  Our plan of operations is subject to fluctuations in the demand for interactive DOOH advertising, which is affected by, among other things, seasonality and general economic conditions, and a decrease in the demand for interactive DOOH advertising may make it difficult for us to sell our advertising time slots.
  Our planned operations are directly linked to the fortunes of the DOOH advertising industry. Demand for such advertising fluctuates significantly from period to period, is subject to seasonality due to weather conditions, and is particularly susceptible to downturns in the economy, any of which could lead to a reduction in the growth of the DOOH industry in North America.
  A decrease in demand for our planned advertising services may materially and adversely affect our ability to generate revenues, our financial condition and results of operations.
  Demand for our advertising services, and the resulting advertising spending by our clients, may fluctuate due to changes in general economic conditions, and advertising spending typically decreases during periods of economic downturn. Our clients may reduce the money they spend to advertise on our network for a number of reasons, including but not limited to:
 11
 •           a general decline in economic conditions;
  •           a general decline in the number of consumers and consumer spending;
  •           a decline in economic conditions in the particular cities where our networks are located;
  •           a decision to shift advertising expenditures to other available advertising media; and
  •           a decline in advertising spending in general.
  A decrease in demand for advertising media in general and for our advertising services in particular would materially and adversely affect our ability to generate revenues from our advertising services, and our financial condition and results of operations may be adversely affected.
  If we fail to manage our growth effectively, we may not be able to take advantage of market opportunities, execute our expansion strategies or meet the demands of our advertising clients.
  Rapid growth and expansion may place significant strain on our management personnel, systems and resources. We must establish and continue to expand our operations to meet the anticipated demands of advertisers for larger and more diverse network coverage. To accommodate our growth, we anticipate that we will need to implement a variety of new and upgraded operational and financial systems, procedures and controls, including the improvement of our accounting and other internal management systems, all of which require substantial management efforts.
  We also will need to continue to expand, train, manage and motivate our workforce as well as manage our relationships with our prospective clientele and third-party non-advertising content providers. We must add sales and marketing offices and personnel to service relationships with new micro-broadcast sponsors that we will aim to add as part of our network. As we add new interactive kiosks and interactive digital TV screens and other media platforms, we will need to incur greater maintenance costs to maintain our equipment.
  All of these endeavors will require substantial managerial efforts and skill, as well as the incurrence of additional expenditures. We cannot assure the reader that we will be able to manage our growth effectively, and we may not be able to take advantage of market opportunities, execute our expansion strategies or meet the demands of our advertising clients.
  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, including but not limited to risks associated with:
  •           the integration of new operations, services and personnel;
  •           unforeseen or hidden liabilities;
  •           the diversion of resources from our existing business and technology;
  •           our potential inability to generate sufficient revenue to offset new costs;
  •           the expenses of acquisitions; or
  •
the potential loss of or harm to relationships with both employees and advertising clients resulting from our integration of new businesses.
  Any of the potential risks listed above 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.
 12
 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 and China 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 experience seasonality effects due to the seasonality of DOOH and advertising spending in North America. Other factors that may cause our operating results to fluctuate include a deterioration of economic conditions in North America and potential changes to the regulation of the advertising industry in North America, which are discussed elsewhere in this Form 20-F. If our projected revenues for a particular quarter are lower than we expect, we may be unable to reduce our operating expenses for that quarter by a corresponding amount, which would harm our operating results for that quarter relative to our operating results from other quarters.
  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.
  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 network.
  Risks Related to Regulation of Our Business and to Our Structure
  We may become a passive foreign investment company, or PFIC, which could result in adverse United States federal income tax consequences to U.S. investors.
  Based upon the past and projected composition of our income and valuation of our assets, including goodwill, we believe we were not a passive foreign investment company, or PFIC, for 2012, we do not expect to be a PFIC for 2013, and we do not expect to become one in the future, although there can be no assurance in this regard. If, however, we were a PFIC, such characterization could result in adverse United States federal income tax consequences to you if you are a U.S. investor. For example, if we are a PFIC, our U.S. investors will become subject to increased tax liabilities under United States federal income tax laws and regulations and will become subject to burdensome reporting requirements. The determination of whether or not we are a PFIC is made on an annual basis and will depend on the composition of our income and assets from time to time. Specifically, we will be classified as a PFIC for United States federal income tax purposes if either: (i) 75% or more of our gross income in a taxable year is passive income, or (ii) the average percentage of our assets by value in a taxable year which produce or are held for the production of passive income (which includes cash) is at least 50%. The calculation of the value of our assets will be based, in part, on the then market value of our common shares, which is subject to change. We cannot assure you that we will not be a PFIC for 2013 or any future taxable year. For more information on PFICs, see “Item 10.E Additional Information — Passive Foreign Investment Corporation”.
 13
 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, governments may revoke a violator’s license for advertising business operations.
  As an interactive advertising service provider, we are obligated under laws and regulations to monitor the advertising content that is shown on our network for compliance with applicable law. In general, the advertisements shown on our network have previously been broadcast over public television networks and have been subjected to internal review and verification of such networks. We are still required to independently review and verify these advertisements for content compliance before displaying the advertisements. In addition, if a special government review is required for certain product advertisements before they are shown to the public, we are obligated to confirm that such review has been performed and approval has been obtained. In addition, for advertising content related to certain types of products and services, such as food products, alcohol, cosmetics, pharmaceuticals and medical procedures, we are required to confirm that the advertisers have obtained requisite government approvals, including the advertising client’s operating qualifications, proof of quality inspection of the advertised products, government pre-approval of the contents of the advertisement and filing with the local authorities.
  We endeavor to comply with such requirements, 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.
  If the PRC government finds that the agreements that establish the structure for operating our business in the PRC do not comply with PRC governmental restrictions on foreign investment we could be subject to severe penalties.
  PRC regulations currently permit 100% foreign ownership of companies that provide software development services.  Penalties for violations include:
  •
revoking the business and operating licenses of our PRC subsidiary;
  •
discontinuing or restricting our PRC subsidiary’s operations;
  •
imposing conditions or requirements with which we or our PRC subsidiary may not be able to comply;
  •
requiring us or our PRC subsidiary to restructure the relevant ownership structure or operations; or
  •
restricting or prohibiting our use of the proceeds of the concurrent private placement to finance our business and operations in China.
  The imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business.
 14
 Risks Related to Doing Business in China
  Adverse changes in the political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our services and have a material adverse effect on our competitive position.
  Our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments of China. The Chinese economy differs from the economies of most developed countries in many respects, including:
  •           the amount of government involvement;
  •           the level of development;
  •           the growth rate;
  •           the control of foreign exchange; and
  •           the allocation of resources.
  While the Chinese economy has experienced significant growth in the past 25 years, growth has been uneven both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may also have a negative effect on us. We cannot predict the future direction of political or economic reforms or the effects such measures may have on our business, financial position or results of operations. Any adverse change in the political or economic conditions in China, including changes in the policies of the PRC government or in laws and regulations in China, could have a material adverse effect on the overall economic growth of China and in the interactive advertising industry. Such developments could have a material adverse effect on our business, lead to reduction in demand for our services and materially and adversely affect our competitive position.
  Uncertainties with respect to the PRC legal system could limit the legal protections available to us or result in substantial costs and the diversion of resources and management attention.
  We conduct our software development business in part through Wuxi, an indirect 100% corporate subsidiary of our company, which is subject to PRC laws and regulations applicable to foreign investment in China and, in particular, laws applicable to wholly-foreign owned companies. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit the legal protections available to us. In addition, any litigation in China may be protracted and result in substantial costs and the diversion of resources and management attention.
  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 expenses of Wuxi may be denominated in the Canadian dollar and renminbi (“RMB”), the official currency of PRC.  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. 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.
 15
 Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited so that we may not be able to successfully hedge our exposure at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.
  Risks Relating to our Management
  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 44.3% 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  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 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.
  As a majority of our directors and officers are residents of countries other than the United States, investors may find it difficult to enforce, within the United States, any judgments obtained against our company, directors and officers.
  A majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our company, officers, and directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.
 16
 Because executive management is free to devote time to other ventures, shareholders may not agree with their allocation of time.
  Our executive officers and directors will devote only that portion of their time which, in their judgment and experience, is reasonably required for the management and operation of our business. Management may have conflicts of interest in allocating management time, services and functions among our company and any present and future ventures which are or may be organized by our officers or directors and/or their affiliates.  Management will not be required to direct us as their sole and exclusive function, and they may have other business interests and engage in other activities in addition to those relating to us. This includes rendering advice or services of any kind to other investors and creating or managing other businesses.
  Our board of directors may change our operating policies and strategies without prior notice to shareholders or shareholder approval and such changes could harm our business and results of operations, and the value of our stock.
  Our board of directors has the authority to modify or waive certain of our current operating policies and strategies without prior notice and without shareholder approval. We cannot predict the effect any changes to our current operating policies and strategies would have on our business, operating results and value of our stock. However, such changes could have a material adverse effect on our financial position or otherwise.
  Our Articles of Association contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.
  Our Articles of Association contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by them in a civil, criminal or administrative action or proceeding to which they are made a party by reason of their being or having been a director or officer of our company.
  Risks Relating to Our Common Shares
  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 shares and we can provide no assurance to investors that a market will develop. If a market for our common shares does not develop, our shareholders may not be able to re-sell the common shares 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 Over-the-Counter Bulletin Board is not an exchange and, because trading of securities on the Over-the-Counter 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 common shares 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.
 17
 Penny stock rules will limit the ability of our shareholders to sell their stock.
  The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
  The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder’s ability to buy and sell our stock.
  In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.
  We do not intend to pay dividends on any investment in the shares of stock of our company.
  We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.
  ITEM 4
Information on the Company
  A.           History and Development
  Name
  Our legal and commercial name is “Qwick Media Inc.”. We are governed by the corporate laws of the Cayman Islands.  Our company is currently a reporting issuer in the Province of British Columbia, Canada. We completed our registration of the U.S. trade-name “Qwick Media”, which was issued on September 20, 2011 under number 4,029,739.
 18
 Principal Office
  Our principal executive offices are located at 3162 Thunderbird Crescent, Burnaby, British Columbia, Canada V5A 3G4. Our telephone number is (778) 370-1715 and our fax number is (778) 370-1720. Our registered office in the Cayman Islands is at 89 Nexus Way, Camana Bay, George Town, Grand Cayman, Cayman Islands KY1-9007.
  Investor inquiries should be directed to us at the address and telephone number of our principal executive offices set forth above. Our website address is http://www.qwickmedia.com. The information contained on our website is not part of this Form 20-F.
  Corporate Information and Important Events
  We were incorporated on October 5, 2000 under the laws of the state of Nevada. Effective June 26, 2006, we re-domiciled from the State of Nevada to the State of Washington. Effective July 7, 2009, we 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, we were issued a certificate of registration by way of continuation by the Registrar of Companies of the Cayman Islands.  As a result of this transaction, we re-domiciled to the Cayman Islands and became a foreign private issuer.
  On October 6, 2009, we received approval from FINRA for the change in our name from “Tuscany Minerals, Ltd.” to “Tuscany Minerals Ltd.” and the re-domiciling of our company from the State of Wyoming to the Cayman Islands.  Effective at the open of trading on October 6, 2009, our new quotation symbol on the OTC Bulletin Board became “TUSMF”.
  On June 22, 2010, we changed our name to “Qwick Media Inc.” with the Registrar of Companies of the Cayman Islands and, on July 15, 2010, we received approval from FINRA for that name change.  The name change was approved by our shareholders at our annual and special meeting held on June 18, 2010.  On March 15, 2011 we changed our trading symbol to “QWIKF”.
  On January 28, 2011 we completed the acquisition of Qeyos Ad Systems Inc. (“Qeyos”), pursuant to which we 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, on the basis of one of our common shares for each share of Qeyos.  We issued all of such shares to five Qeyos shareholders who are non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933, as amended) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933, as amended.
  On the same day, we completed a private placement of 10,000,000 common shares at a price of $0.20 per share for aggregate gross proceeds of $2,000,000. We used the net proceeds from this private placement to fund further capital fund raising and for other general corporate purposes. On the same day, we completed the issuance of 637,140 common shares at a deemed price of $0.20 per share in settlement of $127,428 debt outstanding.
  On April 19, 2011, Qeyos incorporated Wuxi under the laws of the PRC as a wholly-owned foreign subsidiary of Qeyos, in order to facilitate the conduct of our operations in the PRC. Wuxi currently employees 15 people at an aggregate cost of approximately $20,000 per month, who provide us with software development services.
  In May 2011, we completed a private placement of 3,010,000 common shares at a price of $0.20 per share for gross proceeds of $602,000, and issued 1,378,915 common shares in settlement of outstanding debt in the amount of  $275,783.
  On August 5, 2011, we issued a $1,000,000 secured convertible debenture to R.J. Tocher Holdings Ltd., a company owned by Ross Tocher, our President and Chief Executive Officer. The debenture has a maturity date of July 30, 2015 and bears interest at 10% per annum. Principal and accrued interest on the debenture were to be convertible at any time into common shares at a deemed conversion price of: (i) $0.60 per share until July 30, 2012 (expired); (ii) $1.00 per share between July 31, 2012 and July 30, 2013; and (iii) $1.50 per share between July 31, 2013 and the maturity date.In November 2011, we amended the terms of the debenture to allow for the conversion of the principal amount of the debenture, and accrued interest thereon, into Class A Shares (as defined below) rather than common shares.  Immediately upon the effectiveness of the amendment, R.J. Tocher Holdings Ltd. determined to convert the principal amount of the debenture, and accrued interest thereon, into an aggregate of 1,027,945 Class A Shares, at a conversion price of $1.00 per Class A Share.
 19
 Effective November 15, 2011, we created one series of the one hundred million (100,000,000) preferred shares we are authorized to issue, consisting of twenty-five million (25,000,000) shares, to be designated as Class A Preferred Shares (each, a “Class A Share”).  The Class A Shares carry certain rights and restrictions that include redemption and retraction rights.  Each Class A Share may be convertible from time to time into one common share, at the holder’s option, until July 31, 2015 at the following conversion prices:
  (a)            $0.60 per common share if converted at any time up to and including July 31, 2012 (expired);
  (b)           $1.00 per common share if converted at any time between August 1, 2012 and July 31, 2013; and
  (c)            $1.50 per common share if converted at any time between August 1, 2013 and July 31, 2015.
 
 In connection with same, we announced the completion of a private placement to R.J. Tocher Holdings Ltd., consisting of  the issuance of 1,000,000 Class A Shares at a price of $1.00 per Class A Share for gross proceeds of $1,000,000.  The gross proceeds of this financing have been used for general working capital purposes.
  Capital Expenditures
  During the three fiscal years ended December 31, 2012, 2011 and 2010, we did not undertake any capital expenditures.Our planned capital expenditures for the next twelve months are summarized below under the heading “Liquidity and Capital Resources – Anticipated Cash Requirements”.
  Takeover offers
  We are not aware of any indication of any public takeover offers by third parties in respect of our common shares during our last or current financial years.
  B.           Business Overview
  Overview
  We develop interactive proprietary software, know-how and hardware. QwickViewTM touch screen software is built in C# programming language on a Windows® multi-touch platform. Technically, there are no creative boundaries, such as limits imposed by third party software applications, intellectual bottle-neck, platform stability and external technical support. The software design process is standardized and documented so new employees can be readily integrated. The software development architecture team in Burnaby, British Columbia, Canada provides technical and creative guidance for coders in Wuxi, China.  It is the equivalent of artists working with engineers. Due to time differences our company programs in a 24/7 environment. This strategy leverages production outsourcing and high execution speed.  QwickViewTM hardware is the physical product that acts as a point of service terminal for end users. The hardware consists of a skeleton platform, chassis (outside enclosure) and integrated PC equipment and peripherals.  Hardware development is presently managed from Burnaby, British Columbia, and outsourced to certain manufacturers in the United States and Taiwan.
  Our software and hardware is used in the DOOH advertising industry. Therefore, our principal business is to provide our clients with advertising opportunities through self-service interactive 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 we  plan to operate in North American advertising markets. Our software development business in China is conducted via Wuxi, an indirect 100% subsidiary of our company.
 20
 Our touch-screen interactive kiosks support mobile apps and iPhone/smart phone integration, while enabling shoppers to access relevant information and self-service their needs through interactive directories, wayfinding, coupons and other instant, on-demand media. We plan to be a complete digital signage company that builds state-of-the-art interactive kiosks and point-of-sale (“POS”) systems, and provides advertising content and micro-broadcast solutions for private channel digital marketing into high traffic, public spaces; thus, empowering advertisers to target and engage audiences where and when they shop and socialize. We believe this makes target audiences more receptive to the advertisements to be included in our programs and ultimately makes our programs more effective for micro-broadcast sponsors and their advertising clients.  We intend to derive revenues principally by selling advertising time slots on our micro-broadcast network, that we intend to expand across Canada and the United States, to advertising clients and to direct third party advertisers and advertising agencies.
  DOOH advertising in North America has experienced significant growth in recent years. By focusing on interactive advertising, we aim to enable our advertising clients to better target consumers, who we believe are an attractive demographic for advertisers due to their higher-than-average disposable income. We strategically place our interactive kiosks and interactive digital TV screens in high-traffic locations of trade show exhibitions, shopping malls, and in stores of large chain retailers, particularly in areas where there tends to be significant waiting time.
  We combine advertising content with non-advertising content, such as news, weather, sports and comedy clips, in our interactive digital TV screen programs. We believe this makes consumers more receptive to the advertisements included in our programs and ultimately makes our programs more effective for our advertising clients. Our standard programs include, for each advertiser, six 15-second spots of advertising content during each hour of programming and are shown for approximately 10 hours per day.
  We plan to derive revenues principally by selling advertising time slots on our network to our advertising clients, including both direct advertisers and advertising agencies.
  We believe our services provide the following significant benefits to our network micro-broadcast network sponsors and advertisers:
  •
Enhanced Consumer Experience.   The content provided in our interactive digital media network provides consumers with an entertaining means to pass time while obtaining relevant information they desire in real time. Our ads engage users by stimulating their curiosity and driving their fingertips onto our touch screen that in turn logs measurable data for evaluating the effectiveness of content engagement. It is a measurable traffic virtual real estate.  Besides reward marketing principles, another powerful driver is pleasure through entertainment. Celebrities and their lifestyles are a public commodity. Popular culture news industry conditions users into repetitive consumption through familiarity. Entertainment news is an important engagement mechanism.  We believe our digital media network enhances the consumer experience and adds value to the interactive services or products provided by our micro-broadcast network.
  •
Incremental Revenue Opportunity. Under our cooperative services contracts, we offer micro-broadcast sponsors a share in revenue as a means of cost recovery in exchange for the concession rights to play our programs in their venues. Through these contractual arrangements, individual micro-broadcast sponsors can deploy a nationwide interactive digital media network to provide high-quality media content to their consumers and their affiliated marketing clientele, who desire to convey their own advertising message to such consumers, under cooperative marketing programs.
  •
Effective Means of Managing Consumer Traffic.   Some micro-broadcast sponsors and advertisers also utilize non-advertising time of our network to provide other information to consumers. The ability to provide timely information to consumers allows our interactive digital media network to aid in the management of consumer traffic.  The media broadcasting industry is driven by advertising dollars through ad placement in TV, radio, newsprint and Internet mediums. The reason for explosive Internet growth is the non-interruptive mechanism for delivering user driven on-demand content with targeted ads. Traditional media does not provide this instant freedom of interactivity and thus has appeared to experience loss of audience to alternative interactive digital mediums that converges content consumption through a digital format.
 21
 •
Cost-Effective Media Service.   The large scale of our planned network allows us to provide our network sponsors with a wide range of digital media programs on a cost-effective basis which may otherwise be costly and time consuming for each sponsor to procure individually.
  We intend to build separate sales teams to focus on developing the client base for different advertising media platforms while promoting the broader value that the overall network and these platforms collectively provide to our advertising clients. We believe the creation of new advertising media platforms within the interactive advertising sector and our broadened service offerings will provide our advertising clients with more choices in selecting and combining different interactive advertising platforms that best suit their advertising needs and preferences. It will also expand the reach of the advertisements shown on our network and allow us to cross-sell different advertising services. We believe that the strong presence that we have built through our existing network provides us with significant opportunities to launch new platforms and services and test new initiatives in a reliable and cost-effective manner. Ultimately, we anticipate these efforts will increase the revenue we can generate.
  Our goal is to extend our competitive position as an interactive digital media network provider in North America and China and to expand into other areas of the DOOH advertising sector. Accomplishing this goal requires the successful implementation of the following strategies:
  •
We plan to broaden our service offerings through new micro-broadcast advertising media platforms within the DOOH advertising sector, in particular by offering a interactive digital media replacement for traditional light box displays to passive digital frames and establish a micro-broadcast platform, to broaden consumer reach, enhance the effectiveness of advertisements and provide our micro-broadcast sponsors and their advertising clients with more choices in selecting and combining different interactive advertising platforms according to their advertising needs and preferences;
  •
We plan to grow our leading technology into a market position and revenues by building local sales teams in additional cities to increase our sales of advertising time slots and utilization rate in these cities and increase the number of interactive digital TV screens and other interactive displays in our emerging micro-broadcast network opportunities;
  •
We will continue to secure high quality non-advertising content to make audiences more receptive to advertisements played on our network and ultimately bring greater value to our business in a cost-effective manner;
  •
We will continue to promote our brand name and the value of interactive DOOH advertising through proactive sales and marketing efforts to solidify and broaden our customer base and our emerging relationships with large retail chains and content providers; and
  •
We plan to pursue strategic relationships and acquisitions that expand our business within the DOOH advertising industry, although we are not currently negotiating any material acquisitions.
  We intend to leverage our leading market position to maintain our market leadership, enhance our mass appeal to our advertising clients and increase our fees and revenues. To achieve this goal, we intend to:
  •
Build Local Sales Teams in Major Additional Cities and Increase our Sales and Utilization Rate of Advertising Time Slots in these Cities.  Currently, we have offices in Vancouver and Burnaby, Canada and in Beijing, Wuxi and Shenzhen China where we maintain our business development and sales network. We plan to build local sales teams in several additional cities associated with key locations of micro-broadcast sponsors to strengthen our sales efforts in these cities, further develop relationships with local advertisers, increase our direct sales of advertising time slots in these cities and improve our utilization rate, or the percentage of available time slots that we sell to advertisers.
  •
Increase the Number of Locations Our Emerging Network.  We intend to enter into further cooperative services contracts for concession rights to increase the number of locations that we can place or operate interactive kiosks and interactive digital TV screens or other displays in order to broaden the viewer reach of the advertisements shown on our network and enhance our current position in many of the most desirable locations.
 22
 We will continue to evaluate further opportunities in the future to obtain new opportunities that are not currently in our network. This will help to ensure that our network continues to include the most significant venues in North America and in China. While the rates of advertising fees that we charge our advertising clients are not directly tied to the number of locations in our network, we believe that expanding our network will extend our audience reach, make our digital media network more attractive to national advertisers and ultimately lead to higher fee rates and increased revenues.
  We will continue to promote our brand name through proactive sales and marketing efforts. We believe this will allow us to broaden our client base as well as strengthen our relationships with micro-broadcast sponsors, advertisers
  We plan to pursue strategic relationships and acquisitions that expand our business within the interactive advertising industry. We plan to identify, execute and integrate acquisitions to build scale and enter into complementary businesses and new media platforms that enhance our interactive advertising network and reach. We plan to evaluate strategic acquisition opportunities that we believe will further enhance our market leadership position while also providing an attractive return on investment. When evaluating potential acquisition targets, we will consider factors such as market position, growth and earnings prospects and ease of integration. We are not currently negotiating any material acquisitions.
  Pricing and Customer Service
  The list prices of our advertising services vary by the size of micro-broadcast network and duration of venue in which the advertisement is placed, the demand of advertising services for each sponsor and advertiser, as well as by the duration of the time slot purchased and the duration of the advertising campaign. Prices for the aggregate time slots on our network to be purchased by each advertiser or advertising agency client are planned to be obtained under sales contracts, perhaps at a discount to our list prices.
  Our customer service team is responsible for compiling monitoring reports to clients as evidence that their advertisements are played on our network within one week after launching the advertising campaign. We also provide our advertising clients with weekly reports prepared by third parties, which verify the proper functioning of our displays and the proper dissemination of the advertisement by conducting on-site evaluations and polls to analyze the effectiveness of and public reaction to the advertisement. In addition, our network sponsors and advertisers are also intended to be actively involved in the monitoring process and our analytics back-end reporting systems can provide our clients with reports of proof of performance certifying the playing of the advertisements and relevant consumer engagement.
  Competition
  We compete primarily with several different groups of competitors:
  •
advertising companies that operate advertising networks, such as CBSDecaux, and DOOH short of the interactive sector, such as Focus Media, Captivate, ClearChannel and others;
  •
in-house advertising companies of large retail chains that may operate their own advertising networks; and
  •
other advertising media companies, such as Internet, street furniture displays, billboard and public transport advertising companies, and with traditional advertising media, such as newspapers, television, magazines and radio, some of which may advertise in the large chain retail locations in which we have exclusive contract rights to operate digital TV screens.
 23
 We compete for advertising clients primarily on the basis of network size and coverage, location, price, quality of our programs, the range of services that we offer and our brand recognition. Many of our competitors have a variety of competitive advantages over us, such as larger resources. Many competitors have a longer history than us in the DOOH advertising industry and may have a more extensive network that extends beyond the interactive sector and offers a more diversified portfolio. This may make their network more attractive to advertising clients and less reliant on a particular advertising sector. In addition, we may also face competition from new entrants into the interactive advertising sector in the future.
  Sales and Marketing
  We provide a number of services in connection with each client’s advertising campaign. We rely on our experienced sales team to assist advertisers in structuring advertising campaigns by analyzing advertisers’ target audiences and consumer products and services. We conduct market research, consumer surveys, demographic analysis and other advertising industry research for internal use to help our advertisers to create effective advertisements. We actively attend various public relation events to promote our brand image and the value of interactive digital advertising. We also market our advertising services by displaying our name and logo on all of our interactive kiosks and digital TV screens.
  We engage third-party agencies to help source advertising clients. Agency fees are calculated based on a pre-set percentage of revenues generated from the clients introduced to us by the agencies.
  Employees
  As of April 30, 2013 we had 16 employees working in Burnaby, British Columbia, and an additional 12 employees working in Wuxi, PRC. Additionally, we have engaged five contractors, three of whom work in Burnaby, British Columbia, and two of whom work in Las Vegas, Nevada.
  In addition, we enter into standard confidentiality agreements with all of our employees, including officers and managers, and contractors that prohibit any of them from disclosing confidential information obtained during their employment or engagement with us. Furthermore, the confidentiality agreements include a covenant that prohibits all employees from engaging in any activities that compete with our business within three years after the period of their employment with us.
  None of our employees is a member of a labor union and we consider our relationship with our employees to be good.
  Intellectual Property
  To protect our brand and other intellectual property, we rely on a combination of trademark and trade secret laws as well as confidentiality agreements with our employees, sales agents, contractors and others.
  We do not hold any patents or copyrights and cannot be certain that our efforts to protect our intellectual property rights will be adequate or that third parties will not infringe or misappropriate these rights.
  Legal Proceedings
  We are currently not a party to any material legal proceeding. From time to time, however, we may be subject to various claims and legal actions arising in the ordinary course of business.
  Regulation
  Advertising regulation comprises laws and rules defining the ways in which products can be advertised in a particular region. Rules can define a wide number of different aspects, such as placement, timing, and content. In the United States, false advertising and health-related ads are regulated the most. Many communities have their own rules, particularly for outdoor advertising.
 24
 Self Regulation Practices - Code of Advertising Practices in Digital Media
  We are committed to delivering our advertiser’s message to the consumer. This role in the arena of public discourse requires both a defense of free speech and sensitivity to contemporary standards and concerns. We recognize the need to balance these demands and therefore adheres to the following code of advertising practices:
  •
Establish exclusionary zones which prohibit advertisements of all products illegal for sale to minors that are intended to be read from or within 1000 feet of established places of worship, primary and secondary schools or playgrounds.
  •
Continue to assert the right to reject creative content that is misleading, sexually explicit, overly suggestive, or in any way reflects upon the character, integrity, or standing of any organization or individual.
  •
Continue our traditional commitment at both the national and local levels to display public service messages for worthy community causes.
  •
Encourage diversity of advertised goods and services in all markets.
  Advertising Content in General
  Advertising laws and regulations set forth certain content requirements for advertisements in North America include prohibitions on, among other things, misleading content; or content involving obscenities, superstition, violence, discrimination or infringement of the public interest. Advertisements for anaesthetic, psychotropic, toxic or radioactive drugs are also prohibited. The dissemination of tobacco advertisements via media is also prohibited as well as the display of tobacco advertisements in any waiting lounge, theatre, cinema, conference hall, stadium or other public area. There are also specific restrictions and requirements regarding advertisements that relate to matters such as patented products or processes, pharmaceuticals, medical instruments, agrochemicals, foodstuff, alcohol and cosmetics. In addition, all advertisements relating to pharmaceuticals, medical instruments, agrochemicals and veterinary pharmaceuticals advertised through radio, film, television, newspaper, magazine, out-of-home and other forms of media, together with any other advertisements which are subject to censorship by administrative authorities according to relevant laws and administrative regulations. We do not believe that advertisements containing content subject to restriction or censorship comprise a material portion of the advertisements displayed on our micro-broadcast network.
  Particular to Business in China
  We operate our business in China under a legal regime consisting of the State Council, which is the highest authority of the executive branch of the National People’s Congress, and several ministries and agencies under its authority including the State Administration for Industry and Commerce (“SAIC”).
  Regulations on Foreign Exchange in China
  Foreign exchange regulation in China is primarily governed by the following rules: the Foreign Currency Administration Rules (1996), as amended, or the Exchange Rules; and the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.
  Under the Exchange Rules, the RMB is convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions. Conversion of RMB for capital account items, such as direct investment, loan, security investment and repatriation of investment, however, is still subject to the approval of the SAFE.
  Under the Administration Rules, foreign-invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from the SAFE. Capital investments by foreign-invested enterprises outside of China are also subject to limitations, including approval by the Ministry of Commerce, the SAFE and the State Development and Reform Commission.
 25
 North American Regulation
  Particular to Business in the United States
  Over the past decade, federal and state governments have passed advertising laws that protect consumer privacy and ensure fair and truthful advertising practices online. The Federal Trade Commission Act allows the Federal Trade Commission (the “FTC”) to act in the interest of all consumers to prevent deceptive and unfair acts or practices. In interpreting Section 5 of the Act, the Commission has determined that a representation, omission or practice is deceptive if it is likely to mislead consumers and affect consumers’ behavior or decisions about the product or service.  In addition, an act or practice is unfair if the injury it causes, or is likely to cause, is substantial, not outweighed by other benefits and not reasonably avoidable.
  The FTC Act prohibits unfair or deceptive advertising in any medium. That is, advertising must tell the truth and not mislead consumers. A claim can be misleading if relevant information is left out or if the claim implies something that’s not true.  Sellers are responsible for claims they make about their products and services. Third parties - such as advertising agencies also may be liable for making or disseminating deceptive representations if they participate in the preparation or distribution of the advertising, or know about the deceptive claims. Advertising agencies or website designers are responsible for reviewing the information used to substantiate ad claims. They may not simply rely on an advertiser’s assurance that the claims are substantiated. In determining whether an ad agency should be held liable, the FTC looks at the extent of the agency’s participation in the preparation of the challenged ad, and whether the agency knew or should have known that the ad included false or deceptive claims.
  Billboards are the most common example of commercial speech that can be regulated at the local or state level. Additionally, many of the newer out-of-home advertising methods, such as video displays, are also within a city or state’s jurisdiction.
  We currently do not operate any significant outdoor advertising business, but may in the future do so with interactive outdoor window displays.  The outdoor advertising industry in the United States is subject to governmental regulation at the federal, state and local levels. These regulations may include, among others, restrictions on the construction, repair, maintenance, lighting, upgrading, height, size, spacing and location of and, in some instances, content of advertising copy being displayed on outdoor advertising structures. In addition, the outdoor advertising industry outside of the United States is subject to certain foreign governmental regulation.
  Domestically, in recent years, outdoor advertising has become the subject of targeted state and municipal taxes and fees. These laws may affect prevailing competitive conditions in our markets in a variety of ways. Such laws may reduce our expansion opportunities, or may increase or reduce competitive pressure from other members of the outdoor advertising industry. No assurance can be given that existing or future laws or regulations, and the enforcement thereof, will not materially and adversely affect the outdoor advertising industry. However, we contest laws and regulations that we believe unlawfully restrict our constitutional or other legal rights and may adversely impact the growth of our outdoor advertising business.
  Federal law, principally the Highway Beautification Act of 1965 (the “HBA”), regulates outdoor advertising on Federal — Aid Primary, Interstate and National Highway Systems roads. The HBA requires states to “effectively control” outdoor advertising along these roads, and mandates a state compliance program and state standards regarding size, spacing and lighting. The HBA requires any state or political subdivision that compels the removal of a lawful billboard along a Federal — Aid Primary or Interstate highway to pay just compensation to the billboard owner.
  All states have passed billboard control statutes and regulations at least as restrictive as the federal requirements, including laws requiring the removal of illegal signs at the owner’s expense (and without compensation from the state). Although we believe that the number of our billboards that may be subject to removal as illegal is immaterial, and no state in which we operate has banned billboards entirely, from time to time governments have required us to remove signs and billboards legally erected in accordance with federal, state and local permit requirements and laws. Municipal and county governments generally also have sign controls as part of their zoning laws and building codes.
 26
 Using federal funding for transportation enhancement programs, state governments have purchased and removed billboards for beautification, and may do so again in the future. Under the power of eminent domain, state or municipal governments have laid claim to property and forced the removal of billboards. Under a concept called amortization by which a governmental body asserts that a billboard operator has earned compensation by continued operation over time, local governments have attempted to force removal of legal but nonconforming billboards (i.e., billboards that conformed with applicable zoning regulations when built but which do not conform to current zoning regulations). Although the legality of amortization is questionable, it has been upheld in some instances. Often, municipal and county governments also have sign controls as part of their zoning laws, with some local governments prohibiting construction of new billboards or allowing new construction only to replace existing structures.
  We may introduce deployment of digital billboards that display static digital advertising copy from various advertisers that change every 10 to 15 seconds. We have encountered some existing regulations that restrict or prohibit these types of digital displays but it has not yet materially impacted our digital deployment. Since digital billboards have only recently been developed and introduced into the market on a large scale, however, existing regulations that currently do not apply to them by their terms could be revised to impose greater restrictions. These regulations may impose greater restrictions on digital billboards due to alleged concerns over aesthetics or driver safety.
  In addition, due to their recent development, relatively few large scale studies have been conducted regarding driver safety issues, if any, related to digital billboards. The U.S. Department of Transportation Federal Highway Administration is currently conducting a study on whether the presence of digital billboards along roadways is associated with a reduction of driver safety for the public. If the results of this study include adverse findings, it may result in regulations at the federal or state level that impose greater restrictions on digital billboards.  For accounting purposes, the Share Exchange was treated as a common control transaction at historical values in a manner similar to the pooling of interests method since the chief executive officer and controlling shareholder of our company is also the chief executive officer, director and controlling shareholder of Qeyos Ad Systems Inc.
  Plan of Operation
  Our business model is predicated upon establishing micro-broadcast networks for large chain retailers and institutions that sponsor their networks by paying for the cost of connectivity and/or paying for or leasing hardware, systems, and customized software development comprising such network.  As such we require working capital to fund maintenance of a sufficient amount of inventories of hardware comprising our interactive kiosks and digital screens that are largely produced on a just in time basis, depending on the scope and size of our future micro-broadcast network deployments. Our practice is to require advance deposits of up to fifty percent (50%) of purchase orders received from micro-broadcast sponsors.
  Additional financing will be required.  We have not generated significant revenues from our operations to date. As of December 31, 2012, we had accumulated $8,679,129 in losses since inception.  We require approximately $2,000,000 per year to maintain operations at their current level, to fund the costs attributed to wages, rents, general and administrative expenses.
  C.           Organizational Structure
  On July 7, 2009, we merged with and into our wholly-owned subsidiary, Tuscany Minerals Ltd., a Wyoming company, with the surviving company being Tuscany Minerals Ltd., the Wyoming company. As a result of this transaction, we re-domiciled from the State of Washington to the State of Wyoming. Our bylaws were amended in accordance with the Wyoming Business Corporation Act. A majority of our shareholders approved the merger at our annual and special meeting held on July 2, 2009.
 27
 Upon the completion of the merger of our company with and into our Wyoming subsidiary, we filed an application for continuance with the Registrar of Companies of the Cayman Islands on July 28, 2009 and received a certificate of registration by way of continuation from the Registrar, dated July 28, 2009, on July 29, 2009. In accordance with the resolutions of our shareholders at the meeting held on July 2, 2009, a new memorandum of association and articles of association were adopted in substitution of our existing constating documents, effective July 28, 2009, as a result of the issuance of the certificate of registration. As a result of the continuation, our company became a “foreign private issuer” as defined in Rule 3b-4(c) promulgated under the Securities Exchange Act of 1934.
  On January 28, 2011, we completed the acquisition of Qeyos and, as a result, Qeyos is now a wholly-owned subsidiary of our company.
  On April 19, 2011, Qeyos incorporated Wuxi under the laws of the PRC as a wholly-owned foreign subsidiary of Qeyos, in order to facilitate the conduct of our operations in the PRC.
  The following chart shows our current corporate structure:
 
 
 
  D.           Property, Plant and Equipment
  Our principal executive offices and operating headquarters are located in Burnaby, British Columbia, where we lease approximately 2,000 square meters of office and warehouse space. Our branch offices lease approximately 908 square meters of office space in three other locations, including Vancouver, British Columbia and Wuxi, China.
  ITEM 4A                      Unresolved Staff Comments
  Not applicable.
  ITEM 5
Operating and Financial Review and Prospects
  The information in this section is presented in accordance with United States generally accepted accounting principles.
  A.           Operating Results
  The following summary should be read in conjunction with our audited financial statements for the years ended December 31, 2012, 2011 and 2010, which are included in this annual report on Form 20-F.
 
 28
   Year Ended

December 31, 2012

(audited)


Year Ended

December 31, 2011

(audited)


Year Ended

December 31, 2010

(audited)ExpensesAdvertising and promotion

$
89,126



149,372


$
8,610Amortization


42,918



26,284



320Consulting fees


94,880



277,825



74,136Filing fees


11,730



13,997



838Foreign exchange


(17,380
)


8,252



62,198Interest and bank charges


210,352



56,147



19,669Management fees


256,962



242,326



104,056Office and administrative


428,285



527,438



66,664Professional fees


159,262



98,617



123,878Rent


203,931



178,706



-Salaries, wages and benefits


1,675,220



1,135,857



445,834Software development costs


-



442,579



179,222Travel


124,285



102,744



19,490Total expenses


3,279,571



3,260,144



1,104,915Net Loss


3,132,952



3,175,999



1,102,197
 
 Revenue
  We are a development stage company and have not generated significant revenues from our business operations since inception. Our company does not currently own any property interests.
  Expenses
  Year Ended December 31, 2012 Compared to Year Ended December 31, 2011
  Our operating expenses for the year ended December 31, 2012 were $3,279,571 compared to $3,260,144 for the year ended December 31, 2011. The small increase from fiscal 2011 to fiscal 2012 was mainly due to decreased expenses attributable to: software development costs (fiscal 2012: Nil; fiscal 2011: $442,579); advertising and promotion (fiscal 2012: $89,126; fiscal 2011: 149,372); consulting fees (fiscal 2012: $94,880; fiscal 2011: $277,825); and office and administrative expenses (fiscal 2012: $428,285; fiscal 2011: $527, 438), offset in part by increases in expenses attributable to: salaries, wages and benefits (fiscal 2012: $1,675,220; fiscal 2011: $1,135,857); interest and bank charges (fiscal 2012: $210,352; fiscal 2011: $56,147); management fees (fiscal 2012: $263,447; fiscal 2011: $242,326); professional fees (fiscal 2012: $159,262; fiscal 2011: $98,617); rent (fiscal 2012: $256,962; fiscal 2011: $178,706); and travel expenses (fiscal 2012: $124,285; fiscal 2011: $102,744).
 29
  Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
  Our operating expenses for the year ended December 31, 2011 were $3,260,144 compared to $1,104,915 for the year ended December 31, 2010. This increase in operating expenses of $2,155,229 resulted from a significant expansion of the company’s business development operations during 2011 subsequent to the acquisition of Qeyos Ad Systems Inc., including an increase in management fees from $104,056 in 2010 to $242,326 in 2011. The only component of our expenses that materially decreased in 2011 was foreign exchange, which decreased by $53,946 to $8,252.
  B.           Liquidity and Capital Resources
  Our financial position as at December 31, 2012 and December 31, 2011 and the changes for the years then ended are as follows:
  Working Capital
  As at

December 31, 2012

(audited)


As at

December 31, 2011

(audited)Current assets

$
641,299


$
1,456,422Current liabilities

$
2,475,594


$
245,031Working capital (deficit)

$
(1,834,295
)

$
1,211,391
  Our working capital decreased from $1,211,391 at December 31, 2011 to a deficit of ($1,834,295) at December 31, 2012 as a result of a decrease in cash, accounts receivable and prepaid expenses and an increase in inventory, accounts payable and accrued liabilities, amounts due to related parties and accrued dividends payable..
  Cash Flows
  Year Ended

December 31, 2012

(audited)


Year Ended

December 31, 2011

(audited)Net cash used in operating activities

$
(548,465
)

$
(3,306,543
)Net cash provided from financing activities

$
-


$
3,217,002Net cash used in investing activities

$
(36,830
)

$
(59,732
)(Decrease) increase in cash during the year

$
(585,295
)

$
(149,273
)Cash, beginning of year

$
728,575


$
877,848Cash, end of year

$
143,280


$
728,575
  Operating activities used cash of $548,465 during the year ended December 31, 2012 as compared to $3,306,543 during the year ended December 31, 2011.  The decrease was primarily due to $2,243,364 cash provided by a related party during fiscal 2012 compared to $109,309 during fiscal 2011.
  During the year ended December 31, 2012, our cash used in investing activities decreased over the period ended December 31, 2011 due to decreased purchases of property and equipment.  Financing activities did not provide any cash during fiscal 2012 as compared to $3,217,002 cash provided during fiscal 2011.
 30
 Anticipated Cash Requirements
  We anticipate that we will incur the following expenses over the next twelve months:
 1.
$100,000 in connection with conclusion of proof of technology pilots in the U.S.2.
$100,000 in connection with locating, evaluating and negotiating potential business opportunities; and3.
$1,800,000 for operating expenses;
  We require a minimum of approximately $2,000,000 to proceed with our plan of operation over the next twelve months, exclusive of any acquisition or development costs. This amount may also increase if we are 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.  We have sufficient working capital to enable us to carry out our stated plan of expanding operation over the next twelve months. In addition, we plan to complete private placement sales of our common stock in order to raise the funds necessary to pursue our plan of operation and to fund our working capital in order to enable us to carry out expansion of our operation. There is no assurance that we will be successful in completing any private placement financings.
  Going Concern
  Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual financial statements for the year ended December 31, 2012, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon our achieving a profitable level of operation. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current shareholder, and obtaining debt financing, assuming such financing would be available, will increase our liabilities and future cash commitments.
  C.           Research and Development, Patents and Licenses etc.
  During 2012, we spent $nil on software development activities as compared to $442,579 during 2011 and 179,222 in 2010.
  In 2012, we launched 60 of our new generation of interactive digital media kiosks in the Greater Vancouver Area, British Columbia as a proof of technology pilot in Canada under the trade name “Qwick Deals”. We concluded the pilot on or about November 30th, 2012. We believe these next generation kiosks will equip us with capabilities to provide interactive, measurable, location-based search services to advertisers in the future, which we believe, is of great importance for our next era of growth, we discontinued this initiative for the time being to repurpose available working capital to the ongoing U.S. proof of technology pilots. We are also continually developing related software systems that will enable us to configure and run the content on our planned advertising network in conjunction with mobile communications systems. Once the planned software development is concluded for Qwick Deals we may redeploy such technology in Vancouver, British Columbia, and then plan to expand eastward across Canada in major metropolitan cities.
  D.           Trend Information
  Please refer to the section entitled “Business Overview” for a discussion of the most significant recent trends in our production, sales, costs and selling prices and to this section, “Operating and Financial Review and Prospects”, for a discussion of known trends, uncertainties, demands, commitments or events that we believe are reasonably likely to have a material effect on our net operating revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
  E.           Off-Balance Sheet Arrangements
  We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
 31
  F.           Contractual Obligations
  We do not have any contractual obligations.
  G.           Safe Harbor
  Not applicable.
  ITEM 6
Directors, Senior Management and Employees
  A. Directors and Senior Management
  All directors of our company hold office until the next annual meeting of our shareholders and until such director’s successor is elected and has been qualified, or until such director’s earlier death, resignation or removal. The following table sets forth the names, positions and ages of our executive officers and directors. Our board of directors elects officers and their terms of office are at the discretion of our board of directors.
 
 Name
Position Held
Age
Date First Elected or AppointedRoss J. Tocher
President, Chief Executive Officer and Director
51
September 10, 2008,

January 28, 2011(1)Barb Welsh
Director
60
January 28, 2011Brian Petersen
Director
45
January 28, 2011Kevin R. Kortje
Chief Financial Officer
55
January 28, 2011Gregory G. Dureault
Senior Vice President and

General Counsel
52
January 28, 2011
  (1)
Mr. Tocher has served as our president and chief executive officer since September 10, 2008. He has served as a director since January 28, 2011.
  Ross J. Tocher
  Mr. Tocher has held the positions of President and Chief Executive Officer since he was appointed on September 10, 2008.  Mr. Tocher has over 30 years of experience managing investment strategies for a variety of family holding companies with interests in different industries. He was one of the founders of British Columbia based Pan-Canadian Mortgage Group Inc., specializing in commercial mortgage investment, and a co-founder of British Columbia based Gateway Casinos Ltd. Mr. Tocher was a trustee of the Gateway Casino Income Fund, Gateway Trust and director of Gateway G.P. Prior to January 2001, he was the President of Marsonn Packaging Ltd., a company specializing in the repackaging of foods. He co-founded Brew King Ltd., a British Columbia company, and manufacturer of commercial and consumer wine-making concentrates that achieved worldwide sales as the largest non-commercial wine producer in North America before being sold, in 1997, to Andres Wines Ltd. Previously, Mr. Tocher was also a senior executive with the Tocher family business. Since 1998, he has gained experience as a director of several private equity companies, including British Columbia based Trian Equities Ltd., and he has been the President of Knight Ventures, Ltd., an investment company, and was a founder of InTouch Digital Media Inc. in 2008 to commence business in China.
  Throughout 2011, Mr. Tocher was the principal founding sponsor of the Heroes Hockey ChallengeTM, recruiting TELUS® as presenting sponsor.  Heroes Hockey ChallengeTM is a charitable fundraiser for the PPCLI Foundation, pairing NHL star alumni against Canadian soldiers in a hockey match and at a  gala to raise money for families of wounded/fallen soldiers.
 32
  Barb Welsh
  Ms. Welsh is the President and founder of Welsh Sales Solutions Ltd., which she founded in 2002.  Ms. Welsh has a marketing background and was successful radio sales person in Canada for over 25 years.  From 1971-78 she rose to the top as Senior Account Manager at The Pattison Group, and from 1978-87 as Senior Account Manager at The Rogers Group.  Ms. Welsh achieved top sales person at Western International Communications Ltd. (now Corus Entertainment Inc.) during 1987-2002 where she sold advertising for CKNW, CFMI (Rock101), CFOX, and CKLG along with selling the play by play for the Vancouver Canucks, BC Lions, and the Vancouver Grizzlies.  After selling traditional media for her entire career Ms. Welsh decided to venture into new media and founded Welsh Sales Solutions Ltd., which focuses on new media and the out-of-home video industry.  Welsh Sales Solutions Ltd. has become a leader in its emerging industry and the company’s main focus is to provide revenue for video screens and has had exclusive contracts for many of the most successful out-of-home video networks in Canada and the US.
  Brian Petersen
  Brian spent 16 years with RBC Capital Markets in Toronto, Calgary and Houston where he was involved in all facets of the financing industry gaining significant experience in initial public offerings, public and private equity, public and private debt, trust unit financings and merger & acquisition transactions. Brian has advised on over $20 billion of M&A assignments and nearly $20 billion of equity and fixed income financings, including over $6 billion of income trust IPOs in Canada and the US.
  Brian joined RBC Capital Markets in 1989 after completing a Bachelor of Commerce in Finance at the University of British Columbia.  Brian Petersen was responsible for the Income Trust Group which works with all industry groups in the origination and execution of equity and merger and acquisitions (M&A) mandates in the Income Trust and Royalty Trust sector. The group also provided coverage support for accounts in the income trust sector. Clients included Pengrowth Energy Trust, Bell Nordiq Income Fund, Keyspan Facilities Income Fund and NAL Oil and Gas Trust. Brian is a member of RBC Capital Markets’ New Names Committee. Brian has had extensive experience in investment banking with RBC Capital Markets in Calgary from 1991 to 1999 and in Houston from 1999 to 2002. He has provided advice to corporations in Canada and the U.S. regarding M&A assignments, debt and equity financing, including an integral role in the Income Trust sector where he has been involved in over $11 billion of equity offerings since 1993. He has been active in the structuring and marketing of many IPO’s in the sector. Between 2005 and 2010 Brian Petersen provided his investment banking expertise to Toronto’s Sprott Securities Inc. and he founded and sold to Versant Partners Inc. his interests in a Calgary-based boutique banking firm Petersen Capital Corp.
  At the beginning of 2011, Brian is the recently announced Managing Director - Head of Energy for the investment banking team at Toronto based Stonecap Securities Inc. He is a Chartered Financial Analyst and a member of the Association for Investment Management and Research. He is also a board member of the Canadian Association of Income Funds (CAIF).
  Kevin Kortje
  Mr. Kortje was appointed as our chief financial officer on January 28, 2011.  Mr. Kortje is a Chartered Accountant with over 25 years accounting, taxation and software development experience. As an entrepreneur, he has been involved in the development of many unique software applications in sports, gaming, lotteries, accounting, payroll, stock market analysis, securities portfolio management, financial services and enterprise management. He has extensive experience with electronic payment processing technologies, and has recently been successful in pioneering the launch of a payroll cash card program as an alternative to paper cheque payments for employees of businesses in the temporary labor industry. Since 2002, Mr. Kortje has been the President and founder of Middle Earth Technologies Ltd.
 33
  Gregory G. Dureault
  Mr. Dureault holds Bachelor’s Degrees in Economics and Law from the University of Saskatchewan earned in 1984. Mr. Dureault has been a member of the British Columbia Law Society since 1985 and was a founding partner in three Vancouver law firms - Johannesen Dureault (1985), Sangra & Mollar (1989), O’Neill & Company (1991-1997); and from 2001 to 2008 was a sole practioner affiliated with Catalyst Corporate Finance Lawyers.  In 2008, he joined Ross Tocher to form InTouch Digital Media Inc. to begin conducting a digital media business in China.
  Mr. Dureault has experience as an international corporate and North American securities lawyer.  In addition to his legal experience, Mr. Dureault was founder and president of IBC Investments Limited from 1995 to 2001, where he worked with former Canadian federal Finance Minister, the Honorable Mr. Otto Jelinek, who was a co-director of IBC Investments Limited between 1995 and 2000 based out of Prague, Czech Republic.  IBC was involved in the business of acquiring and licensing certain U.S. patents and developing tracking software and related technology underlying such patented know-how that was offered to the government lottery industry.  Mr. Dureault holds personal experience launching new national televised lottery game show content and pattern recognition lotteries (Czech Republic 1994 - 1996 “TV Nova – Televizni Bingo” as Supervisory Director to Prague based TV Bingo S.R.O., and Dominican Republic – 2001 to current “Super Bingo” as contractor to LEIDSA and Autotote Systems – now Scientific Games Corporation), and point of sales delivery systems over closed intranet systems.
  Relationships
  There are no family relationships between any of the directors or executive officers of our company.
  There are no arrangements or understandings between any of the directors and/or executive officers and any other person pursuant to which that director and/or executive officer was selected.
  B.           Compensation
  Executive Compensation
  The following table sets forth all compensation paid or accrued during the year ended December 31, 2012 to our directors, our Chief Executive Officer, Chief Financial Officer and each of the other most highly compensated executive officers whose total compensation exceeded $150,000 in such fiscal year.
  SUMMARY COMPENSATION TABLEName

and Principal Position
Year
Salary

($)
Bonus

($)
Stock Awards

($)
Option Awards

($)
Non-Equity Incentive Plan Compensation

($)
Change in Pension

Value and Nonqualified Deferred Compensation Earnings

($)
All

Other Compensation

($)
Total

($)Ross J. Tocher

President and Chief Executive Officer and Director (1)
2012
Nil
Nil
Nil
Nil
Nil
Nil
Nil
NilKevin Kortje

Chief Financial Officer(2)
2012
Nil
Nil
Nil
Nil
Nil
Nil
60,000(4)
NilBarb Welsh

Director(3)
2012
Nil
Nil
Nil
Nil
Nil
Nil
Nil
NilBrian Petersen

Director(3)
2012
Nil
Nil
Nil
Nil
Nil
Nil
Nil
NilGregory G. Dureault

Senior Vice President and General Counsel(3)
2012
Nil
Nil
Nil
Nil
Nil
Nil
180,000(5)
Nil
 (1)
Mr. Tocher was appointed as our president and chief executive officer effective September 10, 2008.
  (2)
Mr. Kortje was appointed as our chief financial officer effective January 28, 2011.
  (3)
Ms. Welsh and Mr. Petersen were appointed as directors and Mr. Dureault was appointed as an officer effective January 28, 2011.
  (4)
Mr. Kortje receives consulting fees of $5,000 per month, payable quarterly.  The consulting fees are paid to Mr. Kortje’s personal corporation, KII Management Inc.
  (5)
Mr. Dureault receives consulting fees of $15,000 per month, payable monthly.  The consulting fees are paid to Mr. Dureault’s personal corporation, Greg Dureault Personal Law Corp.
 
 34
  
 C.           Board Practices
  Our directors are re-elected and our officers are re-appointed at the annual general meeting of our shareholders. The last annual general meeting was held on December 16, 2011 and each of our current directors and officers will continue to hold his respective office until his successor is elected or appointed, unless his office is earlier vacated under any of the relevant provisions of our Articles or of the Cayman Island’s Companies Law (Revised) statute.
  There are no service contracts between our company and any of our officers, directors or employees providing for benefits upon termination of employment.
  As of the date of this annual company report, our entire board functions as our audit committee.  The audit committee reviews and approves the scope of the audit procedures employed by our independent auditors, reviews the results of the auditor’s examination, the scope of audits.  The audit committee also recommends the selection of independent auditors. We do not have a remuneration or compensation committee.
  This annual report does not include an attestation report of our company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our company’s independent registered public accounting firm pursuant to rules of the SEC that permit our company to provide only management’s report in this annual report.
  D.           Employees
  As of December 31, 2012, we had  16 employees working on software development in Burnaby, British Columbia, and an additional 12 employees working on software development in Wuxi, PRC. Additionally, we have engaged Mr. Tom Bowan and Mr. Jean Claude Buffington as contractors, working on sales and marketing out of  Las Vegas, Nevada.
 35
 E.           Share Ownership
  As of April 2, 2013, there were 71,128,456 common shares of our company issued and outstanding. Of the shares issued and outstanding on that date, our directors and officers owned the following common shares:
  Name and Address of Beneficial Owner
Position Held With the Company
Amount and Nature of Beneficial Ownership
Percentage of Class(1)Ross J. Tocher

3162 Thunderbird Crescent

Burnaby, BC V6A 3G1
President and Chief Executive Officer
30,325,135(2)
42.46%Kevin Kortje

3162 Thunderbird Crescent

Burnaby, BC V6A 3G1
Chief Financial Officer
300,000(3)
0.4%Barb Welsh

3162 Thunderbird Crescent

Burnaby, BC V6A 3G1
Director
300,000(3)
0.4%Brian Petersen

3162 Thunderbird Crescent

Burnaby, BC V6A 3G1
Director
300,000(3)
0.4%Gregory G. Dureault

3162 Thunderbird Crescent

Burnaby, BC V6A 3G1
Senior Vice President and General Counsel
300,000(3)
0.4%Directors and Executive Officers as a Group (five persons)

31,525,135(6)
44%
  (1)
Percentage based on 71,128,456 shares of common stock outstanding on April 2, 2013.
  (2)
Includes 6,171,021 shares of common stock held by R J Tocher Holdings Ltd., a private company wholly owned by Ross Tocher, 15,594,28 shares of common stock held by Concept Financial Inc., a private company wholly owned by Ross Tocher, and 8,295,486 shares of common stock held by In Touch Digital Media, a private company wholly owned by Ross Tocher.  Also includes options to acquire 300,000 common shares at an exercise price of $0.20 per share until December 29, 2015.  Does not include 2,027,945 Class A preferred shares, which do not carry voting rights.
  (3)
Includes options to acquire 300,000 common shares at an exercise price of $0.20 per share until December 29, 2015.
  (4)
Includes options to acquire 200,000 common shares at an exercise price of $0.20 per share until December 29, 2015.
  (5)
Includes options to acquire 400,000 common shares at an exercise price of $0.20 per share until December 29, 2015.
  (6)
Includes options to acquire 2,100,000 common shares at an exercise price of $0.20 per share until December 29, 2015.
 36
 ITEM 8
Major Shareholders and Related Party Transactions
  A.           Major Shareholders
  As of April 2, 2013, there were 71,128,456 common shares of our company issued and outstanding.  The following table sets forth persons known to us to be the beneficial owner of more than five (5%) of our common shares as of April 2, 2013:
 Name
Number of Common Shares

Beneficially Owned
Percentage(1)
Number of Class A Preferred Shares Beneficially Owned
PercentageRoss J. Tocher(2)

3162 Thunderbird Crescent

Burnaby, BC V6A 3G1
30,325,135
42.46%
2,027,945
100%
  (1)
Based on 71,128,456 common shares issued and outstanding as of April 2, 2013. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as otherwise indicated, we believe that the beneficial owners of the common shares listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.
  (2)
Includes 6,171,021 shares of common stock held by R J Tocher Holdings Ltd., a private company wholly owned by Ross Tocher, 15,594,628 shares of common stock held by Concept Financial Inc., a private company wholly owned by Ross Tocher, and 8,295,486 shares of common stock held by In Touch Digital Media, a private company wholly owned by Ross Tocher.  Also includes options to acquire 300,000 common shares at an exercise price of $0.20 per share until December 29, 2015.
  The voting rights of our major shareholder do not differ from the voting rights of holders of our company’s shares who are not major shareholders.
  As of April 2, 2013, our 71,128,456 issued and outstanding common shares are held as follows:
 
 Location
Number of Shares
Percentage of Shares
Number of Registered Shareholders of RecordCanada
71,050,456
99.89%
166United States
77,000
0.1%
35Australia
1,000
*
1Total
71,128,456
100.00%
202
 *      Less than 1%.
 37
 There are no arrangements known to us, the operation of which may at a subsequent date result in a change in the control of our company.
  B.           Related Party Transactions
  For the period beginning on January 1, 2010 until the present, we 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 that are not otherwise disclosed elsewhere:
  (a)
We paid a management fee of $Nil (2011: Nil; 2010: $63,885) to a company controlled by a former director for the year ended December 31, 2012. The management services were on a month to month basis at $5,000, plus applicable sales tax, in Canadian dollars, per month for management services.
  (b)
As of December 31, 2012, amounts owing from related parties was $Nil. At December 31, 2011, amounts owing from related parties consisted of $158,474 owed from a director and companies controlled by a director, which is included in accounts receivable.  At December 31, 2010, accounts payable included $11,320 owed to a director of our company and to a company controlled by the same director, and $5,209 owed to a company controlled by an officer of our company.
  (c)
Interest expensed relating to notes payable due to a company with a common director amounted to $Nil (2011: $27,945; 2010 - $Nil) for the year ended December 31, 2012.
  (d)
Interest expensed relating to notes payable due to a company with a common officer amounted to $Nil (2011: Nil; 2010: $158) for the year ended December 31, 2012.
  (e)
On November 15, 2011, we completed a private placement with a company owned by our 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.
  (f)
On November 15, 2011, we converted the principal amount of the Debenture (as defined below), and accrued interest thereon, into an aggregate of 1,027,945 Class A Preferred Shares, at a conversion price of $1.00 per Class A Preferred Share.
  (g)
On November 15, 2011, we modified the terms of the Debenture (as defined below) to allow for the conversion of the principal amount of the Debenture, and accrued interest thereon, into Class A Preferred Shares rather than common shares.
  (h)
On August 5, 2011, we closed a private placement with a company owned by our President and Chief Executive Officer, consisting of the issuance of a $1,000,000 secured convertible debenture (the “Debenture”).  The Debenture has a maturity date of July 30, 2015, and bears interest at 10% per annum.  Principal and accrued interest on the Debenture were to be convertible at any time into common shares at a deemed conversion price of:
  (i)
$0.60 per share until July 30, 2012 (expired);
  (ii)
$1.00 per share between July 31, 2012 and July 30, 2013; and
  (iii)
$1.50 per share between July 31, 2013 and the maturity date.
 38
 (i)
On January 28, 2011, Qeyos issued 4,789,935 common shares of Qeyos to a director of Qeyos and our company at a fair value of $0.20 per share to settle debt of $957,787.
  (j)
On January 28, 2011, we completed the acquisition of Qeyos, a company controlled by our president, pursuant to which we 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, on the basis of one common share for each share of Qeyos.
  (k)
On September 30, 2009, we entered into debt settlement agreements with holders of promissory notes and an assignment of debt pursuant to which 21,287,895 shares of our common stock were issued to companies with a common officer to settle debt totaling $319,318.
  These transactions were in the normal course of operations. Neither our company, nor any of our subsidiaries, have made any loans to or for the benefit of any associates, major shareholders, key management personnel, or their families or related companies.
  C.           Interests of Experts and Counsel
  Not applicable.
  ITEM 9
Financial Information
  A.           Financial Statements and Other Financial Information
  Our financial statements are stated in U.S. dollars and are prepared in accordance with US GAAP.  Financial statements included with this annual company report are listed below:
  Audited Annual Financial Statements for Qwick Media Inc. as at December 31, 2012, 2011 and 2010, and for the fiscal years ended December 31, 2012, 2011 and 2010:
  (a)
Independent Auditor’s Report of Morgan LLP dated April 29, 2013 on the Financial Statements as at December 31, 2012, 2011 and 2010;
  (b)
Balance Sheets at December 31, 2012 and 2011;
  (c)
Statements of Operations for the years ended December 31, 2012, 2011 and 2010, and for the period October 5, 2000 (Date of Inception) to December 31, 2012;
  (d)
Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010, and for the period October 5, 2000 (Date of Inception) to December 31, 2012;
  (e)
Statement of Shareholders’ Equity (Deficiency) from October 5, 2000 (Date of Inception) to December 31, 2012; and
  (f)
Notes to Financial Statements.
  Legal Proceedings
  There are no pending legal proceedings to which we are a party or of which any of our property is the subject.  There are no legal proceedings to which any director, officer or affiliate of our company or any associate of any such director, officer or affiliate of our company is a party or has a material interest adverse to us.
 39
 Dividend Distributions
  Holders of our common shares are entitled to receive such dividends as may be declared from time to time by our board, in its discretion, out of funds legally available for that purpose.  We intend to retain future earnings, if any, for use in the operation and expansion of our business and do not intend to pay any cash dividends in the foreseeable future.
  B.           Significant Changes
  None.
  ITEM 10
The Offer and Listing
  A.           Offer and Listing Details
  Our common shares were initially quoted on the OTC Bulletin Board (the “OTC-BB”) under the trading symbol “TUSMF” in October 2001.  On March 15, 2011 we changed our trading symbol to “QWIKF”. Trading in our shares on the OTC-BB has been extremely limited and sporadic. There were no trades of our common shares on the OTC-BB from 2001 until June 2011 and the last trade was on August 9, 2011 at a price of $0.70 per share.
  Our authorized capital consists of 400,000,000 common shares with a par value of $0.001 per share and 100,000,000 preferred shares with a par value of $0.001 per share. Our preferred shares may be issued in one or more series and our directors may fix the number of shares which is to comprise each series and the designation, rights, privileges, restrictions and conditions attaching to each series.
  Holders of our common shares are entitled to vote at all meetings of shareholders, except meetings at which only holders of a specified class of shares are entitled to vote, receive any dividend declared by our company’s board of directors and, subject to the rights, privileges, restrictions and conditions attaching to any other class of shares, receive the remaining property of our company upon dissolution.
  All of our common shares are issued in registered form. The transfer of our common shares is managed by our transfer agent, Pacific Stock Transfer Company, 4045 South Spencer Street, Suite 403, Las Vegas, NV  89119 (Telephone: 702.361.3033; Facsimile:  702.433.1979).
  B.           Plan of Distribution
  Not applicable.
  C.           Markets
  Since October 2001, our common shares have been quoted exclusively on the OTC-BB.  They are currently quoted under the symbol “QWIKF”. Our shares are not currently listed or quoted for trading on any other market or quotation system.
  D.           Selling Shareholders
  Not applicable.
  E.           Dilution
  Not applicable.
  F.           Expenses of the Issue
  Not applicable.
 40
  ITEM 11
Additional Information
  A.           Share Capital
  Not applicable.
  B.           Memorandum and Articles of Association
  The information required by this item is incorporated herein by reference from our prospectus filed on June 9, 2009.
  C.           Material Contracts
  There are no material contracts to which we are a party which were entered into during the last two years immediately preceding April 30, 2013.
  D.           Exchange Controls
  There are no government laws, decrees or regulations in Canada which restrict the export or import of capital or which affect the remittance of dividends, interest or other payments to non-resident holders of our common shares.  Any remittances of dividends to United States residents and to other non-residents are, however, subject to withholding tax.  See “Taxation” below.
  E.           Taxation
  Material Cayman Islands Taxation
  The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties that may be applicable on instruments executed in, or after execution brought within, the jurisdiction of the Cayman Islands. The Cayman Islands are not party to any double tax treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.
  No stamp duties are payable on the issue or transfer of shares. An agreement to transfer shares may be subject to stamp duty if the agreement is executed in the Cayman Islands or, if executed outside the Cayman Islands, subsequently brought into the Cayman Islands. The Stamp Duty Law (2007 Revision), as amended, does not provide who is liable to pay stamp duty on any document but, in practice, the person who seeks to rely on the document in any civil court proceedings will be required to pay stamp duty in order to have the document admitted in evidence.
  Material United States Federal Income Tax Consequences
  The following is a general discussion of certain possible United States Federal foreign income tax matters under current law, generally applicable to a U.S. Holder (as defined below) of our common shares who holds such shares as capital assets.  This discussion does not address all aspects of United States Federal income tax matters and does not address consequences peculiar to persons subject to special provisions of Federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences.  See “Certain Canadian Federal Income Tax Consequences” above.
  The following discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time.  In addition, this discussion does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.  No assurance can be given that the IRS will agree with such statements and conclusions, or will not take, or a court will not adopt, a position contrary to any position taken herein.
 41
 The following discussion is for general information only and is not intended to be, nor should it be construed to be, legal, business or tax advice to any holder or prospective holder of our common shares, and no opinion or representation with respect to the United States Federal income tax consequences to any such holder or prospective holder is made.  Accordingly, holders and prospective holders of common shares are urged to consult their own tax advisors with respect to Federal, state, local, and foreign tax consequences of purchasing, owning and disposing of our common shares.
  U.S. Holders
  As used herein, a “U.S. Holder” includes a holder of less than 10% of our common shares who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof, any entity which is taxable as a corporation for United States tax purposes and any other person or entity whose ownership of our common shares is effectively connected with the conduct of a trade or business in the United States.  A U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals or foreign corporations whose ownership of our common shares is not effectively connected with the conduct of a trade or business in the United States and shareholders who acquired their shares through the exercise of employee stock options or otherwise as compensation.
  Distributions
  The gross amount of a distribution paid to a U.S. Holder will generally be taxable as dividend income to the U.S. Holder for United States federal income tax purposes to the extent paid out of our current or accumulated earnings and profits, as determined under United States federal income tax principles.  Distributions which are taxable dividends and which meet certain requirements will be “qualified dividend income” and taxed to U.S. Holders at a maximum United States federal rate of 15%.  Distributions in excess of our current and accumulated earnings and profits will be treated first as a tax-free return of capital to the extent the U.S. Holder’s tax basis in the common shares and, to the extent in excess of such tax basis, will be treated as a gain from a sale or exchange of such shares.
  Capital Gains
  In general, upon a sale, exchange or other disposition of common shares, a U.S. Holder will generally recognize a capital gain or loss for United States federal income tax purposes in an amount equal to the difference between the amount realized on the sale or other distribution and the U.S. Holder’s adjusted tax basis in such shares.  Such gain or loss will be a United States source gain or loss and will be treated as a long-term capital gain or loss if the U.S. Holder’s holding period of the shares exceeds one year.  If the U.S. Holder is an individual, any capital gain will generally be subject to United States federal income tax at preferential rates if specified minimum holding periods are met.  The deductibility of capital losses is subject to significant limitations.
  Foreign Tax Credit
  A U.S. Holder who pays (or has had withheld from distributions) Canadian income tax with respect to the ownership of our common shares may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld.  Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax.  This election is made on a year-by-year basis and generally applies to all foreign income taxes paid by (or withheld from) the U.S. Holder during that year.  There are significant and complex limitations which apply to the tax credit, among which is an ownership period requirement and the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign source income bears to his or its worldwide taxable income.  In determining the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources.  Complex rules govern this classification process.  The availability of the foreign tax credit and the application of these complex limitations on the tax credit are fact specific and holders and prospective holders of our common shares should consult their own tax advisors regarding their individual circumstances.
 42
 Passive Foreign Investment Corporation
  We do not believe that we are a passive foreign investment corporation (a “PFIC”).  However, since PFIC status depends upon the composition of a company’s income and assets and the market value of its assets and shares from time to time, there is no assurance that we will not be considered a PFIC for any taxable year.  If we were treated as a PFIC for any taxable year during which a U.S. Holder held shares, certain adverse tax consequences could apply to the U.S. Holder. If we are treated as a PFIC for any taxable year, gains recognized by such U.S. Holder on a sale or other disposition of shares would be allocated ratably over the U.S. Holder’s holding period for the shares.  The amount allocated to the taxable year of the sale or other exchange and to any year before we became a PFIC would be taxed as ordinary income.  The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as applicable, and an interest charge would be imposed on the amount allocated to such taxable year.  Further, any distribution in respect of shares in excess of 125% of the average of the annual distributions on shares received by the U.S. Holder during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, would be subject to taxation as described above.  Certain elections may be available to U.S. Holders that may mitigate some of the adverse consequences resulting from PFIC status.  However, regardless of whether such elections are made, dividends paid by a PFIC will not be “qualified dividend income” and will generally be taxed at the higher rates applicable to other items of ordinary income.
  U.S. Holders and prospective holders should consult their own tax advisors regarding the potential application of the PFIC rules to their ownership of our common shares.
  F.           Dividends and Paying Agents
  Not applicable.
  G.           Statements by Experts
  Not applicable.
  H.           Documents on Display
  Documents concerning our company referred to in this annual report may be viewed by appointment during normal business hours at our executive offices at 3162 Thunderbird Crescent, Burnaby, British Columbia, Canada V5A 3G1.
  I.           Subsidiary Information
  Not applicable.  All information regarding our subsidiaries is called for by the body of generally accepted accounting principles used in preparing our financial statements.
  ITEM 12
Quantitative and Qualitative Disclosures About Market Risk
  Not applicable.
  ITEM 13
Description of Securities Other Than Equity Securities
  Not applicable.
 43
 PART II
  ITEM 14
Defaults, Dividend Arrearages and Delinquencies
  Not applicable.
  ITEM 15
Material Modifications to the Rights of Security Holders and Use of Proceeds
  Not applicable.
  ITEM 16
Controls and Procedures Controls and Procedures
  A.  Disclosure Controls and Procedures
 As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our principal executive officer and principal financial officer evaluated our company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this annual report on Form 20-F. Based on this evaluation, these officers concluded that as of the end of the period covered by this Annual Report on Form 20-F, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.  These disclosure controls and procedures include controls and procedures designed to ensure that such information is accumulated and communicated to our company’s management, including our company’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as identified below under the heading “Management’s Report on Internal Control Over Financial Reporting.” Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated. Our company intends to remediate the material weaknesses as set out below.
  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected.
  B.  Management’s Report on Internal Control Over Financial Reporting
  Our company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our company’s internal control over financial reporting is designed to provide reasonable assurance, not absolute assurance, regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that our company’s receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.
  Our management, including our principal executive officer and principal financial officer, conducted an evaluation of the design and operation of our internal control over financial reporting as of December 31, 2012 based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, our management concluded our internal control over financial reporting was not effective as at December 31, 2012 due to the following material weaknesses: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting, financial reporting and corporate governance.
  Our company has taken steps to enhance and improve the design of our internal controls over financial reporting, however these steps were not complete as of December 31, 2012. During the period covered by this annual report on Form 20-F, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, 2013: (i) address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting, financial reporting and corporate governance. Although we had intended to complete these activities in 2012, we were unable to complete them so intend to focus on them in 2013. The remediation efforts set out above are largely dependent upon our company securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
  Our internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
  C. Changes in Internal Controls Over Financial Reporting
  There were no changes in internal controls over financial reporting during the year ended December 31, 2012.  However, as a result of the evaluation of our internal control over financial reporting as of December 31, 2012, conducted by our principal executive officer and principal financial officer, we expect to make such changes in the year ended December 31, 2013.
  44
 ITEM 15T                      Controls and Procedures
  Not applicable.
  ITEM 17
[Reserved]
  ITEM 16A                      Audit Committee Financial Expert
  Our board of directors has determined that Brian Peterson qualifies as an “audit committee financial expert” as defined in Item 16A(b) of Form 20-F, and is “independent” as the term is defined by Nasdaq Marketplace Rule 5605(a)(2).
  ITEM 16B                      Code of Ethics
  Code of Ethics
  Effective March 15, 2004, our company’s board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, our company’s president and secretary (being our principal executive officer, principal financial officer and principal accounting officer), as well as persons performing similar functions. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:
  1.
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
 45
 2.
full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;
  3.
compliance with applicable governmental laws, rules and regulations;
  4.
the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and
  5.
accountability for adherence to the Code of Business Conduct and Ethics.
  Our Code of Business Conduct and Ethics requires, among other things, that all of our company’s personnel shall be accorded full access to our president and secretary with respect to any matter which may arise relating to the Code of Business Conduct and Ethics. Further, all of our company’s personnel are to be accorded full access to our company’s board of directors if any such matter involves an alleged breach of the Code of Business Conduct and Ethics by our president or secretary.
  In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal, provincial and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to his or her immediate supervisor or to our company’s President or Secretary. If the incident involves an alleged breach of the Code of Business Conduct and Ethics by the President or Secretary, the incident must be reported to any member of our board of directors. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company’s Code of Business Conduct and Ethics.
  Our Code of Business Conduct and Ethics was filed with the Securities and Exchange Commission on March 30, 2004 as Exhibit 14.1 to our annual report on Form 10-KSB. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to 3172 Thunderbird Crescent, Burnaby, British Columbia, Canada V5A 3G1.
  ITEM 16C                      Principal Accountant Fees and Services
  Audit Fees.  This category includes the fees for the audit of our financial statements and the quarterly reviews of interim financial statements.  This category also includes advice on audit and accounting matters that arose during or as a result of the audit or the review of interim financial statements and services in connection with Securities and Exchange Commission filings.
  Audit-Related Fees.  This category includes assurance and related services that are reasonably related to the performance of the audit or review of the financial statements that are not reported under Audit Fees, and describes the nature of the services comprising the fees disclosed under this category.
  Tax Fees.  This category includes the fees for professional services rendered for tax compliance, tax advice and tax planning, and describes the nature of the services comprising the fees disclosed under this category.
  All Other Fees.  This category includes products and services provided by the principal accountant, other than the services reported under Audit Fees, Audit-Related Fees or Tax Fees.
 46
 Our current independent public accountants provided audit and other services during the fiscal years ended December 31, 2012 and 2011 as follows:
  2012

($)

2011

($)Audit Fees
44,000

22,275Audit-Related Fees
-

10,350Tax Fees
-

-All Other Fees
-

-Total Fees
44,000

32,625
  We do not use Morgan LLP, Chartered Accountants, for financial information system design and implementation.  These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers.  We do not engage Morgan LLP, Chartered Accountants, to provide compliance outsourcing services.
  Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before Morgan LLP, Chartered Accountants, is engaged by us to render any auditing or permitted non-audit related service, the engagement be:
  ·
approved by our audit committee (which consists of our entire board of directors); or
  ·
entered into pursuant to pre-approval policies and procedures established by our board, provided the policies and procedures are detailed as to the particular service, our board is informed of each service, and such policies and procedures do not include delegation of the board of directors’ responsibilities to management.
  Our board of directors pre-approves all services provided by our independent auditors.  All of the above services and fees were reviewed and approved by our board either before or after the respective services were rendered.
  Our board of directors has considered the nature and amount of fees billed by Morgan LLP, Chartered Accountants, and believes that the provision of services for activities unrelated to the audit is compatible with maintaining Morgan LLP’s independence.
  ITEM 16D.                      Exemption from the Listing Standards for Audit Committees
  Not applicable.
  ITEM 16E                      Purchases of Equity Securities by the Company and Affiliated Purchasers
  Not applicable.
  ITEM 16F                      Change in Registrant’s Certifying Accountant
  Not applicable.
  ITEM 16G                      Corporate Governance
  Not applicable.
  ITEM 16H                      Mine Safety Disclosure
  Not applicable.
 47
 ITEM 18
Financial Statements
  Financial Statements Filed as Part of this Report:
  Audited Annual Financial Statements for Qwick Media Inc. as at December 31, 2012, 2011 and 2010:
  (a)
Independent Auditor’s Report of Morgan LLP dated April 29, 2013 on the Financial Statements as at December 31, 2012, 2011 and 2010;
  (b)
Balance Sheets at December 31, 2012 and 2011;
  (c)
Statements of Operations for the years ended December 31, 2012, 2011 and 2010, and for the period October 5, 2000 (Date of Inception) to December 31, 2012;
  (d)
Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010, and for the period October 5, 2000 (Date of Inception) to December 31, 2012;
  (e)
Statement of Stockholders’ Equity (Deficiency) from October 5, 2000 (Date of Inception) to December 31, 2013; and
  (f)
Notes to Financial Statements.
  
 
  
  48

















































QWICK MEDIA INC.


(A Development Stage Company)








CONSOLIDATED FINANCIAL STATEMENTS







YEARS ENDED DECEMBER 31, 2012, 2011 and 2010




(Stated in U.S. Dollars)

















































49











REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the Directors and Stockholders of


Qwick Media Inc.


(A Development Stage Company)





We have audited the accompanying consolidated balance sheets of Qwick Media Inc. (a development stage company) and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations and cash flows for each of the three years in the period ended December 31, 2012, and for the period from October 5, 2000 (date of inception) to December 31, 2012, and stockholders’ (deficiency) equity for the period from October 5, 2000 (date of inception) to December 31, 2012.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Qwick Media Inc. and subsidiaries as of December 31, 2012 and 2011, and the consolidated results of their operations and their consolidated cash flows for each of the three years in the period ended December 31, 2012, and for the period from October 5, 2000 (date of inception) to December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.





The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, has negative cash flows, has a stockholders’ deficiency and is dependent upon obtaining adequate financing to fulfil its development activities and upon future profitable operations.  These factors raise substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are also discussed in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.








Vancouver, Canada                                                                                                                   “Morgan LLP”




April 29, 2013  Chartered Accountants


















PO Box 10007, 1488 – 700 West Georgia Street, Vancouver, British Columbia, Canada V7Y 1A1


Tel: (604) 687 – 5841                                           Fax: (604) 687 – 0075                                            Email: info@morganllp.com


50


QWICK MEDIA INC.


(A Development Stage Company)




CONSOLIDATED BALANCE SHEETS




(Stated in U.S. Dollars)







DECEMBER 31,2012


2011ASSETSCurrentCash

$
143,280


$
728,575Accounts receivable


152,922



381,955Inventory


344,208



296,382Prepaid expenses


889



49,510Total Current Assets


641,299



1,456,422Property and Equipment


80,338



86,426Total Assets

$
721,637


$
1,542,848LIABILITIESCurrentAccounts payable and accrued liabilities

$
174,393


$
111,831Due to related parties


2,073,960



109,309Accrued dividends payable


227,241



23,891Total Liabilities


2,475,594



245,031Redeemable Preferred Stock


2,027,945



2,027,945STOCKHOLDERS’ DEFICIENCYCommon Stock


71,128



71,128Additional Paid-in Capital


4,826,099



4,744,921Deficit Accumulated During The Development Stage


(8,679,129
)


(5,546,177
)Total Stockholders’ Deficiency


(3,781,902
)


(730,128
)Total Liabilities and Stockholders’ Deficiency

$
721,637


$
1,542,848






Going Concern, Commitments and Contractual Obligations (Notes 1 and 11)




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


51


QWICK MEDIA INC.


(A Development Stage Company)





CONSOLIDATED STATEMENTS OF OPERATIONS


(Stated in U.S. Dollars)







PERIOD FROMDATE OFINCEPTIONOCTOBER 5, 2000YEARS ENDED DECEMBER 31,


TO

DECEMBER 31,2012


2011


2010


2012Revenue

$
146,619


$
84,145


$
2,718


$
239,633ExpensesAdvertising and promotion


89,126



149,372



8,610



244,926Amortization


42,918



26,284



320



69,498Consulting fees


94,880



277,825



74,136



458,362Filing fees


11,730



13,997



838



42,745Foreign exchange


(17,380
)


8,252



62,198



314,647Interest and bank charges


210,352



56,147



19,669



480,543Management fees


256,962



242,326



104,056



793,566Mineral property

exploration expenditures


−



−



−



8,500Mineral property option

payments


−



−



−



3,428Office and administrative


428,285



527,438



66,664



995,014Oil and gas property

development expenditures


−



−



−



202,686Professional fees


159,262



98,617



123,878



669,451Rent


203,931



178,706



−



421,524Salaries, wages and benefits


1,675,220



1,135,857



445,834



3,250,398Software development costs


−



442,579



179,222



638,660Travel


124,285



102,744



19,490



288,102Total Expenses


3,279,571



3,260,144



1,104,915



8,882,050Net Loss For The Period

$
(3,132,952
)

$
(3,175,999
)

$
(1,102,197
)

$
(8,642,417
)Basic And Diluted Loss Per Common Share

$
(0.04
)

$
(0.05
)

$
(0.02
)Weighted Average Number Of Common Shares Outstanding


71,128,000



61,940,000



51,313,000











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





52


QWICK MEDIA INC.


(A Development Stage Company)





CONSOLIDATED STATEMENTS OF CASH FLOWS


(Stated in U.S. Dollars)






PERIOD FROMDATE OFINCEPTIONOCTOBER 5, 2000YEARS ENDED DECEMBER 31,


TO

DECEMBER 31,2012


2011


2010


2012Cash Flows (Used In) Operating Activities Provided By:Net loss for the period

$
(3,132,952
)

$
(3,175,999
)

$
(1,102,197
)

$
(8,642,417
)Adjustments to reconcile net loss to cash used by operating activities:Amortization


42,918



26,284



320



69,498Foreign exchange loss


−



−



−



226,512Stock-based compensation


81,178



195,399



−



276,577Changes in operating assets and liabilities:Accounts receivable


(49,680
)


(330,875
)


(49,407
)


(430,335
)Prepaid expenses


48,621



(49,510
)


−



(889
)Inventory


(47,826
)


(179,294
)


(117,088
)


(345,920
)Due to and from related parties


2,243,364



109,309



626,933



3,084,891Accrued dividends payable


203,350



23,891



−



227,241Accounts payable and accrued liabilities


62,562



74,252



49,121



462,011(548,465
)


(3,306,543
)


(592,318
)


(5,072,831
)Investing ActivitiesSubsidiary cash upon acquisition


−



−



−



15,465Purchase of property and equipment


(36,830
)


(59,732
)


(41,873
)


(138,434
)(36,830
)


(59,732
)


(41,873
)


(122,969
)Financing ActivitiesProceeds from share issuances


−



1,217,002



1,385,000



2,678,002Proceeds from notes payable


−



1,000,000



111,950



1,661,078Proceeds from preferred shares


−



1,000,000



−



1,000,000−



3,217,002



1,496,950



5,339,080Net (Decrease) Increase In Cash


(585,295
)


(149,273
)


862,759



143,280Cash, Beginning Of Period


728,575



877,848



15,089



−Cash, End Of Period

$
143,280


$
728,575


$
877,848


$
143,280Non-cash Financing ActivitiesCommon stock issued to settle debt

$
−


$
403,211


$
−


$
984,841Supplemental Disclosure of Cash Flow InformationInterest paid

$
−


$
−


$
−


$
−Income taxes paid

$
−


$
−


$
−


$
−





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




53





QWICK MEDIA INC.


(A Development Stage Company)




CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIENCY) EQUITY


PERIOD FROM INCEPTION, OCTOBER 5, 2000, TO DECEMBER 31, 2012




(Stated in U.S. Dollars)


COMMON STOCK





DEFICITNUMBER





ACCUMULATEDOF





ADDITIONAL


SHARE


DURING THE


CUMULATIVECOMMON


PAR


PAID-IN


SUBSCRIPTIONS


DEVELOPMENT


TRANSLATIONSHARES


VALUE


CAPITAL


RECEIVED


STAGE


ADJUSTMENT


TOTALBalance, October 5, 2000


-


$
-


$
-


$
-


$
-


$
-


$
-November 2000 - Shares issued for cash at $0.001


6,500,000



6,500



-



-



-



-



6,500November 2000 - Shares issued for cash at $0.01


6,000,000



6,000



54,000



-



-



-



60,000December 2000 - Shares issued for cash at $0.25


38,000



38



9,462



-



-



-



9,500Translation adjustment


-



-



-



-



-



660



660Net loss for the period


-



-



-



-



(7,310
)


-



(7,310
)Balance, December 31, 2000


12,538,000



12,538



63,462



-



(7,310
)


660



69,350Translation adjustment


-



-



-



-



-



(752
)


(752
)Net loss for the year


-



-



-



-



(54,811
)


-



(54,811
)Balance, December 31, 2001


12,538,000



12,538



63,462



-



(62,121
)


(92
)


13,787Translation adjustment


-



-



-



-



-



16



16Net loss for the year


-



-



-



-



(24,972
)


-



(24,972
)Balance, December 31, 2002


12,538,000



12,538



63,462



-



(87,093
)


(76
)


(11,169
)Translation adjustment


-



-



-



-



-



(205
)


(205
)Net loss for the year


-



-



-



-



(271,508
)


-



(271,508
)Balance, December 31, 2003


12,538,000



12,538



63,462



-



(358,601
)


(281
)


(282,882
)Translation adjustment


-



-



-



-



-



281



281Net loss for the year


-



-



-



-



(72,049
)


-



(72,049
)Balance, December 31, 2004


12,538,000



12,538



63,462



-



(430,650
)


-



(354,650
)Net loss for the year


-



-



-



-



(49,562
)


-



(49,562
)Balance, December 31, 2005


12,538,000



12,538



63,462



-



(480,212
)


-



(404,212
)Net loss for the year


-



-



-



-



(67,488
)


-



(67,488
)Balance, December 31, 2006


12,538,000



12,538



63,462



-



(547,700
)


-



(471,700
)Net loss for the year


-



-



-



-



(74,191
)


-



(74,191
)Balance, December 31, 2007


12,538,000



12,538



63,462



-



(621,891
)


-



(545,891
)Net loss for the year


-



-



-



-



(104,412
)


-



(104,412
)Balance, December 31, 2008


12,538,000



12,538



63,462



-



(726,303
)


-



(650,303
)September 2009 - Shares issued for settling debt at $0.015


38,775,366



38,775



542,855



-



-



-



581,630Shares issued pursuant to share exchange agreement (Note 1)


4,789,035



4,789



953,018



-



(190,387
)


-



767,420Net loss for the year


-



-



-



-



(351,291
)


-



(351,291
)Balance, December 31, 2009


56,102,401



56,102



1,559,335



-



(1,267,981
)


-



347,456Share subscriptions received


-



-



-



1,385,000



-



-



1,385,000Net loss for the year


-



-



-



-



(1,102,197
)


-



(1,102,197
)Balance, December 31, 2010


56,102,401



56,102



1,559,335



1,385,000



(2,370,178
)


-



630,259Shares issued for cash at $0.20


13,010,000



13,010



2,588,992



(1,385,000
)


-



-



1,217,002Shares issued for settling debt at $0.20


2,016,055



2,016



401,195



-



-



-



403,211Stock-based compensation


-



-



195,399



-



-



-



195,399Net loss for the year


-



-



-



-



(3,175,999
)


-



(3,175,999
)Balance, December 31, 2011


71,128,456



71,128



4,744,921



-



(5,546,177
)


-



(730,128
)Stock-based compensation


-



-



81,178



-



-



-



81,178Net loss for the year


-



-



-



-



(3,132,952
)


-



(3,132,952
)Balance, December 31, 2012


71,128,456


$
71,128


$
4,826,099


$
-


$
(8,679,129
)

$
-


$
(3,781,902
)





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





54
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)





1.      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.”




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.




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




For accounting purposes, the acquisition is being 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 is 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.





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


55
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)




1.      NATURE OF OPERATIONS AND GOING CONCERN(Continued)





a)
Organization (Continued)





Condensed combined summaries of operations for the year ended December 31, 2010 is presented below:





Year Ended December 31, 2010Qwick


Qeyos Ad


IntercompanyMedia Inc.


Systems Inc.


Adjustments


CombinedRevenues

$
−


$
2,718


$
−


$
2,718ExpensesAdvertising and promotion


−



8,610



−



8,610Amortization


−



320



−



320Consulting fees


−



74,136



−



74,136Filing and stock transfer fees


838



−



−



838Foreign exchange


−



71,045



(8,847
)


62,198Interest and bank charges


19,097



572



−



19,669Management fees


78,903



25,153



−



104,056Office and administrative


13,452



53,212



−



66,664Professional fees


75,726



48,152



−



123,878Salaries, wages and benefits


−



445,834



−



445,834Software development costs


−



179,222



−



179,222Travel


−



19,490



−



19,490Total Expenses


188,016



925,746



(8,847
)


1,104,915Net Loss For The Year

$
(188,016
)

$
(923,028
)

$
8,847


$
(1,102,197
)


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.


56
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)




1.      NATURE OF OPERATIONS AND GOING CONCERN(Continued)





c)      Going Concern (Continued)





As shown in the accompanying consolidated financial statements, the Company has incurred accumulated losses of $8,679,129 for the period from October 5, 2000 (inception) to December 31, 2012. 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.







2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





The 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 consolidated financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:




a)     Cash and Cash Equivalents




Cash consists of cash on deposit with high quality major financial institutions. The carrying amounts approximated fair market value due to the liquidity of these deposits.  For purposes of the balance sheets and statements of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents.  The Company had no cash equivalents at December 31, 2012 and 2011.




b)     Use of Estimates and Assumptions




The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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.


57
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)




2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)




c)     Revenue Recognition




The Company recognizes revenue when all of the following criteria are met: (1) the Company has evidence of an arrangement with a customer; (2) the Company delivers the specified products; (3) license agreement terms are fixed or determinable and free of contingencies or uncertainties that may alter the agreement such that it may not be complete and final; and (4) collection is probable.




The Company has granted a software license which provides for the right to receive payment of a royalty fee based on a percentage of revenues earned by the licensee from the use of the software. Royalty revenues arising from software licenses with an undefined or expected term exceeding three years are generally recognized as received or receivable when the other revenue criteria noted above are satisfied.




d)    Software Development Costs




The Company accounts for software development costs in accordance with ASC 985-20, Software - Cost of Software to Be Sold, Leased, whereby costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established and all research and development activities for the other components of the product or processes have been completed, at which time any additional costs are capitalized.




To December 31, 2012, software development costs have been charged to operations as the research and development activities for other components of the product and processes have not been completed.




In accordance with ASC 985-705, software modification costs to satisfy hardware upgrades and changes in system configurations are treated as maintenance costs. Maintenance costs are expensed as incurred or recognized with related revenues, whichever occurs first.




e)     Inventory




Inventory is recorded at the lower of cost or market with cost being determined on the weighted average method.  When required, a provision is made to reduce excess and obsolete inventory to estimated net realizable value.  The net realizable value of inventory is generally considered to be the selling price in the ordinary course of business less the estimated costs of completion and estimated costs to make the sale.  Inventory consists of computers, general, monitors, printers, modems, and parts and enclosures.





f)     Equipment and Amortization




Equipment is recorded at cost and amortized using the declining-balance and straight-line method at rates determined to estimate the useful lives of the assets. The annual rates used in calculating amortization are as follows:




Computer hardware                                                     30% declining-balance


Computer software                                                      50% declining-balance


Office furniture                                                             20% declining-balance


Equipment                                                                     30% declining-balance


Leasehold improvements                                            straight-line over the term of the lease


58
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)




2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)




g)     Foreign Currency Translation




The Company’s functional currency is the U.S. dollar.  Transactions in foreign currency are translated in accordance with SFAS 52, Foreign Currency Translation (codified in ASC Topic 830, Foreign Currency Matters), into U.S. dollars and reporting as follows:




i)
monetary items at the  exchange rate prevailing at the balance sheet date;




ii)
non-monetary items at the historical exchange rate;




iii)
revenue and expense at the average exchange rate in effect during the applicable accounting period.




Gains and losses on foreign currency transactions are reported in the statements of operations.




h)     Basic and Diluted Loss Per Share




The Company computes loss per share in accordance with ASC 260, Earnings Per Share.  Under these provisions, basic loss per share is computed using the weighted average number of common stock outstanding during the periods.  Diluted loss per share is computed using the weighted average number of common and potentially dilutive common stock outstanding during the period.  As the Company generated net losses in the periods presented, the basic and diluted loss per share is the same as the exercise of options or warrants would be anti-dilutive.




i)      Fair Value of Financial Instruments




ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value.  The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.




These tiers are:





·
Level 1 – defined as observable inputs such as quoted prices in active markets;





·
Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and





·
Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.





Cash consists of cash on deposit with a high quality major financial institution.  The carrying cost approximates fair value due to the liquidity of these deposits.  The carrying amounts of other financial assets and liabilities comprising accounts receivable, accounts payable and accrued liabilities, due to related parties, promissory notes and notes payable, were a reasonable approximation of their fair value.




j)      Income Taxes




The Company has adopted ASC 740, Income Taxes. This standard requires the use of an asset and liability approach for financial accounting, and reporting on income taxes. Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.


59
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)




2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)




k)     Asset Impairment




Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate the carrying amount may not be recoverable, pursuant to guidance established in ASC 360-50, Impairment or Disposal of Long-lived Assets. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by its assets to their respective carrying amounts. If impairment is deemed to exist, assets are written down to fair value.




l)      Comprehensive Loss




ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive items in the consolidated financial statements.  As at December 31, 2012, 2011 and 2010, the Company had no items that represent a comprehensive income or loss and, therefore, has not included a statement of comprehensive loss in the consolidated financial statements.




m)    Equity Instruments




In situations where common shares are issued and the fair value of the goods or services received is not readily determinable, the fair value of the common shares is used to measure and record the transaction.  The fair value of the common shares issued in exchange for the receipt of goods and services is based on the stock price as of the earliest of:




i)
the date at which the counterparty’s performance is complete;


ii)
the date at which a commitment for performance by the counterparty to earn the common shares is reached; or


iii)
the date at which the common shares are issued if they are fully vested and non-forfeitable at that date.




The Company has a stock-based compensation plan which is described more fully in Note 9.  The Company measures the compensation cost of stock options and other stock-based awards to employees and directors at fair value at the grant date and recognizes compensation expense over the requisite service period for awards expected to vest.Except for transactions with employees and directors, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable.  Additionally, the Company has determined that the dates used to value the transaction are either:





i)
The date at which a commitment for performance by the counter party to earn the equity instruments is established; or


ii)
The date at which the counter party’s performance is complete.


60
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)




2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)





n)    Recent Accounting Pronouncements





In February 2013, the FASB issued Accounting Standards Update (ASU) No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. The updated guidance requires expanded disclosures for amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The guidance is to be applied prospectively for reporting periods beginning after December 15, 2012. Accordingly, the Company will adopt ASU No. 2013-02 commencing  January 1, 2013.  The new guidance affects disclosures only and will have no impact on the Company's results of operations or financial position.




In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2012-04, ''Technical Corrections and Improvements". The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The Company will adopt ASU No. 2012-02 effective January 1, 2013; however, the Company does not expect such adoption to have a material impact on its financial position or results of operations.




In August 2012, the FASB issued ASU No. 2012-03, "Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)" in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU No. 2012-03 is not expected to have a material impact on the Company’s financial position or results of operations.




In July 2012, the FASB issued ASU No. 2012-02, "Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment" in Accounting Standards Update No. 2012-02. This update amends ASU No. 2011-08, “Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, “Intangibles Goodwill and Other General Intangibles Other than Goodwill”. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for non-public entities, have not yet been made available for issuance. The Company will adopt ASU No. 2012-02 effective January 1, 2013; however, the Company does not expect such adoption to have a material impact on its financial position or results of operations.







61
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)


2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)





n)    Recent Accounting Pronouncements (Continued)




In November 2011, ASC guidance was issued related to disclosures about offsetting assets and liabilities. The new standard requires disclosures to allow investors to better compare financial statements prepared under U.S. GAAP with financial statements prepared under IFRS. The update is effective for the Company’s fiscal year beginning January 1, 2013, and interim periods within those annual periods. Retrospective application is required. In January 2013, ASC guidance was issued to clarify that the disclosure requirements are limited to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (i) offset in the financial statements or (ii) subject to an enforceable master netting arrangement or similar agreement. The Company does not expect the updated guidance to have an impact on the consolidated financial position, results of operations or cash flows.




3.      INVENTORY





2012


2011Computers

$
2,765


$
23,654Monitors


31,146



38,389Printers


-



19,715Parts and enclosures


291,301



214,624General


18,996



-$
344,208


$
296,382








4.
PROPERTY AND EQUIPMENT


2012Cost


Accumulated Amortization


Net Book

ValueComputer hardware

$
38,713


$
19,569


$
19,144Computer software


1,324



1,182



142Office furniture


21,012



6,926



14,086Equipment


41,882



13,257



28,625Leasehold improvements


47,628



29,287



18,341$
150,559


$
70,221


$
80,338





62
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)


4.      PROPERTY AND EQUIPMENT(Continued)


2011Cost


Accumulated Amortization


Net Book

ValueComputer hardware

$
38,713


$
8,336


$
30,377Computer software


1,324



543



781Office furniture


14,511



1,716



12,795Equipment


11,929



3,075



8,854Leasehold improvements


47,628



14,009



33,619$
114,105


$
27,679


$
86,426





5.    CONVERTIBLE NOTE AND ACCRUED INTEREST PAYABLE




On August 5, 2011, the Company closed a private placement with a company owned by the Company's President and Chief Executive Officer, consisting of a $1,000,000 secured convertible debenture (the “Debenture”).  The Debenture has a maturity date of July 30, 2015, and bears interest at 10% per annum.  Principal and accrued interest on the Debenture may be convertible at any time into common shares of the Company (the “Conversion Shares”) at a deemed conversion price of:




i)
$0.60 per Conversion Share until July 30, 2012;




ii)
$1.00 per Conversion Share between July 31, 2012 and July 30, 2013; and




iii)
$1.50 per Conversion Share between July 31, 2013 and the Maturity Date.




On November 15, 2011, the Company modified the terms of the convertible debenture to allow for the conversion of the principal amount of the Debenture, and accrued interest thereon, into the Company’s Class A Preferred Shares rather than common shares of the Company. As the Company did not grant a concession and the modified terms were not substantially different from the original terms, the Company did not apply extinguishment accounting.  In addition, as the fair value of the debt was not affected by the modification of the terms, no gain or loss on modification was recorded.




Immediately upon the effectiveness of the amendment, the creditor converted the principal amount of the Debenture, and accrued interest thereon, into an aggregate of 1,027,945 Class A Preferred Shares, at a conversion price of $1.00 per Class A Preferred Share.




6.     RELATED PARTY TRANSACTIONS AND AMOUNTS OWING




For the year ended December 31, 2012, 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 December 31, 2012 that are not otherwise disclosed elsewhere:




a)
The Company paid management fees of $Nil (2011 - $Nil; 2010 - $63,885) to a company controlled by a director for the year ended December 31, 2012. Pursuant to an agreement dated November 1, 2008, the Company entered into an agreement with the same party in which the Company agreed to pay $5,506 (CDN$5,600) per month for management services on a month-to-month basis.





63
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)


6.     RELATED PARTY TRANSACTIONS AND AMOUNTS OWING(Continued)




b)
The Company paid management fees of $256,858 (2011 - $256,327; 2010 - $Nil) to companies controlled by officers for the year ended December 31, 2012.




c)
The Company recorded stock-based compensation of $50,004 (2011 - $131,118; 2010 - $Nil) as consulting fees paid to directors and officers for the year ended December 31, 2012.




d)
As of December 31, 2012, amounts owing to related parties consists of $2,073,965 owed to a director and companies controlled by a director, and $18,815 owed to a company controlled by an officer. The amounts owed are unsecured, non-interest bearing and due on demand.




e)
As of December 31, 2011, amounts owing from related parties consists of $158,474 owed from a director and companies controlled by a director, which is included in accounts receivable.




f)
Interest expensed by the Company relating to notes payable due to a company with a common director amounted to $Nil (2011 - $27,945; 2010 - $Nil) for the year ended December 31, 2012.




g)
Interest expensed by the Company relating to notes payable due to a company with a common officer amounted to $Nil (2011 - $Nil; 2010 - $158) for the year ended December 31, 2012.




h)
On January 28, 2011, the Company issued 4,789,935 common shares of Qeyos to a director of the Company at a fair value of $0.20 per share to settle debt of $957,787.




i)
On January 28, 2011, the Company completed the acquisition of Qeyos, a company controlled by the President of the Company, 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 share of Qeyos.





7.      INCOME TAXES




The provision for income taxes differs from the result which would be obtained by applying the statutory income tax rate of 34% (2011 - 34%; 2010 – 34%) to income before income taxes. The difference results from the following items:


2012


2011


2010Computed expected (benefit) income taxes

$
(1,023,000
)

$
(1,004,000
)

$
(375,000
)Increase in valuation allowance


1,023,000



1,004,000



375,000$
-


$
-


$
-




Significant components of the Company’s deferred income tax assets are as follows:





2012


2011


2010Deferred income tax asset

$
2,768,000


$
1,744,000


$
740,000Valuation allowance


(2,768,000
)


(1,744,000
)


(740,000
)$
-


$
-


$
-







64
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)




7.     INCOME TAXES(Continued)




The Company has net operating losses of approximately $8,140,000 (2011 - $5,131,000; 2010 - $2,177,000), which if unutilized, will expire through to 2032.  Future tax benefits, which may arise as a result of these losses, have not been recognized in these consolidated financial statements and have been offset by a valuation allowance.





The Company and its subsidiaries file income tax returns in Canada and China.  These tax returns are subject to examination by local taxation authorities provided the tax years remain open to audit under the relevant statute of limitations.





8.     CAPITAL STOCK




a)
Authorized




At December 31, 2012 and 2011, the Company was authorized to issue the following number and classes of shares:




400,000,000 common shares, $0.001 par value;




100,000,000 preferred shares, $0.001 par value, and series as determined by directors.




b)
Common Stock




On January 28, 2011, the Company issued 10,000,000 common shares at $0.20 per share pursuant to a private placement for proceeds of $2,000,000, of which $1,385,000 was included in share subscriptions at December 31, 2010.




On January 28, 2011, the Board of Directors of the Company authorized the issuance of 637,140 common shares at a price of $0.20 per share in settlement of $127,428 notes and accrued interest payable.




On January 28, 2011, the Company completed the acquisition of 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.




On May 30, 2011, the Board of Directors of the Company authorized the issuance of 1,378,915 common shares at a price of $0.20 per share in settlement of $275,783 notes and accrued interest payable.




On May 30, 2011, the Company issued 3,010,000 common shares at $0.20 per share pursuant to a private placement for proceeds of $602,002.




9.     STOCK OPTIONS





During the year ended December 31, 2011, 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 January 28, 2011, the Company granted 2,400,000 stock options to directors, officers, and employees exercisable at $0.20 per share to December 29, 2015. The options vest 50% on the date of grant, 25% on the first anniversary and 25% on the second anniversary.  During the year ended December 31, 2012, the Company recorded stock-based compensation of $40,146 (2011 - $185,113) as consulting expense related to these options.


65
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)





9.    STOCK OPTIONS (Continued)





On May 1, 2011, the Company granted 300,000 stock options to a consultant exercisable at $0.20 per share to December 29, 2015.  The options vest 50% on the date of grant, 25% on the first anniversary and 25% on the second anniversary.  During the year ended December 31, 2012, the Company recorded stock-based compensation of $29,993 (2011 - $21,832) as consulting expense related to these options.





On July 1, 2011, the Company granted 60,000 stock options to an employee exercisable at $0.60 per share.  50% of the options vest on the date of grant and expire on July 30, 2013. Another 25% vest on the first anniversary and expire on July 30, 2014. The last 25% vest on the second anniversary and expire on July 30, 2015.  During the year ended December 31, 2012, the Company recorded stock-based compensation of $963 (2011 - $682) as consulting expense related to these options.





On November 1, 2011, the Company granted 360,000 stock options to an employee exercisable at $0.60 per share.  50% of the options vest on the date of grant and expire on July 30, 2013. Another 25% vest on the first anniversary and expire on July 30, 2014. The last 25% vest on the second anniversary and expire on July 30, 2015.  During the year ended December 31, 2012, the Company recorded stock-based compensation of $9,736 (2011 - $682) as consulting expense related to these options.





On March 1, 2012, the Company granted 300,000 stock options to a consultant exercisable at $0.60 per share.  50% of the options vest on the date of grant and expire on February 28, 2013. Another 25% vest on the first anniversary and expire on February 28, 2014. The last 25% vest on the second anniversary and expire on February 28, 2015.  During the year ended December 31, 2012, the Company recorded stock-based compensation of $340 as consulting expense related to these options.





The fair values of stock options granted were estimated at the date of grant using the Black-Scholes option-pricing model and the weighted average grant date fair value of stock options granted during the years ended December 31, 2012 and 2011 was $0.001 and $0.10 respectively.  During the year ended December 31, 2012, the Company recorded stock-based compensation of $81,178 (2011 - $195,399) as consulting expense related to the vesting of stock options.





The fair value assumptions used were as follows:


2012
2011Expected dividend yield
0%
0%Risk-free interest rate
0.43%
1.92%Expected volatility
54%
66%Expected option life (in years)
1.00
4.54 – 5.00





66
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)


9.    STOCK OPTIONS (Continued)




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 ValueOutstanding, December 31, 2010


−


$
−



−


$
−Granted


3,120,000


$
0.25Cancelled


(400,000
)

$
0.20Outstanding, December 31, 2011


2,720,000


$
0.26



4.98


$
−Granted


300,000


$
0.60Expired


(200,000
)

$
0.20Outstanding, December 31, 2012


2,820,000


$
0.30



2.56


$
−Exercisable, December 31, 2012


2,040,000


$
0.29



2.50


$
−





A summary of the status of the Company’s non-vested options at December 31, 2012, and changes during the years ended December 31, 2012 and 2011 are presented below:


Number of Options


Weighted

Average

Grant Date

Fair ValueNon-vested at December 31, 2010


−


$
−Granted


3,120,000


$
0.10Cancelled


(400,000
)

$
0.10Vested


(1,360,000
)

$
0.10Non-vested at December 31, 2011


1,360,000


$
0.10Granted


300,000


$
0.001Expired


(50,000
)

$
0.11Vested


(830,000
)

$
0.08Non-vested at December 31, 2012


780,000


$
0.08




As at December 31, 2012, there was $9,460 (2011 - $71,342) in total unrecognized compensation cost related to non-vested stock options.


67
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)


9.    STOCK OPTIONS (Continued)




As at December 31, 2012, the following stock options were outstanding:





Number of Options
Exercise Price
Expiry Date150,000*
$0.60
February 28, 2013210,000
$0.60
July 30, 201375,000
$0.60
February 28, 2014105,000
$0.60
July 30, 201475,000
$0.60
February 28, 2015105,000
$0.60
July 30, 20152,100,000
$0.20
December 29, 20152,820,000


* Subsequent to year-end, these stock options expired unexercised.





10.   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.


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 temporary equity because they are redeemable beyond the control of the issuer.




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.





The Company converted the principal amount of a Debenture and accrued interest thereon, into an aggregate of 1,027,945 Class A Preferred Shares, at a conversion price of $1.00 per Class A Preferred Share.





68
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)


10.   REDEEMABLE PREFERRED STOCK (Continued)





The following table reflects activity in Class A Preferred Shares:




Number of

Class A

Preferred Shares


AmountBalance, December 31, 2010


−


$
−Issuance of preferred shares for cash


1,000,000



1,000,000Issuance of preferred shares

upon conversion of note


1,027,945



1,027,945Balance, December 31, 2012 and 2011


2,027,945


$
2,027,945





11.   COMMITMENTS AND CONTRACTUAL OBLIGATIONS




The Company had no significant commitments or contractual obligations with any parties respecting executive compensation, consulting arrangements, or other matters other than disclosed below.  Management services provided are on a month-to-month basis.




On February 21, 2012, the Company entered into a consulting agreement.  Pursuant to the agreement, the Company will pay the consultant $6,000 per month for a period of three years commencing March 1, 2012.




The Company has entered into two leases for the provision of office space until January 31, 2014.   The Company’s future minimum lease payments for the two leases are as follows:





Fiscal year ending December 31, 2013

$    139,000 (Cdn$138,295)Fiscal year ending December 31, 2014

11,583   (Cdn$11,525)$    150,583 (Cdn$149,820)











69
 QWICK MEDIA INC.
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 
 YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
 (Stated in U.S. Dollars)








12.   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 December 31, 2012, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair values:





DECEMBER 31, 2012

FAIR

VALUE

INPUT

LEVEL


HELD-FOR- TRADING


TOTAL

CARRYING

VALUE


FAIR VALUEFinancial assetsCash


1


$
143,280


$
143,280


$
143,280





DECEMBER 31, 2011

FAIR

VALUE

INPUT

LEVEL


HELD-FOR- TRADING


TOTAL

CARRYING

VALUE


FAIR

VALUEFinancial assetsCash


1


$
728,575


$
728,575


$
728,575




Due to the nature of cash, accounts receivable, accounts payable, and redeemable preferred stock, the fair value of these instruments approximated their carrying value.




13.  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.


70









ITEM 19
Financial Statements




Refer to “Item 17. Financial Statements”.




ITEM 20
Exhibits




The following exhibits are being filed as part of this annual company report, or are incorporated by reference where indicated:





Exhibit

Number
Description of Exhibit1.1
Memorandum of Association (incorporated by reference from Exhibit 3.1 to our current report on Form 8-K as filed with the SEC on August 5, 2009)1.2
Articles of Association (incorporated by reference from Exhibit 3.2 to our current report on Form 8-K as filed with the SEC on August 5, 2009)4.1
Promissory Note with In Touch Digital Media Inc. dated February 18, 20094.2
Promissory Note with In Touch Digital Media Inc. dated March 31, 2009 (incorporated by reference from Exhibit 10.5 to our registration statement on Form S-4 as filed with the SEC on April 9, 2009)4.3
Promissory Note with In Touch Digital Media Inc. dated May 8, 2009 (incorporated by reference from Exhibit 10.9 to our quarterly report on Form 10-Q as filed with the SEC on May 15, 2009)4.3
Form of Debt Settlement and Subscription Agreement, effective as of September 30, 2009 (incorporated by reference from our Annual Report on Form 20-F as filed with the SEC on April 29, 2010)4.4
Share Exchange Agreement with Qeyos Ad Systems Inc. dated January 28, 2011 (incorporated by reference from our Annual Report on Form 20-F as filed with the SEC on February 3, 2011)4.6
Debt Settlement and Subscription Agreement dated January 28, 2011 with R. J. Tocher Holdings Ltd. (incorporated by reference from our Annual Report on Form 20-F as filed with the SEC on February 3, 2011)4.7
Form of Private Placement Subscription Agreement (incorporated by reference from our Annual Report on Form 20-F as filed with the SEC on February 3, 2011)4.8
2011 Stock Option Plan (incorporated by reference from our Annual Report on Form 20-F as filed with the SEC on February 3, 2011)8.1
Significant subsidiaries of our Company: Qeyos Ad Systems Inc., a British Columbia corporation, all of the shares of which are owned by our company, and Wuxi Xun Fu Information Technology Co., Ltd., a company incorporated under the laws of the People’s Republic of China, all of the shares of which are owned by Qeyos.11.1
Code of Ethics (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on March 30, 2004).12.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1*
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2*
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*           Filed herewith


71




SIGNATURES




The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.




QWICK MEDIA INC.










By: /s/ Ross Tocher


Ross J. Tocher,


President and Chief Executive Officer


(Principal Executive Officer)




Date: April 30, 2013










By: /s/ Kevin Kortje


Kevin Kortje


Chief Financial Officer


(Principal Financial Officer


and Principal Accounting Officer)




Date: April 30, 2013