Summary of LIVE CURRENT MEDIA INC.

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

(a) Forward Looking Statements

The Company makes forward-looking statements in this Amendment and may make such statements in future filings with the Securities and Exchange Commission. The Company may also make forward-looking statements in its press releases or other public shareholder communications. Its forward-looking statements are subject to risks and uncertainties and include information about its expectations and possible or assumed future results of operations. When management uses any of the words "believes", "expects", "anticipates", "estimates" or similar expressions, it is making forward-looking statements.

While management believes that our forward-looking statements are reasonable, you should not place undue reliance on any such forward-looking statements, which speak only as of the date made. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond management's control or are subject to change, actual results could be materially different. Factors that might cause such a difference include, without limitation, the following: the Company's inability to generate sufficient cash flows to meet its current liabilities, its potential inability to retain qualified management, sales and customer service personnel, the potential for an extended decline in sales, the possible failure of revenues to offset additional costs associated with any changes in our business model, the potential lack of website acceptance, the Company's potential inability to introduce new products to the market, the potential loss of customer or supplier relationships, the extent to which competition may negatively affect prices and sales volumes or necessitate increased sales or marketing expenses, and the other risks and uncertainties set forth in this Amendment.

Other factors not currently anticipated by management may also materially and adversely affect our results of operations. Except as required by applicable law, management does not undertake any obligation to publicly release any revisions which may be made to any forward-looking statements to reflect events or circumstances occurring after the date of this Amendment.

Readers of this report should not rely solely on the forward-looking statements and should consider all risks and uncertainties throughout this Amendment, as well as those discussed under "Item 1A Risk Factors" in our Amendment No. 1 to our Annual Report on Form 10-K for the year ended December 31, 2008.

The following discussion should be read in conjunction with our interim consolidated financial statements and their explanatory notes, which begin at page F-1.

(b) Business Overview

Live Current Media Inc. was incorporated under the laws of the State of Nevada on October 10, 1995 under the name "Troyden Corporation". We changed our name on August 21, 2000 from Troyden Corporation to "Communicate.com Inc.", and again on May 30, 2008 to Live Current Media Inc. Since August 4, 2008, our common stock has been quoted on the OTCBB under the symbol, "LIVC".

Our corporate website is located at www.livecurrent.com. Information included on the website is not a part of this Amendment.

Subsidiaries

Our principal operating subsidiary, Domain Holdings Inc. ("DHI"), was incorporated under the laws of British Columbia on July 4, 1994 under the name "IMEDIAT Digital Creations Inc.". On April 14, 1999, IMEDIAT Digital Creations, Inc. changed its name to "Communicate.com Inc." and was redomiciled from British Columbia to the jurisdiction of Alberta. On April 5, 2002, Communicate.com Inc. changed its name to Domain Holdings Inc. DHI has 62,635,383 shares of common stock currently issued and outstanding. 61,478,225 shares, or approximately 98.2% of the outstanding shares, are held by Live Current.

On December 31, 2005, DHI reorganized by transferring certain domain name assets into its wholly owned subsidiary, Acadia Management Corp. ("Acadia"), a British Columbia corporation incorporated on December 1, 2005. In October 2008, the assets and liabilities of Acadia were assigned to DHI and Acadia was subsequently dissolved in January 2009. On December 31, 2006, DHI transferred the domain name Importers.com to its wholly owned subsidiary 0778229 B.C. Ltd. ("Importers"), a British Columbia company incorporated on December 27, 2006. DHI also has a dormant wholly owned subsidiary, 612793 B.C. Ltd. ("612793"), which was incorporated on August 21, 2000.

On March 13, 2008, the Company incorporated a wholly owned subsidiary in the state of Delaware, Communicate.com Delaware, Inc. ("Delaware"). The new subsidiary was incorporated to facilitate the merger with Auctomatic.

On August 8, 2008, the Company formed a wholly-owned subsidiary in Singapore, LCM Cricket Ventures Pte. Ltd. ("LCM Cricket Ventures"). This company holds 50.05% of Global Cricket Venture Pte. Ltd.

We presently employ twenty-three full-time and one part-time employee, as well as one consultant.

Our principal office is located at #645-375 Water Street, Vancouver, British Columbia V6B 5C6. We also lease an office at 12201 Tukwila Intl. Blvd, Suite 200, Tukwila, WA 98168 for a nominal amount per month.

Operations

DHI, our majority-owned subsidiary, owns more than 800 domain names. Through DHI, we build consumer internet experiences around our large portfolio of intuitive, easy to remember domain names. These domain names span several consumer and business-to-business categories including health and beauty (such as Perfume.com), sports and recreation (such as Cricket.com and Boxing.com), travel (such as Brazil.com and Indonesia.com), and global trade (Importers.com). We believe that we can develop and sustain businesses based on these intuitive domain names in part because of the significant amount of search and direct type-in traffic they receive. We have begun to exploit this traffic through the construction of consumer experiences online, which we call DestinationHubs®, at Perfume.com and, prior to its disposition, at Cricket.com. DestinationHubs® tap into a large, passionate, pre-existing community of interested users. From a technology and product standpoint, a DestinationHub® is architected for discovery, meaning it is built in such a way that it is found easily through search. One of the best ways to ensure sites are found through search is to have a powerful domain name asset as a low-cost customer acquisition vehicle that easily enables ownership of that subject category. Over time, we expect to build out additional DestinationHubs® at several of our domain names. We may also choose to sell select domain names to strategic buyers.

We also own a number of .cn (China) domain names. We believe that the .cn domain names could have significant value as the internet market in China develops. We also have a number of non-core "bound.com" domain names that we may choose to develop that cover expansive categories of interest such as shoppingbound.com, pharmacybound.com and vietnambound.com.

We have organized our operations into two principal segments: (1) ECommerce Products, which currently consists of our "Health and Beauty" websites, and (2) Advertising. Our Health and Beauty websites generate revenue by facilitating the sale of products direct to consumers (eCommerce). Currently, our eCommerce revenues are primarily derived from the sale of fragrance products to consumers at our Perfume.com website. Our sports and recreation, travel, and global trade websites generate revenues through the sale of online advertising space to advertisers, derived by offering "pay per click" and display advertising on various websites in our portfolio.

ECommerce Revenues

We currently generate almost all of our eCommerce revenues through product sales on Perfume.com. We plan to continue to build Perfume.com eCommerce revenues by expanding to more efficient distribution and fulfillment channels, creating a more engaging consumer experience, and performing continued technical improvements to the websites. We will also continue to explore other product-related revenue streams across our domain name portfolio.

Health and Beauty Products

Our Perfume.com website sells discounted brand name fragrances, including women's perfume, men's cologne, and designer hair care and skin care products direct to consumers in the US and select international markets. Perfume.com sells 100% authentic products and provides customers with a satisfaction guarantee. We are not dependent on any single supplier for the products that we sell. The products are supplied by various wholesale suppliers located in the United States.

Our products are described in detail on our website. The products are offered through an easily navigated website experience within a transaction secure environment accepting the usual modes of secure credit card payments, PayPal and Google Checkout. Products can also be ordered using our toll-free telephone number.

By way of its intuitive domain name and through ongoing technical optimizations, Perfume.com consistently ranks highly in organic, unpaid search results across major search engines. Organic search traffic delivers the majority of traffic and customers to Perfume.com. The site also realizes traffic through direct navigation by visitors. Finally, we acquire internet traffic through paid search, comparison shopping websites, and our robust email marketing efforts as well as through affiliate sales. We use affiliate relationships whereby we pay our affiliates sales commissions if they deliver traffic to Perfume.com that results in a successful sale. Affiliates do not represent themselves as Perfume.com, and through a rigorously enforced policy, are not allowed to use our name. Affiliates place our advertisements on their websites. We pay these affiliates a commission when visitors to their sites click on our advertisements and make purchases on Perfume.com.

Advertising Revenues

Over time, we expect to generate significant revenues by selling advertising either directly to advertisers or in partnership with third party advertising networks. During 2007 and early 2008, we had an arrangement with Overture Services, Inc. ("Overture") pursuant to which we were paid a fee for referrals to sites with connections to Overture. We terminated our relationship with Overture effective February 29, 2008, to give us more flexibility to deploy advertising across our websites. Currently, many of our websites are part of Google AdSense's network of publishers which generates advertising revenues and monetizes our properties. Google AdSense matches ads to our sites' content and audiences, and depending on the type of ad, we earn revenues from clicks or impressions. The relationship with Google is a non-exclusive agreement and as we develop our domain websites we may revisit direct relationships or other third party advertising networks.

Sports and Recreation

At March 31, 2009, we hosted one sports-related website, Cricket.com. Cricket.com is a community website for cricket fans. The site includes cricket-related news, schedules of games played worldwide, scores, photos and an active fantasy cricket league. Cricket.com generates revenue through paid advertisements on the website.

Travel

We currently host two travel websites; Brazil.com and Indonesia.com, as Vietnam.com was sold after March 31, 2009. These sites seek to provide much of the information a traveler to these destinations might need. Aside from information and access to flights and hotels, the sites provide basic facts about the countries (history, language, maps and facts), information on tourist attractions and major cities, weather, blogs from travelers and links to other sites about the destination. We earn advertising revenues and affiliate commission revenues for the referred sales of hotels, flights and travel bookings from these websites.

Global Trade

Importers.com is a trade website that connects businesses around the world by providing tools such as an email service and a searchable, online database which helps facilitate communication between buyers and sellers. Businesses register on the website for free. Once registered, buyers and distributors can access information about manufacturers and wholesalers and vice versa. The information is grouped in product categories or may be found via a search bar included on the website. As long as both parties are members, they may contact each other via e-mail. The website also provides useful information concerning international trade-related issues such as customs clearance, transportation providers and trade development organizations. We earn advertising revenues from this website.

Sale and Lease of Domain Names

We own more than 800 domain names. We believe that there is high value in building businesses around the domain names we own, however we recognize that there are opportunities whereby selling or leasing them may be more valuable than exploiting the ownership value of the names. We also recognize that selling some non-core domain names is an effective way to raise funds in a non-dilutive manner, and have successfully sold or leased two domain names in February 2009 with differing payment schedules, and another domain name subsequent to our quarter end. We continue to evaluate any offers received. In the future, we may buy domain names to complement our existing businesses in the health and beauty, sports, travel and global trade categories. In 2008, there was one outright sale and another sales-type lease of domain name assets.

Karate.com

On September 30, 2008, we signed a letter of intent with Domain Strategies, Inc., a leading internet development and management company, to jointly establish a new company ("Newco") for the purpose of building, managing and monetizing the Karate.com domain name we own. The partnership with Domain Strategies will provide management focus and resources to efficiently monetize the domain name. We will contribute the domain name Karate.com to Newco and will receive a 50% interest of the new company, plus a distribution and liquidation preference of $500,000. The Board of Directors of Newco will have equal representation from both partners with Domain Strategies having primary responsibility for the management of day-to-day operations including site design, employment relationships, vendors, customer acquisition and maintenance and relationships with potential strategic partners. If after three years from the date of formation, Newco has not achieved the annual financial goals as set by management and approved by the Board, we have the right to terminate our participation in Newco and ownership of the domain name www.karate.com will revert back to us. In the event that we are the terminating party, Domain Strategies will have the right but not the obligation to purchase our interest in Newco, including the domain name www.karate.com for $1 million within 60 days of termination.

Global Cricket Venture

On April 17, 2008, we signed two Memoranda of Understanding (individually the "BCCI Memorandum" and the "IPL Memorandum" and, together, the "Memoranda") with each of the Board of Control for Cricket in India ("BCCI") and the DLF Indian Premier League ("IPL"). The Memoranda, each of which had a term of 10 years, granted to us the exclusive right to provide the official websites for the BCCI and the IPL (the "Cricket Websites"). As consideration for the rights conveyed, we agreed to pay a minimum annual fee to the BCCI of the greater of 50% of all revenues generated from the BCCI website or an average payment of $3 million per year and a minimum annual fee to the IPL of the greater of 50% of all revenues generated from the IPL website or an average payment of $2 million per year. In addition to the annual fee, we agreed to pay a total of 5% of the revenues generated by a third website, Cricket.com, to the BCCI and the IPL. Revenues were defined as all revenues generated by the Cricket Websites with the exception of revenues earned from the sale of tickets to the matches. We agreed that the minimum annual fee would be paid on a quarterly basis during the first 3 years of the term. The payments, when made, may have been subject to certain withholding or other taxes which we may have been required to gross up pursuant to the terms of the Memoranda. The first payment to the BCCI of $625,000 was due on October 1, 2008, with additional payments of $625,000 due on January 1, 2009, April 1, 2009 and July 1, 2009. The first payment to the IPL of $375,000 was due on October 1, 2008, with additional payments of $375,000 due on January 1, 2009, April 1, 2009 and July 1, 2009. The payment due to the BCCI was decreased to $125,000 pursuant to an agreement we reached with the BCCI. We did not make any of the payments called for by the Memoranda.

In conjunction with our execution of the Memoranda, we signed an agreement (the "Venture Agreement") with Netlinkblue, the owner of the live streaming and mobile rights to the BCCI and IPL cricket matches. Under the Venture Agreement, we and Netlinkblue agreed to create a new company into which we would transfer our rights under the Memoranda and Netlinkblue would transfer the rights it acquired to live stream the matches. As contemplated by the Venture Agreement, a company was incorporated in Singapore on June 10, 2008 and named Global Cricket Venture Pte. Ltd. ("Global Cricket Venture" or "GCV"). Our wholly-owned subsidiary, LCM Cricket Ventures, currently owns 50.05% of the shares of Global Cricket Venture. Pursuant to the Venture Agreement, once we and Netlinkblue each transfer the rights we received from the BCCI and the IPL into Global Cricket Venture, certain rights and obligations will arise, including the obligation that each of us provides funding to Global Cricket Venture. As described below, on March 31, 2009, we and the BCCI jointly terminated the BCCI Memorandum and we assigned the IPL Memorandum to Global Cricket Venture. To our knowledge, Netlinkblue has not transferred the rights it received from the BCCI and the IPL to Global Cricket Venture, therefore, as of March 31, 2009, we do not believe that we have an obligation to provide funding to Global Cricket Venture. The Venture Agreement also required that we and Netlinkblue negotiate and enter into definitive agreements with further terms and conditions to govern our relationship. To date, no definitive agreements have been prepared.

On March 31, 2009, we and the BCCI entered into a Termination Agreement, pursuant to which the BCCI Memorandum was terminated. On that same date, we, Global Cricket Venture and the BCCI, on behalf of the IPL, entered into a Novation Agreement (the "Novation") with respect to the IPL Memorandum. Pursuant to the Novation, Global Cricket Venture was granted all of our rights, and assumed all of our obligations, under the IPL Memorandum. Global Cricket Venture also assumed certain payments due to the BCCI under the BCCI Memorandum.

As a result of the Novation,

· Global Cricket Venture, a 50.05% owned subsidiary, rather than Live Current, is the party to the IPL Memorandum;

· the term of the IPL Memorandum was modified, so that it began on April 1, 2008 and will end on December 31, 2017;

· the minimum payment due on October 1, 2008 to the BCCI of $125,000, reduced from $625,000, and any other payments owed to the BCCI through March 31, 2009 were assumed by Global Cricket Venture and are to be paid on July 1, 2009. We will be fully released from these liabilities once Global Cricket Venture makes these payments;

· the minimum payment due on October 1, 2008 to the IPL of $375,000, and any other payments owed to the IPL through March 31, 2009 were assumed by Global Cricket Venture and are to be paid on July 1, 2009;

· a right to terminate the IPL Memorandum due to a material breach or on the insolvency of either party was added; and

· the "Minimum Annual Fee Payment Schedule" (Schedule 2 to the IPL Memorandum) was revised. The first payment of $2,250,000 is due on July 1, 2009.

The $375,000 owing to the IPL for the October 1, 2008 minimum payment under the IPL Memorandum that was accrued and expensed in 2008 was reversed on March 31, 2009. The $625,000 owing to the BCCI for the October 1, 2008 minimum payment under the BCCI Memorandum that was accrued and expensed in 2008 was renegotiated to $125,000. Therefore $500,000 was reversed on March 31, 2009. The $625,000 owing to the BCCI for the January 1, 2009 minimum payment under the BCCI Memorandum was accrued and expensed in the first quarter of 2009. The two minimum payments of $125,000 and $625,000 owing to the BCCI as at March 31, 2009 were assumed by Global Cricket Venture, however the release of the Company's obligation to make the payments is contingent on Global Cricket Venture making the payments on or before July 1, 2009.

During the first quarter of 2009, the Company incurred $227,255 of costs relating to initial performance of its obligations under the Memoranda with each of the BCCI and the IPL and establishing Global Cricket Venture with Netlinkblue. These costs relate to, but are not limited to, expenditures for business development, travel, consulting, and salaries.

Due to the reversal of the $375,000 and $500,000 accrued liabilities at December 31, 2008, the recognition of $625,000 owing for the January 1, 2009 BCCI minimum payment, and the costs incurred of $227,255 as noted above, there was a net recovery of Global Cricket Venture expenses of $22,745 recorded during the quarter.

We accounted for our economic obligations to the BCCI and IPL based on the schedule of payments defined by the MOUs by accruing individual payments as liabilities based on the payment schedule, and expensed such payments in the related period as a current expense as the minimum guaranteed payments owing to the BCCI and IPL had no future benefit to the Company.

The Company determined that its original interim consolidated financial statements for the quarter ended March 31, 2009 (the "Original Financial Statements"), as well as the consolidated financial statements for the years ended December 31, 2008 and 2007, contained errors. These errors, which are described below, affected the financial position, results of operations and cash flows for the quarters ended March 31, 2009 and March 31, 2008, and the fiscal year ended December 31, 2008. Please also see Note 2 to our restated interim financial statements for the quarter ended March 31, 2009.

A. Deferred income tax liability related to indefinite life intangible assets:

The Company's intangible assets, comprised of its domain names, have book values in excess of their tax values. The Original Financial Statements considered the taxable temporary differences associated with these indefinite life intangible assets in reducing the valuation allowance associated with its loss carryforwards. This was an incorrect application of GAAP. A deferred tax liability should have been recognized for these taxable temporary differences. Correction of this error resulted in the recognition of a deferred tax liability of $206,370 as at March 31, 2009 and December 31, 2008. There was an immaterial effect to the consolidated statements of operations for the quarters ended March 31, 2009 and March 31, 2008.

B. Non-Controlling Interest:

The Company determined that it should have recorded $66,692 of goodwill and an increase to non-controlling interest liability associated with the exchange of $3,000,000 of amounts due from a subsidiary for additional common stock in 2008. See Note 5 to our consolidated financial statements.

Prior to recognizing the non-controlling interest liabilities described in the preceding paragraph, the non-controlling interest's share of subsidiary losses in 2008 was limited to the non-controlling interest liability. As a consequence of the above increase to non-controlling interest liability, the non-controlling interest's share in subsidiary losses was increased by $51,506 during the quarter ended March 31, 2008. There was no effect to the non-controlling interest at December 31, 2008 or March 31, 2009, or for the three month period then ended.

C. Management Compensation:

(i) The March 31, 2008 financial statements did not accrue $88,287 for two CDN$250,000 special bonuses to be paid on October 1, 2008 and October 1, 2009 to the Company's former President and Chief Operating Officer pursuant to his employment agreement. These special bonuses were not discretionary, but would only be paid if he remained employed as an officer of the Company on the dates payable. On February 4, 2009, he resigned as the Company's President and Chief Operating Officer and employee, effective January 31, 2009. There was no effect to the March 31, 2009 financial statements.

(ii) The March 31, 2008 financial statements did not accrue $35,314 for two CDN$100,000 special bonuses to be paid on January 1, 2009 and January 1, 2010 to the Company's current President and Chief Corporate Development Officer pursuant to his employment agreement. These special bonuses are not discretionary, but will only be paid if he remains employed as an officer of the Company on the dates payable. The December 31, 2008 financial statements had an underaccrual of $119,045, and the March 31, 2009 financial statements had an overaccrual of $72,741 in bonuses payable and expensed during the quarter.

D. Estimated life of stock options:

The Company originally estimated the life of its stock options as equal to the vesting period for these options, 3 years. The estimated life should have been 3.375 years, resulting in an increase of $155,500 and a decrease of $38,423 to the Company's stock-based compensation expense in the quarters ended March 31, 2009 and March 31, 2008, respectively.

E. Other

(i) Expense accruals

The Company discovered an accrual and cutoff error in its recorded accounting fees, resulting in an underaccrual of accounts payable and accounting expense (included in Corporate General and Administrative expenses) of $83,271 and $63,750 in the quarters ended March 31, 2009 and March 31, 2008, respectively.

(ii) Gain on sale of domain name

The Company failed to record website development costs attributable to a domain name sold in December 2008, reducing website development costs and gain on sale of domain names by $37,408 in the year ended December 31, 2008. As a result, a corresponding decrease to the gain on sale of domain names in the quarter ended March 31, 2009 was adjusted. There was no effect to the consolidated balance sheet as at March 31, 2009.

F. Classification of warrants issued in November 2008 private placement:

In November 2008, the Company raised $1,057,775 of cash by selling 1,627,344 units consisting of one share of the Company's common stock and two warrants, each for the purchase of a half share of common stock. The offering price was $0.65 per unit. The estimated fair value of the warrants was $157,895 and was presented as equity in the Original Financial Statements. The warrants contained provisions which could require their redemption in cash in certain circumstances which may not all be within the Company's control. The fair value of the warrants therefore should have been recorded as a liability, with future changes to fair value reported as either income or expense in the period in which the . . .