(a) Forward Looking Statements

The Company makes forward-looking statements in this report 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 as a result of the recession in the U.S., 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 create new businesses around domain names, the potential loss of customer or supplier relationships, the potential failure to receive or maintain necessary regulatory approvals, 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 report.

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 report.

Readers of this report should not rely solely on the forward-looking statements and should consider all risks and uncertainties throughout this report, as well as those discussed under "Item 1 Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2008 and the amendment thereto.

The following discussion should be read in conjunction with our interim consolidated financial statements and their explanatory notes, which are attached in Item 1.

(b) Business Overview

We build consumer internet experiences around our large portfolio of domain names. In addition, we own hundreds of non-core domain names that we may choose to develop, lease or sell in the future to raise funds in a non-dilutive manner. We generate revenues from consumer internet experiences in two different ways; through the online sales of products (eCommerce) and through the sale of advertising. Currently, almost all of the revenues we earn are generated from our main health and beauty website, Perfume.com. Through this website, we sell discount brand name fragrances, skin care and hair care products directly to consumers. We also generate revenues by selling online advertising space to advertisers or in partnership with third party advertising networks. However, in 2008 and during the first half of 2009, advertising accounted for less than 2% of total revenues. We presently employ eighteen 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. We also lease an office at 12201 Tukwila Intl. Blvd, Suite 200, Tukwila, Washington.

In 2008, we began shipping our Perfume.com products to selected international markets. Until then, we shipped only to delivery addresses located in the United States. However, through the first half of the 2009 fiscal year, sales of products shipped to non-U.S. locations are immaterial and therefore are not disclosed separately.

The recent downturn in the global economy has significantly impacted the U.S. economy and consumer confidence. It remains a challenge for all retailers, including online retailers, to achieve sales growth with adequate gross margins. As a result of our dependence on the U.S. marketplace for sales, it is likely that the current recession will cause a negative impact to our results for at least the short-term.

During 2008 and through the first half of 2009, our revenues were not sufficient to support our operations and we do not expect this to change in the short-term. Therefore, we have needed to find ways to raise funds for working capital. Toward the end of the 2008 fiscal year, we began to experience significant challenges in raising capital through the sale of our securities and these challenges are on-going. Financing opportunities have become more expensive and difficult to find. Furthermore, if we attempted to raise funds through the sale of our securities, the steep decline in the price of our common stock would result in significant dilution to our current stockholders. As a result, management sold some of our non-core domain names to raise funds. From December 31, 2008 through August, 2009, we sold seven domain names, not including our cricket.com domain name, for a total of nearly $3.4 million. We believe these sales are a testament to the inherent value of our domain name assets, and together with other cost-cutting measures, the proceeds will help meet our working capital needs and management's strategy to achieve the goal of cash flow positive operations by the end of 2010.

In 2008, we had a significant net loss and significant cash outflows. In late 2008 and early 2009 we instituted cost-cutting measures, including layoffs of staff and the termination of consulting and investor relations contracts. In addition, our Chief Executive Officer has agreed to defer the payment of his salary indefinitely. As a result of these efforts, our net cash outflows have begun to decrease.

For the immediate future, we do not anticipate independently developing technologies, processes, products or otherwise engaging in research, development or similar activities. Instead, if we find these activities to be necessary to our business, we intend to enter into relationships with strategic partners who conduct such activities.

RECENT DEVELOPMENTS

Karate.com

On May 15, 2009 (the "Effective Date"), we signed an agreement ("LLC Agreement") with Domain Strategies, Inc., a leading internet development and management company, and Develep, a partnership, to jointly establish a limited liability company ("Karate, LLC") for the purpose of developing, managing and monetizing the Karate.com domain name we own. This partnership will provide management focus and resources to efficiently monetize the domain name. Pursuant to the LLC Agreement, we will contribute the domain name, Karate.com, to Karate, LLC and will receive a 55% interest of Karate, LLC, plus a liquidation and withdrawal preference. The Board of Directors of Karate, LLC will have equal representation from all parties with Domain Strategies and Develep 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. On the second anniversary of the Effective Date, we have the right to withdraw from Karate, LLC for any reason. We also have the right to withdraw from Karate, LLC at any time on or before the third anniversary of the Effective Date if we are required at any time to make a capital contribution, or if our equity interest in Karate, LLC has been or will be diluted in any way. In the event we are the terminating party, ownership of the domain name www.karate.com will revert back to us, however Domain Strategies will have the right but not the obligation to purchase the domain name www.karate.com for $1 million within 60 days of termination.

Exit from Cricket.com

On March 31, 2009 the Company, Global Cricket Ventures Pte. Ltd. (sometimes referred to in this Report as "GCV"), a subsidiary of the Company, and the Board of Control for Cricket in India ("BCCI") entered into a Novation Agreement (the "Novation") pursuant to which GCV was granted all of the Company's rights, and assumed all of the Company's obligations, under the Memorandum of Understanding (the "Original Agreement") dated April 16, 2008 that had been executed by the Company and the BCCI, acting for and on behalf of its separate subcommittee unit known as the Indian Premier League.

On August 25, 2009 GCV entered into an Assignment and Assumption Agreement (the "Assignment") with Global Cricket Ventures Limited (Mauritius) ("Mauritius"), an entity unrelated to the Company or its affiliates. The Assignment is dated August 20, 2009. Pursuant to the Assignment, GCV transferred and assigned to Mauritius all of GCV's right, title and interest in and to the Original Agreement, as amended by the Novation, and Mauritius accepted the assignment and assumed and agreed to be liable for all past and future obligations and liabilities of GCV arising under, pursuant to or in connection with the Original Agreement, as amended by the Novation.

In conjunction with the Assignment, on August 25, 2009 DHI entered into the Cricket.com Lease and Transfer Agreement (the "Lease") with Mauritius. The Lease is dated August 20, 2009. Pursuant to the Lease, DHI leased to Mauritius the cricket.com domain name, the cricket.com website (the "Website"), and certain support services in exchange for the payment of $1 million (the "Purchase Price") plus the expenses described below. The Purchase Price is to be paid in 4 equal installments, each of $250,000. The first installment was received subsequent to the execution of the Lease and the remaining 3 installments are to be paid on a quarterly basis. Upon the payment of the final installment and the expenses described below, DHI will assign to Mauritius all rights, title and interest in the Website, the cricket.com domain name and the registration thereof, all trademarks, services marks and logos that incorporate the term cricket.com and the goodwill (if any) associated with the foregoing.

In order to facilitate the transfer of the Website, DHI has agreed to provide Mauritius with support services for a period of no more than 6 months (the "Transition Period"). In exchange for the support services, Mauritius has agreed to the payment of certain expenses related to the support services including (i) direct costs incurred by DHI for maintaining the Website, (ii) rent and overhead costs in the amount of $2,500 per month, (iii) employee related costs, and (iv) severance costs (not to exceed $60,000) related to the termination of employees whose employment will be terminated as a result of the transfer of the Website. The $60,000 has been received. In addition, Mauritius has agreed that, prior to the expiration of the Transition Period, it will either enter into an employment agreement with Mark Melville, the Company's President and Chief Corporate Development Officer, or pay any severance costs related to his termination without cause (with the exception of special bonus payments), in accordance with the terms of his employment agreement with the Company.

These two agreements will result in our full exit out of the Cricket business, pending any obligation we may have to pay to the BCCI and IPL if Mauritius fails to make the assumed payments, and with the exception of interim support services which we have agreed to provide for a period of six months. The Company cannot determine the financial impact of this transaction at this time.

Auctomatic

At June 30, 2009, we determined that the auction software acquired through the merger with Auctomatic was impaired. As a result, we recorded an impairment loss of $590,973 at that date.

In August 2009, we reached an agreement with twelve of the eighteen Auctomatic shareholders to convert $424,934 of the $800,000 payable to them into convertible interest bearing notes with a one year term. The payment due date is May 22, 2010.

Also in August 2009, we reached an agreement with the remaining two founders of Auctomatic to terminate their employment. Under their severance agreements, we will pay the amounts owed under the Merger Agreement at a 10% discount to face value and will record an additional $60,000 of severance costs in Q3 of 2009 due to them under their employment agreements. In consideration of these payments, these individuals have each agreed to forfeit their rights to 91,912 shares of Live Current common stock that were due to be issued to each of them in May 2010 and May 2011 under the Merger Agreement.

RESTATEMENT OF FINANCIAL STATEMENTS

Correction of an error in comparative periods:

On June 18, 2009, we were advised by Ernst & Young, LLP, our independent registered public accounting firm, that our consolidated financial statements for the quarter ended March 31, 2009, as well as the consolidated financial statements for the quarter ended June 30, 2008 and the years ended December 31, 2008 and 2007 contained errors. Based on the foregoing, C. Geoffrey Hampson, the Company's Chief Executive Officer and Chief Financial Officer, concluded that the Original Financial Statements should no longer be relied upon. These errors, which are described below, affected opening balances as at December 31, 2007 and the financial position, results of operations and cash flows for the comparative period ended June 30, 2008 and December 31, 2008. Please also see Note 2 to our restated financial statements, as well as our related disclosure on our Amendment No.1 to Form 10-K as filed with the Securities and Exchange Commission on September 14, 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 December 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, the non-controlling interest's share of subsidiary losses in 2008 and 2007 was limited to the non-controlling interest liability. As a consequence of the above increases to non-controlling interest liabilities, the non-controlling interest's share in subsidiary losses was increased by $23,972 in the three month period and $75,748 in the six month period ended June 30, 2008. There was no effect to the non-controlling interest on the consolidated balance sheets at December 31, 2008.

C. Management Compensation:

(i) The financial statements for the three and six month periods ended June 30, 2008 did not expense $89,466 and $177,752, respectively, for two CDN$250,000 special bonuses to be paid on October 1, 2008 and October 1, 2009 to our 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 our President and Chief Operating Officer and employee, effective January 31, 2009. There was no effect to the December 31, 2008 or June 30, 2009 financial statements.

(ii) The financial statements for the three and six month periods ended June 30, 2008 did not expense $35,786 and $71,101, respectively for two CDN$100,000 special bonuses to be paid on January 1, 2009 and January 1, 2010 to our 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 effect to the consolidated balance sheets at December 31, 2008 was an underaccrual of bonuses payable of $119,045.

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 decreases of $45,913 and $84,336 to stock-based compensation expense in the three and six month periods ended June 30, 2008.

E. Other

(i) Expense accruals

The Company discovered an accrual and cutoff error in its recorded accounting fees, resulting in an underaccrual of accounting expense (included in Corporate General and Administrative expenses) of $0 and $63,750 in the three and six month periods, respectively, ended June 30, 2008. The error resulted in an overaccrual of accounts payable and accounting expense (included in Corporate General and Administrative expenses) of $19,521 in the year ended December 31, 2008.

(ii) Gain on sale of domain name

The Company failed to record website development costs attributable to a domain name sold in 2008, reducing website development costs and gain on sale of domain names by $37,408 in the year ended December 31, 2008.

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 financial statements for the fiscal year ended December 31, 2008. 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 change in fair value occurs. There were no changes to the fair value of the warrants between the November 2008 issue date and December 31, 2008. There was no effect to the comparative reported amounts at June 30, 2008.

G. Shares issued in connection with the merger with Auctomatic:

(i) Valuation of shares issued as purchase consideration

The Auctomatic merger closed on May 22, 2008. The original estimate of the fair value of the share purchase consideration attributable to the acquisition was based on the trading value of the shares around March 25, 2008. However, the Merger Agreement had an adjustment provision regarding the number of shares to be issued, such that the shares should have been valued with reference to the May 22, 2008 closing date as opposed to the announcement date on March 25, 2008. Using the average share price around the closing date, an additional $110,746 should have been recorded as additional paid-in capital and goodwill during the quarter ended June 30, 2008 and year ended December 31, 2008.

(ii) Shares issued to Auctomatic founders

As part of the merger, the Company agreed to distribute 413,604 shares of its common stock payable on the first, second, and third anniversaries of the Closing Date (the "Distribution Date") to the Auctomatic founders subject to their continuing employment with the Company or a subsidiary on each Distribution Date. These shares, which were not accounted for in the Auctomatic purchase, also were not properly accounted for as compensation to the Auctomatic founders for their continued employment with the Company. The related stock-based compensation expense that should have been recorded in the three and six months ended June 30, 2008 was $45,326.

H. Financial Statement Classification of Amounts Payable to the BCCI and IPL:

In order to provide clarity, the Company also classified separately on its consolidated balance sheets and consolidated statements of operations the $1,000,000 of amounts payable as at December 31, 2008 and $750,000 as at June 30, 2009 to the BCCI and IPL.

I. Tax Impact:

Exclusive of Item A, none of the above adjustments gave rise to an increase or
decrease in the Company's tax position.

The following is a summary of the significant effects of the restatements on the
Company's comparative consolidated statements of operations for the three months
ended June 30, 2008.

                                                                      As previously      Restatement
For the three months ended June 30, 2008            Reference           reported          adjustment       As restated

GROSS PROFIT                                                                356,568                  -          356,568

EXPENSES
                                                 C(i), C(ii), D,
Management fees and employee salaries                 G(ii)               1,470,418            124,665        1,595,083
All other expenses                                                          928,735                  -          928,735
Total Expenses                                                            2,399,153            124,665        2,523,818

OTHER INCOME (EXPENSES)
Interest and investment income                                               16,680                  -           16,680
Non-controlling interest                                                          -                  -                -
Total Other Income (Expenses)                                                16,680                  -           16,680

CONSOLIDATED NET LOSS                                                    (2,025,905 )         (124,665 )     (2,150,570 )
ADD: NET LOSS ATTRIBUTABLE TO
 NON-CONTROLLING INTEREST                               B                         -             23,972           23,972

NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD                        $  (2,025,905 )   $     (100,693 )   $ (2,126,598 )

LOSS PER SHARE - BASIC AND DILUTED
Net Loss attributable to Live Current Media Inc. common
stockholders                                                          $       (0.10 )            (0.00 )   $      (0.10 )
Weighted Average Number of Common Shares
Outstanding - Basic and Diluted                                          20,832,026                  -       20,832,026

The following is a summary of the significant effects of the restatements on the Company's comparative consolidated statements of operations for the six months ended June 30, 2008.

                                                                     As previously      Restatement
For the six months ended June 30, 2008             Reference           reported          adjustment       As restated

GROSS PROFIT                                                               718,985                  -          718,985

EXPENSES
Corporate general and administrative                 E(i)                1,053,960             63,750        1,117,710
                                                C(i), C(ii), D,
Management fees and employee salaries                G(ii)               2,528,965            209,843        2,738,808
All other expenses                                                       1,328,251                  -        1,328,251
Total Expenses                                                           4,911,176            273,593        5,184,769

OTHER INCOME (EXPENSES)
Gain from sales and sales-type lease of domain names                       168,206                  -          168,206
Interest and investment income                                              59,178                  -           59,178
Total Other Income (Expenses)                                              227,384                  -          227,384

CONSOLIDATED NET LOSS                                                   (3,964,807 )         (273,593 )     (4,238,400 )
ADD: NET LOSS ATTRIBUTABLE TO
 NON-CONTROLLING INTEREST                              B                         -             75,478           75,478

NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD                       $  (3,964,807 )   $     (198,115 )   $ (4,162,922 )

LOSS PER SHARE - BASIC AND DILUTED
Net Loss attributable to Live Current Media Inc. common
stockholders                                                         $       (0.19 )            (0.01 )   $      (0.20 )
Weighted Average Number of Common Shares
Outstanding - Basic and Diluted                                         20,832,026                  -       20,832,026

The following is a summary of the significant effects of the restatements on the Company's comparative consolidated statements of cash flows for the six months ended June 30, 2008.

                                                              As previously      Restatement
For the quarter ended June 30, 2008          Reference          reported          adjustment       As restated
OPERATING ACTIVITIES
Net loss for the period                                       $  (3,964,807 )   $     (198,115 )   $ (4,162,922 )
Non-cash items included in net loss:
Gain from sales and sales-type lease of
domain names                                                       (168,206 )                -         (168,206 )
Stock-based compensation                      D, G(ii)            1,025,889            (39,010 )        986,879
Warrants issued                                                       3,792                  -            3,792
Issuance of common stock for services                                85,350                  -           85,350
Amortization and depreciation                                        58,448                  -           58,448
Change in operating assets and
liabilities:
Accounts receivable                                                   7,032                  -            7,032
Amounts payable to the BCCI and IPL                                (733,539 )                -         (733,539 )
Prepaid expenses and deposits                                       (64,552 )                -          (64,552 )
Accounts payable and accrued liabilities        E(i)                 37,117            174,496          211,613
Bonuses payable                             C(i), C(ii)              92,152            248,853          341,005
Deferred revenue                                                    (37,292 )                -          (37,292 )
Cash flows used in operating activities                          (3,658,616 )          186,224       (3,472,392 )

INVESTING ACTIVITIES
. . .