UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-Q





[
X ]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE


SECURITIES
EXCHANGE ACT OF 1934





For the
quarterly period ended June 30, 2008


or





[  
]      TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
transition period from ______ to ______





Commission
File Number 000-29929





LIVE
CURRENT MEDIA INC.


(Exact
name of registrant as specified in its charter)








Nevada
            88-0346310(State
      or other jurisdiction of
            (IRS
      Employerincorporation
      or organization)
            Identification
      Number)





375 Water Street, Suite 645,
Vancouver, British Columbia, V6B 5C6





(604)
453-4870








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 þ No o








Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer o  (Do
      not check if a smaller reporting company)
            Smaller
      reporting company þ








Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


[   ]
Yes         [ X
]  No








APPLICABLE
ONLY TO CORPORATE ISSUERS





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date.





Common
      Stock
            22,093,026
      shares outstanding$.001
      Par Value
            as
      of August 14, 2008




Transitional
Small Business Disclosure Format (Check one):  Yes [  ] No
[X]




























2


LIVE
CURRENT MEDIA INC.


REPORT
ON FORM 10-Q


QUARTER
ENDED JUNE 30, 2008


TABLE
OF CONTENTS





PagePART
      I.
              Financial
      InformationItem 1.
              Unaudited Financial
      Statements
              4Consolidated
      Balance Sheets as of June 30, 2008 and December 31,
    2007
              F-2Consolidated
      Statements of Operations for the periods ended June 30, 2008
      and June 30, 2007
              F-3Consolidated
      Statement of Stockholders’ Equity for the periods ended June 30, 2008
      and June 30, 2007
              F-4Consolidated
      Statements of Cash Flows for the periods ended June 30, 2008
      and June 30, 2007
              F-5Notes to the
      Consolidated Financial Statements
              F-6Item
      2.
              Management's
      Discussion and Analysis or Plan of Operation
              4Item
    3.
              Quantitative and
      Qualitative Disclosures About Market Risk
              15Item
    4T.
              Controls and
      Procedures
              15PART
      II.
              Other
    InformationItem
    1.
              Legal
      Proceedings
              15Item
    1A.
              Risk
    Factors
              15Item 2.
              Unregistered Sales
      of Equity Securities and Use of Proceeds
              15Item
    3.
              Defaults Upon Senior
      Securities
              17Item
    4.
              Submission of
      Matters to a Vote of Security Holders
              17Item 5.
              Other
      Information
              17Item 6.
              Exhibits
              19Signatures
              
              20Certifications


3


PART  I
– FINANCIAL INFORMATION








Item 1: Financial
Statements.





The
response to Item 1 has been submitted as a separate section of this Report
beginning on page F-1.








Item 2:
Management’s discussion and analysis or plan of operation





Statements included in this
management’s discussion and analysis of financial condition and results of
operations, and in future filings by the company with the securities and
exchange commission, in the company’s press releases and in oral statements made
with the approval of an authorized executive officer which are not historical or
current facts are “forward-looking statements” and are subject to certain risks
and uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. You are
cautioned not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. The following important factors, among
others, in some cases have affected and in the future could affect the company’s
actual results and could cause the company’s actual financial performance to
differ materially from that expressed in any forward-looking statement:
(i) the extremely competitive conditions that currently exist in the market
for companies similar to the company and (ii) lack of resources to maintain
the company’s good standing status and requisite filings with the securities and
exchange commission. The foregoing list should not be construed as exhaustive
and the company disclaims any obligation subsequently to revise any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events. The following discussion should be read in conjunction with our
financial statements and their explanatory notes included as part of this
quarterly report.





(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.





To the
extent it is entitled, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995 for all of its 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 hire and 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
business model, the potential lack of product acceptance, its potential
inability to introduce new products to the market, the potential failure of
customers to meet purchase commitments, the potential loss of customer
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, the timing
of and proceeds from the sale of restricted securities it holds 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.


4





(b)           Business
Overview





Live
Current Media Inc. (formerly known as Communicate.com Inc.) (the “Company”)
changed its name on May 30, 2008 from Communicate.com Inc. to Live Current Media Inc. after
obtaining formal shareholder approval to do so at the Annual General Meeting in
May 2008.





The
Company currently holds 98.2% (December 31, 2007 – 94.9%) of the outstanding
shares of its principal operating subsidiary, Domain Holdings, Inc. (“DHI”), an
Alberta company.  During Q1 of 2008, DHI issued 40,086,645 shares to
the Company in exchange for a conversion of intercompany debt of
$3,000,000.





The
Company presently employs twenty-three full-time employees, three part-time
employees, and four consultants. The Company anticipates that it will continue
to invest in management, marketing, finance, operations, and technology
capability. In addition to the above, the Company plans to engage in
arrangements with strategic partners and outside suppliers where
appropriate.





The
Company’s principal office is located at #645-375 Water Street, Vancouver,
British Columbia V6B 5C6.  It also leases an office at the Pacific
NorthWest Trade Center, 800 Fifth Avenue, Suite 4100, Seattle, WA 98104 for a
nominal amount per month.





The
corporate website is located at www.livecurrent.com.





Operations





Through
its majority-owned subsidiary, DHI, the Company builds consumer internet
experiences around its large portfolio of domain names.  These domain
names span several consumer and business-to-business categories including health
& beauty (such as Perfume.com), sports and recreation (such as Cricket.com
and Boxing.com), travel (such as Brazil.com and Vietnam.com), and global trade
(importers.com).  Management believes that it 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.  Management has begun to exploit this traffic through the
construction of next generation consumer experiences, which they call
DestinationHubsTM, at perfume.com and cricket.com.  Over time, the
Company will build out additional DestinationHubs at several of their domain
names.  The Company may also choose to sell select domain names to
strategic buyers.





The
Company also owns a number of .cn (China) domain names and a portfolio of second
and third tier .com domain names, such as shoppingbound.com, pharmacybound.com
and vietnambound.com.  Management believes that the .cn domain names
could have significant value as the internet market in China
develops.  The “bound.com” domains may benefit from the massive online
travel market.





The
Company generates revenue by selling products online to consumers (eCommerce)
and by selling online advertising space to advertisers.  Ecommerce
revenues are primarily derived from the sale of fragrance products to consumers
at Perfume.com.  Advertising revenues are derived by offering “pay per
click” and display advertising on certain other websites in its
portfolio.  Prior to November 12, 2007, the Company also sold travel
services through its majority-owned subsidiary FrequentTraveller.com Inc.
(“FT”).  Due to poor operating results and cash flows, the Company’s
relationship with FT was terminated effective November 12, 2007.  On
the same date, the Company entered into an Asset Purchase Agreement (“APA”) with
FT whereby the Company acquired all of the tangible and intangible assets
associated or used in connection with the operation of FT’s travel business,
exclusive of all cash and real property for a total consideration of (a) the
8,000,000 shares of FT owned by the Company; and (b) the cancellation of
$261,833 of debt owed by FT to the Company resulting in a gain on disposal of
the investment of $276,805.  As such, the Company has acquired all
rights associated with the operation of the FrequentTraveller.com
website.  As at November 12, 2007, FT is no longer a
subsidiary.





On March
25, 2008, the Company and its wholly owned subsidiary, Communicate.com Delaware,
Inc. (“Delaware”) entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Entity, Inc., a Delaware corporation,
(“Auctomatic”).  The Merger Agreement closed on May 22,
2008 (the “Closing Date”).  The surviving entity in the transaction,
and our subsidiary, Delaware, has had minimal operations in Q2 of 2008, but
continues to be a part of the Company’s strategic foundation for future
growth.  The Auctomatic technology framework and toolset, as well as
the team of senior employees obtained in this transaction, have already helped
the Company in strengthening its eCommerce platform and enhancing its product
and technology capability.


5





A list of
the Company’s subsidiaries at August 14, 2008 is attached as Exhibit
21.





Global
Cricket Venture





On April
17, 2008, the Company signed a Memorandum of Understanding (“MOU”) with the
Board of Control for Cricket in India (“BCCI”) and the DLF Indian Premier League
(“IPL”) to build, operate and promote two cricket-related web sites —
IPLT20.com, the official web site of the IPL, and BCCI.tv, the official web site
of the BCCI.  Pursuant to the MOU, the BCCI granted the Company
exclusive and non-exclusive rights to digital cricket-related content (e.g.
video, photos, etc.).  The Company also gained rights to use this
content to launch cricket.com, a global portal for cricket
enthusiasts.  The MOU has a term of ten years and renewal rights for
an additional ten years.  The IPLT20.com website was launched on April
18, 2008.  The parties are currently negotiating further, definitive
agreements, to memorialize the terms and conditions of the deal.





The
Company subsequently signed a Memorandum of Understanding on May 19, 2008 to
form Global Cricket Venture with netlinkblue (“NLB”) to combine digital assets
around the IPL.  In addition to the digital assets referenced above,
Global Cricket Venture controls the right to live stream IPL matches and has the
exclusive global mobile rights.  The parties are currently negotiating
further, definitive agreements, to memorialize the terms and conditions of the
venture.





On April
18, 2008, the Company launched the IPLT20.com website in conjunction with the
inaugural Indian Premier League season.  Consistent with a highly
successful first season for the league, the website saw extremely high levels of
traffic and fan engagement during the 44 day tournament.  However,
since the MOU was signed just prior to the commencement of the league’s first
season, revenues for the first season were immaterial.





On August
8, 2008, the Company formed a wholly-owned subsidiary in Singapore, LCM Cricket
Ventures Pte. Ltd. (“LCM Cricket Ventures”).  The new subsidiary is
intended to be a holding company to support the Global Cricket Venture with NLB
and the Company’s activities relating to cricket and the IPL.  It is
anticipated that LCM Cricket Ventures will become a shareholder in Global
Cricket Venture Pte. Ltd. (“Global Cricket
Venture”), a
Singapore company that was formed by NLB on June 10, 2008 for the purpose of
conducting the activities outlined in the MOU’s.  To date, the new
subsidiary has no or nominal assets and no operations.





The
Company has incurred substantial costs relating to negotiating and performing
under the terms of the MOUs with each of the BCCI and the IPL, and establishing
the venture with NLB.  During Q2 of 2008, these costs totaled $678,222
(Q1 of 2008 - $55,317) including, but not limited to, expenditures for business
development, travel, consulting, and salaries.  There were no such
costs in Q2 or Q1 of 2007.  It is anticipated that the costs incurred
by each party to the venture in the launch phase will be reimbursed by Global
Cricket Venture, which may seek its own funding from outside
sources.  As a result, the Company has recorded these costs as amounts
receivable from the Global Cricket Venture at June 30, 2008.














6





(c)           Selected
Financial Data





The
following selected financial data was derived from the Company’s unaudited
interim consolidated financial statements for the quarter ended June 30,
2008.  The information set forth below should be read in conjunction
with the Company’s financial statements and related notes included elsewhere in
this report.





(Expressed
      in U.S. dollars)
              
              Three
      Months EndedJune
      30, 2008
              (unaudited)
            
            
            June
      30, 2007
              (unaudited)SALESHealth and Beauty eCommerce
            
            $
            1,908,036
            
            
            $
            1,470,610Other
      eCommerce
            
            
            -
            
            
            
            114,862Domain name leasing and
      advertising
            
            
            27,418
            
            
            
            70,692Total Sales
            
            
            1,935,454
            
            
            
            1,656,164COST
      OF SALESHealth and Beauty eCommerce
            
            
            1,578,886
            
            
            
            1,143,715OthereCommerce
            
            
            -
            
            
            
            93,979Total Cost of
    Sales
            
            
            1,578,886
            
            
            
            1,237,694GROSS
      PROFIT
            
            
            356,568
            
            
            
            418,470EXPENSESAmortization and
      depreciation
            
            
            43,888
            
            
            
            3,024Corporate general and
      administrative
            
            
            591,169
            
            
            
            109,946ECommerce general and
      administrative
            
            
            100,495
            
            
            
            58,034Management fees and employee
      salaries
            
            
            1,479,782
            
            
            
            359,825Corporate
    marketing
            
            
            20,243
            
            
            
            -ECommerce
    marketing
            
            
            129,885
            
            
            
            121,067Other
      expenses
            
            
            33,691
            
            
            
            -Total
      Expenses
            
            
            2,399,153
            
            
            
            651,896LOSS
      BEFORE OTHER ITEMS
            
            
            (2,042,585
            )
            
            
            (233,426
            )Interest and investment
      income
            
            
            16,680
            
            
            
            14,246NET
      LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD
            
            $
            (2,025,905
            )
            
            $
            (219,180
            )BASIC
      AND DILUTED LOSS PER SHARE
            
            $
            (0.10
            )
            
            $
            (0.01
            )WEIGHTED
      AVERAGE NUMBER OF COMMON
              SHARES
      OUTSTANDING – BASIC AND DILUTED
            
            
            20,832,026
            
            
            
            17,872,860





7








BALANCE SHEET
      DATA
            
            At
              June 30,
              2008
              (unaudited)
            
            
            At
              December 31,
              2007
              (audited)Current
      Assets
            
            $
            3,172,481
            
            
            $
            7,760,349Long-term
      Portion of Investment in Sales-Type Lease
            
            
            23,423
            
            
            
            -Property
      and Equipment
            
            
            1,225,440
            
            
            
            175,797Website
      Development Costs
            
            
            276,030
            
            
            
            -Intangible
      Assets
            
            
            1,625,881
            
            
            
            1,645,061Goodwill
            
            
            2,417,296
            
            
            
            -Total
      Assets
            
            $
            8,740,551
            
            
            $
            9,581,207Current
      Liabilities
            
            $
            2,668,706
            
            
            $
            1,829,936Deferred
      Lease Inducements
            
            
            65,449
            
            
            
            75,518Total
      Liabilities
            
            
            2,734,155
            
            
            
            1,905,454Common
      Stock
            
            
            13,087
            
            
            
            12,456Additional
      Paid in Capital
            
            
            12,483,794
            
            
            
            10,188,975Accumulated
      Deficit
            
            
            (6,490,485
            )
            
            
            (2,525,678
            )Total
      Stockholders’ Equity
            
            
            6,006,396
            
            
            
            7,675,753Total
      Liabilities and Stockholders’ Equity
            
            $
            8,740,551
            
            
            $
            9,581,207








(d)           Results
of Operations




Sales
and Costs of Sales




Overall,
combined sales in Q2 of 2008 totaled $1,935,454 versus $1,656,164 in Q2 of 2007,
an increase of 16.9%. However, Q2 of 2007 included significant revenues of
$114,862 from the Frequent Traveler (“FT”) relationship that was terminated in
November 2007.  Without considering these revenues, the increase in
overall revenues in Q2 of 2008 was $394,152, or 25.6%, compared to Q2 of
2007.  Most of this increase was driven by a large increase in sales
on Perfume.com as noted below.  Overall, Health & Beauty eCommerce
product sales, consisting of Perfume.com sales, represented 98.6% of total
revenues in Q2 of 2008, compared to approximately 95.4% of total revenues in Q2
of 2007 not including any influence from the FT revenues.





Costs of
sales were $1,578,886 in Q2 of 2008 compared to $1,237,694 during Q2 of 2007, an
increase of 27.6%.  The 2007 costs of sales included costs of sales
attributable to FT in the amount of $93,979.  The increase of costs of
sales in Q2 of 2008 over Q2 of 2007 without the FT costs of sales was
38.1%.  This increase is due to higher product and shipping costs in
Q2 of 2008 compared to Q2 of 2007.





Overall
gross margin in Q2 of 2008 was 18.4% compared to a gross margin of 25.3% in Q2
of 2007.  Without any influence from FT sales and costs of sales, the
gross margin in Q2 of 2007 was 25.8%.  This decrease in the overall gross
margin from Q2 of 2007 is due to reduced advertising revenues which provide
nearly 100% gross margins and Management’s focus on more aggressive discounts to
invest in growing revenues and customers at Perfume.com, as discussed
below.





Health
and Beauty eCommerce Sales





The
Company’s eCommerce sales are a result of selling consumable goods to customers
at Perfume.com.





Perfume.com
revenues grew 29.7% from $1,470,610 in Q2 of 2007 to $1,908,036 in Q2 of 2008.
This was the third consecutive quarter with year-over-year revenue growth of
more than 27% for Perfume.com.  Daily sales averaged $20,967 per day in Q2
of 2008 compared to $16,161 per day in Q2 of 2007. Management believes that the
significant quarterly increases demonstrate continued strong potential of this
business segment.


8





Costs of
shipping and purchases totaled $1,578,886 in Q2 of 2008 versus $1,143,715 in Q2
of 2007. This produced a gross margin of $329,150 or 17.3% in Q2 of 2008
compared to $326,895 or 22.2% in Q2 of 2007. Gross profit margin in Q2 2008
decreased compared to Q2 of 2007 primarily due to an increase in shipping costs
attributed to the rise in oil prices and more aggressive discounting to drive
customer and revenue growth.  Management plans to maintain this profit
margin through 2008.  In 2009, Management intends to introduce and
implement more robust supply chain capability which should expand gross margins
by the end of 2010.  However, there is no certainty that such results
can be maintained throughout the year or continue into the foreseeable
future.





Health
and Beauty eCommerce product sales in Q2 of 2008 increased 4.6% compared to Q1
of 2008.





Other
eCommerce Sales





In Q1 of
2008, the Company ceased offering goods or services for sale on its non-Health
and Beauty websites as Management is revisiting the business models around those
websites.  As a result, there were no revenues generated on the
Company’s other eCommerce retail sites in Q2 of 2008, and only $455 earned in Q1
of 2008.





Comparable
quarterly results in Q2 of 2007 included only eCommerce service sales through
its subsidiary FT of $114,862 and FT costs of sales of $93,979.  This
produced a gross margin of $20,883 or 18.2% in Q2 of 2007.  In that
quarter, the travel operation incurred a net loss of $68,768, excluding the
minimum royalty of $37,500 to Domain Holdings Inc.  Effective November
12, 2007, the Company unwound its relationship with travel business subsidiary
FT pursuant to an Asset Purchase Agreement (“APA”) between the Company and FT as
noted above. FT had an accumulated deficit of $1,152,145 at November 12,
2007.  During 2007, there was no requirement to record any
non-controlling interest in the share of loss in FT.





Advertising





In Q2 of
2008, the Company generated advertising revenues of $27,418 compared to $70,692
in Q2 of 2007, a decrease of 61.2%. Management terminated its primary
advertising contract in early 2008 because its restrictive conditions limited
monetization in the medium and long term. In Q2 of 2008, advertising accounted
for only 1.4% of total revenues, compared to 1.5% of total revenues in Q1 of
2008 and 4.3% of total revenues in Q2 of 2007.  Advertising revenues
are expected to continue to account for a small percentage of total revenues in
the next few quarters as Management investigates new monetization opportunities
with vendors, and realigns to increase advertising options available on the
Company’s properties. In the medium-term, Management expects advertising
revenues to be an important part of overall revenue.





Domain
Name Leases and Sales





In Q1 of
2008, the Company entered into an agreement with an unrelated third party for a
sales-type lease of surrey.com for $200,000CAD.  The terms of the
lease agreement provide for five lease payments over a term of two
years.  Title and rights to the domain name will be transferred to the
purchaser only when full payment is received.  Payments received
pursuant to the agreement are forfeited if the contract is terminated or if
subsequent payments do not comply with the agreement.  The present
value of the lease payments were reflected as revenues in Q1
2008.  The investment in the sales-type lease was reflected on a net
basis after the receipt of the first lease payment.





There
were no sales of domain names in Q2 or Q1 of 2008 or the 2007 fiscal
year.  Management continues to evaluate expression of interest from
domain name buyers, and continues to look at acquiring certain other domain
names that would complement either the advertising or eCommerce
businesses.





General
and Administrative





In Q2 of
2008, the Company recorded total general and administrative expense of $691,664
or 35.7% of total sales as compared to $167,980 or 10.9% of total sales in Q2 of
2007, an increase of over 310%. This total includes corporate and eCommerce
related general and administrative costs.  Total general and
administrative expenses in Q2 of 2008 were 9.3% higher than Q1 of 2008, which
were in turn 38.0% higher than these expenses in Q4 of
2007.  Management expects general and administrative expenses to
increase as corporate activity increases.


9





Corporate
general and administrative costs of $591,169 have increased over Q2 of 2007 by
$481,223, which is the result of an increase in accounting and legal fees of
approximately $200,000 due to increased corporate activity and SEC filings,
expenditures relating to investor relations of approximately $197,000 paid in
both cash and common stock, approximately $80,000 in increased rent and
telecommunications in our new office, as well as increased travel expenses and
increased foreign currency for expenses in Canadian dollars which has gained
against the US dollar compared to last year.  These expenses accounted
for 30.5% of total revenues in Q2 of 2008 (25.0% in Q1 of 2008 and 7.1% in Q2 of
2007).  The amounts for Q2 of 2008 have increased by $128,378, or
27.7%, over Q1 of 2008 due primarily to increased costs relating to our new
investor relations firm of approximately $130,000.





General
and administrative costs relating to the eCommerce business in Q2 of 2008
increased by $42,461 over Q2 of 2007 primarily due to approximately $33,000 in
consulting fees and related travel expenses, as well as increased merchant fees
generated on increased sales.  These expenses represented 5.3% of
eCommerce sales in Q2 of 2008 (9.3% in Q1 of 2008) compared to 3.9% of eCommerce
sales in Q2 of 2007, not including eCommerce revenues for
FT.com.  This is reasonable given Management’s focus on growing the
eCommerce business in 2008. Management expects to maintain eCommerce general and
administrative costs below 10% of eCommerce sales.  ECommerce general
and administrative expenses in Q2 decreased by $69,318, or 40.8%, compared to Q1
of 2008 as most recruiting costs to attract talented and experienced employees
were incurred in the first quarter of 2008.





Management
Fees and Employee Salaries





In Q2 of
2008, the Company incurred management fees and staff salaries of $1,479,782
compared to $1,058,546 in Q1 of 2008. This amount includes stock based
compensation of $543,745 in Q2 of 2008 and $482,144 in Q1 of
2008.  The management fees and staff salaries expense in Q2 of 2008
also includes accrued amounts for performance bonuses payable to the management
team of $333,442.  Excluding these amounts, management fees and
employee salaries expense in Q2 of 2008 of $602,595 was an increase of 4.5% over
the normalized expense of $576,402 in Q1 of 2008.  This increase was
primarily due to the addition of senior employees through the Auctomatic merger
which closed on May 22, 2008.





The
normalized expense in Q2 of 2008 has increased $242,770 or 67.5% over Q2 of
2007.  The addition of a new executive management team in late 2007
and early 2008, as well as some additional senior employees, contributed to a
larger expense overall in 2008.  Compensation commensurate with the
caliber of the new management team as well as the addition of more employees and
consultants in marketing, technology, product management and customer service
have contributed significantly to this increase. This investment in the future
of the Company matches the quality of the assets.  In addition to
these new members of executive management, additional senior employees may be
added in the remainder of 2008.





Management
fees and staff salaries, excluding stock-based compensation and accrued bonuses,
represented 31.1% of total revenues in Q2 of 2008 compared to 31.1% in Q1 of
2008 and 21.7% in Q2 of 2007.  Given the caliber of current
management, employees and consultants, it is reasonable to maintain salaries
expense at approximately 30 % of revenues for the next two subsequent
quarters.





Marketing





The
Company acquires internet traffic by pay-per-click, email and affiliate
marketing. In Q2 of 2008, the Company incurred total marketing expenses of
$150,128, compared to $175,751 in Q1 of 2008 and $121,067 in Q2 of
2007.





Included
in this total were corporate marketing expenses of $20,243 related to public
relations and press releases, compared to $26,459 in Q1 of 2008 related to
public relations around repositioning the Company’s business.





ECommerce
marketing expenses in Q2 of 2008 were $129,885 or 6.8% of eCommerce sales,
compared to $149,187 or 8.2% of eCommerce sales in Q1 of 2008 and $121,067 or
8.2% of eCommerce sales in Q2 of 2007.  Q1 of 2008 was higher due to
increased email marketing campaigns for Perfume.com.  Marketing
expenses have been steady as Management repositions Perfume.com and invests in
new customer acquisitions.  Management believes that customer
acquisition is the key to accelerated growth, and direct, measurable marketing
vehicles like search, email, and affiliates account for the largest part of
these marketing expenditures.


10





The
Company’s websites’ search rankings currently perform adequately however
Management believes targeted keywords advertising at opportune times will bring
additional traffic to perfume.com.  Management believes that the more
strategic and measurable advertising expenditures were a contributing factor to
increased revenues in Q2 of 2008.





Other
Expenses





During Q2
of 2008, the Company incurred various unusual and one-time
costs.  During the period, such costs included $31,691 in valuation
costs relating to the Q1 share issuance of DHI shares to the Company and $2,000
in some final windup costs related to the FT disposition in late
2007.





During Q1
of 2008 and Q4 of 2007, these types of costs related to restructuring, and the
recruiting and relocating costs associated with attracting the new management
team.  There were no such costs in Q2 or Q1 of 2007.





(e)           Liquidity
and Capital Resources





The
Company generates revenues from (1) the sale of third-party products and
services over the Internet; (2) "pay-per-click" advertising revenue; (3) selling
advertising on media rich websites with relevant content; and (4) the sale or
lease of domain name assets.





As at
June 30, 2008, the Company had current assets in excess of current liabilities
resulting in working capital of $503,775 compared to working capital of
$4,001,968 at March 31, 2008 and $5,930,413 at December 31, 2007. This quarter’s
working capital balance includes amounts owing from the Global Cricket Venture
of $733,539 as discussed above, and without this balance the Company would have
a negative working capital of $229,764.  The collectibility of these
amounts is reasonably assured, however they may not be reimbursed by the Global
Cricket Venture in the near future as operations for the Venture are set up and
capital funding is sought.  During the three months ended June 30,
2008, the Company had a net loss of $2,025,905 and a decrease in cash of
$3,007,804 compared to a net loss of $219,180 and an increase in cash of
$909,553 over the three-month period ended June 30, 2007.  During the
six months ended June 30, 2008, the Company had a net loss of $3,964,807 and a
decrease in cash of $5,477,305 compared to a net loss of $247,952 and an
increase in cash of $151,707 for the same six-month period of last
year.  From the beginning of the fiscal year to June 30, 2008, the
Company has increased its accumulated deficit to $6,490,485 from $2,525,678 and
has stockholders’ equity of $6,006,396.


Operating
Activities
  Operating
activities in the six months ended June 30, 2008 resulted in cash outflows of
$3,658,616 after adjustments for non-cash items, the most significant of which
were the gain from the sales-type lease of a domain name of $168,206, the
stock-based compensation expensed during the period of $1,025,889, amounts
receivable from the Global Cricket Venture of $733,539, and performance bonuses
accrued in the amount of $333,442 offsetting the decrease in other accounts
payable of $246,473.  In the six months ended June 30, 2007, cash outflows
of $573,720 were primarily due to the decrease in accounts payable and accrued
liabilities of $253,593 during the period.
  Investing
Activities
  Investing
activities during the six months ended June 30, 2008 generated cash outflows of
$1,818,689, primarily due to cash consideration and related acquisition costs of
$1,422,747 pursuant to the Auctomatic merger.  The Company also invested
approximately $176,000 in the purchase of property and equipment, mostly
consisting of furniture and equipment for our new office location, as well as
$285,000 in website development. Investing activities in the period also
included proceeds of $65,585 from a sales-type lease for surrey.com.
 During the six months ended June 30, 2007, cash from investing activities
used $274,573 to purchase “available for sale” securities, which were all
subsequently sold during the 2007 fiscal year end.


11




Financing
Activities




Financing
activities in the six months ended June 30, 2008 resulted in no cash inflows or
outflows.  In Q2 of 2007, there was a $1,000,000 issuance of common
stock to the CEO of the Company.




Future
Operations





While
Management believes it has made significant progress in enhancing its liquidity,
there is no certainty that the improvements can continue in view of changing
market conditions, technological innovations and legal and regulatory
requirements. For 2008, Management expects to expend some of its cash in
additional marketing costs, which it believes will translate into higher revenue
growth, and plans to attract and retain additional talent for new and existing
management and staff positions in order to execute on its business
plan.  In addition, Management expects to continue to expend funds
related to the Global Cricket Venture.  There is no certainty that the
profit margins the Company may generate will be sufficient to offset the
anticipated marketing, salary and other expenditures and may result in net cash
outflow for 2008.





While the
Company has positive working capital, its currently reported quarter has
experienced a loss. Management expects to continue to incur losses in the coming
quarters as planned general and administrative and marketing expenditures
increase.  The Company may also seek to explore new business
opportunities, including the building or acquisition of a distribution center or
warehouse in the United States to enhance its fragrance fulfillment capability
and improve gross margins. These acquisitions may require additional cash beyond
what is available and such funds may be raised by way of equity and/or debt
financing, and through the sale of non-strategic domain name
assets.





The
interim consolidated financial statements have been prepared on a going concern
basis which assumes that the Company will be able to realize assets and
discharge liabilities in the normal course of business for the foreseeable
future.  The Company's ability to continue as a going-concern is
dependent on continued financial support from its investors, the ability of the
Company to raise equity financing, and the attainment of profitable operations
and external financings to meet the Company's liabilities as they become
payable.  The outcome of our operations and fundraising efforts is
dependant in part on factors and sources beyond the direct control of the
Company that cannot be predicted with certainty.  Access to debt or
equity financing is not assured and Management may not be able to enter into
arrangements with financing sources on terms acceptable to the Company, if at
all.  If the Company is unable to raise adequate funds as needed,
Management may seek other alternatives including approaching current
shareholders for financing, curtailing some operations and growth activities, or
selling domain names in order to address short term liquidity
needs.  The accompanying financial statements have been prepared on a
going concern basis which assumes that the Company will be able to realize
assets and discharge liabilities in the normal course of business for the
foreseeable future.  These financial statements do not include any
adjustments relating to the recoverability or classification of assets or the
amounts or classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.





On or
about October 1, 2008, the Company is scheduled to make a payment to the BCCI in
the amount of $625,000 and a payment to the IPL in the amount of $375,000, in
connection with the Global Cricket Venture.  If the Company is unable
to make the required payments and no extension or renegotiation of the payment
terms can be arranged, the Company may have to forfeit its rights to the
cricket-related digital content and may be exposed to potential liability for
defaulting on its payment.  The Company cannot determine at this time
the actual value of such rights, only that the loss of such rights would impact
negatively upon the potential revenues from the Global Cricket
Venture.  In addition, if the Company is unable to make the required
payments, the Company faces potential claims for breach, lack of performance and
other damages which other parties to the MOU may seek to enforce against the
Company.  The Company does not concede that such claims would be
enforceable or result in a recovery against the Company.  If these
events were to occur, such events would have a negative effect on the Company’s
overall anticipated results of operations and performance.





The
Company has no current plans to purchase any significant property and
equipment.





12


Off-Balance
Sheet Arrangements





As of
June 30, 2008, we did not have any off-balance sheet arrangements, including any
outstanding derivative financial instruments, off-balance sheet guarantees,
interest rate swap transactions or foreign currency
contracts.   We do have off-Balance Sheet commitments as
disclosed in the notes to the financial statements.  We do not engage
in trading activities involving non-exchange traded contracts.





(f)           Application
of Critical Accounting Policies





Our
consolidated financial statements and accompanying notes are prepared in
accordance with United States generally accepted accounting
principles.  Preparing financial statements requires Management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by Management's application of accounting policies.  We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our consolidated financial statements is critical
to an understanding of our operating results and financial
position.





Revenue
Recognition





Revenues,
and associated costs of goods sold, from the on-line sales of products,
currently consisting primarily of fragrances and other beauty products, are
recorded upon shipment of products and determination that collection is
reasonably assured. The Company does not record inventory as an asset because
all products sold are delivered to the customer on a “just-in-time” basis by
inventory suppliers.  All associated shipping and handling costs are
recorded as cost of goods sold.





Revenue
from the sale of domain names, whose carrying values are recorded as intangible
assets, consists primarily of funds earned for the transfer of rights to domain
names that are currently in the Company’s control. Collectibility of revenues
generated is usually subject to a high level of uncertainty; accordingly
revenues are recognized only as received.  There were no sales of
domain names in Q1 or Q2 of 2008, or the fiscal year ended December 31,
2007.





Revenue
from the sales-type leases of domain names, whose carrying values are recorded
as intangible assets, consists primarily of funds earned over a period of time
for the transfer of rights to domain names that are currently in the Company’s
control. Collectibility of these revenues generated are reasonably assured and
therefore accounted for as a sales-type lease in the period the transaction
occurs.





Web
advertising revenue consists primarily of commissions earned from the referral
of visitors to the Company’s sites to other parties. The amount and
collectibility of these referral commissions is subject to uncertainty;
accordingly, revenues are recognized when the amount can be determined and
collectibility can be reasonably assured. In accordance with Emerging Issues
Task Force (“EITF”) 99-19, “Reporting Revenue Gross as a Principal versus Net as
an Agent”, the Company records web advertising revenue net of service
costs.





Until the
disposal of the Company’s shares in FrequentTraveller.com Inc., revenues from
the sales of travel products, including tours, airfares and hotel reservations,
where the Company acted as the merchant of record and had inventory risk, were
recorded on a gross basis. Customer deposits received prior to ticket issuance
or 30-days prior to travel were recorded as deferred revenue. Where the Company
did not act as the merchant of record and had no inventory risk, revenues were
recorded at the net amounts, without any associated cost of revenue in
accordance with EITF 99-19.





Stock-Based
Compensation





During
the third quarter of 2007, we implemented the following new critical accounting
policy related to stock-based compensation. Beginning July 1, 2007, we began
accounting for stock options under the provisions of Financial Accounting
Standards No. 123 (revised 2004), “Share-Based Payment” (“FAS 123(R)”), which
requires the recognition of the fair value of stock-based compensation. Under
the fair value recognition provisions for FAS 123(R), stock-based compensation
cost is estimated at the grant date based on the fair value of the awards
expected to vest and is recognized as expense ratably over the requisite service
period of the award. We have used the Black-Scholes valuation model to estimate
fair value of our stock-based awards which require various judgmental
assumptions including estimating price volatility and expected life. Our
computation of expected volatility is based on a combination of historic and
market-based implied volatility. In addition, we consider many factors when
estimating expected life, including types of awards and historical experience.
If any of these assumptions used in the Black-Scholes valuation model change
significantly, stock-based compensation expense may differ materially in the
future from what is recorded in the current period.





13


In August
2007, the Company’s board of directors approved a Stock Incentive Plan to make
available 5,000,000 shares of common stock to be awarded as restricted stock
awards or stock options, in the form of incentive stock options (“ISO”) or
non-qualified stock options to be granted to employees of the Company, and other
stock options to be granted to employees, officers, directors, consultants,
independent contractors and advisors of the Company, provided such consultants,
independent contractors and advisors render bona-fide services not in connection
with the offer and sale of securities in a capital-raising transaction or
promotion of the Company’s securities.  The Company’s shareholders
approved the Stock Incentive Plan noted above at the 2008 Annual General
Meeting.





The
Company accounts for equity instruments issued in exchange for the receipt of
goods or services from other than employees in accordance with SFAS No. 123(R)
and the conclusions reached by the EITF in Issue No. 96-18.  Costs are
measured at the estimated fair market value of the consideration received or the
estimated fair value of the equity instruments issued, whichever is more
reliably measurable.  The value of equity instruments issued for
consideration other than employee services is determined on the earliest of a
performance commitment or completion of performance by the provider of goods or
services as defined by EITF 96-18.





Website
Development Costs





The
Company has adopted the provisions of EITF No. 00-2, "Accounting for Web Site
Development Costs," whereby costs incurred in the preliminary project phase are
expensed as incurred; costs incurred in the application development phase are
capitalized; and costs incurred in the post-implementation operating phase are
expensed as incurred.  Website development costs are stated at cost
less accumulated amortization and are amortized using the straight-line method
over its estimated useful life.  Upgrades and enhancements are
capitalized if they result in added functionality which enables the software to
perform tasks it was previously incapable of performing. The costs are related
to infrastructure development of various websites that the Company operates. In
previous periods, costs qualifying for capitalization were immaterial and
therefore were expensed as incurred. Website maintenance, training, data
conversion and business process reengineering costs are expensed in the period
in which they are incurred.





In Q2 of
2008, $138,368 (Q1 2008 - $147,025) in website development costs incurred in the
application development phase were capitalized.  Various websites
reached the post-implementation operating phase during Q2 of 2008, and therefore
during this quarter amortization of $9,363 has been recorded.  Company
began amortizing these costs during this quarter on a straight-line basis over
36 months beginning in the month following the implementation of the related
websites.





Intangible
Assets





The
Company has adopted the provision of the SFAS No. 142, “Goodwill and Intangible
Assets”, which revises the accounting for purchased goodwill and intangible
assets. Under SFAS No. 142, goodwill and intangible assets with indefinite lives
are no longer amortized and are tested for impairment annually. The
determination of any impairment would include a comparison of estimated future
operating cash flows anticipated during the remaining life with the net carrying
value of the asset as well as a comparison of the fair value to book value of
the Company.





The
Company’s intangible assets, which consist of its portfolio of generic domain
names, have been determined to have an indefinite life and as a result are not
amortized.  Management has determined that there is no impairment of
the carrying value of intangible assets at June 30, 2008.





Goodwill





Goodwill
has been recorded as a result of the Auctomatic merger.  It is
reflected at the amount originally recognized. Goodwill will be tested for
impairment in value on an annual basis.











14


(g)           Recent
Accounting Pronouncements





SFAS
160


In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements”, and simultaneously revised SFAS 141
“Business Combinations”.  This Statement applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008, which, for the Company, would be the fiscal year beginning January 1,
2009. An entity may not adopt the policy before the transitional
date.  The Company is currently assessing the impact of SFAS No. 160
and the revision of SFAS 141 on its financial position and results of
operations.





SFAS
159


In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". This Statement permits entities to
choose to measure many financial assets, financial liabilities, and certain
other items at fair value, with the objective of improving financial reporting
by mitigating volatility in reported earnings caused by measuring related assets
and liabilities differently without having to apply complex accounting
provisions. Most of the provisions of SFAS No. 159 apply only to entities that
elect the fair value option. The provisions of SFAS No. 159 were adopted January
1, 2008. The Company elected the Fair Value Option for its financial assets and
liabilities; however, the adoption of SFAS No. 159 had no material impact on the
Company’s interim consolidated financial statements.





SFAS
157


In
September 2006, the FASB issued SFAS No. 157, "Fair Value Measures". This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), expands disclosures about
fair value measurements, and applies under other accounting pronouncements that
require or permit fair value measurements. SFAS No. 157 does not require any new
fair value measurements. However, the FASB anticipates that for some entities,
the application of SFAS No. 157 will change current practice. The effective date
of SFAS No. 157 has been deferred on February 12, 2008 to become effective for
financial statements issued for fiscal years beginning after November 15, 2008,
which for the Company would be the fiscal year beginning January 1, 2009. The
Company is currently assessing the impact of SFAS No. 157 on its financial
position and results of operations.





Item
3:Quantitative and Qualitative
Disclosures about Market Risk





Not
required.





Item 4T: Controls and
Procedures.





Disclosure
Controls and Procedures





C.
Geoffrey Hampson, the Company’s Chief Executive Officer and Principal Financial
Officer has evaluated the effectiveness of the Company’s disclosure controls and
procedures (as such term is defined in Rules 13a-15 and 15d-15 under the
Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the
period covered by this quarterly report (the “Evaluation
Date”).  Based on such evaluation, he has concluded that, as of the
Evaluation Date, the Company’s disclosure controls and procedures are effective
in alerting the Company on a timely basis to material information required to be
included in its reports filed or submitted under the Exchange Act.





Changes
in Internal Controls





During
the quarter covered by this report, there were no changes in the Company’s
internal controls or, to the Company’s knowledge, in other factors that have
materially affected, or are reasonably likely to materially affect, these
controls and procedures subsequent to the date the Company carried out this
evaluation.





15





PART
II - OTHER INFORMATION





Item 1. Legal
Proceedings.





The
Company is not aware of any pending or threatened material legal proceedings
that arose during the quarter.





Item 1A. Risk
Factors.





Not
required.





Item 2. Unregistered Sales
of Equity Securities and Use of Proceeds.





During
the quarter of the fiscal year covered by this report, (i) the Company did not
modify the instruments defining the rights of its shareholders, and (ii) no
rights of any shareholders were limited or qualified by any other class of
securities.





During Q2
of 2008, the Company issued the following securities not registered under the
Securities Act of 1933, as amended (the “Securities Act”):





On June
6, 2008, the Company issued 30,000 shares of common stock to its investor
relations firm as partial consideration for services rendered.  The
shareholder took the shares for investment purposes without a view to
distribution and had access to information concerning our business and
prospects, as required by the Securities Act.  In addition, there was
no general solicitation or advertising for the issuance of the
shares.  The shareholder was permitted access to our management for
the purpose of acquiring investment information.  Due to the
shareholder’s status as consultants and their dealings with companies similar to
ours, we deem the shareholder sophisticated for the purposes of Section 4(2) of
the Act.





On June
17, 2008, the Company issued 586,403 shares of common stock to the founders and
shareholders of Auctomatic pursuant to the terms of the Merger Agreement
referenced above.  We relied upon the exemption from registration as
set forth in Section 4(2) of the Securities Act for the issuance of these
shares.  The shareholders took the shares for investment purposes
without a view to distribution and had access to information concerning our
business and prospects, as required by the Securities Act.  In
addition, there was no general solicitation or advertising for the issuance of
the shares.  Due to the shareholders’ status as sophisticated, and in
some cases, as accredited, and their dealings with companies similar to ours, we
deem the shareholders sophisticated for the purposes of Section 4(2) of the Act.
In the alternative, some of the issuances qualify as exempt under Regulation S
of the Securities Act.





On June
30, 2008, the Company issued 15,000 shares of common stock to its investor
relations firm as partial consideration for services rendered.  The
shareholder took the shares for investment purposes without a view to
distribution and had access to information concerning our business and
prospects, as required by the Securities Act.  In addition, there was
no general solicitation or advertising for the issuance of the
shares.  The shareholder was permitted access to our management for
the purpose of acquiring investment information.  Due to the
shareholder’s status as consultants and their dealings with companies similar to
ours, we deem the shareholder sophisticated for the purposes of Section 4(2) of
the Act.





Subsequent
to June 30, 2008, the Company issued the following securities not registered
under the Securities Act of 1933, as amended (the “Securities
Act”):





On August
6, 2008, the Company issued 15,000 shares of common stock to its investor
relations firm as partial consideration for services rendered.  The
shareholder took the shares for investment purposes without a view to
distribution and had access to information concerning our business and
prospects, as required by the Securities Act.  In addition, there was
no general solicitation or advertising for the issuance of the
shares.  The shareholder was permitted access to our management for
the purpose of acquiring investment information.  Due to the
shareholder’s status as consultants and their dealings with companies similar to
ours, we deem the shareholder sophisticated for the purposes of Section 4(2) of
the Act.


16





Item 3. Defaults Upon Senior
Securities.





During
the quarter of the fiscal year covered by this report, no material default has
occurred with respect to any indebtedness of the Company.  Also,
during this quarter, no material arrearage in the payment of dividends has
occurred.





Item 4. Submission of
Matters to a Vote of Security Holders.





The
annual meeting of shareholders was held on May 27, 2008 in Las Vegas,
Nevada.  The following proposals were submitted to
shareholders:





·
            the
      election of four (4) directors, each to a one-year term or until the next
      annual meeting;





·
            the
      ratification of Ernst & Young LLP as the Company’s independent
      auditors for the 2008 fiscal year;





·
            the
      approval of an amendment of the Articles of Incorporation to change the
      Company’s name to LIVE CURRENT MEDIA INC.;
and,





·
            the
      approval of the Company’s 2007 Stock Incentive
  Plan.





The
shareholders voted as follows:





Board
of Director Election Results





Votes For
            Votes Against
            AbstainedC.
      Geoffrey Hampson
            11,397,067
            0
            29,085James
      P. Taylor
            11,396,876
            0
            29,305Mark
      Benham
            11,396,976
            0
            39,205Boris
      Wertz
            11,394,876
            0
            31,305





Ratification
of Ernst & Young LLP as the Company’s independent auditors





The
results of the voting included 11,394,896 votes for, 28,885 votes against, and
2,400 votes abstained.  The appointment was ratified.





Approval
of Amendment to the Articles of Incorporation to change the Company’s name to
Live Current Media Inc.





The
results of the voting included 11,355,436 votes for, 70,145 votes against, and
600 votes abstained.  The name change was approved.





Approval
of the Company’s 2007 Stock Incentive Plan





The
results of the voting included 11,196,700 votes for, 208,677 votes against, and
20,804 votes abstained.  The plan was approved.





Item 5. Other
Information.





On May
30, 2008, the Company filed a Certificate of Amendment to its Certificate of
Incorporation (the “Amendment”) with the Secretary of State of the State of
Nevada after shareholders approved a proposal to change the Company’s name from
Communicate.com Inc. to Live Current Media Inc. at the annual meeting of
shareholders held on May 27, 2008.  A copy of the filed Amendment is
attached as Exhibit 3.1.


17





To effect
the name change on the Over-the-Counter Bulletin Board (“OTCBB”), the Company’s
Common Stock was assigned a new trading symbol.  Effective at the
opening of business on August 4, 2008, the Company’s new trading symbol on the
OTCBB was LIVC.





On or
about June 30, 2008, the Company appointed Computershare Trust Company, N.A., as
its transfer agent and registrar.  Computershare’s address is 250
Royall Street, Canton, MA 02021.  Its corporate website is www.computershare.com.




























18


Item 6.
Exhibits.





(A)           Index to and Description of
Exhibits.





EXHIBIT
            DESCRIPTIONF-1
            Financial
      Statements3.1
            Amendment
      to Articles of Incorporation21
            List
      of Subsidiaries31.1
            Section
      302 Certification of Chief Executive Officer31.2
            Section
      302 Certification of Principal Financial Officer32.1
            Section
      906 Certificate of Chief Executive Officer32.2
            Section
      906 Certificate of Principal Financial Officer99
            Pro
      Forma Consolidated Financial
Statements














19


SIGNATURES





In
accordance with the requirements of the Exchange Act, Registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.











LIVE
      CURRENT MEDIA INC.Dated:August
      14, 2008
            By: /s/
      C. Geoffrey
      HampsonName:    
      C. Geoffrey HampsonTitle:     
      CEO and Chairman of the Board
              (Principal Executive
      Officer)Dated:     August 14,
      2008
            By:/s/
      C. Geoffrey
      HampsonName:     C.
      Geoffrey HampsonTitle:     
      CEO and Chairman of the Board
              (Principal Financial
      Officer)






















20



























































LIVE
CURRENT MEDIA INC.


(formerly
COMMUNICATE.COM INC.)











CONSOLIDATED
FINANCIAL STATEMENTS





JUNE
30, 2008





(UNAUDITED)





















































CONSOLIDATED
BALANCE SHEETS





CONSOLIDATED
STATEMENTS OF OPERATIONS





CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY





CONSOLIDATED
STATEMENTS OF CASH FLOWS





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS








F-1





LIVE
CURRENT MEDIA INC.


(formerly
COMMUNICATE.COM INC.)


CONSOLIDATED
BALANCE SHEETS


(Going
Concern – See Note 1)







(Expressed
      in U.S. dollars)June 30,
              2008
            
            
            December
      31,
              2007(unaudited)
            
            
            (audited)ASSETSCurrentCash
      and cash equivalents
            
            $
            1,897,940
            
            
            $
            7,375,245Accounts
      receivable
            
            
            131,898
            
            
            
            138,930Amounts
      receivable from Global Cricket Venture (Note
5)
            
            
            733,539
            
            
            
            -Prepaid
      expenses and deposits
            
            
            310,726
            
            
            
            246,174Current
      portion of investment in sales-type lease (Note
    11)
            
            
            98,378
            
            
            
            -Total
      current assets
            
            
            3,172,481
            
            
            
            7,760,349Long-term
      portion of investment in sales-type lease (Note
    11)
            
            
            23,423
            
            
            
            -Property
      & equipment (Note
      7)
            
            
            1,225,440
            
            
            
            175,797Website
      development costs (Note
      8)
            
            
            276,030
            
            
            
            -Intangible
      assets
            
            
            1,625,881
            
            
            
            1,645,061Goodwill
      (Note
      6)
            
            
            2,417,296
            
            
            
            -Total
      Assets
            
            $
            8,740,551
            
            
            $
            9,581,207LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrentAccounts
      payable and accrued liabilities
            
            $
            1,518,222
            
            
            $
            1,756,719Bonuses
      payable
            
            
            333,442
            
            
            
            -Due
      to shareholders of Auctomatic (Note
6)
            
            
            781,117
            
            
            
            -Deferred
      revenue
            
            
            15,787
            
            
            
            53,079Current
      portion of deferred lease inducements (Note
9)
            
            
            20,138
            
            
            
            20,138Total
      current liabilities
            
            
            2,668,706
            
            
            
            1,829,936Deferred
      lease inducements (Note
      9)
            
            
            65,449
            
            
            
            75,518Total
      Liabilities
            
            
            2,734,155
            
            
            
            1,905,454STOCKHOLDERS’
      EQUITYCommon
      stock (Note
      10)Authorized:
      50,000,000 common shares, $0.001 par valueIssued
      and outstanding:22,078,026
      common shares (December 31, 2007 – 21,446,623)
            
            
            13,087
            
            
            
            12,456Additional
      paid-in capital
            
            
            12,483,794
            
            
            
            10,188,975Accumulated
      deficit
            
            
            (6,490,485
            )
            
            
            (2,525,678
            )Total
      Stockholders’ Equity
            
            
            6,006,396
            
            
            
            7,675,753Total
      Liabilities and Stockholders’ Equity
            
            $
            8,740,551
            
            
            $
            9,581,207





Commitments
and Contingency (Notes 15 and
16)





See
accompanying notes to consolidated financial statements





F-2





LIVE
CURRENT MEDIA INC.


(formerly
COMMUNICATE.COM INC.)


CONSOLIDATED
STATEMENTS OF OPERATIONS


(UNAUDITED)










(Expressed
      in U.S. dollars)Three
      months ended
              June
      30, 2008
            
            
            Three
      months ended
              June
      30, 2007
            
            
            Six
      months ended
              June
      30, 2008
            
            
            Six
      months ended
              June
      30, 2007SALESHealth and Beauty eCommerce
            
            $
            1,908,036
            
            
            $
            1,470,610
            
            
            $
            3,732,405
            
            
            $
            2,887,534Other
      eCommerce
            
            
            -
            
            
            
            114,862
            
            
            
            455
            
            
            
            319,282Domain
      name leasing and advertising
            
            
            27,418
            
            
            
            70,692
            
            
            
            55,254
            
            
            
            140,593Total Sales
            
            
            1,935,454
            
            
            
            1,656,164
            
            
            
            3,788,114
            
            
            
            3,347,409COST
      OF SALESHealth and Beauty eCommerce
            
            
            1,578,886
            
            
            
            1,143,715
            
            
            
            3,068,577
            
            
            
            2,251,123OthereCommerce
            
            
            -
            
            
            
            93,979
            
            
            
            552
            
            
            
            290,383Total Cost of
    Sales
            
            
            1,578,886
            
            
            
            1,237,694
            
            
            
            3,069,129
            
            
            
            2,541,506GROSS
      PROFIT
            
            
            356,568
            
            
            
            418,470
            
            
            
            718,985
            
            
            
            805,903EXPENSESAmortization and
      depreciation
            
            
            43,888
            
            
            
            3,024
            
            
            
            59,154
            
            
            
            6,287Corporate general and
      administrative
            
            
            591,169
            
            
            
            109,946
            
            
            
            1,053,960
            
            
            
            203,436ECommerce general and
      administrative
            
            
            100,495
            
            
            
            58,034
            
            
            
            270,308
            
            
            
            117,173Management fees and employee
      salaries
            
            
            1,479,782
            
            
            
            359,825
            
            
            
            2,538,328
            
            
            
            548,364Corporate
    marketing
            
            
            20,243
            
            
            
            -
            
            
            
            46,807
            
            
            
            -ECommerce
    marketing
            
            
            129,885
            
            
            
            121,067
            
            
            
            279,072
            
            
            
            211,456Other
      expenses (Note
      12)
            
            
            33,691
            
            
            
            -
            
            
            
            663,547
            
            
            
            -Total
      Expenses
            
            
            2,399,153
            
            
            
            651,896
            
            
            
            4,911,176
            
            
            
            1,086,716LOSS
      BEFORE OTHER ITEMS
            
            
            (2,042,585
            )
            
            
            (233,426
            )
            
            
            (4,192,191
            )
            
            
            (280,813
            )Net proceeds from sales-type lease
      of domain names(Note
      11)
            
            
            -
            
            
            
            -
            
            
            
            168,206
            
            
            
            -Interest and investment
      income
            
            
            16,680
            
            
            
            14,246
            
            
            
            59,178
            
            
            
            32,861NET
      LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD
            
            $
            (2,025,905
            )
            
            $
            (219,180
            )
            
            $
            (3,964,807
            )
            
            $
            (247,952
            )BASIC
      AND DILUTED LOSS PER SHARE
            
            $
            (0.10
            )
            
            $
            (0.01
            )
            
            $
            (0.19
            )
            
            $
            (0.01
            )WEIGHTED
      AVERAGE NUMBER OF COMMON
              SHARES
      OUTSTANDING – BASIC AND DILUTED
            
            
            20,832,026
            
            
            
            17,872,860
            
            
            
            20,832,026
            
            
            
            17,872,860





See accompanying notes to
consolidated financial statements







F-3








LIVE
CURRENT MEDIA INC.


(formerly
COMMUNICATE.COM INC.)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


(UNAUDITED)







(Expressed
      in U.S. dollars)Common
      stockNumber
      of
              Shares
            
            
            Amount
            
            
            Additional
              Paid-in
      Capital
            
            
            Accumulated
      Deficit
            
            
            TotalBalance,
      December 31, 2006
            
            
            17,836,339
            
            
            $
            8,846
            
            
            $
            3,605,579
            
            
            $
            (507,729
            )
            
            $
            3,106,696Issuance
      of 60,284 common shares at $0.98 per share in lieu of accrued bonuses to
      officers
            
            
            60,284
            
            
            
            60
            
            
            
            59,018
            
            
            
            -
            
            
            
            59,078Issuance
      of 1,000,000 common shares at $1.00 per share to CEO
            
            
            1,000,000
            
            
            
            1,000
            
            
            
            999,000
            
            
            
            -
            
            
            
            1,000,000Private
      Placement of 2,550,000 common shares at $2.00 per share
            
            
            2,550,000
            
            
            
            2,550
            
            
            
            5,097,450
            
            
            
            -
            
            
            
            5,100,000Share
      issue costs
            
            
            -
            
            
            
            -
            
            
            
            (100
            )
            
            
            -
            
            
            
            (100
            )Stock-based
      compensation
            
            
            -
            
            
            
            -
            
            
            
            428,028
            
            
            
            -
            
            
            
            428,028Total
      comprehensive loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (2,017,949
            )
            
            
            (2,017,949
            )Balance,
      December 31, 2007
            
            
            21,446,623
            
            
            
            12,456
            
            
            
            10,188,975
            
            
            
            (2,525,678
            )
            
            
            7,675,753Stock-based
      compensation
            
            
            -
            
            
            
            -
            
            
            
            1,025,889
            
            
            
            -
            
            
            
            1,025,889Issuance
      of 586,403 common shares at $3.00 per share per the merger agreement with
      Auctomatic
            
            
            586,403
            
            
            
            586
            
            
            
            1,137,533
            
            
            
            
            
            
            
            1,138,119Issuance
      of 45,000 common shares to investor relations firm
            
            
            45,000
            
            
            
            45
            
            
            
            127,605
            
            
            
            
            
            
            
            127,650Issuance
      of 50,000 warrants to investor relations firm
            
            
            -
            
            
            
            -
            
            
            
            3,792
            
            
            
            
            
            
            
            3,792Total
      comprehensive loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (3,964,807
            )
            
            
            (3,964,807
            )Balance,
      June 30, 2008
            
            
            22,078,026
            
            
            $
            13,087
            
            
            $
            12,483,794
            
            
            $
            (6,490,485
            )
            
            $
            6,006,396








See accompanying notes to
consolidated financial statements





F-4








LIVE
CURRENT MEDIA INC.


(formerly
COMMUNICATE.COM INC.)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(UNAUDITED)











(Expressed
      in U.S. dollars)Six
      months ended
              June
      30, 2008
            
            
            Six
      months ended
              June
      30, 2007OPERATING
      ACTIVITIESNet
      loss for the period
            
            $
            (3,964,807
            )
            
            $
            (247,952
            )Non–cash
      items included in net loss:Return
      of restricted cash
            
            
            -
            
            
            
            20,000Gain
      from sales-type lease of domain name
            
            
            (168,206
            )
            
            
            -Stock-based
      compensation
            
            
            1,025,889
            
            
            
            -Warrants
      issued
            
            
            3,792
            
            
            
            -Non-cash
      issuance of common stock
            
            
            85,350
            
            
            
            -Accrued
      bonuses payable
            
            
            333,442
            
            
            
            -Amortization
      of deferred lease inducements
            
            
            (10,069
            )
            
            
            -Amortization
      and depreciation
            
            
            68,517
            
            
            
            6,287Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            7,032
            
            
            
            (20,323
            )Amounts
      due from Global Cricket Venture
            
            
            (733,539
            )
            
            
            -Prepaid
      expenses
            
            
            (22,252
            )
            
            
            (78,139
            )Accounts
      payable and accrued liabilities
            
            
            (246,473
            )
            
            
            (253,593
            )Deferred
      revenue
            
            
            (37,292
            )
            
            
            -Cash
      flows used in operating activities
            
            
            (3,658,616
            )
            
            
            (573,720
            )INVESTING
      ACTIVITIESPurchase
      of available for sale securities
            
            
            -
            
            
            
            (274,573
            )Net
      proceeds from sales-type lease
            
            
            65,585
            
            
            
            -Cash
      consideration for Auctomatic
            
            
            (1,422,747
            )
            
            
            -Purchase
      of property and equipment
            
            
            (176,134
            )
            
            
            -Web
      development costs
            
            
            (285,393
            )
            
            
            -Cash
      flows used in investing activities
            
            
            (1,818,689
            )
            
            
            (274,573
            )FINANCING
      ACTIVITIESIssuance
      of common stock for cash
            
            
            -
            
            
            
            1,000,000Cash
      flows from financing activities
            
            
            -
            
            
            
            1,000,000Net increase (decrease) in
      cash and cash equivalents
            
            
            (5,477,305
            )
            
            
            151,707Cash and cash equivalents,
      beginning of period
            
            
            7,375,245
            
            
            
            2,105,340Cash and cash equivalents, end of
      period
            
            $
            1,897,940
            
            
            $
            2,257,047







See
accompanying notes to consolidated financial statements







F-5
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION





Nature
of business


On May
30, 2008, Live Current Media Inc. (formerly Communicate.com Inc.) (the
“Company”) changed its name from Communicate.com Inc. to Live Current Media Inc.
after obtaining formal shareholder approval to do so at the Annual General
Meeting in May 2008.





Through
its majority-owned subsidiary, Domain Holdings, Inc. (“DHI”), the Company builds
consumer Internet experiences around its large portfolio of domain
names.  DHI’s current business strategy is to develop or to seek
partners to develop its domain names to include content, commerce and community
applications.  DHI is currently actively developing websites on two
domain names; one that provides e-commerce for fragranceand
other health and beauty products, and another that will be a media rich consumer
experience on a sports related website where the revenue model is based on paid
advertising and sales of digital content and merchandise.  DHIdevelops
content and sells advertising services on other domains held forfuture
development.





On March
13, 2008, the Company incorporated a wholly owned subsidiary in the state of
Delaware, Communicate.com Delaware, Inc. (“Delaware”).  The new
subsidiary has been incorporated in relation to the Auctomatic transaction.
Refer to Note 6.  The Company’s other subsidiary, DHI, owns 100% of
0778229 B.C. Ltd. (“Importers”), Acadia Management Corp. (“Acadia”), and a
dormant company 613784 B.C. Ltd. (“613784”).





As at
December 31, 2006, the Company owned 50.4% of the outstanding shares in
FrequentTraveller.com Inc. (“FT”), a Nevada private company incorporated on
October 29, 2002.  FT was a full service travel agency that catered to
Internet-based customers seeking tours and other travel services.  On
November 12, 2007, the Company disposed of its controlling interest in FT and at
the end of 2007 no longer had any ownership in FT.  Refer to Note
4.





Basis
of presentation


The
consolidated financial statements are presented in United States dollars and are
prepared in accordance with accounting principles generally accepted in the
United States.





Going
Concern


The
interim consolidated financial statements have been prepared on a going concern
basis which assumes that the Company will be able to realize assets and
discharge liabilities in the normal course of business for the foreseeable
future. The Company has generated a consolidated net loss of $2,025,905 for the
three months ended and $3,964,807 for the six months ended June 30, 2008 and
realized a negative cash flow from operating activities of $1,756,672 and
$3,716,835 for the three and six months ended June 30, 2008
respectively.  At June 30, 2008, the Company had positive working
capital of $503,775 (December 31, 2007 - $5,930,413), however without the
$733,539 in amounts receivable from the Global Cricket Venture, it has a
negative working capital of $229,764.  There is an accumulated deficit
of $6,490,485 (December 31, 2007 - $2,525,678).  However, the Company
has maintained stockholders equity of $6,006,396 (December 31, 2007 –
$7,675,753).





The
Company's ability to continue as a going-concern is dependent on the continued
financial support from its investors, the ability of the Company to raise equity
financing and the attainment of profitable operations and further share
issuances to meet the Company's liabilities as they become payable, including
its commitments for the Global Cricket Venture as disclosed in Note
5.  The outcome of these matters is dependant on factors outside of
the Company’s control and cannot be predicted at this time.





The
accompanying financial statements have been prepared on a going concern basis
which assumes that the Company will be able to realize assets and discharge
liabilities in the normal course of business for the foreseeable
future.  These financial statements do not include any adjustments
relating to the recoverability or classification of assets or the amounts or
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.








F-6
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





The
following is a summary of significant accounting policies used in preparation of
these consolidated financial statements:





Principles
of consolidation


The
consolidated financial statements include the accounts of the Company, its
wholly owned subsidiary Delaware, its 98.2% (December 31, 2007 - 94.9%) interest
in its subsidiary DHI and DHI’s wholly owned subsidiaries Importers, Acadia, and
613784.  The comparative figures in 2007 include its 50.4% interest in
FT (from January 1, 2007 until the sale of the Company’s controlling interest in
FT on November 12, 2007).  All significant intercompany balances and
transactions are eliminated on consolidation.





Revenue
recognition


Revenues,
and associated costs of goods sold, from the on-line sales of products,
currently consisting primarily of fragrances and other beauty products, are
recorded upon shipment of products and determination that collection is
reasonably assured. The Company does not record inventory as an asset because
all products sold are delivered to the customer on a “just-in-time” basis by
inventory suppliers.  All associated shipping and handling costs are
recorded as cost of goods sold.





Web
advertising revenue consists primarily of commissions earned from the referral
of visitors to the Company’s sites to other parties. The amount and
collectibility of these referral commissions is subject to uncertainty;
accordingly, revenues are recognized when the amount can be determined and
collectibility can be reasonably assured. In accordance with Emerging Issues
Task Force (“EITF”) 99-19, “Reporting Revenue Gross as a Principal versus Net as
an Agent,” the Company records web advertising revenue net of service
costs.





Until the
disposal of the Company’s shares in FrequentTraveller.com Inc. on November 12,
2007, revenues from the sales of travel products, including tours, airfares and
hotel reservations, where the Company acts as the merchant of record and has
inventory risk, were recorded on a gross basis. Customer deposits received prior
to ticket issuance or 30-days prior to travel were recorded as deferred revenue.
Where the Company did not act as the merchant of record and had no inventory
risk, revenues were recorded at the net amounts, without any associated cost of
revenue in accordance with EITF 99-19.  See also Note 4.





Revenue
from the sale of domain names, whose carrying values are recorded as intangible
assets, consists primarily of funds earned for the transfer of rights to domain
names that are currently in the Company’s control. Collectibility of revenues
generated are usually subject to a high level of uncertainty; accordingly
revenues are recognized only as received.  There have not been any
sales of domain names in 2008 or during the fiscal year ended December 31,
2007.





Revenue
from the sales-type leases of domain names, whose carrying values are recorded
as intangible assets, consists primarily of funds earned over a period of time
for the transfer of rights to domain names that are currently in the Company’s
control. Collectibility of these revenues generated are reasonably assured and
therefore accounted for as a sales-type lease in the period the transaction
occurs.  See also Note 11.





Foreign
currency transactions


The
consolidated financial statements are presented in United States
dollars.  The functional currency of the Company is United States
dollars.  In accordance with SFAS No. 52, “Foreign Currency
Translation”, the foreign currency financial statements of the Company’s
subsidiaries are translated into U.S. dollars.  Monetary assets and
liabilities are translated using the foreign exchange rate that prevailed at the
balance sheet date.  Revenue and expenses are translated at weighted
average rates of exchange during the year and stockholders’ equity accounts and
certain other historical cost balances are translated by using historical
exchange rates.  Any resulting exchange gains and losses are presented
as cumulative foreign currency translation gains (losses) within other
accumulated comprehensive income (loss).





Transactions
denominated in foreign currencies are remeasured at the exchange rate in effect
on the respective transaction dates and gains and losses are reflected in the
consolidated statements of operations.





F-7
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)





Earnings
per share


Basic
earnings per share are computed by dividing earnings for the period by the
weighted average number of common shares outstanding for the period. Fully
diluted earnings per share reflects the potential dilution of securities by
including other potential common stock, in the weighted average number of common
shares outstanding for a period and is not presented where the effect is
anti-dilutive.





Comprehensive income
(loss)


Comprehensive
income (loss) includes all changes in equity except those resulting from
investments by owners and distributions to owners.





Cash
and cash equivalents


The
company considers all highly liquid instruments, with original maturity dates of
three months or less at the time of issuance, to be cash
equivalents.





Property & Equipment


These
assets are stated at cost. Minor additions and improvements are charged to
operations, and major additions are capitalized. Upon retirement, sale or other
disposition, the cost and accumulated depreciation are eliminated from the
accounts, and a gain or loss is included in operations.





Amortization
for equipment is computed using declining balance method at the following annual
rates:





Office
      Furniture and Equipment
            20%Computer
      Equipment
            30%Computer
      Software
            100%Auction
      Software
            3
      years straight-line





Amortization
for leasehold improvements is computed on a straight-line method calculated over
the term of the lease.  Auction software is amortized straight line
over the life of the asset.  Other additions are amortized on a
half-year basis in the year of acquisition.





Website
development costs


The
Company has adopted the provisions of EITF No. 00-2, "Accounting for Web Site
Development Costs," whereby costs incurred in the preliminary project phase are
expensed as incurred; costs incurred in the application development phase are
capitalized; and costs incurred in the post-implementation operating phase are
expensed as incurred.  Website development costs are stated at cost
less accumulated amortization and are amortized using the straight-line method
over its estimated useful life.  Upgrades and enhancements are
capitalized if they result in added functionality which enables the software to
perform tasks it was previously incapable of performing. The costs are related
to infrastructure development of various websites that the Company operates. In
previous periods, costs qualifying for capitalization were immaterial and
therefore were expensed as incurred. Website maintenance, training, data
conversion and business process reengineering costs are expensed in the period
in which they are incurred.  Various websites reached the
post-implementation operating phase during Q2 of 2008, and therefore the Company
began amortizing these costs during this quarter on a straight-line basis over
36 months beginning in the month following the implementation of the related
websites.  See also Note 8.





Intangible
assets


The
Company has adopted the provision of the SFAS No. 142, “Goodwill and Intangible
Assets”, which revises the accounting for purchased goodwill and intangible
assets. Under SFAS No. 142, goodwill and intangible assets with indefinite lives
are no longer amortized and are tested for impairment annually. The
determination of any impairment would include a comparison of estimated future
operating cash flows anticipated during the remaining life with the net carrying
value of the asset as well as a comparison of the fair value to book value of
the Company.





The
Company’s intangible assets, which consist of its portfolio of generic domain
names, have been determined to have an indefinite life and as a result are not
amortized.  Management has determined that there is no impairment of
the carrying value of intangible assets at June 30, 2008.





F-8
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)





Goodwill


Goodwill
has been recorded as a result of the Auctomatic merger.  It is
reflected at the amount originally recognized. Goodwill will be tested for
impairment in value on an annual basis.  See also Note 6.





Deferred
Revenue


Revenue
that has been received but does not yet qualify for recognition under the
Company's policies is reflected as either deferred revenue or long-term deferred
revenue.





Deferred
Lease Inducements


Lease
inducements, including rent free periods, are deferred and accounted for as a
reduction of rent expense over the term of the related lease on a straight-line
basis.





Stock-based
compensation


During
the third quarter of 2007, the Company implemented the following new critical
accounting policy related to stock-based compensation. Beginning on July 1,
2007, the Company began accounting for stock options under the provisions of
Financial Accounting Standards No. 123 (revised 2004), “Share-Based
Payment” (FAS 123(R)), which requires the recognition of the fair value of
stock-based compensation. Under the fair value recognition provisions for
FAS 123(R), stock-based compensation cost is estimated at the grant date
based on the fair value of the awards expected to vest and recognized as expense
ratably over the requisite service period of the award. The Company has used the
Black-Scholes valuation model to estimate fair value of its stock-based awards,
which requires various judgmental assumptions including estimating stock price
volatility and expected life. The Company’s computation of expected volatility
is based on a combination of historical and market-based volatility. In
addition, the Company considers many factors when estimating expected life,
including types of awards and historical experience. If any of the assumptions
used in the Black-Scholes valuation model change significantly, stock-based
compensation expense may differ materially in the future from that recorded in
the current period.





In August
2007, the Company’s board of directors approved an Incentive Stock Option Plan
to make available 5,000,000 incentive stock options (“ISO”) to be granted to
employees of the Company, and other stock options to be granted to employees,
officers, directors, consultants, independent contractors and advisors of the
Company, provided such consultants, independent contractors and advisors render
bona-fide services not in connection with the offer and sale of securities in a
capital-raising transaction or promotion of the Company’s
securities.  See also Note 10.





The
Company accounts for equity instruments issued in exchange for the receipt of
goods or services from other than employees in accordance with SFAS No. 123R and
the conclusions reached by the EITF in Issue No. 96-18.  Costs are measured
at the estimated fair market value of the consideration received or the
estimated fair value of the equity instruments issued, whichever is more
reliably measurable.  The value of equity instruments issued for
consideration other than employee services is determined on the earliest of a
performance commitment or completion of performance by the provider of goods or
services as defined by EITF 96-18.





Use
of estimates


The
preparation of consolidated financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of intangible assets, fair
value measurement, related party transactions, stock based compensation,
determination and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and for the periods that the consolidated
financial statements are prepared. Actual results could differ from these
estimates.





F-9
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)





Recent
Accounting Pronouncements





SFAS
160


In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements”, and simultaneously revised SFAS 141
“Business Combinations”.  This Statement applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008, which, for the Company, would be the fiscal year beginning January 1,
2009. An entity may not adopt the policy before the transitional
date.  The Company is currently assessing the impact of SFAS No. 160
and the revision of SFAS 141 on its financial position and results of
operations.





SFAS
159


In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". This Statement permits entities to
choose to measure many financial assets, financial liabilities and certain other
items at fair value, with the objective of improving financial reporting by
mitigating volatility in reported earnings caused by measuring related assets
and liabilities differently without having to apply complex accounting
provisions. Most of the provisions of SFAS No. 159 apply only to entities that
elect the fair value option. The provisions of SFAS No. 159 were adopted January
1, 2008. The Company elected the Fair Value Option for its financial assets and
liabilities; however, the adoption of SFAS No. 159 had no material impact on the
Company’s interim consolidated financial statements.





SFAS
157


In
September 2006, the FASB issued SFAS No. 157, "Fair Value Measures". This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), expands disclosures about
fair value measurements, and applies under other accounting pronouncements that
require or permit fair value measurements. SFAS No. 157 does not require any new
fair value measurements. However, the FASB anticipates that for some entities,
the application of SFAS No. 157 will change current practice. The effective date
of SFAS No. 157 has been deferred on February 12, 2008 to become effective for
financial statements issued for fiscal years beginning after November 15, 2008,
which for the Company would be the fiscal year beginning January 1, 2009. The
Company is currently assessing the impact of SFAS No. 157 on its financial
position and results of operations.





NOTE
3 – FINANCIAL INSTRUMENTS





Interest
rate risk exposure


The
Company has limited exposure to any fluctuation in interest rates.





Foreign
exchange risk


The
Company is subject to foreign exchange risk for sales and purchases denominated
in foreign currencies. Foreign currency risk arises from the fluctuation of
foreign exchange rates and the degree of volatility of these rates relative to
the United States dollar. The Company does not actively manage this
risk.





Concentration
of credit risk


Financial
instruments, which potentially subject the Company to concentrations of credit
risk, consist primarily of cash and cash equivalents, trade accounts
receivable and amounts receivable from Global Cricket Venture. The Company
limits its exposure to credit loss by placing its cash and cash equivalents on
deposit with high credit quality financial institutions. Receivables arising
from sales to customers are generally immaterial and are not collateralized.
Management regularly monitors the financial condition of its customers to reduce
the risk of loss.





Fair
values of financial instruments


The
following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107. “Disclosures about
Fair Value of Financial Instruments.” The Company has determined the estimated
fair value amounts by using available market information and appropriate
valuation methodologies. The fair value of financial instruments classified as
current assets or liabilities, including cash and cash equivalents, accounts
receivable, amounts receivable from the Global Cricket Venture, accounts payable
and accrued liabilities and due to shareholders of Auctomatic are approximately
equal to their carrying value due to the short-term maturity of the
instruments.








F-10
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE 4 – NON-CONTROLLING
INTEREST


The
Company currently holds 98.2% (December 31, 2007 – 94.9%) of its principal
operating subsidiary’s, DHI’s, outstanding shares.  During Q1 2008,
DHI issued 40,086,645 shares to Live Current Media Inc. at fair value in
exchange for a conversion of Intercompany debt of $3,000,000, therefore diluting
the non-controlling interest by 3.3%. This conversion was accounted for using
the purchase method.  There was no effect to the consolidated
financial statements in the six-months ended June 30, 2008 to the
non-controlling interest of DHI.





As of
December 31, 2006, the Company owned a 50.4% controlling interest in
FrequentTraveller.com Inc. (“FT”) a private Nevada corporation incorporated on
October 29, 2002.  FT provided travel services to customers online and
by telephone to destinations encompassed by the geographic domain names owned by
the Company, pursuant to a domain lease agreement entered with FT, dated May 1,
2005 (the “Domain Lease Agreement”).  FT commenced operations in
November 2003.  On November 12, 2007, the Company sold its remaining
50.4% share holdings in FT via an Asset Purchase Agreement (“APA”).





As part
of this agreement the Domain Lease Agreement was cancelled for nil
consideration, and all ties with FT were severed. Intercompany debt of $265,000
was cancelled and the rights to use the domain names were returned to the
Company. The Company assumed no liabilities of FT going-forward.  The
resulting gain of $276,805 on the disposal of the subsidiary was booked as other
income. The following table summarizes the assets and liabilities foregone in
exchange for the Company’s shareholding.





AssetsCash
            
            $
            46,974Accounts
      Receivable
            
            
            7,570LiabilitiesAccount
      payable and accrued liabilities
            
            
            (176,312
            )Deferred
      Revenue
            
            
            (111,857
            )Loan
            
            
            (43,180
            )Net
      Liabilities
            
            $
            276,805





NOTE
5 – GLOBAL CRICKET VENTURE





Memoranda
of Understanding


On April
17, 2008, the Company signed a Memorandum of Understanding (“MOU”) with the
Board of Control for Cricket in India (“BCCI”) and the DLF Indian Premier League
(“IPL”).  The Company will be the exclusive online provider of content
for the BCCI and the IPL.  The ten-year agreement outlined in the MOU
includes extensive co-marketing and exclusive online content rights agreements
for the Company to build, launch and operate the official online destinations
for the BCCI and the IPL. The BCCI will be guaranteed on a combined basis a
minimum of US $3 million annually and the IPL US $ 2 million annually through
revenue sharing agreements including percentages of advertising, sponsorship and
merchandising sales.  The Company is currently negotiating definitive
binding agreements to finalize the terms of the transaction.  The
original ten-year MOU with the BCCI and the IPL was subsequently expanded to
include the online and mobile live video streaming rights secured by netlinkblue
(“NLB”) as detailed below.





The
Company signed a separate MOU with NLB to create a venture combining all of the
digital assets secured independently by the Company and NLB. The Company is
currently negotiating a definitive binding agreement to finalize the terms of
the transaction.





On August
8, 2008, the Company formed a wholly-owned subsidiary in Singapore, LCM Cricket
Ventures Pte. Ltd. (“LCM Cricket Ventures”).  The new subsidiary is
intended to be a holding company to support the Global Cricket Venture with NLB
and the Company’s activities relating to cricket and the IPL.  Refer
to Note 17.  It is anticipated that LCM Cricket Ventures will become a
shareholder in Global Cricket Venture Pte. Ltd., a Singapore company that was
formed by NLB on June 10, 2008 for the purpose of conducting the activities
outlined in the MOU’s.








F-11
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008








NOTE
5 – GLOBAL CRICKET VENTURE (continued)





Memoranda
of Understanding (continued)


The
Company has incurred substantial costs relating to the initial performance of
its obligations under the MOUs with each of the BCCI and the IPL, and
establishing the venture with NLB.  During Q2 of 2008, these costs
totaled $678,222 (Q1 of 2008 - $55,317) relating to but not limited to
expenditures for business development, travel, consulting, and
salaries.  There were no such costs in Q2 or Q1 of 2007.  It
is anticipated that the costs incurred by each party to the venture in the setup
phase will be reimbursed by Global Cricket Venture once this entity is
funded.  As a result, the Company has recorded these costs as amounts
receivable from the Global Cricket Venture at June 30, 2008.





NOTE
6 – MERGER AGREEMENT





On March
25, 2008, the Company and its wholly owned subsidiary, Communicate.com Delaware,
Inc. (“Delaware”) entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Entity, Inc., a Delaware corporation, (“Auctomatic”). The
Company believes that Auctomatic’s technology framework and toolset will
strengthen its commerce platform and Auctomatic’s team will dramatically enhance
the Company’s product and technology capability.





The
Merger Agreement closed on May 22, 2008 (the “Closing Date”).  In
connection with the Merger Agreement, the stockholders of Auctomatic received in
total (i) $2,000,000 cash minus $153,305 in certain assumed liabilities and (ii)
1,000,007 shares of common stock of the Company (equal to $3,000,000 divided by
the lower of (a) $3.00 per share or (b) the closing price of the Company’s share
on the Over the Counter Bulletin Board on the business day immediately preceding
the Closing Date, which was also $3.00 per share) in exchange for all the issued
and outstanding shares of Auctomatic.





The
consideration was payable on the Closing Date as follows: (i) 340,001 shares, or
34%, of the common stock and (ii) $1,200,000 less $153,305 in assumed
liabilities.  246,402 shares of the common stock was issued and shall
be distributed in equal amounts to the Auctomatic shareholders on each of the
first, second and third anniversary of the Closing Date. The remaining $800,000
of the total Cash Consideration shall be distributed on the first anniversary of
the Closing Date.  All amounts of cash and common stock shall be
distributed pro rata among the Auctomatic Stockholders. The distribution of the
remaining 413,604 shares of the common stock payable on the first, second and
third anniversary of the Closing Date to the Auctomatic founders is subject to
their continuing employment with the Company or a subsidiary on each
Distribution Date.  See also Note 10.





The
present value of the amounts payable in cash to shareholders of Auctomatic on
the first anniversary of the closing date is $640,000, and at June 30, 2008
$141,117 of cash owing at closing had yet to be paid to a number of these
shareholders.  As a result, at June 30, 2008, amounts payable to
shareholders of Auctomatic totaled $781,117.





The
following is the purchase price allocation:





Purchase
      Price PaidCash
      (net of assumed liabilities)
            
            $
            1,046,695Transaction
      Costs
            
            
            376,052Cash
      consideration for Auctomatic
            
            
            1,422,747Present
      value of shares of common stock paid
              and
      payable to shareholders of Auctomatic
            
            
            1,138,119Present
      value of amounts payable to
              shareholders
      of Auctomatic
            
            
            640,000Total
            
            $
            3,200,866











F-12
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
6 – MERGER AGREEMENT (continued)





Net
      Assets AcquiredAssetsCash
            
            $
            3,066Share
      subscriptions receivable
            
            
            780Computer
      hardware
            
            
            7,663Auction
      Software
            
            
            925,000Goodwill
            
            
            2,417,296Less
      LiabilitiesAccounts
      payable and accrued liabilities
            
            
            (85,622
            )Loan
      payable
            
            
            (67,317
            )Net
      Assets Acquired
            
            $
            3,200,866




To show
effect to the merger of Auctomatic and Delaware as if the merger had occurred on
January 1, 2008, the pro forma information for the six-months ended June 30,
2008 would have resulted inrevenues that remain
unchanged from those reported in the consolidated financial statements, no
cumulative effect of accounting changes, and income before extraordinary items
and net income which both would have decreased by $106,035.  To show effect
to the merger of Auctomatic and Delaware as if the merger had occurred on
January 1, 2007, the comparative pro forma information for the six-months ended
June 30, 2007 would have no effect to reported revenues, cumulative effect of
accounting changes, income before extraordinary items or net income.





NOTE
7 – PROPERTY & EQUIPMENT







June
      30, 2008
            
            Cost
            
            
            Accumulated
      Amortization
            
            
            Net
      Book ValueOffice
      Furniture and Equipment
            
            $
            165,869
            
            
            $
            22,468
            
            
            $
            143,401Computer
      Equipment
            
            
            99,391
            
            
            
            43,613
            
            
            
            55,778Computer
      Software
            
            
            17,276
            
            
            
            4,319
            
            
            
            12,957Auction
      Software
            
            
            925,000
            
            
            
            25,694
            
            
            
            899,306Leasehold
      Improvements
            
            
            142,498
            
            
            
            28,500
            
            
            
            113,998$
            1,350,034
            
            
            $
            124,594
            
            
            $
            1,225,440





December
      31, 2007
            
            Cost
            
            
            Accumulated
      Amortization
            
            
            Net
      Book ValueOffice
      Furniture and Equipment
            
            $
            28.644
            
            
            $
            14,159
            
            
            $
            14,485Computer
      Equipment
            
            
            70,095
            
            
            
            37,031
            
            
            
            33,064Leasehold
      Improvements
            
            
            142,498
            
            
            
            14,250
            
            
            
            128,248$
            241,237
            
            
            $
            65,440
            
            
            $
            175,797


Pursuant
to the merger agreement (refer to Note 6), the Company acquired computer
equipment and auction software valued at $7,663 and $925,000
respectively.  These amounts are included in the June 30, 2008 table
above.





F-13
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008






NOTE
8 – WEBSITE DEVELOPMENT COSTS
 
  June
      30,
                2008
              
              
              December
      31,
                2007Website
      Development Costs
              
              $
              285,393
              
              
              $
              -Less:
      Amortization
              
              
              ( 9,363
              )
              
              
              -$
              276,030
              
              
              $
              -







NOTE
9 – DEFERRED LEASE INDUCEMENTS







June
      30,
              2008
            
            
            December
      31,
              2007Deferred
      Lease Inducements
            
            $
            85,587
            
            
            $
            95,656Less:
      Current Portion
            
            
            (20,138
            )
            
            
            (20,138
            )$
            65,449
            
            
            $
            75,518





NOTE
10 – COMMON STOCK





a)  Authorized





The
authorized capital of the Company consists of 50,000,000 common shares with a
par value of $0.001 per share. No other shares have been
authorized.





b)  Issued





At June
30, 2008, there were 22,078,026 shares issued and outstanding.





2008





In June
2008, the Company issued 586,403 shares of common stock in relation to the May
22, 2008 merger with Auctomatic.  Of those total issued shares,
340,001 shares were distributed to the shareholders and 246,402 shares are being
held for future distribution in three equal installments on the next three
anniversary dates of the merger pursuant to the terms of the merger
agreement.  The value of the stock consideration was added to the cash
consideration in our determination of the purchase price.  See also
Note 6.





Also in
June 2008, the Company issued 45,000 shares to an investor relations firm that
has been engaged to provide investor relations services to the
Company.  30,000 shares with a value of $85,350 were issued as partial
consideration for services rendered during the quarter and are reported as a
non-cash transaction on the consolidated statements of cash
flows.  15,000 shares with a value of $42,300 were prepaid for
services to be rendered in July 2008 and are included on the consolidated
statements of cash flows as a change in operating activities in prepaids and
common stock.  The Company also issued this firm 50,000 warrants in
May 2008 and expensed $3,792 in relation to the value of the warrants during the
quarter.  See also Note 10(e).





2007





On May
24, 2007 the Company issued 60,284 shares of common stock to management in lieu
of $59,078 of bonuses payable.





On June
11, 2007, the Company issued 1,000,000 shares of common stock and 1,000,000
common stock share purchase warrants to a company owned and controlled by the
Company’s Chief Executive Officer (“CEO”) in exchange for $1,000,000
cash.  See also Note 10(e).





F-14
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
10 – COMMON STOCK (continued)





b)  Issued
(continued)





2007
(continued)





During
September and October 2007 the Company accepted subscriptions from 11 accredited
investors pursuant to which the Company issued and sold 2,550,000 of the
Company’s shares of common stock, at a price of $2.00 per share for total gross
proceeds of $5,100,000 (the “Offering”).  The shares were issued pursuant
to the subscriptions as follows: 1,000,000 shares for $1,999,956 net cash
proceeds were issued before September 30, 2007, and the balance of 1,550,000
shares for net cash proceeds of $3,099,944, were issued in October
2007.  Pursuant to the terms of the Offering, the Company filed a
registration statement on Form SB-2 with the Securities and Exchange Commission
(the “Registration Statement”) before December 31, 2007 covering the resale of
the common stock (the “Registerable Securities”) sold.  The Company is
further required to use its reasonable best efforts to maintain the Registration
Statement effective for a period of (i) two years or (ii) until such time as all
the Registerable Securities are eligible for sale under Rule 144k of the
Securities Act of 1933, as amended.  The Offering was conducted in reliance
upon an exemption from registration under the Securities Act of 1933, as amended
(the "Securities Act"), including, without limitation, that under Section 506 of
Regulation D promulgated under the Securities Act. The securities were offered
and sold by the Company to accredited investors in reliance on Section 506 of
Regulation D of the Securities Act of 1933, as amended.





c)  Reserved





2008





The
Company has reserved 413,604 shares of common stock for future issuance and
distribution in relation to the May 22, 2008 merger with
Auctomatic.  These shares are to be issued to the Auctomatic founders
in three equal instalments on the next three anniversary dates of the merger
contingent on their continued employment with the Company pursuant to the terms
of the merger agreement.  See also Note 6.





d)  Stock
Options





The Board
of Directors and stockholders approved the 2007 Stock Incentive Plan and adopted
it August 21, 2007 (“the Plan”).  The Company has reserved 5,000,000
shares of its common stock for issuance to directors, employees and consultants
under the Plan. The Plan is administered by the Board of
Directors.  Vesting terms of the options range from immediately to
five years and no options will be exercisable for a period of more than ten
years.





(i)    On
      September 11, 2007, the Company granted a total of 1,250,000 stock options
      to purchase the Company’s common shares at an exercise price of $2.50 per
      share to the following individuals:


i.
            1,000,000
      to the Company’s CEO;


ii.
            50,000
      to a consultant; and


iii.
            100,000
      each to two directors.





The
Company valued the options to the CEO and directors using the Black Scholes
option pricing model using the following assumptions: no dividend yield;
expected volatility rate of 118.22%; a risk free interest rate of 4.07% - 4.11%
and an expected life of 3 years resulting in a value of $1.74-$1.78 per option
granted.





The
Company is valuing the options to the consultant at each reporting period under
FAS 123(R) for non-employees using the Black Scholes option pricing model using
the following assumptions: no dividend yield; expected volatility rate of
67.22%; a risk free interest rate of 2.91% and an expected life of 3 years
resulting in a value of $1.40 per option granted.





F-15
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
10 – COMMON STOCK (continued)





d)  Stock
Options (continued)





(ii)
              On
      October 1, 2007, the Company granted to its Chief Operating Officer
      (“COO”) 1,500,000 options to purchase the Company’s common stock at a
      price of $2.42 per share.  The Company valued these options
      using the Black Scholes option pricing model using the following
      assumptions: no dividend yield; expected volatility rate of 118.22%; risk
      free interest rate of 4.23% and an expected life of 3 years resulting in a
      value of $1.45 per option
granted.





(iii)
              On
      January 1, 2008, the Company granted to its Chief Corporate Development
      Officer (“CCDO”) 1,000,000 options to purchase the Company’s common stock
      at a price of $2.06 per share.  The Company valued these options
      using the Black Scholes option pricing model using the following
      assumptions: no dividend yield; expected volatility rate of 75.66%; risk
      free interest rate of 3.07% and an expected life of 3 years resulting in a
      value of $1.05 per option
granted.





(iv)
              On
      January 7, 2008, the Company granted to its Vice President, Finance (“VP
      Finance”) 150,000 options to purchase the Company’s common stock at a
      price of $1.98 per share.  The Company valued these options
      using the Black Scholes option pricing model using the following
      assumptions: no dividend yield; expected volatility rate of 75.68%; risk
      free interest rate of 2.76% and an expected life of 3 years resulting in a
      value of $1.01 per option
granted.





(v)
            On
      March 14, 2008, the Company granted to a director 100,000 options to
      purchase the Company’s common stock at a price of $2.49 per
      share.  The Company valued these options using the Black Scholes
      option price model using the following assumptions: no dividend yield;
      expected volatility rate of 73.39%; risk free interest rate of 1.65% and
      an expected life of 3 years resulting in a value of $1.21 per option
      granted.





(vi)
              On
      May 27, 2008, the Company granted to its Vice President, General Counsel
      (“VP CC”) 125,000 options to purchase the Company’s common stock at a
      price of $3.10 per share.  The Company valued these options
      using the Black Scholes option pricing model using the following
      assumptions: no dividend yield; expected volatility rate of 68.19%; risk
      free interest rate of 2.82% and an expected life of 3 years resulting in a
      value of $1.45 per option
granted.





(vii)
              Between
      January 1, 2008 and June 30, 2008, the Company granted to its full-time
      employees a total of 710,000 options to purchase the Company’s common
      stock at a range of prices between $2.06 and $3.30 per
      share.  The Company valued these options using the Black Scholes
      option pricing model using the following assumptions: no dividend yield;
      expected volatility rate of between 68.19% and 75.66%; risk free interest
      rates of between 1.79% and 3.07% and an expected life of 3 years resulting
      in a value of between $1.05 and $1.66 per option
  granted.





(viii)
              Between
      January 1, 2008 and June 30, 2008, the Company granted to consultants a
      total of 70,000 options to purchase the Company’s common stock at prices
      ranging from $2.06 to $2.49 per share.  The Company is valuing
      these options at each reporting period under FAS 123(R) for non-employees
      using the Black Scholes option pricing model using the following
      assumptions: no dividend yield; expected volatility rate of 67.22%; risk
      free interest rates of 2.91% and an expected life of 3 years resulting in
      a value of between $1.41 and $1.55 per option
  granted.





All of
the options noted in (i) to (viii) vest over three years and are exercisable for
a period of five years based on the date of grant.  Management does
not expect any forfeitures to occur as over 90% of the options in question have
been granted to senior officers, senior employees and directors of the Company
who are not expected to leave in the near future.  This is the first
year of the Stock Option Plan and this assumption will be reassessed on an
annual basis.  The fair value of these options at June 30, 2008 of
$6,954,050 (Q1 2008 - $6,183,100; December 31, 2007 - $4,396,000) will be
recognized on a straight-line basis over a vesting term of 3 years and
accordingly, an expense has been recognized in the three-month period ended
June 30, 2008 of $543,745 (Six month period ended June 30, 2008 -
$1,025,889; FYE 2007 - $428,028) and included in management fees and employee
salaries expense.





F-16
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
10 – COMMON STOCK (continued)





d)  Stock
Options (continued)





A summary
of the option activity under the 2007 Plan as of June 30, 2008, and changes
during the six-month period then ended is presented below:







Options
            Shares
            Weighted
              Average
              Exercise
      Price
              $
            Intrinsic
              Value
              $Options
      outstanding, March 31, 2007
            -
            -
            -Granted
            2,750,000
            $
      2.25
            -Exercised
            -
            -
            -Cancelled
      or expired
            -
            -
            -Options
      outstanding, December 31, 2007
            2,750,000
            $
      2.25
            $1.74
      - 1.78Granted
            2,155,000
            $
      2.40
            $1.01
      - 1.66Exercised
            -
            -
            -Cancelled
      or expired
            -
            -
            -Options
      outstanding, June 30, 2008
            4,905,000
            $
      2.32
            $1.01
      - 1.78Options
      vested or expected to vest at June 30, 2008
            -Options
      exercisable June 30, 2008
            -Exercise
      price
            $
      2.32Weighted
      average remaining life
            4.41
      Years








e)  Common
Stock Purchase Warrants





2008





On June
30, 2008, the Company issued 50,000 common stock share purchase warrants to its
investor relations firm in connection with a services agreement with an exercise
price of $2.33.  The warrants expire May 1, 2010.  The
Company valued these options using the Black Scholes option pricing model using
the following assumptions: no dividend yield; expected volatility rate of
69.27%; risk free interest rate of 2.37% and an expected life of 2 years
resulting in a fair value of $0.91 per option granted.





2007





On June
11, 2007, in connection with the issuance of 1,000,000 common shares to a
company owned and controlled by the Company’s Chief Executive Officer (“CEO”),
the Company also issued 1,000,000 common stock share purchase warrants with an
exercise price of $1.25.  The warrants expire June 10,
2009.





F-17
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
10 – COMMON STOCK (continued)





e)  Common
Stock Purchase Warrants (continued)





As of
June 30, 2008, 1,050,000 warrants to purchase the Company’s common stock remain
outstanding as follows:





WeightedOutstanding
            
            Average
      Exercise
            
            Date
      ofWarrants
            
            Price
            
            ExpiryWarrants
      outstanding, March 31, 2007
            -
            
            -Granted
            1,000,000
            
            $       1.25
            
            June
      10, 2009Cancelled
      or expired
            -
            
            -Warrants
      outstanding, December 31, 2007
            1,000,000
            
            $       1.25Granted
            50,000
            
            $       2.33
            
            June
      30, 2010Cancelled
      or expired
            -
            
            -Warrants
      exercisable June 30, 2008
            1,050,000
            
            $       1.30Exercise
      price
            $1.30Weighted
      average remaining life
            1.00
      Years





NOTE 11 – DOMAIN NAME LEASES AND
SALES





On
January 17, 2008, the Company entered into an agreement to lease Surrey.com to
an unrelated third party for CAD$200,000.  The terms of the agreement
provide for the receipt of this amount in five irregular lease payments over a
two-year term.  The first payment of $25,000CAD was due on January 17,
2008 (the “Effective Date”), $45,000CAD was due 3 months after the Effective
Date, $80,000CAD is due 6 months after the Effective Date, $25,000CAD is due 1
year after the Effective Date, and $25,000CAD is due 2 years after the Effective
Date. The Company will lease the domain name to the third party exclusively
during the term of the agreement.  Title and rights to the domain name
will be transferred to the purchaser only when full payment is received at the
end of the lease term.  If the third party defaults on any payments,
the agreement terminates, funds received to date are forfeited by the lessee,
and rights to the domain name return to the Company.  This transaction
was recorded as a sales-type lease in Q1 of 2008.  The investment in a
sales-type lease of $163,963 was recorded on the balance sheet on a net basis
after the lease payments received to date.  Revenues of $168,206 were
recorded at the present value of the lease payments over the term, net of the
cost of the domain name, at an implicit rate of 6%.  Payments have been
collected as due to date according to terms of the agreement.





There
were no sales of domain names in 2008 or the 2007 fiscal year.





NOTE
12 – OTHER EXPENSES





During Q2
of 2008, the Company incurred various restructuring costs.  During the
period, such costs included $31,691 in valuation costs relating to the Q1 share
issuance of DHI shares to the Company and $2,000 in some final windup costs
related to the FT disposition in late 2007.  There were no such costs
in Q2 of 2007.


NOTE
13 – INCOME TAXES





The
Company’s subsidiaries, DHI, Acadia, Importers, 613784 are subject to federal
and provincial taxes in Canada.  The Company, its subsidiaries
Delaware and FT (until the date of disposition of FT on November 12, 2007) are
subject to United States federal and state taxes.








F-18
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008





NOTE
13 – INCOME TAXES





The
Company adopted the provisions of FIN 48, on January 1, 2007. FIN 48 clarifies
the accounting for uncertainty in income taxes recognized in an enterprise’s
financial statements in accordance with FASB Statement 109, “Accounting for
Income Taxes”, and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The Company and its subsidiaries are
subject to U.S. federal income tax and Canadian income tax, as well as
income tax of multiple state and local jurisdictions. Based on the Company’s
evaluation, the Company has concluded that there are no significant uncertain
tax positions requiring recognition in the Company’s financial statements. The
Company’s evaluation was performed for the tax years ended December 31, 2001,
2002, 2003, 2004, 2005, 2006 and 2007, as well as the quarters ended March 31,
2008 and June 30, 2008, the tax years which remain subject to examination by
major tax jurisdictions as of June 30, 2008.  The Company may from time to
time be assessed interest or penalties by major tax jurisdictions, although any
such assessments historically have been minimal and immaterial to the Company’s
financial results. In the event the Company has received an assessment for
interest and/or penalties, it has been classified in the financial statements as
selling, general and administrative expense.





As at the
last fiscal tax year December 31, 2007, the Company and its subsidiaries have
net operating loss carryforwards of approximately $2,507,000 that result in
deferred tax assets.  These loss carryforwards will expire, if not
utilized, through 2027.  The Company’s subsidiary DHI also has
approximately $1,592,000 in undepreciated capital costs relating to property and
equipment that have not been amortized for tax purposes.  The
Company’s subsidiaries Acadia and Importers also have approximately $2,943,000
combined in undepreciated capital costs relating to intangible assets that have
not been amortized for tax purposes.  The costs may be amortized in
future years as necessary to reduce taxable income.  Management
believes that the realization of the benefits from these deferred tax assets is
uncertain and accordingly, a full deferred tax asset valuation allowance has
been provided and no deferred tax asset benefit has been recorded.





NOTE
14 – SEGMENTED INFORMATION





The
Company’s eCommerce operations have historically been conducted in three
business segments, Domain Leasing and Advertising, eCommerce Products and
eCommerce Services. The business segment of eCommerce services ended upon the
termination of the Company’s relationship with FT on November 12,
2007.  Revenues, operating profits and net identifiable assets by
business segments are as follows:





For the six months
      ended June 30, 2008Domain
      Leasing and
              Advertising
            
            
            eCommerce
              Products
            
            
            eCommerce
              Services
            
            
            Total$
            
            
            $
            
            
            $
            
            
            $Revenue
            
            
            55,254
            
            
            
            3,732,860
            
            
            
            -
            
            
            
            3,788,114Segment
      Loss
            
            
            (1,241,462
            )
            
            
            (2,950,729
            )
            
            
            -
            
            
            
            (4,192,191
            )As at June 30,
      2008
            
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $Total
      Assets
            
            
            1,495,316
            
            
            
            7,245,235
            
            
            
            -
            
            
            
            8,740,551Intangible
      Assets
            
            
            1,373,515
            
            
            
            252,366
            
            
            
            -
            
            
            
            1,625,881





For the six months
      ended June 30, 2007Domain
      Leasing and
              Advertising
            
            
            eCommerce
              Products
            
            
            eCommerce
              Services
            
            
            Total$
            
            
            $
            
            
            $
            
            
            $Revenue
            
            
            140,593
            
            
            
            2,887,534
            
            
            
            319,282
            
            
            
            3,347,409Segment
      Loss
            
            
            (122,918
            )
            
            
            (89,127
            )
            
            
            (68,768
            )
            
            
            (280,813
            )As at June 30,
      2007
            
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $Total
      Assets
            
            
            1,471,412
            
            
            
            1,803,682
            
            
            
            106,616
            
            
            
            3,381,710Intangible
      Assets
            
            
            1,471,412
            
            
            
            252,366
            
            
            
            3,300
            
            
            
            1,727,078








F-19
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008








NOTE
14 – SEGMENTED INFORMATION





The
reconciliation of the segment profit to net income as reported in the
consolidated financial statements is as follows:





For
      the six-months endedJune
      30, 2008
              (unaudited)
            
            
            June
      30, 2007
              (unaudited)$
            
            
            $Segment
      Loss
            
            
            (4,192,191
            )
            
            
            (280,813
            )Non-Recurring
      Income
            
            
            -
            
            
            
            -Net
      proceeds from sales-type lease of domain names
            
            
            168,206
            
            
            
            -Interest
      and Investment Income
            
            
            59,178
            
            
            
            32,861Net
      Loss for the period
            
            
            (3,964,807
            )
            
            
            (247,952
            )





Substantially
all property and equipment and intangible assets are located in
Canada.





NOTE
15 – COMMITMENTS





Premise
Lease





Effective
October 1, 2007 the Company leased its 5,400 square feet office in Vancouver,
Canada from an unrelated party for a 5-year period starting from October 1, 2007
to September 30, 2012.  Pursuant to the terms of the lease agreement,
the Company is committed to basic rent payments expiring September 30, 2012 as
follows.





CAD
      $2008
            56,0912009
            116,1882010
            121,5312011
            126,8732012
            98,159





The
Company will also be responsible for common costs currently estimated to be
equal to approximately 75% of basic rent.





Cricket
Venture





The MOU
with the BCCI and the IPL requires the Company to pay both the BCCI and the IPL
minimum payments over the next ten years, beginning on October 1,
2008.  See also Note 5.  Pursuant to the terms of the MOU,
the future minimum payments are as follows:





BCCI
              USD$
            IPL
              USD$
            TOTAL
              USD
      $2008
            625,000
            375,000
            1,000,0002009
            2,625,000
            1,625,000
            4,250,0002010
            3,000,000
            2,000,000
            5,000,0002011
            3,750,000
            2,500,000
            6,250,0002012
            3,000,000
            2,000,000
            5,000,0002013
            3,000,000
            2,000,000
            5,000,0002014
            3,000,000
            2,000,000
            5,000,0002015
            3,000,000
            2,000,000
            5,000,0002016
            3,000,000
            2,000,000
            5,000,0002017
            3,250,000
            2,250,000
            5,500,0002018
            1,750,000
            1,250,000
            3,000,000








F-20
 Live
      Current Media Inc.
                      (formerly
      Communicate.com Inc.)
                      Notes
      to Consolidated Financial Statements
                      For
      the Six Months Ended June 30, 2008











NOTE
16– CONTINGENCY





The
former Chief Executive Officer of DHI commenced a legal action against DHI on
March 9, 2000 for wrongful dismissal and breach of contract.  He is
seeking, at a minimum, 18.39% of the outstanding shares of DHI, specific
performance of his contract, special damages in an approximate amount of
$30,000, aggravated and punitive damages, interest and costs. On June 1, 2000,
DHI filed a Defence and Counterclaim against this individual claiming damages
and special damages for breach of fiduciary duty and breach of his employment
contract. The outcome of these legal actions is currently not determinable and
as such the amount of loss, if any, resulting from this litigation is presently
not determinable.  To date, there has been no further action taken by
the plaintiff since the filing of the initial legal action on March 9,
2000.





NOTE 17 – SUBSEQUENT
EVENTS





On August
6, 2008, the Company issued 15,000 shares of common stock to its investor
relations firm as partial consideration for investor relations services
rendered.





On August
8, 2008, the Company formed a wholly-owned subsidiary in Singapore, LCM Cricket
Ventures Pte. Ltd. (“LCM Cricket Ventures”).  The new subsidiary is
intended to be a holding company that was incorporated to support the Global
Cricket Venture with NLB and the Company’s activities relating to cricket and
the IPL. To date, the new subsidiary has no or nominal assets and no
operations.  Refer to Note 5.





NOTE
18 – COMPARATIVE FIGURES





In order
to provide more relevant data in 2008, the Company has specifically identified
and reported eCommerce sales and costs of sales generated from the operation of
our Perfume.com and Body.com websites as “Health & Beauty eCommerce”, and
the eCommerce sales and costs of sales generated from the operation of our other
websites as “Other eCommerce”.  Other eCommerce includes eCommerce
services generated from FT in 2007, which are NIL in 2008. The Company also
reclassified Q1 expenses relating to Cricket as these amounts are actually
recoverable from the Global Cricket Venture and therefore should not have been
expensed during the period.  The effect of the adjustment to balances
originally presented for the quarter ended March 31, 2008, is to reduce Expenses
Related to Cricket.com, increase Amounts Receivable from Global Cricket Venture,
and decrease Deficit at March 31, 2008 all by $55,317.  As a result, the
comparative figures for Q1 of 2008 and Q2 of 2007 have been reclassified in
order to conform to the current quarter’s consolidated financial statement
presentation.