U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2009.

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD OF _________ TO _________

Commission File Number: 000-19846

Current Technology Corporation

(Exact name of registrant as specified in its charter)


Canada	__N/A_____
State or other jurisdiction of	(I.R.S. Employer
incorporation or organization	Identification No.)

800 West Pender Street, Suite 1430

Vancouver, B.C., Canada V6C 2V6

(Address of principal executive offices, including zip code)

Registrant’s telephone number: (604) 684-2727

Indicate by check mark whether the registrant (1) 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 o No R

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o 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:

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o Smaller Reporting company R

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

Yes o No R

As of August 31, 2009, there were 161,479,617 shares of the Registrant’s no par value Common Stock (“Common Stock”), the Registrant’s only outstanding class of voting securities, outstanding.

CURRENT TECHNOLOGY CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED June 30, 2009

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2008 and June 30, 2009 …..…..….….... _3

Consolidated Statements of Operations for the three and six month period ended

June 30, 2009 and June 30, 2008......................................................................................

_4_

Consolidated Statements of Cash Flow for the three and six month period ended

June 30, 2009 and June 30, 2008......................................................................................

_5_

Condensed Notes to Consolidated Financial Statements....................................................

_6_

[The balance of this page has been intentionally left blank.]

See accompanying notes -

CURRENT TECHNOLOGY CORPORATION

(Incorporated under the Canada Business Corporations Act)

Interim Consolidated Balance Sheet

June 30, 2009 and December 31, 2008

(United States Dollars)


Assets	June 30, 2009 Unaudited	December 31, 2008
Current:
Cash and cash equivalents	$34,515	$42,949
Accounts receivable	8,140	61,500
Due from related parties (Note 14)	100,000	100,000
Inventories	467,916	492,644
Prepaid expenses	27,754	17,973
Total Current Assets	638,325	765,066

Long term asset	11,825	-

Equipment, Furniture, & Leased Assets (Note 7)	485,858	484,104
Less accumulated depreciation	199,574	138,290
Total Equipment, Furniture & Leased Assets	286,284	345,814

Total Assets	$936,434	$1,060,880
Liabilities and Stockholders’ Deficiency
Current:
Accounts payable	$1,189,668	$606,186
Due to related parties (Note 13)	341,332	230,479
Stock based debt settlement	-	270,000
Accrued liabilities	67,030	136,869
Subscription liability (Note 9)	87,500	272,500
Unearned revenue	9,019	18,038
Total current liabilities	1,694,549	1,534,072

Liabilities from discontinued operations (Note 6)	657,417	657,417
Convertible promissory note (Note 8)	1,615,860	1,428,365
Total liabilities	3,967,826	3,619,854

Stockholders’ Deficiency:
Common shares without par value (Note 9)	32,232,028	30,835,668
Additional paid-in capital (Note 10)	7,590,145	4,391,752
Accumulated deficit	(42,540,210)	(37,473,039)
Accumulated other comprehensive loss	(313,355)	(313,355)
Total stockholders’ deficiency	(3,031,392)	(2,558,974)
Total Liabilities and Stockholders’ Deficiency	$936,434	$1,060,880
Going Concern (Note 3)
Commitments (Note 16)
Subsequent Events (Note 17)
Approved by Directors: __ “Robert Kramer” ________ __ “George Chen”__________

CURRENT TECHNOLOGY CORPORATION

Interim Consolidated Statement of Operations and Deficit

For the six months ended June 30

(Unaudited)

(United States Dollars)


	Three months ended June 30,	Six months ended June 30	Three months ended June 30,	Six months ended June 30
	2009	2009	2008	2008
Revenue	$29,651	$120,411	$224,931	$354,728
Cost of sales	1,420	26,198	191,861	328,643
	28,231	94,213	33,070	26,085

Selling, General and Administrative Costs and Expenses
General & Administrative	67,164	212,600	221,353	370,878
Salaries & wages	3,548,321	4,121,261	298,636	891,088
Legal, auditing and filing fees	39,663	81,178	147,769	214,104
Amortization and deprecation	30,706	61,284
Consulting	73,788	435,484	37,288	219,558
Corporate Communications	74,710	154,914	50,190	160,175
Business development	-	-	288,608	488,608
Interest on convertible promissory note	38,267	74,637	28,293	56,587
Foreign Exchange (Recovery)	12,192	20,026	7,403	1,603
Total Selling, General and Administrative Costs and Expenses	3,884,811	5,161,384	1,079,540	2,402,601

Income (Loss) from operations before income taxes, minority interests and equity in net loss (income) from associated companies	$(3,856,580)	$(5,067,171)	$(1,046,470)	$(2,376,516)
Income taxes	-	-	-	-
Minority interest	-	-	127,160	430,466
Equity in net loss (income) from associated companies	-	-	203,967	261,590
Net loss	(3,856,580)	(5,067,171)	$(1,123,277)	$(2,207,640)
Deficit, beginning	(38,683,630)	(37,473,039)	$(29,372,686)	(28,288,323)
Deficit, ending,	$(42,540,210)	$(42,540,210)	$(30,495,963)	$(30,495,963)

Basic and fully diluted net loss per share	$(0.02)	$(0.03)	$(0.01)	$(0.02)
Weighted average shares outstanding	157,646,285	153,844,613	128,411,776	126,351,900

The per share effect in the change in accounting policy	$(0.02)	$(0.03)	$(0.01)	$(0.02)

See accompanying notes -

CURRENT TECHNOLOGY CORPORATION

Interim Consolidated Statement of Cash Flows

For the six months ended June 30

(Unaudited)

(United States Dollars)


	Three months ended June 30,	Six months ended June 30	Three months ended June 30,	Six months ended June 30
	2009	2009	2008	2008


Opertating Activities:
Net Loss	$(3,856,580)	$(5,067,171)	$(1,123,277)	$(2,207,640)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities-
Amortization and Depreciation	30,706	61,284	16,897	36,274
Professional Fees accrual	-	8,000	111,000	136,000
Bad debt expense	12,810	22,314	-	10,250
Stock based compensation	3,215,752	3,215,752	-	314,027
Additional paid in capital	-	-	-	1,350,997
Shares issued for services provided	320,000	600,000	43,750	103,750
Interest on promissory note	38,267	74,637	28,294	56,587
Minority interest	-	-	127,160	430,466
Loss from Equity investment	-	-	203,967	261,590
Exchange adjustment	(2,014)	(7,488)	(47,045)	(19,967)
Changes in operating assets and liabilities-
(Increase) Decrease in accounts receivable	15,058	53,361	(211,890)	(186,963)
(Increase) Decrease in inventory	367	12,904	(301,087)	(301,087)
(Increase) Decrease in prepaid expenses	(9,781)	(9,781)	(3,216)	(653)
(Increase) Decrease in subscription receivable	-	-	13,162	13,162
Increase (Decrease) in accounts payable	82,022	220,698	397,735	448,676
Increase (Decrease) in due to related parties	20,099	110,394	-	-
Increase (Decrease) in unearned revenue	(9,019)	(9,019)	-	-
Net cash used in operating activities	(142,313)	(713,536)	(744,550)	445,469
Cash flows from investing activities
Investment in Celevoke	-	-	54,068	(2,454,768)
Fixed assets purchase	-	(1,754)	(157,802)	(458,915)
Net cash used in investing activities	-	(1,754)	(103,734)	(2,913,683)
Cash flows from financing activities:
Issuance of new shares	99,999	778,999	1,520,738	3,020,728
Convertible promissory note	12,857	112,857	-	-
Subscription advances	50,000	(185,000)	(112,500)	37,500
Net cash provided by financing activities	162,856	706,856	1,408,238	3,058,228
Net Increase in Cash and Cash Equivalents	20,543	(8,134)	559,954	590,014
Cash and Cash Equivalents, beginning	13,972	42,949	63,558	33,498
Cash and Cash Equivalents, ending	34,515	34,515	$623,512	$623,512

See accompanying notes -

CURRENT TECHNOLOGY CORPORATION

Notes to Interim Consolidated Financial Statements

For the six months ended June 30, 2009 and 2008

Unaudited- (United States Dollars)

Basis of Presentation:

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with US generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by US generally accepted accounting principles for complete financial statements of Current Technology Corporation and its subsidiaries (the “Company”). In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation have been included. Interim results are not necessarily indicative of the results that may be expected for the year. The unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2008 included in the Company’s Form 10-K filed with the Securities and Exchange Commission (the “SEC”) in April 2009.

The consolidated balance sheet at December 31, 2008 has been derived from the audited financial statements at that date but does not include all the information and notes required by US generally accepted accounting principles for complete financial statements.

The acquisitions described in Note 7 below significantly affects the comparability of the financial information for the three month period then ended.

Nature of Operations:

On January 31, 2008, the Company entered into a securities purchase agreement with Celevoke, Inc. (“Celevoke”). On May 23, 2008, the Company completed the purchase of 102 shares of Celevoke common stock for an aggregate purchase price of $2.5 million. During the remainder of the year ended December 31, 2008, the Company purchased an additional 55 common shares of Celevoke for a total price of $1,750,000, and during the quarter ended March 31, 2009, the Company purchased an additional 6 common shares of Celevoke for a price of $200,000. The Company has a 62% interest in Celevoke as at June 30, 2009.

The Company has developed an electrotherapeutic medical device designed to stimulate hair regrowth (ElectroTrichoGenesis or ETG) and a cosmetic unit designed to improve the appearance of thinning hair (CosmeticTrichoGenesis or CTG). ETG and CTG are marketed as TrichoGenesis platform products. The Company has entered into an exclusive distribution agreement with an entity based in the United States for the placement on a revenue sharing basis of its TrichoGenesis platform products in the United States, Canada, South America (excluding Brazil), Europe and Russia. The Company is working in concert with its United States based distributor to attempt to lower the cost of ETG devices and CTG units by having non-proprietary components of the chair and hood manufactured in China.

The Company was incorporated on June 3, 1986 and commenced operations on April 21, 1987. The Company currently does not generate sufficient funds from operations to support continuing activities and has financed expenditures through private and public offerings of equity securities and the private placement of debt instruments. The common shares of the Company trade on the OTCBB in the United States under the symbol "CRTCF".

Going Concern:

These unaudited consolidated financial statements have been prepared on the going concern assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business.

A net loss of $5,067,171 was incurred during the six months ended June 30, 2009 (2008: $2,207,640). Recurring losses have been reported since inception, which have resulted in an accumulated deficit of $42,540,210 (2008: $30,495,963). The Company may attempt to obtain additional debt or equity financing but there can be no assurance that such capital will be available in sufficient amounts or on acceptable terms and there is no certainty that these discussions will be concluded successfully.

The ability of the Company to continue as a going concern is dependent on the successful conclusion of these discussions, the receipt of additional financing, and/or proceeds on the sale of assets and ultimately its ability to generate sufficient cash from operations and financing sources to meet its obligations as they come due.

If the Company is unable to continue as a going concern, material adjustments may be required to the carrying value of assets and liabilities and to the classifications used on the balance sheet.

Any inability to obtain additional financing when needed would have a material adverse affect on the Company including possibly requiring the Company to significantly reduce or cease its operations.

Accounting changes:

Change in Functional Currency

Effective January 1, 2008, the Company changed its functional currency to the U.S. dollar from the Canadian dollar. With the acquisition of Celevoke, Inc (Note 7), the Company’s primary economic environment changed from Canada to United States. This has resulted in significant changes in economic facts and circumstances that clearly indicate that the functional currency has changed. The Company accounted for the change in functional currency prospectively.

The financial statements of the Company for the year ended December 31, 2007 which is based on the Canadian functional currency, has been translated into the U.S. reporting currency using the current rate method as allowed by Statement of Financial Accounting Standards No.52 ("SFAS 52") as follows: assets and liabilities using the rate of exchange prevailing at the balance sheet date; stockholders' deficiency using the applicable historic rate; and revenue and expenses using the monthly average rate of exchange. Translation adjustments have been included as part of the accumulated other comprehensive income.

Fair value measurement

In February 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-2, which delays the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years, for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Examples of items to which the deferral would apply include, but are not limited to:

Accounting changes (continued):

Non-financial assets and non-financial liabilities initially measured at fair value in a business combination or other new basis event, but not measured at fair value in subsequent periods (non-recurring fair value measurements)

Reporting units measured at fair value in the first step of a goodwill impairment test and non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test (measured at fair value on a recurring basis, but not necessarily recognized or disclosed in the financial statements at fair value)

Indefinite-lived intangible assets measured at fair value for impairment assessment (measured at fair value on a recurring basis, but not necessarily recognized or disclosed in the financial statements at fair value)

Long-lived assets (asset groups) measured at fair value for an impairment assessment (non-recurring fair value measurements); and

Liabilities for exit or disposal activities initially measured at fair value (non-recurring fair value measurements)

The Company has adopted SFAS No. 157 on January 1, 2009, as required, and the adoption of SFAS 157 resulted in no impact on the Company’s financial position, results of operations or cash flows.

c) Derivative instruments and hedging activities

In March 2008, the FASB issued Statement No. 161, Disclosure about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 requires companies to provide enhance disclosures regarding derivative instruments and hedging activities. It requires companies to better convey the purpose of derivative use in terms of the risks that such company is intending to manage. Disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect a company’s financial position, financial performance, and cash flows are required. SFAS 161 contains the same scope as SFAS 133 and is effective for fiscal years and interim periods beginning after November 15, 2008. The Company adopted SFAS 161 on January 1, 2009, as required, and the adoption of SFAS 161 resulted in no impact on the Company’s financial position, results of operations or cash flows.

d) Transfers of financial assets and repurchase financing transactions

In February 2008, the FASB issued a FASB Staff Position (“FSP”) on Accounting for Transfers of Financial Assets and Repurchase Financing Transactions (“FSP FAS 140-3”). FSP FAS 140-3 addresses the issue of whether or not these transactions should be viewed as two separate transactions or as one ‘linked’ transaction. The FSP includes a ‘rebuttable presumption’ that presumes linkage of the two transactions unless the presumption can be overcome by meeting certain criteria. The FSP will be effective for fiscal years beginning after November 15, 2008 and will apply only to original transfers made after that date. The Company adopted FAS 140-3 on January 1, 2009, as required, and the adoption of SFAS 161 resulted in no impact on the Company’s financial position, results of operations or cash flows.

Accounting changes (continued):

e) Useful life of intangible assets

In April 2008, the FASB issued FASB Staff Position (“FSP”) No. SFAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP SFAS 142-3”). FSP SFAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The intent of FSP SFAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141R (revised 2007), Business Combination (“SFAS 141R”) and other applicable accounting literature. The Company adopted FAS 142-3 on January 1, 2009, as required, and the adoption of FAS 142-3 resulted in no impact on the Company’s financial position, results of operations or cash flows.

f) Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued SFAS No. 162, Hierarchy of Generally Accepted Accounting Principles (“SFAS 162”). This statement is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements of nongovernmental entities that are presented in conformity with GAAP. This statement will be effective 60 days following the US Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendment to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company is currently evaluating the potential impact, if any, of the adoption of SFAT 162 on its financial position, results of operations or cash flows.

In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 affects entities that accrue cash dividends on share-based payment awards during the awards’ service period when dividends do not need to be returned if the employees forfeit the awards. The Company adopted FAS 162 on January 1, 2009, as required, and the adoption of FAS 162 resulted in no impact on the Company’s financial position, results of operations or cash flows.

g) Collaborative arrangements

In December 2007, the FASB ratified the consensus reached by the EITF on EITF Issue No. 07-1, Accounting for Collaborative Arrangements (“EITF 07-1”). EITF 07-1 requires collaborators to present the results of activities for which they act as the principal on a gross basis and report any payments received from (made to) other collaborators based on other applicable GAAP or, in the absence of other applicable GAAP, based on analogy to authoritative accounting literature or a reasonable, rational, and consistently applied accounting policy election. Further, EITF 07-1 clarified the determination of whether transactions within a collaborative arrangement are part of a vendor-customer (or analogous) relationship subject to EITF Issue No. 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). EITF 07-1 became effective for the Company beginning on January 1, 2009. The implementation of EITF 07-1 did not have a material effect on the Company’s consolidated financial statements.

Summary of Significant Accounting Policies:

Equipment, Furniture and Capital Lease

Leasehold, equipment and furniture are stated at cost. Maintenance and repairs are charged to expense as incurred. Expenditures, which extend the physical or economic life of the assets are capitalized and depreciated. Depreciation is provided using the straight-line method over the estimated useful life as follows:

Equipment

1-5 years

Furniture

3 years

Leasehold improvement

1.5 years

Leased assets

5 years

Impairment of Long-Lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, long lived assets, such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimate undiscounted future cash flow expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeded the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or the fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

Revenue recognition

The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements” ("SAB 104").

The following policies have been established with respect to revenue recognition on the sale of ETG devices and CTG units:

Purchase/sale negotiations conclude with an agreement to purchase and are also secured by a deposit;

Goods are shipped when collection of the balance of the purchase price is reasonably assured. This is indicated by:

actual receipt of funds from distributors or customers; or

secured lease or term financing by distributors or customers which would result in immediate payment of the balance upon delivery; or

distributors or customers exceptional credit and operating history, and an agreement in writing to specific terms of payment;

Summary of Significant Accounting Policies (continued):

Revenue recognition (continued):

Revenue is recognized only after goods are shipped. At this point collection is reasonably assured and risks and rewards of ownership have been transferred.

Revenue from royalty agreements is recognized when earned, which is generally the period in which the services to which the royalty relates are provided to third parties and collection of the balance owing is reasonably assured.

Customer deposits, as required by the Company’s revenue recognition policy above, received in advance are treated as deferred revenue until goods are shipped. Only then is revenue recognized.

Revenue recognition relating to the Company’s subsidiary, Celevoke Inc’s wireless asset tracking or control systems and internet hosting operation is recognized when evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. Celevoke enters into certain arrangements, where it is obligated to deliver multiple products and / or services (multiple elements). In these arrangements, Celevoke generally allocates the total revenue among the elements based on the sales price of each element when sold separately (vendor-specific objective evidence).

Deferred Revenues

Deferred revenue is attributable to deposits made by customers for goods and services not yet rendered. Unearned revenue from certain licensing programs represents customer billings, paid either upfront or at the beginning of each billing coverage period, that are accounted for as subscriptions with revenue recognized ratably over the billing coverage period. For certain other licensing arrangements, revenue attributable to undelivered elements is based on the sales price of those elements when sold separately and is recognized ratably on a straight-line basis over the related product’s life cycle. Deferred revenues include subscription services where we have been paid upfront and earn the revenue when we provide the service or otherwise meet the revenue recognition criteria.

Cost of Sales

Cost of revenue includes direct costs to produce and distribute products or services and the direct costs associated with the delivery of online services, professional services, product support and resold hardware.

Equity Investment

Purchased equity interests that are not publicly traded and / or do not have a readily determinable fair value are accounted for pursuant to the equity method of accounting if the Company’s ownership position is large enough to significantly influence the operating and financial policies of an investee. This is generally presumed to exist when we own between 20% - 50% of a corporation. The Company’s share of earnings and losses in equity method investees is included in loss from equity method investments on the Consolidated Statement of Operations.

For investments accounted for using the equity method of accounting, management evaluates information such as budgets, business plans, financial statements of the investee in determining

Summary of Significant Accounting Policies (continued):

Equity Investment (continued):

whether an other-than-temporary decline in value exists. Factors indicative of an other-than-temporary decline in value include, but not limited to, recurring operating losses and credit defaults. For any of the Company’s investments in which the estimated fair value is less than its carrying value, the Company considers whether the impairment of that investment is other-than-temporary.

Use of estimates

The preparation of consolidated financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates.

Fair value of financial instrument

Effective January 1, 2008, we adopted SFAS 157, Fair Value Measurements ("SFAS 157"). SFAS 157 provides a definition of fair value, establishes a hierarchy for measuring fair value under generally accepted accounting principles, and requires certain disclosures about fair values used in the financial statements.

SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under SFAS 157 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

Level 1 – Quoted prices in active markets for identical assets or liabilities

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value of cash and cash equivalents; accounts receivable; accounts payable; loans; and mortgages for all periods presented approximate their respective carrying amounts.

Acquisitions:

Celevoke Inc

On January 31, 2008, the Company entered into a securities purchase agreement with Celevoke, Inc (“Celevoke”). Under the agreement the Company purchased 102 shares of Celevoke common stock for an aggregate purchase price of $2,500,000. The 102 shares were purchased in four installments of 20 shares and a fifth installment of 22 shares.

As at March 31, 2008, the Company completed the purchase of 60 shares out of the 102 shares of Celevoke common stock for total consideration of $1,500,000. The 60 shares gave the Company 37.5% equity interest in Celevoke. Consequently, the Company has accounted for this 37.5% interest in Celevoke as an equity investment.

On May 23, 2008, the Company completed the purchase of the remaining 42 shares of Celevoke and increased its ownership interest in the voting equity of Celevoke from 37.5% to 51%. Effective with the close of that transaction on May 23, 2008, the Company began consolidating Celevoke’s financial results into the Company’s interim consolidated financial statements.

From May 23, 2008 through December 31, 2008, the Company purchased an additional 55 common shares of Celevoke for a price of $1,750,000 and increased its ownership interest in the voting equity of Celevoke from 51% to 61%. During the quarter ended March 31, 2009, the Company purchased an additional 6 common shares of Celevoke for a price of $200,000 and increased its ownership interest in the voting equity of Celevoke from 61% to 62%.

The acquisition was recorded under the purchase method of accounting and the purchase price was allocated based on the fair value of the assets acquired and the liabilities assumed to the extent of the 62% ownership interest acquired as of the various date the payments were made under step acquisition accounting. The remaining 38% portion of the acquired net assets represents the minority interest ownership in Celevoke.

Star One Telematica S/A

On May 5, 2008, Celevoke, acquired 521 common shares of Star One Telematica S/A, a company incorporated under the laws of Brazil in April 2008, for a 51% interest. At the time of purchase, Star One was a newly formed company and therefore had no net assets. The purchase price for this 51% interest was $1,330,000. Celevoke believed that the purchase could give it entry into the Brazilian market for Telematics Solutions and Tracking Systems before implementation of the law requiring tracking devices in vehicles commencing in August 2009. Potential customers included local bus operators, regional trucking companies and tertiary service providers.

On March 20, 2009, Celevoke indefinitely suspended StarOne’s operation due to the state of the capital markets and the inability to obtain sufficient financing to support ongoing operations. Celevoke wrote off its investment in StarOne for the December 31, 2008 year end, taking a charge of $1,911,437. The Company also recorded a net liability of $657,417 on its balance sheet and loss of $165,732 as a result of treating the subsidiary as discontinued operation at year end December 31, 2008.

Equipment, Furniture and Leased Assets:


	Cost	Accumulated Amortization	2009 Net	2008 Net
Leased assets	$ 212,500	$106,250	$ 106,250	$ 127,500
Furniture and fixtures	10,900	4,709	6,191	8,008
Equipment	243,255	71,117	172,138	202,201
Leasehold improvement	19,203	17,498	1,705	8,105
	$ 485,858	$ 199,574	$ 286,284	$ 345,814

Convertible Promissory Note:

On September 29, 2008, the Company extended the maturity date of a previously issued convertible promissory note from January 16, 2009 to January 19, 2010. The extension of the maturity date has been accounted for as a modification to the original convertible promissory note.

As additional consideration for restructuring, the Company issued the holder of the convertible promissory note 5,200,000 share purchase warrants exercisable for common shares at $0.17 per share. The expiry date of these warrants is the later of December 31, 2013 or the date which is two years after the note is fully repaid.

The note bears interest at 10% per annum and the holder of the convertible promissory note has the right to convert all or part of the note to common shares of the Company at a conversion price of $0.10 per share.

The note is secured by a security agreement under which the Company agreed to grant the lender a security interest over all the Company’s property and assets, including all intellectual property.


	At June 30, 2009	At December 31, 2008
Interest payable	$74,637	$33,646
Convertible promissory note	1,541,223	1,394,719
	$1,615,860	$1,428,365


Volatility factor of the market		82.94%
Price of the Company shares		$0.083- $0.42
Dividend yield		0%
Weighted average expiry date of options		5 years
Risk free interest rate		3.00%

9. Share Capital:

Authorized –

Unlimited Common shares without par value

Unlimited Class “A” Preference shares without par value

Issued and fully paid –


		June 30, 2009		December 31, 2008
		Number of		Number of
		Shares	Amount	Shares	Amount
Balance, beginning	141,911,253		$30,835,667	103,892,023	$25,787,959
Common Shares Issued -
- For cash	4,028,571		384,000	34,975,000	4,695,000
- For settlement of services provided	5,300,000		600,000	875,000	103,750
- Exercise of options	-		-	-	-
- Exercise of warrants	6,906,461		412,361	2,169,230	248,958
Balance, ending	158,146,285		$32,232,028	141,911,253	$30,835,667

Options, warrants and convertible debt will have an anti-dilutive effect on loss per share

Subscription Liability -

The Company received $87,500 for the private placement in which the underlying units had not been issued as of June 30, 2009.

10. Additional Paid-In Capital:

The Company accounts for its stock-based compensation under the fair value based method using the Black-Scholes Option Pricing Model. $3,215,752 of compensation expense relating to vested stock options has been charged to the additional paid-in capital account. Options granted during the period were valued using the following assumptions:


Volatility factor of the market		54.58% to 87.27%
Price of the Company shares		$0.09- $0.42
Dividend yield		0%
Weighted average expiry date of options		5 years
Risk free interest rate		3.00%-3.44%

11.

Stock Options:

From time to time, the Company grants incentive stock options to directors, officers, employees and promoters of the Company. On September 2, 2004, the Company adopted the 2004 Stock Option and Stock Bonus Plan. Options outstanding on June 30, 2009 are as follows:


Expiry Date			Number of Shares	Option Price

September	30,	2009 *	200,000		$0.30
December	22,	2009	175,000		$0.25
December	23,	2009 *	100,000		$0.25
January	2	2011	375,000		$0.31
August	22	2011 *	200,000		$0.19
August	29	2012	1,000,000		$0.08
September	16	2012	7,495,000		$0.09
January	7	2013	5,000,000		$0.15
January	10	2013 **	50,000,000		$0.14
February	21	2013	1,050,000		$0.20
February	24	2013 ***	466,667		$0.21
July	3	2013 ***	100,000		$0.23
July	3	2013 ***	100,000		$0.23
August	15	2013	600,000		$0.32
December	30	2013 ****	300,000		$0.30
			67,161,667

2004 Stock Option and Stock Bonus Plan

12.5 million vested on January 31, 2008, remainder vested on June 30, 2009.

***

2004 Stock Option and Stock Bonus Plan

33% vested December 31, 2008

33% vested December 31, 2009

34% vested December 31, 2010

****

2004 Stock Option and Stock Bonus Plan

50,000 vested December 31, 2008

Remaining vested over 2009 to 2011.

11.

Stock Options (continued):

The following table summarizes information about stock options to purchase common shares outstanding and exercisable at June 30, 2009:


		As at June 30, 2009 Weighted		As at December 31, 2008 Weighted
	Common	Average	Common	Average
	Shares	Exercise Price	Shares	Exercise Price
Outstanding, beginning	69,145,000	$0.15	9,545,000	$0.12
- Granted	-	-	60,200,000	0.15
- Cancelled	(1,983,333)	0.25	(600,000)	0.21
Outstanding, ending	67,161,667	$0.14	69,145,000	$0.15
Exercisable, ending	66,661,667	$0.14	28,628,299	$0.15

The following table summarizes information about stock options outstanding and exercisable at June 30, 2009:


		Weighted Number	Average		Weighted Number
		Outstanding at	Remaining		Outstanding
Exercise Price		2009	Contractual Life		2008
	$0.08	1,000,000	3.17	years	1,000,000
	$0.09	7,495,000	3.22	years	7,495,000
	$0.14	50,000,000	6.25	years	12,500,000
	$0.15	5,000,000	3.53	years	5,000,000
	$0.19	200,000	2.15	years	200,000
	$0.20	1,050,000	3.65	years	1,050,000
	$0.21	466,667	3.66	years	166,130
	$0.23	500,000	4.01	years	267,169
	$0.30	200,000	0.25	years	200,000
	$0.25	275,000	0.48	years	275,000
	$0.31	375,000	1.51	years	375,000
	$0.32	100,000	4.13	years	100,000
		66,661,667			28,628,299

12. Warrants:

The following table summarizes information about warrants outstanding on June 30, 2009:


Expiry Date	Number of Shares	Exercise Price
January 9, 2007	2,000,000		$0.25	^1,3
January 9, 2007	2,980,000		$0.10	^1,3
January 9, 2007	6,949,766		$0.05	^1,3
January 9, 2007	179,167		$0.15	^1,3
January 9, 2007	1,600,000		$0.50	^1,3
June 30, 2014	2,500,000		$0.05	³
June 15, 2011	600,000		$0.075	³
July 15, 2009	200,000		$0.20	⁵
January 2, 2010	3,200,000		$0.25	^2,3
March 25, 2010	1,200,000		$0.25	⁵
May 31, 2010	1,120,000		$0.25	⁵
July 25, 2010	200,000		$0.075
September 21, 2010	300,000		$0.25	⁵
September 21, 2010	2,852,000		$0.25	⁵
December 30, 2010	600,000		$0.25	⁵
March 2, 2011	144,000		$0.25	⁵
December 31, 2011	4,000,000		$0.10	^3,4
February 12, 2012	1,750,000		$0.10	⁶
March 30, 2012	7,200,000		$0.10	⁵
April 30, 2012	5,000,000		$0.12	^3,7
August 9, 2012	5,150,000		$0.10
December 26, 2012	4,000,000		$0.10
December 31, 2012	5,000,000		$0.17
January 10, 2013	20,000,000		$0.15	³
February 26, 2013	1,000,000		$0.20	⁵
April 3, 2013	1,000,000		$0.20
May 19, 2013	2,000,000		$0.50	³
August 5, 2013	5,000,000		$0.45	³
August 15, 2013	650,000		$0.45	³
October 2, 2013	5,000,000		$0.25
December 31, 2013	5,200,000		$0.17	^3,9
February 20, 2014	2,028,571		$0.25	³
June 14, 2014	2,000,000		$0.10	³

The expiry date for each set of warrants shall be the later of:

January 9, 2007; and

CURRENT TECHNOLOGY CORP 10-Q