As of version 1.0.5, lives will no longer automatically regenerate. We had to make some changes to the app to continue supporting it. Along with the changes to the lives system, the customization option has been made free and we are working on a new chat system, an additional way to earn lives (by inviting friends to play) and other features for the next update.
Additional lives can be purchased in the shop or you can watch a video ad to earn 1 life per video ad view (subject to availability). There is not a limit to the number of lives that can be stored. Infinite lives can also be purchased in the shop. Forfeiting a match does not recover a life.