U.S. SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                  FORM 10-QSB

(Mark One)

[X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

     For the quarterly period ended June 30, 2004

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

     For the transition period from ________________________


                        Commission file number 0-27845

                         TRANSAX INTERNATIONAL LIMITED
        ---------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

     COLORADO                                                  84-1304106
------------------------------                               -----------------
 (State or other jurisdiction of                              (I.R.S. Employer
incorporation of organization)                             Identification No.)



                           7545 Irvine Center Drive
                                   Suite 200
                           Irvine, California 92618
                    --------------------------------------
                   (Address of Principal Executive Offices)

                                (949) 623-8316
                           -------------------------
                          (Issuer's telephone number)



                                      n/a
              ---------------------------------------------------
  (Former name, former address and former fiscal year, if changed since last
                                    report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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  X    No
         -----    -----

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

Class                         Outstanding as of August 17, 2004
------                        -----------------------------------

Common Stock, $.00001 par value                16,848,217

Transitional Small Business Disclosure Format (check one)

         Yes       No  X
         -----     -----





To table of contents






<PAGE>
FORM 10-QSB
June 30, 2004
                                                 Transax international Limited



TABLE OF CONTENTS

    ITEM 1. FINANCIAL STATEMENTS...............................................

       Consolidated Balance Sheet  [Unaudited].................................

       Consolidated Statements of Operations [Unaudited].......................

       Consolidated Statement of Stockholders' Deficit [Unaudited].............

       Consolidated Statements of Cash Flows [Unaudited].......................

       Notes to the Unaudited Consolidated Financial Statements................

    ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..........
        General................................................................
          TDS Telecommunication Data Systems LTDA..............................
          Transax Australia Pty Ltd............................................
          Medlink Technologies, Inc............................................
        Current Business Operations............................................
          MedLink Solution.....................................................
          Strategic Alliances..................................................
          Material Agreements..................................................
        Results of Operations..................................................
          For the Six-Month Period Ended June 30, 2004 Compared to the Six-
          Month Period Ended June 30, 2003.
          For the Three-Month Period Ended June 30, 2004 Compared to the Three-
          Month Period Ended June 30, 2003.
        Liquidity and Capital Resources........................................
          For the Six-Month Period Ended June 30, 2004.........................
        Plan of Operation......................................................
        Material Agreements....................................................
          Walters Consulting Agreement.........................................
          Pilon Consulting Agreement...........................................
          De Castro Consulting Agreement.......................................
        Material Operating Liabilities.........................................
          Convertible Loans....................................................
          Loan.................................................................
          Cash Advances from a Related Party...................................
          Cash Advances Payable................................................
          Accrued Payroll and Related Expenses.................................
        Off Balance Sheet Arrangements.........................................
    ITEM 3. Controls and Procedures............................................

  PART II. OTHER INFORMATION...................................................
    ITEM 1. Legal proceedings..................................................
    ITEM 2. Changes in Securities and Use of Proceeds..........................
    ITEM 3. Defaults upon Senior Securities....................................
    ITEM 4. Submission of Matters to Vote of Securities Holders................
    ITEM 5. Other Information..................................................
    ITEM 6. Exhibits and Other Information on Form 8-K.........................
          Reports on Form 8-K..................................................
          Signatures...........................................................

  EXHIBIT 11.1.................................................................

  EXHIBIT 31.1.................................................................

  EXHIBIT 31.2.................................................................

  EXHIBIT 32.1.................................................................






<PAGE>
                                                                            ts
June 30, 2004
Unaudited Consolidated Financial Statements       Transax International Limited





PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS




	TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL STATEMENTS [Unaudited]
			JUNE 30, 2004






Statements  made  in  this  Form  10-QSB  (the "Quarterly Report") that are not
historical or current facts are "forward-looking  statements"  made pursuant to
the  safe harbor provisions of Section 27A of the Securities Act  of  1933,  as
amended (the "Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended  (the  "Exchange Act"). These statements often can be identified by the
use  of  terms  such  as  "may,"  "will,"  "expect,"  "believe,"  "anticipate,"
"estimate," "approximate"  or  "continue,"  or  the  negative  thereof. Transax
International   Limited  (the  "Company")  intends  that  such  forward-looking
statements be subject  to  the  safe  harbors  for such statements. The Company
wishes  to caution readers not to place undue reliance  on  any  such  forward-
looking statements,  which  speak only as of the date made. Any forward-looking
statements represent management's  best  judgment  as  to what may occur in the
future. However, forward-looking statements are subject to risks, uncertainties
and important factors beyond the control of the Company that could cause actual
results and events to differ materially from historical  results  of operations
and events and those presently anticipated or projected. These factors  include
adverse  economic conditions, entry of new and stronger competitors, inadequate
capital and unexpected costs. The Company disclaims any obligation subsequently
to revise  any  forward-looking  statements  to reflect events or circumstances
after the date of such statement or to reflect the occurrence of anticipated or
unanticipated events.








Page #1

<PAGE>
                                                                             ts
June 30, 2004
Unaudited Consolidated Financial Statements       Transax International Limited





<TABLE>
<CAPTION>
         TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
<S>                                            <C>      <C>
         CONSOLIDATED BALANCE SHEET  [UNAUDITED]

		                                      June 30
							2004
						 ---------------

ASSETS

CURRENT
  Cash	                                         $	   6,381
  Accounts receivable - net				  80,114
  Prepaid expenses and other current assets		  39,530
						 ---------------
TOTAL CURRENT ASSETS 		                         126,025

Software Development Costs, net		                 193,569
						 ---------------
Property and Equiptment, net 		                  63,924
						 ---------------

TOTAL ASSETS 	                                 $	 383,518
						 ===============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Current portion of capital lease obligation	 $	  26,000
  Accounts payable and accrued expenses		         500,406
  Accrued payroll and related expenses 		         393,600
  Advances payable                    		         146,232
  Due to related parties              		         644,519
  Loan from related party              		         142,698
  Convertible loans from related party  		 411,950
						 ---------------
TOTAL CURRENT LIABILITIES 	         	       2,265,405

Accrued payroll and related expenses,
net of current portion 		                         146,254

Capital Lease Obligation,
net of current portion 		                           6,168
						 ---------------
TOTAL LIABILITIES		                       2,417,827
						 ---------------

COMMITMENTS AND CONTINGENCIES (NOTES 9 AND 10)

STOCKHOLDERS' DEFICIT

Common stock 0.00001 par value;
  100,000,000 shares authorized;
  15,948,217 shares issued and outstanding 		     159
Treasury stock						 (75,000)
Paid-in capital		                               5,198,868
Accumulated deficit 		                      (7,232,066)
Cumulative foreign currency
 translation adjustment					  73,730

						 ---------------
TOTAL STOCKHOLDERS' DEFICIT   		              (2,034,309)
						 ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	   $	 383,518
						 ===============


The accompanying notes are an integral part of these unaudited consolidated financial statements.

</TABLE>

Page #2


<TABLE>
<CAPTION>

<S>             <C>         <C>         <C>         <C>
                   TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS [UNAUDITED]

  			                        FOR THE THREE                 FOR THE SIX
			                            MONTHS          	        MONTHS
 			                        ENDED JUNE 30,		     ENDED JUNE 30,
			                  2004		      2003	2004	            2003
					  -----------   ----------	----------  ------------
REVENUES			          $   312,615   $   66,974	$  450,199  $    112,201
					  -----------   ----------	----------  ------------
Cost of product support services	      161,999	   134,062	   246,849       214,357
Payroll and related benefits		       83,271	    59,027 	   165,213       186,641
Research & development costs		       28,616	     1,838	    47,981         1,838
Professional fees			      (64,058)	    49,972	    33,581        95,418
Management & consulting fees-related party     78,900	   110,157	   157,800       181,895
Stock based compensation			    - 	         -	         -       222,390
Investor relations			        2,827	         - 	    19,637             -
Depreciation and amortization		       16,754	    24,075	    34,751        74,752
General & administrative		       83,015	    62,341	   184,766       147,371
					  -----------   ----------	----------  ------------
TOTAL OPERATING EXPENSES		      391,324	   441,472	   890,578     1,124,662
					  -----------   ----------	----------  ------------

OPERATING LOSS				      (78,709)	  (374,498)	  (440,379)   (1,012,461)
					  -----------   ----------	----------  ------------
OTHER EXPENSES:
Other expense 				      (11,372)	         -	   (19,203)       (1,550)
Foreign exchange losses			       18,191	   (49,542)	       881         8,696
Interest expense			      (17,514)	    (7,800)	   (42,651)      (14,100)
Interest expense-related party		      (22,810)	   (17,006)	   (43,032)      (19,011)
					  -----------   ----------	----------  ------------
TOTAL OTHER EXPENSES			      (33,505)	   (74,348)	  (104,005)      (25,965)
					  -----------   ----------	----------  ------------
NET LOSS		                  $  (112,214)	$ (448,846)	$ (544,384) $ (1,038,426)
					  ===========	==========	==========  ============
NET LOSS PER SHARE:
 BASIC AND DILUTED		          $	(0.01)  $    (0.04)	$    (0.04) $	   (0.08)
					  ===========	==========	==========  ============
WEIGHTED AVERAGE SHARES OUTSTANDING        15,720,910	12,472,917	15,374,472    12,472,917
					  ===========	==========	==========  ============

The accompanying notes are an integral part of these unaudited consolidated financial statements.
</TABLE>

Page #3


<TABLE>
<CAPTION>
				TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
			CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT [UNAUDITED]
					FOR THE PERIOD ENDED JUNE 30, 2004


<S>             <C>      <C>    <C>           <C>     <C>
                                                      									                     Accumulated
                                           									                                Other           Total
						Common Stock	Par Value	    Share	 Paid-in      Treasury 	  Accumulated	    Comprehensive    Stockholders'
					           Shares	  Amount	Subscriptions	 Capital	Stock	    Deficit	    Income (Loss)      Deficit
						--------------------------------------------------------------------------------------------------------------------------
Balance, January 1, 2004			  14,029,647	$	141     $     421,293   $ 4,590,093   $		- $(6,687,682)	    $	   54,676    $ (1,621,479)

Issuance of stock for settlement of share
subscriptions,January 7, 2004			     300,000		  3	      (75,000)	     74,997                                              		-


Issuance of stock for settlement of share
subscriptions-Related Party,January 7, 2004	     373,570		  3	      (93,393)	     93,390 								-

Issuance of restricted stock for services,
January 26, 2004				     300,000		  3	                     74,997		                                           75,000

Issuance of stock for options exercised for
settlement of debt, February 12, 2004		     300,000		  3		             74,997		                                           75,000

Issuance of stock for settlement of share
subscriptions, April 18, 2004			     450,000		  4          (225,000)	    224,996			                                        -

Stock returned to treasury, May 5, 2004					                         		 (75,000)	                                  (75,000)

Issuance of stock for settlement of
finders' fees, June 2, 2004			      45,000		  1	      (27,900)	     27,899			                                        -

Issuance of stock for options exercised
for settlement of debt, June 11, 2004 		     150,000 		  1		    -	     37,499		                                           37,500

Comprehensive Income (Loss):
 Net loss for period    								                                       (544,384)
 Foreign currency translation adjustments 						                                                           19,054
 Total comprehensive income (loss)   							                                                                         (525,330)
						--------------------------------------------------------------------------------------------------------------------------
Balance, June 30 2004				  15,948,217	$	159	$           -	$ 5,198,868	$(75,000)  $(7,232,066)      $     73,730    $( 2,034,309)
						==========================================================================================================================

The accompanying notes are an integral part of these unaudited consolidated financial statements.

</TABLE>

Page #4


<TABLE>
<CAPTION>

		 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
		CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]


<S>                                <C>       <C> <C>
 			                             For the six months ended June 30,
			                            	2004		    2003
						    ----------------------------------
Cash Flows from (used in)
Operating Activities
Net (loss) for the period		            $	 (544,384)       $  (1,038,426)

Adjustments to reconcile net loss to net cash
used in operating activities:
   - depreciation and amortization			   75,651		74,752
   - gain on sale of fixed assets			     (251)		     -
   - stock based compensation				        -	       222,390
Changes in assets and liabilities:
   - accounts receivable, net				  (80,114)		     -
   - prepaid expenses and other current assets		  (13,899)		 1,960
   - accounts payable				           98,250	       112,100
   - accrued interest payable,related party		   43,032		     -
   - accrued interest payable				    7,133		13,953
   - due to related party			          162,316		     -
   - accrued payroll and related expenses		  130,660	       171,139
   - other			                            7,081	        (4,708)
						    -------------	--------------
Cash Flows - Operating Activities			 (114,525)	      (446,840)
						    -------------	--------------
Cash flows from (used in)
Investing Activities:
Capitalized software development costs			 (131,212)	       (63,065)
Proceeds from disposal of property and equipment	    3,113	             -
Acquisition of property and equipment			   (3,432)	       (32,130)
						    -------------	--------------
Cash Flows - Investing  Activities			 (131,531)	       (95,195)

Cash flows from (used in) Financing Activities:

Advances from related party				   82,500	       250,000
Advances from non-related company			   24,000		     -
Repayments under capital lease obligations		  (27,131)	       (15,736)
Proceeds from loan - related party			  139,500		     -
Proceeds from convertible loans - related party		        -	       355,000
						    -------------	--------------
Cash Flows - Financing  Activities			  218,869	       589,264
						    -------------	--------------
Effect of Exchange Rate Changes on Cash			   23,096	       (63,446)
						    -------------	--------------
Net Increase (Decrease) in Cash 			   (4,091)	       (16,217)

Cash, Beginning of Period			           10,472		31,107
						    -------------	--------------
Cash, End of Period			            $       6,381	$       14,890
						    =============	==============


The accompanying notes are an integral part of these unaudited consolidated financial statements.

</TABLE>

Page #5


<TABLE>
<CAPTION>


		TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED] (CONTINUED)


<S>                                                     <C>      <C>
                                                      	For the six months ended June 30,
                                                         2004                        2003
							---------------------------------

SUPPLEMENTAL CASH DISCLOSURES
Cash paid for interest                                  $  31,564       	$  19,000
							=========		=========
Cash paid for interest - Related Party                  $	-               $	-
							=========		=========
Cash paid for income taxes                              $	-               $	-
							=========		=========
SUPPLEMENTAL NON-CASH DISCLOSURES
							=========		=========
204,000 shares issued for finders' fees [pre merger]    $	-               $  51,000
							=========		=========
5,000,000 shares issued for cash advances [pre merger]	        -                 250,000
							=========		=========
300,000 shares issued for options exercised for         $  75,000               $	-
settlement of debt, February 12, 2004			=========		=========
150,000 shares issued for options exercised for         $  37,500               $	-
settlement of debt, June 11, 2004			=========		=========

The accompanying notes are an integral part of these unaudited consolidated financial statements.

</TABLE>

Page #6


NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1. THE COMPANY

Transax International Limited ("TNSX" or the "Company") was incorporated in the
State of Colorado.   The Company currently trades  on  the  OTC  Bulletin Board
under the symbol "TNSX" and the Frankfurt and Berlin Stock Exchanges  under the
symbol "TX6".

The  Company,  through  its wholly owned subsidiary TDS Telecommunication  Data
Systems LTDA ("TDS"), is  an  international  provider  of  information  network
solutions  specifically  designed  for  the  healthcare  providers  and  health
insurance  companies.   The MedLink SolutionTM enables the real time automation
of routine patient eligibility, verification, authorizations, claims processing
and payment functions.

As of January 1, 2004, the Company is no longer a development stage company .as
defined in Financial Accounting  Standards  Board  ("FASB")  Statement  No.  7,
Accounting and Reporting for Development Stage Companies.

The  accompanying  unaudited  consolidated  financial statements of the Company
have  been  prepared  in  accordance with Regulation  S-B  promulgated  by  the
Securities and Exchange Commission and does not include all the information and
footnotes required by generally  accepted  accounting  principals in the United
States  of  America  for  complete  financial  statements. In  the  opinion  of
management, these interim unaudited consolidated  financial  statements include
all  adjustments  necessary  in  order  to  make  the financial statements  not
misleading.  The  results  of  operations  for  such interim  periods  are  not
necessarily indicative of results for a full year.  The  unaudited consolidated
interim  financial statements should be read in conjunction  with  the  audited
consolidated  financial statements and notes thereto of the Company and results
of its operations  included  in  the  audited financial statements for the year
ended December 31, 2003.  All material  intercompany  accounts and transactions
between the Company and its subsidiaries have been eliminated.


2. GOING CONCERN


Since   inception,   the  Company  has  incurred  cumulative  net   losses   of
approximately $7,232,100  and  has  a  stockholders'  deficit  of approximately
$2,034,300  at  June  30,  2004.  The  Company  expects  to  continue to  incur
substantial losses to develop its products and distribution networks,  and does
not  expect  to  attain profitability in the near future.  Since its inception,
the Company has funded  operations  through  short-term  borrowings  and equity
investments  in  order  to  meet its strategic objectives. The Company's future
operations are dependent upon  external  funding  and  its  ability to increase
revenues and reduce expenses.  Management believes that sufficient funding will
be available from additional related party borrowings and private placements to
meet  its  business  objectives  including anticipated cash needs  for  working
capital, for a reasonable period of  time.   However, there can be no assurance
that  the  Company  will be able to obtain sufficient  funds  to  continue  the
development of its software products and distribution networks.



Page #7


2. GOING CONCERN (CONTINUED)

Further, since fiscal  2000,  the  Company has been deficient in the payment of
Brazilian payroll taxes and Social Security  taxes.   At  June  30, 2004, these
deficiencies  amounted  to  approximately $425,200.  This payroll liability  is
included  as  part of the accrued  payroll  and  related  expenses  within  the
consolidated balance sheet.

As  a result of  the  foregoing,  there  exists  substantial  doubt  about  the
Company's  ability to continue as a going concern. These consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A. REVENUE RECOGNITION

      Revenue  from  the  sale  of  software products, which do not require any
      significant production, modification  or  customization for the Company's
      targeted customers and do not have multiple elements, is recognized when:
      (1)  persuasive  evidence  of  an arrangement exists;  (2)  delivery  has
      occurred; (3) the Company's fee  is  fixed  and  determinable,  and;  (4)
      collectibility  is  probable.   As of June 30, 2004, the Company does not
      have any multiple elements arrangement with any of its customers.

         B. PROPERTY AND EQUIPMENT, NET

      Property and equipment is stated  at  cost  less accumulated depreciation
      and  amortization.  Depreciation  and  amortization   is  recorded  on  a
      straight-line basis over the estimated useful lives (approximately 2 - 10
      years) of the assets. Expenditures for maintenance and  repairs  that  do
      not  improve  or  extend  the life of the expected assets are expensed to
      operations, while major repairs are capitalized.

         C. FOREIGN CURRENCY TRANSLATION

      The assets and liabilities  of  the  Company's  foreign  subsidiaries are
      translated  into  U.S.  dollars  at the year-end exchange rates  and  all
      revenue and expenses are translated  into  U.S.  dollars  at  the average
      exchange rates prevailing during the periods in which these items  arise.
      Translation  gains and losses are deferred and accumulated as a component
      of other comprehensive income in stockholders' deficit. Transaction gains
      and losses that  arise  from  exchange  rate fluctuations on transactions
      denominated  in  a currency other than the  functional  currency  (TDS  -
      Brazilian Real, Transax  Australia,  -  Australian dollar and Transax and
      the  Company  -  USD)  are  included in the Statement  of  Operations  as
      incurred.


Page #8


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         D. LOSS PER SHARE

      Basic loss per share is computed  by  dividing the loss for the period by
      the weighted average number of common shares  outstanding for the period.
      Diluted loss per share reflects the potential dilution  of  securities by
      including  other  potential  common  stock,  including stock options  and
      warrants, in the weighted average number of common shares outstanding for
      a period, if dilutive.

      Diluted loss per share reflects the potential  dilution  of securities by
      including  other  potential  common  stock,  including stock options  and
      warrants, in the weighted average number of common shares outstanding for
      a period, if dilutive

      At June 30, 2004, there were 4,748,570 outstanding warrants and 2,293,270
      outstanding options that were granted under the year 2003 incentive stock
      option plan (See Note 8).  These securities may  dilute  the earnings per
      share calculation in the future.

         E. COMPREHENSIVE INCOME

      The  Company  has  adopted SFAS No. 130, Reporting Comprehensive  Income.
      Other  comprehensive   income,  which  currently  includes  only  foreign
      currency translation adjustments, is shown net of tax in the Statement of
      Changes in Stockholders' Deficit.

         F. STOCK BASED COMPENSATION

      The Company accounts for  stock-based  employee compensation arrangements
      in accordance with the provisions of Accounting  Principles Board ("APB")
      Opinion  No. 25, Accounting for Stock Issued to Employees,  and  complies
      with the disclosure  provisions  of  SFAS  No. 123, Accounting for Stock-
      Based Compensation. Under APB No. 25, compensation  expense is recognized
      based  on  the  difference,  if  any,  on the date of grant  between  the
      estimated market value of the Company's  stock and the amount an employee
      must  pay  to  acquire  the  stock. Compensation  expense  is  recognized
      immediately for past services  and  rateably for future services over the
      option-vesting period.

      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  and  the conclusions reached by the Emerging Issues  Task
      Force ("EITF") in Issue No. 96-18, Accounting for Equity Instruments That
      Are Issued to Other Than  Employees for Acquiring, or in Conjunction with
      Selling, Goods or Services.   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 earlier of a performance  commitment  or
      completion of performance by the provider of goods or services as defined
      by EITF No. 96-18.



Page #9



4. FINANCIAL INSTRUMENTS / CREDIT RISK

The Company performs certain credit  evaluation procedures and does not require
collateral  for financial instruments subject  to  credit  risk.   The  Company
believes that credit risk is limited because the Company routinely assesses the
financial strength  of  its  customers,  and based upon factors surrounding the
credit  risk  of  its customers, establishes  an  allowance  for  uncollectible
accounts and, as a  consequence,  believes  that its accounts receivable credit
risk exposure beyond such allowances is limited.

The Company's principal business activities are  located  in  Brazil.  Although
Brazil  is  considered  to  be economically stable, it is always possible  that
unanticipated  events  in  foreign   countries   could  disrupt  the  Company's
operations.

The Company had net sales to 3 major customers during  the  quarter  ended June
30,  2004,  and  to  2  major customers during the quarter ended June 30, 2003.
Currently,  TDS  has  three  clients:  Camed  -  Caixa  de  Assist{e^}ncia  dos
Funcion{a'}rios do Banco  Nordeste,  Golden  Cross  and  Bradesco Seguros, with
Golden  Cross  being currently responsible for approximately  55%  of  revenues
during the quarter ended June 30, 2004.

The Company maintains  cash  deposits  with  financial institutions, which from
time  to  time  may  exceed  federally  insured limits.  The  Company  has  not
experienced any losses and believes it is not exposed to any significant credit
risk from cash. At June 30, 2004 the Company  did  not  have  cash  balances on
deposit that exceeded the federally insured limits.



5. SOFTWARE DEVELOPMENT COSTS


The Company established the technological feasibility of its MedLink  Solutions
in the year ended December 31, 2002.  Therefore, from Inception to December 31,
2002, all costs incurred in establishing the technological feasibility  of  the
MedLink  Solutions  were  charged  to  expense  when  incurred,  as required by
Statement   of  Financial  Accounting  Standards  ("SFAS")  Statement  No.   2,
Accounting for Research and Development Costs.

In accordance  with  SFAS No. 86, Accounting for the Costs of Computer Software
to be Sold, Leased or  Otherwise  Marketed, the Company has capitalized certain
of its software development costs incurred.   The Company began to amortize the
capitalized costs in the third quarter of the year  ended  December  31,  2003,
based  on  the  current  and  future revenue for each product.  Amortization of
these costs for the three-month  and  six-month  periods ended June 30, 2004 of
approximately $21,500 (2003 : $0), and $40,900 (2003  :  $0), respectively, are
included  in  the statement of operations as part of research  and  development
expenses.




Page #10


6.   PROPERTY AND EQUIPMENT

Property and equipment are comprised of the following:


	June 30, 2004

Computer equipment		 $203,558
Furniture and fixtures 		   11,350
Other	 			   40,579
				----------
Total at cost	 		  255,487
Less: accumulated
depreciation and amortization	  191,563
				----------
Net property and equipment	 $ 63,924


Depreciation and  amortization  charged  to operations is approximately $16,800
(2003 : $24,000) and $ 34,800  (2003 : $ 74,800)  for  the  three month and six
month periods ended June 30, 2004, respectively.


7. FOREIGN OPERATIONS


The Company identifies its operating segments based on its business  activities
and  geographical  locations.  The  Company  operates within a single operating
segment,  being  a  provider  of  information  network  solutions  specifically
designed for healthcare providers and health insurance  companies.  The Company
operates  in  Brazil,  Australia  and  Mauritius,  and has a registered mailing
address in Singapore and in the USA.  All of the Company's  assets  are located
in Brazil.


Page #11



7.  FOREIGN OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>

<S>                            <C>          <C>            <C>         <C>
                              Three months ended June 30,           Six months ended June 30,
                              2004		   2003             2004 	          2003
			      --------------------------	    --------------------------
Net sales to
Unaffiliated Customers:
     Brazil                   $	  312,615  $	 66,974		    $	  450,199  $   112,201
     USA                                -            - 			        -            -
     Singapore                          -            -	  		        -            -
     Australia                          -            - 			        -            -
     Mauritius                          -            - 			        -            -
			      -----------  -----------	 	    -------------  -----------
                                  312,615       66,974			  450,199      112,201
			      -----------  -----------	 	    -------------  -----------
Loss from operations:
    Brazil                       (367,057)    (314,797) 		 (662,392)    (657,772)
    USA                           (22,093)     (92,830)   		 (206,871)    (421,136)
    Singapore                      11,623       (3,759)			               (12,586)
    Australia                           -      (30,086)			      (85)     (33,168)
    Mauritius                      13,797            - 		   	  (21,230)           -
			      -----------  ----------- 		    -------------  -----------
                                 (391,324)    (441,472)			 (890,578)  (1,124,662)
			      -----------  -----------	 	    -------------  -----------
                                  (78,709)    (374,498)			 (440,379)  (1,012,461)
			      -----------  ----------- 		    -------------  -----------
Other income (expenses):
    Brazil                         (7,774)     (63,952)			  (54,722)     (13,564)
    USA                           (25,731)     (11,895)			  (49,709)     (13,900)
    Singapore                           -             - 		        -            -
    Australia                           -         1,499			      426        1,499
    Mauritius                           -             -  		        -            -
			      -----------  ------------ 	    -------------  -----------
                                  (33,505)      (74,348) 		 (104,005)     (25,965)

Net loss as reported in the
accompanying statements	      $  (112,214) $   (448,846)	    $	 (544,384) $(1,038,426)
			      -----------  ------------ 	    -------------  -----------
</TABLE>


8. SHARE CAPITAL

COMMON STOCK


On January 7, 2004, the Company issued 300,000 shares of common stock for share
subscriptions received in 2003 of $75,000.


On  January  7,  2004, the Company issued 373,570 units for share subscriptions
received in 2003 of approximately $93,400 owed to a related party whose officer
is an officer of the  Company.  The  units were issued to assignees of the debt
holder.  Each unit is comprised of one  common  share  and  one  warrant.  Each
warrant  entitles  the holder to purchase an additional share of TNSX's  common
stock at $0.50, for a period of 12 months.



Page #12

8. SHARE CAPITAL (CONTINUED)


On January 26, 2004,  the  Company  issued  300,000 shares of restricted common
stock for services rendered, for net value of $75,000 included in the statement
of   operations   for  the   three - month  period  ended   March  31, 2004  as
professional fees.  On May 5, 2004, the  Company  returned to  treasury 300,000
restricted shares that  had  been issued for services  rendered on  January 26,
2004.  The  shares  were  returned  for  non-performance,  and  the expense was
reversed during the three month period ended June 30, 2004. (See Note 11)


On  February  12,  2004,  the Company issued 300,000 shares of common stock for
options exercised, for net  proceeds of $75,000. The proceeds were utilized for
the settlement of advances payable.


On April 18, 2004, the Company  issued  450,000  units  for  options  exercised
during the year ended December 31, 2003.  Each unit is comprised of one  common
share  and  one half warrant.  Each warrant entitles the holder to purchase  an
additional share  of TNSX's common stock at $1.00 until November 20, 2005.  The
proceeds, totaling $225,000, were utilized to reduce existing debt.


On June 2, 2004, the  Company  issued  45,000  shares of common stock to settle
share subscriptions for finders' fees, for net value of $27,900 included in the
statement of operations for the year ended December  31,  2003  as  stock based
compensation.


On June 11, 2004, the Company issued 150,000 shares of common stock for options
exercised,  for net proceeds of  $37,500.  The proceeds were utilized  for  the
settlement of  accounts  payable  related  to  financing  fees  included in the
statement  of  operations for the three and six -month periods ended  June  30,
2004.


As at June 30, 2004, 15,948,217 shares were issued and outstanding.


STOCK OPTIONS

The Board of Directors  of  Transax approved the adoption of an incentive Stock
Option Plan, effective January 1, 2003.


As at June 30, 2004, the Company  granted 6,999,040 stock options and cancelled
2,499,040 stock options under the Plan.   As  at June 30, 2004, 2,206,730 stock
options were exercised, including 150,000 during  the  quarter  ended  June 30,
2004.   At June 30, 2004, 2,293,270 stock options were outstanding. There  were
no stock  options  granted during the six-months period ended June 30, 2004 and
2003. These securities  may  dilute  the  earnings per share calculation in the
future.

The  table  below  lists the exercise prices and  expiry  date  of  outstanding
options.


Page #13


8. SHARE CAPITAL (CONTINUED)


<TABLE>
<CAPTION>
											 Weighted
									    Weighted	  Average
									    Exercise	Remaining
         	                   Number of	 Exercise     Expiration     Average  Contractual
         	                     Options 	   Price         Date          Price	     Life
<S>                       <C>         <C>           <C>           <C>                 <C>
				  ---------------------------------------------------------------
Granted, August 14, 2003	   4,500,000    $    0.50   August 14, 2008 $	0.44         3.60

      exercised during 2003	  (1,206,730)
      cancelled during 2003	  (1,293,270)
				   ---------
	number exercisable,
	  December 31, 2003 	   2,000,000


      exercised during 2004		   -
      cancelled during 2004 	           -
				   ---------
 	number exercisable, 	   2,000,000
  	     March 31, 2004

Granted, October 1, 2003	   1,293,270    $     0.50 October 22, 2008        -            -

    exercised during 2003	     (87,500)
    cancelled during 2003	  (1,205,770)
				   ---------
      number exercisable,
        December 31, 2003	           -

Granted, December 1, 2003	   1,205,770    $     0.25 December 1, 2008  $	0.33         0.57

    exercised during 2003	    (462,500)
    cancelled during 2003	           -
				   ---------
      number exercisable,
        December 31, 2003	     743,270

    exercised during 2004	    (450,000)
    cancelled during 2004	 	   -
				   ---------
 number exercisable, June 30, 2004   293,270


Balance, June 30, 2004		   2,293,270                                 $  0.47         4.16  years
				   =========				     =======	     ===========

The weighted average fair value of options outstanding is $0.30.
</TABLE>


WARRANTS

As at June 30, 2004,  4,748,570  warrants  were outstanding.    The Company has
not issued additional warrants during the quarter  ended  June 30, 2004.  These
securities may dilute the earnings per share calculation in the future.

The table below lists the exercise prices and expiry date of outstanding
warrants.

<TABLE>
<CAPTION>
											Weighted
									  Weighted	 Average
									   Average     Remaining
                   	     Number of    Exercise        Expiration      Exercise   Contractual
                  	      Warrants      Price           Date             Price	    Life
			     -------------------------------------------------------------------
<S>                      <C>        <C>       		  <C>    		     <C>

Granted, August 14, 2003     4,100,000    $	1.00    August 14, 2008

Granted, August 26, 2003        50,000    $	1.50    August 26, 2004

Granted, November 21, 2003     225,000	  $	1.00  November 20, 2005

Granted, December 31, 2003     373,570    $	0.50  December 31, 2004
			     ---------
Balance, June 30, 2004       4,748,570					 $   0.93    3.81  years
			     =========					 ========    ===========

The weighted average fair value of warrants outstanding is $0.32.
</TABLE>


Page #14


9. CASH ADVANCES

As  of  January  1,  2004  the Company had approximately $152,600  of  advances
payable and accrued interest  to  a non-related company outstanding. During the
quarter ended March 31, 2004, the Company  issued  300,000 shares of its common
stock  for  the  settlement of approximately $37,500 of  advances  payable  and
$37,500 of accrued expenses to this non-related company.

During the quarter  ended  June  30, 2004, the Company received $24,000 in cash
advances from this non-related company.   These  advances  accrue  interest  at
approximately  1%  per month (12% per annum). The Company accrued approximately
$3,500 for interest  during the quarter ended March 31, 2004, and approximately
$3,600 during the quarter  ended June 30-, 2004.  As at June 30, 2004, advances
and accrued interest amounted to approximately $146,200.


10. RELATED PARTY

DUE TO RELATED PARTIES

As  of  January 1, 2004 the Company  had  approximately  $188,400  of  advances
payable and accrued interest due to a related party whose officer is an officer
of the Company.   During  the  quarter ended March 31, 2004, this related party
advanced the Company $72,500, for  working capital purposes. During the quarter
ended June 30, 2004, this related party  advanced  an additional $10,000 to the
Company.   The Company incurred approximately $7,400  for  interest  during the
quarter  ended  March  31,  2004,  and approximately $ 7,800 during the quarter
ended June 30, 2004.  At June 30, 2004,  approximately $286,100 in advances and
accrued interest was due to this related company.  This  balance is included in
due to related parties on the balance sheet.

Within  the  statement of operations, the following related  party  costs  were
expensed during the six-month ended June 30, 2004:

   -	   The  Company  incurred  $66,000  in  consulting  and management fees
      (2003:  $66,000)  to  a  director  of  the  Company.  At  June 30,  2004,
      approximately  $149,600 in consulting fees and approximately  $79,800  in
      expenses were outstanding to this director;
   -	   The Company  incurred  $48,000  in  consulting  and  management fees
      (2003: $48,000) to a company whose officer is an officer of the operating
      subsidiary  of the Company. At June 30, 2004, $27,000 in consulting  fees
      was outstanding to this officer;
   -	   The Company  incurred  approximately $0 in consulting and management
      fees (2003: $20,400) to a director  of  the  Company.   At June 30, 2004,
      approximately  $6,400  in  consulting  fees and approximately  $3,100  in
      expenses were outstanding to this director;
   -	   The Company incurred approximately $43,800 in consulting fees (2003:
      $29,000) to a company whose officer is an  officer  of  the  Company.  At
      June 30, 2004, approximately $64,700 in consulting fees and approximately
      $2,100 in expenses were outstanding to this officer;
   -	   The  Company  incurred  approximately  $0 in consulting fees  (2003:
      $18,400) to a company whose director is a director  of  the  Company.  At
      June  30,  2004, approximately $25,600 in consulting fees was outstanding
      to this director;
   -	   The Company  incurred  approximately  $  43,000  in  interest (2003:
      $19,000) to a company whose director is a director of the Company.


Page #15


10.  RELATED PARTIES  (CONTINUED)

LOAN


On March 5,2004,the Company borrowed Euro 115,000 (approximately $139,500) from
an officer of the Company for working capital purposes.   The loan accrues 0.8%
interest  per  month,  compounded, has a term of twelve months, and the debt is
repayable quarterly in arrears.  As  at  June 30, 2004, approximately $2,800 in
interest was accrued on this loan.


CONVERTIBLE LOANS


At June 30, 2004, the loans for $255,000 and  $100,000,  due to a related party
whose officer is an officer of the Company, were in default. The lender carries
the option during the term of the loan, and any extension  thereto,  to convert
the principal and interest into common stock of TNSX, at a conversion  price of
$0.25  per  unit.  Each  unit is comprised of one common share and one warrant.
Each warrant entitles the  holder  to  purchase  an  additional  share  of  the
Company's  common  stock at $0.50, for a period of twelve months. The holder of
the notes has not exercised  this conversion feature.  The interest rate of the
loan is 12% per annum compounded  monthly.  As  at June 30, 2004, approximately
$56,900 in interest was accrued on these two loans.


The Company did not incur beneficial conversion charges  because the conversion
price was equivalent to the average offering price for equity  when these loans
became convertible.



11. SUBSEQUENT EVENTS


   -	   On  July  9,  2004,  the  Company  entered  into  an agreement  with
      Dartmouth Capital Inc. ("Dartmouth")  whereas  Dartmouth  will  act  as a
      finder  with  respect  to  sale  of  the  Company's  equity  to   outside
      investors.  The  term  of the agreement is  for  a period of three years.
      In consideration for the services Dartmouth will provide to  the Company,
      the Company will pay Dartmouth a cash fee equivalent  to 10% of the funds
      received and  will  issue  convertible  warrants  equal  to  10%  of  the
      securities   received   by  the  investors.  These  warrants will carry a
      strike  price equal to $0.125  per  share  of  common  stock for a period
      of three years.


  	   On  July  26,  2004,  the  Company  cancelled  75,000  stock options
      previously granted on August 14, 2003;


   -	   On  July  26,  2004,  the  Company  cancelled  250,000 stock options
      previously granted on August 14, 2003;


   -	   On  July  26,  2004,  the  Company cancelled 275,000  stock  options
      previously granted on December 1, 2003;


   -	   On  July  26, 2004, the Company  granted  600,000  options  to  non-
      employees under  its  Stock  Option  Plan, at an exercise price of $0.06,
      expiring July 26, 2009.  For financial statement disclosure purposes, the
      fair  market  value  of each stock option  and  stock  warrant  grant  is
      estimated on the date  of  grant  using  the Black-Scholes option-pricing
      model, in accordance with Statement No. 123 using the following weighted-
      average assumptions: expected dividend yield  0%, risk-free interest rate
      of  3.15%, volatility of 60.89% and expected term  of  5  years.  In  the
      quarter  ended  September  30,  2004, under SFAS No 123, the Company will
      incur a stock based compensation  cost  of  $26,700  for  the issuance of
      these options;

Page #16


   -	   On  July  28,  2004,  the Company issued 600,000 shares for  options
      exercised, for net cash proceeds of $36,000;


   -	   On August 12, 2004, the  Company  issued  600,000  restricted common
      shares at par value, for services rendered, for net proceeds  of  $6.  In
      the  quarter  ended  September  30,  2004, the Company will incur a stock
      based compensation cost of $36,000 for the issuance of these shares;


   -	   On August 17, 2004, the Company cancelled  300,000 restricted shares
      that had been returned to treasury on May 5, 2004.  (See Note 8)

Page #17


FORM 10-QSB
June 30, 2004
                                                  Transax international Limited




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

Transax   International  Limited,  a  Colorado  corporation  (the   "Company"),
currently trades on the OTC Bulletin Board under the symbol "TNSX"".

The Company  was  incorporated  under the laws of the State of Colorado in 1999
under the name "Vega-Atlantic Corporation". Previously, the Company was engaged
in  the  business of minerals and oil  and  gas  exploration,  acquisition  and
development  within  the  United States and worldwide.  During August 2003, the
Company  completed the acquisition  of  Transax  Limited,  a  Colorado  private
corporation  ("Transax  Limited"), pursuant to a reverse merger and changed its
name to "Transax International  Limited" by filing an amendment to its articles
of incorporation.

As of the date of this Quarterly  Report, the Company, through its wholly-owned
subsidiary TDS Telecommunication Data Systems LTDA. ("TDS") is an international
provider of information network solutions,  products  and services specifically
designed   for   the  healthcare  providers  and  health  insurance   companies
(collectively, the "Health Information Management Products").

TDS TELECOMMUNICATION DATA SYSTEMS LTDA

TDS Telecommunication Data Systems LTDA ("TDS") was incorporated under the laws
of Brazil on May 2,  1998,  and is a wholly-owned subsidiary of the Company. As
of the date of this Quarterly  Report,  TDS  assists  the  Company in providing
information network solutions, products and services within Brazil.

TRANSAX AUSTRALIA PTY LTD.

Transax  Australia  Pty Ltd. ("Transax Australia") was incorporated  under  the
laws of the state of  New  South Wales, Australia on January 19, 2003, and is a
wholly-owned subsidiary of the  Company.  As  of  the  date  of  this Quarterly
Report,   Transax   Australia   assists   the   Company  in  seeking  marketing
opportunities to provide information network solutions,  products  and services
within Australia and regionally.

MEDLINK TECHNOLOGIES, INC.

Medlink  Technologies,  Inc.  ("Medlink")  was  incorporated under the laws  of
Mauritius on January 17, 2003, and is a wholly-owned subsidiary of the Company.
As  of  the  date  of  this Quarterly Report, Medlink  holds  the  intellectual
property developed by the  Company  and  is responsible for initiating research
and development.

CURRENT BUSINESS OPERATIONS

As  of  the date of this Quarterly Report, the  Company,  through  TDS,  is  an
international  provider of health information management products, as described
below, specifically  designed for the healthcare providers and health insurance
companies.  The Company  is  dedicated  to  improving  healthcare  delivery  by
providing to hospitals, physician practices and health insurance companies with
innovative health  information management systems to manage coding, compliance,
abstracting and record managements processes.


Page #18


The strategic focus  of  the  Company  is  to  become  a  premier international
provider of health information management network solutions  for the healthcare
providers and health insurance companies, enabling the real time  automation of
routine  patient  transactions.  Management  of  the Company believes that  the
Company's  unique  combination  of  complimentary  solutions   is  designed  to
significantly  improve  the  business  of  healthcare.  The  Company's   health
information management products and software solutions are designed to generate
operational efficiencies, improve cash flow and measure the cost and quality of
care.

MEDLINK SOLUTION

The  Company  has  developed  a  proprietary software trademarked (Brazil only)
"MedLink", which was specifically designed and developed for the healthcare and
health insurance industry enabling  the real time automation of routine patient
eligibility,  verifications,  authorizations,  claims  processing  and  payment
functions that are currently performed  manually  (the  "MedLink  Solution"). A
transaction fee is charged to the insurer for use of the MedLink Solution.

The  MedLink  Solution  hosts  its  own  network  processing system (the "Total
Connectivity Solution"), whereby the Company is able to provide an insurer with
the  ability  to  cost  effectively process all of the  transactions  generated
regardless of location or  method  of  generation.  Management  of  the Company
believes  that  the  MedLink  Solution  solves  technological and communication
problems within the healthcare systems by creating a virtual "paperless office"
for the insurer and total connectivity, regardless  of  method,  for the health
provider.  The  MedLink  Solution  replaces  manual medical claims systems  and
provides  insurance  companies  and  healthcare providers  significant  savings
through  a substantial reduction in operational  costs.  The  MedLink  Solution
allows users to collect, authorize and process transaction information in real-
time for applications  including,  but  not  limited  to,  patient and provider
eligibility  verification,  procedure  authorization  and  claims   and   debit
processing.  Participants  of  the  MedLink  Solution  include  private  health
insurance companies, group medical companies, and healthcare providers.

As of the date of this Quarterly Report the Company has installed approximately
1,900  solutions into healthcare provider locations throughout Brazil and plans
to install up to a further 10,000 solutions during fiscal 2004.

STRATEGIC ALLIANCES

The Company has developed key strategic alliances with the following technology
providers  to  support  the  MedLink  Solution's unique system architecture and
design. Management of the Company believes  that  the  establishment  of  these
strategic  alliances have given the Company a significant competitive advantage
in Brazil.

BEARINGPOINT  INC.   On  February  12, 2004, the Company and BearingPoint, Inc.
("BearingPoint"), entered into a teaming  agreement  (the "BearingPoint Teaming
Agreement") for tendering to Petrobras.  Pursuant to the  terms  and provisions
of the BearingPoint Teaming Agreement, (i) BearingPoint will be responsible for
the  supply  of the SmartCards; (ii) BearingPoint will be responsible  for  the
development and  maintenance  of  the  various applications for the SmartCards;
(iii) BearingPoint will be responsible for  the management and operation of the
Card Management Systems ("CMS");  (iv) BearingPoint  will  be  responsible  for
consulting  services  for the integration of the specifications of the project;
(iv) BearingPoint will  be providing Help Desk services for stage one; (vi) TDS
will  be  responsible for the  development,  customization,  installation,  and
maintenance  of the MedLink Solutions capture methods and transaction services;
(vii) TDS will  be  responsible for development, customization, and maintenance
of the system authorizer;  (viii)  TDS will be providing Help Desk services for
stages  two and three; (ix) TDS will  be  responsible  for  the  operation  and
maintenance  of  the  capture  methods  and  their components;  (x) TDS will be
responsible for consulting services for the integration  and  specification  of
the project.


Page #19


GENS  INFORMATION   -  PMS/ASP.  On  February  19,  2001,  the Company and GENS
Information ("GENS"), entered into an operating agreement (the  "GENS Operating
Agreement").  Pursuant  to  the  terms  and  provisions  of  the GENS Operating
Agreement:  (i)  GENS  will  provide  to  the  Company  a basic product  called
"Personal  Med",  which  is a Windows client-server application,  running  with
Delphi front-end and Paradox  and  Oracle  DB  (which  has approximately thirty
variations designed around specific exam data to be acquired and stored in each
medical  specialization);  and  (ii) the Company will incorporate  the  MedLink
Solution transaction services within the Personal Med allowing for its users to
use the MedLink Solution services from within their PMS.

As of the date of this Quarterly  Report,  GENS is implementing versions to its
Personal  Med  based on SQL server, and is further  developing  a  web  enabled
version, which will  allow  doctors to select patients they want to have access
through the InternetWeb, and  a tool to access the database of each patient for
this centralized base. GENS is  also implementing access to doctor's agenda and
some direct news to be directed to Internet enabled doctors.

VIDALINK  - DRUG MANAGEMENT. On August  29,  2001,  the  Company  and  Vidalink
entered into  an  operational agreement (the "Vidalink Operational Agreement"),
to allow the Vidalink health portal access to the MedLink Solution connectivity
services, creating  the  first  authorization  and  claims  processing Internet
service in Brazil. The Vidalink health portal offers doctors the most extensive
set of information on pathologies and medication practices, with  complete drug
interaction   analysis  and  alert  functionality.  It  offers  also  extensive
continuous education programs, with selection of doctor's areas of interest and
automatic issuing news on selected subjects.

Pursuant to the terms and provisions of the Vidalink Operational Agreement, the
MedLink Solution connectivity capabilities will be added to the Vidalink health
portal,  which will  give  the  MedLink  Solution  access  to  Vidalink's  drug
management services and Internet content, thus creating a synergic relationship
between the two portals and allow doctors access to each portal reaching a much
broader range of services.

MOSAIC SOFTWARE,  INC.  -  NETWORK  PROCESSOR SYSTEM. On November 25, 2002, the
Company  and  Mosaic  entered into supplier  agreement  (the  "Mosaic  Supplier
Agreement") to develop  the  Network  Processor  software package, known as the
"Positllion  ",  for  use in the MedLink Solution. Management  of  the  Company
believes that Mosaic is  the supplier of the most modern technology for network
control software, based on  a  low cost hardware platform (PC's) and Windows NT
software.  Management  believes  the  Postillion  software  is  the  best  cost
effective solution for this kind of  system,  and  has  just  been  selected by
Calypso, the new ATM being deployed in United States, as the chosen platform.

HYPERCOM  CORPORATION.  On  December  1 2003, the Company and Hypercom Inc.,  a
publicly traded multinational company ("Hypercom"),  entered  into  a servicing
agreement  (the  "Hypercom  Service  Agreement").  Pursuant  to  the  terms and
provisions  of  the  Hypercom Service Agreement, Hypercom would provide leasing
arrangements  for  POS  (Point  of  Sale)  terminals  in  Brazil.  The  Company
subsequently entered into capital leases for 255 POS units.

On April 30th 2002, the Company  and  Netset,  a  wholly  owned  subsidiary  of
Hypercom  based in Brazil, entered into a service agreement whereby Netset will
(i) provide  to the Company installation, servicing, training, customer service
and technical  support  (Call  Center)  for its terminal network in Brazil; and
(ii)  allow  the Company to use the entire  Hypercom  structure  to  serve  its
clients.


Page 20


SCHLUMBERGERSEMA.  On  February  21,  2003,  the  Company  and SchlumbergerSema
("Schlumberger")  entered  into  an  agreement (the "Schlumberger  Agreement"),
pursuant to which the Company and Schlumberger  would co-operate on a number of
business opportunities in the Asia-Pacific and Australasian region.

The  Company's  strategic  alliance  with  Schlumberger  covers  the  following
components: (i) capture devices, which consist  of  a  combination  of  capture
application  hardware  and  software  capable  of identifying and handling pre-
defined services entries, to be rerouted by means of electronic transactions to
an authorizer system; (ii) rerouting, which is the  development  of  a hardware
and  software  structure  for  performing  services  of  collecting  electronic
transactions  at  one  service  point  (a  service provider), where there is  a
capture  device,  with  the  rerouting  of  the  transaction   to   a   service
authorization system, and the following return of the authorization's result to
the  capture  device; and (iii) authorization system,  which is comprised of  a
hardware structure  and  application  software, for creating parameters for the
business regulations, tables and insured  registries,  providers and histories,
and is responsible for handling the transactions received  from  the collection
network, in reference to services, their analyses, release or negative, and for
sending the corresponding response to the registered provider, in the form of a
message.

MATERIAL AGREEMENTS

During  the  six-month  period  ended  June  30,  2004,  the  Company processed
approximately   1,079,225   "real-time"  transactions  for  its  3   customers,
compared to approximately 1,075,000 during all of fiscal 2003.

GOLDEN CROSS - On  August  9, 2002, the Company's wholly-owned subsidiary, TDS,
and Golden Cross, one of Brazil's  largest  health insurance companies ("Golden
Cross") entered into an agreement (the "Golden  Cross  Agreement"). Pursuant to
the  terms  and  conditions  of  the Golden Cross Agreement,  the  Company  has
committed to supply to Golden Cross  a  total of 1,500 installations consisting
of more than 500 MedLink Solution POS terminals  with the balance being MedLink
PC  and MedLink Solution servers.  Additional installations,  principally  IVR,
commenced  in  July  2004.      The  Golden  Cross  Agreement also provides for
MedLink Solution WEB and MedLink Solution phone solutions,  which  will be used
as  appropriate  by  the healthcare provider.  As of the date of this Quarterly
Report, the Company has  approximately  2,440 Medlink Solutions in Golden Cross
Provider's locations.

CAMED - On October 17, 2002, the Company's  wholly-owned  subsidiary,  TDS, and
Camed, a self-insured company based in northern Brazil ("Camed"), entered  into
an  agreement  (the  "Camed Agreement") pursuant to which the Company installed
MedLink Solution POS terminals  for  pilot  testing, which was completed during
first  quarter  2003.  As of the date of this Quarterly  Report,  approximately
4,750 installations are  scheduled  to  complete the roll out consisting of 250
MedLink Solution POS terminals and 4,500  IVR  Phone.  The Camed Agreement also
provides for MedLink Solution WEB and MedLink Solution phone  solutions,  which
will be used as appropriate by the healthcare providers. As of the date of this
Quarterly  Report  the Company has approximately 320 Medlink Solutions in Camed
providers' locations.

BRADESCO HEALTH  - On October 17, 2002 TDS and Bradesco Insurance ("Bradesco"),
Brazil's largest health  insurance  company,  entered into an agreement for the
provision of a four month pilot program contract for the testing of its Medlink
Solution. Subsequently, in February 2003, the pilot  program was extended for a
further six months at the request of Bradesco. On October  1, 2003 Bradesco and
the  Company  entered  into  a  contract  pursuant  to which the Company  would
undertake  and  install  its  Medlink  Solution  into  the Bradesco  healthcare
provider's network. In order to undertake this program,  Bradesco agreed to set
up  a  stand  alone  processing  facility  to  hold  its  database,  which  was
subsequently contracted to a third party. Phase one of the program went live in
March  2004.  Management  of  the Company anticipates that current  plans  will
require the Company to install up to 750 solutions into the Bradesco provider's
network during 2004 in order to  achieve  Bradesco's  initial target of 400,000
transactions per month.


Page #21


RESULTS OF OPERATIONS

The  accompanying unaudited consolidated financial statements  of  the  Company
present the accounts of the Company at June 30, 2004 and of Transax for the six
months ended June 30, 2003.

FOR THE  SIX-MONTH  PERIOD ENDED JUNE 30, 2004 COMPARED TO THE SIX-MONTH PERIOD
ENDED JUNE 30, 2003.

The Company incurred  net  losses  of  approximately $544,400 for the six-month
period  ended  June  30, 2004 ($0.04 per share)  compared  to  a  net  loss  of
approximately $1,038,400  ($0.08 per share) for the six-month period ended June
30, 2003. Comparative results  for  the  six-month  period  ended June 30, 2003
include only the results of Transax and TDS. The results for the current period
include the operations of the Company. Analysis of the operating losses for the
six-month  period  ended June 30, 2004 compared to the six-month  period  ended
June 30, 2003 is as follows.

During  the six-month  period  ended  June  30,  2004,  the  Company  generated
approximately  $450,200 in gross revenues compared to approximately $112,200 in
gross revenues during the six-month period ended June 30, 2003. The significant
increase in revenues is due to the rollout of new software contracts in Brazil.

During  the  six-month  period  ended  June  30,  2004,  the  Company  incurred
approximately   $890,600   in  operating  expenses  compared  to  approximately
$1,124,700 in operating expenses  during  the  six-month  period ended June 30,
2003. The decrease in operating expenses during the six-month period ended June
30,  2004  is  primarily due to the non-incurrence of stock-based  compensation
during such period and as more particularly described below.

During the six-month  period  ended June 30, 2004, payroll and related benefits
decreased  to  approximately  $165,200   (2003:   $186,600)   mostly   due  the
capitalization  of  research  and development expenditures. The cost of product
support services has slightly increased from approximately $214,400 to $246,900
for the six-month period ended  June  30,  2004  due  to  the  rollout  of  the
Company's newest contract.

During  the  six-month  period  ended  June  30,  2004,  the  Company  incurred
approximately  $33,600  in  professional fees compared to approximately $95,400
during the six month period ended June 30, 2003. This decrease  in professional
fees is primarily due to a reduction in accounting and legal expenses  relating
to the merger of Transax with  the  Company.  During the six-month period ended
June 30, 2004, professional fees consisted mainly of approximately: (i) $17,200
in audit and accounting fees (2003: $ 46,300);  (ii)  ($30,100)  in  legal fees
(2003:  $32,600);  (iii)  $38,700 in financing fees (2003: $0); (iv) $7,800  in
regulatory and filing fees (2003: $0);  (v) $0 in monitor fees (2003: $14,800);
and (vi) $0 in management fees (2003: $1,700).

During  the  six-month  period  ended  June  30,  2004,  the  Company  incurred
approximately  $157,800  (2003:  $181,900)  in  related  party  management  and
consulting fees. During the  six-month  period ended June 30, 2004, the Company
incurred general and administrative expenses of approximately $184,800 compared
to general and administrative expenses of  approximately  $147,400  during  the
six-month  period ended June 30, 2003. The higher costs are primarily due to an
increase in support services required to maintain operations.

During  the  six-month  period  ended  June  30,  2004,  the  Company  incurred
approximately  $19,600  (2003:  $0)  in  investor relations costs.  These costs
consist  mainly  of  the  production  of  promotional   materials  directed  to
shareholders.


Page #22


During  the  six-month period ended June 30, 2004, the Company  incurred  other
expenses as follows:  (i)  $900  (2003: $8,700) in foreign exchange gains; (ii)
$42,700 (2003: $14,100) in interest  expense;  (iii) $43,000 (2003: $19,000) in
interest  expense-  related party; and (iv) $19,200  (2003:  $1,600)  in  other
expenses. The increase  in  interest  expense during the six-month period ended
June 30, 2004 was related to an increase  in  cash advances payable and capital
leases  in Brazil. The increase in interest expense  due  to  a  related  party
results from  the  Company  receiving  cash  advances  and  entering  into loan
agreements with related parties.

Mr.  Walters,  the  President,  Chief  Executive  Officer and a director of the
Company, derives remuneration from the Company as compensation  for  management
and  consulting  services rendered. During the six-month period ended June  30,
2004, $66,000 was  incurred  by  the  Company to Mr. Walters for management and
consulting services rendered. Furthermore,  Mr.  Walters  has advanced funds to
the  Company and incurred expenses on behalf of the Company.  During  the  six-
month  period ended June 30, 2004, Mr. Walters was paid $-0- by the Company. At
June 30,  2004,  Mr.  Walters  was owed approximately $229,400 for consulting /
management fees and incurred expenses.  See  "  -  Plan of Operation - Material
Agreements".

Ms.  Pilon,  the Chief Financial Officer of the Company,  derives  remuneration
from  the Company  as  compensation  for  management  and  consulting  services
rendered.  During six-month period ended June 30, 2004, $43,800 was incurred by
the Company  to  Ms.  Pilon  for  management  and consulting services rendered.
Furthermore, Ms. Pilon has incurred expenses on  behalf  of the Company. During
the  six-month  period  ended  June 30, 2004, Ms. Pilon was paid  $-0-  by  the
Company.  At  June  30, 2004, Ms. Pilon  was  owed  approximately  $66,800  for
management / consulting fees and incurred expenses. See " - Plan of Operation -
Material Agreements".

FOR THE THREE-MONTH PERIOD  ENDED  JUNE  30,  2004  COMPARED TO THE THREE-MONTH
PERIOD ENDED JUNE 30, 2003.

The Company incurred net losses of approximately $112,200  for  the three-month
period  ended  June  30,  2004  ($0.01  per  share)  compared to a net loss  of
approximately $448,800 ($0.04 per share) for the three-month  period ended June
30, 2003. Comparative results for the three-month period ended  June  30,  2003
include only the results of Transax and TDS. The results for the current three-
month period include the operations of the Company.

During  the  three-month  period  ended  June  30,  2004, the Company generated
approximately  $312,600 in gross revenues compared to  approximately $67,000 in
gross revenues during the three-month period ended June 30, 2003.

During  the  three-month  period  ended  June  30,  2004, the Company  incurred
approximately $391,300 in operating expenses compared to approximately $441,500
in operating expenses during the three-month period ended  June  30,  2003. The
operating  expenses incurred during the three-month period ended June 30,  2004
consisted primarily  of:  (i)  $162,000  (2003:  $134,100)  in  cost of product
support services; (ii) $83,300 (2003: $59,000) in payroll and related benefits;
(iii) $28,600 (2003: $1,800) in research and development costs; (iv)  ($64,100)
(2003:   $50,000)  in  professional  fees;  (v)  $78,900  (2003:  $110,200)  in
management  and  consulting  fees-  related  party; (vi) $2,800 (2003: $-0-) in
investor  relations;  (vii)  $16,800  (2003:  $24,100)   in   depreciation  and
amortization; and (viii) $83,000 (2003: $62,300) in general and administrative.

During the three-month period ended June 30, 2004, the Company  incurred  other
expenses  as follows: (i) ($18,200) (2003: $49,500) in foreign exchange losses;
(ii) $17,500  (2003: $7,800) in interest expense; (iii) $22,800 (2003: $17,000)
in interest expense-  related  party;  and  (iv)  $11,400 (2003: $-0-) in other
expenses.


Page #23


LIQUIDITY AND CAPITAL RESOURCES

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2004

Since   inception,  the  Company  has  incurred  cumulative   net   losses   of
approximately  $7,232,100  and  has  a  stockholders'  deficit of approximately
$2,034,300  as  at  June  30,  2004. The Company expects to continue  to  incur
substantial losses to develop its  products and distribution networks, and does
not expect to attain profitability in  the  near  future.  Since its inception,
the  Company  has funded operations through short-term  borrowings  and  equity
investments in  order  to  meet  its strategic objectives. The Company's future
operations are dependent upon external  funding  and  its  ability  to increase
revenues and reduce expenses.  Management believes that sufficient funding will
be  available  from  additional related party borrowings and private placements
following its merger to meet its business objectives including anticipated cash
needs for working capital, for a reasonable period of time.  However, there can
be no assurance that the  Company  will  be  able to obtain sufficient funds to
continue the development of its software products and distribution networks.

As  at  June  30,  2004, the Company's current liabilities  were  approximately
$2,265,400 compared  to  approximately  $1,857,300  at  December 31, 2003.  The
increase in current liabilities is due primarily to additional  loans  and cash
advances received from a related party to fund operations.

For  six-month  period  ended  June  30, 2004, net cash flows used in operating
activities were approximately $114,000  compared  to $446,900 for the six-month
period  ended  June  30, 2003.    The change in cash flows  used  in  operating
activities is mainly due  to  the  decrease in operating loss for the six-month
period ended June 30, 2004.

Net cash flows from financing activities during six-month period ended June 30,
2004, were approximately $218,900 resulting  primarily  from  a  loan  and cash
advances  from  a related party, compared to approximately $589,300 during  the
six-month period  ended  June  30,  2003.    The  borrowings  were used to fund
operating activities.

Net cash flows used in investing activities amounted to approximately  $131,800
during six-month period ended June 30, 2004, compared to $95,200  for six-month
period ended June 30, 2003.   During six-month period ended June 30,  2004, the
Company  capitalized  software  research  and development costs, while in 2003,
some  of these costs were expenses as part of  the  costs  of  product  support
services.

In summary, based upon the cash flow activities as previously discussed, during
six-month  period  ended  June  30,  2004,  the Company's overall cash position
decreased by approximately $4,100.


Page #24


PLAN OF OPERATION


As of the date of this Quarterly Report, there  is  substantial doubt regarding
the Company's ability to continue as a going concern  as  the  Company  has not
generated  sufficient  cash  flow  to fund its business operations and material
commitments.  The  Company's  future  success  and  viability,  therefore,  are
dependent  upon  the  Company's ability to  develop,  provide  and  market  its
anticipated information  network  solutions  to  healthcare  providers,  health
insurance companies and other end-users, and the continuing ability to generate
capital financing. Management is optimistic that the Company will be successful
in  its business operations and capital raising efforts; however, there can  be
no assurance  that  the  Company  will  be  successful in generating revenue or
raising  additional  capital. The failure to generate  sufficient  revenues  or
raise additional capital  may  have  a  material  and  adverse  effect upon the
Company and its shareholders.


Management  of  the Company anticipates an increase in operating expenses  over
the next three years to pay costs associated with such business operations. The
Company must raise  additional  funds.  The  Company may finance these expenses
with further issuances of Common Stock of the  Company.  The  Company  believes
that  any  anticipated private placements of equity capital and debt financing,
if successful,  may  be adequate to fund the Company's operations over the next
twelve months. Thereafter, the Company expects it will need to raise additional
capital  to  meet long-term  operating  requirements.  If  the  Company  raises
additional funds  through the issuance of equity or convertible debt securities
other than to current  shareholders,  the  percentage  ownership of its current
shareholders  would  be  reduced,  and  such  securities  might   have  rights,
preferences  or  privileges  senior  to its existing Common Stock. In addition,
additional financing may not be available  upon acceptable terms, or at all. If
adequate funds are not available, or are not available on acceptable terms, the
Company may not be able to conduct its business  operations successfully, which
could  significantly  and  materially restrict the Company's  overall  business
operations.


Based upon a twelve-month work  plan  proposed by management, it is anticipated
that such a work plan would require approximately  $2,000,000  to $5,000,000 of
financing designed to fund various commitments and business operations.  As  of
the  date  of  this  Quarterly Report, management believes that the Company can
satisfy its cash requirements  for  the next twelve months based on its ability
to successfully raise capital and to obtain advances from certain investors and
related parties, as necessary. The Company's  future  success and viability are
primarily dependent upon the Company's current management  to generate revenues
from business operations and raise additional capital through  further  private
offerings  of  its  stock  or  loans  from  private  investors. There can be no
assurance, however, that the Company will be able to raise  additional capital.
The  Company's  failure to successfully raise additional capital  will  have  a
material and adverse affect upon the Company and its shareholders.


MATERIAL AGREEMENTS

In connection with the management of the Company and/or its subsidiary incurred
liability  or borrowed  funds  pursuant  to  various  contractual  arrangements
representing the following material commitments.

WALTERS CONSULTING AGREEMENT

A significant  and  estimated service agreement for the Company for fiscal year
2004 is the aggregate  amount of $132,000 to be paid to Mr. Walters pursuant to
the Walters Consulting Agreement.  Pursuant  to the terms and provisions of the
Walters  Consulting Agreement: (i) Mr. Walters  agreed  to  provide  technical,
research and  technology  development  services  to  the  Company; and (ii) Mr.
Walters  shall  be  paid  a monthly fee of $11,000 US Dollars for  a  potential
annual salary of $132,000, and reimbursement of expenses.


Page #25


PILON CONSULTING AGREEMENT

A significant and estimated  service  agreement for the Company for fiscal year
2004 is the aggregate amount of $87,600 to be paid to Ms. Pilon pursuant to the
Pilon Consulting Agreement. Pursuant to  the  terms and provisions of the Pilon
Consulting Agreement: (i) Ms. Pilon agreed to provide financial, administrative
and managerial services to the Company; and (ii)  Ms.  Pilon  shall  be  paid a
monthly fee of $7,300 US Dollars for a potential annual salary of $87,600,  and
reimbursement of expenses.

DE CASTRO CONSULTING AGREEMENT

A  significant and estimated material agreement for the Company for fiscal year
2004 is the aggregate amount of $96,000 to be paid to Mr. De Castro pursuant to
the De Castro Consulting Agreement. Pursuant to the terms and provisions of the
De Castro  Consulting Agreement: (i) Mr. De Castro agreed to provide technical,
research and  developmental  services to the Company's subsidiary; and (ii) Mr.
De Castro shall be paid a monthly  fee  of  $8,000  US Dollars for an aggregate
annual salary of $96,000, and reimbursement of expenses.

MATERIAL OPERATING LIABILITIES

CONVERTIBLE LOANS

A significant and estimated material liability for the  Company for fiscal year
2004  is  the aggregate amount of $411,900 in principal and  interest  due  and
owing to a  related  party.  On  December  31,  2002,  Transax Limited borrowed
$66,195  from such related party. On March 31, 2003, Transax  Limited  borrowed
$255,000 from  this  related  party,  and a further $100,000 on April 30, 2003.
Each principal amount loan is evidenced by a convertible promissory note and is
repayable on or before a six-month term.  The  interest  rate  is 12% per annum
compounded monthly. The related party as the lender has the option  during  the
term  of  the  loan,  and  any  extension thereto, to convert the principal and
interest into units in the capital  of  the  Company  at  a conversion price of
$0.25 per unit (the "Unit"). Each Unit is comprised of one  share of restricted
Common  Stock  of  the Company and one warrant, and each warrant  entitles  the
holder thereof to purchase  one share of restricted Common Stock of the Company
at $0.50 per share for a period of twelve months.

On December 31, 2003, the loan  and  accrued interest of $93,000 were converted
for  373,570 common shares and warrants.  At  June  30,  2004,  the  loans  for
$255,000  and  $100,000  were  in  default, and the holder of the notes has not
exercised the conversion feature.  At  June  30,  2004, $56,900 in interest was
accrued on these two loans.


Page #26


LOAN

A significant and estimated material liability for  the Company for fiscal year
2004  is the aggregate amount of $142,700 in principal  and  interest  due  and
owing to a related party. On  March  5, 2004, the Company borrowed Euro 115,000
(approximately USD $139,500) from such related  party. The loan is evidenced by
a  promissory  note  and  is repayable on or before a  twelve-month  term.  The
interest rate is 0.8% per month,  compounded.  At  June 30, 2004, approximately
$2,800 in interest was accrued on this loan.

CASH ADVANCES FROM A RELATED PARTY

A significant and estimated material liability for the  Company for fiscal year
2004 is the aggregate amount of $286,100 in cash advances  and interest due and
owing  to  a related party, and is included in due to related  parties  in  the
balance sheet.  During  the  six-month period ended June 30, 2004, such related
party advanced approximately $82,500 for working capital purposes. The advances
due and owing at June 30, 2004 were non-interest bearing until August 31, 2003,
and are accruing 1% interest per month since September 1, 2003.

CASH ADVANCES PAYABLE

During the year ended December  31,  2003,  the  Company received cash advances
from  a non-related company of $526,500 for working  capital  purposes.  During
fiscal  year ended December 31, 2003, the lender converted $225,000 of advances
into 450,000  units.   Each  unit is comprised of one share of Common Stock and
one half warrant. Each one whole  warrant  entitles  the  holder to purchase an
additional share of the Company's Common Stock at $1.00, for  a  period  of  24
months.

During the year ended December 31, 2003, the Company also issued 700,000 shares
of restricted Common Stock for the settlement of $196,875 in cash advances.

As  of  January  1,  2004  the  Company  had approximately $152,600 of advances
payable and accrued interest to this non-related  company  outstanding.  During
the  quarter  ended  March  31,  2004, the Company issued 300,000 shares of its
common stock for the settlement of  approximately  $37,500  of advances payable
and $37,500 of accrued expenses to this non-related company.

During the quarter ended June 30, 2004, the Company received  $24,000  in  cash
advances  from this non-related company.  These remaining advances are accruing
1% interest  per  month,  starting  September  1,  2003.   As at June 30, 2004,
advances and accrued interest amounted to approximately $146,200.

ACCRUED PAYROLL AND RELATED EXPENSES

A significant and estimated material liability for the Company  for fiscal year
2004  is  the aggregate amount of $498,500 due and owing for Brazilian  payroll
taxes and Social Security taxes.


Effective April  1,  2004,  the Company has entered into a payment program with
the Brazilian authorities whereas  the  Social  Security ("INSS") taxes due and
applicable penalties and interests will be repaid  over  a period of 60 months.
At  March  31,  2004,  the  Company's INSS tax liabilities were  approximately$
139,600 plus $13,800 in interest,  penalties  and  fines.   The payment program
requires  the  Company to pay a monthly fixed amount of  approximately  $2,560.
Discussions are  currently  ongoing  for  the  Company  to enter into a similar
payment  plan for the remainder of the payroll tax liabilities.    The  Company
made the first payment as per the plan in April 2004.



OFF BALANCE SHEET ARRANGEMENTS

As of the  date  of  this  Quarterly Report, the Company does not have any off-
balance sheet arrangements that  have  or are reasonably like to have a current
or future effect on the Company's financial  condition,  changes  in  financial
condition,  revenues  or  expenses,  results  of operations, liquidity, capital
expenditures  or capital resources that are material  to  investors.  The  term
"off-balance sheet  arrangement"  generally means any transaction, agreement or
other  contractual  arrangement to which  an  entity  unconsolidated  with  the
Company is a party, under  which  the  Company  has  (i) any obligation arising
under a guarantee contract, derivative instrument or variable interest; or (ii)
a  retained  or contingent interest in assets transferred  to  such  entity  or
similar arrangement that serves as credit, liquidity or market risk support for
such assets.


Page #27


ITEM 3. CONTROLS AND PROCEDURES

(a) The Company,  under  the  supervision  of  its  President, has conducted an
evaluation of the effectiveness of the design and operation  of  the  Company's
disclosure  controls  and procedures within 90 days of the filing date of  this
Quarterly Report. Based  upon  the  results  of  this  evaluation,  the Company
believes  that  it  maintains  proper  procedures for gathering, analyzing  and
disclosing all information in a timely fashion that is required to be disclosed
in its reports under the Securities Exchange  Act  of  1934,  as amended. There
have  been no significant changes in the Company's controls subsequent  to  the
evaluation date.

(b) There  were  no significant changes in the Company's internal control or in
other factors that  could  significantly affect the Company's internal controls
subsequent to the evaluation date.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On May 21, 2004, X-Clearing  Corporation (`X-Clearing") forwarded, via courier,
a complaint dated May 17, 2001.  As  of  the date of this Quarterly Report, the
complaint has not been filed with the district  court of the State of Colorado.
X-Clearing seeks relief for damages incurred following the alleged breach of an
agreement  entered  with X-Clearing in 2001. The Company  has  had  no  further
correspondence from X-Clearing.

In the event a summons  and  the complaint are filed with the district court of
the State of Colorado, management of the Company intends to aggressively pursue
all such legal actions and review further legal remedies against X-Clearing.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Debt Settlement

(a) During the six-month period ended June 30, 2004, the Company and a creditor
entered  into  a  settlement of outstanding  account  dated  January  26,  2004
regarding professional  fees.  Pursuant  to  the  terms  and  provisions of the
settlement  agreement,  the  Company  issued  300,000 shares of its  restricted
Common Stock to the creditor at approximately $0.25 per share for settlement of
debt in the aggregate amount of $75,000. The shares of Common Stock were issued
under the exemption from registration pursuant  to  Section  4(2)  of  the 1933
Securities  Act.   On  August  17,  2004,  the  Company  returned the shares to
treasury for non-performance.


Page #28


(b) During the year ended December 31, 2003, the Company and a creditor entered
into  a  settlement  of  outstanding  account dated November 21,2003  regarding
settlement of debt. Pursuant to the terms  and  provisions  of  the  settlement
agreement,  the  Company  issued,  on  April  18,  2004,  450,000 shares of its
restricted Common Stock to the creditor at approximately $0.50  per  share  for
settlement  of  debt  in the aggregate amount of $225,000. The shares of Common
Stock were issued under  the  exemption  from  registration pursuant to Section
4(2) of the 1933 Securities Act.

(c) On June 2, 2004, the Company issued 45,000 shares  of its restricted Common
Stock  to  an  unrelated  third party to settle share subscriptions  issued  as
payment for compensation regarding finders' fees incurred during the year ended
December 31, 2003.  The Company issued 45,000 shares at approximately $0.62 per
share as payment for an aggregate amount of $27,900. The shares of Common Stock
were issued under the exemption  from  registration pursuant to Section 4(2) of
the 1933 Securities Act.

Stock Options Exercised

As at June 30, 2004, an aggregate of 4,500,000  Stock Options have been granted
under the Stock Option Plan, an aggregate of 2,206,730  Stock Options have been
exercised  for  net  proceeds  of  $800,240, and an aggregate  2,293,270  Stock
Options were outstanding.

(a) On February 12, 2004, an aggregate  of 300,000 Stock Options were exercised
at $0.25 per share for $75,000 by employees  or  consultants  of the Company in
accordance with the terms of the respective notice and agreements  of  exercise
of option for $75,000 in settlement of debt due and owing by the Company to the
optionees.

(b)  On June 11, 2004, an aggregate of 150,000 Stock Options were exercised  at
$0.25  per  share  for  $37,500  by  employees or consultants of the Company in
accordance with the terms of the respective  notice  and agreements of exercise
of option for $37,500 in settlement of debt due and owing by the Company to the
optionees.

Subsequent to June 30, 2004, and as of the date of this  Quarterly  Report, the
Company  cancelled  325,000  Stock  Options  at  $0.50 that had been previously
granted  on August 14, 2003, and cancelled another  275,000  Stock  Options  at
$0.25 that  had been previously granted on December 1, 2003.  On July 26, 2004,
the Company granted 600,000 Stock Options at $0.06 expiring July 26, 2009 under
the Stock Option  Plan.   As of the date of this Quarterly Report, an aggregate
of 4,500,000 Stock Options  have  been  granted under the Stock Option Plan, an
aggregate of 2,806,730 Stock Options have  been  exercised  for net proceeds of
$836,240, and an aggregate 1,693,270 Stock Options were outstanding.

(a) On July 26, 2004, an aggregate of 600,000 Stock Options were  exercised  at
$0.06  per  share  for $36,000 by consultants of the Company in accordance with
the terms of the respective  notice  and  agreements  of exercise of option for
$36,000 in settlement of debt due and owing by the Company to the optionees.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES

No report required.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS


Page #29


No report required.

ITEM 5. OTHER INFORMATION

No report required.

ITEM 6. EXHIBITS AND OTHER INFORMATION ON FORM 8-K

      11.1   Statement of computation of per share earnings [Unaudited]

      31.1   Certification  of Chief Executive Officer pursuant  to  Securities
            Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)


      31.2   Certification of  Chief  Financial  Officer pursuant to Securities
            Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)

      32.1   Certifications pursuant to Securities  Exchange  Act  of 1934 Rule
            13a-14(b)  or  15d-14(b)  and  18  U.S.C.  Section 1350, as adopted
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

REPORTS ON FORM 8-K

July 21, 2004: current report, item 9;
March 11, 2004: current report, item 9;
February 24, 2004: current report, item 9;


SIGNATURES

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



                                    Transax International Limited


Dated: August 20, 2004  By:  /s/ Stephen Walters
                                    ---------------------------------
                                    Stephen Walters, President and
                                    Chief Executive Officer

Dated: August 20, 2004  By:  /s/ Nathalie Pilon
                                    --------------------------------
                                    Nathalie Pilon, Chief Financial Officer



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<TABLE>
<CAPTION>

				EXHIBIT 11.1

		TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
	STATEMENT OF COMPUTATION OF PER SHARE EARNINGS [UNAUDITED]

	                                        For the six months ended
							June 30,
<S>          <C>        <C>
				             2004 (A)                2003 (A)
					 ------------------------------------
BASIC:
Average shares outstanding 		   15,374,472              12,472,917

Net loss applicable to Common Shares	 $   (544,384)		$  (1,033,426)
					 ------------		-------------
Per share amount			 $	(0.04)          $	(0.08)
					 ============		=============

FULLY DILUTED:

Average shares outstanding disregarding
dilutive outstanding stock options and
warrant conversion of debenture for
each year				   15,374,472              12,472,917

Convertible loans 			    1,647,800		    1,740,592

Dilutive stock options and warrants,
based on the treasury stock method
using the average market price		            0			    -
					 ------------		-------------
Shares outstanding			   17,022,272		   14,213,509

Net loss				 $   (544,384)		$  (1,033,426)

Interest on convertible loan 		 $     56,950           $      13,953
					 ------------		-------------
Net loss for fully diluted calculation	 $   (487,434)		$  (1,019,473)


Per share amount			 $	(0.03)		$	(0.07)
					 ============		=============
Note A:   The fully-diluted calculation is submitted in accordance with Regulation S-K, Item 601 (b)(11),
although it is contrary to paragraph 13 of Statement of Financial Accounting Standards No. 128 because it
produces an anti-dilutive result.

</TABLE>


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EXHIBIT 31.1

                   CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                 PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
                         RULE 13a-14(a) OR 15d-14(a)

I, Stephen Walters, certify that:
   1. I  have  reviewed  this  quarterly  report  on  Form  10-QSB  of  Transax
      International Limited;
   2. Based on my knowledge,  this report does not contain any untrue statement
      of a material fact or omit to state a material fact necessary to make the
      statements  made,  in  light   of  the  circumstances  under  which  such
      statements were made, not misleading  with  respect to the period covered
      by this report;
   3. Based  on  my knowledge, the financial statements,  and  other  financial
      information  included  in  this  report,  fairly  present in all material
      respects the financial condition, results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;
   4. The  registrant's  other  certifying  officer and I are  responsible  for
      establishing  and  maintaining disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
      and have:
         a. designed such  disclosure  controls  and procedures, or caused such
            disclosure  controls  and  procedures  to  be  designed  under  our
            supervision, to ensure that material information  relating  to  the
            registrant,  including its consolidated subsidiaries, is made known
            to us by others  within  those  entities,  particularly  during the
            period in which this report is being prepared;
         b. evaluated the effectiveness of the registrant's disclosure controls
            and  procedures and presented in this report our conclusions  about
            the effectiveness  of the disclosure controls and procedures, as of
            the  end  of the period  covered  by  this  report  based  on  such
            evaluation; and
         c. disclosed in  this  report  any change in the registrant's internal
            control  over  financial  reporting   that   occurred   during  the
            registrant's  most  recent fiscal quarter (the registrant's  fourth
            fiscal quarter in the case of an annual report) that has materially
            affected,  or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and
   5. The registrant's other certifying  officer and I have disclosed, based on
      our most recent evaluation of internal  control over financial reporting,
      to the registrant's auditors and the audit  committee of the registrant's
      board of directors (or persons performing the equivalent functions):
         a. all significant deficiencies and material  weaknesses in the design
            or operation of internal control over financial reporting which are
            reasonably likely to adversely affect the registrant's  ability  to
            record, process, summarize and report financial information; and
         b. any  fraud,  whether  or  not material, that involves management or
            other employees who have a  significant  role  in  the registrant's
            internal control over financial reporting.

Dated: August 20, 2004	By:  /s/ Stephen Walters
                        ---------------------------------
                        Stephen Walters, President and
                        Chief Executive Officer



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EXHIBIT 31.2
                   CERTIFICATION OF CHIEF FINANCIAL OFFICER
                  PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
                          RULE 13a-14(a) OR 15d-14(a)

I, Nathalie Pilon, certify that:
   1. I  have  reviewed  this  quarterly  report  on  Form  10-QSB  of  Transax
      International Limited;
   2. Based  on my knowledge, this report does not contain any untrue statement
      of a material fact or omit to state a material fact necessary to make the
      statements   made,  in  light  of  the  circumstances  under  which  such
      statements were  made,  not misleading with respect to the period covered
      by this report;
   3. Based on my knowledge, the  financial  statements,  and  other  financial
      information  included  in  this  report,  fairly  present in all material
      respects the financial condition, results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;
   4. The  registrant's  other  certifying  officer and I are  responsible  for
      establishing  and  maintaining disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
      and have:
         a. designed such  disclosure  controls  and procedures, or caused such
            disclosure  controls  and  procedures  to  be  designed  under  our
            supervision, to ensure that material information  relating  to  the
            registrant,  including its consolidated subsidiaries, is made known
            to us by others  within  those  entities,  particularly  during the
            period in which this report is being prepared;
         b. evaluated the effectiveness of the registrant's disclosure controls
            and  procedures and presented in this report our conclusions  about
            the effectiveness  of the disclosure controls and procedures, as of
            the  end  of the period  covered  by  this  report  based  on  such
            evaluation; and
         c. disclosed in  this  report  any change in the registrant's internal
            control  over  financial  reporting   that   occurred   during  the
            registrant's  most  recent fiscal quarter (the registrant's  fourth
            fiscal quarter in the case of an annual report) that has materially
            affected,  or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and
   5. The registrant's other certifying  officer and I have disclosed, based on
      our most recent evaluation of internal  control over financial reporting,
      to the registrant's auditors and the audit  committee of the registrant's
      board of directors (or persons performing the equivalent functions):
         a. all significant deficiencies and material  weaknesses in the design
            or operation of internal control over financial reporting which are
            reasonably likely to adversely affect the registrant's  ability  to
            record, process, summarize and report financial information; and
         b. any  fraud,  whether  or  not material, that involves management or
            other employees who have a  significant  role  in  the registrant's
            internal control over financial reporting.

Dated: August 20, 2004	By:  /s/ Nathalie Pilon
                        --------------------------------
                        Nathalie Pilon,
                        Chief Financial Officer




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EXHIBIT 32.1

          CERTIFICATIONS PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
                        RULE 13a-14(b) OR 15d-14(b) AND
                            18 U.S.C. SECTION 1350,
                            AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the quarterly report of Transax International  limited  (the
"Company")  on  Form  10-QSB for the period ended March 31, 2004, as filed with
the Securities and Exchange  Commission  on  the  date  hereof  (the "Report"),
Stephen  Walters,  Chief Executive Officer of the Company, and Nathalie  Pilon,
Chief Financial Officer  of  the  Company,  each  certifies  for the purpose of
complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities  Exchange Act
of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title  18 of the
Untied States Code, that:

   1. the Report fully complies with the requirements of Section 13(a) or 15(d)
      of the Exchange Act; and
   2. the  information contained in the Report fairly presents, in all material
      respects,  the  financial  condition  and  results  of  operations of the
      Company.




Dated: August 20, 2004      By:  /s/ Stephen Walters
                        ---------------------------------
                        Stephen Walters, President and
                        Chief Executive Officer

Dated: August 20, 2004	By:  /s/ Nathalie Pilon
                        --------------------------------
                        Nathalie Pilon,
                        Chief Financial Officer





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