UNITED STATES
                       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 September 30, 2007

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

              For the transition period from ________ to __________

                         Commission File Number: 0-27845
                                                 -------

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

                  COLORADO                             90-0287423
                  --------                             ----------
      (State or other jurisdiction of          (I.R.S. Employer I.D. No.)
       incorporation or organization)

                        8th Floor, 5201 Blue Lagoon Drive
                                Miami, FL, 33126
                        ---------------------------------
                    (Address of principal executive offices)

                                 (305) 629-3090
                                 --------------
                           (Issuer's telephone number)

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 |_|

Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_|   No |X|

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 November 10, 2007
             -----                           -----------------------------------
Common Stock, $0.00001 par value                          33,582,778

Transitional Small Business Disclosure Format (Check one): Yes |_|   No |X|

<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
                                   FORM 10-QSB
                    QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007

                                      INDEX

                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

   Item 1 - Consolidated Financial Statements

   Consolidated Balance Sheet (Unaudited)
      As of September 30, 2007.................................................3

   Consolidated Statements of Operations (Unaudited)
      For the Three and Nine Months Ended September 30, 2007 and 2006..........4

   Consolidated Statements of Cash Flows (Unaudited)
      For the Nine Months Ended September 30, 2007 and 2006....................5

   Notes to Unaudited Consolidated Financial Statements.....................6-19

   Item 2 - Management's Discussion and Analysis or Plan of Operation......20-28

   Item 3 - Controls and Procedures...........................................28

PART II - OTHER INFORMATION

   Item 1 - Legal Proceedings.................................................28

   Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.......28

   Item 3 - Default Upon Senior Securities....................................28

   Item 4 - Submission of Matters to a Vote of Security Holders...............29

   Item 5 - Other Information.................................................29

   Item 6 - Exhibits..........................................................29

   Signatures.................................................................29

                                     - 2 -
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
                        TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
                                  CONSOLIDATED BALANCE SHEET
                                      SEPTEMBER 30, 2007
                                          (UNAUDITED)
<CAPTION>
                                            ASSETS
<S>                                                                              <C>
CURRENT ASSETS:
  Cash ........................................................................  $     47,117
  Accounts receivable (net of allowance for doubtful accounts of $0) ..........       550,948
  Prepaid expenses and other current assets ...................................       306,720
                                                                                 ------------

     TOTAL CURRENT ASSETS .....................................................       904,785

SOFTWARE DEVELOPMENT COSTS, net ...............................................       406,048
PROPERTY AND EQUIPMENT, net ...................................................       796,621
OTHER ASSETS ..................................................................         4,800
                                                                                 ------------

     TOTAL ASSETS .............................................................  $  2,112,254
                                                                                 ============

                             LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Current portion of loans payable ............................................  $    423,286
  Convertible debenture payable ...............................................       225,000
  Accounts payable and accrued expenses .......................................     2,090,715
  Due to related parties ......................................................       371,466
  Warrant liability ...........................................................       137,165
  Convertible feature liability ...............................................     1,263,359
  Loans payable - related party ...............................................       276,945
  Convertible loans - related party ...........................................       233,328
                                                                                 ------------

     TOTAL CURRENT LIABILITIES ................................................     5,021,264

LOANS PAYABLE, NET OF CURRENT PORTION .........................................        18,391
ACCOUNTS PAYABLE AND ACCRUED EXPENSES, NET OF CURRENT PORTION .................       441,728
                                                                                 ------------

     TOTAL LIABILITIES ........................................................     5,481,383
                                                                                 ------------

STOCKHOLDERS' DEFICIT:
  Series A convertible preferred stock, no par value; 16,000 shares authorized;
    15,880 shares issued and outstanding; liquidation preference $1,588,000 ...     1,467,879
  Common stock $.00001 par value; 100,000,000 shares authorized;
    62,030,511 shares issued and 32,332,778 outstanding .......................           323
  Paid-in capital .............................................................     7,834,308
  Accumulated deficit .........................................................   (12,765,375)
  Accumulated other comprehensive income ......................................        93,736
                                                                                 ------------

     TOTAL STOCKHOLDERS' DEFICIT ..............................................    (3,369,129)
                                                                                 ------------

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT ..............................  $  2,112,254
                                                                                 ============

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

                                             - 3 -
</TABLE>
<PAGE>
<TABLE>
                                   TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                                           FOR THE THREE MONTHS ENDED    FOR THE NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                 SEPTEMBER 30,
                                                          ---------------------------   ---------------------------
                                                              2007           2006           2007           2006
                                                          ------------   ------------   ------------   ------------
                                                           (UNAUDITED)    (UNAUDITED)    (UNAUDITED)    (UNAUDITED)
<S>                                                       <C>            <C>            <C>            <C>
REVENUES ...............................................  $  1,328,636   $  1,115,930   $  3,852,538   $  3,131,832
                                                          ------------   ------------   ------------   ------------

OPERATING EXPENSES:
  Cost of product support services .....................       580,372        392,002      1,540,255      1,210,418
  Compensation and related benefits ....................       219,465        277,598        652,733        709,107
  Professional fees ....................................        17,496         43,707         96,294        159,253
  Management and consulting fees - related parties .....        71,365        157,502        284,032        383,088
  Investor relations ...................................         9,700         94,442         27,978        237,841
  Depreciation and amortization ........................       105,592         50,817        272,503        172,745
  General and administrative ...........................       438,258        306,671      1,025,094        812,081
                                                          ------------   ------------   ------------   ------------

     TOTAL OPERATING EXPENSES ..........................     1,442,248      1,322,739      3,898,889      3,684,533
                                                          ------------   ------------   ------------   ------------

LOSS FROM OPERATIONS ...................................      (113,612)      (206,809)       (46,351)      (552,701)
                                                          ------------   ------------   ------------   ------------

OTHER INCOME (EXPENSES):
  Other income (expenses) ..............................       (52,871)        15,815         14,749        (32,660)
  Foreign exchange loss ................................        (9,166)        (1,576)       (22,093)       (11,044)
  Debt settlement and offering costs ...................             -              -              -       (153,671)
  Gain (loss) from derivative liabilities ..............       331,500        (30,946)       738,898     (1,215,680)
  Registration rights penalty ..........................             -       (160,000)             -       (160,000)
  Interest expense .....................................       (49,756)      (231,239)      (342,049)      (464,717)
  Interest expense - related party .....................       (20,093)        (8,823)       (44,850)       (27,195)
                                                          ------------   ------------   ------------   ------------

     TOTAL OTHER INCOME (EXPENSES) .....................       199,614       (416,769)       344,655     (2,064,967)
                                                          ------------   ------------   ------------   ------------

INCOME (LOSS) BEFORE INCOME TAXES ......................        86,002       (623,578)       298,304     (2,617,668)

PROVISION FOR INCOME TAXES .............................      (145,462)             -       (145,462)             -
                                                          ------------   ------------   ------------   ------------

NET INCOME (LOSS) ......................................       (59,460)      (623,578)       152,842     (2,617,668)

DEEMED AND CUMULATIVE PREFERRED STOCK DIVIDENDS ........       (27,790)       (28,230)       (83,790)    (1,662,444)
                                                          ------------   ------------   ------------   ------------

NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS .....  $    (87,250)  $   (651,808)  $     69,052   $ (4,280,112)
                                                          ============   ============   ============   ============

COMPREHENSIVE INCOME (LOSS):
  NET INCOME (LOSS) ....................................  $    (59,460)  $   (623,578)  $    152,842   $ (2,617,668)

  OTHER COMPREHENSIVE INCOME (LOSS):
     Unrealized foreign currency translation (loss) gain       147,064         31,418           (317)        66,257
                                                          ------------   ------------   ------------   ------------

  COMPREHENSIVE INCOME (LOSS) ..........................  $     87,604   $   (592,160)  $    152,525   $ (2,551,411)
                                                          ============   ============   ============   ============

NET INCOME (LOSS) PER COMMON SHARE:
  BASIC ................................................  $          -   $      (0.02)  $          -   $      (0.14)
                                                          ============   ============   ============   ============
  DILUTED ..............................................  $          -   $      (0.02)  $          -   $      (0.14)
                                                          ============   ============   ============   ============

WEIGHTED AVERAGE SHARES OUTSTANDING:
  BASIC ................................................    32,299,923     31,981,702     32,121,302     31,683,345
                                                          ============   ============   ============   ============
  DILUTED ..............................................    32,299,923     31,981,702     72,988,284     31,683,345
                                                          ============   ============   ============   ============

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

                                                        - 4 -
</TABLE>
<PAGE>
<TABLE>
                           TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                                            FOR THE NINE MONTHS
                                                                            ENDED SEPTEMBER 30,
                                                                        --------------------------
                                                                            2007           2006
                                                                        -----------    -----------
                                                                        (UNAUDITED)    (UNAUDITED)
<S>                                                                     <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ............................................................   $   152,842    $(2,617,668)
Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
     Depreciation and amortization ..................................       272,503        172,745
     Amortization of software maintenance costs .....................       176,264        160,407
     Stock-based compensation and consulting ........................             -        247,714
     Grant of warrants in connection with debt extension ............             -         46,686
     Amortization of deferred debt issuance costs ...................         4,783        121,334
     Amortization of debt discount ..................................        31,250         93,750
     (Gain) loss from derivative liabilities ........................      (738,898)     1,215,680

Changes in assets and liabilities:
     Accounts receivable ............................................      (102,922)       (67,269)
     Prepaid expenses and other current assets ......................       (24,834)       (48,818)
     Other assets ...................................................             -         (2,400)
     Accounts payable and accrued expenses ..........................       453,665        (49,890)
     Accrued interest payable, related party ........................        57,144         16,439
     Due to related parties .........................................       138,727         11,187
     Accounts payable and accrued expenses - long-term ..............      (113,165)       104,446
                                                                        -----------    -----------

NET CASH PROVIDED BY (USED IN)  OPERATING ACTIVITIES ................       307,359       (595,657)
                                                                        -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capitalized software development costs ............................      (254,409)      (179,500)
  Acquisition of property and equipment .............................       (36,713)      (269,797)
                                                                        -----------    -----------

NET CASH USED IN INVESTING ACTIVITIES ...............................      (291,122)      (449,297)
                                                                        -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from sale of Series A preferred stock ................             -      1,223,734
  Repayments under capital lease obligations ........................             -        (16,289)
  Proceeds from loan payable ........................................             -        136,032
  Repayment of loan .................................................      (125,205)             -
  Proceeds from loan - related party ................................        80,000              -
  Repayment of loan - related party .................................             -        (85,000)
                                                                        -----------    -----------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES .................       (45,205)     1,258,477
                                                                        -----------    -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH .............................         4,584            547
                                                                        -----------    -----------

NET INCREASE (DECREASE) IN CASH .....................................       (24,384)       214,070

CASH, BEGINNING OF PERIOD ...........................................        71,501          7,875
                                                                        -----------    -----------

CASH, END OF PERIOD .................................................   $    47,117    $   221,945
                                                                        ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid for interest ............................................   $   297,602    $   199,111
                                                                        ===========    ===========
  Cash paid for income taxes ........................................   $         -    $         -
                                                                        ===========    ===========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Common stock issued for debt and accrued interest .................   $         -    $    15,000
                                                                        ===========    ===========
  Common stock and options issued for services ......................   $         -    $    82,715
                                                                        ===========    ===========
  Loan paid with preferred stock proceeds ...........................   $         -    $   255,237
                                                                        ===========    ===========
  Derivative liabilities recorded for deemed preferred stock dividend   $         -    $ 1,600,000
                                                                        ===========    ===========
  Seres A preferred stock converted to common stock .................   $    11,092    $         -
                                                                        ===========    ===========

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

                                               - 5 -
</TABLE>
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation
---------------------

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, the financial statements do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments considered necessary to make the interim financials not misleading
have been included and such adjustments are of a normal recurring nature. These
consolidated financial statements should be read in conjunction with the
financial statements for the year ended December 31, 2006 and notes thereto
contained in the Report on Form 10-KSB of Transax International Limited ("our
Company" or the "Company") as filed with the Securities and Exchange Commission
(the "Commission"). The results of operations for the nine months ended
September 30, 2007 are not necessarily indicative of the results for the full
fiscal year ending December 31, 2007.

The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America. The consolidated
financial statements include the Company and its wholly-owned subsidiaries,
Transax Limited, Medlink Conectividade em Saude Ltda., Transax (Australia) Pty
Ltd., and Medlink Technologies, Inc. All material intercompany balances and
transactions have been eliminated in the consolidated financial statements.

Organization
------------

Transax International Limited was incorporated in the State of Colorado in 1999.
The Company, primarily through its wholly-owned subsidiary, Medlink
Conectividade em Saude Ltda ("Medlink"), is an international provider of
information network solutions specifically designed for healthcare providers and
health insurance companies. The Company's MedLink Solution (TM) enables the real
time automation of routine patient eligibility, verification, authorizations,
claims processing and payment functions. The Company has offices located in
Miami, Florida and Rio de Janeiro, Brazil. Effective March 31, 2007, the Company
closed its office in Australia and closed Transax (Australia) Pty Ltd.

Use of estimates
----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates. Significant estimates used in
the preparation of the accompanying financial statements include the allowance
for doubtful accounts receivable, the useful lives of property, equipment and
the accounting for capitalized software development costs, variables used to
determine stock-based compensation, and the valuation of derivative liabilities.

Fair value of financial instruments
-----------------------------------

The fair value of our cash, accounts receivable, accounts payable and accrued
expenses approximate carrying values due to their short maturities. The fair
values of the Company's debt instruments approximate their carrying values based
on rates currently available to it.

                                     - 6 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (continued)

Revenue recognition
-------------------

The Company's revenues, which do not require any significant production,
modification or customization for the Company's targeted customers and do not
have multiple elements, are 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.

Substantially all of the Company's revenues are derived from the processing of
applications by healthcare providers for approval of patients for healthcare
services from insurance carriers. The Company's software or hardware devices
containing the Company's software are installed at the healthcare provider's
location. The Company offers transaction services to authorize and adjudicate
identity of the patient and obtains "real time" approval for any necessary
medical procedure from the insurance carrier. The Company's transaction-based
solutions provide remote access for healthcare providers to connect with
contracted insurance carriers. Transaction services are provided through
contracts with insurance carriers and others, which specify the services to be
utilized and the markets to be served. The Company's clients are charged for
these services on a per transaction basis. Pricing varies depending on the type
of transactions being processed under the terms of the contract for which
services are provided. Transaction revenues are recognized in the period in
which the transactions are performed.

Foreign currency translation
----------------------------

The assets and liabilities of the Company's foreign subsidiaries are translated
into U.S. dollars at the period-end exchange rates, equity is converted
historically 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 or loss in stockholders' deficit. Transaction
gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the functional currency (Medlink -
Brazilian Real, Transax Australia - Australian dollar and Transax Limited and
the Company - USD) are included in the Statement of Operations as incurred.

Comprehensive income (loss)
---------------------------

Other comprehensive income (loss) currently includes only foreign currency
translation adjustments.

Stock-based compensation
------------------------

The Company uses the provisions of Financial Accounting Standards Board
Statement of Financial Accounting Standard ("SFAS") No. 123(R), "Share-Based
Payments," which establishes the accounting for employee stock-based awards.
Under the provisions of SFAS No.123(R), stock-based compensation is measured at
the grant date, based on the calculated fair value of the award, and is
recognized as an expense over the requisite employee service period (generally
the vesting period of the grant).

                                     - 7 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (continued)

Earnings/Loss per common share
------------------------------

Basic earnings/loss per share is computed by dividing net earnings/loss by the
weighted average number of shares of common stock outstanding during the period.
Diluted income per share is computed by dividing net income by the weighted
average number of shares of common stock, common stock equivalents and
potentially dilutive securities outstanding during each period. Potentially
dilutive common shares consist of the common shares issuable upon the exercise
of stock options and warrants (using the treasury stock method) and upon the
conversion of convertible preferred stock (using the if-converted method). A
reconciliation of the denominator used in the calculation of basic and diluted
net income (loss) per share is as follows:
<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED              NINE MONTHS ENDED
                                         SEPTEMBER 30,                  SEPTEMBER 30,
                                 ----------------------------    ---------------------------
                                     2007            2006            2007           2006
                                 ------------    ------------    ------------   ------------
<S>                              <C>             <C>             <C>            <C>
NUMERATOR:
Net income (loss) available to
common shareholders ..........   $    (87,250)   $   (651,808)   $     69,052   $ (4,280,112)
                                 ============    ============    ============   ============
DENOMINATOR:
Weighted-average shares
outstanding for basic earnings
(loss) per share .............     32,299,923      31,981,702      32,121,302     31,683,345
Effect of dilutive securities:
   Convertible debt ..........              -               -       5,357,143              -
   Convertible preferred stock              -               -      35,509,839              -
                                 ------------    ------------    ------------   ------------

Weighted-average shares
outstanding for diluted
earnings (loss) per share ....     32,299,923      31,981,702      72,988,284     31,683,345
                                 ============    ============    ============   ============
</TABLE>

         The following were excluded from the computation of diluted shares
outstanding as they would have had an anti-dilutive impact. In periods where the
Company has a net loss, all dilutive securities are excluded. In periods where
the Company has net income, the dilutive securities are excluded when, for
example, their exercise prices are greater than the average fair values of the
Company's common stock as follows:

                                    THREE MONTHS ENDED      NINE MONTHS ENDED
                                       SEPTEMBER 30,           SEPTEMBER 30,
                                  ----------------------  ----------------------
                                     2007        2006        2007        2006
                                  ----------  ----------  ----------  ----------

Stock options ..................   2,825,000   3,625,000   2,825,000   3,625,000
Stock warrants .................  11,902,500  16,902,500  11,902,500  16,902,500
Convertible debt ...............   5,357,143   2,447,917           -   2,447,917
Convertible debt-related party .   1,400,000   1,400,000   1,400,000   1,400,000
Convertible preferred stock .. .  35,509,839  14,814,815           -  14,814,815

                                     - 8 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (continued)

Concentrations of credit risk
-----------------------------

Financial instruments that potentially subject us to significant concentrations
of credit risk consist principally of cash and accounts receivable.

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 receivable. As a consequence, the Company believes that its accounts
receivable credit risk exposure beyond such allowances is limited. The Company
recognizes an allowance for doubtful accounts to ensure accounts receivable are
not overstated due to uncollectibility and are maintained for all customers
based on a variety of factors, including the length of time the receivables are
past due, significant one-time events and historical experience. An additional
reserve for individual accounts is recorded when the Company becomes aware of a
customer's inability to meet its financial obligation, such as in the case of
bankruptcy filings or deterioration in the customer's operating results or
financial position. If circumstances related to customers change, estimates of
the recoverability of receivables would be further adjusted. As of September 30,
2007, the allowance for doubtful accounts was $0.

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 revenues from two major customers that accounted for
approximately 89% or $3,433,449, and 98%, or $3,062,990, of the total revenues
for the nine months ended September 30, 2007 and 2006, respectively. For the
nine months ended September 30, 2007, these two major customers accounted for
49.5% and 39.6% of net revenues, respectively. At September 30, 2007, these two
major customers accounted for 55% and 35%, respectively, of the total accounts
receivable balance outstanding.

The Company maintains its cash in accounts with major financial institutions in
the United States and Brazil in the form of demand deposits and money market
accounts. Deposits in these banks may exceed the amounts of insurance provided
on such deposits. As of September 30, 2007, the Company had no deposits
subjected to such risk. Historically we have not experienced any losses on our
deposits of cash and cash equivalents.

Accounting for conversion features and warrants issued with preferred stock
---------------------------------------------------------------------------

In 2006, the Company issued $1,600,000 of convertible Series A preferred stock,
which contained an Embedded Conversion Feature ("ECF") and warrants to purchase
common stock. In accordance with the guidance in paragraph 12 of SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," it was necessary
to evaluate the separation of the conversion option from the debt host and
account for it separately as a derivative if the conversion option met certain
criteria. The Conversion option met all three criteria of paragraph 12: (1) the
conversion feature is not clearly and closely related to the host component, (2)
the convertible instrument is not accounted for at fair value, and (3) the
embedded conversion option meets the definition of a derivative in paragraph 6
of SFAS No. 133.

                                     - 9 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (continued)

Accounting for conversion features and warrants issued with preferred stock
(continued)
---------------------------------------------------------------------------

To assess whether or not the ECF would be classified as stockholders' equity if
it were freestanding, management considered the guidance in EITF 00-19,
"Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Company's Own Stock." In assessing whether or not the conversion
option would be classified as equity or a liability if it were freestanding,
management determined whether or not the Series A convertible preferred stock is
considered "conventional." EITF 00-19 and EITF 05-2, "The Meaning of
Conventional Convertible Debt Instruments in issue No. 00-19," defines
conventional convertible debt as debt whereby the holder will, at the issuer's
option, receive a fixed amount of shares or the equivalent amount of cash as
proceeds when he exercises the conversion option. Management determined that
Series A convertible preferred stock was not "conventional," and the Company
considered all aspects of EITF 00-19, paragraphs 12-33.

This caused the ECF of the Series A convertible preferred stock to be classified
as a derivative financial instrument under SFAS No. 133. In addition, all
warrants to purchase common stock issued with the preferred stock were then
deemed to be classified as derivative instruments under SFAS No. 133. The
accounting treatment of derivative financial instruments requires that the
Company record the ECF and warrants at their fair values as of each reporting
date. Any change in fair value is recorded as non-operating, non-cash income or
expense at each reporting date. The derivatives were valued using the
Black-Scholes option pricing model and are classified in the consolidated
balance sheet as current liabilities at September 30, 2007.

Income Taxes
------------

The Company files federal and state income tax returns in the United States for
its domestic operations, and files separate foreign tax returns for the
Company's foreign subsidiaries in the jurisdictions in which those subsidiaries
operate. Due to net operating loss carry forwards available, no provision for
income taxes has been recorded for the U.S. entities for the nine months ended
September 30, 2007.

Recent accounting pronouncements
--------------------------------

In July 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes,"
an interpretation of FASB Statement No. 109 ("SFAS 109"). The interpretation
clarifies the accounting for uncertainty in income taxes recognized in an
entity's financial statements in accordance with SFAS 109, "Accounting for
Income Taxes." It prescribes a recognition threshold and measurement attribute
for financial statement recognition and measurement of a tax position taken or
expected to be taken on a tax return. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The adoption of this interpretation did not
have an impact on the Company's consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS 157"), which provides guidance for how companies should measure fair
value when required to use a fair value measurement for recognition or
disclosure purposes under generally accepted accounting principles. SFAS 157 is
effective for fiscal years beginning after November 15, 2007. The Company is
currently assessing what impact, if any, the adoption of SFAS 157 will have on
its consolidated financial statements.

                                     - 10 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (continued)

Recent accounting pronouncements (continued)
--------------------------------------------

In December 2006, the FASB issued Staff Position EITF 00-19-2, "Accounting for
Registration Payment Arrangements." The pronouncement specifies that the
contingent obligation to make future payments or otherwise transfer
consideration under a registration payment arrangement, whether issued as a
separate agreement or included as a provision of a financial instrument or other
agreement, should be separately recognized and measured in accordance with SFAS
No. 5, "Accounting for Contingencies." The Company believes that its current
accounting is consistent with FSP EITF 00-19-2. Accordingly, its adoption has
had no effect on our consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities, Including an Amendment of FASB
Statement No. 115", under which entities will now be permitted to measure many
financial instruments and certain other assets and liabilities at fair value on
an instrument-by-instrument basis. This Statement is effective as of the
beginning of an entity's first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provisions of SFAS 157. The Company is currently assessing what impact, if any,
the adoption of SFAS 159 will have on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.

NOTE 2 - RELATED PARTY TRANSACTIONS

Convertible Loans Payable
-------------------------

At September 30, 2007, the Company had aggregate loans payable for $175,000 to a
related party company whose officer is an officer of the Company. On March 23,
2005, the Company modified the terms of its convertible loans to this related
party. Under the modified terms, $75,000 of principal due under the convertible
loans was due on March 31, 2007 and is convertible into the Company's common
stock at $0.125 per share. The remaining principal of $100,000 was due on April
30, 2007 and is convertible into the Company's common stock at $0.125 per share.
For each common share received upon conversion of the principal balance, the
related party is entitled to receive one warrant to purchase the Company's
common stock at $0.25 per share for a period of two years from the conversion
date. The interest rate of the loan is 12% per annum compounded monthly. At
September 30, 2007, interest due on these two loans amounted to $58,328 and the
aggregate principal amount due is $175,000. During the nine months ended
September 30, 2007 and 2006, the Company incurred $15,707 and $15,707,
respectively, in interest expense related to these two loans. These two loans
are in default and currently under re-negotiation with the lender.

                                     - 11 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 2 - RELATED PARTY TRANSACTIONS (continued)

Due to Related Parties
----------------------

For the nine months ended September 30, 2007 and 2006, the Company incurred
$144,405 and $133,615, respectively, in management fees to an officer/director
of the Company, which has been included in management and consulting fees -
related party on the accompanying consolidated statements of operations.
Effective July 1, 2007, the Company's board of directors agreed to increase the
compensation of this officer/director from $15,000 per month to $17,500 per
month. Additionally, on August 18, 2006, the Company granted this officer
150,000 options to purchase 150,000 shares of the Company's common stock at
$0.15 per share. The options expire on August 17, 2011. The fair value of this
option grant was estimated at $22,304 on the date of grant using the
Black-Scholes option-pricing model. In connection with these options, for the
nine month ended September 30, 2006, the Company recorded stock-based
compensation expense of $22,304, which has been included in management and
consulting fees - related party on the accompanying consolidated statement of
operations. At September 30, 2007, $330,456 in management fees and other
expenses are payable to this officer/director and are included in due to related
parties on the accompanying consolidated balance sheet. The amount due is
unsecured, non-interest bearing and is payable on demand.

For the nine months ended September 30, 2007 and 2006, the Company incurred
$35,627 and $40,147, respectively, in accounting fees to a company whose officer
is an officer of the Company. The fees are included in management and consulting
fees - related party on the accompanying consolidated statements of operations.
At September 30, 2007, $32,510 in these fees is payable to this officer and is
included in due to related parties on the accompanying consolidated balance
sheet.

For the nine months ended September 30, 2007 and 2006, the Company incurred
$32,000 and $61,600, respectively, in consulting fees to an officer of the
Company. Additionally, on January 26, 2006, the Company granted this officer
100,000 options to purchase 100,000 shares of the Company's common stock at
$0.15 per share. The options expire on February 5, 2011. The fair value of this
option grant was estimated at $12,834 on the date of grant using the
Black-Scholes option-pricing model. In connection with these options, the
Company recorded stock-based compensation expense of $12,834 that has been
included in management and consulting fees - related party on the accompanying
consolidated statement of operations. At September 30, 2007, $2,500 of these
fees is payable to this officer and is included in due to related parties on the
accompanying consolidated balance sheet.

For the nine months ended September 30, 2007 and 2006, the Company incurred
$72,000 and $94,000, respectively, in consulting fees to a director of the
Company that has been included in management and consulting fees - related party
on the accompanying consolidated statements of operations. Additionally, on
August 18, 2006, the Company granted this officer 75,000 options to purchase
75,000 shares of the Company's common stock at $0.15 per share. The options
expire on August 17, 2011. The fair value of this option grant was estimated at
$11,152 on the date of grant using the Black-Scholes option-pricing model. In
connection with these options, for the nine months ended September 30, 2006, the
Company recorded stock-based compensation expense of $11,152, which has been
included in management and consulting fees - related party on the accompanying
consolidated statement of operations. At September 30, 2007, $6,000 of these
fees is payable to this officer and is included in due to related parties on the
accompanying consolidated balance sheet.

                                     - 12 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 2 - RELATED PARTY TRANSACTIONS (continued)

Loans Payable - Related Party
-----------------------------

On March 5, 2004, the Company borrowed Euro 115,000 ($164,128 at September 30,
2007) from an officer of the Company for working capital purposes. The loan
accrues 0.8% interest, compounded monthly (9.6% per annum), had an initial term
of twelve months, and was repayable quarterly in arrears. On September 25, 2007,
the officer agreed to extend this loan for an additional twelve months until
March 4, 2008. Additionally, during fiscal 2007, the Company borrowed $80,000
from this officer. This loan accrues 1.0% interest, compounded monthly (12% per
annum), and are due on demand. Additionally, in connection with these loans, the
Company incurred a loan fee of $5,000 and an additional fee of 5,500 EURO
(approximately $7,756) which has been included in interest expense - related
party on the accompanying statement of operations. For the nine months ended
September 30, 2007 and 2006, the Company incurred $29,143 and $10,861,
respectively, in interest related to these loans. At September 30, 2007, $32,817
in interest and loan fees was accrued on these loans and the aggregate principal
and interest amount due is $276,945 and is included in loan payable - related
party on the accompanying balance sheet.

NOTE 3 - FINANCING ARRANGEMENTS

Loans Payable
-------------

The Company's subsidiary, Medlink, has several loans and credit lines with
financial institutions. The loans require monthly installment payments, bear
interest at rates ranging from 30% to 50% per annum, are secured by certain
receivables of Medlink, and are due through July 2009. At September 30, 2007,
loans payable to these financial institutions aggregated $441,677.

Convertible Debentures Payable
------------------------------

On April 1, 2005, the Company entered into a Securities Purchase Agreement with
Scott and Heather Grimes, Joint Tenants - with Rights of Survivorship (the
"Investor"). Pursuant to the Securities Purchase Agreement, the Company issued
convertible debentures to the Investor in the original principal amount of
$250,000. The debentures are convertible at the holder's option any time up to
maturity at a conversion price equal to the lower of (i) 120% of the closing bid
price of the common stock on the date of the debentures or (ii) 80% of the
lowest closing bid price of the common stock for the five trading days
immediately preceding the conversion date. The debentures have a two-year term
and accrue interest at 5% per year. On February 1, 2006, the Company and the
debenture holder mutually agreed to extend the term of the debentures until
December 1, 2007. At maturity, the debentures will automatically convert into
shares of common stock at a conversion price equal to the lower of (i) 120% of
the closing bid price of the common stock on the date of the debentures or (ii)
80% of the lowest closing bid price of the common stock for five trading days
immediately preceding the conversion date.

The Company determined that the conversion feature of the convertible debentures
represents an embedded derivative since the debentures are convertible into a
variable number of shares. Accordingly, the convertible debentures are not
considered to be conventional debt under EITF 00-19 and the embedded conversion
feature must be bifurcated from the debt host and accounted for as a derivative
liability. The Company believes that the aforementioned embedded derivative
meets the criteria of SFAS 133 and EITF 00-19, and should be accounted for as a
separate derivative with a corresponding value recorded as a liability.
Accordingly, the fair value of this derivative instrument has been recorded as a
liability on the consolidated balance sheet.

                                     - 13 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 3 - FINANCING ARRANGEMENTS (continued)

Convertible Debentures Payable (continued)
------------------------------------------

The change in the fair value of the liability for derivative contracts has been
recorded as other income / (expense) in the consolidated statements of
operations. In connection with the loan extension, in February 2006, the Company
granted a warrant to purchase 400,000 shares of the Company's common stock to
the debenture holder. The warrant has a term of two years and is exercisable at
$0.20 per share. The fair value of this warrant grant was estimated at $46,686
on the date of grant using the Black-Scholes option-pricing model. In connection
with these warrants, on February 1, 2006, the Company recorded debt settlement
expense of $46,686 and a warrant liability of $46,686.

On July 17, 2006, in connection with the conversion of $15,000 of outstanding
principal on this convertible debenture, the Company issued 104,167 shares of
common stock. On October 31, 2006, in connection with the conversion of $10,000
of outstanding principal on this convertible debenture, the Company issued
151,515 shares of common stock.

At the end of each reporting period, the Company revalues the warrant and
convertible feature of these derivative liabilities. For the nine months ended
September 30, 2007 and 2006, the Company recorded a gain on valuation of the
derivative liability and warrants of $113,412 and $5,510, respectively.
Amortization of debt discount for the nine months ended September 30, 2007 and
2006 was $31,250 and $93,750, respectively, and is included in interest expense.
Amortization of debt offering costs for the nine months ended September 30, 2007
and 2006 was $4,783 and $14,348, respectively, and is included in interest
expense. At September 30, 2007, the estimated fair values of the convertible
feature derivative liabilities and warrants are $130,937 and $874, respectively,
and are reflected as a conversion feature liability and warrant liability,
respectively, on the accompanying consolidated balance sheet.

The Company agreed to register, on a best efforts basis, 3,571,429 shares of its
common stock underlying the conversion of the debentures and the exercise of the
warrants.

At the valuation date of September 30, 2007, the following assumptions were
applied to the convertible debt and warrants:

                                              September 30, 2007
                                              ------------------
               Market price ...............         $0.057
               Exercise price of debt .....     $0.042 to $0.20
               Term .......................       0.50 years
               Volatility .................          114%
               Risk-free interest rate ....         4.05%

The convertible debenture liability is as follows at September 30, 2007:

         Convertible debentures payable ..................     $225,000
         Less: unamortized discount on debentures ........            -
                                                               --------

         Convertible debentures, net .....................     $225,000
                                                               ========

                                     - 14 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 3 - FINANCING ARRANGEMENTS (continued)

Convertible Debentures Payable (continued)
------------------------------------------

For the nine months ended September 30, 2007, the related gain or loss from
derivative liabilities is as follows:
<TABLE>
<CAPTION>
                                                              Preferred
                                                Convertible     stock
                                                   debt      (See Note 4)     Total
                                                -----------  -----------   -----------
<S>                                             <C>          <C>           <C>
                    2007
----------------------------------------------
Change in fair value of derivative liabilities  $   113,412  $   625,486   $   738,898
                                                -----------  -----------   -----------

Total gain from derivative liabilities .......  $   113,412  $   625,486   $   738,898
                                                ===========  ===========   ===========

                    2006
----------------------------------------------
Initial  loss on derivative valuation ........  $         -  $  (680,498)  $  (680,498)
Change in fair value of derivative liabilities  $     5,510  $  (540,692)  $  (535,182)
                                                -----------  -----------   -----------

Total loss from derivative liabilities .......  $     5,510  $(1,221,190)  $(1,215,680)
                                                ===========  ===========   ===========
</TABLE>

NOTE 4 - STOCKHOLDERS' DEFICIT

Preferred Stock
---------------

On January 13, 2006, the Company entered into an Investment Agreement with
Cornell Capital Partners, LP ("Cornell"), and, together with the Company, (the
"Parties"), pursuant to which the Company agreed to sell to Cornell up to 16,000
shares of Series A Convertible Preferred Stock, no par value, (the "Series A
Preferred Shares") which shall be convertible, at Cornell's discretion, into
shares of the Company's common stock, par value $.00001 (the "Common Stock") for
a total price of up to $1,600,000.

Of the 16,000 Series A Preferred Shares to be sold, 8,000 were sold to Cornell
on January 13, 2006 and had a purchase price of $800,000, which consisted of
$255,237 from the surrender of a Promissory Note and $544,763 consisting of new
funding, from which the Company received net proceeds of $495,734 after the
payment of placement fees of $49,029. Additionally, the Company paid
approximately $25,000 in legal fees with the proceeds of this financing. On May
8, 2006, the Company sold the remaining 8,000 shares to Cornell, at the purchase
price of $800,000 and received proceeds of $728,000 (net of placement fees of
$72,000).

On January 13, 2006, the Company also issued to Cornell warrants to purchase up
to 5,000,000 shares of Common stock. The first warrant issued to Cornell is for
2,500,000 shares of Common Stock at an exercise price of $0.30 per share and
shall terminate after the five (5) year anniversary of the date of issuance. The
second warrant issued to Cornell is for 2,500,000 shares of Common Stock at an
exercise price of $0.20 per share and shall terminate after the five (5) year
anniversary of the date of issuance.

Subject to the terms and conditions of an Investor Registration Rights
Agreement, the Company was required to prepare and file in 2006 and shall cause
the Registration Statement to remain effective until all of the Registerable
Securities have been sold. The Company filed its initial registration statement
on Form SB-2 on May 9, 2006 and it has not been declared effective.

                                     - 15 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 4 - STOCKHOLDERS' DEFICIT (continued)

Preferred Stock (continued)
---------------------------

In the event the Registration Statement is not declared effective by the SEC on
or before the Scheduled Effective Deadline, or if after the Registration
Statement has been declared effective by the SEC, sales cannot be made pursuant
to the Registration Statement, the Company will pay as liquidated damages (the
"Liquidated Damages") to the holder, at the holder's option, either a cash
amount or shares of the Company's Common Stock equal to two percent (2%) of the
Liquidation Amount (as defined in the Certificate of Designation of Series A
Convertible Preferred Shares) outstanding as Liquidated Damages for each thirty
(30) day period or any part thereof after the Scheduled Filing Deadline or the
Scheduled Effective Deadline as the case may be. In fiscal 2006, the Company
recorded a registration rights penalty expense of $160,000 that is included in
accrued expenses on the accompanying consolidated balance sheet. Based on
discussions with Cornell and management's analysis, the Company does not believe
that any additional penalty is due under the Investor Registration Rights
Agreement.

In accordance with SFAS No. 133, the Company is required to record the fair
value of the ECF and warrants as a liability. In connection with the initial
sale of the Series A Preferred Stock on January 13, 2006, the initial estimated
fair value of the ECF and warrants was $588,363 and $689,000, respectively,
which reduced the carrying value of the Series A Preferred Stock to zero. The
$477,363 excess value of the fair values of the ECF and warrants over the gross
proceeds received from the Preferred Stock was charged to loss from derivative
liabilities upon sale. In connection with the final sale of the Series A
Preferred Stock on May 8, 2006, the initial estimated fair value of the ECF was
$1,003,135, which reduced the carrying value of the Series A Preferred Stock to
zero. The $203,135 excess value of the fair values of the ECF over the gross
proceeds received from the Preferred Stock was charged to loss from derivative
liabilities upon sale. At September 30, 2007, the Company revalued the ECF and
warrants resulting in a gain on derivative liability of $625,486 for the nine
months ended September 30, 2007.

At September 30, 2007, the estimated fair value of the ECF and warrants was
$1,132,422 and $136,291, respectively, and are reflected as a conversion feature
liability and a warrant liability, respectively, on the accompanying
consolidated balance sheet.

At the valuation date of September 30, 2007, the fair value of the ECF and
warrants were estimated using the Black-Scholes option pricing model with the
following assumptions:

                                              September 30, 2007
                                              ------------------
               Dividend rate ..............           0%
               Term (in years) ............    1.3 to 3.3 years
               Volatility .................          114%
               Risk-free interest rate ....         4.05%

At September 30, 2007, cumulative and unpaid Series A preferred dividends
amounting to $62,444 are in included in accounts payable and accrued expenses on
the accompanying consolidated balance sheet.

On July 10, 2007, the Company issued 302,267 shares of its common stock upon
conversion of 120 shares of Series A preferred stock.

                                     - 16 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 4 - STOCKHOLDERS' DEFICIT (continued)

Stock Options
-------------

A summary of the status of the Company's outstanding stock options as of
September 30, 2007 and changes during the period then ended are as follows:

                                                Number of       Weighted Average
                                                 Options         Exercise Price
                                                ----------      ----------------
Balance at December 31, 2006 ............        3,425,000           $ 0.29
Granted .................................                -                -
Exercised ...............................                -                -
Forfeited ...............................         (600,000)            0.28
                                                ----------           ------
Balance at September 30, 2007 ...........        2,825,000           $ 0.29
                                                ==========           ======

Options exercisable at end of period ....        2,825,000           $ 0.29
                                                ==========           ======

Weighted average fair value of options
granted during the period ...............                            $    -

The following table summarizes information about employee and consultant stock
options outstanding at September 30, 2007:

                Options Outstanding                       Options Exercisable
---------------------------------------------------    -------------------------
                              Weighted
               Number          Average     Weighted        Number       Weighted
Range of   Outstanding at     Remaining     Average    Exercisable at    Average
Exercise    September 30,    Contractual   Exercise     September 30,   Exercise
 Price          2007        Life (Years)     Price          2007          Price
--------   --------------   ------------   --------    --------------   --------
 $ 0.50      1,050,000          0.87        $ 0.50        1,050,000      $ 0.50
 $ 0.20        425,000          2.25          0.20          425,000        0.20
 $ 0.15      1,350,000          3.00          0.15        1,350,000        0.15
             ---------                      ------        ---------      ------
             2,825,000                      $ 0.29        2,825,000      $ 0.29
             =========                      ======        =========      ======

As of September 30, 2007, there are no unrecognized compensation costs since all
options granted under the stock option plans are completely vested.

                                     - 17 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 4 - STOCKHOLDERS' DEFICIT (continued)

Stock Warrants
--------------

A summary of the status of the Company's outstanding stock warrants as of
September 30, 2007 and changes during the periods then ended is as follows:

                                                Number of       Weighted Average
                                                 Warrants        Exercise Price
                                                ----------      ----------------
Balance at December 31, 2006 ............       12,902,500           $ 0.48
Granted .................................                -                -
Exercised ...............................                -                -
Forfeited ...............................       (1,000,000)            0.10
                                                ----------           ------
Balance at September 30, 2007 ...........       11,902,500           $ 0.50
                                                ==========           ======

Options exercisable at end of period ....       11,902,500           $ 0.50
                                                ==========           ======

The following information applies to all warrants outstanding at September 30,
2007:

                      Warrants Outstanding                Warrants Exercisable
            ----------------------------------------     -----------------------
                             Weighted
                             Average        Weighted                    Weighted
Range of                    Remaining        Average                    Average
Exercise                   Contractual      Exercise                    Exercise
 Price        Shares       Life (Years)       Price        Shares         Price
--------    ----------     ------------     --------     ----------     --------
 $ 1.00      4,100,000         0.87          $ 1.00       4,100,000      $ 1.00
 $ 0.30      2,500,000         3.29            0.30       2,500,000        0.30
 $ 0.20      5,302,500         2.48            0.20       5,302,500        0.20
            ----------                       ------      ----------      ------
            11,902,500                       $ 0.50      11,902,500      $ 0.50
            ==========                       ======      ==========      ======

NOTE 5 - 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, Mauritius, and has a registered mailing address in the United States of
America. All of the Company's assets are located in Brazil.

                                     - 18 -
<PAGE>

                          TRANSAX INTERNATIONAL LIMITED
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2007

NOTE 5 - FOREIGN OPERATIONS (continued)

                                                 Nine months ended September 30,
                                                     2007               2006
                                                 -----------        -----------
Net revenues to unaffiliated customers:
         Brazil .........................        $ 3,852,538        $ 3,131,832
                                                 -----------        -----------
Operating Expenses:
         Brazil .........................          3,335,991          2,574,663
         USA ............................            533,953          1,036,568
         Australia ......................                  -              2,408
         Mauritius ......................             28,945             70,894
                                                 -----------        -----------
                                                   3,898,889          3,684,533
                                                 -----------        -----------
Income (loss) from operations ...........            (46,351)          (552,701)
                                                 -----------        -----------
Other income (expenses) and income taxes:
         Brazil .........................           (483,279)          (197,721)
         USA ............................            692,271         (1,867,246)
         Australia ......................             (9,799)                 -
                                                 -----------        -----------
                                                     199,193         (2,064,967)
                                                 -----------        -----------
Net income (loss) as reported ...........        $   152,842        $(2,617,668)
                                                 -----------        -----------

NOTE 6 - GOING CONCERN

Since inception, the Company has incurred cumulative net losses of $12,765,375,
and has a stockholders' deficit of $3,369,129 at September 30, 2007 and a
working capital deficit of $4,116,479. Since its inception, the Company has
funded operations through debt 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. Further, since fiscal 2000, the Company has been
deficient in the payment of Brazilian payroll taxes and Social Security taxes.
At September 30, 2007, these deficiencies (including interest and fines)
amounted to approximately $1,013,000. This payroll liability is included as part
of the accounts payable and accrued expenses (short-term and long-term) 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.

NOTE 7 - SUBSEQUENT EVENT

On October 7, 2007, Series A preferred stockholders converted 550 shares of
Series A Preferred Stock into 1,250,000 shares of common stock.

                                     - 19 -
<PAGE>

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

This report on Form 10-QSB contains forward-looking statements that are subject
to risks and uncertainties that could cause actual results to differ materially
from those discussed in the forward-looking statements and from historical
results of operations. Among the risks and uncertainties which could cause such
a difference are those relating to our dependence upon certain key personnel,
our ability to manage our growth, our success in implementing the business
strategy, our success in arranging financing where required, and the risk of
economic and market factors affecting us or our customers. Many of such risk
factors are beyond the control of the Company and its management.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2007 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2006

For the nine months ended September 30, 2007, we generated $3,852,538 in
revenues compared to $3,131,832 in revenues generated for the nine months ended
September 30, 2006, (an increase of $720,706, or 23%). The increase in revenues
is due to an increase in installations of our software and/or hardware devices
containing our software at the healthcare providers' locations in Brazil. Upon
installation, we begin the processing of applications submitted by healthcare
providers for approval of patients for healthcare services from the insurance
carrier. We charge for these services on a per transaction basis. We undertook
6.40 million "real time" transactions during the nine months ended September 30,
2007 compared to 5.80 million during the nine months ended September 30, 2006.

For the nine months ended September 30, 2007, we incurred operating expenses in
the aggregate amount of $3,898,889 compared to $3,684,533 incurred during the
nine months ended September 30, 2006, (an increase of $214,356, or 5.8%). The
increase in operating expenses incurred for the nine months ended September 30,
2007 compared to operating expenses incurred during the nine months ended
September 30, 2006 resulted from: (i) an increase of $329,837, or 27.2%, in cost
of product support services; (ii) a decrease of $56,374, or 8%, in compensation
and related benefits associated with our MedLink operations; (iii) a decrease of
$62,959, or 39.5%, in professional fees relating to a decrease in legal and
accounting costs associated with the filing of a registration statement on Form
SB-2 in the 2006 period and a decrease in legal fees; (iv) a decrease of
$99,056, or 25.9%, in management and consulting fees-related parties due to a
decrease in the use of management and a director/consultant needed to handle our
investment relations activities; (v) a decrease in investor relations of
$209,863, or 88.2%, primarily resulting from recording stock-based consulting
expense from the issuance of common stock and warrants to a consultant for
investor relations services during the 2006 period amounting to $174,166
compared to $0 in the 2007 period; (vi) an increase of $213,013, or 26.2%, in
general and administrative expenses resulting from an increase in operating
costs associated with increased operations and increased travel expenses; and
(vii) an increase in depreciation and amortization expense of $99,758, or 57.7%.

We reported a loss from operations of $46,351 for the nine months ended
September 30, 2007 as compared to a loss from operations of $552,701 for the
nine months ended September 30, 2006, a decrease of $506,350, or 91.6%. Although
there can be no assurances, we anticipate that during fiscal year 2007, our
ongoing marketing efforts and product roll-out will result in an increase in our
net sales from those reported during fiscal year 2006. To support these
increased sales, we anticipate that our operating expenses will also increase
during fiscal year 2007 as compared to fiscal year 2006. We are, however, unable
to predict at this time the amount of any such increase in operating expenses.

                                     - 20 -
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (continued)

For the nine months ended September 30, 2007, we recorded other income in the
aggregate of $344,655 as compared to other expenses of $2,064,967 incurred
during the nine months ended September 30, 2006. The change in other income
(expenses) for the nine months ended September 30, 2007 compared to the nine
months ended September 30, 2006 resulted from: (i) the recording of
miscellaneous other income of $14,749 in fiscal 2007 due to the recording of
certain employee tax and other tax credits due to us as compared other
miscellaneous expenses of $32,660 in fiscal 2006; (ii) a decrease of $122,668,
or 26.4%, in interest expense, which represents a decrease in interest incurred
on our outstanding debt; (iii) the recording of a gain from derivative
liabilities of $738,898 for the nine months ended September 30, 2007 as compared
to a loss from derivative liabilities of $1,215,680 for the nine months ended
September 30 ,2006, which relates to the revaluation of the embedded conversion
feature and the related warrants issued in connection with our Series A
Preferred Stock and debenture payable; (iv) a decrease of $153,671 to $-0- in
debt settlement and offering costs, which relates to the issuance of warrants to
the debenture holder and amortization of certain debt offering costs in the 2006
period; (v) an increase of $11,049, or 100%, in loss on foreign exchange; (vi)
an increase in interest expense - related parties of $17,655, or 65%, due to the
recording of loan fees of $12,756 pursuant to a note agreement with our CEO in
the 2007 period; and (vii) a decrease in registration rights penalties of
$160,000.

For the nine months ended September 30, 2007, we recorded income tax expense of
$145,462 related to net earnings from the Medlink operations in Brazil as
compared to $0, a loss from operations incurred during the nine months ended
September 30, 2006.

Our net income for the nine months ended September 30, 2007 was $152,842
compared to a net loss of $(2,617,668) for the nine months ended September 30,
2006.

For the nine months ended September 30, 2007, we recorded a deemed preferred
stock dividend of $83,790 compared to $1,662,444 for the nine months ended
September 30, 2006, which related to our Series A Preferred Stock. This non-cash
item is related to the embedded conversion feature of those securities and the
fair value of the warrants issued with those securities.

We reported net income available to common shareholders of $69,052 for the nine
months ended September 30, 2007 as compared to a net loss attributable to common
shareholders of $(4,280,112) for the nine months ended September 30, 2006. This
translates to an overall basic and dilutive per-share loss available to
shareholders of $0.00 and a per-share loss available to shareholders of $0.14
for the nine months ended September 30, 2007 and 2006, respectively.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2007, our current assets were $904,785 and our current
liabilities were $5,021,264, which resulted in a working capital deficit of
$4,116,479. As of September 30, 2007, our total assets were $2,112,254
consisting of: (i) $47,117 in cash; (ii) $306,720 in prepaid expenses and other
current assets; (iii) $550,948 in accounts receivable; (iv) $406,048 in net
software development costs; (v) $796,621 in net property and equipment; and (vi)
$4,800 in other assets.

                                     - 21 -
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (continued)

As of September 30, 2007, our total liabilities were $5,481,383 consisting of:
(i) $2,532,443 in long-term and current portion of accounts payable and accrued
expenses; (ii) $371,466 due to related parties; (iii) $233,328 in convertible
loans and interest to related party; (iv) $276,945 in loans payable and interest
due to related party; (v) $225,000 in convertible debentures payable; (vi)
$441,677 in long-term and current portion of loans payable; (vii) $137,165 in
warrant liability; and (viii) $1,263,359 in convertible features of the
debentures derivative liability. As at September 30, 2007, our current
liabilities were $5,021,264 compared to $5,087,019 at December 31, 2006, a
decrease of $65,755, due primarily to the revaluation of warrant and convertible
feature derivative liabilities offset by an increase in related party loans
payable.

Stockholders' deficit decreased from $3,528,064 at December 31, 2006 to
$3,369,129 at September 30, 2007 principally due to the Company's net earnings
for the nine month period ended September 30, 2007.

For the nine months ended September 30, 2007, net cash flow provided by
operating activities was $307,359 compared to net cash used in operating
activities of $595,657 for the nine months ended September 30, 2006. The change
in cash flows provided by or used in operating activities is principally due to
a decrease in net losses for the nine months ended September 30, 2007 compared
to the 2006 period. Additionally, during the nine months ended September 30,
2007, our accounts payable and accrued expenses have increased compared to the
same period in 2006.

Net cash flows used in investing activities amounted to $291,122 for the nine
months ended September 30, 2007 compared to $449,297 for the nine months ended
September 30, 2006. For the nine months ended September 30, 2007 and 2006, we
capitalized software development costs and during the 2006 period, we acquired
additional equipment for our hardware and software installations versus the 2007
period.

Net cash flows used in financing activities for the nine months ended September
30, 2007 were $45,205 compared to net cash provided by financing activities of
$1,258,477 for the nine months ended September 30, 2006. During the nine months
ended September 30, 2007, we received proceeds of $80,000 from related party
loans and repaid third party loans of $125,205. During the nine months ended
September 30, 2006, we received net proceeds from the sale of shares of Series A
Preferred Stock of $1,223,734 and proceeds from loans in the amount of $136,032,
offset by repayment of capital lease obligations of $16,289 and the repayment of
related party loans of $85,000.

PLAN OF OPERATIONS

Since our inception, we have funded operations through debt and equity
investments in order to meet our strategic objectives. Our future operations are
dependent upon external funding and our 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 our business
objectives including anticipated cash needs for working capital, for a
reasonable period of time. However, there can be no assurance that we will be
able to obtain sufficient funds to continue the development of our software
products and distribution networks.

                                     - 22 -
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (continued)

Certain negative covenants in the Investment Agreement with Cornell could
substantially impact our ability to raise funds from alternative sources in the
future. For example, so long as any Series A Preferred Shares are outstanding,
we shall not, without the prior written consent of Cornell (a) directly or
indirectly consummate any merger, reorganization, restructuring, reverse stock
split consolidation, sale of all or substantially all of our assets or any
similar transaction or related transactions; (b) incur any indebtedness for
borrowed money or become a guarantor or otherwise contingently liable for any
such indebtedness except for trade payables or purchase money obligations
incurred in the ordinary course of business; (c) file any other registration
statements on any form (including but not limited to forms S-1, SB-2, S-3 and
S-8); (d) issue or sell shares of common stock or preferred stock without
consideration or for a consideration per share less than the bid price of the
common stock determined immediately prior to its issuance or issue any preferred
stock, warrant, option, right, contract, call, or other security or instrument
granting the holder thereof the right to acquire common stock without
consideration or for a consideration per share less than the bid price of the
common stock determined immediately prior to the issuance of such convertible
security or (e) enter into any security instrument granting the holder a
security interest in any and all of our assets.

Certain negative covenants in the Securities Purchase Agreement with Grimes
could substantially affect our ability to raise funds from alternative sources
in the future. For example, for as long as the convertible debenture remains
outstanding and without the written consent of the debenture holder, we (a)
shall not directly or indirectly consummate any merger, reorganization,
restructuring, reverse stock split consolidation, sale of all or substantially
all of our assets or any similar transaction or related transactions; (b) shall
not issue or sell shares of common stock or preferred stock without
consideration or for a consideration per share less than the bid price of the
common stock determined immediately prior to its issuance or issue any warrant,
option, right, contract, call, or other security or instrument granting the
holder thereof the right to acquire common stock without consideration or for a
consideration per share less than the bid price of the common stock determined
immediately prior to the issuance of such convertible security; (c) shall not
enter into any security instrument granting the holder a security interest in
any or all of our assets; (d) shall not file any registration statement on Form
S-8 except we may file one registration statement on Form S-8 for up to
2,500,000 shares of common stock and provided however, anyone receiving shares
pursuant to such permitted Form S-8 registration shall be restricted from
selling such shares for a period of ninety (90) days after the registration
statement becomes effective and (e) shall not, and shall cause each of its
subsidiaries not to, enter into, amend, modify or supplement, or permit any
subsidiary to enter into, amend, modify or supplement any agreement,
transaction, commitment, or arrangement with any of its subsidiary's officers,
directors, person who were officers or directors at any time during the previous
two years, stockholders who beneficially own five percent (5%) or more of our
common stock, or affiliates (as defined in the Securities Purchase Agreement) or
with any individual related by blood, marriage, or adoption to any such
individual or with any entity in which any such entity or individual owns a five
percent (5%) or more beneficial interest, except for (i) customary employment
arrangements and benefit programs on reasonable terms, (ii) any investment in
one of our Affiliates, (iii) any agreement, transaction, commitment, or
arrangement on an arms-length basis on terms no less favorable than terms which
would have been obtainable from a person other than such related party and (iv)
any agreement transaction, commitment, or arrangement which is approved by a
majority of our disinterested directors.

                                     - 23 -
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (continued)

As of the date of this Quarterly Report, there is substantial doubt regarding
our ability to continue as a going concern as we have not generated sufficient
cash flow to fund our business operations and material commitments. Our future
success and viability, therefore, are dependent upon our ability to develop,
provide and market our information network solutions to healthcare providers,
health insurance companies and other end-users, and the continuing ability to
generate capital financing. We are optimistic that we will be successful in our
business operations and capital raising efforts; however, there can be no
assurance that we 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 us and our shareholders.

We anticipate an increase in operating expenses over the next three years to pay
costs associated with such business operations. We may need to raise additional
funds. We may finance these expenses with further issuances of our common stock.
We believe that any anticipated private placements of equity capital and debt
financing, if successful, may be adequate to fund our operations over the next
twelve months. Thereafter, we expect we will need to raise additional capital to
meet long-term operating requirements. If we raise additional funds through the
issuance of equity or convertible debt securities other than to current
shareholders, the percentage ownership of our current shareholders would be
reduced, and such securities might have rights, preferences or privileges senior
to our 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 with acceptable terms, we may not be able to conduct our
business operations successfully. This eventuality could significantly and
materially restrict our overall business operations.

Based upon a twelve (12) month work plan proposed by management, it is
anticipated that such a work plan would require approximately $1,000,000 to
$3,000,000 of financing designed to fund various commitments and business
operations

MATERIAL COMMITMENTS

CONVERTIBLE LOANS - RELATED PARTY

A significant material liability for us for fiscal year 2007 is the aggregate
principal amount of $175,000 and $58,328 in accrued interest due and owing to a
related party in accordance with two convertible promissory notes (collectively,
the "Convertible Promissory Notes"). During March 2005, we modified the terms of
the Convertible Promissory Notes. Accordingly, the Convertible Promissory Notes
were due prior to June 30, 2007 and are convertible into shares of our common
stock at $0.125 per share and upon conversion, a warrant per share to purchase
our common stock at $0.25 per share for a period of two years. As of the date of
this quarterly report, the balance of these loans and the related interest has
not been paid. As of September 30, 2007 these loans are in default and are
currently being renegotiated with the lender.

                                     - 24 -
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (continued)

LOAN - RELATED PARTY

A significant material liability for us for fiscal year 2007 is the aggregate
amount of $276,945 in principal and interest due and owing to Stephen Walters,
our Chief Executive Officer (the "Loans"). The Loans are evidenced by a
promissory note with interest rates of 9.6% to 12% per annum. Approximately
$164,000 of this balance is repayable during March 2008. Additionally, during
2007, we borrowed $80,000 from Mr. Walters that is due on demand. As of the date
of this report, the loans have not been repaid.

CONSULTING AGREEMENT

A significant and estimated material liability for us for fiscal year 2007 is
the aggregate amount of $330,456 due and owing to Stephen Walters. In accordance
with the terms of an agreement effective July 1, 2007, we pay monthly to Mr.
Walters $17,500 as compensation for managerial and consulting services he
provides.

ACCRUED TAXES AND RELATED EXPENSES

A significant and estimated material liability for us for fiscal year 2007 is
the aggregate amount of approximately $1,013,000 due and owing for Brazilian
payroll taxes and Social Security taxes.

Effective April 1, 2004, we entered into a payment program with the Brazilian
authorities whereby the Social Security ("INSS") taxes due and applicable
penalties and interests will be repaid over a period of up to sixty months. We
continue to make periodic payments.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve
months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this quarterly report, we do not have any off-balance sheet
arrangements that have or are reasonably like to have a current or future effect
on our 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 us is a party, under which we
have: (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.

                                     - 25 -
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (continued)

CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with
generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue and expenses. These
estimates and assumptions are affected by management's application of accounting
policies. Critical accounting policies for Transax International Limited include
the useful lives of property and equipment, accounting for stock based
compensation, accounting for derivatives, and revenue recognition.

We review the carrying value of property and equipment for impairment at least
annually or whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of long-lived
assets is measured by the comparison of its carrying amount to the undiscounted
cash flows that the asset or asset group is expected to generate. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the property, if any, exceeds its
fair market value.

Under the criteria set forth in SFAS No. 86, "Accounting for the Costs of
Computer Software to be Sold, Leased or Otherwise Marketed", capitalization of
software development costs begins upon the establishment of technological
feasibility of the software. The establishment of technological feasibility and
the ongoing assessment of the recoverability of these costs require considerable
judgment by management with respect to certain external factors, including, but
not limited to, anticipated future gross product revenues, estimated economic
life, and changes in software and hardware technology. Capitalized software
development costs are amortized utilizing the straight-line method over the
estimated economic life of the software not to exceed three years. We regularly
review the carrying value of software development assets and a loss is
recognized when the unamortized costs are deemed unrecoverable based on the
estimated cash flows to be generated from the applicable software.

Accounting for Stock Based Compensation - We use the provisions of Financial
Accounting Standards Board Statement of Financial Accounting Standard ("SFAS")
No. 123(R), "Share-Based Payments," which establishes the accounting for
employee stock-based awards. Under the provisions of SFAS No.123(R), stock-based
compensation is measured at the grant date, based on the calculated fair value
of the award, and is recognized as an expense over the requisite employee
service period (generally the vesting period of the grant). We adopted SFAS No.
123(R) using the modified prospective method.

Accounting for Derivatives - We evaluate our convertible debt, options, warrants
or other contracts to determine if those contracts or embedded components of
those contracts qualify as derivatives to be separately accounted for under
Statement of Financial Accounting Standards 133 "Accounting for Derivative
Instruments and Hedging Activities" and related interpretations including EITF
00-19 "Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company's Own Stock". The result of this accounting
treatment is that the fair value of the embedded derivative is marked-to-market
at each balance sheet date and recorded as a liability.

                                     - 26 -
<PAGE>

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

Revenue Recognition - Our revenues which do not require any significant
production, modification or customization for the Company's targeted customers
and do not have multiple elements, are 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.

Substantially all of our revenues are derived from the processing of
applications by healthcare providers for approval of patients for healthcare
services from insurance carriers. Our software or hardware devices containing
our software are installed at the healthcare provider's location. We offer
transaction services to authorize and adjudicate identity of the patient and
obtain "real time" approval for any necessary medical procedure from the
insurance carrier. Our transaction-based solutions provide remote access for
healthcare providers to connect with contracted insurance carriers. Transaction
services are provided through contracts with insurance carriers and others,
which specify the services to be utilized and the markets to be served. Our
clients are charged for these services on a per transaction basis. Pricing
varies depending on the type of transactions being processed under the terms of
the contract for which services are provided. Transaction revenues are
recognized in the period in which the transactions are performed.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes,"
an interpretation of FASB Statement No. 109 ("SFAS 109"). The interpretation
clarifies the accounting for uncertainty in income taxes recognized in an
entity's financial statements in accordance with SFAS 109, "Accounting for
Income Taxes." It prescribes a recognition threshold and measurement attribute
for financial statement recognition and measurement of a tax position taken or
expected to be taken on a tax return. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The adoption of this interpretation did not
have an impact on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157), which provides guidance for how companies should measure fair value when
required to use a fair value measurement for recognition or disclosure purposes
under generally accepted accounting principle (GAAP). SFAS 157 is effective for
fiscal years beginning after November 15, 2007. We are currently assessing what
effect, if any, the adoption of SFAS 157 will have on our financial statements.

In December 2006, FASB Staff Position, ("FSP"), EITF 00-19-2, "Accounting for
Registration Payment Arrangements," was issued. The FSP specifies that the
contingent obligation to make future payments or otherwise transfer
consideration under a registration payment arrangement, whether issued as a
separate agreement or included as a provision of a financial instrument or other
agreement, should be separately recognized and measured in accordance with SFAS
No. 5, "Accounting for Contingencies." We believe that our current accounting is
consistent with the FSP. Accordingly, adoption of the FSP had no effect on our
financial statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities, Including an Amendment of FASB
Statement No. 115", under which entities will now be permitted to measure many
financial instruments and certain other assets and liabilities at fair value on
an instrument-by-instrument basis. This Statement is effective as of the
beginning of an entity's first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provisions of SFAS 157. We are currently assessing what effect, if any, the
adoption of SFAS 159 will have on our financial statements.

                                     - 27 -
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

We maintain "disclosure controls and procedures," as such term is defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"),
that are designed to ensure that information required to be disclosed in our
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission rules and
forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer, ("CEO"), and Chief Financial
Officer, ("CFO"), as appropriate, to allow timely decisions regarding required
disclosure. We conducted an evaluation (the "Evaluation"), under the supervision
and with the participation of our CEO and CFO, of the effectiveness of the
design and operation of our disclosure controls and procedures ("Disclosure
Controls") as of the end of the period covered by this report pursuant to Rule
13a-15 of the Exchange Act. The evaluation of our disclosure controls and
procedures included a review of the disclosure controls' and procedures'
objectives, design, implementation and the effect of the controls and procedures
on the information generated for use in this report. In the course of our
evaluation, we sought to identify data errors, control problems or acts of fraud
and to confirm the appropriate corrective actions, if any, including process
improvements, were being undertaken. Our CEO and our CFO concluded that, as of
the end of the period covered by this report, our disclosure controls and
procedures were effective and were operating at the reasonable assurance level.

Our management, including our CEO and CFO, do not expect that our disclosure
controls and internal controls will prevent all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints and the benefits of controls must be considered relative to
their costs.

Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of
fraud, if any, within our Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management or board override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

                           PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

         None

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

         None

Item 3 - Defaults Upon Senior Securities

         None

                                     - 28 -
<PAGE>

Item 4 - Submissions of Matters to a Vote of Security Holders

         None

Item 5 - Other Information

         None

Item 6 - Exhibits

         10.1     Management Consulting Services Agreement dated July 1, 2007
                  among Transax International Limited, Transax Limited, and
                  Carlingford Investments Limited

         31.1     Certification of the Chief Executive Officer pursuant to
                  Section 302 of the Sarbanes- Oxley Act of 2002

         31.2     Certification of the Chief Financial Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

         32.1     Certification of Chief Executive Officer Certification
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

         32.2     Certification of Chief Financial Officer Certification
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



                                   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


         Date: November 19, 2007        By: /s/ Stephen Walters
                                            -------------------
                                            Stephen Walters
                                            Chief Executive Officer


         Date: November 19, 2007        By: /s/ Adam Wasserman
                                            ------------------
                                            Adam Wasserman
                                            Principal Financial and
                                            Accounting Officer

                                     - 29 -