UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)

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

      For the period ended September 30, 2009

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

      For the transition period from ______ to _______

                           COMMISSION FILE NO. 0-27845

                          TRANSAX INTERNATIONAL LIMITED
                          -----------------------------
                (Name of registrant as specified in its charter)

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

          950 S. Pine Island Rd, Suite A-150, Plantation, Florida 33324
          -------------------------------------------------------------
                    (Address of principal executive offices)

                                 (888) 317-6984
                                 --------------
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

         Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]

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

Large accelerated filer [ ]                        Accelerated filer         [ ]
Non-accelerated filer   [ ]                        Smaller reporting company [X]

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

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the most practicable date: 87,402,089 shares of
common stock are issued and outstanding as of November 20, 2009.

<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
                                    FORM 10-Q
                               SEPTEMBER 30, 2009

                                TABLE OF CONTENTS
                                                                            Page
                                                                             No.
                                                                            ----
                         PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements:
           Consolidated Balance Sheets -
             As of September 30, 2009 (Unaudited) and December 31, 2008 ....   3
           Consolidated Statements of Operations -
             For the Three and Nine Months Ended September 30, 2009 and
             2008 (unaudited) ..............................................   4
           Consolidated Statements of Cash Flows -
             For the Nine Months Ended September 30, 2009 and 2008
             (unaudited) ...................................................   5
           Notes to Unaudited Consolidated Financial Statements ............   6
Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations. ......................................  24
Item 3.  Quantitative and Qualitative Disclosures About Market Risk. .......  35
Item 4   Controls and Procedures. ..........................................  35
                          PART II - OTHER INFORMATION
Item 1.  Legal Proceedings. ................................................  37
Item 1A. Risk Factors. .....................................................  37
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds. ......  37
Item 3.  Defaults Upon Senior Securities. ..................................  37
Item 4.  Submission of Matters to a Vote of Security Holders. ..............  37
Item 5.  Other Information. ................................................  37
Item 6.  Exhibits. .........................................................  37

                           FORWARD LOOKING STATEMENTS

         This report contains forward-looking statements regarding our business,
financial condition, results of operations and prospects. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates"
and similar expressions or variations of such words are intended to identify
forward-looking statements, but are not deemed to represent an all-inclusive
means of identifying forward-looking statements as denoted in this report.
Additionally, statements concerning future matters are forward-looking
statements.

         Although forward-looking statements in this report reflect the good
faith judgment of our management, such statements can only be based on facts and
factors currently known by us. Consequently, forward-looking statements are
inherently subject to risks and uncertainties and actual results and outcomes
may differ materially from the results and outcomes discussed in or anticipated
by the forward-looking statements. Factors that could cause or contribute to
such differences in results and outcomes include, without limitation, those
specifically addressed under the headings "Risks Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in our
annual report on Form 10-K, in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in this Form 10-Q and in other
reports that we file with the SEC. You are urged not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. We file reports with the SEC. The SEC maintains a website (www.sec.gov)
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC, including us. You can
also read and copy any materials we file with the SEC at the SEC's Public
Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain
additional information about the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330.

         We undertake no obligation to revise or update any forward-looking
statements in order to reflect any event or circumstance that may arise after
the date of this report, except as required by law. Readers are urged to
carefully review and consider the various disclosures made throughout the
entirety of this Quarterly Report, which are designed to advise interested
parties of the risks and factors that may affect our business, financial
condition, results of operations and prospects.

                                        2
<PAGE>
<TABLE>
                                TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
                                          CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                                                  SEPTEMBER 30,  DECEMBER 31,
                                                                                      2009           2008
                                                                                  ------------   ------------
                                                                                   (Unaudited)
<S>                                                                               <C>            <C>
                                     ASSETS

CURRENT ASSETS:
  Cash .........................................................................  $     40,254   $     25,676
  Accounts receivable, net .....................................................       428,407        374,539
  Prepaid expenses and other current assets ....................................       329,375        279,080
                                                                                  ------------   ------------

     TOTAL CURRENT ASSETS ......................................................       798,036        679,295

SOFTWARE DEVELOPMENT COSTS, net ................................................        56,169        147,896
PROPERTY AND EQUIPMENT, net ....................................................       821,019        456,842
                                                                                  ------------   ------------

     TOTAL ASSETS ..............................................................  $  1,675,224   $  1,284,033
                                                                                  ============   ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Current portion of loans payable .............................................  $    848,373   $    663,854
  Current portion of capital lease obligations .................................             -         30,943
  Accounts payable and accrued expenses ........................................     3,534,782      1,748,187
  Deferred gain on sale of minority interest in subsidiary .....................       937,700        937,700
  Due to related parties .......................................................       499,995        303,126
  Warrant liability ............................................................         6,113          3,321
  Convertible feature liability ................................................     1,193,551      1,007,472
  Loans payable - related party ................................................       399,709        306,218
  Convertible loan - related party .............................................       215,386        259,679
                                                                                  ------------   ------------

     TOTAL CURRENT LIABILITIES .................................................     7,635,609      5,260,500

LOANS PAYABLE, NET OF CURRENT PORTION ..........................................       118,764              -
CAPITAL LEASE OBLIGATION, NET OF CURRENT PORTION ...............................             -         37,102
ACCOUNTS PAYABLE AND ACCRUED EXPENSES, NET OF CURRENT PORTION ..................       218,955        160,840
                                                                                  ------------   ------------

     TOTAL LIABILITIES .........................................................     7,973,328      5,458,442
                                                                                  ------------   ------------

STOCKHOLDERS' DEFICIT:
  Series A convertible preferred stock, no par value; 16,000 shares authorized;
   14,410 and 14,460 shares issued and outstanding at September 30, 2009 and
   December 31, 2008, respectively; liquidation preference $1,441,000 at
   September 30, 2009 ..........................................................     1,325,039      1,330,039
  Common stock $.00001 par value; 100,000,000 shares authorized;
   87,402,089 and 52,368,756 shares issued and outstanding at September 30, 2009
   and December 31, 2008, respectively .........................................           874            524
  Paid-in capital ..............................................................     8,474,832      8,405,984
  Accumulated deficit ..........................................................   (16,350,071)   (14,410,077)
  Accumulated other comprehensive income .......................................       251,222        499,121
                                                                                  ------------   ------------

     TOTAL STOCKHOLDERS' DEFICIT ...............................................    (6,298,104)    (4,174,409)
                                                                                  ------------   ------------

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT ...............................  $  1,675,224   $  1,284,033
                                                                                  ============   ============

            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
                                                       (Unaudited)
<CAPTION>
                                                            FOR THE THREE MONTHS ENDED      FOR THE NINE MONTHS ENDED
                                                                   SEPTEMBER 30,                   SEPTEMBER 30,
                                                          -----------------------------   -----------------------------
                                                               2009            2008            2009            2008
                                                          -------------   -------------   -------------   -------------
<S>                                                       <C>             <C>             <C>             <C>
REVENUES ...............................................  $   1,155,060   $   1,774,551   $   3,201,083   $   4,986,507
                                                          -------------   -------------   -------------   -------------

OPERATING EXPENSES:
  Cost of product support services .....................        604,619         738,657       1,529,443       1,838,302
  Compensation and related benefits ....................        452,958         442,008       1,236,464       1,252,684
  Professional fees ....................................         10,785          16,687          51,406          94,186
  Management and consulting fees - related parties .....         64,085          74,985         199,104         229,426
  Investor relations ...................................              -           1,000               -           1,000
  Depreciation and amortization ........................        149,156          87,593         306,873         261,012
  General and administrative ...........................        322,151         504,664         887,658       1,377,122
                                                          -------------   -------------   -------------   -------------

     TOTAL OPERATING EXPENSES ..........................      1,603,754       1,865,594       4,210,948       5,053,732
                                                          -------------   -------------   -------------   -------------

LOSS FROM OPERATIONS ...................................       (448,694)        (91,043)     (1,009,865)        (67,225)
                                                          -------------   -------------   -------------   -------------

OTHER INCOME (EXPENSES):
  Foreign currency exchange gain (loss) ................         (8,207)         15,536         (13,428)          3,219
  Gain (loss) from derivative liabilities ..............      2,416,786          97,524        (193,071)        309,166
  Interest expense,net .................................       (164,717)         24,956        (692,860)       (238,612)
  Interest expense - related party .....................        (13,347)         (8,379)        (30,770)        (31,404)
                                                          -------------   -------------   -------------   -------------

     TOTAL OTHER INCOME (EXPENSES) .....................      2,230,515         129,637        (930,129)         42,369
                                                          -------------   -------------   -------------   -------------

INCOME (LOSS) BEFORE INCOME TAXES ......................      1,781,821          38,594      (1,939,994)        (24,856)

PROVISION FOR INCOME TAXES .............................              -          (3,852)              -        (101,986)
                                                          -------------   -------------   -------------   -------------

NET INCOME (LOSS) ......................................      1,781,821          34,742      (1,939,994)       (126,842)

CUMULATIVE PREFERRED STOCK DIVIDENDS ...................        (25,220)        (25,556)        (75,660)        (77,476)
                                                          -------------   -------------   -------------   -------------

NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS .....  $   1,756,601   $       9,186   $  (2,015,654)  $    (204,318)
                                                          =============   =============   =============   =============

COMPREHENSIVE INCOME (LOSS):
  NET INCOME (LOSS) ....................................  $   1,781,821   $      34,742   $  (1,939,994)  $    (126,842)

  OTHER COMPREHENSIVE INCOME (LOSS)
     Unrealized foreign currency translation gain (loss)       (143,977)        274,278        (247,899)        518,730
                                                          -------------   -------------   -------------   -------------

  COMPREHENSIVE INCOME (LOSS) ..........................  $   1,637,844   $     309,020   $  (2,187,893)  $     391,888
                                                          =============   =============   =============   =============

NET INCOME (LOSS) PER COMMON SHARE:
  BASIC ................................................  $        0.02   $           -   $       (0.03)  $           -
                                                          =============   =============   =============   =============
  DILUTED ..............................................  $        0.02   $           -   $       (0.03)  $           -
                                                          =============   =============   =============   =============

WEIGHTED AVERAGE SHARES OUTSTANDING:
  BASIC ................................................     75,336,872      46,534,216      62,221,015      41,690,594
                                                          =============   =============   =============   =============
  DILUTED ..............................................    100,000,000     100,000,000      62,221,015      41,690,594
                                                          =============   =============   =============   =============

                 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
                                            (Unaudited)
<CAPTION>
                                                                             FOR THE NINE MONTHS
                                                                             ENDED SEPTEMBER 30,
                                                                         -------------------------
                                                                             2009          2008
                                                                         -----------   -----------
<S>                                                                      <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ..............................................................  $(1,939,994)  $  (126,842)
Adjustments to reconcile net loss to net cash provided by (used in)
  operating activities:
     Depreciation and amortization ....................................      306,873       261,012
     Amortization of software maintenance costs .......................       91,727       158,197
     Deposit on sale of minority interest  applied to professional fees            -       (20,000)
     Loss (gain) from derivative liabilities ..........................      193,071      (309,166)
     Foreign currency exchange gain ...................................       13,428             -
Changes in assets and liabilities:
     Accounts receivable ..............................................       54,163      (237,078)
     Prepaid expenses and other current assets ........................       31,609      (111,853)
     Other assets .....................................................            -         2,190
     Accounts payable and accrued expenses ............................    1,170,789       (58,861)
     Accrued interest payable, related party ..........................       30,770        28,186
     Due to related parties ...........................................      196,869      (100,936)
     Accounts payable and accrued expenses  - long-term ...............        6,411       (79,437)
                                                                         -----------   -----------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES ...................      155,716      (594,588)
                                                                         -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of minority interest .............................            -       937,700
  Acquisition of property and equipment ...............................     (216,780)     (497,924)
                                                                         -----------   -----------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ...................     (216,780)      439,776
                                                                         -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from loans .................................................       80,252        84,200
  Proceeds from loans payable - related party .........................       65,000             -
  Repayment of convertible debt .......................................            -      (225,000)
  Payment of  capital lease obligations ...............................      (75,855)            -
                                                                         -----------   -----------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ...................       69,397      (140,800)
                                                                         -----------   -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH ...............................        6,245       280,464
                                                                         -----------   -----------

NET INCREASE (DECREASE) IN CASH .......................................       14,578       (15,148)

CASH, BEGINNING OF YEAR ...............................................       25,676       175,938
                                                                         -----------   -----------

CASH, END OF PERIOD ...................................................  $    40,254   $   160,790
                                                                         ===========   ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid for interest ..............................................  $   346,752   $   234,448
                                                                         ===========   ===========
  Cash paid for income taxes ..........................................  $         -   $         -
                                                                         ===========   ===========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Series A preferred stock converted to common stock ..................  $     5,000   $    81,300
                                                                         ===========   ===========
  Derivative liability reclassified to equity upon conversion .........  $     4,200   $   300,693
                                                                         ===========   ===========
  Issuance of common stock for accrued interest - related party .......  $    60,000   $         -
                                                                         ===========   ===========

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

                                                 5
</TABLE>
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

Transax International Limited ("TNSX" or the "Company") was incorporated in the
State of Colorado in 1987. The Company currently trades on the OTC Bulletin
Board under the symbol "TNSX" and the Frankfurt and Berlin Stock Exchanges under
the symbol "TX6".

The Company, primarily through its 55% owned subsidiary, Medlink Conectividade
em Saude Ltda ("Medlink Conectividade") is an international provider of
information network solutions specifically designed for healthcare providers and
health insurance companies. The Company's MedLink Solution enables the real time
automation of routine patient eligibility, verification, authorizations, claims
processing and payment functions. The Company has offices located in Plantation,
Florida and Rio de Janeiro, Brazil.

On March 26, 2008, the Company executed a stock purchase and option agreement
(the "Agreement") with Engetech, Inc., a Turks & Caicos corporation (the
"Buyer") controlled and owned 20% by Americo de Castro, director and President
of Medlink Conectividade, and 80% by Flavio Gonzalez Duarte or assignees. In
accordance with the terms and provisions of the Agreement, the Company sold to
the Buyer 45% of the total issued and outstanding stock of its wholly-owned
subsidiary, Transax Limited, which owns one hundred percent of the total issued
and outstanding shares of: (i) Medlink Conectividade, and (ii) Medlink
Technologies, Inc., ("MTI") a Mauritius corporation (See Note 8).

Principles of Consolidation

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 55% owned subsidiary, Transax
Limited, and Transax Limited's wholly-owned subsidiaries Medlink Conectividade,
and MTI. All significant intercompany balances and transactions have been
eliminated in the consolidated financial statements.

Management acknowledges its responsibility for the preparation of the
accompanying interim consolidated financial statements, which reflect all
adjustments, consisting of normal recurring adjustments, considered necessary,
in its opinion, for a fair statement of its consolidated financial position and
the results of its operations for the interim period presented. These
consolidated financial statements should be read in conjunction with the summary
of significant accounting policies and notes to consolidated financial
statements included in the Company's Form 10-K annual report for the year ended
December 31, 2008.

The accompanying unaudited condensed consolidated financial statements for
Transax International, Inc. and its subsidiaries have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
and Article 8-03 of Regulation S-X. Operating results for interim periods are
not necessarily indicative of results that may be expected for the fiscal year
as a whole.

Use of Estimates

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues, expenses, and the related disclosures at the date
of the financial statements and during the reporting period. Actual results
could materially differ from these estimates.

                                        6
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Significant estimates include the allowance for doubtful accounts receivable,
the estimated lives and recoverable value of property, equipment and software
development costs, and the assumptions used to calculate stock-based
compensation and derivative liabilities.

Fair Value of Financial Instruments

The Company classifies the inputs used in measuring fair value as follows:

      Level 1- inputs which include quoted prices in active markets for
      identical assets or liabilities;

      Level 2 - inputs which include observable inputs other than Level 1 inputs
      such as quoted prices for similar assets and liabilities in active
      markets, quoted prices for identical or similar assets and liabilities in
      markets that are not active, inputs other than quoted prices that are
      observable, and inputs derived from or corroborated by observable market
      data for the full term of the asset or liability; and

      Level 3 - inputs which include unobservable inputs that are supported by
      little or no market activity and that are significant to the fair value of
      the underlying asset or liability. Level 3 assets and liabilities include
      those whose fair value measurements are determined using pricing models,
      discounted cash flow methodologies or similar valuation techniques, as
      well as significant management judgment or estimation.

The carrying amounts reported in the balance sheet for cash, accounts
receivable, loans payable, accounts payable and accrued expenses, and amounts
due from related parties approximate their fair market value based on the
short-term maturity of these instruments. The Company uses Level 3 inputs to
value its derivative liabilities.

The following table provides a reconciliation of the beginning and ending
balances for the major classes of assets and liabilities measured at fair value
using significant unobservable inputs (Level 3). The following table reflects
gains and losses for the quarter for all financial assets and liabilities
categorized as Level 3 as of September 30, 2009.

    Liabilities:
    Balance of derivative liabilities as of January 1, 2009 ....  $ 1,010,793
    Reclassification of derivative liabilities to paid-in
      capital upon conversion ..................................       (4,200)
    Increase in fair value of derivative liabilities (a) .......      193,071
                                                                  -----------
    Balance of derivative liabilities as of September 30, 2009 .  $ 1,199,664
                                                                  ===========

   (a) The Company calculates the fair value of the conversion features on the
       convertible preferred stock and warrants on a quarterly basis, as these
       conversion features on the convertible preferred stock and warrants have
       been treated as a derivative liability since their initial issuance dates
       (See Note 7).

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. The Company had no
cash equivalents at September 30, 2009 and December 31, 2008.

                                        7
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION 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 its
credit risk is limited because the Company routinely assesses the financial
strength of its customers, and, based upon factors surrounding the credit risk
of its customers, establishes an allowance for uncollectible accounts and, as a
consequence, believes that its accounts receivable credit risk exposure beyond
such allowances is limited.

The Company recognizes an allowance for doubtful accounts to ensure accounts
receivable are not overstated due to uncollectability 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, 2009 and December 31, 3008, the Company's
allowance for doubtful accounts was $0.

The Company's operations are carried out in Brazil. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environment in Brazil, and by the general state of
Brazil's economy. The Company's operations in Brazil are subject to specific
considerations and significant risks not typically associated with companies in
North America. The Company's results may be adversely affected by changes in
governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion and remittance abroad, and rates and methods of
taxation, among other things.

The Company's revenues from two major customers for the nine months ended
September 30, 2009 accounted for approximately 75.4% or $2,412,000 of the
revenues. For the nine months ended September 30, 2009, these two major
customers accounted for 61.9% and 13.5% of revenues, respectively. At September
30, 2009, these two major customers accounted for 62.9% and 12.9%, respectively,
of the total accounts receivable balance outstanding. The Company's revenues
from these two major customers for the nine months ended September 30, 2008
accounted for approximately 79.9% or $3,981,700 of the revenues. For the nine
months ended September 30, 2008, these two major customers accounted for 40.8%
and 39.1% of revenues, respectively. At September 30, 2008, these same two major
customers accounted for 33.2% and 38.3%, 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. Deposits in these banks may exceed the amounts of
insurance provided on such deposits. As of September 30, 2009, bank deposits in
the United States did not exceed federally insured limits. At September 30,
2009, the Company had deposits of $38,842 in banks in Brazil which may not be
insured. Historically, we have not experienced any losses on our deposits of
cash.

Property and Equipment, net

Property and equipment, net, is stated at cost less accumulated depreciation and
amortization. Depreciation and amortization is computed generally by the
straight-line method at rates adequate to allocate the cost of applicable assets
over their estimated useful lives, which range from 2 to 10 years. Expenditures
for maintenance and repairs that do not improve or extend the lives of the
related assets are expensed as incurred, while major repairs are capitalized.

                                        8
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes
in circumstances indicate that the carrying amount of the assets may not be
fully recoverable. The Company recognizes an impairment loss when the sum of
expected undiscounted future cash flows is less than the carrying amount of the
asset. The amount of impairment is measured as the difference between the
asset's estimated fair value and its book value. The Company did not record any
impairment charges during the nine months ended September 30, 2009 and 2008.

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. Deferred tax assets and liabilities are determined based on differences
between the financial statement and tax basis of assets and liabilities and net
operating loss and credit carry forwards using enacted tax rates in effect for
the year in which the differences are expected to affect taxable income. A
valuation allowance is established, when necessary, to reduce deferred tax
assets to the amount that is more likely than not to be realized. If it becomes
more likely than not that a deferred tax asset will be used, the related
valuation allowance on such assets would be reversed. Management makes judgments
as to the interpretation of the tax laws that might be challenged upon an audit
and cause changes to previous estimates of tax liability. In management's
opinion, adequate provisions for income taxes have been made for all years. If
actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversal of reserves may be necessary. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

The Company has adopted the accounting standard related to the accounting for
uncertainty in income taxes, which provides a financial statement recognition
threshold and measurement attribute for a tax position taken or expected to be
taken in a tax return. The Company may recognize the tax benefit from an
uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities, based on the
technical merits of the position. The tax benefits recognized in the financial
statements from such a position should be measured based on the largest benefit
that has a greater than 50% likelihood of being realized upon ultimate
settlement. The accounting standard also provides guidance on de-recognition of
income tax assets and liabilities, classification of current and deferred income
tax assets and liabilities, accounting for interest and penalties associated
with tax positions, and income tax disclosures. Management believes its exposure
to uncertain tax positions as of September 30, 2009 is deemed immaterial. The
Company's tax returns for the years 2006 and beyond are subject to audit.

Foreign Currency Translation

The reporting currency of the Company is the U.S. dollar. The functional
currency of the Company's operating subsidiary, Medlink Conectividade, is its
local currency, the Brazilian Real ("R$"). Results of operations and cash flows
are translated at average exchange rates during the period, assets and
liabilities are translated at the unified exchange rate at the end of the
period, and equity is translated at historical exchange rates. Translation
adjustments resulting from the process of translating the local currency
financial statements into U.S. dollars are included in determining comprehensive
income (loss). The cumulative translation adjustment and effect of exchange rate
changes on cash for the nine months ended September 30, 2009 and 2008 was $6,245
and $280,464, respectively. Transaction gains and losses that arise from
exchange rate fluctuations on transactions denominated in a currency other than
the functional currency are included in the results of operations as incurred.

                                        9
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Asset and liability accounts at September 30, 2009 and December 31, 2008 were
translated at 1.7781 R$ to $1.00 and at 2.337 R$ to $1.00, respectively. Equity
accounts are translated at their historical rate. Cash flows from the Company's
operations are calculated based upon the local currencies using the average
translation rate. As a result, amounts related to assets and liabilities
reported on the statement of cash flows will not necessarily agree with changes
in the corresponding balances on the balance sheet. Transactions and balances
originally denominated in U.S. dollars are presented at their original amounts.
Transactions and balances in other currencies are converted into U.S. dollars
and are included in determining net earnings.

Although the Brazilian economy has remained relatively stable in recent years, a
return to higher levels of inflation, and currency exchange rate volatility
could adversely affect the Company's operations. Changes in the valuation of the
Brazilian Real in relation to the U.S. dollar may have significant effects on
the Company's consolidated financial statements.

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) collectability 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
the 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.

Accounting for Conversion Features and Warrants issued with Preferred Stock

In 2006, the Company issued 16,000 shares of convertible Series A preferred
stock, (see Note 7), which contained an Embedded Conversion Feature, ("ECF"),
and warrants to purchase common stock. In accordance with the accounting
standards related to accounting for derivative instruments and hedging
activities, it was necessary to evaluate the conversion option separately from
the debt host and account for it separately as a derivative if the conversion
option met certain criteria. The conversion option met all of the three
criteria: (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.

                                       10
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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". Conventional
convertible debt is defined 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 the conversion option is exercised. Management determined that the
Series A convertible preferred stock was not conventional as defined.

This caused the ECF of the Series A convertible preferred stock to be classified
as a derivative financial instrument. In addition, all warrants to purchase
common stock issued with the preferred stock were then deemed to be derivative
instruments. 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 a gain or loss from
derivative liabilities within the consolidated statements of operations for all
periods presented. The derivatives are valued using the Black-Scholes-Merton
option pricing model and are classified in the consolidated balance sheets as
current liabilities at September 30, 2009 and December 31, 2008.

Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss)
allocable to common shareholders by the weighted average number of shares of
common stock outstanding during the period. Diluted income per share is computed
by dividing net income (loss) 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 common shares
issuable upon the conversion of series A preferred stock (using the if-converted
method) and common stock warrants and options (using the treasury stock method).
The following table presents a reconciliation of basic and diluted net income
per share:

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:
<TABLE>
<CAPTION>
                                                              Three Months Ended             Nine Months ended
                                                                September 30,                  September 30,
                                                         ---------------------------   -----------------------------
                                                             2009           2008            2009            2008
                                                         ------------   ------------   -------------    ------------
<S>                                                      <C>            <C>            <C>              <C>
Net income (loss) allocable to common shareholders for
  basic and diluted earnings per common share ........   $  1,756,601   $      9,186   $  (2,015,654)   $   (204,318)
                                                         ============   ============   =============    ============

Weighted average common shares outstanding - basic ...     75,336,872     46,534,216      62,221,015      41,690,594
  Effect of dilutive securities:
    Convertible debt .................................              -              -               -               -
    Series A convertible preferred stock .............     24,663,128     53,465,784               -               -
                                                         ------------   ------------   -------------    ------------

Weighted average common shares outstanding - diluted *    100,000,000    100,000,000      62,221,015      41,690,594
                                                         ============   ============   =============    ============
Earnings (loss) per common share - basic .............   $       0.02   $          -   $       (0.03)   $          -
                                                         ============   ============   =============    ============
Earnings (loss) per common share - diluted ...........   $       0.02   $          -   $       (0.03)   $          -
                                                         ============   ============   =============    ============
</TABLE>
* The Company's authorized number of shares of common stock is limited to
  100,000,000 common shares

                                       11
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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:
<TABLE>
<CAPTION>
                                     Three Months Ended          Nine Months ended
                                        September 30,               September 30,
                                 -------------------------   -------------------------
                                     2009          2008          2009          2008
                                 -----------   -----------   -----------   -----------
<S>                              <C>           <C>           <C>              <C>
Stock options ................     2,375,000     2,375,000     2,375,000     2,375,000
Stock warrants ...............     5,000,000     7,402,500     5,000,000     7,402,500
Convertible debt-related party     1,400,000     1,400,000     1,400,000     1,400,000
Convertible preferred stock ..   600,416,667   853,856,716   600,416,667   907,312,500
                                 -----------   -----------   -----------   -----------

Total ........................   609,191,667   865,034,216   609,191,667   918,490,000
                                 ===========   ===========   ===========   ===========
</TABLE>

These common stock equivalents may be dilutive in the future. However, the
Company's authorized number of shares of common stock is limited to 100,000,000
common shares

Stock Based Compensation

Stock based compensation is accounted for based on the requirements of the
share-based payment topic 718 of the Financial Accounting Standards Board,
("FASB"), Accounting Standards Codification. This FASB Accounting Standards
Codification requires recognition in the financial statements of the cost of
employee and director services received in exchange for an award of equity
instruments over the period the employee or director is required to perform the
services in exchange for the award (presumptively the vesting period). The FASB
Accounting Standards also requires measurement of the cost of employee and
director services received in exchange for an award based on the grant-date fair
value of the award.

Advertising

Advertising costs are expensed when incurred. For the three and nine months
ended September 30, 2009 and 2008, advertising expense was immaterial.

Comprehensive Income

The Company follows the accounting standards related to reporting comprehensive
income to recognize the elements of comprehensive income. Comprehensive income
is comprised of net income (loss) and all changes to the statements of
stockholders' equity, except those due to investments by stockholders, changes
in paid-in capital and distributions to stockholders. For the Company,
comprehensive income (loss) for the nine months ended September 30, 2009 and
2008 included net income and unrealized gains (losses) from foreign currency
translation adjustments.

Research and Development

Research and development costs are expensed as incurred. For the three and nine
months ended September 30, 2009 and 2008, research and development costs were
immaterial.

                                       12
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Pronouncements

In June 2009, the FASB issued Accounting Standards Update No. 2009-01,
"Generally Accepted Accounting Principles" (ASC Topic 105) which establishes the
FASB Accounting Standards Codification ("the Codification" or "ASC") as the
official single source of authoritative U.S. generally accepted accounting
principles ("GAAP"). All existing accounting standards are superseded. All other
accounting guidance not included in the Codification will be considered
non-authoritative. The Codification also includes all relevant Securities and
Exchange Commission ("SEC") guidance organized using the same topical structure
in separate sections within the Codification.

Following the Codification, the FASB will not issue new standards in the form of
Statements, Staff Positions or Emerging Issues Task Force Abstracts. Instead, it
will issue Accounting Standards Updates ("ASU") which will serve to update the
Codification, provide background information about the guidance and provide the
basis for conclusions on the changes to the Codification.

The Codification is not intended to change GAAP, but it will change the way GAAP
is organized and presented. The Codification is effective for our third-quarter
2009 financial statements and the principal impact on our financial statements
is limited to disclosures as all future references to authoritative accounting
literature will be referenced in accordance with the Codification. In order to
ease the transition to the Codification, we are providing the Codification
cross-reference alongside the references to the standards issued and adopted
prior to the adoption of the Codification.

In April 2009, the FASB issued FASB Staff Positions FAS 115-2 and FAS 124-2,
"Recognition and Presentation of Other-Than-Temporary Impairments" (ASC Topic
320-10-65). This update provides guidance for allocation of charges for
other-than-temporary impairments between earnings and other comprehensive
income. It also revises subsequent accounting for other-than-temporary
impairments and expands required disclosure. The update was effective for
interim and annual periods ending after June 15, 2009. The adoption of FAS 115-2
and FAS 124-2 did not have a material impact on the results of operations and
financial condition.

In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, "Interim Disclosures
About Fair Value of Financial Instruments" (ASC Topic 320-10-65). This update
requires fair value disclosures for financial instruments that are not currently
reflected on the balance sheet at fair value on a quarterly basis and is
effective for interim periods ending after June 15, 2009. The Company's
financial instruments include cash, accounts receivable, accounts payable,
accrued expenses and notes payable. At September 30, 2009 and December 31, 2008
the carrying value of the Companies financial instruments approximated fair
value, due to their short term nature.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" (ASC Topic 855).
This guidance is intended to establish general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or available to be issued. It is effective for
interim and annual reporting periods ending after June 15, 2009. The adoption of
this guidance did not have a material impact on our consolidated financial
statements. The Company evaluated all events and transactions that occurred
after September 30, 2009 up through November 23, 2009. During this period no
material subsequent events came to our attention.

                                       13
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation
No. 46(R)" (ASC Topic 810-10). This updated guidance requires a qualitative
approach to identifying a controlling financial interest in a variable interest
entity ("VIE"), and requires ongoing assessment of whether an entity is a VIE
and whether an interest in a VIE makes the holder the primary beneficiary of the
VIE. It is effective for annual reporting periods beginning after November 15,
2009. The Company is currently evaluating the impact of the pending adoption of
SFAS No. 167 on our consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-13, "Multiple-Deliverable Revenue
Arrangements." This ASU establishes the accounting and reporting guidance for
arrangements including multiple revenue-generating activities. This ASU provides
amendments to the criteria for separating deliverables, measuring and allocating
arrangement consideration to one or more units of accounting. The amendments in
this ASU also establish a selling price hierarchy for determining the selling
price of a deliverable. Significantly enhanced disclosures are also required to
provide information about a vendor's multiple-deliverable revenue arrangements,
including information about the nature and terms, significant deliverables, and
its performance within arrangements. The amendments also require providing
information about the significant judgments made and changes to those judgments
and about how the application of the relative selling-price method affects the
timing or amount of revenue recognition. The amendments in this ASU are
effective prospectively for revenue arrangements entered into or materially
modified in the fiscal years beginning on or after June 15, 2010. Early
application is permitted. The Company is currently evaluating this new ASU.

In October 2009, the FASB issued ASU No. 2009-14, "Certain Revenue Arrangements
That Include Software Elements." This ASU changes the accounting model for
revenue arrangements that include both tangible products and software elements
that are "essential to the functionality," and scopes these products out of
current software revenue guidance. The new guidance will include factors to help
companies determine what software elements are considered "essential to the
functionality." The amendments will now subject software-enabled products to
other revenue guidance and disclosure requirements, such as guidance surrounding
revenue arrangements with multiple-deliverables. The amendments in this ASU are
effective prospectively for revenue arrangements entered into or materially
modified in the fiscal years beginning on or after June 15, 2010. Early
application is permitted. The Company is currently evaluating this new ASU.

NOTE 2 - GOING CONCERN

Since inception, the Company has incurred cumulative net losses of $16,350,071,
and has a stockholders' deficit of $6,298,104 and a working capital deficit of
$6,837,573 at September 30, 2009. Since inception, the Company has funded
operations through short-term borrowings and the proceeds from equity sales 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, 2009 and December 31, 2008, these deficiencies
(including interest and penalties) amounted to approximately $2,588,000 and
$1,180,000, respectively. This payroll liability is included as part of the
accounts payable and accrued expenses (short-term and long-term) within the
consolidated balance sheets. Additionally, the Company had sold 45% of its
operating subsidiary and the Buyer had an option to acquire the remaining 55%.
However, the Buyer has defaulted on payments and the Company is renegotiating
with the Buyer and its assignee to restructure the contract.

                                       14
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 2 - GOING CONCERN (CONTINUED)

At September 30, 2009, the Company cannot determine the outcome of these
negotiations. If the negotiations are successful, the Company may sell the
remaining 55% of its operating subsidiary, at which point the Company will have
no continuing operations. 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 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 2009 and
December 31, 2008:

                                               2009           2008
                                           -----------    -----------
          Computer Equipment ...........   $ 1,682,346    $ 1,251,416
          Software .....................       826,963        379,107
          Office Furniture and Equipment        23,164         18,045
          Vehicle ......................        77,627         59,050
          Other ........................        21,286         17,142
                                           -----------    -----------
                                             2,631,386      1,724,760
          Accumulated Depreciation .....    (1,810,367)    (1,267,918)
                                           -----------    -----------
                                               821,019    $   456,842
                                           ===========    ===========

For the nine months ended September 30, 2009 and 2008, depreciation expense
amounted to $306,873 and $261,012 respectively.

NOTE 4 - SOFTWARE DEVELOPMENT COSTS

Pursuant to accounting standards related to 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. The Company regularly
reviews 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. Capitalized
software development costs consisted of the following at September 30, 2009 and
December 31, 2008:

                                                2009           2008
                                            -----------    -----------
         Software development costs .....   $   471,419    $   471,419
         Accumulated amortization .......      (415,250)      (323,523)
                                            -----------    -----------
                                            $    56,169    $   147,896
                                            ===========    ===========

For the nine months ended September 30, 2009 and 2008, amortization of
development costs amounted to $91,727 and $158,197, respectively, and has been
included in cost of product support services on the accompanying consolidated
statements of operations.

                                       15
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 5 - RELATED PARTY TRANSACTIONS

Convertible Loan - Related Party

At September 30, 2009 and December 31, 2008, the Company had aggregate loans
payable for $175,000 to Carlingford Investments Limited ("Carlingford"), a
related party company whose officer is an officer of the Company. These loans
are convertible into the Company's common stock at $0.125 per share (1,400,000
common shares). For each share of common stock 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
computed at simple interest. At September 30, 2009 and December 31, 2008,
interest due on these loans amounted to $40,386 and $84,679, respectively, and
the aggregate principal amount due is $175,000. The Company and Carlingford
entered into a settlement agreement dated August 5, 2009, regarding the
settlement of an aggregate amount of $60,000 due and owing to Carlingford by the
Company (see Note 7). During the nine months ended September 30, 2009 and 2008,
the Company incurred $15,707 and $15,764, respectively, in interest expense
related to these two loans. These two loans are in default and are currently
under re-negotiation with the lender.

Due to Related Parties

For the nine months ended September 30, 2009 and 2008, the Company incurred
$158,579 and $162,411 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, pursuant to a Management Consulting Services Agreement, the Company's
board of directors approved compensation for this officer/director of $17,500
per month. At September 30, 2009 and December 31, 2008, $440,190 and $274,646 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
sheets. The amount due is unsecured, non-interest bearing and payable on demand.
For the nine months ended September 30, 2009 and 2008, the Company incurred
$40,525 and $36,015, 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, 2009 and December 31, 2008, $59,805 and $28,480 in these fees
is payable to this officer and are included in due to related parties on the
accompanying consolidated balance sheets. The amount due is unsecured,
non-interest bearing and payable on demand.

For the nine months ended September 30, 2009 and 2008, the Company incurred $0
and $25,000, respectively, in consulting fees to an officer of the Company which
has been included in management and consulting fees - related party on the
accompanying consolidated statements of operations. At September 30, 2009 and
December 31, 2008, the Company did not have any amounts due to this officer.

Loans Payable - Related Party

On March 5, 2004, the Company borrowed 115,000 Euros (translated to $167,808 and
$162,116 at September 30, 2009 and December 31, 2008, respectively) from an
officer of the Company for working capital purposes. The loan accrues 0.8%
non-compounding interest per month, (9.6% per annum), had an initial term of
twelve months, and was repayable quarterly in arrears. This loan has not been
repaid and is currently payable on demand. Additionally, during fiscal 2007 and
during the nine months ended September 30, 2009, the Company borrowed $80,000
and $65,000 from this officer, respectively. These loans accrue 1.0%
non-compounding interest per month, (12% per annum), and are due on demand. For
the nine months ended September 30, 2009 and 2008, the Company incurred $22,798
and $15,640, respectively, in interest related to these loans. At September 30,
2009 and December 31, 2008, $86,901 and $64,102 in interest and loan fees was
accrued on these loans and the aggregate principal and interest amount due is
$399,709 and $306,218, respectively, and is included in loan payable - related
party on the accompanying consolidated balance sheets.

                                       16
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 6 - LOANS PAYABLE

The Company's subsidiary, Medlink Conectividade, has several loans and credit
lines with financial institutions. The loans require monthly installment
payments, bear interest at rates ranging from 28% to 42% per annum, are secured
by certain receivables of Medlink Conectividade, and are due through October
2009. At September 30, 2009 and December 31, 2008, loans payable to these
financial institutions aggregated $848,373 and $663,854, respectively.

NOTE 7 - STOCKHOLDERS' DEFICIT

Preferred stock

On January 13, 2006, the Company's Board of Directors approved the creation of
16,000 shares of Series A Convertible Preferred Stock having the following
rights, preferences and limitations:

(a) each share has a stated value of $100 per share and no par value;

(b) With respect to the payment of dividends and other distributions on the
    capital stock of the Company, including distribution of the assets of the
    Company upon liquidation, the Series A Preferred Shares shall be senior to
    the common stock of the Company, par value $.00001 per share and senior to
    all other series of Preferred Shares (the "Junior Stock").

(c) The holders of Series A Preferred Shares shall be entitled to receive
    dividends or distributions on a pro rata basis according to their holdings
    of shares of Series A Preferred Shares in the amount of seven percent (7%)
    per year (computed on the basis of a 365-day year and the actual days
    elapsed). Dividends shall be paid in cash. Dividends shall be cumulative. No
    cash dividends or distributions shall be declared or paid or set apart for
    payment on the common stock in any calendar year unless cash dividends or
    distributions on the Series A Preferred Shares for such calendar year are
    likewise declared and paid or set apart for payment. No declared and unpaid
    dividends shall bear or accrue interest.

(d) Each share of Series A Preferred Shares shall be convertible, at the option
    of the holder thereof, at any time after the date of issuance of such
    shares, into such number of fully paid and non-assessable shares of common
    stock equal to the sum of (i) the Liquidation Amount of the Series A
    Preferred Shares ($100 per share) plus (ii) all accrued but unpaid dividends
    thereon, divided by the "Conversion Price", which is equal to the lower of
    (i) $0.192 ( the "Fixed Conversion Price"), or (ii) eighty percent (80%) of
    the lowest daily volume weighted average price ("VWAP") of the common stock
    during the ten (10) Trading Days immediately preceding the date of
    conversion (the "Market Conversion Price"). The VWAP shall be determined
    using price quotations from Bloomberg, LP. A "Trading Day" is any day during
    which the FINRA OTC Bulletin Board is open for trading. Additionally, each
    share of Series A Preferred Shares shall automatically convert into shares
    of common stock at the Conversion Price then in effect immediately upon the
    consummation of the occurrence of a stock acquisition, merger, consolidation
    or reorganization of the Company into or with another entity through one or
    a series of related transactions, or the sale, transfer or lease of all or
    substantially all of the assets of the Company.

(e) The Series A Preferred Shares shall not have any voting rights except as
    provided under the laws of the state of Colorado.

                                       17
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

(f) The Company has the right to redeem (unless otherwise prevented by law),
    with three (3) business days advance written notice (the "Redemption
    Notice"), any shares of Series A Preferred Shares provided that the closing
    bid price of the of the Company's common stock, as reported by Bloomberg,
    LP, is less than the Fixed Conversion Price at the time of the Redemption
    Notice. The Company shall pay an amount equal to One Hundred Fifteen percent
    (115%) of the Liquidation Amount, plus accrued but unpaid dividends thereon
    (the "Redemption Amount"). The Company shall deliver to the holder the
    Redemption Amount on the third (3rd) business day after the Redemption
    Notice. Upon receipt of a Redemption Notice, the holder shall be entitled to
    continue to convert outstanding shares of Series A Preferred Shares until
    the Redemption Price is received, subject to the conversion limitations as
    defined. The Company may not redeem these shares under any other
    circumstances.

Initially, there was an automatic conversion clause associated with the Series A
Preferred Shares which would cause them to automatically convert into shares of
common stock at the Conversion Price then in effect upon the third anniversary
of the date of the Investment Agreement. On January 8, 2009, the Company amended
the certificate of designation for the Series A Preferred shares to eliminate
this provision.

The Company is required to record the fair value of the ECF and warrants as a
liability. At September 30, 2009 and 2008, the Company revalued the ECF and
warrants resulting in (loss) gains on derivative liability of $(193,071) and
$309,166 for the nine months ended September 30, 2009 and 2008, respectively.

At September 30, 2009, the estimated fair value of the ECF and warrants were
liabilities of $1,193,551 and $6,113, respectively. At December 31, 2008, the
estimated fair value of the ECF and warrants were liabilities of $1,007,472 and
$3,321, respectively. These derivative liabilities are reflected as a conversion
feature liability and a warrant liability, respectively, on the accompanying
consolidated balance sheets.

At the valuation date of September 30, 2009, the fair value of the ECF and
warrants were estimated using the Black-Scholes-Merton option pricing model with
the following assumptions:

         Dividend rate ...............          0%
         Term (in years) .............   .25 to 1.29 years
         Volatility ..................         251%
         Risk-free interest rate .....     0.14% - 0.40%

For the nine months ended September 30, 2009 and 2008, the related gain (loss)
from derivative liabilities is as follows:

                                        Convertible    Preferred
                                          debt (a)       stock         Total
                                        -----------   -----------   -----------
                 2009
                 ----
Loss from change in fair value of
 derivative liabilities .............   $         -   $  (193,071)  $  (193,071)
                                        -----------   -----------   -----------

                 2008
                 ----
(Loss) gain from change in fair value
 of derivative liabilities ..........   $   (41,939)  $   351,105   $   309,166
                                        -----------   -----------   -----------

                                       18
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

(a) At the end of each reporting period and through May 15, 2008, the Company
    revalued the convertible feature of derivative liabilities and the unexpired
    warrant relating to a previously outstanding convertible debt. For the nine
    months ended September 30, 2008, the Company recorded a loss on valuation of
    the derivative liability and warrants of $41,939. At May 15, 2008, pursuant
    to an agreement with the investor, the convertible debt was payable in cash.
    Accordingly, the remaining derivative liability at May 15, 2008 of $257,058
    was reclassified to paid-in capital. Prior to December 31, 2008, all
    remaining debt was paid in full.

Common Stock
------------

On February 27, 2009, the Company issued 2,533,333 shares of its common stock
upon conversion of 38 shares of Series A preferred stock.

On March 16, 2009, the Company issued 2,500,000 shares of its common stock upon
conversion of 12 shares of Series A preferred stock.

On August 6, 2009, the Board of Directors of the Company, pursuant to unanimous
written consent, authorized and approved the execution of a debt settlement
agreement whereby the Company issued 30,000,0000 shares of its restricted stock
in settlement of $60,000 of outstanding interest as discussed below.

The Company and Carlingford, a related party, entered into a settlement
agreement dated August 5, 2009, (the "Carlingford Settlement Agreement"),
regarding the settlement of an aggregate amount of $60,000 due and owing to
Carlingford by the Company relating to cash advances in the principal amount of
$175,000 and accrued interest thereon in the amount of $95,093 (the "Debt").
Pursuant to the terms and provisions of the Carlingford Settlement Agreement:
(i) the Company agreed to partially settle $60,000 of the accrued interest by
issuing to Carlingford an aggregate of 30,000,000 shares of its restricted
Common Stock at the rate of $0.002 per share (which amount is based upon the
weighted average close price of $0.002 of the Company's shares of Common Stock
traded on the OTC Bulletin Board between July 10, 2009 and August 4, 2009); and
(ii) Carlingford agreed to convert the accrued interest and accept the issuance
of an aggregate of 30,000,000 shares of restricted Common Stock.

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

On November 28, 2004, the Company adopted the 2004 Incentive Stock Option Plan
(the "Plan"). The Plan, as amended, provides options to be granted, exercisable
for a maximum of 7,000,000 shares of common stock. Both incentive and
nonqualified stock options may be granted under the Plan. The exercise price of
options granted, the expiration date, and the vesting period, pursuant to this
plan, are determined by a committee of the Board of Directors.

                                       19
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

A summary of the status of the Company's outstanding stock options as of
September 30, 2009 and changes during the period ending on that date is as
follows:

                                                        Nine Months Ended
                                                        September 30, 2009
                                                  ------------------------------
                                                   Number of    Weighted Average
                                                    Options      Exercise Price
                                                  ----------    ----------------
Stock options
-------------
Balance at beginning of the period .........       2,375,000         $ 0.14
Granted ....................................               -              -
Exercised ..................................               -              -
Forfeited ..................................               -              -
                                                  ----------         ------
Balance at end of the period ...............       2,375,000         $ 0.14
                                                  ==========         ======

Options exercisable at end of period .......       2,375,000         $ 0.14
                                                  ==========         ======

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, 2009:

                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         2009        Life (Years)      Price         2009         Price
--------   --------------   ------------   ---------   --------------   --------
$   0.20          425,000       0.25            0.20          425,000       0.20
$   0.15        1,350,000       1.00            0.15        1,350,000       0.15
$   0.06          600,000       3.15            0.06          600,000       0.06
           --------------                  ---------   --------------   --------
                2,375,000                  $    0.14        2,375,000   $   0.14
           ==============                  =========   ==============   ========

As of September 30, 2009 and December 31, 2008, there are no unrecognized
compensation costs since all options granted under the stock option plan are
vested.

                                       20
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

Stock Warrants

A summary of the status of the Company's outstanding stock warrants as of
September 30, 2009 and activities during the period then ended is as follows:

                                                     For the Nine Months Ended
                                                        September 30, 2009
                                                  ------------------------------
                                                   Number of    Weighted Average
                                                   Warrants      Exercise Price
                                                  ----------    ----------------
Warrants
--------
Balance at beginning of the period .........       7,402,500         $ 0.23
Granted ....................................               -              -
Exercised ..................................               -              -
Forfeited ..................................      (2,402,500)          0.20
                                                  ----------         ------
Balance at end of the period                       5,000,000         $ 0.25
                                                  ==========         ======

The following information applies to all warrants outstanding at September 30,
2009:

               Warrants Outstanding                      Warrants Exercisable
----------------------------------------------------   -------------------------
                             Weighted
                              Average       Weighted                    Weighted
Range of                     Remaining      Average                      Average
Exercise                     Contractual    Exercise                    Exercise
  Price        Shares       Life (Years)      Price       Shares         Price
--------   --------------   ------------   ---------   -------------   ---------
$   0.30        2,500,000       1.29            0.30       2,500,000        0.30
$   0.20        2,500,000       1.29            0.20       2,500,000        0.20
           --------------                  ---------   -------------   ---------
                5,000,000                  $    0.25       5,000,000   $    0.25
           ==============                  =========   =============   =========

NOTE 8 - SALE OF NON-CONTROLLING INTEREST IN SUBSIDIARY

On March 26, 2008, the board of directors of the Company, pursuant to unanimous
written consent resolutions, approved the execution of a stock purchase and
option agreement (the "Agreement") with the Buyer. In accordance with the terms
and provisions of the Agreement, the Company sold to the Buyer 45% of the total
issued and outstanding stock of its wholly-owned subsidiary, Transax Limited
("Transax Sub"). Transax Sub owns one hundred percent of the total issued and
outstanding shares of: (i) Medlink Conectividade and (ii) MTI.

The purchase price for the 45%, or 45 shares, ("Initial Shares") is $3,200,000.
Through December 31, 2008, the Company received proceeds towards the purchase
price of $937,700. The Company did not receive any proceeds during the nine
months ended September 30, 2009. The balance due and owing by the Buyer is
evidenced by an installment note secured by a pledge of all of the Initial
Shares. As of the date of this report, the Buyer is in default on its payments
of principal and interest. At September 30, 2009 and December 31, 2008, pursuant
to the terms of the Agreement, as amended, the Company has a remaining note
receivable of $2,262,300 due from the Buyer. Since collection of the remaining
purchase price is not reasonably assured, the Company recorded the full amount
of the purchase price of $3,200,000 as deferred revenue and is reflecting the
deferred revenue net of the remaining note receivable on the accompanying
consolidated balance sheets.

                                       21
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 8 - SALE OF NON-CONTROLLING INTEREST IN SUBSIDIARY (CONTINUED)

Accordingly, at September 30, 2009 and December 31, 2008, the Company's
consolidated balance sheets reflect a deferred gain on the sale of
non-controlling interest of $937,700, which will be recognized as other income
when collection is reasonably assured and when all of the risks and other
incidents of ownership have been passed to the buyer. At September 30, 2009 and
December 31, 2008, deferred gain on sale of non-controlling interest consists of
the following:

Sale price of 45% interest in Transax Limited ...................   $ 3,200,000
Less: note receivable balance ...................................    (2,262,300)
                                                                    -----------
Deferred gain on sale of non-controlling interest in subsidiary .   $   937,700
                                                                    ===========

As of the date of this report, the Buyer is in default on the remaining notes
receivable balance of $2,262,300. The Company has issued default notices to the
buyer in respect of non-payment under the Agreement. The Company is currently in
discussion with the Buyer and/or assignees and plans to conclude any
renegotiation of contract terms by December 31, 2009.

NOTE 9 - FOREIGN OPERATIONS

The Company identifies its operating segments based on its geographical
locations. The Company operates in the United States, Brazil and Mauritius.
Substantially all of the Company's assets are located in Brazil.

                                                      Nine Months ended
                                                        September 30,
                                                  -------------------------
                                                      2009         2008
                                                  -----------   -----------
      Revenues to unaffiliated customers:
              Brazil ..........................   $ 3,201,083   $ 4,986,507
                                                  -----------   -----------
      Operating Expenses:
              Brazil ..........................     3,927,657     4,626,386
              USA .............................       281,809       426,063
              Mauritius .......................         1,482         1,283
                                                  -----------   -----------
           Total Operating Expenses                 4,210,948     5,053,732
                                                  -----------   -----------
      (Loss) from operations  .................    (1,009,865)      (67,225)
                                                  -----------   -----------
      Other income (expenses) and income taxes:
              Brazil ..........................      (692,860)     (336,434)
              USA .............................      (237,269)      276,817
                                                  -----------   -----------
                                                     (930,129)      (59,617)
                                                  -----------   -----------

      Net loss as reported ....................   $(1,939,994)  $ (126,842)
                                                  -----------   -----------

                                       22
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                               September 30, 2009

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Accrued Taxes and Social Contribution

Since 2000, the Company has been deficient in the payment of Brazilian payroll
taxes and Social Security taxes. At September 30, 2009 and December 31, 2008,
these deficiencies, plus interest and penalties, amounted to approximately
$2,588,000 and $1,180,000, respectively. This liability is included as part of
the accounts payable and accrued expenses (short-term and long-term) within the
consolidated balance sheet. During years 2006 and 2005, the Company entered into
a number of payment programs with the Brazilian authorities whereby the Social
Security taxes due, plus applicable penalties and interests are to be repaid
over a period of up to 60 months. However, there is no certainty that the
Brazilian authorities will enter into similar plans in the future for the
remaining non-negotiated balances due or any future taxes due. The current
portion due, which is included in current liabilities, also includes amounts
whose payment terms have not been negotiated with the Brazilian authorities.

Legal Proceedings

The Company's subsidiary, Medlink Conectividade, is involved in litigation
pertaining to a previous provider of consultancy services regarding breach of
contract and two labor law suits involving employees for claims of unfair
dismissal. At September 30, 2009 and December 31, 2008, the Company has accrued
approximately $198,500 and $151,000, respectively, related to these lawsuits
which are probable and estimable. The ultimate outcome of these claims is
uncertain at this time.

                                       23
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following analysis of the results of operations and financial condition
should be read in conjunction with our unaudited consolidated financial
statements for the nine months ended September 30, 2009 and notes thereto
contained elsewhere in this report.

GENERAL

Transax International Limited is a Colorado corporation and currently trades on
the OTC Bulletin Board under the symbol "TNSX.OB" and the Frankfurt and Berlin
Stock Exchanges under the symbol "TX6". Please note that throughout this report,
and unless otherwise noted, the words "we," "our," "us," or the "Company" refer
to Transax International Limited. We are an international provider of
information network solutions, products and services specifically designed for
the healthcare providers and health insurance companies (collectively, the
"Health Information Management Products").

CURRENT BUSINESS OPERATIONS

At the end of the nine month period ended September 30, 2009, we had twelve
signed contracts with Healthcare Insurance companies in Brazil to develop our
solutions. One of these contracts was signed during the nine months ended
September 30, 2009. Currently one of our twelve contracts remains under
development with the customer and is awaiting final implementation. Transaction
data under development is being collected in a test environment and will be
subject to full roll out at a later date. In 2008, we lost our major customer
and did not record any revenues from Bradesco during the 2009 period,

We processed 6.30 million transactions during the nine month period ended
September 30, 2009 compared to 6.8 million transactions during the same period
in 2008. Significant new growth was achieved in the introduction of the
company's WEB (internet based) solution which increased to over 420,000
transactions per month in March 31, 2009 from 225,000 transactions in January
2009.

At the end of the nine month period ended September 30, 2009, we had 16,768
solutions operational in Brazil compared with 7,664 solutions during the same
period in 2008. Our installations at the end of the nine month period ended
September 30, 2009 included 3,502 POS (point of service) solutions, 11,025 WEB
solutions and 2,192 Interactive Voice Response ("IVR") solutions with the
balance of installations being Personal Computer ("PC") and Server based
solutions installed in major medical laboratories. During the nine month period
ending September 30, 2009 we installed over 7,200 new WEB solutions in Brazil.

During the nine month period ended September 30, 2009, the Company maintained
its current staffing levels in response to the development of the Company's HOSP
solution, a solution which would allow real time, on-line healthcare
transactions to be undertaken in an in-patient hospital environment. Current
transactions are generally limited to real time, on-line transactions in the
out-patient environment.

STOCK PURCHASE AND OPTION AGREEMENT

On March 26, 2008, our board of directors, pursuant to unanimous written consent
resolutions approved the execution of a stock purchase and option agreement (the
"Agreement") with Engetech, Inc., a Turks & Caicos corporation controlled and
20% owned by Americo de Castro, director and President of our subsidiary,
Medlink Conectividade, and 80% owned by Flavio Gonzalez Duarte (the "Buyer"). In
accordance with the terms and provisions of the Agreement, we sold to the Buyer
45% of the total issued and outstanding stock of our wholly-owned subsidiary,
Transax Limited. Transax Limited owns 100% of the total issued and outstanding
shares of: (i) Medlink Conectividade; and (ii) Medlink.

                                       24
<PAGE>

In accordance with further terms and provisions of the Agreement: (i) we sold 45
of the 100 shares of Transax Limited's issued and outstanding, (the "Initial
Shares"), with an option to purchase the remaining 55 shares of Transax Limited,
(the "Option"); and (ii) the Buyer agreed to pay us an aggregate purchase price
of $3,200,000 for the Initial Shares. A total of $937,700 was received through
December 31, 2008. We did not receive any proceeds during the nine months ended
September 30, 2009. The Company also has received monies as reimbursement for
legal fees which are excluded from these amounts as they were used to offset the
associated expenses. For the nine months ended September 30, 2009, we received
$15,000 of such reimbursement, and a total of $0 of reimbursement was received
during the nine months ended September 30, 2008.

The balance due and owing by the Buyer is evidenced by an installment note
secured by a pledge of all of Initial Shares. As of the date of this report, the
Buyer is in default on its payments of principal and interest. At September 30,
2009, pursuant to the terms of the Agreement, as amended, the Company has a
remaining note receivable of $2,262,300 due from the Buyer. Since collection of
the remaining purchase price is not reasonably assured, the Company recorded the
full amount of the purchase price of $3,200,000 as deferred revenue and is
reflecting the deferred revenue net of the remaining note receivable on the
accompanying consolidated balance sheets. Accordingly, at September 30, 2009 and
December 31, 2008, the Company's consolidated balance sheets reflect a deferred
gain on the sale of non-controlling interest of $937,700, which will be
recognized as other income when collection is reasonably assured and not until
all of the risks and other incidents of ownership have been passed to the buyer
or when the Company invalidates the Agreement due to breach of contract. At
September 30, 2009 and December 31, 2008, the deferred gain on sale of
non-controlling interest consists of the following:

Sale price of 45% interest in Transax Limited ...................   $ 3,200,000
Less: note receivable balance ...................................    (2,262,300)
                                                                    -----------
Deferred gain on sale of non-controlling interest in subsidiary .   $   937,700
                                                                    ===========

As of the date of this quarterly report, the Buyer is in default by $2,262,300
in periodic payments. We are currently in discussions with the buyer and plan to
conclude any renegotiation of contract terms on or about December 31, 2009.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. We continually evaluate our estimates, including those related to
bad debts, recovery of long-lived assets, income taxes, the change in fair value
of our derivatives, and the valuation of equity transactions. We base our
estimates on historical experience and on various other assumptions that we
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Any future changes to these
estimates and assumptions could cause a material change to our reported amounts
of revenues, expenses, assets and liabilities. Actual results may differ from
these estimates under different assumptions or conditions. We believe the
following critical accounting policies affect our more significant judgments and
estimates used in the preparation of the financial statements

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.

                                       25
<PAGE>

Pursuant to accounting standards related to 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.

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, is recognized when (1) persuasive evidence of
an arrangement exists; (2) delivery has occurred; (3) the Company's fee is fixed
and determinable, and; (4) collectability 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.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued Accounting Standards Update No. 2009-01,
"Generally Accepted Accounting Principles" (ASC Topic 105) which establishes the
FASB Accounting Standards Codification ("the Codification" or "ASC") as the
official single source of authoritative U.S. generally accepted accounting
principles ("GAAP"). All existing accounting standards are superseded. All other
accounting guidance not included in the Codification will be considered
non-authoritative. The Codification also includes all relevant Securities and
Exchange Commission ("SEC") guidance organized using the same topical structure
in separate sections within the Codification.

Following the Codification, the Board will not issue new standards in the form
of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts.
Instead, it will issue Accounting Standards Updates ("ASU") which will serve to
update the Codification, provide background information about the guidance and
provide the basis for conclusions on the changes to the Codification.

The Codification is not intended to change GAAP, but it will change the way GAAP
is organized and presented. The Codification is effective for our third-quarter
2009 financial statements and the principal impact on our financial statements
is limited to disclosures as all future references to authoritative accounting
literature will be referenced in accordance with the Codification. In order to
ease the transition to the Codification, we are providing the Codification
cross-reference alongside the references to the standards issued and adopted
prior to the adoption of the Codification.

                                       26
<PAGE>

In April 2009, the FASB issued FASB Staff Positions FAS 115-2 and FAS 124-2,
"Recognition and Presentation of Other-Than-Temporary Impairments" (ASC Topic
320-10-65). This update provides guidance for allocation of charges for
other-than-temporary impairments between earnings and other comprehensive
income. It also revises subsequent accounting for other-than-temporary
impairments and expands required disclosure. The update was effective for
interim and annual periods ending after June 15, 2009. The adoption of FAS 115-2
and FAS 124-2 did not have a material impact on the results of operations and
financial condition.

In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, "Interim Disclosures
About Fair Value of Financial Instruments" (ASC Topic 320-10-65). This update
requires fair value disclosures for financial instruments that are not currently
reflected on the balance sheet at fair value on a quarterly basis and is
effective for interim periods ending after June 15, 2009. The Company's
financial instruments include cash and cash equivalents, accounts receivable,
accounts payable, accrued expenses and notes payable. At September 30, 2009 and
December 31, 2008 the carrying value of the Companies financial instruments
approximated fair value, due to their short term nature.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" (ASC Topic 855).
This guidance is intended to establish general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or available to be issued. It is effective for
interim and annual reporting periods ending after June 15, 2009. The adoption of
this guidance did not have a material impact on our consolidated financial
statements. We evaluated all events and transactions that occurred after
September 30, 2009 up through November 20, 2009. During this period no material
subsequent events came to our attention.

In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation
No. 46(R)" (ASC Topic 810-10). This updated guidance requires a qualitative
approach to identifying a controlling financial interest in a variable interest
entity (VIE), and requires ongoing assessment of whether an entity is a VIE and
whether an interest in a VIE makes the holder the primary beneficiary of the
VIE. It is effective for annual reporting periods beginning after November 15,
2009. We are currently evaluating the impact of the pending adoption of SFAS No.
167 on our consolidated financial statements.

In October 2009, the FASB issued ASU No. 2009-13, "Multiple-Deliverable Revenue
Arrangements." This ASU establishes the accounting and reporting guidance for
arrangements including multiple revenue-generating activities. This ASU provides
amendments to the criteria for separating deliverables, measuring and allocating
arrangement consideration to one or more units of accounting. The amendments in
this ASU also establish a selling price hierarchy for determining the selling
price of a deliverable. Significantly enhanced disclosures are also required to
provide information about a vendor's multiple-deliverable revenue arrangements,
including information about the nature and terms, significant deliverables, and
its performance within arrangements. The amendments also require providing
information about the significant judgments made and changes to those judgments
and about how the application of the relative selling-price method affects the
timing or amount of revenue recognition. The amendments in this ASU are
effective prospectively for revenue arrangements entered into or materially
modified in the fiscal years beginning on or after June 15, 2010. Early
application is permitted. We are currently evaluating this new ASU.

In October 2009, the FASB issued ASU No. 2009-14, "Certain Revenue Arrangements
That Include Software Elements." This ASU changes the accounting model for
revenue arrangements that include both tangible products and software elements
that are "essential to the functionality," and scopes these products out of
current software revenue guidance. The new guidance will include factors to help
companies determine what software elements are considered "essential to the
functionality." The amendments will now subject software-enabled products to
other revenue guidance and disclosure requirements, such as guidance surrounding
revenue arrangements with multiple-deliverables. The amendments in this ASU are
effective prospectively for revenue arrangements entered into or materially
modified in the fiscal years beginning on or after June 15, 2010. Early
application is permitted. We are currently evaluating this new ASU.

                                       27
<PAGE>

CONSOLIDATED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2008

                                                          2009          2008
                                                      -----------   -----------

REVENUES ...........................................  $ 3,201,083   $ 4,986,507
                                                      -----------   -----------

OPERATING EXPENSES
  Cost of product support services .................    1,529,443     1,838,302
  Compensation and related benefits ................    1,236,464     1,252,684
  Professional fees ................................       51,406        94,186
  Management and consulting fees - related  parties       199,104       229,426
  Investor relations ...............................            -         1,000
  Depreciation and amortization ....................      306,873       261,012
  General and administrative .......................      887,658     1,377,122
                                                      -----------   -----------
TOTAL OPERATING EXPENSES ...........................    4,210,948     5,053,732
                                                      -----------   -----------

INCOME (LOSS) FROM OPERATIONS ......................   (1,009,865)      (67,225)
                                                      -----------   -----------

OTHER INCOME (EXPENSES)
  Foreign exchange loss ............................      (13,428)        3,219
  (Loss) gain from derivative liabilities ..........     (193,071)      309,166
  Interest expense .................................     (692,860)     (238,612)
  Interest expense -related party ..................      (30,770)      (31,404)
                                                      -----------   -----------
                                                         (930,129)       42,369
                                                      -----------   -----------

LOSS BEFORE INCOME TAXES ...........................   (1,939,994)      (24,856)

PROVISION FOR INCOME TAXES .........................            -      (101,986)
                                                      -----------   -----------

NET LOSS ...........................................   (1,939,994)     (126,842)

OTHER COMPREHENSIVE (LOSS) INCOME
Unrealized foreign currency translation (loss) gain      (247,899)      518,730
                                                      -----------   -----------

COMPREHENSIVE (LOSS) INCOME ........................  $(2,187,893)  $   391,888
                                                      -----------   -----------

Our net loss for the nine months ended September 30, 2009 was $1,939,994
compared to net loss of $126,842 for the nine months ended September 30, 2008
(an increase of $1,813,152 or 1,429.5%).

During the nine months ended September 30, 2009, we generated $3,201,083 in
revenues compared to $4,986,507 in revenues generated during the nine months
ended September 30, 2008 (a decrease of $1,785,424 or 35.8%). The significant
decrease in revenues is due to the loss of a major customer, Bradesco. The
decrease in revenues from the loss of Bradesco was approximately $2,030,000 and
was offset by an increase of revenues from new customers and increased revenues
from existing customers of approximately $245,000. We continue the installation
of our software and/or hardware devices containing our software at 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 processed approximately 6,430,000 "real time"
transactions for the nine months ended September 30, 2009, of which 1,980,000
were from POS terminals, 670,000 from PC and PC servers, 3,056,000 were via our

                                       28
<PAGE>

proprietary WEB solution, and 595,000 from our Interactive Voice Response
solution. We undertook approximately 6,750,000 "real time" transactions during
the nine months ended September 30, 2008, of which 3,840,000 were from POS
terminals, 1,620,000 from PC servers, 680,000 from Interactive Voice Response
and 615,000 from our proprietary WEB solution. The decrease in transaction
volume for the nine months ended September 30, 2009 compared with the nine
months ended September 30, 2008 was due to the non renewal of the Bradesco
contract commencing January 1, 2009 being partially offset by new transactions
from recently signed contracts and continued roll out of established contracts
during the nine months ended September 30, 2009.

During the nine months ended September 30, 2009, we incurred operating expenses
in the aggregate amount of $4,210,948 compared to $5,053,732 incurred during the
nine months ended September 30, 2008 (a decrease of $842,784 or 16.7%). The
decrease in operating expenses incurred during the nine-month period ended
September 30, 2009 compared to the nine-month period ended September 30, 2008
resulted from: (i) a decrease of $308,859 or 16.8% in cost of product support
services resulting from the decrease in revenues; (ii) a decrease of $16,220 or
1.3% in compensation and related benefits; (iii) a decrease of $42,780 or 45.4%
based on a decrease in the amount of professional fees incurred; (iv) a decrease
of $30,322 or 13.2% in management and consulting fees-related parties due to a
decrease in use of certain management and a director/consultant needed to handle
our operations; (v) an increase of $45,861 or 17.6% in depreciation and
amortization due to the additions and purchase of computer equipment and
software; and (vi) a decrease of $489,464 or 35.5% in general and administrative
expenses primarily resulting from a decrease in operating costs associated with
our decreased business revenues in 2009.

We reported a loss from operations of $(1,009,865) during the nine months ended
September 30, 2009 as compared to loss from operations of $(67,225) during the
nine months ended September 30, 2008 due to the factors previously discussed.

During the nine-month period ended September 30, 2009, we incurred other expense
of $930,129, compared to other income of $42,369 during the nine-month period
ended September 30, 2008 (an increase of $972,498). The variance change during
the nine-month period ended September 30, 2009, compared to the nine-month
period ended September 30, 2008 resulted primarily from the nine-month period
change in the fair value of the Company's derivative liabilities positions of
$193,071 loss in 2009, as compared to 2008 ($309,166 gain). This change is
related to the classification of the embedded conversion feature and related
warrants issued in connection with our Series A Preferred Stock and debenture
payable as derivative instruments.

For the nine-month period ended September 30, 2009, our loss before income taxes
was $1,939,994 compared to loss before taxes of $24,856 for the nine-month
period ended September 30, 2008. During the nine-month period ended September
30, 2009, we did not record any tax provision for Brazilian income taxes as
compared to the 2008 period of $101,986, resulting in a net loss of $1,939,994
compared to net loss of $126,842.

During the nine-month period ended September 30, 2009, we recorded a deemed and
cumulative preferred stock dividend of $75,660 compared to $77,476 during the
nine-month period ended September 30, 2008, which is related to our cumulative
dividends on the Series A Preferred Stock.

We reported net loss allocable to common shareholders of $2,015,654 during the
nine-month period ended September 30, 2009 as compared to net loss allocable to
common shareholders of $204,318 during the nine-month period ended September 30,
2008. This translates to an overall loss per-share available to shareholders of
$0.04 and $0.00 for each of the nine-month periods ended September 30, 2009 and
2008, respectively.

During the nine-month period ended September 30, 2009 and 2008, we recorded an
unrealized foreign currency translation loss of $247,899 compared to a gain of
$518,730, respectively. This resulted in comprehensive loss for the nine months
ended September 30, 2009 of $2,187,893 compared to comprehensive income of
$391,888 for the nine months ended September 30, 2008.

                                       29
<PAGE>

THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2008

                                                      For the Three Months Ended
                                                            September 30,
                                                      --------------------------
                                                          2009          2008
                                                      -----------   -----------
REVENUES ...........................................  $ 1,155,060   $ 1,774,551
                                                      -----------   -----------

OPERATING EXPENSES
  Cost of product support services .................      604,619       738,657
  Compensation and related benefits ................      452,958       442,008
  Professional fees ................................       10,785        16,687
  Management and consulting fees - related parties .       64,085        74,985
  Investor relations ...............................            -         1,000
  Depreciation and amortization ....................      149,156        87,593
  General and administrative .......................      322,151       504,664
                                                      -----------   -----------
TOTAL OPERATING EXPENSES ...........................    1,603,754     1,865,594
                                                      -----------   -----------

LOSS FROM OPERATIONS ...............................     (448,694)      (91,043)
                                                      -----------   -----------

OTHER (EXPENSES) INCOME
  Foreign exchange gain (loss) .....................       (8,207)       15,536
  Gain from derivative liabilities .................    2,416,786        97,524
  Interest expense .................................     (164,717)       24,956
  Interest expense - related party .................      (13,347)       (8,379)
                                                      -----------   -----------
                                                        2,230,515       129,637
                                                      -----------   -----------

INCOME BEFORE INCOME TAXES .........................    1,781,821        38,594

PROVISION FOR INCOME TAXES .........................            -        (3,852)
                                                      -----------   -----------

NET INCOME .........................................    1,781,821        34,742

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized foreign currency translation (loss) gain      (143,977)      274,278
                                                      -----------   -----------

COMPREHENSIVE INCOME ...............................  $ 1,637,844   $   309,020
                                                      -----------   -----------

Our income for the three months ended September 30, 2009 was $1,781,821 compared
to of $34,742 for the three months ended September 30, 2008 (an increase of
$1,747,079).

For the three months ended September 30, 2009, we generated $1,155,060 in
revenues compared to $1,774,551 in revenues generated for the three months ended
September 30, 2008 (a decrease of $619,491 or 34.9%). The significant decrease
in revenues is principally due to the loss of a major customer, Bradesco.

For the three months ended September 30, 2009, we incurred operating expenses in
the aggregate amount of $1,603,754 compared to $1,865,594 incurred for the three
months ended September 30, 2008 (a decrease of $261,840 or 14.0%). The decrease
in operating expenses incurred during the three months ended September 30, 2009
compared to the three months ended September 30, 2008 resulted principally from:
a decrease of $134,038 or 18.2% in cost of product support services; an increase
of $61,563 or 70.3% in depreciation and amortization due to the additions and
purchase of computer equipment and software; and a decrease of $182,513 or 36.2%
in general and administrative expenses primarily resulting from management's
efforts to implement certain cost cutting measures.

                                       30
<PAGE>

We reported a loss from operations of $448,694 for the three months ended
September 30, 2009 as compared to a loss from operations of $91,043 for the
three months ended September 30, 2008 (an increase of $357,651 or 392.8%).

For the three months ended September 30, 2009, we recorded other income of
$2,230,515, compared to other income of $129,637 during the three months ended
September 30, 2008. The variance for the three months ended September 30, 2009,
compared to the three months ended September 30, 2008 resulted primarily from
the change in the fair value of the Company's derivative liabilities which was a
gain of $2,416,786 in 2009, as compared to a gain in 2008 of $97,524. This
change is related to the classification of the embedded conversion feature and
related warrants issued in connection with our Series A Preferred Stock and
debenture payable as derivative instruments.

For the three months ended September 30, 2009, our net income was $1,781,821
compared to net income of $34,742 for the three months ended September 30, 2008.

For the three months ended September 30, 2009, we recognized a deemed and
cumulative preferred stock dividend of $25,220 compared to $25,556 for the three
months ended September 30, 2008, which is related to our Series A Preferred
Stock.

We reported a net income allocable to common shareholders of $1,756,601 for the
three months ended September 30, 2009 as compared to $9,186 for the three months
ended September 30, 2008. This translates to a basic net income per common share
of $0.02 and $0.00 and diluted net income per common share $0.02 and $0.00 for
the three months ended September 30, 2009 and 2008, respectively.

We recorded an unrealized foreign currency translation (loss) gain of ($143,977)
and $274,278 for the three months ended September 30, 2009 and 2008,
respectively. This resulted in comprehensive net income during the three months
ended September 30, 2009 of $1,637,844 compared to $309,020 during the three
months ended September 30, 2008.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2009, our current assets were $798,036 and our current
liabilities were $7,635,609, which resulted in a working capital deficit of
$(6,837,573). As of September 30, 2009, our total assets were $1,675,224
consisting of: (i) $40,254 in cash; (ii) $428,407 in accounts receivable; (iii)
$329,375 in prepaid expenses and other current assets; (iv) $56,169 in net
software development costs; and (v) $821,019 in net property and equipment. As
at September 30, 2009, our total assets were $1,675,224 compared to $1,284,033
at December 31, 2008.

As of September 30, 2009, our total liabilities were $7,973,328 consisting of:
(i) $3,872,501 in long-term and current and non-current portion of accounts
payable and accrued expenses; (ii) $499,995 due to related parties; (iii)
$215,386 in convertible loan to related party; (iv) $399,709 in loan payable to
related party; (v) $848,373 in current portion of loans payable; (vi) $6,113 in
warrant liability; (vii) $1,193,551 in convertible feature liability; (viii)
$937,700 in deferred gain on sale of non-controlling interest in subsidiary. As
at September 30, 2009, our total liabilities were $7,973,328 compared to
$5,458,442 at December 31, 2008.

For the nine months ended September 30, 2009, net cash flow provided by
operating activities was $155,716 compared to net cash used in operating
activities of ($594,588) for the nine months ended September 30, 2008. For the
nine months ended September 30, 2009, net cash flows provided by operating
activities is principally due to our net loss of $(1,939,994) adjusted for
non-cash items of $605,099 such as a loss from derivative liabilities of
$193,071, depreciation and amortization of $306,873,the amortization of software
maintenance costs of $91,727, a foreign currency loss of $13,428, and a decrease
in accounts receivable of $54,163, a decrease in prepaid expense and other
current assets of $31,609, an increase in accounts payable and accrued expenses
of $1,170,789, an increase in accrued interest payable-related party of $30,770
and an increase in due to related parties of $196,869. For the nine months ended
September 30, 2008, net cash flows used in operating activities is principally
due to our net loss of $(126,842) adjusted for non-cash items of $90,043 such as

                                       31
<PAGE>

the depreciation and amortization of $261,012, the amortization of software
maintenance costs of $158,197, the deposit on sale of non-controlling interest
applied to professional fees of $(20,000) and a gain from derivative liabilities
of $(309,166) and an increase in accounts receivable of $237,078, an increase in
prepaid expenses and other current assets of $111,853, a decrease in accounts
payable and accrued expenses of $58,861, a decrease in due to related parties of
$100,936, a decrease in accounts payable and accrued expenses-long-term of
$79,437 offset by a decrease in other assets of $2,190 and an increase in
accrued interest payable, related parties of $28,186.

Net cash flows used in investing activities amounted to $216,780 for the nine
months ended September 30, 2009 as compared to net cash provided by investing
activities of $439,776 for the nine months ended September 30, 2008. During the
nine months ended September 30, 2009, we used cash for the acquisition of
property and equipment of $216,780. During the nine months ended September 30,
2008, we received proceeds of $937,700 from the sale of a non-controlling
interest ownership offset by the acquisition of property and equipment of
$497,924.

Net cash flows provided by financing activities for nine months ended September
30, 2009 were $69,397 as compared to net cash flows used in financing activities
of $140,800 for nine months ended September 30, 2008. For the nine months ended
September 30, 2009, cash flow provided by financing activities was attributable
to $80,252 in proceeds from loans and $65,000 in proceeds from loans-related
party offset by the payment of capital lease obligations of $75,855. During the
nine months ended September 30, 2008, net cash used in financing activities is
primarily caused by the repayment of convertible debt of $225,000 offset by the
proceeds from loans of $84,200.

PLAN OF OPERATION

Since our inception, we have funded operations through borrowings and equity
sales 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.

YA GLOBAL INVESTMENTS ("YA GLOBAL")

On January 13, 2006, we entered into an Investment Agreement with YA Global
(collectively, the "Parties"), pursuant to which we sold YA Global up to 16,000
shares of Series A Convertible Preferred Stock, no par value, (the "Series A
Preferred Shares") for a total price of up to $1,600,000. The Series A Preferred
Shares are convertible, at YA Global's discretion, into shares of our common
stock.

In connection with the Investment Agreement, the Parties entered into an
Investor Registration Rights Agreement (the "IRRA"), dated January 13, 2006,
pursuant to which the Parties agreed that, in the event the Registration
Statement is not filed within thirty (30) days from the date we file our Annual
Report on Form 10-KSB for the year ended December 31, 2005 (the "Filing
Deadline") or is not declared effective by the Securities and Exchange
Commission within ninety (90) days of the date of the IRRA (the "Effective
Deadline"), then as relief for the damages to any holder of Registerable
Securities (as defined in the IRRA) by reason of any such delay in or reduction
of its ability to sell the underlying shares of common stock (which remedy shall
not be exclusive of any other remedies at law or in equity), we would pay as
liquidated damages to the holder, at the holder's option, either a cash amount
or shares of our 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 Filing Deadline or the Effective Deadline
as the case may be. It shall also become an event of default under the IRRA if
the Registration Statement is not declared effective by the Securities and
Exchange Commission within one-hundred twenty (120) days from the date of the
IRRA.

                                       32
<PAGE>

We initially filed our Registration Statement with the Securities and Exchange
Commission on May 9, 2006. As of the date of this Quarterly Report, the
Registration Statement has not been declared effective by the Securities and
Exchange Commission. We do not have any intent to re-file our Registration
Statement and on November 13, 2008, we formally withdrew the Registration
Statement by filing form RW with the Securities and Exchange Commission. 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 management's analysis, the Company does not believe that any additional
penalty is due under the Investor Registration Rights Agreement.

Certain covenants in the Investment Agreement 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 YA Global (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.

During the nine months ended September 30, 2009, we issued 5,033,333 shares of
our common stock to YA Global in connection with the conversion of 50 shares of
Series A Preferred Stock.

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 consummate
the sale of our subsidiary, Medlink Connectividade and to subsequently further
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.

                                       33
<PAGE>

We believe that we can satisfy our cash requirements for the next twelve (12)
months based on our ability to consummate the sale of Transax Limited's
subsidiary-Medlink Connectividade, and to enter into additional financing
arrangements as necessary. Our future success and viability are primarily
dependent upon our current management to generate revenues from business
operations and raise additional capital through further private offerings of our
stock or loans from private investors. There can be no assurance, however, that
we will be able to raise additional capital. Our failure to successfully raise
additional capital will have a material and adverse affect upon us and our
shareholders.

MATERIAL COMMITMENTS

CONVERTIBLE LOANS - RELATED PARTY

A material liability for us at September 30, 2009 is the aggregate principal
amount of $175,000 and $40,386 in accrued interest due and owing to a related
party in accordance with two convertible promissory notes (collectively, the
"Convertible Promissory Note(s)"). The Convertible Promissory Notes are
convertible into shares of our common stock at $0.125 per share together with a
warrant to purchase our common stock at $0.25 per share for a period of two
years. As of September 30, 2009, an aggregate principal amount of $175,000 and
interest in the amount of $40,386 remains due and owing under the Convertible
Promissory Notes. As of the date of this quarterly report, the Convertible
Promissory Notes are deemed in default and are under re-negotiation with the
lender. On August 5, 2009, we entered into a settlement agreement with
Carlingford Investments Limited, ("Carlingford"), regarding the settlement of an
aggregate amount of $60,000 of interest payable due and owing to Carlingford by
issuing 30,000,0000 common shares.

LOAN - RELATED PARTY

A material liability for us at September 30, 2009 is the aggregate amount of
$399,709 in principal and interest due and owing to Stephen Walters, our Chief
Executive Officer (collectively, the "Loans"). The Loans are evidenced by a
promissory note with an interest rate of 0.8% per month and are currently due on
demand. For the nine months ended September 30, 2009 and 2008, we incurred
$22,798 and $15,640, respectively, in interest related to these loans. At
September 30, 2009 and December 31, 2008, $86,901 and $64,102 in interest and
loan fees was accrued on these loans and the aggregate principal and interest
amount due is $399,709 and $306,218, respectively. During the nine months ended
September 30, 2009, we borrowed $65,000 which was used for working capital
purposes.

CONSULTING AGREEMENT

A material liability for us at September 30, 2009 is the amount due and owing as
management fees to Stephen Walters, our Chief Executive Officer. For the nine
months ended September 30, 2009 and 2008, we incurred $158,579 and $162,411,
respectively, in management fees. At September 30, 2009 and December 31, 2008,
$440,190 and $274,646 in management fees and other expenses are payable to Mr.
Walters. In accordance with the terms of an agreement effective July 2007, we
pay monthly to Mr. Walters an aggregate amount of $17,500 as compensation for
managerial and consulting services he provides.

ACCRUED TAXES AND RELATED EXPENSES

A material estimated liability for us for fiscal year 2009 and 2008 is the
amount due and owing for Brazilian payroll taxes and Social Security taxes. At
September 30, 2009 and December 31, 2008, these deficiencies, plus interest and
penalties, amounted to approximately $2,588,000 and $1,180,000, respectively.

We have 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 time. At September 30, 2009, approximately
$2,585,000 of our INSS and other taxes are to be repaid within a 12 month
period. At September 30, 2009, the future payments due to the Brazilian
authorities are as follows: (i) 2009 - $2,584,618; (ii) 2010 - $3,752.

                                       34
<PAGE>

MEDLINK CONNECTIVIDADE LOAN PAYABLE AND OTHER LOANS PAYABLE

At September 30, 2009, significant liabilities for us are the several loans and
credit lines with financial institutions in Brazil. The Brazil loans require
monthly installment payments, bear interest at rates ranging from 28% to 42% per
annum, are secured by certain receivables of Medlink Connectividade, and are due
through October 2009. As of September 30, 2009 and December 31, 2008, the loans
payable to these financial institutions and others aggregated $848,373 and
$663,854, respectively.

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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE 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. In designing and evaluating
our disclosure controls and procedures, our management recognized that
disclosure controls and procedures, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of
disclosure controls and procedures are met. Additionally, in designing
disclosure controls and procedures, our management was necessarily required to
apply its judgment in evaluating the cost-benefit relationship of possible
disclosure controls and procedures. The design of any disclosure controls and
procedures is also 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.

Our management, including our Chief Executive Officer and our Chief Financial
Officer, has evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this Quarterly Report. Based
on such evaluation, and as described in greater detail below, our CEO and CFO
have concluded that, as of the end of the period covered by this Quarterly
Report on Form 10-Q, our disclosure controls and procedures were not effective:

    o   to give reasonable assurance that the information required to be
        disclosed by us in reports that we file under the Securities Exchange
        Act of 1934 is recorded, processed, summarized and reported within the
        time periods specified in the Securities and Exchange Commission's rules
        and forms, and

    o   to ensure that information required to be disclosed in the reports that
        we file or submit under the Securities Exchange Act of 1934 is
        accumulated and communicated to our management, including our Chief
        Executive Officer and our Chief Financial Officer, to allow timely
        decisions regarding required disclosure.

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<PAGE>

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Securities Exchange Act. Our management is also required to assess and
report on the effectiveness of our internal control over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404").
Management assessed the effectiveness of our internal control over financial
reporting as of June 30, 2009. In making this assessment, we used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control - Integrated Framework. During our
assessment of the effectiveness of internal control over financial reporting as
of September 30, 2009, management identified significant deficiencies related to
(i) the U.S. GAAP expertise of our internal accounting staff, (ii) our internal
audit functions; (iii) the absence of an Audit Committee as of September 30,
2009, and (iv) a lack of segregation of duties within accounting functions.
However, management believes that these deficiencies do not amount to a material
weakness. Therefore, the Company's internal control over financial reporting was
effective as of September 30, 2009.

We have begun preparing to be in compliance with the internal control
obligations, including Section 404, in 2009. Our internal accounting staff was
primarily engaged in ensuring compliance with Brazil's accounting and reporting
requirements for our operating subsidiary and their U.S. GAAP knowledge was
limited. As a result, the majority of our internal accounting staff, on a
consolidated basis, is relatively inexperienced with U.S. GAAP and the related
internal control procedures required of U.S. public companies. Although our
accounting staff is professional and experienced in accounting requirements and
procedures generally accepted in Brazil, management has determined that they
require additional training and assistance in U.S. GAAP matters. Management has
determined that our internal audit function is also significantly deficient due
to insufficient qualified resources to perform internal audit functions.
Finally, management determined that the lack of an Audit Committee of our Board
of Directors also contributed to insufficient oversight of our accounting and
audit functions.

In order to correct the foregoing weaknesses, we have taken the following
remediation measures:

    o   We have committed to the establishment of effective internal audit
        functions, however, due to the scarcity of qualified candidates with
        extensive experience in U.S. GAAP reporting and accounting in Brazil, we
        were not able to hire sufficient internal audit resources before
        September 30, 2009. However, we will increase our search for qualified
        candidates with assistance from recruiters and through referrals.

    o   We will consider searching for independent directors, with one qualified
        to serve on an audit committee to be established by our Board of
        Directors and we anticipate that our Board of Directors will also
        establish a compensation committee to be headed by one of the
        independent directors.

Due to our size and nature, segregation of all conflicting duties may not always
be possible and may not be economically feasible. However, to the extent
possible, we will implement procedures to assure that the initiation of
transactions, the custody of assets and the recording of transactions will be
performed by separate individuals.

We believe that the foregoing steps will remediate the significant deficiencies
identified above, and we will continue to monitor the effectiveness of these
steps and make any changes that our management deems appropriate. Due to the
nature of these significant deficiencies in our internal control over financial
reporting, there is a remote likelihood that misstatements which could be
material to our annual or interim financial statements could occur that would
not be prevented or detected. Accordingly, our internal control over

A material weakness (within the meaning of PCAOB Auditing Standard No. 5) is a
deficiency, or a combination of deficiencies, in internal control over financial
reporting, such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented
or detected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control over financial reporting that
is less severe than a material weakness, yet important enough to merit attention
by those responsible for oversight of the company's financial reporting.

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<PAGE>

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies and procedures may deteriorate.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting for
the three months that has materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Our subsidiary, Medlink Connectividade, is involved in litigation pertaining to
a previous provider of consultant services regarding breach of contract and two
labor law suits involving employees for unfair dismissal claims. At September
30, 2009 and December 31, 2008, we have accrued approximately $198,500 and
$151,000, respectively, related to these lawsuits. The outcome of these claims
is uncertain at this time.

Management is not aware of any other legal proceedings contemplated by any
governmental authority or any other party involving us or our properties. As of
the date of this Quarterly Report, no director, officer or affiliate is (i) a
party adverse to us in any legal proceeding, or (ii) has an adverse interest to
us in any legal proceedings. Management is not aware of any other legal
proceedings pending or that have been threatened against us or our properties.

ITEM 1A. RISK FACTORS

Not required for smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On August 6, 2009, the Board of Directors of the Company, pursuant to unanimous
written consent, authorized and approved the execution of a debt settlement
agreement whereby the Company issued 30,000,0000 shares of its restricted stock
in settlement of $60,000 of outstanding interest.

Thie issuance was exempt from registration under the Securities Act in reliance
on an exemption provided by Section 4(2) of that Act. Each person to whom the
shares were issued acquired the shares for investment and not with a view to the
sale or distribution and received information concerning us, our business and
our financial condition, and the stock certificates bear an investment legend.
No brokerage fees were paid in connection with any of these stock issuances.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

    None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    None.

ITEM 5. OTHER INFORMATION

    None.

ITEM 6. EXHIBITS

31.1    Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer
31.2    Rule 13a-14(a)/15d-14(a) certificate of Chief Financial Officer
32.1    Section 1350 certification of Chief Executive Officer
32.2    Section 1350 certification of Chief Financial Officer

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                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                        TRANSAX INTERNATIONAL LIMITED


Dated: November 24, 2009                By: /s/ STEPHEN WALTERS
                                        -----------------------
                                        Stephen Walters, President/Chief
                                        Executive Officer and Director


Dated: November 24, 2009                By: /s/ ADAM WASSERMAN
                                        ----------------------
                                        Adam Wasserman, Chief Financial Officer

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