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 March 31, 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
     incorporation or organization)                Identification No.)

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

                               (888) 317-698-6984
                               ------------------
              (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: 57,402,089 shares of
common stock are issued and outstanding as of May 15, 2009.

<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
                                    FORM 10-Q
                                 MARCH 31, 2009

                                TABLE OF CONTENTS
                                                                            Page
                                                                             No.
                                                                            ----
                         PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements ..............................................   3
Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations. .......................................  24
Item 3.  Quantitative and Qualitative Disclosures About Market Risk. .......  33
Item 4   Controls and Procedures. ..........................................  34
                           PART II - OTHER INFORMATION
Item 1.  Legal Proceedings. ................................................  35
Item 1A. Risk Factors. ..................................................... n/a
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds. ......  36
Item 3.  Defaults Upon Senior Securities. ..................................  36
Item 4.  Submission of Matters to a Vote of Security Holders. ..............  36
Item 5.  Other Information. ................................................  36
Item 6.  Exhibits. .........................................................  36

                           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

                                                                                       MARCH 31,     DECEMBER 31,
                                                                                     ------------    ------------
                                                                                         2009            2008
                                                                                     ------------    ------------
                                                                                      (Unaudited)     (Audited)*
<S>                                                                                  <C>             <C>
                                      ASSETS
CURRENT ASSETS:
  Cash ...........................................................................   $     24,621    $     25,676
  Accounts receivable, net .......................................................        413,197         374,539
  Prepaid expenses and other current assets ......................................        269,737         279,080
                                                                                     ------------    ------------

     TOTAL CURRENT ASSETS ........................................................        707,555         679,295

SOFTWARE DEVELOPMENT COSTS, net ..................................................        112,225         147,896
PROPERTY AND EQUIPMENT, net ......................................................        596,659         456,842
                                                                                     ------------    ------------

     TOTAL ASSETS ................................................................   $  1,416,439    $  1,284,033
                                                                                     ============    ============

                       LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Current portion of loans payable ...............................................   $    790,696    $    663,854
  Current portion of capital lease obligations ...................................         16,198          30,943
  Accounts payable and accrued expenses ..........................................      2,046,621       1,748,187
  Deferred gain on sale of non-controlling interest in subsidiary ................        937,700         937,700
  Due to related parties .........................................................        365,093         303,126
  Warrant liability ..............................................................            475           3,321
  Convertible feature liability ..................................................        877,966       1,007,472
  Loans payable - related party ..................................................        299,255         306,218
  Convertible loan - related party ...............................................        264,857         259,679
                                                                                     ------------    ------------

     TOTAL CURRENT LIABILITIES ...................................................      5,598,861       5,260,500

CAPITAL LEASE OBLIGATION. NET OF CURRENT PORTION .................................         21,122          37,102
ACCOUNTS PAYABLE AND ACCRUED EXPENSES, NET OF CURRENT PORTION ....................        160,525         160,840
                                                                                     ------------    ------------

     TOTAL LIABILITIES ...........................................................      5,780,508       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 March 31, 2009 and December
    31, 2008, respectively; liquidation preference $1,441,000 at March 31, 2009 ..      1,325,039       1,330,039
  Common stock $.00001 par value; 100,000,000 shares authorized; 57,402,089 and
    52,368,756 shares issued and outstanding at March 31, 2009 and
    December 31, 2008, respectively ..............................................            574             524
  Paid-in capital ................................................................      8,415,132       8,405,984
  Accumulated deficit ............................................................    (14,689,304)    (14,410,077)
  Accumulated other comprehensive income .........................................        584,490         499,121
                                                                                     ------------    ------------

     TOTAL STOCKHOLDERS' DEFICIT .................................................     (4,364,069)     (4,174,409)
                                                                                     ------------    ------------

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT .................................   $  1,416,439    $  1,284,033
                                                                                     ============    ============

* Financial data derived from Form 10-K filed with the Securities and Exchange Commission on April 15, 2009.

              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 MARCH 31,
                                                           ------------------------------
                                                               2009              2008
                                                           -------------    -------------
<S>                                                        <C>              <C>
REVENUES ...............................................   $     952,318    $   1,480,964
                                                           -------------    -------------

OPERATING EXPENSES:
  Cost of product support services .....................         507,138          450,496
  Compensation and related benefits ....................         330,864          393,587
  Professional fees ....................................          23,261           51,494
  Management and consulting fees - related parties .....          65,259           74,981
  Depreciation and amortization ........................          72,769           91,803
  General and administrative ...........................         270,210          293,224
                                                           -------------    -------------

     TOTAL OPERATING EXPENSES ..........................       1,269,501        1,355,585
                                                           -------------    -------------

INCOME (LOSS) FROM OPERATIONS ..........................        (317,183)         125,379
                                                           -------------    -------------

OTHER INCOME (EXPENSES):
  Foreign currency exchange gain (loss) ................          10,224          (12,317)
  Gain from derivative liabilities .....................         128,152          739,185
  Interest expense,net .................................         (91,981)         (98,336)
  Interest expense - related party .....................          (8,439)         (14,048)
                                                           -------------    -------------

     TOTAL OTHER INCOME (EXPENSES) .....................          37,956          614,484
                                                           -------------    -------------

NET INCOME (LOSS) ......................................        (279,227)         739,863

CUMULATIVE PREFERRED STOCK DIVIDENDS ...................         (25,220)         (26,422)
                                                           -------------    -------------

NET INCOME (LOSS) ALLOCABLE TO COMMON STOCKHOLDERS .....   $    (304,447)   $     713,441
                                                           =============    =============

COMPREHENSIVE INCOME (LOSS):
  NET INCOME (LOSS) ....................................   $    (279,227)   $     739,863

  OTHER COMPREHENSIVE INCOME (LOSS)
     Unrealized foreign currency translation gain (loss)          85,369          (60,535)
                                                           -------------    -------------

  COMPREHENSIVE INCOME (LOSS) ..........................   $    (193,858)   $     679,328
                                                           =============    =============

NET INCOME (LOSS) PER COMMON SHARE:
  BASIC ................................................   $       (0.01)   $        0.02
                                                           =============    =============
  DILUTED ..............................................   $       (0.01)   $           -
                                                           =============    =============

WEIGHTED AVERAGE SHARES OUTSTANDING:
  BASIC ................................................      53,686,164       36,362,669
                                                           =============    =============
  DILUTED ..............................................      53,686,164      278,450,169
                                                           =============    =============

  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 THREE MONTHS
                                                                      ENDED MARCH 31,
                                                                 -------------------------
                                                                    2009           2008
                                                                 ----------     ----------
<S>                                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) ...........................................    $ (279,227)    $  739,863
Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
     Depreciation and amortization ..........................        72,769         91,803
     Amortization of software maintenance costs .............        35,671         57,154
     Deposit on sale of non-controlling interest applied to
       professional fees ....................................             -        (20,000)
     Gain from derivative liabilities .......................      (128,152)      (739,185)
     Foreign currency exchange gain .........................       (10,224)             -
Changes in assets and liabilities:
     Accounts receivable ....................................       (34,951)      (148,171)
     Prepaid expenses and other current assets ..............        11,903        (26,387)
     Other assets ...........................................             -          2,190
     Accounts payable and accrued expenses ..................       283,029         76,008
     Accrued interest payable, related party ................         8,439         26,365
     Due to related parties .................................        61,967         12,666
     Accounts payable and accrued expenses - long-term ......        (1,821)       (41,487)
                                                                 ----------     ----------

NET CASH PROVIDED BY OPERATING ACTIVITIES ...................        19,403         30,819
                                                                 ----------     ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of non-controlling interest.............             -        120,000
  Acquisition of property and equipment .....................      (110,485)       (64,116)
                                                                 ----------     ----------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES .........      (110,485)        55,884
                                                                 ----------     ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from (repayment of) loans ........................       119,972        (82,882)
  Payment of capital lease obligations ......................       (31,204)             -
                                                                 ----------     ----------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES .........        88,768        (82,882)
                                                                 ----------     ----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH .....................         1,259            251
                                                                 ----------     ----------

NET INCREASE (DECREASE) IN CASH .............................        (1,055)         4,072

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

CASH, END OF PERIOD .........................................    $   24,621     $  180,010
                                                                 ==========     ==========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid for interest ....................................    $   91,981     $   95,531
                                                                 ==========     ==========
  Cash paid for income taxes ................................    $        -     $        -
                                                                 ==========     ==========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Series A preferred stock converted to common stock ........    $    5,000     $   46,300
                                                                 ==========     ==========
  Common stock and options issued for services ..............    $        -     $   29,565
                                                                 ==========     ==========
  Derivative liability reclassified to equity upon conversion    $    4,200     $        -
                                                                 ==========     ==========

  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
                                 March 31, 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 9).

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
                                 March 31, 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

Effective January 1, 2008, the Company adopted Statement of Financial Accounting
Standards ("SFAS") 157, Fair Value Measurements. SFAS 157 clarifies the
definition of fair value, prescribes methods for measuring fair value, and
establishes a fair value hierarchy to classify the inputs used in measuring fair
value as follows:

   Level 1inputs 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 adoption of SFAS 157 did not have a material impact on the Company's fair
value measurements. 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.

In February 2008, the Financial Accounting Standards Board ("FASB") issued FASB
Staff Position FAS 157-2, "Effective Date of FASB Statement No. 157" ("FSP FAS
157-2"), which delayed the effective date of SFAS 157 for all nonrecurring fair
value measurements of nonfinancial assets and liabilities until fiscal years
beginning after November 15, 2008. The adoption of FSP FAS 157-2 on January 1,
2009 did not have a material impact on the Company's results of operations, cash
flows or financial position.

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 March 31, 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)
   Decrease in fair value of derivative liabilities .........       (128,152)
                                                                 -----------
   Balance of derivative liabilities as of March 31, 2009 ...    $   878,441
                                                                 ===========

                                        7
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

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

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 March 31, 2009 and December 31, 2008.

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 March 31, 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 three months ended March
31, 2009 accounted for approximately 71.9% or $684,431 of the revenues. For the
three months ended March 31, 2009, these two major customers accounted for 59.3%
and 12.6% of revenues, respectively. At March 31, 2009, the two major customers
accounted for 61% and 13%, respectively, of the total accounts receivable
balance outstanding. The Company's revenues from two major customers for the
three months ended March 31, 2008 accounted for approximately 87% or $1,297,000
of the revenues. For the three months ended March 31, 2008, the two major
customers accounted for 46% and 41% of revenues, respectively. At March 31,
2008, the two major customers accounted for 42% and 38%,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 March 31, 2009, bank deposits in the
United States did not exceed federally insured limits of $250,000. At March 31,
2009, the Company had deposits of $22,270 in banks in Brazil which may not be
insured. Historically, we have not experienced any losses on our deposits of
cash.

                                        8
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

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

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.

Impairment of Long-Lived Assets

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting for the Impairment or Disposal 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 three months ended March 31, 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. The Company accounts for income taxes under SFAS 109, "Accounting for
Income Taxes." Under SFAS 109, 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.
Under SFAS 109, 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 provisions of the FASB's Interpretation Number 48,
"Accounting for Uncertainty in Income Taxes - an interpretation of SFAS
Statement No. 109", ("FIN 48"), which provides a financial statement recognition
threshold and measurement attribute for a tax position taken or expected to be
taken in a tax return. Under FIN 48, we 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. FIN 48 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.

                                        9
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

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

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 three months ended March 31, 2009 and 2008 was $1,259
and $251, 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.

Asset and liability accounts at March 31, 2009 and December 31, 2008 were
translated at 2.3152 R$ to $1.00 and at 2.337 R$ to $1.00, respectively. Equity
accounts are translated at their historical rate. In accordance with SFAS 95,
"Statement of Cash Flows," 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 in accordance with
SFAS 52, "Foreign Currency Translation," and are included in determining net
earnings.

Although the economic situation in Brazil 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.

                                       10
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

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

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 8), which contained an Embedded Conversion Feature, ("ECF"),
and warrants to purchase common stock. In accordance with the guidance in
paragraph 12 of SFAS 133, "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 three criteria of
paragraph 12: (1) the conversion feature is not clearly and closely related to
the host component, (2) the convertible instrument is not accounted for at fair
value, and (3) the embedded conversion option meets the definition of a
derivative in paragraph 6 of SFAS 133.

To assess whether or not the ECF would be classified as stockholders' equity if
it were freestanding, management considered the guidance in Emerging Issues Task
Force ("EITF") issue No. 00-19, "Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company's Own Stock." In assessing
whether or not the conversion option would be classified as equity or a
liability if it were freestanding, management determined whether or not the
Series A convertible preferred stock is considered "conventional". EITF 00-19
and EITF issue No. 05-2, "The Meaning of Conventional Convertible Debt
Instruments in issue No. 00-19," defines conventional convertible debt as debt
whereby the holder will, at the issuer's option, receive a fixed amount of
shares or the equivalent amount of cash as proceeds when the conversion option
is exercised. Management considered all aspects of EITF 00-19, paragraphs 12-33
and determined that 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 under SFAS 133. In addition, all warrants
to purchase common stock issued with the preferred stock were then deemed to be
derivative instruments under SFAS 133. The accounting treatment of derivative
financial instruments requires that the Company record the ECF and warrants at
their fair values as of each reporting date. Any change in fair value is
recorded as 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 March 31, 2009 and
December 31, 2008.

Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss)
earnings 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:

                                       11
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
<TABLE>
<CAPTION>
                                                               Three Months ended
                                                                    March 31,
                                                         ------------------------------
                                                              2009            2008
                                                         -------------    -------------
<S>                                                      <C>              <C>
Net income (loss) allocable to common shareholders for
  basic and diluted net income (loss) per common share   $    (304,447)   $     713,441
                                                         =============    =============

Weighted average common shares outstanding - basic ...      53,686,164       36,362,669
Effect of dilutive securities:
   Convertible debt ..................................               -       56,250,000
   Series A convertible preferred stock ..............               -      185,837,500
                                                         -------------    -------------
Weighted average common shares outstanding - diluted .      53,686,164      278,450,169
                                                         =============    =============
Net income (loss) per common share - basic ...........   $       (0.01)   $        0.02
                                                         =============    =============
Net income (loss) per common share - diluted .........   $       (0.01)   $        0.00
                                                         =============    =============
</TABLE>

The Company's aggregate common stock equivalents not included above at March 31,
2009 and 2008 include the following:

                                                      2009            2008
                                                 -------------     ----------
   Stock options ...........................         2,375,000      3,425,000
   Stock warrants ..........................         7,402,500     11,502,500
   Series A convertible preferred stock ....     1,441,000,000              -
   Convertible debt-related party ..........         1,400,000      1,400,000
                                                 -------------     ----------
        Total ..............................     1,452,177,500     16,327,500
                                                 =============     ==========

Stock Based Compensation

Stock based compensation is accounted for under SFAS 123R, "Share-Based
Payment." SFAS 123R 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). SFAS 123R
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. The
Company accounts for non-employee share-based awards in accordance with EITF No.
96-18, "Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquisition, or in Conjunction with Selling, Goods or Services."

Advertising

Advertising costs are expensed when incurred. For the three months ended March
31, 2009 and 2008, advertising expense was deemed to be immaterial.

                                       12
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

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

Comprehensive Income

The Company follows SFAS 130 "Reporting Comprehensive Income" to recognize the
elements of comprehensive income. Comprehensive income is comprised of net
income 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 for the three months
ended March 31, 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 months
ended March 31, 2009 and 2008, research and development costs were deemed not
material.

Recent Authoritative Pronouncements

In December 2007, the FASB issued SFAS 141(R), "Business Combinations" which
replaces SFAS 141. SFAS 141(R) establishes principles and requirements for how
an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, any non-controlling interest in the
acquiree and the goodwill acquired. The Statement also establishes disclosure
requirements which will enable users to evaluate the nature and financial
effects of the business combination. SFAS 141(R) is effective for fiscal years
beginning after December 15, 2008, and applies to any business combinations that
occur after December 31, 2008. The adoption of SFAS 141(R) did not have an
impact on the Company's results of operations or financial position.

In December 2007, the FASB issued SFAS 160, "Non-controlling Interests in
Consolidated Financial Statements - an amendment of Accounting Research Bulletin
No. 51", which establishes accounting and reporting standards for ownership
interests in subsidiaries held by parties other than the parent, the amount of
consolidated net income attributable to the parent and to the non-controlling
interest, changes in a parent's ownership interest and the valuation of retained
non-controlling equity investments when a subsidiary is deconsolidated. The
Statement also establishes reporting requirements that provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the non-controlling owners. SFAS 160 is effective
for fiscal years beginning after December 15, 2008. The adoption of SFAS 160 did
not have a material impact on the Company's consolidated financial statements.

In March 2008, the FASB issued SFAS 161, "Disclosures about Derivative
Instruments and Hedging Activities". The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The adoption of SFAS 161 did not have a material impact on the
preparation of its consolidated financial statements.

In May 2008, the FASB issued Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)." FSP APB 14-1 clarifies that convertible
debt instruments that may be settled in cash upon either mandatory or optional
conversion (including partial cash settlement) are not addressed by paragraph 12
of APB Opinion No. 14, "Accounting for Convertible Debt and Debt issued with

                                       13
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

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

Stock Purchase Warrants." Additionally, FSP APB 14-1 specifies that issuers of
such instruments should separately account for the liability and equity
components in a manner that will reflect the entity's non-convertible debt
borrowing rate when interest cost is recognized in subsequent periods. FSP APB
14-1 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years. The
Company adopted FSP APB 14-1 beginning January 1, 2009, and this standard must
be applied on a retroactive basis. The adoption of FSP APB 14-1 did not have a
material impact on the Company's consolidated financial position and results of
operations.

In May 2008, the FASB issued SFAS 162, "The Hierarchy of Generally Accepted
Accounting Principles." This standard is intended to improve financial reporting
by identifying a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with generally accepted accounting principles in the United States
for non-governmental entities. SFAS 162 is effective 60 days following approval
by the U.S. Securities and Exchange Commission, ("SEC"), of the Public Company
Accounting Oversight Board's amendments to AU Section 411, "The Meaning of
Present Fairly in Conformity with Generally Accepted Accounting Principles." The
Company does not expect SFAS 162 to have a material impact on the preparation of
its consolidated financial statements.

On June 16, 2008, the FASB issued final FSP No. EITF 03-6-1, "Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities," to address the question of whether instruments
granted in share-based payment transactions are participating securities prior
to vesting. The FSP determines that unvested share-based payment awards that
contain rights to dividend payments should be included in earnings per share
calculations. The guidance will be effective for fiscal years beginning after
December 15, 2008. The adoption of EITF 03-6-1 did not have a material impact on
the Company's consolidated financial statements.

In June 2008, the FASB ratified Emerging Issues Task Force Issue No. 07-5,
"Determining Whether an Instrument (or Embedded Feature) is Indexed to an
Entity's Own Stock." EITF 07-5 mandates a two-step process for evaluating
whether an equity-linked financial instrument or embedded feature is indexed to
the entity's own stock.

Warrants that a company issues that contain a strike price adjustment feature,
upon the adoption of EITF 07-5, are no longer being considered indexed to the
company's own stock. Accordingly, adoption of EITF 07-5 will change the current
classification (from equity to liability) and the related accounting for such
warrants outstanding at that date. EITF 07-5 is effective for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years. The adoption of EITF 07-5 did not have a material effect on the Company's
consolidated financial statements.

NOTE 2 - GOING CONCERN

Since inception, the Company has incurred cumulative net losses of $14,689,304,
and has a stockholders' deficit of $4,364,069 and a working capital deficit of
$4,891,306 at March 31, 2009. Since its inception, the Company has funded
operations through short-term borrowings and equity investments in order to meet
its strategic objectives. The Company's future operations are dependent upon
external funding and its ability to increase revenues and reduce expenses.
Management believes that sufficient funding will be available from additional
related party borrowings and private placements to meet its business objectives,

                                       14
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

NOTE 2 - GOING CONCERN (CONTINUED)

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 March 31, 2009 and December 31, 2008, these deficiencies (including interest
and penalties) amounted to approximately $1,351,000 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. At March 31, 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 March 31, 2009 and December
31, 2008:
                                                  2009            2008
                                              -----------     -----------
      Computer Equipment .................    $ 1,316,555     $ 1,251,416
      Software ...........................        394,034         379,107
      Office Furniture and Equipment .....         18,215          18,045
      Vehicle ............................         59,618          59,050
      Other ..............................         17,304          17,142
                                              -----------     -----------
                                                1,805,726       1,724,760
      Accumulated Depreciation ...........     (1,209,067)     (1,267,918)
                                              -----------     -----------
                                              $   596,659     $   456,842
                                              ===========     ===========

For the three months ended March 31, 2009 and 2008, depreciation expense
amounted to $72,769 and $91,803 respectively.

NOTE 4 - SOFTWARE DEVELOPMENT COSTS

Under the criteria set forth in SFAS 86, "Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed," capitalization of software
development costs begins upon the establishment of technological feasibility of
the software. The establishment of technological feasibility and the ongoing
assessment of the recoverability of these costs require considerable judgment by
management with respect to certain external factors, including, but not limited
to, anticipated future gross product revenues, estimated economic life, and
changes in software and hardware technology. Capitalized software development
costs are amortized utilizing the straight-line method over the estimated
economic life of the software not to exceed three years. 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 March 31, 2009 and
December 31, 2008:

                                       15
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

NOTE 4 - SOFTWARE DEVELOPMENT COSTS (CONTINUED)

                                                   2009            2008
                                                ---------       ---------
      Software development costs .........      $ 471,419       $ 471,419
      Accumulated amortization ...........       (359,194)       (323,523)
                                                ---------       ---------
                                                $ 112,225       $ 147,896
                                                =========       =========

For the three months ended March 31, 2009 and 2008, amortization of development
costs amounted to $35,671 and $57,154, respectively, and has been included in
cost of product support services on the accompanying consolidated statements of
operations.

NOTE 5 - RELATED PARTY TRANSACTIONS

Convertible Loan - Related Party
--------------------------------

At March 31, 2009 and December 31, 2008, the Company had aggregate loans payable
for $175,000 to 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. 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 March 31, 2009 and December 31, 2008, interest
due on these loans amounted to $89,857 and $84,679 and the aggregate principal
amount due is $175,000. During the three months ended March 31, 2009 and 2008,
the Company incurred $5,178 and $5,236, 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 three months ended March 31, 2009 and 2008, the Company incurred $53,579
and $55,866, 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 agreed to increase the compensation of this officer/director
from $15,000 per month to $17,500 per month. At March 31, 2009 and December 31,
2008, $329,933 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 three months ended March 31, 2009 and 2008, the Company incurred $11,680
and $9,115, 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
March 31, 2009 and December 31, 2008, $35,160 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.

For the three months ended March 31, 2009 and 2008, the Company incurred $0 and
$10,000, 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.

                                       16
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

NOTE 5 - RELATED PARTY TRANSACTIONS (CONTINUED)

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

On March 5, 2004, the Company borrowed 115,000 Euros (translated to $151,892 and
$162,116 at March 31, 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. On September 25, 2007,
the officer agreed to extend this loan for an additional twelve months until
March 4, 2008. This loan has not been repaid and is currently payable on demand.
Additionally, during fiscal 2007, the Company borrowed $80,000 from this
officer. This loan accrues 1.0% non-compounding interest per month, (12% per
annum), and is due on demand. For the three months ended March 31, 2009 and
2008, the Company incurred $3,261 and $8,812, respectively, in interest related
to these loans. At March 31, 2009 and December 31, 2008, $67,363 and $64,102 in
interest and loan fees was accrued on these loans and the aggregate principal
and interest amount due is $299,255 and $306,218, respectively, and is included
in loan payable - related party on the accompanying consolidated balance sheets.

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 30% to 90% per annum, are secured
by certain receivables of Medlink Conectividade, and are due through October
2009. At March 31, 2009 and December 31, 2008, loans payable to these financial
institutions aggregated $790,696 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.

                                       17
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

  (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.

  (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.

In accordance with SFAS 133, the Company is required to record the fair value of
the ECF and warrants as a liability. At March 31, 2009 and 2008, the Company
revalued the ECF and warrants resulting in gains on derivative liability of
$835,993 and $693,749 for the three months ended March 31, 2009 and 2008,
respectively.

At March 31, 2009, the estimated fair value of the ECF and warrants were
liabilities of $877,966 and $475, 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.

                                       18
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

At the valuation date of March 31, 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 1.78 years
         Volatility ............................        223%
         Risk-free interest rate ...............    0.21% - 0.81%

For the three months ended March 31, 2009 and 2008, the related gain from
derivative liabilities is as follows:

                                            Convertible    Preferred
                                              debt (a)       stock        Total
                                            -----------    ---------    --------
                 2009
                 ----
Change in fair value of derivative
 liabilities - gain .....................     $      -     $128,152     $128,152
                                              --------     --------     --------

                 2008
                 ----
Change in fair value of derivative
 liabilities - gain .....................     $ 45,436     $693,749     $739,185
                                              --------     --------     --------

  (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 three months ended March 31, 2008, the Company recorded a gain on
      valuation of these derivative liability and warrants of $45,436. 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.

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

On November 28, 2004, the Company adopted a 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
                                 March 31, 2009

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

A summary of the status of the Company's outstanding stock options as of March
31, 2009 and changes during the period ending on that date is as follows:

                                                        Three Months Ended
                                                          March 31, 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 March 31, 2009:

                Options Outstanding                       Options Exercisable
----------------------------------------------------   -------------------------
                              Weighted
               Number         Average       Weighted        Number      Weighted
Range of   Outstanding at    Remaining      Average    Exercisable at    Average
Exercise      March 31,     Contractual     Exercise      March 31,     Exercise
  Price         2009        Life (Years)      Price         2009         Price
--------   --------------   ------------   ---------   --------------   --------
$   0.20          425,000       0.75            0.20          425,000       0.20
$   0.15        1,350,000       1.50            0.15        1,350,000       0.15
$   0.06          600,000       3.65            0.06          600,000       0.06
           --------------                  ---------   --------------   --------
                2,375,000                  $    0.14        2,375,000   $   0.14
           ==============                  =========   ==============   ========

As of March 31, 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
                                 March 31, 2009

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

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

A summary of the status of the Company's outstanding stock warrants as of March
31, 2009 and activities during the period then ended is as follows:

                                                        Three Months Ended
                                                          March 31, 2009
                                                  ------------------------------
                                                   Number of    Weighted Average
                                                   Warrants      Exercise Price
                                                  ----------    ----------------
Warrants
--------
Balance at beginning of the period .........       7,402,500         $ 0.23
Granted ....................................               -              -
Exercised ..................................               -              -
Forfeited ..................................               -              -
                                                  ----------         ------
Balance at end of the period                      7,402,500          $ 0.23
                                                  ==========         ======

The following information applies to all warrants outstanding at March 31, 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       1.79            0.30       2,500,000        0.30
$   0.20        4,902,500       1.16            0.20       4,902,500        0.20
           --------------                  ---------   -------------   ---------
                7,402,500                  $    0.23       7,402,500   $    0.23
           ==============                  =========   =============   =========

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.

                                       21
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 31, 2009

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

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 three
months ended March 31, 2009. 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 March 31, 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.

Accordingly, at March 31, 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 March 31, 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
                                                                 ===========


In accordance with the further terms and provisions of the Agreement, a
performance bonus was payable by the Buyer to the Company (the "Bonus") equal to
50% of the revenues received by Medlink Conectividade with respect to certain
transactions in excess of an aggregate of 678,076 executed during 2008. The
Company has not recorded the bonus receivable since the collection of this
receivable is not reasonably assured. Additionally, in accordance with the terms
of the Agreement, MTI grant to the Company a perpetual, exclusive and
sub-license to use all of the software and other intellectual property owned by
MTI in all territories other than (i) Latin America (defined as all mainland
countries in the Western Hemisphere south of the USA/Mexico border; and (ii)
Spain and Portugal.

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 June 30, 2009.

                                       22
<PAGE>

                 TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
            Notes to the Unaudited Consolidated Financial Statements
                                 March 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.

                                                   Three Months ended
                                                        March 31,
                                               --------------------------
                                                   2009          2008
                                               -----------    -----------
   Revenues to unaffiliated customers:
           Brazil ..........................   $   952,318    $ 1,480,964
                                               -----------    -----------
   Operating Expenses:
           Brazil ..........................     1,172,392      1,148,282
           USA .............................        96,277        203,092
           Mauritius .......................           832          4,211
                                               -----------    -----------
        Total Operating Expenses                 1,269,501      1,355,585
                                               -----------    -----------
   Income (Loss) from operations  ..........      (317,183)       125,379
                                               -----------    -----------
   Other income (expenses) and income taxes:
           Brazil ..........................       (91,981)       (95,531)
           USA .............................       129,937        710,015
                                               -----------    -----------
                                                    37,956        614,484
                                               -----------    -----------
   Net income (loss) as reported ...........   $ (279,227)    $   739,863
                                               -----------    -----------

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 March 31, 2009 and December 31, 2008, these
deficiencies, plus interest and penalties, amounted to approximately $1,351,000
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 "unfair dismissal"
claims. At March 31, 2009 and December 31, 2008, the Company has accrued
approximately $152,500 and $151,000, respectively, related to these lawsuits.
The outcome of these clams 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 three months ended March 31, 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 first quarter, 2009, we had eleven contracts to develop our
solutions for customers. Two of these contracts were signed during the first
quarter of 2009 and a total of three of our contracts and are currently under
development with our customers and awaiting implementation. Transaction data is
being collected in a test environment and will be subject to full roll out at a
later date.

We processed 1.9 million transactions during the three month period ended March
31, 2009 compared to 2.1 million transactions compared with the same period in
2008. Significant growth was achieved in the introduction of the company's
web-based solution which increased to over 300,000 transactions per month in
March 31, 2009 from 225,000 transactions in January 2009.

At the end of the three month period ended March 31, 2009, we had 9,338
solutions operational in Brazil compared with 6,269 solutions during the same
period in 2008. Our installations at the end of the three month period ended
March 31, 2009 included 3,300 POS solutions, 4,200 WEB solutions and 2,300 IVR
solutions with the balance of installations being PC and server based solutions
installed in major medical laboratories.

During the three month period ended March 31, 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.

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

                                       24
<PAGE>

December 31, 2008. We did not receive any proceeds during the three months ended
March 31, 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 three months ended March 31, 2009, we received
$15,000 of such reimbursement, and a total of $20,000 of reimbursement was
received during the three months ended March 31, 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 default on its payments of principal and interest. At March 31, 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 March 31, 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
March 31, 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 $2,262,500
in periodic payments. We are currently in discussions with the buyer and plan to
conclude any renegotiation of contract terms on or about June 30, 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, 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>

Under the criteria set forth in SFAS 86, "Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed", capitalization of software
development costs begins upon the establishment of technological feasibility of
the software. The establishment of technological feasibility and the ongoing
assessment of the recoverability of these costs require considerable judgment by
management with respect to certain external factors, including, but not limited
to, anticipated future gross product revenues, estimated economic life, and
changes in software and hardware technology. Capitalized software development
costs are amortized utilizing the straight-line method over the estimated
economic life of the software not to exceed three years. We regularly review the
carrying value of software development assets and a loss is recognized when the
unamortized costs are deemed unrecoverable based on the estimated cash flows to
be generated from the applicable software.

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.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued SFAS 141(R), "Business Combinations", which
replaces SFAS 141. SFAS 141(R) establishes principles and requirements for how
an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, any non-controlling interest in the
acquiree and the goodwill acquired. The Statement also establishes disclosure
requirements which will enable users to evaluate the nature and financial
effects of the business combination. SFAS 141(R) is effective for fiscal years
beginning after December 15, 2008, and applies to any business combinations
which occur after December 31, 2008. The adoption of SFAS 141(R) did not have an
impact on the Company's results of operation or financial position.

In December 2007, the FASB issued SFAS 160, "Non-controlling Interests in
Consolidated Financial Statements - an amendment of Accounting Research Bulletin
No. 51", which establishes accounting and reporting standards for ownership
interests in subsidiaries held by parties other than the parent, the amount of
consolidated net income attributable to the parent and to the non-controlling
interest, changes in a parent's ownership interest and the valuation of retained
non-controlling equity investments when a subsidiary is deconsolidated. The
Statement also establishes reporting requirements that provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the non-controlling owners. SFAS 160 is effective
for fiscal years beginning after December 15, 2008. The adoption of SFAS 160 did
not have a material impact on the preparation of our consolidated financial
statements.

                                       26
<PAGE>

In March 2008, the FASB issued SFAS 161, "Disclosures about Derivative
Instruments and Hedging Activities". The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The adoption of SFAS 161 did not have a material impact on the
preparation of our consolidated financial statements.

In May 2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement). FSP APB 14-1 clarifies that convertible debt instruments that may
be settled in cash upon either mandatory or optional conversion (including
partial cash settlement) are not addressed by paragraph 12 of APB Opinion No.
14, "Accounting for Convertible Debt and Debt issued with Stock Purchase
Warrants." Additionally, FSP APB 14-1 specifies that issuers of such instruments
should separately account for the liability and equity components in a manner
that will reflect the entity's non-convertible debt borrowing rate when interest
cost is recognized in subsequent periods. FSP APB 14-1 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. The Company has adopted FSP APB
14-1 beginning January 1, 2009, and this standard must be applied on a
retroactive basis. The adoption of FSP APB 14-1 did not have a material impact
on our consolidated financial position and results of operations.

In May 2008, the FASB issued SFAS 162, "The Hierarchy of Generally Accepted
Accounting Principles." This standard is intended to improve financial reporting
by identifying a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with generally accepted accounting principles in the United States
for non-governmental entities. SFAS 162 is effective 60 days following approval
by the U.S. Securities and Exchange Commission of the Public Company Accounting
Oversight Board's amendments to AU Section 411, "The Meaning of Present Fairly
in Conformity with Generally Accepted Accounting Principles." The adoption of
SFAS 162 did not have a material impact on the preparation of our consolidated
financial statements.

On June 16, 2008, the FASB issued FSP No. EITF 03-6-1, "Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities," to address the question of whether instruments granted in
share-based payment transactions are participating securities prior to vesting.
The FSP determines that unvested share-based payment awards that contain rights
to dividend payments should be included in earnings per share calculations. The
guidance will be effective for fiscal years beginning after December 15, 2008.
The adoption of FSP No. EITF 03-6-1 did not have an impact on our consolidated
financial statements.

In June 2008, the FASB ratified Emerging Issues Task Force Issue No. 07-5,
"Determining Whether an Instrument (or Embedded Feature) is Indexed to an
Entity's Own Stock." EITF 07-5 mandates a two-step process for evaluating
whether an equity-linked financial instrument or embedded feature is indexed to
the entity's own stock. Warrants that a company issues that contain a strike
price adjustment feature, upon the adoption of EITF 07-5, are no longer being
considered indexed to the company's own stock. Accordingly, adoption of EITF
07-5 will change the current classification (from equity to liability) and the
related accounting for such warrants outstanding at that date. EITF 07-5 is
effective for fiscal years beginning after December 15, 2008, and interim
periods within those fiscal years. The adoption of EITF 07-5 did not have a
material impact on our consolidated financial statements.

                                       27
<PAGE>

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2009 COMPARED TO THREE MONTHS ENDED MARCH 31, 2008

                                                     For the Three Months Ended
                                                              March 31,
                                                     --------------------------
                                                         2009           2008
                                                     -----------    -----------

REVENUES ..........................................  $   952,318    $ 1,480,964
                                                     -----------    -----------

OPERATING EXPENSES
  Cost of product support services ................      507,138        450,496
  Compensation and related benefits ...............      330,864        393,587
  Professional fees ...............................       23,261         51,494
  Management and consulting fees - related partiers       65,259         74,981
  Depreciation and amortization ...................       72,769         91,803
  General and administrative ......................      270,210        293,224
                                                     -----------    -----------
TOTAL OPERATING EXPENSES ..........................    1,269,501      1,355,585
                                                     -----------    -----------

(LOSS) INCOME FROM OPERATIONS .....................     (317,183)       125,379
                                                     -----------    -----------

OTHER (EXPENSES) INCOME
  Foreign exchange gain (loss) ....................       10,224        (12,317)
  Gain from derivative liabilities ................      128,152        739,185
  Interest expense ................................      (91,981)       (98,336)
  Interest expense -related party .................       (8,439)       (14,048)
                                                     -----------    -----------
                                                          37,956        614,484
                                                     -----------    -----------

(LOSS) INCOME BEFORE INCOME TAXES .................     (279,227)       739,863

PROVISION FOR INCOME TAXES ........................            -              -
                                                     -----------    -----------

NET (LOSS) INCOME .................................     (279,227)       739,863

OTHER COMPREHENSIVE INCOME  (LOSS)
Unrealized foreign currency translation gain (loss)       85,369        (60,535)
                                                     -----------    -----------

COMPREHENSIVE INCOME (LOSS) .......................  $  (193,858)   $   679,328
                                                     -----------    -----------

Our net income (loss) for the three months ended March 31, 2009 was $(279,227)
compared to net income of $739,863 for the three months ended March 31, 2008 (a
decrease of $1,019,090 or 137.7%).

For the three months ended March 31, 2009, we generated $952,318 in revenues
compared to $1,480,964 in revenues generated for the three months ended March
31, 2008 (a decrease of $528,646 or 35.7%). The significant decrease in revenues
is due to the loss of our major customer, Bradesco. The decrease in revenues
from the loss of Bradesco was $798,283 and was offset by an increase of revenues
from new customers of $116,649 and increased revenues from existing customers.
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
1,900,000 "real time" transactions for the three months ended March 31, 2009, of
which 684,000 were from POS terminals, 219,000 from PC and PC servers, 774,000
were via our proprietary WEB solution, and 193,000 from our Interactive Voice

                                       28
<PAGE>

Response solution. We undertook approximately 2,100,000 "real time" transactions
during three months ended March 31, 2008, of which 1,200,000 were from POS
terminals, 554,000 from PC servers, 227,000 from Interactive Voice Response and
84,000 transaction from our proprietary WEB solution. The decrease in
transaction volume for the three months ended March 31, 2009 compared with the
three months ended March 31, 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 quarter ended March 31, 2009.

For the three months ended March 31, 2009, we incurred operating expenses in the
aggregate amount of $1,269,501 compared to $1,355,585 incurred for the three
months ended March 31, 2008 (a decrease of $86,084 or 6.4%). The decrease in
operating expenses incurred during the three months ended March 31, 2009
compared to the three months ended March 31, 2008 resulted from: (i) an increase
of $56,642 or 12.6% in cost of product support services; (ii) a decrease of
$62,723 or 15.9 % in compensation and related benefits associated with a
decrease in compensation for our MedLink operations; (iii) a decrease of $28,233
or 54.8% based on a decrease in the amount of professional fees incurred; (iv) a
decrease of $9,722 or 13% 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) a decrease of $19,034 or 20.7% in depreciation and
amortization; and (vi) a decrease of $23,014 or 7.8% in general and
administrative expenses primarily resulting from cost cutting measures.

We reported a loss from operations of ($317,183) for the three months ended
March 31, 2009 as compared to income from operations of 125,379 for the three
months ended March 31, 2008 (a decrease of $442,562 or 353%).

For the three months ended March 31, 2009, we recorded other income of $37,956,
compared to other income of $614,484 during the three months ended March 31,
2008 (an increase of $576,528). The variance for the three months ended March
31, 2009, compared to the three months ended March 31, 2008 resulted primarily
from the change in the fair value of the Company's derivative liabilities which
was a gain of $128,152 in 2009, as compared to a gain in 2008 of $739,185. 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 March 31, 2009, our net income (loss) was $(2794,227)
compared to net income of $739,863 for the three months ended March 31, 2008.

For the three months ended March 31, 2009, we recognized a cumulative preferred
stock dividend of $25,220 compared to $26,422 for the three months ended March
31, 2008, which is related to our Series A Preferred Stock.

We reported a net income (loss) allocable to common shareholders of $(304,447)
for the three months ended March 31, 2009 as compared to $713,441 for the three
months ended March 31, 2008. This translates to a basic net income (loss) per
common share of $(0.01) and $0.02 and diluted net income (loss) per common share
$(0.01) and $0.00 for the three months ended March 31, 2009 and 2008,
respectively.

We recorded an unrealized foreign currency translation gain (loss) of $85,369
and ($60,535) for the three months ended March 31, 2009 and 2008, respectively.
This resulted in comprehensive net income (loss) during the three months ended
March 31, 2009 of $(193,858) compared to $679,328 during the three months ended
March 31, 2008.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2009, our current assets were $707,555 and our current
liabilities were $4,891,020, which resulted in a working capital deficit of
$(4,183,465). As of March 31, 2009, our total assets were $1,416,439 consisting
of: (i) $24,621 in cash; (ii) $269,737 in prepaid expenses and other current
assets; (iii) $413,197 in accounts receivable; (iv) $112,225 in net software
development costs; and (v) $596,659 in net property and equipment. As at March
31, 2009, our total assets were $1,416,439 compared to $1,284,033 at December
31, 2008.
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<PAGE>

As of March 31, 2009, our total liabilities were $5,072,667 consisting of: (i)
$2,207,146 in long-term and current portion of accounts payable and accrued
expenses; (ii) $365,093 due to related parties; (iii) $264,857 in convertible
loan to related party; (iv) $299,255 in loan payable to related party; (v)
$790,696 in current portion of loans payable; (vi) $475 in warrant liability;
(vii) $170,125 in convertible feature liability; (viii) capital lease
obligations of $37,320 and (ix) $937,700 in deferred gain on sale of minority
interest in subsidiary. As at March 31, 2009, our total liabilities were
$5,072,667 compared to $5,458,442 at December 31, 2008.

Stockholders' deficit decreased from ($4,174,409) at December 31, 2008 to
($4,364,069) at March 31, 2009. For the three months ended March 31, 2009, net
cash flow provided in operating activities was $19,403 compared to net cash
provided by operating activities of $30,819 for the three months ended March 31,
2008. For the three months ended March 31, 2009, net cash flows provided by
operating activities is principally due to our net loss of $(279,227) adjusted
for non-cash items of $(29,936) such as a gain from derivative liabilities of
($128,152), depreciation and amortization of $72,769,the amortization of
software maintenance costs of $35,671, and a foreign currency gain of $(10,224),
and an increase in accounts receivable of $34,951, offset by a decrease in
prepaid expense and other current assets of $11,903, an increase in accounts
payable and accrued expenses of $283,029 and an increase in due to related
parties of $61,967. For the three months ended March 31, 2008, the change in
cash flows provided by operating activities is principally due our net income an
increase in net income of $739,863 offset by non-cash items of $610,228, the
increase in accounts payable and accrued expenses of $76,008, offset by an
increase in accounts receivable of $148,171.

Net cash flows used in investing activities amounted to $110,485 for the three
months ended March 31, 2009 as compared to net cash provided by investing
activities of $55,884 for the three months ended March 31, 2008. During the
three months ended March 31, 2009, we used cash for the acquisition of property
and equipment of $110,485. During the three months ended March 31, 2008, we
received proceeds of $120,000 from the sale of a non-controlling interest
ownership in Transax Limited offset by the acquisition of property and equipment
of $64,116.

Net cash flows provided by financing activities for three months ended March 31,
2009 were $88,768 as compared to net cash flows used in financing activities of
$82,882 for three months ended March 31, 2008. For the three months ended March
31, 2009, cash flow provided by in financing activities was attributable to
$119,972 in proceeds from loans offset by the payment of capital lease
obligations of $31,204. During the three months ended March 31, 2008, net cash
used in financing activities is caused by the repayment of loans of $82,882.

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.

                                       30
<PAGE>

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.

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. In
2006, pursuant to FASB Staff Position, or FSP, EITF 00-19-2, "Accounting for
Registration Payment Arrangements", 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 three months ended March 31, 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

                                       31
<PAGE>

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.

We believe that we can satisfy our cash requirements for the next twelve (12)
months based on our ability to consummate the sale of our 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 March 31, 2009 is the aggregate principal amount
of $175,000 and $89,857 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
March 31, 2009, an aggregate principal amount of $175,000 and interest in the
amount of $89,857 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.

LOAN - RELATED PARTY

A material liability for us at March 31, 2009 is the aggregate amount of
$299,255 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, had an initial term of
twelve months and was repayable quarterly in arrears. The Loans are currently
due on demand. For the three months ended March 31, 2009 and 2008, we incurred
$3,261 and $8,812, respectively, in interest related to these loans. At March
31, 2009 and December 31, 2008, $67,363 and $64,102 in interest and loan fees
was accrued on these loans and the aggregate principal and interest amount due
is $299,255 and $306,218, respectively.

                                       32
<PAGE>

CONSULTING AGREEMENT

A material liability for us at March 31, 2009 is the amount due and owing as
management fees to Stephen Walters, our Chief Executive Officer. For the three
months ended March 31, 2009 and 2008, we incurred $53,579 and $55,866,
respectively, in management fees. At March 31, 2009 and December 31, 2008,
$329,933 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 three months 2008 is the amount due
and owing for Brazilian payroll taxes and Social Security taxes. At March 31,
2009 and December 31, 2008, these deficiencies, plus interest and penalties,
amounted to approximately $1,351,000 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 up to sixty months. At March 31, 2009,
approximately $1,344,000 of our INSS and other taxes are to be repaid within a
12 month period. At March 31, 2009, the future payments due to the Brazilian
authorities are as follows: (i) 2009 - $1,344,043; (ii) 2010 - $6,962.

MEDLINK CONNECTIVIDADE LOAN PAYABLE AND OTHER LOANS PAYABLE

At March 31, 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 30% to 90% per
annum, are secured by certain receivables of Medlink Connectividade, and are due
through October 2009. As at March 31, 2009 and December 31, 2008, the loans
payable to these financial institutions and others aggregated $790,696 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.

                                       33
<PAGE>

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.

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 September 30, 2008. 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, 2008, 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,
2008, and (iv) a lack of segregation of duties within accounting functions.

We began preparing to be in compliance with the internal control obligations,
including Section 404, for our three months ending March 31, 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

                                       34
<PAGE>

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 March 31,
      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.

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.

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 March
31, 2009 and December 31, 2008, we have accrued approximately $152,500 and
$151,000, respectively, related to these lawsuits. The outcome of these claims
is uncertain at this time.

                                       35
<PAGE>

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

During the three months ended March 31, 2009 and up to the date of this
Quarterly Report, we have issued to YA Global Investments an aggregate of
5,033,333 shares of our common stock upon conversion of the Series A preferred
stock.

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


                                   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: May 20, 2009                     By: /s/ STEPHEN WALTERS
                                        -----------------------
                                        Stephen Walters, President/Chief
                                        Executive Officer and Director


Dated: May 20, 2009                     By: /s/ADAM WASSERMAN
                                        -----------------------
                                        Adam Wasserman, Chief Financial Officer

                                       36