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

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.

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.

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.

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

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.
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 . . .