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

FORM 20-F /A
(Amendment No.1)

[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended December 31, 2009

OR

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

For the transition period from _____________________to ______________________

Commission file number _______________________________

TransAKT Ltd.
(Exact name of Registrant as specified in its charter)

___________________________________
(Translation of Registrant’s name into English)

Alberta, Canada
(Jurisdiction of incorporation or organization)

Suite 260, 1414 – 8 th Street S.W., Calgary, Alberta, Canada, T2R 1J6
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class Name of each exchange on which registered
   
None Not applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Stock
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s capital or common stock as of the close period covered by the annual report.

On December 31, 2009, there were a total of 102,645,120 common shares issued and outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[ ] Yes  [X] No


If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
[ ] Yes  [X] No

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.
[ X ] Yes  [ ] 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 (§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).
[ X ] Yes  [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X ]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP [X] International Financial Reporting Standards as issued by the International Accounting Standards Board [ ] Other [ ]

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
[ ] Item 17  [ ] Item 18
_________________________________

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes  [X] No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
[ ] Yes  [ ] No


TABLE OF CONTENTS

PART I   1
  Item 1. Identity of Directors, Senior Management and Advisers 1
  Item 2. Offer Statistics and Expected Timetable 1
  Item 3. Key Information 1
  Item 4. Information on the Company 5
  Item 4A. Unresolved Staff Comments 10
  Item 5. Operating and Financial Review and Prospects 10
  Item 6. Directors, Senior Management and Employees 17
  Item 7. Major Shareholders and Related Party Transactions 20
  Item 8. Financial Information 21
  Item 9. The Offering and Listing 21
  Item 10. Additional Information 23
  Item 11. Quantitative and Qualitative Disclosures About Market Risk 25
  Item 12. Description of Securities Other than Equity Securities 26
PART II   26
  Item 13. Defaults, Dividend Arrearages and Delinquencies 26
  Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 26
  Item 15. Controls and Procedures 26
  Item 15T. Controls and Procedures 26
  Item 16A. Audit committee financial expert 27
  Item 16B. Code of Ethics 27
  Item 16C. Principle Accountant Fees and Services 27
  Item 16D. Exemptions from the Listing Standards for Audit Committees 28
  Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 28
PART III   28
  Item 17. Financial Statements 28
  Item 18. Financial Statements 28
  Item 19. Exhibits 28


PART I

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable to Form 20-F filed as an Annual Report.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable to Form 20-F filed as an Annual Report.

ITEM 3. KEY INFORMATION

3.A. Selected Financial Data

The table below presents selected financial information. Our financial statements are stated in United States dollars (“USD”) and are prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”). The following table presents selected financial information under U.S. GAAP. The table should be read in conjunction with the financial statements and notes thereto and our discussion and analysis included elsewhere in this Annual Report. All dollar amounts in this report are expressed in USD unless otherwise stated.

Selected Financial Data US GAAP
(USD$)

  2009 2008 2007 2006 2005
Operating Revenues 10,623,736 9,546,132 9,687,678 8,385,075 9,167,708
Income (loss) from Operations (186,069) (206,483) (1,463,176) (152,291) (7,282)
Net Income (loss) (249,643) (420,776) (921,158) (237,459) (702)
Net Loss per share (basic and diluted) 0 0 (0) (0.00) (0.00)
Dividends per share - - - - -
Weighted Ave Shares Outstanding 102,645,120 102,645,120 99,707,278 52,379,273 50,000,000
Working Capital 1,164,286 1,493,102 1,778,734 1,189,171 1,601,039
Long Terms Debt - - - - -
Shareholders’ Equity 1,220,848 1,531,931 1,854,514 1,269,299 1,652,044
Capital Stock 3,260,018 3,260,018 3,260,018 1,832,174 1,826,400
Total Assets 4,980,879 6,161,158 6,331,827 5,539,691 3,796,596

This Annual Report contains financial statements that were prepared in USD with conversions of certain amounts of Taiwan Dollars (“TWD”) and Canadian Dollars (“CAD”) converted into USD based upon the exchange rate in effect at the end of the calendar year to which the amount relates, or the exchange rate on the date specified. These translations should not be construed as representations that the TWD and CAD amounts actually represent such USD amounts or that TWD and CAD could be converted into USD at the rate indicated.

1


3.B. Capitalization and Indebtedness

Not applicable to Form 20-F filed as an Annual Report.

3.C. Reasons for the Offer and Use of Proceeds

Not applicable to Form 20-F filed as an Annual Report.

3.D. Risk Factors

INVESTMENT IN OUR COMMON SHARES IS HIGHLY SPECULATIVE. A PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS:

Risks Relating to Our Stock

We Have a History of Operating Losses Which May Affect Our Ability to Continue Operations.

We sustained operating losses for each of the fiscal years ended December 31, 2009 and 2008 of $249,643 and $420,776, respectively. . We also anticipate sustaining a loss from operations for the fiscal year ended December 31, 2010. If we are unable to achieve profitability or to raise sufficient capital to carry out our business plan, we may not be able to continue operations.

We Have a Limited Operating History and Are Still Proving the Viability of Our Products and Business Model, and thus, We May Be Unable to Sustain Operations and You May Lose Your Entire Investment.

Since inception, we have been primarily focused on research and development. In April 2003, our products became commercially available and in 2006, we significantly changed our product line. We are still adding to our product line and are in the process of proving the viability of our products and business model. If our business model proves unsuccessful or our products prove unviable, we may not be able to sustain operations and our ability to raise additional funding may be jeopardized.

Our Competition Has Greater Resources Than We Do and Can Respond More Quickly to Changes in Our Industry Which Could Adversely Affect our Ability to Compete.

Communications-based businesses are intensely competitive and involve a high degree of risk. Public acceptance of our products may never reach the magnitude required for us to achieve commercial profitability.

Many of our existing competitors, as well as a number of potential new competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical and marketing resources than us. These factors may allow them to respond more quickly than us to new or emerging technologies and changes in customer requirements. It may also allow them to devote greater resources than we can to the development, promotion and sale of their products and services. Such competitors may also engage in more extensive research and development, undertake more far-reaching marketing campaigns, adopt more aggressive pricing policies and make more attractive offers to existing and potential employees, strategic partners, advertisers and Internet publishers. In addition, current and potential competitors have established or may establish cooperative relationships among themselves or with third parties to increase the quality and commercial viability of their products or services.

Volatility of Global Economic Conditions May Affect Our Ability to Raise Capital and our Product Costs Which May Affect Our Ability to Continue Operations.

Our revenues, profitability, future growth, and the carrying value of our assets are substantially dependent on prevailing global economic conditions, generally, and on fluctuations in specific factors such as exchange rates, rates of inflation, governmental stability and the occurrence of economically disruptive events, such as war or natural or industrial disaster. Our ability to borrow and to obtain additional capital on attractive terms is also substantially dependent upon these factors. The negative impact of these factors on sales orders originating from an affected country would have an adverse effect on our borrowing capacity, revenues, profitability and cash flows from operations. For example, unfavorable changes in exchange rates can increase the cost of our products and reduce revenues, resulting in reduced profitability. In the event that our profitability is reduced and we are unable to maintain our profit margins, our ability to raise or to borrow capital may decrease. In addition, as has been recently experienced, general downturns in the technology sector worldwide have made fundraising difficult. Since the marketing of our products will require us to raise additional capital, such downturns may have an adverse affect on our ability to continue operations and to effectively market our products.

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We are Dependent on Key Personnel Who Have Extensive Knowledge of Our Products and Business and thus, the Loss of One or More of These Individuals May Adversely Affect Our Business.

We are heavily dependent upon the expertise of our management and certain other key officers and directors who have extensive knowledge of our products and our operations, and the loss of one or more of these individuals could have a material adverse effect on our business. We do not maintain key-person insurance policies on any of our executive officers. Since we are a technology driven company, our future success also depends on our ability to continue to attract, retain, and motivate highly skilled employees in the telecommunications technology sector, and in the technology sector, generally. Competition for employees in our industry is intense. We may be unable to retain key employees or to attract, assimilate, or retain other highly qualified employees in the future. We currently have employment agreements with our key executive officers, engineers and other key employees. These contracts are for five (5) year terms and include non-competition clauses.

If We Are Unable to Respond To the Rapid Technological Change in Our Industry, Our Products Could Become Obsolete and We May Be Unable to Compete, Resulting In the Termination of Our Operations.

The communications technology industry is characterized by rapid and significant technological change. Many communication applications have a short life cycle. For example, our former payment system technologies product lines became obsolete and reached their end-of-life. Furthermore, due to changes in governmental policy, the cellular phones that our products were designed to work with have become obsolete. Going forward, our main products will be in the areas of telecommunications equipment, including VoIP hardware, HTT’s USB Dongle designed for use with Skype, HTT’s SkyDECT, HTT’s EZDECT advanced multi-line cordless telephone systems, etc. We also plan to distribute other name-brand telecommunications equipment in Taiwan, China and other regions throughout Asia. Our future success will depend in large part on our ability to continue to respond to such changes. If we are unable to respond to such changes and/or new or improved competing technology is developed, our technology may be rendered non-competitive. In the event that we are unable to respond to these changes, our ability to raise capital to carry out our business plan may be severely restricted. In addition, our profitability may decrease as any existing inventory may need to be sold at a discount. In this event, our cash flow and liquidity would also be decreased.

Government Regulation Could Adversely Affect Our Ability to Sell Our Products.

Laws and regulations directly applicable to communications, commerce and advertising are becoming more prevalent. In addition, the growth and development of the communications industry may prompt calls for more stringent consumer protection laws, both in Canada and abroad, that may impose additional burdens on companies. Recently, the United States government mandated wireless number portability for all new cell phones allowing consumers to keep their existing phone numbers when changing carriers. The implementation of wireless number portability rendered several then popular cellular phone models obsolete. In the event that a phone model that our unit attaches to is rendered obsolete by regulations such as wireless number portability, our sales and inventory values would be adversely affected. In addition, to the extent that regulatory bodies impose restrictions on VoIP, our ability to compete with major telecommunication companies would be effected. The result would be decreased profitability, which may adversely affect our share price.

Government regulations could also potentially slow down our expansion plans. We may be required to obtain approval of our products from several regulatory agencies. Regulatory approval processes can be onerous and slow, and could adversely affect our ability to meet our financial projections. Further, compliance with different national standards may require additional capital investments and testing. If we are unable to obtain such financing or to obtain any necessary approvals, our business could be adversely impacted.

3


We Will Need Additional Funds In Order to Expand our product Design, Production and Distribution Capacities, and There Is No Assurance That Such Funds Will Be Available As, If and When Needed, Which May Adversely Affect Our Operations.

We generated positive cash flow from operations of $1,007,964 for the fiscal year ended December 31, 2009, and negative cash flow from operations of $890,840 for the same period in 2008. Although our operating activities generated net proceeds in fiscal 2009, we are dependent on the proceeds of equity and non-equity financing to finance the expansion of operations. No assurances can be given that our actual cash requirements will fall within our budget, that anticipated revenues will be realized when needed, that lines of credit will be available to us if required, or that additional capital will be available to us. We anticipate that over the next twelve (12) months, we will need a minimum of $1,000,000 in order to execute the planned expansion of our distribution operations into China and Hong Kong. Similarly, any future research and development activities will be subject to our ability to raise additional financing.

Failure to obtain such additional funds on terms and conditions that we deem acceptable may materially and adversely affect our ability to effectively market and distribute our products, resulting in decreased revenues which may also result in a decreased share price.

The Market Price of Our Common Shares Has Been and Will In All Likelihood Continue To Be Volatile, Which May Adversely Affect the Value of Your Investment.

The market price of our common shares has fluctuated over a wide range and it is likely that the price of our common stock will continue to fluctuate in the future. Announcements regarding acquisitions, the status of corporate collaborations, regulatory approvals or other developments by us or our competitors could have a significant impact on the market price of our common shares.

Our shares currently trade on the Over-the-Counter Bulletin Board (“OTCC.BB”) with limited activity. If this market is not sustained or we are unable to satisfy any future trading criteria that may be imposed by the Financial Industry Regulation Authority (“FINRA”) on our market makers or by the Securities and Exchange Commission (“SEC”) on us, there may not be any liquidity for our shares. What’s more, we have not generated any profit from the sale of our products to date. These factors could have a negative impact on the liquidity of any investment made in our stock.

The Value and Transferability of Our Shares May Be Adversely Impacted By the Penny Stock Rules.

Holders of our common stock in the United States may experience substantial difficulty in selling their securities as a result of the “penny stock rules.” Our common stock is subject to the penny stock rules propagated by the Securities SEC, which impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors. Accredited investors generally include institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of purchasers of our stock to sell their shares in the secondary market. It may also cause fewer broker-dealers to make a market in our stock.

The Large Number of Shares Eligible for Future Sale by Existing Shareholders May Adversely Affect the Market Price for Our Common Shares.

Future sales of substantial amounts of our common shares in the public market, or the perception that such sales could occur, could adversely affect the market price of our common shares. At December 31, 2009, we had 102,645,120 common shares outstanding. On that date, we had no common shares reserved for issuance under our stock option plan; and no common shares reserved for issuance under the warrants issued pursuant to various private placements.

No prediction can be made as to the effect, if any, that sales of shares of our common stock or the availability of such shares for sale will have on the market prices of our common stock.

We Have Limited Sales of Products to Date and No Assurance Can Be Given That Our Products Will Be Widely Accepted In the Marketplace, Which May Adversely Affect Your Investment .

Our future sales, and therefore, our cash flow, income, and ultimate success, are highly dependent on success in marketing our products and consumer acceptance of those products. If our products are not widely accepted or we are unable to market our products effectively, we may face reduced share prices, decreased profitability, and decreased cash flow.

4


There Is A Limited Public Market for Our Common Shares At This Time In the United States Which May Affect Your Ability to Sell Our Stock.

Our shares currently trade on the OTCC.BB with limited trading. If this market is not sustained or we are unable to satisfy any future trading criteria that may be imposed on our market makers by the Financial Industry Regulations Authority (“FINRA”) or by the SEC on us, there may not be any liquidity for our shares. We have generated only limited revenue from the sale of our products to date. These factors could have a negative impact on the liquidity of any investment made in our stock.

You Should Not Expect to Receive Dividends.

We have never paid any cash dividends on shares of our capital stock, and we do not anticipate that we will pay any dividends in the foreseeable future. Our current business plan is to retain any future earnings to finance the expansion of our business. Any future determination to pay cash dividends will be at the discretion of our board of directors, and will be dependent upon our consolidated financial condition, results of operations, capital requirements, and such other factors that our board of directors may deem relevant at that time.

ITEM 4. INFORMATION ON THE COMPANY

History and Development of the Company

TransAKT Ltd. (“we”, “us”, “our”, or similar terms) was incorporated in the Province of British Columbia on December 10, 1996 as Green Point Resources Inc. On October 18, 2000, we changed our name to Wildcard Wireless Solutions Inc. On June 30, 2001, we filed Articles of Continuance in the Province of Alberta and became an Alberta corporation. On that same day, we conducted an amalgamation with Wildcard Communications Canada Inc., an Alberta corporation, our wholly-owned subsidiary, wherein Wildcard Communications Canada was merged into Wildcard Wireless Solutions Inc. On June 20, 2003, we changed our name to TransAKT Corp. We changed our name from TransAKT Corp. to TransAKT Ltd. on July 12, 2006. The legislation under which we operate is the Alberta Company Act and our registered office is located at Suite 260, 1414 – 8 th Street S.W., Calgary, Alberta, T2R 1J6 (403) 290-1744.

We have operated principally as a research and development company since our inception. Initial seed capital has been directed toward areas of product research and development, patent filings and administration. We initially focused on the research, design, development and manufacturing of mobile payment terminals. However, the sale of these payment terminals reached its end-of life due to changes in cellular phone regulations and limited acceptance in the marketplace. In October 2004, we purchased the existing business and certain assets of IP Mental Inc., a Taiwan-based Voice over Internet Protocol (“VoIP”) hardware and software provider. On November 15, 2006, we acquired Taiwan Halee International Co. Ltd. (“HTT”), a Taiwan-based leading designer, manufacturer and distributor of telecommunications equipment, including specialized VoIP-compatible phone systems. These acquisitions were intended to enable us to remain competitive in the marketplace. Our current business is the design, development , and distribution of telecommunications equipment, including VoIP compatible telephone systems and multi-line cordless telephone systems. We currently rely exclusively on third parties for the manufacture or supply of products that we design and distribute under our own HTT brand. We are also engaged in the distribution of name brand telecommunications equipment supplied by third party producers.

Over the past three (3) years we have made no major capital expenditures and we currently have no planned capital expenditures. In 2004, we purchased the assets of IP Mental Inc. in consideration for shares of our common stock that were fair valued at USD$2,944,000. We also advanced additional consideration of USD$500,000 to IP Mental Inc. by way of a promissory note payable to us. Other capitalized costs in the transaction were $363,618, which included a finder’s fee in stock of $294,400 and miscellaneous acquisition costs. On May 19, 2006, IP Mental Inc. settled its debt with us in the amount of $505,150 in exchange for the return of 9,300,000 of our common shares. Our outstanding shares were reduced correspondingly. On November 15, 2006, we acquired HTT, for the sum of USD$5,000,000. The purchase price was paid by the delivery to the shareholders of HTT of: (i) USD$200,000 in cash; (ii) USD$300,000 in a promissory note from us due in cash six (6) months after closing; (iii) 50,000,000 of our common voting shares, with a deemed value of USD$0.09 per share; and (iv) 5,000,000 of our common voting shares issued to Mr. James Wu as performance-based compensation. Other than the acquisitions of IP Mental Inc. and HTT, we have generally only had capital expenditures on computer equipment, tools and dies, patents, and trademarks.

5


We have mainly financed our operations through the use of debt and the issuance of equity in private placements. In October 2006, we repaid a loan we took against inventory produced to fund our first commercial run of our payment terminals. We settled the loan for USD$90,000 using funds raised from the private placement of our shares. In the short-term and until our sales are sufficient to fund operations, we will continue to finance our operations through debt or equity financing.

Business Overview

Operations and Principal Activities

We began operations in 1997 and commercialized our first product line of wireless point-of-sale (“WPOS”) terminals in April 2003. With the use of cellular phones, these terminals allow merchants to accept payments anywhere, anytime. However, our WPOS terminals were discontinued due to changes in cellular phone regulations and limited acceptance in the marketplace. In October 2004, through the acquisition of the business and certain assets of IP Mental Inc., we entered the VoIP business. We currently offer a range of telecommunications products including VoIP equipment and advanced multi-line cordless phone systems.

We sustained operating losses of $249,643 and $420,776 during the years ended December 31, 2009 and 2008, respectively, and incurred an accumulated deficit of $2,038,892 and $1,789,249 as of December 31, 2009 and December 31, 2008, respectively. In addition, we expect to incur an operating loss in 2010.

We have operated principally as a research and development company since our inception. Initial seed capital has been directed toward areas of product research and development, patent filings and administration. We have now completed development of our initial products and have entered into the sales and distribution phase. Our current business is the design, development, production and distribution of mobile wireless equipment, and other telecommunications solutions for business and individual consumers, including VoIP solutions in Taiwan. In 2010, our business will include the design, and distribution of telecommunications equipment, including specialized VoIP compatible phone systems and multi-line cordless telephone systems, and the distribution of name brand telecommunications equipment including Panasonic, Sanyo, Siemens, etc. in Taiwan. We currently rely exclusively on third parties for the manufacture of products that we design or distribute.

Principal Products and Markets

Our first product was the TransAKT™. The TransAKT™ is a wireless point-of-sale (“WPOS”) device that clips onto the back of certain Motorola cellular phones providing the user with a mechanism for swiping cards with magnetic stripes (e.g., credit cards, debit cards, etc.) for conducting wireless commercial transactions. Once attached, the phones are used to send transaction information over the cellular network to the processing center for credit approval. This application provides mobile merchants, business professionals and consumers with voice, data and transactional capability all in one handheld device. TransAKT™ was never adapted for use with other types of cellular phones and is no longer distributed or produced.

Our second product line consists of VoIP products and solutions. These products allow communication over the World Wide Web at reduced communication rates. Our products range from Universal Serial Bus (“USB”) plug and play phones to stand alone phone adapters and phones. All of our in house products are currently designed by our subsidiary, HTT, and marketed under the HTT brand. Our product offerings vary from time to time and currently include, among others, USB dongle adapters for use with DECT phones via Skype, our SkyDECT cordless phone system that integrates use of VoIP, a traditional telephone based on a landline, and our EZDECT specialized multi-line cordless phone systems.

The products of HTT, our subsidiary, are currently distributed in Taiwan and we plan to continue to expand distribution of these products, first toChina, beginning in 2011, and later to other regions of Asia and North America. We have had limited revenues in the last four (4) fiscal years as we only began marketing our VoIP products in October 2004. The expansion of our distribution network will depend on our ability to raise required financing through private placements.

6


Manufacturing

It is not our intention to engage in the capital and management intensive endeavor of manufacturing our own products. We instead outsource our manufacturing and have spent considerable time identifying a stable of suitable engineering and manufacturing firms with proven track records. Our products are currently manufactured exclusively in Taiwan and China where intense competition among manufacturers provides a readily available supply of cost-effective, quality manufacturing options. In order to take advantage of the ample supply of manufacturing choices available to us in Taiwan and China, we have not entered into any formal or long-term agreements with any manufacturer for the fabrication of our products. Instead, by selecting manufacturers on an as needed basis, we are better able to take advantage of competitive pricing, ensure quality control, and maintain appropriate inventory supply levels. We do not rely on any particular manufacturer for any of our products. Currently, we primarily commission for manufacture our own HTT brand products, although from time to time we commission the production of 3 rd party labeled products under license from those parties.

Distribution of Third Party Products

In addition to the distribution of products under our HTT brand, we are engaged in the distribution of name brand telecommunications equipment in Taiwan, including Panasonic, Lenovo, Sanyo, and Siemens products, among others. The products that we purchase for resale are warehoused at our offices. Our own employees are responsible for the inventory, sale and expedition of products. We maintain a cargo van used for smaller deliveries while larger orders are delivered by local freight companies.

Generally, our distribution arrangements are on an ad-hoc basis; we purchase products from suppliers as needed and distribute them to a wide range of retailers in Taiwan. However, we have recently entered into binding distribution agreements with Panasonic and Sanyo for the resale of their telecommunications products in Taiwan.

On April 1, 2010 we entered into an agreement with Panasonic whereby we will endeavor to sell up to $320,000,000 New Taiwanese Dollars (TWD) (approximately USD$10,939,463.65) of Panasonic products. If we are successful in meeting the TWD $320,000,000 sales target, we will be entitled to a rebate of 0.4% of the value of goods sold. If we successfully sell in excess of TWD$380,000,000 (USD$12,990,569.52), we will receive a rebate of 0.5% of the value of goods sold. The sales target must be achieved by March 31, 2011.

On December 14, 2010, we entered into an agreement with Sanyo Electronics ( Taiwan ) CO.,LTD granting us the right to manufacture and distribute, under the Sanyo trademark, up to 3,000 Sanyo Caller-ID cordless telephones. The royalty payable to Sanyo is $783 New Taiwanese Dollars or approximately $26.81 U.S. Dollars per unit produced. The term of the agreement continues until January, 4, 2013.

The following table provides a breakdown of our sales results during the last fiscal year by product brand-name:

Product Brand Percentage of Sales
HTT 30%
Panasonic 32%
Siemens 28%
Lenovo 8%
Other 2%

Seasonality

Our products can be used all year round and are not affected by seasonal trends.

7


Sources and Availability of Raw Materials

All raw materials for our products are sourced from China, Taiwan and the United Kingdom. The computer components used in our products can be subject to high price volatility and to the risk of obsolescence. In order to control component costs and the risk of their obsolescence, we contract with a manufacturer at a set price for the building of our products over a number of terminals. The manufacturer becomes responsible for making sure that enough components are in stock and, if components become unavailable, to quickly implement minor product changes to allow for components to be replaced. This process is conducted for all manufacturing of our products.

Marketing Channels

We are no longer marketing our WPOS products. For VoIP, we plan to align ourselves with Internet Service Providers (“ISPs”), computer retailers, telephone companies, and computer manufacturers to capitalize on the existing distribution infrastructure. These large established partners normally will fund and support extensive domestic and international marketing programs for our products. We plan to develop new businesses and joint ventures and to enter into distribution agreements to diversify our products, clients and geographic revenue base. We have recruited a senior sales executive from a major consumer electronics corporation to help us develop the Asian market for our products.

The marketing of the VoIP products is targeted at consumers and small businesses that are calling internationally on a regular basis. With our products, consumers can have the benefit of either calling free or at reduced rates through outside VoIP networks.

Patents or Licenses

Patent rights, copyrights, trademarks, trade secrets and similar intellectual property rights are important to our success. We rely on patent, trademark and copyright law, trade secret protection and confidentiality or license agreements with our employees, customers, partners and others to protect both their and our proprietary rights.

Our patent application for our VoIP technology filed in United States was cancelled and we are no longer pursuing any patents for this technology. In addition, all our intellectual properties relating to the WPOS technologies have become obsolete and were written off on December 20, 2006.

Competitive Position

Innovation in this market is primarily focused on combining different technologies in new ways. Our management believes that our SKYDECT, a single device capable of connecting to different technologies, is an example of such innovation. Our research and development team is focused on creating similarly innovative products.

We currently generate revenues, at least in part, through the distribution of third party name brand products in Taiwan. Our management believes that this provides us with an insider’s view of some of the latest developments and trends in technology and design. It also may provide us with relationships that can be utilized for globalizing some of our new products. For example, we are working in cooperation with SANYO on an informal basis to develop a Wi-Fi phone and a GSM/Wi-Fi dual mode phone for production under the Sanyo label. The decision of whether to proceed with the production of Wi-Fi phones in partnership with Sanyo will depend on our mutual agreement with Sanyo that a market exists for this product. We intend to conduct market analysis to make this determination. We do not rely on a single revenue base or third parties for revenue generation. We also have kept our marketing, allowances or rebates to a minimum. Our management believes that these factors will allow us to effectively compete in the industry and minimize our costs, thereby allowing us to focus on intellectual property development.

The VoIP industry is relatively young and several of the more well-known players have much greater resources than we do. They have used their resources to get their name out to the public and become leaders in the industry. Some of the more well-known companies are Vonage, Packet 8, and Net 2 Phone. Our current share of the global VoIP market is negligible.

8


Our main focus is on telecommunications equipment, including VoIP hardware and multi-line cordless telephone systems. We also plan to distribute other name-brand telecommunications equipment in Taiwan, China and other regions throughout Asia. These areas are marked by strong competition and rapid change. The following summarizes our current competitors.

Vtech

Vtech was founded in Hong Kong in October 1976 by two (2) engineers. Vtech began its operations with 2,000 sq. ft. of office space and a staff of forty (40) employees. Sales in Vtech ’s first year were under US$1 million. Today, Vtech has worldwide operations and approximately 20,000 employees. In fiscal year 2010, Vetch recorded sales of over US$1.5 billion in fiscal 2010.

In 1984, Vtech introduced its first self-designed satellite receiver. By 1991, Vtech had designed a new generation of high frequency cordless telephones employing microwave technology - the 900MHz cordless phone.

Subsequently, Vtech introduced several new generations of 900MHz cordless phones and has –established itself as a leading provider of high-frequency cordless phones in the US.

In 1988, to assist in business expansion, Vtech moved its production facilities to Dungun, Guangdong province in southern China. Currently, Vtech has two (2) manufacturing sites in China, located at Housie town and Liao Science Park, within hours of its headquarters in Hong Kong.

Vtech acquired the consumer phone business of Lucent Technologies, as well as a license to sell AT&T branded products on wire line telephones and accessories in the US and Canada in April 2000. These transactions allowed Vtech to expand its product range to be sold under both the " Vtech " and the "AT&T" brand names.

In August of 2002, Vtech launched the industry's first 5.8GHz cordless phone in the US. Furthermore, Vtech amended the AT&T brand license agreement in which the revised terms granted Vetch exclusive rights to sell AT&T-branded wire line telephone products and accessories in Greater China, and non-exclusive rights in Europe, Mexico, Central and South America.

Uniden

Uniden’s principal activities are to develop, manufacture and sell telecommunication equipments and related products. Its operations are carried out through the following divisions: telephone-related equipment; wireless communication and applied equipment; digital home appliances and others. The telephone-related equipments division deals in cordless phones and mobile phones. The wireless communication and applied equipment division deals in handheld walkie-talkies radios, radar detectors and scanners. The other activities include marine electronics, CB radios and business phones manufacturing. Uniden develops its products in Japan and China and has manufacturing facilities in Asia. Its North American subsidiary manufactures and markets wireless consumer products for sale in North, Central, and South America. Uniden had sales of over $547 million in fiscal 2010.

Advance Wireless Technology Corp.

Advance Wireless Technology Corp. (“Advance Wireless”) was established in 2000 as a design house engaged in the development of wireless communication and networking products. Its founders were predominantly from a Taiwan-based communication company, Vida SMS (Sun Moon Star) Group, which develops and markets pagers and cellular phones.

Over the years, Advance Wireless has expanded its core wireless technologies to include Bluetooth products, GSM phone modules, wireless PBXs, home gateways and VoIP products such as phones and gateways. Advance Wireless plans to focus on DECT-based products and IP PBXs in the next two (2) years.

DECT cordless phones supporting voice and data transmission have been Advance Wireless’ main product line. To generate sales, Advance Wireless sells its finished products and licenses its wireless technologies.

9


In 2005, net revenues reached USD$9,167,708 and USD$8,385,075 was attained in 2006.

BBK Communication Equipment Ltd.

Founded in 1995 as one of three (3) subsidiaries (communication equipment, A/V electronics, and educational electronics), BBK Communication Equipment Ltd. (“BBK”) specializes in the research, development, production and distribution of DECT phones, 2.4G digital cordless telephones, GSM WLL/FWP phones, basic telephones, caller ID phones, and 46-49MHz cordless telephones. BBK has business partners in Russia and Vietnam, and is expanding worldwide. BBK currently sells only to the Chinese market and has annual sales of over $100 million.

Government Regulations

All radio communication devices sold in Taiwan are regulated by the National Communications Commission (NCC). Each of our wireless devices operating on 1.8GHz and 2.4GHz frequencies have been tested and certified for compliance with all applicable NCC regulations by ETC (Electronics Testing Center, Taiwan). The VoIP industry is in its infancy and is not currently heavily regulated, and thus, in the future, governments may put in place regulations that affect our ability to compete in foreign markets with local communications providers. In addition, regulations may also come into effect in our domestic market that limits our ability to compete with incumbent telephone companies. If we are successful in expanding the distribution of our products into other jurisdictions, we will be required to comply with equivalent regulation in those jurisdictions. However, because international operating standards for wireless devices are increasingly harmonized, we do not anticipate having to incur significant expense in order to render our products compliant with foreign regulation.

Organizational Structure

We have one (1) wholly owned subsidiary, TransAKT Holdings Limited (a Turks and Caicos company). TransAKT Holdings Limited owns all of the issued and outstanding shares of TransAKT Taiwan Corp, our Taiwan based operating company. Other than holding the shares of TransAKT Taiwan Corp., TransAKT Holdings Limited is non-active. TransAKT Taiwan Corp. owns all of the issued and outstanding shares of Taiwan Halee International Co. Ltd. (“HTT”) (a Taiwan corporation).

Property, Plants and Equipment

We have no material tangible fixed assets as we subcontract all manufacturing to third parties.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Operating Results

In 2007, we expanded our product portfolio with the launch of our EZ DECT multiline cordless telephone systems. These revolutionary products allow small offices to create extensions to their telecommunications similar to a PABX system, but without the need for wires. Full functionality including 3-way conference calls and multiple lines of up to 16 cordless phones provide smaller offices with mobile, reliable communications.

In September 2007, we entered into a distribution arrangement with Senao Telecom, a subsidiary of Chung-Hua Telecom, whereby Senao Telecom began purchasing our HTT brand cordless telephones on an as-need basis for sale in Senao Telecom’s retail outlets. Senao Telecom is a well known publicly traded telecommunications company in Taiwan with projected total revenues of over USD $500 million in 2007. Senao Telecom has more than two hundred (200) retail outlets in Taiwan, and will be distributing HTT branded products throughout its well established channels. Based on current markets conditions and on our discussions with Senao, we anticipate that we will generate approximately $200,000 in annual revenues as a result of this arrangement. However, because we have not entered into a definitive agreement with Senao, no future revenues are guaranteed.

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In the fourth quarter of 2007, we began planning the expansion of our operations into China and in the second quarter of 2008 we received regulatory approval to register TransAKT (Guangzhou) Ltd. and TransAKT (Hong Kong) Ltd., both wholly-owned subsidiaries of TransAKT Ltd. With the registration of these subsidiaries, TransAKT has been approved by the Chinese government to do business in China and Hong Kong. The approval in question was granted by the China’s Investment Commission (MOEA) which is responsible for the regulation of foreign enterprise under the Statute for Investment by Foreign Nationals. Subsequent government approvals will be required in respect of any products that we aim to distribute. However, the expansion of our product distribution into China will be subject to our ability to raise additional financing through the private placement of our common stock. Subject to our ability to obtain additional financing, our management expects to see continued revenue growth and profit recognition in fiscal 2011 through the expansion of our operations into China.

1. Year Ended December 31, 2009 Compared to the Year Ended December 31, 2008

Changes in Net Sales or Revenues

Sales for the year ended December 31, 2009 increased by $1,077,604 to $10,623,736 compared to $9,546,132 for the same period in 2008. The increased sales volume in telecommunications equipment, including specialized VoIP compatible phone systems and multi-line cordless telephone systems, was primarily due to the general economic recovery in 2009 from the economic downturn experienced in 2008. We expect our sales to improve in 2010.

Cost of Sales; Gross Profit

Cost of sales for the year ended December 31, 2009 totaled $9,780,380 or approximately 92% of net sales compared to $8,489,638 or approximately 88.9% of net sales for the year ended December 31, 2008, representing an increase crease of $1,290,742 or approximately 15%. The increase was due to increased purchase costs from major vendors for the year ended December 31, 2009. Gross profit as a percentage of net sales was 8% in 2009, compared to 11.1% in 2008. The lower gross profit in 2009 was primarily due to the substantial increase in costs.

Operating Expenses

Operating expenses for the year ended December 31, 2009 totaled $1,029,425 or approximately 9.6% of net sales compared to $1,262,977 or approximately 13% of net sales for the year ended December 31, 2008 representing a decrease of $233,552 or approximately 18.4% . The decrease in operating expenses was due to decreases in commission, payroll, rent, and professional fees, which were partially offset by increases in bad debt and legal expenses.

Income (Loss) from Operations

Loss from operations for the year ended December 31, 2009 totaled $186,069 or approximately 1.7% of net sales compared to $206,483 or approximately 2.2% of sales for the year ended December 31, 2008, representing a reduction in loss of $20,414 or approximately 10%. The reduction in loss from operations was primarily due to reduced operating expenses and increased sales recognized in 2009.

Interest Expense

Interest expense for the year ended December 31, 2009 totaled $96,474 compared to $122,573 for the year ended December 31, 2008, representing a decrease of $26,099 or approximately 21%. The decrease was due to higher accounts receivable turnover rate, decreased capital requirements resulting in decreased borrowings.

11


Net Income (Loss)

Loss for the year ended December 31, 2009 totaled 249,643 compared to a loss of $420,776 for the year ended December 31, 2008, representing a decreased in losses of $171,133 or approximately 41%. The decrease in net loss was primarily due to decreased operating expenses and currency exchange gains recognized in 2009.

2. Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007

Net Sales

Revenues for the year ended December 31, 2008 decreased by $141,546, or approximately 1.5%, to $9,546,132 compared to $9,687,678 for the same period in 2007. The changes in sales volume and amount were not significant.

Cost of Sales; Gross Profit

Cost of sales for the year ended December 31, 2008 totaled $8,489,638 or approximately 88.9% of net sales compared to $9,440,398 or approximately 97.4% for the year ended December 31, 2007, a decrease of $950,760 or approximately 10%. The decrease was due to decreased purchase costs including purchase allowance from major vendors for the year ended December 31, 2008. Gross profit as a percentage of net sales was 11.1% in 2008, compared to 2.6% in 2007. The higher gross profit in 2008 was primarily due to the substantial decrease in purchase costs.

Operating Expenses

Operating expenses for the year ended December 31, 2008 totaled $1,262,977 or approximately 13% of net sales compared to $1,710,456 or approximately 18% for the year ended December 31, 2007, a decrease of $447,479 or approximately 26%. The decrease in operating expenses was due to decreases in travel expense, commission, and professional fee, which is partially offset by increases in payroll and pension expenses.

Income (Loss) from Operations

Loss from operations for the year ended December 31, 2008 totaled $(206,483) or approximately (2.2)% of sales compared to $(1,463,176) or approximately (15.1)% of sales for the year ended December 31, 2007, a decrease of $1,256,693. The decrease in loss from operations was primarily due to decreased purchase costs and operating expenses recognized in 2008.

Interest Expense

Interest expense for the year ended December 31, 2008 totaled $122,573 compared to $113,138 for the year ended December 31, 2007, an increase of $9,435 or approximately 8.3% . The increase was due to lower accounts receivable turnover rate, increased capital requirements resulting in increased borrowings.

Net Income (Loss)

Loss for the year ended December 31, 2008 totaled $(420,776) compared to $(921,158) for the year ended December 31, 2007, an increase of $500,382. The decrease in net loss was primarily due to decreases in purchase costs and operating expenses recognized in 2008 as described above.

3. Impact of Inflation

Inflation is not considered to be a material factor affecting our continuing operations, as the inflation rate of the country in which we are presenting our financial statements remains low.

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4. Impact of Foreign Currency Fluctuations

Our revenue and cost of product sales are primarily earned and spent in Taiwan Dollars (“TWD”) and Canadian Dollars (“CAD”). Operating expenses are likewise primarily denominated in TWD and CAD. Consequently, significant movements in exchange rates may have a significant impact on our financial results. In addition, sales and cost of products for our Taiwan office are based in United States dollars (“USD”) while operational expenses are in TWD and CAD, and therefore, any significant movements in exchange rates between the USD and the TWD or CAD may also have a significant impact on our financial results.

5. Governmental Economic, Fiscal, Monetary of Political Policies

There are no known governmental economic, fiscal, monetary or political policies or factors that have materially affected, or could materially affect, directly or indirectly, our operations or investments by host country shareholders.

Liquidity and Capital Resources
1. Sources of Liquidity

Our primary source of liquidity as of December 31, 2009 is our cash on hand and accounts receivable. Net cash provided by operations for the year ended December 31, 2009 was $1,007,964. For the year ended December 31, 2008, operations provided no net cash and used net cash of $890,840. The increase in net cash provided by operations was a result of the decrease in accounts receivable and inventory, which is partially offset by the increase in prepaid expense and deposits, and a decrease in accounts payable. Our cash and cash equivalents were $ 874,418 and $205,658 as of December 31, 2009 and 2008, respectively. Our current assets were $4,904,858 on December 31, 2009. Our current assets totaled $6,122,329 on December 31, 2008. The decrease in current assets during 2009 was primarily due to a decrease in inventory. Working capital was $1,164,286 as of December 31, 2009 compared to $1,493,102 as of December 31, 2008.

In management’s opinion, our working capital is currently sufficient for our present requirements. Nevertheless, we will continue to evaluate alternative sources of capital to meet our growth requirements, including other asset or debt financing, issuing equity securities and entering into other financing arrangements. There can be no assurance, however, that any of the contemplated financing arrangements described herein will be available and, if available, can be obtained on terms favorable to us.

Historically, operations and short-term financing have been sufficient to meet our cash needs. We believe that we will be able to generate revenues from sales and raise capital through private placement offerings of our equity securities to provide the necessary cash flow to meet anticipated working capital requirements. However, our actual working capital needs for the long and short -term will depend upon numerous factors, including operating results, competition, and the availability of credit facilities, none of which can be predicted with certainty. Future expansion will be limited by the availability of financing products and raising capital.

Our Cash Flows

Net sales

Net sales for the year ended December 31, 2009 were $10,623,736 compared to $9,546,132 for the year ended December 31, 2008 representing an increase of $1,077,604 or approximately 11%. The increase in sales was due to the overall economic recovery in 2009 from the downturn experienced in fiscal 2008. We expect to achieve modest growth in sales during fiscal 2010.

Cost of Sales

Cost of sales for the year ended December 31, 2009 totaled $9,780,380 or approximately 92% of net sales compared to $8,489,638 or approximately 88.9% of net sales for the year ended December 31, 2008, representing an increase crease of $1,290,742 or approximately 15%. The increase was due to increased purchase costs from major vendors for the year ended December 31, 2009.

Operating Expenses

Operating expenses for the year ended December 31, 2009 totaled $1,029,425 or approximately 9.6% of net sales compared to $1,262,977 or approximately 13% of net sales for the year ended December 31, 2008 representing a decrease of $233,552 or approximately 18.4% . The decrease in operating expenses was due to decreases in commission, payroll, rent, and professional fees, which were partially offset by increases in bad debt and legal expenses.

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Income (Loss) from Operations

Loss from operations for the year ended December 31, 2009 totaled $186,069 or approximately 1.7% of net sales compared to $206,483 or approximately 2.2% of sales for the year ended December 31, 2008, representing a reduction in loss of $20,414 or approximately 10%. The reduction in loss from operations was primarily due to reduced operating expenses and increased sales recognized in 2009.

Interest Expense

Interest expense for the year ended December 31, 2009 totaled $96,474 compared to $122,573 for the year ended December 31, 2008, representing a decrease of $26,099 or approximately 21%. The decrease was due to decreased capital requirements resulting in decreased borrowing and increased repayment of loans.

Net Income (Loss)

Loss for the year ended December 31, 2009 totaled 249,643 compared to a loss of $420,776 for the year ended December 31, 2008, representing a decreased in losses of $171,133 or approximately 41%. The decrease in net loss was primarily due to decreased operating expenses and currency exchange gains recognized in 2009.

Lease Obligation

The following table provides information, as of the latest fiscal year, with respect to our known contractual obligations, including amounts aggregated by contractual obligation.

Year   Amount (for leases)  
  $  21,483  
Total $  21,483  

We lease various office facilities under operating leases that terminate on various dates in 2010. Rental expense for these leases consisted of approximately $39,596 and $83,677 for the years ended December 31, 2009 and 2008, respectively. We have future minimum lease obligations of $21,483 for the twelve-month period ended December 31, 2010.

Bank Loan Payable

The Company has loan payable amounting to $2,083,361 as of December 31, 2009 from several commercial banks in Taiwan. The loans are partially secured by certificate of deposits for $498,540 and accounts receivable. The loans payable at December 31, 2009 comprised of the following:

        Interest per    
Nature     Due on   Annum   Amount
Secured note payable from a bank    1/12/2010   5.25%   27,000
Secured note payable from a bank    1/12/2010   5.25%   39,300
Secured note payable from a bank   2/3/2010   5.25%   40,300
Secured note payable from a bank   2/10/2010   5.25%   55,460
Secured note payable from a bank   2/23/2010   5.25%   117,700
Secured note payable from a bank    2/4/2010   5.25%   23,250

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Secured note payable from a bank   4/8/2010   5.25%   37,800
Secured note payable from a bank   4/20/2010   5.25%   12,500
Secured note payable from a bank   4/20/2010   5.25%   37,500
Secured note payable from a bank   4/25/2010   5.25%   16,500
Secured note payable from a bank   4/25/2010   5.25%   31,286
Secured note payable from a bank   4/25/2010   5.25%   25,920
Secured note payable from a bank   5/5/2010   5.25%   38,700
Secured note payable from a bank   5/13/2010   5.25%   27,000
Secured note payable from a bank   5/8/2010   5.25%   39,000
Secured note payable from a bank   5/17/2010   5.25%   16,170
Secured note payable from a bank   5/25/2010   5.25%   55,460
Secured note payable from a bank   5/26/2010   5.10%   56,875
Secured note payable from a bank   12/28/2010   2.88%   151,500
Secured note payable from a bank   3/1/2010   5.35%   23,007
Secured note payable from a bank   3/6/2010   5.35%   27,914
Secured note payable from a bank   1/14/2010   5.00%   52,000
Secured note payable from a bank   1/22/2010   5.00%   25,750
Secured note payable from a bank   5/7/2010   5.00%   82,800
Secured note payable from a bank   3/8/2010   1.52%   692,717
Secured note payable from a bank   2/10/2010   2.40%   17,800
Secured note payable from a bank   4/26/2010   2.58%   45,797
Secured note payable from a bank   3/22/2010   2.42%   36,600
Secured note payable from a bank   3/30/2010   2.42%   27,000
Secured note payable from a bank   3/29/2010   2.42%   32,250
Secured note payable from a bank   3/30/2010   2.42%   36,000
Secured note payable from a bank   4/12/2010   2.43%   21,000
Secured note payable from a bank   4/12/2010   2.43%   31,800
Secured note payable from a bank   4/28/2010   2.43%   40,500
Secured note payable from a bank   5/4/2010   2.43%   31,125
Secured note payable from a bank   5/10/2010   2.43%   10,080
   

Total

    2,083,361
   

Current portion

2,083,361
   

Long-term portion

-

In light of the recurring net loss over the past three years and current uncertain market and economic conditions, we are aggressively managing our cost structure and cash position to ensure that we will meet our debt obligations while preserving the ability to make investments that will enable us to respond to customer requirements and achieve long-term profitable growth. We currently believe that our cash and cash equivalent, working capital, and cash generated from operations, will be sufficient to meet our payment obligations, forecasted operating expense, and capital expenditures through the next twelve months.

2. Financial Instruments

Net cash used in financing activities totaled $495,805 compared with net cash provided by financing activities of $886,531 for the year ended December 31, 2008. The decrease was mainly due to the net decrease in cash proceeds received from bank loans and operating loans borrowed from related parties. In 2007, we closed a private placement of 8,650,000 shares for total proceeds of $1,037,653. No private placement was closed in 2008. On May 29, 2009, we received $30,000 in consideration of the issuance of a convertible debenture, due May 29, 2011, in the form attached to this report as exhibit 4.4. The debenture will accrue interest at 12% per annum due upon maturity. The debenture is convertible at any time after the first anniversary after the closing date, at the holder’s option, into shares of our common stock at a price of $0.02 per share.

Net cash provided by investing activities totaled $173,333 for the year ended December 31, 2009 compared to the $20,094 used in investing activities for the year ended December 31, 2008. The increase in cash provided by investing activities resulted primarily from an increase in the proceeds from the sale of investments in fiscal 2009.

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3. Material Commitments for Capital Expenditures

Subject to our ability to obtain additional financing, we anticipate expanding our current operations in Taiwan into mainland China over the next twelve (12) months. We estimate that expenditures related to this project will be approximately USD$1,000,000. We intend to finance the project through the private placement of our common shares.

Research and Development, Patents and Licenses, etc.

In 2007, we spent USD$400,000 for the development of our multiline cordless phone systems. No significant research and development expenses were incurred in 2008 or 2009. Any future research and development undertakings will be subject to the availability of sufficient capital.

Trend Information

VoIP has emerged as the next generation global communications platform and has greatly impacted the telecommunications industry. Traditional telecommunications companies are seeing their market share start to erode away as barriers to entry in the industry are dropping due to VoIP. Ian Cox of Juniper Research says “VoIP will bring new revenue-generating opportunities to the telephony market by combining voice services with other IP applications”. The use of VoIP for communications drastically reduces the cost of long distance.

Many of the networks and much of the hardware available today have problems with Network Address Translation (“NAT”). Our diverse VoIP offerings include a proprietary network that operates in NAT environments as well as behind firewalls, and also includes hardware that works with or without a computer. We currently have four (4) different hardware offerings and are continuing to expand on them.

As more and more companies enter the VoIP market, margins on hardware are shrinking in exchange for capturing clients. As the larger incumbent telecommunications companies enter the market and offer significant discounts to retain their existing client base, we will be forced to offer the same rates in order to stay competitive.

In addition to risks described elsewhere in this report, we are subject to each of, and the cumulative effect of all the following uncertainties. We have risk management practices in place designed to offset these uncertainties to the greatest extent possible; however there are no guarantees that these practices will be effective. These uncertainties include, but are not necessarily limited to:

  • Competition in the industry;
  • Technological change, new products and standards and dependence on proprietary technologies;
  • Third party claims for patent infringement;
  • Inability to protect our intellectual property against unauthorized or infringing uses;
  • Inability to effectively manage future growth and expansion;
  • Dependence on key personnel, products and customers;
  • Variances in the industry growth rate;
  • Dependence on continuing demand for our products;
  • Finite financial resources and the potential need for future financing;
  • Dependence on third party manufacturers, suppliers and licensees;
  • Potential fluctuations in quarterly results;
  • Lengthy and variable sales cycles;
  • Acquisitions;
  • Reliance on international sales;
  • Product liability issues;
  • Changes in the regulatory environment;
  • Regulatory approval; and
  • Changes in currency exchange rates.

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Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements.

Tabular Disclosure of Contractual Obligations

The following table provides information, as of the latest fiscal year, with respect to our known contractual obligations, including amounts aggregated by contractual obligation.

Year   Amount (for leases)  
2010 $  21,483  
Total $  21,483  

We lease various office facilities under operating leases that terminate on various dates in 2010. Rental expense for these leases consisted of approximately $39,596 and $83,677 for the years ended December 31, 2009 and 2008, respectively. We have future minimum lease obligations of $21,483 for the twelve-month period ended December 31, 2010.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

Name Age Position
James Wu 57 Chairman, Chief Executive Officer, President and Director
Taifen Day 51 Chief Financial Officer
Cheng Chun-Chih 64 Director (Chairman of Taiwan Halee International Co. Ltd.)
Dr. Shiau Tzong- Huei 55 Director (Chief Technical Officer of Taiwan Halee International Co. Ltd. and Chairman of TransAKT Taiwan Corp.)
Tseng Ming-Huang 41 Director
J.T. Wang 44 Vice President of Asia Operations

None of the above directors or officers is related and no arrangements or understandings with major shareholders, customers, suppliers, or other persons resulted in their selections as a director or officer.

The following summaries include the name, business experience, functions and areas of experience of each of our directors and executive officers.

James Wu - Chairman, Chief Executive Officer, President and Director

Mr. James Wu served as President of IP Mental Inc. from 1997 to 2006. During his tenure at IP Mental Inc., Mr. Wu oversaw the development of a line of VoIP hardware and was part of the development team of the proprietary U&Me VoIP network. Mr. Wu has over twenty (20) years of experience in the information technology and telecommunication business. He has also served as the founder of Cellstar South Africa and Anstek Electronics South Africa, where he successfully grew these businesses. He was also an agent for Asus, COMPEL and Motorola Computer and Cellular Handsets in South Africa.

Taifen Day– Chief Financial Officer

Ms. Day holds a BA from Tunghai University of Taiwan and an MBA from the University of St. Thomas of Texas. She became a Certified Public Accountant in the State of Texas in 1987. After working in Texas for one (1) year, Ms. Day returned to Taiwan where she worked for two (2) years as an in-house Accounting Manager, and then eight (8) years as an auditor (five (5) as a partner) with a public accounting firm. She became a Certified Public Accountant in Taiwan in 1992. Ms. Day then moved to Alberta, receiving her Chartered Accountant designation in 2001, where she currently works performing public company accounting.

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Cheng Chun-Chih- Director (Chairman of Taiwan Halee International Co. Ltd.)

Mr. Cheng is the Chairman of Taiwan Halee International Co. Ltd., which was acquired by us for US$5MM on November 15, 2006, and has served in this position since 1997. Prior to joining HTT Mr. Cheng was a consultant to the Economy Department of Taiwan on small and medium industry.

Dr. Shiau Tzong-Huei- Director (Chief Technical Officer of Taiwan Halee and Chairman of TransAKT Taiwan Corp.)

Dr. Shiau holds a Ph.D in Computer Sciences from the University of Wisconsin–Madison, an MSc in Mathematics from the John Hopkins University and a BSc in Mathematics from the National Taiwan University. Dr. Shiau has been a director of Taiwan Halee since 2003, is a specialist in digital cordless switching and has directed the engineering team at the Hsinchu Science Park (“HSP”) for more than fifteen (15) years. Established in December 1980, HSP leads the high-tech industry as the most respected science park created by the Taiwanese government. Dr. Shiau is the founder and current Chief Technical Officer of Computer & Communications Associates, INC. (now UWIN Technologies), a research and development oriented company.

Tseng Ming-Huang- Director

Mr. Tseng was a founder and currently serves as CEO of CeraMicro Technology Corp. which was started in 2003. From 2001 to 2003, he served as the general manager of international strategy investment for the Wise Group Inc.

J.T. Wang– Vice President of Asia Operations

Mr. Wang joined us on April 1, 2007. During the past seventeen (17) years, Mr. Wang served as a senior regional manager of Panasonic Taiwan Operations. Mr. Wang has profound knowledge of the telecommunications industry not only in the associated technologies, but also with sales distribution channels.

Compensation

The following table sets forth the amount of compensation paid, and benefits in kind granted, to our directors and members of our administrative, supervisory or management bodies and our subsidiaries for services in all capacities to us and our subsidiaries by any such person(s), including, but not limited to, total amounts set aside or accrued by us or our subsidiaries to provide pension, retirement or similar benefits, within the last full financial year.




Name and Principal Position
Annual Compensation Long-Term Compensation


Salary
($)


Bonus
($)

Other Annual Compensation
($)
Stock Awards
Securities Under Options/ SARs Granted
(#)
Restricted Shares or
Restricted Share Units
($)
James Wu
President & Chief Executive Officer
90,000









J.T. Wang
Vice President of Asia Operations
40,000









Taifen Day
Chief Financial Officer





Lionel Ni
Director
       
Mark Fletcher
Director, Corporate Secretary*
       
Tseng Ming-Huang
Director
       
Leroy Wolbaum
Director
       

* Mr. Fletcher resigned as our Corporate Secretary and as a Director on our Board of Directors on May 1, 2009.

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Board Practices

The following table lists information for our last completed financial year (2009) with respect to our directors and executive officers.

Name Position Director (1) or Executive Officer Since
James Wu Chairman, President and CEO 2004/10/25
Cheng Chun-Chih Director 2006/12/14
Dr. Shiau Tzong-Huei Director 2006/12/14
Mark Fletcher (2) Director and Corporate Secretary 2006/05/26 (2)
Taifen Day Chief Financial Officer 2006/07/27
Tseng Ming-Huang Director 2006/05/25

(1)

Each director is elected at our Annual General Meeting and holds office until the next Annual General Meeting or until his or her successor is duly elected or appointed, unless the office is earlier vacated in accordance with our Articles or the Company Act (Alberta) or he or she becomes disqualified as a director.

   
(2)

Mr. Fletcher resigned as our Corporate Secretary and as a Director on our Board of Directors on May 1, 2009.

None of our directors or executive officers has a service contract with us.

Audit Committee

We have no formal audit committee. Our Board of Directors (“Board”) oversees the retention, performance and compensation of our independent auditors, and the establishment and oversight of our systems of internal accounting and auditing control.

Compensation Committee

We have no formal compensation committee. Our Board determines the terms of the compensation packages provided to our senior executive officers, including salary, bonus and awards under our stock option plan and any other compensation plans that we may adopt in the future.

Corporate Governance Committee

We have no formal corporate governance committee. Our Board meets with and discusses current disclosure issuances with our management personnel and with both our Canadian and United States counsel, in order to not only report any matters which should be the subject of either public disclosure or remedial action, but also to assist in establishing reporting and disclosure procedures to ensure that we are in compliance with our disclosure and compliance obligations under applicable laws, rules and obligations.

19


Employees

We have thirty (30) employees in Taiwan in various capacities and also use independent consultants for all corporate activities. We currently have three (3) independent consultants in addition to our executive Board members that carry out day-to-day operations. One consultant takes care of our sales efforts, the other takes care of overseeing day-to-day operations and the third takes care of investor relations activities.

Share Ownership

The following table sets forth information, as of June 22, 2010, with respect to the beneficial ownership of our common stock, by each of our executive officers and directors, and by our executive officers and directors as a group. Information is also provided regarding beneficial ownership of common stock if all outstanding options, warrants, rights and conversion privileges (to which the applicable executive officers and directors have the right to exercise in the next sixty (60) days) are exercised and additional shares of common stock are issued.

Beneficial Owner Common Shares Options Total Percent of
        Class (2)
James Wu (1) 5,000,000  5,000,000 4.9%
Cheng Chun-Chih 5,000,000  5,000,000 4.9%
Tseng Ming-Huang 50,000  50,000 -
Dr. Shiau Tzong-Huei 1,000,000  1,000,000 1.0%
Mark Fletcher -  - -
Taifen Day -  - -
All Officers and Directors as a group 11,050,000  11,050,000 10.8%

(1)

James Wu is our current President and CEO.

   
(2)

Based on 102,645,120 common shares outstanding as of June 22, 2010.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

The following table sets forth information, as of June 22, 2010, with respect to the beneficial ownership of our common shares by each person known to be the beneficial owner of more than five percent (5%) of the outstanding common shares, by each of our executive officers and directors, including the names of our major shareholders, the number of their shares and the percentage of outstanding shares of each class owned by each of them.

TITLE OF BENEFICIAL AMOUNT AND NATURE PERCENT
CLASS OWNER OF BENEFICIAL OWNER OF
      CLASS (1)
       
Common James Wu 5,000,000 4.9%
Common Cheng Chun Chih 5,000,000 4.9%
Common Hsieh Chi-Hsien 7,650,000 7.5%
Common Lin Yu-Hsiung 10,000,000 9.7%
Common Pan Yu-Jung 6,000,000 5.9%

(1) Based on 102,645,120 common shares outstanding as of June 22, 2010.

20



During the past three (3) years, the only significant changes in the percentage ownership of shares held by our major shareholders that we are aware of were as follows:

Mr. Gordon Miller – Pursuant to a private placement that closed on June 24, 2004, Mr. Miller purchased 1,000,000 of our shares at USD$0.30 per share.

In October 2004, we purchased the business and certain assets of IP Mental Inc. in exchange for 12,800,000 of our common shares. On May 19, 2006, IP Mental Inc. settled its debt of USD$505,150 with us. In settlement, IP Mental Inc. surrendered 12,800,000 shares it received as consideration for the sale of its assets in exchange for 3,500,000 shares.

Our major shareholders do not have any different voting rights than those held by any other shareholder.

We are not directly or indirectly owned or controlled by any other corporation(s), by a foreign government or by any other natural or legal person(s) severally or jointly, except as disclosed above. We are not aware of any arrangements, the operation of which may at a subsequent date result in a change in our control.

Related Party Transactions

During the last three (3) fiscal; years, we entered into the following related party transactions.

As of December 31, 2009 and 2008, there were $435,225 and $216,632 advances outstanding from related parties, respectively.

The advances are repayable to our officers and are interest free, unsecured, current, and without fixed terms of repayment.

We also had loans of $60,400 in the aggregate payable to five shareholders as of December 31, 2009 and 2008. The unsecured loans bear interest at the rate of 12% per annum, and due on May and June 2010. Each of these loans payable was made under promissory note in the form attached as exhibit 4.3 to this report.

As at December 31, 2007, we had $178,289 due from an officer of TransAKT Ltd. This amount was unsecured, interest free and due on demand. Subsequently on March 2008, the officer paid $340,000 to clear his debt and loaned the balance of $161,171 to us.

Interests of Experts and Counsel

None of our named experts or counsellors was or is employed on a contingent basis, owns an amount of our shares or our subsidiaries which is material to that person, or has a material, direct or indirect economic interest us.

ITEM 8. FINANCIAL INFORMATION

The required financial statements are provided at the end of this Annual Report starting on Page 26.

ITEM 9. THE OFFER AND LISTING

Offer and Listing Details

(a)

Set forth below are the annual high and low market prices for our stock for the last five (5) most recent full financial years ending December 31.

21



  2005* 2006 2007 2008 2009
High 0.23 0.24 0.25 0.12 0.055
Low 0.031 0.04 0.042 0.01 0.007

* These numbers represent the annual high and low market prices for our stock as quoted on the Over the Counter Bulletin Board (“OTC.BB”). Our stock began quotation on the OTCC.BB on May 20, 2004. Previously, our stock traded on the TSX Venture Exchange (“TSX”) which trading began on October 18, 2000. We voluntarily de-listed from the TSX on September 17, 2004.

(b)

Set forth below are the high and low market prices for each full financial quarter for the two most recent full financial years and any subsequent period.

For the Over-the-Counter Bulletin Board (“OTC.BB”) (1)

Year 2007

Quarter March June Sept Dec
High 0.25 0.23 0.158 0.095
Low 0.06 0.11 0.09 0.042

Year 2008

Quarter March June Sept Dec
High 0.07 0.07 0.12 .02
Low 0.04 0.02 0.01 .01

Year 2009

Quarter March June Sept Dec
High 0.02 0.055 0.03 0.028
Low 0.01 0.025 0.015 0.007

Year 2010

Quarter March
High 0.01
Low 0.0051

(1) Our stock began trading on the OTCC.BB on May 20, 2004.

(c)

Set forth below are the high and low market prices for each month for the most recent six (6) months on the OTC.BB.


Six Months
December
2009
January
2010
February
2010
March
2010
April
2010
May
2010
High 0.0198 0.01 0.007 0.0088 0.0078 0.71
Low 0.007 0.0055 0.0065 0.005 0.0051 0.78

Plan of Distribution

Not applicable to Form 20-F filed as an Annual Report.

Markets

Currently, our shares trade on the OTCC.BB under the symbol TAKDF. There is a limited trading market for our shares and the market is not liquid.

22


Selling Shareholders

Not applicable to Form 20-F filed as an Annual Report.

Dilution

Not applicable to Form 20-F filed as an Annual Report.

Expenses of the Issue

Not applicable to Form 20-F filed as an Annual Report.

ITEM 10. ADDITIONAL INFORMATION

Share Capital

Not applicable to Form 20-F filed as an Annual Report.

Memorandum and Articles of Association

Reference is hereby made to our Articles of Amalgamation (“Articles”) and to our Bylaws, each of which is incorporated herein by reference to, respectively, Exhibits 1.1 and 1.2 to our Registration Statement on Form 20-F, file number 000-50392 as filed on September 16, 2003.

On June 23, 2006, our Board and majority shareholders approved an amendment to our Articles to effect the consolidation of our common shares on a 2-for-1 basis.

All stock issuances have been retroactively updated to reflect the 2-for-1 reverse stock split.

Material Contracts

On April 27, 2007, we entered into a consulting agreement with Mr. Liu Fu Ming for a twelve (12) month period beginning on April 27, 2007. Persuant to this agreement, we issued 2,000,000 shares of common stock to Mr. Liu, as compensation for service provided. These shares were recorded at the fair market value of $326,778, based on the price of stock on the agreement date. Since the compensation for services is settled through issuance of shares, we recorded $195,488 as an expense for the period and the balance of $131,290 was recorded as prepaid consulting for the service not performed as part of equity.

Exchange Controls

There are no governmental laws, decrees, regulations or other legislation of Canada that may affect the import or export of capital for use.

Other than the withholding of any taxes due under the terms of specific treaties between countries on dividends paid to our shareholders, there are no restrictions on the remittance of dividends, interests or other payments.

Taxation

The discussions below summarize the material tax considerations relevant to an investment in common shares by individuals and corporations who, for income tax purposes, are resident in the U.S. for purposes of the Convention (as hereinafter defined) and are not resident in Canada, who hold common shares as a capital asset (a “Holder”), and who do not hold the common shares in carrying on a business through a permanent establishment in Canada or in connection with a fixed base in Canada (collectively, "Unconnected U.S. Shareholders" or "Holders"). The tax consequences of an investment in common shares by investors who are not Unconnected U.S. Shareholders may differ substantially from the tax consequences discussed herein. The discussion of U.S. tax considerations is addressed only to Unconnected U.S. Shareholders whose "functional currency" within the meaning of Section 985 of the Internal Revenue Code of 1986, as amended (the "Code"), is the U.S. dollar, and to U.S. citizens who are not residents in the U.S. for the purpose of the Convention, but who otherwise meet the definition of Unconnected U.S. Shareholders. Furthermore, the discussion of U.S. tax considerations do not address the tax treatment of Unconnected U.S. Shareholders that own, or are deemed for U.S. federal income tax purposes to own, ten percent (10%) or more of the total combined voting power of all classes of our voting stock. The discussion of Canadian tax considerations does not address the tax treatment of a trust, company, organization or other arrangement that is a resident of the U.S. and that is generally exempt from U.S. tax.

23


This discussion does not address all of the income tax consequences that may be applicable to any Holder subject to special treatment under the U.S. federal income tax law or to any particular Holder in light of such Holder's particular facts and circumstances. Some Holders, including tax exempt entities, banks, insurance companies and persons who hold common shares as part of a hedging transaction, may be subject to special or different rules not discussed below. The discussion of U.S. tax considerations is based on the provisions of the Code.

The discussion of Canadian tax considerations is based upon the provisions of the Income Tax Act (Canada) (the "Tax Act"), the Convention between Canada and the U.S. with Respect to Taxes on Income and Capital, as amended from time to time (the "Convention"), and our understanding of published administrative practices of Canadian Customs and Revenue Agency and judicial decision, all of which are subject to change. The discussion does not take into account the tax laws of the various provinces or territories of Canada or the tax laws of the various state and local jurisdictions in the U.S.

U.S. Federal Income Tax Considerations

Unconnected U.S. Shareholders generally will treat the gross amount of the distributions paid by us, including the amount of any Canadian tax withheld, as foreign source dividend income for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits, as computed for U.S. federal income tax purposes. Distribution in excess of that amount will reduce an Unconnected U.S. Shareholder's tax basis in the common shares, but not below zero, and the remainder, if any, will be treated as taxable capital gains. In general, in computing its U.S. federal income tax liability, an Unconnected U.S. Shareholder may elect for each taxable year whether to claim a deduction or, subject to the limitations described below, a credit for Canadian taxes withheld from dividends paid on their common shares. If the Unconnected U.S. Shareholder elects to claim a credit for such Canadian taxes, the election will be binding for all foreign taxes paid or accrued by the Shareholder for such taxable year. The Code applies various limitations on the amount of foreign tax credit that may be available to a U.S. taxpayer based upon the segregation of foreign source income into separate categories of income. The amount of credit which may be claimed with respect to the category of income to which the dividend is allocated, and to which the foreign taxes are attributable generally may not exceed the same portion of the U.S. tax on worldwide taxable income, before applying the foreign tax credit as the U.S. Holder's foreign source taxable income allocation to such category bears to such U.S. Holder's entire taxable income. The foreign tax credit is disallowed for dividends on stock unless a minimum holding period is satisfied and additional limitations may restrict the ability of some individuals to claim the foreign tax credit. Accordingly, we urge investors to consult their own tax advisors with respect to the potential consequences to them of the foreign tax credit limitations.

For U. S. federal income tax purposes, the amount of any distributions made on a common share to an Unconnected U.S. Shareholder in Canadian dollars will equal the U.S. dollar value of the Canadian dollars calculated by reference to the appropriate exchange rate in effect on the date of receipt of the distribution, regardless of whether the Canadian dollars are actually converted into U.S. dollars upon receipt. Unconnected U.S. Shareholders are urged to consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any Canadian dollars which are converted into U.S. dollars subsequent to receipt by the shareholder.

The sale of common shares generally will result in a gain or loss to the Holder in an amount equal to the difference between the amount realized and the Holder's adjusted cost basis in the shares. Provided that the Holder is not considered a "dealer' in the shares sold, gain or loss on the sale of the common shares will generally be capital gain or loss.

24


Capital losses are deductible to the extent of capital gains. Individual taxpayers may deduct excess capital losses of up to US$3,000 a year, US$1,500 in the case of a married individual filing separately, from ordinary income. Non-corporate taxpayers may carry-forward unused capital losses indefinitely. Unused capital losses of a corporation may be carried back three (3) years and carried forward five (5) years.

Canadian Tax Considerations

Dividends paid or credited, or that we deem to pay or credit, on the common shares to Unconnected U.S. Shareholders will be subject to Canadian withholding tax. Under the Convention, the maximum rate of withholding tax on dividends paid or credited on the common shares is fifteen percent (15%) if the beneficial owner of such dividends is an Unconnected U.S. Shareholder. However, that rate is reduced to five percent (5%) under the Convention if the beneficial owner of such dividends is an Unconnected U.S. Shareholder that is a corporation that owns at least ten percent (10%) of our voting stock.

An Unconnected U.S. Shareholder will not be subject to tax in Canada on any capital gain realized upon the disposition or deemed disposition of the common shares, provided that the common shares do not constitute "taxable Canadian property" of the shareholder within the meaning of the Tax Act.

Canada does not currently impose any estate taxes or succession duties.

Dividends and Paying Agents

Not applicable to Form 20-F filed as an Annual Report.

Statements By Experts

Not applicable to Form 20-F filed as an Annual Report.

Documents on Display

All documents filed in connection with this Annual Report have been filed with the Securities and Exchange Commission (“SEC”) using the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system. The SEC maintains a Web site on the Internet at the address http://www.sec.gov that contains reports, proxy information statements and other information regarding registrants that file electronically with the SEC.

Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Currency Exchange Rate Sensitivity

The results of our operations are subject to currency translational risk and currency transactional risk. Regarding currency translational risk, the operating results and financial position of our subsidiaries are reported in TWD and then translated into USD at the applicable exchange rate for preparation of our consolidated financial statements. The fluctuation of the TWD in relation to the USD will, therefore, have an impact upon profitability of our operations and may also affect the value of our assets and the amount of shareholders’ equity.

In regards to transaction risk, our functional currency is TWD and are activities are predominantly executed in TWD. However, due to the fact that the majority of our financings are completed in USD, we are not subject to significant operational exposures due to fluctuations in these currencies. Our common shares are listed on the OTC.BB and are bought and sold in USD (see tables in Item 9). We have not entered into any agreements or purchased any instruments to hedge any possible currency risks at this time.

25


Interest Rate Sensitivity

We currently have no significant short-term or long-term debt requiring interest payments. This does not require us to consider entering into any agreements or purchasing any instruments to hedge against possible interest rate risks at this time. Our interest earning investments are short-term. Thus, any reductions in future income or carrying values due to future interest rate declines are believed to be immaterial.

Commodity Price Sensitivity

Not applicable.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable to Form 20-F filed as an Annual Report. In respect of Items 12.D.3 and 12.D.4, no fees or charges are payable by any holder of American depositary receipts in respect of our securities and no payments have been made to us by any depositary.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

We have elected to report under Item 15T.

ITEM 15T. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed under Canadian and U.S. securities regulations is recorded, processed, summarized and reported within the time periods specified and is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

An evaluation was carried out under the supervision of, and with the participation of, our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as such term is defined in the Exchange Act, as amended, Rules 13a-15(e) and 15d-15(e)) as of December 31, 2009. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2009.

26


Internal Controls over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934 (the “Exchange Act”).

Under the supervision and with the participation of our Company's Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of December 31, 2009, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2009.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the period covered by the annual report, being the fiscal year ended December 31, 2009, that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

We have no formal audit committee, and thus, we have no audit committee financial expert. Our Board is responsible for reviewing our financial reporting procedures, internal controls, and the performance of our auditors. Our Board is also responsible for reviewing all disclosure with respect to financial matters prior to filing or release. Ms. Taifen Day is our Chief Financial Officer and a Chartered Accountant in the Province of Alberta, Canada. Ms. Day reports to our Board in her capacity as Chief Financial Officer.

ITEM 16B. CODE OF ETHICS

We have adopted a code of ethics as part of a broader “code of conduct”, which addresses ethical issues as well as broader corporate governance issues. Our code of conduct has been approved by our Board of Directors and is applicable to all our directors, officers, employees and consultants, including but not limited to our principle executive officer, our principal financial officer and principal accounting officer, and any persons performing similar functions. No amendments have been made or waivers granted in respect of any provision of our Code of Ethics during the most recently completed fiscal year.

A copy of the code of ethics portion of our code of conduct is attached to this annual report as Exhibit “A”.

In addition, we practice corporate governance in accordance with rules and regulations in Canada.

Corporate governance relates to the activities of our our directors who are elected by and accountable to the shareholders and takes into account the role of management who are appointed by the Board and who are charged with our on-going management. Our Board of Directors encourages sound corporate governance practices designed to promote our well being and on-going development, having always as its ultimate objective the best long-term interests of us and the enhancement of value for all shareholders. The Board also believes that sound corporate governance benefits our employees and the communities in which we operate. The Board is of the view that our corporate governance policies and practices, outlined in our Code of Ethics, are appropriate and substantially consistent with the guidelines for improved corporate governance in Canada as adopted by the Toronto Stock Exchange.

ITEM 16C. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

Audit Fees

Our external auditors, KCCW Accountancy Corp., charged total fees of $45,000 for the year ended December 31, 2009. All of the $45,000 above was for audit fees and none of the amount was for audit-related fees or income tax preparation fees. Our external auditors, KCCW Accountancy Corp., charged total fees of $45,000 for the year ended December 31, 2008. All of the $45,000 above was for audit fees and none of the amount was for audit-related fees or income tax preparation fees.

27


Audit-Related Fees

None.

Tax Fees

None.

All Other Fees

None.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not Applicable.

ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER

Not Applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

The required financial statements are provided herein starting on page 26.

ITEM 18. FINANCIAL STATEMENTS

See above.

ITEM 19. EXHIBITS

Exhibit No. Exhibit
1.1* Articles of Amalgamation
1.2* Bylaws

28



2(a)* See Exhibit 1.1 and 1.2
2(b)* Form of Loan Agreement and Promissory Note
4.1 Distribution Agreement with Panasonic (Taiwan) (April, 2010)
4.2 Manufacture and Distribution Agreement with Sanyo (December, 2010)
4.3 Form of Promissory for Shareholder Loan.
4.4 Form of Subscription Agreement for Convertible Debenture
11. Code of Ethics
12.1 CEO Certification Pursuant to Section 302
12.2 CFO Certification Pursuant to Section 302
13.1 CEO Certification Pursuant to Section 906
13.2 CFO Certification Pursuant to Section 906

* Incorporated by reference to the Exhibits filed with our Form 20-F filed on September 16, 2003.

29


TRANSAKT LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
           DECEMBER 31, 2009, AND 2008 AND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

i


CONTENTS

  Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-1 - F-2
FINANCIAL STATEMENTS  
          Consolidated Balance Sheets F-3
          Consolidated Statements of Operations F-4
          Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income F-5
          Consolidated Statements of Cash Flows F-6
          Notes to Financial Statements F-7 - F-16

ii


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
TransAKT Ltd.

We have audited the accompanying consolidated balance sheets of TransAKT Ltd. and its subsidiaries (the “Company”) as of December 31, 2008 and 2009, and the related consolidated statements of operations, shareholders’ equity and comprehensive income, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the consolidated financial positions of TransAKT Ltd. as of December 31, 2008 and 2009, and the consolidated results of their operations and their consolidated cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has accumulated deficit of $(2,038,892) at December 31, 2009 including a net loss of $(249,643) during the year ended December 31, 2009. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KCCW Accountancy Corp.

Diamond Bar, California
June 6, 2010

F-1


Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

TransAKT Ltd and Subsidiaries
Calgary, Canada.

     We have audited the accompanying consolidated statements of operations of TransAKT Ltd and Subsidiaries for the year ended December 31, 2007, and the related consolidated statements of stockholders’ equity, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated results of operations of TransAKT Ltd and Subsidiaries for the year ended December 31, 2007, and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

     The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has accumulated deficit of $(1,368,473) at December 31, 2007 including a net loss of $(921,158) during the year ended December 31, 2007. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KABANI & COMPANY, INC.

CERTIFIED PUBLIC ACCOUNTANTS

Los Angeles, California
February 6, 2008

F-2



TRANSAKT LTD.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2009 and 2008

    December 31,     December 31,  
ASSETS   2009     2008  
Current Assets            
Cash and cash equivalents $  874,418   $  205,658  
Restricted cash   498,540     563,756  
Accounts receivable, net   2,049,995     2,245,101  
Inventory   1,373,516     2,924,211  
Other receivable, net   6,278     4,351  
Prepaid expenses   51,196     26,683  
Investments   50,915     152,569  
           Total Current Assets   4,904,858     6,122,329  
             
Property & Equipment, net   3,130     9,205  
             
Deposits   72,891     29,624  
             
Total Assets $  4,980,879   $  6,161,158  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current Liabilities            
Accounts payable and accrued expenses $  1,161,586   $  1,556,676  
Other payable   -     22,120  
Bank loans   2,083,361     2,773,399  
Loan payable to related party   495,625     277,032  
           Total Current Liabilities   3,740,572     4,629,227  
             
Non-current Liabilities            
Unsecured convertible notes payable,
   net of unamortized discounts of $10,541
 
19,459
   
-
 
             
Stockholders' Equity            
Common stock, unlimited shares authorized for issuance,
   no par value, 102,645,120 shares issued and outstanding
 
3,260,018
   
3,260,018
 
Additional paid-in capital   15,000     -  
Other comprehensive income (loss)   (15,278 )   61,162  
Accumulated deficit   (2,038,892 )   (1,789,249 )
Total Stockholders' Equity   1,220,848     1,531,931  
             
Total Liabilities and Stockholders' Equity $  4,980,879   $  6,161,158  

The accompanying notes are an integral part of the financial statements

F-3



TRANSAKT LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008, AND 2007

    2009     2008     2007  
Revenues:                  
     Sales of goods, net $ 10,623,736   $  9,546,132   $ 9,687,678  
                   Total revenues   10,623,736     9,546,132     9,687,678  
                   
Operating costs and expenses:                  
     Cost of sales   9,780,380     8,489,638     9,440,398  
     Selling, general and administrative expenses   1,029,425     1,262,977     1,710,456  
                   
                   Loss from operations   (186,069 )   (206,483 )   (1,463,176 )
                   
     Other income (expense)                  
     Interest income   1,414     8,147     6,516  
     Investment income (loss)   7,119     (9,279 )   -  
     Currency exchange gain (loss)   25,699     (84,180 )   -  
     Gain on settlement of debt   -     -     4,603  
     Other income   -     11,151     655,242  
     Interest expense   (96,474 )   (122,573 )   (113,138 )
                   Total other expense   (62,242 )   (196,734 )   553,224  
                   
     Loss before income taxes   (248,311 )   (403,217 )   (909,952 )
                   
     Provision for income taxes   1,332     17,559     11,206  
                   
     Net loss $  (249,643 ) $  (420,776 ) $  (921,158 )
                   
     Loss per share:                  
     Basic and diluted loss per share $  (0.00 ) $  (0.00 ) $  (0.01 )
                   
     Weighted average number of shares outstanding:
     Basic and diluted   102,645,120     102,645,120     99,707,278  

The accompanying notes are an integral part of the financial statements

F-4



TRANSAKT LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008, AND 2007

                Additional           Other              
    Common Stock     Paid-in     Prepaid     Comprehensive     Accumulated        
    Shares     Amount     Capital     Consulting     Income (loss)     Deficit     Total  
Balance at December 31, 2006   90,912,620   $  1,832,174   $  -   $  (189,151 ) $  38,271   $  (411,994 ) $  1,269,299  
   Issuance of shares for cash   8,772,500     1,037,653     -     -     -     -     1,037,653  
   Issuance of shares for services   2,000,000     362,098     -     (131,290 )   -     (35,320 )   195,488  
   Issuance of shares for compensation   500,000     -     -     -     -     -     -  
   Issuance of shares for debt settlement   460,000     28,093     -     -     -     -     28,093  
   Amortization of consulting fees   -     -     -     189,151     -     -     189,151  
   Foreign currency translation adjustment   -     -     -     -     55,988     -     55,988  
   Net loss   -     -     -     -     -     (921,158 )   (921,158 )
Balance at December 31, 2007   102,645,120   $  3,260,018   $  -   $  (131,290 ) $  94,259   $  (1,368,473 ) $  1,854,514  
   Amortization of consulting fees   -     -     -     131,290     -     -     131,290  
   Foreign currency translation adjustment   -     -     -     -     (33,097 )   -     (33,097 )
   Net loss   -     -     -     -     -     (420,776 )   (420,776 )
Balance at December 31, 2008   102,645,120   $  3,260,018   $  -   $  -   $  61,162   $  (1,789,249 ) $  1,531,931  
   Foreign currency translation adjustment   -     -     -     -     (76,440 )   -     (76,440 )
   Beneficial conversion feature relating to convertible debentures   -     -     15,000     -     -     -     15,000  
   Net loss   -     -     -     -     -     (249,643 )   (249,643 )
Balance at December 31, 2009   102,645,120   $  3,260,018   $  15,000   $  -   $  (15,278 ) $  (2,038,892 ) $  1,220,848  

The accompanying notes are an integral part of the financial statements

F-5



TRANSAKT LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECDEMBER 31, 2009, 2008, AND 2007

    2009     2008     2007  
Cash flows from operating activities                  
     Net loss $  (249,643 ) $  (420,776 ) $  (921,158 )
     Adjustments to reconcile net income to net cash provided by (used in) operating activities:            
     Depreciation   6,159     18,526     64,976  
     Gain on settlement of debt   -     -     (4,603 )
     Loss on disposal of fixed assets   -     16,724     -  
     Investment loss (income)   (7,119 )   9,279     -  
     Issuance of shares for services   -     -     195,488  
     Amortization of consulting fees   -     121,592     189,151  
     Amortization of debt discount attributable to convertible debentures   4,118     -     -  
     Changes in assets and liabilities:                  
             (Increase) Decrease in accounts receivable   185,362     858,511     (242,458 )
             (Increase) Decrease in inventory   1,568,377     (1,052,753 )   189,174  
             (Increase) Decrease in other receivables   6,659     (4,529 )   68,420  
             (Increase) Decrease in prepaid expense   (33,947 )   44,206     54,221  
             (Increase) in deposits   (42,252 )   (329 )   (18,921 )
             (Decrease) in accounts payable and accrued expenses   (429,750 )   (481,291 )   (684,790 )
                                       Net cash provided by (used in) operating activities   1,007,964     (890,840 )   (1,110,500 )
Cash flows from investing activities                  
     Proceeds from sales of property and equipment   -     91     -  
     Decrease in restricted cash   63,151     188,104     (536,360 )
     Purchase of investments   -     (168,101 )   -  
     Proceeds from sale of investments   110,182     -     -  
                                       Net cash provided by (used in) investing activities   173,333     20,094     (536,360 )
Cash flows from financing activities                  
     Proceeds from bank loans   2,132,162     2,887,063     993,731  
     Repayment of bank loans   (2,820,683 )   (2,432,730 )   -  
     Proceeds from loan from related party   165,011     432,198     (281,954 )
     Issuance of shares for cash   -     -     1,037,653  
     Net proceeds from issuance of convertible debentures   27,705     -     -  
                                       Net cash provided by (used in) financing activities   (495,805 )   886,531     1,749,430  
Effect of exchange rate changes on cash and cash equivalents   (16,732 )   (38,188 )   21,738  
Net increase (decrease) in cash and cash equivalents   668,760     (22,403 )   124,308  
Cash and cash equivalents                  
     Beginning   205,658     228,061     103,753  
     Ending $  874,418   $  205,658   $  228,061  
Supplemental disclosure of cash flows: Cash paid during the year for:                  
     Income tax $  197   $  30,524   $  3,201  
     Interest expense $  109,663   $  115,391   $  93,858  

The accompanying notes are an integral part of the financial statements

F-6



TRANSAKT LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009

NOTE 1 – ORGANIZATION

TransAKT Ltd. (the “Company”) was incorporated under the laws of the Province of Alberta on June 3, 1997. The Company completed the acquisition of Green Point Resources Inc. on October 18, 2000 whereby it became a publicly traded company listed on the Canadian Venture Exchange. In 2004 the Company voluntarily delisted from the TSX Venture Exchange and retained a listing on the Over the Counter Bulletin Board in the United States.

In October 2004 the Company purchased certain assets of IP Mental Inc., a Taiwan based Voice over Internet Protocol (VoIP) company. The company name was changed from TransAKT Corp. to TransAKT Ltd. on September 29, 2006. The Company designs and develops Voice over Internet Protocol (“VoIP”) solutions and mobile payment terminals for the consumer electronics industry.

On November 15, 2006 TransAKT Ltd and the shareholders of Taiwan Halee International Co. Ltd. (HTT), entered into a Share Exchange Agreement in which TransAKT Ltd. acquired 100% of Taiwan Halee International Co. Ltd.’s outstanding common stock. HTT was incorporated under the laws of Republic of China in 1985. HTT is engaged in designing, manufacturing and distribution of Taiwan telecommunications equipment. The acquisition has been accounted for as a reverse acquisition under the purchase method of accounting. Accordingly, the merger of the two companies has been recorded as a recapitalization of HTT, with HTT being treated as the continuing entity. The historical financial statements presented are those of HTT. The continuing company has retained December 31 as its fiscal year end.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of TransAKT Holdings Limited and its wholly owned subsidiaries Taiwan Halee International Co. Ltd. and TransAKT Taiwan Limited, collectively referred to within as the Company. All material intercompany accounts, transactions and profits have been eliminated in consolidation.

Financial Statement Presentation

Certain changes to the 2007 and 2008 financial statements have been made to conform to the 2009 financial statement format.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-7


Revenue Recognition

The Company’s revenue recognition policies are in compliance with Staff Accounting Bulletin (SAB) 104. Revenues are recognized when finished products are shipped to unaffiliated customers and both title and the risks and rewards of ownership are transferred and collectibility is reasonably assured.

The Company’s revenues are recorded upon confirmed acceptance after inspection by the customers of the Company.

Exchange Gain (Loss):

During the years ended December 31, 2009, 2008, and 2007, the transactions of TransAKT Holdings Limited, Taiwan Halee International Co. Ltd. and TransAKT Taiwan Limited were denominated in foreign currency and were recorded in Taiwan Dollar (TWD) and Canadian Dollar (CAD) at the rates of exchange in effect when the transactions occur. Exchange gains and losses are recognized for the different foreign exchange rates applied when the foreign currency assets and liabilities are settled.

Translation Adjustment

The Company financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency, while its functional currency is Taiwan dollar (TWD) and Canadian Dollar (CAD). Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income.

In accordance with ASC 830, Foreign Currency Matters, the Company translates the assets and liabilities into U.S. dollar ($) using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from TWD and CAD into U.S. dollar are recorded in stockholders’ equity as part of accumulated other comprehensive income.

Comprehensive Income

Comprehensive income includes accumulated foreign currency translation gains and losses. The Company has reported the components of comprehensive income on its statements of stockholders’ equity.

Advertising

Advertising expenses consist primarily of costs of promotion for corporate image and product marketing and costs of direct advertising. The Company expenses all advertising costs as incurred.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.

The Company adopted ASC 740-10-25, Income Taxes- Overall-Recognition, on January 1, 2007, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must 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 are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.

F-8


Statement of Cash Flows

In accordance with generally accepted accounting principles (GAAP), cash flows from the Company’s operations is based upon the local currencies. 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.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and other receivables arising from its normal business activities. The Company has a diversified customer base. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for un-collectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

Cash and Cash Equivalents

Cash and cash equivalents include cash in hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Restricted Cash

The Company had restricted cash and investments of $498,540 and $563,756 for year ended December 31, 2009 and 2008, respectively. The restricted cash primarily collateralizes the Company’s bank loans and issuances of standby and commercial letters of credit. The restrictions expire when related obligations are fulfilled.

Allowance for Doubtful Accounts

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Allowance for doubtful debts amounted to $190,402 and $187,353 as at December 31, 2009 and December 31, 2008, respectively.

Inventory

Inventories are valued at the lower of cost (determined on a weighted average basis) or market. The Management compares the cost of inventories with the market value and allowance is made for writing down their inventories to market value, if lower. As of December 31, 2009 and 2008, inventory consisted only of finished goods.

Property, Plant & Equipment

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with estimated lives of:

F-9



Furniture and Fixtures 3-5 years
Equipment 3-5 years
Computer Hardware and Software 3-5 years
Automobile 3-5 years

As of December 31, 2009, Property, Plant & Equipment consist of the following:

Computer and office equipment $  59,769  
Accumulated depreciation   (56,639 )
       
  $  3,130  

Depreciation expenses were $6,159, $18,526, and $64,976 for the years ended December 31, 2009, 2008, and 2007, respectively.

Fair Value of Financial Instruments

In the first quarter of fiscal year 2008, the Company adopted Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”). ASC 820-10 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure. ASC 820-10 delays, until the first quarter of fiscal year 2009, the effective date for ASC 820-10 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of ASC 820-10 did not have a material impact on the Company’s financial position or operations.

Effective October 1, 2008, the Company adopted Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. Neither of these statements had an impact on the Company’s unaudited condensed consolidated financial position, results of operations or cash flows. The carrying value of cash and cash equivalents, accounts payable and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments.

Net Loss Per Share

The Company has adopted Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) which specifies the computation, presentation and disclosure requirements of earnings per share information. Basic earnings per share have been calculated based upon the weighted average number of common shares outstanding. Common equivalent shares are excluded from the computation of the diluted loss per share if their effect would be anti-dilutive.

Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell.

F-10


Recent accounting pronouncements

In October 2009, the FASB issued Accounting Standards Update 2009-13, “Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force,” to provide amendments to the criteria in Subtopic 609-24 of the Codification for separating consideration into multiple-deliverable revenue arrangements. ASU 2009-13 establishes a selling price hierarchy for determining the selling price of each specific deliverable which includes vendor-specific objective evidence (“VSOE”) if available, third party evidence if VSOE is not available or estimated selling price if neither VSOE nor third party evidence is available. ASU 2009-13 also eliminates the residual method for allocating revenue between the elements of an arrangement and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the arrangement proportionally to each deliverable on the basis of each deliverable’s selling price. This Update expands the disclosure requirements regarding a vendor’s multiple-deliverable revenue arrangements. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The Company is currently evaluating the impact of ASU 2009-13 on its financial statements and does not expect the adoption of this standard will have material impact on its financial position, results of operations or cash flows.

In January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair Value Measurements , which, among other things, amends Accounting Standards Topic 820 Fair Value Measurements and Disclosures (ASC 820) to require entities to separately present purchases, sales, issuances, and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and which clarifies existing disclosure requirements provided by ASC 820 regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy. ASU No. 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company’s adoption of this standard had no impact on its financial position, results of operations or cash flows.

Going Concern

The Company has incurred a net loss of $249,643, $420,776, and $921,158 during the years ended December 31, 2009, 2008, and 2007, respectively, and has an accumulated deficit of $2,038,892, $1,789,249, and $1,368,473 as of December 31, 2009, December 31, 2008, and December 31, 2007, respectively.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. This presentation presumes funds will be available to finance ongoing research and development, operations and capital expenditures and permit the realization of assets and the payment of liabilities in the normal course of operations for the foreseeable future.

The ability of the Company to continue research and development projects and realize the capitalized value of proprietary technologies and related assets is dependent upon future commercial success of the technologies and raising sufficient funds to continue research and development as well as to effectively market its products. Through December 31, 2009, the Company has not realized commercial success of the technologies, nor have they raised sufficient funds to continue research and development or to market its products.

F-11


There can be no assurances that there will be adequate financing available to the Company and the consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

The Company has taken certain restructuring steps to provide the necessary capital to continue its operations. These steps included: (1) Tightly budgeting and controlling all expenses; (2) Expanding the company’s operations into China, expanding product lines and recruiting a strong sales team to significantly increase sales revenue and profit in 2010; (3) The Company plans to continue actively seeing additional funding opportunities to improve and expand upon our product lines.

NOTE 3 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

The accounts payable and accrued expenses as of December 31, 2009 and 2008 are summarized as follows:

    2009     2008  
Accounts payable $  911,780   $  1,390,155  
Accrued expenses   155,110     153,482  
Sales tax payable   35,391     -  
Accrued payroll   59,305     -  
Income Taxes Payable   -     13,039  
Total $  1,161,586   $  1,556,676  

NOTE 4 - RELATED PARTY TRANSACTIONS

The Company’s officers and shareholders have advanced funds to the Company for working capital purposes. The Company has not entered into any agreement on the repayment terms for these advances. As of December 31, 2009 and 2008, there were $435,225 and $216,632 advances outstanding, respectively.

The Company also had loans payable to five shareholders amounted to $60,400 as of December 31, 2009 and 2008. The unsecured loans bear interest at the rate of 12% per annum, and due on May and June 2010.

NOTE 5 - LOANS PAYABLE

The Company has loan payable amounting to $2,083,361 as of December 31, 2009 from several commercial banks in Taiwan. The loans are partially secured by certificate of deposits for $498,540 and accounts receivable. The loans payable at December 31, 2009 comprised of the following:

F-12



        Interest per    
Nature   Due on   Annum   Amount
Secured note payable from a bank   1/12/2010   5.25%   27,000
Secured note payable from a bank   1/12/2010   5.25%   39,300
Secured note payable from a bank   2/3/2010   5.25%   40,300
Secured note payable from a bank   2/10/2010   5.25%   55,460
Secured note payable from a bank   2/23/2010   5.25%   117,700
Secured note payable from a bank   2/4/2010   5.25%   23,250
Secured note payable from a bank   4/8/2010   5.25%   37,800
Secured note payable from a bank   4/20/2010   5.25%   12,500
Secured note payable from a bank   4/20/2010   5.25%   37,500
Secured note payable from a bank   4/25/2010   5.25%   16,500
Secured note payable from a bank   4/25/2010   5.25%   31,286
Secured note payable from a bank   4/25/2010   5.25%   25,920
Secured note payable from a bank   5/5/2010   5.25%   38,700
Secured note payable from a bank   5/13/2010   5.25%   27,000
Secured note payable from a bank   5/8/2010   5.25%   39,000
Secured note payable from a bank   5/17/2010   5.25%   16,170
Secured note payable from a bank   5/25/2010   5.25%   55,460
Secured note payable from a bank   5/26/2010   5.10%   56,875
Secured note payable from a bank   12/28/2010   2.88%   151,500
Secured note payable from a bank   3/1/2010   5.35%   23,007
Secured note payable from a bank   3/6/2010   5.35%   27,914
Secured note payable from a bank   1/14/2010   5.00%   52,000
Secured note payable from a bank   1/22/2010   5.00%   25,750
Secured note payable from a bank   5/7/2010   5.00%   82,800
Secured note payable from a bank   3/8/2010   1.52%   692,717
Secured note payable from a bank   2/10/2010   2.40%   17,800
Secured note payable from a bank   4/26/2010   2.58%   45,797
Secured note payable from a bank   3/22/2010   2.42%   36,600
Secured note payable from a bank   3/30/2010   2.42%   27,000
Secured note payable from a bank   3/29/2010   2.42%   32,250
Secured note payable from a bank   3/30/2010   2.42%   36,000
Secured note payable from a bank   4/12/2010   2.43%   21,000
Secured note payable from a bank   4/12/2010   2.43%   31,800
Secured note payable from a bank   4/28/2010   2.43%   40,500
Secured note payable from a bank   5/4/2010   2.43%   31,125
Secured note payable from a bank   5/10/2010   2.43%   10,080
    Total   $   2,083,361
    Current portion $   2,083,361
    Long-term portion $   -

NOTE 6 – STOCKHOLDERS’ EQUITY

On January 25, 2007, the Company issued 460,000 shares of common stock to Patrick Hillier and Manfred Schauer in connection with the settlement of debt. These shares have been recorded at fair value of $28,093, based on the price of the stock on the agreement date. The Company recorded gain on settlement of debt amounting to $4,603.

On January 25, 2007, the Company issued 22,500 shares of common stock to Rick Martens as 10% commission for arranging the private placement in September 2006 .These shares have been recorded as net of cash received as part of private placement..

On January 25, 2007 the Company issued 500,000 shares to its former shareholders as compensation for loss of capital due to termination of a distribution agreement for the Asia Pacific region. The Company recorded those shares as deemed dividend amounting to $35,320.

On April 3, 2007, the Company had a private placement and issued 8,650,000 shares of common stock. The Company issued share at $0.12 per share for cash.

F-13


On April 3, 2007, the Company issued 100,000 shares of common stock to Allen Schwabe as 10% commission for arranging the private placement to 10 individuals in British.Columbia in April 2007 .These shares have been recorded as net of cash received as part of private placement.

On April 27, 2007, the Company issued 2,000,000 shares of common stock to Liu Fu Ming, an outside consultant, as compensation for service provided. These shares were recorded at the fair market value of $326,778, based on the price of stock on the agreement date. The consulting agreement is for the period of 12 months starting April 27, 2007. Since the compensation for services is settled thru issuance of shares therefore the Company recorded $195,488 as an expense for the period and the balance of $131,290 was recorded as prepaid consulting for the service not performed as part of equity.

Stock Based Compensation:

Stock Option Plan

In 2004 the Company filed a stock option plan where management is authorized to issue 5,250,000 shares under the plan.

Activity under the 2004 plan is as follows:

          Weighted     Aggregate  
    Number of     Average     Intrinsic Value  
2004 Equity Incentive Plan   Shares     Exercise Price        
Outstanding at December 31, 2005   4,235,000   $  0.36   $  -  
Granted in 2006   4,600,000              
Exercised in 2006   (4,235,000 )            
Canceled in 2006   (1,900,000 )            
Outstanding at December 31, 2006   2,700,000   $  0.18        
Exercisable at December 31, 2006   2,700,000   $  0.18   $  -  
Expired in 2007   (2,700,000 )            
Outstanding at December 31, 2007   -              
Exercisable at December 31, 2007   -              

All outstanding options under the 2004 plan have expired during the year 2007.

NOTE 7 – INCOME TAXES

The Company was incorporated under the laws of the Province of Alberta, Canada and has operations in primarily two tax jurisdictions - Taiwan and Canada. For certain operations in Taiwan and Canada, the Company has incurred net accumulated operating losses for income tax purposes. The Company believes that it is more likely than not that these net accumulated operating losses will not be utilized in the future. Therefore, the Company has provided full valuation allowance for the deferred tax assets arising from the losses at these locations as of December 31, 2009, 2008, and 2007. Accordingly, the Company has no net deferred tax assets.

Canada:

The statutory tax rate under Canada tax law is 34%. The Company has significant income tax net operating losses (“NOL”) carried forward from prior years. Due to the uncertainty of the realizability of the related deferred tax assets, a reserve equal to the amount of deferred income taxes has been established at December 31, 2009 and 2008. The Company has provided 100% valuation allowance to the deferred tax assets as of December 31, 2009 and 2008.

F-14


Taiwan:

The statutory tax rate under Taiwan tax law is 25%. The Company has several deferred tax asset items. Due to the uncertainty of the realizability of the related deferred tax assets, a reserve equal to the amount of deferred income taxes has been established at December 31, 2009 and 2008. The Company has provided 100% valuation allowance to the deferred tax assets as of December 31, 2009 and 2008.

The provision for income taxes from continuing operations on income consists of the following for the years ended December 31, 2009, 2008, and 2007:

    2009     2008     2007  
Income tax expense – current $  1,332   $  17,559   $  11,206  
Income tax expense – deferred   -     -     -  
Total income tax expense $  1,332   $  17,559   $  11,206  

Deferred taxes:

The tax effect of temporary differences that give rise to the Company’s deferred tax asset as of December 31, 2009, and 2008 are as follows:

Canada:   2009     2008  
Deferred tax asset – non-current:            
Net operating loss carry forward $  2,301,024   $  2,241,872  
Valuation allowance   (2,301,024 )   (2,241,872 )
Net deferred tax asset $  -   $  -  

Taiwan:   2009     2008  
Deferred tax asset – non-current:            
Net operating loss carry forward $  16,514   $  -  
Foreign currency exchange loss (gain)   (7,555 )   14,280  
Other temporary non-deductible difference   -     2,539  
Valuation allowance   (8, 959 )   (16,819 )
Net deferred tax asset $  -   $  -  

NOTE 7 - COMMITTMENTS

Operating Leases

The Company leases various office facilities under operating leases that expire on various dates of year 2010. Rental expense for these leases consisted of approximately $39,596, $83,677, and $64,174 for the years ended December 31, 2009, 2008, and 2007, respectively. The Company has future minimum lease obligations of $21,483 for the twelve-month period ended December 31, 2010.

NOTE 8 - OTHER COMPREHENSIVE INCOME

Balances of related after-tax components comprising accumulated other comprehensive income (loss), included in stockholders’ equity, at December 31, 2009, 2008, and 2007 are as follows:

      Foreign Currency  
      Translation  
      Adjustment  
Balance at December 31, 2006   $  38,271  
Change for 2007     55,988  
Balance at December 31, 2007   $  94,259  
Change for 2008     ( 33,097 )
Balance at December 31, 2008     61,162  
Change for 2009     (76,440 )
Balance at December 31, 2009   $  (15,278 )

F-15


NOTE 9 - FAIR VALUE MEASUREMENTS

Generally accepted accounting principles (GAAP) utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to observable quoted prices (unadjusted) in active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

As of December 31, 2009 and 2008 the Company had $50,915 and $152,569, respectively, in Level 1 investments in the form of mutual funds.

NOTE 10 - PRIVATE PLACEMENT OF CONVERTIBLE NOTES

12% Unsecured Convertible Promissory Notes dated May 29, 2009

On May 29, 2009, the Company issued $30,000 convertible promissory notes due May 29, 2011 with interest at 12% per annum due upon maturity. The note is convertible at any time after the first anniversary after the closing date, at the holder’s option, into shares of the Company’s common stock at a price of $0.02 per share. At maturity, any accrued and unpaid interest, is payable to the holder.

In accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the note. The Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $15,000 of the proceeds, which is equal to the intrinsic value of the embedded beneficial conversion feature, to additional paid-in capital and a discount against the note. The debt discount attributed to the beneficial conversion feature is amortized over the note’s maturity period (two years) as interest expense.

The Company recorded the intrinsic value of the embedded beneficial conversion feature ($15,000) to debt discount which will be amortized to interest expense over the term of the note. Amortization of $4,459 was recorded for the year ended December 31, 2009.

******

F-16


SIGNATURES

The registrant hereby certifies that it meets all the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

TRANSAKT LTD.

Date: June 25, 2010 By: /s/ James Wu
Name: James Wu
Title: President and Chief Executive Officer (principal executive officer)

Date: June 25, 2010 By: /s/ Taifen Day
Name: Taifen Day
Title: Chief Financial Officer (principal financial officer and principal accounting officer) 

30



Panasonic

Yearly sales contract

2010 communication product dealer Taiwan Halee CORP. ( 8M17+8M18+8M19+ 8M20 ) yearly sales contract

Contract number: SE-8M17-2010-0401

Taiwan Halee CORP. ( Hereinafter called A )
Panasonic Taiwan Co., Ltd. SE SECT. ( Hereinafter called B )

1. Period: 2010/04/01 – 2011/03/31
   
2. Target: During the contract period,A should purchase from B for the following target amount:

  Amount Achievement rebate
2010 target NTD 320,000,000 0.40%
2010 challenge target NTD 380,000,000 0.5%

1. The 1st, 2nd half year target should be set up between A and B.
   
2. The rebate should be calculated base on the actual sales amount.
   
3. Reward: In the end of the contract period, if A can achieve the yearly target, B have to follow this contract to give achievement rebate to A

NOTE: 1. The period of validity for this contract from 2010/04/01 to 2011/03/31
     
  2. The above amount is including 5% selling tax.

 

/s/Taiwan Halee CORP. /s/Panasonic Taiwan Co., Ltd.
(executed by corporate seal) (executed by corporate seal)



Purchasing Order

PO number : 101008059

Issue number : 1010039

Order the following product from: Taiwan Halee CORP .

Product: Caller-ID cordless phone Model Number: CLT-2091
   
Q’TY: 3000 units unit price ( w/o tax): NTD 783
   
Request delivery: 2010/12/20  

Barcode: 4712124861547

Serial number: 08600081006001 - 08600081009000

Ordering Sanyo Electric ( Taiwan ) LTD.,

President:

2010/10/14


Order Confirmation

PO number:

101008059

Issue number: 1010039

We received the order from Sanyo Electric ( Taiwan ) LTD.,,the contents are

ASF:

Product: Caller-ID cordless phone Model Number: CLT-2091
   
Q’TY: 3000 units unit price ( w/o tax): NTD 783

Actual delivery:______ year ______ month ______ day,_______ units

( Manufactory ):______ year ______ month ______ day,_______ units

Barcode: 4712124861547

Serial number: 08600081006001 – 08600081009000

Manufactory: Taiwan Halee CORP.

President:

2010/10/14


Trademark authorization Letter

Sanyo Electronics ( Taiwan ) CO.,LTD. was authorized to Taiwan Halee CORP. require SHENZHEN KCM ELECTRONICS CO.,LTD can use trademark “ SANYO “ to produce the following product, model number, quantity and date of expiry:

Order number: 101008095

Product : Caller-ID cordless phone

Model Number: CLT-2091 ( Barcode:4712124861547 )

Q’ty: 3000 units ( Serial number:08600081006001 – 08600081009000 )

Date of expiry: From 2010/12/14 to 2011/01/04



By authorization: Authorization:
Taiwan Halee CORP. Sanyo Electronics ( Taiwan ) CO.,LTD.

Note:

1.
By authorization accept and must follow the content of this Trademark authorization Letter, never doing the illegal activity. If produce the q’ty are more than this Trademark authorization Letter, or changing the content of this Trademark authorization Letter, by authorization should take the legal liability, and compensate the authorization 500 times of this letter amount.

2.
In any reason, if the by authorization need to change the manufactory, they should inform authorization in advance by document. After authorization agreed, by authorization should take the liability of the product.
 
3.
This trademark authorization Letter will be activated after the by authorization put the company stamp and fax to authorization ( Fax number 02-25231301 )

 

2010/10/14



   
Suite 260, 1414 8 th Street SW
Calgary, Alberta
T2R 1J6
Canada
Phone: (403) 290-1744
Fax: (403) 266-5732
Website: www.transaktltd.com

 
PROMISSORY NOTE

AMOUNT:        $____________________

FOR VALUE RECEIVED TransAKT Ltd. ("Borrower") hereby promises to pay to the **VENDOR** ("Lender") or to the order of the Lender, on **CLOSINGDATE**, at __________________________________________or such other address in Canada that Lender or its order shall from time to time designate in writing, the sum of $________________(United States Dollars), together with interest at the rate of twelve percent (12%) per annum, compounded annually, calculated from and including the date following the date hereof to and including the date of payment. The Lender may request full repayment of this Promissory Note anytime after 90 days has passed from the date of this agreement (plus accrued Interest), and provide the Borrower with 30 days notice to provide the repayment. Interest for a period less than one calendar year shall be calculated on the basis of a 360 day year. For greater certainty, interest shall continue to accrue and be payable at the rate referred to above both before and after judgment should judgment be obtained in respect of this Promissory Note.

The Borrower hereby waives presentment, notice of dishonour, protest and notice of protest of this Promissory Note.

DATED in Calgary, Alberta, as of the ____ Day of ______________, 2008.

  Per: ____________________________________   Per: ____________________________________
       
  Per: “Lender”   Per: James Wu
    Name __________________________________          President and Chief Executive Officer
             TransAKT Ltd. ____________________________________
       


SUBSCRIPTION AGREEMENT – CONVERTIBLE DEBENTURES

TO: TransAKT Ltd. (the “Company” )
RE: Purchase of Units of the Company, each Unit consisting of $1,000 Principal Amount Convertible Debentures
   

Details of Subscription: The undersigned (the “Subscriber” ) hereby irrevocably subscribes for and agrees to purchase from the Company, on the terms and conditions set forth herein and in the attached schedules, that number of units of the Company (“Units” ) set out below at a price of $1,000 per Unit. Each Unit shall consist of one $1,000 principal amount convertible debenture (the “Convertible Debenture” ) of the Company. The securities subscribed for in this Agreement form part of a larger private placement (the “Private Placement” ) of an aggregate of CDN$_________ Convertible Debentures. A term sheet describing the terms, conditions and attributes of the Convertible Debentures is attached hereto as Schedule “A”.

 

 

Number of Units:

              __________ x CDN$1,000

(Name of Subscriber)

 

 

 

 

Account Reference (if applicable): ____________________________

 

 

 

 

 

Aggregate Subscription Price:  ____________________________________________

By: ___________________________________________________

 

 

(the “ Subscription Price ”)

       Authorized Signature

 

 

 

 

(Official Capacity or Title – if the Subscriber is not an individual)

 

If the Subscriber is signing as agent for a principal

 

 

(beneficial purchaser) and is not purchasing as

 

 

trustee or agent for accounts fully managed by it,

 

 

complete the following:

(Name of individual whose signature appears above if

 

 

 

different than the name of the subscriber printed

 

 

 

above.)

 

 

(Name of Principal)

 

(Subscriber’s Address, including Municipality and

 

 

 

Province)

 

 

(Principal’s Address)

 

(Telephone Number)                                                                    (Email Address)

 

 

 


1




Account Registration Information :

 

  Delivery Instructions as set forth below :

(Name)

 

  (Name)  

(Account Reference, if applicable)

 

  (Account Reference, if applicable)
(Address, including Postal Code)  

(Address)

 

 
   

(Contact Name)

 

(Telephone Number)
Number and kind of securities of the Corporation held,      
directly or indirectly, if any:   State whether Subscriber is an insider of the Corporation:

 

 

     

 

 

  Yes [    ]                                     No [    ]

ACCEPTANCE

The foregoing is accepted and agreed to as of the _______day of _________________________________, 2009.

TransAKT Ltd.

Per: _________________________________________
       Authorized Signatory



 SCHEDULE A
 
  TransAKT Ltd.
 
  TERM SHEET
   
ISSUER: TransAKT Ltd. (the “Company”).
   
ISSUE: Secured Convertible Debentures (“Debentures”).
   
PURPOSE: Provide working capital for expansion of operations.
   
AMOUNT:
The aggregate principal amount of Debentures to be issued pursuant to the offering is up to CDN$__________. The Debentures will be issued only as fully registered debentures in denominations of CDN$1,000 and integral multiples thereof. Certificates (the “Debenture Certificates”) representing the Debentures will be delivered by the Company to each subscriber (“Debenture Holder”).
   
MATURITY: 2 years from Closing (the “Maturity Date”).
   
PRE-PAYMENT:
The principal amount and interest may be pre-paid at any time without any notice being given by the Company and without bonus or penalty being paid to the Debenture Holder.
   
COUPON: Ten Per Cent (as herein defined) 10% , calculated annually, in arrears, payable on the Maturity Date.
   
CONVERSION PRICE:
The Debentures and accrued and unpaid interest will be convertible at the Debenture Holder’s option at any time after the first anniversary of the Closing, into common shares of the Company at a conversion price of $0.02 per common share. The Debenture Holder may not elect to convert the Debenture prior to the first anniversary of the Closing without the Company’s written consent.
   
CLOSING: _____________________, 2009
   
AGENT:
The Company may pay finder’s fees or commission in connection with the offering of Debentures consisting of a cash commission equal of up to 10% of the principal amount of Debentures and/or shares of common stock, or options to acquire such shares.

3


SCHEDULE B

TERMS & CONDITIONS

1.

Description of Securities

The securities subscribed for hereunder shall be units (“Units” ), each Unit consisting of a $1,000 principal amount convertible debenture (the “Convertible Debentures” ). The Units subscribed for hereunder form part of a larger offering (the “Offering” ) of up to CDN$___________Convertible Debentures. The material terms of the Offering are set out in the Term Sheet attached as Schedule “A” to this Agreement. The Units and Convertible Debentures are herein collectively referred to as the “Securities”.

The Securities will be subject to restricted resale (hold) periods imposed by National Instrument 45-102 Resale of Securities of the Canadian Securities Administrators (the “ Resale Instrument ”) during which they may be resold only in compliance with the Resale Instrument. Such restricted resale periods will expire four months and day after the Closing Date and there are additional restrictions imposed pursuant to the United States Securities Act of 1933 , as amended, and the rules promulgated thereunder.

2.

Payment of Subscription Price

The total Subscription Price set out on the first page of this Subscription Agreement (the “Agreement” ) must be paid by money order, certified cheque, bank draft or wire transfer payable to the Company .

3.

Documents Required

The Subscriber must complete, sign and deliver to the Company’s legal counsel, an executed copy of this Agreement together with the following Schedules to this Agreement:

  (a)

All Subscribers must complete Schedule C "Accredited Investor Certificate" ;

     
  (b)

All Subscribers who are U.S. Persons (as defined in section 6(e) of Schedule B herein) must also complete Schedule D – "Certificate of U.S. Accredited Investor Status"; and

The Subscriber must complete, sign and deliver to the Company’s legal counsel, W.L. Macdonald Law Corporation (Attention: Bill Macdonald), as soon as possible such further documents, questionnaires, notices and undertakings as may be required by regulatory authorities, stock exchanges and applicable law.

4. 

Closing

Delivery and payment for the Units (the “Closing”) will be at the offices of the Company’s legal counsel at Suite 1210 - 777 Hornby St Vancouver BC at 10:00 a.m. (BC time) on the second business day (the “Closing Date” ) after the day on which the Company has received sufficient subscriptions to complete the Private Placement.

On the Closing Date, certificates representing the Convertible Debentures will be sent to the Subscriber against payment to the Company of the total Subscription Price in Canadian funds for the Units.

4



5.

Resale Restrictions and Legending of Securities

     

The Subscriber, on its own behalf and on behalf of any other person for whom it is contracting hereunder, hereby expressly acknowledges and agrees that:

     
(a)

the Offering is being made pursuant to Exemptions and, as a result, the Securities will be subject to a number of statutory restrictions on resale and trading – until these restrictions expire, the Subscriber will not be able to sell or trade the Securities unless the Subscriber complies with an exemption from the prospectus and registration requirements under applicable securities laws;

     
(b)

the Issuer is a reporting issuer in any certain Canadian jurisdictions and, as a result, the Securities will be subject to a statutory hold period in Canada, and for residents outside Canada may be subject to additional restrictions on resale and trading imposed by the applicable securities laws of its jurisdiction of residence;

     
(c)

the Issuer has no present intention and is not obligated under any circumstances to file a prospectus, or take any other actions to qualify, facilitate or permit any resale or transfer of the Securities, or to become a reporting issuer in any jurisdiction; and

     

The Subscriber acknowledges and agrees that:

     
(a)

the Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any State securities laws, and may not be offered and sold, directly or indirectly, in the United States or by or to or for the account or benefit of a U.S. Person (as defined in Regulation S ("Regulation S") promulgated under the 1933 Act) without registration under the 1933 Act and any applicable State securities laws, unless an exemption from registration is available; and

     
(b)

the Issuer has no present intention and is not obligated under any circumstances to register the Securities, or to take any other actions to facilitate or permit any proposed resale or transfer thereof in the United States or otherwise by or to or for the account or benefit of a U.S. Person, and in particular, the Subscriber and the Issuer further acknowledge and agree that the Issuer is hereby required to refuse to register any transfer of the Securities not made in accordance with the provisions of Regulation S, pursuant to registration under the 1933 Act, or pursuant to an available exemption from registration.

     

The foregoing discussion on resale restrictions is a general summary only and is not intended to be comprehensive or exhaustive, or to apply in all circumstances. Subscribers are advised to consult with their own advisors concerning their particular circumstances and the particular nature of the restrictions on transfer, the extent of the applicable hold period and the possibilities of utilizing any further Exemptions or the obtaining of a discretionary order to transfer any Securities. Subscribers are further advised against attempting to resell or transfer any Securities until they have determined that any such resale or transfer is in compliance with the requirements of all applicable securities laws, including but not limited to compliance with restrictions on certain pre-trade activities and the filing with the appropriate regulatory authority of initial trade and other reports required upon any resale of the Securities.

     

In the event that any of the Securities are subject to a hold period or any other restrictions on resale and transferability, the Issuer will place a legend on the certificates representing the Securities as required under applicable securities laws or as it may otherwise deem necessary or advisable.

5



6.

Acknowledgements of Subscriber

       

The Subscriber acknowledges that:

       
(a)

the Units are being offered for sale only on a ‘private placement’ basis and the Company has advised the Subscriber that the Company is relying on exemptions (and such sales are conditional upon the existence of such exemptions or the receipt of such orders, consents and approvals as are necessary to make such sales exempt) from the requirements to provide the Subscriber with a prospectus or offering memorandum and to sell securities through a person registered to sell securities under the Securities Act (British Columbia), Securities Act (Alberta) and Securities Act (Ontario) (together with the respective rules, policies, instruments and orders thereunder, the “BC Act”, “Alberta Act” and “Ontario Act”, respectively), as the case may be, and, as a consequence of acquiring securities pursuant to these exemptions

       
(i)

certain protection, rights and remedies provided by such securities legislation, including statutory rights of rescission or damages, will not be available to the Subscriber,

       
(ii)

information that would otherwise be provided to the Subscriber under such securities legislation will not be provided to it, and

       
(iii)

the Company is relieved from various obligations under such securities legislation that would otherwise apply to it;

       
(b)

no securities commission or similar regulatory authority has reviewed or passed on the merits of the Securities;

       
(c)

there is no government or other insurance covering the Securities;

       
(d)

there are risks associated with the purchase of the Securities;

       
(e)

there are restrictions on the Subscriber’s ability to resell the Securities and

       
(i)

it is the responsibility of the Subscriber to find out what those restrictions are and to comply with them before selling the Securities,

       
(ii)

it may not be possible to liquidate the Subscriber’s investment readily in case of any emergency, and

       
(iii)

pursuant to the Resale Instrument, the Securities will be subject to restrictions on transfer for a period of four months from the Closing Date and legends will be placed upon the certificates representing the Securities to the effect that the securities represented thereby are subject to hold or restricted resale periods and may not be traded until the expiry thereof except as permitted under the Resale Instrument and any other applicable securities legislation, rules or policies;

       
(f)

the Company may pay to finders that introduce purchasers to the Company a finder's fee in accordance with applicable securities laws, payable in cash or Securities of the Company;

6



  (g)

the Subscriber has had access to all information regarding, and has been offered the opportunity to ask questions and receive answers concerning, the Company and the Securities that the Subscriber has considered necessary in connection with its investment decision, that any request for information has been complied with to the Subscriber's satisfaction, and, in particular, the Subscriber's decision to execute this Subscription and purchase Securities has not been based upon any written or oral representation or warranty as to fact or otherwise made by or on behalf of the Company;

     
  (h)

no person has made to the Subscriber any written or oral representations (i) that any person will resell or repurchase the Securities, (ii) that any person will refund the purchase price for the Securities, (iii) as to the future price or value of the Securities, or (iv) that the Securities will be listed and posted for trading or any stock exchange or that application has been made to list the common shares of the Company on any stock exchange;

     
  (i)

the Subscriber is capable by reason of knowledge and experience in financial and business matters in general, and investments in particular, of assessing and evaluating the merits and risks of an investment in the Securities, and is and will be able to bear the economic loss of its entire investment in any of the Securities and can otherwise be reasonably assumed to have the capacity to protect its own interest in connection with the investment;

     
  (j)

the Subscriber has been advised to consult its own investment, legal and tax advisors with respect to the merits and risks of an investment in the Securities, applicable securities laws and resale restrictions, and in all cases the Subscriber has not relied upon the Issuer or its counsel or advisors for investment, legal or tax advice, always having, if desired, in all cases sought the advice of the Subscriber's own personal investment advisor, legal counsel and tax advisors, and in particular, the Subscriber has been advised and understands that it is solely responsible, and neither the Issuer, nor its counsel or advisors are in any way responsible, for the Subscriber's compliance with applicable securities laws and resale restrictions regarding the holding and disposition of the Securities;

     
  (k)

to the knowledge of the Subscriber, the offering was not advertised or solicited in any manner in contravention of Selling Securities Laws, and has not been made through or as a result of any general solicitation or general advertising or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

     
  (l)

the Subscriber has no knowledge of a "material fact" or "material change", as those terms are defined in the Selling Securities Laws applicable in its jurisdiction of residence, in respect of the affairs of the Issuer that has not been generally disclosed to the public;

     
  (l)

the Subscriber has the legal capacity and competence to enter into and execute this Subscription and to take all actions required pursuant hereto, and if the Subscriber is not an individual, it is also duly formed and validly subsisting under the laws of its jurisdiction of formation and all necessary approvals by its directors, shareholders, partners and others have been obtained to authorize the entering into and execution of this Subscription and the taking of all actions required hereto on behalf of the Subscriber;

     
  (m)

the Subscriber has duly and validly entered into, executed and delivered this Subscription and it constitutes a legal, valid and binding obligation of the Subscriber enforceable against it in accordance with its terms;

7



  (n)

the Company is entitled to rely on the statements and answers of the Subscriber contained in this Agreement and in the Schedules to this Agreement and the Subscriber will hold the Company harmless from any loss or damage it may suffer as a result of the Subscriber’s failure to correctly complete this Agreement and such Schedules;

     
  (o)

this Agreement is not enforceable by the Subscriber unless it has been accepted by the Company, it has been entered into by the Subscriber for valuable consideration and may not be revoked or withdrawn by the Subscriber and it is not assignable by the Subscriber without the written consent of the Company which consent may be unreasonably withheld;

     
  (p)

the Securities have not been and will not be registered under the 1933 Act or under any state securities or ‘blue sky’ laws, and the Company has no obligation or present intention of filing a registration statement under the 1933 Act in respect of the Securities;

     
  (q)

if the Subscriber is either a Rule 506 Subscriber or a Reg S Subscriber, the sale of the Units is being made in reliance on private placement exemptions pursuant to Rule 506 of the 1933 Act or Rule 903 of Regulation S of the 1933 Act, respectively;

     
  (r)

the Securities will be ‘restricted securities’ under the 1933 Act since they are being acquired from the Company in a transaction not involving a public offering and, therefore, cannot be offered or sold in the United States of America without registration under the 1933 Act and the securities laws of all applicable states of the United States of America, unless an exemption from registration is available or registration is not required pursuant to Regulation S under the 1933 Act;

     
  (s)

if the Subscriber is either a Rule 506 Subscriber or a Reg S Subscriber, the certificates representing any of the Securities (and all certificates issued in exchange therefore or in substitution thereof) shall bear, upon the issuance thereof, and unless and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable state securities laws and regulations of the United States of America, on the face of such certificates, the following legend:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, (THE “1933 ACT”) OR ANY APPLICABLE STATE SECURITIES LAW. NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE UNITED STATES STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION, OR (B) AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.”

  (t)

if the Subscriber is either a Rule 506 Subscriber or a Reg S Subscriber, the Convertible Dentures may only be converted in circumstances where there is an exemption from the registration requirements of the 1933 Act available and applicable state securities laws of the United States of America and upon the original issue of the Convertible Debentures each certificate representing the

8


Convertible Debentures and all certificates issued in exchange therefore or in substitution or transfer thereof, shall bear the following legend:

“THESE CONVERTIBLE DEBENTURES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS. THESE CONVERTIBLE DEBENTURES MAY NOT BE EXERCISED BY OR ON BEHALF OF A U.S. PERSON OR PERSON WITHIN THE UNITED STATES UNLESS REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. AS USED HEREIN, THE TERMS ‘UNITED STATES’ AND ‘U.S. PERSON’ HAVE THE MEANINGS ASSIGNED TO THEM IN REGULATION S UNDER THE 1933 ACT.”

6.

Representations, Warranties and Covenants of the Subscriber

The Subscriber hereby represents and warrants to and covenants with the Company which representations, warranties and covenants shall survive Closing) that:

  (a)

if the Subscriber is purchasing the Units as principal for its own account, it is

       
  (i)

purchasing such securities for investment only and not for the benefit of any other person or for resale, distribution or other disposition of the Securities; and

       
  (ii)

purchasing a sufficient number of Units that the aggregate acquisition cost is not less than CDN$150,000; or

       
  (iii)

an “accredited investor” as evidenced on the completed Schedule C, Accredited Investor Certificate, delivered with this Agreement;

       
 

-or-

       
 

United States Subscribers

       
  (iv)

resident in the United States of America, or is otherwise subject to the securities laws thereof;

       
  (v)

an Accredited Investor as set out in the completed Schedule D, Confirmation by US Subscribers, delivered with this Agreement, if the Subscriber is a Rule 506 Subscriber;

       
  (vi)

not a party to any contract, undertaking, agreement or arrangement with any person to sell, transfer or pledge to such person, or anyone else, the Securities, or any part thereof, or any interest therein and the Subscriber has no present plans to enter into any such contract, undertaking, agreement or arrangement;

       
  (vii)

not planning to offer, sell or otherwise transfer any of the Securities, and, if it does, it will not offer, sell or otherwise transfer any of the Securities, directly or indirectly, unless the sale is:

9



    (A)

to the Company;

         
    (B)

made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the 1933 Act (or such rule or regulation promulgated by the Securities and Exchange Commission of the United States of America as is then in effect) and in compliance with applicable local laws and regulations; or

         
    (C)

made in a transaction that does not require registration under the 1933 Act or any applicable United States state securities laws and regulations governing the offer and sale of securities and the Subscriber has furnished to the Company, prior to such sale, an opinion of counsel of recognized standing reasonably satisfactory to the Company confirming the compliance of such sale with the 1933 Act and applicable state securities laws of the United States of America;

         
    (viii)

not engaging and will not engage in any ‘directed selling efforts’ (as defined in Regulation S of the 1933 Act) in the United States of America in respect of the resale of the Securities, which includes any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of the Securities; and

         
    (ix)

not subscribing for the Units as a result of any form of ‘general solicitation’ or ‘general advertising’ (as those terms are used in Regulation D under the 1933 Act), including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or other form of telecommunications, including electronic display, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.


  (b)

if it is not purchasing the Units for its own account but for one or more accounts that are fully managed by it, the Subscriber is duly authorized to enter into this Agreement and complete the transactions contemplated hereby and is:

       
  (i)

a trust company or an insurance company which has received a business authorization under the Financial Institutions Act (British Columbia) or is authorized under the laws of another province of Canada to carry on such business in such other province and the Subscriber is purchasing such securities as an agent or trustee for accounts that are fully managed by it; or

       
  (ii)

an adviser managing the investment portfolios of clients through discretionary authority granted by one or more clients, and is either (1) registered as such an adviser under the BC Act, Alberta Act or the laws of another province of Canada or is exempt from such registration, or (2) in a jurisdiction other than Canada and, in either (1) or (2), is purchasing securities as an agent for accounts that are fully managed by it; and

       
  (iii)

resident in British Columbia, Alberta or Ontario and the aggregate acquisition cost for such securities is not less than CDN$150,000; or

       
  (iv)

resident outside of Canada;

10



  (c)

if it is not purchasing the Units for its own account or one or more accounts that are fully managed by it but is purchasing them on behalf of certain principals for which it is acting as agent, the Subscriber is duly authorized to enter into this Agreement and complete the transactions contemplated hereby and each such principal:

         
  (i)

is disclosed on the execution page at the beginning of this Subscription Agreement;

         
  (ii)

is purchasing as principal for its own account as an investment and not for the benefit of any other person or with a view to the resale, distribution or other disposition of the Securities; and

         
  (iii)

satisfies the conditions set out in paragraph (a), as applicable,

         
 

and the Subscriber acknowledges that the Company is required by law to disclose to certain regulatory authorities the identity of each such principal for whom it is acting and consents to such disclosure;

         
  (d)

if the Subscriber is not an individual or a corporation and is purchasing securities for not less than CDN$150,000, each member of the partnership, syndicate or other unincorporated organization which is the beneficial purchaser, or each beneficiary of the trust which is the beneficial purchaser, as the case may be, is an individual who has an aggregate acquisition cost for the Units of at least CDN$ 150,000 if resident in British Columbia, Alberta or Ontario;

         
  (e)

unless the subscriber is a Reg S Subscriber or Rule 506 Subscriber, the subscriber is not a U.S. Person or a person in the United States and is not acquiring the Units for the account or benefit of a U.S. Person or a person in the United States. A ‘U.S. Person’ is defined in Regulation S under the 1933 Act to be any person who is

         
  (i)

any natural person resident in the United States,

         
  (ii)

any partnership or corporation organized or incorporated under the laws of the United States,

         
  (iii)

any estate of which any executor or administrator is a U.S. Person,

         
  (iv)

any trust of which any trustee is a U.S. Person,

         
  (v)

any agency or branch of a foreign entity located in the United States,

         
  (vi)

any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or, if an individual, resident in the United States, and

         
  (vii)

any partnership or corporation if

         
  (A)

organized or incorporated under the laws of any foreign jurisdiction, and

         
  (B)

formed by a U.S. Person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by ‘Accredited Subscribers’ (as defined in Section 230.50 1(a) of the 1933 Act) who are not natural persons, estates or trusts;

11


     
  (f)

the Subscriber is not acquiring the Units as a result of any information about the material affairs of the Company that is not generally known to the public except knowledge of this particular transaction;

       
  (g)

pursuant to the Resale Instrument the Subscriber will not transfer the Securities for a period of four months from the Closing Date except in compliance with the Resale Instrument and will comply with such notice and other requirements under applicable securities legislation upon disposition;

       
  (h)

neither the Subscriber nor any party on whose behalf it is acting has been created, established, formed or incorporated solely, or is used primarily, to acquire securities or to permit the purchase of the Units without a prospectus in reliance on an exemption from the prospectus requirements of applicable securities legislation;

       
  (i)

the Subscriber and any beneficial purchaser for whom it is acting are resident in the jurisdiction set out on the first page of this Agreement;

       
  (j)

the entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;

       
  (k)

the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporation, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution of this Agreement on behalf of the Subscriber;

       
  (l)

the Subscriber has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber;

       
  (m)

this subscription by the Subscriber has not been induced by any representations or warranties by any person whatsoever with regard to the future value of the Securities;

       
  (n)

it consents to the Company making a notation on its records or giving instructions to any transfer agent of the Company in order to implement the restrictions on transfer set forth in this Agreement;

       
  (o)

to the best of its knowledge, none of the funds the Subscriber is using to purchase the Units

       
  (i)

have been or will be derived from or related to any activity that is prohibited by, or deemed criminal under, the laws of Canada, United States of America, or any other jurisdiction, or

       
  (ii)

are being tendered on behalf of a person or entity who has not been identified to the Subscriber; and

       
  (p)

the Subscriber is an investor in securities of corporations in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment and it has such knowledge and experience in financial or business matters such that it is capable of evaluating the merits and risks of the investment in the Units.

12


The foregoing representations, warranties and covenants are made by the Subscriber with the intent that they be relied upon by the Company in determining the Subscriber’s suitability as a purchaser of the Units and are true and correct as of the date of this Agreement and the Closing Date. The Subscriber hereby agrees to indemnify the Company and its directors, officers, employees, advisors, affiliates, shareholders, partners and agents from and against all losses, claims, costs, expenses and damages or liabilities whatsoever including, but not limited to, any fees, costs and expenses reasonably incurred in investigating, preparing or defending against any litigation, administrative proceeding or investigation commenced or threatened or any claim arising out of or based upon a breach of any such representations, warranties and covenants which it may suffer or incur as a result thereof. The Subscriber undertakes to immediately notify the Company of any change in any representation, warranty or other information relating to the Subscriber set forth herein which occurs before the Closing Date.

7.

Representations, Warranties and Covenants of the Company

The Company represents and warrants to and covenants with the Subscriber (which representations, warranties and covenants shall survive Closing) that:

  (a)

the Company and its subsidiaries, if any, are valid and subsisting corporations duly incorporated, continued or amalgamated and in good standing under the laws of the jurisdictions in which they are incorporated, continued or amalgamated with respect to all acts necessary to maintain their corporate existence; and

     
  (b)

this Agreement has been duly authorized by all necessary corporate action on the part of the Company and, subject to acceptance by the Company, constitutes a valid obligation of the Company legally binding upon it and enforceable in accordance with its terms.

8.

Costs

The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the acquisition of the Securities shall be borne by the Subscriber.

9.

Governing Law

This Agreement is governed by the laws of the province of British Columbia and the federal laws of Canada applicable herein. The Subscriber, in its personal or corporate capacity and, if applicable, on behalf of each beneficial purchaser for whom it is acting, irrevocably attorn to the jurisdiction of the courts of the province of British Columbia.

10.

Personal Information

The Subscriber (on its own behalf and, if applicable, on behalf of any person for whose benefit the Subscriber is subscribing) acknowledges and consents to the Company:

  (a)

collecting the Subscriber’s (and that of any person for whose benefit the Subscriber is subscribing) personal information for the purposes of completing the Subscriber’s subscription;

13



  (b)

retaining the personal information for as long as permitted or required by applicable law or business practices; and

     
  (c)

providing to various governmental and regulatory authorities, as may be required by applicable securities laws, stock exchange rules, and the rules of the Investment Dealers Association, or to give effect to this agreement any personal information provided by the Subscriber.

The Subscriber represents and warrants that it has the authority to provide the consents and acknowledgments set out in this paragraph on behalf of all persons for whose benefit the Subscriber is subscribing.

If the Subscriber is resident in Ontario, it acknowledges it has been notified by the Company: (i) of the delivery to the Ontario Securities Commission (the “OSC” ) of the Subscriber’s personal information; (ii) that the Subscriber’s personal information is being collected indirectly by the OSC under the authority granted to it in the securities legislation; (iii) the Subscriber’s personal information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario; and (iv) the contact information of the public official in Ontario who can answer questions about the OSC’s indirect collection of personal information is, Administrative Assistant to the Director of Corporate Finance, Ontario Securities Commission, Suite 1903, Box 5520 Queen Street West, Toronto, Ontario, M5H 3S8, telephone (416) 593-8086, facsimile (416) 593-8252.

11.

Survival

This Agreement including, without limitation, the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties for a period of one year after the Closing Date notwithstanding the completion of the purchase of the by the Subscriber and any subsequent disposition by the Subscriber of the Securities.

12.

Assignment

This Agreement is not transferable or assignable.

13.

Execution & Delivery

The Company shall be entitled to rely on delivery by facsimile machine of an executed copy of this Agreement and acceptance by the Company of such facsimile copy shall be equally effective to create a valid and binding agreement between the Subscriber and the Company in accordance with the terms hereof.

14.

Severability

The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.

15.

Entire Agreement

Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Agreement contains the entire agreement between the parties with respect to the sale of the Units and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute, by common law, by the Company, by the Subscriber, or by any third party.

14


   
16.

Amendment

No amendment of the provisions of this Agreement shall be effective unless in writing and signed by all of the parties hereto.

17.

Notice

Unless otherwise provided herein, any notice or other communication to a party under this Agreement may be made, given or served by registered mail, postage pre-paid, by telecopier or by delivery to the parties at the addresses as set out in this Agreement. Any notice or other communication:

  (a)

mailed shall be deemed to have been received on the fifth business day following its mailing;

     
  (b)

telecopied shall be deemed to have been received on the business day following the date of transmission; and

     
  (c)

delivered shall be deemed to have been received on the date of delivery.

In the event of a postal strike or delay affecting mail delivery, the date of receipt of any notice by mail is deemed to be extended by the length of such strike or delay. Each party may change its

18.

Securities Regulatory Approval

This Agreement shall be subject to the approval of all securities regulatory authorities having jurisdiction.

15


SCHEDULE C

All Subscribers are required to complete and execute this Certificate. If the Subscriber is purchasing as agent for a Disclosed Principal it must complete and provide as a separate attachment a copy of this Certificate on behalf of such Disclosed Principal.

ACCREDITED INVESTOR CERTIFICATE

In addition to the representations, warranties acknowledgments and agreements contained in the subscription to which this Schedule C – Accredited Investor Certificate is attached, the Subscriber, for itself or on behalf of any Disclosed Principal, as applicable, hereby represents, warrants and certifies to the Company that the Subscriber or the Disclosed Principal, as applicable, is purchasing the securities set out in the subscription as principal, that it is resident in the jurisdiction set out on the Acceptance Page of the subscription and: [check all appropriate boxes]

Accredited Investor

The Subscriber or the Disclosed Principal, as applicable, is:

 
[    ] (m)

a Canadian financial institution, or a Schedule III bank;

     
[    ] (n)

the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act ;

     
[    ] (o)

a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;

     
[    ] (p)

a person registered under the securities legislation of a jurisdiction of Canada, as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario), or the Securities Act (Newfoundland and Labrador);

     
[    ] (q)

an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d);

     
[    ] (r)

the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada;

     
[    ] (s)

a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l'île de Montréal or an intermunicipal management board in Québec;

     
[    ] (t)

any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government;

     
[    ] (u)

a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a jurisdiction of Canada;

     
[    ] (v)

an individual who, either alone or with a spouse, beneficially owns, directly or indirectly, financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds Cdn$1,000,000;

     
[    ] (w)

an individual whose net income before taxes exceeded Cdn$200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded Cdn$300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

     
[    ] (x)

an individual who, either alone or with a spouse, has net assets of at least Cdn$5,000,000;

     
[    ] (y)

a person, other than an individual or investment fund, that has net assets of at least Cdn$5,000,000 as shown on its most recently prepared financial statements;

16


     
[    ] (z)

an investment fund that distributes or has distributed its securities only to:

       
  (i)

a person that is or was an accredited investor at the time of the distribution;

       
  (ii)

a person that acquires or acquired securities in the circumstances referred to in sections 2.10 and 2.19 of NI 45-106, or

       
  (iii)

a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 of NI 45-106;

       
[    ] (aa)

an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Quebec, the securities regulatory authority, has issued a receipt;

       
[    ] (bb)

a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be;

       
[    ] (cc)

a person acting on behalf of a fully managed account managed by that person, if that person:

       
  (i)

is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; and

       
  (ii)

in Ontario, is purchasing a security that is not a security of an investment fund;

       
[    ] (dd)

a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded;

       
[    ] (ee)

an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function;

       
[    ] (ff)

a person in respect of which all of the owner of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;

       
[    ] (gg)

an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser, or

       
[    ] (hh)

a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Quebec, the regulator as:

       
  (i)

an accredited investor; or

       
  (ii)

an exempt purchaser in Alberta or British Columbia after NI 45-106 comes into force.

Definitions

" Canadian financial institution " means

  (a)

an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or

     
  (b)

a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada;

" EVCC " means an employee venture capital corporation that does not have a restricted constitution, and is registered under Part 2 of the Employee Investment Act (British Columbia), R.S.B.C. 1996 c. 112, and whose business objective is making multiple investments;

" financial assets " means

17



  (a) cash,
     
  (b)

securities, or

     
  (c)

a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

" fully managed account " means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client's express consent to a transaction; " investment fund " means a mutual fund or a non-redeemable investment fund, and, for greater certainty in British Columbia, includes an EVCC and a VCC;

" person " includes

  (a)

an individual,

     
  (b)

a corporation,

     
  (c)

a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and

     
  (d)

an individual or other person in that person's capacity as a trustee, executor, administrator or personal or other legal representative;

" related liabilities " means

  (a)

liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or

     
  (b)

liabilities that are secured by financial assets;

" Schedule III bank " means an authorized foreign bank named in Schedule III of the Bank Act (Canada); " spouse " means, an individual who,

  (a)

is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual, or

     
  (b)

is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender; or

     
  (c)

in Alberta, is an individual referred to in paragraph (a) or (b), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta);

" subsidiary " means in issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary;

" VCC " means a venture capital corporation registered under Part 1 of the Small Business Venture Capital Act (British Columbia), R.S.B.C. 1996 c. 429, whose business objective is making multiple investments. 

* * * * * * *

The representations, warranties, statements and certification made in this Certificate are true and accurate as of the date of this Certificate and will be true and accurate as of the Closing. If any such representation, warranty, statement or certification becomes untrue or inaccurate prior to the Closing, the Subscriber shall give the Issuer immediate written notice thereof.

18


The Subscriber acknowledges and agrees that the Issuer will and can rely on this Certificate in connection with the Subscriber's Subscription Agreement.

EXECUTED by the Subscriber at _________________________this _________day of _______________, 20____.
,

If a corporation, partnership or other entity: If an individual:

 

 

Print Name of Subscriber/Disclosed Principal Print Name of Subscriber/Disclosed Principal

 

 

Signature of Authorized Signatory Signature

 

 

Name and Position of Authorized Signatory Representative Capacity, if applicable

 

 

Jurisdiction of Residence of Subscriber/Disclosed Principal Jurisdiction of Residence of Subscriber/Disclosed Principal

19


CERTIFICATE OF U.S. ACCREDITED INVESTOR STATUS

In addition to the representations, warranties acknowledgments and agreements contained in the subscription (the "Subscription Agreement") to which this Schedule D – Certificate of U.S. Accredited Investor Status is attached, the Subscriber, for itself or on behalf of any Disclosed Principal, as applicable, hereby represents, warrants and certifies to the Issuer that the Subscriber or the Disclosed Principal, as applicable, is purchasing the securities set out in the Subscription Agreement as principal, that it is resident in the jurisdiction set out on the Subscriber's execution page of the Subscription Agreement, and:

1.

The Subscriber represents, warrants, acknowledges and agrees to and with the Issuer that:

     
(a)

the Subscriber is a U.S. Person;

     
(b)

the Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the transactions detailed in the Subscription Agreement and it is able to bear the economic risk of loss arising from such transactions;

     
(c)

the Subscriber is acquiring the Securities for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Securities in the United States or to U.S. Persons; provided, however, that the Subscriber may sell or otherwise dispose of any of the Securities pursuant to registration thereof pursuant to the Securities Act of 1933 , as amended (the "1933 Act"), and any applicable State securities laws or if an exemption from such registration requirements is available or registration is otherwise not required under this 1933 Act;

     
(d)

the Subscriber satisfies one or more of the categories indicated below ( check appropriate box ):


  [   ] Category 1:
An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of US $5,000,000;
     
  [   ] Category 2:
A natural person whose individual net worth, or joint net worth with that person's spouse, on the date of purchase exceeds US $1,000,000;
     
  [   ] Category 3: 
A natural person who had an individual income in excess of US $200,000 in each of the two most recent years or joint income with that person's spouse in excess of US $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
     
  [   ] Category 4:
A "bank" as defined under Section (3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section 3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934 (United States); an insurance company as defined in Section 2(13) of the 1933 Act; an investment company registered under the Investment Company Act of 1940 (United States) or a business development company as defined in Section 2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958 (United States); a plan with total assets in excess of $5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (United States) whose investment decisions are made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors;

20



  [   ] Category 5: A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940 (United States);
       
   [   ]  Category 6:

 A director or executive officer of the Issuer;

       
  [   ] Category 7:

A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act; or

       
  [   ] Category 8: An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories; and
     
  (e)

the Subscriber is not acquiring the Securities as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.


2.

The Subscriber acknowledges and agrees that:

       
(a)

if the Subscriber decides to offer, sell or otherwise transfer any of the Securities, it will not offer, sell or otherwise transfer any of such securities, directly or indirectly, unless:

       
(i)

the sale is to the Issuer;

       
(ii)

the sale is made pursuant to the exemption from the registration requirements under the 1933 Act provided by Rule 144 thereunder if available and in accordance with any applicable state securities or "Blue Sky" laws; or

       
(iii)

the Securities are sold in a transaction that does not require registration under the 1933 Act or any applicable U.S. state laws and regulations governing the offer and sale of securities, and it has prior to such sale furnished to the Issuer an opinion of counsel reasonably satisfactory to the Issuer;

       
(b)

any of the Warrants may not be exercised in the United States or by or on behalf of a U.S. Person unless registered under the 1933 Act and any applicable state securities laws unless an exemption from such registration requirements is available;

       
(c)

the Subscriber has not acquired the Securities as a result of, and will not itself engage in any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities; provided, however, that the Subscriber may sell or otherwise dispose of any of the Securities pursuant to registration of any of the Securities pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements and as otherwise provided herein;

21



     
  (d)

upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. State laws and regulations, the certificates representing any of the Securities will bear a legend in substantially the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

  (e)

the Issuer may make a notation on its records or instruct the registrar and transfer agent of the Issuer in order to implement the restrictions on transfer set forth and described herein; and

     
  (f)

the Subscriber, if an individual, is a resident of the state or other jurisdiction disclosed as its address on the Subscriber's execution page of the Subscription Agreement, or if the Subscriber is not an individual, the office of the Subscriber at which the Subscriber received and accepted the offer to acquire the Securities is the address listed on the Subscriber's execution page of the Subscription Agreement.

* * * * * * *

The representations, warranties, statements and certification made in this Certificate are true and accurate as of the date of this Certificate and will be true and accurate as of the Closing. If any such representation, warranty, statement or certification becomes untrue or inaccurate prior to the Closing, the Subscriber shall give the Issuer immediate written notice thereof.

22


The Subscriber acknowledges and agrees that the Issuer will and can rely on this Certificate in connection with the Subscriber's Subscription Agreement.

IN WITNESS, the undersigned has executed this Certificate as of the _______day of __________________, 2009.

 

If a Corporation, Partnership or Other Entity:

  If an Individual:

 

 

   
Print or Type Entity's Name   Print or Type Individual's Name

 

 

   
Signature of Authorized Signatory   Signature

 

 

   
Name and Title of Authorized Signatory   Social Security/Tax I.D. No.

 

 

   
Type of Entity    

23



TransAKT Ltd.

Code of Conduct

TransAKT Ltd. (the "Corporation") will adhere to high ethical standards in all of its business activities and all of the Corporation's directors, officers, employees and consultants are expected to maintain these standards. The Corporation's directors, officers, employees and consultants are expected to strive to deal fairly with the Corporation's security holders, customers, suppliers and competitors.

The Corporation and its directors, officers, employees and consultants shall comply with all laws and regulations applicable to the Corporation's activities. Directors, officers, employees and consultants must diligently ensure that their conduct is not and cannot be interpreted as being in contravention of laws governing the affairs of the Corporation in any jurisdiction where it carries on business.

In view of the ever-increasing complexity of the law affecting business activity, whenever a director, officer, employee or consultant is in doubt about the application or interpretation of any legal requirement, the director, officer, employee or consultant should seek the advice of the President and Chief Executive Officer of the Corporation or, if that is not considered satisfactory, the Corporation's legal counsel.

1. No business operation should be considered effective or complete without proper attention to safety, health and the environment.

2. The Corporation believes that its directors, officers, employees and consultants are a valuable asset to be treated fairly without discrimination by reason of race, national or ethnic origin, colour, religion, age, sex, sexual orientation, marital status or physical handicap.

3. Directors, officers, employees and consultants shall not use their status with the Corporation to obtain personal gain from those doing or seeking to do business with the Corporation.

4. Directors, officers, employees and consultants shall not furnish, on behalf of the Corporation, expensive gifts or provide excessive benefits to other persons. At times, the Corporation's suppliers may offer gifts, including entertainment. While gifts of cash are never acceptable, you may accept nominal gifts on behalf of the Corporation. If in doubt, consult a senior officer of the Corporation for advice in this regard or if you are an officer or director, consult the Chairman of the Corporation.

5. The direct or indirect use of the Corporation's funds, goods or services as contributions to political parties, campaigns or candidates for election to any level of government requires approval of a senior executive officer of the Corporation.

6. All dealings between directors, officers, employees and consultants of the Corporation and public officials are to be conducted in a manner that will not, and will not appear to, compromise the integrity or impugn the reputation of any public official or the Corporation.

7. Directors, officers, employees and consultants who become involved in a situation in which their personal interests conflict or might conflict with their duties to the Corporation must immediately report the situation to their manager or a senior executive officer or, in the case of officers or directors, to the Chairman of the Corporation.

8. Directors, officers, employees and consultants have an obligation to promote the best interests of the Corporation at all times. They should avoid any action which may involve a conflict of interest with the Corporation.


9. Where conflicts of interest arise, directors, officers, employees and consultants must provide full disclosure of the circumstances and not be involved in any related decision making process.

10. Directors, officers, employees and consultants should also avoid apparent conflicts of interest, which occur where a reasonable observer might assume there is a conflict of interest and, therefore, a loss of objectivity in their dealings on behalf of the Corporation.

11. All directors, officers, employees and consultants are responsible for protecting the Corporation's assets and managers are specifically responsible for establishing and maintaining appropriate internal controls to safeguard the Corporation's assets against loss from unauthorized use or disposition.

12. The books and records of the Corporation must reflect in reasonable detail all of its business transactions in a timely and accurate manner in order to, among other things, permit the preparation of accurate financial statements in accordance with generally accepted accounting principles. All assets and liabilities of the Corporation must be recorded as necessary to maintain accountability for them. All business transactions must be properly authorized and transactions must be supported by materially accurate documentation in reasonable detail and recorded properly.

13. No information may be concealed from the Corporation's external auditors, the board of directors of the Corporation or any committee of the board of directors of the Corporation. In addition, it is illegal to fraudulently influence, coerce, manipulate or mislead an external auditor who is auditing the Corporation's financial statements.

14. Certain of the Corporation's records, reports, papers, devices, processes, plans, methods and apparatus are considered by the Corporation to be confidential information, and directors, officers, employees and consultants are prohibited from revealing such matters except as may be allowed under the Corporation's Disclosure Policy. Confidential information includes, but is not limited to, technical information, results, observations, analyses, compilations, evaluations, assessments, business or commercial data or plans and investor related data. The term "confidential information" relates to the underlying nature of the information, covering both oral and written information, and is independent of the medium on which the information is stored. It thus covers information stored on paper, various magnetic media, computer, microfiche or any other medium.

15. During the course of employment in the case of employees, the term of the consulting contract with the Corporation in the case of consultants and during their term as directors or officers in the case of directors and officers of the Corporation and for a period of one year thereafter, directors, officers, employees and consultants shall not use for their own financial gain or disclose for the use of others, confidential information, obtained as a result of their position with the Corporation.

16. As a publicly traded entity, the Corporation has an obligation to comply with the rules relating to disclosure of material information under the relevant Canadian and American securities legislation and the rules, policies and guidance of the OTCBB.

17. In accordance with the Corporation's disclosure obligations, all financial communications and reports must contain full, accurate and timely manner. All directors, officers, employees and consultants who are responsible for the preparation of the Corporation's public disclosure, or who provide information as part of the process, have a responsibility to ensure that such disclosure is prepared and information is provided honestly, accurately and in compliance with the various disclosure controls and procedures.

18. Any director, officer, employee or consultant in possession of material information must not disclose such information before its public disclosure and must take steps to ensure that the Corporation complies with its timely disclosure obligations.


19. Speculation in business, shares and other securities, land or other ventures of any kind on the basis of confidential information obtained in the course of a director's, officer's, employee's or consultant's duties with the Corporation is prohibited. This includes but is not limited to shares or securities of any company which the Corporation is evaluating or is studying as a possible acquisition or joint venture partner or with whom a major contract may be concluded. Use or disclosure of such information can result in civil or criminal penalties, for both the individuals involved and the Corporation.

20. It is the responsibility of every director, officer, employee and consultant to bring to the attention of the Corporation knowledge of any situation which might adversely affect the Corporation's reputation. All directors, officers, employees and consultants are encouraged to report, verbally, or in writing any evidence of improper practice of which they are aware. As used here, the term "improper practice" means any illegal, fraudulent, dishonest, unsafe, negligent or otherwise unethical action by a director, officer, employee or consultant.

21. The Corporation and the Corporation's directors, officers, employees and consultants shall comply with copyright law and any other laws applicable to the use of computer software, hardware and related materials, as well as with any and all contracts entered into by the Corporation with suppliers or licensers of computer software, hardware and related materials.

22. Any waiver of this Code for directors or officers may be made only by the board of directors and will be promptly disclosed as required by law, regulation or stock exchange requirement. Any amendment of this Code will be disclosed as required by law. Waivers in respect of employers or consultants may be given by the President and Chief Executive Officer who shall report any waivers given to the board of directors at its next meeting.

All directors, officers, employees and consultants are responsible for abiding by this Code. This includes individuals responsible for the failure to exercise proper supervision and to detect and report a violation by their subordinates. . Violations of this Code will result in the Corporation taking effective remedial action commensurate with the severity of the violation. This action may include disciplinary measures up to and including termination in the case of a director, employee or officer or termination of the consulting contract in the case of a consultant and, if warranted, legal proceedings. If determined appropriate, a matter may be referred to the appropriate authorities.

This Code of Conduct has been approved by the board of directors of the Corporation.



CERTIFICATION

I, James Wu, certify that:

     1. I have reviewed this annual report on Form 20-F of TransAKT Ltd.;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

     4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

  (a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     
  (b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     
  (c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
  (d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

     5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

  (a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

     
  (b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: June 25, 2010

/s/ James Wu
President and Chief Executive Officer (principal executive officer)



CERTIFICATION

I, Taifen Day, certify that:

     1. I have reviewed this annual report on Form 20-F of TransAKT Ltd.;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

     4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

  (a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     
  (b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     
  (c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
  (d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

     5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

  (a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

     
  (b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: June 25, 2010

/s/ Taifen Day
Chief Financial Officer (principal financial officer and principal accounting officer)



Certification by the Chief Executive Officer
Of TransAKT Ltd.
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of TransAKT Ltd. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Wu, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

  (1)

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

     
  (2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 25, 2010

/s/ James Wu
President and Chief Executive Officer (principal executive officer)



Certification by the Chief Financial Officer
Of TransAKT Ltd.
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of TransAKT Ltd. (the “Company”) on Form 20-F for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Taifen Day, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

  (1)

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

     
  (2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 25, 2010

/s/ Taifen Day
Chief Financial Officer (principal financial officer and principal accounting officer)