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

                                    FORM 10-Q

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

For the quarterly period ended SEPTEMBER 30, 2005
                               ------------------

                                       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 No. 0-8693
                    --------------


                              TRANSNET CORPORATION
                              ---------------------
             (Exact name of registrant as specified in its charter)

           DELAWARE                                      22-1892295
--------------------------------            -----------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)

45 COLUMBIA ROAD, SOMERVILLE, NEW JERSEY                 08876-3576
----------------------------------------               -------------
(Address of principal executive offices)                 (Zip Code)

Registrant's Telephone Number, Including Area Code:     908-253-0500
                                                        ------------


--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

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

   Indicate by check mark whether the registrant is an accelerated filed (as
                   defined in Rule 12b-2 of the Exchange Act)
                                                                 Yes     No  X
                                                                    ---     ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of November 3, 2005: 4,823,304.



<PAGE>


                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS
                                -----------------

                                                                        PAGE NO.
                                                                        --------

PART I.  FINANCIAL INFORMATION

         Consolidated Balance Sheets
                  September 30, 2005 (unaudited) and June 30, 2005        1


         Consolidated Statements of Operations (unaudited)
                  Three Months Ended September 30, 2005 and 2004          2


         Consolidated Statements of Cash Flows (unaudited)
                  Three Months Ended September 30, 2005 and 2004          3


         Notes to Consolidated Financial Statements                       4


     Item 2.  Management's Discussion and Analysis                        7


     Item 4.  Controls and Procedures                                    11


PART II.  OTHER INFORMATION
-------   -----------------


     Item 6. Exhibits and Reports on Form 8-K                            12

     Signatures                                                          12
     Certifications                                                      13



                                       i
<PAGE>


                       TRANSNET CORPORATION AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                        September 30,           June 30,
                                                                           2 0 0 5               2 0 0 5
                                                                           -------               -------
                                                                         (unaudited)
<S>                                                                   <C>                <C>
ASSETS:
CURRENT ASSETS
   Cash and Cash Equivalents                                          $     1,848,323    $      5,752,404
   Accounts Receivable - Net                                                7,198,110           3,522,831
   Inventories                                                              2,503,569           1,579,353
   Other Current Assets                                                       175,499              92,469
   Deferred Tax Asset                                                          51,674              98,183
                                                                      ---------------    ----------------

   TOTAL CURRENT ASSETS                                               $    11,777,175    $     11,045,240

PROPERTY AND EQUIPMENT - NET                                                  644,104             701,563


OTHER ASSETS                                                                  263,192             262,297
                                                                      ---------------    ----------------

   TOTAL ASSETS                                                       $    12,684,471    $     12,009,100
                                                                      ===============    ================

LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
   Accounts Payable                                                   $     1,545,480    $        465,656
   Accrued Expenses                                                           330,753             291,177
   Income Taxes Payable                                                        19,992              19,992
   Floor Plan Payable                                                         762,395           1,284,905
                                                                      ---------------    ----------------

   TOTAL CURRENT LIABILITIES                                          $     2,658,620           2,061,730

DEFERRED TAX LIABILITY                                                         11,712              11,712

COMMITMENTS AND CONTINGENCIES                                                      --                  --

STOCKHOLDERS' EQUITY:
   Capital Stock - Common, $.01 Par Value, Authorized
   15,000,000 Shares; Issued 7,408,524 at September 30, 2005
    and June 30, 2005
     [of which 2,585,220 are in Treasury
      at September 30 and June 30, 2005]                                       74,085              74,085

   Paid-in Capital                                                         10,574,670          10,574,670

   Retained Earnings                                                        6,518,219           6,439,738
                                                                      ---------------    ----------------

   Totals                                                                  17,166,974          17,088,493
   Less:  Treasury Stock - At Cost                                         (7,152,835)         (7,152,835)
                                                                      ---------------    ----------------

   TOTAL STOCKHOLDERS' EQUITY                                              10,014,139           9,935,658
                                                                      ---------------    ----------------

   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $    12,684,471    $     12,009,100
                                                                      ===============    ================
</TABLE>


See Notes to Consolidated Financial Statements.

                                                                               1
<PAGE>


                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED SEPTEMBER 30,
                                                             --------------------------------

                                                                2005                  2004
                                                                ----                  ----
<S>                                                       <C>                    <C>
REVENUE
Equipment                                                 $     7,298,903        $   6,616,088
Services                                                        3,782,956            4,077,139
                                                          ---------------        -------------

Total Revenue:                                                 11,081,859           10,693,227
                                                          ---------------        -------------


COST OF REVENUE
Equipment                                                       6,588,346            6,034,003
Services                                                        2,628,497            2,914,004

Total Cost of Revenue                                           9,216,843            8,948,007
                                                          ---------------        -------------

Gross Profit                                                    1,865,016            1,745,220

Selling, General and Administrative Expenses                    1,759,246            1,701,748
                                                          ---------------        -------------


Operating Income                                                  105,770               43,472
                                                          ---------------        -------------

Other Income
     Interest Income                                               13,141               10,147
                                                          ---------------        -------------


Income Before Tax Expense                                         118,911               53,619

Provision for Income Tax                                           40,430             (110,781)
                                                          ---------------        -------------

Net Income                                                $        78,481        $     164,400
                                                          ===============        =============

Basic Net Income Per Common Share                         $          0.02        $        0.03
                                                          ===============        =============

Diluted Net Income Per Common Share                       $          0.02        $        0.03
                                                          ===============        =============

Weighted Average Common shares Outstanding-Basic                4,823,304            4,805,804
                                                          ===============        =============
Weighted Average Common shares Outstanding-Diluted              4,936,033            4,936,547
                                                          ===============        =============
</TABLE>

See Notes to Consolidated Financial Statements.

                                                                               2
<PAGE>



                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED SEPTEMBER 30,
                                                                            --------------------------------

                                                                             2005                    2004
                                                                             ----                    ----
<S>                                                                    <C>                    <C>
OPERATING ACTIVITIES:
       Net Income                                                      $        78,481        $        164,400
                                                                       ---------------        ----------------
       Adjustments to Reconcile Net Income to Net Cash:
       Depreciation and Amortization                                            60,135                  40,951
       Provision for Doubtful Accounts                                          15,000                  15,000
       Deferred Income Taxes                                                    46,509                (110,781)

Changes in Assets and Liabilities
       (Increase) Decrease in:
       Accounts Receivable                                                  (3,690,281)             (2,711,421)
       Inventory                                                              (924,216)               (464,996)
       Other Current Assets                                                    (83,030)                (72,382)
       Other Assets                                                             (1,143)                (24,514)

Increase (Decrease) in:
       Accounts Payable and Accrued
         Expenses                                                            1,119,400                 423,510
       Income Tax Payable                                                           --                  (2,996)
       Total Adjustments                                                    (3,457,626)             (2,907,629)

Net Cash - Operating Activities                                             (3,379,145)             (2,743,229)
                                                                       ---------------        ----------------
Investing Activities:
       Capital Expenditures                                                     (2,424)               (149,190)
Net Cash-Investing Activities                                                   (2,424)               (149,190)

Financing Activities:
Floor Plan Payable-Net                                                        (522,512)               (389,326)
                                                                       ----------------       ----------------

Net Cash-Financing Activities                                                 (522,512)               (389,326)
                                                                       ---------------        ----------------

Net (Decrease) In Cash and Cash Equivalents                            $    (3,904,081)       $     (3,281,745)

Cash and Cash Equivalents-Beginning of periods                         $     5,752,404        $      7,064,644
                                                                       ---------------        ----------------

Cash and Cash Equivalents-End of periods                               $     1,848,323        $      3,782,899
                                                                       ---------------        ----------------

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest                                                               $            --        $             --
Income Taxes                                                           $            --        $             --
</TABLE>


See Notes to Consolidated Financial Statements

                                                                               3
<PAGE>


                       TRANSNET CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


(1.)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a) Consolidation: The consolidated financial statements include the
       accounts of the Corporation and its wholly owned subsidiary, Century
       American Corporation. Intercompany transactions and accounts have been
       eliminated in consolidation.

       (b) Inventory: Inventory consists of finished goods. The Corporation's
       inventory is valued at the lower of cost (determined on the average cost
       basis) or market.

       (c) Cash and Cash Equivalents: For the purposes of the statement of cash
       flows, the Corporation considers highly liquid debt instruments,
       purchased with a maturity of three months or less, to be cash
       equivalents.

       (d) Earnings Per Share: Earnings per common share - basic are based on
       4,823,304 and 4,805,804 weighted shares outstanding for the three months
       ended September 30, 2005 and 2004, respectively. Diluted are based on
       4,936,033 and 4,936,547 weighted shares outstanding for the three months
       ended September 30, 2005 and 2004, respectively.

       (e) In the opinion of management, the accompanying unaudited consolidated
       financial statements contain all adjustments consisting only of normal
       recurring adjustments necessary to present fairly the financial position,
       the results of operations and cash flows for the periods presented.

       (f) These statements should be read in conjunction with the summary of
       significant accounting policies and notes contained in the Corporation's
       annual report on Form 10-K for the year ended June 30, 2005.

       (g) The results of operations for the three months ended September 30,
       2005 are not necessarily indicative of the results to be expected for the
       entire year.

       (h) In November 2004, the Financial Accounting Standards Board ("FASB")
       issued SFAS No. 151, "Inventory Costs - an amendment to ARB No. 43." This
       statement provides guidance to clarify the accounting for abnormal
       amounts of idle facility expense, freight handling costs, and wasted
       material (spoilage), among other production costs. Provisions of ARB No.
       43 stated that under some circumstances, items such as idle facility
       expense, excessive spoilage and other costs "may" be so abnormal as to
       require treatment as current period charges. This statement requires that
       those items be recognized as current period charges regardless of whether
       they meet the criterion of so abnormal. In addition, SFAS 151 requires
       that allocation of fixed production overheads to the costs of conversion
       be based on the normal capacity of the production overheads to the costs
       of conversion be based on the normal capacity of the production
       facilities. Adoption of the Statement is not expected to have a material
       impact on the financial statements of the Company.

       In November 2004, the FASB issued SFAS No. 152 "Accounting for Real
       Estate time-Sharing Transactions - An amendment of SFAS No. 66 and 67.
       This Statement amends SFAS No. 66. "Accounting for Sales of Real Estate,
       to reference the financial accounting and reporting guidance for real
       estate time-sharing transactions that is provided in AICPA Statement of
       Position (SOP) 04-2, Accounting for Real Estate Time-Sharing
       Transactions.


                                                                               4
<PAGE>

       This Statement also amends SFAS No. 67, "Accounting for Costs and Initial
       Rental Operations of Real Estate Projects," to state the guidance for (a)
       incidental costs and (b) costs incurred to sell real estate projects does
       not apply to real estate time-sharing transactions. The accounting for
       those operations and costs is subject to guidance in SOP 04-2. Effective
       for financial statements with fiscal years beginning after June 15, 2005.
       Adoption of this Statement is not expected to have a material impact on
       the financial statements of the Company.

       In November 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
       Assets - an amendment to APB No. 29." This Statement amends Opinion No.
       29 to eliminate the exception for nonmonetary exchanges of similar
       productive assets and replaces it with a general exception for exchanges
       of nonmonetary assets that do not have commercial substance. A
       nonmonetary exchange has commercial substance if the future cash flows of
       the entity expected to change significantly as a result of the exchange.
       Adoption of this statement is not expected to have a material impact on
       the financial statements of the Company.

       In December 2004, the FASB issued SFAS No. 123 (revised 2004),
       "Share-Based Payment" (SFAS No. 123R). SFAS No 123R requires companies to
       recognize in the income statement the grant date fair value of stock
       options and other equity-based compensation issued to employees. SFAS No.
       123R eliminates the intrinsic value-based method prescribed by Accounting
       Principles Board Opinion No. 25, "Accounting for Stock Issued to
       Employees", and related interpretations, that the Company currently uses.
       SFAS No. 123R requires the Company to adopt the new accounting provisions
       beginning on July 1, 2005. Management estimates that the adoption will
       not have a material impact on the financial statements of the Company.

       (i) At September 30, 2005, the Corporation had a stock-based employee
       compensation plan. The Corporation accounts for the plan under the
       measurement principals of APB Opinion No. 25, Accounting for Stock Issued
       to Employees, and related Interpretations. No stock-based employee
       compensation cost is reflected in net income, as all options granted
       under those plans had an exercise equal to the market value of the
       underlying common stock on the date of grant. The following tables
       illustrate the effect on net income and earnings per share if the
       Corporation had applied the fair value recognition provisions of FASB
       Statement No. 123 to stock based employee compensation.






                                                                               5
<PAGE>


<TABLE>
<CAPTION>
                                                                                THREE MONTHS ENDED
                                                                                  SEPTEMBER 30,
                                                                               ------------------

                                                                         2 0 0 5                2 0 0 4
                                                                         -------                -------
<S>                                                                   <C>                    <C>
NET INCOME:
   As Reported                                                        $     78,481           $   164,400

DEDUCT:
   Stock Based Employee Compensation Expense
    Determined under the Fair Value Based Method - Net of Tax                    0                (7,929)
                                                                      ------------           ------------

   PRO FORMA NET INCOME                                                          0               156,471
                                                                      ------------           -----------

BASIC  EARNINGS PER SHARE:
   As Reported                                                        $       0.02           $      0.03
   Pro-Forma                                                          $       0.02           $      0.03

DILUTED [LOSS] EARNINGS PER SHARE:
   As Reported                                                        $       0.02           $      0.03
   Pro-Forma                                                          $       0.02           $      0.03
</TABLE>

(2.)   INCOME TAXES

       The Corporation has a deferred tax benefit of $51,674 and a deferred tax
       liability of $11,712 based upon temporary timing differences including
       inventory capitalization, allowance for doubtful accounts, vacation pay
       accruals and depreciation.






                                                                               6
<PAGE>


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

RESULTS OF OPERATIONS

Revenues and earnings increased in the quarter ended September 30, 2005 as
compared to the same quarter in the prior year, primarily due to an increase in
equipment sales. Revenues for the quarter ended September 30, 2005 were
$11,081,859, an increase from $10,693,227 for the quarter ended September 30,
2004. For the quarter ended September 30, 2005, the Corporation reported net
income of $78,481 as compared with net income of $164,400 for the corresponding
period in 2004. The net income for quarter ended September 30, 2004 included a
deferred tax benefit of $110,781.

The pre-tax earnings for the quarter ended September 30, 2005 increased 122%
over the pre-tax earnings from the same period in the prior year due to the
increased revenues and slightly increased profit margins. Despite a sluggish IT
environment, the Corporation was able to increase revenue levels in the 2005
quarter as compared to same quarter in 2004, an increase attributable to
increased demand, primarily from the educational market, particularly with
respect to Internet protocol communications ("IPC") products and services
[including Voice over Internet Protocol ("VoIP" and IP Telephony products and
services]. As referenced above, earnings in the September 2004 quarter included
an income tax benefit that was primarily derived from the Company decreasing the
deferred tax asset valuation allowance recorded at June 30, 2004. The decrease
in the deferred tax asset valuation allowance was recorded in proportion to
those existing net operating losses that the Company currently expects to
realize in connection with certain IRS carryback provisions.

During the September 2005 quarter, the Corporation initiated new projects and
continued work on existing awards for IPC products and services. The performance
of these projects will extend over several quarters. Management notes that some
of these projects have been effected by construction delays beyond the
Corporation's control, and these delays have resulted in inventory increases and
an order backlog. None of these delays have had any significant impact upon the
operations of the Corporation. In addition to orders and awards already
received, indications of interest have been received by existing and prospective
clients with respect to IPC products and services and security technology, areas
which management has targeted as growth areas for the Corporation. Although
requests for quotations have increased in the past few months and management is
cautiously optimistic, assurances cannot be given that all quotations will
produce orders.

With respect to selling, general and administrative expenses, expenses remained
relatively constant at approximately 16% of revenues for the September 2005
quarter despite slightly increased costs, as compared to approximately 16% of
revenue for the September 2004 quarter. These expenses increased as a result of
the Corporation's expansion of its sales staff based upon its anticipated
growth, particularly in business related to the convergence of voice, video, and
data networks in the IPC marketplace. Management continues its efforts to
control and reduce administrative and personnel related costs.

As part of the industry competition pressures discussed herein, management
continues to see certain erosion in business related to Fortune 500 customers as
those customers enter into and/or expand business relationships with large
global partners. As part of this erosion, the Corporation's largest customer, a
Fortune 500 company, signed an agreement with a global support organization that
encompasses some lower margin work previously awarded to TransNet. While the
Corporation will still have a significant presence at this client's locations,
overall service billing to

                                                                               7
<PAGE>

this client will be reduced. The overall reduction and resulting effects on the
Corporation's operations are not known at this time. Although management
believes that its focus on higher margin services related to IPC and security
will lead to continued growth and opportunities that will help compensate for
this reduction, no assurances can be given that the Corporation will be able to
replace the loss of a significant amount of business from this customer, should
that occur, or that such operations will not be adversely effected.

Management continues its concentration on sales of sophisticated network and
system integration products which yield higher profit margins, and continues
adherence to and implementation of cost control measures. To maximize profit
margins, management consistently works to obtain the best discounts available to
it on hardware purchases from its distributors. Management also utilizes new
trends such as manufacturers' direct shipment and billing of the customers in
exchange for payment to the Corporation of an "agency fee" as a means to reduce
equipment related costs while increasing profits. Management believes that this
approach, although it may impact revenues, insulates the corporation from
challenges which may accompany sudden price decreases, hardware obsolescence and
delays collection of receivables.

During the last several years, the computer industry has experienced a trend of
decreasing prices of computers and related equipment. Management believes that
this trend will continue, but hopes to offset these decreases by expansion of
its IPC sales. Industrywide, the result of price erosion has been lower profit
margins on sales, which require businesses to sell a greater volume of equipment
to maintain past earning levels. Another result of the price decreases has been
intensified competition within the industry, including the consolidation of
businesses through merger or acquisition, the initiation of sales by many
manufacturers directly to the end-user, and the entrance of manufacturers into
technical services business. Management believes that the adoption of policies
by many larger corporate customers, which limit the number of vendors permitted
to provide goods and services for specified periods of time, has further
increased price competition.

During the periods discussed, the IT industry as a whole was impacted by a
significant slowdown in client spending. Clients have begun to scrutinize their
IT spending and the related returns on investments before incurring new
expenses. Management believes that future spending will be subject to specific
criteria, but also believes that as single source provider, the Corporation will
be in a better position to satisfy client demands for cost-effectiveness and a
suitable return on investment. Service related revenues, a material segment of
revenues, are significant in their contributions to net income because these
operations yield a higher profit margin than equipment sales. For the fiscal
quarters discussed, revenue from the provision of service, support, outsourcing
and network integration was largely attributable to the Corporation's service
contracts with a number of corporate customers to provide service and support
for the customer's personal computers, peripherals and networks. Most of these
contracts are short-term, usually twelve months or less, and contain provisions
which permit early termination. Although the contracts generally contain renewal
terms, there is no assurance that such renewals will occur. Recently, management
has noted a transition to project-based rather than contract based business with
respect to certain support services. Accordingly, the Corporation must rely more
upon projects as a source of revenues. Industry changes have also diminished the
demand for certain legacy support services, such as help desk, as demand for
services such as those related to VoIP systems and call centers has increased.
The Corporation has modified its service offerings in response to these industry
fluctuations, and has recruited experienced systems engineers and project
managers to respond to increased VoIP projects.

The Corporation's performance is also impacted by other factors, many of which
are not within its control. These factors include: the short-term nature of
client's commitments; patterns of capital spending by clients; the timing and
size of new projects; pricing changes in response to


                                                                               8
<PAGE>

competitive factors; the availability and related costs of qualified technical
personnel; timing and customer acceptance of new product and service offerings;
trends in IT outsourcing; product constraints; and industry and general economic
conditions.

LIQUIDITY AND CAPITAL RESOURCES

There are no material commitments of the Corporation's capital resources.

The Corporation currently finances a portion of its accounts receivable and
finances purchases of portions of its inventory through floor-planning
arrangements under which such inventory secures the amount outstanding. Floor
planning payables decreased in the 2005 period compared to the same period in
2004 as the result of purchases conducted through other channels. Inventory
increased in the quarter ended September 30, 2005 as compared to the
corresponding period in 2004 as a result of open orders pending at the end of
the quarter.

Accounts receivable increased for the quarter ended September 30, 2005 as
compared to the same period in 2004 as a result of increased sales.
Corresponding with the increased accounts receivables, cash levels decreased in
the three months ended September 30, 2005 as compared to the same period in
2004, as funds were used to finance hardware sales. Accounts payable increased
in the first quarter of fiscal 2005 as compared to the same quarter in fiscal
2004 as a direct result of the increase in inventory at the end of the quarter.

Management continues its efforts to control administrative and personnel related
costs.

Interest income, not a material source of income, increased in the 2005 quarter
as compared to 2004 primarily due to higher rates of return on invested funds.

IMPACT OF INFLATION

The effects of inflation on our operations were not significant during the
periods presented.

       CONTRACTUAL OBLIGATIONS
<TABLE>
<CAPTION>
       CONTRACTUAL OBLIGATIONS     TOTAL         Less than            1-3          3-5         More than
       -----------------------     -----          ONE YEAR          YEARS        YEARS           5 YEARS
                                                  --------          -----        -----           -------

<S>                           <C>                 <C>            <C>          <C>               <C>
       Real Estate Lease      $1,036,847          $170,690       $371,210     $371,210          $123,737

       Office Equipment          $12,560             7,010         $5,550           --                --
</TABLE>

CRITICAL ACCOUNTING POLICIES

The Corporation's financial statements are prepared in accordance with
accounting principles that are generally accepted in the United States. The
methods, estimates, and judgments used in applying these most critical
accounting policies have a significant impact on the results reported in the
financial statements. The Securities and Exchange Commission has defined
critical accounting policies as policies that involve critical accounting
estimates that require (a) management to make assumptions that are highly
uncertain at the time the estimate is made and (b) different estimates that
could have been reasonably used for the current period, or changes in the
estimates that are reasonably likely to occur from period to period, which would
have a material impact on the

                                                                               9
<PAGE>

presentation of our financial condition, changes in financial condition or in
result of operations. Based on this definition, the most critical policies
include: revenue recognition, allowance for doubtful accounts, and valuation of
deferred tax assets.

REVENUE RECOGNITION

TransNet recognizes revenue in accordance with SEC Staff Accounting Bulletin No.
104. Revenue from sales of hardware is recognized when the rights and risks of
ownership have passed to the customer, which is upon shipment or receipt by the
customer, depending on the terms of the sales contract. Revenue from services is
recognized upon performance and acceptance after consideration of all the terms
and conditions of the customer contract. Service contracts generally do not
extend over one year, and are billed periodically as services are performed.
Shipping and handling costs are included in the cost of sales.

ACCOUNTS RECEIVABLE

Accounts receivable are reported at their outstanding unpaid principal balances
reduced by an allowance for doubtful accounts, based on certain percentages of
aged receivables. We estimate doubtful accounts based on historical bad debts,
factors related to specific customers' ability to pay and current economic
trends.

VALUATION OF DEFERRED TAX ASSETS

At June 30, 2005, we have a valuation allowance of approximately $808,918
primarily to reduce our deferred tax asset, which is based on a net operating
loss carryforwards of $2,020,000 to an amount that will more likely than not be
realized. These net operating loss carryforwards have varying carryforward
periods and restrictions on usage. The estimation of future taxable income and
our resulting ability to utilize net operating loss and tax credit carryforwards
can significantly change based on future events, including our determinations as
to the feasibility of certain tax planning strategies. Thus, recorded valuation
allowances may be subject to material future changes.

THE MATTERS DISCUSSED IN MANAGEMENT'S DISCUSSION AND ANALYSIS AND THROUGHOUT
THIS REPORT THAT ARE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT MANAGEMENT
EXPECTATIONS THAT INVOLVE RISK AND UNCERTAINTIES. POTENTIAL RISKS AND
UNCERTAINTIES INCLUDE, WITHOUT LIMITATION: THE IMPACT OF ECONOMIC CONDITIONS
GENERALLY AND IN THE INDUSTRY FOR MICROCOMPUTER PRODUCTS AND SERVICES;
DEPENDENCE ON KEY VENDORS; CONTINUED COMPETITIVE AND PRICING PRESSURES IN THE
INDUSTRY; PRODUCT SUPPLY SHORTAGES; OPEN-SOURCING OF PRODUCTS OF VENDORS; RAPID
PRODUCT IMPROVEMENT AND TECHNOLOGICAL CHANGE, SHORT PRODUCT LIFE CYCLES AND
RESULTING OBSOLESCENCE RISKS; TECHNOLOGICAL DEVELOPMENTS; CAPITAL AND FINANCING
AVAILABILITY; AND OTHER RISKS SET FORTH HEREIN.







                                                                              10
<PAGE>


ITEM 4.  CONTROL AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer of the Corporation have
concluded, based on their evaluation as of September 30, 2005, that the
Corporation's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Corporation in the reports filed or
submitted by it under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and include controls and
procedures designed to ensure that information required to be disclosed by the
Corporation in such reports is accumulated and communicated to the Corporation's
management, including the Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the Corporation's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of such evaluation.













                                                                              11
<PAGE>



                                     PART II
                                OTHER INFORMATION
                                -----------------


ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

         A. Exhibits -
            31.1 Certification required by Section 302
            31.2 Certification required by Section 302
            32  Certification required by Section 906

         B. Reports on Form 8-K -

            On September 29, 2005, TransNet Corporation filed a Form 8-K under
Item 9.







<PAGE>



                                   SIGNATURES

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

                                      TRANSNET CORPORATION
                                      (Registrant)


                                      /s/ STEVEN J. WILK
                                      ------------------------------------------
                                      Steven J. Wilk, President and
                                      Chief Executive Officer

                                      /s/ JOHN J. WILK
                                      ------------------------------------------
                                      John J. Wilk,
                                      Principal Financial and Accounting Officer
                                      and Chairman of the Board of Directors



DATE:  November 14, 2005