Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


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

For the quarterly period ended September 30, 1999

                                       OR

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

For the transition period from ________________to _________________

For Quarter Ended September 30, 1999


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


        DELAWARE                                     22-1892295
        --------                                     ----------
(State or other jurisdiction of          (I.R.S. 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 the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of November 7, 1999: 4,957,804.




<PAGE>




                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS


                                                                     Page No.


PART I.  FINANCIAL INFORMATION

   Consolidated Balance Sheets as of September 30, 1999 and
   June 30, 1999                                                        1

   Consolidated Statements of Operations for the Three Months Ended
   September 30, 1999 and 1998                                          2

   Consolidated Statements of Cash Flows for the Three Months Ended
   September 30, 1999 and 1998                                          3

   Notes to Consolidated Financial Statements                           4

   Management's Discussion and Analysis                                 5 - 7

PART II.  OTHER INFORMATION                                             8







<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------



                                                      September 30,  June 30,
                                                         1 9 9 9      1 9 9 9
                                                         -------      -------
                                                       [Unaudited]
Assets:
Current Assets:
  Cash and Cash Equivalents                             $6,394,160  $7,617,241
  Accounts Receivable - Net                              7,991,518   6,736,351
  Inventories                                              906,294     886,936
  Other Current Assets                                      83,817      56,030
  Deferred Tax Asset                                       249,000     249,000
                                                        ----------  ----------

  Total Current Assets                                  15,624,789  15,545,558

Property and Equipment - Net                               684,573     745,703

Mortgage Receivable - Related Party                        250,000     250,000

Other Assets                                               524,647     577,619
                                                        ----------  ----------

  Total Assets                                         $17,084,009 $17,118,880
                                                       =========== ===========

Liabilities and Stockholders' Equity:
Current Liabilities:
  Accounts Payable                                      $1,949,831  $1,160,978
  Accrued Expenses                                         354,496     374,064
  Accrued Payroll                                          219,941     258,858
  Floor Plan Payable                                       836,083   1,200,441
  Deferred Income                                           60,869          --
  Income Taxes Payable                                     244,140     664,167
  Other Current Liabilities                                     --          --
                                                        ----------  ----------

  Total Current Liabilities                              3,665,360   3,658,508
                                                        ----------  ----------

Deferred Tax Liability                                      11,100      11,100
                                                        ----------  ----------

Stockholders' Equity:
  Capital Stock - Common, $.01 Par Value, Authorized
   15,000,000 Shares; Issued 7,469,524 Shares
   [of which 2,511,720 are in Treasury]                     74,695      74,695

  Paid-in Capital                                       10,686,745  10,686,745

  Retained Earnings                                      9,583,627   9,252,475
                                                        ----------  ----------

  Totals                                                20,345,067  20,013,915
  Less:  Treasury Stock - At Cost                       (6,937,518) (6,564,643)
                                                        ----------  ----------

  Total Stockholders' Equity                            13,407,549  13,449,272
                                                        ----------  ----------

  Total Liabilities and Stockholders' Equity           $17,084,009 $17,118,880
                                                       =========== ===========


See Notes to Consolidated Financial Statements.


                                        1

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TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------


                                                           Three months ended
                                                              September 30,
                                                          1 9 9 9      1 9 9 8
                                                          -------      -------

Revenue                                                 $11,254,860 $12,919,438

Cost of Revenue                                           9,391,958  10,747,858
                                                         ----------  ----------

  Gross Profit                                            1,862,902   2,171,580
                                                         ----------  ----------

Expenses:
  Selling, General and Administrative Expenses            1,440,021   1,811,735
  Bad Debt Expense                                           15,000       7,500
                                                         ----------  ----------

  Total Expenses                                          1,455,021   1,819,235
                                                         ----------  ----------

  Operating Income                                          407,881     352,345
                                                         ----------  ----------

Other Income:
  Interest Income                                            88,511      77,471
  Interest Income - Related Party                             5,672       8,872
                                                         ----------  ----------

  Total Other Income                                         94,183      86,343
                                                         ----------  ----------

  Income Before Provision for Income Taxes                  502,064     438,688

Provision for Income Tax                                    170,912     140,000
                                                         ----------  ----------

  Net  Income                                            $  331,152  $  298,688
                                                         ==========  ==========

  Income Per Common Share                                $     0.07  $     0.06
                                                         ==========  ==========



See Notes to Consolidated Financial Statements.


                                        2

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
------------------------------------------------------------------------------


CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
------------------------------------------------------------------------------



                                                            Three months ended
                                                               September 30,
                                                           1 9 9 9      1 9 9 8
                                                           -------      -------

Operating Activities:
  Net Income                                             $  331,152  $  298,688
                                                         ----------  ----------
  Adjustments to Reconcile Net Income
   to Net Cash:
  Depreciation and Amortization                              61,130      71,661
  Provision for Bad Debts                                    15,000       7,500

Changes in Assets and Liabilities:
  [Increase] Decrease in:
   Accounts Receivable                                   (1,270,167)   (914,313)
   Inventory                                                (19,358)    297,802
   Other Current Assets                                     (27,787)     30,791
   Other Assets                                              52,972      (1,187)

Increase [Decrease] in:
  Accounts Payable and Accrued Expenses                     310,341     815,621
  Deferred Income                                            60,869    (100,649)
  Other Current Liabilities                                      --       6,395
                                                         ----------  ----------

  Total Adjustments                                        (817,000)    213,621
                                                         ----------  ----------

  Net Cash - Operating Activities                          (485,848)    512,309
                                                         ----------  ----------

Investing Activities                                             --          --
                                                         ----------  ----------

Financing Activities:
  Floor Plan Payable - Net                                 (364,358) (1,333,877)
  Treasury Stock Repurchased                               (372,875)     (5,000)
                                                         ----------  ----------

  Net Cash - Financing Activities                          (737,233) (1,338,877)
                                                         ----------  ----------

  Net [Decrease] in Cash and Cash Equivalents            (1,223,081)   (826,568)

Cash and Cash Equivalents - Beginning of Periods          7,617,241   5,378,846
                                                         ----------  ----------

  Cash and Cash Equivalents - End of Periods             $6,394,160  $4,552,278
                                                         ==========  ==========


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 are based on  5,002,163
weighted  shares  outstanding  for the period  ended  September  30, 1999 and on
5,216,804 weighted shares outstanding for the period ended September 30, 1998.

[2] Income Taxes

The  Corporation  has a  deferred  tax  asset of  $249,000  and a  deferred  tax
liability of $11,100 based upon temporary timing differences including inventory
capitalization,  allowance  for  doubtful  accounts,  vacation  pay accruals and
depreciation.

[3] Reclassification

Certain items from the prior year's financial  statements have been reclassified
to conform to the current year's presentation.

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.

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, 1999.






                    .   .   .   .   .   .   .   .   .   .   .



                                        4

<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Results of Operations

Revenues for the quarter ended  September 30, 1999 were  $11,254,860 as compared
with $12,919,438 for the quarter ended September 30, 1998. For the quarter ended
September 30, 1999 the  Corporation  reported net income of $331,152 as compared
with net income of $298,688 for the  corresponding  period in 1998. The decrease
in revenues is primarily due to a decrease in hardware  sales,  which is turn is
due  to  the   Corporation's   agency  model.   Under  this  program,   computer
manufacturers ship products to and bill the Corporation's clients directly,  and
pay the Corporation a fee of  approximately  5% of the aggregate  amount billed.
This  accounted  for the 13%  decrease in  revenue,  while also  resulting  in a
reduction  in our  SG&A  expense  by  approximately  $372,000  or 21%.  Revenues
attributable  to  service,   support  and  training   operations   increased  by
approximately  48%  compared to the same period in the prior year.  Revenues for
the quarter ended September 30, 1998 include a significant and seasonal increase
in the sale of  hardware  and  technical  support  services  to state  and local
government and educational institutions in the tri-state area.

The  increase  in  earnings  for  the  quarter  ended  September  30,  1999  are
attributable  to the  significant  increase  in service,  support  and  training
operations,  and  management's  concentration  on sales of  network  and  system
integration  products  which yield higher profit  margins,  as well as continued
adherence to and  implementation of cost control measures.  Service and training
related  revenues are  significant in their  contributions  to earnings  because
these  operations yield a higher profit margin than equipment sales. In addition
to the technical service sales referenced above, for the quarter ended September
30, 1999,  the  increase in revenues  from the  provision  of service,  support,
outsourcing  and network  integration  is largely the result of the  Corporation
renewing and/or entering into service contracts with a number of large corporate
customers.  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.

The  computer  industry  continually  faces a trend  of  decreasing  prices  for
computers  and  related  equipment.  Management  believes  that this  trend will
continue.  Industrywide,  the  result of price  erosion  has been  lower  profit
margins on hardware 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  and the entrance of
manufacturers  into technical services  business.  Management  believes that the
adoption of policies by many larger  corporate  customers to limit the number of
vendors  permitted to provide goods and services for  specified  periods of time
has further increased price competition.

To meet these competitive  challenges and to maximize the  Corporation's  profit
margin,  management has modified its marketing  strategy  during these years and
has  enforced  expense  controls.  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's current marketing strategy
is designed to shift its focus to provision  of technical  services and to sales
of lower  revenue/higher  profit margin products  related to service and support
operations.  Management's efforts include targeting commercial,  educational and
governmental customers who provide marketplaces for a wide range of products and
services at one time, a cost-effective approach to sales. Management believes it
maximizes  profits through  concentration on sales of value-added  applications;
promotion  of the  Corporation's  service  and  support  operations;  and strict
adherence to cost-cutting controls. In light of the above, management emphasizes
and  continues  the  aggressive  pursuit  of an  increased  volume  of  sales of
technical service and support programs,  and promotion of its training services.
In addition, the Corporation's buying agreement with Ingram Micro, Inc. enhances
the Corporation's competitive edge through product discounts unavailable through
other sources.


                                        5

<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Results of Operations [Continued]

Selling,  general and administrative  expenses decreased to approximately 13% of
revenue  for the first  quarter of fiscal  2000 due to the  decrease in revenues
from hardware sales and the related agency model, as discussed  above.  Selling,
general and  administrative  expenses were approximately 14% of revenues for the
same quarter in fiscal 1999.

Interest income  increased in the 1999 quarter as compared to 1998 primarily due
to a stronger  cash  position,  which allowed the  Corporation  to invest larger
amounts than in prior years.

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.
Inventory  decreased in the quarter ended  September 30, 1999 as compared to the
corresponding period in 1998 in response to the lower level of hardware sales.

Accounts  receivable  decreased  for the  quarter  ended  September  30, 1999 as
compared  to the same  period  in 1998 as a direct  result  of the  decrease  in
revenues.  Accounts  payable  decreased for the quarter ended September 30, 1999
compared  with the same  period in 1998 as a result of  management's  efforts to
shorten payable cycles and thereby avoid floor plan financing costs. Cash levels
increased  in the three  months  ended  September  30,  1999 as  compared to the
corresponding  period in 1998 due to  increased  sales of higher  profit  margin
services.

For the fiscal quarter ended  September 30, 1999, as in the fiscal quarter ended
September 30, 1998, the internal resources of the Corporation were sufficient to
enable the Corporation to meet its obligations.

In the first  quarter of fiscal 1998,  management  was apprised of an unasserted
possible claim or assessment involving the Corporation's  Pension Plan. The Plan
was adopted in 1981 as a defined  benefit  plan. In 1989,  various  actions were
taken by the  Corporation  to  terminate  the Plan,  to  convert it to a defined
contribution plan and to freeze benefit accruals. No filing for plan termination
was  made  with  the  Pension  Benefit   Guaranty   Corporation   [the  "PBGC"].
Additionally,  a final  amended and restated  plan  document  incorporating  the
foregoing  amendments and other required amendments  including those required by
the Tax  Reform  Act of 1986 do not  appear to have been  properly  adopted.  In
addition, since 1989, it appears that certain operational violations occurred in
the  administration  of the Plan including the failure to obtain spousal consent
in certain instances where it was required.

The  Corporation  decided to (i) take  corrective  action  under the IRS Walk-in
Closing  Agreement  Program  ["CAP"],  (ii) apply for a favorable  determination
letter with respect to the Plan from the IRS, and (iii)  terminate the Plan. The
CAP program  provides a  correction  mechanism  for  "non-amenders"  such as the
Corporation.  Under CAP, the Corporation will be subject to a monetary  sanction
[which  could range from $1,000 to  approximately  $40,000].  In  addition,  the
Corporation will be required to correct, retroactively,  operational violations,
and to pay any resulting  excise taxes and PBGC premiums and penalties  that may
be due.  Special counsel has advised the  Corporation  that although it believes
that the Corporation will incur some liability in connection with the correction
of such  operational  violations,  any  estimate in dollar terms of the range of
such liability at this time would be  speculative  and  potentially  misleading.
However,  management has been advised by counsel that the estimated  liabilities
are significantly lower than originally anticipated.


                                        6

<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Year 2000

The Corporation began preparing its computer-based systems for year 2000 ["Y2K"]
computer  software  compliance  issues in 1998. Many existing  computer systems,
including certain of the Corporation's  internal systems,  use only the last two
digits to identify years in the date field. As a result,  these computer systems
do not  properly  recognize a year that begins with "20" instead of the familiar
"19," or may not function properly with years later than 1999. If not corrected,
many  computer  applications  could fail or create  erroneous  results.  This is
generally  referred to as the "Year 2000" or "Y2K" issue.  Computer systems that
are able to deal  correctly  with dates after 1999 are referred to as "Year 2000
compliant."  The  Corporation's  Y2K project  covers both  traditional  computer
systems and  infrastructure  ["IT  Systems"]  and  computer-based  hardware  and
software,  facilities and equipment  ["Non-IT  Systems"],  such as its telephone
system.  The  Corporation's  Y2K project has the  following  phases:  inventory;
assessment  of  action   required  to  assure  Y2K   compliance;   upgrading  or
replacement; testing; and contingency planning.

The  Corporation  completed  the  inventory  and  assessment  of its critical IT
systems  and it expects  that by the end of  November  1999,  its main  internal
computer system, which processes  information to prepare  inventories,  purchase
orders,   invoices  and  accounting  functions  shall  be  Y2K  compliant.   The
Corporation has upgraded or replaced any non-compliant IT Systems,  with testing
and  implementation to be completed by the end of November 1999,  although it is
possible  that  testing  will  continue  through the end of calendar  1999.  The
Corporation  has also  completed  an  inventory  and  assessment  of its  Non-IT
Systems. The Corporation has replaced  non-compliant  systems,  with testing and
implementation expected to be completed by the end of November 1999.

The  Corporation's  Y2K project also  considers  the  readiness  of  significant
customers  and  vendors.  Although  significant  vendors  have  indicated to the
Corporation that they expect to be Y2K compliant, non-compliance of such vendors
could impair the ability of the Corporation to obtain  necessary  products or to
sell or provide  services to its customers.  Disruptions of the computer systems
of the  Corporation's  vendors  could  have a  material  adverse  effect  on the
Corporation's  financial  condition and results of operations  for the period of
such disruption.  Because of the uncertainties involved, pending receipt of this
information, it is not possible to estimate the effect upon the Corporation, for
example,  the amount of lost revenues,  if its material  vendors,  suppliers and
customers were not Y2K compliant.

The Corporation believes that the most reasonably likely worst case Y2K scenario
is that a small number of vendors may be delayed in supplying  components  for a
short  time  after  January  1, 2000,  with a  resulting  disruption  of product
shipments  and  services  to the  Corporation's  customers.  As  part of its Y2K
process, the Corporation plans to develop contingency plans with respect to such
scenario  and  the  vendors  who are  either  unable  or  unwilling  to  develop
remediation  plans  to  become  Y2K  compliant.  The  Corporation  is  currently
developing  these  plans.  The  Corporation's  contingency  plans will include a
combination  of  actions  including  preparations  to allow the  Corporation  to
selectively purchase from Y2K compliant vendors.

The Corporation has incurred approximately $30,000 of Y2K project expenses as of
June 30, 1999. Future expenses are estimated to include approximately $20,000 of
additional  costs.  Such cost  estimates  are  based  upon  presently  available
information and may change as the Corporation continues with its Y2K project.

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.

                                        7

<PAGE>




                           PART II - OTHER INFORMATION



Item 6:  Exhibits and Reports on Form 8-K

        A. Exhibits - None required to be filed for Part II of this report.

        B.  Reports on Form 8-K - None filed  during the  quarter for which this
report is submitted.





                                        8

<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



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



DATE:  November 12, 1999


                                        9

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