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, 2007
                               ------------------

                                       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 12, 2007: 4,823,304.


<PAGE>


                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS



                                                                        PAGE NO.
PART I.  FINANCIAL INFORMATION

        Consolidated Balance Sheets
             September 30, 2007 (unaudited) and June 30, 2007              1

        Consolidated Statements of Operations (unaudited)
             Three Months Ended September 30, 2007 and 2006                2

        Consolidated Statements of Cash Flows (unaudited)
             Three Months Ended September 30, 2007 and 2006                3

        Notes to Consolidated Financial Statements                         4

    Item 2.  Management's Discussion and Analysis                          7

    Item 4.  Controls and Procedures                                      12


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

    Item 6.  Exhibits and Reports on Form 8-K                             13

    Signatures                                                            13
    Certifications                                                        14



                                       i.


<PAGE>


                       TRANSNET CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         September 30,               June 30,
                                                             2007                      2007
                                                       ------------------       ------------------
                                                          (unaudited)
<S>                                                     <C>                      <C>
ASSETS:
CURRENT ASSETS

Cash and Cash Equivalents                               $     1,991,447          $     2,462,442
Accounts Receivable - Net                                     8,247,641                5,606,680
Inventories                                                     843,945                  470,827
Other Current Assets                                             84,817                    9,032
                                                       ------------------       ------------------

TOTAL CURRENT ASSETS                                    $    11,167,850               $8,548,981

PROPERTY AND EQUIPMENT - NET                                    385,811                  435,787

OTHER ASSETS                                                    184,274                  183,544
                                                       ------------------       ------------------

TOTAL ASSETS                                            $    11,737,935          $     9,168,312
                                                       ==================       ==================

LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts Payable                                        $       675,688                  741,993
Accrued Expenses                                                374,586                  231,651
Income Taxes Payable                                                  0                    1,569
Floor Plan Payable                                            3,264,688                  802,020
                                                       ------------------       ------------------

TOTAL CURRENT LIABILITIES                               $     4,314,962          $     1,777,233

COMMITMENT AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Capital Stock - Common, $.01 Par Value,
Authorized 15,000,000 Shares; Issued 7,408,524
at September 30, 2007 and June 30, 2007
[of which 2,585,220 are in Treasury at September 30,
2007 and June 30, 2007]                                          74,085                   74,085

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

Retained Earnings                                             3,927,053                3,895,159
                                                       ------------------       ------------------

Totals                                                       14,575,808               14,543,914
Less: Treasury Stock - At Cost                               (7,152,835)              (7,152,835)
                                                       ------------------       ------------------

TOTAL STOCKHOLDERS' EQUITY                                    7,422,973                7,391,079
                                                       ------------------       ------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $11,737,935          $     9,168,312
                                                       ==================       ==================
</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,
                                                              2007                     2006
                                                              ----                     ----
<S>                                                     <C>                      <C>
REVENUE
Equipment                                               $     5,736,091          $     5,008,754
Services                                                      3,270,905                3,362,568
                                                       ------------------       ------------------

Total Revenue:                                                9,006,996                8,371,322
                                                       ------------------       ------------------

COST OF REVENUE
Equipment                                                     5,109,939                4,356,160
Services                                                      2,209,385                2,413,839
                                                       ------------------       ------------------

Total Cost of Revenue                                         7,319,324                6,769,999
                                                       ------------------       ------------------

Gross Profit                                                  1,687,672                1,601,323

Selling, General and Administrative Expenses                  1,670,150                1,615,922
                                                       ------------------       ------------------

Operating Income                                                 17,522                  (14,599)
                                                       ------------------       ------------------

OTHER INCOME (EXPENSE):
Interest Income                                                  14,372                   22,329
                                                       ------------------       ------------------

Income Before Tax Expense                                        31,894                    7,730

Income Tax (Benefit)                                                 --                       --
                                                       ------------------       ------------------

Net Income                                              $        31,894          $         7,730
                                                       ==================       ==================

Basic Net Income Per Common Share                                 $0.01          $          0.00
                                                       ==================       ==================

Diluted Net Income Per Common Share                               $0.01          $          0.00
                                                       ==================       ==================

Weighted Average Common Shares Outstanding - Basic            4,823,304                4,823,304
                                                       ==================       ==================

Weighted Average Common Shares Outstanding - Diluted          4,907,958                4,913,328
                                                       ==================       ==================
</TABLE>

See Notes to Consolidated Financial Statements.


                                                                               2


<PAGE>


                      TRANSNET CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED SEPTEMBER 30,
                                                              2007                     2006
                                                              ----                     ----
<S>                                                     <C>                      <C>
OPERATING ACTIVITIES:
Net Income                                              $        31,894                   $7,730
                                                       ------------------       ------------------
Adjustments to Reconcile Net Income to Net Cash:
Depreciation and Amortization                                    57,750                   51,258
Provision for Doubtful Accounts                                      --                   15,000
Inventory Reserve Adjustment                                         --                   12,000

Changes in Assets and Liabilities:
(Increase) Decrease in:
Accounts Receivable                                          (2,640,962)              (1,960,181)
Inventory                                                      (373,118)                 723,601
Other Current Assets                                            (74,122)                 (67,298)
Other Assets                                                       (979)                    (860)

Increase (Decrease) in:
Accounts Payable and Accrued Expenses                            76,630                  340,490
Income Tax Payable                                               (3,231)                  (6,992)
                                                       ------------------       ------------------

Total Adjustments                                       $    (2,958,032)         $      (892,982)
                                                       ------------------       ------------------

NET CASH - OPERATING ACTIVITIES - FORWARD               $    (2,926,138)         $      (885,252)
                                                       ------------------       ------------------

INVESTING ACTIVITIES:
Capital Expenditures                                    $        (7,525)         $        (3,046)
                                                       ------------------       ------------------

NET CASE - INVESTING ACTIVITIES                         $        (7,525)         $        (3,046)
                                                       ------------------       ------------------

FINANCING ACTIVITIES -
Floor Plan Payable - Net                                $     2,462,668          $      (328,664)
                                                       ------------------       ------------------

NET CASH - FINANCING ACTIVITIES                               2,462,668          $      (328,664)
                                                       ------------------       ------------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS    $      (470,995)              (1,216,962)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODS       $     2,462,442          $     4,034,495
                                                       ------------------       ------------------

CASH AND CASH EQUIVALENTS AT END OF PERIODS             $     1,991,447          $     2,817,533
                                                       ------------------       ------------------

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest                                                         $4,913                       $0
Income Taxes                                                         $0                       $0
</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) Revenue Recognition: Revenues related to our equipment sales are
     recognized when evidence of an arrangement exists, delivery of equipment
     has occurred, the sales price of the equipment being sold to our customers
     is both fixed and determinable and collectability of the accounts
     receivable related to the equipment sale is reasonably assured in
     accordance with SEC Staff Accounting Bulletin No. 104 Topic 13.

     Revenues related to our services are recognized as the service is performed
     using the percentage of completion method of accounting under which the
     total contract revenue during the term of an agreement is recognized on the
     basis of the percentage that each contract's proportional performance to
     date bears to the total completion of performance. Estimates of
     proportional performance are continuously monitored during the term of the
     contract, and recorded revenues and costs are subject to revision as the
     contract progresses.

     (e) Earnings Per Share: Earnings per common share - basic are based on
     4,823,304 weighted shares outstanding for the three months ended September
     30, 2007 and 2006, respectively. Diluted are based on 4,907,958 and
     4,913,328 weighted shares outstanding for the three months ended September
     30, 2007 and 2006, respectively.

     (f) 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.

     (g) 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, 2007.

     (h) The results of operations for the three months ended September 30, 2007
     are not necessarily indicative of the results to be expected for the entire
     year.


                                                                               4


<PAGE>


     (i) New Accounting Pronouncements:

         In June 2006, the FASB issued FIN No. 48, "Accounting for Uncertainty
         in Income Taxes - An Interpretation of FASB Statement No. 109
         Accounting For Income Taxes". T his interpretation requires a
         recognition threshold and measurement attribute for the financial
         statement recognition and measurement of a tax position taken or
         expected to be taken in a tax return. This interpretation also provides
         guidance on derecognition, classification, interest, penalties,
         accounting in interim periods, disclosure and transition. This
         interpretation requires the evaluation of whether the technical merits
         of a tax position is more likely or not to be sustained upon
         examination, including the resolution of any related appeals or
         litigation. The Statement requires the measurement of the largest
         amount of benefit that is greater than a 50% likelihood of being
         realized upon final settlement, presuming the position will be examined
         by the appropriate taxing authority with the benefit of full knowledge
         and relevant information. The adoption of this interpretation is
         effective for fiscal years beginning after December 15, 2006.

         In September, 2006, the FASB issued SFAS No. 157, "Fair Value
         Measurements". This Statement defines fair value as 'exit prices' NOT
         'entry prices' in generally accepted accounting principles (GAAP), and
         expands disclosures about fair value measurements for the purpose of
         promoting consistency and simplification of the existing codification
         of accounting principles. To eliminate differences in practice and
         reduce complexity in the application of GAAP, the Statement emphasizes
         that fair value is a market-based measurement, not an entity specific
         measurement and should be determined based on the assumptions that
         market participants would use in pricing the asset or liability. This
         statement establishes a fair value hierarchy that distinguishes between
         observable and unobservable inputs and clarifies the need for
         adjustments to fair value based on nonperformance, and other market
         risk assessment criteria, certain asset or event restrictions, and
         trading blockage. The adoption of this Statement is effective for
         financial statements beginning with fiscal years on or after September
         15, 2007, including interim financial statements within that fiscal
         year.

         In September 2006, the Securities and Exchange Commission released
         Staff Accounting Bulletin No. 108, "Considering the Effects of Prior
         Year Misstatements when Quantifying Misstatements in Current Year
         Financial Statements" ("SAB 108"). SAB 108 provides guidance regarding
         the methodology for quantifying and evaluating the materiality of
         financial statement misstatements. SAB 108 is effective for fiscal
         years ending after November 15, 2006. Application of the guidance in
         SAB 108 is not expected to have a material effect on the Company's
         financial position, cash flows, or results of operations.

         In October, 2006, the FASB issued SFAS No.158, "Employers' Accounting
         for Defined Benefit Pension and other Postretirement Plans- An
         amendment of FASB Statements No. 87, 88, 106 and 132(R)". This
         statement requires an employer to recognize the overfunded or
         underfunded status of a defined benefit postretirement plan, other than
         a multiemployer plan, as an asset or liability in its statement of
         financial position and to recognize changes in


                                                                               5


<PAGE>


         that funded status in the year in which the changes occur through the
         comprehensive income of a business entity. This statement requires the
         measurement and recognition of the difference between plan assets at
         fair value and the benefit obligation, as of the date of the employer's
         fiscal year-end statement of financial position. This statement also
         requires additional disclosure in the footnotes to the financial
         statements about certain effects on net periodic benefit cost for the
         next fiscal year that arise from delayed recognition of the gains or
         losses, prior service costs or credits, and transition assets or
         obligations. Employers who have issued outstanding publicly traded
         equity securities are required to adopt this Statement by initially
         recognizing the funded status of a defined benefit postretirement plan
         including the required footnote disclosures as of the end of the fiscal
         year ending after December 15, 2006.






                                                                               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, 2007 as
compared to the same quarter in the prior year, primarily due to an increase in
equipment sales which was attributable to the expanded sales and marketing
efforts of the Corporation's staff, and the Corporation's focus upon revenues
derived from New Jersey state and local municipal entities. Revenues for the
quarter ended September 30, 2007 were $9,006,996, an increase over revenues
$8,371,322 reported for the same quarter in fiscal 2007. Service revenues
(technical support, repair and maintenance, network integration, staffing, and
training) for the first quarter of fiscal 2008 decreased slightly as compared to
the same period in fiscal 2007 as a result of decreased demand for certain of
the Corporation's legacy technical services. For the quarter ended September 30,
2007, the Corporation reported net income of $31,894 as compared with net income
of $7,730 for the quarter ended September 30, 2006.

As stated above, revenues increased in the first quarter of fiscal 2007 as
compared to the same quarter in fiscal 2007, in large part due to increases in
purchases from state and municipal entities, and educational clients within New
Jersey. Although hardware sales increased, there was a reduction in service
revenues, however, which included the impact of the industry-wide reduction in
demand for certain legacy services, as discussed above, which services are
frequently moved to off-shore organizations, including those in India. Overall
profit margins remained constant in the comparative quarters. During the
September 2007 quarter, profit margins on equipment sales decreased to 11% from
13% in the comparable 2006 quarter, as a result of product mix sold and
continued competitive pressure on equipment pricing. Gross profit margins on
service revenues increased to 32% in the September 2007 quarter from 28% in the
comparable 2006 quarter as a result of the services provided better utilization
rates of our technical staff.

During the fiscal periods discussed, the Corporation performed under contract
awards for VoIP products and services, the performance of which will extend over
several quarters, pending construction of the sites into which the systems will
be installed and implemented. Management notes that some of these projects were
affected by construction delays beyond the Corporation's control, and these
delays resulted in some order backlogs. None of these delays had any significant
impact upon the operations of the Corporation. During the periods discussed, the
Corporation's clients continued to be conservative in their IT budgetary
spending and to scrutinize their IT spending and the related returns on
investments before incurring new expenses. As a result, management refocused its
attention on utilization rates of its service technicians and selling and
administrative expenses to reduce expenses.

Management believes that clients' 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. The VoIP networks marketed by TransNet are
designed with the capacity for "optimization" through the subsequent addition of
layers of solutions, for ex., security solutions, as discussed in Item 1. We are
confident that our strategy of being an advanced solutions provider will result
in future revenues from clients' optimization of already installed networks. In
conjunction with these solutions, we note the rapid development of technologies
which now allow for the integration of voice, video, and data at levels not seen
before now, and which provide clients with greater operating efficiencies.


                                                                               7


<PAGE>


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 and the transfer of this business to overseas service providers,
such as those in India. Management believes that projects performed during the
first quarters of fiscal 2008 and 2007 replaced much of the reduced business,
and believes its focus on higher margin services related to VoIP/IP Telephony
and security will lead to continued growth and opportunities that will help
compensate for this reduction. No assurances can be given, however, that the
Corporation will be able to replace the loss of a significant amount of business
from these legacy services, or that such operations will not be adversely
effected.

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. Services during the past two fiscal years are
comprised primarily of services related to the sale and implementation of VoIP
networks. These services include planning, design, configuration, installation
and implementation, testing, and optimization. Revenues are also generated by a
variety of support contracts for these networks. Under these agreements,
TransNet's Support Center provides troubleshooting, diagnosis, and remedial
services performed remotely by skilled system engineers, who will be dispatched
to perform on-site repairs, if necessary. The agreements are for twelve months,
and provide a range of guaranteed response time, based upon the client's
specific response requirements or the nature of the outage. The availability of
these services is determined by the client, from 24/7 to next business day. In
addition, our system engineers and service technicians provide service and
support on an on-call basis. Additionally, for the fiscal periods discussed, as
noted above, revenue resulting from contracts with corporate clients for the
provision of service, support, outsourcing, and network integration has
decreased, in conjunction with the erosion of demand for these services. Those
service contracts, with a number of corporate and educational customers, provide
service and support for the customer's personal computers, peripherals, and
networks. These contracts are short-term, and contain provisions which permit
early termination. Although the contracts generally contain renewal terms, there
is no assurance that such renewals will occur.

As noted above, with respect to certain support services, services are performed
for a specific project, such as a VoIP installation, rather performed under a
services related contract, under which technical services are provided for a
specific period of time. 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 services, while
increasing the demand for services such as those related to VoIP systems and
call centers. The Corporation has modified its service offerings in response to
these industry fluctuations, and has recruited experienced and specially
certified systems engineers and project managers to respond to increased VoIP
projects.

In addition to the challenging economic environment, the computer industry has
experienced a continuing trend of decreasing prices of computers and related
equipment. Management believes that this trend will continue. Industry-wide, 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, as well as the increased initiation of sales by certain
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.

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 approaches such as
manufacturers' direct shipment and billing of the


                                                                               8


<PAGE>


customers in exchange for payment to the Corporation of an "agency fee" as a
means to reduce equipment related costs while increasing profits. These direct
ship sales supplement sales through traditional channels, and are not material.
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. These customers often do not have their own
technical staffs and outsource their computer service requirements to companies
such as TransNet. 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 VoIP systems, and related technical service and
support programs, and has introduced new technical support programs offering a
wide variety of alternatives of remote and on-site network support and
monitoring. Management believes that product sales will continue to generate a
significant percentage of the Company's revenues. In addition, the Corporation's
buying agreement with Ingram Micro, Inc. enhances the Corporation's competitive
edge through product discounts unavailable through other sources.

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 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.

During the quarter ended September 30, 2007, selling, general and administrative
expenses remained constant at 19% of revenues as compared to the same period in
the prior year. These expenses include those management incurred to invest in
the expertise of its sales and support teams, their certifications, and
corporate infrastructure, particularly in the last quarter of fiscal 2007 when
management expanded its sales staff to expand its sales of products and
services. Management incurred these expenses as investments required to meet the
demands of the current IT environment, and to lead to sustainable growth for the
Corporation. Management continues its efforts to control expenses, despite
increasing personnel related costs, such as health benefits.

Interest income decreased in the first fiscal quarter of 2008 as compared to the
comparative quarter as a result of lower interest rates and lower amounts
invested.


LIQUIDITY AND CAPITAL RESOURCES

There are no material commitments of the Corporation's capital resources, other
than floor planning commitments.

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 increased significantly in the 2007 period compared to the
same period in 2006 as the result of purchases underlying equipment sales to
meet existing orders. The increase was also impacted by the increase in accounts
receivable from New Jersey state and local governmental entities, as these
entities have slower payment cycles. Inventory increased in the quarter ended
September 30, 2007 as compared to the corresponding period in 2006 as a result
of increased sales in the quarter.


                                                                               9


<PAGE>


Accounts receivable increased for the quarter ended September 30, 2007 as
compared to the same period in 2006 as a result of the increased level of sales,
and primarily due to the business conducted with governmental agencies which
have extended and slower payment cycles than non-governmental agencies.
Management has initiated efforts to expedite payments from the governmental
bodies. Cash levels decreased in the three months ended September 30, 2007 as
compared to the same period in 2006, as funds were used to finance hardware
sales. Accounts payable decreased in the first quarter of fiscal 2008 as
compared to the same quarter in fiscal 2008 as utilization of floor planning
options was increased.


IMPACT OF INFLATION

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


CONTRACTUAL OBLIGATIONS

<TABLE>
<CAPTION>
                                                 LESS THAN            1-3            4-5       MORE THAN
CONTRACTUAL OBLIGATIONS            TOTAL          ONE YEAR          YEARS          YEARS         5 YEARS
-----------------------            -----          --------          -----          -----         -------

<S>                             <C>               <C>            <C>             <C>              <C>
Real Estate Lease               $634,150          $185,605       $371,210        $77,335              --

Office Equipment                 $26,640            $7,104         14,208          5,328              --
</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 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

Revenues related to our equipment sales are recognized when evidence of an
arrangement exists, delivery of equipment has occurred, the sales price of the
equipment being sold to our customers is both fixed and determinable, and
collectability of the accounts receivable related to the equipment sale is
reasonably assured in accordance with SEC Staff Accounting Bulletin No. 104
Topic 13.

Revenues related to our services are recognized as the service is performed
using the percentage of completion method of accounting under which the total
contract revenue during the term of an agreement is recognized on the basis of
the percentage that each contract's proportional performance to date bears to
the total completion of performance. Estimates of proportional performance are
continuously monitored during the term of the contract, and recorded revenues
and costs are subject to revision as the contract progresses.


                                                                              10


<PAGE>


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.





INVESTMENT CONSIDERATIONS AND UNCERTAINTIES

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 AND CUSTOMERS; CONTINUED COMPETITIVE AND PRICING
PRESSURES IN THE INDUSTRY; PRODUCT SUPPLY SHORTAGES; OPEN-SOURCING OF PRODUCTS
OF VENDORS, INCLUDING DIRECT SALES BY MANUFACTURERS; 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.






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<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, 2007, 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.






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<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 October 1, 2007, TransNet Corporation filed a Form 8-K under
          Item 7.



                                   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, 2007





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