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 MARCH 31, 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 May 3, 2007: 4,823,304.


<PAGE>





                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                                                    PAGE NO.
                                                                                                    --------
PART I.  FINANCIAL INFORMATION
-------  ----------------------

<S>                                                                                                  <C>
         Consolidated Balance Sheets
                  March 31, 2007 (unaudited) and June 30, 2006                                         1


         Consolidated Statements of Operations (unaudited)
                  Three Months Ended March 31, 2007 and 2006                                           2
                  Nine Months Ended March 31, 2007 and 2006                                            3


         Consolidated Statements of Cash Flows (unaudited)
                  Nine Months Ended March 31, 2007 and 2006                                            4


         Notes to Consolidated Financial Statements                                                    5


     Item 2.  Management's Discussion and Analysis                                                    10


     Item 4.  Controls and Procedures                                                                 14


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

     Item 4.  Submission of Matters to a Vote of Shareholders                                         15

     Item 6.  Exhibits and Reports on Form 8-K                                                        15

     Signatures                                                                                       15
     Certifications                                                                                   16
</TABLE>




                                       i.



<PAGE>



                       TRANSNET CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                               March 31,             June 30,
                                                                                                 2007                  2006
                                                                                           ----------------       ----------------
                                                                                              (unaudited)
<S>                                                                                         <C>                    <C>
ASSETS:
CURRENT ASSETS
Cash and Cash Equivalents                                                                   $  2,206,435           $  4,034,495
Accounts Receivable - Net                                                                      6,905,200              3,438,526
Inventories                                                                                      614,667              1,501,695
Other Current Assets                                                                             176,061                 70,013
Deferred Tax Asset                                                                               210,293                133,941
                                                                                            ------------           ------------

TOTAL CURRENT ASSETS                                                                        $ 10,112,656           $  9,178,670

PROPERTY AND EQUIPMENT - NET                                                                     489,581                563,543

OTHER ASSETS                                                                                     282,106                280,035
                                                                                            ------------           ------------

TOTAL ASSETS                                                                                $ 10,884,343           $ 10,022,248
                                                                                            ============           ============

LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts Payable                                                                            $    656,557           $     89,465
Accrued Expenses                                                                               1,022,293                316,662
Income Taxes Payable                                                                               1,603                  9,611
Floor Plan Payable                                                                               986,655                621,507
                                                                                            ------------           ------------

TOTAL CURRENT LIABILITIES                                                                   $  2,667,108           $  1,037,245

DEFERRED TAX LIABILITY                                                                            18,500                 47,470

COMMITMENT AND CONTINGENCIES                                                                          --                     --

STOCKHOLDERS' EQUITY:
Capital Stock - Common, $.01 Par Value, Authorized 15,000,000 Shares;
Issued 7,408,524 at March 31, 2007 and June 30, 2006
[of which 2,585,220 are in Treasury at March 31, 2007 and June 30, 2006]                           74,085                 74,085

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

Retained Earnings                                                                              4,702,815              5,441,613
                                                                                            ------------           ------------

Totals                                                                                        15,351,570             16,090,368
Less: Treasury Stock - At Cost                                                                (7,152,835)            (7,152,835)
                                                                                            ------------           ------------

TOTAL STOCKHOLDERS' EQUITY                                                                     8,198,735              8,937,533
                                                                                            ------------           ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                  $ 10,884,343           $ 10,022,248
                                                                                            ============           ============
</TABLE>

See Notes to Consolidated Financial Statements.

                                                                               1

<PAGE>

                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       THREE MONTHS ENDED MARCH 31,
                                                                                       ----------------------------
                                                                                       2007                       2006
                                                                                       ----                       ----

<S>                                                                                 <C>                        <C>
REVENUE
Equipment                                                                           $ 4,007,882                $ 4,304,840
Services                                                                              2,723,960                  4,038,218
                                                                                    -----------                -----------

Total Revenue:                                                                        6,731,842                  8,343,058
                                                                                    -----------                -----------

COST OF REVENUE
Equipment                                                                             3,461,704                  3,788,689
Services                                                                              2,310,410                  2,787,221

Total Cost of Revenue                                                                 5,772,114                  6,575,910
                                                                                    -----------                -----------

Gross Profit                                                                            959,728                  1,767,148

Selling, General and Administrative Expenses                                          1,541,809                  1,751,862
                                                                                    -----------                -----------

Operating (Loss) Income                                                                (582,081)                    15,286
                                                                                    -----------                -----------

Interest Income                                                                          17,227                     12,595
                                                                                    -----------                -----------

Income (Loss) Before Tax Expense                                                       (564,804)                    27,881

Income Tax (Benefit)                                                                       (538)                        --
                                                                                    -----------                -----------

Net (Loss) Income                                                                   $  (564,266)               $    27,881
                                                                                    ===========                ===========

Basic Net Income (Loss)  Per Common Share                                           $     (0.12)               $      0.01
                                                                                    ===========                ===========

Diluted Net Income (Loss)  Per Common Share                                         $     (0.12)               $      0.01
                                                                                    ===========                ===========

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

Weighted Average Common Shares Outstanding - Diluted                                  4,823,304                  4,925,992
                                                                                    ===========                ===========
</TABLE>


See Notes to Consolidated Financial Statements.

                                                                               2

<PAGE>




                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             NINE MONTHS ENDED MARCH 31,
                                                                                             ---------------------------
                                                                                      2007                        2006
                                                                                      ----                        ----

<S>                                                                               <C>                         <C>
REVENUE
Equipment                                                                         $ 13,681,265                $ 16,282,505
Services                                                                             9,202,207                  11,646,447
                                                                                  ------------                ------------

Total Revenue:                                                                      22,883,472                  27,928,952
                                                                                  ------------                ------------

COST OF REVENUE
Equipment                                                                           12,004,552                  14,415,618
Services                                                                             7,154,899                   8,128,151

Total Cost of Revenue                                                               19,159,451                  22,543,769
                                                                                  ------------                ------------

Gross Profit                                                                         3,724,021                   5,385,183

Selling, General and Administrative Expenses                                         4,631,611                   5,190,806
                                                                                  ------------                ------------

Operating Income (Loss)                                                               (907,590)                    194,377
                                                                                  ------------                ------------

Interest Income                                                                         63,470                      32,875
                                                                                  ------------                ------------

Income (Loss)  Before Tax Expense                                                     (844,120)                    227,252


Provision for Income Tax (Benefit)                                                    (105,322)                     55,471
                                                                                  ------------                ------------

Net Income (Loss)                                                                 $   (738,798)               $    171,781
                                                                                  ============                ============

Basic Net Income (Loss) Per Common Share                                          $      (0.15)               $       0.04
                                                                                  ============                ============

Diluted Net Income (Loss) Per Common Share                                        $      (0.15)               $       0.03
                                                                                  ============                ============

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

Weighted Average Common Shares Outstanding - Diluted                                 4,823,304                   4,925,992
                                                                                  ============                ============
</TABLE>


See Notes to Consolidated Financial Statements.

                                                                               3

<PAGE>




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

<TABLE>
<CAPTION>
                                                                                             NINE MONTHS ENDED MARCH 31,
                                                                                             ---------------------------
                                                                                         2007                       2006
                                                                                         ----                       ----

<S>                                                                                   <C>                        <C>
OPERATING ACTIVITIES:
Net Income (Loss)                                                                     $  (738,798)               $   171,781
                                                                                      -----------                -----------
Adjustments to Reconcile Net Income
to Net Cash:

Depreciation and Amortization                                                             154,968                    180,769
Provision for Doubtful Accounts                                                           (55,000)                    33,977
Deferred Income Taxes                                                                     (84,127)                    74,670

Changes in Assets and Liabilities:
(Increase) Decrease in:
Accounts Receivable                                                                    (3,411,674)                (1,214,217)
Inventory                                                                                 887,028                 (1,344,601)
Other Current Assets                                                                     (106,048)                   (93,635)
Other Assets                                                                               (2,818)                    (3,102)

Increase (Decrease) in:
Accounts Payable and Accrued Expenses                                                   1,272,723                   (235,098)
Income Tax Payable                                                                        (29,203)                   (12,902)
                                                                                      -----------                -----------

Total Adjustments                                                                     $(1,374,151)               $(2,614,139)
                                                                                      -----------                -----------

NET CASH - OPERATING ACTIVITIES - FORWARD                                             $(2,112,949)                (2,442,358)
                                                                                      -----------                -----------

INVESTING ACTIVITIES:
Capital Expenditures                                                                  $   (80,259)               $   (84,630)
                                                                                      -----------                -----------


NET CASH - INVESTING ACTIVITIES                                                       $   (80,259)               $   (84,630)
                                                                                      -----------                -----------

FINANCING ACTIVITIES -
Floor Plan Payable - Net                                                              $   365,148                $  (676,201)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                  $(1,828,060)               $(3,203,189)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODS                                     $ 4,034,495                  5,752,404
                                                                                      -----------                -----------

CASH AND CASH EQUIVALENTS AT END OF PERIODS                                             2,206,435                $ 2,549,215
                                                                                      -----------                -----------

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

See Notes to Consolidated Financial Statements.

                                                                               4

<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 March
       31, 2007 and 2006, and 4,823,304 weighted shares outstanding for the nine
       months ended March 31, 2007 and 2006. Diluted are based on 4,823,304
       weighted shares outstanding for the three months ended March 31, 2007 and
       2006, respectively, and 4,823,304 and 4,925,992 weighted shares
       outstanding for the nine months ended March 31, 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, 2006.

       (h) The results of operations for the three months ended March 31, 2007
       are not necessarily indicative of the results to be expected for the
       entire year.

       (i) New Accounting Pronouncements:

                                                                               5

<PAGE>

                  In December 2004, the FASB issued SFAS No. 123R (Revised 2005)
                  "Share-Based Payment." The statement requires that the
                  compensation cost relating to share-based payment transactions
                  be recognized in financial statements. That cost will be
                  measured based on the fair value of the equity or liability
                  instrument issued. The statement covers a wide range of
                  share-based compensation arrangements including share options,
                  restricted share plans, performance-based awards, share
                  appreciation rights, and employee share purchase plans. The
                  Company has adopted the requirements contained in this
                  statement, the effects of which are reflected in the financial
                  statements for this quarter. The Company was required to adopt
                  SFAS 123 (R) as of July 1, 2006.

                  In March 2005, the FASB issued Interpretation No. 47 (FIN 47)
                  "Accounting for Conditional Asset Retirement Obligations,"
                  which refers to a legal obligation to perform an asset
                  retirement activity in which the timing or method of
                  settlement are conditional on a future event that may or may
                  not be within the control of the entity. A liability must be
                  recognized for such an obligation (e.g. major clean-up costs
                  under a leasehold) when incurred if the liability's fair value
                  can reasonably be estimated. The adoption of this statement is
                  required for fiscal years beginning after December 15, 2005.
                  The adoption of this statement is not expected to have a
                  material impact on the consolidated financial statements of
                  the Company.

                  In May 2005, the FASB issued SFAS No. 154 "Accounting Changes
                  and Error Corrections". This Statement replaces APB Opinion
                  No. 20, Accounting Changes, and FASB Statement No. 3,
                  "Reporting Accounting Changes in Interim Financial
                  Statements", and changes the requirements for the accounting
                  for and reporting of a change in accounting principle. This
                  Statement applies to all voluntary changes in accounting
                  principle. It also applies to changes required by an
                  accounting pronouncement in the unusual instance that the
                  pronouncement does not include specific transition provisions.
                  When a pronouncement includes specific transition provisions,
                  those provisions should be followed. Adoption of this
                  statement is required for fiscal years starting after December
                  15, 2005. The Company has adopted the requirements contained
                  in this statement, the effects of which are reflected in the
                  financial statements. The adoption of this statement is not
                  expected to have a material impact on the consolidated
                  financial statements of the Company.

                  In February 2006, the FASB issued SFAS No. 155 "Accounting for
                  Certain Hybrid Financial Instruments (as amended)". This
                  Statement amends FASB Statements No. 133, Accounting for
                  Derivative Instruments and Hedging Activities, and No. 140,
                  Accounting for Transfers and Servicing of Financial Assets and
                  Extinguishment of liabilities, and, resolves issues addressed
                  in Statement No. 133 Implementation Issue No. D1, "Application
                  of Statement No. 133 to Beneficial Interests in Securitized
                  Financial Assets". This Statement requires the evaluation of
                  interest securitized financial assets to identify interests
                  that are freestanding derivatives or that are hybrid financial
                  instruments that contain an embedded derivative requiring
                  bifurcation. This Statement clarifies that embedded
                  derivatives do not include concentrations of credit risk in
                  the form subordination and further clarifies the accounting
                  for interest-only and principal-only strips. This statement
                  also eliminates the prohibition on a qualifying
                  special-purpose entity from holding a derivative financial
                  instrument that pertains to a beneficial interest other than
                  another derivative financial instrument. Lastly, this
                  statement permits fair value measurement for any hybrid
                  financial instrument that contains an embedded derivative that
                  would otherwise require bifurcation. The adoption of

                                                                               6

<PAGE>

                  this Statement is effective for financial statements with
                  fiscal years beginning or after September 15, 2006, or for all
                  financial instruments acquired or issued beginning on or after
                  September 15, 2006. The adoption of this statement is not
                  expected to have a material impact on the consolidated
                  financial statements of the Company.

                  In March 2006, the FASB issued SFAS No. 156, "Accounting for
                  Servicing of Financial Assets- An Amendment of FASB Statement
                  No. 140". This Statement amends FASB Statement No. 140
                  "Accounting for Transfers and Servicing of Financial Assets
                  and Extinguishments of Liabilities," with respect to the
                  accounting for separately recognized servicing assets and
                  servicing liabilities. This Statement requires the recognition
                  of a servicing asset or liability initially measured at fair
                  value, for every obligation incurred for contracts to service
                  financial assets in certain sales-type transfers, qualifying
                  special purpose entity transfers, or in certain acquisitions
                  that do not relate to the financial servicer or its
                  consolidated affiliates. This Statement permits the choice of
                  either the amortization method or the fair value method for
                  each class of separately recognized servicing assets and
                  servicing liabilities, and, requires separate disclosure at
                  fair value in the statement of financial position. The
                  adoption of this Statement is effective for financial
                  statements beginning with fiscal years on or after September
                  15, 2006. The adoption of this statement is not expected to
                  have a material impact on the consolidated financial
                  statements of the Company.

                  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". This
                  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

                                                                               7

<PAGE>

                  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 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.

         (h) At March 31, 2007, the Corporation had a stock-based employee
         compensation plan. The Corporation accounts for the plan under the
         measurement principles 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.

                                                                               8

<PAGE>

<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED
                                                                                       MARCH 31,
                                                                                   -------------------
                                                                                                         2006
                                                                                                         ----
<S>                                                                                                    <C>
                              NET INCOME [LOSS]:
                                 As Reported                                                           $ 27,881

                                   DEDUCT:

                  Stock Based Employee Compensation Expense
          Determined under the Fair Value Based Method - Net of Tax                                          --
                                                                             ---                       --------

                         PRO FORMA NET INCOME [LOSS]                                                     27,881
                                                                             ---                       --------

                          BASIC EARNINGS PER SHARE:
                                 As Reported                                                            $ 0.01
                                  Pro-Forma                                                             $ 0.01

                         DILUTED EARNINGS PER SHARE:
                                 As Reported                                                            $ 0.01
                                  Pro-Forma                                                             $ 0.01
</TABLE>




<TABLE>
<CAPTION>

                                                                                           NINE MONTHS ENDED
                                                                                              MARCH 31,
                                                                                           -----------------
                                                                                                         2006
                                                                                                         ----

<S>                                                                                                    <C>
                             NET INCOME [LOSS]:
                                 As Reported                                                           $ 171,781


                                   DEDUCT:
                  Stock Based Employee Compensation Expense
          Determined under the Fair Value Based Method - Net of Tax
                                                                             ---                       ---------

                         PRO FORMA NET INCOME [LOSS]                                                     171,781
                                                                             ---                       ---------

                          BASIC EARNINGS PER SHARE:
                                 As Reported                                                           $    0.04
                                  Pro-Forma                                                            $    0.04

                         DILUTED EARNINGS PER SHARE:
                                 As Reported                                                           $    0.03
                                  Pro-Forma                                                            $    0.03

</TABLE>


(2.) INCOME TAXES
       The Corporation has a deferred tax benefit of $210,293 and a deferred tax
       liability of $18,500 based upon temporary timing differences including
       inventory capitalization, allowance for doubtful accounts, vacation pay
       accruals and depreciation.

                                                                              9

<PAGE>



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


RESULTS OF OPERATIONS

Revenues and earnings decreased in the quarter and nine-month period ended March
31, 2007 as compared to the same periods in the prior year, primarily due to a
decrease in service revenues, as well as an overall slowdown in equipment sales.
Revenues for the quarter ended March 31, 2007 were $6,731,842, as compared to
$8,343,058 for the quarter ended March 31, 2006. For the quarter ended March 31,
2007, the Corporation reported a net loss of $564,266 as compared with net
income of $27,881 for the similar period in the prior fiscal year. Revenues for
the nine months ended March 31, 2007 were $22,883,472 as compared with
$27,928,952 for the same period ended March 31, 2006, with a net loss of
$738,798 for the nine-month period ended March 31, 2007, compared with net
income of $171,781 for the same period in the prior fiscal year.

During the quarter and nine-month period in 2007, revenues from hardware sales
and service revenues decreased due to reduced sales of equipment and services.
The decreases were also due in part to continued delays in initiation of state
funded educational projects. As a result of these reductions combined with
factors discussed below, operations resulted in a pre-tax loss of $564,804 for
the quarter ended March 31, 2007, as compared to pre-tax income of $27,881 in
the same period in the prior year. For the nine months ended March 31, 2007,
operations resulted in a pre-tax loss of $844,120 compared to pre-tax earnings
of $227,252. Further impacting the Corporation's results, the increased level of
technical sophistication of projects, for example, VoIP installations, requires
the Corporation to maintain a high skill level among its technical staff, with
corresponding increases in salaries and related personnel expenses. These
factors contributed to decreased profit margins on service revenues to
approximately 22%, and combined with the decrease in revenues, caused overall
gross profit to decrease for the quarter and in the nine-month period ended
March 31, 2007. Profit margins on hardware sales increased to 14% from 12% for
the quarters ended March 31, 2007 and 2006, respectively.

During the March 2007 quarter, the Corporation initiated new projects and
continued work on existing awards for IPC products and services. Certain of
these projects involve installations in buildings yet to be constructed, and the
construction is scheduled to take place over several quarters. The Corporation's
installations in these projects remains at a fixed length of time, which
typically approximates three months, regardless of when the construction reaches
the degree of completion at which the Corporation begins its work at the
respective site. Management notes that initiation of some of these projects has
been affected by construction delays beyond the Corporation's control, and
through the referenced periods, these delays have resulted in 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, as a result of the
decrease in overall revenues, these expenses increased as a percentage of
revenues for both the quarter and nine month

                                                                              10


<PAGE>

period ended March 31, 2007. The increase was to 23% of revenues as compared to
21% of revenues for the quarter ended March 31, 2006, and to approximately 20%
of revenue, as compared to 19% for the nine month period ended March 31, 2006.
Expenses for all the referenced periods include 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. 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 these customers, should that occur, or that such
operations will not be adversely effected. Although management believes that
projects performed during 2006 and fiscal 2007 to date 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 that
the Corporation will be able to replace the loss of a significant amount of
legacy business from this sector of its customer base, should that occur, or
that operations will not be adversely effected. In this regard, in addition to
orders and awards already received, indications of interest have been received
by existing and prospective clients with respect to VoIP/IP 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.

Management continues its concentration on sales of sophisticated network and
system integration products which typically 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. These sales supplement sales
through traditional channels, and are not a material source of revenue.

The computer industry continues to experience decreasing prices of computers and
related equipment. Management believes that this will continue, but hopes to
offset these decreases by expansion of its IPC sales. 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, 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

                                                                              11


<PAGE>

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, and contain
provisions which permit early termination. Although the contracts generally
contain renewal terms, there is no assurance that such renewals will occur.

With respect to certain support services, Management has noted a transition to
project-based business, in which services are rendered for a specific project,
such as a VoIP installation, rather than contract based business, in which
technical services are rendered 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, 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 has modified its service offerings, and is marketing
service contracts to provide remote monitoring services, and contracts which
allow for remote as well as on-site services. Remote monitoring and remedial
services allow for greater utilization of the Corporation's technical staff. In
addition, the Corporation has established a Support Call Center operating from
its Branchburg, New Jersey headquarters.


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.

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 increased in the 2007 period compared to the same period in
2006 as the result of purchases for open orders related to future revenues.
Inventory decreased in the quarter and nine months ended March 31, 2007, as
compared to the corresponding periods in 2006 as a result of the decrease in
hardware sales.

Accounts receivable increased for the quarter and nine months ended March 31,
2007 as compared to the same periods in 2006 as a result of the significant
amount the quarter's invoicing done during March 2007. Accounts payable
increased in the March quarter of fiscal 2007 as compared to the same quarter in
fiscal 2006 as a result of purchases required by sales orders and made outside
of floor planning financing. Corresponding with the increased accounts
receivables and payables, cash levels decreased in the three and nine months
ended March 31, 2007 as compared to the same

                                                                              12


<PAGE>

period in 2006, as funds were used to finance hardware sales and inventory
required to full customer orders.

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

Interest income, not a material source of income, increased in the quarter and
nine months ended March 31, 2007 as compared to the same periods in fiscal 2006,
due to the availability of higher interest rates.

For the fiscal quarter and nine months ended March 31, 2007, as in the similar
periods in the prior year, the internal resources of the Corporation were
sufficient to enable the Corporation to meet its obligations.

IMPACT OF INFLATION

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


CONTRACTUAL OBLIGATIONS

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

<S>                        <C>               <C>             <C>          <C>               <C>
Real Estate Lease          $726,954          $92,803         $375,077     $259,074          --

Office Equipment             $1,385          $ 1,385               --           --          --
</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

                                                                              13

<PAGE>

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.

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 March 31, 2007, we have a valuation allowance of approximately $1,540,000
primarily to reduce our deferred tax asset, which is based on a net operating
loss carry forwards of $4,160,000 to an amount that will more likely than not be
realized. These net operating loss carry forwards have varying carry forward
periods and restrictions on usage. The estimation of future taxable income and
our resulting ability to utilize net operating loss and tax credit carry
forwards 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.





ITEM 4.  CONTROL AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer of the Corporation have
concluded, based on their evaluation as of March 31, 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.

                                                                              14

<PAGE>



                                     PART II
                                OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

On March 8, 2007, the Corporation held its annual meeting of shareholders for
the purpose of considering and acting upon the election directors. At the
meeting, the election of three nominated directors was approved.

Election of Directors:

         NAME                               SHARES VOTED
         ----                               ------------
                                         FOR                AUTHORITY WITHHELD
                                         ---                ------------------
Raymond J. Rekuc                      3,556,944                 581,618
Steven J. Wilk                        3,554,934                 583,628
Susan M. Wilk                         3,554,734                 583,828


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 February 13, 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: May 15, 2007


                                                                              15