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, 2009
                               ------------------

                                       Or

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

For the transition period from ________________to _________________

Commission File 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 a large accelerated filer, an
 accelerated filer, a non-accelerated filer, or a smaller reporting company (as
                       defined in Rule 12b-2 of the Act)
      Large Accelerated Filer [ ]                Accelerated Filer [ ]
      Non-accelerated Filer [ ]                  Smaller Reporting Company [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act)
[ ] Yes [X] No

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of November 5, 2009: 4,823,304.

<PAGE>

                              TRANSNET CORPORATION
                                    FORM 10-Q

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------
PART I.   FINANCIAL INFORMATION

      Consolidated Balance Sheets
         September 30, 2009 (unaudited) and June 30, 2009                  1

      Consolidated Statements of Operations (unaudited)
         Three Months Ended September 30, 2009 and 2008                    2

      Consolidated Statements of Cash Flows (unaudited)
         Three Months Ended September 30, 2009 and 2008                    3

      Notes to Consolidated Financial Statements                           4

   Item 2.  Management's Discussion and Analysis                           9

   Item 4.  Controls and Procedures                                       14

PART II.  OTHER INFORMATION

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

   Signatures                                                             15
   Certifications                                                         16

                                       i.

<PAGE>

                       TRANSNET CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                  September 30,       June 30,
                                                                                       2009             2009
                                                                                  -------------    -------------
                                                                                   (unaudited)
<S>                                                                               <C>              <C>
ASSETS:
CURRENT ASSETS
Cash and Cash Equivalents                                                         $     564,155    $   1,654,366
Restricted Cash                                                                         866,762          863,621
Accounts Receivable - Net                                                             3,478,863        4,392,995
Inventories - Net                                                                       413,093          261,456
Other Current Assets                                                                     63,473           11,152
                                                                                  -------------    -------------

TOTAL CURRENT ASSETS                                                              $   5,386,346    $   7,183,590

PROPERTY AND EQUIPMENT - NET                                                            115,102          120,690

OTHER ASSETS                                                                            216,755          216,755
                                                                                  -------------    -------------

TOTAL ASSETS                                                                      $   5,718,203    $   7,521,035
                                                                                  =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts Payable                                                                  $   2,020,750    $   3,481,381
Accrued Expenses                                                                        420,403          403,181
Unearned Revenue                                                                        232,051          365,442
Line of Credit                                                                          500,000          828,094
                                                                                  -------------    -------------

TOTAL CURRENT LIABILITIES                                                         $   3,173,204    $   5,078,098
                                                                                  -------------    -------------

STOCKHOLDERS' EQUITY:

Capital Stock - Common, $.01 Par Value, Authorized 15,000,000 Shares;
   Issued 7,408,524 at September 30, 2009 and June 30, 2009
   [of which 2,585,220 are in Treasury at September 30, 2009 and June 30, 2009]          74,085           74,085

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

Accumulated Deficit                                                                    (950,921)      (1,052,983)
                                                                                  -------------    -------------

Total                                                                                 9,697,834        9,595,772
Less: Treasury Stock - At Cost                                                       (7,152,835)      (7,152,835)
                                                                                  -------------    -------------

TOTAL STOCKHOLDERS' EQUITY                                                            2,544,999        2,442,937
                                                                                  -------------    -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                        $   5,718,203    $   7,521,035
                                                                                  =============    =============
</TABLE>

See Notes to Consolidated Financial Statements.

                                                                               1

<PAGE>

                       TRANSNET CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                               THREE MONTHS ENDED SEPTEMBER 30,
                                               --------------------------------
                                                    2009              2008
                                               --------------    --------------

REVENUE
Equipment                                      $    3,402,561    $    5,928,328
Services                                            2,462,388         2,636,937
                                               --------------    --------------

Total Revenue:                                 $    5,864,949    $    8,565,265
                                               --------------    --------------

COST OF REVENUE
Equipment                                           2,761,807         4,984,605
Services                                            1,706,805         1,748,892
                                               --------------    --------------

Total Cost of Revenue                               4,468,612         6,733,497
                                               --------------    --------------

Gross Profit                                        1,396,337         1,831,768

Selling, General and Administrative Expenses        1,291,546         1,766,151
                                               --------------    --------------

Operating Income                                      104,791            65,617
                                               --------------    --------------

OTHER INCOME (EXPENSE):
Interest Income                                         3,724             6,669
Interest Expense                                       (6,453)          (21,855)
                                               --------------    --------------

Net Income                                     $      102,062    $       50,431
                                               ==============    ==============

Basic and Diluted Net Income Per Common
   Share                                       $         0.02    $         0.01
                                               ==============    ==============

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

See Notes to Consolidated Financial Statements.

                                                                               2

<PAGE>

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

                                               THREE MONTHS ENDED SEPTEMBER 30,
                                               --------------------------------
                                                    2009              2008
                                               --------------    --------------

OPERATING ACTIVITIES:
Net Income                                     $      102,062    $       50,431
                                               --------------    --------------
Adjustments to Reconcile Net Income to
   Net Cash:
Depreciation and Amortization                          20,176            37,339
Provision for Doubtful Accounts                       (82,823)               --

Changes in Assets and Liabilities:
(Increase) Decrease in:
Restricted Cash                                        (3,141)           (6,629)
Accounts Receivable                                   996,955           135,046
Inventory                                            (151,636)          (59,968)
Other Current Assets                                  (52,321)          (55,001)
Other Assets                                               --            (1,151)

Increase (Decrease) in:
Accounts Payable and Accrued Expenses              (1,443,409)          123,578
Unearned Revenue                                     (133,391)               --
                                               --------------    --------------

Total Adjustments                              $     (849,590)   $      173,214
                                               --------------    --------------

NET CASH - OPERATING ACTIVITIES                $     (747,528)   $      223,645
                                               --------------    --------------
INVESTING ACTIVITIES:
Capital Expenditures                           $      (14,589)   $       (4,630)
                                               --------------    --------------

FINANCING ACTIVITIES:
Line of Credit - Net                           $     (328,094)   $     (455,062)
                                               --------------    --------------

NET DECREASE IN CASH AND CASH EQUIVALENTS      $   (1,090,211)   $     (236,047)

CASH AND CASH EQUIVALENTS AT BEGINNING OF
   PERIODS                                     $    1,654,366    $      314,618
                                               --------------    --------------

CASH AND CASH EQUIVALENTS AT END OF
   PERIODS                                     $      564,155    $       78,571
                                               --------------    --------------

Supplemental Disclosures of Cash Flow
   Information:
Cash paid during the period for:
Interest                                       $        6,453    $       15,413
Income Taxes                                   $           --    $           --

See Notes to Consolidated Financial Statements.

                                                                               3

<PAGE>

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

(1.)  BASIS OF PRESENTATION

      The accompanying unaudited financial statements have been prepared in
      accordance with accounting principles generally accepted in the United
      States of America for interim financial information and with the
      instructions to Form 10-Q and Article 8 of Regulation S-X. They do not
      include all of the information and footnotes required by accounting
      principles generally accepted in the United States of America for complete
      financial statements. In the opinion of management, all adjustments
      (consisting of normal recurring accruals) considered necessary in order to
      make the interim financials not misleading have been included and all such
      adjustments are of a normal recurring nature. The operating results for
      the three months ended September 30, 2009 are not necessarily indicative
      of the results that can be expected for the year ending June 30, 2010.

      The balance sheet as of June 30, 2009 has been derived from the audited
      financial statements at such date, but does not include all of the
      information and footnotes required by accounting principles generally
      accepted in the United States of America for complete financial
      statements.

      The complete list of significant accounting policies followed by TransNet
      Corporation (the "Corporation") are set forth in Note 2 to the
      Corporation's consolidated financial statements in the Form 10-K for the
      fiscal year ended June 30, 2009.

      For further information, please refer to the consolidated financial
      statements and footnotes thereto included in the Corporation's Annual
      Report on Form 10-K for the year ended June 30, 2009.

      All material intercompany transactions have been eliminated in
      consolidation.

      Certain reclassifications have been made to prior period financial
      statements to conform to the current year presentation.

(2.)  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: The Corporation considers highly liquid
      debt instruments, purchased with a maturity of three months or less, to be
      cash equivalents.

      (d) Revenue Recognition: The Corporation's revenues are derived from both
      the sale of equipment and services provided to customers. Revenues related
      to equipment sales are recognized when evidence of an arrangement exists,
      delivery has occurred, the sales price is both fixed and determinable, and
      collectability is reasonably assured, in accordance with the FASB
      ACCOUNTING STANDARDS CODIFICATION (the "ASC") topic 605 REVENUE
      RECOGNITION.

      Revenues related to services provided are recognized ratably over the term
      of the underlying customer contract or at the end of the contract when
      obligations have been satisfied, in accordance with the ASC topic 605
      REVENUE RECOGNITION. For service performed on a time and materials basis,
      revenue is recognized upon performance.

                                                                               4

<PAGE>

      The Corporation also enters into revenue arrangements in which customers
      may purchase a combination of equipment and services (multiple-element
      arrangements). When vendor-specific objective evidence ("VSOE") of fair
      value exists for all elements, revenue is allocated to each element based
      on the relative fair value of each of the elements. VSOE of fair value is
      established by the price charged when that element is sold separately. For
      services, VSOE of fair value is established by the rates charged when they
      are sold separately. For arrangements where VSOE of fair value exists only
      for the undelivered elements, we defer the full fair value of the
      undelivered elements and recognize the difference between the total
      arrangement fee and the amount deferred for the undelivered items as
      revenue, assuming all other criteria for revenue recognition have been
      met.

      (e) Earnings Per Share: Earnings per common share - basic and diluted are
      based on 4,823,304 weighted shares outstanding for the three months ended
      September 30, 2009 and 2008. The options to purchase an aggregate of
      297,500 shares of our common stock at a price of $0.88 per share were not
      included in the computation of diluted earnings per share for the period
      ended September 30, 2009and 2008 because the options' exercise price was
      greater than the average market price of the common shares.

(3.)  NEW ACCOUNTING UPDATES

      On June 29, 2009, the FASB issued an accounting pronouncement establishing
      the FASB ACCOUNTING STANDARDS CODIFICATION (the "ASC") as the source of
      authoritative accounting principles recognized by the FASB to be applied
      by nongovernmental entities. This pronouncement was effective for
      financial statements issued for interim and annual periods ending after
      September 15, 2009, for most entities. On the effective date, all non-SEC
      accounting and reporting standards will be superseded. The Corporation
      adopted this new accounting pronouncement for the quarterly period ended
      September 30, 2009, as required, and adoption did not have a material
      impact on its financial statements taken as a whole.

      In April 2009, the FASB issued Staff Position ("FSP") SFAS 157-4,
      "DETERMINING FAIR VALUE WHEN THE VOLUME AND LEVEL OF ACTIVITY FOR THE
      ASSET OR LIABILITY HAVE SIGNIFICANTLY DECREASED AND IDENTIFYING
      TRANSACTIONS THAT ARE NOT ORDERLY," which was subsequently incorporated
      into FASB ASC topic 820, "FAIR VALUE MEASUREMENTS AND DISCLOSURES." This
      ASC emphasizes that even if there has been a significant decrease in the
      volume and level of activity, the objective of a fair value measurement
      remains the same. Fair value is the price that would be received to sell
      an asset or paid to transfer a liability in an orderly transaction (that
      is, not a forced liquidation or distressed sale) between market
      participants. The ASC provides a number of factors to consider when
      evaluating whether there has been a significant decrease in the volume and
      level of activity for an asset or liability in relation to normal market
      activity. In addition, when transactions or quoted prices are not
      considered orderly, adjustments to those prices based on the weight of
      available information may be needed to determine the appropriate fair
      value. The ASC also requires increased disclosures. This ASC is effective
      for interim and annual reporting periods ending after June 15, 2009. The
      adoption of this ASC did not have a material impact on the Corporation's
      results of operations or financial position.

      In April 2009, the FASB issued FSP SFAS 115-2 and SFAS 124-2, "RECOGNITION
      AND PRESENTATION OF OTHER-THAN-TEMPORARY IMPAIRMENTS," which was
      subsequently incorporated into ASC topic 320, "INVESTMENTS - DEBT AND
      EQUITY SECURITIES." The purpose of this ASC was to provide greater clarity
      to investors about the credit and noncredit component of an
      other-than-temporary impairment event and to communicate more effectively
      when an other-than-temporary impairment event has occurred. This ASC
      amends the other-than-temporary impairment guidance in GAAP for debt
      securities and improves the presentation and disclosure of
      other-than-temporary impairment on investment securities and changes the
      calculation of the other-than-temporary impairment

                                                                               5

<PAGE>

      recognized in earnings in the financial statements. This ASC does not
      amend existing recognition and measurement guidance related to
      other-than-temporary impairment of equity securities.

      For debt securities, ASC topic 320 requires an entity to assess whether
      (a) it has the intent to sell the debt security, or (b) it is more likely
      than not that it will be required to sell the debt security before its
      anticipated recovery. If either of these conditions is met, an
      other-than-temporary impairment on the security must be recognized.

      In instances in which a determination is made that a credit loss (defined
      as the difference between the present value of the cash flows expected to
      be collected and the amortized cost basis) exists but the entity does not
      intend to sell the debt security and it is not more likely than not that
      the entity will be required to sell the debt security before the
      anticipated recovery of its remaining amortized cost basis (i.e., the
      amortized cost basis less any current-period credit loss), ASC topic 320
      changes the presentation and amount of the other-than-temporary impairment
      recognized in the income statement.

      In these instances, the impairment is separated into (a) the amount of the
      total impairment related to the credit loss, and (b) the amount of the
      total impairment related to all other factors. The amount of the total
      other-than-temporary impairment related to the credit loss is recognized
      in earnings. The amount of the total impairment related to all other
      factors is recognized in other comprehensive loss and will be amortized
      over the remaining life of the debt security as an increase in the
      carrying value of the security (with no effect on earnings unless the
      security is subsequently sold or there is additional other-than-temporary
      impairment losses recognized). The total other-than-temporary impairment
      is presented in the income statement with an offset for the amount of the
      total other-than-temporary impairment that is recognized in other
      comprehensive loss. Previously, in all cases, if an impairment was
      determined to be other-than-temporary, an impairment loss was recognized
      in earnings in an amount equal to the entire difference between the
      security's amortized cost basis and its fair value at the balance sheet
      date of the reporting period for which the assessment was made. The new
      presentation provides additional information about the amounts that the
      entity does not expect to collect related to a debt security.

      ASC topic 320 is effective and is to be applied prospectively for
      financial statements issued for interim and annual reporting periods
      ending after June 15, 2009. When adopting ASC topic 320, an entity is
      required to record a cumulative-effect adjustment as of the beginning of
      the period of adoption to reclassify the noncredit component of a
      previously recognized other-than-temporary impairment from retained
      earnings to accumulated other comprehensive loss if the entity does not
      intend to sell the security and it is not more likely than not that the
      entity will be required to sell the security before the anticipated
      recovery of its amortized cost basis.

      In May 2009, the FASB issued SFAS 165 "SUBSEQUENT EVENTS," which was
      subsequently incorporated into FASB ASC topic 855 "SUBSEQUENT EVENTS."
      This ASC establishes general standards of accounting for and disclosures
      of events that occur after the balance sheet date but before financial
      statements are issued or are available to be issued. In particular, this
      ASC sets forth the period after the balance sheet date during which
      management of a reporting entity should evaluate events or transactions
      that may occur for potential recognition or disclosure in the financial
      statements, the circumstances under which an entity should recognize
      events or transactions occurring after the balance sheet date in its
      financial statements, and the disclosures that an entity should make about
      events or transactions that occurred after the balance sheet date. In
      accordance with this ASC, an entity should apply the requirements to
      interim or annual financial periods ending after June 15, 2009. Subsequent
      events were evaluated through November 13, 2009 which is the date the
      financial statements were issued. The impact of adoption of this ASC did
      not have a material impact on the results of operations or financial
      position of the Corporation.

                                                                               6

<PAGE>

      In June 2009, the FASB issued SFAS 166 "ACCOUNTING FOR TRANSFERS OF
      FINANCIAL ASSETS -- AN AMENDMENT OF FASB STATEMENT NO. 140." SFAS 166
      amends SFAS 140 and removes the concept of a qualifying special-purpose
      entity and limits the circumstances in which a financial asset, or portion
      of a financial asset, should be derecognized when the transferor has not
      transferred the entire financial asset to an entity that is not
      consolidated with the transferor in the financial statements being
      presented and/or when the transferor has continuing involvement with the
      transferred financial asset. The new standard will become effective for
      the Corporation on January 1, 2010. This update is not expected to have a
      material impact on the results of operations or financial position of the
      Corporation.

      In June 2009, the FASB issued SFAS 167 "AMENDMENTS TO FASB INTERPRETATION
      NO. 46(R)." SFAS 167 amends tests under Interpretation No. 46(R) for
      variable interest entities to determine whether a variable interest entity
      must be consolidated. SFAS 167 requires an entity to perform an analysis
      to determine whether an entity's variable interest or interests give it a
      controlling financial interest in a variable interest entity. SFAS 167
      requires ongoing reassessments of whether an entity is the primary
      beneficiary of a variable interest entity and enhanced disclosures that
      provide more transparent information about an entity's involvement with a
      variable interest entity. The new standard will become effective for the
      Corporation on January 1, 2010. This update is not expected to have a
      material impact on the results of operations or financial position of the
      Corporation.

(4.)  FAIR VALUE MEASUREMENTS

      We adopted ASC topic 820 FAIR VALUE MEASUREMENTS AND DISCLOSURES on July
      1, 2008 for all financial assets and liabilities and nonfinancial assets
      and liabilities that are recognized or disclosed at fair value in the
      financial statements on a recurring basis (at least annually). Topic 820
      defines fair value, establishes a framework for measuring fair value, and
      expands disclosures about fair value measurements.

      Topic 820 defines fair value as the price that would be received upon sale
      of an asset or paid upon transfer of a liability in an orderly transaction
      between market participants at the measurement date and in the principal
      or most advantageous market for that asset or liability. The fair value
      should be calculated based on assumptions that market participants would
      use in pricing the asset or liability, not on assumptions specific to the
      entity. In addition, the fair value of liabilities should include
      consideration of non-performance risk including our own credit risk.

      In addition to defining fair value, topic 820 expands the disclosure
      requirements around fair value and establishes a fair value hierarchy for
      valuation inputs. The hierarchy prioritizes the inputs into three levels
      based on the extent to which inputs used in measuring fair value are
      observable in the market. Each fair value measurement is reported in one
      of the three levels which is determined by the lowest level input that is
      significant to the fair value measurement in its entirety. These levels
      are:

            o     Level 1 - inputs are based upon unadjusted quoted prices for
                  identical instruments traded in active markets.

            o     Level 2 - inputs are based upon quoted prices for similar
                  instruments in active markets, quoted prices for identical or
                  similar instruments in markets that are not active, and
                  model-based valuation techniques for which all significant
                  assumptions are observable in the market or can be
                  corroborated by observable market data for substantially the
                  full term of the assets or liabilities.

            o     Level 3 - inputs are generally unobservable and typically
                  reflect management's estimates of assumptions that market
                  participants would use in pricing the asset or liability. The
                  fair

                                                                               7

<PAGE>

                  values are therefore determined using model-based techniques
                  that include option pricing models, discounted cash flow
                  models, and similar techniques.

The following table presents assets that are measured and recognized at fair
value on a recurring basis.

                                 SEPTEMBER 30,
            DESCRIPTION              2009        LEVEL 1    LEVEL 2    LEVEL 3
            -----------          -------------   -------   ---------   -------

      Certificate of Deposit       $ 866,762      $  --    $ 866,762    $  --

(5.)  DEBT

      The Corporation previously financed inventory purchases through a credit
      line with a finance company, with a maximum credit line of $2,500,000,
      which was terminated by the Corporation in fiscal 2009. The Corporation
      currently utilizes credit available from multiple vendors under terms
      which provide for interest free periods ranging from 30 to 60 days. The
      credit extended by the vendors is secured by substantially all of the
      Corporation's assets. The vendors may in their sole discretion from time
      to time determine the maximum amount of credit which they elect to extend.

(6.)  INCOME TAXES

      The following reconciles the tax provision with the U.S. statutory tax
      rates:

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED SEPTEMBER 30,
                                                           2009      2008
<S>                                                        <C>       <C>
         Income taxes at U.S. statutory rate               (35.0)%   (35.0)%
         State taxes, net of federal tax benefit            (6.0)     (6.0)
         Tax benefit of federal net operating tax
            loss carryforward                               41.0      41.0
         TOTAL EXPENSE (BENEFIT)                               0%        0%
                                                          ======    ======
</TABLE>

      At June 30, 2009, the Corporation had a federal net operating tax loss
      carryforward of approximately $9.6 million, which will begin to expire on
      June 30, 2024. The Corporation has provided a full valuation allowance
      against its deferred tax asset due to the uncertainty about its
      realization.

                                                                               8

<PAGE>

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

SPECIAL NOTE ABOUT FORWARD LOOKING STATEMENTS

Certain statements in Management's Discussion and Analysis ("MD&A"), other than
purely historical information, including estimates, projections, statements
relating to our business plans, objectives, and expected operating results, and
the assumptions upon which those statements are based, are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements generally are
identified by the words "believe," "project," "expect," "anticipate,"
"estimate," "intend," "strategy," "plan," "may," "should," "will," "would,"
"will be," "will continue," "will likely result," and similar expressions
identify forward-looking statements, but are not the exclusive means of
identifying such statements and their absence does not mean that a statement is
not forward-looking. Forward-looking statements are based on current
expectations and assumptions that are subject to risks and uncertainties, which
may cause actual results to differ materially from the forward-looking
statements. Except as required by law, we undertake no obligation to update or
revise publicly any forward-looking statements, whether as a result of new
information, future events, or otherwise.

RESULTS OF OPERATIONS

Earnings for the quarter ended September 30, 2009 increased as compared to the
same quarter in the prior year, despite a decrease in overall revenues. For the
quarter ended September 30, 2009, the Corporation reported net income of
$102,062 as compared with net income of $50,431 for the quarter ended September
30, 2008. The increase in earnings was due to an increase in gross profit
margins as a result of the Corporation's focus on sales and service of more
sophisticated and complex IT and physical security systems. Revenues for the
quarter ended September 30, 2009 were $5,864,949, as compared to $8,565,265
reported for the same quarter in the prior year. Revenues for fiscal quarter
ended September 30, 2009 decreased as compared to the same quarter in the prior
year as a result of an overall slowdown in business stemming from the national
recession. Revenues from equipment sales decreased, while service related
revenues (technical support, repair and maintenance, network integration,
staffing, and training) remained relatively constant.

Revenues decreased in the first quarter of fiscal 2010 as compared to the same
quarter in fiscal 2009 due to the general slowdown resulting from the recession,
including a significant reduction in purchases by state, and local governmental
agencies, and educational customers (K-12 through higher education)
(collectively "Public Sector" clients) and restrictions on capital expenditures
experienced by many clients. Service revenues remained relatively constant as
the Corporation increased the number of technical staff in the field as well as
their billable hours. Uncertainty of our Public Sector clients regarding the
proposed federal stimulus package added to the slowdown while their projects
were on hold pending funding parameters. Once fully implemented, the stimulus
package is expected to provide an influx of capital for these clients to use for
programs such as security and first-responder technology. During the September
2009 quarter, the new "agency model" purchasing mechanisms recently instituted
by the State of New Jersey contributed to the decrease in equipment sales
revenue. Under this model, certain orders are processed directly by our hardware
partners, who receive purchase orders directly, and ship and invoice our clients
directly. TransNet is paid an agency fee for generating the transaction.
Although these transactions lower the amount of revenue realized, they provide
payment of the fee within a shorter period than the typical payment period for
sales invoiced by the Corporation, and free our funding for other transactions.
Sales under this agency model were not a material source of revenues. Despite
the reduction in hardware sales, because of management's concentration on sales
of higher margin equipment such as Voice over Internet Protocol ("VoIP") systems
and physical security systems, overall profit margins increased to 24% for the
fiscal 2010 quarter from 21% in the same quarter in fiscal 2009. Cost of

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equipment sold may be impacted by the Corporation's eligibility for temporary
incentives, such as rebates, offered by equipment manufacturers from time to
time. The Corporation's eligibility for the rebates is usually subject to
minimum sales levels and satisfaction of other criteria established by the
manufacturers in their sole discretion. Rebates received during the September
2009 quarter did not have a material impact upon cost of equipment sold.

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 sales of higher profit margin IT
equipments, optimizing the utilization rates of its service technicians, and
reducing selling and administrative expenses. Management notes during the first
quarter of fiscal 2010, the Corporation had an increased backlog of open orders
as compared to the same period in the prior year. In addition, Management
optimistically notes that the requests for quotations increased by approximately
10% since the end of fiscal 20009. Although no assurance can be given, based
upon the number of open sales orders and the number of requests for quotations,
Management believes that will continue its profitability into the second quarter
of fiscal 2010.

Management believes that future spending will be subject to specific criteria,
but also believes that as single source provider, the Corporation is in a better
position to satisfy client demands for cost-effectiveness and a suitable return
on investment. The VoIP systems and solutions marketed by TransNet are designed
with the capacity for "optimization" through the subsequent addition of layers
of solutions, for example, security solutions, paving the way to future business
from existing customers. The Corporation reviews and modifies its service
offerings in response to industry fluctuations, and has recruited experienced
and specially certified systems engineers and project managers to respond to
increased VoIP projects. We are confident that our strategy of being an advanced
solutions provider will result in future revenues from clients' optimization of
already installed networks, providing clients with greater operating
efficiencies.

Service related revenues, a material portion of revenues, are significant in
their contributions to net income because these operations typically yield a
higher profit margin than equipment sales. Service revenues are generated
primarily by services including planning, design, configuration, installation
and implementation, testing, and optimization, often related to the sale and
implementation of VoIP networks. As previously reported, due to industry changes
over the past few years, project work became the major source of service revenue
generation. Revenues are also generated by a variety of support contracts for
these networks which 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. 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 or less. In addition, our system
engineers and service technicians provide service and support on an on-call
basis.

During the fiscal periods discussed, the Corporation performed under contract
awards for VoIP products and services, 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. Construction related
delays are typical in a number of projects because the Corporation's portion of
the project cannot be performed until a specified amount of the construction has
been completed and/or certain determinations made as to specifics of the project
due to customer-originated change orders. None of these delays had any
significant impact upon the operations of the Corporation. During the fiscal
periods discussed, the Corporation's clients continued to be conservative in
their IT budgetary spending and to scrutinize

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budgets and returns on investments. As a result, Management refocused its
attention on utilization rates of its service technicians and monitoring
selling, general and administrative expenses in an effort to contain expenses as
much as possible.

In addition to the challenging economic environment, the IT industry experiences
a continuing trend of decreasing prices of 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 and has taken steps to
reduce expenses. Management also utilizes approaches such as manufacturers'
direct shipment as a means to reduce equipment related overhead costs which
increases profits. Management's current marketing strategy is designed to shift
its focus to provision of technical services and to sales of lower
revenue/higher profit margin products related to service and support operations.
Management's efforts include targeting commercial and public sector 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. 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.

The Corporation's performance is also impacted by other factors, many of which
are not within its control. These factors include: industry and general economic
conditions; availability of credit; 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; and
product constraints.

In the second fiscal quarter of fiscal 2009, Management initiated aggressive
steps to significantly reduce selling, general and administrative expenses and
to adjust the allocation of personnel to increase the number of employees
providing billable services. Despite the actual reduction in expenses, as a
result of the lower amount of revenues, selling, general and administrative
expenses for the quarter ended September 30, 2009, were 22% of revenues as
compared to 21% of revenues for the comparative quarter in the prior year.
Management continues its efforts to monitor control expenses, despite increasing
personnel related costs, such as health benefits.

Interest income decreased in the first fiscal quarter of 2010 as compared to the
same quarter in the prior year as a result of lower interest rates and lower
amounts invested. Interest expense decreased in the comparative quarters due to
the use of better financing options available to the Corporation.

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LIQUIDITY AND CAPITAL RESOURCES

There are no material commitments of the Corporation's capital resources, other
than leases, a third party line of credit, and employment contracts.

Cash and cash equivalents decreased in the quarter ended September 30, 2009, as
cash was used to fund operations. Cash levels continue to be impacted by the
slow payment cycles of Public Sector clients and extended payment cycles from
some commercial clients as a result of the economic downturn. The Corporation
has entered into vendor credit arrangements to assist in purchasing inventory
and provide more flexibility with respect to cash. A portion of the vendor
credit is secured by certain of the Corporation's assets.

The amount of cash received from or used by operating activities will vary based
on a number of business factors which may vary at different times, including
terms of available financing from vendors, and slowdowns or upturns in our
business or that of our customers. A decline in service revenues and/or a change
in the proportion of service revenues to total revenues may affect operating
cash flow as the bulk of the Corporation's service revenues are derived from
billing of our technical staff's services. The cash outlay for the labor/payroll
underlying these services is incurred on a semi-monthly basis. Billing is
determined by timeframes set by our clients.

Accounts receivable decreased for fiscal 2009 due to reduced revenues. Although
the Corporation continues to be impacted by the extended and slower payment
cycles of commercial customers and governmental agencies, Management continues
its vigorous efforts to expedite payments from the governmental bodies and is
working to implement more favorable payment schedules where possible. Management
notes that payment terms with governmental clients are usually dictated by the
client.

Inventories increased in fiscal 2010 quarter due to existing open orders. The
decrease in accounts payable during the quarter ended September 30, 2009 is
attributable to the reduction in revenues. Amounts outstanding under the line of
credit decreased because purchases were made using vendor credit.

We require access to working capital from a third party line of credit and
vendor credit to fund our day-to-day operations, particularly at the end of our
fiscal quarters when demand for our products and services increase. We have made
a concerted effort to improve our working capital position and implemented
measures to reduce headcount, streamline operations, and manage costs in
response to the impact of the recession. In conjunction with the tightening of
credit in the US economy, which has negatively impacted our access to credit,
management has reviewed the Corporation's line of credit and available vendor
credit and has taken steps to obtain the most favorable credit arrangements
available. The Corporation previously financed inventory purchases through a
credit line with a finance company, with a maximum credit line of $2,500,000,
which was terminated by the Corporation in fiscal 2009 because the modified
terms were unfavorable. Management currently utilizes various vendor credit
options, all of which provide the Corporation with more favorable payment terms
than those available under the prior credit line. Management believes that its
cash balance and access to credit will be sufficient to fund its operations for
the next twelve months. The unavailability of such credit going forward may have
an adverse impact upon the operations of the Corporation.

IMPACT OF INFLATION

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

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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

The Corporation's revenues are derived from both the sale of equipment and
services provided to our customers. Revenues related to our equipment sales are
recognized when evidence of an arrangement exists, delivery has occurred, the
sales price is both fixed and determinable, and collectability is reasonably
assured, in accordance with the ASC topic 605 REVENUE RECOGNITION.

Revenues related to services provided are recognized ratably over the term of
the underlying customer contract or at the end of the contract when obligations
have been satisfied, in accordance with the ASC topic 605 REVENUE RECOGNITION.
For service performed on a time and materials basis, revenue is recognized upon
performance.

The Corporation enters into revenue arrangements in which customers may purchase
a combination of equipment and services (multiple-element arrangements). When
vendor-specific objective evidence ("VSOE") of fair value exists for all
elements, we allocate revenue to each element based on the relative fair value
of each of the elements. VSOE of fair value is established by the price charged
when that element is sold separately. For services, VSOE of fair value is
established by the rates charged when they are sold separately. For arrangements
where VSOE of fair value exists only for the undelivered elements, we defer the
full fair value of the undelivered elements and recognize the difference between
the total arrangement fee and the amount deferred for the undelivered items as
revenue, assuming all other criteria for revenue recognition have been met.

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 IT 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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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, 2009, that the
Corporation's disclosure controls and procedures are not 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.

In light of this conclusion, the Corporation continues its efforts regarding
documentation of its policies and procedures, and will institute compensating
procedures and processes as necessary to ensure the reliability of its financial
reporting. Management intends to remediate weaknesses in the control environment
through new resources and processes in its accounting department. Management
believes that its actions will continue to improve the Corporation's internal
control over financial reporting, as well as its disclosure controls and
procedures.

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. The Corporation has commenced a review by its internal
staff, including its accounting staff, of new processes to provide an evaluation
of the level of controls and related procedures currently in place for each
process.

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                                     PART II
                                OTHER INFORMATION

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

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

      B.  Reports on Form 8-K -
            On September 30, 2009, 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 13, 2009

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