UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549
                                    ---------

                                    FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the quarter ended     September 30, 1997    Commission File Number   0-8693

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

               Delaware                                      22-1892295
            (State or other jurisdiction of              (I.R.S. Employer
            incorporation or organization)              Identification No.)

            45 Columbia Road
            Somerville, New Jersey                           08876-3376
            (Address of principal executive offices)        (Zip code)

Registrant's telephone number, including area code:             (908) 253-0500
                                                        ----------------------


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  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                              Yes   X      No


Indicate the number of shares outstanding of each of the issuer's classes of 
common stock as of November 7, 1997:  5,216,804.


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TRANSNET CORPORATION AND SUBSIDIARY
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INDEX TO FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997.
------------------------------------------------------------------------------





PART I:  FINANCIAL INFORMATION

Item 1.  Financial Statements

   Consolidated Balance Sheets as of September 30, 1997 [Unaudited]
   and June 30, 1997 [Audited]...................................... 1.....  2

   Consolidated Statements of Operations for the Three Months
   Ended September 30, 1997 and 1996 [Unaudited].................... 3.....

   Consolidated Statements of Cash Flows for the Three Months Ended
   September 30, 1997 and 1996 [Unaudited].......................... 4.....

   Notes to Consolidated Financial Statements [Unaudited]........... 5.....  8

Item 2.  Managements' Discussion and Analysis of the Financial
         Condition and Results of Operations........................ 9..... 11

PART II: OTHER INFORMATION..........................................12.....

SIGNATURES..........................................................13.....





                         . . . . . . . . . . . . . . .


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TRANSNET CORPORATION AND SUBSIDIARY
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CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------
<TABLE>



                                                          September 30,   June 30,
                                                             1 9 9 7       1 9 9 7
Assets:
Current Assets:
<S>                                                        <C>          <C>        
  Cash and Cash Equivalents                                $2,138,760   $ 3,336,917
  Accounts Receivable - Net                                10,459,428     8,986,318
  Inventories                                               3,007,550     3,274,462
  Land                                                        519,638            --
  Deferred Tax Asset                                          334,700       334,700
  Other Current Assets                                        278,275       324,546
                                                           ----------   -----------

  Total Current Assets                                     16,738,351    16,256,943

Property and Equipment - Net                                  850,674       916,254

Other Assets                                                  520,442     1,051,101
                                                           ----------   -----------

  Total Assets                                             $18,109,467  $18,224,298
                                                           ===========  ===========

Liabilities and Stockholders' Equity:
Current Liabilities:
  Accounts Payable                                         $2,592,868   $   965,340
  Accrued Expenses                                            738,788       650,242
  Floor Plan Payable                                        2,195,484     4,384,040
  Deferred Income                                             281,597       162,576
  Other Current Liabilities                                   209,705       264,481
                                                           ----------   -----------

  Total Current Liabilities                                 6,018,442     6,426,679
                                                           ----------   -----------

Deferred Tax Liability                                         97,700        97,700
                                                           ----------   -----------

Commitments and Contingencies                                      --            --
                                                           ----------   -----------

Stockholders' Equity:
  Capital Stock - Common, $.01 Par Value, Authorized
   15,000,000 Shares; Issued 7,469,524 Shares
   [of which 2,252,720 are in Treasury]                        74,695        74,695

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

  Retained Earnings                                         7,449,528     7,156,122
                                                           ----------   -----------

  Totals                                                   18,210,968    17,917,562
  Less:  Treasury Stock - At Cost                          (6,217,643)   (6,217,643)
                                                           ----------   -----------

  Total Stockholders' Equity                               11,993,325    11,699,919
                                                           ----------   -----------

  Total Liabilities and Stockholders' Equity               $18,109,467  $18,224,298
                                                           ===========  ===========



See Notes to Consolidated Financial Statements.

</TABLE>
                                        1

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TRANSNET CORPORATION AND SUBSIDIARY
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CONSOLIDATED STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------
<TABLE>




                                                               Three months ended
                                                                  September 30,
                                                               1 9 9 7     1 9 9 6
                                                               -------     -------

<S>                                                         <C>         <C>        
Revenue                                                     $19,513,585 $16,539,108

Cost of Revenue                                              17,574,117  14,696,920
                                                            ----------- -----------

  Gross Profit                                                1,939,468   1,842,188
                                                            ----------- -----------

Expenses:
  Selling, General and Administrative Expenses                1,674,272   1,560,137
  Bad Debt Expense                                                7,500       7,500
                                                            ----------- -----------

  Total Expenses                                              1,681,772   1,567,637
                                                            ----------- -----------

  Operating Income                                              257,696     274,551
                                                            ----------- -----------

Other Income [Expense]:
  Interest Income                                                43,710      28,032
  Interest Expense                                                   --      (5,302)
                                                            ----------- -----------

  Other Income - Net                                             43,710      22,730
                                                            ----------- -----------

  Income Before Provision for Income Taxes                      301,406     297,281

Provision for Income Tax                                          8,000          --
                                                            ----------- -----------

  Net Income                                                $   293,406 $   297,281
                                                            =========== ===========

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

</TABLE>


See Notes to Consolidated Financial Statements.




                                         2

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TRANSNET CORPORATION AND SUBSIDIARY
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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<TABLE>



                                                               Three months ended
                                                                  September 30,
                                                               1 9 9 7     1 9 9 6
                                                               -------     -------
Operating Activities:
<S>                                                         <C>         <C>        
  Net Income                                                $   293,406 $   297,281
                                                            ----------- -----------
  Adjustments  to  Reconcile  Net  Income  to Net Cash 
   Provided  by [Used  for]
   Operating Activities:
   Depreciation and Amortization                                 77,580      88,803

  Changes in Assets and Liabilities:
   [Increase] Decrease in:
     Accounts Receivable                                     (1,473,110)   (403,789)
     Inventory                                                  266,912     501,650
     Other Current Assets                                        46,271     225,597
     Other Assets                                                  (979)       (979)

   Increase [Decrease] in:
     Accounts Payable and Accrued Expenses                    1,716,074  (1,016,950)
     Deferred Income                                            119,021     (65,969)
     Other Current Liabilities                                  (54,776)    (65,375)
                                                            ----------- -----------

   Total Adjustments                                            696,993    (737,012)
                                                            ----------- -----------

  Net Cash - Operating Activities                               990,399    (439,731)
                                                            ----------- -----------

Investing Activities:
  Capital Expenditures                                               --     (21,237)
                                                            ----------- -----------

Financing Activities:
  Floor Plan Payable                                         (2,188,556)   (234,690)
                                                            ----------- -----------

  Net [Decrease] in Cash and Cash Equivalents                (1,198,157)   (695,658)

Cash and Cash Equivalents - Beginning of Periods              3,336,917   2,383,741
                                                            ----------- -----------

  Cash and Cash Equivalents - End of Periods                $ 2,138,760 $ 1,688,083
                                                            =========== ===========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the periods for:
   Interest                                                 $       --   $    6,000
   Income Taxes                                             $   18,000   $   17,000
</TABLE>

Supplemental Disclosures of Non-Cash Investing Activities:
  During 1996,  $520,790 of other assets were placed into service and classified
as property and equipment.

  During 1997, the Company  disposed of $138,126 of fully  depreciated  property
and equipment.



See Notes to Consolidated Financial Statements.

                                         3

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TRANSNET CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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[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.  During the prior year, the Corporation  liquidated four inactive
subsidiaries whose activities were previously merged with the Corporation.

[B]  Inventory  -  Inventory  consists  of  finished  goods.  The  Corporation's
inventory is valued at the lower of cost  [determined on the average cost basis]
or market.

[C] Cash and Cash Equivalents - For the purposes of the statement of cash flows,
the  Corporation  considers  highly liquid debt  instruments,  purchased  with a
maturity of three months or less, to be cash equivalents.

[D]  Earnings  Per Share -  Earnings  per  common  share are based on  5,216,804
weighted shares outstanding for the period ended September 30, 1997 and 1996.

[2] Income Taxes

The  Corporation  has a deferred  tax asset of $334,700  based  primarily on net
operating loss carryforwards of approximately $650,000. A valuation allowance of
$372,000 has been provided  against this deferred asset.  Realization of the tax
asset is dependent upon future events effecting utilization of the net operating
loss carryforwards ("NOL's"). NOL's expire in the years 2005 and 2006.

Current  tax  expense of  $117,000  has been  offset by the net  operating  loss
carryforward benefit of $117,000.

[3] Reclassification

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

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

These  statements  should be read in conjunction with the summary of significant
accounting  policies and notes contained in the  Corporation's  annual report on
Form 10-K for the year ended June 30, 1997.

                                        4

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TRANSNET CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2
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[4] Subsequent Events

[A] On October 31, 1997, the  Corporation  executed an Asset Purchase  Agreement
providing  for the sale for a  maximum  $20.5  million  cash  purchase  price of
substantially all of its operating assets, subject to certain liabilities,  to a
wholly-owned  subsidiary of GE Capital Information  Technology  Solutions,  Inc.
["GEITS"].  GEITS is an  affiliate  of GE  Capital  Services  which in turn is a
wholly-owned  subsidiary of General Electric Company. The sale is subject to the
approval of TranNet's  stockholders at a stockholder  meeting anticipated in the
first  quarter of calendar  1998,  as well as the  occurrence  of certain  other
conditions.

[B]  On  November  11,1997,  the  Corporation  executed  an  agreement  to  sell
approximately 6.32 acres of unimproved real property in Mountainside, New Jersey
[the "real  property"]  to W Realty LLC ["W Realty] for the  appraised  value of
$1,000,000.  W Realty is a partnership  consisting of John J. Wilk,  Chairman of
the Board,  and Raymond J. Rekuc,  a Director of the  Corporation.  The purchase
price is payable  through a credit  extended  by W Realty as  sub-lessor  to the
Corporation  as sub-lessee  for the $410,000 of rent payable by the  Corporation
over  the  last  two  years  of its  sublease  for  its  principal  facility  in
Somerville,  New Jersey  and a $590,000  promissory  note  executed  by W Realty
payable in  installments  of $150,000 in February  1998 and $440,000 in November
1998.  The note bears  interest  at the rate of 8% per annum and is secured by a
mortgage on the Real Property.  The Real Property was specifically excluded from
the assets which the Corporation  agreed,  subject to stockholder  approval,  to
sell to GEITS [See Note 4A].






                       . . . . . . . . . . . . . . . . .


                                        5

<PAGE>



Item 2:

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




Results of Operations

Revenues for the three  months  ended  September  30, 1997 were  $19,513,585  as
compared  with  $16,539,108  for the quarter ended  September 30, 1996.  For the
quarter ended September 30, 1997 the Corporation reported net income of $293,406
as compared  with net income of $297,281 for the  corresponding  period in 1996.
The  increase  in  revenues is due to  increases  in  hardware  sales as well as
increased  sales  of the  Corporation's  technical  services  (hardware  service
contracts, technical support contracts and training).

Earnings for the quarter ended September 30, 1997 are  attributable to increased
revenues,  including a  significant  increase in sales of hardware and technical
services  to  governmental  and  educational  institutions,  which  in  turn  is
attributable  to  the  seasonal  nature  of  their  budgets;   and  management's
concentration  on sales of network and system  integration  products which yield
higher profit margins,  continued growth of the Corporation's  technical service
and support programs, and continued adherence to cost control measures.  Service
related revenues,  though not a material source of the  Corporation's  revenues,
are  significant in their  contributions  to earnings  because these  operations
yield a higher profit margin than equipment  sales. In addition to the technical
services sales  referenced  above, for the quarter ended September 30, 1997, the
increase in revenues from the  provision of service,  support,  outsourcing  and
network  integration is largely the result of the  Corporation  renewing  and/or
entering into service contracts with a number of large corporate customers. Most
of these  contracts are  short-term,  usually twelve months or less, and contain
provisions  which permit early  termination.  Although the  contracts  generally
contain renewal terms, there is no assurance that such renewals will occur.

The  computer  industry  continually  faces  a trend  of  decreasing  prices  of
computers  and  related  equipment.  Management  believes  that this  trend will
continue.  Industrywide,  the  result of price  erosion  has been  lower  profit
margins on sales, which require businesses to sell a greater volume of equipment
to maintain past earning levels.  Another result of the price decreases has been
intensified  competition  within the industry,  including the  consolidation  of
businesses  through merger or acquisition and the entrance of manufacturers into
technical services business.  Management  believes that the adoption of policies
by many larger corporate  customers to limit the number of vendors  permitted to
provide goods and services for specified  periods of time has further  increased
price  competition.  To meet these  competitive  challenges  and to maximize the
Corporation's profit margin,  management has modified its marketing strategy and
has  enforced  expense  controls.  Management's  current  marketing  strategy is
designed  to  increase  sales of lower  revenue/higher  profit  margin  products
related  to  service  and  support  operations.   Management's  efforts  include
targeting  commercial,  educational  and  governmental  customers  which provide
marketplaces  for a  wide  range  of  products  and  services  at  one  time,  a
cost-effective  approach  to sales.  Management  believes it  maximizes  profits
through  concentration  on sales of value-added  applications;  promotion of the
Corporation's   service  and  support   operations;   and  strict  adherence  to
cost-cutting  controls.  In  light  of  the  above,  management  emphasizes  and
continues  the  aggressive  pursuit of an increased  volume of equipment  sales,
technical service and support programs, and promotion of its training services.

Interest  income for the quarter  increased  as  compared  to the  corresponding
period in the prior year because of the increase in the amount of funds invested
and higher yields. Interest expense decreased in the quarter ended September 30,
1997 compared to the same period in 1996 as a result of management's  efforts to
shorten the  collection  cycles of accounts  receivables  and  payables,  with a
resulting reduction in related financing costs.

Selling,  general and administrative  expenses remained  relatively  constant at
approximately  9% of revenues for the quarter ended September 30, in both fiscal
1997 and 1996 periods,  due to  management's  strict  adherence to  cost-control
measures.

                                        6

<PAGE>



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



Liquidity and Capital Resources

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

The  Corporation  currently  finances a portion of its accounts  receivable  and
finances   purchases  of  portions  of  its  inventory  through   floor-planning
arrangements  under  which  such  inventory  secures  the  amount   outstanding.
Inventory  decreased in the quarter ended  September 30, 1997 as compared to the
corresponding period in 1996 in response to increased inventory turns related to
the higher volume of sales.  Management  shall  continue its efforts to increase
turnover  and to provide  the  Corporation  with  protection  against  inventory
obsolescence  resulting  from the rapid  technological  advances of the computer
industry.

Accounts  receivable  increased  for the  quarter  ended  September  30, 1997 as
compared to the same period in fiscal 1997 as a direct result of the increase in
revenues.  Accounts  payable  decreased for the quarter ended September 30, 1997
compared  with the same  period in 1996 as a result of  management's  efforts to
shorten  payables  cycles and thereby  avoid floor plan  financing  costs.  Cash
levels decreased in the three months ended September 30, 1997 as compared to the
corresponding  period  in  1996.  The  decrease  is  due  to  scheduled  payment
requirements under the floor planning arrangements.

For the fiscal quarter ended  September 30, 1997, as in the fiscal quarter ended
September 30, 1996, the internal resources of the Corporation were sufficient to
enable the Corporation to meet its obligations.

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

The Corporation  currently  intends to (i) take corrective  action under the IRS
Walk-in  Closing  Agreement   Program  ("CAP"),   (ii)  apply  for  a  favorable
determination  letter with respect to the Plan from the IRS, and (iii) terminate
the Plan.  The CAP program  provides a correction  mechanism for "non  amenders"
such as the  Corporation.  Under  CAP,  the  Corporation  will be  subject  to a
monetary sanction (which could range from $1,000 to approximately  $40,000).  In
addition,   the  Corporation   will  be  required  to  correct,   retroactively,
operational violations,  and to pay any resulting excise taxes and PBGC premiums
and penalties that may be due.  Special counsel has advised the Corporation that
although  it  believes  that  the  Corporation  will  incur  some  liability  in
connection  with  the  correction  of  such  operational  violations,  it is not
possible to estimate the  potential  amount of or the range of liability at this
time. Such counsel has also advised that depending on the corrections  required,
such liability could range from an insignificant to a material amount,  but that
due to the uncertainties  involved, any estimate in dollar terms of the range of
any such liability at this time would be speculative and potentially misleading.

                                        7

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
PART II - OTHER INFORMATION
------------------------------------------------------------------------------



Item 6:Exhibits and Reports on Form 8-K

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

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

                                        8

<PAGE>


SIGNATURES
------------------------------------------------------------------------------






Pursuant to the  requirements of Section 13 or 15(d) 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


Date: November 18, 1997                By:
                                          Steven J. Wilk,
                                          Chief Executive Officer



Date: November 18, 1997                By:
                                          John J. Wilk,
                                          Chief Financial and Accounting Officer



                                        9

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