---

SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-QSB

| |   |                                                                                            | 
| | - | ------------------------------------------------------------------------------------------ | 
| | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
  OF THE SECURITIES EXCHANGE ACT OF 1934  | 
| |   |                                                                                            | 
| |   | For the Quarterly Period Ended September 30, 2007                                          | 
| |   |                                                                                            | 
| |   | Or                                                                                         | 
| |   |                                                                                            | 
| | o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
  OF THE SECURITIES EXCHANGE ACT OF 1934 | 

For the Transition Period from
_________________ to _________________

COMMISSION FILE NUMBER: 0-25413

FIRST TRANSACTION MANAGEMENT, INC.(Exact Name of
Small Business Issuer as Specified in
its Charter)

|                                  |  |  |  |                    
|--------------------------------- |  |  |  | -------------------
|DELAWARE                          |  |  |  | 52-2158936         
|(State or Other Jurisdiction      |  |  |  | (IRS Employer      
|of Incorporation or Organization) |  |  |  | Identification No.)

381 SE Crystal Creek Circle, Issaquah, WA
98027(Address of Principal Executive Offices)

(206) 355-1467(Issuers Telephone Number, Including Area Code)

Check whether the Issuer (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 o

Indicate by check mark whether
the Registrant is a shell company (as defined in Rule 12b-2 of the Securities
Exchange Act of 1934).

|      |  |     
|----- |  | ----
|YES x |  | NO o

State the
number of shares outstanding of each of the Issuers classes of common equity
as of the latest practicable date: As of October 22, 2007 the Registrant had
7,258,704 shares of common stock outstanding.

Transitional
Small business Disclosure Format (Check one): YES o       
   NO x

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FIRST TRANSACTION MANAGEMENT, INC.FORM 10-QSBFor the quarterly period ended September 30,
2007

INDEX

|               |                                                                                                               |      | 
|-------------- | ------------------------------------------------------------------------------------------------------------- | ---- | 
|               |                                                                                                               | Page
|               |                                                                                                               |      | 
|PART I         | FINANCIAL INFORMATION                                                                                         |      | 
|               |                                                                                                               |      | 
|Item 1         | Balance Sheets at December 31, 2006 and September 30, 2007 (unaudited
  at September 30, 2007)                | 3    | 
|               |                                                                                                               |      | 
|               | Statements of Operations for the three and nine month periods ended
  September 30, 2007 and 2006 (unaudited) | 4    | 
|               |                                                                                                               |      | 
|               | Statement of Changes in Stockholders Equity for  the nine months ended September 30, 2007
  (unaudited)      | 5    | 
|               |                                                                                                               |      | 
|               | Statements of Cash Flows for the nine months ended September 30, 2007
  and 2006 (unaudited)                  | 6    | 
|               |                                                                                                               |      | 
|               | Notes to Consolidated Financial Statements                                                                    | 7    | 
|               |                                                                                                               |      | 
|Item 2         | Managements Discussion and Analysis or Plan of Operation                                                     | 12   | 
|               |                                                                                                               |      | 
|Item 3         | Controls and Procedures                                                                                       | 16   | 
|               |                                                                                                               |      | 
|PART II        |                                                                                                               |      | 
|               |                                                                                                               |      | 
|Item 1         | Legal Proceedings                                                                                             | 16   | 
|               |                                                                                                               |      | 
|Item 2         | Unregistered Sales of Equity Securities and Use of Proceeds                                                   | 16   | 
|               |                                                                                                               |      | 
|Item 3         | Defaults Upon Senior Securities                                                                               | 16   | 
|               |                                                                                                               |      | 
|Item 4         | Submission of Matters to a Vote of Security Holders                                                           | 16   | 
|               |                                                                                                               |      | 
|Item 5         | Other Information                                                                                             | 16   | 
|               |                                                                                                               |      | 
|Item 6         | Exhibits                                                                                                      | 16   | 
|               |                                                                                                               |      | 
|Signatures     |                                                                                                               | 17   | 
|               |                                                                                                               |      | 
|Certifications |                                                                                                               |      | 

2

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Item 1. Financial Statements

FIRST TRANSACTION MANAGEMENT, INC
(A Development Stage Company)
BALANCE SHEET

|                                                                                                      |  |                                |            |                             |   |            |  
|----------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | --------------------------- | - | ---------- | -
|                                                                                                      |  | September 30,
 2007
 Unaudited |            | December 31,
 2006
 Audited |  
|                                                                                                      |  |                                |            |                             |  
|ASSETS                                                                                                |  |                                |            |                             |   |            |  
|Current Assets                                                                                        |  |                                |            |                             |   |            |  
|Cash                                                                                                  |  | $                              | 143,672    |                             | $ | 11,644     |  
|                                                                                                      |  |                                |            |                             |   |            |  
|Total current assets                                                                                  |  |                                | 143,672    |                             |   | 11,644     |  
|                                                                                                      |  |                                |            |                             |   |            |  
|Long Term Assets                                                                                      |  |                                |            |                             |   |            |  
|Intangible & other assets, net                                                                        |  |                                | 6,440      |                             |   | 8,588      |  
|                                                                                                      |  |                                |            |                             |   |            |  
|TOTAL ASSETS                                                                                          |  | $                              | 150,112    |                             | $ | 20,232     |  
|                                                                                                      |  |                                |            |                             |   |            |  
|LIABILITIES & EQUITY                                                                                  |  |                                |            |                             |   |            |  
|Liabilities                                                                                           |  |                                |            |                             |   |            |  
|Current Liabilities                                                                                   |  |                                |            |                             |   |            |  
|Accounts payable & accrued expenses                                                                   |  | $                              | 59,565     |                             | $ | 10,000     |  
|Interest payable                                                                                      |  |                                | 232,271    |                             |   | 214,303    |  
|                                                                                                      |  |                                |            |                             |   |            |  
|Total current liabilities                                                                             |  |                                | 291,836    |                             |   | 224,303    |  
|                                                                                                      |  |                                |            |                             |   |            |  
|Long Term Liabilities                                                                                 |  |                                |            |                             |   |            |  
|Loan payable - stockholder                                                                            |  |                                | 773,541    |                             |   | 773,541    |  
|                                                                                                      |  |                                |            |                             |   |            |  
|Total liabilities                                                                                     |  |                                | 1,065,377  |                             |   | 997,844    |  
|                                                                                                      |  |                                |            |                             |   |            |  
|                                                                                                     
|Equity                                                                                                |  |                                |            |                             |   |            |  
|Common stock; 15,000,000 shares authorized;
 
 7,258,704 shares issued and outstanding, par value .01 |  |                                | 72,587     |                             |   | 72,587     |  
|Additional paid in capital                                                                            |  |                                | 1,303,145  |                             |   | 1,303,145  |  
|Deficit accumulated during the development
 stage                                                     |  |                                | (2,290,997 | )                           |   | (2,353,344 | )
|                                                                                                      |  |                                |            |                             |   |            |  
|Total equity                                                                                          |  |                                | (915,265   | )                           |   | (977,612   | )
|                                                                                                      |  |                                |            |                             |   |            |  
|                                                                                                      |  |                                |            |                             |   |            |  
|                                                                                                      |  |                                |            |                             |   |            |  
|TOTAL LIABILITIES & EQUITY                                                                            |  | $                              | 150,112    |                             | $ | 20,232     |  
|                                                                                                      |  |                                |            |                             |   |            |  

See Notes to Financial Statements.

3

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FIRST TRANSACTION MANAGEMENT, INC(A Development Stage Company)STATEMENT
OF OPERATIONS

|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|------------------------------------------ |  | ---------------------------------------------------- | --------- | --------------------------------------------------- | - | --------- | - | ---- | --------- | - | - | --------- | -
|                                           |  | For the Three Months Ended
 September 30,
 Unaudited |           | For the Nine Months Ended
 September 30,
 Unaudited |  
|                                           |  |                                                      |           |                                                     |  
|                                           |  | 2007                                                 |           | 2006                                                |   | 2007      |   | 2006 |          
|                                           |  |                                                      |           |                                                     |   |           |   |      |          
|INCOME                                     |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|Fees - consulting                          |  | $                                                    | 173,361   |                                                     | $ | 390       |   | $    | 229,321   |   | $ | 5,702     |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|Total income                               |  |                                                      | 173,361   |                                                     |   | 390       |   |      | 229,321   |   |   | 5,702     |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|EXPENSES                                   |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|Operating expense                          |  |                                                      | 23,320    |                                                     |   | 4,316     |   |      | 118,519   |   |   | 13,984    |  
|Depreciation & Amortization                |  |                                                      | 716       |                                                     |   | 1,334     |   |      | 2,148     |   |   | 2,669     |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|Total expenses                             |  |                                                      | 24,036    |                                                     |   | 5,650     |   |      | 120,667   |   |   | 16,653    |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|Net operating income                       |  |                                                      | 149,325   |                                                     |   | (5,260    | ) |      | 108,654   |   |   | (10,951   | )
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|OTHER INCOME/EXPENSE                       |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|Other income                               |  |                                                      | 91        |                                                     |   |          |   |      | 106       |   |   |          |  
|Interest expense                           |  |                                                      | 15,471    |                                                     |   | 15,471    |   |      | 46,413    |   |   | 46,413    |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|Net other income/expense                   |  |                                                      | (15,380   | )                                                   |   | (15,471   | ) |      | (46,307   | ) |   | (46,413   | )
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|Net income before taxes                    |  |                                                      | 133,945   |                                                     |   | (20,731   | ) |      | 62,347    |   |   | (57,364   | )
|Provision for income taxes                 |  |                                                      |          |                                                     |   |          |   |      |          |   |   |          |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|NET INCOME
 (LOSS)                         |  | $                                                    | 133,945   |                                                     | $ | (20,731   | ) | $    | 62,347    |   | $ | (57,364   | )
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |  |                                                      | 5,747,695 |                                                     |   | 5,161,305 |   |      | 5,747,695 |   |   | 5,090,127 |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  
|AVERAGE GAIN (LOSS) PER COMMON SHARE       |  | $                                                    | 0.02      |                                                     | $ | (0.00     | ) | $    | 0.01      |   | $ | (0.01     | )
|                                           |  |                                                      |           |                                                     |   |           |   |      |           |   |   |           |  

See Notes to Financial Statements.

4

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FIRST TRANSACTION MANAGEMENT, INC
(A Development Stage Company)

STATEMENTS
OF STOCKHOLDERS EQUITY
For the Period Ended June 30, 2007

|                           |  |                    |                 |  |           |  |   |        |       |                          |           |                                               |   |            |   |   |          |  
|-------------------------- |  | ------------------ | --------------- |  | --------- |  | - | ------ | ----- | ------------------------ | --------- | --------------------------------------------- | - | ---------- | - | - | -------- | -
|                           |  |                    |                 |  |           |  |   |        |       | AdditionalPaid-inCapital |           | DeficitAccumulatedDuring
 theDevelopmentStage |   |            |   |  
|                           |  | Date ofTransaction |                 |  |           |  |   |        |       |                          |           |                                               |   |           
|                           |  |                    | Common Stock    |  |           |  |   |        |      
|                           |  |                    |                 |  |           |  |   |        |      
|                           |  |                    | Numberof Shares |  | ParValue  |  |   |        | Total |                         
|                           |  |                    |                 |  |           |  |   |        |       |                          |           |                                               |  
|                           |  |                    |                 |  |           |  |   |        |       |                          |           |                                               |   |            |   |   |          |  
|Balance, December 31, 2006 |  |                    |                 |  | 7,258,704 |  | $ | 72,587 |       | $                        | 1,303,145 |                                               | $ | (2,353,344 | ) | $ | (914,469 | )
|Dividends paid on stock    |  |                    |                 |  |           |  |   |        |       |                          |           |                                               |   |            |   |   |          |  
|Stock-based compensation   |  |                    |                 |  |           |  |   |        |       |                          |           |                                               |   |            |   |   |          |  
|Net income/(loss) for 2007 |  |                    |                 |  |           |  |   |        |       |                          |           |                                               |   | 62,347     |   |   | 62,347   |  
|                           |  |                    |                 |  |           |  |   |        |       |                          |           |                                               |   |            |   |   |          |  
|Balance September 30, 2007 |  |                    |                 |  | 7,258,704 |  | $ | 72,587 |       | $                        | 1,303,145 |                                               | $ | (2,290,997 | ) | $ | (852,122 | )
|                           |  |                    |                 |  |           |  |   |        |       |                          |           |                                               |   |            |   |   |          |  

See Notes to Financial Statements.

5

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FIRST TRANSACTION MANAGEMENT, INC
(A Development Stage Company)

STATEMENTS
OF CASH FLOWS

|                                                                     |  |                                                      |         |      |   |         |  
|-------------------------------------------------------------------- |  | ---------------------------------------------------- | ------- | ---- | - | ------- | -
|                                                                     |  | For the Nine Months Ended 
 September 30,
 Unaudited |        
|                                                                     |  |                                                      |        
|                                                                     |  | 2007                                                 |         | 2006 |  
|                                                                     |  |                                                      |         |      |  
|CASH FLOWS
 FROM OPERATING ACTIVITIES                                |  |                                                      |         |      |   |         |  
|Net income/(loss)                                                    |  | $                                                    | 62,347  |      |   | (20,731 | )
|Adjustments to reconcile net loss to net
 cash flows from operations |  |                                                      |         |      |   |         |  
|Depreciation/amortization                                            |  |                                                      | 2,148   |      |   | 1,334   |  
|Change in other operating assets and
 liabilities                    |  |                                                      |         |      |   |         |  
|Accounts payable and accrued expenses                                |  |                                                      | 67,533  |      |   | (29,163 | )
|                                                                     |  |                                                      |         |      |   |         |  
|Net cash flows used in operating activities                          |  |                                                      | 132,028 |      |   | (48,560 | )
|                                                                     |  |                                                      |         |      |   |         |  
|                                                                     |  |                                                      |         |      |   |         |  
|CASH FLOWS
 FROM INVESTING ACTIVITIES                                |  |                                                      |         |      |   |         |  
|Purchase of intangible assets and
equipment                          |  |                                                      |        |      |   | (3,984  | )
|                                                                     |  |                                                      |         |      |   |         |  
|Net cash flows used in investing activities                          |  |                                                      |        |      |   | (3,984  | )
|                                                                     |  |                                                      |         |      |   |         |  
|                                                                     |  |                                                      |         |      |   |         |  
|CASH FLOWS
 FROM FINANCING ACTIVITIES                                |  |                                                      |         |      |   |         |  
|None                                                                 |  |                                                      |        |      |   |        |  
|                                                                     |  |                                                      |         |      |   |         |  
|                                                                     |  |                                                      |        |      |   |        |  
|                                                                     |  |                                                      |         |      |   |         |  
|                                                                     |  |                                                      |         |      |   |         |  
|Net increase (decrease) in cash                                      |  |                                                      | 132,028 |      |   | (52,544 | )
|                                                                     |  |                                                      |         |      |   |         |  
|Cash and
 cash equivalents, beginning of period                      |  |                                                      | 11,344  |      |   | 37,539  |  
|                                                                     |  |                                                      |         |      |   |         |  
|                                                                     |  |                                                      |         |      |   |         |  
|Cash and
 cash equivalents, end of period                            |  | $                                                    | 143,372 |      | $ | (15,005 | )
|                                                                     |  |                                                      |         |      |   |         |  
|                                                                     |  |                                                      |         |      |   |         |  
|Supplemental
 Disclosure                                             |  |                                                      |         |      |   |         |  
|Interest                                                             |  | $                                                    | 28,444  |      | $ | 6,000   |  

See Notes to Financial Statements.

6

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FIRST TRANSACTION MANAGEMENT, INC.

NOTES TO
FINANCIAL STATEMENTS
For the Nine Months Ended September 30, 2007

|       |                                          
|------ | -----------------------------------------
|NOTE 1 | ORGANIZATION
 AND DESCRIPTION OF BUSINESS

First Transaction
Management, Inc. (the Company), a development stage company, was incorporated
in the State of Delaware on March 25, 1999 as Creative Products International,
Inc. The Company was a subsidiary of another corporation until December 23,
1999, when it was spun-off. In 2002, the Company elected to change its name to
First Transaction Management to more directly reflect its business interests in
web based promotion and transaction processing management services. Effective,
December 31, 2004, the Company discontinued its business efforts and is
currently seeking new economic opportunities, including a merger transaction.

|       |                                            
|------ | -------------------------------------------
|NOTE 2 | SUMMARY
 OF SIGNIFICANT ACCOUNTING POLICIES

Cash

The Company considers all
highly liquid debt instruments purchased with maturity of three months or less
to be cash equivalents. Cash balances regularly fall under the federally
insured limit covered by the Federal Deposit Insurance Corporation (FDIC) as of
September 30, 2007.

Use of accounting estimates in preparation of financial
statements

The preparation of financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Property, plant & equipment

Property and equipment,
including computer equipment, are recorded at cost and are depreciated over the
estimated useful lives. Expenditures for routine maintenance and repairs are
charged to expenses as incurred. Trademarks and copyrights are recorded at cost
and are amortized over their legal lives or their estimated useful lives, whichever
is shorter, using the straight-line method. They are reviewed annually to
assess recoverability; impairment will be recognized in results of operations
when intangible assets are deemed unrecoverable.

Capitalization of software

FASB EITF Issue No. 00-2, Accounting for Web Site Development Costs,
states that the identification of software needed for a company shall be
expensed as incurred. Such software includes web applications needed for the
web sites functionalities, and those required for development purposes.
However, if the company chooses to acquire or develop software, AICPA Statement
of Position 98-1, Accounting for the Costs
of Computer Software Developed or Obtained for Internal Useallows
capitalization. The method of software capitalization depends on the intended
use. Costs incurred in the purchasing or development of software can be

7

---



capitalized unless they are
used in research and development and do not have alternative future uses or
represent a pilot project. Costs of acquired or developing for general web site
operations require capitalization of external direct costs of materials and
services used in the acquisition or development. Costs of acquired or developed
software for the integration of distributed applications into web applications
are capitalized. During the period from 2002-2007 the company capitalized
certain costs in accordance with the aforementioned standards.

Amortization is recorded
using the straight-line method over the estimated useful lives of the assets
that do not exceed ten years. The Company periodically reviews intangible
assets to assess recoverability. Impairment will be recognized in results of
operations when intangible assets are deemed unrecoverable.

Research and development

Research and development costs
are expensed during the period incurred.

Revenue recognition

The Company recognizes
revenue at the time of service or as contractual terms are satisfied.

Earnings per share

Basic earnings per share are
computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding in the period. Diluted earnings per
share takes into consideration common shares outstanding (computed under basic
earnings per share) and potentially dilutive common shares; however, there are
no dilutive securities.

The weighted average number
of shares outstanding for the quarter ended September 30, 2007 is as follows:

|                    |  |          
|------------------- |  | ---------
|September
 30, 2007 |  | 5,747,695

Stock based compensation

The Company
adopted a stock-based compensation plan in 1999. The plan provides for options
to be granted to officers, directors and employees to acquire a maximum of
1,000,000 shares of the Companys stock. Compensation cost for stock options
was measured as the excess, if any, of the value of the Companys stock at the
date of the grant over the amount an employee is required to pay for the stock.
During 2001, the Companys Board of Directors approved the organization of
another stock option plan for technology and web related employees and
consultants. A maximum of 750,000 shares of the Companys common stock was
available for issuance under the plan. No stock options were issued under this
plan. As of September 30, 2007 all stock options issued to former employees,
consultants and directors have expired.

8

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The following is a summary of
stock option plan activity from inception to September 30, 2007:

|                                      |                         |         |                     |   |                                     |      | 
|------------------------------------- | ----------------------- | ------- | ------------------- | - | ----------------------------------- | ---- | 
|                                      |                         |         | Number of
  Options |   | Weighted
  Average
  Exercise Price
|                                      |                         |         |                     |   |                                    
|                                      |                         |         |                     |   |                                     |     
|Outstanding
  at December 31, 1999    |                         | 19,000  |                     | $ | .30                                 |     
|                                      | Granted
  during 2000   |         | 395,000             |   | $                                   | 1.05 | 
|                                      | Exercised
  during 2000 |         | 0                   |   |                                     |      | 
|                                      | Forfeited
  during 2000 |         | 55,000              |   |                                     |      | 
|                                      |                         |         |                     |   |                                     |      | 
|Outstanding
  at December 31, 2000    |                         | 469,000 |                     | $ | .95                                 |     
|                                      | Granted
  during 2001   |         | 210,000             |   | $                                   | 1.51 | 
|                                      | Exercised
  during 2001 |         | 0                   |   |                                     |      | 
|                                      | Forfeited
  during 2001 |         | 110,000             |   |                                     |      | 
|                                      |                         |         |                     |   |                                     |      | 
|Outstanding
  at December 31, 2001    |                         | 569,000 |                     | $ | 1.21                                |     
|                                      | Granted
  during 2002   |         | 25,000              |   | $                                   | 1.50 | 
|                                      | Exercised
  during 2002 |         | 0                   |   |                                     |      | 
|                                      | Forfeited
  during 2002 |         | 49,000              |   |                                     |      | 
|                                      |                         |         |                     |   |                                     |      | 
|Outstanding
  at December 31, 2002    |                         | 545,000 |                     | $ | 1.20                                |     
|                                      | Granted
  during 2003   |         | 0                   |   |                                     |      | 
|                                      | Exercised
  during 2003 |         | 0                   |   |                                     |      | 
|                                      | Forfeited
  during 2003 |         | 0                   |   |                                     |      | 
|                                      |                         |         |                     |   |                                     |      | 
|Outstanding
  at December 31, 2003    |                         | 545,000 |                     | $ | 1.20                                |     
|                                      | Granted
  during 2004   |         | 0                   |   |                                     |      | 
|                                      | Exercised
  during 2004 |         | 0                   |   |                                     |      | 
|                                      | Forfeited
  during 2004 |         | 15,000              |   |                                     |      | 
|                                      |                         |         |                     |   |                                     |      | 
|Outstanding
  at December 31, 2004    |                         | 530,000 |                     | $ | 1.23                                |     
|                                      | Granted
  during 2005   |         | 0                   |   |                                     |      | 
|                                      | Exercised
  during 2005 |         | 0                   |   |                                     |      | 
|                                      | Forfeited
  during 2005 |         | 320,000             |   |                                     |      | 
|                                      |                         |         |                     |   |                                     |      | 
|Outstanding
  at December 31, 2005    |                         | 210,000 |                     | $ | 1.51                                |     
|                                      | Granted
  during 2006   |         | 0                   |   |                                     |      | 
|                                      | Exercised
  during 2006 |         | 0                   |   |                                     |      | 
|                                      | Forfeited
  during 2006 |         | 210,000             |   |                                     |      | 
|                                      |                         |         |                     |   |                                     |      | 
|Outstanding
  at December 31, 2006    |                         | 0       |                     |   |                                    |     
|                                      |                         |         |                     |   |                                     |      | 
|Outstanding
  at September 30th, 2007 |                         | 0       |                     |   |                                    |     

These options
and the warrants discussed in Note 4 were
not included in the computation of earnings per share because they are
anti-dilutive.

9

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Income Taxes

Income taxes
are accounted for using the asset and liability approach, which requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or tax
returns. Deferred income taxes will be provided for the temporary differences
between the financial reporting basis and the tax basis of the Companys assets
and liabilities. A valuation allowance will be recognized for deferred tax
assets not likely to be realized. Deferred taxes are to be measured by the
provisions of currently enacted tax laws. There were no material temporary
differences at September 30, 2007.

Comprehensive income

The Company had no elements of
comprehensive income for the period ended September 30, 2007. Further, there
are no other new financial accounting standards that would have an effect on
these financial statements.

|       |                  
|------ | -----------------
|NOTE 3 | CAPITAL STRUCTURE

At September
30, 2007, the Company had 7,258,704 shares of common stock, par value $.01 per
share, issued and outstanding, 71.3% of which were held by the Companys CEO
and the remainder by approximately 130 other parties. Common shares are voting
and dividends are paid at the discretion of the Board of Directors. The Company
has never paid a dividend on its common stock, and it is the present policy of
the Company not to pay cash dividends on the common stock.

The Company has authorized
1,000,000 shares of preferred stock at a par value of $.01 per share. No
preferred shares have been issued as of September 30, 2007.

|       |         
|------ | --------
|NOTE 4 | WARRANTS

Pursuant to a private
placement, the Company issued, in the aggregate, warrants to purchase 375,000
shares of the Companys common stock at $1.50 per share. The warrants expire 5
years from the date the Companys common stock begins trading on an exchange.
No warrants have been exercised from the date of grant. The Companys CEO
received warrants to purchase 100,000 shares pursuant to an investment in the
private placement.

|       |                               
|------ | ------------------------------
|NOTE 5 | WRITE OFF OF INTANGIBLE ASSETS

From inception to September 30,
2007, the Company wrote off an aggregate $146,983 of intangible assets related
to its web based promotion distribution and transaction processing services.

|       |              
|------ | -------------
|NOTE 6 | GOING CONCERN

As shown in the financial
statements, the Company incurred a net loss since inception of $2,290,997. This
result raises concerns about the Companys ability to continue as a going
concern. The Companys ability to continue as a going concern is contingent
upon its ability to achieve positive cash flow from operating and financing
activities. There is no assurance that the Company will be successful in its
efforts to significantly improve its financial and operating condition, attract
new investors or develop the strategic partnerships necessary to meet the
Companys business and financial objectives.

10

---



|       |             
|------ | ------------
|NOTE 7 | INCOME TAXES

There was no
provision for federal, or state and local income taxes as the Company has
sustained losses. As of September 30, 2007, the Company had accumulated
approximately $2.2 million of net operating loss carry forwards for federal
income tax purposes, which begin to expire in 2019.

Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. The difference between the tax loss
carry forward and the Companys financial statement losses is due to
differences in amortization rates on intangible assets and certain accrued
expenses which are deductible for income tax purposes only when paid.

In assessing the realizability
of deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the period in which the net operating loss carry
forwards can be utilized. Since the Company is in the development stage and it
is uncertain when the Company will begin generating future taxable income, the
Company has provided a full valuation allowance for deferred tax assets at
December 31, 2006.

|                                             |                                    |  |   |           |  
|-------------------------------------------- | ---------------------------------- |  | - | --------- | -
|Deferred
 tax asset as of December 31, 2006: |                                    |  |   |          
|                                             | Net
 operating loss carry forwards |  | $ | 2,263,098 |  
|                                             |                                    |  |   |           |  
|                                             | Total
 deferred tax asset          |  |   | 769,453   |  
|                                             | Valuation
 allowance               |  |   | (769,453  | )
|                                             |                                    |  |   |           |  
|                                             | Net deferred
 tax asset            |  | $ |          |  
|                                             |                                    |  |   |           |  

|        |                           
|------- | --------------------------
|NOTE 10 | RELATED PARTY TRANSACTIONS

On July 12,
2000, the Company entered into a loan agreement with an officer and director,
which provided for the repayment of the outstanding balance plus accrued simple
interest at 8 percent per annum on the loan balance. The note and accompanying
security agreement provide a first lien over all of the Companys assets,
including equipment, intellectual property and liquid assets. The note holder
is entitled to convert some or all of the outstanding obligation, plus accrued
but unpaid interest, into shares of the Companys common stock at the rate of
$.08 per share. From inception through September 30, 2007, the lender advanced
$1,248,541 of which $475,000 of this amount had been converted into common
stock equity.

As of October
22, 2007, warrants to purchase a total of 270,000 shares of common stock have
been provided to the officer and director pursuant to the loan agreement terms.
All lender warrants have expired, and the outstanding balance of the note
payable is $773,541.

It is the
policy of the Company with respect to insider transactions, that all
transactions between the Company, its officers, directors, principal
stockholders and their affiliates be on terms no less favorable to the Company
that could be obtained from unrelated third parties in arms-length
transactions, and that all such transactions shall be approved by a majority of
the disinterested members of the Board of Directors. The Company believes the
transactions described above complied with such policy.

11

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Item 2. Managements Discussion and Analysis or Plan of Operation

The following
discussion and analysis of our financial condition and results of operations
should be read in conjunction with our financial statements and notes thereto
and other financial information included elsewhere in this report.

NOTE ON
FORWARD LOOKING STATEMENTS

This quarterly
report on Form 10-QSB includes and incorporates by reference forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934 with respect to
our financial condition, results of operations, plans, objectives, future
performance and business, which are usually identified by the use of words such
as will, may, anticipates, believes, estimates, expects,
projects, plans, predicts, continues, intends, should,
would or
similar expressions. We intend for these forward looking statements to be
covered by the safe harbor provisions for forward looking statements contained
in the Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with these safe harbor provisions.

These
forward-looking statements reflect our current views and expectations about our
plans, strategies and prospects, which are based on the information currently
available and on current assumptions.

We cannot give
any guarantee that these plans, intentions or expectations will be achieved.
Investors are cautioned that all-forward-looking statements involve risks and
uncertainties, and actual results may differ materially from those discussed in
the forward-looking statements as a result of various factors, including those
Risk Factors set forth in our Form 10-KSB for the fiscal year ended December
31, 2006. You should read this quarterly report and the documents that we
incorporate by reference in this quarterly report completely and with the
understanding that our actual future results may be materially different from
what we expect. We may not update these forward-looking statements, even though
our situation may change in the future. We qualify all of our forward-looking
statements by these cautionary statements.

Overview

First
Transaction Management, Inc. (the Company), a development stage company, was
incorporated in the State of Delaware on March 25, 1999, to develop certain
consumer products and web based promotion and transaction processing management
services. Effective December 31, 2004, the Company discontinued its business
efforts related to web based promotion management services and is currently
seeking new economic opportunities, including a merger transaction. From 2002
to present, the Company generated ancillary revenues from general business
consulting services to support its nominal operations. These consulting
services have been unrelated to the Companys prior interests in promotion
management services. The Company does not have any contractual commitments to
provide business management consulting services to any customer. In addition,
the Company has devoted its efforts to seeking other economic opportunities,
including, but not limited to, the possibility of acquiring a new line of
business through a business combination. There is no assurance that the Company
will be able to secure additional customers for its ancillary consulting
services to generate interim working capital to support the Companys efforts
to identify new economic opportunities for the Company.

12

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Critical Accounting
Policies and Estimates

Managements
discussion and analysis of the Companys financial condition and results of operations are
based on its financial statements which have been prepared in accordance with
accounting principles generally accepted in the U.S. The preparation of these
financial statements requires the Company to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements,
as well as the revenues and expenses during the reporting periods. The Company
evaluates its estimates and judgments on an ongoing basis. The Company bases
its estimates on historical experience and on various other factors it believes
are reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

Recovery of
long-lived assets (other than goodwill)

In accordance
with Statement of Financial Accounting Standards (SFAS) No.144, Accounting for
the Impairment or Disposal of Long-Lived Assets, the Company reviews these
types of assets for impairment whenever events or circumstances indicate that
carrying amount may not be recoverable over the remaining life of the assets or
assets group. In order to determine if the asset or asset group is recoverable,
the Company determines if the expected future cash flows directly related to
the asset or asset group are less than the carrying amount of the asset or
asset group. If so, the Company then determines if the carrying amount of the
asset or asset group exceeds its fair value. The Company determines fair value
using estimated discounted cash flows.

Revenue
Recognition

The Company
maintains its financial records on the accrual basis of accounting. There was
no revenue generated from the Companys development stage promotion management
services. Since December 31, 2002, the Company has generated nominal revenues
from various consulting services. These services are primarily billed on a
project completion basis and revenues are reported when all goods and services
have been performed or delivered, the amounts are readily determinable and
collection is reasonably assured. The Company does not have any contractual
commitments to provide any additional business management consulting services
to any customer.

Income Taxes

Assessment of
the appropriate amount and classification of income taxes is dependent on
several factors, including estimates of the timing and probability of
realization of deferred income taxes and the timing of income tax payments.
This process requires the Company to estimate its actual current tax exposure
together with an assessment of temporary differences resulting from differing
treatment of items, such as depreciation on property, plant and equipment, for
tax and accounting purposes. These differences may result in deferred tax
assets and liabilities, which are included within our balance sheet. Since the
Company has a net operating losses carry forward of approximately $2.1 million
at December 31, 2006, a valuation allowance is provided on deferred tax assets
if it is determined that it is more likely than not the asset will not be
realized, because the ultimate realization of any deferred tax assets will be
dependent on future taxable income.

13

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Results of
Operations

Comparison of the Three Month Fiscal Period
Ended September 30, 2007 to the Three Month Fiscal Period Ended September 30,
2006

Revenues from
consulting services in the fiscal quarter ended September 30, 2007 (the 2007
Third Quarter) were $173,361, as compared to $390 in the fiscal quarter ended
September 30, 2006 (the 2006 Third Quarter). This increase is attributable
to more consulting client service activity in the 2007 Third Quarter. Total
operating expenses before depreciation and amortization increased from $4,316
for the 2006 Third Quarter to $23,320 for the 2007 Third Quarter, representing
a 540% increase. The primary reason for such increase in operating expenses is
the higher costs associated with increased consulting activity. Depreciation
and amortization decreased from $1,334 in the 2006 Third Quarter to $716 in the
2007 Third Quarter, representing a 46% decrease. The Companys operating
results improved from a loss of $5,260 in the 2006 Third Quarter to an
operating profit of $149,325 in the 2007 Third Quarter. This improvement is
primarily attributable to increased consulting fees. Accrued interest expense
associated with loan advances provided to the Company by its controlling
shareholder and sole director and officer during 2000 to 2002 for each of the
2007 Second Quarter and the 2006 Third Quarter was $15,471. The Company earned
$91 in interest income for the 2007 Third Quarter.

As a result of
the foregoing, the Company generated net income of $133,945 for the 2007 Third
Quarter, as compared to a net loss of $20,731 for the 2006 Third Quarter. The
weighted net loss per share for the 2007 Third Quarter was not material as
compared to a weighted net income per share of $.02.

As the
Companys current focus and that for the next 12 months is on effecting a
business combination, the Company does not believe that quarter to quarter and
year to year comparisons of its historical results of operations are meaningful
in predicting the Companys future financial performance. All of the Companys
revenues in the 2007 Third Quarter and the 2006 Third Quarter were generated
from providing ancillary consulting services. The Company does not have any
contractual commitments to provide such services in the future and no assurance
can be given that the Company will obtain any such contracts. Even if the
Company is able to procure such contracts, the timing of procurement, the
length of the services and the completion date of such services are generally
beyond the Companys control. Accordingly, it is anticipated that the Companys
results of operations will fluctuate from quarter to quarter and from fiscal
year to fiscal year.

Comparison of the Nine Month Period Ended
September 30, 2007 to the Nine Month Period Ended September 30, 2006

Revenues from
consulting services in the nine month period ended September 30, 2007 (the
2007 Period) were $229,321, as compared to $5,702 in the nine month period
ended September 30, 2006 (the 2006 Period), representing an 3,922% increase.
This increase is attributable to more consulting client service activity in the
2007 Period. Total operating expenses before depreciation and amortization
increased from $13,984 for the 2006 Period to $118,519 for the 2007 Period,
representing a 748% increase. The primary reason for the increase in operating
expenses was audit and accounting related expenses and $60,000 in accrued legal
fees. Depreciation and amortization decreased from $2,669 in the 2007 Period to
$2,148 in the 2006 Period, representing a 20% decrease. The Companys operating
results improved from an operating loss of $10,951 in the 2006 Period to
generating operating income of $108,654 in the 2007 Period. Accrued interest
expense associated with loan advances provided to the Company by its
controlling shareholder and current sole director and officer during 2000 to
2002 for each of the 2007 Period and the 2006 Period was $46,413. The Company
earned $106 in interest income during the 2007 Period.

14

---



As a result of
the foregoing, the Company generated net income of $62,347 for the 2007 Period,
as compared to a net loss of $57,364 for the 2006 Period. The weighted net loss
per share for the 2006 Period was $.01. The weighted net income per share for the
2007 Period was $.01.

Liquidity,
Capital Resources and Going Concern

From inception
of the Company through 2002, the Company has been primarily funded through
loans provided by our controlling shareholder and current sole officer and
director, equity investments by her, a nominal private placement and the
initial capitalization provided at the time of spin off from its then parent in
1999. From 2003 to present, the Company has maintained nominal operations
through the cash flows provided by limited engagement consulting activities.
The Company intends to rely on ancillary consulting services to fund its
nominal operations until it can find a new business opportunity or business
combination for the Company. The Company may also issue additional common or preferred
shares to raise additional funds to finance new business acquisitions or to pay
for professional services or other costs associated with such acquisitions.
There is no assurance, however, that additional working capital or financing
from these sources can be obtained on acceptable terms or that a business
combination can be completed.

The Company
had $143,672 in cash and cash equivalents at September 30, 2007 and $11,644 at
December 31, 2006. The Company had current liabilities of $59,565 in accrued professional
fees and $232,271 in accrued interest payable at September 30, 2007; $10,000 in
accrued professional fees and $214,303 in accrued interest payable at December
31, 2006. The Company had total assets, including intangible assets, of $150,112
at September 30, 2007 and $20,232 at December 31, 2006. Long-term liabilities
on each of such dates were $773,541, representing the loan to the Company from
its controlling shareholder and current sole officer and director. This loan
continues to accrue interest at the rate of 8% per annum.

Management
believes that the Companys existing financial resources and anticipated
revenues from ancillary consulting services will not be sufficient to fund
operations for the foreseeable future. Therefore, the Company will have to seek
additional loans or raise additional capital. No assurances can be given that
the Company will be able to obtain such loans or raise additional capital. If
the Company is unable to do so, it may have to curtail its operations or defer
any combination with another entity.

At September
30, 2007, the Company had a stockholders deficiency of $2,290,997 and a
working capital deficit of $148,164. At December 31, 2006, the Company had a
stockholders deficiency of $2,353,344 and a working capital deficit of
$212,659.Further, the Company
has a history of generating net income losses. These conditions indicate that
the Company may be unable to continue as a going concern. Its ability to do so
is dependent on its finding economic opportunities that will achieve profitable
operations, obtaining necessary financing and finding a suitable candidate for
a business combination. No adjustments have been provided in the Companys
financial statements that might result form the outcome of this uncertainty. Our
auditors have referred to the substantial doubt about our ability to continue
as a going concern.

15

---



Item
3. Controls and Procedures

Disclosure Controls. As of the end of the
period covered by this Report, with the participation of our Chief Executive
and Chief Financial Officer, we evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) of the Securities Exchange Act of 1934). Based upon that evaluation,
our Chief Executive and Chief Financial Officer concluded that as of the end of
such period, our disclosure controls and procedures were effective as of the
end of the period covered by this Report in timely alerting her to material
information relating to First Transaction Management, Inc. required to be
disclosed in our periodic reports with the Securities and Exchange Commission.
In addition, our Chief Executive and Chief Financial Officer concluded that as
of the end of such period, our disclosure controls and procedures are also effective
to ensure that information required to be disclosed in the reports that we file
or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified and that such information is
accumulated and communicated to our management, including our Chief Executive
and Chief Financial Officer, to allow timely decisions regarding required
disclosure. There were no changes in our disclosure controls during the period
covered by this Report on Form 10-QSB.

PART II
OTHER INFORMATION

Item
1. Legal Proceedings

None

Item
2. Unregistered Sales of Equity Securities

None.

Item
3. Defaults Upon Senior Securities

None

Item
4. Submission of Matters to a Vote of Security Holders

None

Item
5. Other Information

None

Item
6. Exhibits and Reports on Form 8-K

|    |                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|(a) | Exhibits                                                                                                                             
|    |                                                                                                                                      
|    | 31.1
 Certification of the Chief Executive and the Chief Financial Officer pursuant
 to Section 302 of the Sarbanes-Oxley Act of 2002
|    |                                                                                                                                      
|    | 32.1
 Certification of the Chief Executive and the Chief Financial Officer pursuant
 to 18 U.S.C. Section 1350                       
|    |                                                                                                                                      
|(b) | Reports on
 Form 8-K                                                                                                                 
|    |                                                                                                                                      
|    | None.                                                                                                                                

16

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SIGNATURES

In accordance
with 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, duly
authorized.

FIRST
TRANSACTION MANAGEMENT, INC.

|    |                                          
|--- | -----------------------------------------
|By: | /s/ Susan
 Schreter                      
|    |                                          
|    | Susan
 Schreter, Chief Executive Officer,
|    | Chief
 Financial Officer and President   

Dated: October
25, 2007

17

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