UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.
20549





FORM 10-K


(Mark
One)


x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934


For
the fiscal year ended December 31, 2008.




or


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


For
the transition period fromto.





Commission
File Number 000-27615




FIRST
TRANSACTION MANAGEMENT, INC.


(Exact
name of registrant as specified in its charter)


Delaware
              
              52-2158936State
      or other jurisdiction of
                incorporation
      or organization
              
              (I.R.S.
      Employer
                Identification
      No.)c/o
      Castle Bison, Inc.
                31200
      Via Colinas, Suite 200
                Westlake
      Village, CA
                (Address
      of principal executive offices)381
      SE Crystal Creek Circle
                Issaquah,
      WA 98027
                (former
      address of principal executive
office)




Registrant’s
telephone number, including area code(818)597-7552




Securities
registered pursuant to Section 12(b) of the Act:


None





Securities
registered pursuant to Section 12(g) of the Act:


Common
Stock, $0.01 par value per share




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act  ̈ Yes  xNo




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  ̈Yes  xNo




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  x  Yes  ̈No




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  x




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.







Large
accelerated filer   ̈Accelerated
filer  ̈Non-accelerated filer  ̈Smaller
reporting company x


(Do not
check if a smaller reporting company)





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








The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter was $0.00 as no market existed for our common stock at such
time.





The
number of shares outstanding of Registrant’s common stock, $0.01 par value at
March 16, 2009 was 1,515,920.





DOCUMENTS
INCORPORATED BY REFERENCE





None







FIRST
TRANSACTION MANAGEMENT, INC





FORM 10-K





FOR
THE YEAR ENDED DECEMBER 31, 2008




INDEX




PagePART
      IItem 1.
                    BusinessItem 1A.
                    Risk Factors
                    3Item 2.
                    Properties
                    4Item 3.
                    Legal Proceedings
                    6Item 4.
                    Submission of Matters to a Vote of Security
      Holders
                    6PART
      IIItem 5.
                    Market for Registrant’s Common Equity, Related Stockholder
      Matters and Issuer Purchases of Equity Securities
                    6Item 6.
                    Selected Financial Data
                    7Item 7.
                    Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
                    7Item 7A.
                    Quantitative and Qualitative Disclosures About Market
      Risk
                    9Item 8.
                    Financial Statements and Supplementary
    Data
                    9Item 9.
                    Changes in and Disagreements With Accountants on Accounting
      and Financial Disclosure
                    20Item 9A.
                    Controls and Procedures
                    20PART
      IIIItem 10.
                    Directors, Executive Officers and Corporate
      Governance
                    21Item 11.
                    Executive Compensation
                    22Item 12.
                    Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters
                    22Item 13.
                    Certain Relationships and Related Transactions, and
      Director Independence
                    23Item 14.
                    Principal Accounting Fees and Services
                    24PART
      IVItem 15.
                    Exhibits, Financial Statement Schedules
                    24


2




PART I





We
urge you to read this entire Annual Report on Form 10-K, including the” Risk
Factors” section and the financial statements and related notes included
herein.  As used in this Annual Report, unless context otherwise
requires, the words “we,” “us,”“our,” “the Company,” “First Transaction
Management” and “Registrant” refer to First Transaction Management,
Inc.  Also, any reference to “common shares,” “Common Stock,” “common
stock” or “Common Shares” refers to our $.01 par value common
stock.





SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS





Certain
statements contained in this Annual Report on Form 10-K constitute
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. All statements included in this Annual Report, including those related to
our cash, liquidity, resources and our anticipated cash expenditures, as well as
any statements other than statements of historical fact, regarding our strategy,
future operations, financial position, projected costs, prospects, plans and
objectives are forward-looking statements.  These forward-looking
statements are derived, in part, from various assumptions and analyses we have
made in the context of our current business plan and information currently
available to us and in light of our experience and perceptions of historical
trends, current conditions and expected future developments and other factors we
believe are appropriate in the circumstances. You can generally identify forward
looking statements through words and phrases such as“believe”, “expect”, “seek”,
“estimate”, “anticipate”, “intend”, “plan”, “budget”, “project”, “may likely
result”, “may be”, “may continue”  and other similar
expressions, although not all forward-looking statements contain these
identifying words. We cannot guarantee future results, levels of activity,
performance or achievements, and you should not place undue reliance on our
forward-looking statements.





Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including the risks
described in Part I, Item 1A, “Risk Factors” and elsewhere in this
Annual Report. Our forward-looking statements do not reflect the potential
impact of any future acquisitions, mergers, dispositions, joint ventures or
strategic investments. In addition, any forward-looking statements represent our
expectation only as of the day this Annual Report was first filed with the
Securities and Exchange Commission (“SEC”) and should not be relied on as
representing our expectations as of any subsequent date. While we may elect to
update forward-looking statements at some point in the future, we specifically
disclaim any obligation to do so, even if our expectations change.





When
reading any forward-looking statement you should remain mindful that actual
results or developments may vary substantially from those expected as expressed
in or implied by such statement for a number of reasons or
factors.  Each forward-looking statement should be read in context
with and in understanding of the various other disclosures concerning our
company and our business made elsewhere in this Annual Report as well as our
public filings with the SEC. You should not place undue reliance on any
forward-looking statement as a prediction of actual results or developments. We
are not obligated to update or revise any forward-looking statements contained
in this Annual Report or any other filing to reflect new events or circumstances
unless and to the extent required by applicable law.





ITEM 1.           BUSINESS





We are a
development stage company originally 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, we changed our name to First Transaction Management, Inc. to more
directly reflect our business interests in web based promotion and transaction
processing management services. Effective December 31, 2004, we discontinued our
efforts in those areas and are currently seeking new economic opportunities,
including a merger transaction.





On August
1, 2008 we affected a 1 for 20 reverse split of our common stock. On August 14,
2008, our former principal shareholder and Chief Executive Officer sold: (i)
262,798 previously issued and outstanding common shares, comprising
approximately 65.82% of our post-split issued and outstanding capital stock in a
private transaction; and (ii) a secured promissory note made by the Company in
the amount of $1,050,663 (including accrued interest) that was convertible into
656,665 post-split shares of our common stock.  The secured promissory
note was converted on August 14, 2008.





Effective
December 31, 2004, our board of directors determined that the implementation of
our business plan was no longer financially feasible.  At such time,
we discontinued the implementation of our prior business plan and are
now pursuing an acquisition strategy, whereby we will seek to
acquire undervalued businesses with a history of operating revenues
in markets that provide room for growth ("Acquisition
Strategy").





Our
Acquisition Strategy is focused on pursuing a strategy of growth by
acquiring undervalued businesses with a history of operating revenues. We
will utilize several criteria to evaluate prospective acquisitions
including whether the business to be acquired  (1) is an
established business with viable
services  or products,  (2) has an experienced and
qualified management  team, (3)  has room for growth
and/or expansion into other markets, (4) is  accretive to
earnings, (5) offers the opportunity
to  achieve and/or  enhance  profitability,  and  (6)  increases  shareholder value.


3





Competition
of Our Acquisition Strategy





In  connection  with  our  Acquisition  Strategy,  we  expect  to encounter
intense competition from other entities having business objectives similar
to ours, including: venture capital firms, blind pool companies, large
industrial and financial institutions, small  business investment
companies  and  wealthy individuals. Many of these
entities are well-established and have greater experience, financial
resources and technical knowledge than us. Our limited financial
resources may compel us to select certain less attractive acquisition
prospects than those of our competitors.





We
believe that our future is dependent upon the consummation of a merger,
acquisition or other business combination between us and a
viable operating entity. There can be no assurance that we will
be able to complete any merger, acquisition or other business combination
between us and a viable operating entity. Additionally, management believes
that we  may  need  to raise additional funds
through
equity  or  debt financing  to  complete
a merger, acquisition or  other  business combination
between us and a viable operating
entity.  There  can be  no assurance that we
will be able to successfully complete
an equity  or  debt financing to complete an
acquisition,
merger  or other  business  combination
between us
and  a  viable  operating entity.





Employees





We have a
total of 2 employees which includes our Chief Executive Officer. Both employees
are considered part-time employees. We do not have any employees
represented by a union or other collective bargaining group. We consider
our relations with our employees to be good.





Where
to Find More Information




We make
our public filings with the SEC, including our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all
exhibits and amendments to these reports.  These materials are
available on the SEC’s web site,http://www.sec.gov .
You may also read or copy any materials we file with the SEC at the SEC’s Public
Reference Room at 100 F Street, N.E., Washington, DC 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330.  Alternatively, you may obtain copies of these
filings, including exhibits, by writing or telephoning us at:




ITEM 1A.       RISK
FACTORS





We
have described below a number of uncertainties and risks which, in addition to
uncertainties and risks presented elsewhere in this Annual Report, may adversely
affect our business, operating results and financial condition.  The
uncertainties and risks enumerated below as well as those presented elsewhere in
this Annual Report should be considered carefully in evaluating our company and
our business and the value of our securities. The following important factors,
among others, could cause our actual business, financial condition and future
results to differ materially from those contained in forward-looking statements
made in this Annual Report or presented elsewhere by management from time to
time.





Our
limited resources may not be sufficient for us to implement our Acquisition
Strategy.





We have
limited resources. We are pursuing an acquisition strategy, whereby we will seek
to acquire undervalued businesses.  The implementation of our strategy
is highly dependent on retaining professions such as lawyers, accountants and
investment bankers to consummate any proposed transaction.  As a
result of our limited resources, we may not have sufficient capital to retain
such professions and as a result, may not be able to successfully implement our
strategy.





We
May Not be Able to Continue as Going Concern





Based on
our limited operations, lack of revenue and relatively minimal assets there can
be no assurance that we will be able to continue as a going concern or complete
a merger, acquisition or other business combination.





We
Will Need Additional Financing in Order to Execute Our Business Plan and it may
be Extremely Expensive





We are
entirely dependent upon our limited available financial resources to implement
our acquisition strategy. We cannot ascertain with any degree of certainty the
capital requirements for the successful execution of our acquisition strategy.
In the event that our limited financial resources prove to be insufficient to
implement our acquisition strategy, we will be required to seek additional
financing. Also, in the event of the consummation of an acquisition, we may
require additional financing to fund the operations or growth of the target.
Additionally, as we are considered a “shell” or “blank check” company,
purchasers of our securities cannot currently rely on Rule 144 promulgated under
the Securities Act with regard to the resale of their shares. Accordingly, any
financing in the form of equity may be deeply discounted to compensate the
investors for the added risk and inability to rely on Rule 144. Depending on
such discount, our current shareholders may be substantially
diluted.


4





Additional
Financing May Not Be Available to Us





There can
be no assurance that additional financing will be available on acceptable terms,
or at all. To the extent that additional financing proves to be unavailable when
needed, we would, in all likelihood, be compelled to abandon plans of further
acquisitions, and would have minimal capital remaining to pursue other targets.
Our inability to secure additional financing, if needed, could also have a
material adverse effect on our continued development or growth. We have no
arrangements with any bank or financial institution to secure additional
financing and there can be no assurance that any such arrangement, if required
or otherwise sought, would be available on terms deemed to be commercially
acceptable to us and in our best interests.





Competition
for Acquisitions





We expect
to encounter intense competition from other entities having business objectives
similar to ours. Many of these entities, including venture capital firms,
partnerships and corporations, blind pool companies, large industrial and
financial institutions, small business investment companies and wealthy
individuals, are well-established and have extensive experience in connection
with identifying and effecting acquisitions directly or through affiliates. Many
of these competitors possess greater financial, technical, human and other
resources than us and there can be no assurance that we will have the ability to
compete successfully. Our financial resources will be limited in comparison to
those of many of our competitors. This inherent competitive limitation may
compel us to select certain less attractive acquisition prospects. There can be
no assurance that such prospects will permit us to achieve our stated business
objectives.




We
May Be Subject to Uncertainty in the Competitive Environment of a
Target





In the
event that we succeed in completing an acquisition, we will, in all likelihood,
become subject to intense competition from competitors of the target. In
particular, certain industries which experience rapid growth frequently attract
an increasingly large number of competitors, including competitors with greater
financial, marketing, technical, human and other resources than the initial
competitors in the industry. The degree of competition characterizing the
industry of any prospective target cannot presently be ascertained. There can be
no assurance that, subsequent to a consummation of an acquisition, we will have
the resources to compete effectively in the industry of the target, especially
to the extent that the target is in a high growth industry.





We
May Pursue an Acquisition with a Target Operating Outside the United States
Which will Entail the Additional Risks Relating to Doing Business in a Foreign
Country





We may
effectuate an acquisition with a target whose business operations or even
headquarters, place of formation or primary place of business are located
outside the United States. In such event, we may face the significant additional
risks associated with doing business in that country. In addition to the
language barriers, different presentations of financial information, different
business practices, and other cultural differences and barriers that may make it
difficult to evaluate such a target, ongoing business risks may result from the
internal political situation, uncertain legal systems and applications of law,
prejudice against foreigners, corrupt practices, uncertain economic policies and
potential political and economic instability that may be exacerbated in various
foreign countries.





Lawrence  Chimerine,
our CEO, is Critical to Our Future Success





Our
ability to successfully carry out our business plan and to consummate additional
acquisitions will be dependent upon the efforts of Mr. Chimerine.
Notwithstanding the significance of Mr. Chimerine, we have not obtained any "key
man" life insurance on his life. The loss of the services of Mr. Chimerine would
have a material adverse effect on our ability to successfully achieve our
business objectives. If additional personnel are required, there can be no
assurance that we will be able to retain such necessary additional
personnel.





The
Uncertain Structure of an Acquisition May Result in Risks Relating to the Market
for Our Common Stock





We may
form one or more subsidiary entities to effect an acquisition and may, under
certain circumstances, distribute the securities of subsidiaries to our
stockholders. There can be no assurance that a market would develop for the
securities of any subsidiary distributed to stockholders or, if a market were to
develop, no assurances as to the prices at which such securities might
trade.





We
Expect to Pay No Cash Dividends





We do not
expect to pay dividends to the holders of common stock. Accordingly, any return
on a stockholders’ investment will require the appreciation of our common
shares.  There can be no assurance that the value of our common shares
will increase.





Indemnification
of Officers and Directors





Our
Certificate of Incorporation provides for the indemnification of our officers
and directors to the fullest extent permitted by the laws of the State of
Delaware. It is possible that the indemnification obligations imposed under
these provisions could result in a charge against our earnings, if any, and
thereby affect the availability of funds for other uses.


5





Taxation
Considerations May Impact the Structure of an Acquisition and Post-merger
Liabilities





Federal
and state tax consequences will, in all likelihood, be major considerations for
us in consummating an acquisition. The structure of an acquisition or the
distribution of securities to stockholders may result in taxation of us, the
target or stockholders. Typically, these transactions may be structured to
result in tax-free treatment to both companies, pursuant to various federal and
state tax provisions. We intend to structure any acquisition so as to minimize
the federal and state tax consequences to both the us and the target. Management
cannot assure that an acquisition will meet the statutory requirements for a
tax-free reorganization, or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes, which may have
an adverse effect on both parties to the transaction.





We
May Be Deemed an Investment Company and Subjected to Related
Restrictions





The
regulatory scope of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), which was enacted principally for the purpose of
regulating vehicles for pooled investments in securities, extends generally to
companies engaged primarily in the business of investing, reinvesting, owning,
holding or trading in securities. The Investment Company Act may, however, also
be deemed to be applicable to a company which does not intend to be
characterized as an investment company but which, nevertheless, engages in
activities which may be deemed to be within the definitional scope of certain
provisions of the Investment Company Act. We believe that our anticipated
principal activities, which will involve acquiring control of an operating
company, will not subject us to regulation under the Investment Company Act.
Nevertheless, there can be no assurance that at some future point we will not be
deemed to be an investment company. If we are deemed to be an investment
company, we may become subject to certain restrictions relating to our
activities, including restrictions on the nature of our investments and the
issuance of securities. In addition, the Investment Company Act imposes certain
requirements on companies deemed to be within its regulatory scope, including
registration as an investment company, adoption of a specific form of corporate
structure and compliance with certain burdensome reporting, record keeping,
voting, proxy, disclosure and other rules and regulations. In the event of the
characterization of us as an investment company, our inability to satisfy such
regulatory requirements, whether on a timely basis or at all, would, under
certain circumstances, have a material adverse effect on us.




ITEM 2.          PROPERTIES





Our   executive
offices are located at 31200 Via Colinas, Suite 200, Westlake Village, CA
91362.  We shares office space with one of our larger shareholders,
Castle Bison, Inc., who has agreed to  waive the payment of any rent
for use of the.




ITEM 3.          LEGAL
PROCEEDINGS





As of the
date of this Annual Report, there are no material pending legal or governmental
proceedings relating to our company or properties to which we are a party, and
to our knowledge there are no material proceedings to which any of our
directors, executive officers or affiliates are a party adverse to us or which
have a material interest adverse to us.




ITEM 4.          SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS





There
were no matters submitted during the fourth quarter of the 2008 fiscal year to a
vote of our security holders.





PART
II





ITEM 5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES





Market
Information





Our
Common Stock is sporadically traded on the Over-the-Counter Bulletin Board under
the symbol “FMND”.  As a result of our sporadic trading, lack of
liquidity and limited public float, we have determined that no established
public trading market for a class of common exists.





Holders





As of
March 16, 2009 our common stock was held by approximately 141 record holders.
Notwithstanding, we believe our actual number of shareholders may be
significantly higher as 68,441 shares are currently being held in street
name.





Dividends





We have
not paid any cash dividends to date, and we have no plans to do so in the
immediate future.





Recent
Sales of Unregistered Securities.





We
have  not issued any securities during 2008 that were not registered
under the Securities Act of 1933, except as previously included in a quarterly
report on Form 10-QSB or a Current Report on Form 8-K other than the
following:


6





·
            On August 14 2008, the holder of
      secured promissory note payable by the Company converted the outstanding
      balance in the amount of $1,055,663 into 656,665 shares of common stock as
      payment in full for the
note.





·
            On
      October 20, 2008, we entered into a Stock Subscription Agreement (“the
      Agreement”) with three accredited and non-affiliated investors (the
      “Investors”). Pursuant to the Agreement, the Investors purchased an
      aggregate of 450,000 shares for
$49,500.





·
            On
      October 20, 2008, we issued 10,000 shares of common stock, valued at
      $1,100, for legal services.





Equity
Compensation Plan Information





The
following table sets forth information with respect to our 1999 & 2001 Stock
Plans as of December 31, 2008.





(a)
                
                
                (b)
                
                
                (c)Number of Securities
                  to be Issued
                  upon Exercise
      of
                  Outstanding
                  Options,
      Warrants
                  and
      Rights
                
                
                Weighted-Average
                  Exercise Price of
                  Outstanding
                  Options,
                  Warrants
      and
                  Rights
                
                
                Number of Securities
                  Remaining Available or
                  Future
      Issuance under
                  Equity Compensation Plans
                  (Excluding
      Securities
                  Reflected
      in Column (a))Equity
      compensation plans approved by security holders1999 Incent
      Program
                
                
                —
                
                
                $
                —
                
                
                
                1,000,000Equity
      compensation plans not approved by security holders
                
                
                N/A
                
                
                
                N/A
                
                
                
                N/A2001 Stock Option
      Plan
                
                
                —
                
                
                
                —
                
                
                
                750,000Total
                
                
                —
                
                
                $
                —
                
                
                
                1,750,000




ITEM
6.          SELECTED FINANCIAL
DATA





We are
not required to provide the information as to selected financial data as we are
considered a smaller reporting company.





ITEM 7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





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
2007, the Company generated ancillary revenues from general business consulting
services to support its nominal operations. We currently have no revenue
generating activities.





On August
1, 2008 we effected a 1 for 20 reverse split of our common stock. All share and
per share amounts have been retroactively adjusted to reflect this reverse
split.





On August
14, 2008, one of our shareholders (the “Seller”) sold 262,798 previously issued
and outstanding post-split shares of our common stock, comprising approximately
65.82% of our post-split issued and outstanding capital stock, and a Secured
Promissory Note (the “Note”) made by the Company to the Seller in the amount of
$1,050,663 (including accrued interest) that is convertible into 656,665
post-split shares of our common stock, for the aggregate purchase price of
$600,000 (for the outstanding shares and the Note). The Note and related accrued
interest was converted into 656,665 shares of common stock during August 2008.
As a result of the sale, our officers and board of directors resigned and our
current officer and director was appointed.





We are
pursuing an acquisition strategy, whereby we will seek to acquire undervalued
businesses with a history of operating revenues in markets that provide room for
growth ("Acquisition Strategy"). We will engage in identifying, investigating
and, if warranted, acquiring companies that will enhance our revenues and
increase shareholder value.




Our
Acquisition Strategy is focused on pursuing a strategy of growth by acquiring
undervalued businesses with a history of operating revenues. We will utilize
several criteria to evaluate prospective acquisitions including whether the
business to be acquired (1) is an established business with viable services or
products, (2) has an experienced and qualified management team, (3) has room for
growth and/or expansion into other markets, (4) is accretive to earnings, (5)
offers the opportunity to achieve and/or enhance profitability, and (6)
increases shareholder value.


7




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.





Critical
Accounting Policies





The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States requires us to make estimates and
judgments that affect our reported assets, liabilities, revenues, and expenses,
and the disclosure of contingent assets and liabilities. We base our estimates
and judgments on historical experience and on various other assumptions we
believe to be reasonable under the circumstances. Future events, however, may
differ markedly from our current expectations and assumptions. While there are a
number of significant accounting policies affecting our financial statements; we
believe the following critical accounting policies involve the most complex,
difficult and subjective estimates and judgments:




Use of
Estimates - These financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and,
accordingly, require management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Specifically, our management has estimated the value of our
shares issued for compensation and our net operating loss for tax purposes.
Actual results could differ from those estimates.





Going
Concern - The financial
statements have been prepared on a going concern basis, and do not reflect any
adjustments related to the uncertainty surrounding our recurring losses or
accumulated deficit





We are
currently in the process of implementing our new business plan, focusing on our
acquisition strategy. At present, we have sufficient capital on hand to fund our
operations only through April of 2009. There can be no assurance that upon
implementing our new business plan, we will be successful or that we will start
producing sufficient revenues to maintain our operations. The foregoing matters
raise substantial doubt about our ability to continue as a going
concern.





Results
of Operations




Comparison
of the Year Ended December 31, 2008 to the Year Ended December 31,
2007




Revenues
from consulting services for the year ended December 31, 2007 were $230,589, as
compared to $0 for the year ended December 31, 2008. This decrease is attributed
to the lack of consulting client service activity since late 2007. Operating
expenses increased slightly from $140,592 in 2007 to $145,987 in 2008, an
increase of $5,395, or 4%. The primary reason for the increase in operating
expenses is an increase in professional and consulting fees of approximately
$37,000 partially offset by the reduction of customer-related expenses and
administrative expenses.




Interest
expense decreased from $61,882 in 2007 to $36,130 in 2008. The decrease resulted
from the conversion of the underlying debt and related accrued interest into
common stock during the third quarter.




As the
Company’s current focus and that for the next 12 months is on our acquisition
strategy, the Company does not believe that year to year comparisons of its
historical results of operations are meaningful in predicting our future
financial performance. All of our revenue in 2007 was generated from providing
ancillary consulting services. We currently have no revenue generating
activities. Accordingly, it is anticipated that the Company’s results of
operations will fluctuate from quarter to quarter and from fiscal year to fiscal
year.





Plan
of Operation




We are
pursuing an Acquisition Strategy, whereby we will seek to acquire undervalued
businesses with a history of operating revenues in markets that provide room for
growth. We will primarily engage in identifying, investigating and, if
investigation warrants, acquiring companies that will enhance our revenues and
increase shareholder value. Our Acquisition Strategy is focused on pursuing a
strategy of growth by acquiring undervalued businesses with a history of
operating revenues. We will utilize several criteria to evaluate prospective
acquisitions including whether the business to be acquired (1) is an established
business with viable services or products, (2) has an experienced and qualified
management team, (3) has room for growth and/or expansion into other markets,
(4) is accretive to earnings, (5) offers the opportunity to achieve and/or
enhance profitability, and (6) increases shareholder value.





Liquidity
and Capital Resources




As of
December 31, 2008 we had a working capital deficit of $8,706. On October 21,
2008, we entered into a Stock Subscription Agreement (“the Agreement”) with
three accredited and non-affiliated investors (the “Investors”). Pursuant to the
Agreement, the Investors purchased an aggregate of 450,000 shares of common
stock for $49,500. While our cash on hand on February 28, 2009 of
approximately $15,000 will satisfy our immediate financial needs, it may not be
sufficient to provide us with sufficient capital to maintain our business and to
finance acquisitions. Accordingly, within the next three months, management
anticipates needing to need to raise additional funds in order to continue
operating. There can be no assurances that we will be able to obtain additional
funds if and when needed.


8





Additionally,
as we are considered a “shell” or “blank check” company, purchasers of our
securities cannot currently rely on Rule 144 promulgated under the Securities
Act with regard to the resale of their shares. Accordingly, any financing in the
form of equity may be deeply discounted to compensate the investors for the
added risk and inability to rely on Rule 144.





ITEM 7A.       QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK





We are
not required to provide the information as to selected financial data as we are
considered a smaller reporting company.




ITEM
8.          FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA





INDEX
TO FINANCIAL STATEMENTS




PageBalance Sheets
              F-1Statements of Income
              F-2Statements of Stockholders’
Equity
              F-3Statements of Cash Flows
              F-4Notes to Financial Statements
              F-5Reports
      of Colabella & Company LLP, Independent Registered Public Accounting
      Firm




9


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To
the Board of Directors and
 Stockholders
of First Transaction Management, Inc.
  We have
audited the accompanying balance sheets of First Transaction Management,
Inc. (the Company) as of December 31, 2008, and the related statements of
operations, changes in stockholders’ equity and cash flows for the year ended
December 31, 2008. First
Transaction Management, Inc.’s management is responsible for these
financial statements. Our responsibility is to express an opinion on these
financial statements based on our audit.
  We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of First Transaction Management,
Inc.  as of December 31, 2008, and the results of its
operations, its statement of changes in stockholder’s equity and its cash flows
for the year ended December 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has experienced losses from operations during the
development stage and has a net capital deficiency that raises substantial doubt
about its ability to continue as a going concern.  Management’s plans
regarding these matters are also described in Note 1, and the financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
  
 COLABELLA & COMPANY, LLP
 Brooklyn,
New York
 March
19, 2009
  
 FIRST TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 BALANCE
SHEETS
 
 December 31,2008
                              
                              
                              2007AssetsCurrent
      assets:Cash
                              
                              $
                              17,144
                              
                              
                              $
                              121,785Total
      assets
                              
                              
                              17,144
                              
                              
                              
                              121,785Liabilities
      and deficiency in stockholders' equityCurrent
      liabilities:Accounts
      payable and accrued expenses
                              
                              $
                              27,482
                              
                              
                              $
                              55,000Accrued
      interest
                              
                              
                              -
                              
                              
                              
                              242,741Total
      current liabilities
                              
                              
                              27,482
                              
                              
                              
                              297,741Loan
      payable - stockholder
                              
                              
                              -
                              
                              
                              
                              773,541Total
      liabilities
                              
                              
                              27,482
                              
                              
                              
                              1,071,282Deficiency
      in stockholders' equity:Preferred
      stock, par value $.01 per share; 25,000,000 shares
    authorized,no
      shares issued and outstanding
                              
                              
                              -
                              
                              
                              
                              -Common
      stock, par value $.01 per share; 125,000,000 shares
      authorized,1,515,920
      and 363,005 shares issued and outstanding, respectively
                              
                              
                              15,159
                              
                              
                              
                              3,630Additional
      paid-in capital
                              
                              
                              2,479,961
                              
                              
                              
                              1,372,102Deficit
      accumulated during the development stage
                              
                              
                              (2,505,458
                              )
                              
                              
                              (2,325,229
                              )Total
      deficiency in stockholders' equity
                              
                              
                              (10,338
                              )
                              
                              
                              (949,497
                              )Total
      liabilities and deficiency in stockholders' equity
                              
                              $
                              17,144
                              
                              
                              $
                              121,785
 
 See
accompanying notes to financial statements.
  F-1


FIRST TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 STATEMENTS
OF OPERATIONS
 
 For the PeriodMarch 25, 1999(Inception) toYears ended December 31,
                        
                        
                        December 31,2008
                        
                        
                        2007
                        
                        
                        2008Fees
      - consulting
                        
                        $
                        -
                        
                        
                        $
                        230,589
                        
                        
                        $
                        534,634Operating
      expenses
                        
                        
                        145,987
                        
                        
                        
                        132,004
                        
                        
                        
                        1,550,022Depreciation
      and amortization
                        
                        
                        -
                        
                        
                        
                        8,588
                        
                        
                        
                        277,177Write-off
      of intangibles
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        776,065Total
      expense
                        
                        
                        145,987
                        
                        
                        
                        140,592
                        
                        
                        
                        2,603,264(Loss)
      income from operations beforeother
      income and interest expense
                        
                        
                        (145,987
                        )
                        
                        
                        89,997
                        
                        
                        
                        (2,068,630
                        )Gain
      on distribution of shares
                        
                        
                        1,750
                        
                        
                        
                        -
                        
                        
                        
                        1,750Other
      income
                        
                        
                        138
                        
                        
                        
                        -
                        
                        
                        
                        5,879Interest
      expense, net
                        
                        
                        (36,130
                        )
                        
                        
                        (61,882
                        )
                        
                        
                        (444,457
                        )(Loss)
      income before income taxes
                        
                        
                        (180,229
                        )
                        
                        
                        28,115
                        
                        
                        
                        (2,505,458
                        )Provision
      for income taxes
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Net
      (loss) income
                        
                        
                        (180,229
                        )
                        
                        
                        28,115
                        
                        
                        
                        (2,505,458
                        )Net
      (loss) income per basic and diluted share
                        
                        $
                        (0.25
                        )
                        
                        $
                        0.08Weighted
      average shares outstanding,basic
      and diluted
                        
                        
                        731,193
                        
                        
                        
                        363,005
 
 See
accompanying note to financial statements.
  F-2
 FIRST TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 STATEMENT
OF STOCKHOLDERS' DEFICIT
 MARCH 25,
1999 (INCEPTION) to DECEMBER 31, 2008
 
 DeficitAccumulatedAdditional
                              
                              
                              During theCommon Stock
                              
                              
                              Paid-in
                              
                              
                              Development
                              
                              
                              Stockholders'Shares
                              
                              
                              Amount
                              
                              
                              Capital
                              
                              
                              Stage
                              
                              
                              DeficiencyCommon
      stock sold for cash
                              
                              March
      25, 1999
                              
                              
                              1
                              
                              
                              $
                              -
                              
                              
                              $
                              50,000
                              
                              
                              $
                              -
                              
                              
                              $
                              50,000Intangible
      assets contributed inspin-off
      transaction
                              
                              June
      30, 1999
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              165,652
                              
                              
                              
                              -
                              
                              
                              
                              165,652Common
      stock sold for cash
                              
                              September
      27, 1999
                              
                              
                              76,410
                              
                              
                              
                              764
                              
                              
                              
                              299,236
                              
                              
                              
                              -
                              
                              
                              
                              300,000Common
      stock sold for cash
                              
                              October
      4, 1999
                              
                              
                              19,200
                              
                              
                              
                              192
                              
                              
                              
                              19,008
                              
                              
                              
                              -
                              
                              
                              
                              19,200Net
      loss
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (33,139
                              )
                              
                              
                              (33,139
                              )Balance,
      December 31, 1999
                              
                              
                              
                              
                              95,611
                              
                              
                              
                              956
                              
                              
                              
                              533,896
                              
                              
                              
                              (33,139
                              )
                              
                              
                              501,713Common
      stock sold for cash
                              
                              December
      4, 2000
                              
                              
                              18,750
                              
                              
                              
                              188
                              
                              
                              
                              374,812
                              
                              
                              
                              -
                              
                              
                              
                              375,000Net
      loss
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (1,211,910
                              )
                              
                              
                              (1,211,910
                              )Balance,
      December 31, 2000
                              
                              
                              
                              
                              114,361
                              
                              
                              
                              1,144
                              
                              
                              
                              908,708
                              
                              
                              
                              (1,245,049
                              )
                              
                              
                              (335,197
                              )Common
      stock issued for services
                              
                              June
      11, 2001
                              
                              
                              2,500
                              
                              
                              
                              25
                              
                              
                              
                              15,975
                              
                              
                              
                              -
                              
                              
                              
                              16,000Common
      stock issued for services
                              
                              December
      31, 2001
                              
                              
                              4,250
                              
                              
                              
                              42
                              
                              
                              
                              27,158
                              
                              
                              
                              -
                              
                              
                              
                              27,200Common
      stock issued for debt
                              
                              December
      31, 2001
                              
                              
                              234,444
                              
                              
                              
                              2,344
                              
                              
                              
                              372,656
                              
                              
                              
                              -
                              
                              
                              
                              375,000Net
      loss
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (262,970
                              )
                              
                              
                              (262,970
                              )Balance,
      December 31, 2001
                              
                              
                              
                              
                              355,555
                              
                              
                              
                              3,555
                              
                              
                              
                              1,324,497
                              
                              
                              
                              (1,508,019
                              )
                              
                              
                              (179,967
                              )Common
      stock issued for services
                              
                              March
      31, 2002
                              
                              
                              4,950
                              
                              
                              
                              50
                              
                              
                              
                              31,630
                              
                              
                              
                              -
                              
                              
                              
                              31,680Common
      stock issued for services
                              
                              June
      30, 2002
                              
                              
                              2,500
                              
                              
                              
                              25
                              
                              
                              
                              15,975
                              
                              
                              
                              -
                              
                              
                              
                              16,000Net
      loss
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (533,871
                              )
                              
                              
                              (533,871
                              )Balance,
      December 31, 2002
                              
                              
                              
                              
                              363,005
                              
                              
                              
                              3,630
                              
                              
                              
                              1,372,102
                              
                              
                              
                              (2,041,890
                              )
                              
                              
                              (666,158
                              )Net
      loss
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (121,281
                              )
                              
                              
                              (121,281
                              )Balance,
      December 31, 2003
                              
                              
                              
                              
                              363,005
                              
                              
                              
                              3,630
                              
                              
                              
                              1,372,102
                              
                              
                              
                              (2,163,171
                              )
                              
                              
                              (787,439
                              )Net
      loss
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (127,030
                              )
                              
                              
                              (127,030
                              )Balance,
      December 31, 2004
                              
                              
                              
                              
                              363,005
                              
                              
                              
                              3,630
                              
                              
                              
                              1,372,102
                              
                              
                              
                              (2,290,201
                              )
                              
                              
                              (914,469
                              )Net
      income
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              28,686
                              
                              
                              
                              28,686Balance,
      December 31, 2005
                              
                              
                              
                              
                              363,005
                              
                              
                              
                              3,630
                              
                              
                              
                              1,372,102
                              
                              
                              
                              (2,261,515
                              )
                              
                              
                              (885,783
                              )Net
      loss
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (91,829
                              )
                              
                              
                              (91,829
                              )Balance,
      December 31, 2006
                              
                              
                              
                              
                              363,005
                              
                              
                              
                              3,630
                              
                              
                              
                              1,372,102
                              
                              
                              
                              (2,353,344
                              )
                              
                              
                              (977,612
                              )Net
      income
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              28,115
                              
                              
                              
                              28,115Balance,
      December 31, 2007
                              
                              
                              
                              
                              363,005
                              
                              
                              
                              3,630
                              
                              
                              
                              1,372,102
                              
                              
                              
                              (2,325,229
                              )
                              
                              
                              (949,497
                              )Common
      stock issued for services
                              
                              April
      21, 2008
                              
                              
                              36,250
                              
                              
                              
                              362
                              
                              
                              
                              17,763
                              
                              
                              
                              -
                              
                              
                              
                              18,125Common
      stock issued upon conversionof
      debt and accrued interest
                              
                              August
      14,2008
                              
                              
                              656,665
                              
                              
                              
                              6,567
                              
                              
                              
                              1,044,096
                              
                              
                              
                              -
                              
                              
                              
                              1,050,663Common
      stock sold for cash
                              
                              October
      20, 2008
                              
                              
                              450,000
                              
                              
                              
                              4,500
                              
                              
                              
                              45,000
                              
                              
                              
                              -
                              
                              
                              
                              49,500Common
      stock issued for services
                              
                              October
      20, 2008
                              
                              
                              10,000
                              
                              
                              
                              100
                              
                              
                              
                              1,000
                              
                              
                              
                              -
                              
                              
                              
                              1,100Net
      loss
                              
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (180,229
                              )
                              
                              
                              (180,229
                              )Balance,
      December 31, 2008
                              
                              
                              
                              
                              1,515,920
                              
                              
                              $
                              15,159
                              
                              
                              $
                              2,479,961
                              
                              
                              $
                              (2,505,458
                              )
                              
                              $
                              (10,338
                              )
 
 See
accompanying notes to financial statements.
 F-3
  
 FIRST TRANSACTION MANAGEMENT, INC.
 STATEMENTS
OF CASH FLOWS
 
 For the PeriodMarch 25, 1999(Inception) toYears ended December 31,
                      
                      
                      December 31,2008
                      
                      
                      2007
                      
                      
                      2008Cash
      flows from operating activities:Net
      (loss) income
                      
                      $
                      (180,229
                      )
                      
                      $
                      28,115
                      
                      
                      $
                      (2,505,458
                      )Adjustments
      to reconcile net (loss) income to net(cash
      used in) provided by operating activities:Depreciation
      and amortization
                      
                      
                      -
                      
                      
                      
                      8,588
                      
                      
                      
                      424,160Stock
      based compensation
                      
                      
                      19,225
                      
                      
                      
                      -
                      
                      
                      
                      66,905Gain
      on reduction of stockholder loan
                      
                      
                      (1,750
                      )
                      
                      
                      -
                      
                      
                      
                      (1,750
                      )Write
      off of intangibles
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      645,631Change
      in operating assets and liabilitiesAccounts
      payable and accrued expenses
                      
                      
                      (27,518
                      )
                      
                      
                      45,000
                      
                      
                      
                      27,482Accrued
      interest
                      
                      
                      36,131
                      
                      
                      
                      28,438
                      
                      
                      
                      278,872Net
      cash (used in) provided by operating activities
                      
                      
                      (154,141
                      )
                      
                      
                      110,141
                      
                      
                      
                      (1,064,158
                      )Cash
      flows from investing activities:Purchase
      of intangible assets and equipment
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (904,139
                      )Net
      cash used by investing activities
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (904,139
                      )Cash
      flows from financing activities:Debt
      conversion to equity
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (34,264
                      )Proceed
      from the sale of common stock
                      
                      
                      49,500
                      
                      
                      
                      -
                      
                      
                      
                      841,925Proceeds
      from stockholder note
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,177,780Net
      cash provided by financing activities
                      
                      
                      49,500
                      
                      
                      
                      -
                      
                      
                      
                      1,985,441Net
      (decrease) increase in cash
                      
                      
                      (104,641
                      )
                      
                      
                      110,141
                      
                      
                      
                      17,144Cash,
      beginning of period
                      
                      
                      121,785
                      
                      
                      
                      11,644
                      
                      
                      
                      -Cash,
      end of period
                      
                      $
                      17,144
                      
                      
                      $
                      121,785
                      
                      
                      $
                      17,144Supplemental
      cash flow information:Cash
      paid for interest
                      
                      $
                      -
                      
                      
                      $
                      33,444Cash
      paid for income taxes
                      
                      $
                      -
                      
                      
                      $
                      -Non-Cash
      Financing Activities:Stockholder
      debt and interest convertedto
      common stock
                      
                      $
                      1,050,663
                      
                      
                      $
                      -
 
 See
accompanying notes to financial statements.
  F-4
  FIRST TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 DECEMBER
31, 2008 AND 2007
 
 NOTE
1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 
 Nature
of Operations
  First
Transaction Management, Inc. (“we”, “us”, “our company”, “our”,
“First Transaction” or 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, we changed
our name to First Transaction Management, Inc. to more directly reflect our
business interests in web based promotion and transaction processing management
services. Effective December 31, 2004, we discontinued our efforts in those
areas and are currently seeking new economic opportunities, including a merger
transaction.
 
 On August
1, 2008 we effected a 1 for 20 reverse split of our common stock. All share and
per share amounts have been retroactively adjusted to reflect this reverse
split.
 
 On August
14, 2008, one of our shareholders sold: (i) 262,798 previously issued post-split
shares of our common stock, comprising approximately 65.82% of our post-split
issued and outstanding capital stock; and (ii) a secured promissory note made by
the Company in the amount of $1,050,663 (including accrued interest). The
secured promissory note is convertible into 656,665 of our common
shares.  The sale was accompanied by the resignation and replacement
of our officers and directors.
  We are
pursuing an acquisition strategy whereby we will seek to acquire businesses with
a history of operating revenues in markets that provide room for growth. We are
engaged in identifying, investigating and, if warranted, acquiring companies
that will enhance revenues and increase shareholder value. In the event that our
limited financial resources prove to be insufficient to implement our
acquisition strategy, we will be required to seek additional financing, through
either equity or debt financing.
 
 Use
of Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying
disclosures. Although these estimates are based on management's best knowledge
of current events and actions the Company may undertake in the future, actual
results may differ from those estimates.
 
 Cash
Equivalents
  For
purposes of the statements of cash flows, we consider all highly liquid debt
instruments purchased with a maturity date of three months or less to be cash
equivalents. We maintain our cash in bank deposit accounts which, at times, may
exceed insured limits. We have not experienced any losses in our accounts. We do
not have any cash equivalents at December 31, 2008 or 2007.
  Revenue
recognition
  The
Company recognized revenue at the time of service or as contractual terms were
satisfied.
 Going
Concern
  The
financial statements have been prepared on a going concern basis, and do not
reflect any adjustments related to the uncertainty surrounding our recurring
losses or accumulated deficit
 
 We
currently have no revenue source and are incurring losses. These factors raise
substantial doubt about our ability to continue as a going concern.
 
 We will
pursue an acquisition strategy whereby we will seek to acquire businesses with a
history of operating revenues in markets that provide room for growth. We are
engaged in identifying, investigating and, if warranted, acquiring companies
that will enhance revenues and increase shareholder value. In the event that our
limited financial resources prove to be insufficient to implement our
acquisition strategy, we will be required to seek additional financing, through
either equity or debt financing.
  F-5
  FIRST
TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 DECEMBER
31, 2008 AND 2007
  Earnings
(Loss) Per Share
 
 We use
SFAS No. 128, “Earnings Per Share” for calculating the basic and diluted
loss per share. We compute basic loss per share by dividing net loss and net
loss attributable to common shareholders by the weighted average number of
common shares outstanding. Diluted loss per share is computed similar to basic
loss per share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
shares had been issued and if the additional shares were dilutive. Common
equivalent shares are excluded from the computation of net loss per share if
their effect is anti-dilutive. There were 13,750 common share equivalents at
December 31, 2008 and 18,750 at December 31, 2007. These potential shares were
excluded from the shares used to calculate diluted earnings per share as their
inclusion would reduce net loss per share or increase net income per
share.
 
 Property,
plant and equipment
 
 Property
and 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. Assets are reviewed annually to
determine their estimated remaining useful life. Assets that are considered
obsolete are written off.
 
 Concentrations
of Credit Risk
 
 Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash and cash equivalents.
The Company places its cash and temporary cash investments with credit quality
institutions. At times, such investments may be in excess of applicable
government mandated insurance limits.
 
 Fair
Value of Financial Instruments
 
 SFAS No.
107, "Disclosures About Fair Value of Financial Instruments," requires
disclosure of the fair value of certain financial instruments. The carrying
value of cash and cash equivalents, accounts payable and short-term borrowings,
as reflected in the balance sheets, approximate fair value because of the
short-term maturity of these instruments.
 
 Stock-Based
Compensation
  We
account for our share-based compensation under the provisions of FASB Statement
No. 123(R), “Share-Based Payment”, (“FAS 123R”). We adopted FAS 123R as of
January 1, 2006, using the modified prospective application method. We did not
have any unvested amounts of stock based compensation grants issued and
outstanding at the date of implementation.
 
 Income
Taxes
 
 We have
adopted the provisions of SFAS No. 109 "Accounting for Income Taxes"("SFAS
109"). SFAS 109 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. Under this method, deferred tax liabilities
and assets are determined based on the differences between the financial
statement and tax basis of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse. The
Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. A valuation
allowance is recorded to reduce a deferred tax asset to that portion that is
expected to more likely than not be realized.
  In July
2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the
recognition threshold and measurement of a tax position taken on a tax return.
FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48
also requires expanded disclosure with respect to the uncertainty in income
taxes.
  F-6
  FIRST
TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 DECEMBER
31, 2008 AND 2007
 
 Recent
Accounting Pronouncements
 
 In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No.157, Fair Value Measurements
(“SFAS 157”).  SFAS 157 defines fair value to be the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date and emphasizes
that fair value is a market-based measurement, not an entity-specific
measurement.  It establishes a fair value hierarchy and expands disclosures
about fair value measurements in both interim and annual periods. SFAS 157 is
effective for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. The Company adopted SFAS 157 on January 1, 2008 which
did not have a material impact on its financial position and results of
operations. The Company also adopted the deferral provisions of the Financial
Accounting Standards Board Staff Position No. 157-2, which delays the
effective date of SFAS No. 157 for all nonrecurring fair value measurements
of non-financial assets and liabilities until fiscal years beginning after
November 15, 2008.
 
 Fair
value is defined as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date.  SFAS No. 157 also
expands disclosures about instruments measured at fair value and establishes a
fair value hierarchy which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair
value.  The standard describes three levels of inputs that may be used to
measure fair value:
  Level 1 —
Quoted prices for identical assets and liabilities in active
markets;
  Level 2 —
Quoted prices for similar assets and liabilities in active markets; quoted
prices for identical or similar assets and liabilities in markets that are not
active; and model-derived valuations in which all significant inputs and
significant value drivers are observable  in active markets;
and
  Level 3 —
Valuations derived from valuation techniques in which one or more significant
inputs or significant value drivers are unobservable.
 
 The
Company designates cash equivalents as Level 1. As of December 31, 2008 and
2007, the Company did not have any cash equivalents, therefore there were no
assets measured at fair value.
 
 In
February 2007, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities-Including an
Amendment of FASB Statement No. 115 (“SFAS 159”).  SFAS 159
permits entities to measure eligible assets and liabilities at fair
value.  Unrealized gains and losses on items for which the fair value
option has been elected are reported in earnings.  SFAS 159 is
effective for fiscal years beginning after November 15, 2007.  The
Company adopted SFAS 159 on January 1, 2008 and did not elect the fair value
option which did not have a material impact on its financial position and
results of operations.
 
 In
December 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141R, Business Combinations , and
Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in
Consolidated Financial Statements,    an amendment of ARB No. 51
..  These new standards significantly change the accounting for and
reporting of business combination transactions and noncontrolling interests
(previously referred to as minority interests) in consolidated financial
statements.  Both standards are effective for fiscal years beginning on or
after December 15, 2008, with early adoption prohibited. These Statements are
effective for the Company beginning on January 1, 2009.  The Company is
currently evaluating the provisions of FAS 141(R) and FAS 160.
  In
March 2008, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 161, Disclosures About Derivative
Instruments and Hedging Activities,    an amendment of FASB Statement No.
133 . This new standard enhances the disclosure requirements related
to derivative instruments and hedging activities required by FASB Statement No. 133
..  This standard is effective for fiscal years and interim periods
beginning after November 15, 2008, with early adoption encouraged. The Company
adopted the required provisions of SFAS 161 on January 1, 2008 and the adoption
did not have a significant impact on its financial position and results of
operations.
  F-7
  FIRST
TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 DECEMBER
31, 2008 AND 2007
 
 NOTE
2 - CAPITAL STOCK AND STOCKHOLDER’S EQUITY
 
 We are
authorized to issue 125,000,000 shares of common stock with a par value of $.01
per share and 25,000,000 shares of preferred stock with a par value of $.01 per
share.
 
 On August
1, 2008 we effected a 1 for 20 reverse split of our common stock. All share and
per share amounts have been retroactively adjusted to reflect this reverse
split.
  On April
21, 2008, we entered into a consulting agreement in which we issued 18,750
shares of restricted common stock for services provided to the Company in
connection with becoming current in its required governmental filings and
related matters. The shares were valued at $0.50 per share. We also entered into
a second agreement with the consulting firm to provide due diligence services on
any potential merger candidate. In consideration of services to be rendered, the
consulting firm will receive $60,000 at the closing of a merger transaction or,
if in lieu thereof, the Company effects a change of control transaction during
the term of the consulting agreement, the consulting firm will receive $60,000
at the closing of the change of control transaction from the seller’s proceeds.
This amount was paid upon the change of control transaction described in Note
1.
  On April
21, 2008, in consideration for legal services, we issued 17,500 shares of
restricted common stock to the Company’s legal counsel. These shares were valued
at $0.50 per share.
  On August
14, 2008, in connection with the change of control described in Note 1,
stockholder debt and accrued interest aggregating $1,050,663 was converted into
656,665 shares of common stock.
 
 On
October 20, 2008, we entered into a Stock Subscription Agreement (“the
Agreement”) with three accredited and non-affiliated investors (the
“Investors”). Pursuant to the Agreement, the Investors purchased an aggregate of
450,000 shares for $49,500.
 
 On
October 20, 2008, we issued 10,000 shares of common stock, valued at $1,100, for
legal services.
  NOTE
3 – RELATED PARTY TRANSACTIONS
  Loans
Payable to Shareholders
  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 eight percent per annum on the loan balance. The note
and accompanying security agreement provides a first lien over all 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 $1.60 per share. From inception through June 30, 2008, the lender
advanced $1,248,541 of which $475,000 of this amount has been converted into
common stock equity.
  On May
27, 2008, the Company distributed 200 shares of stock it held in China Bio
Energy Holding Group Co., Inc., an unaffiliated company, to such officer and
director. The total value of these shares on the date of distribution was $1,750
and was applied against the outstanding principal balance of the note payable to
such officer and director. The outstanding principal balance of the note payable
was $771,791.
  In
connection with the change of control described in Note 1, the office and
director transferred her interest in the note and accrued interest to the
purchasers. The note and accrued interest, aggregating $1,055,663, was then
converted into 656,665 shares of common stock.
 
 NOTE
4 – WARRANTS
 
 At
December 31, 2008 and 2007 we have outstanding common stock warrants to purchase
13,750 and 18,750 shares, respectively, of our common stock at $30.00 per share.
These warrants expire January 18, 2013.
  F-8
  FIRST
TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 DECEMBER
31, 2008 AND 2007
 
 Transactions
involving our warrant issuances are summarized as follows:
  2008
                                      
                                      
                                      2007Number
                                      
                                      
                                      Weighted
                                        Average
                                        Exercise Price
                                      
                                      
                                      Number
                                      
                                      
                                      Weighted
                                        Average
                                        Exercise PriceOutstanding at beginning of
      the period
                                      
                                      
                                      18,750
                                      
                                      
                                      $
                                      30.00
                                      
                                      
                                      
                                      24,150
                                      
                                      
                                      $
                                      27.76Granted
      during the period
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —Exercised
      during the period
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —Terminated
      during the period
                                      
                                      
                                      (5,000
                                      )
                                      
                                      
                                      30.00
                                      
                                      
                                      
                                      (5,400
                                      )
                                      
                                      
                                      20.00Outstanding
      at end of the period
                                      
                                      
                                      13,750
                                      
                                      
                                      $
                                      30.00
                                      
                                      
                                      
                                      18,750
                                      
                                      
                                      $
                                      30.00Exercisable
      at end of the period
                                      
                                      
                                      13,750
                                      
                                      
                                      $
                                      30.00
                                      
                                      
                                      
                                      18,750
                                      
                                      
                                      $
                                      30.00
 
 NOTE
5 - INCOME TAXES
  During
the year ended December 31, 2007, we adopted Financial Accounting Standards
Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes"
(FIN 48), which supplements SFAS No. 109, "Accounting for Income Taxes," by
defining the confidence level that a tax position must meet in order to be
recognized in the financial statements. The Interpretation requires that the tax
effects of a position be recognized only if it is "more-likely-than-not" to be
sustained based solely on its technical merits as of the reporting date. The
more-likely-than-not threshold represents a positive assertion by management
that a company is entitled to the economic benefits of a tax position. If a tax
position is not considered more-likely- than-not to be sustained based solely on
its technical merits no benefits of the tax position are to be recognized.
Moreover, the more-likely-than-not threshold must continue to be met in each
reporting period to support continued recognition of a benefit. With the
adoption of FIN 48, companies are required to adjust their financial statements
to reflect only those tax positions that are more-likely-than-not to be
sustained. Any necessary adjustment would be recorded directly to retained
earnings and reported as a change in accounting principle.
 
 SFAS No.
109 requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of events that have been included in the
financial statement or tax returns. Under this method, deferred tax liabilities
and assets are determined based on the difference between financial statements
and tax bases of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse. Temporary differences
between taxable income reported for financial reporting purposes and income tax
purposes are insignificant.
  Net
operating losses for tax purposes of approximately $2,253,000 at December 31,
2008 are available for carryover. The net operating losses will expire in 2028.
We have provided a 100% valuation allowance for the deferred tax benefit
resulting from the net operating loss carryover due to our limited operating
history. In addressing 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 not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences are deductible. The valuation
allowance increased by $128,000 in 2008 and decreased by $9,000 in 2007. A
reconciliation of the statutory Federal income tax rate and the effective income
tax rate for the years ended December 31, 2008 and 2007
follows.
  F-9
  FIRST
TRANSACTION MANAGEMENT, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 
 DECEMBER
31, 2008 AND 2007
 Significant
components of deferred tax assets and liabilities are as follows:
 2008
                            
                            
                            2007Deferred
      tax assets:Net
      operating loss carryforward
                            
                            
                            766,000
                            
                            
                            
                            638,000Valuation
      allowance
                            
                            
                            (766,000
                            )
                            
                            
                            (638,000
                            )Net
      deferred tax assets
                            
                            $
                            -
                            
                            
                            $
                            -Statutory
      federal income tax rate
                            
                            
                            -34
                            %
                            
                            
                            -34
                            %State
      income taxes, net of federal taxes
                            
                            
                            -0
                            %
                            
                            
                            -0
                            %Non-deductible
      items
                            
                            
                            11
                            %
                            
                            
                            0
                            %Valuation
      allowance
                            
                            
                            23
                            %
                            
                            
                            34
                            %Effective
      income tax rate
                            
                            
                            0
                            %
                            
                            
                            0
                            %
  F-10




ITEM 9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE




Not
applicable.





ITEM 9A.
            CONTROLS
      AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures




Based on
management’s evaluation (with the participation of our CEO and Chief Financial
Officer (Principal Accounting Officer)), as of the end of the period covered by
this report, our CEO and Principal Accounting Officer have concluded that our
disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange
Act)), are effective to provide reasonable assurance that information required
to be disclosed by us in reports that we file or submit under the Exchange Act
is recorded, processed, summarized, and reported within the time periods
specified in SEC rules and forms, and is accumulated and communicated to
management, including our principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding required
disclosure.




Changes
in Internal Control Over Financial Reporting




There
were no changes to our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during
the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.




Management
Report on Internal Control Over Financial Reporting




The
management of First Transaction Management, Inc. is responsible for establishing
and maintaining adequate internal control over financial reporting, as defined
in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.
Internal control over financial reporting is a process designed by, or under the
supervision of, the Company’s principal executive and principal accounting
officers to provide reasonable assurance to the Company’s management and board
of directors regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. Internal control over financial
reporting includes those policies and procedures that:




·
            pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;




20





·
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the Company
      are being made only in accordance with authorizations of management and
      directors of the Company; and




·
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.




Because
of inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risks that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. A control system, no matter how well
designed and operated, can provide only reasonable, but not absolute, assurance
that the control system’s objectives will be met. The design of a control system
must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs.




Management
assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2008. In making this assessment, management
used the criteria set forth inInternal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”) as a guide. However, due
to the timing of many of the changes to the processes and internal controls,
management’s assessment was limited to a risk assessment and a review of the
design effectiveness of the entity level and financial reporting controls.
Accordingly, while management’s assessment is that the design of controls is
adequate, except as noted herein, since the controls were not completely tested
in accordance with the COSO standards. We have determined that our controls over
financial reporting were effective.




Inherent
Limitations on Effectiveness of Controls




Our
management, including the CEO and Principal Accounting Officer, does not expect
that our disclosure controls or our internal control over financial reporting
will prevent or detect all error and all fraud. A control system, no matter how
well designed and operated, can provide only reasonable, not absolute, assurance
that the control system’s objectives will be met. The design of a control system
must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple
error or mistake. Controls can also be circumvented by the individual acts of
some persons, by collusion of two or more people, or by management override of
the controls. The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Projections of any evaluation of controls effectiveness to
future periods are subject to risks. Over time, controls may become inadequate
because of changes in conditions or deterioration in the degree of compliance
with policies or procedures.




PART III





ITEM 10.        DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





Directors





The
following sets forth our current directors and information concerning their ages
and background. All directors hold office until the next annual meeting of
stockholders and until their respective successors are elected, except in the
case of death, resignation or removal:





Name
                
                Principal Occupation
                
                Age
                
                Director
                  SinceLawrence
      Chimerine
                
                President
      of Radnor International Consulting, Inc.
                
                
                
                8/08





Lawrence
Chimerine,Dr.
Chimerine has for more than the past nineteen years been president of Radnor
International Consulting Inc., based in Radnor, Pennsylvania and partner and
member of the Investment Committee of Miller Investment Management, based in
West Conshohocken, Pennsylvania. For more than the past 25 years Dr. Chimerine
has been an economic consultant advising financial institutions and government
agencies on the state of the United States and world economics, on specific
industries and business sectors, and on the impact of economic conditions on
decision making, budgeting, and strategic planning. He has served on the House
of Representatives Task Force on International Competitiveness, the Census
Advisory Committee and the Economic Policy Board of the Department of Commerce.
He is the author or editor of two books as well as articles that have appeared
in the New York Times, Washington Post, and American Economic Review and other
publications.


21





Executive
Officers and Significant Employees





The
following sets forth our current executive officers and information concerning
their age and background:





Name
                
                Position
                
                Age
                
                Position SinceLawrence  Chimerine
                
                Chief
      Executive Officer and Chief Financial Officer
                
                
                
                8/08





Lawrence  Chimerine. –
See Bio in Directors Section





Code
of Ethics





We have
not adopted a "Code of Ethics” as a result of our shell status, limited
management and limited number of transactions, if any, conducted by the
company.





Committees




There are
no committees of the Board of Directors. The Company’s By-laws provide that the
size of the Board of Directors may be changed by resolution of the Board.
Members of the Board serve until the next annual meeting of shareholders and
until their successors are elected and qualified. Meetings of the Board are held
when and as deemed necessary or appropriate. Officers are appointed by and serve
at the discretion of the Board.





ITEM 11.        EXECUTIVE
COMPENSATION





Executive
Compensation





Summary
Compensation





The
following table sets forth information for our most recently completed fiscal
year concerning the compensation of (i) the Principal Executive Officer and
(ii) all other executive officers of First Transaction Management, Inc. who
earned over $100,000 in salary and bonus during the last most recently completed
fiscal year ended December 31, 2008 (together the “Named
Executive Officers”).  No other employees earned a salary over
$100,000 in the last completed fiscal years.





Name and
                                        principal
                                        position
                                        (a)
                                      
                                      Year
                                        (b)
                                      
                                      Salary($)(c)
                                      
                                      Bonus
                                        ($)
                                        (d)
                                      
                                      Stock
                                        Awards
                                        ($)
                                        (e)
                                      
                                      Option
                                        Award
                                        ($)
                                        (f)(2)
                                      
                                      Nonequity
                                        Incentive
                                        Plan
                                        compensation
                                        ($)
                                        (g)
                                      
                                      Non-qualified
                                        deferred
                                        compensation
                                        earning
                                        ($)
                                        (h)
                                      
                                      All other
                                        Compensation
                                        ($)
                                        (i)(1)
                                      
                                      Total
                                        ($)
                                        (j)Lawrence  Chimerine
                                        Chief
      ExecutiveOfficer
                                      
                                      2008
                                      
                                      $
                                      3,000
                                      (1)
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      $
                                      3,000Susan
      Schreter
                                        Chief Executive
      Officer
                                      
                                      2008
                                      
                                      $
                                      14,237
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      $
                                      14,237







(1)  We
have accrued for GAAP reporting purposes a monthly salary of $1,000 to Mr.
Chimerine.





Employment
Agreements and Arrangements





At
present, we have no employment agreements with any of our executive
officers.  For purposes of GAAP reporting, we are accruing a monthly
salary of $1,000 per month to Mr. Chimerine.








ITEM 12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS





Securities
authorized for issuance under equity compensation plans





Information
regarding shares authorized for issuance under equity compensation plans
approved and not approved by stockholders required by this Item are incorporated
by reference from Item 5 of this Annual Report from the section entitled
“Equity Compensation Plan
Information.”





Security
Ownership of Certain Beneficial Owners and Management





The
following table sets forth, as of March 16, 2009, information regarding
beneficial ownership of our capital stock by:


22





·
              each
      person, or group of affiliated persons, known by us to be the beneficial
      owner of 5% or more of any class of our voting
  securities;





·
              each
      of our current directors and
nominees;





·
              each
      of our current named executive officers;
and





·
              all
      current directors and named executive officers as a
  group.




Beneficial
ownership is determined according to the rules of the SEC. Beneficial ownership
means that a person has or shares voting or investment power of a security and
includes any securities that person or group has the right to acquire within 60
days after the measurement date. This table is based on information supplied by
officers, directors and principal stockholders. Except as otherwise indicated,
we believe that each of the beneficial owners of the common stock listed below,
based on the information such beneficial owner has given to us, has sole
investment and voting power with respect to such beneficial owner’s shares,
except where community property laws may apply.





Common StockName
      and Address of Beneficial Owner(1)
                      
                      Shares
                      
                      
                      Shares
                        Underlying
                        Convertible
                        Securities(2)
                      
                      
                      Total
                      
                      
                      Percent ofClass(2)Directors
      and named executive officersLawrence
      Chimerine
                      
                      
                      18,022
                      
                      
                      
                      —
                      
                      
                      
                      18,022
                      
                      
                      
                      1.2
                      %Beneficial
      Owners of 5% or moreVision
      Opportunity Master Fund, Ltd.
                      
                      
                      627,533
                      
                      
                      
                      —
                      
                      
                      
                      627,533
                      
                      
                      
                      41.4
                      %Potomac
      Investments
                      
                      
                      420,000
                      
                      
                      
                      
                      
                      
                      
                      420,000
                      
                      
                      
                      27.7
                      %Castle
      Bison, Inc.
                      
                      
                      183,796
                      
                      
                      
                      —
                      
                      
                      
                      183,796
                      
                      
                      
                      12.1
                      %





*
            Less
      than one percent.(1)
            Except
      as otherwise indicated, the persons named in this table have sole voting
      and investment power with respect to all shares of common stock shown as
      beneficially owned by them, subject to community property laws where
      applicable and to the information contained in the footnotes to this
      table. Unless otherwise indicated, the address of the beneficial owner is
      First Transaction Management, Inc., 31200 Via Colinas, Suite 200, Westlake
      Village, CA 91362.(2)
            Pursuant
      to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership
      includes any shares as to which a shareholder has sole or shared voting
      power or investment power, and also any shares which the shareholder has
      the right to acquire within 60 days, including upon exercise of common
      shares purchase options or warrant. There are 1,515,920 shares of common
      stock issued and outstanding as of March 16,
  2009.





ITEM 13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE





Transactions
with our former Chief Executive Officer and Majority Shareholder





On July
12, 2000, we entered into a secured loan agreement with Susan Schreter, our
former Chief Executive Officer and majority shareholder which provided for the
repayment of the outstanding balance plus accrued simple interest at eight
percent per annum on the loan balance. The note and accompanying security
agreement provides a first lien over all our assets, including equipment,
intellectual property and liquid assets. Ms. Schreter was 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 $1.60 per share. From
inception through June 30, 2008, the lender advanced $1,248,541 of which
$475,000 has previously been converted into common stock.




On May
27, 2008, the Company distributed 200 shares of stock it held in China Bio
Energy Holding Group Co., Inc., an unaffiliated company, to Ms Schreter. The
total value of these shares on the date of distribution was $1,750 and was
applied against the outstanding principal balance of the note payable to such
officer and director. The outstanding principal balance of the note payable was
$771,791 as of such date.





In
connection with the change of control described in our Current Report on Form
8-K filed on August 19, 2008, the purchasers converted the outstanding balance
of the note of $1,055,663 (including accrued interest) into 656,665 shares of
common stock.


23





ITEM 14.        PRINCIPAL
ACCOUNTING FEES AND SERVICES





The
following table summarizes the approximate aggregate fees billed to us or
expected to be billed to us by our independent auditors for our 2008 and 2007
fiscal years:





Type of Fees
                
                2008
                
                
                2007Audit
      Fees
                
                $
                10,000
                
                
                $
                10,000Audit
      Related Fees
                
                
                7,500
                
                
                
                5,000Tax
      Fees
                
                
                -
                
                
                
                1,000All
      Other Fees
                
                
                -
                
                
                
                -Total
      Fees
                
                $
                17,500
                
                
                $
                16,500





Pre-Approval
of Independent Auditor Services and Fees




Our board
of directors reviewed and pre-approved all audit and non-audit fees for services
provided by Colabella & Company LLP and has determined that the provision of
such services to us during fiscal 2008 is compatible with and did not impair
independence. It is the practice of the audit committee to consider and approve
in advance all auditing and non-auditing services provided to us by our
independent auditors in accordance with the applicable requirements of the SEC.
Colabella & Company LLP did not provide us with any services, other than
those listed above.




PART IV





ITEM 15.      EXHIBITS, FINANCIAL
STATEMENT SCHEDULES





1.
            Financial
      Statements: See “Index to Financial Statements” in Part II,
      Item 8 of this Form 10-K.




2.
            Exhibits:
      The exhibits listed in the accompanying index to exhibits are filed or
      incorporated by reference as part of this
  Form 10-K.




Certain
of the agreements filed as exhibits to this Form 10-K contain
representations and warranties by the parties to the agreements that have been
made solely for the benefit of the parties to the agreement. These
representations and warranties:





·
            may
      have been qualified by disclosures that were made to the other parties in
      connection with the negotiation of the agreements, which disclosures are
      not necessarily reflected in the
agreements;





·
            may
      apply standards of materiality that differ from those of a reasonable
      investor; and





·
            were
      made only as of specified dates contained in the agreements and are
      subject to later developments.





Accordingly,
these representations and warranties may not describe the actual state of
affairs as of the date they were made or at any other time, and investors should
not rely on them as statements of fact.





SIGNATURES




In
accordance with 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.




FIRST
      TRANSACTION MANAGEMENT, INCDated:
      March 27, 2009
                  By:
                  /S/
      Lawrence ChimerineLawrence
      Chimerine
                    Chief
      Executive Officer




24





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
following capacities and on the dates indicated.





Name
                              
                              Title
                              
                              Date/s/
      Lawrence Chimerine
                              
                              Chief
      Executive Officer and Principal Accounting Officer and Director
                              
                              March
      27, 2009Lawrence
      Chimerine
                              
                              (Principal
      executive officer and Principal financial and accounting
                                officer)




25




EXHIBITS
LIST
 
 INDEX
TO EXHIBITS
 Incorporated by
ReferenceExhibit No.
                    Description
                    Filed Herewith
                    Form
                    Exhibit No.
                    File No.
                    Filing Date3.01
                    Certificate
      of Incorporation dated March 25, 1999
                    
                    10SB12G
                    3.1
                    000-27615
                    10/13/993.02
                    Certificate
      of Amendment dated September 24, 1999
                    
                    10SB12G
                    3.2
                    000-27615
                    10/13/993.03
                    Certificate
      of Amendment filed August 20, 2001
                    
                    10KSB
                    3.3
                    000-27615
                    8/24/074.01
                    1999
      Incentive Stock Plan
                    
                    10SB12G/A
                    4.1
                    000-27615
                    11/24/9910.01
                    Secured
      Promissory Note dated July 12, 2000
                    
                    10KSB
                    10.4
                    000-27615
                    8/24/0710.02
                    Security
      Agreement dated July 12, 2000
                    
                    10KSB
                    10.5
                    000-27615
                    8/24/0731.1
                    Certification
      of the Principal Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
                    *31.2
                    Certification
      of the Principal Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
                    *32.1
                    Certification
      of Principal Executive Officer Pursuant to 18 U.S.C. §
1350
                    *32.2
                    Certification
      of Principal Financial Officer Pursuant to 18 U.S.C. §
1350
                    *
  **Management
contracts or compensation plans or arrangements in which directors or executive
officers are eligible to participate.


26