FIRST TRANSACTION MANAGEMENT INC - FORM 10-K/A

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EX-31.1 - EXHIBIT 31.1 - FIRST TRANSACTION MANAGEMENT INC	v237503_ex31-1.htm
EX-32.2 - EXHIBIT 32.2 - FIRST TRANSACTION MANAGEMENT INC	v237503_ex32-2.htm
EX-31.2 - EXHIBIT 31.2 - FIRST TRANSACTION MANAGEMENT INC	v237503_ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - FIRST TRANSACTION MANAGEMENT INC	v237503_ex32-1.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(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, 2010.

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

For the transition period from _____________ to _____________.

Commission File Number 000-27615

FIRST TRANSACTION MANAGEMENT, INC.

(Exact name of registrant as specified in its charter)

Delaware		52-2158936
State 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)

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 x No

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 x No

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ 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, 2011 was 1,515,920.

DOCUMENTS INCORPORATED BY REFERENCE

None

EXPLANATORY NOTE

This Amendment No. 1 to the Annual Report on Form 10-K/A (the “Amendment”) amends the Annual Report on Form 10-K of First Transaction Management, Inc. (the “Company”) for the fiscal year ended December 31, 2010 (the “Original Filing”), that was originally filed with the U.S. Securities and Exchange Commission on March 31, 2011. The Amendment is being filed to revise the Report of Independent Registered Public Accounting Firm for the fiscal year 2010 to include the period March 25, 1999 (Inception) to December 31, 2010. Additionally, the Amendment revises Item 9A to correct a typographical error and to state that management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010. In connection with the filing of this Form 10-K/A and pursuant to SEC rules, the Amendment includes currently dated certifications of our Chief Executive Officer and Chief Financial Officer.

Except as described above, the Amendment does not modify or update the disclosures presented in, or exhibits to, the Original Filing in any way. The Amendment continues to speak as of the date of the Original Filing. Furthermore, the Amendment does not reflect events occurring after the filing of the Original Filing. Accordingly, the Amendment should be read in conjunction with the Original Filing, as well as the Company’s other filings made with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act subsequent to the filing of the Original Filing.

FIRST TRANSACTION MANAGEMENT, INC

FORM 10-K/A

FOR THE YEAR ENDED DECEMBER 31, 2010

INDEX

		Page
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	4
Item 2.	Properties	6
Item 3.	Legal Proceedings	6
Item 4.	Removed and Reserved	6

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6.	Selected Financial Data	7
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	9
Item 8.	Financial Statements and Supplementary Data	9
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	10
Item 9A.	Controls and Procedures	10
Item 9B.	Other Items	11

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	11
Item 11.	Executive Compensation	12
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	13
Item 13.	Certain Relationships and Related Transactions, and Director Independence	14
Item 14.	Principal Accounting Fees and Services	14

PART IV
Item 15.	Exhibits, Financial Statement Schedules	14

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” or “common stock” refers to our $0.01 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.

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").

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.

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 1 employee which includes our Chief Executive Officer. Our employee is considered a part-time employee. We do not have any employees represented by a union or other collective bargaining group. We consider our relations with our employee 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: First Transaction Management, Inc., c/o Castle Bison, Inc., 31200 Via Colinas, Suite 200, Westlake Village, CA 91362, (818) 597-7552.

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.

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.

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 share 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 facilities. Our use of the space is minimal.

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.

REMOVED AND RESERVED

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 “FMNG”. 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 17, 2011 our common stock was held by approximately 143 record holders. Notwithstanding, we believe our actual number of shareholders may be significantly higher as 68,304 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.

None.

Equity Compensation Plan Information

The following table sets forth information with respect to our 2001 Stock Plan as of December 31, 2010.

	(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 not approved by security holders
2001 Stock Option Plan		—		—		750,000
Total		—		—		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 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").

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 March of 2011. 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, 2010 to the Year Ended December 31, 2009

We had no revenues from consulting services in the years ended December 31, 2010 or 2009 attributable to lack of consulting client service activity since late 2007. Operating expenses decreased from $85,229 in 2009 to $81,719 in 2010, a decrease of $3,510, or 4%, resulting from a decrease in administrative expenses. The primary components of our current operating expenses are compensation and professional fees.

Interest expense was $1,442 in 2010 and $459 in 2009. The increase results from loans received from a stockholder during each of the third quarters of 2010 and 2009.

As the Company’s current focus and that for the next 12 months is on our acquisition strategy, the Company does not believe that quarter to quarter and year to year comparisons of its historical results of operations are meaningful in predicting our future financial performance. 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, 2010 we had a working capital deficit of $169,187. 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. On August 19, 2009 we executed a promissory note with a stockholder in the amount of $25,000. The note bears interest at 5% per year and matures on August 19, 2011. On August 13, 2010 we executed a second promissory note with a stockholder in the amount of $10,000. The note bears interest at 5% per year and matures on August 13, 2012. Our cash on hand on at March 15, 2011 of approximately $5,600 is insufficient to satisfy our immediate financial needs or provide us with sufficient capital to maintain our business and to finance acquisitions. Ultimately 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.

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

		Page

Report of Colabella & Company LLP, Independent Registered Public Accounting Firm		F-1

Balance Sheets		F-2

Statements of Operations		F-3

Statements of Deficiency in Stockholders’ Equity		F-4

Statements of Cash Flows		F-5

Notes to Financial Statements		F-6

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, 2010 and 2009, and the related statements of operations, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2010 and the period from March 25, 1999 (date of inception) through December 31, 2010. 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, 2010 and 2009, and the results of its operations, its statement of changes in stockholder’s equity and its cash flows for each of the two years in the period ended December 31, 2010 and the period from March 25, 1999 (date of inception) through December 31, 2010 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 22, 2011

F-1

FIRST TRANSACTION MANAGEMENT, INC.

(A Development Stage Company)

BALANCE SHEETS

	December 31,			December 31,
	2010			2009

Assets

Current assets:
Cash	$	6,817		$	14,185

Total assets	$	6,817		$	14,185

Liabilities and deficiency in stockholders' equity

Current liabilities:

Accounts payable and accrued expenses	$	145,503		$	84,752
Accrued interest - stockholder		1,901			459
Advance payable		3,600			-
Note payable - stockholder		25,000			-

Total current liabilities		176,004			85,211

Note payable - stockholder		10,000			25,000

Total liabilities		186,004			110,211

Deficiency 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 shares issued and outstanding, respectively		15,159			15,159
Additional paid-in capital		2,479,961			2,479,961
Deficit accumulated during the development stage		(2,674,307	)		(2,591,146	)

Total deficiency in stockholders' equity		(179,187	)		(96,026	)

Total liabilities and deficiency in stockholders' equity	$	6,817		$	14,185

The accompanying notes are an integral part of these financial statements.

F-2

FIRST TRANSACTION MANAGEMENT, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

							For the Period
							March 25, 1999
							(Inception) to
	Years ended December 31,						December 31,
	2010			2009			2010

Fees - consulting	$	-		$	-		$	534,634

Operating expenses		81,719			85,229			1,716,970
Depreciation and amortization		-			-			277,177
Write-off of intangibles		-			-			776,065

Total expense		81,719			85,229			2,770,212

Loss from operations before other income and interest expense		(81,719	)		(85,229	)		(2,235,578	)

Gain on distribution of shares		-			-			1,750
Other income		-			-			5,879
Interest expense, net		(1,442	)		(459	)		(446,358	)

Loss before income taxes		(83,161	)		(85,688	)		(2,674,307	)

Provision for income taxes		-			-			-

Net loss		(83,161	)		(85,688	)		(2,674,307	)

Net loss per basic and diluted share	$	(0.05	)	$	(0.06	)

Weighted average shares outstanding, basic and diluted		1,515,920			1,515,920

The accompanying notes are an integral part of these financial statements.

F-3

FIRST TRANSACTION MANAGEMENT, INC.

(A Development Stage Company)

STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY

MARCH 25, 1999 (INCEPTION) to DECEMBER 31, 2010

								Deficit
								Accumulated
						Additional		During the
		Common Stock				Paid-in		Development			Stockholders'
		Shares		Amount		Capital		Stage			Deficiency

Common stock sold for cash	March 25, 1999		1	$	-	$	50,000	$	-		$	50,000

Intangible assets contributed in spin-off transaction	June 30, 1999		-		-		165,652		-			165,652

Common stock sold for cash	September 27, 1999		76,410		764		299,236		-			300,000

Common stock sold for cash	October 4, 1999		19,200		192		19,008		-			19,200

Net loss			-		-		-		(33,139	)		(33,139	)

Balance, December 31, 1999			95,611		956		533,896		(33,139	)		501,713

Common stock sold for cash	December 4, 2000		18,750		188		374,812		-			375,000

Net 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		-			16,000

Common stock issued for services	December 31, 2001		4,250		42		27,158		-			27,200

Common stock issued for debt	December 31, 2001		234,444		2,344		372,656		-			375,000

Net 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		-			31,680

Common stock issued for services	June 30, 2002		2,500		25		15,975		-			16,000

Net 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			28,686

Balance, 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			28,115

Balance, 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		-			18,125

Common stock issued upon conversion of debt and accrued interest	August 14,2008		656,665		6,567		1,044,096		-			1,050,663

Common stock sold for cash	October 20, 2008		450,000		4,500		45,000		-			49,500

Common stock issued for services	October 20, 2008		10,000		100		1,000		-			1,100

Net loss			-		-		-		(180,229	)		(180,229	)

Balance, December 31, 2008			1,515,920		15,159		2,479,961		(2,505,458	)		(10,338	)

Net loss			-		-		-		(85,688	)		(85,688	)

Balance, December 31, 2009			1,515,920		15,159		2,479,961		(2,591,146	)		(96,026	)

Net loss			-		-		-		(83,161	)		(83,161	)

Balance, December 31, 2010			1,515,920	$	15,159	$	2,479,961	$	(2,674,307	)	$	(179,187	)

The accompanying notes are an integral part of these financial statements.

F-4

FIRST TRANSACTION MANAGEMENT, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

							For the Period
							March 25, 1999
							(Inception) to
	Years ended December 31,						December 31,
	2010			2009			2010

Cash flows from operating activities:
Net loss	$	(83,161	)	$	(85,688	)	$	(2,674,307	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		-			-			424,160
Stock based compensation		-			-			66,905
Gain on reduction of stockholder loan		-			-			(1,750	)
Write off of intangibles		-			-			645,631
Change in operating assets and liabilities
Accounts payable and accrued expenses		60,751			57,270			145,503
Accrued interest		1,442			459			280,773

Net cash used in operating activities		(20,968	)		(27,959	)		(1,113,085	)

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		-			-			841,925
Advance payable		3,600			-			3,600
Proceeds from stockholder note		10,000			25,000			1,212,780

Net cash provided by financing activities		13,600			25,000			2,024,041

Net increase (decrease) in cash		(7,368	)		(2,959	)		6,817
Cash, beginning of period		14,185			17,144			-
Cash, end of period	$	6,817		$	14,185		$	6,817

Supplemental cash flow information:

Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of these financial statements.

F-5

FIRST TRANSACTION MANAGEMENT, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2010 and 2009

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 “ the 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.

We are a development stage entity, as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915.

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.

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.

F-6

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.

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, 2010 or 2009.

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. We place our cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of applicable government mandated insurance limits.

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, 2010 and 2009. 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.

Fair value of financial instruments

Our short-term financial instruments, including cash, accounts payable and note payable, consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our long term note is based on management estimates and reasonably approximates its book value after comparison to obligations with similar interest rates and maturities.

Income Taxes

We utilize ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

F-7

Stock-Based Compensation

We account for our stock based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial statements.

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.

NOTE 3 – RELATED PARTY TRANSACTIONS

Notes Payable - Stockholder

On August 13, 2010 we executed a $10,000 promissory note with a stockholder. The note bears interest at 5% per year and matures on August 13, 2012. Interest is payable at maturity.

On August 19, 2009 we executed a $25,000 promissory note with a stockholder. The note bears interest at 5% per year and matures on August 19, 2011. Interest is payable at maturity.

NOTE 4 – WARRANTS

At December 31, 2010 and 2009 we have outstanding common stock warrants to purchase 13,750 shares of our common stock at $30.00 per share. These warrants expire January 18, 2013.

Transactions involving our warrant issuances are summarized as follows:

	2010				2009
	Number		Weighted Average Exercise Price		Number		Weighted Average Exercise Price
Outstanding at beginning of the period		13,750	$	30.00		13,750	$	30.00
Granted during the period		—		—		—		—
Exercised during the period		—		—		—		—
Terminated during the period		—		—		—		—
Outstanding at end of the period		13,750	$	30.00		13,750	$	30.00
Exercisable at end of the period		13,750	$	30.00		13,750	$	30.00

F-8

NOTE 5 - INCOME TAXES

We utilize ASC 740 “Income Taxes”, which requires the 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 difference between financial statement 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 $2,423,000 at December 31, 2010 are available for carryover. The net operating losses will expire in 2030. The net operating loss carryovers may be subject to limitations under Internal Revenue Code due to significant changes in the Company’s ownership. 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 $28,000 in 2010 and increased by $30,000 in 2009. A reconciliation of the statutory Federal income tax rate and the effective income tax rate for the years ended December 31, 2010 and 2009 follows.

Significant components of deferred tax assets and liabilities are as follows:

	2010			2009

Deferred tax assets:
Net operating loss carryforward		824,000			796,000
Valuation allowance		(824,000	)		(796,000	)

Net deferred tax assets	$	-		$	-

Statutory federal income tax rate		-34	%		-34	%
State income taxes, net of federal taxes		-0	%		-0	%
Valuation allowance		34	%		34	%

Effective income tax rate		0	%		0	%

F-9

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;

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, 2010. In making this assessment, management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO ”) as a guide. Based on this assessment, our management concluded that, as of December 31, 2010, our internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only the management’s report in this annual report.

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.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective at that reasonable level of assurance.

ITEM 9B

OTHER INFORMATION

None.

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 Since
Lawrence Chimerine		President of Radnor International Consulting, Inc.		70		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.

Executive Officers and Significant Employees

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

Name		Position		Age		Position Since
Lawrence Chimerine		Chief Executive Officer and Chief Financial Officer		70		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.

Board Leadership Structure & Diversity

The Board does not have a policy on whether the same person should serve as both the chief executive officer and chairman of the board or, if the roles are separate, whether the chairman should be selected from the non-employee directors or should be an employee. The Board believes that it should have the flexibility to make these determinations at any given point in time in the way that it believes best to provide appropriate leadership for our company and business at that time. The Board believes that its current leadership structure, with Mr. Chimerine serving as both chief executive officer and board chairman, is appropriate given our shell status and limited operations.

Our risk management program is overseen by our Chief Executive Officer and sole board member.

We do not have a formal policy with regard to the consideration of diversity in identifying Director nominees.

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 Executive Officer	2010	$	12,000	(1)							$	12,000
	2009	$	12,000	(1)							$	12,000

(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, 2011, information regarding beneficial ownership of our capital stock by:

·	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 Stock
Name and Address of Beneficial Owner(1)	Shares		Shares Underlying Convertible Securities(2)		Total		Percent of Class(2)
Directors and named executive officers
Lawrence Chimerine		18,022		—		18,022		1.2	%
Beneficial Owners of 5% or more
Vision 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, 2011.

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.

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 2010 and 2009 fiscal years:

Type of Fees	2010		2009

Audit Fees	$	8,500	$	8,500

Audit Related Fees		7,500		7,500

Tax Fees		-		-

All Other Fees		-		-

Total Fees	$	16,000	$	16,000

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 2010 and 2009 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

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

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, INC

Dated: October 17, 2011	By:	/S/ Lawrence Chimerine
		Lawrence Chimerine Chief Executive Officer

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	October 19, 2011
Lawrence Chimerine	(Principal executive officer and Principal financial and accounting officer)

EXHIBITS LIST

INDEX TO EXHIBITS

Incorporated by Reference

Exhibit No.

Description

Filed Herewith

Form

Exhibit No.

File No.

Filing Date

3.01

Certificate of Incorporation dated March 25, 1999

10SB12G

3.1

000-27615

10/13/99

3.02

Certificate of Amendment dated September 24, 1999

10SB12G

3.2

000-27615

10/13/99

3.03

Certificate of Amendment filed August 20, 2001

10KSB

3.3

000-27615

8/24/07

3.04

Bylaws

10SB12G

3.4

000-27615

10/13/99

4.01

1999 Incentive Stock Plan

10SB12G/A

4.1

000-27615

11/24/99

31.1

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.

Attached files

FIRST TRANSACTION MANAGEMENT INC Reports

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