SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                   FORM 10-KSB

(Mark One)

      |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Fee required)

      For the fiscal year ended December 31, 2002

      |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No fee required)

      For the transition period from __________ to __________

      Commission file number l-9224

                           CAREERENGINE NETWORK, INC.
                 (Name of Small Business Issuer in Its Charter)

                 DELAWARE                                       13-2689850
      (State or Other Jurisdiction of                        (I.R.S. Employer
       Incorporation or Organization)                       Identification No.)

200 West 57th Street, Suite 1103, New York, NY.                   10022
  (Address of Principal Executive Offices)                      (Zip Code)

                                  212-775-0400
                (Issuer's Telephone Number, including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:

                                                    Name of Each Exchange
          Title of Each Class                       on Which Registered

    Common stock - par value $.10                  American Stock Exchange
                                                       Pacific Exchange

         Securities registered under Section 12(g) of the Exchange Act:

                                      None
                                (Title of Class)

      Check whether the issuer; (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes |X| No |_|

                            (Cover page 1 of 2 pages)

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      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. |_|

      Issuer's revenues for 2002, its most recent fiscal year, were $240,048.

      As of March 31, 2003, the aggregate market value of voting stock held by
non-affiliates of the Issuer was approximately $2,795,000.

      The number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

            Class                       Outstanding at March 31, 2003

   Common stock - par value $.10                      5,590,944

                       DOCUMENTS INCORPORATED BY REFERENCE

      None.

                            (Cover page 2 of 2 pages)

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                                     PART I

Item l. Description of Business.

      Background and History

      CareerEngine Network, Inc., through its wholly-owned subsidiary
      CareerEngine, Inc., is engaged in the business of e-recruiting.
      CareerEngine Network, Inc. and all its subsidiaries are hereinafter
      collectively referred to as the "Company," "our," or "we" unless the
      context requires otherwise.

      In August 2000, we discontinued our merchant banking operations, which
      consisted of our real estate project with Carmike Cinemas, Inc., and our
      financial consulting operations. Accordingly, our remaining operations, as
      stated above, are solely from our e-recruiting activities. Our financial
      resources and our management's efforts are currently focused on this
      segment and raising capital.

      Our Continuing Operations

      E-recruiting activities are derived from the operations of the two
      divisions of our wholly-owned subsidiary, CareerEngine, Inc. These
      divisions, CareerEngine Network and CareerEngine Solutions, provide
      e-recruiting services.

      Our Network Division operates 6 portal career sites organized by specific
      job function and diversity and one general board.

      These sites enable employers and recruiters to post job offerings for
      specific target areas in one or more of our career specific sites.
      Prospective employees can search for jobs, confidentially post their
      resumes, and avail themselves of a host of other services.

      Our Solutions Division develops and maintains career sites for companies
      and recruiters. We customize these sites to reflect the particular look
      and feel of our customers' websites utilizing our software that we make
      available on an ASP basis. We believe that by offering multiple products
      and services to address online

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      recruiting needs, we have established our own unique niche in the online
      recruiting market.

            Our CareerEngine Network Division

            Most online job sites that offer aggregate listings in different
      fields lack specialized capabilities. Their postings are broad based,
      covering all types of jobs in many industries. As a result, job seekers
      must often search through exhaustive lists of unsuitable opportunities.
      The CareerEngine Network is different. Our category specific approach
      enables job seekers to focus on those opportunities that are suitable for
      their skills. We do this by limiting employment opportunities in each
      database to the industry covered by that database. This helps to reduce
      the quantity of non-related postings delivered by a key word search.
      Recruiters and employers can quickly find and attract qualified candidates
      with specialized skills and expertise. We attempt to screen our employment
      postings for specificity, although we are not always successful. However,
      we believe we offer a network of career sites through which a recruiter
      can conveniently and cost effectively focus on highly trained qualified
      candidates suited for specific job openings. The vertical orientation of
      our job sites - which encompass fields ranging from accounting to sales
      and IT - makes it easier for job seekers and potential employers to locate
      and evaluate one another.

      We derive a significant number of job postings through independent
      distributors. These distributors include major online and offline
      recruitment advertising firms and major recruitment and placement agencies
      that seek a variety of websites, both category specific and broad based,
      to post their clients' job openings. Some of our distributors include
      Bernard Hodes, TMP Worldwide, Shaker Advertising and Dice.

      Among the services provided to employers and recruiters on our network is
      the opportunity to access our confidential resume database containing
      resumes placed on our category specific websites by job seekers. These
      resumes are furnished to them with built-in safeguards to protect the
      privacy concerns of applicants.

      Revenue from the CareerEngine Network Division is derived from job
      placement advertisements, outsourced job seeker services and resume
      database access.

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            Our CareerEngine Solutions Division

            Online career centers are becoming increasingly utilized by web
      publishers, corporations and other organizations such as search firms that
      can generate revenue by selling job postings. Web publishers can utilize
      career centers to create additional revenue streams through advertising
      and retain visitors. Corporations can use a career center to make their
      online recruitment efforts more productive. Our CareerEngine Solutions
      Division offers the experience, staff and know-how to build, host and
      maintain on an ASP basis career centers for on and offline organizations
      more effectively, quicker and at less cost than would be the case if the
      organizations built and maintained their own websites. Our management
      believes that these career centers should provide a company with the
      opportunity to attract and recruit the best candidates by being able to
      offer them the ability to quickly assess the company's visions and
      competitive advantages by accessing information placed by the company in
      appropriate fields provided by us.

      We develop customized career websites for our clients and recommend
      proprietary "plug-ins" that incorporate the latest technology - such as
      job search agents and confidential resume hosting. If the site we
      construct becomes an important revenue producer for the client, they have
      the option of joining the CareerEngine Network and utilizing the sales
      representatives of our distributors to sell and market job postings for
      their sites. We also provide programs to help our clients facilitate their
      site updates and provide them with customer service capabilities.

      Revenues generated by this division include fees generated from website
      construction services, monthly subscription-type revenue streams based
      upon contractual terms for maintenance and website hosting services, and
      fees from consulting services.

      Our Discontinued Operations

      During the past five years we had concentrated in providing merchant and
      investment banking (primarily related to real estate projects such as our
      project with Carmike Cinemas, Inc.), financial consulting, and
      e-recruiting services. In 2000 our Board of Directors decided to
      discontinue the merchant and investment

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      banking and financial consulting segments to concentrate our efforts on
      our online recruiting business.

      In 1997, Movieplex Realty Leasing, L.L.C. ("Movieplex"), a subsidiary of
      the Company, entered into an agreement with a major film exhibitor,
      Carmike Cinemas, Inc. ("Carmike"), to develop and lease an unspecified
      number of state of the art multiplex movie theaters at a cost not to
      exceed approximately $75,000,000, plus an amount equal to any proceeds
      received by Movieplex from the investment of related funding prior to the
      expending of development costs (the "Project Funding"). Under the terms of
      the agreement, Carmike was responsible for construction costs in excess of
      the Project Funding. The primary components of the Project Funding were
      (i) $72,750,000 from Movieplex's issuance of bonds and (ii) $2,272,500
      from an equity investment. Pursuant to one of the related agreements,
      Carmike acted as the development agent for Movieplex over the period
      November 20, 1997 through November 19, 1999 (the "Development Period").
      During the Development Period, eight theaters (each theater consisting of
      an acquired parcel of land and the improvements constructed thereon) were
      developed at a cost substantially in excess of the Project Funding. These
      excess costs were funded by Carmike. In order to restore the original
      intent of developing multiple theaters at an amount not to exceed the
      Project Funding, on April 11, 2000, Movieplex transferred title to two
      theaters to Carmike. The costs relating to the remaining six properties,
      after reallocating those costs incurred by Movieplex pertaining to the two
      transferred theaters, does not exceed the cost incurred to develop such
      remaining theaters. The allocated costs for each of the six theaters does
      not exceed their value as determined by an outside appraiser. In
      connection with the transfer of the two theaters, the related lease was
      amended to (i) increase the purchase option price to Carmike at the
      expiration of the initial lease term from 100% to 110% of a pre-determined
      future value, (ii) effectively increase the rent payable during the
      initial renewal option term of the lease by 10%, and (iii) increase the
      current return on Movieplex's common members' equity investment. These
      amendments, in the aggregate, increased the Company's anticipated
      financial return on this transaction. The Company was also compensated
      $188,000 for its consulting services provided with regard to this matter.

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      Commencing November 20, 1999, Carmike leased each of the six theaters
      under the terms of a triple net, credit type lease with Movieplex, as
      lessor. Monthly rental payments received by the lessor primarily
      fluctuated with the debt service payments on the related bonds and the
      cash return due to the Common and Preferred Members of Movieplex. The
      lease required that Carmike, in addition to paying a stipulated monthly
      rental to the lessor (i) pay all utilities, insurance, and local real
      estate, corporate and franchise taxes; (ii) reimburse the lessor for
      substantially all of its necessary and reasonable expenses incurred in
      fulfilling its role as lessor; and (iii) assume full operating,
      maintenance and environmental responsibilities for the preservation and,
      if necessary, restoration of the land and related improvements thereon. At
      the end of the initial lease term in 2015, Carmike had the option to
      extend the lease, relating to not less than all the theaters, for an
      additional term of ten years and, thereafter, for an additional term of
      five years at rental rates provided in the lease. Alternatively, at the
      end of the initial lease term, Carmike had the option to purchase, not
      less than all the theaters, at an amount based on a predetermined future
      value.

      Bonds payable were secured by irrevocable letters of credit issued by a
      group of banks which, in turn, were collateralized solely by the related
      land and theaters thereon. In connection therewith the Company entered
      into a Reimbursement Agreement with Wachovia, N.A. as agent for the banks,
      under which the Company was obligated to remit all rent received under the
      lease to Wachovia to reimburse the banks for the Bond payments made by
      draws on their letters of credit. The bonds bore interest, payable
      monthly, at a variable base rate indexed to the 30-day, high-grade
      commercial paper rate which was reset weekly. Principal on the bonds was
      payable in annual installments, commencing December 1, 2000, in amounts
      ranging from $970,000 to $7,775,000 with a final payment due at maturity,
      November 1, 2015, of $12,975,000.

      The 3% equity investment by the lessor amounted to $2,272,500 of which
      $2,250,000 and $22,500 was contributed by the lessor's Preferred and
      Common Memberships (or shareholdings), respectively. A third party owns
      100% of the Preferred Membership and two subsidiaries of the Company own
      100% of the Common Membership of the lessor. The Common and Preferred

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      Membership interests are entitled to a cash return based on a formula
      specified within the lease.

      On August 8, 2000, Carmike filed a petition under Chapter 11 of the United
      States Bankruptcy Code. As a result of that filing and Carmike's
      subsequent failure to pay rent to date under the lease, the Company failed
      to make required payments to Wachovia under the Reimbursement Agreement.
      Accordingly, on August 15, 2000, Wachovia declared a default under the
      Reimbursement Agreement and accelerated all amounts due by the Company
      thereunder. Wachovia also directed the Trustee under the related indenture
      to redeem the bonds. On August 15, 2000 the bonds were paid entirely
      through draws on the related letters of credit. Accordingly, amounts
      previously payable on the bonds became payable to the banks immediately
      under the Reimbursement Agreement. Interest and fees which have been
      accrued on the reimbursement obligations through December 2001 have been
      recorded with a corresponding amount of accrued rent receivable from
      Carmike. On January 31, 2002 title to the six theaters was transferred to
      the banks in payment of the non-recourse debt under the Reimbursement
      Agreement and the Company recognized a gain of $3,512,884, representing
      the excess of the liabilities over the carrying value of the assets
      relating to the real estate leased to Carmike. In addition, the Company
      received $294,755 in connection with the sale of its common membership
      interest in Movieplex relating to the transfer of title of the movie
      theaters to Wachovia.

      General

      The Company was incorporated under the laws of the State of Delaware in
      1968. It maintains offices at 200 West 57th Street, Suite 1103, New York,
      New York 10019 and its telephone number is (2l2) 775-0400.

      Unless the context requires otherwise, the term "Company," "our," or "we"
      refers to CareerEngine Network, Inc. and its wholly-owned subsidiaries:
      CareerEngine, Inc.; Snider, Williams & Co., Inc.; Randolph, Hudson & Co.,
      Inc.; Shaw Realty Company, Inc.; Helmstar Funding, Inc.; Burrows, Hayes
      Company, Inc.; Dover, Sussex Company, Inc.; Housing Capital Corporation;
      Randel, Palmer & Co., Inc.; Parker, Reld & Co., Inc., McAdam, Taylor &
      Co., Inc.; Ryan, Jones & Co., Inc.; Advanced Digital Networks, Inc.; A.E.
      Lander Corp. (formerly Alexander Edwards International, Inc.); and
      Matthews & Wright, Inc. The above companies,

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      other than CareerEngine, Inc., are currently operationally inactive.

      As of March 31, 2003, the Company had 6 employees.

      Competition

      The market for online recruiting services is relatively new, intensely
      competitive and rapidly evolving. There are minimal barriers to entry, and
      current and new competitors can launch new websites and add content at
      relatively low costs within relatively short time periods. We expect
      competition to persist and intensify and the number of competitors to
      increase significantly in the future. We compete against large online
      recruiting services that operate "generalist sites" that offer single
      database job boards, such as Monster.com, HotJobs.com, CareerBuilder.com,
      as well as corporate Internet sites, and not-for-profit websites operated
      by individuals, educational institutions and governmental agencies. We
      also compete against some companies that offer one or more specific career
      sites oriented toward the community served by one or more of our vertical
      career sites, and with an increasing number of companies offering ASP
      services that construct, host and maintain career centers for individual
      corporations, professional associations and other organizations. In
      addition to this online competition, we compete against a variety of
      companies that provide similar content through one or more media, such as
      classified advertising, radio and television. Many of our current and
      potential competitors, including those mentioned above, have significantly
      greater financial, technical and marketing resources, longer operating
      histories, better name recognition and more experience than we do. Many of
      our competitors also have established relationships with employers,
      recruiters and other job posters.

      Regulation

      The Company does not believe that they are subject to regulation in the
      current conduct of its business.

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                                       10


      American Stock Exchange (the "Exchange") Listing

      The Company received a letter dated March 15, 2002 from the Exchange (the
      "Letter") indicating that the Company is not in compliance with the
      Exchange's continuing listing requirements in that the Company has
      sustained losses from continuing operations and/or net losses in three of
      its four most recent fiscal years and its Stockholders' Equity is less
      than $4,000,000.

      On April 16, 2002 the Company submitted to the Exchange its detailed plan
      to regain compliance. The Exchange approved the Company's plan on June 7,
      2002. The plan is subject to periodic monitoring by the Exchange. Assuming
      the Company reasonably achieves its scheduled financial milestones as
      determined by the Exchange, the Company will have until December 31, 2002
      to regain compliance with the continuing listing requirements of the
      Exchange. If the Company does not reasonably achieve its scheduled
      financial milestones as determined by the Exchange, or its Stockholders'
      Equity does not equal or exceed $4,000,000 by December 31, 2002, the
      Company may lose its listing on the Exchange. The Company has been
      notified that, subject to the procedural requirements of the American
      Stock Exchange, its stock can be delisted imminently.

      The Company is considering entering into a transaction with certain
      selling parties with whom it previously signed a letter of intent to
      acquire two entities and an intangible asset. The letter of intent has
      expired but the Company is attempting to finalize such business
      combination. The Company is considering the issuance of a combination of
      its securities including its preferred stock, warrants, and notes payable
      as consideration. The execution of such purchase agreement would depend,
      but is not limited to, the Company's ability to raise appropriate amounts
      of capital, and maintain its listing on the American Stock Exchange.

      The Company is attempting to raise additional financing to regain
      compliance. Furthermore, the Company is actively pursuing other
      alternatives as well so as maintain its listing on the Exchange.

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                                       11


      Forward Looking Statements

      Certain statements in this Annual Report Form 10-KSB constitute
      "forward-looking statements" relating to the Company within the meaning of
      the Private Securities Litigation Reform Act of 1995. All statements
      regarding future events, our financial performance and operating results,
      our business strategy and our financing plans are forward-looking
      statements. In some cases you can identify forward-looking statements by
      terminology, such as "may," "will," "would," "should," "could," "expect,"
      "intend," "plan," "anticipate," "believe," "estimate," "predict,"
      "potential" or "continue," the negative of such terms or other comparable
      terminology. These statements are only predictions. Known and unknown
      risks, uncertainties and other factors could cause actual results to
      differ materially from those contemplated by the statements. In evaluating
      these statements, you should specifically consider various factors that
      may cause our actual results to differ materially from any forward-looking
      statements.

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Item 2. Description of Property.

            The Company currently leases, on a month-to-month basis,
      approximately 1,500 square feet of office space at Suite 1103, 200 West
      57th Street in New York City at a monthly rental rate of $5,000. This
      rental arrangement expires April 2003. The Company is currently
      negotiating to lease approximately 1,000 square feet of space in New York
      City at a base rental rate not to exceed $2,500 per month on a one or two
      year basis.

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Item 3. Legal Proceedings.

      The Company is a party to various vendor related litigations. Based on the
      opinion of legal counsel, the Company has accrued a liability of
      approximately $100,000.

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

      None.

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                                       15


                                     PART II

Item 5. Market For Common Equity and Related Stockholder Matters.

      Exchange Listing:

      The common stock of CareerEngine Network, Inc. is listed on the American
      Stock Exchange and the Pacific Exchange (trading symbol CNE).

      The approximate number of recordholders of Common Stock as of March 31,
      2003 was 220.

      Equity Sale Prices:

                                            Common Stock
                                            ------------
                               High Sales Price        Low Sales Price
                               ----------------        ---------------

               2001

           1st Quarter              1.8125                   0.60
           2nd Quarter              1.2                      0.45
           3rd Quarter               .75                     0.15
           4th Quarter              2.00                     0.50

               2002

           1st Quarter              1.40                     0.60
           2nd Quarter              0.57                     0.16
           3rd Quarter              0.34                     0.16
           4th Quarter              0.56                     0.10

      Dividends:

      The Company has not previously paid cash dividends on its common stock.
      The Board of Directors does not presently intend to pay cash dividends on
      the outstanding shares of common stock in the foreseeable future. The
      payments of future dividends and the amount thereof will depend upon the
      Company's earnings, financial condition, capital requirements and such
      other factors as the Board of Directors may consider relevant.

      Private Issuance of Company Securities:

      None.

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Item 6. Management's Discussion and Analysis.

      Summary Financial Information

      The summary financial data set forth below are derived from and should be
      read in conjunction with the financial statements, including the notes
      thereto, filed as part of this Annual Report in Form 10-KSB.

                                               Year Ended December 31,
                                               -----------------------
                                                2002               2001
                                                ----               ----
                                             (In thousands, except per
                                                     share data)
      Statement of Operations Data
      Revenues                              $       240       $     1,243
      Net income (loss)                     $     1,597       $    (2,786)
      Net income per common share           $       .29       $      (.51)
      Weighted average number
      of shares                               5,585,944         5,514,775

                                                    December 31,
                                                    ------------
                                                2002               2001
                                                ----               ----
                                                   (in thousands)

      Balance Sheet Data
      Working capital                       $    (3,640)      $    (4,690)
      Total assets                          $       316       $     1,250
      Total liabilities                     $     4,214       $     7,043
      Capital deficit                       $    (3,898)      $    (5,793)

      General

      The Company's headquarters were located at Suite 2112 of Two World Trade
      Center in New York City. The catastrophe of September 11, 2001 involved no
      injury to any of the Company's employees. However, with the complete
      destruction of the building, all of the Company's leasehold improvements,
      furniture and fixtures, and office and computer equipment located at this
      site were also destroyed.

      Since the attack, the Company's management has been preoccupied with the
      relocation and reestablishment of its businesses, assessing and processing
      of insurance claims with the assistance of a risk manager with its
      insurers, and seeking sources of financing. In 2002, the Company received
      insurance proceeds in amounts that have exceeded the net carrying value of
      the destroyed assets and, accordingly, has recorded a $152,934 gain on
      assets destroyed due to this catastrophe.

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      The Company also had insurance coverage for other than assets destroyed.
      The remaining outstanding insurance claims at December 31, 2002 of
      approximately $64,000 were received in January 2003.

      In addition, the Company had applied for governmental assistance grants
      related to the catastrophe. In April and September 2002, the Company
      received grants aggregating $291,827. The grants have various restrictions
      that could require their repayment (e.g., the Company temporarily
      suspending its business due to the events of September 11th and not
      resuming its operations in one year, or relocating a substantial portion
      its operations outside of New York City for a period of three years).
      Until such time as the grant restrictions shall no longer apply, the
      grants have been classified as a liability of the Company. Upon the
      satisfaction or lapse of the restrictions, the Company will remove the
      liability and record grant income on its financial statements or,
      alternatively, have to repay such grants if the above conditions are not
      satisfied.

      In August 2000, we discontinued our merchant banking operations, which
      consisted of our real estate project with Carmike Cinemas, Inc., and our
      financial consulting operations. Accordingly, our remaining operations are
      solely from our e-recruiting segment. Our financial resources and our
      management's efforts are now focused on this segment and raising capital.

      E-recruiting activities are derived from the operations of the two
      divisions of our wholly-owned subsidiary, CareerEngine, Inc. These
      divisions, CareerEngine Network and CareerEngine Solutions, provide on-
      and off-line companies with products and services addressed to meeting
      on-line recruiting problems.

      Critical Accounting Policies

      The Company's consolidated financial statements have been prepared in
      accordance with the accounting principles generally accepted in the United
      States of America. Certain accounting policies have a significant impact
      on amounts reported in the financial statements. A summary of those
      significant accounting policies can be found in  to the Company's
      financial statements included in this Annual Report on Form 10-KSB. The
      Company has not adopted any significant new accounting policies during the
      year ended December 31, 2002.

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      A significant judgment made by management in the preparation of the
      Company's financial statements is the determination of the allowance for
      doubtful accounts. This determination is made periodically and adjusted as
      necessary.

      Forward Looking Statements

      Certain statements in this Annual Report on Form 10-KSB constitute
      "forward-looking statements" relating to the Company within the meaning of
      the Private Securities Litigation Reform Act of 1995. All statements
      regarding future events, our financial performance and operating results,
      our business strategy and our financing plans are forward-looking
      statements. In some cases you can identify forward-looking statements by
      terminology, such as "may," "will," "would," "should," "could," "expect,"
      "intend," "plan," "anticipate," "believe," "estimate," "predict,"
      "potential," or "continue," the negative of such terms or other comparable
      terminology. These statements are only predictions. Known and unknown
      risks, uncertainties and other factors could cause actual results to
      differ materially from those contemplated by the statements. In evaluating
      these statements, you should specifically consider various factors that
      may cause our actual results to differ materially from any forward-looking
      statements.

A.    Results of Operations: 2002 Compared to 2001

      Revenues

      Total revenues from continuing operations decreased to $240,048 in 2002
      from $1,242,980 in 2001.

      Service fee income decreased to $237,800 in 2002 from $796,870 in 2001 as
      the operations of our subsidiary, CareerEngine, Inc. have been
      significantly reduced since January 2001 due to the significant downturn
      in the online technology sector.

      Income on securities transactions, net decreased to nil in 2002 from
      $420,253 in 2001 due to the cessation of cash management and investing
      activities effective April 1, 2001. This revenue category included the net
      profit from our cash management and our investing in futures, puts, calls,
      municipals and other securities.

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      Interest income decreased to $2,248 in 2002 from $25,857 in 2001 due to
      the reduced amount of funds available for investment and lower interest
      rates.

      Costs and Expenses

      Total costs and expenses from continuing operations decreased to
      $2,558,178 in 2002 from $3,931,317 in 2001.

      Compensation and related costs decreased to $580,145 in 2002 from
      $1,970,411 in 2001. The decrease is due to the Company's cost reduction
      strategy, consisting primarily of significant staff reductions, which
      commenced in December 2000 and the reduction of two officers' salaries as
      of December 31, 2001.

      Advertising expense decreased to $10,000 in 2002 from $244,490 in 2001 as
      CareerEngine, Inc. continued its cost reduction program, which focused
      primarily on compensation and advertising related expenditures.

      General and administrative expenses decreased to $927,367 in 2002 from
      $1,330,494 in 2001 as the Company continued its cost reduction program.
      General and administrative expenses in 2002 include a $320,350 charge
      incurred relating to the write-off of all remaining deferred financing
      costs pertaining to the Company's debentures payable.

      Interest expense increased to $1,040,666 in 2002 from $385,922 in 2001
      primarily due to the Company's recognition of all of the remaining
      unamortized debt discount relating to its debentures payable as interest
      expense.

      Other Items

      Gain on insurance claim for fixed assets destroyed in catastrophe
      consisting of $152,934 in 2002 relates to insurance proceeds in excess of
      carrying costs due to the destruction of the World Trade Center where the
      Company was headquartered.

      Reversal of Directors fees of $55,000 in 2002 relates to the forgiveness
      of fees earned by the outside Directors and their agreement to forego
      these fees until further notice.

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      Operating Loss

      Our loss from continuing operations in 2002 was $2,115,446 compared with a
      loss from continuing operations of $2,697,857 in 2001. In 2002, loss per
      common share from continuing operations, basic and diluted, was $.37 per
      share. In 2001, loss per common share from continuing operations, basic
      and diluted, was $.49 per share.

      Our income from discontinued operations in 2002 was $3,712,884 compared
      with a loss from discontinued operations of $87,750 in 2001 due primarily
      to the transfer of title of the six theaters leased to Carmike Cinemas,
      Inc. by the Company to the banks in payment of the related non-recourse
      debt, and the consequential recognition of the related gain representing
      the excess of liabilities over the carrying value of the theaters. In
      2002, income per common share from discontinued operations, basic and
      diluted, was $.66 per share. In 2001, loss per common share from
      discontinued operations, basic and diluted, was $.02 per share.

      Our net income in 2002 was $1,597,438 compared with a net loss of
      $2,785,607 in 2001. In 2002, net income per common share, basic and
      diluted, was $.29 per share. In 2001, net loss per common share, basic and
      diluted, was $.51 per share. All outstanding options and warrants were not
      dilutive.

B.    Liquidity and Capital Resources

      The Company has incurred substantial losses from continuing operations,
      sustained substantial cash outflows from operating activities, has a
      working capital deficit and at December 31, 2002 has a capital deficiency.
      Management believes that such losses and negative operating cash flows
      will continue in the first quarter of fiscal year 2003. The above factors
      raise substantial doubt about the Company's ability to continue as a going
      concern. The Company's continued existence is dependent on its ability to
      obtain additional equity and/or debt financing to fund its operations and
      ultimately to achieve profitable operations. The Company is attempting to
      raise additional financing and is continuing a cost reduction strategy.
      However, the Company has been notified that, subject to the procedural
      requirements of the American Stock Exchange, its stock can be delisted
      imminently.

<PAGE>
                                       21


      There is no assurance that the Company will obtain additional financing or
      achieve profitable operations or positive cash flows. The financial
      statements do not include any adjustments relating to the recoverability
      or classification of recorded asset amounts or the amount and
      classification of liabilities that might be necessary as a result of this
      going concern uncertainty. The financial statements do not include any
      adjustments relating to the recoverability or classification of recorded
      asset amounts or the amount and classification of liabilities that might
      be necessary as a result of this uncertainty.

      Our cost reduction strategy since December 14, 2000 has primarily
      consisted of more than a 90% staff reduction, and the effective
      elimination of our advertising expenditures.

      Historically, we have sustained our operations primarily from the use of
      our own financial resources, the net proceeds generated from our cash
      management activities, and from the proceeds of the private financing of
      units completed in June and August 2000. We are seeking sources of
      financing, most likely from one or more additional public or private
      equity or debt offerings. We currently have no commitments for any
      additional funding. We may not be able to raise needed cash on terms
      acceptable to us or at all. Financings may be on terms that are dilutive
      or potentially dilutive to our stockholders. Should the Company not be
      able to raise additional financing or should it lose its American Stock
      Exchange listing, it might have to cease operations.

      We do not have any material commitments for capital expenditures as of
      December 31, 2002.

C.    American Stock Exchange

      The Company received a letter dated March 15, 2002 from the Exchange (the
      "Letter") indicating that the Company is not in compliance with the
      Exchange's continuing listing requirements in that the Company has
      sustained losses from continuing operations and/or net losses in three of
      its four most recent fiscal years and its Stockholders' Equity is less
      than $4,000,000.

      On April 16, 2002 the Company submitted to the Exchange its detailed plan
      to regain compliance. The Exchange approved the Company's plan on June 7,
      2002. The plan

<PAGE>
                                       22


      is subject to periodic monitoring by the Exchange. Assuming the Company
      reasonably achieves its scheduled financial milestones as determined by
      the Exchange, the Company will have until December 31, 2002 to regain
      compliance with the continuing listing requirements of the Exchange. If
      the Company does not reasonably achieve its scheduled financial milestones
      as determined by the Exchange, or its Stockholders' Equity does not equal
      or exceed $4,000,000 by December 31, 2002, the Company may lose its
      listing on the Exchange. The Company has been notified that, subject to
      the procedural requirements of the American Stock Exchange, its stock can
      be delisted imminently.

      The Company is considering entering into a transaction with certain
      selling parties with whom it previously signed a letter of intent to
      acquire two entities and an intangible asset. The letter of intent has
      expired but the Company is attempting to finalize such business
      combination. The Company is considering the issuance of a combination of
      its securities including its preferred stock, warrants, and notes payable
      as consideration. The execution of such purchase agreement would depend,
      but is not limited to, the Company's ability to raise appropriate amounts
      of capital, and maintain its listing on the American Stock Exchange.

      The Company is attempting to raise additional financing to regain
      compliance. Furthermore, the Company is actively pursuing other
      alternatives as well so as maintain its listing on the Exchange.

D.    Inflation

      The Company believes that inflation does not significantly impact its
      current operations.

<PAGE>
                                       23


Item 7. Financial Statements.

      The Company's financial statements to be filed hereunder follow, beginning
      with page F.

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
CareerEngine Network, Inc.
New York, New York


We have audited the accompanying consolidated balance sheet of CareerEngine
Network, Inc. and subsidiaries (the "Company") as of December 31, 2002, and the
related consolidated statements of operations, changes in capital deficit and
cash flows for each of the years in the two-year period then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements enumerated above present fairly, in all
material respects, the consolidated financial position of CareerEngine Network,
Inc. and subsidiaries as of December 31, 2002, and the consolidated results of
their operations and their consolidated cash flows for each of the years in the
two-year period then ended 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 A to the
financial statements, the Company has experienced substantial losses, sustained
operating cash outflows, and at December 31, 2002 has a capital deficit from
continuing operations and anticipates that such conditions will continue in
fiscal year 2003. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note A. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.





Eisner LLP

New York, New York
April 9, 2003




                                      F-2
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Consolidated Balance Sheet
December 31, 2002

<TABLE>
<S>                                                                  <C>
ASSETS

Current:
   Cash and cash equivalents                                         $    183,200
   Accounts receivable, net                                                35,144
   Insurance claims receivable                                             63,912
                                                                     ------------
      Total current assets                                                282,256
Fixed assets, net                                                          33,250
                                                                     ------------
                                                                     $    315,506
                                                                     ============

LIABILITIES

Current:
   Accounts payable and accrued expenses                             $    392,307
   Interest payable                                                       216,000
   Debentures payable (Note E)                                          2,400,000
   Tax assessment payable (Note C)                                        913,461
                                                                     ------------
      Total current liabilities                                         3,921,768

Deferred grant revenue                                                    291,827
                                                                     ------------
                                                                        4,213,595
                                                                     ------------

Commitments and contingencies (Note I)

CAPITAL DEFICIT

Preferred stock - authorized 1,000,000 shares, par value $0.10;
   none issued
Common stock - authorized 20,000,000 shares, par value $0.10;
   6,829,600 shares issued                                                682,960
Paid-in surplus                                                        16,290,691
Accumulated deficit                                                   (17,998,640)
                                                                     ------------
                                                                       (1,024,989)
Less treasury stock, at cost - 1,238,656 shares                        (2,873,100)
                                                                     ------------
                                                                       (3,898,089)
                                                                     ------------
                                                                     $    315,506
                                                                     ============
</TABLE>


See notes to financial statements                                            F-3
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                                 Year Ended December 31,
                                                                              -----------------------------
                                                                                  2002              2001
                                                                              -----------       -----------
<S>                                                                           <C>               <C>
Revenue:
   Service fee income                                                         $   237,800       $   796,870
   Income on securities transactions                                                                420,253
   Interest income                                                                  2,248            25,857
                                                                              -----------       -----------

                                                                                  240,048         1,242,980
                                                                              -----------       -----------

Costs and Expenses:
   Compensation and related costs                                                 580,145         1,970,411
   Advertising                                                                     10,000           244,490
   General and administrative                                                     927,367         1,330,494
   Interest                                                                     1,040,666           385,922
                                                                              -----------       -----------

                                                                                2,558,178         3,931,317
                                                                              -----------       -----------

Loss from continuing operations before items shown below                       (2,318,130)       (2,688,337)
Gain on insurance claim for fixed assets destroyed in catastrophe                 152,934
Reversal of Director fees accrual                                                  55,000
                                                                              -----------       -----------

Loss from continuing operations before income taxes                            (2,110,196)       (2,688,337)
Income tax provision                                                                5,250             9,520
                                                                              -----------       -----------

Loss from continuing operations                                                (2,115,446)       (2,697,857)

Discontinued operations:
   Income (loss) from discontinued operations                                   3,712,884           (87,750)
                                                                              -----------       -----------

Net income (loss)                                                             $ 1,597,438       $(2,785,607)
                                                                              ===========       ===========

Per common share - basic and diluted:
   Loss from continuing operations                                            $      (.37)      $      (.49)
   Income (loss) from discontinued operations                                         .66              (.02)
                                                                              -----------       -----------

Net income (loss) per common share                                            $       .29       $      (.51)
                                                                              ===========       ===========

Weighted average number of common shares outstanding - basic and diluted        5,585,944         5,514,775
                                                                              ===========       ===========
</TABLE>


See notes to financial statements                                            F-4
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Capital Deficit

<TABLE>
<CAPTION>
Years ended December 31, 2002 and 2001
                                          Common Stock                                          Treasury Stock
                                     -----------------------     Paid-in       Accumulated   ------------------------
                                       Shares       Amount       Surplus         Deficit      Shares       Amount          Total
                                     ----------   ----------  -------------   -------------  ---------   ------------  -------------
<S>                                   <C>         <C>         <C>             <C>            <C>         <C>           <C>
Balance - January 1, 2001             6,749,600   $  674,960  $  16,022,187   $(16,810,471)  1,305,594   $(3,028,396)  $ (3,141,720)

Common stock issued for services,
   at market value                       20,000        2,000         25,000                                                  27,000
Issuance of common stock in
   connection with the exercise
   of stock options                      20,000        2,000         11,000                                                  13,000
Treasury stock issued for services,
   at fair value                                                    (61,246)                   (66,938)      155,296         94,050
Net loss                                                                        (2,785,607)                              (2,785,607)
                                     ----------   ----------  -------------   ------------   ---------   -----------   ------------

Balance - December 31, 2001           6,789,600   $  678,960  $  15,996,941   $(19,596,078)  1,238,656   $(2,873,100)  $ (5,793,277)
Common stock issued for services,
   at market value                       40,000        4,000         27,500                                                  31,500
Capital contributions by officers,
   directors and stockholders
   in the form of compensation
   forgiveness                                                      266,250                                                 266,250
Net income                                                                       1,597,438                                1,597,438
                                     ----------   ----------  -------------   ------------   ---------   -----------   ------------

Balance - December 31, 2002           6,829,600   $  682,960  $  16,290,691   $(17,998,640)  1,238,656   $(2,873,100)  $ (3,898,089)
                                     ==========   ==========  =============   ============   =========   ===========   ============
</TABLE>


See notes to financial statements                                            F-5
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                             -----------------------------
                                                                                 2002              2001
                                                                             -----------       -----------
<S>                                                                          <C>               <C>
Cash flows from operating activities:
   Loss from continuing operations                                           $(2,115,446)      $(2,697,857)
   Adjustments to reconcile loss from continuing operations to net cash
      used in operating activities:
        Depreciation and amortization                                            534,239           366,432
        Issuance of common and treasury stock for services                        31,500           121,050
        Reversal of fees due to Directors                                        (55,000)
        Gain on fixed assets destroyed in catastrophe                           (152,934)
        Sale of marketable securities, net                                                       1,084,182
        Amortization of debt discount                                            691,748            29,768
        Changes in:
           Accounts and insurance claims receivable                              471,451           102,867
           Other assets                                                           63,815           (26,621)
           Accrued expenses and other liabilities                                 21,218            75,863
           Deferred grant revenue                                                291,827
                                                                             -----------       -----------
Cash (used in) continuing operations                                            (217,582)         (944,316)
Cash provided by (used in) discontinued operations                               200,000           (87,750)
                                                                             -----------       -----------

              Net cash (used in) operating activities                            (17,582)       (1,032,066)
                                                                             -----------       -----------

Cash flows from investing activities:
   Proceeds from surrender of life insurance policies                                              226,390
   Disposal of computer equipment                                                                    4,080
   Purchase of furniture and equipment                                                              (1,722)
                                                                             -----------       -----------
Cash provided by continuing operations                                                             228,748
                                                                             -----------       -----------

              Net cash provided by investing activities                                            228,748
                                                                             -----------       -----------

Cash flows from financing activities:
   Proceeds from exercise of stock options                                                          13,000
   Principal payments in reduction of tax assessment payable                                      (135,258)
                                                                             -----------       -----------
Cash (used in) continuing operations                                                              (122,258)
                                                                             -----------       -----------

              Net cash (used in) financing activities                                             (122,258)
                                                                             -----------       -----------

Decrease in cash and cash equivalents                                            (17,582)         (925,576)
Cash and cash equivalents at beginning of year                                   200,782         1,126,358
                                                                             -----------       -----------

Cash and cash equivalents at end of year                                     $   183,200       $   200,782
                                                                             ===========       ===========

Supplemental disclosures of cash flow information related to
   continuing operations:
      Cash paid during the year for:
        Interest                                                             $    72,000       $   356,154
        Income taxes                                                         $     5,250       $     9,520

Noncash investing and financing activities:

        See Note J
</TABLE>


See notes to financial statements                                            F-6
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE A - THE COMPANY

CareerEngine Network, Inc. (the "Company") is engaged in the e-recruiting
(online) business through its subsidiary CareerEngine, Inc., which was formed in
1998 and commenced revenue producing operations in the fourth quarter of 1999.
CareerEngine Network, Inc. through other subsidiaries was also engaged in
merchant banking activities concentrating on real estate projects and also
provided financial consulting services. On August 16, 2000, the Board of
Directors of CareerEngine Network, Inc. decided to discontinue such operations
and accordingly, the accompanying consolidated financial statements reflect the
merchant banking activities and financial consulting services as discontinued
operations. The Company's sole operating segment is the e-recruiting business,
which provides services.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As reflected in the accompanying
financial statements, the Company has incurred substantial losses from
continuing operations, sustained substantial cash outflows from operating
activities, has a working capital deficit and at December 31, 2002 has a capital
deficiency. Management believes that such losses and negative operating cash
flows will continue in the first quarter of calendar year 2003. The above
factors raise substantial doubt about the Company's ability to continue as a
going concern. The Company's continued existence is dependent on its ability to
obtain additional equity and/or debt financing to fund its operations and
ultimately to achieve profitable operations. The Company is attempting to raise
additional financing and has initiated a cost reduction strategy. However, the
Company has been notified that, subject to the procedural requirements of the
American Stock Exchange, its stock can be delisted imminently. There is no
assurance that the Company will obtain additional financing or achieve
profitable operations or generate possible cash flow. The financial statements
do not include any adjustments relating to the recoverability or classification
of recorded asset amounts or the amount and classification of liabilities that
might be necessary as a result of this going concern uncertainty.

Catastrophe on September 11, 2001

The Company's headquarters were located at Suite 2112 of Two World Trade Center
in New York City. With the complete destruction of the building, all of the
Company's leasehold improvements, furniture and fixtures, and office and
computer equipment located at this site were also destroyed (see Note D).

Subsequent to September 11, 2001, the Company's management has been preoccupied
with the relocation and reestablishment of its businesses, assessing and
processing of insurance claims, with the assistance of a risk manager, with its
insurers, and seeking sources of financing.


                                                                             F-7
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE B - SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO CONTINUING OPERATIONS

[1]   Principles of consolidation:

      The accompanying consolidated financial statements include the accounts of
      the Company and its wholly-owned subsidiaries. All significant
      intercompany balances and transactions have been eliminated.

[2]   Revenue recognition:

      E-recruiting fees are earned on the placement of banner advertisements,
      job placement advertisements and sponsorship advertisements on the
      Company's web site and are recognized over the period during which the
      advertisements are exhibited. Revenues derived from co-branding
      arrangements with content providers are of a similar nature and were
      recognized over the period during which the advertisements are exhibited.
      Website construction fees are recognized ratably over the construction
      period. Monthly hosting and maintenance fees for such sites are recognized
      ratably over the period of the underlying contract.

[3]   Depreciation and amortization:

      Furniture, fixtures and equipment were being depreciated using the
      straight-line method over estimated lives of three to seven years.
      Leasehold improvements were amortized on a straight-line basis over the
      shorter of the term of the lease or their estimated useful lives. Computer
      equipment is being depreciated on a straight-line basis over an estimated
      life of three years.

[4]   Cash and cash equivalents:

      The Company considers all highly liquid debt instruments purchased with an
      original maturity of three months or less to be cash equivalents. As of
      December 31, 2002, cash equivalents consist principally of an investment
      of approximately $151,000 in a money market account.

[5]   Net income (loss) per share:

      Basic and diluted net loss per share is computed based upon the weighted
      average number of common shares outstanding during each year. Based on
      losses recognized from continuing operations, outstanding stock options,
      warrants and convertible debentures did not have an effect on the
      computation as they were anti-dilutive.

[6]   Income taxes:

      Deferred income taxes are measured by applying enacted statutory rates in
      effect at the balance sheet date to net operating loss carryforwards and
      to the differences between the tax bases of assets and liabilities and
      their reported amounts in the financial statements. The resulting deferred
      tax asset as of December 31, 2002 was fully reserved since the likelihood
      of realization of future tax benefits cannot be established.


                                                                             F-8
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE B - SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO
         CONTINUING OPERATIONS (CONTINUED)

[7]   Derivative financial instruments:

      As part of its investment strategies to profit from anticipated market
      movements, the Company maintained trading positions in a variety of
      derivative financial instruments consisting principally of futures
      contracts in treasuries, stocks and municipal securities. All positions
      were reported at fair value, and changes in fair value are reflected in
      operations as they occurred. The Company realized net gains from
      derivatives sold in 2002 and 2001 were de minimus and $420,000,
      respectively. Such amounts are included in income on securities
      transactions in the accompanying statements of operations. At December 31,
      2002, no derivative financial instruments were held by the Company and the
      average fair value of such instruments held during the years was not
      material.

[8]   Stock-based compensation:

      We apply the provisions of Accounting Principles Board Opinion No. 25
      "Accounting for Stock Issued to Employees" and related interpretations in
      accounting for our stock-based compensation plans. Accordingly, no
      compensation has been recognized in the financial statements with respect
      to employee and director grants of options and warrants issued with an
      exercise price at or above the fair market value of the stock on the grant
      date. Since options to be awarded can vest over several years, the pro
      forma results noted below are not necessarily representative of the
      effects on future years of the application of the fair value method. Had
      compensation costs for such options and warrants been determined based on
      the fair value approach promulgated by SFAS No. 123 "Accounting for Stock
      Based Compensation", our net loss applicable to Common Stock would have
      been as follows.

                                           For the year ended December 31,
                                           -------------------------------
                                                2002              2001
                                                ----              ----

      Net income (loss) as reported         $ 1,597,438       $(2,785,607)
      SFAS 123 compensation charge             (213,657)         (307,556)
                                            -----------       -----------
      Proforma net income (loss)            $ 1,383,781       $(3,093,163
                                            ===========       ===========
      Proforma net income (loss)
         per share as reported              $      0.25       $     (0.56)
                                            ===========       ===========

      For the purpose of the above pro forma information, the fair value of
      these options was estimated at the date of grant using the Black-Scholes
      option pricing model. The weighted-average fair value of the options
      granted during 2001 was $.24. The following weighted-average assumptions
      were used in computing the fair value of option grants for 2001:
      weighted-average risk-free interest rate of 3.62%; zero dividend yield;
      volatility of the Company's Common Stock of 192%; and an expected life of
      the options range from one to seven years. No stock options were issued in
      the twelve months ending December 31, 2002.


                                                                             F-9
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE B - SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO
         CONTINUING OPERATIONS (CONTINUED)

[9]   Use of estimates:

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

[10]  Advertising costs:

      Advertising costs are expensed as incurred.

[11]  Software development costs:

      External direct costs of materials and services incurred to develop the
      Company's website during the application development stage were
      capitalized. There were no such costs during the years ended December 31,
      2002 and 2001, respectively. These costs are being amortized using the
      straight-line method over an estimated useful life of three years.

[12]  Impairment of long-lived assets:

      Impairment losses are recognized for long-lived assets used in operations
      when indicators of impairment are present and the undiscounted cash flows
      estimated to be generated by those assets are not sufficient to recover
      the assets' carrying amount. The impairment loss is measured by comparing
      the fair value of the asset to its carrying amount. No write-down of
      assets for impairment losses were required during the years ended December
      31, 2002 and 2001.

[13]  Deferred financing costs:

      Deferred financing costs were being amortized on a straight-line basis
      over the term of the debentures. (See Note E.)


                                                                            F-10
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE B - SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO
         CONTINUING OPERATIONS (CONTINUED)

[14]  Recent accounting pronouncements:

      In August 2001, the FASB issued SFAS No. 144, "Accounting for the
      Impairment or Disposal of Long-Lived Assets." This statement supercedes
      SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
      Long-Lived Assets to be Disposed Of." The statement retains the previously
      existing accounting requirements related to the recognition and
      measurement of the impairment of long-lived assets to be held and used
      while expanding the measurement requirements of long-lived assets to be
      disposed of by sale to include discontinued operations. It also expands
      the previously existing reporting requirements for discontinued operations
      to include a component of an entity that either had been disposed of or is
      classified as held for sale. The Company implemented SFAS No. 144 on
      January 1, 2002. Management does not expect this statement to have a
      material impact on the Company's financial position or results of
      operations.

      In June 2002, the FASB issued Statement of Financial Accounting Standards
      No. 146, "Accounting for Costs Associated with Exit or Disposal
      Activities" ("SFAS 146"), which addresses financial accounting and
      reporting for costs associated with exit or disposal activities and
      supersedes Emerging Issues Tax Force ("EITF") Issue 94-3, "Liability
      Recognition for Certain Employee Termination benefits and Other Costs to
      Exit an Activity" (including Certain Costs Incurred in a Restructuring).
      SFAS 146 requires that a liability for a cost associated with an exit or
      disposal activity be recognized when the liability is incurred. Under EITF
      Issue 94-3, a liability for an exit cost as defined in EITF Issue 94-3 was
      recognized at the date of an entity's commitment to an exit plan. SFAS 146
      also establishes that the liability should initially be measured and
      recorded at fair value. SFAS 146 is effective for exit and disposal
      activities initiated after December 31, 2002. Management is currently
      evaluating the provision of SFAS 146 but expects that they will not have a
      material impact on the Company's results of operations and financial
      position upon adoption.

      In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
      "Guarantor's Accounting and Disclosure Requirements for Guarantees,
      Including Indirect Guarantees and Indebtedness of Others." FIN 45
      elaborates on the disclosures to be made by the guarantor in its interim
      and annual financial statements about its obligations under certain
      guarantees that it has issued. It also requires that a guarantor
      recognize, at the inception of a guarantee, a liability for the fair value
      of the obligation undertaken in issuing the guarantee. The initial
      recognition and measurement provisions of this interpretation are
      applicable on a prospective basis to guarantees issued or modified after
      December 31, 2002; while the provisions of the disclosure requirements are
      effective for financial statements of interim or annual reports ending
      after December 15, 2002. Management does not expect this statement to have
      a material impact on the Company's financial position or results of
      operations.


                                                                            F-11
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE B - SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO
         CONTINUING OPERATIONS (CONTINUED)

[14]  Recent accounting pronouncements (continued)

      In December 2002, the FASB issued Statement of Financial Accounting
      Standards No. 148, "Accounting for Stock-Based Compensation - Transition
      and Disclosure" ("SFAS 148"). SFAS 148 amends Statement No. 123,
      "Accounting for Stock-Based Compensation" ("SFAS 123"), to provide
      alternative methods for voluntary transition to SFAS 123's fair value
      method of accounting for stock-based employee compensation ("the fair
      value method"). SFAS 148 also requires disclosure of the effects of an
      entity's accounting policy with respect to stock-based employee
      compensation on reported net income (loss) and earnings (loss) per share
      in annual and interim financial statements and has determined not to adopt
      the fair value method for stock based compensation.

      In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
      "Consolidation of Variable Interest Entities." In general, a variable
      interest entity is a corporation, partnership, trust, or any other legal
      structure used for business purposes that either (a) does not have equity
      investors with voting rights or (b) has equity investors that do not
      provide sufficient financial resources for the entity to support its
      activities. FIN 46 requires certain variable interest entities to be
      consolidated by the primary beneficiary of the entity if the investors do
      not have the characteristics of a controlling financial interest or do not
      have sufficient equity at risk for the entity to finance its activities
      without additional subordinated financial support from other parties. The
      consolidation requirements of FIN 46 apply immediately to variable
      interest entities created after January 31, 2003. The consolidation
      requirements apply to older entities in the first fiscal year or interim
      period beginning after June 15, 2003. Certain of the disclosure
      requirements apply in all financial statements issued after January 31,
      2003, regardless of when the variable interest entity was established.
      Management does not expect this statement to have a material impact on the
      Company's financial position or results of operations.

NOTE C - INCOME TAXES

The income tax provision applicable to continuing operations, all of which is
current, consists of the following:

                                                           Year Ended
                                                          December 31,
                                                      --------------------
                                                       2002          2001
                                                      ------        ------

      Federal                                         $   --        $   --
      State and local franchise taxes                  5,250         9,520
                                                      ------        ------

                                                      $5,250        $9,520
                                                      ======        ======

At December 31, 2002, the Company has a net operating loss carryforward for
federal income tax purposes of approximately $31,596000, which expires in the
years 2005 through 2022.


                                                                            F-12
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE C - INCOME TAXES (CONTINUED)

The Company's deferred tax assets and liabilities consists of the following:

<TABLE>
<CAPTION>

                                                                        ------------       ------------
                                                                            2002               2001*
                                                                        ------------       ------------
<S>                                                                     <C>                <C>
      Deferred tax assets:
         Net operating loss carryforward                                $ 14,534,000       $ 12,254,000
         Liability for interest and state taxes related to federal
            tax settlement                                                   232,000            203,000
         Other                                                                16,000            134,000
                                                                        ------------       ------------
            Total deferred tax assets, before valuation allowance         14,782,000         15,650,000
         Valuation allowance                                             (14,782,000)       (14,890,000)
                                                                        ------------       ------------

            Total deferred tax assets                                              0            760,000
      Deferred tax liability:
         Deferred rental income                                                    0           (760,000)
                                                                        ------------       ------------

                                                                        $          0       $          0
                                                                        ============       ============
</TABLE>

The valuation allowance (decreased) increased by approximately ($108,000) during
2002 and $1,092,000 during 2001. The decrease in the valuation allowance of
$108,000 for the twelve months ended December 31, 2002 results from the increase
in the valuation allowance attributable to the deferred tax benefit of
approximately $840,000 on the loss from continuing operations and a benefit
recognized of $948,000 from discontinued operations.

*The amount of net operating loss carried forwards at December 31, 2001
and the corresponding amount of valuation allowance attributable thereto
has been retroactively adjusted to conform to the company's federal tax return.

The effective tax rate applicable to continuing operations varied from the
statutory federal income tax rate as follows:

<TABLE>
<CAPTION>
                                                                          Year Ended
                                                                         December 31,
                                                                   ----------------------
                                                                     2002           2001
                                                                   -------        -------
<S>                                                                 <C>             <C>
      Statutory rate                                                 (34)%          (34)%
      State and local taxes, net of federal income tax effect        (12)           (12)
      Nondeductible expenses                                           2              1
      Valuation allowance                                             44             45
                                                                   -------        -------

      Effective rate                                                   0 %            0 %
                                                                   =======        =======
</TABLE>

The Internal Revenue Service ("IRS") has examined the Company's federal income
tax returns for the years 1985 through 1989 and in December 1999 assessed a tax
deficiency of $348,000 together with accrued interest of $576,000. During 2002
and 2001, the Company accrued additional interest expense of $60,918 and
$68,154, respectively, related to the tax deficiency. Commencing in August 2000,
pursuant to an understanding with the IRS, the Company began paying $30,000 per
month until the assessed tax deficiency relating to the years 1985 through 1989
and interest thereon is fully satisfied. However, after a technical review by
special tax counsel of the tax deficiency and related interest, management of
the Company believes that there may be a basis for its reduction. Management is
actively pursuing such a


                                                                            F-13
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE C - INCOME TAXES (CONTINUED)

reduction at this time. Pending the ultimate resolution of this matter with the
IRS, in September 2001 the Company temporarily suspended making monthly
payments. At December 31, 2002, the outstanding balance of the liability
amounted to $913,000 including related additional state and local taxes and
interest.

NOTE D - INSURANCE CLAIMS RECEIVABLE AND FIXED ASSETS

The Company's headquarters were located at Suite 2112 of Two World Trade Center
in New York City. With the complete destruction of the building, all of the
Company's leasehold improvements, furniture and fixtures, and office and
computer equipment located at this site were destroyed.

The net carrying value of the destroyed assets of the Company was $356,531 at
September 11, 2001. These assets consisted of:

                  Leasehold improvements                             $   76,809
                  Furniture and fixtures                                 36,966
                  Office and computer equipment                         242,756
                                                                     ----------
                                                                     $  356,531
                                                                     ==========

In 2002, the Company received insurance proceeds in amounts that have exceeded
the net carrying value of the destroyed assets and, accordingly, has recorded a
$152,934 gain on assets destroyed due to this catastrophe.

The Company also had insurance coverage for other than assets destroyed. The
remaining outstanding insurance claims at December 31, 2002 of approximately
$64,000 were received in January 2003.

In addition, the Company had applied for governmental assistance grants related
to the catastrophe. In April and September 2002, the Company received grants
aggregating $291,827. The grants have various restrictions that could require
their repayment (e.g., the Company temporarily suspending its business due to
the events of September 11th and not resuming its operations in one year, or
relocating a substantial portion its operations outside of New York City for a
period of three years). Until such time as the grant restrictions shall no
longer apply, the grants will be classified as a liability of the Company. Upon
the satisfaction or lapse of the restrictions, the Company will remove the
liability and record grant income on its financial statements or, alternatively,
have to repay such grants if the above conditions are not satisfied

Fixed assets, net at December 31, 2002 consists of the following:

       Computer equipment                                           $   657,172
       Software                                                         133,000
                                                                    -----------
                                                                        790,172
       Less, accumulated depreciation and amortization                  756,922
                                                                    -----------
                                                                    $    33,250
                                                                    ===========

Such receivable was used to reduce the corresponding costs included in general
and administrative expenses.


                                                                            F-14
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE E - DEBENTURES PAYABLE

In 2000, the Company privately placed 48 units of its securities. Each unit
consisted of a $50,000 subordinated convertible debenture, 12,500 Class A Common
Stock Warrants and 12,500 Class B Common Stock Warrants. Each $50,000 debenture
is convertible into 25,000 shares of common stock. The Class A and B Warrants
are exercisable at $4 and $6, respectively. The debentures bear interest at 12%,
payable quarterly, commencing October 1, 2000 and mature March 31, 2010. The
Class A and B Warrants are exercisable at any time until March 31, 2003 and
March 31, 2005, respectively. In the private placement, officers, stockholders
and directors of the Company acquired 10.5 units for $525,000. The Class A
Warrants expired at March 31, 2003.

The aggregate number of shares issue able upon the exercise of all the warrants
and the conversion of all the debentures is 2,400,000.

The Company incurred an interest charge of $246,875 due to the beneficial
conversion feature of the debentures. In addition, the Company valued the
warrants, utilizing the Black-Scholes Pricing Model, at $740,000 which is being
accounted for as debt discount and was amortized through the period the
debentures are callable. The amounts ascribed to the beneficial conversion
feature and the warrants aggregating $986,875 were credited to paid-in-surplus.

The Company paid the placement agent cash of $375,025 and granted the agent a
warrant exercisable through June 2005 (valued at $200,000) to purchase 5 units
at $60,000 per unit. Of the total consideration, $426,658 was accounted for as
deferred financing costs which is being amortized over the life of the
debentures and $148,367 deemed attributable to the warrant portion of the unit,
was charged to paid-in surplus.

Interest accrued on debentures payable, relating to the period from April 1,
2002 through December 31, 2002, aggregating $216,000 has not been paid through
April 1, 2003.

Since the Company had not paid the interest due on April 1, 2002 by April 16,
2002 (the "grace period"), the Company's obligation is considered callable by
the debenture holders and as a consequence the entire balance of the debentures
with the related unpaid interest is classified as a current obligation at
December 31, 2002. For the debentures to be in default, the holders of no less
then 51% in principal amount of the debentures must notify the Company that an
event of default has occurred and may thereafter declare all debentures and
related interest immediately due and payable. As of April 9, 2003, no such
demand has been made by any debenture holder. In addition, unamortized debt
discount on the debentures was recognized as interest expense for the year ended
December 31, 2002. The Company also recognized as expense the unamortized
deferred financing costs associated with the debentures of $320,350.


                                                                            F-15
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE F - WARRANTS

As of December 31, 2002 outstanding warrants to acquire common stock consisted
of:

<TABLE>
<CAPTION>
                                                                                                 Shares of
      Type of Warrant               Expiration Date               Exercise Price               Common Stock
      ---------------               ---------------               --------------               ------------
<S>                                    <C>                              <C>                       <C>
          Class A                      March 2003                       $4                          600,000
          Class B                      March 2005                       $6                          600,000
       Units (Note E)                  June 2005                        $5                          125,000
                                                                                                 ----------
                                                                                                  1,325,000
                                                                                                 ==========
</TABLE>

NOTE G - STOCK OPTION PLANS

In 1990, the Company adopted a stock option plan (the "1990 Plan") for granting
of options to purchase up to 750,000 shares of its common stock, pursuant to
which officers and other key employees are eligible to receive incentive and/or
nonqualified stock options, stock appreciation rights, and restricted stock
awards. Incentive stock options granted under the 1990 Plan are exercisable for
a period of up to 10 years (five years in the case of a 10% or greater
stockholder) from date of grant at an exercise price which is not less than the
quoted market price on date of grant, except that the exercise price of options
granted to a stockholder owning more than 10% of the outstanding capital stock
may not be less than 110% of the quoted market price of the common stock at date
of grant. The 1990 Plan was terminated on June 3, 1999.

On April 23, 1999, the Company adopted a stock option plan (the "1999 Plan") for
granting options to purchase up to 350,000 shares of common stock, pursuant to
which officers and other key employees, directors, independent contractors and
agents are eligible to receive incentive and/or nonqualified stock options.
Options granted under the 1999 Plan are exercisable for a period of up to 10
years from date of grant at an exercise price which is not less than the quoted
market price on date of grant, except that the exercise price of options granted
to a stockholder owing more than 10% of the outstanding capital stock may not be
less than 110% of the quoted market price of the common stock at date of grant.

Stock option activity under the 1990 Plan and 1999 Plan is summarized as
follows:

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                                           -----------------------------------------------------
                                                                     2002                        2001
                                                           ------------------------      -----------------------
                                                                           Weighted                     Weighted
                                                                           Average                      Average
                                                                           Exercise                     Exercise
                                                             Shares         Price         Shares         Price
                                                           ---------     ----------      ---------    ----------
<S>                                                          <C>         <C>              <C>         <C>
       Options outstanding at beginning of year              290,000     $    2.55         490,000    $    2.09
       Options granted during year                                                          20,000          .65
       Options cancelled                                                                  (200,000)        1.41
       Options exercised during year                                                       (20,000)         .65
                                                           ---------                     ---------
       Options outstanding at end of year                    290,000     $    2.55         290,000    $    2.55
                                                           ---------                     ---------

       Options exercisable at end of year                    200,000     $    2.55         135,000    $    2.57
                                                           =========                     =========
</TABLE>


                                                                            F-16
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE G - STOCK OPTION PLANS (CONTINUED)

The following table presents information relating to stock options outstanding
at December 31, 2002

<TABLE>
<CAPTION>
                                                        Options Outstanding                 Options Exercisable
                                               -------------------------------------       ---------------------
                                                                            Weighted
                                                            Weighted        Average                     Weighted
                                                             Average       Remaining                     Average
                                                            Exercise        Life in                     Exercise
             Range of Exercise Price           Shares         Price          Years         Shares         Price
             -----------------------           ------       --------       ---------       ------       --------
<S>                                              <C>        <C>               <C>            <C>          <C>
                  $2.25 - $2.50                  250,000       2.40           6.27           160,000       2.41
                      $3.50                       40,000       3.50           7.05            40,000       3.50
                                               ---------                                    --------

                                                 290,000    $  2.55           6.86           200,000      $2.63
                                               =========                                    ========
</TABLE>

In March 2003, the Company's employees and directors rescinded their interest in
290,000 of the options granted to them.

On May 1, 1999, CareerEngine, Inc., a subsidiary of the Company, adopted a stock
option plan (the "1999 Plan") for granting options to purchase up to 2,000,000
shares of common stock, pursuant to which officers and other key employees are
eligible to receive incentive and/or nonqualified stock options. Options granted
under the 1999 Plan are exercisable for a period of up to 10 years from date of
grant at an exercise price which is not less than the fair value on date of
grant, except that the exercise price of options granted to a stockholder owing
more than 10% of the outstanding capital stock may not be less than 110% of the
fair value of the common stock at date of grant.

Stock option activity under the 1999 Plan is summarized as follows:

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                    --------------------------------------------------------------
                                                             2002                               2001
                                                    --------------------------      ------------------------------
                                                                     Weighted
                                                                      Average                          Weighted
                                                                     Exercise                          Average
                                                      Shares           Price           Shares       Exercise Price
                                                    ----------       ---------      ------------    --------------
<S>                                                    <C>           <C>              <C>              <C>
  Options outstanding at
    beginning of year                                   73,500       $    2.50         1,565,000       $   .79
  Options cancelled                                    (21,500)           2.50        (1,491,500)          .71
                                                    ----------                      ------------
  Options outstanding at end of year                    52,000       $    2.50            73,500       $  2.50
                                                    ==========                      ============
  Options exercisable at end of year                    51,167       $    2.50            45,000       $  2.50
                                                    ==========                      ============
</TABLE>


                                                                            F-17
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE G - STOCK OPTION PLANS (CONTINUED)

The following table presents information relating to stock options outstanding
at December 31, 2002:

<TABLE>
<CAPTION>
                 Options Outstanding                       Options Exercisable
         ------------------------------------      -----------------------------------
                                                    Weighted
           Range                     Weighted       Average                   Weighted
            of                       Average       Remaining                   Average
         Exercise                    Exercise       Life in                   Exercise
           Price        Shares        Price          Years         Shares       Price
         --------      --------      --------      ---------      --------    --------
<S>                     <C>           <C>             <C>          <C>         <C>
          $2.50         52,000        $ 2.50          7.02         51,167      $ 2.50
</TABLE>

In March 2003 the Company's employees and directors rescinded their interests in
52,000 of the options granted to them.

NOTE H - CAPITAL CONTRIBUTION AND DIRECTOR FEES

As of March 31, 2002, significant shareholders of the Company, who are also
Directors and Officers, have agreed to permanently forego $266,250 of
compensation earned by them during 2001 and 2000. The amount of the forgone
salaries through December 31, 2001 has been reflected in the financial
statements as contributions to the capital of the Company during the year ended
December 31, 2002.

In addition, at March 31, 2002, the Company's five outside directors have
similarly agreed to forego previously accrued and unpaid directors' fees earned
through December 31, 2001 and agreed to forgo future compensation until further
notice. The reversal of previously accrued fees has been reflected in the
Company's Statement of Operations for the year ended December 31, 2002.

NOTE I - COMMITMENTS, LITIGATION AND OTHER MATTERS

[1]   The Company currently leases, on a month-to-month basis, approximately
      1,500 square feet of office space in New York City at a monthly rental
      rate of $5,000. This rental arrangement expires April, 2003. The Company
      is currently negotiating to lease approximately 1,000 square feet of space
      at a different location in New York City at a base rental rate of less
      than $3,000 per month for a one or two year lease.

      Rental expense amounted to $60,500 and $180,477 for the years ended
      December 31, 2002 and 2001, respectively.

[2]   The Company has a Retirement Savings Plan for its employees, pursuant to
      Section 401(k) of the Internal Revenue Code. Employee contributions to the
      plan and the Company's matching contributions vest immediately. The
      Company's contribution to the plan amounted to approximately $8,245 and
      $26,876, for the years ended December 31, 2002 and 2001, respectively.


                                                                            F-18
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE I - COMMITMENTS, LITIGATION AND OTHER MATTERS (CONTINUED)

[3]   The Company is a party to various vendor related litigations. Based on the
      opinion of legal counsel, the Company has accrued a liability of
      approximately $100,000 and, accordingly, this liability has been reflected
      in accounts payable and accrued expenses.

NOTE J - DISCONTINUED OPERATIONS

In 2000, the Board of Directors of the Company decided to discontinue its
merchant banking operations, which consisted of its real estate operations
project with Carmike Cinemas, Inc., and its financial consulting operations.
Results of discontinued operations related thereto have been shown separately in
the accompanying financial statements.

Results of discontinued operations are summarized as follows:

<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                                ----------------------------
                                                                    2002              2001
                                                                ----------      ------------
<S>                                                             <C>             <C>
      Rental income from real estate leased                     $1,249,710      $ 14,996,520
      Gain on extinguishment of debt                             3,512,884
      Common membership interest transfer fee                      294,755
                                                                ----------      ------------

         Total revenue                                           5,057,349        14,996,520
                                                                ----------      ------------

      Real estate leased expenses, consisting
         principally of interest and letter of credit fees       1,249,710        14,996,520
      Compensation and other costs                                  94,755            87,750
                                                                ----------      ------------

         Total expenses                                          1,344,465        15,084,270
                                                                ----------      ------------

      Income (loss) from discontinued operations                $3,712,884      $    (87,750)
                                                                ==========      ============
</TABLE>

Description of real estate operations:

      In 1997, Movieplex Realty Leasing, L.L.C. ("Movieplex"), a subsidiary of
      the Company, entered into an agreement with Carmike Cinemas, Inc.
      ("Carmike"), to develop and lease an unspecified number of multiplex movie
      theaters at a cost not to exceed approximately $75,000,000, plus an amount
      equal to any proceeds received by Movieplex from the investment of related
      funding prior to the expending of development costs (the "Project
      Funding"). Under the terms of the agreement, Carmike was responsible for
      construction costs in excess of the Project Funding. The primary
      components of the Project Funding were (i) $72,750,000 from Movieplex's
      issuance of bonds and (ii) $2,272,500 from an equity investment. Pursuant
      to one of the related agreements, Carmike acted as the development agent
      for Movieplex over the period November 20, 1997 through November 19, 1999
      (the "Development Period"). During the Development Period, eight theaters
      (each theater consisting of an acquired parcel of land and the
      improvements constructed thereon) were developed at a cost substantially
      in excess of the Project Funding. These excess costs were funded by
      Carmike. In order to restore the original intent of developing multiple
      theaters at an


                                                                            F-19
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE J - DISCONTINUED OPERATIONS (CONTINUED)

      amount not to exceed the Project Funding, on April 11, 2000, Movieplex
      transferred title to two theaters to Carmike. The costs relating to the
      remaining six properties, after reallocating those costs incurred by
      Movieplex pertaining to the two transferred theaters, did not exceed the
      cost incurred to develop such remaining theaters. The allocated costs for
      each of the six theaters did not exceed their value as determined by an
      outside appraiser. In connection with the transfer of the two theaters,
      the related lease was amended to (i) increase the purchase option price to
      Carmike at the expiration of the initial lease term from 100% to 110% of a
      pre-determined future value, (ii) effectively increase the rent payable
      during the initial renewal option term of the lease by 10%, and (iii)
      increase the current return on Movieplex's common members' equity
      investment. These amendments, in the aggregate, increased the Company's
      anticipated financial return on this transaction. The Company was also
      compensated $188,000 for its consulting services provided with regard to
      this matter.

      Commencing November 20, 1999, Carmike leased each of the six theaters
      under the terms of a triple net, credit type lease with Movieplex, as
      lessor. Monthly rental payments received by the lessor primarily
      fluctuated with the debt service payments on the related bonds and the
      cash return due to the Common and Preferred Members of Movieplex. The
      lease required that Carmike, in addition to paying a stipulated monthly
      rental to the lessor (i) pay all utilities, insurance, and local real
      estate, corporate and franchise taxes; (ii) reimburse the lessor for
      substantially all of its necessary and reasonable expenses incurred in
      fulfilling its role as lessor; and (iii) assume full operating,
      maintenance and environmental responsibilities for the preservation and,
      if necessary, restoration of the land and related improvements thereon. At
      the end of the initial lease term in 2015, Carmike had the option to
      extend the lease, relating to not less than all the theaters, for an
      additional term of ten years and, thereafter, for an additional term of
      five years at rental rates provided in the lease. Alternatively, at the
      end of the initial lease term, Carmike had the option to purchase, not
      less than all the theaters, at an amount based on a predetermined future
      value.

      Bonds payable were secured by irrevocable letters of credit issued by a
      group of banks which, in turn, were collateralized solely by the related
      land and theaters thereon. In connection therewith the Company entered
      into a Reimbursement Agreement with Wachovia, N.A. as agent for the banks,
      under which the Company was obligated to remit all rent received under the
      lease to Wachovia to reimburse the banks for the Bond payments made by
      draws on their letters of credit. The bonds bore interest, payable
      monthly, at a variable base rate indexed to the 30-day, high-grade
      commercial paper rate which was reset weekly. Principal on the bonds was
      payable in annual installments, commencing December 1, 2000, in amounts
      ranging from $970,000 to $7,775,000 with a final payment due at maturity,
      November 1, 2015, of $12,975,000.

      The 3% equity investment by the lessor amounted to $2,272,500 of which
      $2,250,000 and $22,500 was contributed by the lessor's Preferred and
      Common Memberships (or shareholdings), respectively. A third party owns
      100% of the Preferred Membership and two subsidiaries of the Company own
      100% of the Common Membership of the lessor. The Common and Preferred
      Membership interests were entitled to a cash return based on a formula
      specified within the lease.


                                                                            F-20
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2002 and 2001

NOTE J - DISCONTINUED OPERATIONS (CONTINUED)

      On August 8, 2000, Carmike filed a petition under Chapter 11 of the United
      States Bankruptcy Code. As a result of that filing and Carmike's
      subsequent failure to pay rent to date under the lease, the Company failed
      to make required payments to Wachovia under the Reimbursement Agreement.
      Accordingly, on August 15, 2000, Wachovia declared a default under the
      Reimbursement Agreement and accelerated all amounts due by the Company
      thereunder. Wachovia also directed the Trustee under the related indenture
      to redeem the bonds. On August 15, 2000 the bonds were paid entirely
      through draws on the related letters of credit. Accordingly, amounts
      previously payable on the bonds became payable to the banks immediately
      under the Reimbursement Agreement. Interest and fees which have been
      accrued on the reimbursement obligations through December 2001 have been
      recorded with a corresponding amount of accrued rent receivable from
      Carmike. On January 31, 2002 title to the six theaters was transferred to
      the banks in payment of the non-recourse debt under the Reimbursement
      Agreement and the Company recognized a gain of $3,512,884, representing
      the excess of the liabilities over the carrying value of the assets
      relating to the real estate leased to Carmike. In addition, the Company
      received $294,755 in connection with the sale of its common
      membership interest in Movieplex relating to the transfer of title of the
      movie theaters to Wachovia.

NOTE K - SUBSEQUENT EVENT

      The Company is considering entering into a transaction with certain
      selling parties with whom it previously signed a letter of intent to
      acquire two entities and an intangible asset. The letter of intent has
      expired but the Company is attempting to finalize such business
      combination. The Company is considering the issuance of a combination of
      its securities including its preferred stock, warrants, and notes payable
      as consideration. The execution of such purchase agreement would depend,
      but is not limited to, the Company's ability to raise appropriate amounts
      of capital, and maintain its listing on the American Stock Exchange.


                                                                            F-21







<PAGE>
                                       24


Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure.

      None.

<PAGE>
                                       25


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.

      (a)   Board of Directors

      Under the Company's By-Laws, the Board of Directors is divided into three
      classes. Each of the three classes has a term that is staggered by one
      year from one another. Members of each class are elected to serve for a
      term of three years and until their successors are elected or until their
      resignation, removal or ineligibility.

      During 2002, the Board had 8 meetings.

      The Company's By-Laws provide for an Executive Committee consisting of the
      Chairman of the Board and not less than two other Directors to exercise
      the powers of the Board during the intervals between meetings of the
      Board. During 2002, the Executive Committee consisting of Messrs. George
      W. Benoit, Kevin J. Benoit and David W. Dube had 5 meetings.

      The Board has an Audit Committee consisting of four outside Directors who
      are not employees of the Company. This committee discusses audit and
      financial reporting matters with both management and the Company's
      independent certified public accountants. To ensure independence, the
      independent certified public accountants may meet with the Audit Committee
      with or without the presence of management representatives. During 2002,
      the Audit Committee consisting of Messrs. Joseph J. Anastasi, Charles W.
      Currie, David W. Dube and James J. Murtha had 4 meetings.

      The Board has a Compensation Committee for the purpose of reviewing the
      compensation of officers and employees of the Company and making
      recommendations to the Board with respect thereto. During 2002, the
      Compensation Committee consisting of Messrs. G. Benoit, K. Benoit, Currie
      and Dube had 2 meetings.

      The Board has a Nominating Committee to propose nominees for election to
      the Board. During 2002, the Nominating Committee consisting of Messrs. K.
      Benoit, Anastasi, Murtha and Currie had 1 meeting. The Nominating

<PAGE>
                                       26


      Committee will consider suggestions for potential nominees submitted by
      stockholders if mailed to the Chairman of the Board.

      The Board has an Incentive Compensation Committee for the purpose of
      administering and making incentive compensation awards under the Company's
      1990 Incentive Compensation Plan. During 2002, the Incentive Compensation
      Committee consisting of Messrs. Anastasi, Murtha, Currie, and Dube had 2
      meetings.

      Each Director attended at least 75% of the aggregate of the total number
      of Board meetings, and meetings of all committees of the Board on which he
      serves, except for Mr. Murtha.

      The members of the Board of Directors of the Company are as follows:

            GEORGE W. BENOIT, 66, has been the President, Chief Executive
            Officer and a director of CareerEngine Network, Inc. since 1971. In
            addition, Mr. Benoit has been Chairman of the Board since 1972. His
            term expires in 2003.

            KEVIN J. BENOIT, 40, has been a director of CareerEngine Network,
            Inc. since August 1999. Since 1995, Mr. Benoit has been the sole
            principal of Stratford Capital Management, Inc., an investment
            management firm. He was Vice President of Randolph, Hudson & Co.,
            Inc., a subsidiary of ours that was responsible for cash management,
            from 1995 through 2001. Mr. Benoit is a registered C.T.A. and C.P.O.
            and specializes in arbitrage and hedging strategies. Mr. Benoit's
            father is George Benoit our President and CEO. His term expires in
            2003.

            CHARLES W. CURRIE, 60, has been a director of CareerEngine Network,
            Inc. since 1986. Mr. Currie is a partner of First American Fund
            Services, Inc., a company that provides marketing services to
            investment managers, since October 2002. Mr. Currie had been a
            partner with Asset Management Services LLC from August 1996 through
            September 2002. His term expires in 2003.

            JOSEPH G. ANASTASI, 66, has been a director of CareerEngine Network,
            Inc. since September 1986. Since 1960 Mr. Anastasi has been the
            owner and

<PAGE>
                                       27


            president of Montgomery Realty Company, Inc., a firm specializing in
            commercial sales, development consulting and property management. He
            was president of The Anastasi Stephens Group, Inc. which was engaged
            in real estate development. The Anastasi Stephens Group, Inc. has
            been inactive since 1994. His term expires in 2003.

            DAVID W. DUBE, 47, has been a director of CareerEngine Network, Inc.
            since June 1996. Mr. Dube is President of Peak Capital Corporation,
            a corporate finance and management advisory firm, and Peak
            Securities Corporation, a registered broker-dealer. Mr. Dube was
            Senior Vice President and Chief Financial Officer of FAB Capital
            Corp., a merchant banking and securities investment firm, and served
            in various other capacities from 1997 through October 1999. Mr. Dube
            was President and Chief Executive Officer of Optimax Industries,
            Inc., a publicly-traded company with interests in the horticultural,
            decorative giftware and truck parts accessories industries from 1996
            to 1997. Mr. Dube serves on the Board of Directors of
            publicly-traded GlycoGenesys, Inc. and New World Wine Group, Ltd.
            His term expires in 2003.

            JAMES J. MURTHA, 54, has been a director of CareerEngine Network,
            Inc. since October 1986. Since June 1997, Mr. Murtha has been
            self-employed as a real estate investor. From August 1994 to June
            1997, Mr. Murtha held the position of President of Kenwood Capital,
            L.P., a limited partnership, that specializes in real estate
            investments. His term expires in 2003.

            EDWARD A. MARTINO, 53, has been a director of CareerEngine Network,
            Inc. since October 2000. Mr. Martino has over twenty years of
            experience in the IT and wireless industry. He has held numerous
            marketing and global sales management positions while at IBM for 18
            years. Mr. Martino also served as a Senior Vice President for two
            companies, one specializing in global IT outsourcing for large
            enterprises and another in the development of wireless solutions and
            consulting. Since December 2002 he assumed his present position as
            the Northeast Director of Corporate Sales for NEXTEL Communications.
            Mr. Martino currently serves on several other boards including the
            New York Software Industry Association where he is a Vice

<PAGE>
                                       28


            Chairman, City University of New York Institute for Software
            Development and Design, and the Bronx Museum of the Arts. His term
            expires in 2003.

      (b)   Executive Officers

      The Executive officers of the Company are as follows:

            GEORGE W. BENOIT has been the President, Chief Executive Officer and
            a director of CareerEngine Network, Inc. since 1971. In addition,
            Mr. Benoit has been Chairman of the Board since 1972.

            ANTHONY S. CONIGLIARO has been the Vice President and Chief
            Financial Officer of CareerEngine Network, Inc. since March 1999.
            From 1996 to 1999, Mr. Conigliaro was Executive Vice President and
            Chief Financial/Operating Officer of InterJet Online Services, Inc.,
            New York, a company that developed an aviation "portal" website.
            From 1991 through 1996, he was Senior Vice President and Chief
            Financial Officer of Akin Bay Company LLC, an investment banking
            concern in New York. Prior to 1991 he was Vice President and Chief
            Operating Officer of Realty and Equipment Corporation, New York, a
            private investment firm primarily specializing in commercial real
            estate portfolio. Mr. Conigliaro, a certified public accountant,
            began his career with Coopers & Lybrand, New York.

      (c)   Compliance with Section 16(a) of the Exchange Act

      Officers, Directors and persons who own more than ten percent of a
      registered class of the Company's equity securities are required by
      Section 16(a) of the Exchange Act to file reports of ownership and changes
      in ownership with the Commission. Officers, Directors and greater than
      ten-percent shareholders are required by the Commission's rules to furnish
      the Company with copies of all Section 16(a) forms they file.

      Based solely on review of the copies of such forms furnished to the
      Company, or representations that no Forms 5 were required, the Company
      believes that all Section 16(a) filing requirements were complied with in
      a timely manner.

<PAGE>
                                       29


Item 10. Executive Compensation.

      (a)   Executive Officer Compensation

      The following table sets forth all compensation awarded to, earned by or
      paid to, our Chief Executive Officer and our most highly compensated
      executive officers. In 2002, annual salaries of such individuals did not
      exceed $100,000. The following table represents annual compensation for
      all services rendered in all capacities to us by highly compensated
      individuals during 2002, 2001 and 2000.

<TABLE>
<CAPTION>
                                       Summary Compensation Table
                                       --------------------------

           Name and Principal                                                  All Other
                Position               Year        Salary        Bonus      Compensation (1)
                --------               ----        ------        -----      ----------------
<S>                                    <C>        <C>            <C>            <C>
      George W. Benoit, President,     2002
      Chief Executive Officer and      2001       $160,000                      $ 3,212
      Chairman                         2000       $155,626                      $35,807

      Anthony S. Conigliaro, Vice      2002
      President and Chief              2001       $110,000
      Financial Officer                2000       $100,000
</TABLE>

----------
(1)   Represents the Company's share of insurance premium on Split Dollar Life
      Insurance Agreement which was cancelled in 2001.

      Executive compensation can vary widely from year to year. The Company may
      pay discretionary bonuses to its salaried employees. Bonuses are
      determined by the Compensation Committee of the Board of Directors. There
      were not bonuses in 2002.

<PAGE>
                                       30


      (b)   Compensation Pursuant to Plans

      401(k) Cash or Deferred Compensation Plan. The Company maintains a
      tax-qualified 401(k) cash or deferred compensation plan that covers all
      employees who have completed one year of service and attained age 21.
      Participants are permitted, within the limitations imposed by the Internal
      Revenue Code, to make pre-tax contributions to the plan pursuant to salary
      reduction agreements. The Company may, in its discretion on an annual
      basis, make additional contributions. The contributions of the
      participants and the Company are held in separate accounts. Participants
      are always fully vested in both accounts.

      1990 Incentive Compensation Plan. The stockholders approved the Company's
      1990 Incentive Compensation Plan (the "Plan") on June 7, 1990. On June 5,
      1996, the Plan was amended to increase the number of shares available for
      grant (the "Amended Plan"). Pursuant to the Amended Plan, 750,000 shares
      of the Company's Common Stock have been reserved for issuance to officers
      and other key employees as incentive or nonqualified stock options, stock
      appreciation rights ("SARs") or restricted stock awards. Incentive stock
      options must have an exercise price per share equal to no less than the
      fair market value of the Company's Common Stock on the date of grant (110%
      in the case of a 10% stockholder). Incentive stock options may not be
      exercised after 10 years from the date of grant (five years in the case of
      a 10% stockholder). Nonqualified stock options cannot be exercised prior
      to one year or after ten years from the date of grant. Concurrently with
      nonqualified options granted, participants may also receive SARs. SARs
      will provide participants with cash equal to the difference between the
      fair market value of the number of shares for which the SAR award is
      exercised and the exercise price of nonqualified stock options on the date
      the SAR award is exercised. Restricted stock will be subject to
      restrictions which will render such shares subject to forfeiture.
      Additionally, restricted stock will be nontransferable during the period
      any restrictions apply. The Board of Directors has established an
      Incentive Compensation Committee to administer the Plan. No member of such
      committee shall be eligible to receive any type of award under the Plan.
      During 1992, options to purchase an aggregate of 150,000 shares were
      granted to employees, none of whom were executive officers. During 1996,
      options to purchase 50,000 of those shares

<PAGE>
                                       31


      expired. On April 7, 1999, options to purchase 460,000 shares were granted
      to various employees, including George W. Benoit (150,000) and Kevin J.
      Benoit (100,000). No other awards have been made under the Plan and no
      options have been exercised. The Plan was terminated on June 3, 1999. On
      March 14, 2003 the recipients of all outstanding awards under the Plan
      waived their rights to such awards.

      1999 Stock Option Plan. The Stockholders approved the 1999 Stock Option
      Plan (the "99 Plan"), which provides, among other matters, for incentive
      and non-qualified stock options to purchase 350,000 shares of Common
      Stock. The purpose of the 99 Plan is to provide incentives to officers,
      key employees, directors, independent contractors and agents whose
      performance will contribute to the long-term success and growth of the
      Company, to strengthen the ability of the Company to attract and retain
      officers, key employees, directors, independent contractors and agents of
      high competence, to increase the identity of interests of such people with
      those of the Company's stockholders and to help build loyalty to the
      Company through recognition and the opportunity for stock ownership. The
      99 Plan is administered by the Incentive Compensation Committee of the
      Board.

      The 99 Plan permits the granting of both incentive stock options and
      non-qualified stock options. Generally, the option price of both incentive
      stock options and non-qualified stock options must be at least equal to
      100% of the fair market value of the shares on the date of grant. The
      maximum term of each option is ten years. For any participant who owns
      shares possessing more than 10% of the voting rights of the Company's
      outstanding shares of Common Stock, the exercise price of any incentive
      stock option must be at least equal to 110% of the fair market value of
      the shares subject to such option on the date of grant and the term of the
      option may not be longer than five years. Options become exercisable at
      such time or times as the Board may determine at the time it grants
      options.

      Under the 99 Plan, incentive stock options may be granted only to officers
      and employees and non-qualified stock options may be granted to officers,
      employees as well as directors, independent contractors and agents.
      Persons eligible to receive options consist primarily of three (3)
      officers and three (3) key employees.

<PAGE>
                                       32


      The 99 Plan expires on March 31, 2009 unless earlier terminated or
      suspended by the Board. The 99 Plan may be amended, terminated or modified
      by the Board at any time, except that the Board may not, without approval
      by a vote of the stockholders of the Company (i) increase the maximum
      number of shares for which options may be granted under the 99 Plan, (ii)
      change the persons eligible to participate in the 99 Plan, or (iii)
      materially increase the benefits accruing to participants under the 99
      Plan. No such termination, modification or amendment may affect the rights
      of an optionee under an outstanding option or the grantee of an award.

      During 2000, options to purchase 40,000 shares were granted to four (4)
      directors of the Company: Charles W. Currie (10,000); Joseph G. Anastasi
      (10,000); David W. Dube (10,000); and James J. Murtha (10,000). No other
      awards were made under the 99 Plan and no options were exercised. During
      2001, 20,000 options were awarded under the 99 Plan and 20,000 options
      were exercised. On March 14, 2003 the recipients of all outstanding awards
      under the 99 Plan waived their rights to such awards.

      (b)   Director Compensation

      There are no family relationships among any of the Directors or executive
      officers of the Company, other than Kevin J. Benoit, who is the son of
      George W. Benoit, Chairman of the Company.

      The Company does not pay Directors who are employees of the Company any
      fees for serving as Directors, but reimburses them for their out-of-pocket
      expenses in connection with such duties. The Company pays Directors who
      are not employees of the Company an annual retainer of $12,000 plus
      expenses incurred for attending meetings of the Board, Annual Stockholders
      Meetings and for each meeting of a committee of the Board not held in
      conjunction with a Board meeting. No payments were made to the Directors
      of the Company in 2002, other than their expenses relating to attending
      meetings of the Board. In addition, in 2002 the Directors of the Company
      forgave $55,000 of such retainer fees.

<PAGE>
                                       33


Item 11. Security Ownership of Certain Beneficial Owners and Management

      The following table sets forth, as of March 31, 2003, the shares of our
      common stock owned beneficially; by each of our current directors; by all
      of our current directors and executive officers as a group; and by persons
      known to us to own, beneficially, more than five (5%) percent of the
      outstanding shares of our common stock:

<TABLE>
<CAPTION>
                                                                                    Percent of Aggregate Voting
                   Name of                              Common Stock                   Power and Outstanding
             Beneficial Owner (1)                  Beneficially Owned (2)                 Equity Owned (3)
             --------------------                  ----------------------                 ----------------
<S>                                                      <C>                                     <C>
      George W. Benoit                                   1,634,120 (4)(7)                        28.71

      Kevin J. Benoit                                      428,000 (5)(7)                         7.52

      Charles W. Currie                                    271,780 (6)                            4.86

      Joseph G. Anastasi                                     2,200                                *

      David W. Dube                                          4,000                                *

      Edward A. Martino                                     15,300                                *

      Anthony S. Conigliaro                                  2,000                                *

      Barry W. Blank                                       884,400 (8)                           14.60

      All Directors and Executive
      Officers as a group (8 persons)                    2,357,400                               40.71
</TABLE>

*     Owns less than one (1%) percent.

(1)   The address of all the beneficial owners is: CareerEngine Network, Inc.,
      Suite 1103, 200 West 57th Street, New York, New York 10019; except that
      the address for Barry W. Blank is P.O. Box 32056, Phoenix, Arizona 85064.

(2)   A person is deemed to be a beneficial owner of securities that can be
      acquired by such person within 60 days from the filing of this Form 10-KSB
      upon the exercise of options and warrants or conversion of convertible
      securities. Each beneficial owner's percentage ownership is determined by
      assuming that options, warrants and convertible securities that are held
      by such person (but not held by any other person) and that are exercisable
      or convertible within 60 days from the filing of this Form 10-KSB have
      been exercise or converted. Except as otherwise indicated, and subject to
      applicable community property and similar laws, each of the persons named
      has sole voting and investment power with respect to the shares shown as
      beneficially owned.

<PAGE>
                                       34


(3)   All percentages of beneficial ownership are calculated based the number of
      shares outstanding as of March 31, 2003. On such date we had 5,590,944
      shares of common stock issued and outstanding.

(4)   Includes the following: 90,700 shares of common stock held in George W.
      Benoit's 401K Plan.

(5)   Includes the following: (a) 31,000 shares of common stock held in the
      Kevin J. Benoit 1998 Family Trust, of which Kevin J. Benoit is the
      Trustee; and (b) 35,300 shares of common stock held in Kevin J. Benoit's
      Individual Retirement Account.

(6)   Includes the following: (a) 200 shares of common stock owned by Mr.
      Currie's wife; and (b) 9,900 shares of common stock held in Charles W.
      Currie's Individual Retirement Account.

(7)   Includes 100,000 shares of common stock that can be acquired on the
      conversion of certain debentures and related warrants.

(8)   Includes 300,000 shares of common stock that can be acquired on the
      conversion of certain debentures and related warrants. Also includes
      168,000 shares that can be acquired on the conversion of certain
      debentures and related warrants issuable upon exercise of placement agent
      warrants issued to the placement agent in the private financing completed
      in June and August 2000 and promised by the placement agent to Mr. Blank.

<PAGE>
                                       35


Item 12. Certain Relationships and Related Transactions

      Other than the purchasing of certain units privately offered by the
      Company in June and August 2000, amounting to $525,000, in the aggregate,
      there have been no material transactions where we were a party, in which
      any of our executive officers, directors or principal security-holders had
      a direct or indirect interest.

<PAGE>
                                       36


Item 13. Exhibits, List and Reports on Form 8-K.

      (a)   Exhibits

      Certain of the following exhibits, as indicated parenthetically, were
      previously filed as exhibits to other reports or registration statements
      filed by the Registrant under the Securities Act of 1933 or under the
      Securities Exchange Act of 1934 and are hereby incorporated by reference.

      3.1   Restated Certificate of Incorporation of the Registrant filed on
            July 31, 1987 and amendments thereto filed on June 8, 1989,
            September 14, 1990 and December 2, 1991. Certificate of change of
            location of registered office and of registered agent filed on May
            7, 1992. (Incorporated by reference to the Registrant's Annual
            Report on Form 10-KSB for the year ended December 31, 1997)

      3.2   Certificates of Amendment of Certificate of Incorporation

                  (A)   Name change, dated March 23, 2000

                  (B)   Number of shares, dated October 16, 2000

            (Incorporated by reference to the Registrant's Annual Report on Form
            10-KSB for the year ended December 31, 2000)

      3.3   Amended and Restated By-Laws of the Registrant. (Incorporated by
            reference to the Registrant's Annual Report on Form 10-KSB for the
            year ended December 31, 2000)

      4.1   Form of CareerEngine Network, Inc. 12% Convertible Subordinated
            Debenture due March 31, 2010. (Incorporated by reference to the
            Registrant's Annual Report on Form 10-KSB for the year ended
            December 31, 2000)

      4.2   Form of Class A Warrants to Purchase Common Stock of CareerEngine
            Network, Inc., dated June 28 and August 7, 2000. (Incorporated by
            reference to the Registrant's Annual Report on Form 10-KSB for the
            year ended December 31, 2000)

<PAGE>
                                       37


      4.3   Form of Class B Warrants to Purchase Common Stock of CareerEngine
            Network, Inc., dated June 28 and August 7, 2000. (Incorporated by
            reference to the Registrant's Annual Report on Form 10-KSB for the
            year ended December 31, 2000)

      4.4   CareerEngine Network, Inc. and Dirks and Company, Inc. Placement
            Agent's Warrant Agreement, dated June 28, 2000; and related form of
            Warrant Certificate. (Incorporated by reference to the Registrant's
            Annual Report on Form 10-KSB for the year ended December 31, 2000)

      10.1  CareerEngine Network, Inc. (formerly Helmstar Group, Inc.) 1999
            Stock Option Plan. (Incorporated by reference to the Registrant's
            Annual Report on Form 10-KSB for the year ended December 31, 1999)

      10.2  Indenture of Trust between Movieplex Realty Leasing, L.L.C. and
            First Union National Bank, as Trustee, dated November 1, 1997.
            (Incorporated by reference to the Registrant's Annual Report on Form
            10-KSB/A for the year ended December 31, 1997)

      10.3  Form of Bond. (Incorporated by reference to the Registrant's Annual
            Report on Form 10-KSB/A for the year ended December 31, 1997)

      10.4  Master Lease between Movieplex Realty Leasing, L.L.C., as Landlord,
            and Carmike Cinemas, Inc., as Tenant, dated November 20, 1997.
            (Incorporated by reference to the Registrant's Annual Report on Form
            10-KSB/A for the year ended December 31, 1997)(1)

      10.5  Reimbursement Agreement, dated as of November 20, 1997, among
            Movieplex Realty Leasing, L.L.C, the Lenders, and Wachovia Bank,
            N.A., as Agent. (Incorporated by reference to the Registrant's
            Annual Report on Form 10-KSB/A for the year ended December 31,
            1997)(1)

----------
(1)   Portions of this exhibit have been deleted per the Registrant's request
      for confidential treatment and filed separately with the Commission
      pursuant to Rule 24b-2

<PAGE>
                                       38


      10.6  Form of Letter of Credit. (Incorporated by reference to the
            Registrant's Annual Report on Form 10-KSB/A for the year ended
            December 31, 1997)

      10.7  Form of Bond Purchase Agreement between Movieplex Realty Leasing,
            L.L.C. and {the Purchaser], dated November 20, 1997. (Incorporated
            by reference to the Registrant's Annual Report on Form 10-KSB/A for
            the year ended December 31, 1997)

      10.8  Agency and Development Agreement between Movieplex Realty Leasing,
            L.L.C. and Carmike Cinemas, Inc., dated November 20, 1997.
            (Incorporated by reference to the Registrant's Annual Report on Form
            10-KSB/A for the year ended December 31, 1997)

      21.0  Subsidiaries of the Registrant.

      (b)   No reports on Form 8-K have been filed during the period covered by
            this report.

<PAGE>
                                       39


Item 14. Controls and Procedures

      The Chief Executive Officer and Chief Financial Officer of the Company
      have conducted an evaluation of the effectiveness of disclosure controls
      and procedures pursuant to Exchange Act Rule 13a-14. Based on that
      evaluation, they have concluded that the Company's disclosure controls and
      procedures are effective in ensuring that all material information
      required to be filed in this Annual Report on Form 10-KSB has been made
      known to them in a timely fashion. There have been no significant changes
      in internal controls, or in other factors that could significantly affect
      internal controls, subsequent to the date they completed their evaluation.

<PAGE>
                                       40


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized on the 15th day of April,
2003.

CareerEngine Network, Inc.


           /s/ George W. Benoit
------------------------------------------
  George W. Benoit, Chairman of the Board
        and Chief Executive Officer


         /s/ Anthony S. Conigliaro
------------------------------------------
   Anthony S. Conigliaro, Vice President
        and Chief Financial 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 in
the capacities indicated on the 15th day of April, 2003.

      Signature                          Title
      ---------                          -----

/s/ George W. Benoit         Chairman of the Board, President,
--------------------         Chief Executive Officer
(George W. Benoit)

/s/ Joseph G. Anastasi       Director
----------------------
(Joseph G. Anastasi)

/s/ Charles W. Currie        Director
---------------------
(Charles W. Currie)

/s/ James J. Murtha          Director
-------------------
(James J. Murtha)

/s/ David W. Dube            Director
------------------
(David W. Dube)

/s/ Kevin J. Benoit          Director
-------------------
(Kevin J. Benoit)

/s/ Edward A. Martino        Director
---------------------
(Edward A. Martino)

<PAGE>
                                       41


                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of CareerEngine Network, Inc. (the
"Registrant") on Form 10-KSB for the year ending December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
George W. Benoit, Chairman of the Board of Directors, President, and Chief
Executive Officer of the Registrant, certify, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, that:

1.    I have reviewed the Report of the Registrant;

2.    To the best of my knowledge, the Report does not contain any untrue
      statements of a material fact or omit to state a material fact necessary
      to make the statements made, in light of the circumstances under which
      such statements were made, not misleading with respect to the periods
      covered by the Report;

3.    To the best of my knowledge, the financial statements, and other financial
      information included in the Report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the Registrant as of, and for, the periods presented in the Report;

4.    The Registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) for the Registrant
      and we have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to the Registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the periods in which the Report
            is being prepared;

      b)    evaluated the effectiveness of the Registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of the Report (the "Evaluation Date"); and

      c)    presented in the Report are our conclusions about the effectiveness
            of the disclosure controls and procedures based on our evaluation as
            of the Evaluation Date;

<PAGE>
                                       42


5.    The Registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation, to the Registrant's auditors and the Audit
      Committee of Registrant's Board of Directors:

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect the Registrant's ability to
            record, process, summarize and report financial data and have
            identified for the Registrant's auditors any material weaknesses in
            internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal controls; and

6.    The Registrant's other certifying officer and I have indicated in the
      Report whether or not there were significant changes in internal controls
      or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any
      corrective actions with regard to significant deficiencies and material
      weaknesses.


                                       /s/ George W. Benoit
                                       ---------------------------------------
Date: April 15, 2003                   George W. Benoit,
                                       Chairman of the Board of Directors,
                                       President, and Chief Executive
                                       Officer

<PAGE>

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of CareerEngine Network, Inc. (the
"Registrant") on Form 10-KSB for the year ending December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Anthony S. Conigliaro, Vice President and Chief Financial Officer of the
Registrant, certify, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
that:

1.    I have reviewed the Report of the Registrant;

2.    To the best of my knowledge, the Report does not contain any untrue
      statements of a material fact or omit to state a material fact necessary
      to make the statements made, in light of the circumstances under which
      such statements were made, not misleading with respect to the periods
      covered by the Report;

3.    To the best of my knowledge, the financial statements, and other financial
      information included in the Report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the Registrant as of, and for, the periods presented in the Report;

4.    The Registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) for the Registrant
      and we have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to the Registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the periods in which the Report
            is being prepared;

      b)    evaluated the effectiveness of the Registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of the Report (the "Evaluation Date"); and

      c)    presented in the Report are our conclusions about the effectiveness
            of the disclosure controls and procedures based on our evaluation as
            of the Evaluation Date;

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                                       44


5.    The Registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation, to the Registrant's auditors and the Audit
      Committee of Registrant's Board of Directors:

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect the Registrant's ability to
            record, process, summarize and report financial data and have
            identified for the Registrant's auditors any material weaknesses in
            internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal controls; and

6.    The Registrant's other certifying officer and I have indicated in the
      Report whether or not there were significant changes in internal controls
      or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any
      corrective actions with regard to significant deficiencies and material
      weaknesses.


                                        /s/ Anthony S. Conigliaro
                                        ---------------------------------
Date: April 15, 2003                    Anthony S. Conigliaro,
                                        Vice President and
                                        Chief Financial Officer