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, 2000
                                             -----------------

[   ]     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.)


        2 World Trade Center, Suite 2112, New York, N.Y.          10048
----------------------------------------------------------     -----------
            (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  [    ]

<PAGE>

               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 2000,  its most recent  fiscal year,  were
$2,918,276.

               As of February 28,  2001,  the  aggregate  market value of voting
stock held by non-affiliates of the Issuer was approximately $3,009,210.

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

               Class                       Outstanding at February 28, 2001
               -----                       --------------------------------

   Common stock - par value $.10                      5,504,944
   -----------------------------                      ---------

               DOCUMENTS INCORPORATED BY REFERENCE

               None.

<PAGE>

                                     PART I


Item l.        Description of Business.

               Background and History

               CareerEngine  Network,  Inc.  (name changed from Helmstar  Group,
               Inc.  on March 28,  2000),  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 now focused entirely on this segment.

               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 on- and  off-line  companies  with  products and services
               addressed to meeting on-line recruiting problems.

               Our Network Division operates 25 portal career sites organized by
               specific job function, profession, designation, work location and
               diversity.

               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,  receive  personalized advice from our online
               career  counselors  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


                                       3
<PAGE>


               basis.  We  believe  that  offering  a  prospective   client  the
               opportunity  to  participate  in our network of career  sites and
               having us build a career  center for the  client's  own  website,
               gives us a flexibility  which we believe is not enjoyed by any of
               our competitors.  We believe that by offering  multiple  products
               and  services  to  address  online   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  our
               network of over 40 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 TMP
               Worldwide,  CareerBuilder, Inc., Bernard Hodes, Vault.Com, Shaker
               Advertising and Recruit USA.

               We estimate,  based on discussions  with our  distributors,  that
               there are more than 5,000 salespersons  and/or account executives
               engaged by

                                       4
<PAGE>

               our  distributors  involved  in  soliciting  job  postings.   Our
               distributors  pay us our standard  posting fees less a negotiated
               commission   for  postings   they   originate  and  list  on  the
               CareerEngine network.

               Among the  services  provided  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.

               Recently,   we  have  entered   into  a  number  of   co-branding
               arrangements where we either develop or upgrade a career site for
               a co-branding  client, such as Crain's NY.com, the online version
               of the financial  news journal,  Engineering.com,  a site serving
               the engineering  community and JoC.com, the online version of The
               Journal of Commerce, an Economist Group publication.

               These sites  participate as members of our  CareerEngine  Network
               together  with our own  vertical  career  sites  and we share the
               revenues generated. Another co-branding client is SmartMoney.com,
               a popular website  offering  personal  financial news,  tools and
               investment  advice.  Users of this site will now have access to a
               career center created by us offering confidential resume hosting,
               job postings and career specific news.

               Revenue from the  CareerEngine  Network  Division is derived from
               job placement advertisements, banner advertisement placements for
               corporations and other organizations, sponsorship advertisements,
               and co-branding arrangements with content providers that generate
               revenues of a similar nature as those mentioned above.

               Our CareerEngine Solutions Division

               Online  career  centers  are  becoming  increasingly  utilized by
               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. Early in 2000, we formed our
               CareerEngine  Solutions  Division to offer the experience,  staff
               and know-how to build, host and

                                       5
<PAGE>

               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 content for our client's site, and
               recommend  proprietary  "plug-ins"  that  incorporate  the latest
               technology - such as job search  agents and  confidential  resume
               hosting.  We  do  not  have  any  agreements  with  third-parties
               pursuant to which we recommend  their  plug-ins to our customers.
               If the site we construct  becomes an important  revenue  producer
               for the  company,  it has the option of joining the  CareerEngine
               Network  and   utilizing   the  sales   representatives   of  our
               distributors  to sell and market job  postings  for the site.  We
               also  provide  programs  to help  the  company  effectively  sell
               advertising  inventory,   facilitate  site  updates  and  provide
               customer service.

               Revenues  generated by this division include a portion of initial
               cash set up fees and monthly  subscription-type  revenue  streams
               based upon contractual terms.

               Our Discontinued Operations

               During the past five years we concentrated in providing  merchant
               and investment banking services, primarily related to real estate
               projects  such as our project with  Carmike  Cinemas,  Inc.,  and
               financial  consulting  services.  On August 16, 2000 our Board of
               Directors  decided to  discontinue  these  business  segments  to
               concentrate our efforts on our online recruiting business.

               In  1997,   Movieplex   Realty  Leasing,   L.L.C.,   one  of  our
               subsidiaries,  entered  into  an  agreement  with  a  major  film
               exhibitor,  Carmike  Cinemas,  Inc.,  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


                                       6
<PAGE>

               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  by  Movieplex.  The 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 on the land. In  connection  therewith we entered into a
               Reimbursement  Agreement  with  Wachovia,  N.A.  as agent for the
               banks,  under which we were  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 3% equity
               investment  by  the  lessor   amounted  to  $2,272,500  of  which
               $2,250,000 and $22,500 were contributed by the lessor's Preferred
               and Common Memberships (or shareholdings),  respectively. A third
               party  owns  100%  of the  Preferred  Membership  and  two of our
               subsidiaries own 100% of the Common Membership of the lessor. The
               Common and Preferred  Membership interests are entitled to a cash
               return based on a formula specified within the lease.

               Pursuant to one of the related  agreements,  Carmike acted as the
               development  agent for Movieplex  over a development  period from
               November 20, 1997 through November 19, 1999.  During this 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 our

                                       7
<PAGE>

               anticipated  financial return on this  transaction.  We were also
               compensated for 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  fluctuate with the debt service payments on the
               related bonds and the cash return due to the Common and Preferred
               Members  of  Movieplex.  The  lease  requires  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  has 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  has the option to
               purchase, not less than all the theaters, at an amount based on a
               predetermined future value.

               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,
               we  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 us  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. We anticipate that
               title to the six  theaters  will be  transferred  to the banks in
               payment  of  the  non-recourse   debt  under  the   Reimbursement
               Agreement.  At such time, we will  recognize a gain to the extent
               of the excess of the  liabilities  over the carrying value of the
               assets related to the real estate leased to Carmike.

                                       8
<PAGE>


               The  transaction  relating to our six movie  theaters and Carmike
               Cinema,  Inc.,  is and always has been cash flow neutral (rent is
               equal to  interest  expense,  principal  amortization  and  other
               related expenses that are our  responsibility).  Carmike's filing
               of a petition  under Chapter 11 of the United  States  Bankruptcy
               Code has not changed this financial  relationship as our exposure
               related  to this  real  estate  project  is and  always  has been
               limited solely to our interest in the theaters.

               General

               The  Company  was  incorporated  under  the laws of the  State of
               Delaware in 1968.  It maintains  offices at 2 World Trade Center,
               Suite 2112, New York, New York 10048 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 term Company also includes Movieplex
               Realty  Leasing,  L.L.C.   ("Movieplex"),   a  limited  liability
               company,  all of whose common membership interests are indirectly
               owned by the Company.

               As of March 15, 2001, the Company had 29 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,  HeadHunter.net, as well as corporate Internet
               sites,  and  not-for-profit  websites  operated  by  individuals,
               educational institutions and governmental agencies.


                                       9
<PAGE>

               We also compete against some companies,  including CareerBuilder,
               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

               In the course of conducting its business of merchant banking, the
               Company may  acquire  interests  in  regulated  activities.  Such
               regulation  may be either  directly or indirectly  related to the
               Company's interest.

               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.

                                       10
<PAGE>


Item 2.        Description of Property. The  Company  leases approximately 7,000
               square  feet of office space at 2 World Trade  Center,  New York,
               New  York  10048  under  the  terms  of   a  lease  that  expires
               February  28,  2006.  This office is  utilized  as the  Company's
               executive   office  in  addition  to  housing  its   e-recruiting
               activities.  The future  minimum  annual base rental  commitments
               under this lease, at December 31, 2000, are as follows:

                              2001                            $139,100
                              2002                             139,100
                              2003                             139,100
                              2004                             139,100
                              2005                             139,100
                              Thereafter                        23,100
                                                              --------

                                                              $718,600
                                                              ========


                                       11
<PAGE>



Item 3.        Legal Proceedings.

               In February 2000,  the Company,  in exchange for a nominal amount
               obtained a release from claims arising from a 1996 litigation.

               In connection with the above litigation,  on November 22, 2000, a
               subsidiary of the Company was served with a Summons and Complaint
               in  connection  with an action  commenced in October 2000, by the
               Housing Authority of the County of Riverside,  California against
               multiple  defendants.  The Plaintiffs  alleged in connection with
               the  issuance  and  underwriting  of certain  bonds that  various
               defendants  negligently and  fraudulently  misrepresented  to the
               Plaintiffs  that the  interest  on the bonds would be tax exempt.
               The  Plaintiffs   are  seeking   damages  as  a  result  of  such
               misrepresentation in the amount of $1,100,000. The Plaintiffs are
               also  seeking   punitive   damages  in  an  unspecified   amount.
               Management is vigorously  opposing  those  claims,  however,  the
               outcome of the litigation is not presently determinable.





                                       12
<PAGE>



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

               None.




                                       13
<PAGE>



                                     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
               February 28, 2001 was 236.

                             Equity Sale Prices:
                             ------------------
<TABLE>
<CAPTION>
                                                                          Common Stock
                                                                          ------------
                                                            High Sales Price        Low Sales Price
                                                            ----------------        ---------------
                                           1999
                                           ----
                                        <S>                      <C>                     <C>
                                        1st Quarter              2.625                   1.00
                                        2nd Quarter              9.50                    2.1875
                                        3rd Quarter              5.00                    2.50
                                        4th Quarter              6.00                    3.50

                                           2000
                                           ----
                                        1st Quarter              5.00                    2.75
                                        2nd Quarter              3.0625                  1.75
                                        3rd Quarter              2.1875                  1.1875
                                        4th Quarter              1.9375                  0.9375
</TABLE>



               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:

               On June 28, 2000, the Company privately placed 39.50 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

                                       14
<PAGE>

               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.  On August 7,
               2000, the Company privately placed an additional 8.50 units under
               the same terms and conditions as set forth above.

               The  securities  were sold by the  Company as assisted by Dirks &
               Company,   Inc.,  the  Placement  Agent,   solely  to  accredited
               investors.   The  aggregate  sales  price  was  $2,400,000.   The
               Placement  Agent  received a cash  commission  of $240,000  and a
               non-accountable expense allowance of $72,000. The Placement Agent
               also received 5 Placement  Agent  Warrants.  Each Placement Agent
               Warrant  entitles the Placement Agent to purchase,  at a purchase
               price of $60,000 (i) a $50,000 subordinated convertible debenture
               or the shares into which the debenture  could be converted,  (ii)
               12,500 Class A Warrants  and (iii)  12,500 Class B Warrants.  The
               Placement  Agent's  debentures,  and Class A and B Warrants  have
               substantially  the same  terms as  those  sold to the  accredited
               investors.

               The offering of securities was exempt from registration under the
               Securities  Act of 1933  pursuant  to Section  4(2)  thereof  and
               Regulation D and Rule 506 promulgated thereunder.




                                       15
<PAGE>



Item 6.        Management's Discussion and Analysis.

               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 entirely on this segment.

               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.

            A. Results of Operations:  2000 Compared to 1999
               ---------------------------------------------

               Revenues

               Total revenues from continuing operations increased to $2,918,276
               in 2000 from $1,471,421 for 1999.

               E-recruiting  related  services  increased to  $1,228,671 in 2000
               from  $30,980  in  1999  as the  operations  of  our  subsidiary,
               CareerEngine,  Inc., primarily commenced in the fourth quarter of
               1999.

               Income on  securities  transactions,  net increased to $1,492,821
               for 2000 from $836,549 for 1999. This revenue  category  includes
               the net profit  from our cash  management  and our  investing  in
               futures, puts, calls, municipals and other securities.

               Interest  income  decreased to $196,784 in 2000 from  $374,522 in
               1999 due to the reduced amount of funds available for investment.

               Other income  decreased to nil for 2000 from $229,370 in 1999 due
               to our  collection in 1999 of a reserved  receivable  relating to
               the sale of a former subsidiary.



                                       16
<PAGE>

               Expenses

               Total expenses from continuing operations increased to $8,089,134
               for 2000 from $4,424,308 in 1999.

               Compensation  and related costs  increased to $3,493,629 for 2000
               from  $1,725,074 for 1999. The increase is due principally to the
               additional  employees hired by  CareerEngine,  Inc. in connection
               with its growing e-recruiting activities.

               Advertising   expense  increased  to  $1,563,693  for  2000  from
               $1,235,778  for  1999  as   CareerEngine,   Inc.   continued  its
               comprehensive  communications  program to expand its e-recruiting
               activities.

               General and  administrative  expenses increased to $2,486,085 for
               2000 from  $1,336,215  for 1999 due  primarily  to the  increased
               operations of CareerEngine, Inc.

               Interest expense increased to $545,727 for 2000 from $127,241 for
               1999  primarily  due  to  the  commencement  of  payments  on our
               outstanding tax assessment and interest on the debentures payable
               issued in 2000.

               Operating Loss

               On a  pre-tax  basis,  we had a loss of  $5,170,858  for the year
               ended December 31, 2000 from continuing  operations compared with
               a loss of  $2,952,887  for the year ended  December 31, 1999 from
               continuing   operations  due  to  the  expenses  associated  with
               CareerEngine,  Inc.  For  Federal  income  tax  purposes,  as  of
               December 31, 2000, we had net  operating  loss  carryforwards  of
               approximately  $24,097,000  available  to reduce  future  taxable
               income.  These  carryforwards  expire in the years  2005  through
               2020.

               Our loss from  continuing  operations for the year ended December
               31,  2000 was  $5,186,198  compared  with a loss from  continuing
               operations  of $2,962,985  for the year ended  December 31, 1999.
               For the year ended December 31, 2000,  loss per common share from
               continuing operations, basic and diluted, was $.95 per share. For
               the year ended  December  31,  1999,  loss per common  share from
               continuing operations, basic and diluted, was $.55 per share.


                                       17
<PAGE>


               Our loss from discontinued operations for the year ended December
               31,  2000 was  $966,412  compared  with a loss from  discontinued
               operations  of $1,089,409  for the year ended  December 31, 1999.
               For the year ended December 31, 2000,  loss per common share from
               discontinued  operations,  basic and diluted, was $.18 per share.
               For the year ended December 31, 1999,  loss per common share from
               discontinued operations, basic and diluted, was $.20 per share.

               Our net loss for the year ended December 31, 2000 was $6,152,610,
               compared  with a net  loss  of  $4,052,394  for  the  year  ended
               December 31, 1999. For the year ended December 31, 2000, net loss
               per common share, basic and diluted, was $1.13 per share. For the
               year ended  December 31, 1999,  net loss per common share,  basic
               and diluted, was $.75 per share.

            B. New Accounting Standard

               In June 1998,  the Financial  Accounting  Standards  Board issued
               Statement No. 133,  Accounting  for  Derivative  Instruments  and
               Hedging Activities,  as amended,  which is required to be adopted
               in years  beginning after June 15, 2000. We are required to adopt
               the new Statement  effective  January 1, 2001. The Statement will
               require us to recognize all  derivatives  on the balance sheet at
               fair value.  Derivatives  that are not hedges must be adjusted to
               fair  value  through  income.  If  the  derivative  is  a  hedge,
               depending  on the nature of the hedge,  changes in the fair value
               of  derivatives  will either be offset against the change in fair
               value of the  hedged  assets,  liabilities,  or firm  commitments
               through  earnings or  recognized  in other  comprehensive  income
               until the hedged item is recognized in earnings.  The ineffective
               portion  of  a   derivative's   change  in  fair  value  will  be
               immediately recognized in earnings. We do not anticipate that the
               adoption of the new Statement  will have a significant  effect on
               the financial statements.

            C. Liquidity and Capital Resources

               The Company has incurred substantial operating losses,  sustained
               substantial operating cash outflows, and at December 31, 2000 has
               a stockholders' deficiency.  Management believes that such losses
               and negative  operating  cash flows will  continue in fiscal year
               2001.  The  above  factors  raise  substantial  doubt  about  the
               Company's  ability to continue as a going concern.  The Company's


                                       18
<PAGE>

               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.  There is no assurance
               that the Company  will  obtain  additional  financing  or achieve
               profitable  operations.  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.

               We initiated a cost reduction strategy consisting  primarily of a
               41% staff reduction since December 14, 2000, and an approximately
               70% reduction in our advertising  expenditures commencing January
               1, 2001.

               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.
               However,  if the actual  costs of our  business  are higher  than
               projected  or our  contemplated  future  revenues  fall below our
               current  expectations,  we may require additional  financing.  We
               anticipate,  but cannot assure,  that this  additional  financing
               will come, primarily,  from the exercise of the warrants from the
               private  financing.  However,  we cannot assure that the price of
               our common stock will ever attain sufficient levels to induce the
               exercise of the warrants.

               In the event that the warrants are not exercised  within the time
               period  needed,  we will be forced to seek  alternate  sources of
               financing,  most  likely  from one or more  additional  public or
               private   equity  or  debt   offerings.   We  currently  have  no
               commitments  for any of such  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.  If  sources  of  financing  are
               required,  but  are  insufficient  or  unavailable,  we  will  be
               required to modify our growth and  operating  plans to the extent
               of available  funding,  which would have an adverse effect on the
               successful  implementation  of our planned business  development.
               The  transaction  relating to our six movie  theaters and Carmike
               Cinema,  Inc., a discontinued  operation,  is and always has been
               cash flow neutral (rent is equal to interest  expense,  principal
               amortization   and   other   related   expenses   that   are  our


                                       19
<PAGE>

               responsibility).  Carmike's filing of a petition under Chapter 11
               of the  United  States  Bankruptcy  Code  has  not  changed  this
               financial  relationship  as our  exposure  related  to this  real
               estate  project  is and  always  has been  limited  solely to our
               interest in the theaters.

               We do not have any material  commitments for capital expenditures
               as of December 31, 2000.

            D. Inflation

               Inflation  may  affect the  Company in certain  areas of its cash
               management.  Changes in interest rates typically follow actual or
               expected  changes in the inflation  rate.  Accordingly,  interest
               rates  usually  increase  during  periods of high  inflation  and
               decrease during periods of low inflation.


                                       20
<PAGE>



Item 7.        Financial Statements.

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


                                       21

<PAGE>

Contents:

CONSOLIDATEED FINANCIAL STATEMENTS                                        PAGE


     Independent auditors' report                                         F-2

     Balance sheet as of December 31, 2000                                F-3

     Statements of operations
              for the years ended December 31, 2000and 1999               F-4

     Statements of changes in stockholders' equity
              for the years ended December 31, 2000and 1999               F-5

     Statements of cash flows
              for the years ended December 31, 2000and 1999               F-6

     Notes to financial statements                                        F-8



                                       F-1

<PAGE>

INDEPENDENT AUDITORS' REPORT

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


We have audited the consolidated balance sheet of CareerEngine Network, Inc. and
subsidiaries as of December 31, 2000, and the related consolidated statements of
operations, changes in stockholders' equity (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  referred to above present fairly, in
all material  respects,  the  consolidated  financial  position of  CareerEngine
Network,  Inc. and  subsidiaries  as of December 31, 2000, 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 operating losses,
sustained  substantial  operating cash outflows,  and at December 31, 2000 has a
stockholders'  deficiency and anticipates  that such conditions will continue in
fiscal year 2001.  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.


Richard A. Eisner & Company, LLP

New York, New York
March 20, 2001

See notes to financial statements                                            F-2



<PAGE>


CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Consolidated Balance Sheet
December 31, 2000

<TABLE>
<CAPTION>
ASSETS

Current:
<S>                                                                    <C>
     Cash and cash equivalents                                         $  1,126,358
     Marketable securities                                                1,084,182
     Accounts receivable, net                                               174,209
     Other current assets                                                   191,514
                                                                       ------------
                                                                          2,576,263

Fixed assets, net                                                           898,790
Deferred financing costs, net                                               405,325
Other assets                                                                 50,465
                                                                       ------------

                                                                       $  3,930,843
                                                                       ============

LIABILITIES

Current:
     Accounts payable and accrued expenses                             $    753,240
     Interest payable                                                        72,000
     Tax assessment payable                                               1,055,955
     Excess of liabilities over assets of discontinued operations         3,512,884
                                                                       ------------
                                                                          5,394,079

Debentures payable, net of unamortized discount of $721,516               1,678,484
                                                                       ------------

                                                                          7,072,563
                                                                       ------------

Commitments and contingencies (Note J)

STOCKHOLDERS' EQUITY (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;
     6,749,600 shares issued                                                674,960
Paid-in surplus                                                          16,022,187
Deficit                                                                 (16,810,471)
                                                                       ------------
                                                                           (113,324)

Less treasury stock, at cost - 1,305,594 shares                          (3,028,396)
                                                                       ------------

                                                                         (3,141,720)
                                                                       ============
                                                                       $  3,930,843
                                                                       ============
</TABLE>



See notes to financial statements                                            F-3



<PAGE>
CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                             Year Ended December 31,
                                                             -----------------------
                                                            2000               1999
                                                            ----               ----
<S>                                                      <C>               <C>
Revenues:
     E-recruiting related services                       $ 1,228,671       $    30,980
     Income on securities transactions                     1,492,821           836,549
     Interest income                                         196,784           374,522
     Other income                                                              229,370
                                                         -----------       -----------

                                                           2,918,276         1,471,421
                                                         -----------       -----------

Expenses:
     Compensation and related costs                        3,493,629         1,725,074
     Advertising                                           1,563,693         1,235,778
     General and administrative                            2,486,085         1,336,215
     Interest                                                545,727           127,241
                                                         -----------       -----------

                                                           8,089,134         4,424,308
                                                         -----------       -----------

Loss from continuing operations before income taxes       (5,170,858)       (2,952,887)
Income tax provision                                          15,340            10,098
                                                         -----------       -----------

Loss from continuing operations                           (5,186,198)       (2,962,985)

Discontinued operations:
     Loss from operations of discontinued real
     estate and consulting activities                       (966,412)       (1,089,409)
                                                         -----------       -----------

Net loss                                                 $(6,152,610)      $(4,052,394)
                                                         ===========       ===========

Per common share - basic and diluted:
     Loss from continuing operations                     $      (.95)      $      (.55)
     Loss from discontinued operations                          (.18)             (.20)
                                                         -----------       -----------

Net loss per common share                                $     (1.13)      $      (.75)
                                                         ===========       ===========
Weighted average number of common shares
     outstanding - basic and diluted                       5,441,066         5,435,673
                                                         ===========       ===========
</TABLE>


See notes to financial statements                                            F-4

<PAGE>


CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>

                                                     Common Stock
                                                     ------------                   Paid-in
                                               Shares             Amount            Surplus            Deficit
                                               ------             ------            -------            -------
<S>                                           <C>             <C>                <C>                <C>
Balance - January 1, 1999                     6,749,600       $    674,960       $ 14,984,510       $ (6,605,467)
Treasury stock acquired at cost
Net loss                                                                                              (4,052,394)
                                           ------------       ------------       ------------       ------------

Balance - December 31, 1999                   6,749,600            674,960         14,984,510        (10,657,861)
Treasury stock issued for services,
     at fair value                                                                       (831)
Value attributable to warrants issued with
     debentures payables, net of related
     expenses                                                                       1,038,508
Net loss                                                                                              (6,152,610)
                                           ------------       ------------       ------------       ------------

Balance - December 31, 2000                   6,749,600       $    674,960       $ 16,022,187       $(16,810,471)
                                           ============       ============       ============       ============
<CAPTION>

                                                     Treasury Stock
                                                     --------------
                                                Shares            Amount              Total
                                                ------            ------              -----
<S>                                            <C>             <C>                <C>
Balance - January 1, 1999                      1,296,227       $ (3,024,529)      $  6,029,474
Treasury stock acquired at cost                   17,700            (23,180)           (23,180)
Net loss                                                                            (4,052,394)
                                            ------------       ------------       ------------

Balance - December 31, 1999                    1,313,927         (3,047,709)         1,953,900
Treasury stock issued for services,
     at fair value                                (8,333)            19,313             18,482
Value attributable to warrants issued with
     debentures payables, net of related
     expenses                                                                        1,038,508
Net loss                                                                            (6,152,610)
                                            ------------       ------------       ------------

Balance - December 31, 2000                    1,305,594       $ (3,028,396)      $ (3,141,720)
                                            ============       ============       ============
</TABLE>

See notes to finanacial statements                                           F-5


<PAGE>
CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                                ------------------------------
                                                                                    2000              1999
                                                                                    ----              ----
<S>                                                                             <C>               <C>
Cash flows from operating activities:
     Loss from continuing operations                                            $(5,170,858)      $(2,962,985)
     Adjustments to reconcile loss from continuing operations to net cash
         (used in) provided by operating activities:
             Depreciation and amortization                                          322,991           168,211
             Beneficial conversion feature of debentures payable                    246,875
             Issuance of treasury stock for services                                 18,482
             Sale of marketable securities, net                                   3,804,428         2,967,800
             Amortization of debt discount                                           18,484
             Changes in:
                  Accounts receivable                                              (132,589)
                  Other assets                                                      281,419           (99,132)
                  Accrued expenses and other liabilities                           (480,807)          566,340
                                                                                -----------       -----------
Cash (used in) provided by continuing operations                                 (1,091,575)          640,234
Cash (used in) discontinued operations                                             (213,411)       (2,308,205)
                                                                                -----------       -----------

                      Net cash (used in) operating activities                    (1,304,986)       (1,667,971)
                                                                                -----------       -----------

Cash flows from investing activities:
Cash (used in) continuing operations - purchase of furniture and equipment         (599,907)         (544,182)
Cash provided by discontinued operations                                                            1,450,654
                                                                                -----------       -----------

                      Net cash (used in) provided by investing activities          (599,907)          906,472
                                                                                -----------       -----------

Cash flows from financing activities:
     Purchase of treasury stock                                                                       (23,180)
     Proceeds from issuance of debentures, net of $375,025
         of related expenses                                                      2,024,975
                                                                                -----------       -----------
Cash provided by (used in) continuing operations                                  2,024,975           (23,180)
Cash provided by discontinued operations                                                              750,000
                                                                                -----------       -----------

                      Net cash provided by financing activities                   2,024,975           726,820
                                                                                -----------       -----------

Increase (decrease) in cash and cash equivalents                                    120,082           (34,679)
Cash and cash equivalents at beginning of year                                    1,006,276         1,040,955
                                                                                -----------       -----------

Cash and cash equivalents at end of year                                        $ 1,126,358       $ 1,006,276
                                                                                ===========       ===========


Supplemental disclosures of cash flow information related to
     continuing operations:
         Cash paid during the year for:
             Interest                                                           $   219,016       $       241
             Income taxes                                                       $    30,684       $    31,175
             Issuance of warrants in connection with debentures payable         $   200,000       $        --
</TABLE>


See notes to financial statements                                            F-6

<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000

NOTE A - THE COMPANY

Effective March 28, 2000,  Helmstar Group, Inc. changed its name to CareerEngine
Network, Inc. CareerEngine Network, Inc. is engaged in the e-recruiting 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
merchant banking  activities and financial  consulting  services as discontinued
operations.  The Company's only remaining  operating segment is the e-recruiting
business,  which  provides on and off-line  companies with products and services
addressed to meet on-line recruiting problems.

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  operating losses,
sustained  substantial  operating cash outflows,  and at December 31, 2000 has a
stockholders'  deficiency.  Management  believes  that such losses and  negative
operating  cash flows will continue in fiscal year 2001. 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.  There is no assurance
that  the  Company  will  obtain  additional  financing  or  achieve  profitable
operations or 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 uncertainty.


NOTE B - SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO CONTINUING OPERATIONS

[1]            Principles of consolidation:

               The accompanying  consolidated  financial  statements include the
               accounts of CareerEngine  Network, Inc. and its subsidiaries (the
               "Company").    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 are  recognized  over the
               period during which the  advertisements  are exhibited.  Up-front
               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.

                                                                             F-7
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000


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

[3]            Depreciation and amortization:

               Furniture,  fixtures and  equipment are being  depreciated  using
               both  straight-line and accelerated  methods over estimated lives
               of three to seven years.  Leasehold improvements are amortized on
               a  straight-line  basis over the shorter of the term of the lease
               or their estimated useful lives.


[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,  2000,  cash  equivalents
               consist principally of an investment of approximately $707,000 in
               a money market account.

[5]            Net 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.   Outstanding  stock  options,   warrants  and  convertible
               debentures did not have an effect on the computation as they were
               anti-dilutive.

[6]            Start-up activities:

               Costs of  activities to start-up the  e-recruiting  business were
               expensed as incurred.

[7]            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, 2000 was fully  reserved  since the  likelihood  of
               realization of future tax benefits cannot be established.

[8]            Marketable securities:

               The Company's marketable securities, which have an amortized cost
               of  $1,084,182,  consist  of  United  States  Treasury  Bills and
               Municipal Bonds,  which are classified as trading  securities and
               are  recorded  at market  value.  Gains and losses on the trading
               securities are included in operations.


                                                                             F-8

<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000



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

[9]            Derivative financial instruments:

               As part of its investment  strategies to profit from  anticipated
               market  movements,  the Company  maintains trading positions in a
               variety   of   derivative   financial   instruments    consisting
               principally  of  futures  contracts  in  treasuries,  stocks  and
               municipal  securities.  All positions are reported at fair value,
               and changes in fair value are  reflected  in  operations  as they
               occur.  The Company  realized net gains from  derivatives sold in
               2000  and  1999  of   approximately   $1,493,000   and  $837,000,
               respectively.  Such amounts are included in income on  securities
               transactions  in the  accompanying  statements of operations.  At
               December 31, 2000, no derivative financial  instruments were held
               by the  Company and the  average  fair value of such  instruments
               held during the years was not material.

               In June 1998,  the Financial  Accounting  Standards  Board issued
               Statement No. 133,  Accounting  for  Derivative  Instruments  and
               Hedging Activities,  as amended,  which is required to be adopted
               in years  beginning  after June 15, 2000. The Company is required
               to  adopt  the new  Statement  effective  January  1,  2001.  The
               Statement  will require the Company to recognize all  derivatives
               on the  balance  sheet at fair  value.  Derivatives  that are not
               hedges  must be  adjusted to fair value  through  income.  If the
               derivative  is a hedge,  depending  on the  nature of the  hedge,
               changes in the fair value of  derivatives  will  either be offset
               against   the  change  in  fair  value  of  the  hedged   assets,
               liabilities,  or firm commitments  through earnings or recognized
               in other comprehensive income until the hedged item is recognized
               in earnings.  The ineffective portion of a derivative's change in
               fair value will be  immediately  recognized  in earnings.  As the
               Company  uses   derivatives  for  trading  purposes  and  carries
               derivatives at fair market value with adjustments  though income,
               management  does  not  anticipate  that the  adoption  of the new
               Statement will have any effect on the financial statements.

[10]           Stock-based compensation:

               The  Company   has   elected  to  account  for  its   stock-based
               compensation plans using the intrinsic value method prescribed by
               Accounting Principles Board Opinion No. 25, "Accounting for Stock
               Issued to Employees"  ("APB25").  Under APB25,  compensation cost
               for stock  options is  measured  as the  excess,  if any,  of the
               quoted market price of the Company's  common stock at the date of
               the grant or other  measurement  date over the amount an employee
               must pay to acquire the stock.

[11]           Use of estimates:

               The  preparation  of  financial  statements  in  conformity  with
               generally accepted  accounting  principles requires management to
               make estimates and assumptions  that affect the 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 revenues and expenses  during the  reporting
               period. Actual results could differ from those estimates.

                                                                             F-9
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000



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

[12]           Advertising costs:

               Advertising costs are expensed as incurred.

[13]           Software development costs:

               External  direct  costs of  materials  and  services  incurred to
               develop the Company's website during the application  development
               stage  were   capitalized.   Such   costs,   which   amounted  to
               approximately   $133,000  and  $38,000  during  the  years  ended
               December  31, 2000 and 1999,  respectively,  are being  amortized
               using the  straight-line  method over an estimated useful life of
               three years.

[14]           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, 2000 and 1999.

[15]           Deferred financing costs:

               Deferred  financing  costs are being amortized on a straight-line
               basis over the term of the debentures.


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,
                                 -------------------------
                                   2000            1999
                                   ----            ----

           Federal               $      0        $      0
           State and local         15,340          10,098
                                 --------        --------

                                 $ 15,340        $ 10,098
                                 ========        ========

At December 31, 2000,  the Company has a net  operating  loss  carryforward  for
federal income tax purposes of approximately  $24,097,000,  which expires in the
years 2005 through 2020.


                                                                            F-10
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000



NOTE C - INCOME TAXES (CONTINUED)

The  Company's  deferred tax asset  consists of the following as of December 31,
2000:

<TABLE>
<CAPTION>

           <S>                                                                        <C>
           Deferred tax assets:
                Net operating loss carryforward                                       $ 11,085,000
                Liability for interest and state taxes related to federal
                    tax settlement                                                         356,000
                Other                                                                       33,000
                                                                                      ------------
                    Total deferred tax assets, before valuation allowance               11,474,000
                Valuation allowance                                                    (10,714,000)
                                                                                      ------------

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

           Net deferred tax assets                                                    $          0
                                                                                      ============
</TABLE>


The valuation  allowance  increased by approximately  $2,712,000 during 2000 and
$2,027,000 during 1999.

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

<TABLE>
<CAPTION>
                                                                       Year Ended
                                                                       December 31,
                                                                -------------------------
                                                                  2000             1999
                                                                  ----             ----
<S>                                                              <C>               <C>
     Statutory rate                                              (34.0)%           (34.0)%
     State and local taxes, net of federal income tax effect     (12.0)            (12.0)
     Nondeductible expenses                                        3.2               1.8
     Tax exempt interest                                          (1.3)             (5.5)
     Valuation allowance                                          44.4              50.0
                                                                ------            ------

     Effective rate                                                 .3%               .3%
                                                                ======            ======
</TABLE>


The  Internal  Revenue  Service 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.  In a prior
year,  the Company had recorded a liability for income tax and interest  related
to the years under  examination  and during 1999 and 2000,  the Company  accrued
additional interest expense of $125,000 and $210,754,  respectively,  related to
the tax  deficiency.  Commencing  in August 2000 the  Company  has made  monthly
payments  of  $30,000  to the  Internal  Revenue  Service  in  reduction  of the
liability.  At December  31,  2000,  the  outstanding  balance of the  liability
amounted  to  $1,056,000  including  related  additional  state  and  local  tax
deficiencies.

                                                                            F-11
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000


NOTE D - FIXED ASSETS

Fixed assets consist of the following:

           Furniture and fixtures                   $ 185,858
           Computer and equipment                   1,269,265
           Software                                   133,000
           Leasehold improvements                     119,874
                                                -------------
                                                    1,707,997
           Less accumulated depreciation              809,207
                                                -------------
                                                    $ 898,790


NOTE E - DEBENTURES PAYABLE

On June 28, and August 7, 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 of the Company acquired 10.5 units for $525,000.

The Company incurred a non-recurring non-cash 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 will be amortized  over the
life of the  debentures.  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.


NOTE F - EXCESS OF LIABILITIES OVER ASSETS OF DISCONTINUED OPERATIONS

In August 2000, the Company discontinued its merchant banking operations,  which
consisted  of its real  estate  project  with  Carmike  Cinemas,  Inc.,  and its
financial consulting operations. Accordingly, the Company's remaining operations
are solely from its e-recruiting segment.


                                                                            F-12
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000




NOTE F - EXCESS OF LIABILITIES OVER ASSETS OF DISCONTINUED OPERATIONS
         (CONTINUED)

The  Company  will  recognize  a gain in an amount  equal to the then  Excess of
Liabilities over Assets of Discontinued  Operations  ($3,512,884 at December 31,
2000) when title  relating to six  properties  leased to Carmike is  transferred
pursuant to the  direction  of  Wachovia,  N. A., as agent to the holders of the
non-recourse debt under the Reimbursement Agreement referred to NOTE K. However,
due to various  proceedings  relating to Carmike's  petition under Chapter 11 of
the United States Bankruptcy Code, no such transfer,  as yet, has been made. The
Company's  exposure  related to this real estate  project is and always has been
limited solely to the Company's interest in the six properties.


NOTE G - STOCKHOLDERS' EQUITY

[1] Stock Authorizations

    On  August  30,  2000,  the  Board of  Directors  increased  the  number  of
    authorized  shares of common stock from 10,000,000 to 20,000,000  shares and
    authorized 1,000,000 shares of preferred stock with a par value of $0.10 per
    share. Preferred stock may be issued in one or more series at the discretion
    of the Board of Directors.

[2] Common Stock Warrants

    As of  December  31,  2000,  outstanding  warrants to acquire  common  stock
    consisted of :

                                                                    Shares of
     Type of Warrant      Expiration Date      Exercise Price      Common Stock
     ---------------      ---------------      --------------      ------------
         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


NOTE H - 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.

                                                                            F-13
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000



NOTE H - STOCK OPTION PLANS  (CONTINUED)

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,
                                                                     -----------------------
                                                                   2000                     1999
                                                          ----------------------   ----------------------
                                                                        Weighted                 Weighted
                                                                         Average                 Average
                                                                        Exercise                 Exercise
                                                           Shares         Price     Shares        Price
                                                          ---------     --------   ---------     --------
           <S>                                           <C>            <C>         <C>          <C>
           Options outstanding at beginning of year       560,000       $   2.02    100,000      $   0.56
           Options granted during year                     40,000           3.50    460,000          2.33
           Options cancelled                             (110,000)          2.25
                                                         --------                  --------
           Options outstanding at end of year             490,000       $   2.09    560,000      $   2.02
                                                         ========                  ========

           Options exercisable at end of year             177,500       $   1.31    100,000      $   0.56
                                                         ========                  ========
</TABLE>

The following table presents  information  relating to stock options outstanding
at December 31, 2000:

<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>
                 $0.56                100,000     $   0.56            1.92         100,000       $ 0.56
             $2.25 - $2.50            350,000         2.36            8.27          77,500         2.25
                 $3.50                 40,000         3.50            9.05
                                       ------                                      -------

                                      490,000     $   2.09            7.04         177,500       $ 1.31
                                      =======                                      =======
</TABLE>


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


                                                                            F-14

<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000



NOTE H - STOCK OPTION PLANS  (CONTINUED)

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>

                                                                            Weighted
                                                                         Average Exercise
                                                             Shares           Price
                                                           ----------      ------------
           <S>                                             <C>              <C>
           Options outstanding at beginning of year        1,580,000        $    .55
           Options granted                                   196,000            2.50
           Options cancelled                                (211,000)           2.50
                                                           ---------
           Options outstanding at end of year              1,565,000        $    .79
                                                          ==========
           Options exercisable at end of year                456,333        $    .54
                                                          ==========
</TABLE>


The following table presents  information  relating to stock options outstanding
at December 31, 2000:

              Options Outstanding                  Options Exercisable
        ---------------------------------   --------------------------------
                                             Weighted
        Range                    Weighted    Average                Weighted
          of                      Average   Remaining                Average
       Exercise                  Exercise    Life in                Exercise
        Price       Shares        Price       Years     Shares        Price
        -----       ------        -----       -----     ------        -----
     $     .01   1,075,000      $    .01      8.33     358,333      $    .01
     $    2.50     490,000          2.50      9.15      98,000          2.50
                 ---------                             -------

                 1,565,000      $    .79      8.59     456,333      $    .54
                 =========                             =======

The fair value of options at date of grant was estimated using the Black-Scholes
option pricing model utilizing the following assumptions:

<TABLE>
<CAPTION>
                                         CareerEngine Network, Inc.               CareerEngine, Inc
                                          2000               1999              2000               1999
                                          ----               ----              ----               ----
<S>                                      <C>            <C>               <C>                <C>      <C>
  Risk-free interest rates               6.78%          5.12% to 6.59%    4.98% to 6.74%     5.15% to 6.30%
  Expected option life in years          5 to 7             5 to 7               5                 5
  Expected stock price volatility         87%                134%               87%               46%
  Expected dividend yield                  0%                 0%                0%                 0%
</TABLE>


                                                                            F-15
<PAGE>


CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000




NOTE H - STOCK OPTION PLANS  (CONTINUED)

Had the Company elected to recognize  compensation  cost based on the fair value
of the options at the date of grant as  prescribed  by  Statement  of  Financial
Accounting  Standards No. 123,  "Accounting for Stock-Based  Compensation",  the
pro-forma loss from continuing  operations and related  pro-forma per share data
in 2000 and 1999  respectively  would have been  approximately  ($5,551,000) and
($4,274,000) or ($1.02) and ($.79), per basic and diluted loss per share.

The weighted average fair value of options granted during the year was $2.82 and
$2.34  with   respect  to  the  Company  and  $.51  and  $.39  with  respect  to
CareerEngine, Inc.


NOTE I - MAJOR CUSTOMER

The Company has only one  significant  customer in excess of 10% of e-recruiting
revenue.  This customer generated  approximately 38% of its e-recruiting revenue
in 2000 and 48% of accounts receivable at December 31, 2000.

On March 20, 2000, the Company completed negotiations relating to the terms of a
one-year  renewal of its contract with its  significant  customer.  The contract
renewal,  when  executed,  will be effective June 20, 2001. If the provisions of
the renewed  contract with this customer were in effect in 2000,  total revenues
for that year would have been reduced by $380,000.


NOTE J - COMMITMENTS AND LITIGATION

[1]   The Company  occupies  office space under a lease expiring on February 28,
      2006.  Rental  expense  relating to the lease  amounted  to  $196,637  and
      $167,966 for the years ended December 31, 2000 and 1999, respectively.

      Minimum future annual rental payments at December 31, 2000 are as follows:


                      2001                    $ 139,100
                      2002                      139,100
                      2003                      139,100
                      2004                      139,100
                      2005                      139,100
                      Thereafter                 23,100
                                     ------------------
                                              $ 718,600

[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,  in  accordance  with the plan's top
      heavy provisions,  amounted to approximately  $14,300 and $10,100,  in the
      years ended December 31, 2000 and 1999, respectively.


                                                                            F-16
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000


NOTE J - COMMITMENTS AND LITIGATION (CONTINUED)


[3]   In February 2000, the Company, in exchange for a nominal amount obtained a
      release from claims arising from a 1996 litigation.

      In connection with the above litigation, on November 22, 2000, the Company
      was served  with a Summons  and  Complaint  in  connection  with an action
      commenced  in October  2000,  by the  Housing  Authority  of the County of
      Riverside,  California against multiple defendants. The Plaintiffs alleged
      in  connection  with the issuance and  underwriting  of certain bonds that
      various  defendants  negligently and  fraudulently  misrepresented  to the
      Plaintiffs  that  the  interest  on the  bonds  would be tax  exempt.  The
      Plaintiffs are seeking  damages as a result of such  misrepresentation  in
      the amount of $1,100,000. The Plaintiffs are also seeking punitive damages
      in an unspecified amount.  Management is vigorously opposing those claims,
      however, the outcome of the litigation is not presently determinable.


NOTE K - DISCONTINUED OPERATIONS


On August 16, 2000, the Board of Directors of the Company decided to discontinue
its merchant banking operations, which consisted of its real estate project with
Carmike  Cinemas,  Inc.,  and its financial  consulting  operations.  Results of
discontinued  operations and assets and  liabilities  related  thereto have been
shown separately in the accompanying financial statements and the 1999 financial
statements have been reclassified.

Results of discontinued operations are summarized as follows:

                                                      Year Ended December 31,
                                                     -----------------------
                                                      2000             1999
                                                      ----             ----

         Rental income from real estate leased     $8,952,096       $ 996,405
         Consulting fees                               14,600         615,314
         Interest income                                                3,212
                                                   ----------    ------------

              Total revenues                        8,966,696       1,614,931
                                                   ----------    ------------

         Real estate leased expenses, net           8,818,086       1,568,029
         Write-off of unamortized financing costs     804,667
         Compensation and other costs                 308,275         917,532
         General and administrative expense             2,080         218,779
                                                   ----------    ------------

              Total expenses                        9,933,108       2,704,340
                                                   ----------    ------------

         Loss from discontinued operations           (966,412)   $ (1,089,409)
                                                   ==========    ============

                                                                            F-17

<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000




NOTE K - DISCONTINUED OPERATIONS  (CONTINUED)

Assets and liabilities of the  discontinued  operations at December 31, 2000 are
as follows:


           Real estate leased, net                        $ 69,510,631
           Accrued rent receivable                           3,749,130
           Other assets                                      2,492,165
                                                          ------------

                Total assets                                75,751,926
                                                          ------------

           Reimbursement obligations                        72,750,000
           Accrued interest and financing fees payable       4,264,810
           Due to preferred member                           2,250,000
                                                          ------------

                Total liabilities                           79,264,810
                                                          ------------

           Excess of liabilities over assets of
                discontinued operations                   $ (3,512,884)
                                                          ============

[1]            Description of real estate operations:

           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 by Movieplex.  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.

                                                                            F-18
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000


NOTE K - DISCONTINUED OPERATIONS  (CONTINUED)

[1]    Description of real estate operations (continued):

           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
           fluctuate with the debt service payments on the related bonds and the
           cash return due to the Common and Preferred Members of Movieplex. The
           lease  requires  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 were interest,  payable monthly, at a variable base rate (6.46%
           at December 31, 1999)  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 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.  The Company  anticipates  that title to the six  theaters
           will be transferred to the banks in

                                                                            F-19
<PAGE>

CAREERENGINE NETWORK, INC. AND SUBSIDIARIES

Notes to Financial Statements
December 31, 2000




NOTE K - DISCONTINUED OPERATIONS  (CONTINUED)

[1]    Description of real estate operations (continued):

           payment of the non-recourse debt under the  Reimbursement  Agreement.
           At such time,  the Company will recognize a gain to the extent of the
           excess  of the  liabilities  over the  carrying  value of the  assets
           related to the real  estate  leased to Carmike.  As of  December  31,
           2000,  due to various  proceedings  related to  Carmike's  bankruptcy
           filing no such  transfer has  occurred.  Interest and fees which have
           been accrued on the reimbursement  obligations  through December 2000
           have  been  recorded  with a  corresponding  amount of  accrued  rent
           receivable from Carmike.

[2]    Other information with respect to real estate operations:

           Expenses related to real estate leased, net consist of the following:
<TABLE>
<CAPTION>
                                                             Year Ended December 31,
                                                             2000               1999
                                                             ----               ----
<S>                                                       <C>               <C>
       Interest expense and
       letter of credit fees                              $ 7,577,246       $ 2,799,381
       Interest income on restricted investments (1)                0        (1,393,946)
                                                          -----------       -----------

       Interest expense, net                                7,577,246         1,405,435
       Depreciation expense                                   888,926           158,927
       Other                                                  351,914             3,667
                                                          -----------       -----------
                                                          $ 8,818,086       $ 1,568,029
                                                          ===========       ===========
</TABLE>

      (1) The  Trust  Indenture   pursuant  to  which  the  bonds  were  issued,
          restricted the term and the  investment  instruments in which the bond
          proceeds would be invested until spent for the purposes defined in the
          indenture. Interest income earned on the investments is being shown as
          an offset to the interest expense on the bonds.

          During the Development Period, interest, related fees and amortization
          of deferred  financing  costs  related to the bonds were  capitalized,
          except those amounts  attributable to funds not yet expended to either
          purchase land or construct the improvements  thereon.  During the year
          ended December 31, 1999, approximately $3,051,629 of interest,  letter
          of credit fees and  amortization  of deferred  financing  costs,  were
          capitalized and included in real estate leased-improvements.


                                                                            F-20
<PAGE>



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


               None.


                                       22
<PAGE>




                                    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 2000, the Board had 5 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  2000,  the
               Executive Committee consisting of Messrs. George W. Benoit, Kevin
               J. Benoit and Charles W. Currie had 3 meetings.

               The Board has an Audit Committee  consisting of Directors who are
               not employees of the Company.  This committee discusses audit and
               financial   reporting   matters  with  both  management  and  the
               Company's independent public accountants. To ensure independence,
               the  independent  public  accountants  may meet  with  the  Audit
               Committee   with  or   without   the   presence   of   management
               representatives.  During 2000, the Audit Committee  consisting of
               Messrs. Joseph J. Anastasi,  Charles W. Currie, David W. Dube and
               James J. Murtha had 4 meeting.

               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 2000, the Compensation  Committee  consisting of
               Messrs. G. Benoit, K. Benoit, Currie and Dube had 3 meetings.

               The Board has a  Nominating  Committee  to propose  nominees  for
               election to the Board.  During  2000,  the  Nominating  Committee
               consisting of Messrs. K. Benoit, Anastasi,  Murtha and Currie had
               2 meetings.  The Nominating  Committee will consider  suggestions

                                       23
<PAGE>

               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 2000, the
               Incentive Compensation Committee consisting of Messrs.  Anastasi,
               Murtha, Currie, and Dube had 1 meeting.

               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.

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

                    GEORGE  W.  BENOIT,  64,  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 2001.

                    THOMAS J. FERRARA,  30, has been employed by our subsidiary,
                    CareerEngine,  Inc.  since June 1998. He has been a director
                    of  CareerEngine  Network,  Inc.  since  October  2000.  Mr.
                    Ferrara is a founder of our online recruiting  business.  He
                    is  the  President  and  Chief  Executive   Officer  of  our
                    subsidiary,  CareerEngine,  Inc. As the  President and Chief
                    Executive   Officer   he   is   responsible   for   business
                    development,  seeking  relationships with companies that can
                    help us establish  and maintain our business and the overall
                    growth of the  subsidiary.  From  January 1996 to June 1998,
                    Mr.  Ferrara  served as Executive  Vice  President of Remote
                    Lojix,  New York, an information  technology  company.  From
                    September  1993 to January  1996, he was employed in various
                    executive  capacities  at  Computer  Maintenance,   Inc.,  a
                    computer integration and consulting  organization.  His term
                    expires in 2001.

                    KEVIN J.  BENOIT,  38, 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, and Vice President of
                    Randolph,   Hudson  &  Co.,   Inc.,  a  subsidiary  of  ours
                    responsible for cash management.  Mr. Benoit is a registered

                                       24
<PAGE>

                    C.T.A.  and C.P.O.  and specializes in arbitrage and hedging
                    strategies. His business experience includes employment with
                    Prudential  Securities,  Inc. (1987- 1995) as Vice President
                    of Arbitrage and Hedging in their Municipal bond Department,
                    and Bear  Stearns,  Inc.  (1984-1987)  where he  served in a
                    similar  capacity.  Mr. Benoit's father is George Benoit our
                    President and CEO. His term expires in 2003.

                    CHARLES W. CURRIE,  58, has been a director of  CareerEngine
                    Network, Inc. since 1986. Mr. Currie has been a partner with
                    Asset  Management  Services  LLC,  a company  that  provides
                    marketing  services to  investment  managers,  since  August
                    1996.  From June  1993 to July  1996,  he was a Senior  Vice
                    President  with  Pryor,  McClendon,   Counts  &  Co.,  Inc.,
                    investment bankers. His term expires in 2003.

                    JOSEPH G. ANASTASI,  64, has been a director of CareerEngine
                    Network,  Inc. since September 1986. Since 1960 Mr. Anastasi
                    has  been the  owner  and  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  and  was the  general
                    partner of Muirkirk Manor  Associates  Limited  Partnership.
                    Muirkirk Manor filed  bankruptcy in December 1994 and it was
                    discharged in December  1995. The Anastasi  Stephens  Group,
                    Inc. has been inactive  since that time. His term expires in
                    2002.

                    DAVID W.  DUBE,  45,  has been a  director  of  CareerEngine
                    Network,  Inc.  since  June  1996.  Mr.  Dube  is a  private
                    investor  with  active  interests  in various  real  estate,
                    financial  services  and giftware  companies.  He 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.  From 1996 to 1997, Mr. Dube was President and
                    Chief  Executive  Officer of  Optimax  Industries,  Inc.,  a
                    publicly-traded  company  with  operating  interests  in the
                    horticultural,   decorative   giftware   and   truck   parts
                    accessories industries.  From February 1991 to June 1996, he
                    was the principal of Dube & Company, a financial  consulting
                    firm.  Mr.  Dube  serves  on  the  Boards  of  Directors  of

                                       25
<PAGE>

                    publicly-traded  Kings Road  Entertainment,  Inc., New World
                    Wine Communications, Ltd., and SafeScience, Inc. and several
                    privately-held enterprises. His term expires in 2001.

                    JAMES J.  MURTHA,  52, has been a director  of  CareerEngine
                    Network,  Inc.  since  December  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 2002.

                    EDWARD A. MARTINO,  51, has been a Director of  CareerEngine
                    Network,  Inc. since October 2000. Mr. Martino is the Senior
                    Vice President for IT Solutions, Inc., a systems integration
                    and  consulting  services  company.   Prior  to  joining  IT
                    Solutions,  Inc.  in May 2000,  Mr.  Martino  held  numerous
                    management  positions in marketing and sales for 18 years at
                    IBM. His most recent  position was IBM Solution  Executive -
                    Global Systems Integrator Unit. Mr. Martino currently serves
                    on several boards  including the New York Software  Industry
                    Association,  where he is the Vice Chairman, City University
                    of New York Institute for Software  Design and  Development,
                    and the Bronx Museum of the Arts. His term expires in 2001.

               (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

                                       26
<PAGE>

                    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.

                    THOMAS  J.  FERRARA  has been  employed  by our  subsidiary,
                    CareerEngine,  Inc.  since June 1998. He has been a director
                    of  CareerEngine  Network,  Inc.  since  October  2000.  Mr.
                    Ferrara is a founder of our online recruiting  business.  He
                    is  the  President  and  Chief  Executive   Officer  of  our
                    subsidiary,  CareerEngine,  Inc. As the  President and Chief
                    Executive   Officer   he   is   responsible   for   business
                    development,  seeking  relationships with companies that can
                    help us establish  and maintain our business and the overall
                    growth of the  subsidiary.  From  January 1996 to June 1998,
                    Mr.  Ferrara  served as Executive  Vice  President of Remote
                    Lojix,  New York, an information  technology  company.  From
                    September  1993 to January  1996, he was employed in various
                    executive  capacities  at  Computer  Maintenance,   Inc.,  a
                    computer integration and consulting organization.

          (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.



                                       27
<PAGE>



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 other
               two most  highly  compensated  executive  officers  whose  annual
               compensation  exceeded $100,000 in 2000 for all services rendered
               in all capacities to us during 2000, 1999, 1998 and 1997.

<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, Chief Executive           2000          $155,626                          $35,807
               Officer and Chairman                                   1999          $201,571                          $36,067
                                                                      1998          $201,414          $ 50,000        $36,344
                                                                      1997          $201,830          $200,000        $36,576

               Anthony S. Conigliaro, Vice President and              2000          $100,000
               Chief Financial Officer                                1999           $70,962

               Thomas J. Ferrara, Director, President and             2000          $178,177
               Chief Executive Officer of CareerEngine, Inc.,         1999          $132,259           $50,000
               a wholly-owned subsidiary of CareerEngine              1998          $ 62,307

</TABLE>

               -----------------
               (1)  Represents  our share of  insurance  premium on Split Dollar
               Life Insurance Agreement.

               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.

                                       28
<PAGE>


               (b) Compensation Pursuant to Plans
<TABLE>
<CAPTION>
                                                Options Outstanding at December 31,2000
                                                ---------------------------------------
                                                  Number of
                                                  Shares of         Percent of
                                                   Common          Total Options
                    Name and                       Stock            Granted to
                    Principal                     Underlying       Employees in      Exercise         Expiration
                    Position                       Options             1999           Price              Date
                    --------                       -------             ----           -----              ----

                    <S>                            <C>                  <C>            <C>           <C>
                    George W. Benoit (1)           150,000              33%            2.50          April 7, 2004

                    Thomas J. Ferrara(1)           100,000              22%            2.25          April 7, 2009
</TABLE>
<TABLE>
<CAPTION>
                                                   Option Values at December 31, 2000
                                                   ----------------------------------

                                            Number of
                                            Shares of
                                           Common Stock      Value of
                                            Underlying      Unexercised
                                           Unexercised     In-The-Money
                                            Options at      Options at
                                           December 31,     December 31,       Exercisable/
                                              2000             2000           Unexercisable
                                              ----             ----          ---------------



                     <S>                     <C>                <C>            <C>
                     George W. Benoit        150,000            -0-            37,500/112,500

                     Thomas J. Ferrara       100,000            -0-            20,000/80,000
</TABLE>
                    --------------------------
                    (1)      Granted under the 1990 Incentive Stock Option Plan.

                     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

                                       29

<PAGE>

                     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 expired.  On April 7, 1999,
                     options to purchase  460,000 shares were granted to various
                     employees,  including George W. Benoit (150,000),  Kevin J.
                     Benoit (100,000) and Thomas J. Ferrara (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.

                     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.


                                       30
<PAGE>


                     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 six (6)
                     officers and five (5) key employees.

                     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
                     have been made under the 99 Plan and no  options  have been
                     exercised.

                     Split  Dollar  Life  Insurance  Agreement.   The  Company's
                     Chairman,  George W. Benoit,  is presently  the  beneficial
                     owner and  holder  of  1,771,620  shares  of the  Company's

                                       31

<PAGE>

                     Common  Stock.  The  Company has been  advised  that on the
                     death of George  Benoit,  his  estate  may be  required  to
                     publicly  sell all or  substantially  all of such shares to
                     satisfy estate tax obligations. The public sale of all such
                     shares  might  destabilize  the  market  for the  Company's
                     publicly traded stock. Accordingly, as of January 20, 1995,
                     the Company entered into an agreement  (commonly known as a
                     split dollar life insurance agreement) with a trust created
                     by  Mr.  Benoit  (the  "Trust").  Under  the  terms  of the
                     agreement,   the  Company  will  pay  the  premiums  for  a
                     $1,000,000 life insurance policy on the life of Mr. Benoit.
                     The Trust has  granted  an  interest  in the  policy to the
                     Company  to the extent of the sum of all  premium  payments
                     made by the  Company.  These  arrangements  are designed so
                     that if the  assumptions  made as to mortality  experience,
                     policy  dividends  and other  factors are realized upon Mr.
                     Benoit's death or the surrender of the policy,  the Company
                     will recover all of its  insurance  premium  payments.  The
                     portion of the premium paid by the Company in 2000 pursuant
                     to this arrangement was $35,807.

                     (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.

                                       32

<PAGE>



Item 11        Security  Ownership of Certain  Beneficial  Owners and Management
               The  following  table sets forth,  as of February 28,  2001,  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
                                                                                              Power and
                       Name of                                 Common Stock                  Outstanding
                       Beneficial Owner (1)               Beneficially Owned (2)           Equity Owned (3)
                                                          ----------------------           ----------------

                       <S>                                   <C>                                <C>
                       George W. Benoit                      1,771,620 (4)(8)                   31.75

                       Kevin J. Benoit                         448,000 (5)(6)(8)                 8.05

                       Charles W. Currie                       276,780 (7)(11)                   4.99

                       Joseph G. Anastasi                        7,200 (11)                      *

                       David W. Dube                             9,000 (11)                      *

                       James J. Murtha                           5,000 (11)                      *

                       Edward A. Martino                           300                           *

                       Thomas J. Ferrara                        46,500 (5)(9)                    *

                       Barry W. Blank                          884,400 (10)                     14.96

                       All Directors and
                       Executive Officers                    2,564,400                          44.63
                       as a group (11 persons)

                     * Owns less than one (1%) percent.
</TABLE>



                     (1)  The   address  of  all  the   beneficial   owners  is:
                          CareerEngine Network,  Inc., 2 World Trade Center, New
                          York,  New York  10048;  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

                                       33
<PAGE>

                          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.

                     (3)  All percentages of beneficial ownership are calculated
                          based the number of shares  outstanding as of February
                          28,  2001.  On such  date we had  5,444,006  shares of
                          common stock issued and outstanding.

                     (4)  Includes the following: (a) options to purchase 37,500
                          shares  of  common  stock;  and (b)  90,700  shares of
                          common stock held in George W. Benoit's 401K Plan. (5)
                          Includes  options to purchase  20,000 shares of common
                          stock.

                     (5)  Includes  options  to purchase 20,000 shares of common
                          stock.

                     (6)  Includes the  following:  (a) 21,000  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.

                     (7)  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.

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

                     (9)  Includes  25,000  shares of common  stock  that can be
                          acquired on the  conversion of certain  debentures and
                          related warrants.

                     (10) 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.


                     (11) Includes  options to purchase  5,000  shares of common
                          stock.

                                       34
<PAGE>



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.

                                       35

<PAGE>


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

               3.3   Amended and Restated By-Laws of the Registrant.

               4.1   Form  of   CareerEngine   Network,   Inc.  12%  Convertible
                     Subordinated Debenture due March 31, 2010.

               4.2   Form of  Class A  Warrants  to  Purchase  Common  Stock  of
                     CareerEngine  Network,  Inc.,  dated  June 28 and August 7,
                     2000.

               4.3   Form of  Class B  Warrants  to  Purchase  Common  Stock  of
                     CareerEngine  Network,  Inc.,  dated  June 28 and August 7,
                     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.

               10.1  Lease of the Company's  executive  offices,  dated February
                     29, 1996.  (Incorporated  by reference to the  Registrant's
                     Annual  Report on Form  10-KSB for the year ended  December
                     31, 1996.)

                                       36

<PAGE>

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

               10.3  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.)

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

                                       37

<PAGE>



               10.5  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

               10.6  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

               10.7  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.)

               10.8  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.)

               10.9  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.


--------
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


                                       38

<PAGE>



                                   SIGNATURES
Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this Report to be signed on its
behalf by the  undersigned,  thereunto duly authorized on the 12th day of April,
2001.

CareerEngine Network, Inc.


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

   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 12th day of April, 2001.

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

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

/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)

/s/ Thomas J. Ferrara         Director
----------------------
(Thomas J. Ferrara)

                                       39