U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

              |X| Quarterly report pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  For the quarterly period ended March 31, 2003

   |_| Transition report under Section 13 or 15(d) of the Exchange Act of 1934

             For the transition period from __________ to __________

                          Commission file number 1-9224

                                 CNE GROUP, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

           DELAWARE                                          56-2346563
(State or Other Jurisdiction of                          (I.R.S. Employer
Incorporation or Organization)                          Identification No.)

              200 West 57th Street, Suite 507, New York, N.Y. 10019
                    (Address of Principal Executive Offices)

                                  212-977-2200
                (Issuer's Telephone Number, Including Area Code)

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 |_|

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

              Class                                Outstanding at April 30, 2003
              -----                                -----------------------------

Common stock - par value $.00001                         5,590,944 shares
<PAGE>

                                     PART I

                              FINANCIAL INFORMATION

Item l.     Financial Statements.

            The following consolidated financial statements of CNE Group, Inc.
            and subsidiaries (collectively referred to as the "Company," unless
            the context requires otherwise) are prepared in accordance with the
            rules and regulations of the Securities and Exchange Commission for
            Form 10-QSB and reflect all adjustments (consisting of normal
            recurring accruals) and disclosures which, in the opinion of
            management, are necessary for a fair statement of results for the
            interim periods presented. It is suggested that these financial
            statements be read in conjunction with the financial statements and
            notes thereto included in the Company's Annual Report on Form 10-KSB
            for the year ended December 31, 2002, which was filed with the
            Securities and Exchange Commission.

            The results of operations for the three-months ended March 31, 2003
            are not necessarily indicative of the results to be expected for the
            entire fiscal year.


                                       1
<PAGE>

                        CNE Group, Inc. and Subsidiaries
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                         March 31,          December 31,
                                                                            2003                2002
                                                                       ------------         ------------
                                                                        (Unaudited)
<S>                                                                    <C>                  <C>
ASSETS

Current:
   Cash and cash equivalents                                           $     96,747         $    183,200
   Accounts receivable, net                                                  28,447               35,144
   Insurance claims receivable                                                                    63,912
                                                                       ------------         ------------
      Total current assets                                                  125,194              282,256
Fixed assets, net                                                            22,167               33,250
                                                                       ------------         ------------

           Total assets                                                $    147,361            $315,5069
                                                                       ============         ============

LIABILITIES

Current:
   Accounts payable and accrued expenses                               $    379,141         $    392,307
   Interest payable                                                         288,000              216,000
   Tax assessment payable                                                   929,403              913,461
   Debentures payable                                                     2,400,000            2,400,000
                                                                       ------------         ------------
      Total current liabilities                                           3,996,544            3,921,768
Deferred grant revenue                                                      291,827              291,827
                                                                       ------------         ------------
        Total liabilities                                                 4,288,371            4,213,595
                                                                       ------------         ------------

Commitments and contingencies

CAPITAL (DEFICIT)

Preferred stock - authorized 1,000,000 shares, par value $0.10;
   none issued
Common stock - authorized 20,000,000 shares, par value $0.10;
   6,829,600 shares issued as of March 31, 2003
   and December 31, 2002                                                    682,960              682,960
Paid-in surplus                                                          16,290,691           16,290,691
Accumulated deficit                                                     (18,241,561)         (17,998,640)
                                                                       ------------         ------------
                                                                         (1,267,910)          (1,024,989)
Less treasury stock, at cost -
   1,238,656 shares                                                      (2,873,100)          (2,873,100)
                                                                       ------------         ------------
        Total deficit                                                    (4,141,010)          (3,898,089)
                                                                       ------------         ------------

           Total liabilities and deficit                               $    147,361         $    315,506
                                                                       ============         ============
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       2
<PAGE>

                        CNE Group, Inc. and Subsidiaries
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                      Three Months Ended
                                                                           March 31,
                                                                -------------------------------
                                                                    2003                2002
                                                                -----------         -----------
                                                                (Unaudited)         (Unaudited)
<S>                                                             <C>                 <C>
Revenues:
   Service fee income                                           $    45,039         $    74,688
   Interest income                                                      282                 404
                                                                -----------         -----------

                                                                     45,321              75,092
                                                                -----------         -----------

Costs and expenses:
   Compensation and related costs                                    90,231             187,787
   Advertising                                                                           10,000
   General and administrative                                       110,071             171,475
   Interest                                                          87,942              94,157
                                                                -----------         -----------

                                                                    288,244             463,419
                                                                -----------         -----------

Loss from continuing operations before items shown below           (242,923)           (388,327)
   Gain on fixed assets destroyed in catastrophe                                        132,047
   Reversal of Director fees accrual                                                     55,000
                                                                -----------         -----------

Loss from continuing operations before income taxes                (242,923)           (201,280)
Income tax provision                                                                      5,250
                                                                -----------         -----------

Loss from continuing operations                                    (242,923)           (206,530)

Discontinued operations:
   Income from discontinued operations                                                3,712,884
                                                                -----------         -----------

Net (loss) income                                               $  (242,923)        $ 3,506,354
                                                                ===========         ===========

Per common share - basic and diluted:
   Loss from continuing operations                              $      (.04)        $      (.04)
   Income (loss) from discontinued operations                            --                 .67
                                                                -----------         -----------

Net (loss) income per common share                              $      (.04)        $       .63
                                                                ===========         ===========

Weighted average number of common
   shares outstanding - basic and diluted                         5,590,944           5,570,944
                                                                ===========         ===========
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       3
<PAGE>

                        CNE Group, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                        March 31,
                                                                              -----------------------------
                                                                                  2003              2002
                                                                              -----------       -----------
                                                                              (Unaudited)       (Unaudited)
<S>                                                                            <C>               <C>
Cash flows from operating activities:
   Loss from continuing operations                                             $(242,923)        $(206,530)
   Adjustments to reconcile loss from continuing operations to net cash
      provided by (used in) operating activities:
        Depreciation and amortization                                             11,083            66,396
        Issuance of common stock for services                                                       27,600
        Amortization of debt discount                                                                7,442
        Reversal of fees due to Directors                                                          (55,000)
        Gain on fixed assets destroyed in catastrophe                                             (132,047)
        Changes in:
           Accounts and insurance claims receivable                               70,609            (4,338)
           Other assets                                                                             32,294
           Accrued expenses and other liabilities                                 74,778             2,333
                                                                               ---------         ---------
Cash (used in) continuing operations                                             (86,453)        (261,850))
Cash provided by discontinued operations                                                           200,000
                                                                               ---------         ---------

              Net cash (used in) operating activities                            (86,453)          (61,850)
                                                                               ---------         ---------

Decrease in cash and cash equivalents                                            (86,453)          (61,850)
Cash and cash equivalents at beginning of period                                 183,200           200,782
                                                                               ---------         ---------

Cash and cash equivalents at end of period                                     $  96,747         $ 138,932
                                                                               =========         =========

Supplemental disclosures of cash flow information related to
   continuing operations:
      Cash paid during the period for:
        Interest                                                               $      --         $  72,000
        Income taxes                                                           $      --         $   5,250
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       4
<PAGE>

                        CNE Group, Inc. and Subsidiaries
                   Notes To Consolidated Financial Statements
                                   (Unaudited)

1.    General

      On April 17, 2003, pursuant to the terms of Section 251(g) of the Delaware
      General Corporation Law, CareerEngine Network, Inc. ("CareerEngine")
      became a wholly-owned subsidiary of the Company. Pursuant to this
      transaction when the Company acquired all of the assets of CareerEngine,
      all former stockholders of CareerEngine became the stockholders of the
      Company, which is the entity that is now publicly traded on the American
      and Pacific Stock Exchanges under the symbol "CNE," and the officers and
      directors of CareerEngine became the officers and directors of the
      Company.

      As a successor entity to CareerEngine, the Company's shares are deemed to
      be registered under Section 12(g) of the Securities Exchange Act of 1934
      and Rule 12g-3 promulgated thereunder. The shares have been issued without
      registration in reliance upon exemptions provided in Section 3(a)(9) of
      the Securities Act of 1933 and Rule 145 promulgated thereunder.
      CareerEngine has been subject to the reporting requirements of the
      Exchange Act since 1986.

      In addition, on April 23, 2003, the Board of Directors and majority of the
      stockholders of the Company increased the authorized number of common
      stock to 40,000,000 with a par value of $0.00001 per share and increased
      the authorized number of preferred stock to 25,000,000 with a par value of
      $0.00001 per share. The preferred stock may be issued in one or more
      series at the discretion of the Board of Directors.

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

      Since the attack, the Company's management has been preoccupied with the
      relocation and reestablishment of its businesses, assessing and processing
      of insurance claims with the assistance of a risk manager with its
      insurers, and seeking sources of financing. In 2002, the Company received
      insurance proceeds in amounts that have exceeded the net carrying value of
      the destroyed assets and, accordingly, has recorded a $152,934 gain on
      assets destroyed due to this catastrophe of which $132,047 was recorded in
      the three months ended March 31, 2002.

      The Company also had insurance coverage for other than assets destroyed.
      As of March 31, 2003 all outstanding insurance claims relating to the
      catastrophe have been received.

      In addition, the Company had applied for governmental assistance grants
      related to the catastrophe. In April and September 2002, the Company
      received grants aggregating $291,827. The grants have a restriction that
      could require their repayment, specifically if the Company were to
      relocate a substantial portion its operations outside of New York City
      before May 1, 2005. Until such time as this restriction shall no longer
      apply, the grants will be classified as a liability of the Company.


                                       5
<PAGE>

      Upon the satisfaction or lapse of the restrictions, the Company will
      remove the liability and record grant income on its financial statements
      or, alternatively, have to repay such grants if the above condition is not
      satisfied.

      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.

2.    Significant Accounting Policies

      The accounting policies followed by the Company are set forth in the notes
      to the Company's financial statements included in its Form 10-KSB, for the
      year ended December 31, 2002, which was filed with the Securities and
      Exchange Commission.

      In the opinion of management, the unaudited consolidated financial
      statements include all adjustments necessary for a fair presentation of
      the Company's financial position as of March 31, 2003 and the results of
      its operations and its cash flows for the three-month periods ended March
      31, 2003 and 2002. The financial statements as of March 31, 2003 and for
      the three months then ended are not necessarily indicative of the results
      that may be expected for the year ending December 31, 2003.

      The Company has incurred substantial losses from continuing operations,
      sustained substantial operating cash outflows, has a working capital
      deficit and at March 31, 2003 has a capital deficiency. 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. However, there is no
      assurance that the Company will achieve profitable operations or cash
      flow.

      Management believes that such working capital deficit, losses and negative
      operating cash flows will be positively addressed by the subsequent events
      disclosed within these financial statements as of March 31, 2003 and 2002
      and the three month periods then ended.

      Revenue Recognition

      E-recruiting fees are earned on the placement of job placement 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. 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.

      Income (Loss) Per Share

      Basic income (loss) per share is based on the weighted average number of
      common shares outstanding. Employee stock options and outstanding warrants
      did not have an effect on the computation of diluted earnings per share
      since they were anti-dilutive.


                                       6
<PAGE>




      Stock-Based Compensation

      As permitted under SFAS No. 123, Accounting for Stock-based Compensation
      (SFAS No. 123), the Company has elected to continue to follow the guidance
      of APB Opinion No. 25, Accounting for Stock Issued to Employees (APB No.
      25), and Financial Accounting Standards Board Interpretation No. 44,
      Accounting for Certain Transactions Involving Stock Compensation--an
      Interpretation of APB Opinion No. 25 (FIN No. 44), in accounting for its
      stock-based employee compensation arrangements. Accordingly, no
      compensation cost is recognized for any of the Company's fixed stock
      options granted to employees when the exercise price of each option equals
      or exceeds the fair value of the underlying common stock as of the grant
      date for each stock option. Changes in the terms of stock option grants,
      such as extensions of the vesting period or changes in the exercise price,
      result in variable accounting in accordance with APB Opinion No. 25.
      Accordingly, compensation expense is measured in accordance with APB No.
      25 and recognized over the vesting period. If the modified grant is fully
      vested, any additional compensation costs is recognized immediately. The
      Company accounts for equity instruments issued to non-employees in
      accordance with the provisions of SFAS No. 123.

      At March 31, 2003, the Company and one of its subsidiaries each had one
      stock-based employee compensation plan. On March 14, 2003 all recipients
      of options granted to them under these plans rescinded their interests. As
      permitted under SFAS No. 148, Accounting for Stock-Based
      Compensation--Transition and Disclosure, which amended SFAS No. 123, the
      Company has elected to continue to follow the intrinsic value method in
      accounting for its stock-based employee compensation arrangements as
      defined by APB No. 25 and related interpretations including FIN No. 44.
      The following table illustrates the effect on net loss and loss per share
      if the Company had applied the fair value recognition provisions of SFAS
      No. 123 to stock-based employee compensation for options granted under its
      plan.

<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                                      March 31,
                                                                             ---------------------------
                                                                                 2003             2002
                                                                                 ----             ----

<S>                                                                          <C>              <C>
               Net (loss) income, as reported                                $ (242,923)      $3,506,354
               Less, Total stock-based employee compensation expense
               determined under fair value-based method for all awards,
               net of related tax effects                                             0                0
                                                                             ----------       ----------

               Proforma net (loss) income                                    $ (242,923)      $3,506,354
                                                                             ==========       ==========

               Net (loss) income per share:
                        Basic and diluted - as reported -                    $    (0.04)      $     0.63
                                                                             ==========       ==========
                        Basic and diluted - Proformad                        $    (0.04)      $     0.63
                                                                             ==========       ==========
</TABLE>

      The Company did not grant fixed stock options to acquire shares of its
      common stock to its employees during the three-months ended March 31,
      2003 and 2002.

3.    Discontinued Operations

      In 1997, the Company entered into a triple net, credit type lease with
      Carmike, pursuant to which the Company leased to Carmike six parcels of
      land and the improvements thereon. Concurrently, the Company issued
      $72,750,000 principal amount of its adjustable rate tender securities due
      November 1, 2015 (the "Bonds"). The Bonds were secured by irrevocable
      letters of credit issued by a group of banks. In connection therewith the
      Company entered into a Reimbursement Agreement with Wachovia, 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.

      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, 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. Such
      amounts were paid entirely through draws on the related letters of credit
      and were not paid with funds of the Company. However, as the Bonds are no
      longer outstanding, all unamortized financing costs (amounting to
      $804,667) relating thereto were expensed. In addition, Carmike has not
      disaffirmed the lease and continues to occupy the six theaters.

      Interest and fees which have been accrued on the reimbursement obligations
      through December 2001 have been recorded with a corresponding amount of
      accrued rent receivable from Carmike.


                                       7
<PAGE>

      On January 31, 2002 title to the six theaters was transferred to the banks
      in payment of the non-recourse debt under the Reimbursement Agreement and
      the Company recognized a gain of $3,512,884, representing the excess of
      the liabilities over the carrying value of the assets relating to the real
      estate leased to Carmike. In addition, the Company received $294,755 in
      connection with the sale of its common membership interest in Movieplex
      relating to the transfer of title of the movie theaters to Wachovia.

      Income from discontinued operations for the three-month period ended March
      31, 2002 is as follows:

                                                                  Three Months
                                                                      Ended
                                                                 March 31, 2002
                                                                 --------------

                Revenues:
                    Rental income                                  $1,249,710
                    Gain on real estate leased                      3,512,884
                    Common membership interest transfer fee           294,755
                                                                   ----------
                                                                    5,057,349
                                                                   ----------
                Expenses
                    Interest                                        1,249,710
                    Other                                              94,755
                                                                   ----------
                                                                    1,344,465
                                                                   ----------
                                                                   $3,712,884
                                                                   ==========

4.    Litigation

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

5.    Debentures Payable

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

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

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


                                       8
<PAGE>

      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 was being amortized
      over the life of the debentures and $148,367 deemed attributable to the
      warrant portion of the unit, was charged to paid-in surplus.

      Interest accrued on debentures payable, relating to the period from April
      1, 2002 through March 31 2003, aggregating $288,000 has not been paid
      through April 1, 2003. Accordingly, since the Company had not paid the
      interest due on April 1, 2002 by April 16, 2002 (the "grace period"), the
      Company's obligation is considered callable by the debenture holders and
      as a consequence the entire balance of the debentures with the related
      unpaid interest is classified as a current obligation at March 31, 2003.
      However, for the debentures to be in default, the holders of no less then
      51% in principal amount of the debentures must notify the Company that an
      event of default has occurred and may thereafter declare all debentures
      and related interest immediately due and payable. As of May 19, 2003, no
      such demand has been made by any debenture holder.

      As a result of the nonpayment of interest as set forth above and the
      reclassification of the debentures as a current obligation, the remaining
      (i) unamortized debt discount on the debentures ($661,980) was recognized
      as interest expense and (ii) unamortized deferred financing costs
      associated with the debentures ($320,350) was recognized as expense, in
      2002.

6.    Income Taxes

      Commencing in August 2000, pursuant to an understanding with the IRS, the
      Company began paying $30,000 per month until the assessed tax deficiency
      relating to the years 1985 through 1989 and interest thereon is fully
      satisfied. However, after a technical review by special tax counsel of the
      tax deficiency and related interest, management of the Company believes
      that there may be a basis for its reduction. Management is actively
      pursuing such a reduction at this time. Pending the ultimate resolution of
      this matter with the IRS, in September 2001 the Company temporarily
      suspended making monthly payments. At March 31, 2003, the outstanding
      balance of the liability amounted to approximately $929,000 including
      related additional state and local taxes and interest.

7.    Director Fees

      At March 31, 2003, the Company's five outside directors have similarly
      agreed to forego previously accrued and unpaid directors' fees earned
      through December 31, 2001 and agreed to forgo future compensation until
      further notice. The reversal of previously accrued fees has been reflected
      in the Company's Consolidated Statement of Operations for the three-month
      period ended March 31, 2002.

8.    Subsequent Events

      Acquisitions

      On April 23, 2003, the Company acquired all of the outstanding stock of
      SRC Technologies, Inc. ("SRC") and Econo-Comm, Inc. ("ECI") by merging
      these companies into two new wholly-owned subsidiaries.

      The Company issued to Michael and Carol Gutowski, the principal
      stockholders of SRC, an aggregate of 4,867,937 shares of its non-voting
      Series C Preferred Stock and a like number of ten year Class C Warrants,
      each to purchase one share of its Common Stock at $1.00 per share. The


                                       9
<PAGE>

      Class C Warrants are not exercisable and are not detachable from the C
      Preferred Stock prior to 66 months after their issuance. The Company
      issued to the other common stockholders of SRC, including Larry Reid,
      SRC's Chief Operating Officer, an aggregate of 899,976 shares of its
      Common Stock, 1,697,961 shares of its non-voting Series A Preferred Stock
      and a like number of ten year non-detachable Class A Warrants, each to
      purchase one share of its Common Stock at $1.00 per share. The Class A
      Warrants are not exercisable and are not detachable from the A Preferred
      Stock prior to 66 months after their issuance. The Company issued an
      aggregate of 440,000 shares of its Series B Preferred Stock to the holders
      of the SRC Series B Preferred Stock. The A Preferred Stock has an
      aggregate liquidating preference over all other CNE equity of $1,697,961
      and the B Preferred Stock has an aggregate liquidating preference over all
      other CNE equity except the A Preferred Stock of $440,000. The C Preferred
      Stock has no liquidating preference.

      The Company issued to Gary Eichsteadt and Thomas Sullivan, the
      stockholders of ECI, an aggregate of 4,867,938 shares of its Series C
      Preferred Stock and a like number of Class C Warrants. In addition,
      Messrs. Eichsteadt and Sullivan retained certain of ECI's trade
      receivables aggregating approximately $100,000. The Company also acquired
      a patent related to the operation of ECI's business from Mr. Eichsteadt
      for four notes each in the principal amount of $500,000, bearing interest
      at the annual rate of 8%, payable quarterly, and due on October 31, 2008.

      There were no relationships between the Company or any of its affiliates
      and any of the sellers of the assets acquired by the Company prior to the
      acquisition transactions. Messrs. Gutowski and Reid and Ms. Gutowski
      became directors and Mr. Gutowski became President and Mr. Reid became
      Executive Vice President of the Company immediately subsequent to the
      consummation of the acquisitions. Ms. Gutowski and Messrs. Eichsteadt and
      Sullivan became executive officers, respectively, of the Company's
      subsidiaries that merged with SRC and ECI.

      Financing

      On April 23, 2003, the Company also effected a private financing pursuant
      to which it issued notes (the "Notes") in the aggregate principal amount
      of $750,000, of which $650,000 was from the officers of the Company, and
      3,124,350 ten year Class B Warrants, each to purchase one share of its
      Common Stock at $0.50 per share. The Notes bear interest at the annual
      rate of 10% payable quarterly and are due on April 30, 2004. The Warrants
      are anti-dilutive until the Notes have been repaid. The due date of the
      Notes may be extended at the Company's option for an additional year in
      consideration for the issuance of 10-year warrants to purchase 5% of the
      Company's then outstanding common stock at $0.50 per share. These Warrants
      will also be anti-dilutive until the Notes have been repaid.

      The Company is using the funds obtained from this financing to pay certain
      ECI notes payable and for working capital. The financing was effected
      pursuant to the exemption from the registration provisions of the
      Securities Act of 1993 provided by Section 4(2) thereof.

      2003 Stock Incentive Plan

      On April 30, 2003 a majority of the stockholders and the Board of
      Directors of the Company approved the 2003 Stock Incentive Plan (the "2003
      Plan"), which provides, among other matters, for incentive and
      non-qualified stock options to purchase 3,500,000 shares of Common Stock.
      The purpose of the 2003 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
      2003 Plan is administered by the Incentive Compensation Committee of the
      Board. In addition, on April 30, 2003, options to purchase 1,987,500
      shares were granted to (5) officers (1,800,000) and one (1) employee
      (187,500) of the Company. No options granted have been exercised.


                                       10
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

      General

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

      Since the attack, the Company's management has been preoccupied with the
      relocation and reestablishment of its businesses, assessing and processing
      of insurance claims with the assistance of a risk manager with its
      insurers, and seeking sources of financing. In 2002, the Company received
      insurance proceeds in amounts that have exceeded the net carrying value of
      the destroyed assets and, accordingly, has recorded a $152,934 gain on
      assets destroyed due to this catastrophe of which $132,047 was recorded in
      the three months ended March 31, 2002.

      The Company also had insurance coverage for other than assets destroyed.
      As of March 31, 2003 all outstanding insurance claims relating to the
      catastrophe have been received.

      In addition, the Company had applied for governmental assistance grants
      related to the catastrophe. In April and September 2002, the Company
      received grants aggregating $291,827. The grants have a restriction that
      could require their repayment, specifically if the Company were to
      relocate a substantial portion its operations outside of New York City
      before May 1, 2005. Until such time as this restriction shall no longer
      apply, the grants will be classified as a liability of the Company. Upon
      the satisfaction or lapse of the restrictions, the Company will remove the
      liability and record grant income on its financial statements or,
      alternatively, have to repay such grants if the above condition is not
      satisfied.

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

      Critical Accounting Policies

      The Company's consolidated financial statements have been prepared in
      accordance with the accounting principles generally accepted in the United
      States of America. Certain accounting policies have a significant impact
      on amounts reported in the financial statements. A summary of those
      significant accounting policies can be found in Note B to the Company's
      financial statements included in its Annual Report on Form 10-KSB for the
      year ended December 31, 2002. The Company has not adopted any significant
      new accounting policies during the three-month period ended March 31,
      2003.

      A significant judgment made by management in the preparation of the
      Company's financial statements is the determination of the allowance for
      doubtful accounts. This determination is made periodically in the ordinary
      course of business.


                                       11
<PAGE>

      Forward Looking Statements

      Certain statements in this Quarterly Report on Form 10-QSB 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.


                                       12
<PAGE>

A.    Results of Operations:

      Three-Month Period Ended March 31, 2003 Compared to the Three-Month Period
      Ended March 31, 2002

      Revenues

      Total revenues from continuing operations decreased to $45,321 for the
      three-month period ended March 31, 2003 from $75,092 for the three-month
      period ended March 31, 2002.

      Service fee income decreased to $45,039 for the three-month period ended
      March 31, 2003 from $74,688 for the three-month period ended March 31,
      2002 as the operations of our subsidiary, CareerEngine, Inc. have
      decreased since January 2002.

      Costs and expenses

      Total costs and expenses from continuing operations decreased to $288,244
      for the three-month period ended March 31, 2003 from $463,419 for the
      three-month period ended March 31, 2002.

      Compensation and related costs decreased to $90,231 for the three-month
      period ended March 31, 2003 from $187,787 for the three-month period ended
      March 31, 2002. The decrease is due to the Company's cost reduction
      strategy, consisting primarily of significant staff reductions, which
      commenced in December 2000.

      Advertising expense decreased to nil for the three-month period ended
      March 31, 2003 from $10,000 for the three-month period ended March 31,
      2002 as CareerEngine, Inc. continued its cost reduction program, focused
      primarily on compensation and advertising related expenditures.

      General and administrative expenses decreased to $110,071 for the
      three-month period ended March 31, 2003 from $171,475 for the three-month
      period ended March 31, 2002 due primarily to significantly reduced
      operating costs associated with our subsidiary, CareerEngine, Inc. These
      costs consisted principally of travel, telephone and legal expenses,
      supplies, and website related expenditures.

      Interest expense decreased to $87,942 for the three-month period ended
      March 31, 2003 from $94,157 for the three-month period ended March 31,
      2002 primarily due to the Company's recognition, as interest expense, of
      all of the remaining unamortized debt discount relating to its debentures
      payable in 2002.


                                       13
<PAGE>

      Other Items

      Gain on fixed assets destroyed in catastrophe of $132,047 for the
      three-month period ended March 31, 2002 relates to the destruction of the
      World Trade Center where the Company was headquartered.

      Reversal of Directors fees of $55,000 for the three-month period ended
      March 31, 2002 relates to the forgiveness of fees earned by the outside
      Directors and their agreement to forego these fees until further notice.

      Operating Loss

      On a pre-tax basis, we had a loss of $242,923 for the three-month period
      ended March 31, 2003 from continuing operations compared with a loss of
      $201,280 for the three-month period ended March 31, 2002 from continuing
      operations.

      Our loss from continuing operations for the three-month period ended March
      31, 2003 was $242,923 compared with a loss from continuing operations of
      $206,530 for the three-month period ended March 31, 2002. For the
      three-month periods ended March 31, 2003 and 2002, loss per common share
      from continuing operations, basic and diluted, was $.04 per share.

      Our income from discontinued operations for the three-month period ended
      March 31, 2002 was due primarily to the transfer of title to the six
      theaters leased to Carmike Cinemas, Inc. by the Company to the banks in
      payment of the related non-recourse debt, and the consequential
      recognition of the related gain representing the excess of liabilities
      over the carrying value of the theaters. For the three-month period ended
      March 31, 2002, income per common share from discontinued operations,
      basic and diluted, was $.67 per share.

      Our net loss for the three-month period ended March 31, 2003 was $242,923
      compared with net income of $3,506,354 for the three-month period ended
      March 31, 2002. For the three-month period ended March 31, 2003, net loss
      per common share, basic and diluted, was $.04 per share. For the
      three-month period ended March 31, 2002, net income per common share,
      basic and diluted, was $.63 per share.


                                       14
<PAGE>

B.    Liquidity and Capital Resources

      The Company has incurred substantial losses from continuing operations,
      sustained substantial operating cash outflows, has a working capital
      deficit and at March 31, 2003 has a capital deficiency. 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. However, there is no
      assurance that the Company will achieve profitable operations or cash
      flow.

      Management believes that such working capital deficit, losses and negative
      operating cash flows will be positively addressed by the subsequent events
      disclosed within these financial statements as of March 31, 2003 and 2002
      and the three month periods then ended. A preliminary unaudited condensed
      Pro-forma Balance Sheet as of March 31. 2003, setting forth the effect of
      these subsequent transactions, is presented in Part II - Other
      Information, Item 5: Other Information-Preliminary Condensed Pro-forma
      Balance Sheet Information, within this Form 10Q-SB.

      We do not have any material commitments for capital expenditures as of
      March 31, 2003.

C.    American Stock Exchange

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

      Management believes that the subsequent events disclosed within these
      financial statements as of March 31, 2003 and 2002 and the three-month
      periods then ended appropriately addresses the American Stock Exchange
      continuing listing requirements. See B above.

D.    Inflation

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

Item 3. Controls and Procedures

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


                                       15
<PAGE>

                                     PART II

                                OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 5. Other Information.

      Preliminary Unaudited Pro-forma Balance Sheet Information

      Preliminary unaudited Pro-forma Balance Sheet information, as of
      March 31, 2003, relating to the subsequent events set forth in Part I:
      Financial Information, Item 1: Financial Statements, is as follows:

      Assets:
         Cash                                      $    895,000
         Accounts receivable
         Inventory                                      234,000
         Other                                           11,000
                                                   ------------
           Current assets                             1,140,000
         Fixed assets, net                              355,000
         Deferred financing costs, net                   78,000
         Intellectual property rights, net            2,390,000
         Goodwill                                     6,631,000
         Other                                           32,000
                                                   ------------
               Total assets                        $ 10,626,000
                                                   ============

      Liabilities:
         Accounts payable and accrued expenses     $    733,000
         Short-term financing arrangements              583,000
         Other                                            5,000
                                                   ------------
           Current liabilities                        1,321,000
      Notes payable                                   3,000,000
      Deferred grant revenue                            292,000
      Other liabilities                                  34,000
                                                   ------------
             Total liabilities                        4,647,000
                                                   ------------

      Capital:
         Preferred Stock
         Common Stock
         Paid-in-surplus                             23,047,000
         Retained earnings                          (14,145,000)
         Treasury stock                              (2,873,000)
                                                   ------------
             Total capital                            5,979,000
                                                   ------------

               Total liabilities and capital       $ 10,626,000
                                                   ============
Please be advised the information presented herein may signifigantly change
upon the filing or the related Form 8-K Financial Information due no later than
July 6, 2003.


                                       16
<PAGE>

      Forward Looking Statements

      Certain statements in this Quarterly Report on Form 10-QSB 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.

Item 6. Exhibits and Reports on Form 8-K.

      (a)   Exhibit 99.1: Certification of the Chief Executive Officer pursuant
                          to Section 906 of the Sarbanes-Oxley Act of 2002.

      (b)   Exhibit 99.2: Certification of the Chief Financial Officer pursuant
                          to Section 906 of the Sarbanes-Oxley Act of 2002.

            A statement regarding the computation of per share earnings is
            omitted because the computation is described in Note 2 of the Notes
            to Consolidated Financial Statements (Unaudited) in this Form
            10-QSB.

      (c)   Reports on Form 8-K:

            The Company filed a report on Form 8-K on May 6, 2003 and said
            report and exhibits thereto are incorporated into this Form 10-QSB
            by reference.


                                       17
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        CNE GROUP, INC.


                                          /s/ George W. Benoit
                                        ----------------------------------------
Date: May 20, 2003                      George W. Benoit, Chairman of the Board
                                        of Directors, and Chief Executive
                                        Officer


                                          /s/ Anthony S. Conigliaro
                                        ----------------------------------------
Date: May 20, 2003                      Anthony S. Conigliaro, Vice President
                                        and Chief Financial Officer


                                       18
<PAGE>

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

In connection with the Quarterly Report of CareerEngine Network, Inc. (the
"Registrant") on Form 10-QSB for the quarterly period ending March 31, 2003 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, George W. Benoit, Chairman of the Board of Directors and Chief
Executive Officer of the Registrant, certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

1.    I have reviewed the Report of the Registrant;

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

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

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

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

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

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

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

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

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

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


                                          /s/ George W. Benoit
                                        ----------------------------------------
Date: May 20, 2003                      George W. Benoit, Chairman of the Board
                                        of Directors and Chief Executive
                                        Officer


                                       19
<PAGE>

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

In connection with the Quarterly Report of CareerEngine Network, Inc. (the
"Registrant") on Form 10-QSB for the quarterly period ending March 31, 2003 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Anthony S. Conigliaro, Vice President and Chief Financial Officer
of the Registrant, certify, pursuant to Section. 906 of the Sarbanes-Oxley Act
of 2002, that:

1.    I have reviewed the Report of the Registrant;

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

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

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

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

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

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

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

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

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

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


                                          /s/ Anthony S. Conigliaro
                                        ----------------------------------------
Date: May 20, 2003                      Anthony S. Conigliaro, Vice President
                                        and Chief Financial Officer


                                       20