**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, 2007




** ̈**
            **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




**Arrow
      Resources Development, Inc.**


**(Name
      of Small Business Issuer in Its Charter)**





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




**Carnegie
                Hall Tower, 152 W. 57****th****Street, New York, NY 10019****(Address
                of Principal Executive Offices) (Zip
                Code)**




**212-262-2300**


**(Issuer's
      Telephone Number, including Area Code)**




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




**Title
                of Each Class**
            
            **Name
                of Each Exchange on Which Registered**Common
                stock - par value $0.00001
            
            OTC:
                Bulletin Board




Securities
      registered under Section 12(g) of the Exchange Act: None





(Title
      of
      Class)





(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  ̈




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act.


Yes  ̈ No x




The
      number of shares outstanding of each of the issuer's classes of common equity,
      as of May 1, 2007.




**Class**
            
            **Outstanding
                at May 1, 2007**Common
                stock - par value $0.00001
            
            649,543,240














ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


FORM
      10-QSB


THREE
      MONTHS ENDED MARCH 31, 2007





TABLE
      OF
      CONTENTS




**Page****PART
                I - FINANCIAL INFORMATION**Item
                1.
            
            Financial
                Statements:Consolidated
                Balance Sheets at March 31, 2007 and December 31, 2006
            
            1Consolidated
                Statement of Operations for the three months ended March 31, 2007
and
                2006, and for the periods from inception (November 15, 2005) to December
                31, 2006
                and from inception (November 15, 2005) to March 31,
                2007
            
            2Consolidated
                Statement of Changes in Stockholders' Equity for the three months
                ended
                March 31, 2007 and for the period from inception (November 14, 2005)
                to
                March 31, 2007
            
            3Consolidated
                Statement of Cash Flows for the three months ended March 31, 2007
                 and for the periods from inception (November 15, 2005) to December
                31, 2006 and from inception (November 15, 2005) to March 31,
                2007
            
            4Notes
                to the Consolidated Financial Statements
            
            5-13Item
                2.
            
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            
            14-17Item
                3.
            
            Controls
                and Procedures
            
            17**PART
                II - OTHER INFORMATION**Item
                1.
            
            Legal
                Proceedings
            
            17Item
                2.
            
            Other
                Information
            
            17Item
                3.
            
            Exhibits
            
            18Signatures
            
            19










**PART
      I - FINANCIAL INFORMATION**




**Item 1.**
            **Financial
                Statements**





ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)





Consolidated
      Balance Sheets





**March
                31, 2007**
            
            **December
                31, 2006****ASSETS**Current:Cash
            
            $
            —
            
            $
            —Prepaid
                expenses
            
            
            5,868
            
            
            —Total
                current assets
            
            
            5,868
            
            
            —Amortizable
                intangible assetMarketing
                and distribution agreement
            
            
            125,000,000
            
            
            125,000,000Total
                assets
            
            $
            125,005,868
            
            $
            125,000,000**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current:Accounts
                and accrued expenses payable (including $2,794,066 and $2,510,491
                due to
                shareholders, respectively)
            
            $
            3,132,223
            
            $
            2,719,251Due
                to related parties
            
            
            2,997,274
            
            
            2,597,751Notes
                payable, including accrued interest of $20,000 (2005)
            
            
            245,000
            
            
            245,000Total
                liabilities
            
            
            6,374,497
            
            
            5,562,002Commitments
                and contingencies
            
            
            —
            
            
            —STOCKHOLDERS’
                EQUITYCommon
                stock, $0.00001 par value, 1 billion shares authorized, 649,543,240
                issued
                and outstanding
            
            
            6,495
            
            
            6,495Preferred
                stock, $0.10 par value, 10 million shares authorized, none issued
                and
                outstanding
            
            
            —
            
            
            —Additional
                paid-in capital
            
            
            124,318,206
            
            
            124,218,206Accumulated
                deficit
            
            
            (5,693,330
            )
            
            (4,786,703
            )Total
                stockholders’ equity
            
            
            118,631,371
            
            
            119,437,998Total
                liabilities and stockholders’ equity
            
            $
            125,005,868
            
            $
            125,000,000





*See
      accompanying notes to the consolidated financial statements.*





1





ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)





Consolidated
      Statement of Operations (during the development stage)





For
                the Three Months Ended March 31, 2007
            
            For
                the Period From Inception (November 15, 2005) to
              December
                31,
              2006
            
            Accumulated
                during the development stage for the Period From Inception (November
                15,
                2005) to
              March
                31,
              2007Revenue
            
            $
            -
            
            $
            -
            
            $
            -Operating
                   expenses:Consulting
                fees and services, including $810,379, $4,197,084 and $5,008,183
                incurred
                to related parties, respectively
            
            
            860,442
            
            
            4,413,216
            
            
            5,273,658General
                and administrative
            
            
            31,772
            
            
            392,553
            
            
            424,325Delaware
                franchise taxes
            
            
            14,413
            
            
            127,349
            
            
            141,762Total
                operating expenses
            
            
            906,627
            
            
            4,933,118
            
            
            5,839,745Loss
                from operations during thedevelopment
                stage
            
            
            (906,627
            )
            
            (4,933,118
            )
            
            (5,839,745
            )Other
                income (expense):Gain
                on write off of liabilities associated with predecessor entity not
                to be
                paid
            
            
            -
            
            
            395,667
            
            
            395,667Expenses
                incurred as part of recapitalization transaction
            
            
            -
            
            
            (249,252
            )
            
            (249,252
            )-
            
            
            146,415
            
            
            146,415Net
                loss
            
            $
            (906,627
            )
            $
            (4,786,703
            )
            $
            (5,693,330
            )Basic
                and diluted net loss per weighted-average shares common stock
                outstanding
            
            $
            (0.001
            )
            $
            (0.008
            )
            $
            (0.009
            )Weighted-average
                number of shares of common stock outstanding
            
            
            649,543,240
            
            
            623,733,021
            
            
            623,733,021




*See
      accompanying notes to the consolidated financial statements.*




2





ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)





Consolidated
      Statement of Changes in Stockholders' Equity (during the development
      stage)


**Common
                  Stock**
              
              **Additional****Shares**
              
              **Amount**
              
              **Paid-in**
                **Capital**
              
              **Accumulated****Deficit**
              
              **Total**Balance,
                  November 14, 2005 pursuant to recapitalization transaction
              
              
              25,543,240
              
              $
              255
              
              $
              (2,674,761
              )
              $
              —
              
              $
              (2,674,506
              )Common
                  stock conversion and settlement of senior note pursuant to
                  recapitalization transaction
              
              
              624,000,000
              
              
              6,240
              
              
              125,907,967
              
              
              —
              
              
              125,914,207Net
                  loss for the period from November 15, 2005 to December 31,
                  2005
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,272,258
              )
              
              (1,272,258
              )Balance,
                  December 31, 2005
              
              
              649,543,240
              
              $
              6,495
              
              $
              123,233,206
              
              $
              (1,272,258
              )
              $
              121,967,443Common
                  stock to be issued for cash received by Company
              
              
              —
              
              
              —
              
              
              985,000
              
              
              —
              
              
              985,000Net
                  loss for the year
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,514,445
              )
              
              (3,514,445
              )Balance
                  at December 31, 2006
              
              
              649,543,240
              
              $
              6,495
              
              $
              124,218,206
              
              $
              (4,786,703
              )
              $
              119,437,998Common
                  stock to be issued for cash received by Company
              
              
              —
              
              
              —
              
              
              100,000
              
              
              —
              
              
              100,000Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              (906,627
              )
              
              (906,627
              )Balance
                  at March 31, 2007
              
              
              649,543,240
              
              $
              6,495
              
              $
              124,318,206
              
              $
              (5,693,330
              )
              $
              118,631,371




*See
      accompanying notes to the consolidated financial statements.*




3





ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)




Consolidated
      Statement of Cash Flows (during the development stage)




For
      the
      three months ended March 31, 2007, for the period from inception (November
      15,
      2005) to December 31, 2006, and for the period from inception (November 15,
      2005) to March 31, 2007




For
                the Three Months Ended March 31, 2007
            
            For
                the Period From Inception (November 15, 2005) to
              December
                31,
              2006
            
            Accumulated
                during the development stage for the Period From Inception (November
                15,
                2005) to
              March
                31,
              2007Net
                loss
            
            $
            (906,627
            )
            $
            (4,786,703
            )
            $
            (5,693,330
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Net
                non-cash change in stockholders’ equity due to recapitalization
                transaction
            
            
            -
            
            
            1,264,217
            
            
            1,264,217Changes
                in operating asset and liabilities:Increase
                in prepaid expenses
            
            
            (5,868
            )
            
            -
            
            
            (5,868
            )Increase
                in accounts and accrued expenses payable
            
            
            412,972
            
            
            1,482,690
            
            
            1,895,662Net
                cash used inoperating
                activities
            
            
            (499,523
            )
            
            (2,039,796
            )
            
            (2,539,319
            )Cash
                flows from investing activities:Cash
                acquired as part of merger transaction
            
            
            -
            
            
            39,576
            
            
            39,576Net
                cash provided by investing activities
            
            
            -
            
            
            39,576
            
            
            39,576Cash
                flows from financing activities:Proceeds
                of issuance of note payable
            
            
            -
            
            
            25,000
            
            
            25,000Net
                increase in due to related parties attributed to operating expenses
                paid
                on the Company’s behalf by the related party
            
            
            399,523
            
            
            940,220
            
            
            1,339,743Net
                increase in investments/capital contributed
            
            
            100,000
            
            
            985,000
            
            
            1,085,000Advances
                from senior advisor
            
            
            -
            
            
            50,000
            
            
            50,000Net
                cash provided by financing activities
            
            
            499,523
            
            
            2,000,220
            
            
            2,499,743Net
                change in cash
            
            
            -
            
            
            -
            
            
            -Cash
                balance at beginning of period
            
            
            -
            
            
            -
            
            
            -Cash
                balance at end of period
            
            $
            -
            
            $
            -
            
            $
            -Supplemental
                disclosures of cash flow information:Cash
                paid during the period for:Income
                taxes
            
            $
            -
            
            $
            -
            
            $
            -Interest
                expense
            
            $
            -
            
            $
            -
            
            $
            -Non-cash
                investing and financing activities:Non-cash
                purchase of marketing and distribution agreement
            
            $
            -
            
            $
            125,000,000
            
            $
            125,000,000Settlement
                of senior note payable through issuance of convertible preferred
                stock
            
            $
            -
            
            $
            125,000,000
            
            $
            125,000,000Non-cash
                acquisition of accrued expenses in recapitalization
            
            $
            -
            
            $
            421,041
            
            $
            421,041Non-cash
                acquisition of notes payable in recapitalization
            
            $
            -
            
            $
            220,000
            
            $
            220,000





*See
      accompanying notes to the consolidated financial statements.*





4




ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      1 -
      NATURE OF BUSINESS / ORGANIZATION




Business
      Description




Arrow
      Resources Development, Inc. and Subsidiaries (“the Company”), was subject to a
      change of control transaction that was accounted for as a recapitalization
      of
      CNE Group, Inc. (“CNE”) in November 2005. Arrow Resources Development, Ltd.,
      (“Arrow Ltd.”) the Company’s wholly-owned subsidiary, was incorporated in
      Bermuda in May 2005. Arrow Ltd. provides marketing and distribution services
      for
      natural resource products and currently has an exclusive marketing and
      distribution agreement with Arrow Pacific Resources (s) Pte. Ltd. (“Arrow Pte.”)
      to market lumber and related products from land leased by Arrow Pte.’s timber
      subsidiaries in Papua, New Guinea. Under the agreement Arrow Ltd. will receive
      a
      commission of 10% of gross sales derived from lumber and related products.




In
      April
      of 2006, Arrow Ltd. entered into an agency agreement with Arrow Pacific
      Resources Group Limited (“APR”) that provides marketing and distribution
      services for timber resource products and currently has an exclusive marketing
      and sales agreement with APR to market lumber and related products from land
      leased by GMPLH which is operated by APR and it's subsidiaries, located in
      Indonesia. Under the agreement Arrow Ltd. will receive a commission of 10%
      of
      gross sales derived from lumber and related products. The consideration to
      be
      paid to APR will be in the form of a to-be-determined amount of the Company's
      common stock, subject to the approval of the Board of Directors.




As
      of
      December 31, 2005, the Company also had a wholly-owned subsidiary, Career
      Engine, Inc. (“Career Engine”) for which operations were discontinued prior to
      the recapitalization transaction. The net assets of Career Engine had no value
      as of December 31, 2005.





NOTE
      2 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Principles
      of consolidation:




The
      accompanying consolidated financial statements include the accounts of the
      Company and its wholly-owned subsidiary, Arrow Ltd. All significant
      inter-company balances and transactions have been eliminated.




Income
      taxes:




The
      Company follows SFAS No. 109, “Accounting for Income Taxes.” Under the asset and
      liability method of SFAS No. 109, deferred tax assets and liabilities are
      recognized for the future tax consequences attributable to differences between
      the financial statement carrying amounts of existing assets and liabilities
      and
      their respective tax bases. A valuation allowance has been provided for the
      Company's net deferred tax asset, due to uncertainty of
      realization.




Fair
      value of financial instruments:




For
      financial statement purposes, financial instruments include cash, accounts
      and
      accrued expenses payable, and amounts due to Empire Advisory, LLC (“Empire”) (as
      discussed in Notes 6 and 7) for which the carrying amounts approximated fair
      value because of their short maturity.




Use
      of
      estimates:




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




5




ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      2 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Loss
      per
      share:




The
      Company complies with the requirements of the Financial Accounting Standards
      Board issued Statement of Financial Accounting Standards No. 128, “Earning per
      share” (“SFAS No. 128”). SFAS No. 128 specifies the compilation, presentation
      and disclosure requirements for earning per share for entities with publicly
      held common stock or potentially common stock. Net loss per common share, basic
      and diluted, is determined by dividing the net loss by the weighted average
      number of common shares outstanding.





Net
      loss
      per diluted common share does not include potential common shares derived from
      stock options and warrants because they are anti-dilutive for the period from
      November 15, 2005 to December 31, 2006 and for the period ended March 31, 2007.
      As of March 31, 2007, there are no dilutive equity instruments outstanding.




Acquired
      intangibles:




Intangible
      assets are comprised of an exclusive sales and marketing agreement. In
      accordance with SFAS 142, “Goodwill and Other Intangible Assets” the Company
      assesses the impairment of identifiable intangibles whenever events or changes
      in circumstances indicate that the carrying value may not be recoverable.
      Factors the Company considers to be important which could trigger an impairment
      review include the following:




1.
            Significant
                underperformance relative to expected historical or projected future
                operating results;




2.
            Significant
                changes in the manner of use of the acquired assets or the strategy
                for
                the overall business; and




3.
            Significant
                negative industry or economic trends.





When
      the
      Company determines that the carrying value of intangibles may not be recoverable
      based upon the existence of one or more of the above indicators of impairment
      and the carrying value of the asset cannot be recovered from projected
      undiscounted cash flows, the Company records an impairment charge. The Company
      measures any impairment based on a projected discounted cash flow method using
      a
      discount rate determined by management to be commensurate with the risk inherent
      in the current business model. Significant management judgment is required
      in
      determining whether an indicator of impairment exists and in projecting cash
      flows.





The
      sales
      and marketing agreement will be amortized over 99 years, utilizing the
      straight-line method. Amortization expense has not been recorded since the
      acquisition occurred as the company has not yet made any sales.




6




ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      2 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Recent
      Accounting Pronouncements:




In
      May
      2005, the FASB issued SFAS 154, “Accounting Changes and Error Corrections,” that
      applies to all voluntary changes in accounting principle. This Statement
      requires retrospective application to prior periods' financial statements of
      changes in accounting principle, unless it is impracticable to determine either
      the period-specific effects or the cumulative effect of the change. When it
      is
      impracticable to determine the period-specific effects of an accounting change
      on one or more individual prior periods presented, this Statement requires
      that
      the new accounting principle be applied to the balances of assets and
      liabilities as of the beginning of the earliest period for which retrospective
      application is practicable and that a corresponding adjustment be made to the
      opening balance of retained earnings (or other appropriate components of equity
      or net assets in the statement of financial position) for that period rather
      than being reported in an income statement. When it is impracticable to
      determine the cumulative effect of applying a change in accounting principle
      to
      all prior periods, this Statement requires that the new accounting principle
      be
      applied as if it were adopted prospectively from the earliest date practicable.
      SFAS 154 will be effective for the Company for fiscal year ended December 31,
      2007. The Company does not anticipate that the adoption of SFAS No. 154 will
      have an impact on the Company's overall results of operations or financial
      position.





In
      February 2006, the FASB issued SFAS 155, “Accounting for Certain Hybrid
      Financial Instruments—an amendment of FASB Statements No. 133 and 140,” that
      allows a preparer to elect fair value measurement at acquisition, at issuance,
      or when a previously recognized financial instrument is subject to a
      re-measurement (new basis) event, on an instrument-by-instrument basis, in
      cases
      in which a derivative would otherwise have to be bifurcated. It also eliminates
      the exemption from applying Statement 133 to interests in securitized financial
      assets so that similar instruments are accounted for similarly regardless of
      the
      form of the instruments. This Statement is effective for all financial
      instruments acquired or issued after the beginning of an entity's first fiscal
      year that begins after September 15, 2006. The Company does not anticipate
      that
      the adoption of SFAS No. 155 will have an impact on the Company's overall
      results of operations or financial position.




In
      March
      2006, the FASB issued SFAS 156, “Accounting for Servicing of Financial Assets—an
      amendment of FASB Statement No. 140,” that applies to the accounting for
      separately recognized servicing assets and servicing liabilities. This Statement
      requires that all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value, if practicable. An entity
      should adopt this Statement as of the beginning of its first fiscal year that
      begins after September 15, 2006. The Company does not anticipate that the
      adoption of SFAS No. 156 will have an impact on the Company's overall results
      of
      operations or financial position.





7




ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      2 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Recent
      Accounting Pronouncements (continued):




In
      July
      2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty
      in
      Income Taxes. The Interpretation clarifies the way companies are to account
      for
      uncertainty in income tax reporting and filing and prescribes a consistent
      recognition threshold and measurement attribute for recognizing, derecognizing,
      and measuring the tax benefits of a tax position taken, or expected to be taken,
      on a tax return. The Interpretation is effective for fiscal years beginning
      after December 15, 2006, although early adoption is possible. The Company does
      not plan to adopt early and the Company is currently in the process of
      evaluating the impact, if any, the adoption of the Interpretation will have
      on
      the 2007 financial statements.




In
      September 2006, the FASB issued SFAS 157, “Fair Value Measurements,” which
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles (GAAP), and expands disclosures about
      fair value measurements. This Statement applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. The adoption of SFAS No. 157 will not have an
      impact on the Company's overall results of operations or financial
      position.





In
      September 2006, the Financial Accounting Standards Board (“FASB”) the issued
      SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
      Postretirement Plans, an Amendment of FASB Statements No. 87, 88, 106, and
      132(R)” (“SFAS No. 158”). SFAS No. 158 requires companies to report the funded
      status of their defined benefit pension and other postretirement benefit plans
      on their balance sheets as a net liability or asset as of December 31, 2006.
      The
      new standard does not address the accounting treatment for pension and
      postretirement benefits in the income statement. This will have no impact on
      the
      Company’s results of operations or financial position.





In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No.159, “The Fair Value Option for Financial Assets and Financial Liabilities -
      Including an amendment of FASB Statement No.115”. SFAS No.159 permits entities
      to choose to measure eligible financial instruments and other items at fair
      value at specified election dates. A business entity shall report unrealized
      gains and losses on items for which the fair value option has been elected
      in
      earnings at each subsequent reporting date. The fair value option may be applied
      instrument by instrument but only upon the entire instrument - not portions
      of
      the instrument. SFAS No.159 is effective as of the beginning of an entity’s
      first fiscal year that begins after November 15, 2007. The Company does not
      anticipate that the adoption of SFAS No. 159 will have an impact on the
      Company's overall results of operations or financial position.





NOTE
      3 -
      AGREEMENT AND PLAN OF MERGER BETWEEN ARROW RESOURCES DEVELOPMENT, LTD. AND
      CNE
      GROUP, INC.




In
      August
      2005, the Company entered into an Agreement and Plan of Merger (“the Agreement”)
      with CNE Group, Inc. (“CNE”) under which, CNE was required to issue 10 million
      shares of Series AAA convertible preferred stock (“the Preferred Stock”) to the
      Company, representing 96% of all outstanding equity of CNE on a fully diluted
      basis for the Marketing and Distribution Agreement provided to the Company,
      Empire, as agent. Under the Agreement, the Company changed its name to Arrow
      Resources Development, Inc. and divested all operations not related to Arrow
      Ltd. The Preferred Stock contained certain liquidation preferences and each
      share of the Preferred Stock was convertible to 62.4 shares of common
      stock.




The
      transaction was consummated upon the issuance of the Preferred Stock on November
      14, 2005, which was used to settle the senior secured note payable for
      $125,000,000 and $1,161,000 of cash advances from Empire. The Preferred Stock
      was subsequently converted to common stock on December 2, 2005, for a total
      of
      approximately 649 million shares of common stock outstanding. This was recorded
      as a change of control transaction that was accounted for as a recapitalization
      of CNE.




The
      operations of the Company’s wholly-owned subsidiary, Career Engine, Inc. were
      discontinued prior to the recapitalization transaction. The net assets of Career
      Engine had no value as of December 31, 2005.




During
      the period from November 15, 2005 to December 31, 2005, the Company incurred
      $249,252 of expenses incurred as part of recapitalization transaction.





8




ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      4 -
      INCOME TAXES




In
      August
      2005, the Company entered into an Agreement and Plan of Merger (“the Agreement”)
      with CNE Group, Inc. (“CNE”). Under the Agreement, the Company changed its name
      to Arrow Resources Development, Inc. and divested all operations not related
      to
      Arrow Ltd. The
      transaction was consummated upon the issuance of the Preferred Stock on November
      14, 2005. (See Note 3 for a detailed description of the
      transaction.)





Consequently,
      as of November 14, 2005 the predecessor CNE entity had a net operating loss
      carryforward available to reduce future taxable income for federal and state
      income tax purposes of the successor entity of approximately zero, because
      those
      losses arose from the predecessor CNE exiting previous business lines that
      had
      generated operating losses.





For
      tax
      purposes, all expenses incurred by the re-named entity now known as Arrow
      Resources Development, Inc. after November 14, 2005 have been capitalized as
      start up costs in accordance with Internal Revenue Code Section (“IRC”) No. 195.
      Pursuant to IRC 195, the Company will be able to deduct these costs by
      amortizing them over a period of 15 years for tax purposes once the Company
      commences operations. Accordingly for tax purposes, except for Delaware
      franchise taxes, none of the Company’s post November 14, 2005 losses are as yet
      reportable in Company income tax returns to be filed for either the year ended
      December 31, 2005 or 2006.




The
      significant components of the Company’s deferred tax assets are as follows:





Net
                operating loss carryforward
            
            $
            48,200Differences
                resulting from use of cash basis for tax purposes
            
            
            -Total
                deferred tax assets
            
            
            48,200Less
                valuation allowance
            
            
            (48,200
            )Net
                deferred tax assets
            
            $
            —




The
        Company has a net operating loss carryover of $141,762 to offset future income
        tax. The net operating losses expire as follows:
 
 December
                  31, 2026
              
              $
              127,3492027
              
              
              14,413
  **Reconciliation
        of net loss for income tax purposes to net loss per financial statement
        purposes**
 
 Costs
                  capitalized under IRC Section 195 which will be amortizable over
                  15 years
                  for tax purposes once the Company commences operations
              
              $
              5,551,568Delaware
                  franchise taxes deductible on Company’s tax return
              
              
              141,762Net
                  loss for the period from inception (November 15, 2005)to
                  March 31, 2007
              
              $
              5,693,330


NOTE
      5 -
      NOTES PAYABLE




As
      of
      March 31, 2007 and December 31, 2006, the Company had notes payable outstanding
      as follows:


**March
                31,**
            
            **December
                31,****Holder**
            
            **Terms**
            
            **2007**
            
            **2006**Barry
                Blank (1)
            
            
            Due
                on demand, 10% interest
            
            $
            200,000
            
            $
            200,000H.
                Lawrence Logan
            
            
            Due
                on demand, non-interest bearing
            
            
            25,000
            
            
            25,000Accrued
                interest (1)
            
            
            
            
            
            20,000
            
            
            20,000**Total**
            
            
            
            
            $
            245,000
            
            $
            245,000




(1)
      The
      Company has a note payable outstanding for $200,000, plus $20,000 in accrued
      interest. Although the predecessor company (CNE) reserved 456,740 shares of
      its
      common stock to retire this debt pursuant to a settlement agreement, the stock
      cannot be issued until the party to whom the note was assigned by its original
      holder emerges from bankruptcy or reorganization. During the three months ended
      March 31, 2007, no interest expense was recorded  on
      the
      note as the number of shares to be issued was determined in the settlement
      agreement, executed prior to the recapitalization.




9





ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS





NOTE
      6 -
      MARKETING AND DISTRIBUTION AGREEMENT AND RELATED SENIOR NOTE PAYABLE DUE TO
      EMPIRE ADVISORY, LLC




As
      discussed in Note 1, in August 2005, the Company executed a marketing and
      distribution agreement with Arrow Pte. This agreement was valued at fair value
      as determined based on an independent appraisal, which approximates the market
      value of 96% of the CNE public stock issued in settlement of the note.




The
      marketing and distribution agreement will be amortized over the remainder of
      99
      years (the life of the agreement) once the Company commences sales. As of
      December 31, 2005, the Company had recorded a $125,000,000 amortizable
      intangible asset for this agreement and corresponding credits to common stock
      and additional paid-in capital in conjunction with the stock settlement of
      the
      senior secured note payable to Empire Advisory, LLC and related cash advances
      in
      the same aggregate amount. The senior secured note payable was non-interest
      bearing and was repaid in the form of the preferred stock, which was
      subsequently converted to common stock (See Note 3). Any preferred stock issued
      under the senior secured note payable is considered restricted as to the sale
      thereof under SEC Rule 144 as unregistered securities. No amortization of the
      agreement has been taken during the period from inception (November 15, 2005)
      to
      March 31, 2007, as the relevant operations have not yet commenced. Operations
      are expected to commence during the 2007 fiscal year.





NOTE
      7 -
      RELATED PARTY TRANSACTIONS




**[1]** Management Agreement with Empire Advisory, LLC:




Effective
      August 1, 2005, the Company entered into a Management Agreement with Empire
      Advisory, LLC (“Empire”) under which Empire provides chief executive officer and
      administrative services to the Company in exchange for a) an annual fee of
      $300,000 for overhead expenses, b) $25,000 per month for rent, c) $1,000,000
      per
      annum (subject to increases in subsequent years) for executive services, and
      d)
      a one-time fee of $150,000 for execution of the proposed transaction. In
      addition, the Board authorized a one-time payment of $500,000 to Empire upon
      closing the transaction.




As
      of
      March 31, 2007 and December 31, 2006, the Company had short-term borrowings
      of
      $2,585,849 and $2,311,326, respectively, due to Empire, consisting of cash
      advances to the Company and working capital raised by Empire, as agent, on
      behalf of the Company. As of March 31, 2007 and December 31, 2006, the Company
      has short-term borrowings of $36,425 and $86,425, respectively, due to Hans
      Karundeng. Accordingly, the Company repaid $50,000 of loans during the three
      months ended March 31, 2007. The
      Company will repay the loan amounts in cash and conversion of the balance to
      shares of restricted stock of Arrow, if and when issued. These amounts are
      non-interest bearing and due on demand.




Peter
      Frugone is a member of the Board of Directors of the Company and is the owner
      of
      Empire. Empire, as agent, was the holder of the $125 million senior secured
      note
      payable settled in December 2005.




Consulting
      fees and services charged in the Statement of Operations for the three months
      ended March 31, 2007 and 2006 incurred to Empire totaled $435,379 and $364,676,
      respectively. In addition, consulting fees and services charged to the Statement
      of Operations for the year ended December 31, 2006 and for the period from
      November 15, 2005 to December 31, 2005 incurred to Empire totaled $1,591,016
      and
      $698,834, respectively




During
      the three months ended March 31, 2007, the Company received additional advances
      of $395,439 from Empire under the agreement.




**[2]** Engagement and Consulting Agreements entered into with individuals affiliated
      with Arrow PNG:




Consulting
      fees and services charged in the Statement of Operations for the three months
      ended March 31, 2007 and 2006incurred to Hans Karundeng and Rudolph Karundeng
      under Engagement and Consulting Agreements totaled $375,000 and $500,000,
      respectively. In addition, as of March 31, 2007 and December 31, 2006, the
      Company owed them $2,794,066 and $2,510,491, respectively, under these
      agreements. These agreements are discussed in detail in Note 10.





**[3]** Non-Interest Bearing Advance Received from Company Director:




In
      July
      2006, the Company received a $150,000 non-interest bearing advance from John
      E.
      McConnaughy, Jr., a Director of the Company, which is due on demand. In October
      2006, the Company received an additional $200,000 non-interest bearing advance
      from Mr. McConnaughy, Jr. which is also due on demand. In February and March
      2007, the Company received an additional $200,000 non-interest bearing advance
      from John E. McConnaughy, Jr., which is due on demand. As of March 31, 2007
      and
      December 31, 2006, the Company had $375,000 and $200,000, respectively, left
      to
      be repaid to Mr. McConnaughy, which is included in “Due to Related Parties.”




10




ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      8 -
      STOCKHOLDERS’ EQUITY




Arrow
      Ltd. was incorporated in May 2005 as a Bermuda corporation. Upon incorporation,
      1,200,000 shares of $.01 par value common stock were authorized and issued
      to
      CNE.





On
      November 14, 2005, the Company increased its authorized shares to 1 billion
      and
      reduced the par value of its common stock to $0.00001 per share, resulting
      in a
      common stock conversion rate of 1 to 62.4.




On
      November 14, 2005, the Company completed a reverse merger with CNE Group, Inc.
      by acquiring 96% of the outstanding shares of CNE’s common stock in the form of
      convertible preferred stock issued in settlement of the senior note payable.




During
      2005, CNE divested or discontinued all of its subsidiaries in preparation for
      the reverse merger transaction. Accordingly, the results of operations for
      the
      divested or discontinued subsidiaries are not included in the consolidated
      results presented herein. In conjunction with the divestitures, CNE repurchased
      and retired all preferred stock and made certain payments to related parties.




In
      conjunction with the reverse merger transaction, the Company retired 1,238,656
      shares of Treasury Stock.





During
      the third and fourth quarters of 2006, the Company received an additional total
      of $985,000 in capital contribution towards the stock purchase agreement with
      APR to purchase up to an aggregate amount of 15,000,000 shares of common stock
      in the Company for $1.00 per share. During the three months ended March 31,
      2007, the Company received an additional $100,000 in capital contribution
      towards the stock purchase agreement with APR to purchase up to an aggregate
      amount of 15,000,000 shares of common stock in the Company for $1.00 per share.
      As of May 1, 2007, the Company received an additional $300,000. (See Note 10
      [5]
      - Stock Purchase Agreement).





NOTE
      9 -
      GOING CONCERN




These
      consolidated financial statements are presented on the basis that the Company
      is
      a going concern. Going concern contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business over a reasonable
      period of time.




As
      shown
      in the accompanying consolidated financial statements, the Company incurred
      a
      net loss of $906,627 for the three months ended March 31, 2007, and a net loss
      during the development stage from inception in November 15, 2005 through March
      31, 2007 of $5,693,330. The Company's operations are in the development stage,
      and the Company has not generated any revenue since inception. The Company's
      existence in the current period has been dependent upon advances from related
      parties and other individuals, and the sale of senior notes
      payable.




The
      consolidated financial statements do not include any adjustments that might
      be
      necessary if the Company is unable to continue as a going concern.





NOTE
      10 -
      COMMITMENTS AND OTHER MATTERS




**[1]**  Engagement
      and Consulting Agreements entered into with individuals affiliated with
      APR




Effective
      May 20, 2005, the Company entered into an Engagement Agreement with Hans
      Karundeng for business and financial consulting services for fees of $1,000,000
      per annum. The term of the agreement is five years. Payments under the agreement
      are subject to the Company’s cash flow.





Effective
      August 1, 2005, the Company entered into a Consulting Agreement with Rudolph
      Karundeng for his services as Chairman of the Board of the Company for fees
      of
      $1,000,000 per annum. The term of the agreement was five years. Rudolph
      Karundeng is a son of Hans Karundeng. However, on May 1, 2006, the Company
      accepted the resignation of Rudolph Karundeng as Chairman of the Board, but
      he
      continues to be a director of the Company. Peter Frugone has been elected as
      Chairman of the Board until his successor is duly qualified and elected.
      Subsequent to his resignation, it was agreed that Rudolph Karundeng’s annual
      salary is to be $500,000 as a director.




During
      the three months ended March 31, 2007, the Company made cash payments of $5,000
      to Rudolph Karundeng under his agreement. During
      the year ended December 31, 2006, the Company received additional advances
      of
      $61,787 from Hans Karundeng under his agreement. During the year ended December
      31, 2006, the Company made cash payments of $62,174 to Rudolph Karundeng under
      his agreement. During the period from November 15, 2005 to December 31, 2006,
      the Company made no cash payments to Hans Karundeng and Rudolph Karundeng under
      the agreements





11




ARROW
      RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES


(A
      DEVELOPMENT STAGE COMPANY)


NOTES
      TO
      THE CONSOLIDATED FINANCIAL STATEMENTS




NOTE
      10 -
      COMMITMENTS AND OTHER MATTERS (CONTINUED)




**[2]** Management Agreement with Empire Advisory, LLC




Effective
      August 1, 2005, the Company entered into a Management Agreement with Empire
      Advisory, LLC (“Empire”) under which Empire provides chief executive officer and
      administrative services to the Company in exchange for a) an annual fee of
      $300,000 for overhead expenses, b) $25,000 per month for reimbursable expenses,
      c) $1,000,000 per annum (subject to increases in subsequent years) for executive
      services, and d) a one-time fee of $150,000 for execution of the proposed
      transaction.





During
      the three months ended March 31, 2007, the Company made cash payment of $160,856
      to Empire under the agreement.




During
      the year ended December 31, 2006, the Company made cash payment of $562,454
      to
      Empire under the agreement. During the period from November 15, 2005 to December
      31, 2005, the Company made cash payments of approximately $364,000 to Empire
      under this agreement.





**[3]** Litigation




The
      Company is a party to a lawsuit where the plaintiff is alleging that he is
      entitled to $60,000 and 1,300,000 of common stock based upon CNE’s failure
      to compensate him for services related to identifying financing for CNE,
      based upon an agreement that was entered into between CNE and the plaintiff
      in
      April 2005. The Company and its counsel strongly feel that the plaintiff’s
      claims against the Company have no merit, the likelihood of an unfavorable
      outcome is very low, and is prepared to vigorously defend the
      matter.




In
      May
      2006, the Company was advised that they were in default of a settlement
      agreement entered into in January of 2005 by CNE related to the release of
      unrestricted, freely-tradable, non-legend shares of stock. Management has agreed
      to release shares of the Company’s stock in consideration of the above
      matter.




**[4]** Consulting/Marketing
      and Agency Agreements





On
      April
      4, 2006, the Company entered into a consulting agreement with Dekornas GMPLH
      (“Dekornas”) (a non-profit organization in Indonesia responsible for
      reforestation in areas that were destroyed by illegal logging) in which the
      Company will provide financial consultancy services to Dekornas for an annual
      fee of $1.00 for the duration of the agreement. The term of the agreement is
      effective upon execution, shall remain in effect for ten (10) years and shall
      not be terminated until the expiration of at least one (1) year.





In
      April
      of 2006, Arrow Resources Development, Ltd. entered into an agency agreement
      with
      APR to provides marketing and distribution services for timber resource products
      and currently has an exclusive marketing and sales agreement with APR to market
      lumber and related products from land leased by GMPLH which is operated by
      APR
      and it's subsidiaries, located in Indonesia. Under the agreement Arrow Ltd.
      will
      receive a commission of 10% of gross sales derived from lumber and related
      products.





On
      April
      9, 2006, the Company entered into a marketing and distribution agreement with
      Shanghai Heyang Bio-Technology Development Co., Ltd. (“Shanghai”), a China
      limited company, in which Shanghai will supply and sell all of its timber
      resource products through the Company. The Company will market, promote,
      distribute and sell those timber resource products worldwide. The Company will
      be entitled to ten percent (10%) of the gross revenue earned by the Company
      from
      the sale of the products. The term of the agreement is effective upon execution
      and shall remain in effect for ninety-nine (99) years. As of December 31, 2006,
      the Company has not recovered any revenue from this agreement. This agreement
      has been cancelled.





On
      April
      14, 2006, the Company entered into a consulting agreement with P.T. Eucalyptus Alam
      Lestari (“Lestari”) in
      which
      the Company will provide financial consultancy services to P.T. Eucalyptus
      for
      an annual fee, payable quarterly, equal to 10% of P.T. Eucalyptus’ gross revenue
      payable commencing upon execution. The term of the agreement is effective upon
      execution, shall remain in effect for ninety-nine (99) years and shall not
      be
      terminated until the expiration of at least ten (10) years. As of March 31,
      2007, the Company has not recovered any revenue from this
      agreement.




**[5]** Stock
      Purchase Agreement




On
      August
      2, 2006, the Company entered into a stock purchase agreement with APR wherein
      APR agreed to purchase up to an aggregate amount of 15,000,000 shares of common
      stock in the Company for $1.00 per share, making this a capital contribution
      of
      $15,000,000 in total. The stock will be delivered at the time the Company files
      for registration. APR is currently the principal shareholder of the Company,
      owning 349,370,000 shares or 53.78%. As of March 31, 2007, the Company has
      received $1,085,000 from APR towards the fulfillment of this agreement. As
      of
      May 1, 2007, the Company received an additional $300,000.




**[6]** Delaware
      Corporate Status





The
      Company is delinquent in its filing and payment of the Delaware Franchise Tax
      Report and, accordingly, is not in good standing.





12




At
      March
      31, 2007, the Company has accrued $14,413 for estimated unpaid Delaware
      franchise taxes incurred to date reportable during the year ending December
      31,
      2007. At December 31, 2006, the Company had estimated unpaid Delaware franchise
      taxes for the years ended December 31, 2006 and 2005 in the amount of $57,650
      and $69,699, respectively. Accordingly, as of March 31, 2007, accounts and
      accrued expenses payable includes aggregate estimated unpaid Delaware Franchise
      taxes of $141,762. The Company expects to file the delinquent forms and pay
      the
      taxes in full during the second quarter of 2007.




**[7]** Table of
      annual obligations under [1] and [2] above:




The
      minimum future obligations for consulting fees and services under agreements
      outlined in [1] and [2] are as follows:




**Years
                Ending March 31,**
            
            **Amounts**2008
            
            $
            3,651,8332009
            
            
            3,922,9172010
            
            
            4,378,6462011
            
            
            1,317,455$
            13,270,851




The
      Company also engages certain consultants to provide services including
      management of the corporate citizenship program and investor relation services.
      These agreements contain cancellation clauses with notice periods ranging from
      zero to sixty days.





**[8]** Appointment to Board of Directors





On
      February 26, 2007, the Company announced the appointment of Robert A. Levinson
      to its Board of Directors.




On
      February 28, 2007, the company announced that it had accepted the resignation
      of
      John W. Allen as a member of its Board of Directors.





NOTE
      11 -
      GAIN ON WRITE OFF OF PREDECESSOR ENTITY LIABILITIES




During
      the fourth quarter of 2006, the Company wrote off accounts payable and accrued
      expenses in the amount of $395,667 associated with CNE, the predecessor entity
      in the reverse merger transaction, which will not be paid. This resulted in
      the
      recognition of a gain reflected in the Statement of Operations for the year
      ended December 31, 2006 in the same amount.





NOTE
      12 -
      SUBSEQUENT EVENTS





In
      April
      2007, the Company received an additional $300,000 of capital contribution
      towards the stock purchase agreement with APR to purchase up to an aggregate
      amount of 15,000,000 shares of common stock in the Company for $1.00 per share
      (as noted in Note 10 above).





13




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





**GENERAL**




We
      are a
      holding company whose only operating subsidiary as of March 31, 2007 is Arrow
      Ltd. The principal business of Arrow is to provide marketing, sales,
      distribution, corporate operations and corporate finance services for the
      commercial exploitation of natural resources around the world. Prior to November
      2005, we used to be a telecommunications and recruiting company formally known
      as CNE Group, Inc. The company elected to shift its business focus to the
      worldwide commercial exploitation of natural resources.





**FORWARD-LOOKING
      STATEMENTS**




This
      report on Form 10-Q contains forward-looking statements relating to such matters
      as anticipated financial performance and business prospects. When used in this
      report, the words, "anticipates," "expects," "believes," "may," "intends,"
      and
      similar expressions are intended to be among the statements that identify
      forward-looking statements. From time to time, the Company may also publish
      forward-looking statements. The Private Securities Litigation Reform Act of
      1995
      provides a safe harbor for forward-looking statements. Forward-looking
      statements involve risks and uncertainties, including, but not limited to,
      the
      consummation of certain events referred to in this report, technological
      changes, competitive factors, maintaining customer and vendor relationships,
      inventory obsolescence and availability, and other risks detailed in the
      Company's periodic filings with the Securities and Exchange Commission, which
      could cause the Company's actual results and experience to differ materially
      from the anticipated results or other expectations expressed in the Company's
      forward-looking statements.





**ARROW
      RESOURCES DEVELOPMENT, LTD.**




In
      August
      2005, Arrow entered into an Agreement and Plan of Merger (“the Agreement”) with
      its wholly-owned subsidiary, Arrow Ltd., in which Arrow (formerly CNE) was
      required to issue 10 million shares of Series AAA convertible preferred
      stock (“the Preferred Stock”) to Arrow Ltd.’s designees, representing 96% of all
      outstanding equity of CNE on a fully diluted basis in exchange for the Marketing
      and Distribution Agreement provided to the Company by Arrow. Under the
      Agreement, the Company discontinued all former operations (CareerEngine, Inc.,
      SRC and US Commlink.) and changed its name to Arrow Resources Development,
      Inc.





On
      August 1, 2005, Arrow Ltd. entered into the Marketing Agreement with Arrow
      Pte. and its subsidiaries in consideration for Arrow issuing a non-interest
      bearing note (the “Note”) in the principal amount of $125,000,000 to Empire
      Advisory, LLC, (“Empire”), acting as agent, due on or before December 31,
      2005. Empire is Arrow Pte.’s merchant banker. The Note permitted the Company, as
      Arrow’s sole stockholder, to cause Arrow to repay the Note in cash or with
      10,000,000 shares of the Company’s non-voting Series AAA Preferred Stock.





On
      April
      4, 2006 Arrow Resource Development Ltd. ( the Company’s Bermuda subsidiary)
      entered into an agency agreement with APR in which the Company will provide
      financial consultancy services to APR for an annual fee, payable as collected,
      equal to 10% of APR’s gross revenue payable commencing upon execution. This
      agreement provides for the company to collect all revenues from all operations,
      retain its 10% fee and disperse the remaining 90% to APR and its subsidiaries.
      The term of the agreement is effective upon execution, shall remain in effect
      for ninety-nine (99) years and shall not be terminated until the expiration
      of
      at least ten (10) years. As of March 31, 2007, the Company has not recovered
      any
      revenue from this agreement.





**CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES**





The
      preparation of financial statements in accordance with U.S. generally accepted
      accounting principles requires us to make estimates and assumptions that affect
      the reported amounts of assets and liabilities at the date of the financial
      statements and the reported amounts of net revenue and expenses during the
      reporting period. On an ongoing basis, we evaluate our estimates, including
      those related to our allowance for doubtful accounts, inventory reserves, and
      goodwill and purchased intangible asset valuations, and asset impairments.
      We
      base our estimates on historical experience and on various other assumptions
      that we believe to be reasonable under the circumstances, the results of which
      form the basis for making judgments about the carrying values of assets and
      liabilities. Actual results may differ from these estimates under different
      assumptions or conditions. We believe the following critical accounting
      policies, among others, affect the significant judgments and estimates we use
      in
      the preparation of our consolidated financial statements.





14




**ALLOWANCE
      FOR DOUBTFUL ACCOUNTS, REVENUE RECOGNITION**





We
      evaluate the collectibility of our accounts receivable based on a combination
      of
      factors. In circumstances where we are aware of a specific customer’s inability
      to meet its financial obligations to us, we record a specific allowance to
      reduce the net receivable to the amount we reasonably believe will be collected.
      For all other customers, we record allowances for doubtful accounts based on
      the
      length of time the receivables are past due, the prevailing business environment
      and our historical experience. If the financial condition of our customers
      were
      to deteriorate or if economic conditions were to worsen, additional allowances
      may be required in the future.





We
      recognize product revenue when persuasive evidence of an arrangement exists,
      the
      sales price is fixed, the service is performed or products are shipped to
      customers, which is when title and risk of loss transfers to the customers,
      and
      collectibility is reasonably assured.





**VALUATION
      OF GOODWILL, PURCHASED INTANGIBLE ASSETS AND LONG-LIVED ASSETS**




We
      perform goodwill impairment tests on an annual basis and on an interim basis
      if
      an event or circumstance indicates that it is more likely than not that
      impairment has occurred. We assess the impairment of other amortizable
      intangible assets and long-lived assets whenever events or changes in
      circumstances indicate that the carrying value may not be recoverable. Factors
      we consider important that could trigger an impairment review include
      significant underperformance to historical or projected operating results,
      substantial changes in our business strategy and significant negative industry
      or economic trends. If such indicators are present, we evaluate the fair value
      of the goodwill. For other intangible assets and long-lived assets we determine
      whether the sum of the estimated undiscounted cash flows attributable to the
      assets in question is less than their caring value. If less, we recognize an
      impairment loss based on the excess of the carrying amount of the assets over
      their respective fair values. Fair value of goodwill is determined by using
      a
      valuation model based on market capitalization. Fair value of other intangible
      assets and long-lived assets is determined by future cash flows, appraisals
      or
      other methods. If the long-lived asset determined to be impaired is to be held
      and used, we recognize an impairment charge to the extent the anticipated net
      cash flows attributable to the asset are less than the asset’s carrying value.
      The fair value of the long-lived asset then becomes the asset’s new carrying
      value, which we depreciate over the remaining estimated useful life of the
      asset.





**RECENT
      ACCOUNTING PRONOUNCEMENTS**





In
      May
      2005, the FASB issued SFAS 154, “Accounting Changes and Error Corrections,” that
      applies to all voluntary changes in accounting principle. This Statement
      requires retrospective application to prior periods’ financial statements of
      changes in accounting principle, unless it is impracticable to determine either
      the period-specific effects or the cumulative effect of the change. When it
      is
      impracticable to determine the period-specific effects of an accounting change
      on one or more individual prior periods presented, this Statement requires
      that
      the new accounting principle be applied to the balances of assets and
      liabilities as of the beginning of the earliest period for which retrospective
      application is practicable and that a corresponding adjustment be made to the
      opening balance of retained earnings (or other appropriate components of equity
      or net assets in the statement of financial position) for that period rather
      than being reported in an income statement. When it is impracticable to
      determine the cumulative effect of applying a change in accounting principle
      to
      all prior periods, this Statement requires that the new accounting principle
      be
      applied as if it were adopted prospectively from the earliest date practicable.
      SFAS 154 will be effective for the Company for fiscal year ended
      December 31, 2007. The Company does not anticipate that the adoption of
      SFAS No. 154 will have an impact on the Company’s overall results of
      operations or financial position.





In
      February 2006, the FASB issued SFAS 155, “Accounting for Certain Hybrid
      Financial Instruments—an amendment of FASB Statements No. 133 and 140,” that
      allows a preparer to elect fair value measurement at acquisition, at issuance,
      or when a previously recognized financial instrument is subject to a
      remeasurement (new basis) event, on an instrument-by-instrument basis, in cases
      in which a derivative would otherwise have to be bifurcated. It also eliminates
      the exemption from applying Statement 133 to interests in securitized financial
      assets so that similar instruments are accounted for similarly regardless of
      the
      form of the instruments. This Statement is effective for all financial
      instruments acquired or issued after the beginning of an entity’s first fiscal
      year that begins after September 15, 2006. The Company does not anticipate
      that
      the adoption of SFAS No. 155 will have an impact on the Company’s overall
      results of operations or financial position.





In
      March
      2006, the FASB issued SFAS 156, “Accounting for Servicing of Financial Assets—an
      amendment of FASB Statement No. 140,” that applies to the accounting for
      separately recognized servicing assets and servicing liabilities. This Statement
      requires that all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value, if practicable. An entity
      should adopt this Statement as of the beginning of its first fiscal year that
      begins after September 15, 2006. The Company does not anticipate that the
      adoption of SFAS No. 156 will have an impact on the Company's overall results
      of
      operations or financial position.





15




In
      September 2006, the FASB issued SFAS 157, “Fair Value Measurements,” which
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles (GAAP), and expands disclosures about
      fair value measurements. This Statement applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. The adoption of SFAS No. 157 will not have an
      impact on the Company's overall results of operations or financial
      position.




In
      September 2006, the Financial Accounting Standards Board (“FASB”) the issued
      SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
      Postretirement Plans, an Amendment of FASB Statements No. 87, 88, 106, and
      132(R)” (“SFAS No. 158”). SFAS No. 158 requires companies to report the funded
      status of their defined benefit pension and other postretirement benefit plans
      on their balance sheets as a net liability or asset as of December 31, 2006.
      The
      new standard does not address the accounting treatment for pension and
      postretirement benefits in the income statement. This will have no impact on
      the
      Company’s results of operations or financial position.





In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No.159, “The Fair Value Option for Financial Assets and Financial Liabilities -
      Including an amendment of FASB Statement No.115”. SFAS No.159 permits entities
      to choose to measure eligible financial instruments and other items at fair
      value at specified election dates. A business entity shall report unrealized
      gains and losses on items for which the fair value option has been elected
      in
      earnings at each subsequent reporting date. The fair value option may be applied
      instrument by instrument but only upon the entire instrument - not portions
      of
      the instrument. SFAS No.159 is effective as of the beginning of an entity’s
      first fiscal year that begins after November 15, 2007. The Company does not
      anticipate that the adoption of SFAS No. 159 will have an impact on the
      Company's overall results of operations or financial position.





**RESULTS
      OF OPERATIONS - FOR THE THREE MONTHS ENDED MARCH 31,
      2007**





In
      November 2005, we discontinued and disposed of our subsidiaries except for
      Arrow
      Ltd. in conjunction with the recapitalization of the Company. The Company had
      no
      revenue during this period as Arrow Ltd. is still in the development stage.
      For
      the three months ended March 31, 2007, we incurred consulting fees of
      $860,442 of which, $810,379 was related to services provided by the Management
      Agreement with Empire under which Empire provides the services of Chief
      Executive Officer and administrative services to the Company and consulting
      services provided by Hans Karundeng and Rudolph Karundeng under Engagement
      and
      Consulting Agreements. For the three months ended March 31, 2006, we
      incurred consulting fees of $936,614 of which, $864,676 was related to services
      provided by the Management Agreement with Empire





**REVENUES**




There
      was
      no revenue for the three months ended March 31, 2007 and March 31, 2006 as
      the Company is in its development stage.





**COST
      OF GOODS SOLD**




There
      was
      no cost of good sold for the three months ended March 31, 2007 and March
      31, 2006 as the Company is in its development stage.





**OTHER
      EXPENSES**





Compensation,
      consulting and related costs decreased to $860,442 for the three months ended
      March 31, 2007 as compared to $936,614 for the three months ended
      March 31, 2006. The decrease was mostly due to the resignation of Rudolph
      Karundeng as Chairman of the Board which resulted in a reduced consulting fee
      under the Engagement and Consulting Agreements.





General
      and administrative expenses decreased to $31,772 for the three months ended
      March 31, 2007 as compared to $183,666 for the three months ended
      March 31, 2006. This was primarily due to a decrease in legal and audit
      related services and limited cash inflow.




Delaware
      franchise taxes amount to $14,413 for the three months ended March 31,
      2007  compared
      to none for the three months ended March 31, 2006, $127,349 for the period
      from inception (November 15, 2005) to December 31, 2006 and $141,762 for the
      period from inception (November 15, 2005) to March 31, 2007. The Company is
      delinquent in its filing and payment of the Delaware Franchise Tax report and,
      accordingly, is not in good standing. At March 31, 2007, the Company has
      estimated unpaid Delaware franchise taxes for the years ended December 31,
      2006
      and 2005 in the amount of $57,650 and $69,699, respectively. The Company expects
      to file the delinquent forms and pay the taxes in full during the second quarter
      of 2007.





Total
      operating expenses during the development stage decreased to $906,627 for the
      three months ended March 31, 2007 as compared to $1,120,280 for the three
      months ended March 31, 2006.




16




**LIQUIDITY
      AND CAPITAL RESOURCES**





In
      November 2005 we discontinued and disposed of our subsidiaries except for Arrow
      Ltd. in conjunction with the recapitalization of the Company. The Company was
      recapitalized by the conversion of $125,000,000 preferred convertible note
      related to the purchase of the Marketing Agreement. As part of the
      recapitalization plan the Company settled all outstanding debt except for
      $220,000. As
      of
      March 31, 2007 and December 31, 2006 the Company had $0 and $0 of cash,
      respectively. We had losses of approximately $907,000 for the three months
      ended
      March 31, 2007, and do not currently generate any revenue. In order for us
      to
      survive during the next twelve months we will need to secure approximately
      $350,000 of debt or equity financing. We expect to raise the additional
      financing in the future but there can be no guarantee that we will be
      successful.




**OFF-BALANCE
      SHEET ARRANGEMENTS**




At
      March
      31, 2007, we had no off-balance sheet arrangements.





**OPERATING
      ACTIVITIES**





We
      used
      $499,523 of cash in our operating activities during the three months ended
      March
      31, 2007. We had a net loss of $906,627 of which $860,442 was related to
      consulting fees and services. We had an increase in accounts payable and accrued
      expenses payable of $412,972 mostly related to compensation and management
      fees.
      In addition, we had a working capital deficiency of $6,368,629 at March
      31,
      2007 .





**INFLATION**




We
      believe that inflation does not significantly impact our current
      operations.





**RECENT
      TRANSACTIONS**




On
      August
      2, 2006, the Company entered into a stock purchase agreement with APR wherein
      APR agreed to purchase up to an aggregate amount of 15,000,000 shares of common
      stock in the Company for $1.00 per share, making this a capital contribution
      of
      $15,000,000 in total. The stock will be delivered at the time the Company files
      for registration. APR is currently the principal shareholder of the Company,
      owning 349,370,000 shares or 53.78%. As of March 31, 2007, the Company has
      received $1,085,000 from APR towards the fulfillment of this agreement.





**Item 3.**
            **Controls
                and Procedures**





Management,
      including the Company’s Chief Executive Officer and Principle Accounting
      Officer, has evaluated the effectiveness of the Company’s disclosure controls
      and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
      as of the end of the period covered by this report. Based upon that evaluation,
      the Chief Executive Officer and Principal Accounting Officer concluded that
      the
      disclosure controls and procedures were effective to ensure that information
      required to be disclosed in the reports the Company files and submits under
      the
      Exchange Act is (i) recorded, processed, summarized and reported as and
      when required and (ii) accumulated and communicated to the Company’s
      management, including its principal executive officer and principal financial
      officer, as appropriate to allow timely decisions regarding disclosure.





There
      have been no changes in the Company’s internal control over financial reporting
      identified in connection with the evaluation that occurred during the Company’s
      last fiscal quarter that has materially affected, or that is reasonably likely
      to materially affect, the Company’s internal control over financial reporting.




**PART
      II - OTHER INFORMATION**




**Item 1.**
            **Legal
                Proceedings**




The
      Company is a party to a lawsuit where the plaintiff is alleging that he is
      entitled to $60,000 and 1,300,000 of common stock based upon CNE’s failure
      to compensate him for services related to identifying financing for CNE,
      based upon an agreement that was entered into between CNE and the plaintiff
      in
      April 2005. The Company and its counsel strongly feel that the plaintiff’s
      claims against the Company have no merit, the likelihood of an unfavorable
      outcome is very low, and is prepared to vigorously defend the
      matter.




In
      May
      2006, the Company was advised that they were in default of a settlement
      agreement entered into in January of 2005 by CNE related to the release of
      unrestricted, freely-tradable, non-legend shares of stock. Management has agreed
      to release shares of the Company’s stock in consideration of the above
      matter.





**Item 5.**
            **Other
                Information**




None





17




**Item 6.**
            **Exhibits**





**Exhibit
      Index**





31.1
       Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
      Officer




31.2
       Rule 13a-14(a)/15d-14(a) Certification of the Principal Accounting
      Officer




32.1
       Certification Pursuant to 18 U.S.C. §1350 of Chief Executive
      Officer




32.2
       Certification Pursuant to 18 U.S.C. §1350 of the Principal Accounting
      Officer





18





**SIGNATURES**




In
      accordance with Section 13(a) or 15(d) of the Exchange Act, the registrant
      has caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.




ARROW
                RESOURCES DEVELOPMENT, INC.Dated:
                May15,
                2007
            By:
            /S/  PETER
                J. FRUGONEPeter
                J. Frugone
              President
                and Chief Executive Officer


Dated:
                  May15,
                  2007
              By:
              /S/  PETER
                    J. FRUGONEPeter
                  J. Frugone
                Principal
                    Accounting Officer
  19