CNE Group, Inc. Board Approves Spin-Off of Its Bermuda Subsidiary to Shareholders.

NEW YORK -- CNE Group, Inc. (AMEX: CNE) today announced that on May 20, 2005 its Board of Directors ratified an agreement with Arrow Auckland Resources (PNG) Ltd. ("AA") pursuant to which, among other things, it approved a spin-off to its stock holders, on a fully-diluted basis, of its recently formed subsidiary, Arrow Resources Development, Ltd. ("ARD"), a Bermuda corporation.

ARD intends to commercially exploit timber resources and their derivatives in New Guinea and elsewhere in the world pursuant to a proposed marketing agreement that it plans to enter into with AA. The Marketing Agreement will provide that ARD will receive 10% of the revenue from the gross sales generated by AA of timber resources and derivative products (e.g. paper, pulp, chips). The agreement will be perpetual in length and worldwide in scope. In exchange for the contribution of the Marketing Agreement and the reimbursement of no more than approximately $120,000 of expenses relating to this transaction, AA will receive 97% of the total issued and outstanding shares of ARD and the CNE stockholders will retain 3% of ARD after the spin-off has been effected.

Shortly after the contribution of the Marketing Agreement by AA, ARD intends to register with the Securities and Exchange Commission as a public reporting registrant, and will seek to register the shares held by all ARD stockholders.

CNE believes that the spin-off will be treated as a distribution with respect to its stock. At an appropriate time, CNE will advise its stockholders as to whether it has any current earnings or profits for the year ending December 31, 2005. As of the date hereof, it does not have any accumulated earnings or profits. Accordingly, it advises its stockholders to consult with their tax advisers to determine the tax effect it will have on them.

About CNE Group, Inc.

CNE Group, Inc.'s (www.cnegroupinc.com) primary operating subsidiaries are SRC Technologies, Inc. and U.S. Commlink, Ltd. SRC is the parent of Connectivity, Inc. and Econo-Comm, Inc. (d/b/a Mobile Communications). Connectivity, U.S. Commlink and Mobile Communications market, manufacture, repair and maintain remote radio and cellular-based emergency response products to a variety of federal, state and local government institutions, and other vertical markets throughout the United States. The Company has intellectual property rights to certain key elements of these products - specifically, certain communication, data entry and telemetry devices.

The Company is located at 200 West 57th Street, New York, NY 10019 (212-977-2200). SRC, Connectivity and Mobile Communications are located at 3733 NW 16th Street, Lauderhill, FL 33311 (954-587-1414). U.S. Commlink is located at 6244 Preston Avenue, Livermore, CA 94550 (925-960-0097).

Certain statements in this press release constitute "forward-looking statements" relating to CNE Group, Inc. and its subsidiaries (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.