THIS DOCUMENT IS A COPY OF THE FORM 10-K FILED ON MARCH 31, 2000
              PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-K

(Mark One

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999
                          -----------------

                                    OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from                    to
                              ------------------     ---------------------

Commission file number:                       0-18700
                        -----------------------------


                              PRIME CELLULAR, INC.
 -----------------------------------------------------------------------------
             (Name of Exact Registrant as Specified in Its Charter)

         Delaware                                  13-3570672
-----------------------------------      --------------------------------------
(State or Other Jurisdiction               (I.R.S. Employer Identification No.)
of Incorporation or Organization)

 580 Marshall Street, Phillipsburg, New Jersey                  08865
---------------------------------------------------- --------------------------
(Address of Principal Executive Offices)                      (Zip Code)

Registrant's telephone number, including area code:    (908) 387-1673
                                                     ----------------

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, par
                                                           value $.01 per share

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     The aggregate market value of the Common Stock held by non-affiliates of
the registrant on March 7, 2000 (based upon the closing sale price on such date
as reported by the OTC Bulletin Board) was approximately $25,833,533.50.

     As of March 7, 2000, 6,078,700 shares of the registrant's Common Stock, par
value $.01 per share were outstanding.

  Documents Incorporated By Reference: None


<PAGE>

                                                      PART I

ITEM 1.  BUSINESS

     The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. The statements contained herein which
are not historical facts are forward-looking statements that involve known and
unknown risks and uncertainties that could significantly affect actual results,
performance or achievements of the Company in the future and, accordingly, such
actual results, performance or achievements may materially differ from those
expressed or implied in any forward-looking statements made by or on behalf of
the Company. These risks and uncertainties include, but are not limited to,
risks associated with the Company's future growth and operating results; the
ability of the Company to successfully integrate newly acquired business
operations and personnel into its operations; changes in customer preferences;
the ability to hire and retain key personnel; compliance with federal or state
environmental laws and other laws and changes in such laws and the
administration of such laws; risks associated with government grants and funding
of the Company's clients' projects; dependence on certain significant customers;
protection of trademarks and other proprietary rights, technological change;
competitive factors; unfavorable general economic conditions. These risks are
included in "Item 1. Business," "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" and in "Exhibit 99: Risk Factors"
included in this Form 10-K. Actual results may vary significantly from such
forward-looking statements. The words "believe," "expect," "anticipate,"
"intend" and "plan" and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date the statement was made.

General

     Prime Cellular, Inc. ("Prime"), acting through two divisions of its
wholly-owned subsidiary, Cell & Molecular Technologies, Inc. ("CMT" and,
together with Prime, collectively sometimes hereinafter referred to as the
"Company"), is engaged in (1) the provision of contract research and development
services to the biotechnology and pharmaceutical industries ("Contract R&D
Services"), through its Molecular Cell Science Division ("MCS") and (2) the
manufacture and direct and wholesale distribution of cell culture media and
reagents, as well as other research products, for the biotechnology and
pharmaceutical industries, through its Specialty Media Division ("SM").

     Prime was incorporated under the laws of the State of Delaware in May 1990
and, after having engaged in the acquisition and operation of different business
entities subsequent to its initial public offering in August 1990, commenced its
current business operations when it acquired CMT, by a reverse merger, in May
1998. CMT was incorporated on May 6, 1997 to acquire all of the outstanding
stock in each of Specialty Media, Inc. and Molecular Cell Science, Inc., two
entities operating in the biotechnology and pharmaceutical industries since 1987
and 1991, respectively. Since the reverse merger in May, 1998, CMT has been the
sole operating entity of the Company.

     From June 1996 to November 1997, Bern Communications, Inc., a wholly-owned
subsidiary of Prime formed pursuant to a merger between Prime and Bern
Associates, Inc. consummated in mid-1996, was the sole operating entity of
Prime. Bern Communications, Inc. engaged in the design, installation,
maintenance, service and support of computer systems enabling companies to
provide Internet access to their subscribers. Prime discontinued the operations
of Bern Communications, Inc. during the quarter ended November 30, 1997.

     The Company maintains its executive offices, together with laboratory,
manufacturing and office/warehouse facilities, at 580 Marshall Street,
Phillipsburg, New Jersey 08865 (the "Phillipsburg Facility").

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<PAGE>

     Molecular Cell Science, Contract Research and Development Division

     CMT provides contract research services in molecular and cellular biology,
protein biochemistry and bioprocessing to customers in the biopharmaceutical
research and development ("R&D") industry, designing and performing
sophisticated experiments for the customer's particular project.

     CMT utilizes a flexible approach, based on collaborative discussions of the
customer's research and development goals, between representatives of the
customer's and CMT's scientific staffs. Such discussions lead to detailed,
milestone-based research proposals that are capable of being periodically
modified based on the data collected during each experimental phase. In this
manner, the Company believes its dynamic approach augments and complements the
customer's own R&D efforts in a cost- and time-effective manner.

     All Contract R&D Services are performed on a fee-for-service basis,
providing for payments only after certain research milestones are reached by CMT
pursuant to the specific research goals arrived at between CMT and its customer.
CMT does not receive residual or royalty payments for future discoveries or uses
involving the materials or services provided by CMT to its contract customers.

     The scientific areas in which CMT offers its Contract R&D Services include
the following areas: (1) molecular biology; (2) cell biology and gene
expression; (3) mouse genetics; and (4) bioproduction and reagent preparation.
CMT also performs assay services for its R&D customers as well as other
customers in the biotechnology and pharmaceutical industries, as described
below.

     Molecular Biology - CMT engages in state-of-the-art techniques in molecular
biology to isolate and characterize genes in order to isolate proteins in
connection with the discovery, testing and validation of potential drug
candidates. Services performed by CMT range from construction of standard gene
libraries (i.e. compilation of the genes contained in an individual cell) to the
cloning and expression of novel genes (i.e. identification of specific functions
with particular genes or gene sequences). CMT's staff scientists are experts in
modern techniques of molecular biology, including without limitation,
construction of cDNA expression libraries, single cell cDNA libraries, genomic
DNA libraries, size selected, normalized, subtraction libraries and other custom
gene libraries. In addition, CMT's expertise includes molecular cloning and
related functions, including the cloning of novel and known cDNAs, the cloning
of promoters and enhancers and the isolation of genomic loci and gene trapping.

     Cell Biology and Gene Expression - CMT's facilities and techniques generate
cell cultures for use in connection with today's "high throughput" screening
assays, which testing utilizes automation or robotics to test large quantities
of cells very rapidly. Employing increasingly sophisticated and sensitive
molecular biology techniques being developed in the industry, CMT's staff
scientists design and engineer highly unique cell lines for drug-screening
assays and the expression of novel genes. Engineered cell lines are used
throughout the biotechnology and pharmaceutical industries to determine the
function of genes and to screen, identify and develop potential drug candidates.
CMT's services include (i) cDNA expression cloning systems, (ii) expression of
recombinant proteins in each of Eschenchia coli, yeast, Mammalian Cells and
Insect Cells and Baculovirus, (iii) preparation of cell-based assays involving
receptor binding, transcriptional activation--reporter genes, signal
transduction pathways and transcription factor translocation assays, and (iv)
affinity purification of epitope-tagged proteins.

     Mouse Genetics - CMT engineers animal models of human diseases for use in
the identification and validation of potential drug candidates. The advent of
transgenic mouse technology has allowed biologists to study the impact of gene
deletions, mutations, and additions in a whole-animal system whose genetics are
well understood and can be easily manipulated. CMT builds upon this foundation
by constructing sophisticated gene deletion and gene insertion models that can
be used to study normal and abnormal gene functions by altering or mutating a
specific gene in the animal.

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<PAGE>

     CMT is proficient in all aspects of applied mouse genetics, including (i)
gene targeting, involving generation of Murine Embryonic Stem Cell lines, of
gene deletion mice and gene insertion mice and (ii) cultivation of Transgenic
mice and mice with specific mutations for use as disease models.

     Bioproduction and Reagent Preparation - CMT possesses multifaceted cell
culture and fermentation capabilities and expertise, enabling CMT to produce
whole cells, cellular fractions or biological molecules for research and assay
purposes. These materials are used by companies in the biotechnology and
pharmaceutical industries in "high throughput" screening assays to sort through
chemical libraries for potential drug candidates and to identify and validate
probable new drug candidates.

     CMT has developed bioproduction techniques and processes to move research
cell lines to the manufacturing floor. Incorporating cell banking through
upstream and downstream process development (including without limitation Cell
Culture Scale-Up and Protein Purification), CMT delivers a well-characterized
process.

     Using its flexible cell culture facility, CMT prepares reagents derived
from a broad range of host cell types (including whole cells, cellular
fractions, or purified biomolecule proteins) properly formatted for further
characterization or for use in screening assays. CMT's facilities give CMT both
adherent (flasks, roller bottles, cell factories) and suspension (spinners,
bioreactors) culture capabilities as well as bioreactor capacity to 150 liters,
fractionation and purification capabilities. Its facilities are well-equipped
with dynamic loop process water system (including ultrafiltration, carbon
adsorption, multiple rounds of ion exchange, and double distillation), warm/cold
rooms, laminar-flow hoods, centrifuges and cellular cryopreservation and
storage.

     Assay Services - Accurate determination of biological activity, measured
using assays based on cellular substrates, is an increasingly important tool in
biopharmaceutical discovery, development, and quality control. Assays performed
by CMT include, without limitation, (i) Enzyme- Linked Immuno-Sorbtion Assays,
(ELISA) (ii) Ligand Binding Assays, (iii) Transcriptional Activation Assays,
(iv) Cell Proliferation Assays and (v) Custom Reporter Gene Cell Assays. These
assays are used for a variety of purposes including but not limited to
monitoring the production of specific biomolecules, determining the biological
function of specific genes and screening and identifying small chemical
compounds as potential drug candidates.

         Specialty Media Division

     The SM Division of CMT develops, manufactures, and markets high quality
research products, providing custom-formulated cell culture media, products for
gene transfer and expression, and media and reagents for serum-free cell
cultures, mouse embryo cultures, and mouse embryonic stem cells. The SM Division
also identifies and develops research products and reagents in response to
customer feedback and as a result of the Company's activities in connection with
its Contract R&D Services as well as in collaboration with academic research
institutions through the National Institute of Health (NIH) funded grant
support.

     CMT manufactures and distributes media and reagents in the following
principal areas:

     Mouse Embryo Media - The genetic manipulation of early stage mouse embryos
allows research scientists to develop animal models for disease states for the
purpose of elucidating the function of genes which have similarities to human
functions. CMT manufactures media and reagents to support the growth of mouse
embryos. In addition to "standard" formulations, CMT has developed novel media
formulations working in collaboration with Harvard University under NIH funded
grants. While mouse embryo media have been traditionally manufactured as
liquids, CMT has also developed a powder format greatly extending the shelf life
and opening the possibility for overseas shipment and distribution.


                                       4
<PAGE>

     Unique Products for General Cell Cultures - A significant portion of the
sales revenue of the SM Division is derived from several unique products
developed by CMT. Cell culture freezing media allows research scientists to
cryogenically archive important cell lines for future use. CMT's line of enzyme
free cell dissociation solutions allow researchers to remove cells from the
vessels on which they are grown while retaining the functionality of the
proteins on their surface. This enables the cells to be used in assays which
rely on cell surface receptors. CMT also markets a kit containing all of the
reagents necessary to introduce foreign genes into cells, genetically altering
the cell line. These unique products are directly marketed by SM and are also
sold by other companies under private label.

     Custom Media Manufacture - CMT actively engages in the production of custom
formulations, with a minimum volume of only 2 liters. It is frequently the case
that research scientists need to vary the components of the nutrient broths in
which cells are grown. This need is met by CMT through its ability to formulate
complex media in a timely fashion and in low volumes. CMT believes that its low
minimum volume requirements have enabled it to enter a niche not otherwise
occupied by the several larger companies advertising such custom capabilities.

Customers

     Molecular Cell Science, Contract Research and Development Division

     CMT provides its Contract R&D Services to manufacturers in the
biotechnology and pharmaceutical industries and to hospitals, universities and
other research institutions. For the years ended December 31, 1999 and 1998,
Merck & Co., Inc. accounted for approximately 35% and 11% of the Company's total
annual revenues, respectively. For the year ended December 31, 1999, Merck & Co.
and Meyer Pharmaceuticals, LLP, accounted for approximately 39% and 13% of the
Company's total receivables at December 31, 1999, respectively. Management
believes that such customers will continue to account for a significant portion
of the Company's revenues in the 2000 fiscal year. There can be no assurance,
however, that these customers will continue to generate significant revenues and
the loss of these, or any other significant customers of CMT's Contract R&D
Services could have a material adverse effect on the Company's business.

     Specialty Media Division

     CMT provides specialty media to manufacturers in the biotechnology and
pharmaceutical industries and to hospitals, universities and other research
institutions. For the year ended December 31, 1998, Life Technologies, Inc.
accounted for approximately 13% of the Company's total annual revenues. Although
there were no customers whose revenue accounted for more than 10% of the
Company's total revenue for the year ended December 31, 1999, management
believes that such customers will account for a significant portion of the
Company's revenues in the 2000 fiscal year. There can be no assurance, however,
that these customers will continue to generate significant revenues and the loss
of these or any other significant customers of CMT's SM Division could have a
material adverse effect on that segment of the Company's business.

Sales and Marketing

     Molecular Cell Science, Contract Research and Development Division

     The Molecular Cell Science Division has focused on providing basic and
pre-clinical contract research and development. Given the rapid development of
molecular biology techniques and pace of drug discovery, the Company believes
that biotechnology and pharmaceutical companies are now focusing on drug
discovery as opposed to basic research and that there is an increasing trend
among companies in the pharmaceutical industry to outsource their R & D
projects. Such outsourcing is due to (i) the quantity of R & D projects
necessary to stay competitive in the industry, (ii) the reduced "in-house"
staffs resulting from corporate down-sizing, (iii) the expense and risk inherent
in conducting R & D internally and (iv) the expanded capabilities and
flexibility offered by third party research companies without the associated
overhead.

                                       5
<PAGE>

     The pattern for outsourcing among the large pharmaceutical companies has
been to expand from pre- and post- approval activities (including clinical trial
management, manufacturing, quality control, packaging, etc.) toward R & D. At
the front end of the development process, drug discovery based on
rapid-throughput synthesis and screening technologies is typically effected by
very large companies. On the other end, smaller technology companies tend to
provide access to "enabling" technologies that facilitate the process of target
identification and lead compound synthesis and identification. CMT intends to
address the perceived opportunity for a combination of these high-throughput
discovery technologies and the relatively mature market for pre- and
post-approval services. Because of the broad, multi-disciplinary range of
customer needs during this phase of R & D, the Company believes that CMT's
synthesis of multiple biologically based capabilities makes it well positioned
in the industry.

     The Company believes that, through rapid growth by expanding
state-of-the-art facilities, recruiting world class scientists, and developing
and acquiring new technologies, CMT can benefit from the growing contract
research market.

     CMT's sales efforts are coordinated by the management staff of the MCS
Division of CMT, whose duties include client contact and the preparation and
submission of project proposals. Direct mailings and listings on web based
reference services (such as Verticalnet and Bioserviceindex) as well as the
company's own website are the principal forms of advertising.

     Specialty Media Division

     CMT's SM Division has directed its products to specialized aspects of the
cell culture market. The Company believes that, while the overall available
revenues from this area is less than other areas of the market, the potential
margins are greater. Moreover, in serving these areas, CMT has built up
significant customer loyalty and name recognition, despite relatively minimal
marketing activities.

     CMT's sales efforts are coordinated by the Vice President of Research
Products of CMT, whose duties include oversight of production development,
direct sales and distributor arrangements. The Company also utilizes the
services of PGC Scientifics and VWR Scientific, national distributors of
research products, as well as e-commerce sales organizations such as Sciquest
and Chemdex, which are responsible primarily for sales to customers not serviced
regularly by management. Such distributors are compensated through sales
commissions.

Manufacturing, Suppliers and Inventory

     The manufacturing as well as order fulfillment and shipping functions with
respect to the SM Division are accomplished at the Phillipsburg Facility. The
raw materials used in the manufacturing process are purchased from a variety of
third-party suppliers. The Company believes that CMT has numerous alternative
sources of supplies with respect to all critical components used in the
manufacturing process. CMT maintains adequate inventory at the Phillipsburg
Facility to support its direct sales needs.


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<PAGE>

Competition

     Generally, CMT competes with a combination of national and regional
companies ranging from large companies engaging in contract research and
development or reagent services to companies specializing in one particular
aspect of R & D or media production. Some of these companies have captured a
significant, and in certain cases controlling, share of the research products
and the transgenic mouse outsourcing markets. Many of such competitors have
achieved significant national, regional and local brand name and product
recognition as well as engage in frequent and extensive advertising and
promotional programs, both generally and in response to efforts by other
competitors entering the market or existing competitors introducing new
products. Many of these companies have substantially greater financial,
technical, marketing, personnel and other resources than CMT.

     The Company believes that entry barriers to these markets are significant,
involving the high costs of specialized scientific equipment, the need to
recruit highly trained professional scientific staff with industrial and
academic experience, and the ability to offer a wide range of services and
expertise. The ability to compete successfully in the industry is affected by
these and other factors, including without limitation price of services, ease of
use, reliability, customer support, geographic coverage and industrial and
general economic trends. In addition, much of the R & D work involves customers
dependent on government grants and other institutional funding.

     The Company believes that CMT can compete effectively based on its ability
to provide its customers with both (i) Contract R&D Services for early
stage/pre-clinical R & D in the pharmaceutical and biotechnology industries and
(ii) the preparation of reagents for cell culture, molecular biology, and mouse
genetics in the international academic and industrial research markets. The
Company believes that, although there are a number of large competitors that
have substantially greater resources than CMT, such competitors have well
established businesses in only one of these two areas. Available contract
research services have for the most part focused on delivering routine
technology at low cost. These services have flourished because by maximizing the
load on their equipment and labor resources, they can reduce the customer's
in-house cost. However, such economies of scale are achieved at a cost to the
customer who remains for the most part responsible for defining protocol and
overseeing its implementation to insure that the results are useable to the
customer's in-house projects. In contrast, CMT offers, in addition to the full
range of R & D services, complete experimental design and consultation
throughout the performance of the Contracted R&D Services.

Molecular Cell Science, Contract Research and Development Division

     The Company believes that the Contract R&D Service business can be divided
into four markets, consisting of the (i) low end R&D, (ii) specialty R&D, (iii)
high end R&D and (iv) technology platform R&D, as follows:

     Low End R&D - Services performed in this market are characterized by low
margins and strong competition and are technical and mechanical in nature. These
services tend not to lead to higher end, more complex projects. This market is
comprised of small local vendors, some of which have grown to cover larger
markets. CMT offers a wide range of services in this area, including those
offered by its competitors.

     Specialty R&D - Services performed in this market tend to be technically
and/or target focused. These services seldom lead to new and more complex
projects. While a number of CMT's services touch upon this market, CMT tends to
offer a broader focus with its services.

     High End R&D - Services performed in this market tend to be high margin,
highly skilled technical and mechanical matters, requiring significant
intellectual input and problem solving and access to well recognized academics.
These services often require the development of new high end technologies and
lead to more complex projects. Such projects can be used as a launch pad for



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<PAGE>

developing proprietary technologies. The Company believes that CMT is well
positioned to participate in this market, offering expert research services,
consultation at all stages of the project and problem solving abilities.

     Technology Platform R&D - This market is comprised of companies which have
based their business on performing drug screening and/or licensing their
proprietary technology to companies for their in-house screening programs. These
relationships are generally associated with significant licensing costs and
downstream royalties. The application and/or licensing of such proprietary
technology platforms involve large contracts and is highly competitive.
Competition arises from the development of alternative and competing
technologies designed to yield results ever more quickly and inexpensively. CMT
is active in this market as well, developing novel technology platforms through
research performed for its own account, licensing arrangements as well as
through collaborative small business research grants. CMT's proprietary
technologies are principally focused on the rapid identification, expression and
characterization of genes and proteins for use in the screening and discovery
efforts of potential drug candidates in the biotechnology and pharmaceutical
industries.

Specialty Media Division

     The Company believes that the SM market is dominated by a few very large
companies with a number of minor participants. Historically, the revenue
producers in the Specialty Media market have been a limited number (fewer that
20) of manufacturers of public-domain media formulations (mostly developed in
the 1960's) and the Fetal Bovine Serum (FBS) which has been used to supplement
media. The Company believes that competition in this area is mostly on a price
basis.

Government Regulation

     The Company and its business operations are subject to many laws and
governmental regulations and changes in these laws and regulations, or their
interpretation by agencies and the courts, occur frequently.

     Environmental Regulation - The Company's operations are subject to various
evolving federal, state and local laws and regulations relating to the
protection of the environment, which laws govern, among other things, emissions
to air, discharges to ground, surface water, and groundwater, and the
generation, handling, storage, transportation, treatment and disposal of a
variety of hazardous and non-hazardous substances and wastes. Federal and state
environmental laws and regulations often require manufacturers to obtain permits
for these emissions and discharges. Failure to comply with environmental laws or
to obtain, or comply with, the necessary state and federal permits can subject
the manufacturer to substantial civil and criminal penalties. CMT operates a
manufacturing facility. Although the Company believes that such facility is in
substantial compliance with all applicable material environmental laws, it is
possible that there are material environmental liabilities of which the Company
is unaware. If the costs of compliance with the various existing or future
environmental laws and regulations, including any penalties which may be
assessed for failure to obtain necessary permits, exceed the Company's budgets
for such items, the Company's business could be adversely affected. In
additions, liability to third parties could have a material adverse effect on
the Company's business.

     Potential Environmental Cleanup Liability - The Federal Comprehensive
Environmental Response, Compensation and Liability Act, as amended ("CERCLA"),
and many similar state statutes, impose joint and several liability for
environmental damages and cleanup costs on past or current owners and operators
of facilities at which hazardous substances have been discharged, as well as on
persons who generate, transport, or arrange for disposal of hazardous wastes at
a particular site. In addition, the operator of a facility may be subject to
claims by third parties for personal injury, property damage or other costs
resulting from contamination present at or emanating from property on which its
facility is located. Furthermore, certain business operations of CMT also
involve shipping hazardous waste off-site for disposal. As a result, the Company
could be subject to liability under these statutes. Furthermore, there can be no
assurance that Prime or CMT will not be subject to liability relating to
manufacturing facilities owned or operated by them currently or in the past.


                                       8
<PAGE>

     Permits - In connections with its business operations, CMT has obtained
permits from the New Jersey Department of Environmental Protection (NJDEP) as
both a hazardous waste and medical waste generator. CMT believes that its
compliance with such regulations, however, is on a voluntary basis inasmuch as
its operations produce insufficient levels of chemical waste. The Company
further believes that none of its medical waste is deemed infectious. In
addition, CMT has obtained a permit from the Nuclear Regulatory Commission for
the use of radioisotopes in connection with CMT's research functions.

     Other Regulations - In addition to the foregoing, the Company may be
subject to various other federal, state and local regulatory and licensing
requirements as the same are promulgated from time to time by the Environmental
Protection Agency, Food and Drug Administration, Nuclear Regulatory Commission,
the New Jersey Department of Environmental Protection and other federal, state
and local regulatory agencies. Failure of the Company to comply with any of
these requirements could result in the imposition of fines by governmental
authorities or awards of damages to private litigants.

     The Company has made, and will continue to make, capital and other
expenditures necessary to monitor and to comply with any applicable regulations.
For the year ended December 31, 1999, no material expenditures by the Company
were necessary with respect to such matters.

Trademarks, Proprietary Information and Patents

     CMT utilizes certain proprietary information in connection with the
providing of its services and the manufacture and sale of its products,
including processes and formulas with respect to cell and embryo culture media
and reagents, and gene expression systems that it believes are proprietary to
it. The Company relies on customary principles of "work-for-hire" as well as
technical measures to establish and protect the ideas, concepts, and
documentation of its proprietary technology and know-how and, in certain
instances, has entered into non-disclosure agreements with its employees. Such
methods, however, may not afford complete protection, and there can be no
assurance that third parties will not independently develop such know-how or
obtain access to the Company's know-how, ideas, concepts, and documentation.
Although the Company believes that its technology has been developed
independently and does not infringe on the proprietary rights of others, there
can be no assurance that the technology does not and will not so infringe or
that third parties will not assert infringement claims against the Company in
the future. In the case of infringement, the Company would, under certain
circumstances, be required to modify its products or obtain a license. There can
be no assurance that the Company will have the financial or other resources
necessary to defend successfully a patent infringement or other proprietary
rights infringement action or that it could modify its products or obtain a
license if it were required to do so. Failure to do any of the foregoing could
have a material adverse effect on the Company. If the Company's products or
technologies are deemed to infringe upon the rights of others, the Company could
be liable for damages, which could have a material adverse effect on the
Company.

     During 1999, CMT was awarded a trademark, EMBRYOMAX(R) by the United States
Patent and Trademark Office with respect to one of its products. The
EMBRYOMAX(R) trademark pertains to SM's mouse embryo culture media and reagents
offered by SM to support the generation of transgenic mice. It is anticipated
that during the year 2000, the EMBRYOMAX(R) trademark will encompass a number of
new products including mouse embryonic stem cell lines (used in gene targeting
technologies), mouse primary fibroblast feeder cells (used to support the
culture of mouse embryonic stem cells), a mouse cloning kit (reagents used in
mouse cloning technology) and cryopreserved mouse embryos (used in the
generation of transgenic or genetargeted mice).

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<PAGE>

Product Liability

     As a manufacturer of certain products, the Company may be exposed to
product liability claims by consumers. The Company has obtained product
liability insurance coverage in the aggregate amount of $2.0 million ($1.0
million per occurrence), and an umbrella policy that provides a $10.0 million
coverage (per occurrence or aggregate) that is excess over the scheduled
underlying policies. Although the appropriate coverage is in place, there can be
no assurance that such insurance will provide coverage for any claim against the
Company or will be sufficient to cover all possible liabilities. In the event a
successful suit is brought against the Company, unavailability or insufficiency
of insurance coverage could have a material adverse effect on the Company.
Moreover, any adverse publicity arising from claims made against the Company,
even if such claims were not successful, could adversely affect the reputation
and sales of the Company's products and services.

Employees

     As of February 15, 2000, the Company had twenty- eight (28) full-time and
four (4) part-time employees. Of such employees, five (5) are executive
employees, two (2) are engaged in customer support, sixteen (16) (including 1
part-time employee) are engaged in research and development and media
production, two (2) (including 1 part-time employee) are engaged in sales and
marketing, two (2) are engaged in warehouse, shipping and receiving, and five
(5) (including two of the part-time employees) are engaged in accounting and
administration. None of the Company's employees are covered by col-lective
bargaining agreements. The Company believes that it has a good relationship with
its employees.

History of Prime Cellular, Inc.

     Prime was incorporated under the laws of the State of Delaware in May 1990
to provide management services, including business planning, marketing,
engineering, design and construction consulting services, to rural service area
cellular telephone licensees. However, preferences of owners of construction
permits and the deterioration in general economic conditions subsequent to
Prime's initial public offering in early August 1990 negatively impacted Prime's
business plan and Prime soon determined that it was prudent for it to explore
other uses for Prime's funds.

     Prime initially analyzed potential investments in debt and equity
instruments of entities involved in either the cellular or related industries
and subsequently expanded its search to include entities involved in
non-cellular operations. From 1991 until May 1999, Prime retained an outside
consultant, who is also a shareholder and currently a director and officer of
the Company, to assist it in finding new business opportunities for the Company.
Such consultant is now an employee of Prime under an employment agreement.

     On June 11, 1996, a wholly-owned subsidiary of Prime consummated a merger
(the "Bern Merger") with Bern Associates, Inc. ("Bern") pursuant to that certain
Merger Agreement, dated May 14, 1996 (the "Bern Agreement"), by and among Prime,
its subsidiary, Bern and all of the stockholders of Bern. Bern's business
consisted principally of designing, installing, maintaining, servicing and
supporting computer systems to enable regional telephone companies to provide
Internet access to their subscribers as well as developing Internet software.
Bern offered its customers an integrated Internet access solution comprised of
off-the-shelf computer hardware and accessories, systems integration, billing
software and twenty-four hour subscriber support. Bern also provided network
management services to regional telephone companies already offering Internet
access. After the Bern Merger, Prime's subsidiary changed its name to "Bern
Communications, Inc." ("Bern Communications"). The Merger was accounted for as a
reverse acquisition whereby Bern Communications was treated as the acquirer for
financial reporting purposes. From June 11, 1996 until November 30, 1997, Bern
Communications was the sole operating entity of Prime.

                                       10
<PAGE>

     On August 28, 1997, Prime entered into a settlement (the "Settlement") with
former stockholders of Bern ("Bern Stockholders") for alleged breaches of
certain representations and warranties made by the Bern Stockholders with
respect to the Bern Merger as well as for on-going disputes concerning the
operations and direction of the business of Bern Communications. Pursuant to the
Settlement, Prime (i) purchased all of the shares of common stock in Prime held
by the Bern Stockholders as a result of the Prime Merger, at a purchase price of
$.50 per share (the market price on the date of such purchase), aggregating
676,937 shares of common stock for an aggregate amount of $338,469, (ii)
transferred to certain Bern Stockholders all right and title to the intellectual
property rights with respect to the computer software program WEBSITENOW and
certain computer hardware used in the development of such software program. In
exchange, such Bern Stockholders signed a general release and, to the extent
applicable, confirmed their prior resignations as officers and/or directors of
the Company and/or Bern Communications as well as terminated their respective
options to purchase the Company's Common Stock. All shares acquired by the
Company pursuant to the settlement were canceled, effective as of August 28,
1997.

     Following the Settlement, Bern Communications ceased soliciting further
opportunities or engaging in any further consulting services in connection with
its integrated Internet access system. Moreover, all sales of computer hardware
and/or software of Bern Communications were discontinued effective as of the
Settlement. Bern Communications did nevertheless continue to provide help desk
functions as well as network management services pursuant to its existing
contractual arrangements. All such contractual arrangements were terminated on
or about November, 1997.

     On May 29, 1998, a newly formed wholly-owned subsidiary of Prime acquired,
by merger, CMT. Pursuant to the Merger Agreement, dated May 29, 1998, the
subsidiary was merged into CMT and all of the outstanding shares of capital
stock of CMT were converted into an aggregate of 1,611,000 shares of Common
Stock, par value $.01 per share, of Prime (the "CMT Merger"), representing
approximately 26.4% (after consummation of the Merger) of Prime's issued and
outstanding Common Stock. The CMT Merger was accounted for as a reverse
acquisition whereby CMT was treated as the acquirer for financial reporting
purposes. Since the CMT Merger, CMT has been the sole operating entity of Prime.

     In connection with the CMT Merger, the Company changed its fiscal year end
from May 31, to December 31, which year end corresponds with the fiscal year end
for CMT.

     On December 22, 1998, each of Prime Cellular of Florida, Inc. and Bern
Communications, Inc., as wholly-owned subsidiaries of Prime no longer conducting
business, merged with and into Prime pursuant to a short-form affiliate merger.


ITEM 2.  PROPERTIES

     Since June 1998, the Company's executive offices have been located at 580
Marshall Street, Phillipsburg, New Jersey 08865, which property consists of
approximately 6,651 square feet of laboratory, manufacturing and
office/warehouse space. The property is owned by the Company, having been
acquired in connection with the CMT Merger subject to a mortgage and note, dated
February 10, 1997, in the aggregate principal amount of $287,600. As of March
15, 2000, the balance due under the note is $271,751.

                                       11
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     Not Applicable.


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

     Not Applicable.



                                       12
<PAGE>


                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock is traded on the OTC Bulletin Board under the
symbol PCEL. The following table sets forth, for the periods indicated, the high
and low bid quotations for the Company's Common Stock for the last two fiscal
years as reported on the OTC Bulletin Board. The quotations reflect prices among
dealers, do not reflect retail markups, markdowns or other fees or commissions,
and do not necessarily represent actual transactions.


    Period                         High($)                Low($)
    -------                       -------                 ------
    Fiscal 1999

        Fourth Quarter             2.125                   .750
        Third Quarter              2.875                  1.500
        Second Quarter             2.250                   .875
        First Quarter               .875                   .875

   Fiscal 1998
        Fourth Quarter             1.500                   .250
        Third Quarter              2.750                  1.000
        Second Quarter             3.500                  1.250
        First Quarter              3.875                   .625


     On March 7, 2000, the average of the bid and ask prices for the Company's
Common Stock was $7.125, as reported by the OTC Bulletin Board. As of March 7,
2000, there were 6,078,700 shares of Common Stock outstanding. The Company
believes that there are in excess of 300 beneficial owners of its Common Stock,
whose shares are held of record or in street name.

Dividend Policy

     To date, the Company has not declared or paid any cash dividends on its
Common Stock. The payment of dividends, if any, in the future is within the
discretion of the Board of Directors and will depend upon the Company's
earnings, its capital requirements and financial condition and other relevant
factors. The Company currently intends to retain all earnings, if any, to
finance the Company's continued growth and development of its business and does
not expect to declare or pay any cash dividends in the foreseeable future.




                                       13

<PAGE>

Recent Sales of Unregistered Shares

     During the year ended December 31, 1999, the Company made the following
sales of unregistered securities:

<TABLE>

================ ==================== ============== ============================== ================ ====================
                                                                                                     If Option, Warrant
                                                      Consideration Received and                       or Convertible
                                                      Description of Underwriting   Exemption from   Security, Terms of
                                                     or Other Discounts to Market    Registration        Exercise or
 Date of Sale     Title of Security    Number Sold   Price Afforded to Purchasers        Claimed         Conversion
================ ==================== ============== ============================== ================ ====================
<S>             <C>                          <C>      <C>                              <C>      <C>
    1/1/99       Options to                  44,250  Options granted under 1990          4(2)        Exercisable for 10
                 purchase Common                     Stock Plan; no cash                             years from date of
                 Stock granted to                    consideration received by                       grant with vesting
                 employees                           the Company until exercise                      from 1-5 years at
                                                                                                     an exercise price
                                                                                                     of $1.00 per share
================ ==================== ============== ============================== ================ ====================
</TABLE>


ITEM 6. SELECTED FINANCIAL DATA

     The following selected financial data at and for the years ended December
31, 1999, 1998, 1997, 1996 and 1995 has been derived from the Company's audited
financial statements for each of the years. Such information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the financial statements and the notes thereto
appearing elsewhere in this Report.

Statement of Income Data:

<TABLE>
                                                                      Fiscal Year Ended December 31
                                                     -----------------------------------------------------
                                                1999            1998         1997          1996            1995
                                                ----            ----         ----          ----            ----
<S>                                         <C>              <C>            <C>           <C>            <C>
Income Statement Data:
Total revenues                              $ 3,916,581      $ 2,127,233    $ 2,180,190   $ 1,471,221    $ 1,526,391
                                              ---------        ---------      ---------     ---------      ---------

Net income (loss)                            $ 641,114       $ (698,674)    $ (209,621)    $ (62,617)     $ 56,709
                                               -------          --------      ---------      --------       ------

Basic earnings
   per common share                            $ .11           $ (.16)        $ (.17)       $ (.07)         $ .06
                                                 ---             -----          -----         -----           ---
Diluted earnings
   per common share                            $ .10           $ (.16)        $ (.17)       $ (.07)         $ .06
                                                 ---             -----          -----         -----           ---

Balance Sheet Data:
------------------
Total assets                                $ 7,428,682       $11,825,68    $ 2,028,457    $ 706,964      $ 443,191
                                              ---------        ---------      ---------      -------        -------

Long - Term Debt                            $ 1,092,095       $  826,024     $  748,738     $  3,872      $ 120,152
                                              ---------         -------         -------        -----        -------
</TABLE>

                                       14
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Results of Operations

     In conjunction with the consummation of the CMT Merger on May 29, 1998, all
of the outstanding shares of capital stock of CMT were converted into an
aggregate of 1,611,000 shares of common stock, par value of $.01 per share of
Prime, representing approximately 26.4% (after consummation of the Merger) of
Prime's issued and outstanding common stock. This transaction was accounted for
as a reverse acquisition whereby CMT was the acquirer for accounting purposes.
The assets and liabilities were recorded at their historical amounts from the
date of acquisition. The historical consolidated financial statements prior to
May 29, 1998 are those of CMT with all common stock data restated into the
equivalent capital structure of Prime.

Comparison of Year Ended December 31, 1999 to Year Ended December 31, 1998

     Revenue for the year ended December 31, 1999 was $3,916,581 as compared to
$2,127,233 for the year ended December 31, 1998. This 84% or $1,789,348 increase
in revenue was a result of a $313,281 or 26% increase in sales of goods, plus by
a $ 1,476,067 or 159% increase in contract revenue. During the year ended
December 31, 1998, MCS was primarily focused on hiring and recruiting personnel
and setting up laboratory space and an internal infrastructure to transition the
majority of the research work from subcontractors to in-house. This staff up and
build out period was completed late in 1998, which allowed the division to focus
on aggressively promoting its services. This anticipated increase in contract
revenue materialized during the year ended December 31, 1999.

     Income after direct costs for the year ended December 31, 1999 was
$2,124,638 as compared to $668,976 for the year ended December 31, 1998. This
$1,455,662 or 218% increase in income after direct costs was a result of a
$221,126 or 40% increase from sales of goods, plus a $1,234,536 or 1095%
increase from contract revenue. This increase from the contract revenue division
was attributable to the more efficient utilization of manpower and material
which was achieved as a direct result of a significant increase in research
contracts which resulted in higher margins for the year ended December 31, 1999
as compared to the year ended December 31, 1998. The margins for the SM division
increased for the year ended December 31, 1999 as compared to the year ended
December 31, 1998 as a result of an increase in sales of higher gross profit
items during the year ended December 31, 1999.

     Corporate activities for the year ended December 31, 1999 resulted in a net
expense of $382,390 as compared to a net expense of $159,278 for the year ended
December 31, 1998. This $223,112 net increase in expense resulted principally
from increased selling, general and administrative expenses plus interest
expense, partially offset by interest income, all of which resulted from Prime,
and was only included from May 29, 1998 (upon the merger with CMT) for the year
ended December 31, 1998. These income and expense items attributable to Prime
were included from January 1, 1999 for the year ended December 31, 1999

     As a result of the foregoing, the net income increased to $641,114 for the
year ended December 31, 1999 as compared to a net loss of ($698,674) for the
year ended December 31, 1998.

Comparison of Year Ended December 31, 1998 to Year Ended December 31, 1997

     Revenue for the year ended December 31, 1998 was $2,127,233 as compared to
$2,180,190 for the year ended December 31, 1997. This 2% or $52,957 decrease in
revenue was a result of a $144,212 or 14% increase in sales of goods, reduced by
a $197,169 or 18% decrease in contract revenue. The decrease in contract revenue
was due to the Company's decision in early 1998 to transition the majority of
the research work from subcontractors to in-house. This staffing up of personnel
and building out additional laboratory space was a major focus in 1998.

                                       15
<PAGE>

     Income after direct costs for the year ended December 31, 1998 was $668,976
as compared to $838,476 for the year ended December 31, 1997. This $169,500 or
20% decrease in income after direct costs was a result of a $147,421 or 36%
increase from sales of goods, reduced by a $316,921 or 74% decrease from
contract revenue. This decrease in income after direct costs for the contract
revenue segment resulted principally from the Company hiring additional
personnel to accommodate an anticipated large increase in contract revenue,
which increase in business did not materialize in 1998.

     Corporate activities for the year ended December 31, 1998 resulted in a net
expense of $159,278 as compared to a net income of $9,897 for the year ended
December 31, 1997. This net increase in expense resulted from selling, general
and administrative expenses, partially offset by interest income, realized in
connection with the CMT Merger.

     As a result of the foregoing, the net loss increased to ($698,674) for the
year ended December 31, 1998 as compared to a net loss of ($209,621) for the
year ended December 31, 1997.

Liquidity and Capital Resources

     At December 31, 1999, the Company had approximately $126,000 in cash and
working capital of approximately $5,380,000.

     Net cash provided by/used in operating activities aggregated $371,456 and
($746,523) for the years ended December 31, 1999 and 1998, respectively. The
$1,117,979 increase in cash provided by operating activities was principally
attributable to increased net income for the year ended December 31, 1999 as
compared to 1998 as well as due to a reduction in customer deposits partially
offset by an decrease in accounts payable and accrued expenses and an increase
in accounts receivable.

     Net cash provided by/used in investing activities aggregated $4,531,181 for
the year ended December 31, 1999 as compared with ($5,015,267) for the year
ended December 31, 1998 respectively. The increase in cash provided by investing
activities was primarily attributable to the sale of $5,000,000 in investment
securities in 1999 and the purchase of approximately $5,000,000 of investment
securities in 1998.

     Net cash used in/provided by financing activities aggregated ($4,860,829)
for the year ended December 31, 1999 as compared to $5,102,253 for the year
ended December 31, 1998 respectively. The increase in cash used was due
primarily to the approximately $5,200,000 in payments of collateralized
investment loan, note payable and long term debt in 1999 offset by $350,000 in
the proceeds from new long term debt in 1999.

Inflation

     Inflation has historically not had a material effect on the Company's
operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     This information appears in a separate section of this report following
Part IV.

                                       16
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE

     Information with respect to matters set forth in Item 304 in Regulation S-K
was previously reported by the Company in its reports on Form 8-K and 8-K/A for
the event dated December 23, 1998, filed with the Securities and Exchange
Commission pursuant to Section 13 of the Securities Exchange Act of 1934 on
December 31, 1998 and January 7, 1999, respectively.

                                       17
<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The current directors and executive officers of the Company are as follows:

Name                       Age     Position

Joseph K. Pagano           54      President and Chairman of the Board
Robert A. Reinhart         50      Vice-President of Finance, Chief Financial
                                     Officer, Treasurer, Secretary
Frederick R. Adler         74      Director
Thomas Livelli             47      Director
Richard Malavarca          47      Director
Samuel A. Rozzi            54      Director
Brett Fialkoff             33      Director


     Joseph K. Pagano has served as President of the Company since June 1994 and
as a director since 1991. He also served as Chief Financial Officer from June
1994 until July 1996. From 1991 until April 1999, he was engaged as a consultant
to the Company. Mr. Pagano has been a private investor for more than the past
five years. Since May 1999, Mr. Pagano has been serving as an employee of the
Company under an employment agreement.

     Robert A. Reinhart is a certified public accountant. Mr. Reinhart has
served as Chief Financial Officer and Vice President - Finance of the Company
since July 1996, and as Treasurer/Secretary since May 1997. Mr. Reinhart served
as Vice President, Finance and Chief Executive Officer for Bern Communications,
Inc. from July 1996 until its dissolution in 1998. Prior thereto, Mr. Reinhart
served as the Chief Operating Officer and Chief Financial Officer of DeBoles
Nutritional Foods, Inc. from 1992 until 1996. Prior to being engaged by De Boles
Nutritional Foods, Inc. in 1992, Mr. Reinhart was a senior manager/engagement
executive with a certified public accounting firm located on Long Island, New
York.

     Frederick R. Adler has been a director of the Company since May 1996. Mr.
Adler is Managing Director of Adler & Company, a venture capital management firm
he organized in 1968, and a general partner of its related investment funds.
Since January 1, 1996, Mr. Alder has been of counsel to the law firm of
Fulbright & Jaworski L.L.P. and, for more than five years prior thereto, was a
senior partner in the firm. Mr. Adler is also Chairman of the Executive
Committee and a director of Data General Corporation, Chairman and director of
Shells Seafood Restaurants, Inc., and a director of USA Detergents, Inc., as
well as a director of various private companies. Mr. Adler is the Chairman of
Intercoastal Health Systems, Inc. (Palm Beach, FL) and a member of the Board of
Managers of Memorial Sloan-Kettering Cancer Center (New York, NY). Mr. Adler is
also a member of the Dean's Advisory Board of the Harvard Law School (Cambridge,
MA).

     Thomas Livelli has been a director of the Company since June 1998. He was
President of CMT's predecessor companies, from 1987 until 1997, when he became
President of CMT. He is currently the President and Chief Executive Officer of
CMT. Mr. Livelli was the founder of MCS, Inc., the predecessor to the Molecular
Cell Science Division of CMT, and the co-founder of the SM Division of CMT. From
January 1986 until July 1997, Mr. Livelli was a Laboratory Manager at the Howard
Hughes Medical Institute at Columbia University. Prior to 1986, Mr. Livelli
worked at Merck Research Laboratories ("Merck") and Cistron Biotechnology
("Cistron"), directing their respective gene expression programs. While at
Cistron, Mr. Livelli was a Visiting Scholar at Columbia University. Mr. Livelli
has also served in the capacity of a scientific consultant for Merck, Cistron,
Synaptic Pharmaceutical, and Life Technologies, Inc. In addition to his duties
as President and Chief Executive Officer of CMT, Mr. Livelli maintains a
part-time faculty appointment at Columbia University College of Physicians &
Surgeons in the Department of Neurobiology and Behavior.

                                       18
<PAGE>


     Richard Malavarca has been a director of the Company since June 1998. He
was Vice President of CMT and its predecessor companies from 1987 until 1997,
when he became Vice President of CMT. He is currently the Vice President -
Research Products of CMT, where he is responsible for the day to day operations,
product development and marketing for the SM Division of CMT. In January 2000,
Mr. Malavarca also became Chief Operating Officer of CMT. Mr. Malavarca was a
co-founder of Specialty Media, Inc., the predecessor to the SM Division of CMT
where he served as Vice President from 1987 until May 1997. Mr. Malavarca has
also worked at the Harvard Medical School, The Roche Institute for Molecular
Biology, Merck Research Laboratories and Cistron in basic research involving
developmental biology, molecular and cell biology. He left Cistron in 1987 to
start Specialty Media, Inc.

     Samuel A. Rozzi has been a director of the Company most recently since
January 1997. He previously served as a director of the Company from 1991 until
June 1996. Mr. Rozzi has been the President of Corporate National Realty, Inc.,
a corporate real estate brokerage and services firm, since September 1988.

     Brett Fialcoff has been a director of the Company since February 2000. From
1993 until 1996, Mr. Fialkoff was a securities analyst with Performance Capital,
LP and Performance Capital II, LP. Since 1997, Mr. Fialkoff has been a member of
Performance Capital LLC, the General Partner of Performance Capital LP, a public
equity investment fund. Mr. Fialkoff has also been a member of Performance
Management LLC, the general partner of Performance Capital II, LP, which is also
a public equity investment fund. Mr. Fialkoff is also an officer of Performance
Offshore Holdings Corp., the General Partner of Performance Offshore Limited,
which is also a public equity investment fund. Mr. Fialkoff graduated with a
B.A. from Bard College in 1988.

     Directors are elected annually by the stockholders. Officers are elected
annually by the Board of Directors and serve at the discretion of the Board of
Directors.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

     Section 16(a) of the Securities Exchange Act of 1934 requires that
Company's officers and directors, and persons who beneficially own more than 10
percent of a registered class of the Company's equity securities, file certain
reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). Officers, directors, and greater than 10 percent beneficial
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.

     Based solely on the Company's review of the copies of such forms received
by the Company, or representations obtained from certain reporting persons, the
Company believes that during the year ended December 31, 1999 all filing
requirements applicable to its officers, directors, and greater than 10 percent
beneficial stockholders were complied with, except that Mr. Pagano, a director
and officer of the Company, filed a Form 4 late.

                                       19
<PAGE>



ITEM 11.  EXECUTIVE COMPENSATION


     The following table discloses the compensation awarded by the Company to
(i) each of the President and Chief Financial Officer of the Company (the
"Company Executives") for the twelve (12) month period ended December 31, 1999,
for the period from June 1, 1998 until December 31, 1998 (the "Stub Period") and
for the twelve (12) month period ended May 31 in each of the two fiscal years
May 31, 1998 and 1997, and (ii) the President of CMT (the "CMT Executive" and,
together with the Company Executives, hereinafter collectively referred to as
the "Named Executives") for the twelve (12) month period ended December 31 in
each of the three fiscal years ended December 31, 1999, 1998 and 1997. During
the most recent twelve (12) month period ended December 31, 1999, no other
officer of the Company or CMT, as the case may be, received a total salary and
bonus that exceeded $100,000 during such twelve (12) month period.

<TABLE>
                                              SUMMARY COMPENSATION TABLE

                                                             Annual Compensation
                                                             --------------------           Long-Term and Other
     Name and Principal Position            Year             Salary ($)       Bonus ($)            Compensation
-------------------------------------- ---------------- ------------------------------- --------------------------------
<S>                                    <C>                     <C>            <C>                  <C>
Joseph K. Pagano                       1999                    $51,495(1)     --                   $ 29,638(1)
    President and Chairman of          Stub Period                   --       --                      43,750(2)
    the Board                          1998                          --       --                      75,000
                                       1997                          --       --                      75,000
-------------------------------------- ---------------- ---------------- -------------- --------------------------------
Robert A. Reinhart                     1999                   $128,887        --                        --
    Chief Financial Officer, Vice      Stub Period              70,369(2)     --                        --
    President, Treasurer and           1998                    125,000        --                     Options(3)
    Secretary                          1997                     86,000(4)    $ 25,000                Options(5)
-------------------------------------- ---------------- ---------------- -------------- --------------------------------
Thomas Livelli                         1999(7)               $151,885          -                        --
   President and Chief                 1998(7)                138,462(8)       -                        --
   Executive Officer (6)               1997(7)                 63,462        $181,000                   --
-------------------------------------- ---------------- ---------------- -------------- --------------------------------
Richard Malavarca                      1999(7)              $ 101,769          -                        --
   Vice President and Chief            1998(7)                 88,961          -                        --
   Operating Officer                   1997(7)                 80,444          -                        --
-------------------------------------- ---------------- ---------------- -------------- --------------------------------
Michael J. Tocci                       1999(7)              $ 121,154          -                        --
   Vice President                      1998(7)                115,385          -                        --
                                       1997(7)                 32,692          -                     Options(9)
-------------------------------------- ---------------- ---------------- -------------- --------------------------------
</TABLE>

---------------------------

(1)  Mr. Pagano, who was elected President of the Company on June 15, 1994,
     received a consulting fee of $75,000 per annum until May 1999, at which
     time he became an employee of the Company at a salary of $85,000 per annum.
     Mr. Pagano also received reimbursement of documented expenses incurred on
     behalf of the Company.


                                       21
<PAGE>

(2)  Reflects the respective compensation or consulting fee, as the case may be,
     of the Named Executive, prorated for the seven-month Stub Period. Following
     the CMT Merger, the Company adopted the calendar fiscal year of CMT. The
     Company previously operated under a fiscal year ended May 31st.

(3)  On April 20, 1998, the Company granted Mr. Reinhart incentive stock options
     to purchase up to 25,000 shares of the Common Stock of the Company at $2.25
     per share, which options vest in two equal installments on each of April
     20, 1999 and April 20, 2000.

(4)  Reflects Mr. Reinhart's salary rate of $100,000 for the year ended May 31,
     1997, prorated from July 22, 1996, when he was elected Chief Financial
     Officer of the Company.

(5)  On October 25, 1996, the Company granted Mr. Reinhart incentive stock
     options to purchase up to 40,000 shares of the Common Stock of the Company
     at $2.50 per share, which options became immediately exercisable on the
     date of grant. Such options were subsequently re-priced on January 16,
     1998, to an exercise price of $0.75 (the fair market value of the Common
     Stock at such time).

(6)  Mr. Livelli is President and Chief Executive Officer of CMT, a wholly-owned
     subsidiary of Prime.

(7)  Reflects salary paid for the calendar years ended December 31, 1998 and
     1997. Because the Company adopted as its fiscal year CMT's calendar year at
     the time of the CMT Merger, no Stub Period calculation is required when
     disclosing the compensation paid to CMT's executive officers.

(8)  Reflects Mr. Livelli's (i) effective salary rate of $135,000 (as amended at
     May 29, 1998 following the CMT Merger) for the year ended December 31,
     1998, prorated from May 29, 1998, when he was elected President of CMT in
     conjunction with the CMT Merger, and (ii) effective salary rate of $150,000
     for the year ended December 31, 1998, prorated for the five months ended
     May 29, 1998.

(9)  On May 29, 1998, the Company granted Mr. Tocci stock options to purchase up
     to 72,000 shares of Common Stock of the Company at $.278 per share, which
     options vest 20% upon grant, 20% on each of October 1, 1998, October 1,
     1999, October 1, 2000 and October 1, 2001.

     The following table sets forth information concerning the number of options
owned by the Named Executives and the value of any in-the-money unexercised
options as of December 31, 1999. No options were exercised by the Named
Executives during fiscal 1999.
<TABLE>

--------------------------------------------------------------------------------------------------------------------
                                     AGGREGATED FISCAL YEAR END OPTION VALUES
--------------------------------------------------------------------------------------------------------------------
                                 Number of Securities Underlying         Dollar Value of Unexercised in-the-Money
                            Unexercised Options at December 31, 1999:        Options at December 31, 1999 (1):
                            ----------------------------------------      ---------------------------------------
                            Exercisable (#)       Unexercisable (#)      Exercisable ($)       Unexercisable ($)
Name
-------------------------- ------------------- ------------------------ ------------------- ------------------------
<S>                            <C>                        <C>                 <C>                      <C>
Joseph K. Pagano               217,000(2)                -0-                  81,375                  -0-
-------------------------- ------------------- ------------------------ ------------------- ------------------------
Robert A. Reinhart              52,500(3)             12,500(4)               50,000                  -0-
-------------------------- ------------------- ------------------------ ------------------- ------------------------
Michael J. Tocci                43,200(5)            28,800 (5)               74,390                49,594
-------------------------- ------------------- ------------------------ ------------------- ------------------------
</TABLE>





                                     21
<PAGE>

-----------------------------

(1)  Year-end values for unexercised in-the-money options represent the positive
     spread between the exercise price of such options and the fiscal year-end
     market value of the common stock. An Option is `in-the-money" if the fiscal
     year-end fair market value of the Common Stock exceeds the option exercise
     price. At December 31, 1999, the closing price per share of the Common
     Stock as reported by the OTC Bulletin Board was $2.00.

(2)  Stock options granted by the board of directors as of May 14, 1996, under
     the Company's 1990 Stock Option Plan, having an exercise price of $1.625
     per share, which options became immediately vested and exercisable from the
     date of grant and, as amended, expire May 14, 2004.

(3)  Incentive stock options granted pursuant to Agreements dated October 25,
     1996 and April 20, 1998 of which 40,000 options have an exercise price of
     $2.50 per share and 12,500 of which are exercisable at $2.25 per share.
     Options to purchase 40,000 shares of common stock became immediately vested
     and exercisable from the date of grant and expire October 25, 2001. Such
     options were subsequently re-priced on January 16, 1998, to $0.75 per share
     (the fair market value of the Common Stock at such time). The remaining
     12,500 options became exercisable one year from the grant date and expire
     five (5) years after the grant date.

(4)  Incentive stock options granted pursuant to Agreement dated April 20, 1998,
     having an exercise price of $2.25 per share, which options vest on April
     20, 2000 and expire five (5) years after the date of grant.

(5)  Incentive stock options granted pursuant to Agreement dated May 29, 1998,
     having an exercise price of $.278 per share, which vest 20% upon grant, 20%
     on each of October 1, 1998, October 1, 1999, October 1, 2000 and October 1,
     2001.

     No options were granted to the Named Executives during the fiscal year
ended December 31, 1999.

Employment Agreements

     In conjunction with the CMT Merger, the Company assumed the employment
agreement with Thomas J. Livelli, pursuant to which Mr. Livelli serves as
President and Chief Executive Officer of CMT through May 2000. The employment
agreement provides for an annual base compensation of $135,000. The employment
agreement provides for Mr. Livelli's employment on a full-time basis and
contains a provision that the employee will not compete or engage in a business
competitive with the current or anticipated business of the Company during the
term of the employment agreement and for a period of one year thereafter.

     In May 1999, Prime entered into an employment agreement with Joseph K.
Pagano to serve as the President of Prime. This replaces the consulting
agreement that Prime had with Mr. Pagano which was terminated at the same time.
The agreement is for an initial term of one year, contains a provision for an
automatic one year extension and provides for an annual base compensation of
$85,000.

     In connection with the employment agreement, the termination date of
217,000 options previously granted to Mr. Pagano under the Company's 1990 Stock
Option Plan were extended an additional three years to May 24, 2004.

Director Compensation

     Directors receive no cash compensation for serving on the Board of
Directors or for attending Board or Committee (if any) meetings. However,
non-employee directors are eligible to be granted non-qualified stock options
under the Company's 1990 Stock Option Plan and the 2000 Performance Equity Plan.




                                       22

<PAGE>

Nonqualified stock options may be exercised for up to 10 years from the date of
grant at such exercise prices as the Board of Directors may determine.

Compensation Committee Interlocks and Insider Participation in Compensation
Decisions

     The Company did not have a Compensation Committee of its Board of Directors
during fiscal 1999. Decisions as to compensation during fiscal 1999 were made by
the Company's Board of Directors. Mr. Pagano, who is an officer of the Company,
and Messrs. Livelli and Malavarca, who are officers of CMT, served as members of
the Board of Directors during fiscal 1999. None of the other executive officers
of the Company served on the Board of Directors or the compensation committee of
any other entity during fiscal 1999.

Stock Option Plans

     The Company adopted the 1990 Stock Option Plan (the "Stock Option Plan"),
which provides for grants of options to purchase up to 1,000,000 shares of
Common Stock and the 2000 Performance Equity Plan (the "Performance Equity
Plan"), which provides for grants of options to purchase up to 2,000,000 shares
of Common Stock. Under the Stock Option Plan and the Performance Equity Plan
options may be granted to employees, consultants, agents and other persons
deemed valuable to the Company or any of its subsidiaries. The Stock Option Plan
and the Performance Equity Plan permit the Board of Directors or the Committee
of the Stock Option Plan or Performance Equity Plan, as the case may be, to
issue incentive stock options ("ISOs"), as defined in Section 422 of the
Internal Revenue Code (the "Code"), and stock options that do not conform to the
requirements of that Code section ("non-ISOs"). The exercise price of each ISO
may not be less than 100% of the fair market value of the Common Stock at the
time of grant, except that in the case of a grant to an employee who owns
(within the meaning of Code Section 422) 10% or more of the outstanding stock of
the Company or any subsidiary (a "10% Stockholder"), the exercise price may not
be less than 110% of such fair market value. The exercise price of each non-ISO
also may not be less than 100% of the fair market value of the Common Stock at
the time of grant.

     Under the Stock Option Plan, options may not be exercised prior to the
first anniversary, or on or after the tenth anniversary (fifth anniversary in
the case of an ISO granted to a 10% Stockholder) of their grant. Options may not
be transferred during the lifetime of the option holder. No stock options may be
granted under the Stock Option Plan after May 2000.

     Under the Performance Equity Plan, the Committee may award stock
appreciation rights, restricted stock, deferred stock, stock reload options and
other stock-based awards in addition to stock options. The Stock Option Plan and
the Performance Equity Plan are administered by the Board of Directors and may
be administered by a Committee chosen by the Board of Directors. Subject to the
provisions of the Stock Option Plan and the Performance Equity Plan, the Board
of Directors or such Committee, as applicable, have the authority to determine
the individuals to whom the stock options are to be granted, the number of
shares to be covered by each option, the option price, the type of option, the
option period, the restrictions, if any, on the exercise of the option, the
terms for the payment of the option price and other terms and conditions.
Payment by option holders upon exercise of an option may be made (as determined
by the Board of Directors or the Committee) in cash, or, in certain instances,
by shares of Common Stock. Under the Performance Equity Plan, no more than
200,000 shares in the aggregate may be granted to any one holder in any one
calendar year.

     Under the terms of the CMT Merger, the Company issued options to purchase
144,000 shares of its Common Stock under the Stock Option Plan to holders of
options to purchase shares of CMT's stock, which options had been granted under
the stock option plan of CMT. In addition, the Company reserved shares of its
Common Stock with respect to options to purchase up to an additional 273,800
shares of Common Stock for future grant under the Stock Option Plan for
employees of CMT. Of these reserved shares, options to purchase up to an
aggregate of 44,250 shares of Common Stock were granted January 1, 1999 under
the 1990 Plan to fourteen (14) employees of CMT. The terms of such options


                                       23
<PAGE>

provide for a five (5) year vesting period by which all the options shall become
exercisable. To the extent not exercised, the options shall expire on December
31, 2008. On January 1, 2000, options to purchase up to an aggregate of 22,850
shares of Common Stock were granted to eleven (11) employees of CMT. The terms
of such options provide for a five- (5) year vesting period by which all the
options shall become exercisable. To the extent not exercised or terminated, the
options shall expire on December 31, 2009.

     At the year ended December 31, 1999, options to purchase an aggregate of
384,630 shares of the Company's Common Stock were outstanding under the Stock
Option Plan. At the year ended December 31, 1999, no options were outstanding
under the Performance Equity Plan.

     The Company from time to time has also granted non-plan options to certain
officers, employees and consultants. Options to purchase an aggregate of 308,000
shares of the Company's Common Stock were outstanding at December 31, 1999.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information, as of March 7, 2000 (except as
otherwise noted in the footnotes), regarding the beneficial ownership of the
Company's Common Stock of: (i) each person or group known by the Company to own
beneficially more than five percent of the outstanding shares of the Company's
Common Stock; (ii) each director of the Company; (iii) the Named Executives; and
(iv) all directors and executive officers of the Company as a group. Except as
otherwise specified, the Company believes that all persons named in the chart
have sole voting and investment power over the shares listed.

<TABLE>
                                              Amount and Nature of Beneficial             Percent of Class
Name of Beneficial Owner                                  Ownership                     of Voting Securities
-------------------------------------------- ------------------------------------ ----------------------------------
<S>                                                       <C>                                  <C>
Frederick R. Adler                                        704,673(1)                           11.31%

Joseph K. Pagano                                        1,313,950(2)                           20.87%

Samuel A. Rozzi                                           467,525                               7.69%

D.H. Blair Investment Banking Corp.                     1,124,859(3)                           18.50%

Robert A. Reinhart                                         52,500(4)                             *

Thomas Livelli                                            276,000                               4.54%

Richard Malavarca                                         180,000                               2.96%

Brett Fialkoff                                                  0                                *

All directors and officers as a group                   2,994,648(5)                           46.08%
(seven persons)

</TABLE>


------------------------------

(*)  Less than 1%.

(1)  Includes options to purchase up to 150,000 shares of the Company's Common
     Stock, at an exercise price of $0.75 per share.

(2)  Includes options to purchase up to 217,000 shares of the Company's Common
     Stock, at an exercise price of $1.625 per share.



                                       24

<PAGE>

(3)  J. Morton Davis is an investment banker and sole shareholder of D.H. Blair
     Investment Banking Corp. ("Blair"). The amount reported includes 8,500
     shares owned by Mr. Davis' wife. Mr. Davis disclaims beneficial ownership
     of the 8,500 shares owned by his wife. The information with respect to D.H.
     Blair Investment Banking Corp. ("Blair") and J. Morton Davis is based upon
     Amendment No. 7, dated May 1, 1996, to the Schedule 13D, dated January 31,
     1992, filed by such persons with the Securities and Exchange Commission.
     The Schedule 13D states that Blair shares voting and investment power over
     1,124,859 shares, and Mr. Davis has sole voting and investment power over
     such 1,124,859 shares.

(4)  Includes options to purchase up to 52,500 shares of the Company's Common
     Stock (of which 40,000 shares have an exercise price of $0.75 per share and
     12,500 shares have an exercise price of $2.25 per share). Excludes options
     to purchase 12,500 shares of Common Stock which are not presently
     exercisable.

(5)  Includes options to purchase up to an aggregate of 419,500 shares of the
     Company's Common Stock.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In October 1998, the Company entered into a 180-day note payable agreement
with a bank for a maximum of $200,000, which note is collateralized by a
$200,000 certificate of deposit as well as a personal guarantee of Joseph K.
Pagano, the President and Chairman of the Board of the Company. In December
1998, the bank advanced the Company $160,000 under this agreement. During 1999,
the note was completely repaid.

     On May 29, 1998, the Company consummated the CMT Merger pursuant to which a
wholly owned subsidiary of Prime merged with and into CMT. Under the terms of
the CMT Merger, all of the outstanding shares of capital stock of CMT were
converted into an aggregate of 1,611,000 shares of Common Stock, par value $.01
per share, of the Company, representing approximately 26.4% (after consummation
of the CMT Merger) of the Company's issued and outstanding Common Stock. Of the
shares issued pursuant to the CMT Merger, 393,000 and 202,500 shares of the
Company's Common Stock were issued to Joseph K. Pagano, the President and
Chairman of the Board of the Company, and Frederick R. Alder, a director of the
Company, respectively, each of whom was a stockholder of CMT at the time of the
CMT Merger.

     At the time of the CMT Merger, there were loans outstanding from CMT to six
of its shareholders, in the aggregate principal amount of $500,000, as evidenced
by promissory notes from CMT to each such shareholder. Messrs. Pagano and Adler
were among these shareholders and, at the time of the CMT Merger, held
promissory notes in the principal amounts of $218,333 and $112,500,
respectively. These notes currently bear interest at a rate of 5% and mature May
1, 2001 (as adjusted in connection with the CMT Merger and subsequently).


                                       25

<PAGE>

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

         (a)      Exhibits

                  See Exhibit Index appearing later in this Report

         (b)      Report on Form 8-K.

                  None.



                                       26
<PAGE>



PRIME CELLULAR, INC. AND SUBSIDIARIES
Table of Contents

------------------------------------------------------------------------------



                                                                       Page

Independent Auditors' Report                                                 F-1


Consolidated Financial Statements
   Balance Sheets
      December 31, 1999 and 1998                                       F-2 - F-3

   Statements of Operations
      For the Years Ended December 31, 1999, 1998 and 1997                   F-4

   Statements of Changes in Stockholders' Equity
      For the Years Ended December 31, 1999, 1998 and 1997                   F-5

   Statements of Cash Flows
      For the Years Ended December 31, 1999, 1998 and 1997             F-6 - F-7

Notes to Consolidated Financial Statements                            F-8 - F-22






<PAGE>



                          Independent Auditors' Report

To the Board of Directors and Stockholders
Prime Cellular, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Prime Cellular,
Inc. and Subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the years ended December 31, 1999, 1998 and 1997. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Prime Cellular, Inc.
and Subsidiaries as of December 31, 1999 and 1998 and the results of its
operations and its cash flows for the years ended December 31, 1999, 1998 and
1997, in conformity with generally accepted accounting principles.

RAICH ENDE MALTER LERNER & CO.
East Meadow, New York
February 17, 2000



                                       F-1


<PAGE>



PRIME CELLULAR, INC. AND SUBSIDIARIES
Consolidated Balance Sheets

-------------------------------------------------------------------------------
<TABLE>

                                                                                            December 31,
                                                                                 ---------------------------------
                                                                                       1999               1998
                                                                                 ---------------------------------
<S>                                                                              <C>                <C>
Assets
    Current Assets
       Cash                                                                       $     125,954    $        84,146
       Certificate of deposit - restricted                                                    -            200,000
       Investment securities                                                          5,008,533          5,096,557
       Accounts receivable - net of allowance for doubtful
         accounts of $20,000 for 1999 and 1998                                          572,075            305,575
       Unbilled services                                                                109,809             23,799
       Inventory                                                                        151,816            116,991
       Prepaid expenses                                                                  14,968              8,728
                                                                                  -------------    ---------------
                                                                                      5,983,155          5,835,796
                                                                                  -------------    ---------------

     Property, Plant and Equipment                                                    1,759,290          1,522,516
     Less:  Accumulated depreciation and amortization                                   667,659            518,792
                                                                                  -------------    ---------------

                                                                                      1,091,631          1,003,724
                                                                                  -------------    ---------------
     Other Assets
       Investment securities                                                            345,932                  -
       Investment securities receivable                                                       -          4,978,947
       Security deposits                                                                  1,000                  -
       Deferred financing costs - net of accumulated amortization
         of $617 and $365 for 1999 and 1998, respectively                                 6,964              7,216
                                                                                  -------------    ---------------

                                                                                        353,896          4,986,163
                                                                                  -------------    ---------------

                                                                                  $   7,428,682    $    11,825,683
                                                                                  =============    ===============
</TABLE>


                                       F-2
<PAGE>



PRIME CELLULAR, INC. AND SUBSIDIARIES
Consolidated Balance Sheets

-------------------------------------------------------------------------------

<TABLE>
                                                                                         December 31,
                                                                                  ---------------------------------
                                                                                     1999               1998
                                                                                  ---------------------------------
<S>                                                                               <C>              <C>
Liabilities and Stockholders' Equity
     Current Liabilities
       Collateralized investment loan                                             $           -    $     5,000,000
       Note payable - bank                                                                    -            160,000
       Current maturities of long-term debt                                              88,761             25,533
       Accounts payable and accrued expenses                                            315,433            427,313
       Customer deposits                                                                143,842            270,143
       Unearned revenue                                                                  54,460             42,387
                                                                                  -------------    ---------------

                                                                                        602,496          5,925,376

     Long-Term Debt - net of current maturities                                         560,107            324,164

     Stockholder Loans - net of unamortized discount
       of $32,387 and $37,515 for 1999 and 1998,
       respectively                                                                     531,988            501,860
                                                                                  -------------    ---------------

                                                                                      1,694,591          6,751,400
                                                                                  -------------    ---------------
     Stockholders' Equity
       Preferred Stock - $.01 par value, 5,000,000 shares
         authorized - none issued                                                             -                  -
       Common Stock - $.01 par value, 20,000,000 shares
         authorized, 6,078,700 and 6,108,700 shares issued
         and outstanding in 1999 and 1998, respectively                                  60,787             61,087
       Additional paid-in capital                                                     5,832,704          5,813,710
       Accumulated (deficit)                                                           (159,400)          (800,514)
                                                                                  -------------    ---------------

                                                                                      5,734,091          5,074,283
                                                                                  -------------    ---------------

                                                                                  $   7,428,682    $    11,825,683
                                                                                  =============    ===============
</TABLE>


See notes to consolidated financial statements.

                                       F-3


<PAGE>



PRIME CELLULAR, INC. AND SUBSIDIARIES
Consolidated Statements of Operations

-------------------------------------------------------------------------------

<TABLE>
                                                                             For the Years Ended
                                                                                   December 31,
                                                                  -------------------------------------------------
                                                                     1999              1998              1997
                                                                  -------------------------------------------------
<S>                                                              <C>             <C>              <C>
Revenue
     Contract revenue                                            $   2,404,753     $     928,686    $    1,125,855
     Sales of goods                                                  1,511,828         1,198,547         1,054,335
                                                                 -------------     -------------    --------------

                                                                     3,916,581         2,127,233         2,180,190
                                                                 -------------     -------------    --------------
Direct Costs
     Contract revenue                                                1,057,478           815,947           696,195
     Sales of goods                                                    734,465           642,310           645,519
                                                                 -------------     -------------    --------------

                                                                     1,791,943         1,458,257         1,341,714
                                                                 -------------     -------------    --------------
Income After Direct Costs
     Contract revenue                                                1,347,275           112,739           429,660
     Sales of goods                                                    777,363           556,237           408,816
                                                                 -------------     -------------    --------------

                                                                     2,124,638           668,976           838,476
                                                                 -------------     -------------    --------------
Other Operating Expenses
     Contract revenue                                                  724,344           699,977           610,388
     Sales of goods                                                    367,077           434,728           427,606
                                                                 -------------     -------------    --------------

                                                                     1,091,421         1,134,705         1,037,994
                                                                 -------------     -------------    --------------
Research and Development
     Contract revenue                                                    5,484            38,307            10,000
     Sales of goods                                                      4,229            35,360            10,000
                                                                 -------------     -------------    --------------

                                                                         9,713            73,667            20,000
                                                                 -------------     -------------    --------------
Income (Loss) from Segment Operations
     Contract revenue                                                  617,447          (625,545)         (190,728)
     Sales of goods                                                    406,057            86,149           (28,790)
                                                                 -------------     -------------    --------------

                                                                     1,023,504          (539,396)         (219,518)
                                                                 -------------     -------------    --------------
Corporate Activities
     Selling, general and administrative expenses                     (542,740)         (278,274)                -
     Other income                                                            -                 -            44,375
     Interest income                                                   295,890           223,381            12,949
     Interest expense                                                 (135,540)         (104,385)          (47,427)
                                                                 -------------     -------------    --------------

                                                                      (382,390)         (159,278)            9,897
                                                                 -------------     -------------    --------------
Income (Loss) Before Provision for Income Taxes                        641,114          (698,674)         (209,621)

Provision for Income Taxes                                                   -                 -                 -
                                                                 -------------     -------------    --------------

Net Income (Loss)                                                $     641,114     $    (698,674)   $     (209,621)
                                                                 =============     =============    ==============
Net Income (Loss) Per Share
   Basic                                                                   .11              (.16)             (.17)
                                                                 -------------     -------------    --------------
   Diluted                                                                 .10              (.16)             (.17)

                                                                 =============     =============    ==============
</TABLE>


See notes to consolidated financial statements.


                                       F-4

<PAGE>



PRIME CELLULAR, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
<TABLE>
                                                                  For the Years Ended December 31, 1999, 1998 and 1997
-----------------------------------------------------------------------------------------------------------------------------------
                                                Common Stock
                                       ---------------------------       Additional              Retained
                                             Shares         Amount     Paid-In Capital       Earnings (Deficit)           Total
                                       ---------------------------------------------------------------------------------------------
<S>                                      <C>         <C>             <C>                     <C>                  <C>
Balance - January 1, 1997                   900,000     $    9,000      $      (8,990)*         $    107,781         $     107,791
   Issuance of stock                        900,000          9,000            241,000                      -               250,000
   Discount on stockholder loan                   -              -            120,199                      -               120,199
   Contribution of shares back
     to the Company                        (270,000)        (2,700)             2,700                      -                     -
   Stock grants                              81,000            810             21,690                      -                22,500
   Net (loss)                                     -              -                  -               (209,621)             (209,621)
                                       ------------     ----------      -------------           ------------         -------------

Balance - December 31, 1997               1,611,000         16,110            376,599               (101,840)              290,869
   Options exercised                          7,200             72              1,928                      -                 2,000
   Recapitalization resulting
     from merger                          4,490,500         44,905          5,494,092                      -             5,538,997
   Adjustment of discount on
     stockholder loans                            -              -            (58,909)                     -               (58,909)
   Net (loss)                                     -              -                  -               (698,674)             (698,674)
                                       ------------     ----------      -------------           ------------         -------------

Balance - December 31, 1998               6,108,700         61,087          5,813,710               (800,514)            5,074,283
   Contribution of shares back
     to the Company                         (30,000)          (300)               300                      -                     -
   Adjustment of discount on
     stockholder loans                            -              -             18,694                      -                18,694
   Net income                                     -              -                  -                641,114               641,114
                                       ------------     ----------      -------------           ------------         -------------

Balance - December 31, 1999               6,078,700     $   60,787      $   5,832,704           $   (159,400)        $   5,734,091
                                       ============     ==========      =============           ============         =============
</TABLE>


*    Negative additional paid-in capital results from the restatement of common
     stock related to the issuance of shares resulting from the merger.

See notes to consolidated financial statements.



                                       F-5

<PAGE>



PRIME CELLULAR, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows                            Page 1 of 2
-------------------------------------------------------------------------------

<TABLE>
                                                                                 For the Years Ended
                                                                                   December 31,
                                                                 --------------------------------------------------
                                                                     1999              1998              1997
                                                                 --------------------------------------------------
<S>                                                            <C>                 <C>             <C>
Cash Flows from Operating Activities
     Net income (loss)                                          $      641,114     $     (698,674)   $    (209,621)
     Adjustments to reconcile net income (loss)
       to net cash provided by (used for) operating
       activities:
         Depreciation                                                  239,205            183,959          112,078
         Amortization                                                      252                190              175
         Increase in allowance for doubtful accounts                         -             10,000           10,000
         Accrued interest on stockholder loans                          48,822             45,324           17,826
         Stock-based compensation                                            -                  -           22,500
         (Increase) decrease in:
           Accrued interest on investment securities                    61,746                  -                -
           Accounts receivable                                        (266,500)           (34,243)         (16,428)
           Unbilled services                                           (86,010)            41,389          (31,578)
           Inventory                                                   (34,825)            18,086          (57,375)
           Prepaid expenses                                             (6,240)              (765)          14,713
         Increase (decrease) in:
           Accounts payable                                           (111,880)            42,969          (44,374)
           Customer deposits                                          (126,301)          (344,497)         614,640
           Taxes payable                                                     -                  -             (800)
           Unearned revenue                                             12,073            (10,261)         (72,072)
                                                                --------------     --------------    -------------

                                                                       371,456           (746,523)         359,684
                                                                --------------     --------------    -------------
Cash Flows from Investing Activities
     Acquisitions of property and equipment                           (327,112)          (347,173)        (447,936)
     Cash acquired in connection with merger                                 -            546,484                -
     Purchase of certificate of deposit                                      -           (200,000)               -
     Redemption of certificate of deposit                              200,000                  -                -
     Purchase of investment securities                                (340,707)        (5,014,578)               -
     Proceeds on sale of investment securities                       5,000,000                  -                -
     Payment of security deposit                                        (1,000)                 -                -
                                                                --------------     --------------    -------------

                                                                     4,531,181         (5,015,267)        (447,936)
                                                                --------------     --------------    -------------
</TABLE>


See notes to consolidated financial statements.



                                       F-6


<PAGE>



PRIME CELLULAR, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows                              Page 2 of 2
-------------------------------------------------------------------------------

<TABLE>
                                                                                 For the Years Ended
                                                                                   December 31,
                                                                 --------------------------------------------------
                                                                     1999              1998              1997
                                                                 --------------------------------------------------
<S>                                                            <C>                 <C>             <C>
Cash Flows from Financing Activities
     Net borrowings (repayments) on line of credit              $            -     $      (31,295)   $       5,605
     Proceeds of notes payable                                               -            160,000          100,000
     Repayment of notes payable                                       (160,000)                 -                -
     Payment of deferred financing costs                                     -                  -           (7,581)
     Proceeds of long-term debt                                        350,000                  -                -
     Repayments of long-term debt                                      (50,829)           (28,452)         (16,754)
     Loans from stockholders                                                 -                  -          517,150
     Repayments of loans from stockholders                                   -                  -         (150,207)
     Issuance of stock                                                       -                  -          250,000
     Proceeds of collateralized investment loan                              -          5,000,000                -
     Payment of collateralized investment loan                      (5,000,000)                 -                -
     Options exercised                                                       -              2,000                -
                                                                --------------     --------------    -------------

                                                                    (4,860,829)         5,102,253          698,213
                                                                --------------     --------------    -------------
Increase (Decrease) in Cash                                             41,808           (659,537)         609,961

Cash - beginning                                                        84,146            743,683          133,722
                                                                --------------     --------------    -------------

Cash - end                                                      $      125,954     $       84,146    $     743,683
                                                                --------------     --------------    -------------

Supplemental Disclosures of Cash Flow Information

     Cash paid during the year:
       Interest                                                 $       86,718     $       58,742    $       9,565
                                                                --------------     --------------    -------------

       Income taxes                                             $          863     $       11,935    $           -
                                                                --------------     --------------    -------------

     Non-cash investing and financing activities:
       Land and building acquired with mortgage                 $            -     $            -    $     287,600
                                                                --------------     --------------    -------------

     In connection with the merger on May 29,
       1998, the following assets (liabilities) were
       acquired by the acquiring entity for
       accounting purposes:
         Cash                                                                      $      546,484
         Investment in U.S. Treasury Note                                               5,060,926
         Other current assets                                                               7,963
         Property and equipment                                                            57,704
         Accumulated depreciation                                                         (12,965)
         Accounts payable and accrued expenses                                           (121,115)
                                                                                   --------------

                                                                                   $    5,538,997
                                                                                   ---------------
</TABLE>

See notes to consolidated financial statements.



                                       F-7


<PAGE>



PRIME CELLULAR, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements     December 31, 1999, 1998 and 1997
-------------------------------------------------------------------------------


1 -  Organization of the Company and Nature of its Operations

     On May 29, 1998, Prime Cellular, Inc. ("Prime"), a Delaware corporation,
     consummated a merger (the "Merger") with Cell & Molecular Technologies,
     Inc. and subsidiary, 580 Marshall St., L.L.C. ("CMT"), another Delaware
     corporation, pursuant to which a wholly-owned subsidiary of Prime was
     merged with and into CMT (collectively, Prime and CMT are referred to
     hereinafter as the "Company"). Under the terms of the Merger, all of the
     outstanding shares of capital stock of CMT were converted into an aggregate
     of 1,611,000 shares of common stock, par value of $.01 per share, of Prime,
     representing approximately 26.4% (after consummation of the Merger) of
     Prime's issued and outstanding common stock. This transaction was accounted
     for as a reverse acquisition under the purchase method of accounting
     whereby CMT was the acquirer for accounting purposes. The historical
     consolidated financial statements prior to May 29, 1998 are those of CMT
     with all common stock data restated into the equivalent capital structure
     of Prime.

     The Company is comprised of two separate divisions (segments) that provide
     goods and services in the domestic biotechnology and pharmaceutical
     industries. The Specialty Media Division ("SM") is a manufacturer and
     wholesaler of cell culture media and reagents. The Molecular Cell Science
     Division ("MCS") provides research services to pharmaceutical companies and
     other molecular and cell biology research and development entities.

2-   Summary of Significant Accounting Policies

     a.   Principles of Consolidation - The consolidated financial statements
          include the accounts of Prime Cellular, Inc. and its wholly-owned
          subsidiaries after elimination of all intercompany accounts and
          transactions.

     b.   Cash and Cash Equivalents - Cash and cash equivalents include liquid
          investments with maturities of three months or less at the time of
          purchase.

     c.   Investment Securities - Investment securities consist of U.S. Treasury
          Notes and U.S. Treasury Notes Receivable from counter parties in
          repurchase agreements. All investment securities are defined as
          held-to-maturity under the provisions of Statement of Financial
          Accounting Standards 115, Accounting for Certain Investments in Debt
          and Equity Securities and, as such, have been reported at amortized
          cost plus accrued interest.

     d.   Inventory - Inventory, consisting of cell culture media, reagents and
          related packaging material, is stated at the lower of cost (first-in,
          first-out method) or market.

     e.   Property, Plant and Equipment - Property, plant and equipment are
          stated at cost. Depreciation is provided on the straight-line and
          accelerated methods over the estimated useful lives of the assets,
          which range from three to forty years. Amortization of leasehold
          improvements is provided on the straight-line basis over the lesser of
          the estimated useful life of the asset or the remaining lease term.
          Repairs and maintenance which do not extend the useful lives of the
          related assets are expensed as incurred.

                                                                     Continued



                                       F-8


<PAGE>



     f.   Deferred Financing Costs - Financing costs, principally incurred in
          connection with the mortgage on Company premises, are amortized on a
          straight-line basis over the duration of the related loan.

     g.   Revenue Recognition - The Company records revenues from fixed-price
          contracts extending over more than one accounting period on a
          percentage-of-completion basis. Percentage-of- completion is
          determined based on the proportion of completed costs to total
          anticipated costs on each contract. If it is determined that a loss
          will result from the performance of a contract, the entire amount of
          estimated loss is charged against income in the period in which the
          determination is made. In general, prerequisites for billings are
          established by contractual provisions including predetermined payment
          schedules, the achievement of contract milestones or submission of
          appropriate billing detail. Unbilled services arise when services have
          been rendered but clients have not been billed. Similarly, unearned
          revenue represents amounts billed in excess of revenue recognized.

     h.   Research and Development Costs - Research and development costs are
          expensed as incurred unless they are reimbursed under specific grants
          in which case the grant reduces the cost of research and development.
          Total expenditures on research and development for 1999, 1998 and 1997
          were approximately $291,000, $213,000 and $20,000, respectively, of
          which approximately $281,000 and $140,000 were refunded by government
          agencies for 1999 and 1998, respectively.

     i.   Income Taxes - The Company accounts for certain income and expense
          items differently for financial reporting and income tax purposes.
          Deferred tax assets and liabilities are determined based on the
          difference between the financial statement and income tax basis of
          assets and liabilities and the tax effect of net operating loss and
          tax credit carryforwards applying the enacted statutory tax rates in
          effect for the year in which the differences are expected to reverse.

     j.   Advertising Costs - All costs relating to advertising and marketing
          are expensed in the period incurred. Advertising costs during 1999,
          1998 and 1997 were $59,539, $24,099 and $12,726.

     k.   Estimates - The preparation of financial statements in conformity with
          generally accepted accounting principles requires management to make
          estimates and assumptions that affect the reported amounts of assets
          and liabilities and disclosure of contingent assets and liabilities at
          the dates of the financial statements and the reported amounts of
          revenues and expenses during the reporting periods. Actual results
          could differ from those estimates.

     l.   Earnings Per Share - The accompanying financial statements include
          earnings per share calculated as required by Financial Accounting
          Standards No. 128 Earnings Per Share which replaced the calculation of
          primary and fully diluted earnings per share with basic and diluted
          earnings per share. Basic earnings per share is calculated by dividing
          net income (loss) by the weighted average number of shares of common
          stock outstanding. Diluted earnings per share include the effects of
          securities convertible into common stock, consisting of stock options,
          to the extent such conversion would be dilutive. Potential common
          stock was excluded from the computation for the years ended December
          31, 1998 and 1997 because of their anti-dilutive effect.

                                                                   Continued

                                      F-9


<PAGE>


          The following is a computation of the weighted average shares
          outstanding:

                                         1999            1998         1997
                                       --------------------------------------

          Basic                        6,102,700       4,308,180   1,255,500
          Effect of dilutive options     287,166               -           -
                                      ----------       ---------   ---------
          Diluted                      6,389,866       4,308,180   1,255,500
                                      ==========       =========   =========

     m.   Stock-Based Compensation - Statement of Financial Accounting Standards
          No. 123 Accounting for Stock-Based Compensation, encourages, but does
          not require companies to record compensation cost for stock-based
          employee compensation plans at fair value. The Company has chosen to
          continue to account for stock-based compensation using the intrinsic
          value method prescribed in Accounting Principles Board Opinion No. 25,
          Accounting for Stock Issued to Employees. APB No. 25 requires no
          recognition of compensation expense for the stock-based compensation
          arrangements provided by the Company where the exercise price is equal
          to the market price at the date of the grants.

     n.   Segments - The accompanying financial statements include segment
          disclosure as required by Financial Accounting Standards No. 131
          Disclosures about Segments of an Enterprise and Related Information,
          which expands and modifies disclosures but has no impact on
          consolidated financial position or results of operations or cash
          flows.

     o.   New Accounting Pronouncement - In June, 1998, the FASB issued SFAS No.
          133 Accounting for Derivative Instruments and Hedging Activities,
          which establishes accounting and reporting standards for derivative
          instruments and for hedging activities. It requires that an entity
          recognize all derivatives as either assets or liabilities in the
          balance sheet and measure those instruments at fair value, with the
          potential effect on operations dependent upon certain conditions being
          met. The statement is effective for all fiscal quarters of fiscal
          years beginning after June 15, 2000. Management does not believe there
          will be a significant impact on the Company upon adopting this
          standard.

     p.   Reclassification - Certain amounts from the prior years have been
          restated to conform to the current year's presentation. These
          reclassifications have no effect on previously reported income.

3 - Inventory

    Inventory consists of the following:

                                                     December 31,
                                               ---------------------------
                                                    1999            1998
                                               ---------------------------

           Finished Goods                       $    65,075     $   55,784
           Packaging Materials                       39,523         31,566
           Raw Materials                             47,218         29,641
                                                -----------     ----------
                                                $   151,816     $  116,991
                                                ===========     ==========

                                                                    Continued


                                      F-10


<PAGE>


4 -  Repurchase Agreement

     On November 20, 1998, the Company bought a U.S. Treasury Note for
     $4,942,187 plus accrued interest of $11,050 and simultaneously resold it
     for $5,000,000 pursuant to a Repurchase Agreement ("Repo") with Goldman,
     Sachs & Co. The Repo requires the Company to repurchase the security on
     February 26, 1999 for $5,000,000 plus accrued interest at 4.7%. Pursuant to
     Statement of Financial Accounting Standards No. 125, Accounting for
     Transfers and Servicing of Financial Assets and Extinguishments of
     Liabilities, the Company has accounted for the Repo as collateralized debt
     and, therefore, has reported the security as an investment security
     receivable and the related $5,000,000 obligation as a collateralized
     investment loan. This investment security is currently held by the Company
     as of December 31, 1999 and is included in investment securities -
     non-current (see Note 5 - Investment Securities).

5 -  Investment Securities

     At December 31, 1999, the Company held investments in securities, which
     were classified as held-to-maturity. Fair values are based on quoted market
     prices, including accrued interest.

                                                     Amortized Cost  Fair Value
                                                      --------------------------
       December 31, 1999

           Investment Securities - current
              U.S. Treasury Note - face value of
                $5,000,000 - interest at 4% - due
                October 31, 2000                      $ 4,975,200  $ 4,917,200
              Accrued interest                             33,333  -----------
                                                      -----------

                                                        5,008,533
                                                      -----------
           Investment Securities - non-current
              U.S. Treasury Note - face value of
              $340,000 - interest at 5.5% - due
              August 31, 2001                             339,681  $   335,964
                                                                   -----------
              Accrued interest                              6,251
                                                      -----------

                                                          345,932
                                                      -----------
           Net Book Value - held-to-maturity
             securities                              $  5,354,465
                                                     ------------


                                                                    Continued

                                      F-11


<PAGE>



<TABLE>
                                                                                 Amortized Cost      Fair Value
                                                                              -------------------------------------
<S>                                                                           <C>                <C>
       December 31, 1998
           Investment Securities - current
              U.S. Treasury Note - face value of $5,000,000 -
                interest at 5.875% - due February 28, 1999                   $     4,997,180     $   5,009,375
                                                                                                 --------------
              Accrued interest                                                        99,377
                                                                             ---------------

                                                                                   5,096,557
           Investment Securities Receivable - non-current
              U.S. Treasury Note - face value of $5,000,000 -
                interest at 4.0000% - due October 31, 2000                         4,945,522     $   4,946,875
                                                                                                 --------------
              Accrued interest                                                        33,425
                                                                             ---------------

                                                                                   4,978,947

           Net Book Value - held-to-maturity securities                      $    10,075,504
                                                                             ---------------
</TABLE>



6 -  Property, Plant and Equipment

     Property, plant and equipment consist of the following:

<TABLE>
                                                               December 31,     Estimated
                                                           -------------------------------
                                                               1999               1998         Useful Lives
                                                           --------------------------------------------------
<S>                                                         <C>              <C>
           Land                                             $      90,000    $      90,000           -
           Building and Improvements                              325,480          325,480     39-40 years
           Machinery and Equipment                              1,258,856          934,544     5-17 years
           Leasehold Improvements                                       -           90,338     Lease life
           Furniture and Fixtures                                  84,954           82,154     5-10 years
                                                            -------------    -------------
                                                                1,759,290        1,522,516
           Less:  Accumulated depreciation

                     and amortization                             667,659          518,792
                                                            -------------    -------------

                                                            $   1,091,631    $   1,003,724
                                                            --------------   --------------
</TABLE>


     Depreciation and amortization expense charged to operations is $239,205,
     $184,149 and $112,253 for the years ended December 31, 1999, 1998 and 1997,
     respectively.

                                                                     Continued

                                     F-12


<PAGE>



7 -  Note Payable - Bank

     In October, 1998, the Company entered into a 180-day note payable agreement
     with a bank for a maximum of $200,000. In December, 1998, the bank advanced
     $160,000 to the Company under this agreement. Interest is stated at 6 1/4%
     and is payable monthly. During February, 1999, $60,000 was repaid. The
     principal and any accrued interest were due April 1, 1999 and the note was
     renewed for an additional 90 days. This note was collateralized by a
     $200,000 certificate of deposit as well as a personal guarantee by one of
     the officers of the Company. This note was paid in full in 1999.

8 -  Retirement Plan

     During 1999, the Company adopted a 401(k) retirement plan for all eligible
     employees who meet certain eligibility criteria such as age, term of
     employment, etc. Eligible employees may elect to contribute to the plan a
     portion of their gross salary (subject to federal tax law). The Company
     does not contribute to the plan.

9 -  Long-Term Debt

     Long-term debt consists of the following:

<TABLE>
                                                                                             December 31,
                                                                                       ---------------------------
                                                                                          1999            1998
                                                                                       ---------------------------
<S>                                                                                <C>              <C>
       Mortgage Payable - payable in 240 monthly installments of
       $2,610 to February, 2017, including a variable interest rate
       which is adjusted every three years (1999 rate was 9%) -
       secured by the Company's building in Phillipsburg, New Jersey                  $   272,864    $   277,488

       Notes Payable - bank - payable in 60 monthly installments of
       $2,132 to April, 2002, including interest at 10% - guaranteed by
       two stockholders and secured by a stockholder's personal
       residence                                                                           52,598         71,863

       Notes Payable - bank - payable in 60 monthly installments of
       $7,223 to August, 2002, including interest at 8.75% - unsecured                    323,406              -

       Other                                                                                    -            346
                                                                                      -----------    -----------
       Less:  Current maturities                                                          648,868        349,697
                                                                                           88,761         25,533
                                                                                      -----------    -----------

                                                                                      $   560,107    $   324,164
                                                                                      -----------    -----------
</TABLE>



                                                                      Continued
                                      F-13


<PAGE>

     Principal maturities of long-term debt over the next five years are as
     follows;


                             December 31,       2000          $    88,761
                                                2001               97,237
                                                2002               88,277
                                                2003               87,835
                                                2004               53,495
                             Thereafter                           233,263
                                                              -----------

                                                              $   648,868
                                                              -----------



10 - Stockholder Loans

     Five stockholders and one of their related parties advanced $500,000, in
     aggregate, to the Company during 1997. The promissory notes bear 5% simple
     interest, payable at maturity, and had an original due date of July 14,
     2002. As the promissory notes bear a below market rate of interest,
     additional interest was imputed on the notes to approximate the Company's
     current available financing rate of 10%.

     As a result of the merger, the above loans' maturity dates have been
     accelerated to May 1, 2000. The imputed interest has been adjusted in 1998,
     as a result of the maturity date acceleration thereby reducing the discount
     by $58,909. This was charged to additional paid-in capital as an adjustment
     to the original $120,199 credited to additional paid-in capital in 1997
     which related to the purchase of stock.

     During 1999, the stockholders agreed to extend the above loans' maturity
     date to May 1, 2001. The imputed interest has been adjusted as a result of
     the maturity date extension thereby increasing the discount by $18,694.
     This amount was added to additional paid-in capital as an adjustment to the
     original $120,199 (as adjusted by $58,909 in 1998) credited to additional
     paid-in capital in 1997, which related to purchase of stock.

     At December 31, 1999, the balance of stockholder loans, net of unamortized
     discount of $32,387, is $531,988.

11 - Commitments

     In May, 1997, the Company entered into an employment agreement with its
     subsidiary's President/CEO. The agreement is for an initial term of three
     years at an annual base compensation of $135,000 and contains a provision
     for an automatic one-year extension, unless written notice is received by
     either party.

     The Company has, from time-to-time, received various loans from its
     stockholders to fund operations.

                                                                     Continued


                                      F-14


<PAGE>



     The Company subleased its former administrative office and executive
     research laboratory from a stockholder of the Company. The underlying lease
     expired in November, 1999. However, the Company entered into a termination
     agreement with the landlord effective April 30, 1999. Rent payments are
     made directly to the landlord on behalf of the officer of the Company.
     Rental expense of $124 (as adjusted for credits received from the
     landlord), $15,840, and $17,444 was incurred under sublease for the years
     ended December 31, 1999, 1998 and 1997, respectively.

     The Company subleases executive office space from the Company's president
     on a month-to- month basis. Rental expense was $26,868 and $10,500 for the
     years ended December 31, 1999 and 1998, respectively. The Company entered
     into a six-month lease for additional office space on December 1, 1999 at
     the rate of $1,000 per month.

     In May, 1999, Prime entered into an employment agreement with Joseph K.
     Pagano ("Pagano") to serve as the president of Prime. This replaces the
     consulting agreement that Prime had with Pagano which was terminated at the
     same time. The agreement is for an initial term of one year at an annual
     base compensation of $85,000 and contains a provision for an automatic
     one-year extension.

     In connection with the employment agreement, the termination date of
     217,000 options previously granted to Pagano under the Company's 1990 Stock
     Option Plan were extended an additional three years to May 24, 2004. In
     accordance with SFAS 123, the additional compensation recognized as of the
     modification date, if the Company had accounted for its stock option plans
     under the fair value method, would have been $45,570, which was estimated
     using the Black- Scholes pricing model, with the following weighted average
     assumptions:

                                               Before                 After
                                               Modification        Modification
                                               --------------------------------

           Expected life of options                2 years             5 years
           Risk-free interest rate                   5%                   5%
           Volatility of stock                     158%                 158%
           Expected dividend yield                   -                    -


12 - Income Taxes

     There was no current or deferred tax provision for the years ended December
     31, 1999, 1998 and 1997.

     Deferred taxes reflect the tax effects of temporary differences between the
     amounts of assets and liabilities for financial reporting and the amounts
     recognized for income tax purposes as well as the tax effects of net
     operating loss and tax credit carryforwards. The significant components of
     deferred tax assets are as follows:

                                                                     Continued


                                      F-15


<PAGE>


<TABLE>
                                                                                      December 31,
                                                                      ---------------------------------------------
                                                                         1999              1998              1997
                                                                      ---------------------------------------------
<S>                                                                   <C>             <C>              <C>
           Net Operating Loss Carryforward                            $    342,000    $    444,000     $    64,000
           Depreciation and Other Temporary Differences                     (7,000)         21,000          11,000
                                                                      -------------   ------------     -----------
                                                                           335,000         465,000          75,000
           Less:  Valuation allowance                                      335,000         465,000          75,000
                                                                      ------------    ------------     -----------

                                                                      $          -    $          -     $         -
                                                                      ------------    -----------      -----------
</TABLE>


     Management believes that, it is not more likely than not, that the
     remaining deferred tax assets will be realized.

     The provision for income taxes differs from the amount using the statutory
     federal income tax rate (34%) as follows:

<TABLE>
                                                                                      December 31,
                                                                      ---------------------------------------------
                                                                         1999              1998              1997
                                                                      ---------------------------------------------
<S>                                                                   <C>             <C>              <C>
           At Statutory Rates                                         $    218,000    $   (238,000)    $   (64,000)
           (Benefit) of net operating loss carryforward
             not previously recognized                                    (199,000)              -               -
           Decrease in beginning of year valuation
             allowance due to changes in circumstances
             reflecting on the realization of deferred tax
             assets                                                        (19,000)              -               -
           Loss for which no benefit was recorded                                -         238,000          75,000
           No Federal Income Tax on S Corporation                                -               -         (17,000)
           Other - primarily state taxes                                         -               -           6,000
                                                                      ------------    ------------     -----------

                                                                      $          -    $          -     $         -
                                                                      ------------    ------------     -----------

     The Company has available to offset future income taxes a net operating
     loss of approximately $1,003,000 as follows:

                   Expiration                      Amount             Type

             ------------------------------------------------------------------


             May 31,            2009           $      66,861         SRLY
                                2010                 106,918         SRLY
                                2011                 119,292         SRLY
                                2012                 226,917         SRLY
                                2012                  45,169         Non-SRLY
             December 31,       2012                   6,328         Non-SRLY
                                2013                 431,684         Non-SRLY
                                               -------------

                                               $   1,003,169

                                                                      Continued


                                      F-16


<PAGE>


13 - Percentage-of-Completion

     The following is a summary of assets and liabilities related to long-term
     contracts which are recognized on the percentage-of-completion basis:

                                                                                       December 31,
                                                                                ---------------------------
                                                                                  1999           1998
                                                                                ---------------------------
<S>                                                                             <C>          <C>
           Contract Receivables
               Billed - contracts in progress                                   $  371,518     $   114,814
               Unbilled                                                            109,809          23,799
                                                                                ----------     -----------
                                                                                   481,327         138,613
               Less:  Allowance for doubtful collections                                 -               -
                                                                                ----------     -----------

                                                                                $  481,327     $   138,613
                                                                                ----------     -----------
           Unearned Revenue
               Costs incurred on uncompleted contracts                          $  329,637     $   131,150
               Estimated earnings                                                  339,412          48,642
                                                                                ----------     -----------
                                                                                   669,049         179,792
               Less:  Billings to date                                             613,700         198,380
                                                                                ----------     -----------

                                                                                $   55,349     $   (18,588)
                                                                                ----------     -----------

                                                                                        December 31,
                                                                                ---------------------------
                                                                                  1999           1998
                                                                                ---------------------------
               Included in the accompanying balance sheets
                  under the following captions:
                    Unbilled services                                           $  109,809     $    23,799
                    Unearned revenue                                               (54,460)        (42,387)
                                                                                ----------     -----------

                                                                                $   55,349     $   (18,588)
                                                                                ----------     -----------
</TABLE>


     The Company uses estimates of remaining costs to complete each contract to
     determine the revenue and profitability on each contract. The estimates are
     reevaluated periodically and, as such, reevaluations may, in the future,
     lead to changes in the rate of profitability on each contract.

     There were no contracts where the expected costs exceeded the contract
     price. All contract receivables are due within one year.

                                                                      Continued

                                      F-17


<PAGE>



14 - Stock Option Plan

     The 1990 Stock Option Plan (the "Plan") provides for the granting of either
     stock options intended to qualify as incentive stock options under the
     Internal Revenue Code or non-statutory stock options for up to an aggregate
     of 1,000,000 shares of common stock. Options may be granted for terms of up
     to ten years and are exercisable as determined by the Company's Board of
     Directors (the "Board"). The option price under the plan must be no less
     than fair market value of the shares on the date of grant, except that the
     term of an incentive stock option granted under the Plan to a stockholder
     owning more than 10% of the outstanding common stock may not exceed five
     years and its exercise price may not be less than 110% of the fair market
     value of the common stock on the date of the grant.

     The pro forma information required by SFAS 123 regarding net income and
     earnings per share has been presented as if the Company had accounted for
     its stock option plans under the fair value method. The fair value of each
     option grant is estimated on the date of the grant using the Black-Scholes
     pricing model with the following weighted average assumptions:

                                                        1999           1998
                                                   -----------------------------
           Assumptions
             Expected life of options                 5 years          5 years
             Risk free interest rate                       5%               5%
             Volatility of stock                         172%             237%
             Expected dividend yield                        -                -


     The weighted average fair value of the options granted during 1999 and 1998
     was $42,038 and $287,390, respectively. Had the fair value of the options
     been amortized to expense over the related service period, the pro forma
     impact on earnings of the stock-based compensation for the options under
     the provision would have been as follows:

                                                       1999           1998
                                                   -----------------------------
          Net Income (Loss)
            As reported                         $    641,114     $   (698,674)
            Pro forma                                540,514         (914,045)

          Diluted Earnings Per Share
            As reported                                  .10             (.16)
            Pro forma                                    .08             (.21)


     In accordance with SFAS 123, the weighted average fair value of stock
     options granted is required to be based on a theoretical statistical model
     using the preceding assumptions. In actuality, the Company's stock options
     do not trade on a secondary exchange and, therefore, the employees and
     directors cannot derive any benefit from holding the stock options under
     these plans without an increase in the market price of Company stock. Such
     an increase in stock price would benefit all stockholders commensurately.

                                                                      Continued


                                      F-18


<PAGE>


     As discussed in Note 11, the Company extended the termination date of
     options previously granted to the Company's president.

     Presented below is a summary of stock option plan activity for the years
     shown:

<TABLE>
                                                                       Weighted                          Weighted
                                                                       Average                           Average
                                                                       Exercise        Options           Exercise
                                                        Options        Price           Exercisable       Price
                                                     -------------------------------------------------------------
<S>                                                   <C>             <C>              <C>              <C>
       Balance - December 31, 1996                             -       $     -
         Granted                                         144,000           .28
                                                     -----------

       Balance - December 31, 1997                       144,000       $   .28             28,800        $  .28
         Granted                                         293,000           .95
         Transferred through merger                      257,000          1.49
         Exercised                                        (7,200)          .28
         Canceled                                        (28,800)          .28
                                                     -----------

       Balance - December 31, 1998                       658,000          1.05            468,200          1.16
         Granted                                          44,250          1.00
         Canceled                                         (9,620)         1.00
                                                     -----------

       Balance - December 31, 1999                       692,630       $  1.05            539,866        $ 1.12
                                                     -----------

     The following summarizes information for options currently outstanding and
     exercisable at December 31, 1999:

                                                    Options Outstanding                     Options Exercisable
                                          -------------------------------------------      -----------------------
                                                         Weighted         Weighted                      Weighted
                                                         Average          Average                       Average
                                                         Remaining        Exercise                      Exercise
                                           Number          Life            Price             Number       Price

                                          ---------------------------------------------------------------------
<S>                                        <C>            <C>            <C>             <C>            <C>
       Range of Prices
         $   .28                            108,000        2 years        $   .28           64,800       $  .28
             .75                            290,000        2 years            .75          223,300          .75
            1.00                             34,630        9 years           1.00            4,266         1.00
            1.63                            217,000        4 years           1.63          217,000         1.63
            2.00                             18,000        3 years           2.00           18,000         2.00
            2.25                             25,000        2 years           2.25           12,500         2.25
                                         ----------                                     ----------

                                            692,630        3 years          $1.05          539,866       $ 1.12
                                         ----------                                     ----------
</TABLE>

                                                                      Continued

                                      F-19


<PAGE>


15 - Segment Information

     As described in Note 1, the Company has two reportable segments which are
     organized along its divisional lines. The accounting policies of the
     segments are the same as those described in the summary of significant
     accounting policies. The Company evaluates performance based on profit or
     loss before interest income, expense and income taxes. The Company accounts
     for inter- segment sales and transfers, if any, as if the transactions were
     to third parties, that is at current market prices.

     The Company's reportable segments are strategic business units that offer
     different products and services. They are managed separately because each
     business requires different technologies and marketing strategies.

  <TABLE>
                                                                             December 31,
                                                              ----------------------------------------------------
                                                                   1999              1998              1997
                                                              ----------------------------------------------------
<S>                                                          <C>                 <C>              <C>
       Contract Revenue and Sales
         MCS                                                   $    2,456,687     $      930,686    $    1,125,855
         SM                                                         1,529,902          1,238,343         1,054,335
                                                               --------------     --------------    --------------

                                                               $    3,986,589     $    2,169,029    $    2,180,190
                                                                 --------------     --------------    --------------

       Income (Loss) Before Taxes
         MCS                                                   $      599,373     $     (678,341)   $     (190,728)
         SM                                                           424,131            138,945           (28,790)
                                                               --------------     --------------    --------------

                                                               $    1,023,504     $     (539,396)   $     (219,518)
                                                               --------------     --------------    --------------

       Depreciation and Amortization
         MCS                                                   $      165,558     $      137,795    $       82,502
         SM                                                            64,421             41,383            29,751
                                                               --------------     --------------    --------------

                                                               $      229,979     $      179,178    $      112,253
                                                               --------------     --------------    --------------
       Segment Assets
         MCS                                                   $    1,128,317     $      811,313    $    1,520,920
         SM                                                           781,124            639,248           507,537
                                                               --------------     --------------    --------------

                                                               $    1,909,441     $    1,450,561    $    2,028,457
                                                               --------------     --------------    --------------
       Expenditures for Long-Lived Assets
         MCS                                                   $      202,885     $      264,896    $      368,778
         SM                                                           118,017             82,277           366,758
                                                               --------------     --------------    --------------

                                                               $      320,902     $      347,173    $      735,536
                                                               --------------     --------------    --------------
</TABLE>


                                                                     Continued

                                      F-20


<PAGE>


     Essentially all revenue earned for the years ended December 31, 1999, 1998
     and 1997 by the Company are attributable to the United States, the
     Company's country of domicile. All long-lived assets of the Company are
     located in the United States.

     The following is a reconciliation of the contract revenues and sales, loss,
     interest income and expense, depreciation and amortization and assets
     segment items disclosed above to the amounts reported on the consolidated
     financial statements:

<TABLE>
                                                                              December 31,
                                                              ---------------------------------------------------
                                                                  1999               1998               1997
                                                              ---------------------------------------------------
<S>                                                            <C>               <C>               <C>
       Contract Revenues and Sales
         Total contract revenues and sales for
           reportable segments                                 $    3,986,589     $    2,169,029    $    2,180,190
         Elimination of intersegment revenues
           and sales                                                  (70,008)           (41,796)                -
                                                               --------------     --------------    --------------

                                                               $    3,916,581     $    2,127,233    $    2,180,190
                                                               --------------     --------------    --------------

       Income (Loss) Before Taxes
         Total income (loss) for reportable segments           $    1,023,504     $     (539,396)   $     (219,518)
         Corporate income and expenses
           unallocated to segments                                    382,390           (159,278)            9,897
                                                               --------------     --------------    --------------

                                                               $      641,114     $     (698,674)   $     (209,621)
                                                               --------------     --------------    --------------

       Depreciation and Amortization
         Total depreciation and amortization for
           reportable segments                                 $      229,979     $      179,178    $      112,253
         Corporate depreciation and amortization
           unallocated to segments                                      9,478              4,971                 -
                                                               --------------     --------------    --------------

                                                               $      239,457     $      184,149    $      112,253
                                                               --------------     --------------    --------------

       Assets
         Total assets for reportable segments                  $    1,909,441     $    1,450,561    $    2,028,457
         Corporate assets unallocated to segments                   5,519,241         10,375,122                 -
                                                               --------------     --------------    --------------

                                                               $    7,428,682     $   11,825,683    $    2,028,457
                                                               --------------     --------------    --------------
</TABLE>

                                                                      Continued


                                      F-21


<PAGE>


16 - Significant Customers and Concentrations of Credit Risk

     For the years ended December 31, 1999, 1998 and 1997, the Company had
     significant sales and receivable balances from major customers in the
     pharmaceutical and biotechnology industries and academia as follows:

<TABLE>
                                                        ................. Approximate Year-to-Date .................
                                           December 31, 1999            December 31, 1998           December 31, 1997
                              ---------------------------------------------------------------------------------------
                                             Percentage                   Percentage                    Percentage
                                   Sales     of Total           Sales      of Total         Sales       of Total
                              ------------------------------------------------------------------------------------
<S>                           <C>             <C>           <C>            <C>         <C>             <C>
       Significant  Customer
         A - segment MCS      $ 1,365,139         35%       $   241,000         11%     $   528,000          24%
         B - segment SM                 -          -            280,000         13          229,000          11
                              -----------      -----        -----------     ------      -----------       -----

                              $ 1,365,139         35%       $   521,000         24%     $   757,000          35%
                              -----------      -----        -----------     ------      -----------       -----
</TABLE>


<TABLE>
                              ............  Approximate Value at Year End  ..............
                                           December 31, 1999            December 31, 1998
                              -----------------------------------------------------------
                               Accounts                       Accounts
                              Receivable      Percentage      Receivable    Percentage
                                (Net) *        of Total         (Net) *     of Total
                              --------------------------------------------------------
<S>                            <C>              <C>        <C>           <C>
       Significant  Customer
         A                    $         -          -%       $    46,000         14%
         B                        249,205         40                  -          -
         C                         87,571         14                  -          -
         D                              -          -             40,000         12
         E                              -          -             33,000         10
         F                              -          -             66,000         20
                              -----------      -----        -----------     ------

                              $   336,776         54%       $   185,000         56%
                              ===========      =====        ===========     ======
</TABLE>


     *Accounts receivable (net) includes billed accounts receivable and unbilled
     services less unearned revenue.

     The Company's financial instruments that are exposed to concentrations of
     credit risk consist primarily of cash and trade accounts receivable. The
     Company placed its cash with high credit quality institutions. At times,
     balances may be in excess of the FDIC insurance limit. The Company
     routinely assesses the financial strength of its customers and, as a
     consequence, believes that its trade accounts receivable credit risk
     exposure is limited.

                                      F-22

<PAGE>


                                   SIGNATURES

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

                                     PRIME CELLULAR, INC.



Dated:   March 30, 2000
                                 By: /s/ Robert A.  Reinhart
                                     ---------------------------------------
                                    Robert A. Reinhart, Chief Financial
                                    Officer and Principal Accounting Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the date indicated.

<TABLE>

               Signature                                     Title                                 Date

<S>                                       <C>                                                       <C>
/s/ Joseph K. Pagano                      Director, President (Principal Executive                  March 30, 2000
-------------------------------------     Officer)
Joseph K. Pagano

/s/ Robert A. Reinhart                    Chief Financial Officer, Treasurer,                       March 30, 2000
------------------------------------      Secretary and Vice President (Principal
Robert A. Reinhart                        Financial Officer and Principal Accounting
                                          Officer)

/s/ Frederick R. Adler                     Director                                                  March 30, 2000
------------------------------------
Frederick R. Adler

/s/ Samuel Rozzi                          Director                                                  March 30, 2000
------------------------------------
Samuel Rozzi

/s/ Richard Malavarca                     Director                                                  March 30, 2000
------------------------------------
Richard Malavarca

/s/ Thomas Livelli                        Director                                                  March 30, 2000
------------------------------------
Thomas Livelli

/s/ Brett Fialkoff                        Director                                                  March 30, 2000
------------------------------------
Brett Fialkoff

</TABLE>

                                       50
<PAGE>

                                                    EXHIBIT INDEX
                                                    ---------------

<TABLE>

                                                                     Incorporated
Exhibit                                                           By Reference from    No. in Document
Number         Description                                             Document                                 Page
------         -----------                                             --------                                 ----
<S>            <S>                                                       <C>             <C>
3.1            Certificate  of   Incorporation,   as  amended             A              Exhibit 3.1

3.2            By-laws of the Company                                     A              Exhibit 3.2

10.1           1990 Stock Option Plan                                     A              Exhibit 10.1

10.2           Consulting Agreement dated July 2, 1991, among             B              Exhibit 10.2
               the Company, Prime Cellular of Florida, Inc.
               and Joseph K. Pagano (the  "Consulting
               Agreement")

10.3           Amendment to Consulting Agreement                          B              Exhibit 10.3

10.4           Agreement  and Plan of Merger,  dated as of May            C              Exhibit 2.1
               14,  1996,  by and among  the  Company,   Prime
               Cellular Acquisition  Corp.,  Bern Associates,
               Inc. and the stockholders of Bern

10.5           Registration  Rights  Agreement,  dated  June              C              Exhibit 10.1
               10,  1996,  between Registrant and the Bern
               Stockholders

10.6           Escrow Agreement,  dated June 10, 1996, between            C              Exhibit 10.2
               Registrant and the Bern Stockholders

10.7           Indemnification  Agreement, dated June 10, 1996            C              Exhibit 10.3
               between Registrant and the Bern Stockholders

10.8           Form of Amendment to Merger Agreement, dated               D              Exhibit 10.9
               June 11, 1997

10.9           Form of Settlement Agreement, dated August 28,             D              Exhibit 10.10
               1997

10.10          Agreement and Plan of Merger, dated as of May              E              Exhibit 2
               29, 1998, by and among the Company, CMT
               Acquisition Corp., Cell  & Molecular
               Technologies, Inc.  and  the  stockholders  of
               Cell &  Molecular Technologies, Inc.

10.11          Mortgage dated February 6, 1997, with respect to           F             Exhibit 10.11
               premises  located at 580  Marshall  Street,
               Phillipsburg,  NJ 08865,  assumed by the Company
               in connection with the CMT Merger

10.12          Form of  Employment  Agreement  dated May 22,              F             Exhibit 10.12
               1997  between Cell & Molecular Technologies,
               Inc. and Thomas Livelli

10.13          Form of Amendment to Employment Agreement dated            G             Exhibit 10.13
               as of May 29, 1998 between Cell & Molecular
               Technologies, Inc.  and Thomas Livelli

10.14          Employment Agreement between Joseph K. Pagano                                                Filed
               and the Company                                                                              Herewith
</TABLE>


<PAGE>
<TABLE>
<S>                                                                                                        <C>
21             List of Subsidiaries                                                                         Filed
                                                                                                            Herewith

27.1           Financial Data Schedule                                                                      Filed
                                                                                                            Herewith

99             Risk Factors                                                                                Filed
                                                                                                            Herewith
</TABLE>



A.   Company's Registration Statement on Form S-18 (Registration No.
     33-35537-NY)

B.   Company's Annual Report on Form 10-K for the fiscal year ended May 31,
     1992.

C.   Company's Report on Form 8-K dated June 11, 1996.

D.   Company's Annual Report on Form 10-K for the fiscal year ended May 31,
     1997.

E.   Company's Report on Form 8-K for the event dated May 29, 1998.

F.   Company's Report on Form 10-K for the fiscal year ended December 31, 1998.

G.   Company's Report on Form 10-K/A for the fiscal year ended December 31,
     1998.