<PAGE>   1

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 2000

                                       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 1-13732

                       SHARED TECHNOLOGIES CELLULAR, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                                          06-1386411
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                            Identification No.)

                        100 Great Meadow Road, Suite 104
               Wethersfield, Connecticut              06109
        (Address of principal executive offices)    (Zip Code)


Registrant's telephone number, including area code:

                                 (860) 258-2500

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

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

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. [X]

The aggregate market value of the registrant's Common Stock held by
nonaffiliates as of March 23, 2001 was approximately $915,000 based on the
average of the closing bid and asked prices as reported on such date in the
over-the-counter market.

As of March 23, 2001, there were 15,476,000 shares outstanding of the
registrant's Common Stock, $.01 par value.
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                                     PART I

ITEM 1.  BUSINESS.

(a) General Development of Business - Shared Technologies Cellular, Inc. ("STC"
or the "Company"), a Delaware corporation incorporated in 1989, is a national
telecommunications products and services provider. The Company offers prepaid
wireless, Internet service and appliances, paging, long distance and local
services through various national distribution channels. The Company also rents
cellular telephones to business and leisure travelers and to individuals at
special events. The rental program is primarily marketed to car rental customers
nationwide under a STC/Nextel co-branding name. STC is capable of delivering
cellular service to approximately 98% of the U.S. population, which allows
customers from coast to coast to utilize the Company's cellular products and
services, and activate these phones with a local cellular phone number.

Through the acquisitions of certain assets from Road and Show Cellular East,
Inc., Road and Show South, Ltd. and Road and Show Pennsylvania, Inc.
(collectively "Road and Show"), in December 1993, the Company obtained a
national distribution network, including relationships with national car rental
companies and hotels. As of December 31, 2000, the Company had approximately
3,000 cellular telephones available to rent at approximately 200 distribution
outlets.

In April 1995, the Company completed its initial public offering, pursuant to
which the Company sold 950,000 shares of its Common Stock, $.01 par value
("Common Stock"). Prior to the offering, the Company was an approximately
86%-owned subsidiary of Shared Technologies Fairchild Inc. ("STFI").

In May 1995, the Company commenced management of, and subsequently acquired the
outstanding capital stock of The Cellular Hotline, Inc., ("Hotline"), a cellular
telephone activation service provider for a purchase price of $1,329,000.

In November 1995, the Company completed its acquisition of substantially all of
the assets of PTC Cellular, Inc. ("PTCC"), one of the largest in-car cellular
telephone providers in the United States for a purchase price of $3,725,000.

In December 1995, the Company sold its post-paid cellular resale business to
SNET Mobility, Inc. The sale included the Company's customer accounts relating
to the resale business and the corresponding accounts receivable, for
approximately $1.1 million in cash.

In December 1995, the Company completed a $3 million private placement of equity
with International Capital Partners, Inc., ("ICP"), a Stamford, Connecticut
based investment firm, two of whose principals are currently directors of the
Company. The $3 million offering proceeds, net of commissions, was used
primarily for the acquisition of certain assets of PTCC and to provide
additional working capital. Under the terms of the offering, STC issued 300,000
shares of its Series A Convertible Preferred Stock, $.01 par value per share
(the "Series A Stock"). In addition, the Company issued to ICP a five-year
warrant to purchase 150,000 shares of the Company's Common Stock at an exercise
price of $2.50. In May 1996, all outstanding shares of Series A Stock were
converted into 1,146,450 shares of Common Stock. In August 1996, the Company's
stockholders approved the Company's cancellation of the Certificate of
Designations for the Series A Stock.

In April 1996, the Company completed its acquisition of substantially all of the
assets of its only franchisee, Summit Assurance Cellular, Inc. and certain other
parties (collectively "Summit") The purchase price was approximately $3,563,000
comprised of $335,000 in cash, the assumption of $669,000 of accounts payable
and $656,000 of notes payable, the issuance of a promissory note for $953,000,
and the issuance of 300,000 shares of Common Stock, valued at $3.125 per share
and three-year warrants each to purchase 100,000 shares of the Company's Common
Stock at prices of $3.00, $4.00 and $5.00 per share, respectively. These
warrants were valued at $13,000. In April 1998, the Company, Summit and Craig
Marlar, who was an officer and director of Summit and was a director of the
Company until his resignation in April 1998, entered into a settlement of
litigation arising out of the acquisition of certain assets of Summit, whereby
the Company received from Summit 100,000 shares of the Company's Common Stock.
The stock received was in exchange for the assumption by the Company of $150,000
to a vendor on behalf of Summit, a one-year extension of the expiration date of
the warrants issued in connection with the acquisition, the issuance to Summit
of a warrant to purchase 100,000 shares of the Company's Common Stock at an
exercise price of $5.00 per share, and forgiveness of all amounts due, including
accrued interest, on a note receivable from Summit in the principal amount of
$180,000. The effect of this transaction on the Company's results of operations
was immaterial.


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In August 1996, the Company completed a $5 million private placement with ICP
and STFI for 500,000 shares of Series B Preferred Stock, $.01 par value per
share (the "Series B Stock"). The Company received gross proceeds from the
offering of $5 million, including the cancellation of $1,200,000 of preexisting
debt to STFI. A commission of $125,000 was paid to ICP. Separately, the Company
engaged the services of ICP to provide certain financial advisory services to
the Company for a period of one year. In consideration for such services, the
Company issued a five-year Common Stock Warrant to ICP for the purchase of
240,000 shares of Common Stock at an exercise price of $3.00 per share and on
terms substantially the same as those provided for in the Common Stock Warrants
issued to the purchasers of the Series B Stock. In August 1997, all outstanding
shares of Series B Stock were converted into 1,667,000 shares of the Company's
Common Stock and the shareholders received warrants to purchase an equal number
of Common Stock at an exercise price of $3.00 per share.

In December 1996, the Company entered into an agreement (the "Purchase
Agreement") with RHI Holdings, Inc. ("RHI") pursuant to which the Company sold
to RHI 500,000 Common Stock units ("Units") with each Unit consisting of one
share of Common Stock, and one warrant to purchase an additional share of Common
Stock at $3.00 per share. The Company received proceeds of $1,469,000, net of
certain transactional expenses, from the sale of such Units. The Purchase
Agreement provided for STC to use its best efforts to cause the Board of
Directors of STC to include at least one member designated by RHI so long as RHI
owns capital stock (or the rights to purchase capital stock) comprising 5% or
more of the voting power in STC, and at least two members designated by RHI so
long as RHI owns capital stock (or the rights to purchase capital stock)
comprising 10% or more of the voting power in STC. To date, no RHI-designated
directors have joined the Board of Directors. The Company used the proceeds
received from the sale of the Units for working capital.

In August and September 1997, the Company sold an additional 407,000 Units
through a private placement that included various members of the Company's
management. The sale generated proceeds of $1,220,000.

In April 1998, the Company secured debt financing in the principal amount of
$4,000,000 from four lenders, in connection with which the Company issued
warrants to purchase an aggregate of 400,000 shares of the Company's Common
Stock. Pursuant to credit agreements entered into in April 1998, the Company
borrowed $1,000,000 from Anthony D. Autorino, the Company's Chairman and Chief
Executive Officer; $500,000 from ICP; $2,000,000 from Salomon Brothers Holding
Company Inc. ("Salomon"); and $500,000 from a private investor. The credit
agreements had a maturity date of July 1999 and a floating interest rate of 2.5%
above a rate comparable to the prime rate. In connection with the debt
financing, the Company issued to Mr. Autorino, ICP, Salomon and the private
investor warrants for the purchase of 100,000, 50,000, 200,000 and 50,000 shares
of Common Stock, respectively. The warrants are exercisable at $5.00 per share,
and expire April 15, 2003. The warrants were valued at $100,000. In connection
with the financing, the Company paid a facility fee of $25,000 to ICP
Investments, Inc. with respect to the funding by ICP and the private investor,
and paid a facility fee of $50,000 to Salomon. The Company used a portion of the
proceeds raised in February 1999 (see below) to repay the $4,000,000 of debt.

In May 1998, the Company issued to nine investors through a private offering 5%
convertible notes in the aggregate principal amount of $2,400,000 (the "Notes").
Purchasers of the Notes included an affiliate of ICP, International Capital
Partners Profit Sharing Trust, which purchased a Note in the amount of $200,000.
The Notes have a term of seven years and are convertible at any time at the
option of the noteholder into shares of the Company's Common Stock at a rate of
$5.00 per share, subject to certain antidilution adjustments. The Company has
the right to force conversion of the Notes after three years, in the event that
the Company's Common Stock trades at or above $10 per share for at least five
consecutive trading days. $1,950,000 of such Notes were converted into 390,000
shares of Common Stock as of March 16, 2001.

In February 1999, the Company completed a $15 million private placement of
15,000 shares of Series C Convertible Preferred Stock ("Series C Shares"). Each
purchaser of the Series C Shares has the right, upon the occurrence of certain
events, to require the Company to redeem all or any part of such purchaser's
Series C Shares. Therefore, the Series C Shares have not been reflected in
Stockholders' Deficit. The number of shares of Common Stock issuable upon the
conversion of the Series C Shares includes a premium of 6%, per annum. The
Company accounted for the premium of 6% as a preferred stock dividend. The
Series C private placement also included Warrants to purchase an aggregate of
300,000 shares of Common Stock. The Warrants were valued at $75,000 and the
value was treated as a "discount" to the Series C Shares and such discount is
being accreted as a preferred stock dividend over the five-year term of the
Warrants. In accordance with Emerging Issues Task Force Topic D-60, the Company
recognized a beneficial conversion feature in the amount of $4,018,000 as a
one-time non-cash preferred stock dividend in the first


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<PAGE>   4
quarter of 1999. The amount represented the difference between the conversion
price of $7 per share at the date of issuance of the Series C Shares, February
5, 1999, and the $8 7/8 market price of Common Stock on that date. As of March
23, 2001, approximately 7,000 of such Series C Shares had been converted into
1,886,000 shares of Common Stock.

In July 1999, as amended in August 2000, the Company entered into a $2,500,000
revolving credit facility with Citizens Bank of Massachusetts ("Citizens"). The
availability of the credit facility was based on a percentage of eligible
receivables and includes covenants requiring certain levels of prepaid customers
and operating results through the term of the agreement. At December 31, 2000,
the Company had approximately $98,000 outstanding under the credit facility and
had $575,000 in standby letters of credit to certain vendors that were
collateralized by the credit facility. The August 2000 amendment also modified
the termination date of the credit facility to December 29, 2000. In March 2001,
the Company's Chairman and Chief Executive Officer, Anthony D. Autorino, assumed
the position as the Company's primary lender from Citizens. Mr. Autorino
subsequently assigned his rights and obligations under such loan to Mobile
Investments, LLC ("Mobile"), which agreed to increase the facility to $5
million, subject to certain conditions (see Note 9 of the Notes to the
Consolidated Financial Statements for a detailed discussion).

In July 1999, the Company completed the acquisition of all of the issued and
outstanding capital stock of Retail Cellular, Inc. ("RCI"), for a purchase price
of 150,000 shares of Common Stock. RCI became a wholly-owned subsidiary of the
Company. The transaction enhanced the Company's sales capabilities, particularly
in connection with the distribution of the Company's prepaid cellular services.
The Company purchased RCI from Retail Distributors, Inc. ("RDI"), the chief
executive officer and a principal stockholder of which is Victor Grillo, Sr.,
who was elected to the Company's Board of Directors on July 7, 1999 at the
annual meeting of the Company's stockholders. As part of the acquisition
transaction, the Company entered into a Services Agreement with RDI, pursuant to
which RDI provides certain services relating to the marketing and distribution
of the Company's prepaid cellular services. Pursuant to terms of the Services
Agreement, which was retroactive to February 8, 1999, the Company paid RDI
approximately $843,000 and issued to RDI 118,194 shares of Common Stock.
Additional compensation, exclusive of expenses, is performance based, payable
through the issuance of Common Stock purchase warrants. As of December 31, 2000,
the Company had issued 275,000 Common Stock purchase warrants to RDI. The Common
Stock purchase warrants were valued at $69,000 and the value was treated as a
sales expense. Also, RCI entered into a Consulting Agreement with RDI, expiring
June 30, 2001, pursuant to which RDI provides certain sales and marketing
services. The Services Agreement and the Consulting Agreement, both as amended
July 2000, include monthly payments to RDI through June 2001 that total
$1,896,000. These transactions were all treated as a services agreement, and as
such were expensed over the useful terms of the Agreements, which the Company
determined was through December 31, 2000.

In October 1999, the Company completed a $6.1 million private placement of 6,100
shares of Series D Convertible Preferred Stock ("Series D Shares"). Each
purchaser of the Series D Shares has the right, upon the occurrence of certain
events, to require the Company to redeem all or any part of such purchaser's
Series D Shares. Therefore, the Series D Shares have not been reflected in
Stockholders' Deficit. The number of shares of Common Stock issuable upon the
conversion of the Series D Shares includes a premium of 6%, per annum. The
Company accounted for the premium of 6% as a preferred stock dividend. The
Series D Shares private placement also included Warrants to purchase an
aggregate of 122,000 shares of Common Stock. The Warrants were valued at $31,000
and the value was treated as a "discount" to the Series D Shares and such
discount is being accreted as a preferred stock dividend over the five-year term
of the Warrants. As of March 23, 2001, 6,000 of such Series D Shares had been
converted into 1,577,000 shares of Common Stock.

In August 2000, the Company raised $2,975,000 through a private placement of
equity with various investors. Such financing included the exchange of certain
outstanding shares of Series D Convertible Preferred Stock for Common Stock, in
conjunction with the purchase of new shares of Common Stock by such Series D
holders, as well as the exercise of certain outstanding warrants for Common
Stock. The Company raised $1,500,000 with the sale of 600,000 new shares of
Common Stock and the exchange of 6,000 shares of Series D Convertible Preferred
Stock into 1,577,000 shares of Common Stock. An additional $1,475,000 was raised
through the exercise of certain warrants into 1,008,000 shares of Common Stock.
The proceeds were used to meet working capital requirements.

(b) Financial Information about Industry Segments - The Company is currently
engaged in two industry segments within the telecommunications industry,
providing a wide range of services including, prepaid cellular phone service


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and short-term cellular phone rentals. The response to this section of Item 1 is
incorporated by reference to Note 19 of the Notes to the Consolidated Financial
Statements, contained in Item 14(a) Financial Statements, below.

(c) Narrative Description of Business

         (1)(i) Products and Services

PREPAID SERVICES

The Company offers prepaid wireless, paging, long distance and local services
through various national distribution channels. STC is capable of delivering
cellular service to 98% of the U.S. population, which allows clients from coast
to coast to utilize the Company's cellular products and services, and activate
these phones with a local cellular phone number.

STC has created an innovative Nationwide Integrated Communications Program
(NICP). This turnkey program will allow Retailers to create a new prepaid
"Communications" destination in their store locations, which will promote
prepaid wireless, paging, Internet, long-distance, local and E-mail services at
very competitive prices. Customers can allocate their purchase to various
services (i.e. a $50 card could have $20 allocated to Internet and $30 to a
cellular account).

With STC's "One card does it all(TM)" approach to managing communications
expenses, the potential for each customer wanting or using several of these
products dramatically increases. The present success of the prepaid cellular
program only serves to reinforce customer demand for prepaid communications
services. Most important, this total communication program is supported by STC's
CellEase(R) 2000 Universal Platform, with back office facilities that handle
activations, redemptions, customer service, reporting, fulfillment and account
management.

STC's DIRECT TO RETAIL PROGRAM is marketed directly to retailers, regardless of
their size or scope. Retailers can choose from different prepaid
product/services, such as cellular, paging, long distance, Internet, and local
access. The current programs include free minutes and do not require the
purchase of a usage card to activate the phone or pager. This is a major benefit
because the products become more attractive to the consumer because no
investment beyond the purchase of the equipment is required. The Company's
cellular rate plan (with rates as low as $0.39 per minute) makes it's cellular
offering one of the most competitively priced prepaid programs available in the
marketplace today. STC's national carrier contracts also enable customers to
purchase this product from the retailer and activate the phone with a local
phone number in any market they choose - making it an ideal gift offering.

STC's PRIVATE LABEL PROGRAM is primarily designed to meet the needs of various
distribution partners. The program mimics the Direct to Retail programs with
respect to the products and pricing, but allows these partners to promote their
own brand recognition, without investing in the technology and human resources
necessary to support the prepaid cellular offering.

STC, through its wholly-owned subsidiary CellEase.com, Inc., is primarily a
business to business IT services company, providing back-office service bureau
functions, advanced platform, and integrated e-commerce and direct marketing
solutions to the telecommunications industry. Utilizing proprietary systems that
were developed over several years, CellEase offers carriers and distribution
partners an array of services, including: a universal prepaid redemption
platform, IVR facilities, point-of-sale activation (POSA) card services,
inter-carrier communications services and one-stop shopping, e-commerce and
direct marketing programs that offer multiple telecommunications services.

CellEase's universal prepaid redemption platform is one of the most widely
distributed payment system in the industry today. Offered under its own
"CellEase Compatible" logo, the platform primarily serves cellular carriers,
service providers and resellers. This innovative platform broadens and enhances
their distribution channels for prepaid cellular, paging and other
communications services without the need for additional investments on the part
of the provider in technology, administration and back room operations.
Participating providers should experience significant reductions in churn by
offering their customer bases thousands of additional outlets for purchasing
prepaid usage cards, thus strengthening their commitment to customer services,
satisfaction and retention.


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<PAGE>   6
CELLULAR PHONE RENTALS

Responding to the need for individuals to stay in touch while traveling, the
incompatibility of many cellular networks throughout the country, the high cost
of roaming, and the increase in cellular fraud, STC began marketing cellular
telephone rental services, primarily through car rental companies, in 1992.

The Company has agreements with The Hertz Corporation ("Hertz"), Budget
Rent-a-Car Corporation and Avis Rent-A-Car System, Inc., as well as certain car
rental company licensees, to offer its portable cellular telephones at car
rental counters (primarily in airport terminals) in approximately 37 cities
throughout the United States.

Customers typically rent STC phones to avoid the confusion (and cost) of
multiple PINs, authentication, roaming access codes, and the other consequences
of using a cellular phone outside one's home calling area. Added benefits of
renting an STC cellular phone include access to an international calling
platform and simplified billing for expense reimbursement to corporate users.
Car rental companies see the cellular rental program as a value-added service
that generates incremental revenue and provides a much-needed customer service.

While STC's national service footprint gives the Company a clear competitive
advantage, the growing acceptance of PCS digital phones -- despite the coverage
gaps that accompany them -- must be acknowledged as a potential threat to market
share. Since business travelers represent that segment of the market that
desires features such as paging, voice mail, caller ID, Internet access and
speaker phone capabilities, and since most business travelers remain within 60
miles of a major metropolitan area, STC can strengthen its already dominant
position in the rental market by offering such services directly. Accordingly,
STC has become a national authorized representative for one of the premier
providers of digital cellular services: Nextel Communications. The Company has
upgraded its fleet of cellular rental phones to Nextel i1000 plus to better
support the business traveler at the car rental locations which has also opened
the door for incremental business directly to corporate groups through national
meeting planners.

(iv)     PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS

The Company, through its wholly-owned subsidiary, The Cellular Hotline, Inc.,
holds a patent for point-of-sale programming of cellular phones that is utilized
in connection with phone activations. In addition, the Company has certain
technology licenses, including agreements with Telemac Corporation, US
Intellicom, Boston Communications Group, and JRC International. "Shared
Technologies Cellular" is a registered trademark that is owned by STFI. STC has
a royalty-free license to use such mark for 15 years, which expires in 2010. The
Company has registered the trademark "CellEase".

(v)      SEASONALITY

The Company has experienced a reduction of revenues from phone rentals in the
winter months due to the reduction in business travel during the holiday season
and inclement weather. The Company has experienced an increase in sales of
prepaid cellular phones in the holiday season.

(vi)     WORKING CAPITAL

The Company has incurred cumulative losses of approximately $72,000,000 through
December 31, 2000. The Company has funded its losses through borrowings from
STFI, its former parent, through its initial public offering in April 1995, and
various private placements of debt and equity. See Item 1(a) - "General
Development of Business", "Management's Discussion and Analysis of Financial
Condition and Results of Operation" and "Notes to Consolidated Financial
Statements" herein.

(vii)    DEPENDENCE ON CERTAIN CUSTOMERS

Approximately 22%, 14% and 10% of the Company's revenues for 2000 were
attributable to MCI WorldCom, Hertz and Home Shopping Network, respectively. The
Company has good relationships with Hertz and Home Shopping Network. MCI
WorldCom is no longer promoting the sale of prepaid cellular phones, but is
distributing CellEase compatible prepaid cards. Nevertheless, the longevity of
these relationships is generally subject to contractual termination provisions
that are effective upon relatively short notice.


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<PAGE>   7
(viii)   BACKLOG

At any given time the Company maintains approximately 3,000 portable cellular
telephones available for short-term rentals. Due to the varying utilization of
the telephones, backlog information for the portable rental business cannot be
quantified.

(ix)     GOVERNMENT REGULATION

From time to time, legislation and regulations that could potentially affect the
Company, either beneficially or adversely, have been proposed by federal and
state legislators and regulators. Management is not aware of any current pending
or proposed legislation or regulations which, if adopted, would have a material
adverse impact on the Company's operations.

(x)      COMPETITION

The telecommunications industry in general, and the cellular telephone industry
in particular, is highly competitive. Competitive factors include price,
customer service, geographical coverage and the ability to increase revenues
through marketing. The Company's short-term portable service competes with
local, regional and national cellular service companies, some of which have
substantially more experience and greater financial, technical and other
resources than the Company.

Other cellular providers in the prepaid market include: national carriers such
as Sprint, Verizon, AT&T, SBC and local carriers and resellers. In addition,
TracFone, a subsidiary of TelMex Telefonos de Mexico, is a nationwide provider
of prepaid cellular telephones. They are marketed under the "TRACFONE" brand
name. They state to be available in more than 30,000 retail locations across the
U.S. Some of the major retailers they are in include Radio Shack, Kmart, Ames,
Eckerd Drug and Circle K.

(xiii)   EMPLOYEES

As of March 23, 2001, the Company had 207 employees; 13 in management, 21 in
administration, 41 in sales and service, 120 in clerical and 12 in technical
positions. The Company's employees are not represented by a labor union. The
Company believes its relations with its employees are satisfactory.

ITEM 2.     PROPERTIES.

The Company does not own any real estate and has no present plans to purchase
any real estate. The Company's principal executive office is leased and is
located at 100 Great Meadow Road, Suite 104, Wethersfield, Connecticut 06109.

The Company's executive office currently occupies approximately 19,000 square
feet pursuant to a five-year lease agreement, as amended in July 1998, expiring
in 2001 (the "Term"). The Company pays a monthly rent of approximately $30,000
during the remainder of the Term. The Company leases approximately 16,000 square
feet pursuant to a five-year lease agreement, expiring in 2004, in Missouri for
a call center. The Company pays a monthly rent of approximately $11,000 on this
lease. The Company also leases approximately 12,000 square feet pursuant to a
five-year lease agreement, expiring in 2002, in Connecticut for another call
center. The Company pays a monthly rent of approximately $14,000 on this lease.
In addition, the Company leases an aggregate of approximately 5,000 square feet
in various locations nationwide for the purpose of direct sales by its sales
force, for a total monthly rent of approximately $10,000. Each of the leased
properties is, in management's opinion, generally well maintained and is
suitable to support the Company's business.

ITEM 3.  LEGAL PROCEEDINGS.

In January 1999, the Company filed a lawsuit against SmarTalk TeleServices, Inc.
("SmarTalk") and certain individuals in the U.S. District Court for the District
of Connecticut. The Company's complaint includes allegations of breach of
contract and fraud in connection with various agreements between SmarTalk and
the Company. SmarTalk subsequently filed for federal bankruptcy protection. The
Company's complaint seeks recovery of $25 million in damages, and the Company
has filed a proof of claim with the bankruptcy court (U.S. Bankruptcy Court,
District of


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<PAGE>   8
Delaware) for $14.4 million. The Company intends to aggressively prosecute its
claim, although due to SmarTalk's impaired financial condition and the number
and value of claims from unsecured creditors, the amount of any recovery against
SmarTalk is questionable. SmarTalk has since disclosed approximately $847,000 in
preference payments that it claims the bankrupt estate is entitled to recover
from the Company, although the Company intends to aggressively defend against
any such claim.

The Company is involved in an eviction proceeding with respect to its Hartford
office, which houses one of the Company's two call centers (Connecticut
Constitution Assoc. L. P. v. Shared Technologies Cellular, Inc., Superior Court,
State of Connecticut, Case No. HDSP 113363). However, the Company is actively
engaged in settlement discussions with the landlord/plaintiff in this matter,
and is optimistic that a satisfactory resolution will be reached soon.

The Company is not involved in any other litigation which, individually or in
the aggregate, if resolved against the Company, would be likely to have a
material adverse effect on the Company's financial condition, results of
operations or cash flows.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of the Company's security holders during the
fiscal quarter ended December 31, 2000.

                                     PART II

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

On July 28, 2000, the Company was notified by The Nasdaq Stock Market, Inc. that
beginning July 31, 2000, its common stock would no longer be listed on The
Nasdaq Stock Market due to the Company's failure to satisfy the minimum
$50,000,000 market capitalization requirement for continued listing on The
Nasdaq National Market or the minimum $35,000,000 market capitalization
requirement for listing on The Nasdaq SmallCap Market. The Company's common
stock was transferred to the OTC Bulletin Board System on July 31, 2000 under
the symbol: STCL.OB. The Company's shares of Common Stock have been quoted and
traded in the over-the-counter market since April 21, 1995. Over-the-counter
market quotations reflect interdealer prices, without retail mark-up, mark-down
or commission and may not necessarily represent actual transactions. During 2000
and 1999, the quarterly high and low closing prices were as follows:

<TABLE>
<CAPTION>
                             2000           2000          1999           1999
                             ----           ----          ----           ----
                             High            Low          High            Low
<S>                         <C>            <C>           <C>            <C>
        First Quarter       $ 9.250        $ 4.625       $ 9.375        $ 6.125
        Second Quarter      $ 4.750        $ 1.500       $13.000        $ 7.500
        Third Quarter       $ 2.875        $ 1.125       $11.500        $ 8.000
        Fourth Quarter      $ 2.219        $ 0.125       $ 9.438        $ 7.125
</TABLE>

The number of beneficial holders of the Company's Common Stock as of March 23,
2001 was approximately 1,590.

ITEM 6.  SELECTED FINANCIAL DATA.

The following table sets forth the selected financial data of the Company for
each of the last five years. Financial statements for 1997 and 1996 are not
presented in this filing. Such selected financial data were derived from audited
financial statements not included herein. The selected financial data of the
Company should be read in conjunction with the Consolidated Financial Statements
and related notes appearing elsewhere in this Form 10-K. All amounts, except per
share amounts, are in thousands.


                                       8
<PAGE>   9
<TABLE>
<CAPTION>
                                     2000        1999        1998        1997        1996
                                   --------    --------    --------    --------    --------
<S>                                <C>         <C>         <C>         <C>         <C>
Statement of Operations-Data:
Revenues                           $ 32,744    $ 28,271    $ 28,200    $ 24,198    $ 20,914
Gross margin                          4,606       6,344       7,941      10,667       6,305
Total operating expenses             24,002      22,628      18,629      14,120      14,173
Loss from operations                (19,396)    (16,284)    (10,688)     (3,453)     (7,868)


Interest expense, net                   582         574         952         232         906


Net loss before income
   Taxes                            (19,978)    (16,858)    (11,640)     (3,685)     (8,774)


Income taxes                             (6)         (7)         (6)        (10)        (22)

Net loss                            (19,984)    (16,865)    (11,646)     (3,695)     (8,796)


Preferred stock dividends              (808)     (5,786)       --          --          (112)


Net loss applicable to
   Common stock                    $(20,792)   $(22,651)   $(11,646)   $ (3,695)   $ (8,908)


Net loss per common
   share, basic and diluted        $  (1.83)   $  (2.84)   $  (1.58)   $  (0.63)   $  (2.18)
Weighted average number of
  shares outstanding                 11,335       7,985       7,375       5,900       4,082


Balance Sheet Data:
Working Capital Deficit            $(23,045)   $ (8,248)   $(16,099)   $ (6,955)   $ (8,975)


Total assets                          9,887      21,585      13,487      11,536      14,262
Notes payable (including current
  portion)                              890       3,027       7,331       1,487       2,578


Other liabilities                    25,574      20,180      14,840       7,832       8,768


Indebtedness to STFI                   --          --         1,411       1,052          59

Series C and D Shares                 8,649      20,861        --          --          --


Accumulated deficit                 (71,797)    (51,005)    (28,354)    (16,708)    (13,013)


Stockholders' equity (deficit)     $(25,226)   $(22,483)   $(10,095)   $  1,165    $  2,857
</TABLE>


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

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Revenues for 2000 were $32,744,000, compared to $28,271,000 for 1999, an
increase of $4,473,000 (16%). The net loss applicable to Common Stock for 2000
was $20,792,000, compared to $22,651,000 for 1999. The net loss applicable to
Common Stock for 1999 included a one-time non-cash preferred stock dividend of
$4,018,000, $0.50 per share, attributable to the beneficial conversion feature
in connection with the Company's issuance of its Series C Convertible Preferred
Stock, in February 1999. The net loss per Common Share was $1.83 for 2000,
compared to a net loss per Common Share of $2.84 for 1999.

Revenues

Prepaid operations had revenues of $22,450,000 for 2000, compared to $14,280,000
for 1999. The increase in revenues of $8,170,000 (57%) was due to the continued
growth of the private label and the direct to retail programs, together with the
continued purchase of new prepaid cards by existing customers.

The growth of the prepaid program was assisted by two major developments during
fiscal 1999 that continued into fiscal 2000. In February 1999, the Company
signed an agreement with MCI WorldCom for the retail distribution of the
Company's prepaid cellular services under the MCI WorldCom brand name, utilizing
MCI WorldCom's extensive network of retail distribution locations. In July 1999,
the Company purchased Retail Cellular, Inc. ("RCI") from Retail


                                       9
<PAGE>   10
Distributors, Inc. ("RDI") and entered into a Services Agreement with RDI for
support in the marketing, sale and distribution of the Company's prepaid
cellular services.

The Company's cellular phone rental operations had revenues of $10,046,000 for
2000, compared to $12,939,000 for 1999. The decrease of $2,893,000 (22%) was
mostly attributable to two car rental companies discontinuing their cellular
phone rental programs, National Car Rental in June 2000 and Alamo Car Rental in
September 2000. In addition, during fiscal 2000 the Company closed several
non-profitable locations and began development of new market opportunities
within the remaining car rental locations.

The Company's cellular activation operations had revenues of $248,000 for 2000,
compared to $1,052,000 for 1999. The Company closed the Connecticut activation
location in November 1999 and terminated activations related to the MOVE program
in the second quarter of 2000. The MOVE program provided cellular service
activations for customers who move from one cellular market to another.

Gross Margin

Gross margin was 14% of revenues for 2000, compared to 22% for 1999. The overall
decrease in gross margin was primarily due to the growth in prepaid revenues, as
compared to the revenues of the other operations. The following table summarizes
the change in the revenues mix and the corresponding gross margins for the two
periods:

<TABLE>
<CAPTION>
                  2000            2000            1999           1999
                  ----            ----            ----           ----
                Revenues      Gross Margin      Revenues     Gross Margin
<S>             <C>           <C>               <C>          <C>
Prepaid           68%             (7)%             50%           (14)%
Rental            31%             60%              46%            62%
Activation         1%             40%               4%            32%
                 ----            ----             ----           ----
                 100%             14%             100%            22%
</TABLE>


Gross margin for prepaid operations improved significantly in 2000, compared to
1999. Fiscal 1999 was negatively impacted by the termination of the Company's
relationship with SmarTalk, in December 1998. As a result of this termination,
during most of fiscal 1999 the Company had a significant gap between lines under
contract with carriers and such carriers' lines that were active with customers,
resulting in higher than normal carrier access charges during that period. Gross
margin for 2000 was negatively impacted by a per minute rate reduction offered
to customers. Effective mid-December 1999, the Company reduced its prepaid
cellular rate from $.79 per minute to rates as low as $.39 per minute, depending
on the denomination of the prepaid card redeemed. The negative impact on gross
margin of the price decrease is expected to be offset by increased usage by
customers and by continued reductions in carrier charges. Gross margin for 2000
was also negatively impacted by subsidies offered by the Company on the sale of
prepaid cellular phones. The Company sold approximately 103,000 cellular prepaid
phones in 2000 with a gross margin of 13%, compared to approximately 49,000
cellular prepaid phones with a gross margin of 35% in 1999.

Gross margin for cellular phone rental operations decreased slightly in 2000,
compared to 1999. During the fourth quarter of 2000, the Company expensed the
unamortized book value of its Motorola cellular phone inventory and resolved a
commission issue with one of the Company's car rental partners.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") were $23,147,000 for 2000,
compared to $21,411,000 for 1999, an increase of $1,736,000 (8%). The increase
included $2,685,000 related to the services agreement with Retail Distributors,
Inc. entered into in early 1999. The services agreement, as amended, was valued
at approximately $5.5 million and was amortized over the life of the services
agreement. As a percentage of revenues, SG&A decreased to 71% for 2000, compared
to 76% for 1999. Excluding the charge related to the services agreement, SG&A
decreased to 58% of revenues for 2000, compared to 71% of revenues for 1999. The
decrease, or improvement, was attributable to several factors. SG&A for 1999, as
a percentage of revenues, were negatively impacted by SmarTalk. The Company
added a new call center in Hartford and expanded its existing call center in St.
Louis in the fourth quarter of 1998, in anticipation of the significant growth
the Company expected from its SmarTalk relationship. As previously discussed,
the significant growth did not occur. Consequently, SG&A, as a percentage of
revenues, increased dramatically in


                                       10
<PAGE>   11
1999 compared to the prior year. As revenues increased through the latter part
of 1999 and 2000, the Company was able to improve, or reduce, SG&A as a
percentage of revenues. In addition, in the latter part of 2000, the Company
implemented SG&A cost reductions that should reduce SG&A by approximately
$400,000 (20%) per month in fiscal 2001.

Bad Debt Expense

Bad debt expense was $855,000 for 2000, compared to $1,217,000 for 1999, a
decrease of $362,000 (30%). As a percentage of revenues, bad debt expense was
approximately 3% for 2000, compared to 4% for 1999. The improvement in bad debt
expense for 2000, compared to 1999, was due to two main factors. The prepaid
operations, which had significant revenue growth between the two years compared
to the rental operation, historically has had lower bad debt than rental
operations. The rental operations continued to show improvement in its
collection procedures. The predominant amounts of these rental sales are paid by
credit card. Historically, the Company has experienced an amount of credit card
charges that it is not able to collect. In addition, the Company receives some
customer requests for amounts charged to be reversed for a variety of reasons.
The Company diligently investigates these occurrences. However, the Company
still experiences a percentage of bad debt write-offs, as it continues to make
efforts to address this problem. The Company therefore maintains an allowance
for doubtful accounts against its receivable balance, representing the unpaid
accounts under investigation, and upon final resolution of the account, the
amount is either collected or written off against the allowance. The
investigation process is time consuming; documentation (typically itemized call
detail for the rental period) must be generated and provided to the credit card
processing company prior to the reversal of the claim. The Company regularly
reviews the allowance for the amounts that are deemed truly uncollectible and
writes them off against the allowance. The allowance represents only those
receivables generated within the current operating cycle and does not have any
amounts that are aged in excess of a 6-month period.

The Company records an allowance for uncollectible receivables from revenues
generated through the ordinary course of business. The Company regularly reviews
uncollected receivables and writes off any that are deemed uncollectible against
the allowance.

Interest Expense

Interest expense, net of interest income, was $582,000 for 2000, compared to
$574,000 for 1999. Interest expense for 2000 was mainly attributable to the
revolving credit facility with Citizens Bank of Massachusetts. Interest expense
in 1999 was mainly due to debt from prior year acquisitions, debt financing
completed in May 1998 and the revolving credit facility with Citizens Bank of
Massachusetts. In February 1999, the Company used a portion of the $15 million
private equity placement proceeds to repay $1,411,000 of the STFI debt and $4
million of the May 1998 debt.

Preferred Stock Dividend

Preferred stock dividends were $808,000 for 2000, compared to $5,786,000 for
1999. Preferred stock dividends represented the 6% premium on the outstanding
Series C and D Shares. The Series C Shares were issued in February 1999 and the
Series D Shares were issued in October 1999. As of December 31, 2000,
approximately 49% of the Series C Shares and 98% of the Series D Shares had been
converted into Common Shares. In fiscal 1999, in accordance with Emerging Issues
Task Force Topic D-60, the Company recognized a $4,018,000 beneficial conversion
feature as a one-time non-cash preferred stock dividend. The amount represented
the difference between the conversion price of $7 per share at the date of the
issuance of the Series C Shares, February 5, 1999, and the $8 7/8 market price
of the Common Stock at that date.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Revenues for 1999 were $28,271,000, compared to $28,200,000 for 1998, an
increase of $71,000. The net loss applicable to Common Stock for 1999 was
$22,651,000, compared to $11,646,000 for 1998. The net loss applicable to Common
Stock for 1999 included a one-time non-cash preferred stock dividend of
$4,018,000, $0.50 per share, attributable to the beneficial conversion feature
in connection with the Company's issuance of its Series C Convertible Preferred
Stock, in February 1999. The net loss per Common Stock was $2.84 for 1999, which
included such one-time charge, compared to a net loss per Common Stock of $1.58
for 1998.


                                       11
<PAGE>   12
Revenues

Prepaid operations had revenues of $14,280,000 for 1999, compared to $12,737,000
for 1998. The increase in revenues of $1,543,000 (12%) was due to growth of the
private label program, which is co-branded with MCI WorldCom and the Company's
CellEase brand name. The private label program, introduced in April 1998,
generated most of the 1999 prepaid revenues, compared to revenues of $9,127,000
for 1998. The balance of the 1998 prepaid revenues ($3,610,000) were primarily
from a major distributor which discontinued its prepaid cellular phone business
and transitioned a small portion of its customers to the Company's end-user
program in the fourth quarter of 1998.

The growth of the prepaid program was assisted by two major developments during
fiscal 1999. In February 1999, the Company signed an agreement with MCI WorldCom
for the retail distribution of the Company's prepaid cellular services under the
MCI WorldCom brand name, utilizing MCI WorldCom's extensive network of retail
distribution locations. In July 1999, the Company purchased Retail Cellular,
Inc. ("RCI") from Retail Distributors, Inc. ("RDI") and entered into a Services
Agreement with RDI for support in the marketing, sale and distribution of the
Company's prepaid cellular services. The 1998 prepaid revenues from the CellEase
program of $9,127,000 were primarily attributable to SmarTalk TeleServices, Inc.
("SmarTalk"). In December 1998, the Company terminated its relationship with
SmarTalk and subsequently the Company filed a lawsuit against SmarTalk (see
"Legal Proceedings").

The Company's cellular phone rental operations had revenues of $12,939,000 for
1999, compared to $14,037,000 for 1998. The decrease of $1,098,000 (8%) was
mostly attributable to a 15% drop in the average revenue per customer rental
agreement to $115 for 1999. Such decrease in revenue per rental was due to a
drop in minutes of usage per rental by 11%, to 58 minutes, as well as to price
discounts offered in connection with market testing of the price elasticity of
the Company's product offering. During 1999, the Company ran various special
promotions, such as "first 10 minutes free". Such promotions were primarily
responsible for the number of rental agreements increasing by 3%, to 106,000 for
1999.

The Company's cellular activation operations had revenues of $1,052,000 for
1999, compared to $1,426,000 for 1998. The decrease of $374,000 (26%) was mainly
attributable to $263,000 in revenues in 1998 related to a test program with a
national retailer that was terminated in September 1998. The balance of the
decrease was due to the Connecticut activation location generating lower
revenues due to a cutback in the sales staff. Due to a reduction in the
activation commission offered by the local cellular carrier, the Company closed
the Connecticut activation location in November 1999.

Gross Margin

Gross margin was 22% of revenues for 1999, compared to 28% for 1998. The
decrease in gross margin was primarily due to the deterioration of gross margin
for the prepaid operations. The following table summarizes the change in the
revenues mix and the corresponding gross margins for the two periods:

<TABLE>
<CAPTION>
                 1999            1999             1998            1998
                 ----            ----             ----            ----
                Revenues      Gross Margin      Revenues     Gross Margin
<S>             <C>           <C>               <C>          <C>
Prepaid           50%            (14)%             45%              4%
Rental            46%             62%              50%             48%
Activation         4%             32%               5%             45%
                 ----            ----             ----            ----
                 100%             22%             100%             28%
</TABLE>

Gross margin for prepaid operations for 1999 was disappointing due to problems
associated with SmarTalk. Prior to STC's termination of its relationship with
SmarTalk in December 1998, the Company was anticipating an increase in volume in
the fourth quarter of 1998. By the middle of the fourth quarter of 1998, the
Company had approximately 63,000 active customers and was experiencing a growth
rate of over 15% per month. To help facilitate the rapid growth, the Company
maintained a reserve of approximately one month's line requirement. As a result
of the termination of the SmarTalk relationship, the Company did not maintain
its growth rate and, in addition, the Company's customer base began to
deteriorate due to the lack of availability of prepaid usage cards needed for
existing customers to maintain service. Consequently, a significant gap was
created between active lines with customers, as compared to committed lines with
carriers. In January 1999, the Company signed a letter of intent with MCI


                                       12
<PAGE>   13
WorldCom for the retail distribution of the Company's prepaid cellular service.
As a result, the Company made the decision to maintain many of its existing
lines with carriers, in an effort to minimize line termination fees and expense,
in anticipation of the launch of the MCI WorldCom program in the second quarter
of 1999. Throughout most of fiscal 1999, the Company worked to reduce the
significant gap between active lines and committed lines by adding new customers
and returning some excess lines to carriers. By year-end, the gap between active
and committed lines was within an acceptable range. The cost of maintaining
these excess lines for fiscal 1999 was approximately $3,000,000.

Gross margin for cellular phone rental operations improved by 14% in 1999,
compared to 1998. The Company took various steps during the year to improve
gross margin. The Company worked with its cellular carriers to reduce monthly
line access charges as well as per minute usage charges. The Company also
increased the utilization of its cellular phone inventory by working more
closely with its field personnel to minimize excess inventory. In addition, the
Company improved its gross margin by passing on certain charges it was
previously incurring.

Gross margin for activation operations decreased in 1999 as a result of two
factors. The Connecticut activation program had a lower gross margin as a result
of the local carrier reducing the activation commission that it was paying to
STC, as previously discussed. In addition, with the closing of the Connecticut
activation program, the national MOVE program made up a larger portion of
activation revenues. The MOVE program historically has had lower gross margins
than the Connecticut activation program. The MOVE program provides cellular
service activations for customers who move from one cellular market to another.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") were $21,411,000 for 1999,
compared to $15,075,000 for 1998, an increase of $6,336,000 (42%). As a
percentage of revenues, SG&A increased to 76% for 1999, compared to 53% for
1998. The increase was attributable to several factors. The Company incurred
additional corporate overhead following the March 1998 acquisition of Shared
Technologies Fairchild Inc. ("STFI") by Intermedia Communications, Inc. STFI,
the former parent of the Company, had been providing certain support and
management services to the Company under a management agreement. Such expenses
included payroll for certain employees of STFI who had not previously received
direct compensation from the Company. The increase in SG&A in 1999, compared to
1998, related to the sale of STFI was approximately $300,000. To assist in the
growth of the prepaid program, the Company increased its IT department by six
programmers; hired several salesmen and program managers; established a
high-speed telephone link between the corporate office and the two call centers;
and leased additional office space. The increase in corporate SG&A related to
the growth in the prepaid program was approximately $800,000 in 1999. Field
SG&A, as a percentage of revenues, increased significantly to 56% for 1999,
compared to 41% for 1998. During the fourth quarter of 1998, the Company added a
new call center in Hartford and expanded its existing call center in St. Louis
in anticipation of the significant growth the Company expected from prepaid
operations, which did not occur, as previously discussed. The increase in SG&A
related to the two call centers was approximately $2,535,000 in 1999. Also, in
February 1999, the Company signed a letter of intent with RDI for support in the
marketing, sale and distribution of the Company's prepaid cellular services. The
Company had incurred expenses in anticipation of its entry into a services
agreement with RDI, which agreement was signed in July 1999. The Company
incurred $1,480,000 in field SG&A related to the services agreement in 1999.

Bad Debt Expense

Bad debt expense was $1,217,000 for 1999, compared to $3,554,000 for 1998, a
decrease of $2,337,000 (66%). As a percentage of revenues, bad debt expense was
approximately 4% for 1999, compared to 13% for 1998. The 1998 amount included a
write-off of $1,975,000 that was due from SmarTalk. The additional decrease in
bad debt expense for 1999, compared to 1998, was due to an improvement in
collection procedures in the Rental Division. The predominant amounts of these
sales are paid by credit card. Historically, the Company has experienced an
amount of credit card charges that it is not able to collect. In addition, the
Company receives some customer requests for amounts charged to be reversed for a
variety of reasons. The Company diligently investigates these occurrences.
However, the Company still experiences a percentage of bad debt write-offs, as
it continues to make efforts to address this problem. The Company therefore
maintains an allowance for doubtful accounts against its receivable balance,
representing the unpaid accounts under investigation, and upon final resolution
of the account, the amount is either collected or written off against the
allowance. The investigation process is time consuming; documentation (typically
itemized call detail for the rental period) must be generated and provided to
the credit card processing company prior to the reversal of the claim.


                                       13
<PAGE>   14
Interest Expense

Interest expense, net of interest income, was $574,000 for 1999, compared to
$952,000 for 1998. Interest expense was mainly due to debt from acquisitions
made in prior years, debt to STFI, debt financing completed in May 1998 and the
revolving credit facility with State Street Bank and Trust Company established
in July 1999, which was subsequently assigned to Citizens Bank of Massachusetts.
In February 1999, the Company used a portion of the $15 million private equity
placement proceeds to repay $1,411,000 of the STFI debt and $4 million of the
May 1998 debt.

Preferred Stock Dividend

In February 1999, the Company completed a $15 million private placement of
15,000 shares of Series C Convertible Preferred Stock ("Series C Shares"). The
number of shares of Common Stock issuable upon the conversion of the Series C
Shares included a premium of 6%, per annum, payable in cash or shares of Common
Stock at the option of the Company. The Company accounted for the premium of 6%
as a non-cash preferred stock dividend. The non-cash preferred stock dividend
was $797,000 for fiscal 1999. The Series C Shares also included Warrants to
purchase an aggregate of 300,000 shares of Common Stock. The Warrants were
valued at $75,000 and the value was treated as a "discount" to the Series C
Shares and such discount is being accreted as a preferred stock dividend over
the five-year term of the Warrants. The amount accreted as a preferred stock
dividend was $14,000 for fiscal 1999. The Company incurred $537,000 in placement
and legal fees related to the completion of this private placement. These fees
were also treated as a preferred stock dividend in fiscal 1999. In accordance
with Emerging Issues Task Force Topic D-60, the Company recognized a beneficial
conversion feature in the amount of $4,018,000 as a one-time non-cash preferred
stock dividend in 1999. The amount represented the difference between the
conversion price of $7 per share at the date of the issuance of the Series C
Shares, February 5, 1999, and the $8 7/8 market price of the Common Stock at
that date.

In October 1999, the Company completed a $6.1 million private placement of 6,100
shares of Series D Convertible Preferred Stock ("Series D Shares"). The number
of shares of Common Stock issuable upon the conversion of the Series D Shares
included a premium of 6%, per annum, payable in cash or shares of Common Stock
at the option of the Company. The Company accounted for the premium of 6% as a
non-cash preferred stock dividend. The non-cash preferred stock dividend was
$92,000 for fiscal 1999. The Series D Shares also included Warrants to purchase
an aggregate of 122,000 shares of Common Stock. The Warrants were valued at
$31,000 and the value was treated as a "discount" to the Series D Shares and
such discount is being accreted as a preferred stock dividend over the five-year
term of the Warrants. The amount accreted as a preferred stock dividend was
$2,000 for fiscal 1999. The Company incurred $326,000 in placement and legal
fees related to the completion of this private placement. These fees were also
treated as a preferred stock dividend in fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a working capital deficit of $23,045,000 at December 31, 2000,
compared to a deficit of $8,248,000 at December 31, 1999. Stockholders' deficit
at December 31, 2000 was $25,226,000, compared to stockholders' deficit of
$22,483,000 at December 31, 1999. Stockholders' deficit at December 31, 2000 and
1999 did not include $8,649,000 and $20,861,000, respectively, related to the
Series C and D Convertible Preferred Stock, since each shareholder of the Series
C and D Shares has the right, upon the occurrence of certain events, to require
the Company to redeem all or any part of such purchaser's Series C or D Shares.

Net cash used in operations for the year ended December 31, 2000 was $4,459,000.
This was mainly attributable to the net loss for the period, offset by the
non-cash depreciation and amortization expense, as well as the amortization of
the services agreement with RCI. In addition, the Company increased accounts
payable and accrued expenses by $4,985,000 as the Company delayed the payment to
vendors beyond normal terms. The Company was able to significantly reduce
receivables at year-end primarily by working closely with MCI WorldCom.
Inventories are primarily comprised of prepaid cellular phones, which were kept
to a minimum due to purchasing constraints. Net cash used in operations for the
year ended December 31, 1999 was $14,175,000. This was mainly attributable to
the net loss for the period, offset by the non-cash depreciation and
amortization expense. The Company experienced a significant increase in
receivables at the end of fiscal 1999, compared to prior year, as a result of
the prepaid program. At December 31, 1999, the Company had approximately
$3,554,000 of prepaid receivables, of which $2,396,000 was due from MCI
WorldCom, compared to an insignificant amount of prepaid receivables at December
31, 1998. In the fourth quarter of 1999, the Company purchased $2,000,000 of
prepaid cellular phones and accessories from DTR Associates Limited Partnership.
Most of the phones and the corresponding liability existed at the end of fiscal
1999. Deferred revenues at the end of fiscal 1999 increased significantly due to
the prepaid program. The Company recognizes


                                       14
<PAGE>   15
prepaid card revenues over the estimated period in which the Company provides
prepaid services to its customers. Customers purchase prepaid cellular service
by buying prepaid cards at retailers throughout the nation and calling the
Company to activate, or redeem, the prepaid cards. Customers may also call the
Company directly to purchase prepaid cellular service. The Company gives the
customer a series of numeric codes that are input into their phone that allows
it to be activated for a specific number of minutes and days. A typical $30
prepaid card expires after approximately 38 minutes of local usage or 60 days
after activation, whichever comes first. However, most of the airtime is used
within the first 30 days of activation. Consequently, the deferred revenue at
December 31, 2000 and 1999 consisted of the unused portion of the prepaid cards
activated plus the prepaid cards sold but not yet activated.

Net cash from investing activities for the year ended December 31, 2000 was
$25,000. This was mainly attributable to a reduction in deposits offset by
purchases of computers and office equipment to support the prepaid programs. Net
cash used in investing activities for the year ended December 31, 1999 was
$513,000. This was mainly attributable to the purchase of computers and office
equipment to support the prepaid programs.

During the year ended December 31, 2000, the Company raised $2,947,000, net of
expenses, through a private placement of equity with various investors. Such
financing included the exchange of certain outstanding shares of Series D
Convertible Preferred Stock for Common Stock, in conjunction with the purchase
of new shares of Common Stock by such Series D holders, as well as the exercise
of certain outstanding warrants for Common Stock. In addition, the Company
received $120,000 from the exercise of 24,000 unrelated warrants. During the
year ended December 31, 1999, the Company raised $14,466,000, net of expenses in
a private equity placement of Series C Shares and related Common Stock purchase
warrants. The Company also raised $5,774,000, net of expenses, in a private
placement of Series D Shares and related Common Stock purchase warrants. In
addition, approximately 380,000 unrelated warrants and options were exercised,
raising an additional $1,792,000. The Company used a portion of these proceeds
to repay $1,411,000 of debt owed to its former parent, STFI, and $4,000,000 of
debt financing raised in May 1998.

The Company has suffered significant losses from operations and has a working
capital deficit. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. An immediate infusion of cash from debt
or equity financing is required to meet the Company's short-term and long-term
liquidity requirements. In March 2001, the Company's Chairman and Chief
Executive Officer, Anthony D. Autorino, assumed the position as the Company's
primary lender from Citizens and, in turn, assigned his rights and obligations
under such loan to Mobile Investments, LLC ("Mobile"), which agreed to increase
the facility to $5 million, subject to certain conditions (see Note 9 of the
Notes to the Consolidated Financial Statements for a detailed discussion). An
additional infusion of cash from debt or equity financing will be required to
meet the Company's short-term and long-term liquidity requirements. Although the
Company is optimistic that it will be successful in raising additional funding,
there can be no assurance of its success.

2001 COMPANY OUTLOOK

The wireless industry continues to diversify and expand with abundant
opportunities. The Company hopes to capitalize on some of these opportunities
and generate revenue growth by expanding its product lines, strengthening
partnerships and growing subscription lines and/or increasing revenues to
existing customers. With PCS and other wireless available today, the Company
intends to try to reach an expanded audience that will open up additional
retailers that appeal to more middle-class America. The Company also plans to
cross market its prepaid and rental products to increase its customer base. With
a more extensive line of communications services, more direct sales channels,
such as HSN and e-commerce sites, STC hopes to reach more people with diverse
offerings to improve the Company's revenue stream.

In our Prepaid Division, emphasis will be placed on nurturing existing accounts,
developing new partnerships, increasing direct sales efforts, opening new
markets, and strengthening our technological platform to accommodate more
products and services. In addition, new pricing has been implemented to ensure
that we can compete successfully in all markets. STC was first to market with
the One Card Does It All platform, which is intended to serve as the driver for
generating new revenue opportunities in 2001.

In fiscal 2000, the Company teamed up with new high-profile partners to launch
its Integrated Communications Program (ICP). Agreements with Rush
Communications, Inc., VTech Connect, Ltd., and Child Watch of North America
(Chris Kirkpatrick of N'Sync is the national spokesman) should result in new
retail launches in the third quarter of 2001, that should open up niche
distribution outlets, including record stores, check cashing outlets, and small


                                       15
<PAGE>   16
convenience stores. In 2001, STC plans to offer an expanded line of products and
services to existing private label agents.

The Company will endeavor to achieve revenue growth in the rental operations by
adding new programs through the Company's car rental partners. New promotions
designed to capture the attention of travelers who rent cellular phones, coupled
with prepaid offerings developed solely for the travelers, should invigorate
this business. In addition, the car partners have agreed to spur revenues by
integrating these products and services on each of our web sites. Special
attention also will be directed to the premier traveler programs, such as Avis
Preferred and Hertz gold, to reach the high-volume wireless users. Also, in 2001
we plan to introduce frequent renter programs with direct benefits to the
customer. The Company intends to try to increase demand for short-term cellular
phone rentals with the Nextel product to corporate meeting planners and
international travelers at major gateway airport locations.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: THE MANAGEMENT'S DISCUSSION AND ANALYSIS MAY INCLUDE FORWARD-LOOKING
STATEMENTS WITH RESPECT TO THE COMPANY'S FUTURE FINANCIAL PERFORMANCE. THESE
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN ANY
FORWARD-LOOKING STATEMENT. SUCH RISKS AND UNCERTAINTIES MAY INCLUDE, WITHOUT
LIMITATION, TECHNOLOGICAL OBSOLESCENCE, PRICE AND INDUSTRY COMPETITION,
LIQUIDITY, FINANCING CAPABILITIES, DEPENDENCE ON MAJOR CUSTOMERS AND
RELATIONSHIPS, DEPENDENCE ON RELATIONSHIPS WITH TECHNOLOGY LICENSORS AND
TELECOMMUNICATIONS CARRIERS, AND THE COMPANY'S ABILITY TO EFFECTIVELY EXECUTE
ITS BUSINESS PLAN WITH RESPECT TO SIGNIFICANT PROJECTED GROWTH IN ITS PREPAID
SERVICES DIVISION, IN PARTICULAR, WITH RESPECT TO ITS VENTURE WITH MCI WORLDCOM
AND ITS CELLEASE.COM, INC. OPERATIONS.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following financial statements and supplementary data are attached.

Independent Auditors' Report

Consolidated Balance Sheets as of December 31, 2000 and 1999.

Consolidated Statements of Operations for the years ended December 31, 2000,
1999 and 1998.

Consolidated Statements of Stockholders' Equity (Deficiency) for the years ended
December 31, 2000, 1999 and 1998.

Consolidated Statements of Cash Flows for the years ended December 31, 2000,
1999 and 1998.

Notes to Consolidated Financial Statements.

Financial Statement Schedules Schedule II.

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

None


                                       16
<PAGE>   17
               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES



       SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE (ITEM 8)




<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                      <C>
FINANCIAL STATEMENTS:
   Independent Auditors' Report                                              F-2

   Consolidated Balance Sheets                                               F-3

   Consolidated Statements of Operations                                     F-4

   Consolidated Statements of Stockholders' Equity (Deficiency)              F-5

   Consolidated Statements of Cash Flows                                   F-6-7

   Notes to Consolidated Financial Statements                             F-8-22

FINANCIAL STATEMENT SCHEDULE (a):
   Schedule II - Valuation and Qualifying Accounts for the
    Years Ended December 31, 2000, 1999 and 1998                             S-1

</TABLE>



NOTE:

(a)   All other schedules are not submitted because they are either not
      applicable, not required or the required information is included in the
      consolidated financial statements or notes thereto.


                                      F-1
<PAGE>   18



                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors of
Shared Technologies Cellular, Inc.

We have audited the accompanying consolidated balance sheets of Shared
Technologies Cellular, Inc. and Subsidiaries as of December 31, 2000 and 1999,
and the related consolidated statements of operations, stockholders' equity
(deficiency) and cash flows and financial statement schedule for each of the
three years in the period ended December 31, 2000. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on our
audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Shared
Technologies Cellular, Inc. and Subsidiaries as of December 31, 2000 and 1999,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States of America. Also
in our opinion, the financial statement schedule referred to above, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information required to be
included therein.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has a stockholders' deficiency, a
working capital deficit, and an accumulated deficit, which raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 3. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


                                          ROTHSTEIN, KASS & COMPANY, P.C.




Roseland, New Jersey
March 16, 2001







                                       F-2
<PAGE>   19


               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2000 and 1999


<TABLE>
<CAPTION>
                                                                                                   2000                    1999
                                                                                               ------------            ------------

                                     ASSETS
<S>                                                                                            <C>                     <C>
Current assets:
Cash                                                                                           $     84,000            $  1,635,000
Accounts receivable, less allowance for doubtful
 accounts of $179,000 in 2000 and $495,000 in 1999                                                  845,000               3,612,000
Carrier commissions receivable, net                                                                                         178,000
Inventories                                                                                         641,000               2,316,000
Prepaid expenses and other current assets                                                         1,174,000               4,526,000
                                                                                               ------------            ------------

Total current assets                                                                              2,744,000              12,267,000
                                                                                               ------------            ------------

Telecommunications and office equipment, net                                                        891,000               1,514,000
                                                                                               ------------            ------------

Other assets:
Intangible assets, net                                                                            5,666,000               6,289,000
Deposits and other                                                                                  586,000               1,515,000
                                                                                               ------------            ------------

                                                                                                  6,252,000               7,804,000
                                                                                               ------------            ------------

                                                                                               $  9,887,000            $ 21,585,000
                                                                                               ============            ============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
Short-term debt                                                                                $     98,000            $       --
Current portion of long-term debt                                                                   317,000                 535,000
Accounts payable                                                                                 10,121,000               8,580,000
Accrued expenses and other current liabilities                                                   10,307,000               7,045,000
Deferred revenues                                                                                 4,946,000               4,355,000
                                                                                               ------------            ------------

Total current liabilities                                                                        25,789,000              20,515,000
                                                                                               ------------            ------------

Long-term debt, less current portion                                                                475,000               2,492,000
                                                                                               ------------            ------------

Redeemable put warrant                                                                              200,000                 200,000
                                                                                               ------------            ------------

Series C and D redeemable preferred stock, issued
and outstanding 7,800 shares in 2000 and 20,100 in 1999                                           8,649,000              20,861,000
                                                                                               ------------            ------------

Commitments and contingencies

Stockholders' deficiency:
Preferred stock, $.01 par value, authorized 5,000,000
 shares, no shares issued or outstanding
Common stock, $.01 par value, authorized 30,000,000
 shares, issued and outstanding 13,903,000 shares in
 2000 and 8,452,000 shares in 1999                                                                  139,000                  85,000
Capital in excess of par value                                                                   46,432,000              28,437,000
Accumulated deficit                                                                             (71,797,000)            (51,005,000)
                                                                                               ------------            ------------

Total stockholders' deficiency                                                                  (25,226,000)            (22,483,000)
                                                                                               ------------            ------------

                                                                                               $  9,887,000            $ 21,585,000
                                                                                               ============            ============
</TABLE>

          See accompanying notes to consolidated financial statements



                                       F-3
<PAGE>   20


               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  Years Ended December 31, 2000, 1999 and 1998


<TABLE>
<CAPTION>
                                                                            2000                   1999                    1998
                                                                       ------------            ------------            ------------
<S>                                                                    <C>                     <C>                     <C>
REVENUES                                                               $ 32,744,000            $ 28,271,000            $ 28,200,000

COST OF REVENUES                                                         28,138,000              21,927,000              20,259,000
                                                                       ------------            ------------            ------------

GROSS MARGIN                                                              4,606,000               6,344,000               7,941,000
                                                                       ------------            ------------            ------------

SELLING, GENERAL AND ADMINISTRATIVE
 EXPENSES                                                                23,147,000              21,411,000              15,075,000

BAD DEBT EXPENSE                                                            855,000               1,217,000               3,554,000
                                                                       ------------            ------------            ------------


                                                                         24,002,000              22,628,000              18,629,000
                                                                       ------------            ------------            ------------

LOSS FROM OPERATIONS                                                    (19,396,000)            (16,284,000)            (10,688,000)

INTEREST EXPENSE, NET                                                      (582,000)               (574,000)               (952,000)
                                                                       ------------            ------------            ------------

LOSS BEFORE INCOME TAXES                                                (19,978,000)            (16,858,000)            (11,640,000)

INCOME TAXES                                                                 (6,000)                 (7,000)                 (6,000)
                                                                       ------------            ------------            ------------

NET LOSS                                                                (19,984,000)            (16,865,000)            (11,646,000)

PREFERRED STOCK DIVIDENDS                                                  (808,000)             (5,786,000)
                                                                       ------------            ------------            ------------

NET LOSS APPLICABLE TO COMMON STOCK                                    $(20,792,000)           $(22,651,000)           $(11,646,000)
                                                                       ============            ============            ============

BASIC AND DILUTED LOSS PER COMMON SHARE                                $      (1.83)           $      (2.84)           $      (1.58)
                                                                       ============            ============            ============

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                                               11,335,000               7,985,000               7,375,000
                                                                       ============            ============            ============
</TABLE>





           See accompanying notes to consolidated financial statements


                                       F-4
<PAGE>   21

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                  Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                                                         Total
                                                                                       Capital in                     Stockholders'
                                                               Common Stock             Excess of      Accumulated        Equity
                                                          Shares          Amount        Par Value        Deficit       (Deficiency)
                                                      ------------    ------------    ------------    -------------    ------------
<S>                                                   <C>            <C>              <C>             <C>              <C>
Balances, January 1, 1998                                7,216,000    $     72,000    $ 17,801,000    $ (16,708,000)   $  1,165,000

Issuances of common stock and warrants                     271,000           3,000         201,000                          204,000

Exercise of warrants and options                           180,000           2,000         547,000                          549,000

Cancellation of common stock                              (100,000)         (1,000)       (366,000)                        (367,000)

Net loss                                                                                                (11,646,000)    (11,646,000)
                                                      ------------    ------------    ------------    -------------    ------------

Balances, December 31, 1998                              7,567,000          76,000      18,183,000      (28,354,000)    (10,095,000)

Issuances of common stock and warrants                     337,000           3,000       3,410,000                        3,413,000

Preferred stock dividend                                                                 4,018,000       (5,786,000)     (1,768,000)

Conversion of redeemable preferred stock                   149,000           2,000       1,038,000                        1,040,000

Exercise of warrants and options                           399,000           4,000       1,788,000                        1,792,000

Net loss                                                                                                (16,865,000)    (16,865,000)
                                                      ------------    ------------    ------------    -------------    ------------

Balances, December 31, 1999                              8,452,000          85,000      28,437,000      (51,005,000)    (22,483,000)

Issuances of common stock                                  765,000           8,000       1,726,000                        1,734,000

Preferred stock dividend                                                                                   (808,000)       (808,000)

Conversion of redeemable preferred stock                 3,314,000          33,000      12,987,000                       13,020,000

Conversion of debt                                         340,000           3,000       1,697,000                        1,700,000

Exercise of warrants                                     1,032,000          10,000       1,585,000                        1,595,000

Net loss                                                                                                (19,984,000)    (19,984,000)
                                                      ------------    ------------    ------------    -------------    ------------

Balances, December 31, 2000                             13,903,000    $    139,000    $ 46,432,000    $ (71,797,000)   $(25,226,000)
                                                      ============    ============    ============    =============    ============
</TABLE>



           See accompanying notes to consolidated financial statements



                                       F-5
<PAGE>   22

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Years Ended December 31, 2000, 1999 and 1998


<TABLE>
<CAPTION>
                                                                                    2000                1999                1998
                                                                                 ------------       ------------       ------------
<S>                                                                            <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                                        $(19,984,000)      $(16,865,000)      $(11,646,000)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
   Accretion of interest on notes payable                                             195,000            107,000             75,000
   Write-off of assets held for disposition                                                                                 153,000
   Amortization of services agreement                                               3,555,000          1,417,000
   Depreciation and amortization                                                    1,377,000          1,473,000          1,332,000
   Bad debt expense                                                                   855,000          1,217,000          3,554,000
   Common stock issued for compensation
    and services                                                                      263,000            646,000            104,000
   Changes in assets and liabilities:
   Accounts receivable                                                              1,659,000         (3,933,000)        (3,086,000)
   Carrier commissions receivable                                                     178,000            814,000           (829,000)
   Inventories                                                                      1,675,000         (2,082,000)          (103,000)
   Prepaid expenses and other current assets                                          192,000         (2,109,000)        (1,903,000)
   Accounts payable, accrued expenses and
    other current liabilities                                                       4,985,000          2,033,000          6,204,000
   Deferred revenues                                                                  591,000          3,107,000          1,204,000
                                                                                 ------------       ------------       ------------

NET CASH USED IN OPERATING ACTIVITIES                                              (4,459,000)       (14,175,000)        (4,941,000)
                                                                                 ------------       ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of equipment                                                             (136,000)          (486,000)          (744,000)
  (Increase) decrease in deposits                                                     161,000            (27,000)          (389,000)
                                                                                 ------------       ------------       ------------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                    25,000           (513,000)        (1,133,000)
                                                                                 ------------       ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings from financial facility                                                   98,000
  Proceeds from issuance of notes payable                                                                                 6,400,000
  Payments for debt issuance costs                                                                                         (171,000)
  Payments on long-term debt                                                         (310,000)        (4,527,000)          (530,000)
  Payments of notes to former parent                                                                  (1,411,000)          (239,000)
  Issuance of common and redeemable preferred stock                                 1,500,000         20,240,000
  Exercise of warrants and options                                                  1,595,000          1,792,000            549,000
                                                                                 ------------       ------------       ------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                           2,883,000         16,094,000          6,009,000
                                                                                 ------------       ------------       ------------

NET INCREASE (DECREASE) IN CASH                                                    (1,551,000)         1,406,000            (65,000)

CASH, beginning of year                                                             1,635,000            229,000            294,000
                                                                                 ------------       ------------       ------------

CASH, end of year                                                                $     84,000       $  1,635,000       $    229,000
                                                                                 ============       ============       ============
</TABLE>



           See accompanying notes to consolidated financial statements



                                       F-6
<PAGE>   23

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                  Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                 2000                    1999                 1998
                                                                              ------------           ------------           --------
<S>                                                                           <C>                   <C>                   <C>
Supplemental disclosures of cash flow information:

Cash paid during the year for:
Interest                                                                      $    237,000           $    640,000           $863,000
                                                                              ============           ============           ========

Income taxes                                                                  $      6,000           $      7,000           $  6,000
                                                                              ============           ============           ========

Supplemental schedules of noncash investing and financing activities:

Cancellation of common stock to settle
 outstanding receivable                                                       $       --             $       --             $367,000
                                                                              ============           ============           ========

Issuance of warrants in connection with certain
 debt instruments and preferred stock                                         $       --             $    306,000           $100,000
                                                                              ============           ============           ========

Issuance of common stock in connection with
 Services Agreement                                                           $       --             $  2,832,000           $   --
                                                                              ============           ============           ========

Redeemable preferred stock issued as preferred
 stock dividends                                                              $    808,000           $  4,018,000           $   --
                                                                              ============           ============           ========

Conversion of redeemable preferred stock
and convertible notes into common stock                                       $ 14,720,000           $  1,290,000           $   --
                                                                              ============           ============           ========


Capital lease obligation incurred for lease of
 equipment                                                                    $       --             $    672,000           $   --
                                                                              ============           ============           ========
</TABLE>



           See accompanying notes to consolidated financial statements



                                       F-7
<PAGE>   24



               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - NATURE OF OPERATIONS

         Shared Technologies Cellular, Inc. (STC) together with its subsidiaries
         (collectively the "Company") is a national cellular service provider
         offering rental and prepaid services in substantially all of the
         Cellular Geographical Service Areas within the United States. The
         Company rents cellular telephones to business and leisure travelers and
         to individuals at special events. The Company has expanded the scope of
         its prepaid (debit) cellular service by offering carrier and
         distribution partners an array of services including: a universal
         prepaid redemption platform, interactive voice response, (IVR),
         point-of-sale activation (POSA) card services, inter-carrier
         communications services and one-stop shopping, e-commerce and direct
         marketing programs that offer multiple telecommunications services.

         The Company's operations are subject to regulation by the Federal
         Communications Commission (FCC), which has generally preempted the
         regulatory jurisdiction of state agencies with respect to the business
         in which the Company is engaged.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Principles of Consolidation

         The consolidated financial statements include the accounts of STC and
         its wholly-owned subsidiaries. All material intercompany accounts and
         transactions have been eliminated in consolidation.

         Cash

         The Company maintains its cash in bank deposit accounts which at times
         may exceed federally insured limits. The Company has not experienced
         any losses in such accounts and believes it is not subject to any
         significant credit risk on cash.

         Fair Value of Financial Instruments

         The fair value of the Company's assets and liabilities which qualify as
         financial instruments under Statement of Financial Accounting Standards
         (SFAS) No. 107 "Disclosures About Fair Value of Financial Instruments",
         approximates the carrying amounts presented in the consolidated balance
         sheets.

         Inventories

         Inventories, consisting of telecommunications equipment and parts
         expected to be sold to customers, are valued at the lower of cost, on
         the first-in, first-out (FIFO) method, or market.

         Impairment of Long-Lived Assets

         The Company reviews its long-lived assets, such as telecommunications
         and office equipment, identifiable intangibles and goodwill, for
         impairment whenever events or changes in circumstances indicate that
         the carrying amount of the assets may not be fully recoverable. To
         determine the recoverability of its long-lived assets, the Company
         evaluates the probability that future undiscounted net cash flows will
         be less than the carrying amount of the assets. Impairment is the
         amount by which the carrying value of the asset exceeds its fair value.








                                       F-8
<PAGE>   25


               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Telecommunications and Office Equipment

         Telecommunications and office equipment are stated at cost less
         accumulated depreciation. The Company records depreciation on the
         straight-line method over the estimated useful lives of the assets as
         follows:

         Telecommunications equipment     2-5 years
         Office equipment                 3-5 years

         Intangible Assets

         Goodwill represents the excess of cost over the fair market value of
         net assets of acquired businesses and is amortized over periods ranging
         from 15 to 20 years from the respective acquisition dates. The Company
         monitors the cash flows of the acquired operations to assess whether
         any impairment of recorded goodwill has occurred.

         The Company amortizes the cost to obtain exclusive agreements to
         provide cellular telephone rentals at specific locations on the
         straight-line basis over the life of the respective agreements,
         generally five to six years.

         Costs incurred relating to the issuance of debt are deferred and are
         being amortized over the life of the related debt. The amortization of
         debt issuance costs included in interest expense was $167,000, $58,000
         and $83,000 in 2000, 1999 and 1998, respectively.

         Revenue Recognition

         Revenues related to providing short-term cellular phone rental services
         are recognized as the service is provided. Debit card revenues are
         recognized over the estimated period in which the Company provides
         debit, or prepaid, cellular service to its customers. Customers
         purchase debit cellular service by buying debit cards at retail
         locations throughout the United States and calling the Company to
         activate, or redeem, the debit cards. Customers may also call the
         Company directly to purchase debit cellular service. The Company gives
         the customer a series of numeric codes that are input into their phone
         that allow it to be activated for a specific number of minutes and
         days. The actual number of minutes will vary based upon the
         denomination of the card and the type of calls made (local or roaming).
         A typical $30 debit card expires after approximately 38 minutes of
         usage or 60 days, whichever occurs first. However, most of the airtime
         is used within the first 30 days of redemption.

         Advertising Costs

         The Company expenses costs of advertising and promotions as incurred.
         Advertising expenses included in selling, general and administrative
         expenses for the years ended December 31, 2000, 1999 and 1998 were
         approximately $84,000, $265,000 and $308,000, respectively.







                                       F-9
<PAGE>   26


               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Income Taxes

         The Company complies with SFAS No. 109, "Accounting for Income Taxes",
         which requires an asset and liability approach to financial reporting
         for income taxes. Deferred income tax assets and liabilities are
         computed for differences between the financial statement and tax bases
         of assets and liabilities that will result in taxable or deductible
         amounts in the future, based on enacted tax laws and rates applicable
         to the periods in which the differences are expected to affect taxable
         income. Valuation allowances are established, when necessary, to reduce
         the deferred income tax assets to the amount expected to be realized.

         Use of Estimates

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

         Loss Per Common Share

         The Company complies with SFAS No. 128, "Earnings Per Share". SFAS No.
         128 requires dual presentation of basic and diluted earnings per share
         for all periods presented. Basic earnings per share excludes dilution
         and is computed by dividing loss applicable to common stockholders by
         the weighted average number of common shares outstanding for the
         period. Diluted earnings per share reflects the potential dilution that
         could occur if securities or other contracts to issue common stock were
         exercised or converted into common stock or resulted in the issuance of
         common stock that then shared in the earnings of the entity. Since the
         effect of the outstanding warrants, options, and convertible debentures
         and preferred stock is antidilutive, they have been excluded from the
         Company's computation of loss per common share.

         Reclassification

         Certain of the 1999 amounts have been reclassified to conform to the
         2000 presentation.

NOTE 3 - UNCERTAINTY - ABILITY TO CONTINUE AS A GOING CONCERN

         The accompanying consolidated financial statements have been presented
         on the basis that it is a going concern, which contemplates the
         realization of assets and the satisfaction of liabilities in the normal
         course of business. The Company has sustained a cumulative net loss of
         approximately $72 million through December 31, 2000, had a working
         capital deficit of approximately $23 million at December 31, 2000 and a
         stockholders' deficiency of approximately $25 million at December 31,
         2000. The consolidated financial statements do not include any
         adjustments that might result from the outcome of this uncertainty.

         Although the Company has taken certain short-term measures to improve
         its condition, such as seeking an increased credit facility (see Note
         9) and certain cost cutting measures, an additional infusion of cash
         from debt or equity financing, which the Company is seeking, will be
         required to meet the Company's short-term and long-term liquidity
         requirements. Further, management's plans also include the continued
         generation of revenue growth in both the prepaid and rental operations
         during 2001. Efforts to generate revenue growth in the Company's
         prepaid operations are focused on three of the Company's programs:
         Total Communications, Private Label Agent and CellEase Universal
         Platform Programs. Efforts to generate growth in the Company's rental
         operations are focused on the increased emphasis on the Company's car
         rental partners' locations.



                                      F-10
<PAGE>   27

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         There can be no assurances that management's plans, as described in the
         preceding paragraph, will be realized.


NOTE 4 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

         Prepaid expenses and other current assets consist of the following at
         December 31, 2000 and 1999:


<TABLE>
<CAPTION>
                                                       2000            1999

<S>                                                <C>             <C>
          Prepaid access fees                         $ 725,000       $ 672,000
          Prepaid telephone line charges                                485,000
          Note receivable                               289,000         500,000
          Prepaid consulting agreement                                2,492,000
          Other                                         160,000         377,000
                                                   -------------   -------------

                                                    $ 1,174,000     $ 4,526,000
                                                   =============   =============
</TABLE>



         In July 1999 (as amended in July 2000), the Company entered into a
         consulting agreement (the "Agreement") with Retail Distributor, Inc.
         (RDI) (an entity for which a Company director is an executive officer
         and principal stockholder), expiring in March 2001 (extended to June
         2001) pursuant to which RDI was to provide certain services relating to
         the marketing, sale and distribution of the Company's prepaid cellular
         services. The Agreement was entered in connection with the Company's
         acquisition, in July 1999, of all of the outstanding capital stock of
         Retail Cellular Inc. (RCI) for 150,000 shares of the Company's common
         stock, valued at fair market value of $10.56 per share. The Company
         also paid RDI approximately $843,000 in cash, issued 118,194 shares of
         the Company's common stock valued at $10.56 per share, and will make
         monthly payments over the term of the Agreement aggregating
         approximately $1,896,000, of which approximately $400,000 and $996,000
         was paid during 2000 and 1999, respectively. All amounts payable under
         the Agreement were to be expensed over the services period expiring in
         March 2001 (extended to June 2001). However, the Company has changed
         its estimate and the remaining balance has been fully amortized at
         December 31, 2000. As of December 31, 2000, the Company issued 275,000
         warrants to purchase shares of the Company's common stock. As part of
         the Agreement, the Company loaned RDI $500,000, bearing interest at the
         prime rate (9.5% at December 31, 2000) plus 1% per annum, which is due
         on demand. Through December 31, 2000, the Company has offset
         approximately $211,000 against the loan.





                                      F-11
<PAGE>   28

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5 - TELECOMMUNICATIONS AND OFFICE EQUIPMENT

         Telecommunications and office equipment consist of the following at
         December 31, 2000 and 1999:



<TABLE>
<CAPTION>
                                                   2000           1999

<S>                                             <C>            <C>
Telecommunications equipment                      $ 336,000      $ 400,000
Office equipment                                  2,004,000      2,141,000
                                               -------------  -------------

                                                  2,340,000      2,541,000
Accumulated depreciation                          1,449,000      1,027,000
                                               -------------  -------------

                                                  $ 891,000    $ 1,514,000
                                               =============  =============
</TABLE>



         Depreciation expense for the years ended December 31, 2000, 1999 and
         1998 was $759,000, $769,000 and $604,000, respectively.

NOTE 6 - INTANGIBLE ASSETS

         Intangible assets consist of the following at December 31, 2000 and
         1999:

<TABLE>
<CAPTION>
                                                   2000           1999

<S>                                             <C>            <C>
Goodwill                                        $ 8,426,000    $ 8,426,000
Rental car agreement                                520,000        520,000
Debt issuance costs                                 171,000        171,000
                                               -------------  -------------

                                                  9,117,000      9,117,000
Accumulated amortization                          3,451,000      2,828,000
                                               -------------  -------------

                                                $ 5,666,000    $ 6,289,000
                                               =============  =============
</TABLE>


         Amortization expense for the years ended December 31, 2000, 1999 and
         1998 was $623,000, $704,000 and $619,000, respectively.

NOTE 7 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

         Accrued expenses and other current liabilities consist of the following
         at December 31, 2000 and 1999:


<TABLE>
<CAPTION>
                                                  2000           1999

<S>                                            <C>             <C>
State and municipal obligations                $ 6,462,000     $ 5,512,000
Payroll and payroll taxes                          802,000         200,000
Commissions                                         99,000         178,000
Unbilled carrier fees                            2,180,000         572,000
Other                                              764,000         583,000
                                              -------------  --------------

                                              $ 10,307,000     $ 7,045,000
                                              =============  ==============
</TABLE>



                                      F-12
<PAGE>   29

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - LONG-TERM DEBT

         Long-term debt consists of the following at December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                     2000           1999
<S>                                               <C>            <C>
Promissory notes bearing interest at 10%
 per annum and payable in monthly installments
 of $8,500 through March 2002.                    $ 119,000      $ 204,000

Convertible debt bearing interest at 5%
 per annum. Interest is payable quarterly,
 with principal due in May 2005. The debt may
 be converted into shares of the Company's
 common stock at $5.00 per share.                   450,000      2,150,000

Capital lease obligation bearing interest
 at 8% per annum payable monthly, with
 principal due in November 2001.  The lease
 is payable to an affiliate of the Company          223,000        448,000

Promissory note bearing interest at 8%
 per annum and payable in semi-annual
 principal installments of $225,000
 through May 2000. The note was
 collateralized by certain of the
 Company's assets.                                                 225,000
                                               -------------  -------------

                                                    792,000      3,027,000
Less current portion                                317,000        535,000
                                               -------------  -------------

                                                  $ 475,000    $ 2,492,000
                                               =============  =============
</TABLE>




                                      F-13
<PAGE>   30

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 8 - LONG-TERM DEBT (CONTINUED)

         Aggregate future principal payments are as follows:



<TABLE>
<CAPTION>
                                                Long-Term       Capital Lease
Year Ending December 31,                           Debt          Obligation
<S>                                            <C>              <C>
2001                                               $ 94,000       $ 232,000
2002                                                 25,000
2003
2004
2005                                                450,000
                                               -------------    -------------

                                                  $ 569,000          232,000
                                               =============
Less amount representing interest                                      9,000
                                                                -------------


Present value of future payments                                   $ 223,000
                                                                =============
</TABLE>


         Telecommunications and office furniture includes assets under capital
         leases with a net book value of approximately $381,000 as of December
         31, 2000.

NOTE 9 - SHORT-TERM DEBT

         In July 1999, as amended in August 2000, the Company entered into a
         $2.5 million revolving credit facility with Citizens Bank of
         Massachusetts (Citizens). The availability of the credit facility was
         based on a percentage of eligible receivables and included covenants
         requiring certain levels of active debit/prepaid customers and
         operating results through the term of the agreement. Advances under the
         facility bore interest at the prime rate and were to be used for
         working capital and general corporate purposes. The credit facility was
         collateralized by substantially all of the Company's assets. In
         connection with the credit facility, the Company issued Citizens a
         ten-year warrant for the purchase of 150,000 shares of its Common Stock
         at an exercise price of $10 per share, subject to certain adjustments.
         The warrant is redeemable by Citizens any time after the third
         anniversary for a minimum redemption price of $200,000. The Company
         accounted for the warrant as additional interest. The August 2000
         amendment terminated the credit facility at December 29, 2000. In March
         2001, the Company's Chairman and Chief Executive Officer assumed the
         position as the Company's primary lender from Citizens and, in turn,
         assigned his rights and obligations under such loan to Mobile
         Investments, LLC (Mobile) (a related party), which agreed to increase
         the facility to $5,000,000, subject to certain conditions. Mobile's
         obligation to provide additional funding is expressly subject to its
         ability to obtain sufficient investment capital for the loan facility
         by March 31, 2001. Subject to funding, Mobile will receive certain
         Company warrants. Although the Company is confident that such funds
         will be secured by Mobile, and thus provided to the Company, there can
         be no assurance of such funding. At December 31, 2000, the Company had
         approximately $98,000 outstanding under the credit facility.

         As part of the credit facility, the Company had standby letters of
         credit to certain vendors in the aggregate of $575,000 at December 31,
         2000. These letters of credit expire on various dates from February
         2001 through March 2001.





                                      F-14
<PAGE>   31

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10 - CONVERTIBLE REDEEMABLE PREFERRED STOCK

          In February 1999, the Company completed a $15 million private
          placement, issuing an aggregate of 15,000 shares of Series C
          Convertible Preferred Stock, $.01 par value, and warrants to purchase
          an aggregate of 300,000 shares of common stock. Each share of Series C
          Convertible Preferred Stock is convertible into common stock of the
          Company based upon certain formulas and limitations. The Series C
          Convertible Preferred Stock contains a dividend of 6%, payable upon
          conversion, in either cash or the Company's common stock, at the
          Company's option (subject to certain conditions). The warrants are
          exercisable at $9 per share and expire in February 2004 and are
          subject to mandatory exercise, subject to certain conditions. The
          warrants were valued at $75,000 and the value was treated as a
          "discount" to the Series C Shares and such discount is being accreted
          as a preferred stock dividend over the five-year term of the warrants.
          In accordance with Emerging Issues Task Force Topic D-60, the Company
          recognized a beneficial conversion feature in the amount of $4,018,000
          as a one-time non-cash preferred stock dividend in the first quarter
          of 1999. The amount represented the difference between the conversion
          price of $7 per share on the date of issuance of the Series C Shares,
          February 5, 1999, and the $8 7/8 market price of common stock at that
          date. The Company has the right to require conversion of all of the
          outstanding shares of Series C Convertible Preferred Stock at any time
          after February 5, 2000, if the closing bid price for the Company's
          common stock is greater than $15 for fifteen consecutive trading days.
          The Series C Convertible Preferred Stock may be redeemed by the holder
          upon certain specified events as defined. During the years ended
          December 31, 2000 and 1999, holders of 6,313 and 1,000 shares,
          respectively, of Series C Preferred Stock converted their stock into
          an aggregate of approximately 1,737,000 and 149,000 shares,
          respectively, of the Company's common stock.

          In October 1999, the Company completed a $6.1 million private
          placement, issuing an aggregate of 6,100 shares of Series D
          Convertible Preferred Stock, $.01 par value, and warrants to purchase
          an aggregate of 122,000 shares of common stock. Each share of Series D
          Convertible Preferred Stock is convertible into common stock of the
          Company at a conversion price of $8.875. The Series D Convertible
          Preferred Stock contains a dividend of 6%, accruing from the date of
          issuance of the Series D Convertible Preferred Stock through and
          including the date of conversion. The dividend is payable upon
          conversion, in the Company's common stock or cash, at the Company's
          option (subject to certain conditions). The warrants are exercisable
          at $11.09 per share, expire in October 2004 and are subject to
          mandatory exercise, subject to certain conditions. The warrants were
          valued at $31,000 and the value was treated as a "discount" to the
          Series D Shares and such discount is being accreted as a preferred
          stock dividend over the five-year term of the warrants. The Company
          has the right to require conversion of all of the outstanding shares
          of Series D Convertible Preferred Stock at any time after October 1,
          2000, if the closing bid price for the Company's common stock is
          greater than $18 for fifteen consecutive trading days. The Series D
          Convertible Preferred Stock may be redeemed by the holder upon certain
          specified events as defined. During the year ended December 31, 2000,
          holders of 6,000 shares of Series D Preferred Stock converted their
          stock into an aggregate of approximately 1,577,000 shares of the
          Company's common stock.




                                      F-15
<PAGE>   32


               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 11 - STOCKHOLDERS' DEFICIENCY

          The Company has reserved for issuance 2,677,000 shares of its common
          stock relating to common stock purchase warrants outstanding as of
          December 31, 2000, at prices ranging from $2.50 to $11.09 per share.

          During the year ended December 31, 2000, the Company raised
          $2,947,000, net of expenses, through a private placement of equity
          with various investors. Such financing included the exchange of
          certain outstanding shares of Series D Convertible Preferred Stock for
          Common Stock, in conjunction with the purchase of new shares of Common
          Stock by such Series D holders, as well as the exercise of certain
          outstanding warrants for Common Stock. In addition, the Company
          received $120,000 from the exercise of 24,000 unrelated warrants.


NOTE 12 - STOCK OPTION PLANS

          The Board of Directors adopted, and the Company's stockholders
          approved, as amended, a stock option plan (the Plan) pursuant to which
          2,250,000 shares of the Company's common stock are reserved for
          issuance upon the exercise of options granted to officers, employees,
          consultants and directors of the Company. Options issued under the
          Plan are nonqualified stock options (NSO's) and the Board of Directors
          (Committee) will grant NSO's at an exercise price which is not less
          than seventy percent of the fair market value on the date such options
          are granted. The Plan further provides that the maximum period in
          which stock options may be exercised will be determined by the
          Committee, except that they may not be exercisable after ten years
          from the date of grant. At December 31, 2000, options to purchase
          1,684,000 shares of common stock were outstanding.

          The Board of Directors adopted, and the stockholders approved, the
          Company's 1994 Director Option Plan (the Director Plan), as amended,
          pursuant to which 200,000 shares of the Company's common stock are
          reserved for issuance upon the exercise of options to be granted to
          non-employee directors of the Company. Under the Director Plan, an
          eligible director will automatically receive, at the commencement of
          the Director's three-year term, nonstatutory options to purchase
          15,000 shares of the Company's common stock. For directors elected to
          less than a three-year term, such directors shall receive an option to
          purchase 5,000 shares per year to be served as a director. The option
          exercise price per share shall be equal to the fair market value of
          such shares at the time of grant. All options granted under the Plan
          vest ratably over the director's term and are exercisable within ten
          years from the date of grant, but generally may not be exercised more
          than 90 days after the date the director ceases to serve as a director
          of the Company. At December 31, 2000, options to purchase 132,000
          shares of the Company's common stock were outstanding under the
          Director Plan.




                                      F-16
<PAGE>   33


               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 12 -   STOCK OPTION PLANS (CONTINUED)

         The activity in the Plan and the Director Plan are as follows:

<TABLE>
<CAPTION>
                                                 Exercise Price Per Share
                                         Number of                    Weighted
                                          Options        Range        Average
                                        ------------  -------------   ---------
<S>                                     <C>           <C>            <C>
Balance outstanding, January 1, 1998        365,000    $ 1.63-4.75     $  3.01

Granted                                     380,000      5.56-7.13        5.60
Exercised                                   (28,000)     2.13-4.75        2.75
Expired                                     (18,000)     2.13-6.50        4.10
                                        ------------  -------------   ---------

Balance outstanding, December 31, 1998      699,000      1.63-4.75        4.38

Granted                                     590,000      6.13-12.00       9.85
Exercised                                   (35,000)     2.13-6.50        3.27
Expired                                     (32,000)     2.13-12.00       8.08
                                        ------------  -------------   ---------

Balance outstanding, December 31, 1999    1,222,000      1.63-12.00       6.95

Granted                                     850,000      .50-14.25        2.14
Expired                                    (256,000)     2.13-12.00       9.02
                                        ------------  -------------   ---------

Balance outstanding, December 31, 2000    1,816,000   $  .50-14.25      $ 4.41
                                        ============  =============   =========

Exercisable, December 31, 2000              948,000   $  1.63-12.00     $ 4.96
                                        ============  =============   =========
</TABLE>



     The Company has adopted the disclosure requirements of SFAS No. 123,
     "Accounting for Stock-Based Compensation". The Company applies Accounting
     Principles Board Opinion No. 25 and related interpretations in accounting
     for its plans. Had compensation cost for the Company's stock-based
     compensation plans been determined based on the fair value at the grant
     dates, consistent with SFAS No. 123, the Company's net loss applicable to
     common stockholders and net loss per share applicable to common
     stockholders would have been adjusted to the pro forma amounts indicated
     below:



<TABLE>
<CAPTION>
                                                                       2000                1999                  1998
<S>                                                             <C>                   <C>                   <C>
Net loss applicable to common stockholders:
As reported                                                     $  (20,792,000)       $ (22,651,000)        $ (11,646,000)
Pro forma                                                          (22,981,000)         (23,735,000)          (12,024,000)

Net loss per share applicable to common stockholders:
As reported                                                     $        (1.83)       $       (2.84)        $       (1.58)
Pro forma                                                                (2.03)               (2.98)                (1.63)
</TABLE>


                                      F-17
<PAGE>   34
\
               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE 12 - STOCK OPTION PLANS (CONTINUED)

          The fair value of each option grant is estimated on the date of grant
          using the Black-Scholes option pricing model with the following
          weighted average assumptions used for grants in 2000, 1999 and 1998,
          respectively: risk-free interest rate of 5.5%, 5.5% and 5%,
          respectively; no dividend yield; expected lives of 3 to 10 years; and
          expected volatility of 108%, 81%, and 91%, respectively.


NOTE 13 - SAVINGS AND RETIREMENT PLAN

          The Company has a savings and retirement plan (the Plan), which covers
          all eligible employees. Participants in the Plan may elect to make
          contributions up to a maximum of 20% of their compensation. For each
          participant, the Company will make a matching contribution of one-half
          of the participant's contributions, up to 5% of the participant's
          compensation. Matching contributions are made in the form of the
          Company's common stock and are vested at the rate of 33% per year
          based on years of employment. For the years ended December 31, 2000,
          1999 and 1998, the Company's matching contributions were approximately
          $133,000, $165,000, and $104,000, respectively.


NOTE 14 - INCOME TAXES

          A reconciliation of income tax benefit, to the federal statutory rate
          for the years ended December 31, 2000, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                        2000     1999     1998
<S>                                                    <C>      <C>      <C>
Income tax benefit on reported pretax
 loss at federal statutory rate                        (35.0)%  (35.0)%  (35.0)%
State net operating losses                              (6.0)    (6.0)    (6.0)
Net operating loss carryforward not recognized          41.0     41.0     41.0
                                                       ----      ----    -----

Income taxes                                             0.0 %    0.0 %    0.0 %
                                                       ====      ====     =====
</TABLE>

          At December 31, 2000 and 1999, the Company recorded net deferred tax
          assets of approximately $25,524,000 and $16,835,000, respectively, and
          valuation allowances in the same amounts. The valuation allowances
          were increased by $8,689,000, $7,133,000, and $4,191,000, for the
          years ended December 31, 2000, 1999 and 1998, respectively. SFAS No.
          109 requires that the Company record a valuation allowance when it is
          "more likely than not that some portion or all of the deferred tax
          asset will not be realized". The ultimate realization of the deferred
          tax asset depends on the Company's ability to generate sufficient
          future taxable income.




                                      F-18
<PAGE>   35

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE 14 -   INCOME TAXES (CONTINUED)

         The net deferred tax asset as of December 31, 2000 and 1999 is
         comprised of the following:


<TABLE>
<CAPTION>
                                                                  2000            1999
<S>                                                           <C>             <C>
Deferred tax assets:
Net operating loss carryforwards                              $ 25,316,000    $ 16,510,000
Allowance for doubtful accounts                                     73,000         237,000
Asset basis difference, intangible and other assets                135,000          88,000
                                                              ------------    ------------

Deferred tax asset, gross                                       25,524,000      16,835,000
Valuation allowance on deferred tax asset                      (25,524,000)    (16,835,000)
                                                              ------------    ------------

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






          At December 31, 2000, the Company has federal net operating loss
          carryforwards of approximately $61,000,000, which can be utilized
          against future taxable income and expire through the year 2020. Net
          operating losses available for state income tax purposes are less than
          those for federal purposes and generally expire earlier.


NOTE 15 - COMMITMENTS AND CONTINGENCIES

         The Company has leases for office facilities and equipment, which
         expire in various years through December 2004. Future aggregate minimum
         annual rental payments as of December 31, 2000 are as follows:

<TABLE>
<CAPTION>
          Year ending December 31,
<S>                                   <C>
                  2001                $1,027,000
                  2002                   264,000
                  2003                   130,000
                  2004                    91,000
</TABLE>



         Rent expense for the years ended December 31, 2000, 1999 and 1998 was
         approximately $1,014,000, $815,000, and $558,000, respectively. Leased
         equipment expense for the year ended December 31, 2000 was
         approximately $64,000.




                                      F-19
<PAGE>   36


               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 15 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

          In January 1999, the Company brought an action against SmarTalk
          TeleServices, Inc. ("SmarTalk"), a former party to an agreement in
          which the Company was to provide prepaid cellular services, for fraud
          and breach of contract. SmarTalk subsequently filed for bankruptcy,
          leading the Company to file a proof of claim with the bankruptcy court
          in the amount of approximately $14.4 million in March 1999. SmarTalk
          has since disclosed approximately $847,000 in preference payments that
          it claims the bankrupt estate is entitled to recover from the Company.
          The Company intends to prosecute its claim against SmarTalk and to
          vigorously contest any preference action brought by the bankrupt
          estate.

          The Company is involved in an eviction proceeding with respect to its
          one of its offices, which houses one of the Company's two call
          centers. However, the Company is actively engaged in settlement
          discussions with the landlord/plaintiff in this matter, and is
          optimistic that a satisfactory resolution will be reached soon.

          The Company, in the ordinary course of business, is a party to various
          legal actions, the outcome of which, in the opinion of management,
          will not have a material adverse effect on the consolidated results of
          operations, cash flows or financial position of the Company.


NOTE 16 - OTHER RELATED PARTY TRANSACTIONS

          The Company sub-leases certain office space to affiliates, expiring in
          December 31, 2001. For the years ended December 31, 2000 and 1999,
          aggregate monthly rental payments were approximately $140,000 and
          $64,000, respectively, plus operating expenses, property taxes and
          rent escalations.

          During 1999, the Company entered into a capitalized lease obligation
          with an affiliate, expiring in November 2001. Aggregate monthly
          payments are approximately $21,000.


NOTE 17 - DEPENDENCE UPON KEY RELATIONSHIPS AND MAJOR CUSTOMERS

Approximately 22%, 14% and 10% of the Company's revenues for 2000 were
attributable to three customers. Approximately 18%, 16% and 16% of the Company's
revenues for 1999 were attributable to three customers. Approximately 24%, 19%,
12% and 10% of the Company's revenues for 1998 were attributable to four
customers. The agreements with these companies are terminable with cause and
require written notification, typically effective upon relatively short notice.
The termination of any one of these agreements would have a material adverse
effect on the Company.




                                      F-20
<PAGE>   37


               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE 18 -   SELECTED QUARTERLY RESULTS (UNAUDITED)


<TABLE>
<CAPTION>
                         First          Second        Third         Fourth
                        Quarter        Quarter       Quarter        Quarter
<S>                    <C>           <C>           <C>            <C>
2000
Revenues               $ 9,744,000   $ 8,185,000   $ 8,307,000    $ 6,508,000
                      =============  ============  ============  =============


Gross margin           $ 1,667,000   $ 1,233,000   $ 1,280,000      $ 426,000
                      =============  ============  ============  =============


Net loss              $ (4,488,000)  $ (4,585,000) $ (3,981,000) $ (6,930,000)
                      =============  ============  ============  =============


Loss per common
 share:
Basic and diluted          $ (0.55)      $ (0.47)      $ (0.33)       $ (0.48)
                      =============  ============  ============  =============



1999
Revenues               $ 5,621,000   $ 6,461,000   $ 7,893,000    $ 8,296,000
                      =============  ============  ============  =============


Gross margin           $ 1,029,000   $ 1,632,000   $ 2,262,000    $ 1,421,000
                      =============  ============  ============  =============


Net loss              $ (4,355,000)  $ (3,581,000) $ (3,409,000) $ (5,520,000)
                      =============  ============  ============  =============

Loss per common
 share:
Basic and diluted          $ (1.12)      $ (0.49)      $ (0.45)       $ (0.78)
                      =============  ============  ============  =============
</TABLE>

NOTE 19 - SEGMENT INFORMATION

          The Company complies with SFAS 131, "Disclosures about Segments of an
          Enterprise and Related Information." SFAS 131 requires disclosures of
          segment information on the basis that is used internally for
          evaluating segment performance and deciding how to allocate resources
          to segments.

          Segment information listed below reflects the three principal business
          units of the Company (as described in Note 1). Each segment is managed
          according to the products or services, which are provided to the
          respective customers, and information is reported on the basis of
          reporting to the Company's Chief Operating Decision Maker (CODM). The
          Company's CODM uses segment information relating to the operations of
          each segment, however, segment balance sheet data is not prepared for
          or used by the CODM.



                                      F-21
<PAGE>   38

               SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 19 -   SEGMENT INFORMATION (CONTINUED)

         Operating segment information for 2000, 1999, and 1998 is summarized as
follows:


<TABLE>
<CAPTION>
                                            Rental          Debit         Activation       Corporate     Consolidated

<S>                              <C>    <C>             <C>             <C>             <C>             <C>
Revenues                         2000   $ 10,046,000    $ 22,450,000    $    248,000    $       --      $ 32,744,000
                                 1999     12,939,000      14,280,000       1,052,000                      28,271,000
                                 1998     14,037,000      12,737,000       1,426,000                      28,200,000

Depreciation
and amortization                 2000        320,000         283,000          11,000         763,000       1,377,000
                                 1999        326,000         280,000          22,000         845,000       1,473,000
                                 1998        429,000         101,000          10,000         792,000       1,332,000

Bad debt expense                 2000        645,000         210,000                                         855,000
                                 1999        883,000         306,000          28,000                       1,217,000
                                 1998      1,441,000       2,097,000          16,000                       3,554,000

Operating income (loss)          2000        236,000     (13,856,000)         55,000      (5,831,000)    (19,396,000)
                                 1999      1,034,000     (10,964,000)        (20,000)     (6,334,000)    (16,284,000)
                                 1998       (777,000)     (5,942,000)       (365,000)     (3,604,000)    (10,688,000)

Interest expense, net            2000                                                        (582,000)      (582,000)
                                 1999                                                        (574,000)      (574,000)
                                 1998                                                        (952,000)      (952,000)

Income (loss) before
income taxes                     2000        236,000     (13,856,000)         55,000      (6,413,000)    (19,978,000)
                                 1999      1,034,000     (10,964,000)        (20,000)     (6,908,000)    (16,858,000)
                                 1998       (777,000)     (5,942,000)       (365,000)     (4,556,000)    (11,640,000)
</TABLE>


                                      F-22
<PAGE>   39




                 SHARED TECHNOLOGIES CELLULAR, INC. AND SUBSIDIARIES

                                   SCHEDULE II
                          VALUATION AND QUALIFYING ACCOUNTS
                     Years Ended December 31, 2000, 1999 and 1998






<TABLE>
<CAPTION>
                                      Balance at          Charged to                             Balance at
                                      Beginning           Costs and                                  End
     Description                       of Year             Expenses           Deductions(1)        of Year
                                      ----------          ----------          ----------          ----------
<S>                                   <C>                 <C>                <C>                 <C>
Year Ended December 31, 2000:
  Allowance for doubtful accounts     $  495,000          $  855,000          $1,171,000          $  179,000
                                      ==========          ==========          ==========          ==========

Year Ended December 31, 1999:
  Allowance for doubtful accounts     $  896,000          $1,217,000          $1,618,000          $  495,000
                                      ==========          ==========          ==========          ==========

Year Ended December 31, 1998:
  Allowance for doubtful accounts     $  991,000          $3,554,000          $3,649,000          $  896,000
                                      ==========          ==========          ==========          ==========
</TABLE>



(1)  Represents write off of uncollectible accounts, net of recoveries.







                                       S-1






<PAGE>   40
                                    PART III

ITEM 10

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11

EXECUTIVE COMPENSATION

ITEM 12

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company incorporates by reference items 10, 11, 12 and 13 in its Proxy
Statement for its Annual Meeting of Stockholders to be held on May 31, 2001 (to
be filed with the Securities and Exchange Commission on or before April 30,
2001).

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM  8-K.

(a)  FINANCIAL STATEMENTS

See Part II, Item 8 hereof.

(b)  REPORTS ON FORM 8-K

On November 14, 2000, the Company filed a report on Form 8-K, Item 5, concerning
the executed definitive agreement and plan of merger with SATX, Inc. pursuant to
which SATX, Inc. would have merged into Shared Technologies Cellular, Inc. and
shareholders of SATX, Inc. would have received 17 million shares of the
surviving company. On February 7, 2001, the Company issued a press release
announcing that the Company had ceased negotiations with SATX, Inc., due to the
absence of necessary financing to consummate the merger and the mutual decision
of SATX and the Company to terminate the agreement and plan of merger.

(c)      EXHIBITS

EXHIBIT NO.                DESCRIPTION OF EXHIBIT

3.(i)             Second Restated Certificate of Incorporation dated
                  February 29, 2000. Incorporated by reference from exhibit
                  3.(i) to the Company's Form 10-K dated March 27, 2000.

3.(ii)            Certificate of Amendment of Certificate of Incorporation,
                  dated June 30, 2000. Incorporated by reference from exhibit
                  3.(i) to the Company's Quarterly Report on Form 10-Q dated
                  August 13, 2000.

3.(iii)           Amended and Restated By-laws, dated July 7, 1999. Incorporated
                  by reference from Exhibit 3.(ii) to the Company's Form 10-K
                  dated March 27, 2000.

4.1               Specimen of Common Stock Certificate. Incorporated by
                  reference from exhibit 4.2 to the Company's Registration
                  Statement of Form SB-2 filed with Amendment No. 3 to such
                  Registration Statement dated January 27, 1995.


                                       17

<PAGE>   41
4.2               Series B Convertible Preferred Stock Purchase Agreement by and
                  between International Capital Partners, Inc. and the Company
                  dated August 19, 1996 (agreement between STFI and the Company
                  is substantially the same), including form of Common Stock
                  Warrant. Incorporated by Reference from Exhibit 4.2 to the
                  Company's Form 8-K dated August 19, 1996 and filed September
                  15, 1996.

4.3               Equity Holders Agreement by and among International Capital
                  Partners, Inc., Zeisiger Capital Group, LLC and Shared
                  Technologies Fairchild Inc. dated August 19, 1996.
                  Incorporated by Reference from Exhibit 4.3 to the Company's
                  Form 8-K dated August 19, 1996 and filed September 15, 1996.

4.4               Purchase Agreement, Common Stock Warrant Certificate and
                  Option Agreement by and among RHI Holdings, Inc., and the
                  Company dated December 27, 1996. Incorporated by Reference
                  from Exhibit 4.1, 4.2, and 4.3 respectively to the Company's
                  Form 8-K dated December 27, 1996, and filed January 22, 1997.


4.5               Form of Registration Rights Agreement dated as of April 15,
                  1998, between Shared Technologies Cellular, Inc., and Salomon
                  Brothers Holding Company Inc. Incorporated by Reference from
                  Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q
                  dated May 15, 1998.

4.6               Form of Warrant Purchase Agreement, dated as of April 15,
                  1998, between Shared Technologies Cellular, Inc., and Salomon
                  Brothers Holding Company Inc. Incorporated by Reference from
                  Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q
                  dated May 15, 1998.

4.7               Form of Shared Technologies Cellular, Inc., Common Stock
                  Purchase Warrant, dated April 15, 1998, in favor of Salomon
                  Brothers Holding Company Inc. or its registered assigns.
                  Incorporated by Reference from Exhibit 4.6 to the Company's
                  Quarterly Report on Form 10-Q dated May 15, 1998.

4.8               Form of Subscription Agreement dated May 1998 between Shared
                  Technologies Cellular, Inc., and the Purchasers (as defined
                  therein), including form of Convertible Note. Incorporated by
                  Reference from Exhibit 4.7 to the Company's Quarterly Report
                  on Form 10-Q dated May 15, 1998.

4.9               Securities Purchase Agreement among the Company and the
                  Purchasers dated as of January 28, 1999. Incorporated by
                  Reference from Exhibit 4.2 to the Company's Form 8-K dated
                  February 5, 1999 and filed February 12, 1999.

4.10              Registration Rights Agreement among the Company and the
                  Purchasers dated as of January 28, 1999. Incorporated by
                  Reference from Exhibit 4.3 to the Company's Form 8-K dated
                  February 5, 1999 and filed February 12, 1999.

4.11              Form of Warrant to Purchase Common Stock of the Company issued
                  to the Purchasers. Incorporated by Reference from Exhibit 4.4
                  to the Company's Form 8-K dated February 5, 1999 and filed
                  February 12, 1999.

4.12              Certificate of Designations, Preferences and Rights of the
                  Series D Convertible Preferred Stock of Shared Technologies
                  Cellular, Inc. dated October 1, 1999. Incorporated by
                  Reference from Exhibit 4.1 to the Company's Form 8-K dated
                  October 1, 1999 and filed October 12, 1999.

4.13              Securities Purchase Agreement among the Company and the
                  Purchasers dated as of October 1, 1999. Incorporated by
                  Reference from Exhibit 4.2 to the Company's Form 8-K dated
                  October 1, 1999 and filed October 12, 1999.

4.14              Registration Rights Agreement among the Company and the
                  Purchasers dated as of October 1, 1999. Incorporated by
                  Reference from Exhibit 4.3 to the Company's Form 8-K dated
                  October 1, 1999 and filed October 12, 1999.


                                       18
<PAGE>   42

4.15              Form of Warrant to Purchase Common Stock of the Company issued
                  to International Capital Partners, LLC. Incorporated by
                  Reference from Exhibit 4.4 to the Company's Form 8-K dated
                  October 1, 1999 and filed October 12, 1999.

4.16              Form of Warrant to Purchase Common Stock of the Company issued
                  to Oakes, Fitzwilliams & Co., S.A. Incorporated by Reference
                  from Exhibit 4.5 to the Company's Form 8-K dated October 1,
                  1999 and filed October 12, 1999.

4.17              First Amendment to Loan Agreement by and between the Company
                  and Citizens Bank of Massachusetts dated December 3, 1999.
                  Incorporated by Reference from Exhibit 4.1 to the Company's
                  Quarterly Report on Form 10-Q dated May 11, 2000.

4.18              Second Amendment to Loan Agreement by and between the Company
                  and Citizens Bank of Massachusetts dated May 1, 2000.
                  Incorporated by Reference from Exhibit 4.2 to the Company's
                  Quarterly Report on Form 10-Q dated May 11, 2000.


4.19              Third Amendment to Loan Agreement by and between the Company
                  and Citizens Bank of Massachusetts dated August 8, 2000.
                  Incorporated by Reference from Exhibit 4.1 to the Company's
                  Quarterly Report on Form 10-Q dated August 13, 2000.

4.20              Fourth Amendment to Loan Agreement by and among the Company,
                  Citizens Bank of Massachusetts and Mobile Investments LLC
                  dated March 1, 2001.

4.21              Referral Agreement by and between the Company and William
                  Bolles dated November 28, 2000, as amended (the "Agreement").

4.22              First Amendment to the Agreement, dated January 7, 2001.

10.1              Lease Agreement by and between Putnam Park Associates and the
                  Company dated January 1, 1995. Incorporated by reference from
                  Exhibit 10.10 to the Company's Registration Statement on Form
                  SB-2 filed with Amendment No. 1 to such Registration Statement
                  dated January 4, 1995.

10.2              Sample Customer Service Agreement. Incorporated by reference
                  from Exhibit 10.15 to the Company's Registration Statement on
                  Form SB-2 filed with Amendment No. 1 to such Registration
                  Statement dated January 4, 1995.

10.3              Sample Customer Service Agreement. Incorporated by reference
                  from Exhibit 10.16 to the Company's Registration Statement on
                  Form SB-2 filed with Amendment No. 1 to such Registration
                  Statement dated January 4, 1995.

10.4              Shared Technologies Cellular, Inc. Savings and Retirement
                  Plan, Effective as of April 1, 1996. Incorporated by reference
                  from Exhibit 10.15 to the Company's Form 10-K dated March 27,
                  1997.

10.5              1994 Stock Option Plan, as amended, June 28, 2000.

10.6              1994 Director Option Plan, as amended, July 7, 1999.

10.7*             Prepaid Cellular Reseller Agreement by and between the Company
                  and MCI Telecommunications Corporation and WorldCom
                  Technologies, Inc. dated February 19, 1999. Incorporated by
                  reference from Exhibit 10.11 to the Company's Form 10-K dated
                  March 30, 1999.

10.8              Employment Agreement by and between Anthony D. Autorino and
                  the Company, effective October 1, 1999. Incorporated by
                  reference from Exhibit 10.12 to the Company's Form 10-K dated
                  March 27, 2000.

10.9              Employment Agreement by and between Sean P. Hayes and the
                  Company, effective October 1, 1999. Incorporated by reference
                  from Exhibit 10.14 to the Company's Form 10-K dated March 27,
                  2000.


                                       19

<PAGE>   43
10.10             Employment Agreement by and between Kenneth M. Dorros and the
                  Company, effective October 1, 1999. Incorporated by reference
                  from Exhibit 10.15 to the Company's Form 10-K dated March 27,
                  2000.

21                List of subsidiaries of the registrant.

27                Financial Data Schedule

*                 Confidential treatment as to certain portions has been
                  requested until April 1, 2004. The copy filed as an exhibit
                  omits the information subject to the confidentiality
                  treatment.


                                       20
<PAGE>   44
                                   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.

                                    SHARED TECHNOLOGIES CELLULAR, INC.
                                    (Registrant)

                                    \s\ Anthony D. Autorino
                                 By Anthony D. Autorino
                                    Chief Executive Officer and Director
                                    Date:  March 27, 2001

                                    \s\ Ismael Pinho
                                 By Ismael Pinho
                                    Chief Financial Officer
                                    Date:  March 27, 2001

                                POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Anthony D.
Autorino and Ismael Pinho, and each of them (with full power to each of them to
act alone), his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign on his behalf individually and in each capacity
stated below any amendment, including post-effective amendments, to this
Registration Statement under the Securities Act of 1933, as amended, and to file
the same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.

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

<TABLE>
<S>                                                <C>                                               <C>
By: /s/Anthony D. Autorino                         By: /s/ William A. DiBella                        By: /s/ Nicholas E. Sinacori
Anthony D. Autorino                                William A. DiBella                                Nicholas E. Sinacori
Chief Executive Officer                            Director                                          Director
and Director                                       Date:  March 27, 2001                              Date:  March 27, 2001
Date:  March 27, 2001

By: /s/ Ajit G. Hutheesing                         By: /s/ Thomas H. Decker                          By: /s/ Victor Grillo, Sr.
Ajit G. Hutheesing                                          Thomas H. Decker                         Victor Grillo, Sr.
Director                                                    Director                                         Director
Date:  March 27, 2001                              Date:  March 27, 2001                             Date:  March 27, 2001

* By: /s/ Anthony D. Autorino
Anthony D. Autorino
Attorney-in-fact
</TABLE>


                                       21