<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-K/A
                                 AMENDMENT NO. 1


                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1999

                        Commission file number is 0-27604

                            PICK COMMUNICATIONS CORP.
                            -------------------------
             (Exact Name of Registrant as Specified in its Charter)

         Nevada                                        75-2107261
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
Incorporation or jurisdiction)

8401 NW 53rd Terrace, Miami, FL                          33166
(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code: (305) 717-1500

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

                          Common Stock, $0.01 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 such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. [ ] Yes [ X] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[ ]

The aggregate market value of the 9,044,846 shares of voting stock held by
non-affiliates of the Registrant as of May 31, 2000 was $7,326,325 (assuming
solely for purposes of this calculation that all directors and officers but not
greater than 5% stockholders of the Registrant are "affiliates").

The number of shares outstanding of the Registrant's Common Stock, par value
$0.01 per share, as of May 12, 2000 was 10,471,996.

Documents incorporated by reference: None.


<PAGE>



                                     PART I


         This Report includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including statements regarding
expected future revenues and expenses. Forward-looking statements relate to
plans and expectations of the Company and are subject to risks and
uncertainties, including the Company's ability to implement its business plan
and strategy and launch its PICK Sat services, the Company's need for additional
funding, the repayment of substantial short-term indebtedness, contingent
liabilities of the Company on its discontinued operations, significant and
continuing losses, dependence on a limited number of customers, dependence on
the Internet, the timely development and acceptance of new products in a
constantly evolving Internet industry, the impact of competitive products and
pricing, government regulations and other risks detailed from time to time in
the Company's SEC reports.

Item 1: Business

(a) General Development of the Business

         PICK Communications Corp. ("PICK" or the "Company") was incorporated in
April 1984 under the laws of the State of Utah as S.T.V., Inc. In February 1986,
the Company changed its name to Adolphus Companies, Inc. and to Prime
International Products Inc. ("Prime") in May 1988. Prime ceased operations in
late 1990. In July 1995, Prime changed its state of organization from Utah to
Nevada. On September l2, 1995, Prime executed a Stock Purchase Agreement to
exchange 16,500,000 shares of Prime's Common Stock for all of the common stock
and warrants of Public Info/Comm. Kiosk, Inc. ("Kiosk"), which made Kiosk a
subsidiary of Prime. Kiosk was incorporated under the laws of New Jersey in
August. 1992. Prime changed its name to PICK Communications Corp. in December
1995. Unless otherwise indicated, all references to "the Company" or "PICK"
hereinafter include the business and operations of Kiosk prior to the September
12, 1995 transaction and the combined companies thereafter. The transaction was
a reverse acquisition accounted for as a re-capitalization of Kiosk.

         The Company currently has two active subsidiaries, PICK Sat, Inc.,
incorporated under the laws of Florida in December 1997 and PICK Online.Com
Inc., incorporated under the laws of Florida in March 1999. PICK Sat and PICK
Online are both developing companies. The Company's current focus is our PICK
Sat subsidiary which has just begun commercial operations. PICK Sat has
developed satellite-based, broadband Internet services. PICK Sat is marketing
its services to media companies, large corporations, cable companies, Internet
Service Providers ("ISPs") and end-users. PICK Sat is focusing its initial
marketing efforts in certain areas of the United States and Latin America, where
PICK Sat's services have a greater cost advantage due to the higher costs of
terrestrial Internet service in those areas.



                                        2

<PAGE>



         PICK Sat services include Fuego(TM), a broad-band Internet access
designed for home use through existing cable television operations, and
SkyRelay(TM), which provides bandwidth to corporate local-area networks (LANs)
and Internet service providers (ISPs). Other branded service products are
expected to be announced later this year.

         On June 23, 1999, the PICK Board of Directors voted to sell or
discontinue the long distance telecommunications and prepaid calling card
business of PICK US, Inc., PICK Net, Inc., and PICK Net UK PLC (alternatively,
"PICK Net"). PICK terminated marketing and distribution of prepaid telephone
calling cards through PICK US, Inc. On January 18, 2000, PICK completed the sale
of all of the stock of PICK Net which provided international long distance
services to other carriers and resellers, for nominal value, and have up to
approximately $10.7 million of their liabilities assumed. Subsequent to the
closing of the sale of PICK Net, the buyer defaulted on its payment obligation.
The Company has demanded compliance by the buyer or it will pursue all legal
remedies against the buyer. See "Narrative Description of Business."


         In April 2000, a group of investors from Europe and the Middle East
committed an aggregate of $10 million to PICK Sat (the "PICK Sat Financing"), to
occur over a l2 month period. The Investors will acquire 20% ownership of PICK
Sat and will be issued equity on the basis of 1% for every $500,000 invested. As
of July 1, 2000, $1.3 million had been invested in PICK Sat. See Item 7.
"Management's Discussion and Analysis of Financial Condition of Results of
Operations."

Note Restructuring

         Between July 29 and September 8, 1998, the Company sold an aggregate of
99 Units in a bridge loan (the "July Bridge Loan") consisting of 10% senior
secured notes and 9,900,000 warrants to purchase 990,000 shares of the Company's
common stock at $5.00 per share for five years, for gross proceeds of
$9,900,000. The Company allocated $8,587,066 of the gross sale proceeds to the
debt and $1,312,934 to the warrants. The $1,312,934 discount was amortized as
interest expense over the original 120-day life of the July Bridge Note. A
security interest in the Company's (but not its subsidiaries) assets was filed
on behalf of the investors in the July Bridge Loan.

         On April 27, 1999, $9,880,000 of the $9,900,000 in principal amount of
the Noteholders consented to a restructuring (the "Restructuring") to amend
their Notes (the "Amended Notes"), which had been conditioned on at least 80%
approval. The Noteholders agreed to (a) exchange 988,000 registered shares of
common stock for the warrants issued in connection with the original issuance of
the Notes, 245,750 shares for the warrants issued in connection with an
extension of the July Bridge Loan and 388,040 shares pursuant to the
anti-dilution provisions of the warrants, and (b) receive one share of common
stock for every ten dollar ($10.00) principal amount of the Amended Notes, or an
aggregate of 988,000 shares of Common Stock. The conversion price of the Amended
Notes was subsequently adjusted from $10.00 to $5.00 per share pursuant to the
anti-dilution provisions of the Notes. Commonwealth Associates and its designees
("Commonwealth"), as agent for the Noteholders, was


                                        3

<PAGE>



paid 200,000 shares, plus warrants to purchase 50,000 shares exercisable at
$13.75 per share, with the exercise price of warrants previously issued to
Commonwealth reduced to $1.00 per share.

         The maturity date of the Amended Notes is April 27, 2002. The Company
has the option to extend the maturity date for one additional year, in which
event the Conversion Price shall be subject to adjustment to 50% of the then
average closing bid price of the Common Stock.

         The Amended Notes shall be automatically converted into shares of
common stock in the event that the closing bid price for the common stock has
exceeded $15.00 per share for 20 consecutive trading days. Commonwealth is
entitled to designate one nominee to the Board and the Noteholders shall have
the right to nominate one person to a reconstructed Board consisting of a
majority of independent Directors. Neither right to designate a nominee has been
exercised.

(b)   Financial Information about Segments.

      The Company's operations have all been in one industry segment.

(c)   Narrative Description of Business.

Satellite Delivered Internet Services

         PICK Sat has developed an Internet delivery platform that leverages the
inherent benefits of satellite transmission. The PICK Sat platform is an
open-platform capable of transmitting unicast and multicast Internet data.
Unicast data transmission is Internet traffic direct to a single user and is the
traditional Internet transmission methodology. PICK Sat combines it with a
satellite broadcast to rapidly deploy broadband Internet services at cost
effective prices. Multicast transmission is Internet traffic that can be
received by more than one user at the same time. This makes it well suited for
the delivery of streaming media including radio and video, music, and software
downloads.

         PICK Sat's technologies, which were achieved in collaboration with
MicroSoft, Phillips, Harmonic Data, and other partners, also allows for the
delivery of data via satellite directly to routers on the Internet, instead of
moving the data over terrestrial links that exist between these routers.

         PICK Sat will market PICK Sat services initially in certain areas in
Latin America as well as certain ex-urban areas of the United States. PICK Sat
services include Fuego(TM), a broad-based Internet access designed for home use
through existing cable television operations. The initial primary market
penetration will be to cable, both coaxial and wireless, and TV operators who
wish to deploy broadband Internet access to their customers as a value added
product. Sky Relay(TM) services will provide bandwidth Internet services to
local-area networks (LANS), Internet Service Providers ("ISPs"), corporations,
telephone companies and other users of Internet services. PICK Sat's SkyRelay
service was first demonstrated live in the GlobalXchange/Telia booth at Comdex
'99 in Miami last September. SkyRelay is a cost-effective, satellite-delivered,
high-speed Internet solution. GlobalXchange was PICK Sat's first reseller of the
SkyRelay product, which is targeted

                                        4

<PAGE>



to ISPs, corporations, government agencies, schools, hotels and other users
throughout Latin America and the Caribbean, and users in the United States where
land lines for high-speed Internet access are either costly or unavailable.
Further, there is also a shortage of adequate backbone facilities in Latin
America. This results in slow speeds, poor transmission quality and high prices
to end users. PICK Sat will collect per subscriber fees or fixed monthly site
charges from cable companies, ISPs and other network services companies who use
PICK Sat for Internet service.

         PICK Sat multicast services are well suited for distance learning
applications, intra-company video events and large file transfers for
enterprises with multiple sites or remote customers. These applications are
designed to leverage the inherent advantages that satellites bring to the
simultaneous transmission of a message or images to a geographically dispersed
audience. PICK Sat will charge one-time and recurring monthly charges to
commercial distance learning customers and file-transfer customers.


         Until the PICK Sat financing in May 2000, PICK Sat was unable to
complete its' Network Operating Center ("NOC"). PICK Sat is operating out of
temporary facilities in Miami, Florida and will be headquartered in a 13,000 sq.
ft. facility in Miami, FL at Koger Park, where an advanced NOC is currently
under construction. This facility will provide ample room for expansion and
anticipated customer transmission requirements. Additionally, a satellite
broadcast dish farm may be constructed next to the building.


         In connection with the commitment for the $10 million PICK Sat
financing in May 2000, an independent Board of Directors and new management were
hired by PICK Sat. The financing is to commercialize PICK Sat's operations which
the Company was unable to fund previously. See "Management".

         PICK Sat presently offers customers three different types of service:
broadband Internet service, asymmetric Internet backbone services, data delivery
services, and video broadcast services. Broadband Internet service allows cable
TV operators to deploy high speed Internet service to their customers on a cost
effective, turnkey, basis. Internet backbone services allow users requiring
commercial amounts of bandwidth who are located in geographic regions of high
Internet connectivity cost, a cost effective alternative for additional
bandwidth requirements. Data delivery services allow for the simultaneous
distribution of data, video, audio and multimedia files, to single users or
groups of users over a geographically dispersed area. Broadcast delivery
services allow for the delivery of real time audio and video feeds to single
users or groups of users also over a geographically dispersed area.

Initial Customers

         The PICK Sat system provides real time multicast file delivery via
satellite and has accomplished its intended near term goal of true wide band
broadcast satellite distribution ability. As such, PICK Sat's first customer,
Cadena Latinoamericana de Television, Inc. ("CLT"), is an owner and distributor
of Spanish-language video programming. CLT will utilize a PICK Sat service to
transmit video content in Internet Protocol (IP) format to cable networks and
broadcast television

                                        5

<PAGE>



stations in Latin America. CLT is currently using courier services to send more
than 20,000 Betacam cassettes a year to its affiliates. CLT, using the PICK Sat
service, will now transmit video files to affiliate stations who will receive
the files via satellite dish, store them on a server, and decode them into
Betacam format as needed for local playout. An agreement between the parties has
been terminated and the parties are negotiating a new contract.

         Between August and October 1999, PICK Sat entered into Internet
Distribution Agreements with four cable television companies located in Mexico.
These Mexican cable contracts are for PICK Sat to provide its Fuego broad-band
Internet access on an exclusive basis to the cable companies' facilities which
will permit the cable companies to provide Internet access to their end-user
customers. PICK Sat is to provide Internet access by means of the PICK Sat
Internet Protocol satellite delivery platform or substantially equal or better
Internet access.


         PICK Sat and the cable companies have been testing the equipment and
making installations, however, PICK Sat was without adequate funds to implement
the contracts on a larger scale. PICK Sat has started receiving the necessary
funds to be able to commercialize its services and expects to invoice its first
customers in or about August 2000. The agreements are for five years with
renewal provisions.


         In addition to the services previously described, PICK Sat has
identified business models which includes: institutional and corporate distance
learning; push technology hosting; news group caching; web page caching; and
secured corporate data file distribution and replication. All of these products
can utilize the same operating platform, personal and technology as PICK Sat's
currently deployed products. Deployment of these products would be subject to
the refinement of the technology, the development of implementation procedures,
the establishment of product pricing and the raising of additional funds to
launch marketing efforts.

         Demand for multicast services that can be provided by the PICK Sat
platform continues to grow as margin conscious distributors and media content
companies search for cost effective solutions to deliver greater amounts of
bandwidth data. Based on Management's knowledge of the industry, PICK Sat
believes it will be able to begin servicing content providers including PICK
Online.Com.

         In June 1998, PICK Sat entered into agreements for hardware with
Philips Digital Video Systems Company ("Philips") and software with MicroSoft
Corporation ("MicroSoft") for the above-described broadband interactive service.
Pursuant to the Company's strategic agreement with Philips, the Company obtained
the right to use the Philips Clevercast(TM) end-to-end data broadcasting system
and the Philips PC-DVB Digital Receiver Cards designed to be installed into all
modern multimedia PCs and to be integrated into PC software via the Windows 95,
98 and NT features. This will allow PC desktop users to receive satellite
transmissions of digital data, television audio, high speed Internet, E-commerce
and other multimedia applications. MicroSoft provided software solutions to
support PICK Sat's services. This is expected to be among the first satellite
interactive platforms that will use the complete range of MicroSoft's server
software solutions. The



                                        6

<PAGE>



Company's Commitment to Cooperate with MicroSoft provides for MicroSoft to
license certain equipment and provide technical support, consulting services,
know-how and training to the Company for three years in exchange for a license
fee with an initial platform license fee and monthly fees based on usage.
MicroSoft may terminate the commitment to cooperate as the Company is in default
of payments to MicroSoft and if the Company does not have a certain amount of
subscribers after two years of commercial operation.

PICK Online.Com

         PICK Online.Com, a wholly-owned subsidiary, is a multi-media content
aggregator and delivery provider of audio and video streaming content
(broadcasts) for ISPs and broadband networks. PICK Online.Com's primary service
is PICK Radio with more than 850 radio stations worldwide. Utilizing the PICK
Sat platform, PICK Online intends to deliver its content to the "Edge of the
Internet". PICK Sat will provide the satellite-based platform for PICK
Online.Com and will contract for, assemble and broadcast live streams of audio
and video from broadcast radio stations, broadcast TV stations and other
streaming content from anywhere in the world. The Company intends to concentrate
corporate resources first on PICK Sat as funds become available and then fund
the operations of PICK Online.Com.

         PICK Online.Com's initial goal is to offer radio and later TV stations,
the ability to reach an audience as IP Multicasting was intended to, but in a
more effective and economical way. Multicasting is a method of disseminating an
audio or video Internet media stream that is normally made available from a
source to a single end user and instead making it available to an unlimited
number of end users.

         Through the use of the PICK Sat platform, PICK Online.Com intends to
present a common sense solution to bringing audio and video streaming to ISPs
and broadband networks such as Cable Modem and Asynchronous Digital Service Line
(ADSL) service providers. Later goals are to further utilize the PICK Sat
platform to provide Internet access and other IP services direct to office and
to home.

         MicroSoft has been a critical resource in the development of the PICK
Sat platform and PICK Online.Com. Contributions have included migration of
MicroSoft Windows NT Server, MicroSoft Commercial Internet Server (MCIS) and the
Windows Media Technology onto the PICK Sat platform.

         PICK Online.Com will have the ability to deliver IP data directly to
ISPs, LANs, Broadband networks and any other IP end user "node" at the Edge of
the Internet. PICK Online.Com is intended to be the portal for end users to
access multicast radio and TV streaming content. The service will use MicroSoft
Media Server to encode signals and multicast them efficiently to Internet Edge
points. End users will be able to listen to or watch a stream via their ISP or
Broadband provided through their MicroSoft browser not knowing that the stream
is multicast and delivered via satellite.


                                        7

<PAGE>



         Terrestrial technology using increasing quantities of the Internet
backbone has been available for some time, but has only been implemented in a
relatively small number of locations. To work properly, terrestrial multicasting
requires Internet-wide implementation which is both costly and time consuming.
PICK Online.Com "leapfrogs" the Internet infrastructure and delivers streaming
content directly to the Edge of the Internet. This not only gets the streams
there with higher quality, but also without using any of the provider's
expensive and limited backbone bandwidth, however, was without funds to continue
until the Spring of 2000.

Customers, Sales and Marketing

         PICK Sat commenced its marketing efforts in March 1999 on a limited
basis, however, was without funds to continue until the Spring of 2000. PICK Sat
is marketing to companies that transmit large amounts of data (including video)
to multiple locations, including television broadcasters and programmers,
corporations and other institutions, and to ISPs and cable television companies
with existing subscriber bases for the delivery of "customer specific content"
to such customer's end users. PICK Sat believes that this strategy will enable
it to market to a broader base of clients and gain subscribers without the high
costs of direct sales, while retaining its primary focus, service delivery. As
such, a necessary client base will include content providers whose products can
be bundled for distribution through PICK Sat's ISP and cable television clients
or directly to offices and homes. This approach enables PICK Sat to negotiate
with clients on a global basis. For example, European content providers wishing
to deliver content to South and Central America, can do so through PICK Sat's
contracts with South and Central American ISPs and cable television companies.
Both clients benefit since the content provider broadens its base of
distribution and the cable Company enhances the quality and volume of end user
choices. In addition, PICK Sat will market to corporations looking to broadcast
presentations and training courses to their locations worldwide.

         PICK Online.Com intends to market its service first to radio stations
already hosted on the Internet. Full marketing activities will not commence,
however, until after PICK Sat has available sufficient funds for marketing and
sales. PICK Online.Com does not initially charge radio stations for them to
participate. For ISPs, an initial number of reception cards and dishes will be
given away with no charge for service until a predetermined number of radio
stations becomes available.

         Media-rich banner advertising opportunities on the Internet will exist
for both PICK Online.Com and its affiliate broadcasters and IP service
providers. Banners for local ads will alternate with national ads at both the
PICK Online.Com home page, as well as www.pickradio.com radio station page.

         Banner space on the PICK Online.Com home page will be allocated for
local area ISP sales while radio station (destination) banners will be allocated
for radio station ad sales. Advertising space will be made available on
consignment with a share of the revenue going to PICK Online.Com. It is expected
that PICK Online.Com will sell banner space on both pages and charge for
creation and insertion of banners.


                                        8

<PAGE>



         Once there is an established network of Internet Edge providers, PICK
Online.Com will be able to offer one-to-many closed circuit broadcasts of audio
and video for teleconferencing distant education, pay-per-view events or other
multicast applications.

         In addition to aggregating radio stations and later TV stations for
broadcasting through its Web site portal, PICK Online.Com seeks to partner with
other important content providers to have them see the benefit of making their
content available on PICK Online.Com. MicroSoft has recognized the potential of
PICK Online.Com as a link to its new Internet Explorer 5.0 browser. MicroSoft
Windows Media Server and Player are integral parts of PICK Online.Com services.


         Through December 31, 1999, all of the Company's revenue was derived
from its international long distance telecommunications services. In 1999,
approximately 40%, 19% and 13% of the Company's sales were from three customers,
Blackstone Calling Card, Inc., IDT Corporation and World Access. Blackstone and
IDT accounted for approximately 72% and 10% of the Company's sales in 1998. In
1997, approximately 19% and 13% of the Company's sales were derived from two
customers, Trescom and DC Communications Corp.


Competition

         The Internet services business is highly competitive and there are few
significant barriers to entry. Currently, the Company competes with a number of
national and local ISPs. In addition, a number of multinational corporations,
including giant communications carriers such as AT&T, MCI/Worldcom, Sprint and
some of the regional Bell operating companies, are offering Internet access or
on-line services. The Company also faces significant competition from Internet
access consolidators and from on-line service firms such as America Online
(AOL), CompuServe, and Prodigy. The Company believes that new competitors which
may include computer software and services, telephone, media, publishing, cable
television and other companies, are likely to enter the on-line services market.

         In addition, PICK Sat believes that the Internet service and on-line
service businesses will further consolidate in the future, which could result in
increased price and other competition in the industry and adversely impact PICK
Sat. A number of on-line services have lowered their monthly service fees, which
may cause PICK Sat to lower its monthly fees in order to compete.

         PICK Sat believes that the primary competitive factors among Internet
access providers are price, customer support, technical expertise, local
presence in a market, ease of use, variety of value-added services and
reliability. PICK Sat believes it will be able to compete favorably in these
areas. PICK Sat's success in the high-speed Internet market will depend heavily
upon its ability to provide high quality Internet connectivity and value-added
Internet services targeted in select markets. Other factors that will affect
PICK Sat's success in these markets include PICK Sat's continued ability to
attract additional experienced marketing, sales and management talent, and the
expansion of support, training and field service capabilities.


                                        9

<PAGE>



         PICK Online.Com expects to be able to market its services to radio and
TV stations who want to reach large Internet audiences and by IP service
providers who are experiencing backbone bandwidth limitation and are not able to
deliver good quality streaming due to increased usage by their subscribers to
streaming media services. The Company is not aware of any other company today
that can offer streaming services to any ISPs and, in turn, to end users in the
same manner as PICK Online.Com. The company that has been the most successful in
providing streaming services is Broadcast.com. This operator has well over 800
radio and TV streams available through its Web site and uses terrestrial IP
multicasting over the Internet. However, Broadcast.com multicasts to only a
limited number of member ISPs and through private land line connections. Part of
Broadcast.com's strength has been in using its private terrestrial
infrastructure to sell other specialized high margin services such as
teleconferencing, pay-per view and other types of Web events. Another strength
is its signing of hundreds of exclusive content agreements with broadcasters,
sports teams and a number of music and audio CDs.

         PICK Online.Com's major strength is its ability to send its multicast
signal to an unlimited number of ISPs almost immediately and at a low cost.
There are hundreds of radio and TV stations that are not on Broadcast.com or
even on the Internet at all. More streams to more Edge of the Internet sites and
the ability to roll out quickly are all factors in how PICK Online.Com will
compete against Broadcast.com. Many of the Company's competitors possess
financial resources significantly greater than those of the Company and,
accordingly, could initiate and support prolonged price competition to gain
market share. If significant price competition were to develop, the Company
might be forced to lower its prices, possibly for a protracted period, which
would have a material adverse effect on its financial condition and results of
operations and could threaten its economic viability.

Patents and Trademarks

         The Company has obtained or applied for trademark registrations for the
name PICK and of each of its subsidiaries. The Company and a non-affiliate are
joint owners of a patent on the technology for a microprocessor-controlled
prepaid cellular telephone system, which has not been marketed by the Company.

Government Regulation

          The Company is subject to regulations administered by the Occupational
Safety and Health Administration, various state agencies and county and local
authorities acting in cooperation with federal and state authorities. The
extensive regulatory framework imposes significant compliance burdens and risks
on the Company. Governmental authorities have the power to enforce compliance
with these regulations and to obtain injunctions or impose civil and criminal
fines in the case of violations.





                                       10

<PAGE>



Discontinued Operations


         On June 23, 1999, the Company's Board of Directors voted to sell or
discontinue the long distance telephone service portion of its business to focus
on the Internet services portion of its business. The Company terminated
marketing and distribution of prepaid telephone calling cards through PICK US,
Inc. The Company entered into a definitive agreement on September 13, 1999, as
described below, to sell the stock of PICK Net Inc. and PICK Net UK PLC
(collectively "PICK Net"), both of which provided international long distance
services to other carriers and resellers, for nominal value, and have up to
approximately $10.7 million of their liabilities assumed including capitalized
leases. The sale of PICK Net occurred in January 2000. The Company still has
contingent liabilities of approximately $4.6 million of indebtedness which was
assumed as part of the sale of PICK Net. The contingent liabilities described
below primarily include: (a) a promissory note in the principal amount of
$2,000,000 plus accrued interest at 12% per annum payable to IDT Corporation by
May 2001 and (b) approximately $2.1 million of indebtedness to Atlantic
Tele-Network Inc. incurred by PICK Sat and PICK Net. As of December 31, 1999,
the Company had approximately an additional $19 million of indebtedness of its
own, including $9.9 million of Senior Secured Notes due April 2002 and
exclusive of discontinued operations.

         On September 17, 1999, PICK agreed to sell PICK Net Inc. and PICK Net
UK PLC (collectively, ("PICK Net"), both wholly-owned subsidiaries of the
Registrant, to Lebow Investments Ltd. ("Lebow"), pursuant to a Stock Purchase
Agreement (the "SPA") dated as of September 13, 1999. Pursuant to the SPA, Lebow
agreed to purchase all of the outstanding capital stock of PICK Net from the
Registrant for $2.00 in cash and assume up to approximately $10.6 million in
liabilities owed to vendors and creditors of PICK Net plus up to $95,000 in
potential liabilities to AT&T as a result of arbitration proceedings. Lebow
agreed to be financially responsible for PICK Net. PICK Net borrowed an
aggregate principal amount of $1,548,000 with interest thereon to continue
operations. The loans are evidenced by a promissory note dated September 13,
1999 in the aggregate amount of $5,000,000 pursuant to a Discretionary Credit
Agreement between PICK Net and Atlantic Tele-Network Inc. ("ATN"). This
indebtedness was guaranteed by PICK Sat and secured by certain assets of PICK
Sat. Subject to closing under the SPA, Lebow granted to ATN the PICK Net Option
to purchase from Lebow all of the outstanding capital stock of PICK Net.


         On September 17, 1999, PICK, PICK Sat, and ATN entered into a PICK Sat
Option Agreement (the "Option Agreement") dated as of September 13, 1999.
Pursuant to the Option Agreement, PICK Sat granted to ATN an option to sell them
up to 19.9% of the common stock of PICK Sat for $8 million, with an option to
acquire an additional 31.1% for an additional $15 million payable either (i) in
500,000 shares of ATN common stock or (ii) a combination of $15 million in cash
and ATN common stock, whichever produces the higher value at the time of
exercise of the option. PICK Sat obtained interim loans in the amount of
$476,000 from ATN for its operating expenses.

         On November 4, 1999, ATN notified the Company of its intention not to
exercise its option to purchase PICK Net and demanded repayment of loans to PICK
Net and PICK Sat in the amount of approximately $2.1 million by February 5,
2000. ATN also indicated that it would not exercise

                                       11

<PAGE>




its option to acquire PICK Sat at the time when it told the Company it would not
acquire PICK Net. The parties entered into a standstill agreement which expired
on May 3, 2000. The loans have not been repaid and the Company is continuing
negotiations with ATN as to the terms of their repayment.


         In late 1997, the Company entered into a reciprocal telecommunications
agreement for international long distance multimedia telecommunication in
Africa, the Middle East and Asia, via satellite, with Gulfsat Communications
Company ("Gulfsat"), a Kuwait based satellite telecommunications firm primarily
engaged in providing VSAT (Very Small Aperture Terminal) solutions world wide,
which agreement, as amended in March 1998, terminates on February 28, 2003.
However, the Company required additional financing, which was not then
available, to increase its ability to capitalize on the Gulfsat agreement and
the Company believed there were better opportunities available for PICK Sat.

         On January 18, 2000, the SPA was amended to reduce the aggregate
liabilities assumed by Lebow to approximately $10.7 million including
capitalized leases. Included in these liabilities was all of the above-disclosed
indebtedness of PICK Net and PICK Sat to ATN in the aggregate amount of
approximately $2.1 million. Simultaneously, Gulfsat purchased all of the Common
Stock of Lebow, a British Virgin Islands corporation, for nominal consideration.
ATN terminated its PICK Sat Option and received five year warrants to purchase
one million shares of PICK at $2.00 per share. Gulfsat was granted five-year
warrants to purchase 2% of the issued and outstanding Common Stock of PICK Sat
plus all then outstanding derivative securities of PICK Sat. These warrants are
exercisable at 50% of the initial public offering price or private placement
resulting in a change of control of PICK Sat if such event occurs on or before
December 31, 2000, or otherwise for an aggregate purchase price of $370,000.

         Following the closing of the sale of PICK Net on January 18, 2000,
Gulfsat continued to fund the operations of PICK Net. Gulfsat paid approximately
$225,000 and $283,000 in cash to PICK Net as of December 31, 1999 and February
29, 2000, respectively, to pay indebtedness and working capital of PICK Net.
Gulfsat also made circuits available to customers of PICK Net with a value of
approximately $630,000. Gulfsat subsequently advised PICK that it will no longer
fund the obligations of PICK Net. In May 2000, PICK demanded compliance by Lebow
and Gulfsat of their obligations under the SPA and will pursue appropriate legal
action if these demands are not satisfied.


         In late 1996, the Company entered into a reciprocal telecommunications
agreement with IDT Corporation ("IDT"), one of the Company's customers/carriers.
Under the agreement, IDT agreed to purchase certain telecommunication services
from the Company, and the Company agreed to purchase certain telecommunications
services from IDT. Pursuant to the agreement, IDT loaned the Company $2,000,000
in working capital financing for one year, which matured on February 9, 1999.
The Company and IDT reached an agreement to execute a new six-month note
executed by PICK Net in the principal amount of $2,000,000 plus accrued interest
and guaranteed by PICK. The Company agreed to issue to IDT 40,000 shares of
PICK's common stock in exchange for IDT's warrants to purchase 40,000 shares of
PICK's common stock, which shall be canceled upon such delivery, plus a
restructuring fee of 50,000 shares of PICK common stock. The Company also agreed
to pay $250,000 upon the


                                       12

<PAGE>



earlier to occur of 30 days from the date of execution of the agreement or the
completion of additional financing for at least $5 million for PICK and shall
make six monthly principal payments of $25,000 each on the last business day of
each month following the issue date of this Note, beginning on December 31,
1999. In the event PICK elects to exercise its option to extend the maturity
date of the Note from six months to three years, it shall deliver to IDT
$375,000, payable in immediately available funds or, at the option of PICK,
37,500 shares of PICK's Common Stock. Thereafter, PICK agrees to pay IDT in
addition to the initial six payments of $25,000 each, $100,000 per month for 6
months, and six payments of $200,000 each in months 13-18 and the final payment
of principal and interest in the 19th month. Interest is payable monthly at 9%
per annum and the Note will be pre-paid pro rata in the event the Company
prepays any indebtedness over $2 million including the July 1998 Bridge Notes,
as amended. The Note will automatically convert into common stock at $10.00 per
share if the average price of the Company's common stock exceeds $15.00 per
share for at least 20 consecutive days. All shares of common stock issued or
issuable to IDT will be registered with the SEC. IDT notified PICK Net of its
alleged default under the Note and on January 18, 2000, a Modification Agreement
was signed whereby the maturity date of the Note was extended until May 15,
2001. IDT refrained from commencing a lawsuit to seek repayment as long as PICK
Net complied with the obligations under the letter agreement and no materially
adverse event covering PICK Net occurred. The failure of Lebow to continue to
fund PICK Net's obligations may be deemed to be a material adverse event,
however no action has been taken. The principal amount due to IDT was reduced by
$114,000 and an additional $76,000 as of December 31, 1999 and January 31, 2000,
respectively, for time purchased by PICK Net from IDT.

Employees

         As of May 31, 2000, the Company had one full-time employee, Robert
Sams, its Chairman of the Board, President, Chief Executive Officer and Chief
Financial Officer. Its subsidiaries, PICK Online and PICK Sat, employed 11
full-time employees and also employed independent contractors for various
purposes. As of December 31, 1999, the Company had employed a total of 27
full-time employees. See Item 11. "Management - Executive Compensation." The
employees are not represented by a labor union, and the Company believes that
its employee relations are excellent.

Item 2: Properties

         PICK Sat has signed a lease for its new facilities at 5255 N.W. 87th
Avenue, Miami, FL 33178. The lease as amended, is for approximately 13,280
square feet and expires on February 28, 2004. The rent is as follows: $6,441 per
month from November 1, 1998 to November 30, 1998; $12,883 per month from
December 1, 1998 to December 31, 1999; $16,600 per month from January 1, 2000 to
February 28, 2000; $17,098 per month from March 1, 2000 to February 28, 2001;
$17,611 from March 1, 2001 to February 28, 2002; $18,139 per month from March 1,
2002 to February 28, 2003; $18,683 per month from March 1, 2003 to February 28,
2004.

         PICK Sat currently occupies approximately 2,000 square feet of office
space at 8401 N.W. 53rd Terrace, Suite 119, Miami, Florida 33166. It occupies
this space under a sublease from a non-affiliated tenant at a monthly rental of
$5,325 at December 31, 1999. The Company intends to establish separate corporate
headquarters from PICK Sat and its subsidiary is expected to move into its new
facility described in the prior paragraph.

                                       13
<PAGE>


         During 1999, the Company leased office space at Wayne Interchange Plaza
II, l55 Route 46 West, Third Floor, Wayne, New Jersey 07470, under a lease which
was to expire on September 30, 2001, with a monthly rental of $8,000. The
Company vacated the New Jersey facilities in September 1999 when ATN assumed
payment obligations for PICK Net. In May 2000, the Company and its landlord
terminated this lease in consideration of $30,000 which included all past due
rent.

Item 3: Legal Proceedings

         Other than the following lawsuits, the Company is not a party to any
material legal proceedings. In February 1997, the Company commenced a mediation
action against AT&T seeking $10 million in damages for breach of contract and
fraudulent inducement and malicious conduct under a carrier agreement (the
"Carrier Agreement") entered into in February 1996. The Company contracted with
AT&T under the Carrier Agreement for inbound 800 service and outbound domestic
and international long distance service. On November 5, 1997, the Company filed
for arbitration proceedings against AT&T and sued for $5 million. In October
1999, the arbitrator found that AT&T was entitled to the gross claim of
$1,776,000 minus credits found in the Company's favor of $399,000 for a net
amount of $1,376,447 plus 9% interest per annum since January 31, 1997. A
liability of $1,100,000 is included in the discontinued operations which the
Company sold in January 2000. However, the Company remains contingently liable
for the judgment and is without the funds to satisfy the judgment. AT&T has
converted the arbitration award into a judgment and is attempting to enforce the
judgment and seize assets of the Company. Unless the Company is able to
negotiate payment over an extended period of time, this amount could force the
Company into curtailing its operations or seeking protection under the
bankruptcy laws.

         On or about March 15, 1999, Worldcom Network Services, Inc., d/b/a
Wiltel, commenced a lawsuit against the Company in the United States District
Court, Southern District of New York demanding a judgment in the amount of
$1,177,734 and interest at 18% per annum plus costs and expenses. The plaintiff
alleged that the Company failed to pay for telecommunications services provided.
On April 15, 1999, as amended on July 27, 1999, the Company and Worldcom entered
into a Settlement Agreement, under which the Company agreed to pay Worldcom
$1,256,622 (the "Settlement") in exchange for a full and complete settlement of
Worldcom's lawsuit against the Company. The Company agreed to pay the Settlement
with interest at 16% per annum on or before January 16, 2001, as extended, and
for Worldcom to discontinue, without prejudice, the legal proceedings until such
date. The Company agreed to pay Worldcom a 100,000 share restructuring fee which
shares have been registered with the SEC.

         In July 1999, L.D. Exchange.com, Inc., a vendor of PICK Net, commenced
arbitration proceedings against PICK Net before the American Arbitration
Association in San Diego, California, alleging breach of contract. These
proceedings involve the alleged nonpayment of between $250,000

                                       14

<PAGE>



and $500,000. At December 3, 1999, the Company's current liabilities included
approximately $266,000 payable to L.D. Exchange. com, Inc. at the time PICK Net
was sold. The arbitration has been stayed until June 2000.

         On March 27, 2000, Telecom Management Resources, Inc. (as successor to
International Career Information, Inc.), a vendor of PICK Net, commenced a
lawsuit against the Company and PICK Net in the Superior Court of New Jersey,
Law Division, Hudson County. The complaint involved the alleged non-payment of
$58,220 under a Facilities Management Service Agreement and $50,400 for
additional payments under an acceleration provision plus interest. The Company
answered and denied the charges and raised affirmative defenses including the
fact that the liability was assigned to PICK Net with the consent of the
plaintiff and then PICK Net was sold.

Item 4: Submission of Matters to a Vote of Securityholders

         There were no matters submitted to a vote of the Company's
securityholders during the quarter ended December 31, 1999.





                                       15

<PAGE>



                                     PART II

Item 5: Market for Registrant's Common Equity and Related Stockholder Matters

         The Company's common stock has been traded in the over-the-counter
market and reported on the NASD's OTC Bulletin Board under the symbol "PICK"
since September 1996 until being delisted as of May 26, 2000. The Company
expects to trade again on the OTC Bulletin Board upon the filing of this Report
and its Quarterly Report on Form 10-Q for March 31, 2000.

         The following table sets forth the high and low bid prices of the
Company's common stock as reported on the over-the-counter market for the last
two completed fiscal years and the current fiscal year. These prices give
retroactive effect to a one-for-ten reverse split authorized by the Board of
Directors on July 6, 1999, to stockholders of record on July 23, 1999. The
prices represent inter-dealer quotations, without retail mark-up, mark down or
commission, and may not represent actual transactions.

                                                  Bid Prices
                                                  ----------
         Period                              High              Low
         ------                              ----              ---

         Fiscal Year 1998
         First quarter                      $ 5.10            $1.90
         Second quarter                      10.50             4.10
         Third quarter                        8.80             4.20
         Fourth quarter                       9.30             3.90

         Fiscal Year 1999
         First quarter                      $15.20            $3.60
         Second quarter                     $28.75            $7.30
         Third quarter                      $ 8.20            $1.625
         Fourth quarter                     $ 2.56            $ .81

         On May 31, 2000, the closing sale price of PICK Common Stock in the
over-the-counter market was $.81 per share.

         As of June 2, 2000, there were 446 shareholders of record of the
Company's common stock. The Company reasonably believes that there are in excess
of 1,000 beneficial owners of its common stock.

         The Company has never paid any cash dividends on its common stock and
has no intention of doing so at this time. The Company intends to retain all its
earnings for use in the business.




                                       16

<PAGE>

Item 6: Selected Consolidated Financial Data

         The following selected, financial data should be read in conjunction
with the Consolidated Financial Statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" appearing elsewhere
in this Report. The selected financial information for and as of the years ended
December 31, 1997, 1996 and 1995 are derived from the Consolidated Financial
Statements of the Company, which financial statements have been audited by
Durland & Company, CPAs, P.A., independent certified public accountants. The
selected financial information for and as of the years ended December 31, 1998
and 1999 have been audited by Goldstein Golub Kessler, LLP. The Consolidated
Balance Sheets as of December 31, 1999 and 1998 and the Consolidated Statements
of Operations for the years ended December 31, 1999, 1998 and 1997 and the
accountants' reports thereon are included elsewhere in this Report.

Statement of Operations Data:


<TABLE>
<CAPTION>
                                                                 Years Ended December 31,
                                   -------------------------------------------------------------------------------
                                         1999           1998             1997            1996             1995
                                   -------------   -------------    -------------   -------------     ------------
<S>                                   <C>             <C>            <C>             <C>                  <C>
Operating loss                     $  (2,926,191)  $  (2,139,830)    $   (399,448)   $   (607,890)     $         -

Other income (expense)                (1,824,845)       (133,000)      (9,890,284)      8,436,809                -

Income (loss) from continuing
  operations before minority
  interest in loss of
  consolidated subsidiary,
  and provision for (benefit)      -------------   -------------    -------------   -------------     ------------
  from income taxes                   (4,751,036)     (2,272,830)     (10,289,732)      7,828,919                -

Minority interest in loss
  of consolidated subsidiary               1,742           2,062          434,064         260,541               37

Benefit (provision) for
  income taxes                               -              -           1,808,000      (1,808,000)

Loss from discontinued
  operations                          (5,486,880)    (14,792,541)      (1,452,134)     (4,645,670)      (1,071,078)

Loss on disposal of
  discontinued operations
  and related costs                  (45,315,574)              -                -               -                -

Estimated cost to
  discontinue operations              (1,793,137)              -                -               -                -
                                   -------------   -------------    -------------   -------------     ------------
Net (loss) income                    (57,344,885)    (17,063,309)      (9,499,802)      1,635,790       (1,071,041)

Beneficial conversion feature
  of preferred stock                 (25,170,000)             -                 -               -                -
                                   -------------   -------------    -------------   -------------     ------------
Net income (loss) applicable to
  common stock                     $ (82,514,885)  $ (17,063,309)   $  (9,499,802)  $   1,635,790     $ (1,071,041)
                                   =============   =============    =============   =============     ============
Net income (loss) per
  common share - basic                  $ (17.37)        $ (4.62)         $ (2.57)         $ 0.39          $ (0.26)
                                   =============   =============    =============   =============     ============
Weighted-average common
  shares outstanding-basic             4,750,742       3,692,356        3,695,853       4,199,150        4,044,252
                                   =============   =============    =============   =============     ============
</TABLE>


                                       17
<PAGE>

Balance Sheet Data:


<TABLE>
<CAPTION>
                                                                    At December 31,
                                   -------------------------------------------------------------------------------
                                         1999           1998             1997            1996             1995
                                   -------------   -------------    -------------   -------------     ------------
<S>                                   <C>             <C>            <C>             <C>                  <C>
Working capital
(deficiency)                       $ (19,912,739)  $ (14,569,842)   $  (7,405,608)  $  (3,152,216)    $ (1,074,159)
                                   =============   =============    =============   =============     ============

    Total Assets                   $   7,266,835   $   6,791,156    $   1,817,513   $   8,917,149     $  2,449,024
                                   =============   =============    =============   =============     ============

Current Liabilities                $  20,414,414   $  16,134,301    $   8,027,642   $   6,582,429     $  2,679,923
                                   =============   =============    =============   =============     ============

Long-term liabilities              $  10,616,586   $  10,922,716    $     794,905   $          --     $    400,000
                                   =============   =============    =============   =============     ============

Stockholders' equity
(deficiency)                       $ (23,848,441)  $ (20,351,879)   $  (7,093,114)  $     869,579     $   (846,407)
                                   =============   =============    =============   =============     ============
</TABLE>


Item 7: Management's Discussion and Analysis of Financial Condition and Results
of Operations

         The following should be read in conjunction with the Consolidated
Financial Statements included elsewhere in this Report.

Material Changes in Results of Operations


         On June 23, 1999, the Company's Board of Directors voted to sell or
discontinue the telecommunications portion of its business in order to focus on
the Internet services portion of its business conducted through its PICK Sat and
PICK Online.Com subsidiaries. Accordingly, the financial statements reflect the
discontinuance of the Company's PICK US, Inc., PICK Net Inc. and PICK Net UK PLC
subsidiaries. The closing of the sale of the PICK Net subsidiaries occurred on
January 18, 2000.


         In 1999, the Company, through its wholly owned subsidiary, PICK Sat
commenced development of a system to multicast the delivery of Internet Protocol
multi-media content via satellite. Also in March 1999, the Company formed PICK
Online to provide broadband Internet content to users. PICK Sat and PICK Online
are in the development stage and have not generated any revenues to date.

         For PICK Sat business, the Company will charge its customers monthly
recurring fees based on type of usage and bandwidth contracted for and may
charge an additional amount per reception location. PICK Online expects to
charge a per subscriber or per site fee to its customers in order for them to
receive the broadband content.

                                       18

<PAGE>


         The discontinued subsidiaries generated revenues from the sale of
telecommunication services. These included international long distance service
to carriers and resellers, and revenues derived from prepaid telephone calling
cards to distributors for resale to retail outlets.

         The Company's costs of sales for the discontinued operations primarily
consist of the cost of telephone services, for both the resale of international
long distance services and for prepaid telephone calling cards.

         For the resale of international long distance, the Company recognized
revenues as its customers used the traffic. For prepaid telephone calling cards
sales, the Company recognized revenues at the time it provided the telephone
services associated with its cards and recognized the cost of the carrier
telephone traffic based on the minutes used in the same periods that the Company
recognized revenues.

Year Ended December  31, 1999 as Compared with Year Ended December 31, 1998

Revenues:

         The Company's continuing operation's, PICK Sat and PICK Online have yet
to commence commercial operations and as such have not had any revenues.

Costs and Expenses:


         Selling, general and administrative expenses increased to approximately
$2,826,000 for the year ended December 31, 1999 ("1999") from $2,094,000 for the
year ended December 31, 1998 ("1998"). PICK Sat was in the organizational phase
through the end of 1998 and as such had nominal expenditures in 1998, therefore,
a substantial portion of the increase is attributable to the newly formed
subsidiaries, PICK Sat and PICK Online's start-up and development expenses. The
Company also had a significant increase in salaries, outside consultants,
accounting, legal, travel and public relations expense. Contemporaneous with the
Board's decision to sell or discontinue its telecommunications operations, and
layoff or fire the associated personnel, it needed to retain outside
professional services on an interim basis to handle the functions previously
performed by salaried employees. Preparation of public filings and the
negotiation of debt arrangements gave rise to the majority of the increase in
expenses.


         On September 13, 1999, the Company agreed to sell its PICK Net
operations to Lebow Investments Ltd., a recently formed corporation ("Lebow").
Lebow agreed to be financially responsible for the PICK Net operations which
received funding to continue operations commencing in September 1999 through the
closing of this transaction which occurred on January 18, 2000. Simultaneously
with the closing, Gulfsat Communications Company, a Kuwaiti company ("Gulfsat"),
purchased all of the common stock of Lebow. Gulfsat was a principal vendor of
services

                                       19

<PAGE>



to the PICK Net companies which was owed approximately $1,555,000 as of October
31, 1999, primarily under a reciprocal telecommunications agreement and payment
of which amount had been assumed by Lebow. In February 2000, Gulfsat defaulted
under its agreements and discontinued operating PICK Net. The Company has made
demand on Lebow and Gulfsat to satisfy their obligations. In any event, however,
in addition to the direct obligations of the Company described hereinafter, the
Company retains substantial contingent liabilities on its discontinued
operations if those liabilities are not paid.

Discontinued Operations


         Total sales amounted to approximately $5,930,000 for 1999, compared to
$9,823,000 for 1998, a decrease of approximately $3,893,000 prior to the
discontinuance of operations. (See Note 12 of Notes to Consolidated Financial
Statements for operating results of the discontinued operations.) The Company
significantly curtailed its operations during the first half of 1998, while it
installed and tested two, leased Siemens Digital Central Office Switches. These
switches replaced switching services previously purchased from third party
vendors. Consequently, the Company decided to curtail its marketing efforts for
the sale of international long distance services until it completed this
installation and until it had the capability to deliver traffic through Gulfsat.
For 1999, the Company generated international long distance revenue of
approximately $2,567,000, as compared with $1,978,000 for 1998. Prepaid
telephone calling card revenues were approximately $3,363,000 for 1999, compared
to $7,844,000 for 1998. This latter decrease is attributable to discontinuance
of sales to Blackstone Calling Card, Inc. ("Blackstone") under the Company's
agreement with Blackstone, a major marketer and distributor of prepaid telephone
calling cards, which had its first full year of sales with PICK Sat in 1998.

         In the discontinued operations, the cost of telephone time purchased
decreased from approximately $16,393,000 in 1998 to $7,860,000 in 1999, as
operations were being wound down.

Loss from Operations:

         The Company's loss from continuing operations increased from
approximately $2,271,000 in l998 to approximately $4,749,000 in 1999, primarily
due to the increases in aggregate salaries, selling, general and administrative
costs, and interest expense primarily on private placement debt outstanding for
the full year of 1999 (See Note 5) and without the receipt of revenues, as PICK
Sat and PICK Online continued the development of their products and offerings
and as PICK Sat began to move into the commercial deployment phase and other
expenses as discussed under "Costs and Expenses" above.

         Total loss from discontinued operations inceased from approximately
$14,793,000 for 1998 to approximately $52,596,000 for 1999. Included in the loss
for 1999, is a loss on the disposal of the discontinued operations in the
aggregate amount of approximately $45,316,000. This amount is attributable to
the writing off of the deferred interest and debt placement charges of the
restructured notes which amounts are related to the discontinued operations and
therefore will provide no future benefit. See Note 5 of Notes to Consolidated
Financial Statements.


                                       20

<PAGE>



         As a result of the foregoing, the company incurred a net loss of
approximately $57,345,000 in l999 as compared to a net loss of approximately
$17,063,000 in l998. In addition, the Company recorded a charge of $25,170,000
in l999 for the beneficial conversion feature of the preferred stock it sold in
l999, whereas, no similar charges were previously recorded.


Year Ended December 31, 1998 as Compared with Year Ended December 31, 1997

         Total revenues amounted to $9,822,903 for the twelve months ended
December 31, 1998 ("1998") compared to $9,015,903 for the twelve months ended
December 31, 1997 ("1997"). The Company significantly curtailed its operations
during the first half of 1998, while it installed and tested two leased Siemens
Digital Central Office Switches. Consequently, the Company decided to curtail
its marketing efforts for the sale of international long distance services until
the switches were installed and enough countries were hooked into the Gulfsat
network to give the Company the capability to deliver competitively priced
traffic through Gulfsat. For 1998, the Company generated international long
distance revenue of $1,978,441, compared with $7,669,243 for 1997, a decrease of
$5,690,802 or 74%. Prepaid telephone calling card revenues were $7,844,462 for
1998, compared to $1,346,660 for 1997. This represents an increase of
$6,497,802, or 483%. This increase reflects beginning of the Blackstone
Agreement, even at lower than anticipated levels.

         The cost of telephone time purchased increased from $8,326,318 to
$13,322,978, an increase of $4,996,660. These costs increased by 60%, even
though revenues declined by 74%, primarily due to the costs of long distance
arising from the usage of prepaid telephone calling cards sold through
Blackstone. Other cost of sales increased from $762,431 to $3,069,566 primarily
due to the fixed costs associated with the Company's newly developed network and
processing costs arising from the increased prepaid telephone calling card
activity. 1997 cost of sales benefitted from the reversal of $649,563,
representing a portion of a previous provision for contingent costs.


         Selling, general and administrative expenses were $2,094,025 for 1998,
compared to $218,917 for 1997, reflecting an increase of $1,875,108, or 857%.
This increase is primarily due to increases in staffing and interest expense.

         The Company's loss from continuing operations before other income
(expense) decreased from $8,047,668 for 1997 to $2,270,768 for 1998 primarily
due to a $9,449,079 loss on marketable securities in 1997 set off, in part, by
the increases in general and administrative expenses discussed above.

         Interest and debt placement expenses increased significantly from the
prior year due to the substantial increase in the amount of short-term debt
placed in 1998. (See Note 12)

Liquidity and Capital Resources

At December 31, 1999

         Due to the losses discussed above, the Company's working capital
deficit increased from approximately $14,570,000 as of December 31, 1998, to
approximately $19,913,000 as of December


                                       21

<PAGE>




31, 1999, an increase of approximately $5,343,000 and the stockholders'
deficit changed from approximately a negative $20,352,000 at December 31,
1998 to approximately $23,848,000 at December 31, 1999, an increase in negative
net worth of approximately $3,496,000.

         Current assets decreased by approximately $1,063,000 primarily due to a
decrease in current assets from discontinued operations. The Company had no cash
on hand and was overdrawn by approximately $20,000 at December 31, 1999. Current
liabilities increased by approximately $4,280,000. This increase is largely due
to net increases in accounts payable and accrued expenses as a result of
increased business activity in the newly formed subsidiaries, funding of
continued losses and lower sales volume, and a decrease in current liabilities
from discontinued operations offset, in part, by a decrease in deferred revenue
for pre-paid calling cards. However, a substantial portion of current
liabilities from discontinued operations were assumed by Lebow and Gulfsat on
January 18, 2000, as described under "Discontinued Operations."

         In April 2000, a group of investors from Europe and the Middle East
committed an aggregate of $10 million to PICK Sat (the "PICK Sat Financing"), to
occur over a l2 month period. The Investors will acquire 20% ownership of PICK
Sat and will be issued equity on the basis of 1% for every $500,000 invested. As
of July 1, 2000, $1.3 million had been invested in PICK Sat.

         In September, 1999, PICK entered into an option agreement with Atlantic
Tele-Network, Inc. ("ATN") to sell them up to 19.9% of the common stock of PICK
Sat for $8 million, with an option to acquire an additional 31.1% for an
additional $15 million payable in 500,000 shares of ATN common stock or $15
million in cash or ATN common stock, whichever produces the higher value at the
time of exercise of the option was exercised in full. PICK Sat obtained interim
loans in the amount of $476,000 from ATN for the Company and PICK Sat's
operating expenses. ATN chose not to exercise the option. In addition, under a
credit facility, one of PICK's former subsidiaries, PICK Net USA, has debt to
ATN, including principal and interest accrued as of December 31, 1999 in the
aggregate of $1,589,663. In accordance with the terms of the above loans from
ATN, the $476,000 borrowed by PICK Sat and the $1,589,663 borrowed by PICK Net
USA, all become due and payable on February 4, 2000 and has not been paid. On
January 4, 2000, in consideration of the then pending completion of the sale of
the Company's PICK Net subsidiaries to Lebow and Gulfsat, as well as the
termination of the PICK Sat option, ATN received five-year warrants to purchase
1 million shares of PICK Common Stock exercisable at $2.00 per share.

         On November 3, 1999, PICK Sat obtained a 120 day revolver for $500,000
(the "Revolver") from Tri-Links Investment Trust ("Tri-Links"). PICK Sat
borrowed $412,000 under the Revolver which bears interest at 13% per annum,
increasing to l5% per annum upon default and payment of which is guaranteed by
PICK. Tri-Links was granted a security interest in substantially all of PICK
Sat's assets which was initially subordinated to ATN and then made pari passu
and equal in priority. The Revolver came due on March 3, 2000.


         On January 26, 2000, Tri-Links, PICK and PICK Sat entered into an
Amendment Agreement which was amended again in March and April 2000, whereby the
commitment under the Revolver was eventually increased to $l,400,000, all of
which has been loaned to PICK Sat. Tri-Links has entered into a Participation
Agreement with Group Technology for Scientific Equipment and Supplies ("Group
Technology") for a $500,000 portion of the commitment and Salah Khalid Al Fulaij
for an aggregate of $400,000. In connection with the Revolver, PICK agreed to
use its best efforts to cause four designees of Tri-Links to be elected to the
PICK Board of Directors. Tri-Links was issued warrants to purchase 2.5% to the
issued and outstanding common stock of PICK Sat on a fully diluted basis. Group
Technology was assigned Tri-Links's right to elect two of the four Directors and
its assignee was given warrants to purchase 2.5% of the issued and outstanding
common stock of PICK Sat on a fully diluted basis.

                                       22
<PAGE>


         On March 3, 2000, in consideration of the above extension and
Tri-Links' efforts to obtain additional funding for PICK Sat, Tri-Links and
Group Technology were each granted warrants to purchase an additional one
percent (1%) of the issued and outstanding common stock of PICK Sat. The loan is
past due and the parties are currently negotiating the restructuring of the
terms of the Revolver, as well as negotiating the terms of repayment of
indebtedness to ATN.

         In early 1999, Management negotiated with the largest trade creditors
to restructure a substantial portion of the Company's short-term debt. The
Company reached certain agreements to make a down payment and convert the
balance of the Company's obligation into long-term indebtedness and/or equity
securities of the Company. However, the Company has been unable to meet its
monetary obligations under the revised agreements. See Notes 7, 9(a) and 10 of
Notes to Consolidated Financial Statements.


         PICK was able to obtain cash equity investments totaling $6,481,000
during 1999. Of the total investments, $1,050,000 was recorded during the first
quarter of 1999 and $5,431,000 was recorded in the second quarter, as follows.
In March 1999, the board of directors authorized the issuance of 2,000,000
shares of Series B convertible preferred stock. The Series B convertible
preferred stock has a stated par value of $.001 per share and 1,871,000 shares
were issued, convertible into 1,871,000 shares of the Company's common stock at
the rate of $1.00 per share. As of December 31, 1999 and March 31, 2000, 941,000
and 1,188,000 shares of Series B convertible preferred stock had been converted
into common stock. The remaining 683,000 shares of Series B convertible
preferred stock are convertible into 683,000 shares of Common Stock.

         In April 1999, the board of directors authorized the issuance of
500,000 shares of Series D convertible preferred stock. The Series D convertible
preferred stock has a stated par value of $.001 per share and was initially
convertible into 1,190,500 shares of the Company's common stock at the rate of
$4.20 per share. As of December 31, 1999, the Company had sold an aggregate of
466,000 shares of Series D convertible preferred stock for $4,660,000 prior to
the payment of $459,750 of preferred stock placement costs. In addition, the
Company issued an aggregate of 700,000 common stock purchase warrants in
connection with the sale of Series D convertible preferred stock. The Warrants,
as adjusted, are exercisable at $6.30 per share of common stock for a two-year
period for an aggregate of 70,000 shares. On July 15, 1999, the Company sold
34,000 shares of Series D convertible preferred stock for $340,000 to Diego
Leiva, then Chairman of the Board. The purchase is evidenced by a recourse
promissory note secured by a pledge of the securities. In January 2000, the
conversion rate was adjusted so that the preferred stock converts into common
stock at $2.00 per


                                       23

<PAGE>



share. As of December 31, 1999 and May 12, 2000, $2,395,000 and $3,095,000
principal amount of Series D Convertible Preferred Stock, respectively, had been
converted into common stock. The remaining $1,905,000 principal amount of Series
D Convertible Preferred Stock are convertible into 952,500 shares of common
stock.


         Due to the restructuring of the $9,900,000 short term notes the Company
recorded an increase in additional paid-in-capital of $45,054,337 during 1999.
We also recorded a charge on the beneficial conversion feature of the preferred
stock of $25,170,000 associated with the issuance of preferred stock. Neither of
these latter two charges used any cash of the Company.

         In June 1999, the Company elected to divest or terminate its long
distance telephone services subsidiaries. PICK recorded a charge to retained
earnings of $45,315,574, as the loss on the discontinuance and disposal of the
long distance telephone services and prepaid calling card business and an
estimated cost to discontinue operations of $1,793,137. These charges did not
affect cash. The Company entered into an agreement in September 1999 to divest
itself of PICK Net, Inc. and PICK Net UK, PLC, both of which provide
international long distance services to other carriers and resellers. The
Company has terminated marketing and distributing of prepaid telephone calling
cards through PICK US Inc. It plans to dissolve its PICK US, Inc. unit upon the
termination of the liability due to the outstanding prepaid calling cards. On
January 18, 2000, the Company completed the sale of the stock of the two PICK
Net subsidiaries for nominal value and had a substantial portion of their
liabilities assumed. However, in February 2000, the buyer of PICK Net defaulted
on the payment obligations for which the Company has demanded payment. The
operations of the Company are currently those of PICK Sat and PICK Online.

Material Changes in Cash Flows

         Cash decreased during 1999, by approximately $17,000. This decrease is
attributable primarily to a decrease in cash used in operating activities of
approximately $63,000 from $5,305,000 in l998 to $5,242,000 in l999, a decrease
in cash provided by financing activities of approximately $2,532,000 from
approximately $9,095,000 to $6,563,000, as described below, as well as a
decrease in cash used in investing activity of approximately $2,477,000.

Cash Flows from Operating Activities

         Operating activities used approximately $5,242,000 in cash during 1999,
compared with cash used of approximately $5,305,000 for 1998. For 1999, the
Company incurred a net loss of approximately $57,345,000, as compared to
approximately $17,063,000 for 1998. The net loss for 1999 included a loss on
disposal of discontinued operations and an estimated cost to discontinue
operations aggregating approximately $47,109,000. This loss on disposal included
a non-cash debt restructuring charge of approximately $45,316,000 (See Note 5 of
Notes to Consolidated Financial Statements) that related to the businesses being
discontinued; the issuance of stock, options and warrants issued for services in
the amount of approximately $3,680,000, none of which included a cash expense.
The increased use of cash in operations in l999 also resulted from the Company's
decreased sales in the prepaid calling card business under the Blackstone
Agreement and sales of long distance services from discontinued operations,
which was partially offset by an increase in accounts payable and accrued
expenses.



                                       24

<PAGE>



Cash Flows from Investing Activities


         The Company's capital expenditures of approximately $1,340,000 for 1999
decreased from approximately $3,817,000 in 1998. This decrease is attributable
primarily to the Company's delay in the development of the satellite-based
Internet access, interactive multimedia structures for its PICK Sat and PICK
Online subsidiaries.

Cash Flows from Financing Activities

         During 1999, the Company had net cash provided by financing activities
of approximately $6,563,000, as compared to net cash provided by financing
activities of approximately $9,095,000 for 1998. The proceeds are from the
issuance of the Series B and Series D preferred stock and funds advanced on
third party debt during 1999. The 1999 amounts were offset by loan repayments
and costs attributable to the issuance of the preferred stock. Cash provided
during l998 was provided primarily from funds advanced from third-party debt,
less debt repayments.

At December 31, 1998

         The Company's 1998 net loss of $17,063,309 generated negative cash flow
from operations of $5,304,994 for 1998, compared with negative cash flow from
operations of $419,672 for 1997. Due to the losses discussed above, the
Company's working capital deficiency increased from $7,405,608 at December 31,
1997 to $14,569,842 at December 31, 1998 (an increase in the working capital
deficiency of $7,164,234). The Company's net worth changed from a negative
$7,093,114 at December 31, 1997 to a negative $20,351,879 at December 31, 1998
(an increase in negative net worth of $13,258,765).


         Current assets increased by $942,425 from December 31, 1997 to 1998,
primarily due to increases in cash, accounts receivable, and prepaid expenses
and other current assets. Current liabilities increased by $8,214,159 largely
due to net increases in debt, accounts payable, deferred revenue and other
current liabilities.

         As of December 31, 1998, the Company had committed approximately
$690,000 to license computer software, payments for which will be due in 1999.

         The Company significantly increased its' capital spending in property
and equipment to $3,817,153 in 1998 from $6,510 in 1997. These expenditures were
to support the development of the Company's international long distance
telephone and high speed broadband Internet service businesses.

         Between July 29 and September 8, 1998, the Company sold an aggregate of
99 Units in a bridge loan (the "July Bridge Loan") for gross proceeds of
$9,900,000. A portion of the net proceeds of the July Bridge Loan was used to
repay a $1,000,000 unsecured bridge loan incurred in April 1998 and a $575,000
bank loan which bore interest at 8% above the bank's prime rate. Upon repayment
of the Bank Loan, the Bank released its security interest and a security
interest on the

                                       25

<PAGE>



Company's assets was filed on behalf of the investors in the July Bridge Loan.
In November 1998, the interest rate of the July Bridge Loan was increased
retroactively to 18% and the maturity date of the promissory notes evidencing
the loan (the "Notes") was extended to April 27, 1999.

         All but $20,000 of the Noteholders consented to a restructuring (the
"Restructuring") to amend their Notes (the "Amended Note"), for which the
Company has agreed for a two-year period to allow each consenting Noteholder to
(a) exchange one-tenth of a share of common stock for each warrant issued in
connection with the original issuance of the Notes, and (b) either receive one
share of common stock for every ten dollars principal amount of Notes amended,
or alternatively elect to have the conversion price of the Amended Note reset to
$5.00 per share. The maturity date of the Amended Notes is April 27, 2002. Each
Amended Note is convertible at any time at the option of the holder thereof into
shares of common stock initially at $10.00 per share, which has been reduced to
$5.00 per share subject to adjustment under certain circumstances at the first
anniversary date of the Restructuring. In addition, the Company shall have the
option to extend the maturity date for one additional year, in which event the
Conversion Price shall be subject to adjustment.

         The Amended Notes shall be automatically converted into shares of
common stock in the event that the closing bid price for the common stock has
exceeded $15.00 per share for 20 consecutive trading days. Commonwealth shall be
entitled to designate one nominee to the Board and the Noteholders shall have
the right to nominate one person to a reconstructed Board consisting of a
majority of independent directors.

         Commonwealth, and/or its designees, as agent for the Noteholders was
paid 200,000 shares, plus warrants exercisable at $13.75 per share to purchase
50,000 shares, and the exercise price of warrants previously issued to
Commonwealth was reduced from $5.00 to $1.00 per share.

Year 2000 Compliance

         Many older computer software programs recognize only the last two
digits of the year and date (e.g.: "99" for "1999"). These programs were
designed and developed without considering the impact of the change in century.
If the software is not reprogrammed or replaced, many computer applications
could fail or create erroneous results by or at the Year 2000. The Year 2000
("Y2K") issue refers to possible events resulting directly or indirectly from
the inability of digital computer equipment or software to accurately and
without interruption handle dates both before and after January 1, 2000. The
Company identified and prepared for all significant internal Y2K issues that
could adversely affect its business operations. The cost of resolving such
issues did not have a material impact on the Company's financial position,
results of operations or liquidity. These unknown or unresolved Y2K issues, as
well as external risks, may have a materially adverse effect on the Company's
business, financial condition, cash flows and operations.

Item 8: Financial Statements and Supplementary, Data


         The Company's financial statements are included by amendment in a
separate section of this Report, following Item 14.


                                       26

<PAGE>




Item 9: Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

         Effective September 17, 1998, Goldstein Golub Kessler LLP had been
engaged as the Company's independent accountants for the 1998 and 1999 fiscal
year. The change in the independent accountants had been approved by the
Company's Board of Directors. Upon the engagement of Goldstein Golub Kessler
LLP, the Company dismissed Durland & Company, CPAs, P.A. (the "Former
Accountants"), its independent accountant for the years ended December 31, 1996
and 1997 ("Fiscal 1996 and 1997"). The Company has no disagreements with its
current and Former Accountants on accounting and financial disclosures.







                                       27

<PAGE>



                                    PART III

Item 10: Directors and Executive Officers of the Registrant

         The following table sets forth the names, ages and positions with the
Company as of June 6, 2000, the initial filing date of this Report of all of the
executive officers of the Company and its principal subsidiaries and the sole
director of the Company. Also set forth below is information as to the principal
occupation and background for each named person in the table.

Name                   Age         Position
----                   ---         --------
Robert R. Sams         61          Chairman of the Board, President, Chief
                                   Executive Officer and Chief Financial Officer

Wolfgang Wacker        53          President and Chief Executive Officer
                                   of PICK Sat

Robert R. Sams has served as Chairman of the Board, President, Chief Executive
Officer and Chief Financial Officer of the Company since May 8, 2000. Prior
thereto, he served as a director of the Company since September 1995 and of
Kiosk since November 1994. He has also served as a director of PICK Sat since
its formation in December 1997. Mr. Sams spent 20 years in commercial and
merchant banking, prior to founding Saicol Limited in 1983, to engage in
merchant banking, corporate finance, acquisitions and financial advisory
services. Prior thereto, he served as chairman and CEO of TDC Development Corp.,
a distribution company serving the convenience store industry with annual sales
of approximately $600 million. He has an MBA from The University of Michigan.

Wolfgang Wacker has served as President and Chief Executive Officer of PICK Sat
since May 23, 2000 and as Interim CEO from March 14, 2000 until May 23, 2000. He
is also serving as a director of PICK Sat since May 16, 2000. Since 1996, Mr.
Wacker has been a consultant under SEPCO GmbH, Germany, to restructure the
Ukranian pipe industry and was responsible for setting up an international sales
and marketing organization. From 1992 to 1996, Mr. Wacker was a consultant for
United States Steel Corp. in charge of international marketing and sales of
tubular pipes, and also served as Managing Director of Metallia Tubulars.

         Pursuant to the terms of the April 1999 Restructuring Agreement with
Commonwealth Associates, the Board of Directors of the Company is to be
restructured to consist of a majority of independent directors. The proposed
board was to be Diego Leiva, Chairman of the Board, two existing independent
directors, a new Chief Executive Officer, one designee of Commonwealth
Associates, one designee of the July 1998 Bridge Loan Noteholders and one other
independent director. Subsequently, Tri-Links Investment Trust ("Tri-Links")
purchased Series D Convertible Stock from the Company and obtained the right to
designate a nominee to the Board or an observer who has the right to attend and
observe at all Board Meetings prior to his actually joining the Board. To date,
none of these persons have joined the Board of Directors. Tri-Links subsequently
received

                                       28

<PAGE>
the right to nominate four additional directors pursuant to the terms of its
November 1999 Bridge Loan, two of which nominees Tri-Links assigned to its
co-lenders.

         Pursuant to Section 16 of the Exchange Act, the Company's Directors and
executive officers and beneficial owners of more than 10% of the Company's
common stock, par value $0.01 ("Common Stock") or warrants are required to file
certain reports, within specified time periods, indicating their holdings of and
transactions in the Common Stock and derivative securities. Based solely on a
review of such reports provided to the Company and written representations from
such persons regarding the necessity to file such reports, the Company is aware
of the following failures to file reports, or report transactions in a timely
manner during the Company's fiscal year ended December 31, 1999.

         On May 18, 1999, Alberto M. Delgado, a former Director of the Company,
filed a Form 4 relating to the purchase of the Company's Series B Convertible
Preferred Stock by P.A.M.D. Investors, of which he is a principal, in April
1999. Also in May 1999, Mr. Delgado filed a Form 4 for the grant of 50,000
options to purchase the Company's Common Stock to Final Age Corp., of which he
is a principal, in March 1999.

         In August 1999, Henry Ewen, a former officer of the Company, filed a
Form 4 relating to the grant to him of 15,000 options to purchase the Company's
Common Stock in June 1999. In December 1999, Mr. Ewen filed a Form 4 relating to
the grant of 16,500 replacement options to purchase the Company's Common Stock
in September 1999.

         In December 1999, Diego Leiva, the former Chairman of the Board of the
Company, filed a Form 4 relating to the grant of 250,000 options to purchase the
Company's Common Stock in January 1999.

         On May 18, 1999, Ricardo Maranon, a former Director of the Company,
filed a Form 4 relating to the purchase of the Company's Series B Convertible
Preferred Stock in April 1999. Also in May 1999, Mr. Maranon filed a From 4 for
the grant of 50,000 options to purchase the Company's Common Stock to Mother of
Three, Inc., of which he is a principal, in March 1999.

         In November 1999, Mario Pino, former president of PICKSat, Inc., filed
a Form 4 relating to the Company's reverse stock split effective in September
1999.

         In August 1999, Robert R. Sams filed a Form 4 relating to his exercise
of Options to purchase Common Stock of the Company. On May 18, 1999, Mr. Sams
filed a Form 4 relating to the purchase of the Company's Series B Convertible
Preferred Stock by Saicol Limited, of which he is a principal, in April 1999.
Also in May 1999, Mr. Sams filed a Form 4 for the grant of 50,000 options to
purchase the Company's Common Stock to Saicol Limited.

         On May 20, 1999, John Tydeman, a former director of the Company, filed
a Form 4 relating to the purchase of the Company's Series B Convertible
Preferred Stock by Dolphin Media Group, of which he is a principal, in April
1999. Also in May 1999, Mr. Tydeman filed a Form 4 for the grant of 50,000
options to purchase the Company's Common Stock to Dolphin Media Group.

Item 11: Executive Compensation

Summary Compensation Table

         The following table sets forth all compensation awarded to, earned by,
or paid to the executive officers named therein for all services rendered to the
Company during the three fiscal years ending December 31, 1999. No other
executive officers of the company received total compensation in excess of
$100,000 during any of the last three years:

Annual Compensation
                                                                   Shares
Name and                                                           Underlying
Positions               Year     Salary ($)       Bonus            Stock Options
---------               ----     ----------       -----            -------------
Diego Leiva             1999     $278,000(1)         -0-                 -0-
  Chief Executive       1998      162,500         15,201             275,000
  Officer and           1997      150,000            -0-              75,000(2)
  Chairman of the
  Board of Directors

Thomas M. Malone        1999     $ 83,333(3)         -0-(3)          500,000(4)
  Chief Executive
  Officer

Robert Bingham,         1999     $ 31,300(5)     $   -0-                 -0-
  Vice President        1998      111,500            -0-               5,000(6)
  and Chief Financial   1997       34,417            -0-              50,000(7)
  Officer

Raymond Brennan,        1999     $ 53,904(8)     $   -0-                 -0-
  Vice President and    1998      138,340            -0-              25,000(9)
  Secretary             1997       88,419            -0-              75,000(10)

Karen Quinn             1999     $ 66,477(8)         -0-                 -0-
  Vice President        1998      100,179            -0-              30,000(11)
                        1997       85,164            -0-              75,000(10)

                                       29
<PAGE>


(1)   Mr. Leiva resigned from all positions with the Company on May 8, 2000 and
      remains an officer and director of PICK Sat.

(2)   Includes options to purchase 50,000 shares granted in 1996, at prices
      varying from $8.75 to $9.625 per share were canceled and re-issued in 1997
      at $1.90 per share and 25,000 options granted in 1997 at $3.00 per share.

(3)   Mr. Malone served as Chief Executive Officer of the Company from April 1,
      1999 until he resigned on July 8, 1999 to pursue other business
      opportunities. Mr. Malone was being paid at the rate of $250,000 per annum
      and the $83,333 included in the table consists only of salary paid to Mr.
      Malone. Pursuant to the terms of a Confidential Separation Agreement and
      Release of all Claims (the "Separation Agreement"), Mr. Malone is to
      receive six (6) months severance pay at his pro rated salary of $250,000
      per annum which has not been paid. He also retained $50,000 of Series B
      Convertible Preferred Stock which was one-half of his signing bonus with
      the other $50,000 being forfeited.

(4)   Pursuant to the Separation Agreement described note (3), Mr. Malone
      retained stock options to purchase 100,000 shares of common stock, which
      had vested and shall be exercisable until July 8, 2000, at $5.00 per
      share. He had been granted options to purchase an aggregate of 500,000
      shares at $5.00 per share. Mr. Malone also entered into a 12 month
      consulting agreement with the Company pursuant to which he retained stock
      options to purchase an additional 50,000 shares of common stock at $5.00
      per share, until July 8, 2001. The remaining 350,000 options were
      forfeited by Mr. Malone following his termination on July 8, 1999.

(5)   Mr. Bingham resigned from all positions with the Company on February 10,
      1999.

(6)   Exercisable at $3.70 per share which terminated on May 10, 1999.

(7)   Includes options to purchase 25,000 shares at $2.50 per share and options
      to purchase 25,000 shares at $5.00 per share which terminated on May 10,
      1999.

(8)   Mr. Brennan's and Ms. Quinn's employment was terminated on May 10, 1999.

(9)   Includes options to purchase 15,000 shares at $3.70 per share and options
      to purchase 10,000 shares at $5.50 per share which terminated on August
      28, 1999.


                                       30

<PAGE>



(10)  Includes options to purchase 25,000 shares at $2.70 per share and options
      to purchase 50,000 shares at $1.70 per share which terminated on August
      28, 1999.

(11)  Includes options to purchase 15,000 shares at $3.70 per share and options
      to purchase 15,000 shares at $5.50 per share which terminated on August
      28, 1999.

         The Company maintains a $250,000 term life insurance policy for Diego
Leiva, for which the Company paid $1,494, $1,377 and $1,257 in 1999,1998 and
1997, respectively. In addition, during 1999 the Company maintained a $1,000,000
key man life insurance policy on Mr. Leiva's life.

Employment and Consulting Agreement

         In September 1998, the Company entered into a five-year employment
agreement with Diego Leiva, as President and Chief Executive Officer, commencing
on the Initial Closing Date of a financing (the "Commencement Date"). The
Agreement is automatically renewable for additional one-year periods unless
terminated on 90 days' prior written notice. Mr. Leiva will be paid $300,000 per
annum beginning on the Commencement Date, increasing by $50,000 increments in
each of the four following years and by $75,000 per year in each year after the
fifth anniversary date if the Agreement is automatically extended. The agreement
provided that Mr. Leiva would continue to receive his then current base salary
until the Company's Senior Secured Notes are repaid. Mr. Leiva is entitled to a
monthly car allowance of $1,600 per month for automobiles in Florida and New
Jersey and shall also be reimbursed for reasonable living expenses in the
location which is not his principal residence. Mr. Leiva's agreement precludes
him from soliciting employees of the Company or interfering with PICK's
relationships with other employees for 18 months after termination of
employment. Mr. Leiva is also prohibited from competing with the Company during
the period following termination of employment for which PICK is liable to pay
him his base salary.

         In April 1999, Mr. Leiva's employment agreement was amended to provide
he would continue solely as Chairman of the Board and Directors and to receive
his salary at the rate of $300,000 per annum. Mr. Leiva agreed to vote his
shares of common stock in favor of Management's nominees, provided he is a
nominee for the Board. As of May 8, 2000, Mr. Leiva resigned from all positions
with the Company and his employment agreement is being terminated.

         Mr. Leiva remains Vice Chairman and Executive Vice President of Sales
and Marketing of PICK Sat. On March 14, 2000, Wolfgang Wacker entered into an
engagement letter pursuant to which he was appointed Interim Chief Executive
Officer of PICK Sat. This engagement is for a six-month period. Mr. Wacker is
not receiving a salary and his sole compensation is warrants to purchase 5% of
the outstanding stock of PICK Sat on a fully diluted basis for nominal value.
One-half of the warrants were issued upon his appointment and the other
one-half will be issued upon completion of permanent financing currently being
conducted.




                                       31

<PAGE>



Directors Compensation

         Directors currently receive no cash compensation for serving on the
Board of Directors or any Committee of the Board, other than reimbursement of
travel expenses incurred by them and their spouses in attending Board meetings
held outside the New York Metropolitan area. Each Director during 1999 received
restricted stock and/or stock options from the Company. "See Item 13.
Certain Relationships and Related Transactions."

         Robert R. Sams, through Saicol Limited ("Saicol"), performed advisory
and other services on behalf of the Company while he was a non-officer director
of the Company. These services were primarily for PICK Net and PICK Net UK Plc,
the Company's long distance telecommunications subsidiaries which were sold in
January 2000. During the period from January 1, 1998 through June 30, 1999,
Saicol was entitled to receive $25,000 (which has been accrued but not paid)
plus expenses and have 75,000 options vested and exercised on a cashless basis
(which Saicol effected) for services rendered to the Company.

         The Company and Saicol entered into a Management Service Agreement on
May 4, 2000, retroactive to June 30, 1999, and to continue until the sale of
PICK Net is complete. This agreement concerns Saicol's retention to provide
management services to PICK Net UK Plc. Mr. Sams is to be compensated at the
rate of $15,000 per month plus expenses. His responsibilities included the sale
of the PICK Net companies to Atlantic Tele-Network; the provision of office
space in the United Kingdom; accounting maintenance and supervision of auditors,
licensing and U.K. government filings and registration and management of
agreements for the provision of fibre and satellite unlinking stations.

Option Grants in Last Fiscal Year

         The table below contains certain information concerning stock options
granted to the Named Executive Officers, named in the Summary Compensation
Table, during the year ended December 31, 1999:

<TABLE>
<CAPTION>

                                                                                Potential Realizable Value at
                      Number of   Percent of Total                           Assumed Annual Rates of Stock Price
                      Securities      Options                                   Appreciation for Option Term
                      Underlying    Granted to      Exercise                    ----------------------------
                       Options     Employees in       Price       Expiration          5%               10%
Name                   Granted      Fiscal year     ($/Share)        Date             ($)              ($)
----                   -----------------------------------------------------------------------------------

<S>                    <C>                           <C>           <C> <C>
Thomas M. Malone       500,000           40%          $5.00         7/8/01(1)        $50,625       $102,500
</TABLE>

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

1)    Following Mr. Malone's resignation on July 8, 1999, 350,000 of these
      options were forfeited and options to purchase 100,000 shares remain
      exercisable until July 8, 2000 and options to purchase 50,000 shares are
      exercisable until July 8, 2001.

                                       32

<PAGE>


Option Grants in 1999

         During 1999, the Company granted an aggregate of 1,237,500 options to
employees and consultants, generally exercisable at $5.00 per share and vesting
over a three-year period, except Mr. Malone's option vesting over a four-year
period. In March 1999, the Company granted to each of the then four non-officer
members of the Board of Directors, options to purchase 50,000 shares at $5.00
which were vested on March 3, 2000 and were repriced at $1.81 per share on
October 1, 1999 and again at $1.47 per share on January 12, 2000. The employees'
options were also vested and repriced on October 1, 1999 and January 12, 2000.
Also included were the following grants to now former officers and/or directors,
all of which have resigned: Thomas Malone, Chief Executive Officer (500,000
shares); Mario Pino, President of PICK Sat (250,000 shares); James H. Season,
Chief Financial Officer (50,000 shares); Niles Ring, Vice President (50,000
shares); and Karen Quinn, President of PICK US Inc. (15,000 shares).

Aggregated Option Exercises in Last Fiscal Year and Year End Option Values

         The table below includes information regarding the value realized on
option exercises and the market value of unexercised options held by the Named
Executive Officers named in the Summary Compensation Table during the year ended
December 31, 1999:

<TABLE>
<CAPTION>
                                                                       Number of           Value of Unexercised
                                                                      Unexercised              In-the-Money
                            Shares                                      Options                   Options
                           Acquired                                  at FY-End(#)              at FY-End (S)
                              on                   Value             Exercisable/              Exercisable/
       Name              Exercise (#)           Realized($)          Unexercisable           Unexercisable(1)
----------------------------------------------------------------------------------------------------------------

<S>                          <C>                <C>                    <C>                    <C>
Diego Leiva                 75,000 (2)                 0               275,000/0                  $  0/0

Thomas M. Malone                 0                     0               150,000/0                     0/0

Raymond Brennan             27,500               $21,994                     0/0                     0/0

Karen Quinn                 50,000 (3)           $19,000                     0/0                     0/0
</TABLE>

-------------
(1)   As of December 31, 1999, the market value of the shares was $1 5/32, which
      was below the exercise price of all outstanding options in the table.
(2)   These options were exercised on a cashless basis.
(3)   Upon Ms. Quinn's resignation from the Company and her entering into a
      release, she received 50,000 shares of Common Stock representing 50,000
      option previously granted to her.

Compensation Committee Interlocks and Insider Participation

         No member of the Compensation Committee was an officer or employee of
the Company or any of its subsidiaries during the prior year or was formerly an
officer of the Company or of any of its subsidiaries. None of the Executive
Officers of the Company has served on the Compensation

                                       33

<PAGE>



Committee during the last fiscal year of any other entity, any of whose officers
served on the Compensation Committee of the Company.

Employee Benefit Plans

         Other than stock options, the Company, does not currently have, nor
during the 1999 fiscal year did it have, any other long-term incentive plans.

Item 12: Security  Ownership of Certain Beneficial Owners and Management

         The following table sets forth, as of May 31, 2000, the number of
shares of the Company's outstanding Common Stock beneficially owned by (i) each
director of the Company, (ii) each Named Executive Officer named above, (iii)
each beneficial owner of more than 5% of the Company's Common Stock and (iv) all
of the Company's executive officers and directors as a group:

<TABLE>
<CAPTION>
Name and Address                                    Amount and Nature of
of Beneficial Owner                               Beneficial Ownership (1)                    Percentage (2)
-------------------                               ------------------------                    --------------

<S>                                                    <C>                                    <C>
Diego Leiva                                            1,756,625  (3)                             16.1%
c/o PICK Sat
8401 N.W. 53rd Terrace
Miami, FL 33166

Robert R. Sams                                           285,768  (4)                              2.7%
Woodman's Farm
Perryman Lane, Burwash, E. Sussex
England TN 197 DN

Tri-Links Investment Trust                               780,000  (5)                              6.9%
Two World Financial Center
17th Floor
New York, NY 10281

Atlantic TeleNetwork, Inc.                             1,000,000  (6)                              8.7%
P.O. Box 12030
St. Thomas, U.S. Virgin Islands 00801

All executive officers and directors
as a group (2 persons)                                   324,725  (7)                              3.0%

</TABLE>

                                       34

<PAGE>



(1)   Unless otherwise noted, all shares are beneficially owned and the sole
      voting and investment power is held by the person indicated.

(2)   Based on 10,471,946 shares outstanding as of May 12, 2000. Each beneficial
      owner's percentage ownership is determined by assuming that options or
      warrants that are held by such person and which are convertible or
      exercisable within sixty (60) days of such date pursuant to Rule l3d-3
      under the Exchange Act have been converted or exercised.

(3)   Includes 429,000 shares beneficially owned by Mr. Leiva' wife. Also
      includes an aggregate of 275,000 stock options, consisting of incentive
      options to purchase up to 15,000 shares at $1.47 per share which expire on
      February 19, 2001 and 6,300 shares at $1.47 per share which expire on
      November 4, 2001, non-qualified stock options to purchase up to 3,700
      shares at $1.47 per share under the Plan which expire on November 4, 2001
      and non-qualified stock options to purchase 250,000 shares at $1.47 per
      share outside of the Plan which expire on November 2, 2003. Also includes
      170,000 shares of common stock issuable upon conversion of 34,000 shares
      of Series D Convertible Preferred Stock at $2.00 per share which shares
      are being held in escrow until paid by Mr. Leiva plus warrants to purchase
      an additional 6,800 shares of Common Stock at $6.30 per share.

(4)   Includes 132,400 shares of common stock issuable upon conversion of
      132,400 shares of Series B Convertible Preferred Stock held in the name of
      Saicol Limited and 50,000 shares of common stock issuable upon exercise of
      non-qualified stock options at $1.47 per share. Excludes 9,600 shares
      owned by Vulcan Petroleum of which Mr. Sams is a director and minority
      shareholder.

(5)   Consents of 750,000 shares of Common Stock issuable upon conversion of
      $1,500,000 principal amount of Series D Preferred Stock, at $2.00 per
      share, plus 30,000 shares of Common Stock issuable upon exercise of Series
      D Common Stock Purchase Warrants.

(6)   Includes five year warrants to purchase 1,000,000 shares at $2.00 per
      share.


                                       35

<PAGE>



(7)   Includes 285,768 shares beneficially owned by the sole named executive
      officer and director, Robert Sams including non-qualified stock options to
      purchase up to 50,000 shares and shares of Series B Preferred Stock to
      purchase up to 132,400 shares of Common Stock. Also includes 38,957 shares
      beneficially owned by Wolfgang Wacker, a current executive officer not
      listed in the table.

Item 13: Certain Relationships and Related Transactions

         See "Item 11 - Executive Compensation for terms and conditions of an
amendment to an employment agreement entered into between the Company and Diego
Leiva; options granted to each of the Company's Executive Officers and
Directors; and the terms of a Separation Agreement between the Company and
Thomas Malone.


         On March 3, 1999, the Company, Diego Leiva ("Leiva"), the Company's
Chairman of the Board, and Commonwealth Associates L.P. ("Commonwealth") the
placement agent for the holders of the Company's outstanding 18% senior secured
notes, entered into an Agreement by which Commonwealth and its designees,
including J.P. Turner & Company, L.L.C. ("Turner") and management of the
Company, would purchase up to $2,000,000 of preferred stock of the Company (the
"Series B Preferred Stock") at a purchase price of $1.00 per share. On March 12,
1999, the Company filed a Certificate of Designation, as later amended, relating
to the Series B Preferred Stock (the "Series B Certificate") with the Secretary
of State for the State of Nevada. The Series B Certificate authorized 2,000,000
shares of Series B Preferred Stock convertible by the holders thereof into the
Company's Common Stock at $1.00 per share as adjusted for the subsequent reverse
split. In addition, the Series B Preferred Stock has a liquidation preference of
$1.00 per share. The Company received $1,871,000 (including $50,000 of Mr.
Malone's signing bonus) for the 1,871,000 shares of Series B Preferred Stock
from Commonwealth, Turner and officers and directors of the Company convertible
into 1,871,000 shares of Common Stock. The following officers, directors and/or
former officers and directors have purchased the respective amounts of Series B
Preferred Stock:


                  Robert R. Sams                      $160,000
                  Alberto M. Delgado                   315,000
                  Ricardo Maranon                       21,000
                  John Tydeman                          60,000
                  Tom Malone                            50,000
                                                      --------
                                                      $606,000
                                                      ========

         On March 3, 1999, the Board granted to each of the Company's then four
independent directors (or their nominees), Robert Sams, Ricardo Maranon, Alberto
M. Delgado and John Tydeman, with each abstaining as to themselves, options to
purchase 50,000 shares of Common Stock at $5.00 per share (repriced at $1.47 per
share on January 12, 2000) in consideration of their substantial efforts in
assisting the Company in obtaining financing and for other valuable
consideration rendered to the Company. These options became fully vested on
March 3, 2000.


                                       36

<PAGE>



         As part of the April 1999 Restructuring Agreement with Commonwealth
Associates and the restructuring of the Company's Board of Directors, Alberto M.
Delgado and Ricardo Maranon resigned from the Board on May l7, 1999. They
entered into Advisory Agreements to render corporate finance advise on a
non-exclusive basis. All of the advisor's options were vested and remain in full
force and effect. The advisors are to receive the same sales compensation as all
other independent contractors of the Company.

         In April 1999, the board of directors authorized the issuance of
500,000 shares of Series D convertible preferred stock. As of September 30,
1999, the Company had sold an aggregate of 466,000 shares of Series D
convertible preferred stock for $4,660,000. In addition, the Company issued an
aggregate of 700,000 common stock purchase warrants exercisable at $6.30 per
share for a two-year period for an aggregate of 70,000 shares, as adjusted. On
July 15, 1999, the Company sold 34,000 shares of Series D convertible preferred
stock for $340,000 to Diego Leiva, then chairman of the board. The purchase is
evidenced by a recourse promissory note secured by a pledge of the securities.
Tri-Links Investment Trust ("Tri-Links") purchased $1,500,000 principal amount
of Series D convertible preferred stock and became a 5% or greater stockholder
of the Company. In January 2000, the conversion rate was adjusted so that the
preferred stock converts into common stock at $2.00 per share.

         The Company has granted warrants to purchase common stock of its
wholly-owned subsidiary, PICK Sat to various persons and entities in the
aggregate amount of 19% of PICK Sat common stock on a fully-diluted basis.
Included in this amount is 3.5% warrants granted to Tri-Links, a holder of in
excess of 5% beneficial ownership of the Company's securities. Of this amount,
2.5% was issued on November 3, 1999 in connection with the bridge loan by
Tri-Links to PICK Sat and 1% was issued as of March 3, 2000 in connection with
the extension of the bridge loan. The loan is past due and the parties are
currently negotiating the restructuring of all terms of the loan. See Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" for a description of the
Tri-Links' Bridge Loan. An additional 3.5% warrants were issued to an
unaffiliated third party who is not an officer, director or 5% or greater
shareholder. These warrants are exercisable until December 31, 2004 at 50% of
PICK Sat's initial public offering price, or the lower of 50% of a private sale
price or book value on the date of grant.

         On November 3, 1999, the Company awarded to Robert R. Sams, Diego Leiva
and John Tydeman, the then three directors of the Company, warrants to each
purchase 1.67% of the outstanding common stock of PICK Sat on a fully diluted
basis exercisable for nominal value until December 31, 2004. The Warrants were
issued for services rendered in attempting to fund PICK Sat and/or merge the
Company and also for restructuring PICK's operations. Upon his appointment as
acting CEO of PICK Sat in March 2000, Wolfgang Wacker was awarded similar
Warrants. He has the right to purchase for nominal value until December 31,
2004, 2.5% of the issued and outstanding common stock of PICK Sat and an
additional 2.5% upon the completion of the pending financing described under
Item 7. "Management's Discussion and Analysis of Financial Condition and Results
of Operations - Liquidity and Capital Resources."


                                       37

<PAGE>



         On August 6, 1999, PICK Net Inc. borrowed $250,000 on demand from
Atlantic Tele-Network Inc. ("ATN") and on April 27, 1999, PICK Sat Inc.
borrowed an additional $274,000 on demand from ATN. Both of these obligations
were previously guaranteed by Diego Leiva, then Chairman of the Board, on an
unconditional basis. In September 1999, these demand loans were replaced by
credit facilities and Mr. Leiva's personal guarantees were removed.

         In May 1999, Niles Ring, James Season, Karen Quinn and Raymond Brennan,
all officers of the Company, were terminated by the Company. These terminations
were part of the Company's discontinuing its long distance telecommunications
services and relocating its headquarters to Florida. As a result of their
terminations, both Niles Ring and James Season received two weeks severance pay
totaling $3,846 and $4,808, respectively, 15,000 stock options representing
accelerated vesting of 15% of their stock options that would have vested on
September 1, 1999 and one month of health insurance premium. As a result of the
termination of Karen Quinn and Raymond Brennan, each received four weeks of
severance pay totaling $10,384 and $7,692, respectively, 19,500 stock options
representing accelerated vesting of 65% of their stock options that would have
vested on September 1, 1999 and three months of health insurance premium.

         On August 12, 1999, Karen Quinn entered into a Release of All Claims
with the Company, releasing the Company and its subsidiaries from all
employment-related claims in exchange for 50,000 shares of the Company's Common
Stock, representing 50,000 stock options previously issued to her, the
continuation of her health insurance coverage for 18 months from the date of her
termination, $4,091 in cash, less withholdings, for unused vacation days, and
the extension of the exercise period for 30,000 stock options previously issued
to her until the original expiration date.

         On December 31, 1999, Niles Ring entered into a Release of All Claims
with the Company, releasing the Company and its subsidiaries from all
employment-related claims, in exchange for 31,500 shares of the Company's Common
Stock.

         On December 31, 1999, James Season entered into a Release of All Claims
with the Company, releasing the Company and its subsidiaries from all
employment-related claims, in exchange for 100,000 vested five-year stock
options to purchase the Company's Common Stock at $1.25 per share.







                                       38

<PAGE>

                                     PART IV

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

(a) 1.  Financial Statements                                               Page
----------------------------                                               ----


Reports of Certified Public Accountants                                    F-2

Consolidated Balance Sheets at December 31, 1999 and 1998                  F-4

Consolidated Statements of Operations for the Years Ended
         December 31, 1999, 1998 and 1997                                  F-5

Consolidated Statement of Stockholders' Deficiency for the Years Ended
         December 31, 1999, 1998 and 1997                                  F-6

Consolidated Statement of Cash Flows for the Years Ended
         December 31, 1999, 1998 and 1997                                  F-9


Notes to Consolidated Financial Statements                                 F-11

(a)(2)   Reports on Form 8-K. A Current Report on Form K under Item 5 Other
         Events was filed on October 4, 1999 for September 17, 1999, reporting
         the Registrant's execution of a Stock Purchase Agreement with Lebow
         Investments Ltd. for the sale of PICK Net UK PLC and PICK Net Inc.

(a)(3)   Exhibits.

<TABLE>

<S>           <C>
     3.1      Amended Articles of Incorporation (1)
     3.2      Certificate of Amendment to Articles of Incorporation
     3.3      By-Laws (2)
     4.1      Form of Warrant Agreement between Registrant and certain holders of warrants (3)
     4.2      Form of Note issued by the Registrant to the Noteholders in the July 1998 Bridge
              Loan (6)
     4.3      Form of Note issued by the Registrant to the Noteholders in the July 1998 Bridge Loan,
              as amended (6)
     4.4      Form of Warrant issued by the Registrant to the Noteholders in the July 1998 Bridge
              Loan (6)
     4.5      Form of Warrant issued by the Registrant to the Noteholders in the July 1998 Bridge
              Loan, as amended (6)
     4.6      Certificate of Designation, Number, Powers, Preferences and Relative Participating,
              Optional and Other Special Rights, Qualifications, Limitations, Restrictions, and Other
              Distinguishing Characteristics of Series B Convertible Preferred Stock (6)
</TABLE>


                                       39


<PAGE>

<TABLE>


<S>          <C>
     4.7      Certificate of Designation, Number, Powers, Preferences and Relative Participating,
              Optional and Other Special Rights, Qualifications, Limitations, Restrictions, and Other
              Distinguishing Characteristics of Series D Convertible Preferred Stock (6)
     4.8      Form of Warrant issued by the Registrant to holders of the Series D Convertible
              Preferred Stock (6)
    *4.9      Form of Amended Note dated April 30, 1999 to the Noteholders in the July, 1998 Bridge
              Loan
   *4.10      Note dated November 10, 1999 issued by PICK Net, Inc. to IDT Corporation.
   *4.11      Promissory Note dated November 3, 1999 issued by PICK Sat, Inc. to Tri-Links
              Investment Trust.
   *4.12      Warrant dated January 13, 2000 issued by PICK Sat, Inc. to Gulfsat Communications
              Company.
   *10.1      General Security Agreement dated July 29, 1998 by and between the Registrant and
              Commonwealth Associates
   *10.2      Amendment No. 1 to General Security Agreement dated December 20, 1999
   *10.3      Amendment No. 2 to General Security Agreement dated March 31, 2000
    10.4      Employment Agreement dated September 28, 1998 between Diego Leiva and the
              Registrant  (4)
   *10.5      Amendment dated April 22, 1999 to Employment Agreement between Diego Leiva and
              the Registrant.
    10.6      Restructuring Agreement dated April 21, 1999 by and between the Registrant and
              Commonwealth Associates.
   *10.7      Agreement dated November 12, 1999 by and between IDT Corporation and the
              Registrant.
   *10.8      Guaranty Agreement dated November 12, 1999 by and between IDT Corporation and the
              Registrant.
   *10.9      Forbearance letter dated July 27, 1999 by and among Worldcom Network Services, Inc.
              the Registrant and other entities of the Registrant.
   *10.10     Consulting Agreement dated July 8, 1999 by and between Thomas M. Malone and the
              Registrant.
   *10.11     Management Services Agreement dated May 4, 2000 by and between the Registrant and
              SAICOL Limited
   *10.12     Advisory Agreement dated April 27, 1999 by and between the Registrant and Alberto M.
              Delgado
   *10.13     Advisory Agreement dated April 27, 1999 by and between the Registrant and Richard
              Maranon
   *10.14     Loan Agreement dated November 3, 1999 by and among Tri-Links Investment Trust,
              PICK Sat, Inc. and the Registrant.
   *10.15     Borrower Security Agreement dated November 3, 1999 by and among
              Tri-Links Investment Trust, and the Registrant.
   *10.16     Parent Guarantee Agreement dated November 3, 1999 by and among
              Tri-Links Investment Trust, and the Registrant.
   *10.17     Amendment Agreement dated January 26, 2000, by and among Tri-Links Investment
              Trust, PICK Sat, Inc. and the Registrant.
</TABLE>


                                       40

<PAGE>

<TABLE>


<S>           <C>
   *10.18     Termination Agreement dated January 13, 2000 by and between the Registrant and
              Lebow Investments, Ltd.
   *10.19     Guaranty dated September 13, 1999 by and between the Registrant and Atlantic
              TeleNetwork, Inc.
    10.20     Stock Purchase Agreement, between the Registrant and Lebow Investments, Ltd., dated
              as of September 13, 1999 (5)
    10.21     PICK Sat Option Agreement, among the Registrant, PICK Sat, Inc. and Atlantic Tele-
              Network, Inc., dated as of September 13, 1999 (5)
    21.1      Subsidiaries of the Registrant (4)
   *23.1      Consent of Goldstein Golub Kessler LLP
   *23.2      Consent of Durland & Company, CPA, P.A.
   *27.1      Financial Data Schedule
</TABLE>

*    Filed with this Report

------------
(1)   Incorporated herein by reference from Exhibits to Registrant's Annual
      Report on Form 10-K for the year ended December 31, 1996.
(2)   Incorporated herein by reference from Exhibits to Registrant's Form 10.
(3)   Incorporated herein by reference from Exhibits to Registrant's Annual
      Report on Form 10-K for the year ended December 31, 1997.
(4)   Incorporated herein by reference from Exhibits to Registrant's Annual
      Report on Form 10-K for the year ended December 31, 1998.
(5)   Incorporated herein by reference from Exhibits to Registrant's Form 8-K
      for September 17, 1999.
(6)   Incorporated herein by reference to Registrant's Registration Statement on
      Form S-1 (No. 333-85205) declined effective on November 15, 1999.







                                       41

<PAGE>


                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES
                                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------









Independent Auditor's Report                                       F-2

Independent Auditor's Report                                       F-3

Consolidated Financial Statements:

   Balance Sheet                                                   F-4
   Statement of Operations                                         F-5
   Statement of Stockholders' Deficiency                        F-6 - F-8
   Statement of Cash Flows                                      F-9 - F-10
   Notes to Consolidated Financial Statements                  F-11 - F-25



                                                                             F-1

<PAGE>
INDEPENDENT AUDITOR'S REPORT




The Board of Directors
PICK Communications Corp.


We have audited the accompanying consolidated balance sheets of PICK
Communications Corp. and Subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of operations, stockholders' deficiency, and
cash flows for the two years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 financial position of PICK Communications
Corp. and Subsidiaries as of December 31, 1999 and 1998, and the results of
their operations and cash flows for the two years then ended in conformity with
generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 15 to
the consolidated financial statements, the Company has incurred substantial
recurring losses from operations, has a net capital deficiency and has a working
capital deficiency that 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 15. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.




GOLDSTEIN GOLUB KESSLER LLP
New York, New York

June 14, 2000

                                                                             F-2
<PAGE>


                                DURLAND & COMPANY
                       ---------------------------------
                          CERTIFIED PUBLIC ACCOUNTANTS
                       ---------------------------------

                     REPORT OF CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
PICK Communications Corp.
Wayne, New Jersey

We have audited the accompanying consolidated statements of operations,
stockholders' equity (deficiency) and cash flows of PICK Communications Corp.,
for the year ended December 31, 1997. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion of these consolidated financial statements, based on our
audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of financial
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of their operations and their cash
flows for the year then ended of PICK Communications Corp., in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 15 to the
consolidated financial statements, the Company incurred a significant losses,
resulting in a deficit equity position. These conditions 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 15. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

                                               /s/ Durland & Company, CPAs, P.A.
                                                   -----------------------------
                                                   Durland & Company, CPAs, P.A.


Palm Beach, Florida
April 29, 1998



                                                                             F-3
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                                      CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


December 31,                                                                                 1999                 1998
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                    <C>
ASSETS
Current Assets:
  Cash                                                                                                    $     17,052
  Prepaid expenses and other current assets                                         $     176,455              278,352
  Current assets from discontinued operations                                             325,220            1,269,055
-------------------------------------------------------------------------------------------------------------------------------
      Total current assets                                                                501,675            1,564,459
-------------------------------------------------------------------------------------------------------------------------------
Property and Equipment - at cost, net of accumulated depreciation and
 amortization of $214,527 and $114,293, respectively                                    4,434,970            3,195,169
-------------------------------------------------------------------------------------------------------------------------------
Other Assets:
  Security deposits                                                                       261,796              161,796
  Deferred income tax asset, net of valuation allowance of $30,509,000
   and $11,000,000, respectively                                                             -                   -
  Long-term assets from discontinued operations                                         2,068,394            1,869,732
-------------------------------------------------------------------------------------------------------------------------------
      Total other assets                                                                2,330,190            2,031,528
-------------------------------------------------------------------------------------------------------------------------------
      Total Assets                                                                  $   7,266,835         $  6,791,156
===============================================================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
  Cash overdraft                                                                    $      20,193
  Current portion of debt                                                                 888,000         $     20,000
  Accounts payable and accrued expenses                                                 8,540,607            2,797,133
  Other current liabilities                                                                  -               1,000,000
  Current liabilities from discontinued operations                                     10,965,614           12,317,168
-------------------------------------------------------------------------------------------------------------------------------
      Total current liabilities                                                        20,414,414           16,134,301
Debt, less current portion                                                              9,880,000            9,880,000
Long-term Liabilities from Discontinued Operations                                        736,586            1,042,716
-------------------------------------------------------------------------------------------------------------------------------
      Total liabilities                                                                31,031,000           27,057,017
-------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Minority Interest in Consolidated Subsidiary                                               84,276               86,018
-------------------------------------------------------------------------------------------------------------------------------
Stockholders' Deficiency:
  Convertible preferred stock - $.001 par value; authorized 10,000,000
   shares
   Designated as Series B - 2,000,000 shares; issued 1,871,000 shares; 930,000
    shares outstanding; aggregate liquidation value
    $1,871,000                                                                            930,000                -
   Designated as Series D - 500,000 shares; issued 500,000 shares;
    260,500 shares outstanding; aggregate liquidation value $4,660,000                  2,605,000                -
  Common stock - $.01 par value; authorized 40,000,000 shares and
   10,000,000 shares, respectively; issued and outstanding 8,919,881
    and 3,816,638 shares, respectively                                                     89,234               38,202
  Additional paid-in capital                                                           79,746,228            4,008,029
  Options and warrants                                                                  2,720,071            2,687,461
  Subscriptions receivable                                                               (340,000)               -
  Treasury stock, at cost, 3,550 shares                                                   (11,978)             (11,978)
  Accumulated other comprehensive income                                                    1,482                -
  Accumulated deficit                                                                (109,588,478)         (27,073,593)
-------------------------------------------------------------------------------------------------------------------------------
      Stockholders' deficiency                                                        (23,848,441)         (20,351,879)
-------------------------------------------------------------------------------------------------------------------------------
      Total Liabilities and Stockholders' Deficiency                                $   7,266,835         $  6,791,156
===============================================================================================================================
</TABLE>


                  The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements


                                                                             F-4
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                            CONSOLIDATED STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,                                                         1999            1998             1997
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>             <C>              <C>
Costs and expenses:
  Selling, general and administrative expenses                            $ 2,825,957     $ 2,094,025      $   218,917
  Depreciation and amortization                                               100,234          45,805          180,531
-------------------------------------------------------------------------------------------------------------------------------
Operating loss                                                              2,926,191       2,139,830          399,448
-------------------------------------------------------------------------------------------------------------------------------

Other expense:
  Interest expense                                                          1,824,845           -                -
  Write-off of intangible asset                                                 -               -              441,205
  Net loss on marketable equity securities                                      -             133,000        9,449,079
-------------------------------------------------------------------------------------------------------------------------------
Total other expenses                                                        1,824,845         133,000        9,890,284
-------------------------------------------------------------------------------------------------------------------------------

Loss from continuing operations before minority interest in
 loss of consolidated subsidiary, and benefit from income taxes             4,751,036       2,272,830       10,289,732

Minority interest in loss of consolidated subsidiary                            1,742           2,062          434,064
-------------------------------------------------------------------------------------------------------------------------------

Loss from continuing operations before benefit from income
 taxes                                                                      4,749,294       2,270,768        9,855,668

Benefit from income taxes                                                       -               -           (1,808,000)
-------------------------------------------------------------------------------------------------------------------------------
Loss from continuing operations                                             4,749,294       2,270,768        8,047,668
-------------------------------------------------------------------------------------------------------------------------------

Discontinued operations:
  Loss from discontinued operations                                         5,486,880      14,792,541        1,452,134
  Loss on disposal of discontinued operations and related costs            45,315,574           -                -
  Estimated cost to discontinue operations                                  1,793,137           -                -
-------------------------------------------------------------------------------------------------------------------------------
Total loss from discontinued operations                                    52,595,591      14,792,541        1,452,134
-------------------------------------------------------------------------------------------------------------------------------

Net loss                                                                   57,344,885      17,063,309        9,499,802

Beneficial conversion feature of preferred stock                           25,170,000           -                -
-------------------------------------------------------------------------------------------------------------------------------
Net loss applicable to common stock                                       $82,514,885     $17,063,309      $ 9,499,802
===============================================================================================================================

Loss from continuing operations and beneficial conversion
 feature of preferred stock per common share - basic                      $      6.30     $       .61      $      2.18
===============================================================================================================================
Loss from discontinued operations per common
 share - basic                                                            $     11.07     $      4.01      $       .39
===============================================================================================================================

Net loss applicable to common share - basic                               $     17.37     $      4.62      $      2.57
===============================================================================================================================

Weighted-average common shares outstanding - basic                          4,750,742       3,692,356        3,695,853
===============================================================================================================================
</TABLE>

                  The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements

                                                                             F-5

<PAGE>


                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                              CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31, 1999
----------------------------------------------------------------------------------------------------------------------------
                                              Series B Preferred Stock    Series D Preferred Stock        Common Stock
                                              ------------------------    ------------------------   -----------------------
                                                Number                      Number                    Number
                                               of Shares     Amount        of Shares     Amount      of Shares     Amount
----------------------------------------------------------------------------------------------------------------------------

<S>                                            <C>         <C>           <C>          <C>            <C>          <C>
Balance at January 1, 1997                        -            -             -            -          4,321,752    $ 87,395

Reduction of $.02 to $.01 par value               -            -             -            -              -         (43,697)

Cancellation of 60,000 shares subscribed          -            -             -            -            (60,000)       (600)

Reacquisition of shares for cash                  -            -             -            -             (3,550)       -

Reacquisition of shares for unused prepaid
 advertising, with a book value of $2,038,155     -            -             -            -            (75,000)       -

Reacquisition of share for Firenze, Ltd.
 and Ultimistics, Inc.                            -            -             -            -           (600,000)       -

Issuance of common stock for services             -            -             -            -             22,700         227

Issuance of warrants in connection with
 short-term debt                                  -            -             -            -              -            -

Accumulated other comprehensive income            -            -             -            -              -            -

Net loss                                          -            -             -            -              -            -
-----------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1997                      -            -             -            -          3,605,902      43,325

Issuance of common stock for compensation         -            -             -            -             66,299         663

Issuance of common stock in connection
 with private placement                           -            -             -            -            139,437       1,394

Issuance of common stock upon exercise of
 warrants by director                             -            -             -            -              5,000          50

Issuance of warrants in connection with
 short-term debt                                  -            -             -            -              -            -

</TABLE>

<PAGE>
(RESTUBBED TABLE)

<TABLE>
<CAPTION>
Year ended December 31, 1999
---------------------------------------------------------------------------------------------------------------------
                                                                                                         Accumulated
                                               Additional      Options     Subscriptions                    Other
                                                 Paid-in         and         and Notes     Treasury     Comprehensive
                                                 Capital      Warrants      Receivable       Stock      Income (Loss)
---------------------------------------------------------------------------------------------------------------------

<S>                                           <C>                           <C>         <C>             <C>
Balance at January 1, 1997                    $  6,399,720       -          $(600,000)  $   (602,089)   $(3,904,965)

Reduction of $.02 to $.01 par value                 43,697       -               -              -             -

Cancellation of 60,000 shares subscribed          (599,400)      -            600,000           -             -

Reacquisition of shares for cash                      -          -               -           (11,978)         -

Reacquisition of shares for unused prepaid
 advertising, with a book value of $2,038,155         -          -               -        (2,038,155)         -

Reacquisition of share for Firenze, Ltd.
 and Ultimistics, Inc.                                -          -               -          (420,000)         -

Issuance of common stock for services               42,808       -               -              -             -

Issuance of warrants in connection with
 short-term debt                                      -      $  21,242           -              -             -

Accumulated other comprehensive income                -          -               -              -         3,942,965

Net loss                                              -          -               -              -             -
---------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1997                     5,886,825      21,242           -        (3,072,222)        38,000

Issuance of common stock for compensation          296,363       -               -              -             -

Issuance of common stock in connection
 with private placement                            864,405       -               -              -             -

Issuance of common stock upon exercise of
 warrants by director                               13,450       -               -              -             -

Issuance of warrants in connection with
 short-term debt                                      -      2,359,940           -              -             -

</TABLE>
<PAGE>
(RESTUBBED TABLE)

<TABLE>
<CAPTION>
Year ended December 31, 1999
-------------------------------------------------------------------------------


                                                   Accumulated    Stockholders'
                                                     Deficit       Deficiency
-------------------------------------------------------------------------------

<S>                                           <C>               <C>
Balance at January 1, 1997                    $       (510,482) $      869,579

Reduction of $.02 to $.01 par value                      -                -

Cancellation of 60,000 shares subscribed                 -                -

Reacquisition of shares for cash                         -             (11,978)

Reacquisition of shares for unused prepaid
 advertising, with a book value of $2,038,155            -          (2,038,155)

Reacquisition of share for Firenze, Ltd.
 and Ultimistics, Inc.                                   -            (420,000)

Issuance of common stock for services                    -              43,035

Issuance of warrants in connection with
 short-term debt                                         -              21,242

Accumulated other comprehensive income                   -           3,942,965

Net loss                                            (9,499,802)     (9,499,802)
-------------------------------------------------------------------------------

Balance at December 31, 1997                       (10,010,284)     (7,093,114)

Issuance of common stock for compensation                -             297,026

Issuance of common stock in connection
 with private placement                                  -             865,799

Issuance of common stock upon exercise of
 warrants by director                                    -              13,500

Issuance of warrants in connection with
 short-term debt                                         -           2,359,940

</TABLE>
                                                                     (continued)

                  The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements


                                                                             F-6
<PAGE>


                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                              CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31, 1999
------------------------------------------------------------------------------------------------------------------------------
                                                 Series B Preferred Stock    Series D Preferred Stock        Common Stock
                                                 ------------------------    ------------------------   ----------------------
                                                   Number                      Number                    Number
                                                  of Shares     Amount        of Shares     Amount      of Shares     Amount
------------------------------------------------------------------------------------------------------------------------------

<S>                                               <C>         <C>           <C>          <C>            <C>          <C>
Issuance of options for compensation                 -             -             -            -             -            -

Cancellation of 723,000 shares of treasury stock     -             -             -            -             -       $  (7,230)

Accumulated other comprehensive loss                 -             -             -            -             -            -

Net loss                                             -             -             -            -             -            -
------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1998                         -             -             -            -          3,816,638     38,202

Issuance of preferred stock                      1,821,000     $1,821,000      466,000   $ 4,660,000        -            -

Issuance of preferred stock for services            50,000         50,000        -            -             -            -

Preferred stock issuance cost - Series B and D       -             -             -            -             -            -

Issuance of common stock for services                -             -             -            -            854,005      8,540

Conversion of preferred stock to common stock     (941,000)      (941,000)    (239,500)   (2,395,000)    1,511,238     15,112

Issuance of preferred stock as subscriptions
 receivable                                          -             -            34,000       340,000        -            -

Expiration of options and warrants                   -             -             -            -             -            -

Issuance of common stock upon exercise of
 options for cash                                    -             -             -            -             24,500        245

Issuance of common stock for old debt                -             -             -            -            100,000      1,000

Issuance of common stock upon exercise of
 options and warrants for services                   -             -             -            -            437,500      4,375

Issuance of common stock and warrants
 to the restructured debt and fees                   -             -             -            -          2,176,000     21,760

</TABLE>
<PAGE>
(RESTUBBED TABLE)

<TABLE>
<CAPTION>
Year ended December 31, 1999
---------------------------------------------------------------------------------------------------------------------
                                                                                                         Accumulated
                                                   Additional    Options   Subscriptions                    Other
                                                    Paid-in        and        and Notes     Treasury     Comprehensive
                                                    Capital      Warrants    Receivable       Stock      Income (Loss)
---------------------------------------------------------------------------------------------------------------------

<S>                                                <C>                           <C>         <C>             <C>
Issuance of options for compensation                 -         $   306,279        -             -              -

Cancellation of 723,000 shares of treasury stock  $(3,053,014)      -             -        $ 3,060,244         -

Accumulated other comprehensive loss                 -              -             -             -         $ (38,000)

Net loss                                             -              -             -             -              -
---------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1998                       4,008,029     2,687,461        -            (11,978)        -

Issuance of preferred stock                          -              -             -             -              -

Issuance of preferred stock for services             -              -             -             -              -

Preferred stock issuance cost - Series B and D      (544,750)       -             -             -              -

Issuance of common stock for services                965,031        -             -             -              -

Conversion of preferred stock to common stock      3,320,888        -             -             -              -

Issuance of preferred stock as subscriptions
 receivable                                          -              -         $(340,000)        -              -

Expiration of options and warrants                    89,743       (89,743)       -             -              -

Issuance of common stock upon exercise of
 options for cash                                     44,705        -             -             -              -

Issuance of common stock for old debt                999,000        -             -             -              -

Issuance of common stock upon exercise of
 options and warrants for services                   639,245      (643,620)       -             -              -

Issuance of common stock and warrants
 to the restructured debt and fees                45,054,337       239,477        -             -              -

</TABLE>

<PAGE>
(RESTUBBED TABLE)

<TABLE>
<CAPTION>
Year ended December 31, 1999
----------------------------------------------------------------------------------


                                                    Accumulated    Stockholders'
                                                      Deficit       Deficiency
----------------------------------------------------------------------------------

<S>                                                <C>               <C>

Issuance of options for compensation                    -          $      306,279

Cancellation of 723,000 shares of treasury stock        -                -

Accumulated other comprehensive loss                    -                 (38,000)

Net loss                                         $  (17,063,309)      (17,063,309)
----------------------------------------------------------------------------------

Balance at December 31, 1998                        (27,073,593)      (20,351,879)

Issuance of preferred stock                             -               6,481,000

Issuance of preferred stock for services                -                  50,000

Preferred stock issuance cost - Series B and D          -                (544,750)

Issuance of common stock for services                   -                 973,571

Conversion of preferred stock to common stock           -                -

Issuance of preferred stock as subscriptions
 receivable                                             -                -

Expiration of options and warrants                      -                -

Issuance of common stock upon exercise of
 options for cash                                       -                  44,950

Issuance of common stock for old debt                   -               1,000,000

Issuance of common stock upon exercise of
 options and warrants for services                      -                -

Issuance of common stock and warrants
 to the restructured debt and fees                      -              45,315,574

</TABLE>
                                                                     (continued)

                  The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements

                                                                             F-7
<PAGE>


                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                              CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31, 1999
------------------------------------------------------------------------------------------------------------------------------
                                                 Series B Preferred Stock    Series D Preferred Stock        Common Stock
                                                 ------------------------    ------------------------   ----------------------
                                                 Number                      Number                    Number
                                                of Shares     Amount        of Shares     Amount      of Shares      Amount
------------------------------------------------------------------------------------------------------------------------------

<S>                                           <C>         <C>           <C>          <C>            <C>          <C>

Issuance of warrants for services                  -             -             -            -             -            -

Issuance of options for services                   -             -             -            -             -            -

Beneficial conversion feature
  of preferred stock                               -             -             -            -             -            -

Foreign currency translation adjustments           -             -             -            -             -            -

Net loss                                           -             -             -            -             -            -

------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                    930,000    $   930,000      260,500   $ 2,605,000     8,919,881    $ 89,234
==============================================================================================================================
</TABLE>
<PAGE>
(RESTUBBED TABLE)
<TABLE>
<CAPTION>
Year ended December 31, 1999
---------------------------------------------------------------------------------------------------------------------
                                                                                                         Accumulated
                                               Additional      Options     Subscriptions                    Other
                                                 Paid-in         and         and Notes     Treasury     Comprehensive
                                                 Capital      Warrants      Receivable       Stock      Income (Loss)
---------------------------------------------------------------------------------------------------------------------

<S>                                              <C>           <C>            <C>           <C>           <C>

Issuance of warrants for services                    -       $   494,996         -             -             -

Issuance of options for services                     -            31,500         -             -             -

Beneficial conversion feature
  of preferred stock                           $25,170,000         -             -             -             -

Foreign currency translation adjustments             -             -             -             -         $  1,482

Net loss                                             -             -             -             -             -

----------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                   $79,746,228    $2,720,071    $(340,000)  $  (11,978)      $  1,482
======================================================================================================================
</TABLE>
<PAGE>
(RESTUBBED TABLE)
<TABLE>
<CAPTION>
Year ended December 31, 1999
----------------------------------------------------------------------------------

                                                   Accumulated         Stockholders'
                                                     Deficit            Deficiency
----------------------------------------------------------------------------------

<S>                                                <C>               <C>

Issuance of warrants for services                      -              $    494,996

Issuance of options for services                       -                    31,500

Beneficial conversion feature
  of preferred stock                             $ (25,170,000)               -

Foreign currency translation adjustments               -                     1,482

Net loss                                           (57,344,885)        (57,344,885)

-----------------------------------------------------------------------------------
Balance at December 31, 1999                     $(109,588,478)       $(23,848,441)
===================================================================================
</TABLE>
                  The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements

                                                                             F-8
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                            CONSOLIDATED STATEMENT OF CASH FLOWS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Year ended December 31,                                                           1999             1998             1997
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>              <C>               <C>
Cash flows from operating activities:
  Net loss                                                                   $(57,344,885)    $(17,063,309)     $(9,499,802)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Loss on marketable securities                                                  -               133,000        9,449,079
    Stock, options and warrants issued for compensation or services             1,550,067          603,305           64,277
    Loss on disposal of discontinued operations and related costs              45,315,574           -                  -
    Amortization of debt discount and debt placement expenses                      -             4,656,773             -
    Depreciation and amortization                                                 100,234          359,711          180,531
    Write-off of intangible asset                                                  -                -               441,205
    Minority interest in subsidiary loss                                           (1,742)          (2,062)        (434,064)
    Bad debt expense                                                               -               125,740          253,270
    Adjustments to provision for contingent liabilities                            -                -              (649,563)
    Benefit for deferred income taxes                                              -                -            (1,808,000)
    Changes in operating assets and liabilities:
      Decrease (increase) in prepaid expenses and other current assets            101,897         (602,956)         (44,046)
      Increase in accounts receivable                                              -              (414,808)          73,092
      Decrease (increase) in current assets from discontinued operations          943,835         (231,499)            -
      Increase in security deposits                                              (100,000)          -                  -
      Increase in long-term assets from discontinued operations                  (198,662)          -                  -
      Increase in accounts payable and accrued expenses                         5,393,474        2,814,642        3,408,763
      Increase (decrease) in deferred revenue                                      -             1,502,153         (985,735)
      Increase (decrease) in other current liabilities                             -             2,814,316         (868,679)
      Decrease in current liabilities from discontinued operations             (1,001,554)          -                  -
------------------------------------------------------------------------------------------------------------------------------
          Net cash used in operating activities                                (5,241,762)      (5,304,994)        (419,672)
------------------------------------------------------------------------------------------------------------------------------

Cash flows used in investing activity - purchase of property and equipment     (1,340,035)      (3,817,153)          (6,510)
------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Funds advanced on third-party debt, net of cash placement costs                 888,000       11,468,966          250,000
  Proceeds from issuance of common stock for cash                                  44,950           13,500             -
  Acquisition of treasury stock for cash                                           -                -               (11,978)
  Proceeds from issuance of Series B preferred stock                            1,821,000           -                  -
  Proceeds from issuance of Series D preferred stock                            4,660,000           -                  -
  Payment of preferred stock issuance cost                                       (544,750)          -                  -
  Decrease in long-term liabilities from discontinued operations                 (306,130)          -                  -
  Payments on debt                                                                (20,000)      (2,217,667)            -
  Increase in bank overdraft                                                       20,193           -                  -
  Funds advanced by stockholder                                                    -                15,000          170,000
  Payments of stockholder advances                                                 -              (185,000)         (25,152)
------------------------------------------------------------------------------------------------------------------------------
          Net cash provided by financing activities                             6,563,263        9,094,799          382,870
------------------------------------------------------------------------------------------------------------------------------

Effect of foreign translation on cash                                               1,482           -                  -
------------------------------------------------------------------------------------------------------------------------------

Net decrease in cash                                                              (17,052)         (27,348)         (43,312)

Cash at beginning of year                                                          17,052           44,400           87,712
------------------------------------------------------------------------------------------------------------------------------
Cash at end of year                                                       $       - 0 -    $        17,052    $      44,400
==============================================================================================================================
</TABLE>

                                                                     (continued)

                  The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements

                                                                             F-9


<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                            CONSOLIDATED STATEMENT OF CASH FLOWS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


Year ended December 31,                                                           1999             1998             1997
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>               <C>              <C?
Supplemental disclosures of cash flow information:

  Cash paid during the year for interest from:
    Continuing operations                                                    $      1,519     $    - 0 -        $   - 0 -
=============================================================================================================================
    Discontinued operations                                                  $    171,413     $  1,167,716      $    75,877
=============================================================================================================================

Supplemental schedule of noncash investing and financing activities:

  Conversion of debt to equity                                               $  1,000,000     $    - 0 -        $   - 0 -
=============================================================================================================================
  Issuance of preferred stock as subscriptions receivable                    $    340,000     $    - 0 -        $   - 0 -
=============================================================================================================================
  Beneficial conversion feature of preferred stock                           $(25,170,000)    $    - 0 -        $   - 0 -
=============================================================================================================================
  Assets from discontinued operations acquired under capital leases          $    - 0 -       $    591,026      $   941,033
=============================================================================================================================
  Discounts on short-term debt                                               $    - 0 -       $  1,312,934      $   - 0 -
=============================================================================================================================
  Book value of marketable equity securities exchanged for common stock
   of the Company and its subsidiary                                         $    - 0 -       $    - 0 -        $ 6,390,625
=============================================================================================================================
  Book value of marketable equity securities exchanged for other marketable
   securities                                                                $    - 0 -       $    - 0 -        $ 4,085,000
=============================================================================================================================
  Book value of prepaid advertising and telephone cards exchanged for
   common stock of the Company and its subsidiary                            $    - 0 -       $    - 0 -        $ 2,458,155
=============================================================================================================================

</TABLE>


                  The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements

                                                                            F-10




<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1. PRINCIPAL BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PICK Communications Corp. and Subsidiaries (collectively, the "Company") provide
satellite-based internet access and interactive multimedia services to end-user
service providers. In March 1999, the Company formed a new subsidiary, PICK
Online.Com Inc., a media content aggregator using a satellite-based multicast
delivery system for internet service providers and broadband networks. The
Company is headquartered and leases facilities in Miami, Florida.

The accompanying consolidated financial statements include the accounts of PICK
Communications Corp. and its wholly owned subsidiaries, PICK US Inc. f/k/a PICK
Inc. ("PICK US"), PICK Net Inc. ("PICK Net"), PICK Net UK PLC ("PICK Net UK"),
PICK Sat Inc. ("PICK Sat"), PICK Online.Com Inc. ("POL") and P.C.T. Prepaid
Telephone Inc. ("PCT"), a majority-owned subsidiary. All significant
intercompany balances and transactions have been eliminated.

The Company has discontinued the operations of its telecommunication and prepaid
calling card business consisting of PICK US, PICK Net and PICK Net UK (see Note
12).

Minority interest represents the minority stockholders' proportionate share of
the equity and loss of PCT.

The Company maintains cash in bank deposit accounts, which, at times, may exceed
federally insured limits. The Company has not experienced any losses on these
accounts.

Revenue from PICK Sat will be derived from monthly fees charged based upon the
type of usage and bandwidth contracted for, while sales from POL will be derived
from subscribers ratably over the contract period. For the year ended December
31, 1999, both PICK Sat and POL had no revenue and no customers. Revenue from
the discontinued operations are recognized at the time that the service is
provided, for long-distance time, as reported by the electronic switching
devices, and for prepaid calling cards as the card is used.

Depreciation of property and equipment is provided for by the straight-line
method over the estimated useful lives of the related assets.

The Company's intangible assets (patent and related rights for prepaid cellular
technology) were valued at cost and amortized over their estimated useful lives
of five years. Since, among other factors, this technology generated no revenue
during 1997, the Company elected to write off the unamortized balance at
December 31, 1997.

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes. The Company
recorded a deferred tax asset for the tax effect of net operating loss
carryforwards and temporary differences. In recognition of the uncertainty
regarding the ultimate amount of income tax benefits to be derived, the Company
has recorded a full valuation allowance.

                                                                            F-11
<PAGE>


                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Loss from continuing operations and beneficial conversion feature of preferred
stock per common share - basic is computed by adding (i) the beneficial
conversion feature of preferred stock and (ii) the loss from continuing
operations and then dividing the result by the weighted-average common shares
outstanding - basic. The loss from discontinued operations per common share -
basic was computed by dividing total loss from discontinued operations by the
weighted-average common shares outstanding-basic.

Net loss per share applicable to common stock - basic is computed by dividing
the net loss applicable to common stock by the weighted-average common shares
outstanding-basic. Diluted net loss per share is not presented because the
inclusion of common share equivalents would be antidilutive.

The financial position and results of operations of the Company's foreign
subsidiaries are measured using local currency as the functional currency.
Assets and liabilities of these subsidiaries have been translated at average
monthly rates. The aggregate effect of the translation adjustments has been
deferred and is reflected as a separate component of stockholders' deficiency
until there is a sale or liquidation of the underlying foreign investment.

The consolidated financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the consolidated
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the
consolidated balance sheet and revenue and expenses for the periods then ended.
Actual results could differ from those estimates.

The Company does not believe that any recently issued but not yet effective
accounting standards will have a material effect on the Company's consolidated
financial position, results of operation or cash flows.

For comparability, certain 1998 and 1997 amounts have been reclassified, where
appropriate, to conform to the financial statement presentation used in 1999.

Effective July 23, 1999, the Company's board of directors authorized a 1-for-10
reverse split of its common stock . All share and per-share amounts in these
consolidated financial statements have been restated to give effect to this
reverse stock split.

2. PREPAID EXPENSES AND OTHER CURRENT ASSETS:

Prepaid expenses and other current assets consist of the following:

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

Sundry receivable                             $    3,100           $    3,100
Computer equipment for resale                     58,159               92,235
Prepaid expenses                                  61,851               96,552
Advances and other current assets                 53,345               86,465
--------------------------------------------------------------------------------
                                                $176,455             $278,352
================================================================================

                                                                            F-12
<PAGE>



                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
3. PPROPERTY AND EQUIPMENT:


Property and equipment, at cost, consists of the following:
<TABLE>
<CAPTION>

                                                                              Estimated
December 31,                                     1999             1998       Useful Life
------------------------------------------------------------------------------------------
<S>                                       <C>              <C>             <C>
Property, equipment and software          $   567,543      $   835,674     3 and 5 years
Asset development/
 installation-in-process                    4,081,954        2,473,788
------------------------------------------------------------------------------------------

                                            4,649,497        3,309,462
Less accumulated depreciation
 and amortization                             214,527          114,293
------------------------------------------------------------------------------------------
                                           $4,434,970       $3,195,169
==========================================================================================
</TABLE>

Asset development/installation-in-process consists of hardware and software
costs related to the Company's high-speed internet business, which is under
development. Depreciation will commence when the development and/or installation
is complete and the assets are fully operational.

4. INVESTMENT IN MARKETABLE EQUITY SECURITIES:

In 1996, the Company acquired 4,700,000 restricted shares of the common stock of
Ultimistics, Inc. ("Ultimistics"). During the first quarter of 1997, the
Company, in four separate transactions, disposed of all of its shares of
Ultimistics, along with $420,000 of prepaid advertising, in return for (i)
100,000 shares of the Company's common stock, (ii) 10,000,000 shares of PCT, and
(iii) 380,000 restricted shares of the common stock of Fairbanks, Inc. (which
subsequently changed its name to Jet Vacations, Inc. and then Precom Tech Inc.).
The Company recorded losses of $9,399,079 on these transactions. During 1998,
the balance of $133,000 was written off.

5. DEBT:

Debt consists of the following:

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

Private placement debt (a)                   $  9,880,000         $  9,900,000
Note payable  (b)                                 476,000               -
Revolver loan (c)                                 412,000               -
--------------------------------------------------------------------------------

                                               10,768,000            9,900,000

Less current portion of debt                      888,000               20,000

--------------------------------------------------------------------------------
        Debt, less current portion           $  9,880,000         $  9,880,000
================================================================================


(a) Between July 29, 1998 and September 8, 1998, the Company, through
    Commonwealth Associates ("Commonwealth"), placed $9,900,000 (face amount) of
    10%, 120-day Senior Secured Notes (the "Original Notes") and 9,900,000
    warrants to purchase 990,000 shares of the Company's common stock at $5.00
    per share for five years (the "Placement"). The Original Notes are secured
    by all the assets of PICK Communications Corp. The Company allocated

                                                                            F-13





<PAGE>



                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
    $8,587,066 of the gross sales proceeds to the debt and $1,312,934 to the
    warrants. The $1,312,934 discount was amortized as interest expense over the
    original 120-day life of the Original Notes. In November and December 1998,
    the Company exercised its rights to extend the maturity date of the Original
    Notes for 60 days. Under the terms of the Original Notes, the interest rate
    of the Original Notes was increased to 18% per annum, retroactive to the
    issuance of the Original Notes. In January, February and March 1999, the
    holders of the Original Notes agreed to extend the maturity of the Original
    Notes until April 27, 1999. In return for the extensions, the Company agreed
    to issue 50,012 shares of its common stock (valued at $265,063 and included
    in loss from discontinued operations in the accompanying consolidated
    statement of operations) and warrants (valued at $485,100 and included in
    loss from discontinued operations in the accompanying consolidated statement
    of operations) to purchase 245,750 shares of the Company's common stock for
    five years at $5.00 per share to the holders of the Original Notes.

    For the placement of the Original Notes, the Company paid Commonwealth and
    Liberty Capital (the Company's co-financial advisor) $1,099,000 in cash,
    issued 139,437 shares of common stock (valued at $865,799) and warrants to
    purchase 250,986 shares of common stock at $5.00 per share (valued at
    $383,002) for five years. The costs related to the Placement were being
    deferred and amortized as debt placement expenses over the term of the debt.
    At December 31, 1998, all debt placement expenses were amortized and
    included in the consolidated statement of operations.

    On April 27, 1999, the holders of the Original Notes, who control in excess
    of 99% of the principal which was due on April 27, 1999, consented to
    restructure their Original Notes (the "Restructured Notes") and extend the
    maturity date until April 27, 2002. Additionally, the Company has the option
    to extend the maturity date for one year. Under the terms of the
    restructuring, the Restructured Notes are convertible into shares of common
    stock at a fixed price of $10.00 rather than fair market value (valued at
    $7,077,600), as defined in the terms of restructuring. The Restructured
    Notes automatically convert to common stock if the closing bid price exceeds
    $15.00 per share, as defined. In addition, if the Company extends the
    maturity date for one additional year, the conversion price shall be subject
    to adjustment to 50% of the then average closing bid price of the common
    stock, but no less than $5.00 per share.

    In consideration for the restructuring, the consenting noteholders received
    the following:

    (i)  the right for a two-year period to exchange the existing warrants for
         an aggregate of 988,000 shares of the Company's common stock for no
         consideration (valued at $15,604,800);

    (ii) the right to receive from the Company an aggregate of 988,000 new
         shares of the Company's common stock for no consideration (valued at
         $16,907,600).

    During 1999, 1,976,000 shares were issued to the consenting noteholders.

    In consideration for the restructuring of the Original Notes, the Company
    issued to Commonwealth 200,000 shares of common stock (valued at $3,440,000
    and included in loss on disposal of discontinued operations in the
    accompanying statement of operations) plus warrants to purchase 50,000 of
    the Company's common stock at $13.75 per share (valued at $239,477 and
    included in loss on disposal of discontinued operations in the accompanying
    statement of operations). Additionally, warrants previously issued to
    Commonwealth will be exercisable at $1.00 per share (valued at $2,046,097
    and included in additional paid-in capital in the accompanying consolidated
    balance sheet).

                                                                            F-14





<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

    Due to the restructuring of the $9,900,000 short-term notes, the Company
    recorded an increase in stockholders' deficiency of $41,636,097 during 1999.

    All deferred interest and placement charges were written off and included in
    the loss on disposal of discontinued operations (see Note 12).

(b) PICK Sat obtained a promissory note from Atlantic Tele-Network Inc. ("ATN")
    aggregating $476,000, which loan bears interest at prime plus 2% (10.5% at
    December 31, 1999). This promissory note was entered into in connection with
    PICK Sat options as described in the PICK Sat option agreement dated
    September 13, 1999. ATN chose not to exercise this option and the promissory
    note became due and payable on February 4, 2000 and has not been paid. On
    January 4, 2000, in consideration of the then pending completion of the sale
    of the Company's PICK Net subsidiaries (see Note 12(d)), as well as the
    termination of the PICK Sat option, ATN received five-year warrants to
    purchase 1,000,000 shares of PICK common stock exercisable at $2.00 per
    share.

(c) On November 3, 1999, PICK Sat entered into a 120-day revolver for $500,000
    (the "Revolver") from Tri-Links Investment Trust ("Tri-Links"). PICK Sat
    borrowed $412,000 under the Revolver which bears interest at 13% per annum,
    increasing to 15% per annum upon default and payment of which is guaranteed
    by PICK. Tri-Links was granted a security interest in substantially all of
    PICK Sat's assets which was initially subordinated to ATN and then made pari
    passu and equal in priority as of April 2000. The Revolver came due on March
    3, 2000 and was extended until May 3, 2000. In addition, on January 26,
    2000, Tri-Links, PICK and PICK Sat entered into an Amendment Agreement which
    was amended again in March and April 2000, whereby the commitment under the
    Revolver was eventually increased to $1,400,000, all of which has been
    loaned to PICK Sat. In connection with the Revolver, PICK agreed to use its
    best efforts to cause four designees of Tri-Links to be elected to the PICK
    board of directors. Tri-Links was issued warrants to purchase 2.5% to the
    issued and outstanding common stock of PICK Sat on a fully diluted basis.
    Group Technology was assigned Tri-Link's right to elect two of the four
    directors and its assignee was given warrants to purchase 2.5% of the issued
    and outstanding common stock of PICK Sat on a fully diluted basis.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

 Accounts payable and accrued expenses consist of the following:

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

Accounts payable - operating                          $2,323,613      $  831,461
Accrued expenses - operating                           2,188,030         315,672
Accrued expenses - for equipment                       1,066,000       1,650,000
Accrued expenses - settlement reserves (see Note 13)   2,962,964           -
--------------------------------------------------------------------------------
                                                      $8,540,607      $2,797,133
================================================================================

                                                                            F-15
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

7. PREFERRED STOCK:

In March 1999, the board of directors authorized the issuance of 2,000,000
shares of Series B convertible preferred stock. The Series B convertible
preferred stock has a stated par value of $.001 per share and 1,821,000 shares
were issued at $1.00 per share, convertible into 1,871,000 shares of the
Company's common stock at the rate of $1.00 per share. An additional 50,000
shares were issued (valued at $50,000) for professional services provided to the
Company. There was a placement cost of $85,000 related to the issuance of Series
B and the amount was paid in full during 1999. As of December 31, 1999, 941,000
shares of Series B convertible preferred stock has been converted into 941,000
shares of common stock. Of the remaining 930,000 shares of Series B preferred
stock as of December 31, 1999, an additional 247,000 shares were converted to
common stock through March 31, 2000.

In April 1999, the board of directors authorized the issuance of 500,000 shares
of Series D convertible preferred stock. The Series D convertible preferred
stock has a stated par value of $.001 per share and was initially convertible
into 1,190,500 shares of the Company's common stock at the rate of $4.20 per
share. As of December 31, 1999, the Company had sold an aggregate of 466,000
shares of Series D convertible preferred stock for $4,660,000 prior to the
payment of $459,750 of preferred stock placement costs. This $459,750 placement
costs has been recorded in the additional paid in capital account. In addition,
the Company issued an aggregate of 700,000 common stock purchase warrants in
connection with the sale of Series D convertible preferred stock. Each warrant,
as adjusted, is exercisable at $6.30 per share of common stock for a two-year
period for an aggregate of 70,000 shares. On July 15, 1999, the Company sold
34,000 shares of Series D convertible preferred stock for $340,000 to Diego
Leiva, chairman of the board. The purchase is evidenced by a recourse promissory
note secured by a pledge of the securities. In January 2000, the conversion rate
was adjusted so that the preferred stock converts into common stock at $2.00 per
share. As of December 31, 1999, $2,395,000 of the principal amount of Series D
convertible preferred stock had been converted into 570,238 shares of common
stock. Of the remaining $2,605,000 of the principal amount of the Series D
preferred stock an additional $700,000 of principal amount was converted into
350,000 shares of common stock through March 31, 2000.

At the time of issuance, the Series B and Series D were convertible at prices
below the market value of the underlying common stock The beneficial conversion
feature represented by the intrinsic value is calculated as the difference
between the conversion price and the market price of the underlying common stock
multiplied by the number of shares to be issued from the conversion. The
beneficial conversion feature is recognized as a return to the preferred
stockholders. At December 31, 1999, the beneficial conversion feature amounted
to $6,361,000 and $18,809,000 for the Series B and Series D, respectively.

8. COMMON STOCK:

On February 26, 1999, the board of directors of the Company authorized an
increase of the Company's authorized shares of common stock from 10,000,000 to
40,000,000 shares, which was effective on April 13, 1999.

On March 3, 1999, the board of directors granted each of the then four
independent directors three-year options to purchase 50,000 shares of common
stock at $5.10 per share. Those options became fully vested on March 3, 2000.

                                                                            F-16
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

9. STOCK OPTIONS:

In February 1996, the Company adopted an incentive stock option plan for
employees, directors, independent contractors and consultants of the Company,
which provides for the grant of stock options and stock appreciation rights.
Options may be granted at exercise prices not less than fair market value of the
Company's common stock at the date of grant and may not be exercised more than
10 years after the date granted. Unless otherwise provided, options vest at a
rate of 20% a year commencing with the date of grant. On March 19, 1999, the
board of directors increased the aggregate number of shares of common stock
reserved for issuance under the plan from 750,000 shares to 1,000,000 shares. Of
the total number of shares of common stock as of December 31, 1999, 421,500
shares of common stock relate to options issued outside of the incentive stock
option plan.

Transactions related to stock options are as follows:

                                           Number             Weighted-average
                                         of Shares*          Price per Share**
-------------------------------------------------------------------------------

Balance at December 31, 1996                350,000                 $ 8.80
Granted                                     450,000                   2.30
Expired/canceled                           (350,000)                 (8.80)
-------------------------------------------------------------------------------

Balance at December 31, 1997                450,000                   2.30
Granted                                     680,000                   5.20
Exercised                                    (5,000)                 (2.70)
-------------------------------------------------------------------------------

Balance at December 31, 1998              1,125,000                   4.10
Granted                                   1,237,500                   3.11
Exercised                                  (437,500)                 (2.06)
Canceled/forfeited                         (907,500)                 (3.78)

-------------------------------------------------------------------------------
Balance at December 31, 1999              1,017,500                 $ 2.49
===============================================================================

 * Adjusted to reflect the 1-for-10 reverse split of common stock effective July
   23, 1999.

** Adjusted to reflect the change of common stock's par value from $.001 to
   $.01.

The weighted-average fair value per share of options granted during the years
ended December 31, 1999, 1998 and 1997 amounted to $0.06, $1.30 and $6.40,
respectively.

Approximately $1,228,624 and $306,000 is reflected in selling, general and
administrative expenses for the years ended December 31, 1999 and 1998,
respectively, relating to options granted to nonemployees.

The Company has elected, in accordance with the provisions of SFAS No. 123,
Accounting for Stock-Based Compensation, to apply the current accounting rules
under Accounting Principles Board Opinion No. 25 and related interpretations in
accounting for its stock options and, accordingly, has presented the
disclosure-only information as required by SFAS No. 123. If the Company had
elected to recognize compensation cost based on the fair value of the options
granted at the grant date as prescribed by SFAS No. 123, the Company's net loss


                                                                            F-17
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

and loss per common share for the years ended December 31, 1999, 1998 and 1997
would approximate the pro forma amounts indicated in the table below:
<TABLE>
<CAPTION>

                                              1999              1998             1997
-------------------------------------------------------------------------------------------
<S>                                      <C>               <C>              <C>
Net loss - as reported                   $(57,344,885)     $(17,063,309)    $ (9,499,802)
Net loss - pro forma                     $(57,454,201)     $(17,253,914)    $(10,138,680)
Diluted net loss per common
 share - as reported                     $     (12.07)*    $      (4.62)    $      (2.57)
Diluted net loss per common
 share - pro forma                       $     (12.09)*    $      (4.67)    $      (2.74)
-------------------------------------------------------------------------------------------
</TABLE>

*This does not give effect to the beneficial conversion feature of preferred
 stock.

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 the years ended December 31, 1999, 1998 and 1997,
respectively; expected volatility of 18 %, 18% and 134%, respectively; risk-free
interest rates of 5 %, 6.01% and 6.00%, respectively; no annualized dividends
paid with respect to a share of common stock at the date of grant, and options
have expected lives of between two and five years.

The following table summarizes information about fixed stock options outstanding
at December 31, 1999:
<TABLE>
<CAPTION>

                                          Options                        Options
                                        Outstanding                   Exercisable
-----------------------------------------------------------------------------------------
                                         Weighted-
                            Number        Average    Weighted-     Number       Weighted-
                        Outstanding at   Remaining    Average  Exercisable at    Average
                         December 31,   Contractual  Exercise   December 31,    Exercise
Range of Exercise Prices     1999      Life (Years)    Price        1999          Price
-----------------------------------------------------------------------------------------
<S>                        <C>            <C>         <C>          <C>             <C>
$ 1.70 - $ 2.70            822,500          3.40      $ 1.81       325,000         $ 1.81
$ 3.00 - $ 5.00            150,000          4.25        5.00        30,000           5.00
$ 5.30 - $ 5.50             35,000          2.85        5.50        17,500           5.50
$ 9.90                      10,000          2.85        9.90         5,000           9.90

-----------------------------------------------------------------------------------------
        Total            1,017,500          3.37      $ 2.49       377,500         $ 2.34
=========================================================================================
</TABLE>



                                                                            F-18
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

10. COMPREHENSIVE INCOME (LOSS):

Comprehensive income, as defined in SFAS No. 130, Reporting Comprehensive
Income, includes all changes in equity during a period from nonowner sources. An
example of items included in comprehensive income that are excluded from net
income are unrealized gains or losses on marketable equity securities. For the
years ended December 31, 1999, 1998 and 1997, changes in accumulated other
comprehensive income (loss) were $1,482, ($38,000) and $3,942,965, respectively,
and relate to unrealized gains or losses on marketable equity securities.

11. INCOME TAXES:

The Company's deferred tax assets at December 31, 1999 consist of the following:

Federal                                                  $ 26,044,000
State                                                       4,465,000
----------------------------------------------------------------------

                                                           30,509,000
Less valuation allowance                                  (30,509,000)

----------------------------------------------------------------------
      Net deferred tax assets                            $     - 0 -
======================================================================

The deferred tax assets are comprised of the tax benefit of net operating loss
carryforwards and capital loss carryforwards from continuing operations are
approximately $6,891,000 and $133,000, respectively, at December 31, 1999. Net
operating loss carryforwards from discontinued operations and loss on disposal
from discontinued operations are approximately $20,279,000 and $47,109,000,
respectively at December 31, 1999. These losses are available to offset future
taxable income through the years 2018 and 2003, respectively.

12. DISCONTINUED OPERATIONS:

On June 23, 1999, the Company formalized its plan to discontinue its
telecommunications and prepaid calling card business consisting of PICK US, PICK
Net and PICK Net UK PLC (collectively "PICK Net"). Accordingly, the
telecommunications and prepaid calling card business are accounted for as
discontinued operations in the accompanying consolidated financial statements.
The Company contracted to sell PICK Net and PICK Net UK PLC on September 13,
1999 and discontinued the operations of PICK US. On January 18, 2000, PICK
completed the sale of all of the stock of PICK Net for nominal value, and had
approximately $10,700,000 of PICK Net's liabilities assumed. The buyer provided
advances to PICK Net during 1999 to continue its operations. The Company issued
100,000 shares of common stock (valued at $1,000,000) of the old debt for
repayment. Subsequent to the closing of the sale of PICK Net, the buyer
defaulted on its payment obligation. The Company has demanded compliance by the
buyer or it will pursue all legal remedies against the buyer.


                                                                            F-19

<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Operating results of discontinued telecommunications and prepaid calling card
business are as follows:
<TABLE>
<CAPTION>

Year ended December 31,                           1999             1998          1997
----------------------------------------------------------------------------------------
<S>                                          <C>             <C>            <C>
Sales of long-distance services              $  2,566,823    $   1,978,441  $  7,669,243
Sales of prepaid calling cards                  3,362,999        7,844,462     1,346,660

----------------------------------------------------------------------------------------
Net sales (a)                                   5,929,822        9,822,903     9,015,903
----------------------------------------------------------------------------------------

Cost of sales                                   7,859,558       16,392,544     8,439,186
Selling, general and administrative             2,332,047        1,786,075     1,617,912
Depreciation and amortization                     451,116          313,906         -
Bad debt expense                                   47,262          125,740       253,270

----------------------------------------------------------------------------------------
Total costs and expenses                       10,689,983       18,618,265    10,310,368
----------------------------------------------------------------------------------------

Loss before amortization of debt placement
 expenses and interest expense                  4,760,161        8,795,362     1,294,465

Amortization of debt placement expenses
 and interest expense                             726,719        5,997,179       157,669

----------------------------------------------------------------------------------------
Loss from discontinued operations            $  5,486,880      $14,792,541  $  1,452,134
========================================================================================
</TABLE>

Assets and liabilities of discontinued telecommunications and prepaid calling
card business are as follows:
<TABLE>
<CAPTION>

Year ended December 31,                                       1999                 1998
----------------------------------------------------------------------------------------
<S>                                                      <C>                 <C>
Cash                                                     $   18,117          $   231,499

Accounts Receivable, less allowance for
 doubtful accounts of $482,735 and
 $351,838, respectively (a)                                 228,885              737,786

Prepaid Expenses and Other Current Assets                    78,218              299,770

----------------------------------------------------------------------------------------
Current Assets from Discontinued Operations                 325,220            1,269,055
----------------------------------------------------------------------------------------

Property and Equipment - at cost, net of
 accumulated depreciation and amortization
 of $771,301 and $313,910, respectively                   2,032,044            1,853,384

Security Deposits                                            36,350               16,348

----------------------------------------------------------------------------------------
Long-term Assets from Discontinued Operations             2,068,394            1,869,732
----------------------------------------------------------------------------------------
</TABLE>

                                                                     (continued)

                                                                            F-20

<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Year ended December 31,                                      1999                 1998
----------------------------------------------------------------------------------------
<S>                                                    <C>                  <C>
Current Liabilities:
  Current portion of debt (b)(c)(d)                    $  3,814,244         $  2,000,000
  Current portion of other debt                             306,130              271,677
  Accounts payable and accrued expenses                   6,815,620            4,893,844
  Deferred revenue - prepaid calling cards                   29,620            2,183,806
  Other current liabilities                                   -                2,967,841

----------------------------------------------------------------------------------------
Current Liabilities from Discontinued
 Operations                                              10,965,614           12,317,168
----------------------------------------------------------------------------------------

Long-term Liabilities from Discontinued
 Operations - less current portion                          736,586            1,042,716

----------------------------------------------------------------------------------------
        Net Liabilities of Discontinued
         Operations                                    $  9,308,586          $10,221,097
========================================================================================
</TABLE>

(a) In 1999, approximately 40%, 19% and 13% of revenue were from three
    customers; in 1998, approximately 72% and 10% of revenue were from two
    customers; and in 1997, approximately 19% and 13% of revenue were from two
    customers. The Company performs periodic credit evaluations of its
    customers, and may, under certain circumstances, require deposits or
    prepayments where deemed appropriate.

    Four customers comprised approximately 21%, 19%, 17% and 16% of gross
    accounts receivable, respectively, at December 31, 1999. The accounts
    receivable balance has been fully reserved at December 31, 1999. Two
    customers comprised approximately 65% and 11% of gross accounts receivable,
    respectively, at December 31, 1998.

(b) In February 1998, the Company amended its existing telecommunications
    agreement with IDT Corporation ("IDT"), one of its long distance
    vendors/customers. Under the terms of the amendment, the Company agreed to
    sell IDT up to 10,000,000 minutes per month of long distance traffic,
    through June 9, 1999, at favorable rates and IDT agreed to lend the Company
    $2,000,000. Of this amount, $500,000 was funded when the transaction was
    signed, $1,000,000 was funded in April 1998 and the remaining $500,000 was
    advanced in June 1998. Concurrently, the Company issued 100,000 warrants
    with an exercise price of $2.40 per share to purchase 10,000 shares of
    common stock, 200,000 warrants with an exercise price of $10.00 per share to
    purchase 20,000 shares of common stock and 100,000 warrants with an exercise
    price of $5.60 per share to purchase 10,000 shares of common stock. The
    warrants are exercisable for a period of one year from the respective dates
    of grant. Management estimates the value of these warrants reflected in
    interest expense in 1998 at $30,879. The loan bears interest at 9% per annum
    and matured on February 9, 1999. In April 1999, the Company renegotiated its
    loan into a new six-month promissory note (the "Note"), in the amount of
    $2,000,000 plus $60,000 accrued interest at 12% per annum.

    Pursuant to an agreement, dated November 12, 1999, the Company extended the
    Note for an additional six months in the principal amount of $2,000,000 plus
    accrued interest. The Company has agreed to issue to IDT 40,000 shares of
    PICK's common stock in exchange for IDT's warrants to purchase 40,000 shares
    of PICK's common stock, which shall be canceled upon such delivery, plus a
    restructuring fee of 50,000 shares of PICK common stock. The Company also
    agreed to pay $250,000 upon the earlier to occur of 30 days from the date of

                                                                            F-21
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

    execution of the agreement or the completion of additional financing for at
    least $5,000,000 for PICK and shall make 6 monthly principal payments of
    $25,000 each on the last business day of each month following the issue date
    of this Note, beginning on November 15, 1999. In the event PICK elects to
    exercise its option to extend the maturity date of the Note from 6 months to
    3 years, it shall deliver to IDT $375,000, payable in immediately available
    funds or, at the option of PICK, 37,500 shares of PICK's common stock.

    Thereafter, PICK agrees to pay IDT $25,000 per month for 12 months,
    including the 6 monthly payments described above beginning on November 15,
    1999. Interest is payable monthly at 9% per annum. This Note will
    automatically convert into common stock at $10.00 per share if the average
    price of the Company's common stock exceeds $15.00 per share for at least 20
    consecutive days during which time the daily trading volume is at least
    20,000 shares. All shares of common stock issued or issuable to IDT were
    included in a registration statement declared effective on November 12,
    1999. PICK has been unable to make any required cash payments to IDT under
    the Note.

(c) During 1999, PICK Net received $224,580 from one of the potential buyers of
    PICK Net to continue its operations.

(d) On September 13, 1999, PICK Net entered into a promissory note with ATN in
    the aggregate amount of $1,589,664, which bears interest at prime plus 2%
    (10.5% at December 31, 1999). This promissory note was entered into in
    connection with the sales of PICK Net as described in the stock purchase
    agreement dated September 13, 1999. The promissory note became due and
    payable on February 4, 2000 and has not been paid (see Note 5(b)).


13. LITIGATION SETTLEMENTS AND RESERVE FOR CONTINGENT LIABILITY:

The Company is involved in various claims and legal actions arising from the
ordinary course of business. Management is of the opinion that ultimate outcome
of these matters would not have a material adverse impact on the financial
position of the Company or the results of its operations, except as described
below.

In February 1997, the Company commenced a mediation action against American
Telephone & Telegraph ("AT&T") seeking $10,000,000 in damages for breach of
contract and fraudulent inducement and malicious conduct under a carrier
agreement (the "Carrier Agreement") entered into in February 1996. The Company
contracted with AT&T under the Carrier Agreement for inbound 800 service and
outbound domestic and international long distance service. The Company claimed
that AT&T reneged on certain commitments to provide the Company with lower
international rates than the Company was invoiced by AT&T. AT&T claimed that the
Company owed it in excess of $1,000,000. In 1996, the Company provided for a
noncash reserve of $1,750,000, which was reduced to $1,100,000 in the third
quarter of 1997 and is a part of the Company's working capital deficiency. The
reserve is included in accounts payable and accrued expenses in the accompanying
consolidated financial statements.

After two mediation sessions, AT&T indicated that it intended to withdraw from
the mediation. Accordingly, on November 5, 1997, the Company filed for
arbitration proceedings against AT&T and reduced its claim to $5,000,000. In
October 1999, the arbitrator found that AT&T was entitled to a net award of
$1,376,447 plus 9% interest per annum since January 31, 1997. The buyer of PICK
Net has assumed $95,000 of this settlement as defined in the purchase agreement
(see Note 12). However, the Company remains liable for the balance of the

                                                                            F-22


<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

judgment and is without the funds to satisfy it. Unless it is able to negotiate
payment over an extended period of time this amount could force the Company into
curtailing its operations or seeking protection under the bankruptcy laws. AT&T
has converted the arbitration award into a judgment which it is attempting to
enforce.

During March 1999, Worldcom Network Services, Inc., d/b/a Wiltel, ("Worldcom")
commenced a lawsuit against the Company in the United States District Court,
Southern District of New York, demanding a judgment in the amount of $1,177,734
and interest at 18% per annum plus costs and expenses. The plaintiff alleges
that the Company failed to pay for telecommunications services provided. On
April 15, 1999, the Company and Worldcom agreed to a settlement (the "Settlement
Agreement"). Under the terms of the Settlement Agreement, the Company agreed to
pay Worldcom $1,256,622 (the "Settlement Payment") in exchange for a full and
complete settlement of Worldcom's lawsuit against the Company. The Company
agreed to pay the Settlement Payment with interest at 16% per annum on or before
January 16, 2000 and for Worldcom to discontinue, without prejudice, the legal
proceedings until such date, although the Company has the option to extend the
forbearance through January 16, 2001. The Company paid Worldcom a 100,000 share
restructuring fee.

In July 1999, L.D. Exchange.com, Inc., a vendor of PICK Net, Inc., commenced
arbitration proceedings against PICK Net before the American Arbitration
Association in San Diego, California, alleging breach of contract. These
proceedings involve the alleged nonpayment of between $250,000 and $500,000. At
December 31, 1999, the Company's current liabilities included approximately
$266,000 payable to L.D. Exchange.com, Inc.

14. COMMITMENTS:

The Company leases facilities under noncancelable operating leases expiring
through February 2004. The future minimum payments due under such leases are as
follows:

Year ending December 31,

            2000                                                 $   395,000
            2001                                                     222,900
            2002                                                     229,600
            2003                                                     236,500
            2004                                                      39,700
----------------------------------------------------------------------------
                                                                  $1,123,700
============================================================================

Rent expense under operating leases was $281,863, $356,781 and $106,586 for the
years ended December 31, 1999, 1998 and 1997, respectively. The Company has the
right to renew its operating leases for terms of between 5 and 15 years.



                                                                            F-23
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

15. GOING CONCERN MATTERS:

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has incurred substantial recurring losses from
operations, has a net capital deficiency in the amount of approximately
$23,848,000 and has a working capital deficiency of approximately $19,913,000 at
December 31, 1999 that raise substantial doubt about its ability to continue as
a going concern. In addition, the Company had negative cash flow from operations
for the years ended December 31, 1999, 1998 and 1997.

Significant short-term obligations exist including the payments of the
settlements with Worldcom and AT&T in the amounts of $1,256,622 and $1,376,447,
respectively (see Note 13). Additionally, a payment of a loan to IDT in the
amount of $2,350,000 (see Note 12) cannot be met through cash flows from
operations. Without the Company's ability to extend the payout terms of the
aforementioned liabilities or obtain additional long-term financing, as well as
increasing revenue and/or decreasing expenses, the Company will be unable to
continue as a going concern. The consolidated financial statements do not
include any adjustments relating to the recoverability of assets or the
classifications of liabilities should the Company be unable to continue as a
going concern.

Furthermore, the Company is in need of immediate financing for working capital.
If the Company is able to obtain adequate funding it expects that its operations
on a going-forward basis will be primarily through its PICK Sat subsidiary,
which has only recently commenced operations and has not generated any revenue
to date.

Should the Company be unable to obtain interim financing in the near term the
Company will be forced to cut back or suspend operations and/or seek protection
under the bankruptcy laws. Although the Company is in discussions with several
sources of financing, there can be no assurance the Company will obtain such
financing.

16. ALLOWANCE FOR DOUBTFUL ACCOUNTS:

Information relating to the allowance for doubtful accounts is as follows for
the year ending December 31:
<TABLE>
<CAPTION>


                   Balance at
                    Beginning         Charged to                              Balance at
                     of Year            Expense           Deductions          End of Year
-----------------------------------------------------------------------------------------
<S>                   <C>               <C>                <C>                  <C>
1997                  $164,163          $253,270           $  90,936            $326,497
=========================================================================================
1998                  $326,497          $125,740            $100,399            $351,838
=========================================================================================

1999                  $351,838         $  47,262           $ (83,635)           $482,735
=========================================================================================
</TABLE>






                                                                            F-24
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


17. SUBSEQUENT EVENTS:

In April 2000, a group of investors from Europe and the Middle East committed an
aggregate of $10,000,000 to PICK Sat (the "PICK Sat Financing"), to occur over a
12-month period. The investors will acquire 20% ownership of PICK Sat and will
be issued equity on the basis of 1% for every $500,000 invested. As of June 5,
2000, $1,000,000 has been invested in PICK Sat. The initial $500,000 was made as
a convertible loan on a pari passu basis with the ATN indebtedness described in
Note 5(b).

                                                                            F-25

<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section l3 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, thereto duly authorized.

                                         PICK COMMUNICATIONS CORP.


Dated: July 11, 2000                     By: /s/Robert Sams
                                             -----------------------------------
                                             Robert Sams,
                                             President and Chairman of the Board


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Registrant in the
capacities and on the dates stated:

Signature              Title                                           Date
---------              -----                                           ----

/s/Robert Sams         Chairman of the Board,                     July 11, 2000
--------------         President and Chief Executive Officer
Robert Sams            (Principal Executive Officer and
                       Principal Financial Officer) and Director