**********
  THIS DOCUMENT IS A COPY OF THE 10-K FILED ON 4/16/97 PURSUANT TO A RULE 201
                          TEMPORARY HARDSHIP EXEMPTION
                                   **********
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ------------------


                                   FORM 10-K


                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended December 31, 1996

                         Commission file number 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 No.)
 incorporation or organization)

  155 Route 46 West, Wayne, New Jersey                                  07470
(Address of principal executive offices)                             (Zip Code)

Registrant's telephone number, including area code:              (201) 812-7425
---------------------------------------------------              --------------

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

                         Common Stock, $.001 par value


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act of 1934  during the  preceding  12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 
days.

Yes  X   No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-K contained  herein,  and no disclosure  will be contained,  to the
best  of  the  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 issuer's revenues for its most recent fiscal year were $9,519,682.

The  aggregate  market  value of the  14,544,477  shares of voting stock held by
non-affiliates of the Registrant, as of March 31 , 1997 was $4,654,233 (assuming
solely for purposes of this calculation that all directors, officers and greater
than 5% stockholders of the Registrant are "affiliates").

The number of shares  outstanding of the  Registrant's  Common Stock,  par value
$.001 per share, as of March 31, 1997, was 35,867,016.

Documents Incorporated by Reference:  Not Applicable.

         Exhibit Index is located on page ____



<PAGE>



Item 1:  Business

(a)      General Development of Business

         PICK  Communications  Corp.  was  incorporated  in  April  1984  under
the laws of Utah as  S.T.V.,  Inc.("STV).

          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 12, 1995,  PRIME  executed a Stock  Purchase  Agreement to
exchange  16,500,000  shares of PRIME's Common Stock for all of the  outstanding
shares of common stock and warrants of Public  Info/Comm Kiosk,  Inc.  ("PICK"),
which made PICK a subsidiary of PRIME.  PICK was incorporated  under the laws of
the  State  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"  hereinafter  include the business and operations of
PICK 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 PICK. In April,  1996,  the Company formed  PICKNET,  Inc.
("PICKNET"),  a wholly owned  subsidiary to resell  International  Long Distance
Services on a wholesale  basis to other  carriers and  resellers.  The financial
statements  contained herein represent the operations of PICK prior to September
12, 1995, and the consolidated operations of the Company thereafter.

         The  Company is  engaged in the  design,  development,  manufacture  or
retooling and marketing of various  telecommunications  products.  To date,  the
Company's  operations have been  concentrated  primarily in the areas of Prepaid
Telephone  Calling  Cards  ("Telephone  Debit  Cards" or  "Calling  Cards")  and
International Long Distance Services on a wholesale (carrier to carrier) basis.

         The Company's  Telephone  Debit Cards provide users with convenient and
cost  effective  access  to local  calls,  long  distance  domestic  calls,  and
international calls through the Company's switching facilities and long distance
network arrangements. The major portion of the Company's operations from January
1, 1994 to May 1, 1996 revolved  around the issuance,  distribution  and sale of
Telephone  Debit Cards.  The  Company's  International  Long  Distance  Services
division, through PICKNET, became a significant business division in May, 1996.

         In October  1995,  the Company  entered  into an  agreement  whereby it
purchased the exclusive worldwide rights
to market, distribute and sell a prepaid cellular telephone system.

         In  December   1996,   the  Company   entered  into  a   non-exclusive,
unrestricted,  worldwide  agreement with ISED Corp. to sell and distribute  that
Company's secured encryption device (SED) point-of-sale (POS) terminal.



<PAGE>



(b)      Financial Information About Industry Segments

         The  Company   operates  on  multiple  tiers  within  one  industry  --
telecommunications.  PICK is engaged in the design, development,  manufacture or
retooling,  distribution  and  sale of  tele-communications  products,  with the
prepaid venue as its primary target.


(c)      Narrative Description of Business

Telephone Debit Card Market Overview

         The  telephone  debit card was  developed in Italy in 1976,  and became
readily available throughout Europe in the mid-1980's.  In 1987, the concept was
introduced in the United States where it has continued to gain widespread
consumer acceptance as both a retail and a promotional telecommunications tool.

         The Company acquired a working knowledge of the technology available in
the public domain  regarding  this rapidly  growing  product.  Accordingly,  the
Company utilizes the current,  industry standard technology but does not own it.
In December 1993, the Company started  production with an initial market test of
a  Telephone  Debit  Card.  The card  proved to be a  technical  success and the
Company further improved its product, developing the COMMUNICASH card in 1994.

         The  market  for  telephone   Calling  Cards  consists  of  distributor
customers,  retail customers,  chain store customers,  promotional customers and
the  ultimate  card  user,  as  well  as  collectors.   Distributors   serve  as
facilitators  and  brokers,  selling to retail  outlets and small chain  stores.
Retailers and larger chain stores sell  directly to the ultimate card user.  The
Promotional  Market is comprised of corporate  customers who use telephone debit
cards as an exciting new marketing option to enhance sales of their own products
or services.  Many companies are offering  consumers  free  telephone  time, via
telephone  debit cards  containing  their corporate or brand name or logo, as an
incentive  to purchase a product or as a "thank  you" after a purchase  has been
made.

         There is also a  significant  Collector  Market  throughout  the world.
Individuals  from all age, gender,  and geographic  groups collect calling cards
with pictures of sports/entertainment  celebrities or commemorating a particular
event.  Purchasers  of  such  cards  do not  expect  to use the  telephone  time
associated with the Debit Cards,  but rather save the cards in "mint"  condition
for potential sale to other collectors at appreciated values in the future.

         The Company has been geared primarily toward the Retail Market with its
trademarked  line of  "COMMUNICASH"(R)  and "las  Americas"(R)  Telephone  Debit
Cards, and toward the Promotional Market with cobranded and private label cards.
To date,  the Company has entered the  Collector  Market only on a very  limited
basis.



<PAGE>



The Company's Telephone Debit Cards

COMMUNICASH

         The Company brought its first prepaid Telephone Debit Card, Communicard
Phone Money,  to market in December  1993 in controlled  distribution.  During a
seven-month  trial  period in 1994,  the  Company  accumulated  a great  deal of
information concerning the product category, the needs of the distribution chain
in the  retail  environment  and the  retail  market  itself,  which  led to the
development and introduction of the current COMMUNICASH card in August 1994. The
Company has taken a comprehensive approach with regard to research, development,
market analysis,  production and distribution for its products which the Company
believes is evident in both the product and the point of sale materials.

         COMMUNICASH cards are currently  non-rechargeable,  disposable  prepaid
Calling  Cards  specifically  designed  for the retail  sales  environment.  The
Company issues these cards in  denominations of $5, $10, $20, $50 and $100 which
can be used  for  local,  long  distance  and  international  calling  from  any
touch-tone phone in the United States at
any time.
An 800 number printed on the back of the COMMUNICASH  card provides the consumer
with network access and a Personal  Identification  Number ("PIN"), also printed
on the back of the card,  allows the  computerized  switch to identify and track
card  usage.  Printed  instructions  and voice  prompts in English  and  Spanish
provide the consumer with step by step  instructions  for card use,  information
regarding  the amount of money  remaining  on the card and the number of minutes
the consumer can talk to the destination number dialed. Calls in a series can be
made without  hanging up and  re-dialing.  To assist the consumer  further,  the
Company  has  contracted  with  Telecommunications   Service  Center,  Inc.  and
Innovative  Telecom Corp., the organizations  which provide telephone  switching
services to the Company, to provide 24-hour customer assistance.

las Americas(R)

         The Company  identified  certain  ethnic or niche  markets where retail
sales are most profitable. The first such market pursued by the Company has been
the Hispanic  community.  To properly  respond to the needs of this market,  the
Company introduced the las Americas card in November 1995. This Spanish-language
version of  COMMUNICASH  featured a revamped  package  design and  Point-of-Sale
materials  specifically  geared toward the Hispanic market, as well as preferred
international rates to countries  frequently called, such as Dominican Republic,
Cuba, Colombia,  Guatemala,  Mexico, etc. The las Americas card is issued in $5,
$10, $20 and $25  denominations  and, to date, the Company has focused marketing
efforts primarily on specific areas in New York, New Jersey,  Texas,  California
and Florida.

         The las Americas card was re-packaged again in mid-1996 to keep current
with successful  market trends.  This card is now a brightly  colored  skin-pack
design which affords greater fraud protection and increased security for the
PIN number.


<PAGE>



COMMUNICASH Co-Branded

         COMMUNICASH Co-Branded was designed to address the prepaid Calling Card
needs of the corporate clients in the Promotional  Market.  Promotional  clients
have included Webcraft  Technologies  and Value Line. Co-branded cards can also
be sold in a retail environment  through existing outlets of a corporate sponsor
such as Kwik Trip, Inc.

This product  features the logo of the corporate  sponsor and/or its product(s),
as well as the COMMUNICASH logo.  Management believes  co-branding also provides
reinforcement  to the  consumer  of the  COMMUNICASH  retail  product  since the
Co-Branded  product includes the name "COMMUNICASH" both on the packaging and on
the card
itself.

Private Label Calling Cards

         The Company learned that huge national and  international  corporations
often prefer to stand alone on the card front and packaging materials.  In these
instances, the Company relinquishes all references to COMMUNICASH,  however, the
card back always "belongs" to the Company.  Information  required by the FCC and
other  governmental  agencies is set forth on the card backs as well as the name
of the responsible telecommunications carrier (the Company).


Sales and Marketing of Telephone Debit Cards

         The Company  targets sales to retail  outlets  through large  wholesale
distributors.  These distributors typically have relationships with a great many
retailers  because they sell candy,  chewing gum,  tobacco,  household items and
assorted  sundries  to  them.  Because  of  the  existing  rapport  between  the
distributor and its retail clients, a new product can be readily introduced into
the sales channel.  With this method, the Company also benefits from having only
one account  receivable with each distributor  rather than thousands of accounts
receivable for individual retail customers. This strategy also obviates the need
for a large  in-house  sales force capable of personally  servicing  each of the
retail  locations in various parts of the country.  Two officers of the Company,
the President and the Vice President of Operations, are directly involved in the
sales efforts and the continued success of these distributors.

Current Market Changes

         The market for  telephone  debit cards is  beginning  to shift toward a
"Point of Sale" design and activation  technology with a recharge function.  The
Company's  distribution  agreement  with ISED offers the ability to  incorporate
these features into the Company's entire product line. These added features will
afford greater  flexibility  to both the Company and the retailers,  will insure
greater retail security (no "live" cards on premises to be lost or stolen), will
reduce  printing costs and should allow a significant  expansion of the existing
distribution network.



<PAGE>



Manufacturing/Production of COMMUNICASH Cards

         The  COMMUNICASH,  las Americas and  COMMUNICASH  Co-Branded  Telephone
Debit  Cards to date have been  designed by Roland  Gebhardt  Design in New York
City.  The  original  cards and several  subsequent  print runs were  printed by
Webcraft  Technologies,  Inc.("Webcraft"). Webcraft, a paper printer, has over
35 press lines in five states capable of unique formatting and product design  
capabilities for the production of prepaid  telephone  calling cards.  Webcraft 
also provides the highest  level of plant and press  security  along  with waste
destruction  and finished  product  security.  The Company procures card print 
runs on a purchase order  basis.  No formal  contract  exists  between  the 
Company  and  Webcraft.

         The most recent  release of the las Americas  card,  because of its new
"skin pack" design for  additional  PIN  protection  and to provide the consumer
with the  packaging  they are now looking for, was printed by Serenity  Press in
Norcross,  GA.  Serenity Press has had prior printing  experience  with the skin
pack design and  packaging  and,  like  Webcraft,  provides the highest level of
plant and press  security  along with waste  destruction  and  finished  product
security.  The Company  procures card print runs on a purchase  order basis.  No
formal contract exists between the Company and Serenity Press.

         The printer most  frequently  utilized for plastic  (rather than paper)
calling cards  produced by the Company in the past,  and for projects  currently
quoted to three  separate  companies,  is Brilliant  Color Card.  This  company,
located in San Rafael,  CA is one of the oldest,  most  respected  plastic  card
printers in the  country.  They also  provide  the highest  level of security as
detailed  above.  No formal  contract  exists  between the Company and Brilliant
Color Cards, Inc.; cards are printed on a purchase order basis.

         Secure PINs are obtained from the Company's selected switching facility
and are directly  transmitted by appropriate  electronic  media to the specified
printer prior to press date.  The  necessary  art work is also  submitted to the
printer in the required  format.  During a web press run, a designated  Webcraft
sales account manager and art/design representative are present to insure smooth
and effective production. Print runs other than on a web press are significantly
less complex and more automated, requiring only print staff in attendance.


Fulfillment

         The Company has an agreement with Players Computer,  Inc.  ("Players"),
located in Hauppauge,  NY for the  fulfillment of all orders for the COMMUNICASH
and las Americas  products.  Players provides 100% secure storage for all of the
cards and handles the  activation  process with the switch so that the cards can
be used. Players also receives shipments directly from the printer following the
press  run,  ships all  orders to the  Company's  customers,  performs  accounts
receivable functions and provides the Company with weekly reports.


<PAGE>



Acquisition Of Telephone Time

         The Company has entered into interconnect  agreements with a variety of
major carriers in the telecommunications field to purchase 800 (inbound) service
and  (outbound)  domestic  and  international  long  distance  services  for the
Company's  Telephone  Debit  Cards  and  International  Long  Distance  Services
divisions.  Under such interconnect agreements, the Company is allowed to direct
domestic,  long  distance  and  international  calls over the  networks of these
carriers,  and is  granted  special  destination  and  rate  discounts  based on
anticipated  volume.  Calls are  routed  through  the  Company's  own  switching
facility (located in Tampa,  Florida and managed by  Telecommunications  Service
Center Inc.), and, since April 1996, through a dedicated switch in New York City
which  is  owned  and  managed  by  Innovative   Telecom   Corporation.   These
interconnect  agreements  were  initially  pursued in relation to the  Company's
International  Long  Distance  Services  division  due to  volume  requirements.
However,  the lower costs  involved here benefit the Company's  Telephone  Debit
Card business as well because the Company becomes, in effect, its own customer.

         The Company  aggregates  minutes from all its customers to increase its
total minute volume and obtain  increasingly  more favorable  rates. The Company
utilizes Least Cost Routing (LCR) of its outgoing  traffic to maximize  benefits
and  profitability.  These reduced costs positively  influence the rates for all
other related businesses of the
Company.


International Long Distance Services

         In  response  to the  opening  of  competitive  long  distance  service
associated  with  the  goals  of the  1984  divestiture  of AT&T  and  the  1996
Telecommunications  Act  passed  by  Congress,  the  Company  entered  into  the
International  Long Distance  Services  business in May of 1996. As stated,  the
Company established interconnect agreements with a variety of major carriers for
800 service (inbound) and for outbound domestic and international  long distance
service in order to resell it to other  carriers and  resellers,  and to benefit
directly from reduced per minute rates. The Company resells  International  Long
Distance Services through PICKNET.

         The traffic from this  division is processed  and reported  through the
Company's  contracted  switch  facility  in New York  City  (through  Innovative
Telecom Corp.). The traffic is billed to the Company's  wholesale customers on a
weekly basis through the Company's  billing agent,  Intertech  Management Group,
Inc., in Chesterfield, MO.



<PAGE>



Government Regulations

         Long distance  telecommunication  services are subject to regulation by
the  FCC  and  by  state  regulatory  authorities.  Among  other  things,  these
regulatory  authorities  impose  regulations  governing  the  rates,  terms  and
conditions for interstate and intrastate telecommunication services. The federal
laws   governing   regulation   of   interstate   telecommunications   are   the
Communications Acts of 1934 and 1996 (the "Communications Acts"), which apply to
all "common carriers," including AT&T, MCI and Sprint, as well as entities, such
as the Company,  which resell the  transmission  services  provided  through the
facilities of other common carriers. In general,  under the Communications Acts,
common carriers are required to charge  reasonable rates and are prohibited from
engaging in unreasonable  practices in the provision of their  services.  Common
carriers are also  prohibited from engaging in  unreasonable  discrimination  in
their rates, charges and practices.

         The  Communications  Acts require  each common  carrier to file tariffs
with the FCC. A tariff is a list of services offered,  the terms under which the
services are offered,  and the rates,  or range of rates,  charged for services.
Upon filing a tariff,  the service  provider is required to provide the services
at the rates and under the terms and conditions specified in the tariff. Failure
to file a tariff could result in fines and  penalties.  The Company  believes it
has filed, or is in the process of filing, all required tariffs with the FCC.

         In addition to federal regulation,  resellers of long distance services
may be subject to regulation by the various state  regulatory  authorities.  The
scope of such  regulation  is in  constant  flux and varies from state to state,
with certain  states  requiring  the filing and  regulatory  approval of various
certifications and state tariffs. As the Company expands the geographic scope of
its long distance operations, it intends to obtain operating authority as may be
required to provide these services.

         The Company  believes  that it is in  substantial  compliance  with all
material laws, rules and regulations  governing its operations and has obtained,
or is in the process of obtaining, all licenses, tariffs and approvals necessary
to conduct its business.  In the future, the Company will continue to attempt to
comply with any new legislation enacted by Congress, court decisions relating to
the  telecommunications  industry, or regulatory actions taken by the FCC or the
states.


Future Directions

         The  Company  plans to  maintain  and expand its  Telephone  Debit Card
business and its  International  Long  Distance  Services  while  simultaneously
developing the Prepaid Cellular Telephone and the Secured Encryption Device
systems.



<PAGE>



Prepaid Cellular Telephone

In October 1995, the Company  entered into an agreement with The Next Edge, Inc.
("TNE") whereby the Company purchased the exclusive  worldwide rights to market,
distribute and sell a prepaid cellular  telephone system.  The Company will also
need to develop the  infrastructure and computer system to support this product.
The agreement,  subsequently  assigned by TNE to The Phone Store, Inc. (TPSI) in
July, 1996, has an initial term of five years with an option for five additional
five year periods, at the Company's sole option, at a cost of $100,000 per year.
Funds for  subsequent  five year periods are  expected to be generated  from the
Company's cash flow. In the event the contract is not renewed, the Company would
be entitled to royalties on the residual sales made,  prior to  cancellation  of
the TPSI contract.

         The  initial  agreement  required  the  Company  to pay TPSI a total of
$500,000,  at a rate of $25,000 per quarter for a period of five years beginning
on January 1, 1996. This requirement was funded and put into escrow in July,
1996.
The Company was required to issue a total of 100,000  shares of its common stock
to TPSI in  increments  of 20,000  shares each year for five years  beginning on
January 1, 1996.  These  shares were also put into escrow for TPSI in 1996.  The
agreement  further  requires the Company to purchase  the circuit  chips for the
system from TPSI, at TPSI's cost. The agreement stipulates that the Company will
be recorded as co-owner of the final United  States  patent  issued  relating to
this  technology  (for which an application is pending) and requires the Company
to implement the international patent applications.

         The Company's prepaid cellular telephone resulted from the explosion of
the use of  cellular  telephones  on a  worldwide  basis and the  percentage  of
individuals who were turned down for "traditional" cellular access. Not everyone
is sufficiently  credit-worthy to own or lease a cellular telephone because once
a person has a cellular phone  activated,  that consumer has an unlimited,  open
line of credit.  Industry  reports suggest that  approximately  one-third of all
applicants  for  cellular  service are  rejected by the  cellular  carriers as a
result of enforcing stringent credit requirements. Other consumers, whose credit
is  "borderline"  by these  standards,  are  required  to pay  significant  cash
deposits to secure a line.

The Company's  prepaid  cellular  telephone  brings prepaid debit  technology to
cellular  phone users and makes it available to  practically  everyone who would
like to use it.  The system  works by  allowing  the phone to  operate  when the
prepaid time is  installed,  and by  automatically  shutting off the  programmed
cellular  telephone  when the  subscriber  has  reached  the  limit  of  prepaid
air-time.  Although  this  system  can  be  used  with  a  variety  of  cellular
telephones,   the  Company  has  chosen   only   Motorola   phones  to  commence
commercialization.

There are other prepaid cellular telephones  available on the market today which
are either  switch-based  or so-called  "smart  phones".  Each of these  systems
perform as prepaid but not in the same manner as "traditional"  cellular phones.
Calls may be limited  to  outbound  only,  and a special  800 number  (sometimes
pre-programmed  into the phone) must be dialed before the destination number can
be accessed.  The systems which allow incoming  calls,  can only do so by having
the caller dial an 800 number  which has been  assigned to a specific  phone and
then  entering a PIN or code  number  assigned  to that  phone.  There is also a
significant  amount of room for error in these systems in that  consumers  often
have to "program" information into the phone via the numerical key pad allowing
for "fat fingering" or number transpositions which render the phone inoperable.

         The Company's prepaid cellular telephone is the first integrated system
consisting of a cellular phone with an internal  programmable computer chip that
allows the phone to operate only for a prepaid amount of time. Because the phone
itself is in control of the on/off processes and tracking the minutes used, the 
Company believes the technology is superior to the switchbased  and "smart" 
prepaid  cellular phones already on the market.  This tamper resistant security
technology  provides the highest degree of protection  from  fraudulent  
charges and eliminates  consumer entry errors.

         To date, approximately 500 units of the TNE technology prepaid cellular
telephones have been produced and successfully  tested in both the United States
and in  South  America.  There  is  little  behavioral  difference  between  the
Company's  system and a "traditional"  cellular phone,  but the Company's system
can also be made  available  for use  outside  the United  States  because  this
specific   technology   can  interface   with  any  cellular   network   without
modification.  In many locations around the world, where the use of credit cards
is less common than it is in the United States and


<PAGE>



currency  is the more  accepted  manner of  payment,  this  system  provides  an
attractive means for cellular access.

In 1996,  the Company  entered  into  exclusive  foreign  license  agreements  
with Firenze  Ltd.  ("Firenze")  and Yakimoto Investment,  Ltd.  ("Yakimoto"). 
These  companies  subsequently  failed to demonstrate the ability or  financial
strength necessary to commercially capitalize on the Company's technology in 
the markets they chose, thus, the Company revoked these licenses in the first 
quarter of 1997.

The Company  anticipates  reselling  specific foreign territory  licenses during
1997.

In the last quarter of 1995, the Company granted an exclusive  license to market
and sell its  prepaid  cellular  telephone  in the  United  States and Canada to
P.C.T.  Prepaid  Telephone,  Inc.  ("PCT"),  which  recently  commenced  limited
operations.  The Company holds  approximately  79% of PCT's  outstanding  common
stock as of March 31, 1997.

PCT has agreed to purchase the licensed technology and equipment from the 
Company on the  basis of cost  plus ten  percent  (10%),  and to pay a  royalty 
fee to the Company of 5% of all gross sales derived from equipment and air time
on a monthly basis.

The Company has entered into  contracts  for AT&T  Wireless  Services in the New
York  Metropolitan area and in Florida for air time. These contracts provide for
the Company to pay AT&T Wireless on a time plus basis,  with the Company  having
the ability to assign individual telephone numbers from equipment in its Wayne,
NJ  headquarters  office.  The  Company is  currently  seeking  agreements  with
wireless  service  providers in other parts of the United States in order to lay
the groundwork for expansion into other regions as well.


<PAGE>



Secured Encryption Device Transactions

The Company has acquired unrestricted  distribution rights to a patented Secured
Encryption  Device (SED) under a SED System  Operator  License  Agreement.  This
device  which  performs  certain  functions  similar to a  VeriFone,  utilizes a
different  technology  and is less  costly.  The  Company  plans to market  this
Secured  Encryption  Device  for a  retail  cost  significantly  less  than  the
competitive  products  (VeriFone,  Hypercom  and USW  which  range  from $500 to
$1,400).  The Company is ready for  immediate  release of this new product.  The
device is  expected  to have a positive  impact on Company  revenues  in several
ways.

First, in the prepaid  Telephone Debit Card market,  for example,  sales to date
have been somewhat suppressed due to the retailers' concerns regarding the costs
and security issues involved in carrying "live" inventory. With the
SED
machine, the Company will be able to introduce a Point of Sale activation system
to allow the  Company to ship  inactive,  non-denominational  and  re-chargeable
cards  for  POS  activation  at the  retail  location,  thus  eliminating  these
concerns.  It is anticipated that this will increase the Company's  distribution
locations, stimulate sales and lower accounts receivable.

Second,  it is anticipated  that the Company will benefit from reduced  printing
costs for Telephone Debit Cards because  all  card faces in a print  run will be
identical.   Prior  to  the   availability   of  Point  of  Sale  activation  of
non-denominational cards, each print run contained multiple card classifications
resulting in additional print charges for plate and color changes. 

Another  consideration  for both the  Company  and the  retailers  which will be
eliminated  by the  SED  unit,  is the  need to  calculate  the  number  of each
denomination  card  necessary to meet consumer  demand.  With the SED activation
capabilities,  cards will be activated for whatever  dollar value the particular
user demands. The Company believes the point of sale activation will also open
up additional channels of  distribution  for the Company and will  provide  
increased  cash flow due to faster electronic payment for card sales.


Competition

The Company faces intense  competition  in the marketing and sale of its prepaid
telephone  Calling  Cards.  The  Company's  Telephone  Debit  Cards  compete for
consumer  recognition  with  other  prepaid  phone  cards  at  both  ends of the
spectrum. Many small, unreliable companies have entered the telephone debit card
market  by  advertising  impossibly  low  calling  prices  which  are  extremely
attractive to the buying public.  Unfortunately for the entire industry, many of
these companies have already failed and consumers have felt the pain of having a
card that is no longer valid.  Many other cards are marketed by companies  which
are  well-established  and  have  significantly  greater  financial,  marketing,
distribution,  personnel  and other  resources  than the  Company.  These  large
companies can implement extensive advertising and promotional campaigns although
marketing a retail product to the consumer is not their strength, especially in


<PAGE>



the niche markets. Certain of these competitors, including AT&T, MCI, Sprint and
the "Baby  Bells," such as Bell  Atlantic  and Bell South,  have  dominated  the
telecommunications  industry in the past but the entire  industry  in  presently
undergoing  a  significant  shift  and  these  "giants"  are now  facing  strong
competition from smaller, more agile and less bureaucratic  organizations,  such
as the Company.  Many of these large telephone companies,  as well as retailers,
such as Southland Corp., and companies engaged in the marketing of collectibles,
have also entered or have announced  their intention to enter into the telephone
debit card sector of the industry.

The International Long Distance Services business is also highly competitive and
is affected by rapidly changing per minute rates to key international cities and
countries.  The Company's future success will depend upon its ability to compete
with  other  similar-sized  carriers,  many of which have  considerably  greater
financial and other  resources  than the Company.  The ability of the Company to
compete  effectively  will depend on its ability to provide high quality service
at  competitive  prices,  and to fund the cost of acquiring the use of effective
switching facilities. Both of these factors are essential elements for success.

The prepaid  cellular  telephone  business is another highly  competitive one in
which the ability to succeed depends on the quality of the product,  the ease of
its use and the resources available to market and continually improve it.
Again,
"known" companies and companies which have been able to enter the market already
are  perceived  as  having a strong  advantage  over  their  competitors.  This,
however,  might not be the only issue.  Recent prepaid cellular  conferences and
industry articles have indicated consumer  dissatisfaction  with the constraints
of switch-based services available.

The telecommunications industry is characterized by frequent introduction of new
products  and  services,  and is subject to changing  consumer  preferences  and
industry trends.  The markets for  telecommunications  products and services are
also  characterized  by  rapidly  changing   technology  and  evolving  industry
standards.

The  Company  is  not  presently  aware  of any  competitor  offering  the  same
chip-controlled prepaid cellular telephone technology.  Although the product has
a patent pending,  larger, more established  entities with greater financial and
personnel  resources than those of the Company may continue to enter into direct
competition with the Company.  However, the Company reasonably believes it has a
superior  product  offering  and will be able to  capture a  significant  market
share.

The competition for the Secured  Encryption  Device  Transactions  is, as stated
previously, the existing similar devices such as VeriFone, Hypercom and USW. The
Company  believes  it's  advantage  in  this  market  is  its  already  existing
penetration  of a specific  niche  which  currently  does not have,  or has very
limited access, to other means of electronic
credit and/or debit transactions because of the prohibitive costs involved.



<PAGE>


Trademarks

The Company has obtained  trademark  registrations for "Communicard by PICK(R)",
"PICK(R)", "COMMUNICASH(R)", "las Americas(R)," and "Love Call(R) ."

Patents

The Company is a co-owner of a pending  patent  (together  with The Phone Store,
Inc.) on the technology for a chipcontrolled  prepaid cellular  telephone system
and expects to implement international patent filings and/or registrations
pertaining to such pending patent during 1997.

Employees

The Company  employs a full-time  staff of ten and considers its relations  with
its employees to be satisfactory.

Item 2:  Properties

The Company  leases  office  space at Wayne  Interchange  Plaza II, 155 Route 46
West,  Third  Floor,  Wayne,  New Jersey  07470 on a 63 month lease at a current
monthly rental of $8,620, which ends on September 30, 2001.

Item 3:  Legal Proceedings

In February 1997,  the Company  commenced  legal  proceedings  against  American
Telephone  and  Telegraph  Company  ("AT&T")  seeking  $10 million for breach of
contract,   fraudulent  inducement  and  malicious  conduct  under  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 in order to resell it to other carriers and
resellers,  and to directly  benefit from reduced per minute rates.  The Company
claims that AT&T  reneged on its  commitments  to provide the Company with lower
international  rates and the Company  relied on AT&T's  promises  and  sustained
substantial damages. Nevertheless,  AT&T billed the Company for higher rates and
claimed the Company owes it approximately  $1,000,000.  The Company has reserved
for this contingency  although it believes that AT&T does not have a meritorious
claim.


Item 4:  Submission Of Matters To A Vote Of Security Holders

None



<PAGE>


<PAGE>

                                     PART II


Item 5:   Market Price of, and Dividends on the Registrant's Common Equity and 
Related Stockholder Matters

     The Company's Common stock has been traded on the  over-the-counter  market
and reported on the OTC Bulletin Board, under the symbol "PICK" since September,
1996. The Company's Common Stock had been traded in the over-the-counter  market
and reported on the OTC Bulletin Board,  under the symbol "PRMF" from August 17,
1995 through September 23, 1996. 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 periods indicated.  The prices represent inter-dealer quotations,
without  retail  mark-up,  mark-down  or  commission,  and may  not  necessarily
represent actual transactions.
<TABLE>
<CAPTION>

                                 Bid Prices

<S>                                                       <C>              <C>


Period ........................................           High             Low

Calendar Year 1995

  Third Quarter ...............................           $    6.625       $   1.00
  (August 17, 1995 to
   September 30, 1995)

  Fourth Quarter ..............................           $    6.25        $   2.00



Calendar Year 1996
                                                          $    4.50        $   2.00
  First Quarter ...............................           $    4.00        $   2.44
  Second Quarter ..............................           $    3.50        $   1.00
  Third Quarter ...............................           $    1.13        $   0.19
  Fourth Quarter

First Quarter, 1997 ...........................           $    0.94        $   0.17
                                                                           
</TABLE>

         As of March 31, 1997, there were approximately 195 record  shareholders
of the Company's  Common Stock.  The Company  reasonably  believes  there are in
excess of 300 beneficial owners of its common stock.

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



<PAGE>



Item 6:  Selected 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 data presented for, and as of the end of the years
ended December 31, 1993,  1994, 1995 and 1996 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  consolidated  balance sheet as of December 31, 1994, 1995 and
1996 and the  consolidated  statement of operations for the years ended December
31,  1994,  1995 and 1996 and the  accountants'  reports  thereon,  are included
elsewhere in this Report.


Statement of Operations Data:
<TABLE>
<CAPTION>

                            Years Ended December 31,




<S>                      <C>            <C>            <C>            <C>
                                1993           1994           1995           1996
                         -----------    -----------    -----------    -----------

Net sales ............   $    23,301    $   529,913    $ 1,565,039    $ 5,869,682

Cost of sales,
excluding provision
for contingency ......   $    10,067    $   753,346    $ 1,387,459    $6,401,231 (1)


Gross profit/(loss),
before cellular
license sales and ....   $    13,234    ($  223,433)   $   177,580    ($  531,549)
contingency

                                                                               
Provision for ........   $         0    $         0    $         0    $ 1,749,563 (1)
  contingency (1)

Gross margin before
cellular license sales
                         $    13,234    ($  223,433)   $   177,580    ($2,281,112)

Cellular license .....   $         0    $         0    $         0    $ 3,650,000
  sales

Gross margin and
  cellular license
  sales ..............   $    13,234    ($  223,433)   $   177,580    $ 1,368,888


Operating expenses ...   $   171,340    $ 1,027,147    $ 1,203,625    $ 2,952,646


Net Profit/(Loss) ....   ($  158,106)   ($1,250,580)   ($1,071,041)   $ 1,635,790


Net Profit/(Loss)               -             -             ($0.03)          $.04
per Share

Weighted average                -             -         40,442,516     45,251,776
number of                                                                                         
shares
outstanding (2)


</TABLE>

<PAGE>



Balance Sheet Data:
<TABLE>
<CAPTION>
                               as of December 31,



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

                             1994           1995              1996
                      -----------    -----------    --------------

Cash ..............   $    17,659    $   110,715    $      87, 712

Working Capital ...   ($1,127,590)   ($1,074,159)      ($3,152,216)

Total Assets ......   $   319,835    $ 2,449,024    $    8,917,149


Total Liabilities .   $ 1,341,521    $ 3,079,923    $    6,582,429
                                                    
Minority Interest .          --      $   215,508    $    1,465,141
                                                    
Shareholders Equity   ($1,021,686)   ($  630,899)   $    2,334,720

<FN>


     The Total cost of sales  ($8,150,794)  includes a provision for  contingent
         costs of  $1,749,563.  Net of the provision for contingent  costs,  the
         cost of sales is $6,401,231.

(2)      Public Info/Comm Kiosk, Inc. (Kiosk) was incorporated in August 1992, 
         and commenced operations in January 1993.  The shares of  the Company 
         are expressed on a fully diluted basis.
</FN>
</TABLE>





<PAGE>



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.

         The Company was incorporated in April 1984 under the laws of Utah as
S.T.V., Inc. ("STV").

         All activities are presented,  based on the actual  operations of Kiosk
for periods prior to September 12, 1995. Pick Communications Corp., (f/k/a Prime
International  Products,  Inc.),  had no operations prior to September 12, 1995.
PCT was incorporated in October 1995, and had no operations through December 31,
1995. As of December 31, 1995, the Consolidated Financial Statements include the
Company,  Kiosk,  and PCT.  In April  1996,  the Company  formed  PICKNET,  Inc.
("PICKNET"),  a wholly owned  subsidiary to resell  International  Long Distance
Services on a  wholesale  basis to other  carriers  and  resellers.  The Company
currently holds  approximately  79% of PCT's outstanding  common stock,  thereby
having control of all of these companies.  Accordingly,  Kiosk,  PICKNET and PCT
are  included  in the  Consolidated  Financial  Statements  of the Company as of
December 31, 1996.

         This Report includes forward-looking  statements that involve risks and
uncertainties,  including the timely  development and acceptance of new products
in a constantly evolving telecommunications  industry, the impact of competitive
products and pricing,  government  regulations and the other risks detailed from
time to time in the Company's SEC reports.


Results of Operations

         The  Company  generates  revenues  from the  sale of  telecommunication
products and services,  including  prepaid Telephone Debit Cards to distributors
for resale to retail  outlets,  International  Long  Distance  Services to other
carriers and resellers,  and marketing and sale of licenses for Prepaid Cellular
Telephones in both domestic and international markets.

         While the Company has achieved  steadily  increasing levels of revenues
since  inception,  the Company's  operating  expenses  have  exceeded  revenues,
resulting in operating  losses of $1,250,580  and $1,071,041 for the years ended
December 31, 1994 and 1995 on a  consolidated  basis,  respectively.  The losses
incurred  through 1995 were  primarily  attributable  to start-up  costs,  costs
incurred in  connection  with the  development  and  promotion of the  Company's
products  and the  hiring of  additional  personnel  to  support  the  Company's
operations.  In 1996, the Company realized a net profit of $1,635,790.  Although
the  Company  incurred   operating  losses  relating  to  the  building  of  its
telecommunications  infrastructure,  these were more than offset by gains on the
exchange of securities and the sale of prepaid cellular telephone licenses.



<PAGE>



         The  Company's  primary  costs of  sales  are the  costs  of  telephone
services for both Telephone Debit Cards and for the International  Long Distance
Services.  The cost of sales also includes the production of the Telephone Debit
Cards - their printing, fulfillment and distribution, as well as the fixed costs
associated with International Long Distance Services.


         Generally  Accepted  Accounting  Principles  for  Debit  Card  revenues
require the Company to recognize:

         -        revenue  only at the time the Company  actually  provides  the
                  service to the consumer  (based on switch  reporting of actual
                  usage).  The unused portion of the Telephone  Debit Card sales
                  remains in deferred revenue until it is used.
         -        the carrier  costs for service  based on switch  reporting  of
                  actual usage (which is also recognized in revenue).
         -        all  other   direct  costs   (non-traffic   costs  for  design
                  royalties, printing,  fulfillment, sales commissions, etc.) at
                  the time of initial sales made ("up front" costs).

         The Company  anticipates that  substantially  all of the telephone time
associated  with the Telephone  Debit Cards will be used by its customers  since
these cards are  primarily  issued for  immediate  consumption  by the  ultimate
consumer.


Year ended December 31, 1996 compared with the Year Ended December 31, 1995:

         On a consolidated  basis, the Company generated  revenues of $5,869,682
and  $1,565,039  for the years ended  December 31, 1996 and 1995,  respectively.
These revenues (and related costs)  primarily  represent the activity of PICKNET
for International Long Distance Services amounting to $4,441,342,  and Kiosk for
Telephone  Debit Card usage  amounting  to  $1,425,340.  The  Company  also sold
licenses for the international marketing and sale of Prepaid Cellular Telephones
and services in 1996,  amounting to $3,650,000.  PCT was  established on October
24, 1995, had no operations in 1995 and no sales in 1996.

         The increase in revenues of  $4,304,643,  or 275.1%,  was primarily the
result of the Company's  expansion,  via PICKNET,  into the  International  Long
Distance Services business. There were only nominal commission revenues for long
distance  activity in 1995. The Company's  Debit Card revenues were $ 1,425,340,
compared  to  $1,565,039  in 1995.  While the  Company  believes  the market for
Telephone Debit Cards continues to gain acceptance and growth,  the Company held
back on the  marketing  of  these  cards  in 1996  (due  to  switching  facility
shortcomings) until pending upgrades were completed in late 1996.

         The  gross  margin  loss   (excluding  the  $1,749,563   provision  for
contingency) of $531,549,  was 9.1% of net sales for the year ended December 31,
1996,  compared  to a gross  margin of  $177,580  (or  11.3%) for the year ended
December 31, 1995. The gross margin



<PAGE>



reflects the deferral of revenues until services are rendered and  front-loading
of all expenses except airtime for Telephone  Debit Cards,  as described  above.
All costs for International Long Distance Services activity is recognized in the
period  incurred.  The gross  margin loss in 1996  compared to 1995 is primarily
attributable  to the incurrence of  disproportionate  start-up costs relating to
the  International   Long  Distance  Services  and  the  continued  low  volumes
associated  with both  Telephone  Debit Cards and  International  Long  Distance
Services.  The vast proportion of the sales activity  (75.7%) in 1996 related to
International  Long Distance  Services  activity  compared to 0% in 1995,  while
98.6% of sales in 1995  related to  Telephone  Debit Card  activity  compared to
24.3% in 1996.

         The  Company  sold  prepaid  cellular  telephone  licenses in the first
quarter of 1996, in exchange for 1,500,000  restricted shares of common stock in
Ultimistics,  Inc. valued at $3,600,000  after a 70% discount to market.  In the
second quarter, the Company exchanged a special developmental license related to
use of the prepaid  chip  technology  with the  Internet.  The Company  received
500,000  restricted  shares of common stock in The Internet  Channel Inc.  which
were valued at $0.10 per share. In 1995, there were no such sales activities.

         The Company realized a gross profit margin of $3,118,451, including the
sale of the prepaid cellular licenses and excluding the provision for contingent
costs of  $1,749,563  in 1996,  compared to a gross margin of $177,580 for 1995.
The Company incurred a gross margin loss of $531,549 in 1996 compared to a gross
margin of $177,580 in 1995, an unfavorable variance of 709,129 (or 399%).

         Total  operating  expenses were $2,952,646 and $1,203,625 for the years
ended  December  31, 1996 and 1995,  respectively,  representing  an increase of
$1,749,021,  or 145.3%.  Selling and  marketing  expenses  for 1996  amounted to
$1,077,766  compared to $257,487 in 1995, an increase of $820,279 or 319%. These
expenses are primarily attributable to the expansion of total revenue activities
and the establishment of a distribution network to support the Company's planned
pre-paid products. As a result,  marketing expenses were 18.4% of total revenues
for the year ended December 31, 1996, compared to 16.5% of revenues for the year
ended December 31, 1995.

         General and  administrative  expenses of $1,473,376  for the year ended
December  31,  1996 were  higher  than those of the prior year by  $600,363,  or
68.8%,  primarily  associated  with  the  establishment  of a staff  ($512,479),
facility  ($28,796)  and office  expense  ($43,178) to support  higher levels of
operations. In connection with the Company's recapitalization in September 1995,
the Company  received  additional  working capital which it used to increase its
level of  business  activity  in 1996.  As a result,  these  expenses  increased
substantially in 1996, compared to 1995, as planned.

         Operating expenses include  depreciation of $39,258 and $30,475 for the
years ending December 31, 1996 and 1995,  respectively,  as well as amortization
expense of $142,500 in 1996  relating to the prepaid  cellular  patent  procured
late in 1995. No amortization was appropriate in




<PAGE>



1995. The interest expense  represents an accrual of interest relating to a bank
loan in 1996;  the 1995 interest  expense  relates to a disputed  vendor charge,
which was subsequently settled in 1996 in the Company's favor.



<PAGE>



         The Company  realized a net  operating  profit of $1,635,  790 in 1996,
including  extraordinary items shown in the consolidated financial statements in
a  separate  section  of this  document,  compared  to a net  operating  loss of
$1,071,041 in 1995, an improvement of $2,706,905.

         The Company expects to make the following improvements:

         -        To  the  Telephone  Debit  Card  service  - by  instituting  a
                  point-of-sale activation process and a rechargeability feature
                  via the SED terminal
         -        By increasing the International Long Distance Services 
                  business through the acquisition of new and upgraded 
                  switching facilities
         -        By developing the prepaid cellular telephone business

         The  Company  owned  4,500,000  restricted  shares of  Common  Stock of
Ultimistics,  Inc.,  and  an  additional  200,000  shares  of  Common  Stock  of
Ultimistics,  Inc.,  through  PCT, as of December 31,  1996,  which  represented
approximately 16.5% of Ultimistics'  outstanding shares at that time. The shares
were  restricted  securities  under Rule 144 of the  Securities  Act of 1933, as
amended,  and could not be publicly sold until 1997. The Ultimistics shares were
valued at $4,762,035 on the balance sheet of the Company at December 31, 1996.

         At December 31, 1996,  the Company,  through PCT,  also held  5,000,000
shares of Firenze, Ltd., which also are restricted securities under Rule 144 and
could not be publicly sold until 1997. The Firenze shares were valued at $625.

         In June 1996, the Company acquired 500,000 shares of The Internet
Channel Inc. in exchange for a special developmental  license. The Internet 
shares were valued at $50,000.


Stock and Marketable Security Transactions Subsequent to 1996

         In February,  1997 the Company exchanged  $2,550,000 face amount of the
prepaid  advertising  with IES for the  remaining  750,000  shares of its common
stock issued into escrow for IES.

         In February,  1997 the Company  agreed to cancel the remaining  600,000
shares of the  Company's  common stock held in escrow for the minor  stockholder
and the balance remaining of the subscription  receivable.  The Company and this
stockholder were unable to re-negotiate this subscription of shares.

         In March, 1997, the Company exchanged  5,000,000 of its shares in 
Firenze and reacquired 5,000,000 restricted shares of PICK Communications Corp.
common stock, as well as 6,250,000 restricted shares of P.C.T. Prepaid 
Telephone Inc. common stock from Firenze Ltd.




<PAGE>




         In March, 1997, the Company exchanged  1,000,000 of its shares in
Ultimistics, Inc. and reacquired 1,000,000 restricted shares of PICK 
Communications Corp. common stock, as well as 1,000,000 restricted shares of 
P.C.T. Prepaid Telephone Inc. common stock from New Century Media Inc.

         In March,  1997,  the Company  exchanged a total of 300,000  restricted
shares of  Ultimistics  Inc.  common  stock and  $420,000  book value in prepaid
advertising from the International  Barter Group for 5,000,000 restricted shares
of P.C.T. Prepaid Telephone Inc.
common stock from an individual.

         In  March, 1997, the Company exchanged  1,500,000 of its restricted 
shares in Ultimistics Inc. for 4,000,000 restricted shares of P.C.T. Prepaid 
Telephone Inc. common stock from Yakimoto Investment Ltd.

         In  March, 1997, the Company exchanged  1,900,000 of its restricted 
shares in Ultimistics Inc. with Fairbanks for 380,000 restricted shares of 
Fairbanks, Inc. common stock.

         As a result of the above-described transactions, the Company obtained a
total of  7,350,000  shares  of its own  common  stock in 1997 in  exchange  for
various  marketable  securities  and assets held as of  December  31,  1996.  In
addition,  the Company  obtained  the  16,250,000  share of common stock of PCT,
resulting  in a total  ownership of  39,000,000  shares or 79.0% of PCT's common
stock.

         Please see the discussion of investment in marketable equity securities
in "Liquidity and Capital Resources," for further information.


Stock Options and Warrants

         In 1994,  Pick,  Inc.  issued warrants for 5,000 shares of common stock
each to three  individuals.  The merger  agreement  between the Company and Pick
Inc.  recognized these warrants and converted them to warrants in the Company of
82,500  shares of the Company's  common stock to each of the three  individuals.
These warrants expired unexercised at December 31, 1996.

         In February,  1996,  the Company  adopted the "1996 Stock Option Plan,"
which  provides the  authority to grant up to 5,000,000  shares of the Company's
common stock to the Company's directors, officers and / or employees. There were
no options  outstanding  at the beginning of 1996.  Under the plan,  the Company
granted  options for 500,000  shares each to the  directors  and officers of the
Company,  aggregating grants of 3,500,000 shares.  Please see Item 11: Executive
Compensation.  In October 1995, the Financial  Accounting Standards Board (FASB)
issued Statement of Financial  Accounting  Standard (SFAS) No. 123,  "Accounting
for Stock Based



<PAGE>



Compensation". SFAS No. 123 requires that companies that continue to account for
employer  stock  options  under APB No. 25  disclose  pro-forma  net  income and
earnings  per  share as if  statement  123 had been  applied.  Pursuant  to this
requirement,   net  income  as  reported  is  $1,635,790  and  would  have  been
$1,295,415.  Primary and fully diluted earnings per share are $.04 per share and
$.04 per share, and would have been $0.03 per share and $.03 per share.




<PAGE>



Year ended December 31, 1995 compared with the Year Ended December 31, 1994:

         On a consolidated  basis, the Company generated  revenues of $1,565,039
and $529,913 for the years ended December 31, 1995 and 1994, respectively. These
revenues (and related costs) primarily represent the activity of Kiosk, inasmuch
as the Company was inactive until the reverse acquisition on September 12, 1995.
PCT was established on October 24, 1995, and had no operations in 1995.

         The increase in revenues of  $1,035,126,  or 195.3%,  was primarily the
result of an expansion in the Company's customer base. The Company believes that
the growth in its customer  base is  attributable  to the growing  acceptance of
telephone  debit  cards  in  the  United  States  and  the  Company's  expanding
distribution  network.  The gross profit  margin of  $177,580,  was 11.3% of net
sales for 1995,  compared to a gross  margin loss of  $223,443,  or 42.2% of net
sales,  for 1994.  The gross  margin  reflects  the  deferral of revenues  until
services are expected to be rendered and  front-loading  of all expenses  except
time,  as  described  previously.  The  improvement  in 1995 over 1994  occurred
primarily because significant  one-time development expenses associated with the
Telephone  Debit Card  product  was  charged to cost of sales in 1994.  The vast
proportion  of the sales  activity  (98.6% in 1995 and 95.7% in 1994) relates to
Telephone Debit Card sales.

         Operating  expenses were $1,203,588  (net of minority  interest of $37)
and  $1,027,147  for 1995 and 1994,  respectively,  representing  an increase of
$176,441,  or 17.2%. This increase is due to higher  administrative  expenses of
$443,878,  or 104.1%,  associated with the  establishment of a staff ($254,135),
travel expenses ($99,189) and facility and communications  ($47,215),  offset by
reduced sales and marketing expenses of $316,237,  or 55.2%. Sales and marketing
expenses were  reduced,  at the  direction of  management,  to conserve cash and
establish  the  administrative   support.   In  connection  with  the  Company's
recapitalization  in September  1995, the Company  received  additional  working
capital which it used to increase its level of business  activity.  As a result,
general  and  administrative  expenses  increased  substantially  in the  fourth
quarter of 1995.

         Operating expenses include depreciation of $30,475 and $11,967 for 1995
and 1994,  respectively and provisions for bad debts of $42,650, and $15,028 for
1995 and 1994, respectively.

         For the reasons  itemized  above,  the Company  incurred net  operating
losses of  $1,071,041  for  1995,  compared  to  $1,250,580  for the year  ended
December 31, 1994, representing an improvement of $179,539, or 14.4%.




<PAGE>



Liquidity and Capital Resources

         The Company has an  accumulated  deficit of $510,482 as of December 31,
1996. During the year, it had a net decrease in cash of $23,003.

         Operating  activities used $1,218,381 and were primarily  composed of a
net profit of  $1,635,790,  which  included  the sale of  cellular  licenses  of
$3,650,000  and a gain on the exchange of  securities  amounting to  $4,784,000.
They also  included a provision  for  deferred  income  taxes on the exchange of
those securities amounting to $1,808,000 and a provision for contingent expenses
amounting to  $1,749,563  (See Item 3: "Legal  Proceedings").  Amortization  and
depreciation   contributed  a  positive  cash  flow  of  $142,500  and  $39,258,
respectively.  Decreases in current assets,  primarily net accounts  receivable,
prepaid  advertising expense and prepaid debit card inventory provided $488,816,
while increases in current  liabilities,  primarily deferred revenues,  customer
deposits and accrued expenses, provided $1,452,701.

         Investing activities required the use of $437,886. The Company paid its
debt to The Phone Store, Inc., using $371,920,  to fully fund its commitment for
rights to the prepaid  cellular  telephone  technology over the next four years.
Capital  expenditures  of $65,966 were primarily used for the purchase of office
furniture and computer equipment.

         Financing activities provided $1,633,264, primarily through the sale of
stock and incurrence of short term bank debt. The Company received  $125,000 for
the sale of its  stock and  $325,000  in  payment  of stock  subscriptions.  The
Company  paid down its debt to The Phone  Store,  Inc. in the amount of $75,000,
and also,  through a short term credit facility with Banco Popular FSB, obtained
a bank loan for  $750,000.  In  addition,  funds were  advanced by  stockholders
amounting to $75,152, of which $50,000 was repaid.

         The Company  anticipates  operating  cash flow will  increase  from the
resale of wholesale International Long Distance Services,  pending the financing
of  upgraded   international   switching   equipment,   and  from  the  upgraded
point-of-sale and rechargeable Telephone Debit Card sales, once the upgrades are
in place.  In support of these  businesses,  additional  monthly  fixed costs of
$25,000 - $75,000 will be required to increase  capacity,  but they are expected
to be more  than  off-set  by  increased  gross  margins.  With  respect  to the
Company's  plans to  implement  the prepaid  cellular  telephone  business,  the
Company will  require  additional  capital to bring this product to market.  The
Company  intends to raise this capital  through a combination  of prepaid sales,
acceptance of cash or letters of credit as deposits toward  equipment  purchases
and  coventures  and/or the  possible  public or private  sale of the  Company's
equity and/or debt  securities.  The Company has agreements  with two investment
banking firms to raise up to  $10,000,000  on a best efforts  basis.  With these
funds,  the Company  expects to develop the Prepaid  Cellular  Telephone and its
Point-of-Sale  Debit Card process,  and expand its  International  Long Distance
Services switching capacity.  There are no other contracts currently in place to
raise capital.




<PAGE>



         The Company has no significant commitments for real estate purchases.

See Item 2:

"Properties" for a description of the Company's office lease.




<PAGE>



The Company plans to spend between $800,000 and $900,000 in capital expenditures
over the next twelve months.  These  expenditures will be made in support of the
growth  of all  lines  of  business,  in the  form  of long  distance  switching
equipment, computer equipment, software, furniture and office equipment.

         In 1995,  the Company  entered  into  commitments  to obtain  blocks of
telephone  time at favorable  rates  (amounting to $420,000) over the succeeding
year. In 1996,  the Company  exchanged that telephone air time for $2,000,000 in
advertising  for use over the subsequent  two years.  In March 1997, the Company
exchanged  it  rights  to  this  prepaid   advertising  and  300,000  shares  of
Ultimistics  common stock to an individual  in exchange for 5,000,000  shares of
PCT.

         In January  1996,  the  Company  entered  into an  agreement  to obtain
$3,000,000 of prepaid advertising in exchange for 1,150,000 shares of its stock.
This  prepaid  advertising  was  available  for  use  for  any of the  Company's
marketing efforts,  including the prepaid cellular business.  The Company used a
portion of this  advertising in 1996. In 1997, the Company  exchanged all of the
remaining book value of this asset  ($2,038,155)  with  International  Executive
Services,  Inc., a  non-affiliated  entity,  to reacquire  750,000 shares of the
Company's outstanding common stock for its treasury.

         The Company expected to receive the proceeds from the sale of 1,250,000
shares  of  Common   Stock  of  the  Company   through   subscriptions   to  two
non-affiliated  investors.  The Company received  $650,000 at $1.00 per share of
those  subscriptions,  with  the  remaining  $600,000  subscriptions  unpaid  at
December 31, 1996. In February, 1997, the Company entered into an agreement with
the subscriber to rescind the remainder of the  subscription,  returning 600,000
shares to the Company's treasury.

         At December 31, 1996, the Company  directly owned  4,500,000  shares of
common  stock of  Ultimistics,  and an  additional  200,000  shares  through its
subsidiary,  PCT. Ultimistics owns commercial/residential real estate in France.
On March 25,  1997,  the bid  price was $0.03 and the asked  price was $0.12 for
Ultimistics stock.

         In accordance with FAS 115, the Company has discounted  those shares by
70% when it valued the various  transactions  by which it  received  Ultimistics
stock in 1996.  As of December 31, 1996,  the shares were valued at the net book
value of Ultimistics Inc., as of June 30, 1996, the latest statements available,
amounting to $1.05 per share. A substantial  portion of the  Ultimistics  shares
have been  exchanged  with others to re-acquire  the Company's own common stock,
the common stock of PCT,  and  restricted  shares of common stock in  Fairbanks,
Inc.  Accordingly,  the  Company  has not  reduced  the  values of the  original
acquisitions of Ultimistics Inc. restricted stock which include:




<PAGE>



(a)      Exchange of 1,000,000 shares of Foxwedge, Inc., for 500,000 shares of 
         Ultimistics.  As of December 31, 1995, the Company owned 1,000,000 
         shares of Foxwedge, Inc., which it acquired on September 12, 1995 in 
         exchange for 3,000,000 shares of the Company's Common Stock.  The 
         Company  valued those shares nominally,  at $6,000, the par value
         of the Company's shares issued, due to concerns by the Company about
         the Foxwedge operations and viability.   As of December 23, 1995, the 
         Company entered into an agreement to exchange the 1,000,000 shares of
         Foxwedge, Inc., for 500,000 shares of Ultimistics, which exchange
         occurred on January 12, 1996.

(b)      Exchange of 1,250,000  shares of the Company's Common Stock for 500,000
         shares of Ultimistics. The Company's Board of Directors authorized this
         transaction on January 25, 1996.

(c)      Sale of a  license  to  market  and  distribute  the  prepaid  cellular
         telephone technology in various countries in South America to Yakimoto,
         in exchange for 1,000,000 shares of Ultimistics. The Company's Board of
         Directors authorized this transaction on January 25, 1996. In 1997, the
         license was revoked due to the non-performance of the licensee.

(d)      Transfer of a license to market and  distribute  the  prepaid  cellular
         telephone  technology in Asia, Africa,  Australia and various countries
         in Europe, from Firenze, to Yakimoto, in exchange for 500,000 shares of
         Ultimistics.   The  Company's   Board  of  Directors   authorized  this
         transaction on January 25, 1996. In 1997, this license was also revoked
         due to non-performance.

(e)      Exchange of 5,000,000 shares of Firenze, with an officer of Firenze,  
         for 2,000,000 shares of Ultimistics.  In 1995 the Company acquired the
         5,000,000 shares of Firenze,  for 5,000,000 shares of the Company's 
         Common Stock and granted a license to Firenze to market the prepaid 
         cellular phone technology in Europe, Asia, Africa and Australia.   The
         Company valued the Firenze shares nominally at $10,000, the par value 
         of the Company's shares issued.  On March 22, 1996, the Company 
         exchanged 5,000,000 shares of Firenze, for 2,000,000 shares of
         Ultimistics, after the Company became concerned about Firenze's
         ability to perform under its agreement.





<PAGE>



         The  Company's  4,500,000  shares of  Ultimistics  common stock and the
200,000 shares acquired by PCT in 1996,  bear the restrictive  legend under Rule
144 of the  Securities  Act of 1933,  as amended.  As of December  31, 1996 this
holding represented approximately 16.5% of the outstanding shares.  Accordingly,
these  shares were  discounted  by 70%.  On a  consolidated  basis,  Ultimistics
transactions  were nil for the years preceding  1995. The Company  believed that
the Ultimistics shares received in the transactions  described above represented
the best  options  for the  Company at the time of the  transactions.  Since the
Company made its investment in  Ultimistics,  the bid price of  Ultimistics  has
dropped  as low as $.06  from a dollar  weighted  average  acquisition  price of
$7.17.

         The Company  believes that by obtaining  its own shares and  additional
shares in PCT in exchange  for shares of  Ultimistics  as set forth  above,  the
Company received significant value.


Item 8:  Financial Statements and Supplementary Data.

         The Company's  financial  statements are included in a separate Section
of this Report following Item 14.


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

         On  November 1, 1995,  the Company  dismissed  the  accounting  firm of
Jones,  Jensen,  Orton & Company  (the  "Former  Accountant")  as the  Company's
principal accountants.

         The Former  Accountant's  report on the  financial  statements  for the
fiscal years ended December 31, 1993 and 1994 did not contain an adverse opinion
or a disclaimer of opinion and was not qualified or modified as to  uncertainty,
audit scope or accounting principles.

         The  decision  to  change  accountants  was  approved  by the  Board of
Directors.

         During the Company's last two fiscal years and the  subsequent  interim
period preceding the Former Accountant's dismissal,  there were no disputes with
the Former  Accountant  on any matter of  accounting  principles  or  practices,
financial statement disclosure, or auditing scope or procedure.

         Durland & Company,  CPAs, P.A., was engaged as the Company's  principal
accountant to audit the Company's financial statements for the fiscal year ended
December  31,  1995,  and was  approved by the Board of Directors to perform the
1996 audit.



<PAGE>



                                    PART III

Item 10: Directors and Executive Officers

         Set forth below are the names of all directors  and executive  officers
of  the  Company  along  with  certain  information  relating  to  the  business
experience of each of the listed officers.

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

            Name                                                        Age  Position

Diego Leiva .........................................................   46   President, Chief Executive Officer and Chairman

Karl R. Petersson ...................................................   51   Vice President and Chief Financial Officer

Raymond M. Brennan ..................................................   59   Vice President, Secretary and Director

Karen M. Quinn ......................................................   49   Vice President of Operations and Corporate
                                                                             Communications

Robert R. Sams ......................................................   58   Director

Ricardo Maranon .....................................................   52   Director

Greg Manning ........................................................   50   Former Director
</TABLE>

         Directors  are  elected  to serve  until  the next  annual  meeting  of
stockholders or until their successors are elected and qualified. Officers serve
at the  discretion  of the  Board  of  Directors  subject  to any  contracts  of
employment. On March 10, 1997, Greg Manning resigned from the Board of Directors
for personal reasons.

         Diego Leiva has been Chief Executive Officer, President and Chairman of
the Company since  September  1995. Mr. Leiva founded Pick in August,  1992, and
has  been  its  President,  Chief  Executive  Officer  and  Chairman  since  its
inception.  From  1989 to July  1992,  he was  Director  of  Sales  for  Apertus
Technologies,  Inc., a computer telecommunications sales firm. Prior thereto, he
was Vice  president  of  Marketing  and Sales for  Market  Makers,  Inc.,  Chief
Operating Officer of Silo, Inc., and President of Astroglow Lamps Company.

         Karl R. Petersson has been Vice President and Chief  Financial  Officer
of the Company since  September 1995.  Since  September 1994, Mr.  Petersson has
served as Vice President and Chief Financial  Officer of Pick. From June 1994 to
August 1995, Mr.  Petersson was employed by United Jewish Appeal - Federation of
Jewish Philanthropies of New York, a charitable organization, as its Director of
Internal  Audit.  From November 1991 to May 1994, Mr.  Petersson  served as Vice
President of Finance and  Administration of the  Telecommunications  Cooperative
Network of New York, Inc. From August 1981 to October 1991, Mr. Petersson served
as  Vice   President  of  Finance  and  Controller  of  Radio  City  Music  Hall
Productions,  Inc.,  where he  administered  both  the  Accounting  and  Finance
Departments.



<PAGE>



         Raymond M. Brennan has been Vice President, Secretary and a Director of
the Company since September 1995. Since May 1994, Mr. Brennan has served as Vice
President,  Secretary,  and  General  Counsel of Pick.  From April 1990 to April
1994, Mr. Brennan served as Executive Vice President and General Counsel of EOL,
Inc., a full service event production and marketing  company.  From January 1982
to March 1990,  Mr.  Brennan  served as Vice  President of Business  Affairs for
Radio  City  Music  Hall  Productions,  Inc.,  where  he  administered  both the
Purchasing and Legal Departments.

         Karen M. Quinn has been Vice  President  of  Operations  and  Corporate
Communications  of the Company since  September  1995.  Since December 1992, Ms.
Quinn has been employed at Pick,  and was appointed Vice President of Operations
in May  1994.  Prior to  joining  the  Company,  Ms.  Quinn  served  in  various
administrative  and  managerial  positions  at  New  York  Medical  College  for
twenty-two years and as Business Manager for George M. Glassman, M.D., P.C. from
September 1989 to April 1995.

         Robert R. Sams has been a Director of the Company since September 1995.
Mr. Sams formed Saicol Limited in 1983, where he engages in merchant banking, 
corporate finance, acquisitions and financial advisory services.

         Ricardo Maranon has been a Director of the Company since September 
1995.  He has served as President of the Florida-based advertising agency, 
Maranon & Associates Advertising, since founding that company in 1986.  
Mr. Maranon is also President of All Florida Advertising, Inc.

         Greg Manning had been a Director of the Company from September 1995,  
until he resigned as of March 10, 1997.    He is Chairman of Greg Manning 
Auctions, Inc. ("Auctions").

         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 $0.001 ("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  representation  from
such persons  regarding the  necessity to file such reports,  the Company is not
aware of any failures to file reports or report  transactions in a timely manner
during the Company's fiscal year ended December 31, 1996.




<PAGE>



Item 11:  Executive Compensation

         The following table sets forth all compensation  awarded to, earned by,
or paid  for  all  services  rendered  to the  Company  by the  Company's  Chief
Executive  Officer.  No other  executive  officer of the Company  received total
compensation in excess of $100,000 during the last three years.
<TABLE>

                                   Annual Compensation            Long Term Compensation
                                                                                         Payouts   Awards

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

  (a)                 (b)              (c)           (d)         (e)          (f)        (g)       (h)           (i)
 
                                                                                                   Long-
                                                                                                   term
Name                                                           Other        Restrict-              incen-                  
and                                                            Compen-      Stock        Options   Plan          Other           
Principal                                                      sation       Award(s)     SARs      Payouts       Com-
Position              Year           Salary ($)    Bonus ($)    ($)           ($)          (#)      ($)          pensation
---------             ----           ----------    ---------    ---        ---------    -----    ----------     -----------

                                      

Diego Leiva,          1996           $ 150,000)    $  0         $0          $ 0           $ 0          $ 0      $ 0
Chief Executive       1995           $  93,750 (1) $  0          0            0             0            0        0
Officer and           1994           $  76,523 (1) $  0          0            0             0            0        0          
Chairman of the
Board of Directors

-----------------------------
<FN>

(1)     Mr. Leiva was entitled to compensation of $150,000.  The Company has 
paid the balances owed from 1995 and 1994 in 1996.
</FN>
</TABLE>

Option Grants in Last Fiscal Year

             The table below includes the number of stock options granted to the
executive  officers with compensation in excess of $100,000 named in the Summary
Compensation  Table  during  the year  ended  December  31,  1996  and  exercise
information.
<TABLE>
<S>                          <C>                  <C>                   <C>                    <C>    

                                     Individual Grants
                             Number of            Percent of
                             Securities           Total Options
                             Underlying           Granted to
                             Options              Employees in          Exercise                Expiration
Name                         Granted(#)           Fiscal Year           Price($/sh)                Date

Diego Leiva                  103,896                  5.2%              $0.9625                 Sept. 29, 1999
Diego Leiva                  396,104                 19.8%              $0.8750                 Sept. 29, 1999


</TABLE>

<PAGE>








Aggregated Option Exercises in Last Fiscal Year and FY 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
executive officers named in the Summary Compensation Table during the year ended
December 31, 1996.
<TABLE>
<S>                       <C>             <C>                 <C>                  <C>   

                                                                                       Value of
                                                                 Number of           Unexercised
                                                                Unexercised          In-The-Money
                           Shares                                 Options               Options
                          Acquired                              at FY-End(#)          at FY-End($)
                          on Exer-         Value               Exercisable/           Exercisable/
         Name             cise (#)        Realized($)          Unexercisable          Unexercisable


None exercised.

Diego Leiva                  0               0                  500,000/0                0 (1)
</TABLE>

 As  of  December  31,  1996,  the market  value of the  shares was $0.21  cents
     compared  to the option  exercise  prices of $0.875 and  $0.9625 per share.
     Therefore, no "in-the-money" options existed at December 31, 1996.

Compensation of Directors

             No compensation is paid by the Company to any of its Directors, who
are not employees of the Company.  However, each Director is entitled to receive
reimbursement for travel expenses for attendance at meetings of the Board.

Compensation Committee Interlocks and Insider Participation

             No member of the Compensation  Committee was an officer or employee
of the  Company  or of 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  Committee
during the last fiscal year of any other entity, any of whose officers served on
the Compensation Committee of the Company.



<PAGE>



Item 12:  Security Ownership of Certain Beneficial Owners and Management

             The following table sets forth, as of the date of this Report,  the
number of shares of the Company's  outstanding  Common  Stock,  $.001 par value,
beneficially  owned (as such term is defined in Rule 13d-3 under the  Securities
Exchange Act of 1934) by each director of the Company,  by each named  executive
officer  of the  Company,  by  each  beneficial  owner  of  more  than 5% of the
Company's  Common Stock and by all of the Company's  officers and directors as a
group.
<TABLE>
<S>                                                    <C>                                      <C>    



Name and Address                                         Amount and Nature of                    Percentage
of Beneficial Owner                                    Beneficial Ownership (1)                 of Class (2)
-------------------                                    ------------------------                 ------------

Diego Leiva                                                   12,466,500                           34.3%
155 Route 46 West, 3rd Floor
Wayne, NJ 07470

Robert Sams                                                      665,000                            1.8%
Woodmans Farm
Perrymans Lane
Burwash
East Sussex, TN19 7ND
England

Ricardo Maranon                                                  826,000  (5)                       2.3%
1400 Stillwater Drive
Miami Beach, FL 33141


Raymond M. Brennan                                              1,011,500 (6)                       2.8%
155 Route 46 West, 3rd Floor
Wayne, NJ 07470

Karen M. Quinn                                                    871,250                           2.4%
155 Route 46 West, 3rd Floor
Wayne, NJ 07470

Karl R. Petersson                                                 870,000 (7)                       2.4%
155 Route 46 West, 3rd Floor
Wayne, NJ 07470

Greg Manning                                                    4,612,289 (8)                      12.7%
775 Passaic Avenue
West Caldwell, NJ 07006

All Officers and directors as a group(6 persons)               16,710,250 (9)                      43.0%
<FN>

(1)          Unless otherwise noted, all shares are beneficially owned and the sole voting and



<PAGE>



             investment power is held by the person indicated.

(2)          Based  on  35,867,016  shares  outstanding  as of the  date of this
             filing, 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
             the date  hereof  (pursuant  to Rule  13d-3  under  the  Securities
             Exchange Act of 1934) have been converted or exercised.

(3)          Includes  4,290,000 shares  beneficially owned by Mr. Leiva's wife,
             792,000  shares  beneficially  owned by a trust for Mr. Leiva's son
             for  which  Mr.  Leiva   serves  as  trustee  and  792,000   shares
             beneficially  owned by a trust for Mr.  Leiva's  daughter for which
             Mr. Leiva serves as trustee.

(4)          Includes options to purchase 500,000 shares of the Company's Common 
             Stock at a price of $0.875,  except that for Mr. Leiva,  103,896 of
             the 500,000 shares granted to him have an option price of $0.9625.

(5)          Includes 37,250 shares of the Company's Common Stock beneficially 
             owned by Mr. Maranon's daughter.

(6)          Includes 250,000 shares beneficially owned by Mr. Brennan's wife.

(7)          Includes 40,000 shares of the Company's  Common Stock  beneficially
             owned by Mr.  Petersson's  wife and 10,000  shares of Common  Stock
             owned by each of Mr. Petersson's three children, or an aggregate of
             30,000 shares of Common Stock.

(8)          These  shares  are  held  by  Greg  Manning  Auctions,  Inc.,  a  
             company controlled by Greg Manning, a former director of the 
             Company.

(9)          Includes an aggregate of 3,500,000 options held by the Company's 
             directors, a former director and officers to purchase a like
             number of shares of the Company's Common Stock at a price of 
             $0.875 per share, except that for Mr.Leiva, 103,896 of the 500,000
             shares granted to him have an option price of $0.9625.


</FN>
</TABLE>



<PAGE>



Item 13.  Certain Relationships and Related Transactions


        On January 31, 1996,  the Company  issued  150,000 shares to All Florida
Advertising,  Inc.,  a company  for which  Richard  Maranon,  a Director  of the
Company,  serves  as an  officer,  at a price of $.235  per share as part of the
1,150,000  shares  issued  for  the  acquisition  of  $3.0  million  of  prepaid
advertising services.

        On January 25,  1996,  the  Company's  Board of  Directors  approved the
reservation of 5,000,000  shares of the Company's  Common Stock for the granting
of the stock options to the Company's directors,  officers and employees,  as an
incentive.  The Company granted 500,000 shares each to Messrs.  Leiva,  Maranon,
Manning, Sams, Brennan, and Petersson,  and Ms. Quinn,  accounting for 3,500,000
of the authorized 5,000,000 shares set aside for this purpose.  Each grantee has
the right to purchase shares at $0.875 each, except that for Mr. Leiva,  103,896
of the 500,000 shares granted to him have an option price of  $0.9625.(10%  over
the market value on September  29, 1996),  and may exercise  these grants within
the three-year period ending September 29, 1999.

        In December,  1996, the Company issued 400,000 shares of common stock to
Diego  Leiva,  President  and CEO of the  Company,  in exchange  for $100,000 of
salary accrued but not paid.
<TABLE>
<CAPTION>


Item 14:  Exhibits, Financial Statement Schedules and
              Reports on Form 8-K.
<S>                                                                                             <C>   


Index to Financial Statements and Exhibits                                                      Page

Independent Auditors' Report..............................................................       F-1

Balance Sheets as of December 31, 1994, 1995 and 1996.....................................       F-2

Statement of Operations for the years ended December 31, 1994,
       1995 and 1996......................................................................       F-3

Statement of Stockholders' Equity for the years ended December 31,
       1994, 1995 and 1996................................................................       F-4

Statement of Cash Flows for the years ended December 31, 1994, 1995
       and 1996...........................................................................       F-5

Notes to the Financial Statements.........................................................       F-6


</TABLE>



<PAGE>



Exhibits

      3.1      Amended Articles of Incorporation


       11      Statement of Computation of Earnings Per Share and Common Stock
               Equivalents.


       21      Subsidiaries of the Registrant. PICKNET INC.,  P.C.T. PREPAID 
               TELEPHONE, INC.,   PUBLIC INFO/COMM KIOSK, INC.

       27      Financial Data Schedule

                                   SIGNATURES



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



                                                     PICK COMMUNICATIONS CORP.


                                                     By:     
                                                           /s/Diego Leiva
                                                               President







<PAGE>




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:
<TABLE>
<S>                                <C>                                          <C>

Signature                                   Title                                       Date

/s/Diego Leiva
------------------
Diego Leiva                            President, CEO (Principal                April _15__, 1997
                                    Executive Officer and Chairman)
/s/Karl K. Petersson
------------------
Karl K. Petersson                   Vice President and                          April _15__, 1997
                                    Chief Financial Officer
                                    (Principal Financial Officer)
/s/Raymond M. Brennan
------------------
Raymond M. Brennan                  Vice President, Secretary                   April _15__, 1997
                                    and Director

/s/Karen M. Quinn
------------------
Karen M. Quinn                      Vice President, Operations                  April __15__, 1997

/s/Robert R. Sams
------------------
Robert R. Sams                      Director                                    April __15__, 1997
/s/Ricardo Maranon
------------------
Ricardo Maranon                     Director                                    April _15___, 1997


</TABLE>