<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED SEPTEMBER 30, 2000

OR

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

         For the transition period from  _______________ to ___________________

Commission file number 0-27604

                            PICK Communications Corp.
                       -----------------------------------
           (Exact name of the registrant as specified in its charter)

               NEVADA                                      75-2107261
   (State or other jurisdiction of                     (I.R.S. employer
   Incorporation or Organization)                      identification no.)

5225-55 N.W. 87th Avenue, First Floor                         33178
(Address of principal executive offices)                    (Zip Code)

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

Indicate by check mark whether the registrant (1) has filed reports to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for 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

As of November 20, 2000, the Registrant had 10,642,969 shares of Common Stock,
$.01 par value, outstanding.


<PAGE>

                               Index to Form 10-Q

<TABLE>
<CAPTION>

                                                                                                         Page Number
                                                                                                         -----------
<S>                                                                                                     <C>

PART I       Financial Information

Item 1.      Financial Statements

             Consolidated Balance Sheet as at September 30, 2000 (Unaudited) and
             December 31, 1999.................................................................                3

             Consolidated  Statement of Operations for the three-month and nine month
             periods ended September 30, 2000 and 1999 (Unaudited).............................                4

             Consolidated Statement of Stockholders' Deficiency for the nine-month period
             ended September 30, 2000 (Unaudited)..............................................                5

             Consolidated Statement of Cash Flows for the
             nine-month periods ended September 30, 2000 and 1999 (Unaudited)..................                6

             Notes to Consolidated Financial Statements........................................             7-16

Item 2.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations.........................................................            17-21

Part II.     Other Information.................................................................               22

Item 1.      Legal Proceedings.................................................................               22

Item 2.      Changes in Securities.............................................................               22

Item 6.      Exhibits and Reports on Form 8-K..................................................               22

             Signatures........................................................................               23

</TABLE>


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

                                      -2-


<PAGE>

                   PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET


<TABLE>
<CAPTION>

                                                                                    September 30,           December 31,
                                                                                         2000                     1999
                                                                                    --------------          -------------
<S>                                                                               <C>                    <C>
ASSETS

Current Assets:
  Prepaid expenses and other current assets                                        $     242,919            $     176,455
  Current assets from discontinued operations                                             36,279                  325,220
                                                                                   --------------           --------------
      Total current assets                                                               279,198                  501,675
                                                                                   --------------           --------------

Property and Equipment - at cost, net of accumulated depreciation
 of $414,669 and $214,527, respectively                                                5,997,149                4,434,970
                                                                                   --------------           --------------

Other Assets:
  Security deposits                                                                      398,004                  261,796
  Deferred income tax asset, net of valuation allowance of $32,092,000
   and $30,509,000, respectively                                                             -                          -
  Long-term assets from discontinued operations                                        2,064,510                2,068,394
                                                                                   --------------           --------------
      Total other assets                                                               2,462,514                2,330,190
                                                                                   --------------           --------------
      Total Assets                                                                 $   8,738,861            $   7,266,835
                                                                                   ==============           ==============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
  Cash overdraft                                                                   $     550,507            $      20,193
  Current portion of debt                                                              1,447,430                  888,000
  Accounts payable and accrued expenses                                               11,262,908                8,624,883
  Current liabilities from discontinued operations                                    11,761,446               10,965,614
                                                                                   --------------           --------------
      Total current liabilities                                                       25,022,291               20,498,690

Debt, less current portion                                                             9,880,000                9,880,000
Long-term Liabilities from Discontinued Operations                                           -                    736,586
                                                                                   --------------           --------------
      Total liabilities                                                               34,902,291               31,115,276
                                                                                   --------------           --------------

Commitments and Contingencies

Stockholders' Deficiency:
  Preferred stock - $.001 par value; authorized 10,000,000 shares; 2,000,000
   shares designated as Series B convertible preferred stock, aggregate
   liquidation value - $1,871,000, issued 1,871,000 shares; 395,000 shares and
   930,000 shares outstanding, respectively                                              395,000                  930,000
  500,000 shares designated as Series D convertible preferred stock, aggregate
   liquidation value - $4,660,000, issued 500,000 shares; 184,000 shares and
   260,500 shares outstanding, respectively                                            1,840,000                2,605,000
  Common stock - $.01 par value; authorized 100,000,000 shares,
   issued 10,642,969 and 8,919,881 shares, respectively                                  106,465                   89,234
  Additional paid-in capital                                                          88,409,574               79,746,228
  Options and warrants                                                                 2,720,071                2,720,071
  Subscription receivable                                                               (340,000)                (340,000)
  Treasury stock, at cost, 3,550 shares                                                  (11,978)                 (11,978)
  Accumulated Other Comprehensive Income                                                   1,482                    1,482
  Accumulated deficit                                                               (119,284,044)            (109,588,478)
                                                                                   --------------           --------------
      Stockholders' deficiency                                                       (26,163,430)             (23,848,441)
                                                                                   --------------           --------------
      Total Liabilities and Stockholders' Deficiency                               $   8,738,861            $   7,266,835
                                                                                   ==============           ==============
</TABLE>


                 See Notes to Consolidated Financial Statements

                                      -3-

<PAGE>


                   PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>


                                                                                 FOR THE THREE MONTHS         FOR THE NINE MONTHS
                                                                                 ENDED SEPTEMEBR 30,          ENDED SEPTEMBER 30,
                                                                                 --------------------         -------------------
                                                                                 2000            1999          2000         1999
                                                                                 ----            ----          ----         ----
<S>                                                                         <C>             <C>           <C>          <C>
 Costs and expenses:
   Selling, general and administrative                                       $ 2,088,518     $  (155,060)  $ 4,392,168  $ 1,920,643
   Non-cash consulting and compensation charges                                2,973,877              --     2,973,877           --
   Depreciation and amortization                                                 104,027          25,883       200,143       68,193
                                                                             ------------    ------------  ------------ ------------
   Operating loss (income)                                                     5,166,422        (129,177)    7,566,188    1,988,836

   Other expense:
   Interest expense                                                              713,303              --     2,019,035           --
   Settlement of third party debts                                                    --              --      (293,977)          --
                                                                             ------------    ------------  ------------ ------------
   Total other expense                                                           713,303              --     1,725,058           --
                                                                             ------------    ------------  ------------ ------------

 Loss (income) from continuing operations before discontinued operations       5,879,725        (129,177)    9,291,246    1,988,836
                                                                             ------------    ------------  ------------ ------------
 Discontinued operations:
 Settlement of third parties debts                                               (45,239)             --       (45,239)          --
 Loss from discontinued operations                                                    --       2,004,682       449,559    6,369,412
 Loss on disposal of discontinued operations and related costs                        --              --            --   47,108,711
                                                                             ------------    ------------  ------------ ------------
  Total loss (income) from discontinued operations                               (45,239)      2,004,682       404,320   53,478,123

 Net loss                                                                      5,834,486       1,875,505     9,695,566   55,466,959

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

Net loss applicable to common stock                                          $ 5,834,486     $ 1,875,505   $ 9,695,566  $80,636,959
                                                                             ============    ============  ============ ============
Loss (income) from continuing operations and beneficial conversion
  feature of preferred stock per common share-basic and diluted              $      0.56     $     (0.03)  $      0.91  $      6.29
                                                                             ============    ============  ============ ============

Loss (income) from discontinued operations per common share-
  basic and diluted                                                          $     (0.01)    $      0.46   $      0.04  $     12.37
                                                                             ============    ============  ============ ============

Net loss applicable to common share-basic and diluted                        $      0.55     $      0.43   $      0.95  $     18.66
                                                                             ============    ============  ============ ============

Weighted-average shares outstanding-basic and diluted                         10,588,832       4,402,698    10,186,905    4,322,139
                                                                             ============    ============  ============ ============
</TABLE>


                 See Notes to Consolidated Financial Statements

                                      -4-

<PAGE>


                   PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

         CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
               FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000
                                   (UNAUDITED)


<TABLE>
<CAPTION>


                                                                                                                    Shares to be
                                                          Series B             Series D                               issued -
                                                      Preferred Stock       Preferred Stock        Common Stock     Common Stock
                                                    ------------------    -----------------      -----------------  ---------------
                                                    Shares      Amount    Shares     Amount      Shares     Amount   Shares   Amount
                                                    ------      ------    ------     ------      ------     ------   ------   ------
<S>                                               <C>        <C>        <C>       <C>          <C>        <C>       <C>     <C>
Balance at January 1, 2000                         930,000    $ 930,000  260,500   $2,605,000   8,919,881  $ 89,234     --    $   --
                                                  =========   ========== ========  =========== ==========  =========  =====   ======

Issuance of common stock for services                   --           --       --           --     200,000     2,000     --        --
Issuance of options and warrants for
  services                                              --           --       --           --          --        --     --        --
Issuance of subsidiary's options and warrants
  for services                                          --           --       --           --          --        --     --        --
Issuance of subsidiary's common stock to new
  investors                                             --           --       --           --          --        --     --        --
Issuance of common stock in connection of
  old debt                                              --           --       --           --      50,000       500     --        --
Conversion of common stock from preferred
  stock                                           (535,000)    (535,000) (76,500)    (765,000)    917,500     9,175     --        --
Issuance of common stock upon exercise of
  options and warrants                                                                            555,588     5,556     --        --
Net loss                                                --           --       --           --          --        --     --        --

                                                  ---------   ---------- --------  ----------- ----------  ---------  -----   ------
Balance at September 30, 2000                      395,000    $ 395,000  184,000   $1,840,000  10,642,969  $106,465     --    $   --
                                                  =========   ========== ========  =========== ==========  =========  =====   ======

</TABLE>

<TABLE>
<CAPTION>

                                                                                            Accumulated
                                                                                               Other
                                             Additional    Options                          Comprehensive                 Total
                                               Paid-in       and        Stock     Treasury     Income     Accumulated  Shareholders'
                                               Capital    Warrants  Subscriptions   Stock      (Loss)       Deficit     Deficiency
                                            ------------ ---------- -------------  -------- ------------ ------------ -----------
<S>                                          <C>          <C>         <C>          <C>          <C>      <C>           <C>
Balance at December 31, 1999                $79,746,228  $2,720,071  $(340,000)   $(11,978)    $1,482   $(109,588,478  $(23,848,441)
                                            ============ ==========  ==========   =========    =======  =============  ============
Issuance of common stock for services           198,000         --          --          --         --              --       200,000
Issuance of options and warrants for
  services                                      511,761         --          --          --         --              --       511,761
Issuance of subsidiary's options and
  warrants for services                       2,462,116         --          --          --         --              --     2,462,116
Issuance of subsidiary's common stock
  to new investors                            4,206,700         --          --          --         --              --     4,206,700
Issuance of common stock in connection of
  old debt                                         (500)        --          --          --         --              --            --
Conversion of common stock from preferred
  stock                                       1,290,825         --          --          --         --              --            --
Issuance of common stock upon exercise of
  options and warrants                           (5,556)        --          --          --         --              --            --
Net loss                                             --         --          --          --         --      (9,695,566)   (9,695,566)
                                            ------------ ----------  ----------   ---------    -------  -------------  -------------
Balance at September 30, 2000               $88,409,574  $2,720,071  $(340,000)   $(11,978)    $1,482   $(119,284,044) $(26,163,430)
                                            ============ ==========  ==========   =========    =======  =============  ============

</TABLE>


                 See Notes to Consolidated Financial Statements

                                      -5-

<PAGE>

                   PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                              Nine months ended September 30,
                                                                                             ---------------------------------
                                                                                             2000                        1999
                                                                                             ----                        ----
<S>                                                                                     <C>                         <C>
Cash flows from operating activities:
Net loss                                                                                 $ (9,695,566)             $ (55,466,959)
Adjustments to reconcile net loss to net cash used in operating activities:
  Stock, options and warrants issued for compensation or services                             711,761                  4,762,266
  Options and warrants issued by subsidiary for consulting and compensation charges         2,462,116                         --
  Loss on disposal of discontinued operations and related costs                                    --                 41,636,097
  Depreciation and amortization                                                               200,143                     68,193
  Bad debt expense                                                                             64,099                         --
  Changes in operating assets and liabilities:
    Increase in prepaid expenses and other current assets                                    (146,234)                   (78,630)
    Decrease in current assets from discontinued operations                                   288,941                  1,000,950
    Increase in security deposits                                                            (136,208)                   (17,927)
    Decrease (increase) in long-term assets from discontinued operations                        3,884                   (265,313)
    Increase in accounts payable and accrued expenses                                       2,638,025                  4,150,469
    Decrease in other current liabilities                                                          --                 (1,000,000)
    Increase in current liabilities from discontinued operations                              795,832                    228,808
    Decrease in long-term liabilities from discontinued operations                           (736,586)                        --
                                                                                         -------------             --------------
       Net cash used in operating activities                                               (3,549,793)                (4,982,046)
                                                                                         -------------             --------------
Cash flows used in investing activity--purchase of property and equipment                  (1,746,651)                (1,293,583)
                                                                                         -------------             --------------
Cash flows from financing activities:
  Funds advanced on third-party debt, net of cash placement costs                             559,430                         --
  Proceeds from subsidiary's new investors                                                  4,206,700                         --
  Proceeds from issuance of Series B preferred stock                                               --                  1,821,000
  Proceeds from issuance of Series D preferred stock                                               --                  4,660,000
  Proceeds from stock subscription                                                                 --                      5,000
  Payment of preferred stock issuance cost                                                         --                    (85,000)
  Payment on third-party debt                                                                      --                    (20,000)
  Increase in book overdraft                                                                  530,314                         --
                                                                                         -------------             --------------
       Net cash provided by financing activities                                            5,296,444                  6,381,000
                                                                                         -------------             --------------
Net increase in cash                                                                               --                    105,371

Cash at beginning of period                                                                        --                     17,052
                                                                                         -------------             --------------
Cash at end of period                                                                    $         --              $     122,423
                                                                                         =============             ==============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest from:
  Continuing operations                                                                  $     38,417              $          --
                                                                                         =============             ==============
  Discontinued operations                                                                $         --              $      76,912
                                                                                         =============             ==============
</TABLE>


                 See Notes to Consolidated Financial Statements

                                      -6-

<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

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

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

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

The Company has discontinued the operations of its telecommunication and prepaid
calling card business consisting of PICK US, PICK Net and PICK Net UK (see Note
7).

Revenue from PICK Sat will be derived from monthly fees charged based upon the
type of usage and bandwidth contracted for, while sales from POL will be derived
from subscribers ratably over the contract period. For the nine-months ended
September 30, 2000, both PICK Sat and POL had no revenue and no customers.
Revenue from the discontinued operations are recognized at the time that the
service is provided, for long-distance time, as reported by the electronic
switching devices, and for prepaid calling cards as the card is used.

For comparability, certain 1999 amounts have been reclassified, where
appropriate, to conform to the financial statement presentation used in 2000.

Effective July 26, 1999, the Company's board of directors authorized a 1-for-10
reverse split of its common stock. All share and per-share amounts in these
consolidated financial statements have been restated to give effect to this
reverse stock split.

2. PREPAID EXPENSES AND OTHER CURRENT ASSETS:

Prepaid expenses and other current assets consist of the following:


                                               September 30,        December 31,
                                                   2000                1999
--------------------------------------------------------------------------------
                                               (Unaudited)

Sundry receivable                               $ 35,472            $  3,100
Computer equipment for resale                     24,750              58,159
Prepaid expenses                                  58,017              61,851
Advances and other current assets                124,680              53,345
--------------------------------------------------------------------------------
                                                $242,919            $176,455
================================================================================


                                       -7-
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     (UNAUDITED)
--------------------------------------------------------------------------------
3. PROPERTY AND EQUIPMENT:


Property and equipment, at cost, consists of the following:


<TABLE>
<CAPTION>
                                         September 30,    December 31,       Estimated
                                             2000            1999           Useful Life
-------------------------------------------------------------------------------------------
                                         (Unaudited)
<S>                                          <C>             <C>               <C>
Property, equipment and software         $1,744,571      $  567,543        3 and 5 years
Asset development/
 installation-in-process                  4,667,247       4,081,954
-------------------------------------------------------------------------------------------

                                          6,411,818       4,649,497
Less accumulated depreciation
 and amortization                           414,669         214,527
-------------------------------------------------------------------------------------------
                                         $5,997,149      $4,434,970
===========================================================================================
</TABLE>

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

4. DEBT:

Debt consists of the following:

                                             September 30,       December 31,
                                                 2000               1999
--------------------------------------------------------------------------------
                                              (Unaudited)

Private placement debt (a)                   $ 9,880,000          $ 9,880,000
Note payable  (b)                                     --              476,000
Revolver loan (c)                              1,447,430              412,000
--------------------------------------------------------------------------------

                                              11,327,430           10,768,000

Less current portion of debt                   1,447,430              888,000

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

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

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



                                       -8-
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

    On April 27, 1999, the holders of the Original Notes, who control in excess
    of 99% of the principal which was due on April 27, 1999, consented to
    restructure their Original Notes (the "Restructured Notes") and extend the
    maturity date until April 27, 2002. Additionally, the Company has the option
    to extend the maturity date for one year. Under the terms of the
    restructuring, the Restructured Notes were initially convertible into shares
    of common stock at a fixed price of $10.00 rather than fair market value
    (valued at $7,077,600), as defined in the terms of restructuring. The
    Restructured Notes automatically convert to common stock if the closing bid
    price exceeds $15.00 per share, as defined. In January 2000, as a result of
    anti-dilution provision of the Restructured Notes the conversion rate was
    reduced to $5.00 per share.

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

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

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

    During 1999, the 1,976,000 shares referred to in (i) and (ii) above were
    issued to the consenting noteholders.

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


                                       -9-
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

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

    All deferred interest and placement charges were written off and included in
    the loss on disposal of discontinued operations during 1999.

(b) PICK Sat obtained a promissory note from Atlantic Tele-Network Inc. ("ATN")
    aggregating $476,000, which loan bears interest at prime plus 2%. This
    promissory note was entered into in connection with PICK Sat options as
    described in the PICK Sat option agreement dated September 13, 1999. ATN
    chose not to exercise this option and the promissory note became due and
    payable on February 4, 2000 and has not been paid. On January 4, 2000, in
    consideration of the then pending completion of the sale of the Company's
    PICK Net subsidiaries (see Note 7), as well as the termination of the PICK
    Sat option, ATN received five-year warrants to purchase 1,000,000 shares of
    PICK common stock exercisable at $2.00 per share. This promissory note was
    assumed by PICK Net's buyer on the date of the sale of PICK Net, January 18,
    2000. During the second quarter ended June 30, 2000, PICK Sat removed the
    full loan balance plus accrued interest from its books and recorded the
    amount on PICK Net's books.

(c) On November 3, 1999, PICK Sat entered into a 120-day revolver for $500,000
    (the "Revolver") from Tri-Links Investment Trust ("Tri-Links"). At December
    31, 1999, PICK Sat borrowed $412,000 under the Revolver which bears interest
    at 13% per annum, increasing to 15% per annum upon default and payment of
    which is guaranteed by PICK. Tri-Links was granted a security interest in
    substantially all of PICK Sat's assets which was initially subordinated to
    ATN and then made pari passu and equal in priority as of April 2000. The
    Revolver came due on March 3, 2000 and was extended until May 3, 2000. In
    addition, on January 26, 2000, Tri-Links, PICK, PICK Sat and Group
    Technology for Scientific Equipment and Supplies and Salah Khalid Al Fulaij
    ("Fulaij") entered into an Amendment Agreement which was amended again in
    March 2000, whereby the commitment under the Revolver was increased. The
    loan payable balance at September 30, 2000 amounted to $1,447,430 plus
    accrued interest.

    As of August 30, 2000, the parties agreed in principle to a Third Amendment
    and Extension Agreement under which repayment of $1,150,000 principal amount
    was extended to April 1, 2001 and $100,000 will be converted into equity of
    PICK Sat by Fulaij. The interest rate was reduced from 13% to 10% per annum.
    Repayment of the loan will be made on a monthly basis until repaid in full
    on April 1, 2001. Until the loans are repaid, PICK and PICK Sat agreed to
    certain negative covenants including the payment of dividends to PICK cannot
    exceed $200,000 in the aggregate; not greater than l5% of PICK Sat's
    projected debt may be paid or incurred; and the companies cannot enter into
    certain mergers or sales of assets. The lenders were granted the right to
    elect either two members of PICK Sat's Board of Directors or two observers
    to the Board. Subject to a proposed recapitalization of PICK Sat, the
    lenders were granted warrants to purchase an aggregate of approximately
    15,000 shares of PICK Sat's common stock at the lesser of $5.00 per share
    or 50% of the price paid by new investors at the time of PICK Sat's
    initial public offering on or before March 1, 2001.


5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

   Accounts payable and accrued expenses consist of the following:

                                                   September 30,    December 31,
                                                       2000             1999
--------------------------------------------------------------------------------
                                                   (Unaudited)
Accounts payable - operating                       $ 1,844,703      $2,323,613
Accrued expenses - operating                         5,389,241       2,272,306
Accrued expenses - for equipment                     1,066,000       1,066,000
Accrued expenses - settlement reserves               2,962,964       2,962,964
          (see Note 8)
--------------------------------------------------------------------------------
                                                   $11,262,908      $8,624,883
================================================================================


                                      -10-
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

6. PREFERRED STOCK:

In March 1999, the board of directors authorized the issuance of 2,000,000
shares of Series B convertible preferred stock. The Series B convertible
preferred stock has a stated par value of $.001 per share and 1,821,000 shares
were issued at $1.00 per share, convertible into 1,821,000 shares of the
Company's common stock at the rate of $1.00 per share. An additional 50,000
shares were issued (valued at $50,000) for professional services provided to the
Company. There was a placement cost of $85,000 related to the issuance of Series
B and the amount was paid in full during 1999. Through September 30, 2000, an
aggregate of 1,476,000 shares of Series B convertible preferred stock have been
converted into 1,476,000 shares of common stock.

In April 1999, the board of directors authorized the issuance of 500,000 shares
of Series D convertible preferred stock. The Series D convertible preferred
stock has a stated par value of $.001 per share and was initially convertible
into 1,190,500 shares of the Company's common stock at the rate of $4.20 per
share. As of December 31, 1999, the Company had sold an aggregate of 466,000
shares of Series D convertible preferred stock for $4,660,000 prior to the
payment of $459,750 of preferred stock placement costs. This $459,750 placement
costs has been recorded in the additional paid in capital account. In addition,
the Company issued an aggregate of 700,000 common stock purchase warrants in
connection with the sale of Series D convertible preferred stock. Each warrant,
as adjusted, is exercisable at $6.30 per share of common stock for a two-year
period for an aggregate of 70,000 shares. On July 15, 1999, the Company sold
34,000 shares of Series D convertible preferred stock for $340,000 to Diego
Leiva, then chairman of the board. The purchase is evidenced by a recourse
promissory note secured by a pledge of the securities. Mr. Leiva has agreed to
return all of such Series D Preferred Stock and Warrants to the Company, which
will cancel his promissory note. In January 2000, the conversion rate was
adjusted so that the preferred stock converts into common stock at $2.00 per
share. Through September 30, 2000, an aggregate of $3,160,000 of the principal
amount of Series D convertible preferred stock had been converted into 952,738
shares of common stock.

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



                                      -11-
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

7. DISCONTINUED OPERATIONS:

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

Operating results of discontinued telecommunications and prepaid calling card
business are as follows:

Nine-month period ended September 30,          2000                  1999
--------------------------------------------------------------------------------
                                           (Unaudited)           (Unaudited)
Sales of long-distance services             $ 168,598            $ 3,189,577
Sales of prepaid calling cards                     --              2,192,812
--------------------------------------------------------------------------------
Net sales                                     168,598              5,382,389
--------------------------------------------------------------------------------

Cost of sales                                 328,864              7,602,906
Selling, general and administrative            37,411              1,332,103
Depreciation and amortization                  18,587                348,005
Bad debt expense                               64,099                 27,832

--------------------------------------------------------------------------------
Total costs and expenses                      448,961              9,310,846
--------------------------------------------------------------------------------

Loss before amortization of debt placement
 expenses and interest expense               (280,363)            (3,928,457)

Amortization of debt placement
 expenses and interest expense                123,957              2,440,955

--------------------------------------------------------------------------------
Loss from discontinued operations           $(404,320)          $ (6,369,412)
================================================================================

                                                                     (continued)

<PAGE>

Assets and liabilities of discontinued telecommunications and prepaid calling
card business are as follows:

                                           September 30,          December 31,
                                               2000                  1999
--------------------------------------------------------------------------------
                                           (Unaudited)
Cash                                      $       --             $    18,117

Accounts Receivable, less allowance for
doubtful accounts of $231,091 and
$482,735, respectively                            --                 228,885

Prepaid Expenses and Other
Current Assets                                36,279                  78,218

--------------------------------------------------------------------------------
Current Assets from Discontinued
Operations                                    36,279                 325,220
--------------------------------------------------------------------------------

Property and Equipment - at cost,
net of accumulated depreciation and
amortization of $723,810 and
$771,301, respectively                     2,013,456               2,032,044

Security Deposits                             51,054                  36,350

--------------------------------------------------------------------------------
Long-term Assets from
Discontinued Operations                    2,064,510               2,068,394

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



                                      -12-
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

                                          September 30,            December 31,
                                              2000                    1999
--------------------------------------------------------------------------------
                                          (Unaudited)
Current Liabilities:
  Current portion of debt (a)(b)(c)      $ 4,626,986             $  3,814,244
  Current portion of other debt            1,018,578                  306,130
  Accounts payable and accrued
   expenses                                6,086,262                6,815,620
  Deferred revenue - prepaid
   calling cards                              29,620                   29,620

--------------------------------------------------------------------------------
Current Liabilities from
Discontinued Operations                   11,761,446               10,965,614
--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------
        Net Liabilities of Discontinued
         Operations                      $ 9,660,657             $  9,308,586
================================================================================

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

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



                                      -13-
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

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

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

(b)  As of September 30, 2000, PICK Net has received from an affiliate of the
     buyer of PICK Net approximately $283,000.

(c)  PICK Net has promissory notes with ATN in the aggregate amount of
     $2,119,424 (including $476,000 principal amount plus accrued interest
     assumed for PICK Sat's balance by PICK Net's buyer on the date of sale,
     January 18, 2000) at September 30, 2000, which bear interest at prime plus
     2% (11.5% at September 30, 2000). These promissory notes were entered into
     in connection with the sales of PICK Net as described in the stock purchase
     agreement dated September 13, 1999. The promissory notes became due and
     payable on February 4, 2000 and have not been paid (see Note 4).


8.   LITIGATION SETTLEMENTS AND RESERVE FOR CONTINGENT LIABILITY:

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

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

After two mediation sessions, AT&T indicated that it intended to withdraw from
the mediation. Accordingly, on November 5, 1997, the Company filed for
arbitration proceedings against AT&T and reduced its claim to $5,000,000. In
October 1999, the arbitrator found that AT&T was entitled to a net award of
$1,376,447 plus 9% interest per annum since January 31, 1997. The buyer of PICK
Net has assumed $95,000 of this settlement as defined in the purchase agreement
(see Note 7). However, the Company remains liable for the balance of the


                                      -14-
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

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

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

In July 1999, L.D. Exchange.com, Inc., a vendor of PICK Net, Inc., commenced
arbitration proceedings against PICK Net before the American Arbitration
Association (AAA) in San Diego, California, alleging breach of contract. These
proceedings involve the alleged nonpayment of between $250,000 and $500,000 by
PICK Net and not the Company. The Company notified the AAA that the matter did
not involve the ompany. By letter dated August l4, 2000, the Company was advised
that the arbitration had been withdrawn.

On March 27, 2000, Telecom Management Resources, Inc. (as successor to
International Career Information, Inc.), a vendor of PICK Net, commenced a
lawsuit against the Company and PICK Net in the Superior Court of New Jersey,
Law Division, Hudson County. The complaint involved the alleged non-payment of
$58,220 under a Facilities Management Service Agreement and $50,400 for
additional payments under an acceleration provision plus interest. The Company
answered and denied the charges and raised affirmative defenses including the
fact that the liability was assigned to PICK Net with the consent of the
plaintiff and then PICK Net was sold. The parties have reached an agreement in
principle which had been properly recorded for at September 30, 2000 to settle
the lawsuit; however no agreement has been signed to date.

On April 14, 2000, Teleglobe USA, Inc. threatened litigation to recover
$900,812.20, plus interest, from the Company. The Company believes that its
former subsidiary, PickNet, Inc., is the obligor, and so informed Teleglobe USA,
Inc. by letter dated May 18, 2000. To our knowledge, no litigation involving the
Company has commenced. At the present time, the outcome of this threatened
litigation cannot be predicted.

                                      -15-

<PAGE>

9. GOING CONCERN MATTERS:

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has incurred substantial recurring losses from
operations, has a net capital deficiency in the amount of approximately
$26,163,000 and has a working capital deficiency of approximately $24,743,000 at
September 30, 2000 that raise substantial doubt about its ability to continue as
a going concern. In addition, the Company had negative cash flow from operations
for the nine-month periods ended September 30, 2000 and 1999, and for the years
ended December 31, 1999, 1998 and 1997.

Significant short-term obligations exist including the payments of the
settlements with Worldcom and AT&T in the amounts of $1,256,622 and $1,376,447,
respectively (see Note 8) plus accrued interest. Additionally, payment of loans
to various creditors plus accrued interest at September 30, 2000 cannot be met
through cash flows from operations. Without the Company's ability to extend the
payout terms of the aforementioned liabilities or obtain additional long-term
financing, as well as increasing revenue and/or decreasing expenses, the Company
will be unable to continue as a going concern. The consolidated financial
statements do not include any adjustments relating to the recoverability of
assets or the classifications of liabilities should the Company be unable to
continue as a going concern.

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

The Company has had discussions with several of its largest unsecured creditors,
including, but not limited to, AT&T and IDT. The Company is attempting to reach
an approved out of court "standby agreement" with all of its creditors. If the
standby agreement is acceptable to the Company's creditors, then as long as the
Company complies with its terms, the Company's creditors will not exercise their
legal rights and remedies. If the proposed settlement with creditors is
successful, the Company have no direct obligation to any of its unsecured
creditors because their claims will be satisfied from the future earnings of
PICK Sat and/or other affiliates. There can be no assurance that the Company's
effort's to resolve the claims of its unsecured creditors will be successful.

Should the Company be unable to obtain interim financing in the near term and/or
reach an agreement with its unsecured creditors, the Company will be forced to
cut back or suspend operations and/or seek protection under the bankruptcy laws.


10. OTHER MATTERS:

In April 2000, a group of investors from Europe and the Middle East committed an
aggregate of $10,000,000 to PICK Sat (the "PICK Sat Financing"), to occur over a
12-month period. The investors will acquire 20% ownership of PICK Sat and will
be issued equity on the basis of 1% for every $500,000 invested. As of September
30, 2000, $4,206,700 had been invested in PICK Sat, and accordingly pursuant to
Staff Accounting Bulletin Topic 5H, the Company has recorded the sale of
subsidiary stock as an equity transaction in the accompanying financial
statements. The initial $500,000 was made as a convertible loan on a pari passu
basis with the ATN indebtedness described in Note 4. Additionally, during the
period ended September 30, 2000, the Company has granted options, warrants and
common stock in the Company and PICK Sat for consulting services and
compensation.

On October 15, 2000, PICK Sat issued a promissory note (the "Note") to an
investor in the principal amount of $2,000,000 which bears interest at 7.5% per
annum. The principal amount and plus accrued interest at 7.5% per annum, is due
on October 15, 2001, and may be repaid at any time without penalty. The Note is
collateralized by all the assets of PICK Sat.

                                      -16-


<PAGE>

Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations

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

Material Changes in Results of Operations

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

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

For PICK Sat business, the Company will charge its customers monthly recurring
fees based on type of usage and bandwidth contracted for and may charge an
additional amount per reception location.

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

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

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

Nine Months Ended September 30, 2000 Compared with September 30, 1999

Revenues:

The Company's continuing operations, PICK Sat, have recently commenced
commercial operations and as such have had no revenues for the nine months ended
September 30, 2000.

                                      -17-

<PAGE>

Costs and Expenses:

Selling, general and administrative expenses increased to $4,392,168 for the
nine months ended September 30, 2000, from $1,920,643 for the nine months ended
September 30, 1999, reflecting an increase of $2,471,525 or approximately 129%.
This increase is primarily due to the fact that the PICK Sat is working towards
commercialization of its new product line. The Company generated significantly
increased expenses for salaries, outside consultants, accounting, marketing,
trade shows, legal, international travel and public relations in developing its
business. The Company also had increased expenses for preparation of public
filings and the negotiation of debt arrangements which were handled primarily by
non-employees.

Loss from Operations:

The Company's loss from continuing operations increased from $1,988,836 for the
nine months ended September 30, 1999 to $9,291,246 for the nine months ended
September 30, 2000, primarily due to the increases in aggregate salaries,
outside consultants, selling, general and administrative costs. PICK Sat is
still developing its products and offerings and is moving closer to the
commercial deployment phase. The Company was without adequate funds during the
nine months ended September 30, 2000 to commercialize its PICK Sat operations.
In addition, the loss from continuing operations during the nine months ended
September 30, 2000 was reduced by $293,977 due to a settlement of an old
outstanding accounts payable balance.

Discontinued Operations

On June 23, 1999, the Company formalized its plan to discontinue its
telecommunications and prepaid calling card business consisting of PICK US, PICK
Net and PICK Net UK PLC (collectively "PICK Net"). Accordingly, the
telecommunications and prepaid calling card business are accounted for as
discontinued operations in the accompanying consolidated financial statements.
On September 13, 1999, the Company agreed to sell its PICK Net operations to
Lebow Investments Ltd., a recently formed corporation ("Lebow"). Lebow agreed to
be financially responsible for the PICK Net operations which received funding to
continue operations commencing in September 1999 through the closing of this
transaction. On January 18, 2000, the Company completed the sale of all of the
stock of PICK Net for nominal value, and had up to approximately $10 million of
PICK Net's liabilities assumed. Simultaneously with the closing, Gulfsat
Communications Company, a Kuwaiti company ("Gulfsat"), purchased all of the
common stock of Lebow. Gulfsat was a principal vendor of services to the PICK
Net companies which was owed approximately $1,555,000 as of October 31, 1999,
primarily under a reciprocal telecommunications agreement and payment of which
amount had been assumed by Lebow. In February 2000, Gulfsat defaulted under its
agreements and discontinued operating PICK Net. The Company has made demand on
Lebow and Gulfsat to satisfy its obligations, or it will pursue all legal
remedies, but is attempting to negotiate a settlement. In any event, however, in
addition to the direct obligations of the Company described hereinafter, the
Company retains substantial contingent liabilities on its discontinued
operations if those liabilities are not paid and has retained all such
liabilities on its financial statements. (See Note 7 of Notes to Consolidated
Financial Statements for operating results of the discontinued operations).

Loss from discontinued operations decreased from $53,478,123 for the nine months
ended September 30, 1999 to $404,320 which was net of $45,239 due to settlement
of certained outstanding accounts payable balances for the nine months ended
September 30, 2000. The Company operated its subsidiaries for only 18 days
during the nine months ended September 30, 2000 before selling the operations,
although it had certain ongoing obligations in view of its contingent
liabilities which necessitated certain payments.

                                      -18-

<PAGE>

For the nine months ended September 30, 2000, the Company generated
international long distance revenue of $168,598, compared with $3,189,577 for
the nine months ended September 30, 1999. The Company had no prepaid telephone
calling card revenues for the nine months ended September 30, 2000, compared to
$2,192,812 for the nine months ended September 30, 1999. The cost of sales
decreased from $7,602,906 for the nine months ended September 30, 1999 to
$328,864 for the nine months ended September 30, 2000, as operations were wound
down.

Material Changes in Financial Condition from December 31, 1999 to September 30,
2000:

Due to the losses discussed above, the Company's working capital deficit
increased from $19,997,015 as of December 31, 1999, to $24,743,093 as of
September 30, 2000, an increase in the working capital deficit of $4,746,078,
and the stockholders' deficiency increased from $23,848,441 at December 31, 1999
to $26,163,430 at September 30, 2000, an increase in stockholders' deficiency of
$2,314,989.

Current assets decreased by $222,477 primarily due to a decrease in current
assets from discontinued operations at September 30, 2000. Current liabilities
increased by $4,523,601. This increase is largely due to increases in the
current portion of debt, in accounts payable and accrued expenses and current
liabilities from discontinued operations. However, a substantial portion of
current liabilities from discontinued operations were assumed by Lebow and
Gulfsat on January 18, 2000, but in February 2000, they defaulted under their
agreements.

A significant portion of the liabilities of the Company mature or are subject to
payment agreements calling for payment before the end of 2000. The Company has
had discussions with several of its largest unsecured creditors, including, but
not limited to, AT&T and IDT. The Company is attempting to reach an approved out
of court "standby agreement" with all of its creditors. If the standby agreement
is acceptable to the Company's creditors, then as long as the Company complies
with its terms, the Company's creditors will not exercise their legal rights and
remedies. If the proposed settlement with creditors is successful, the Company
have no direct obligation to any of its unsecured creditors because their claims
will be satisfied from the future earnings of PICK Sat and/or other affiliates.
There can be no assurance that the Company's effort's to resolve the claims of
its unsecured creditors will be successful.

The Company is in need of immediate financing for working capital. In April
2000, a group of investors from Europe and the Middle East committed an
aggregate of $10 million to PICK Sat (the "PICK Sat Financing"), to occur over a
12-month period. The investors will acquire 20% ownership of PICK Sat and will
be issued equity on the basis of 1% for every $500,000 invested. As of September
30, 2000 and November 1, 2000, $4.2 million, and approximately $5.2 million,
respectively, has been invested in PICKSat. The initial $500,000 was made as a
convertible loan on a pari passu basis with the Atlantic Tele-Network Inc.
("ATN") indebtedness described below. In addition, on October 15, 2000, PICK Sat
issued a promissory note (the "Note") to an investor in the principal amount of
$2,000,000 which bears interest at 7.5% per annum. The principal amount plus
accrued interest at 7.5% per annum, is due on October 15, 2001, and may be
repaid at any time without penalty. The Note is collateralized by all the assets
of PICK Sat.

In September, 1999 PICK entered into an option agreement with Atlantic
Tele-Network, Inc. ("ATN") to sell them up to 19.9% of the common stock of PICK
Sat for $8 million, with an option to acquire an additional 31.1% for an
additional $15 million payable in 500,000 shares of ATN common stock or $15
million in cash or ATN common stock, whichever produces the higher value at the
time of exercise of the option was exercised in full. PICK Sat obtained interim
loans in the principal amount of $476,000 from ATN for the Company and PICK
Sat's operating expenses. ATN chose not to exercise the option. In addition,


                                      -19-

<PAGE>

under a credit facility, as of September 30, 2000, one of PICK's former
subsidiaries, PICK Net USA, had debt, amounting to $2,119,424 plus accrued
interest, which includes the $476,000 principal amount plus accrued interest
assumed from PICK Sat's balance by PICK Net's buyer on the date of sale, January
18, 2000. In accordance with the terms of the above loans from ATN, the $476,000
borrowed by PICK Sat and the $1,589,664 borrowed by PICK Net USA, all become due
and payable on February 4, 2000 and has not been paid. On January 4, 2000, in
consideration with the completion of the sale of the Company's PICK Net
subsidiaries to Lebow and Gulfsat, as well as the termination of the PICK Sat
option, ATN received five-year warrants to purchase 1 million shares of PICK
Common Stock exercisable at $2.00 per share.

On November 3, 1999, PICK Sat obtained a 120 day revolver for $500,000 (the
"Revolver") from Tri-Links Investment Trust ("Tri-Links"). PICK Sat borrowed the
entire $500,000 under the Revolver which bears interest at 13% per annum,
increasing to l5% per annum upon default and payment of which is guaranteed by
PICK. Tri-Links was granted a security interest in substantially all of PICK
Sat's assets which was initially subordinated to ATN and then made pari passu
and equal in priority. The Revolver came due on March 3, 2000 and was extended
until May 3, 2000. In addition, on January 26, 2000, Tri-Links, PICK, PICK Sat
and Group Technology for Scientific Equipment and Supplies and Salah Khalid Al
Fulaij ("Fulaij") entered into an Amendment Agreement which was amended again in
March and April 2000, whereby the commitment under the Revolver was increased.
The loan payable balance at September 30, 2000 amounted to $1,447,430.

     As of August 30, 2000, the parties agreed in principle to a Third Amendment
and Extension Agreement under which repayment of $1,150,000 principal amount was
extended to April 1, 2001 and $100,000 will be converted into equity of PICK Sat
by Fulaij. The interest rate was reduced from 13% to 10% per annum. Repayment of
the loan will be made on a monthly basis until repaid in full on April 1, 2001.
Until the loans are repaid, PICK and PICK Sat agreed to certain negative
covenants including the payment of dividends to PICK cannot exceed $200,000 in
the aggregate; not greater than l5% of PICK Sat's projected debt may be paid or
incurred; and the companies cannot enter into certain mergers or sales of
assets. The lenders were granted the right to elect either two members of PICK
Sat's Board of Directors or two observers to the Board. Subject to a proposed
recapitalization of PICK Sat, the lenders were granted warrants to purchase an
aggregate of 15,000 shares of PICK Sat's common stock at the lesser of $5.00 per
share or 50% of the price paid by new investors at the time of PICK Sat's
initial public offering on or before March 1, 2001.

In March 1999, the board of directors authorized the issuance of 2,000,000
shares of Series B convertible preferred stock. The Series B convertible
preferred stock has a stated par value of $.001 per share and 1,871,000 shares
were issued, convertible into 1,871,000 shares of the Company's common stock at
the rate of $1.00 per share. As of September 30, 2000, 1,476,000 shares of
Series B convertible preferred stock had been converted into common stock.

In April 1999, the board of directors authorized the issuance of 500,000 shares
of Series D convertible preferred stock. The Series D convertible preferred
stock has a stated par value of $.001 per share and was initially convertible
into 1,190,500 shares of the Company's common stock at the rate of $4.20 per
share. As of December 31, 1999, the Company had sold an aggregate of 466,000
shares of Series D convertible preferred stock for $4,660,000 prior to the
payment of $459,750 of preferred stock placement costs. In addition, the Company
issued an aggregate of 700,000 common stock purchase warrants in connection with
the sale of Series D convertible preferred stock. Each Warrant is exercisable at


                                      -20-
<PAGE>

$6.30 per share of common stock for a two-year period. On July 15, 1999, the
Company sold 34,000 shares of Series D convertible preferred stock for $340,000
to Diego Leiva, chairman of the board. The purchase is evidenced by a recourse
promissory note secured by a pledge of the securities. Mr. Leiva has agreed to
return the 34,000 shares of Series D Preferred Stock and accompanying warrants
to the Company for cancellation. In January 2000, the conversion rate was
adjusted so that the preferred stock converts into common stock at $2.00 per
share. As of September 30, 2000, $3,160,000 principal amount of Series D
Convertible Preferred Stock had been converted into 952,738 shares of common
stock. The remaining $1,500,000 principal amount (exclusive of Mr. Leiva's
$340,000 of preferred stock) of Series D Convertible Preferred Stock, is
convertible into 750,000 shares of Common Stock, subject to adjustment.

At December 31, 1999, we also recorded a beneficial dividend of $25,170,000
associated with the issuance of preferred stock. This charge did not use any
cash of the Company.

Material Changes in Cash Flows

At September 30, 2000, the Company had an overdraft of $530,314 as compared
to a cash balance of $122,423 at September 30, 1999.

Cash Flows from Operating Activities

Operating activities used $3,549,793 in cash for the nine months ended
September 30 2000, compared with a use of $4,982,046 for the nine months ended
September 30, 1999. Cash flows from operating activities consists primarily of a
net loss of $9,695,566 for the nine months ended September 30, 2000, compared
with a net loss of $55,466,959 for the nine months ended September 30, 1999. Net
cash flow from operating activities also reflected a $736,586 decrease in
long-term liabilities from discontinued operations and a $795,832 increase in
current liabilities from discontinued operations, whereas there was an increase
in current liabilities from discontinued operations of $228,808 for the nine
months ended September 30, 1999.

Cash Flows from Investing Activities

The Company's capital expenditures of $1,746,651 for the nine months ended
September 30, 2000 increased from the nine months ended September 30, 1999 of
$1,293,583. This increase is attributable primarily to the Company's development
of the satellite-based Internet access, interactive multimedia structures for
its PICKSat subsidiary during 2000.

Cash Flows from Financing Activities

During the nine months ended September 30, 2000, the Company had net cash
provided by financing activities of approximately $5,296,444, as compared to
$6,381,000 for the nine months ended September 30, 1999. The proceeds are
primarily from the issuance of PICK Sat's equity and funds advanced on
third-party debt during the nine months ended September 30, 2000 in the amounts
of $4,206,700 and $559,430, respectively. The proceeds were primarily from the
issuance of the Series B and Series D preferred stock and funds advanced on
third-party debt during the nine months ended September 30, 1999.

Year 2000 Compliance

There have been no material changes since the Company's disclosure in its Annual
Report on Form 10-K for December 31, 1999. The Company identified and prepared
for all significant internal Y2K issues that could adversely affect its business
operations. The cost of resolving such issues did not have a material impact on
the Company's financial position, results of operations or liquidity.


                                      -21-

<PAGE>

Part II  Other Information

Item 1 - Legal Proceedings:

During the quarter ended September 30, 2000, there were no material changes in
the Company's previously reported legal proceeding in its Annual Report on Form
10-K for December 31, 1999 except as described herein.

On April 14, 2000, Teleglobe USA, Inc. threatened litigation to recover
$900,812.20, plus interest, from the Company. The Company believes that its
former subsidiary, PickNet, Inc., is the obligor, and so informed Teleglobe USA,
Inc. by letter dated May 18, 2000. To our knowledge, no litigation involving the
Company has commenced. At the present time, the outcome of this threatened
litigation cannot be predicted.

Item 2 - Changes in Securities:

There have been no material changes since the Company's disclosure in the Annual
Report on Form 10-K from December 31, 1999.

Item 6. Exhibits and Reports on Form 8-K

        (a) Exhibits

            27.1 Selected Financial Data.

        (b) Reports on Form 8-K.

            None.

                                      -22-


<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                   PICK COMMUNICATIONS CORP.



Dated: November 22, 2000           By: /s/ Helge Bornmann
                                       ------------------------------------
                                       Helge Bornmann
                                       Chairman of the Board and Chief
                                       Executive Officer (Principal Executive
                                       Officer and Principal Financial Officer)




                                      -23-