FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549



[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
     For the period ended March 31, 1997
                                       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 jurisdictiction of      (I.R.S. employer identification no.)
    Incorporation or Organization)

155 Route 46, West, Third Floor
   Wayne Interchange Plaza II
         Wayne, NJ                                                07470
  (Address of principal executive offices)                      (Zip code)

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

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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.
                  Class                        Outstanding at May 15, 1997
         Common Stock, $.001 Par Value                 35,867,016

             (See Index to Sections of this Document on Page 2)



<PAGE>



                            PICK Communications Corp.


                                Table of Contents

                                                                      Page No.
PART I            Financial Information

Item 1:  Financial Statements                                            3
         Consolidated Balance Sheets                                     4
         Consolidated Statements of Operations                           5
         Consolidated Statements of Stockholders' Equity                 6
         Consolidated Statements of Cash Flows                           7
         Notes to the Consolidated Financial Statements                  8

Item 2: Management's Discussion and Analysis of Financial
        Condition and Results of Operations                             15

PART II           Other Information:

Item 1   Legal Proceedings                                              17
Item 2   Changes in Securities                                          18
Item 3   Defaults Upon Senior Securities                                18
Item 4   Submission of Matters to a Vote of Security Holders            18
Item 5   Other Information                                              19
Item 6   Exhibits and Reports on Form 8-K                               19


SIGNATURES                                                              20













                                        2



<PAGE>



                            PICK Communications Corp.

PART I   Financial Information

Item 1 - Financial Statements:

Financial Information

Financial consolidated financial statements for the three months ended March 31,
1997  and  March  31,  1996  are  derived  from  the  consolidation  of the PICK
Communications  Corp,  (the "Company" or "PCC") Public  Info/Comm  Kiosk,  Inc.,
("PICK"),  P.C.T. Prepaid Telephone,  Inc. ("PCT") and PICKNET,  Inc. (PICKNET).
They are included in the following pages labeled F-1 through F-12.




                                        3


<PAGE>

<TABLE>
<CAPTION>


                                             PICK Communications Corp.
                                            Consolidated Balance Sheets
                                       December 31, 1996 and March 31, 1997


<S>                                                                                <C>            <C> 

                          ASSETS ...............................................          1996           1997
                                                                                   -----------    -----------
CURRENT ASSETS .................................................................                  (Unaudited)
    Cash .......................................................................   $    87,712        116,781
    Accounts receivable, net (note 1g) .........................................       778,180      1,442,037
    Prepaid telephone card inventory (note 1d) .................................        23,914         13,868
    Prepaid advertising ........................................................     2,458,155              0
    Prepaid expenses and other current assets ..................................        82,252         74,377
                                                                                   -----------    -----------
       Total Current Assets ....................................................     3,430,213      1,647,063
                                                                                   -----------    -----------

PROPERTY AND EQUIPMENT
    Furniture and equipment, net (note 1e) .....................................        90,571         87,924
                                                                                   -----------    -----------
       Total Property and Equipment ............................................        90,571         87,924
                                                                                   -----------    -----------

OTHER ASSETS
    Pre-paid cellular patent and rights, net ...................................       583,705        534,425
    Purchased goodwill (note 1i) ...............................................             0      2,893,302
    Investment in marketable equity securities, net (note 6) ...................     4,812,660      1,992,797
                                                                                   -----------    -----------
       Total Other Assets ......................................................     5,396,365      5,420,524
                                                                                   -----------    -----------
Total Assets ...................................................................   $ 8,917,149      7,155,511
                                                                                   ===========    ===========
                 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Accounts payable (note 5) ..................................................   $ 1,072,052      2,196,090
    Direct cost telephone time accrual (note 5) ................................       316,215        623,380
    Accrued expenses and other current payables (note 1h) ......................       702,059        461,348
    Customer deposits ..........................................................       300,000        432,017
    Reserve for contingent liabilities .........................................     1,749,563      1,749,563
    Advances from stockholders (note 4) ........................................        25,152              0
    Deferred revenue ...........................................................     1,667,388      1,448,407
    Line of credit (note 4) ....................................................       750,000        750,000
                                                                                   -----------    -----------
       Total Current Liabilities ...............................................     6,582,429      7,660,805
                                                                                   -----------    -----------

LONG-TERM LIABILITIES
    Deferred income tax liability (note 1j) ....................................             0              0
                                                                                   -----------    -----------
       Total Long-Term Liabilities .............................................             0              0
                                                                                   -----------    -----------
Total Liabilities ..............................................................     6,582,429      7,660,805
                                                                                   -----------    -----------
Minority interest in consolidated subsidiary ...................................     1,465,141        114,099
                                                                                   -----------    -----------

STOCKHOLDERS' EQUITY
    Common stock, $.002 par; Authorized 75,000,000 shares; 43,697,516 issued and
       43,217,516 outstanding at December 31, 1996 and $.001 par; 43,097,516
       issued and 35,832,016 outstanding at March 31, 1997 (note 2) ............        87,395         43,098
    Additional paid in capital in excess of par (note 2) .......................     6,399,720      5,844,017
    Stock subscription receivable (note 2) .....................................      (600,000)             0
    Treasury stock (note 2) ....................................................      (602,089)    (4,802,534)
    Marketable equity securities valuation reserve (note 6) ....................    (3,904,965)    (2,142,203)
    Retained earnings (deficit) ................................................      (510,482)       438,229
                                                                                   -----------    -----------
Total Stockholders' Equity .....................................................       869,579       (619,393)
                                                                                   -----------    -----------
Total Liabilities and Stockholders' Equity .....................................   $ 8,917,149      7,155,511
                                                                                   ===========    ===========
</TABLE>

               The accompanying notes are an integral part of the
                             financial statements.
                                        4


<PAGE>

<TABLE>
<CAPTION>


                                             PICK Communications Corp.
                                       Consolidated Statements of Operations
                                             3 months ended March 31,
                                                    (UNAUDITED)
<S>                                                                                <C>             <C> 
                                                                                           1996            1997
                                                                                   ------------    ------------
         Revenue
Sales - debit cards to related parties (note 5) ................................   $     49,781           7,506
Sales - debit cards to others ..................................................        461,048         280,207
Sales - long distance services .................................................          1,837       2,150,519
                                                                                   ------------    ------------
    Total sales ................................................................        512,666       2,438,232

Cost of sales - related parties (note 5) .......................................         68,690          18,405
Other cost of sales ............................................................        529,972       2,398,504
                                                                                   ------------    ------------
   Total cost of sales .........................................................        598,662       2,416,909
                                                                                   ------------    ------------

   Gross profit(loss) ..........................................................        (85,996)         21,323

Sales - prepaid cellular licenses ..............................................      3,600,000               0

         Operating Expenses
Sales and marketing - related party (note 5) ...................................              0               0
Sales and marketing - other ....................................................         56,383           1,554
                                                                                   ------------    ------------
   Total sales and marketing ...................................................         56,383           1,554
General and administrative .....................................................        502,126         381,527
Depreciation ...................................................................          8,026           6,298
Amortization ...................................................................         35,625          35,575
Bad debt .......................................................................          5,193          26,292
                                                                                   ------------    ------------
   Total operating expenses ....................................................        607,353         451,246
                                                                                   ------------    ------------

Income(loss) from operations ...................................................      2,906,651        (429,923)
Interest expense ...............................................................         10,330          13,944
                                                                                   ------------    ------------

Income(loss) before taxes, minority interest in subsidiary loss and gain on sale
     of marketable equity securities ...........................................      2,896,321        (443,867)
Gain(loss) on sale of marketable equity securities (notes 6) ...................      4,784,000        (748,625)
                                                                                   ------------    ------------

Income(loss) before taxes and minority interest in subsidiary loss .............      7,680,321      (1,192,492)

Minority interest in subsidiary loss ...........................................          6,654         333,203
Provision for income taxes(benefit) - deferred (note 1j) .......................      1,808,000      (1,808,000)
Provision for income taxes(benefit) - current (note 1j) ........................        346,000               0
                                                                                   ------------    ------------

Net income(loss) ...............................................................   $  5,532,975         948,711
                                                                                   ============    ============

Primary net income(loss) per share .............................................   $       0.13            0.02
                                                                                   ============    ============

Weighted average number of shares outstanding ..................................     42,755,713      39,884,372
                                                                                   ============    ============

Fully diluted net income(loss) per share .......................................   $       0.12            0.02
                                                                                   ============    ============

Weighted average number of shares outstanding ..................................     45,294,165      43,384,372
                                                                                   ============    ============
</TABLE>

               The accompanying notes are an integral part of the
                             financial statements.
                                        5


<PAGE>

<TABLE>
<CAPTION>


                                             PICK Communications Corp.
                                  Consolidated Statement of Stockholders' Equity
  
<S>                     <C>               <C>          <C>            <C>              <C>           <C>          <C>

                                          Additional        Stock        Mkt Sec                     Retained          Total
                           Common           Paid in      Subscrip      Valuation       Treasury      Earnings/    Stockholders'
                            Stock           Capital    Receivable        Reserve          Stock      (Deficit)         Equity
BALANCE, January
    1, 1997       A)    $     87,395      6,399,720      (600,000)    (3,904,965)      (602,089)      (510,482)       869,579

Capital transactions:
                  B) ..      (43,697)        43,697              0             0              0              0              0
                  C) ..         (600)      (599,400)       600,000             0              0              0              0
                  D) ..            0              0              0             0     (2,038,155)             0     (2,038,155)
                  E) ..            0              0              0             0           (313)             0           (313)
                  F) ..            0              0              0       856,969     (2,149,999)             0     (1,293,030)
                  G) ..            0              0              0       849,181              0              0        849,181
                  H) ..            0              0              0             0        (11,978)             0        (11,978)
                  I) ..            0              0              0        56,612              0              0         56,612

Marketable equity
  securities valuation
  reserve - net .......            0              0              0             0              0              0              0

Net income(loss) ......            0              0              0             0              0        948,711        948,711
                         -----------    -----------   -----------    -----------    -----------    -----------    -----------
BALANCE, March
   31, 1997
(Unaudited) ...........  $    43,098      5,844,017              0    (2,142,203)    (4,802,534)       438,229       (619,393)
                         ===========    ===========   ===========    ===========    ===========    ===========    ===========

<FN>

A) 43,697,516 shares of common stock issued and 43,217,516 outstanding.

B) January 1997; reduction in par value from $.002 to $.001 per share.

C) February 1997; (600,000) shares of common stock; cancellation of shares subscribed. 43,097,516 shares of common
stock issued and 42,617,516 outstanding.

D) February 1997; (750,000) shares of common stock; $2,550,000 face amount, $2,038,155 book value of prepaid
advertising exchanged for 750,000 shares. 43,097,516 shares of common stock issued and 41,867,516 outstanding.

E) February 1997; (5,000,000) shares of common stock; shares of Firenze, Ltd. exchanged for 5,000,000 shares.
43,097,516 shares of common stock issued and 36,867,516 outstanding.

F) February 1997; (1,000,000) shares of common stock; shares of Ultimisics, Inc. exchanged for 1,000,000 shares.
43,097,516 shares of common stock issued and 35,867,516 outstanding.

G) February 1997; exchange 1,500,000 shares of Ultimistics, Inc. for 4,000,000 shares of PCT Prepaid Telephone, Inc.,
a consolidated subsidiary.

H) February 1997; (35,500) shares of common stock; $11,978 in cash exchanged for 35,500 shares. 43,097,516 shares
of common stock issued and 35,832,016 outstanding.

I) March 1997:  exchange 300,000 shares of Ultimistics, Inc. and $420,000 book value of prepaid advertising for
5,000,000 shares of PCT Prepaid Telephone, Inc., a consolidated subsidiary.
</FN>
</TABLE>

               The accompanying notes are an integral part of the
                             financial statements.
                                        6


<PAGE>

<TABLE>
<CAPTION>


                                             PICK Communications Corp.
                                       Consolidated Statements of Cash Flows
                                             3 months ended March 31,
                                                    (UNAUDITED)
<S>                                                                                              <C>                 <C> 
                                                                                                1996                1997
                                                                                        ------------------      ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income(loss)                                                                    $         5,532,975              948,711
Adjustments to reconcile net loss to net cash used for operating activities:
  Non-cash revenues - prepaid cellular license revenue                                       (3,600,000)                   0
  Non-cash gain on sale of marketable equity securities                                      (4,784,000)                   0
  Non-cash loss on consolidated subsidiary sale of marketable equity securities                       0              748,625
  Minority interest in consolidated subsidiary (loss) income                                     (6,654)            (333,203)
  Compensation expense accrued for treasury stock purchase                                       29,500                    0
  Depreciation                                                                                    8,026                6,298
  Amortization                                                                                   35,625               35,575
  Bad debt expense                                                                                5,193               26,292
Changes in operating assets and liabilities:
  (Increase) decrease in accounts receivable                                                   (184,571)            (679,548)
  (Increase) decrease in prepaid telephone card inventory                                       (15,774)              10,046
  (Increase) decrease in prepaid and other assets                                               (38,417)               7,875
  Increase (decrease) in accounts payable (note 5)                                              434,084            1,124,038
  Increase (decrease) in direct cost telephone time accrual (note 5)                           (430,522)             307,165
  Increase (decrease) in deferred revenue                                                        72,245             (218,981)
  Increase (decrease) in prepaid telephone time liability                                      (105,000)                   0
  Increase (decrease) in current income taxes payable                                           346,000                    0
  Increase (decrease) in customer deposits                                                            0              132,017
  Increase (decrease) in deferred income taxes payable                                        1,808,000           (1,808,000)
  Increase (decrease) in accrued expenses (note 1h)                                             378,519             (240,711)
                                                                                          -------------         -------------
Net cash (used) provided by operating activities                                               (514,771)              66,199
                                                                                         --------------         -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Common stock repurchased for cash                                                                     0              (11,978)
Purchase of fixed assets                                                                         (3,105)                   0
                                                                                       ----------------         -------------
Net cash (used) provided by investing activities                                                 (3,105)              (11,978)
                                                                                       ----------------        --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issued for cash                                                                    125,000                     0
Common stock issued for cash by subsidiary                                                      135,000                     0
Payments received on stock subscriptions receivable                                             150,000                     0
Payments on stockholder advances                                                                      0               (25,152)
Payments on third-party debt                                                                    (25,000)                    0
Funds advanced by stockholder                                                                    50,000                     0
                                                                                       ----------------         -------------
Net cash provided (used) by financing activities                                                435,000               (25,152)
                                                                                        ---------------       ---------------
Net increase (decrease) in cash                                                                 (82,876)               29,069
                                                                                       ----------------       --------------
CASH, beginning of period                                                                       110,715                87,712
                                                                                        ---------------        --------------
CASH, end of period                                                               $              27,839               116,781
                                                                                       ================         =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash                                                             $                   0                 6,095
                                                                                      =================        ==============
 Noncash financing activities:
     Stock issued for investment in marketable equity securities                  $           2,075,000                     0
                                                                                         ==============       ===============
     Stock issued to acquire prepaid advertising                                  $           2,700,000                     0
                                                                                         ==============     =================
     Stock issued for subscription receivable                                     $             125,000                     0

                                                                                         ===============     =================
    
</TABLE>
              The accompanying notes are an integral part of the
                             financial statements.
                                        7


<PAGE>



                            PICK Communications Corp.
                   Notes to Consolidated Financial Statements
                                   (UNAUDITED)

(1) Summary of Significant Accounting Principles
    Organization PICK Communications  Corp., (the "Company") was incorporated in
         the State of Utah on April 30, 1984, as S.T.V., Inc., changing its name
         to  Adolphus  Companies,  Inc.,  in  February  1986,  and then to Prime
         International  Products,  Inc., in May 1988 and to PICK  Communications
         Corp. in December 1995. In December 1987, the Company acquired American
         Italian Food Processing  Co., Inc. in a stock for stock  exchange.  All
         operations  ceased in 1990. On September 12, 1995, the Company acquired
         Public Info/Comm  Kiosk,  Inc. (PICK) in a stock for stock exchange and
         conducts business from its headquarters in Wayne, NJ.

         PICK was  incorporated in the state of New Jersey on August 6, 1992. It
         was inactive  until  January  1993,  when the founder began funding the
         operations.  PICK  operated  in 1993,  as an agent for the sale of long
         distance  services.  In  1994  the  founder  investigated  the  prepaid
         telephone  card industry and  discovered a potential  niche market.  In
         August 1994,  PICK began selling its own brand of prepaid calling card.
         PICK's target market is primarily  Hispanics  located in New York,  New
         Jersey, South Florida, California and Texas.

         The  financial   statements  have  been  prepared  in  conformity  with
         generally accepted  accounting  principles.  In preparing the financial
         statements,  management is required to make  estimates and  assumptions
         that affect the reported  amounts of assets and  liabilities  as of the
         dates  of the  statements  of  financial  condition  and  revenues  and
         expenses for the years then ended.  The  financial  statements  for the
         three  months  ended  March 31, 1996 and 1997  include all  adjustments
         which in the opinion of management are necessary for fair presentation.
         The following  summarize the more significant  accounting and reporting
         policies and practices of the Company:

    a) Basis of presentation  The financial statements reflect the financial 
         position and results of operations of PICK, Inc., prior to the 
         acquisition by the Company, and on a consolidated basis subsequent to 
         the acquisition. The acquisition has been accounted for as a 
         recapitalization of PICK, Inc.

   b)    Basis of consolidation The consolidated  financial  statements  include
         the  accounts of the Company and its  subsidiaries.  Minority  interest
         represents minority shareholders' proportionate share of the equity and
         earnings/loss of PCT Prepaid Telephone,  Inc. Intercompany transactions
         have been eliminated.

    c)   Revenue  recognition  For debit cards  sales,  the  Company  recognizes
         revenues at the time it provides the telephone services associated with
         its cards. It defers revenue until then, based on customer  patterns of
         usage, and recognizes the cost of the carrier  telephone  traffic based
         on minutes used, which are also recognized in revenue. All other direct
         costs,  (non-traffic  costs  representing  design royalties,  printing,
         fulfillment, sales commissions,  etc.), are recognized as upfront costs
         when  the  initial  sales  are  made  to   distributors.   The  Company
         anticipates  that  substantially  all of the telephone time  associated
         with the debit cards will be used by its  customers.  The Company  does
         not have a written returns policy, but consider sales returns on a case
         by case basis.

         For bulk long distance time sales, the Company  recognizes  revenue and
         the related expenses at the time the service is provided as reported by
         the switch.

    d)   Prepaid telephone card inventory Card inventory is composed of costs to
         provide  unactivated cards to the fullfillment  company,  which include
         printing  and  freight,  and is valued at the lower of cost or  market.
         Inventory is  relieved,  and charged to cost of sales,  when  activated
         cards  are  shipped  from the  fullfillment  company  to the  wholesale
         purchaser.

      e) Fixed assets Fixed assets are stated at cost.  Depreciation is computed
         using the  straight-line  method over the estimated useful lives of the
         assets, generally 3, 5 and 7 years. Depreciation expense was $8,026 and
         $6,298  for  the  three   months   ended   March  31,  1996  and  1997,
         respectively.

                                        8


<PAGE>



                            PICK Communications Corp.
                   Notes to Consolidated Financial Statements

(1) Summary of significant accounting principles, continued
    f)   Concentration   of  credit   risk   Three   customers   accounted   for
         approximately 65%, 11.5% and 2.8% of net sales and approximately 69.1%,
         0% and 7.5% of accounts  receivable at March 31, 1996.  Four  customers
         accounted for approximately  22.8%,  21.7%, 19.5% and 5.3% of net sales
         and approximately  29.1%,  24.2%, 5.4% and 0% of accounts receivable at
         March 31, 1997. The Company performs periodic credit evaluations of its
         customers, but generally does not require collateral.

      g) Accounts  receivable The Company  provides  credit for open accounts in
         the normal course of business. As of the date of these statements,  the
         Company has  established  a reserve for doubtful  accounts at a rate of
         approximately  11.7%  of  outstanding  accounts  receivable  or 7.8% of
         sales.  The reserve amounts at March 31, 1996 and 1997 were $37,871 and
         $190,454.  Bad debt expense was $5,193 and $26,292 for the three months
         ended March 31, 1996 and 1997 respectively.

    h)   Accrued compensation Accrued compensation of $145,448 at March 31, 1996
         is composed of compensation  accrued, but not yet paid to the President
         of the Company.  Accrued  compensation  of $56,349 at March 31, 1997 is
         composed of compensation accrued, but not yet paid to various officers.

       i)Valuation  of  intangibles  Intangible  assets  are  valued at cost and
         amortized over their estimated  remaining  useful lives. The Company is
         amortizing the prepaid cellular asset over the initial 60 month term of
         the  contract.  Amortization  expense  was  $35,625 and $35,575 for the
         three months  ended March 31, 1996 and 1997.  The Company has not begun
         to amortize the purchased goodwill related to the various  acquisitions
         of PCT Prepaid  Telephone,  Inc.  common stock.  The Company expects to
         amortize the goodwill over seven years  beginning in the second quarter
         of 1997.

    j)   Income taxes  Deferred  income taxes are provided on elements of income
         that are recognized  for income tax purposes in periods  different than
         such items are recognized for financial accounting purposes.  Statement
         of Financial  Accounting  number 109 (SFAS 109)  requires  companies to
         take into account changes in tax rates when valuing the deferred income
         tax amounts carried on their Balance Sheets (the  "Liability  Method").
         The Company  adopted SFAS 109 effective with the conversion  from Sub-S
         status,  August 1, 1994.  The Company had a deferred  tax  liability of
         $1,808,000  and $0 and a current tax  liability  of $346,000  and $0 at
         March 31,  1996 and 1997.  In the first  quarter of 1997,  the  Company
         determined  that it has no income tax liability,  therefore it reversed
         the  $1,808,000   previously   provided  for  as  deferred  income  tax
         liability.  Any income tax benefits related to the differences  between
         methods of depreciation is de minimus.

    k)   Net income(loss)  per share Primary  income(loss) per share is computed
         by dividing  the net  income(loss)  by the weighted  average  number of
         common shares outstanding during the period. Fully-diluted income(loss)
         per share is computed by dividing the net  income(loss) by the weighted
         average number of common shares and common share equivalents,  assuming
         the equivalents had been shares outstanding, during the period.

(2)      Stockholders'  equity The Company has authorized  50,000,000  shares of
         $0.002 par value common stock.  In August 1995, the Company had 277,516
         shares outstanding.  In August 1995, the Company completed a Regulation
         D Rule 504  private  offering  in which the  Company  issued  8,000,000
         shares in exchange  for $232,650 in cash,  net of offering  expenses of
         $7,350.

         PICK had authorized 1,000,000 shares of no par common stock. In January
         1993, PICK issued 100,000 shares in exchange for $1,000.  At the end of
         1993, the President of PICK  contributed  his  compensation to PICK, by
         way of waiving the compensation accrued. During 1994, the President had
         loaned  $161,000 to PICK,  which he  exchanged  for  623,000  shares of
         common  stock.  In August  1994,  PICK issued  20,000  shares to a then
         unrelated  third-party  in  exchange  for a  telephone  switch  and the
         tariffs  required  to operate  the  switch,  valued at  $100,000.  From
         January  through July 1995,  PICK issued shares to various  parties for
         services provided,
                                        9


<PAGE>



                            PICK Communications Corp.
                   Notes to Consolidated Financial Statements

(2)      Stockholders' equity,  continued valued at $0.01 per share, for a total
         value of $2,420.  These shares were valued at this level because at the
         time of  issuance,  there was no  assurance  that PICK would be able to
         stay in business and it had  negative  book value.  In June 1995,  PICK
         sold 25,000 shares to an independent consultant for $250 in cash.

         On September 12, 1995, the Company  completed the  acquisition of PICK,
         (see note 1a).  Pursuant to the  agreement to effect this  transaction,
         the Company issued 3,000,000 shares in exchange for 1,000,000 shares of
         Foxwedge,  Inc., 4,500,000 shares in exchange for $250,000 in cash with
         a formerly unrelated party, which subsequently became related through a
         common  director,  500,000 shares in exchange for an  outstanding  note
         payable  of  $250,000,  1,500,000  shares in  exchange  for an  $82,500
         subscription  receivable and 16,665,000  shares in exchange for 100% of
         the issued and outstanding shares of PICK. In October 1995, the Company
         issued  100,000  shares in partial  exchange  for  co-ownership  of the
         prepaid cellular patent and exclusive  commercialization rights, valued
         at $425,000.  In October 1995, the Company issued  5,000,000  shares in
         exchange for 5,000,000 shares of Firenze,  Ltd. common stock, valued at
         $10,000. On November 21, 1995, the Company issued to an unrelated third
         party  1,000,000  shares  in  exchange  for  $200,000  cash  and a note
         receivable for $800,000 to be paid during 1996.

         In January 1996, the Company  entered into an agreement to sell 250,000
         shares of its common stock to an unrelated  third party for $250,000 in
         cash.  Also in January 1996, the Company entered into an agreement with
         International Executive Services,  (IES), a barter exchange company, to
         exchange 1,000,000 shares to IES and 150,000 shares to Richard Maranon,
         a director of the Company, of the Company's common stock for $3,000,000
         of prepaid  advertising.  The  Company  has  recorded  these  shares at
         $2,700,000, or $2.35 per share. The advertising to be provided is to be
         composed  of print,  television,  radio and outdoor  media.  In January
         1996, the Company  exchanged  1,250,000  shares of its common stock for
         500,000 shares of Ultimistics Inc. common stock with an unrelated third
         party  individual  who  desired to  diversify  his/her  portfolio.  The
         Company  recorded  this  transaction  at  $1,275,000,  which  was a 70%
         discount  from the then  current  market  value of  $4,250,000  for the
         Ultimistics stock.

         In January 1996, the Company issued stock options to seven officers and
         directors of the Company. Each of these options was for 500,000 shares,
         for a total of  3,500,000  shares,  at an  exercise  price of $2.75 per
         share and expire on January 25, 1999.  The exercise price was 10% above
         the market  price of the shares on the date of the grant.  The  Company
         has reserved an additional 1,500,000 shares for potential future use in
         granting options for valued employees.

         In June 1996, the Company settled a dispute with a former officer. This
         former  officer had the right to exchange  20,000 shares of PICK,  Inc.
         into 330,000 shares of the Company and owned a warrant for 5,000 shares
         of PICK,  Inc. with an exercise price of $5 per share,  which the board
         of directors  had amended to a warrant for 82,500 shares of the Company
         with an  exercise  price of $0.30 per share.  The  Company  repurchased
         230,000 of the 330,000 shares and the warrant for $29,500 in cash. This
         settlement  finalized  the  September  1995   recapitalization  of  the
         Company.

         In July 1996,  the Company  issued 50,000 shares to Snow Becker Krauss,
         P.C.,  the  Company's  legal  counsel in lieu of cash payment for prior
         services rendered.  In July 1996, the Company reacquired 250,000 shares
         from IES,  previously  issued in January  1996. In December  1996,  the
         Company  issued  400,000  shares to the  President  of the  Company  in
         exchange for $100,000 of salary  accrued but not yet paid.  In December
         1996, the Company issued 55,000 shares to several non-officer employees
         of the Company in  recognition  of the  outstanding  work  performed by
         these individuals on behalf of the Company.

         In February 1997, the Company agreed to cancel the remaining 600,000 
         shares of the Company's common stock held in trust for the minority 
         stockholder and the balance remaining of the subscription receivable.
 
                                       10


<PAGE>



                            PICK Communications Corp.
                   Notes to Consolidated Financial Statements

(2) Stockholders'  equity,  continued 
         The Company and the stockholder were unable to renegotiate the stock 
         subscription.

         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
         exchanged to Firenze Ltd. 5 million  shares of Firenze common stock for
         5 million shares of the Company's  common stock and 6.25 million shares
         of PCT common stock.  In February 1997, the Company  exchanged with New
         Century Media Inc. 1 million  shares of Ultimistics  Inc.  common stock
         for 1 million shares of the Company's common stock and 1 million shares
         of PCT common stock. In March 1997, the Company exchanged with Yakimoto
         Investment Ltd. 1.5 million shares of Ultimistics Inc. common stock for
         4 million  shares of PCT  common  stock.  In March  1997,  the  Company
         exchanged   with  an   unaffiliated   third  party  300,000  shares  of
         Ultimistics Inc. common stock and the balance of the Company's  prepaid
         advertising  for 5 million  shares of PCT common stock.  In March 1997,
         the  Company  repurchased  35,500  shares of its  common  stock in open
         market purchases at an average price of $0.337 per share, or a total of
         $11,978. The cumulative total of the Treasury stock acquisitions by the
         Company is $4.2 million.

         At the January 1997, annual stockholders meeting four amendments to 
         the Company's Articles of Incorporation were approved. 1) The total 
         number of authorized shares of common stock was increased from
         50 million to 75 million. 2) The common stock par value per share was
         decreased from $0.002 to $0.001 per share. 3) The prohibition on 
         cumulative voting of the common stock was eliminated. 4) The Company 
         is now authorized to issue up to 10 million shares of no par "blank 
         check" preferred stock.

(3)      Commitments The Company entered into a 63 month operating lease for the
         Company's  facilities  beginning  in July 1996.  Future  minimum  lease
         payments  under this  operating  lease in effect at March 31,  1997 are
         $8,620 per month,  or  $103,441  per year.  Rent  expense for the three
         months   ended  March  31,  1996  and  1997  was  $3,855  and  $25,860,
         respectively.

(4)      Notes payable  Short-term debt had been made up entirely of advances to
         PICK by the principal stockholder, which were not collateralized. These
         advances  carried  no  interest  nor a stated  maturity.  The  advances
         totalled $25,152 and $0 in 1996 and 1997. PICK repaid $25,152 in 1997.

         In 1995,  the Company  acquired  co-ownership  of the prepaid  cellular
         patent and exclusive  commercialization rights for stock and a $500,000
         note payable to The Next Edge,  Inc.,  which was assigned by TNE to The
         Phone Store, Inc. (TPSI).  This note is to be paid at a rate of $25,000
         per  quarter  for five  years.  The  Company  made the January 1, 1996,
         payment in December 1995. This note was not  collateralized  nor did it
         carry  interest.  In July 1996, the Company  acquired US Treasury Notes
         with a maturity  amount of $425,000 with scheduled  maturity dates that
         coincide  with the  scheduled  payment due dates on the then  remaining
         balance of the note payable to TPSI. The Company placed these UST Notes
         in an  irrevocable  trust that has as its trustee a Miami law firm. The
         trust is to collect the maturity amounts of the UST Notes and remit the
         correct amount to TPSI on such scheduled  payment dates.  The UST Notes
         were  acquired  for $371,920 in cash.  As the Company  retains no legal
         interest in the trust,  this  transaction  has been accounted for as an
         in-substance  defeasance,  whereby  the  Company  recognized  a gain of
         $53,080 and removed the asset and liability from its books and records.

         In November 1996,  the Company  received a $750,000 line of credit from
         Banco Popular,  which the Company had drawn down completely.  This line
         of credit is payable on demand and  carries an  interest  rate of prime
         rate plus 2%.  This line of  credit  is  collateralized  with 1 million
         shares of  Ultimistics,  Inc.  common  stock that the Company  owns and
         accounts receivable.  These Ultimistics shares are part of the exchange
         into Fairbanks shares discussed in note 6.

(5)      Related  party   transactions  The  Company  purchased  no  advertising
         services in 1996 and 1997,  from an entity  controlled by an individual
         who is a  stockholder  and a member  of the  Board of  Directors.  This
         individual also
                                       11


<PAGE>



                            PICK Communications Corp.
                   Notes to Consolidated Financial Statements

(5)      Related party  transactions,  continued  received 150,000 shares of the
         Company's  common stock for his and his staff's  efforts to develop and
         oversee the implementation of the advertising/marketing  programs to be
         instituted by the Company to use the prepaid  advertising.  The Company
         purchased  $18,405 in  services  from three minor  stockholders  in the
         first quarter of 1997 and owed $8,892 to them at March 31, 1997

(6)      Investment  in  marketable  equity  securities  The  Company  exchanged
         1,000,000 shares of common stock of Foxwedge,  Inc. it held for 500,000
         shares  of  Ultimistics   Inc.  common  stock  with  a  stockholder  of
         Ultimistics in January 1996. The Company  recorded a $1,194,000 gain as
         a result of this transaction. The market value of the Ultimistics stock
         received  was  $4,000,000  at the date of the  transaction,  which  the
         Company  discounted  by 70% to  $1,200,000,  based  on the  size of the
         Company's  holdings of Ultimistics and the  restrictions on resale.  In
         January 1996, the Company entered into two  transactions  with Yakimoto
         Ltd. whereby the Company sold the prepaid cellular marketing rights for
         South America to Yakimoto for 1,000,000  shares of  Ultimistics  stock,
         and the  rights  to  Asia,  Australia,  Africa  and most of  Europe  to
         Yakimoto for 500,000 shares of Ultimistics. The current market value of
         the Ultimistics  stock at the time of the  transactions was $12,000,000
         total, which the Company discounted by 70% to $3,600,000,  based on the
         size of the Company's  holdings of Ultimistics and the  restrictions on
         resale. The Company recorded licensing revenue for these transactions.

         In March 1996, the Company  exchanged  5,000,000 shares of common stock
         of  Firenze,  Ltd. it held for  2,000,000  shares of  Ultimistics  Inc.
         common stock with a stockholder of Ultimistics.  The Company recorded a
         $3,590,000  gain as a result of this  transaction.  The market value of
         the  Ultimistics  stock  received  was  $12,000,000  at the date of the
         transaction,  which the Company discounted by 70% to $3,600,000,  based
         on  the  size  of  the  Company's   holdings  of  Ultimistics  and  the
         restrictions on resale. In January 1996, P.C.T. Prepaid Telephone, Inc.
         (PCT),  a  consolidated  subsidiary  of the  Company,  entered  into an
         agreement with unrelated  individuals to issue 10,000,000 shares of PCT
         common stock to the individuals and 10,000,000 shares to the Company in
         exchange for 200,000  shares of  Ultimistics  common  stock,  valued at
         $480,000.

         In March 1997, the Company  exchanged with Fairbanks,  Inc. 1.9 million
         shares of  Ultimistics  common  stock for 380,000  shares of  Fairbanks
         common  stock.  Fairbanks  has  acquired  over  75% of the  issued  and
         outstanding  common stock of  Ultimistics  Inc., and has entered into a
         letter of intent to acquire an existing operating US based company. The
         Company  believes that by completing  this exchange it will  eventually
         realize the value in the underlying  Ultimistics common stock, which as
         a minority shareholder might not have been possible.

         As a result of the transactions  discussed herein and in Note 2 on page
         F-9, the Company's  investment in marketable equity securities consists
         of 500,000  shares of  Internet  Channel,  Inc.  valued at $50,000  and
         380,000 shares of Jet Vacations,  Inc.,  (f/k/a/  Fairbanks,  Inc.), at
         March 31, 1997.

         Although Statement of Financial  Accounting  Standards number 115 (SFAS
         115) does not apply to the investments held by the Company, as they are
         all  restricted by Rule 144 of the  Securities Act of 1933, as amended,
         the Company has decided to incorporate  the disclosure  requirements of
         SFAS 115. At March 31, 1997,  the Company holds  380,000  shares of Jet
         Vacations  with a  current  market  value of  $4,560,000.  The  Company
         recorded  these  shares at the original  book value of the  Ultimistics
         shares given up,  $4,085,000  less the valuation  reserve of $2,142,203
         for this  investment,  for a net value of  $1,942,797.  The  Company is
         watching the market value of Jet Vacations  closely to determine future
         changes in valuation.

(7)      Statement  of  Financial  Accounting  Standards  not yet  evaluated  In
         February 1997, the Financial  Accounting  Standards Board (FASB) issued
         Statement of Financial  Accounting  Standards (SFAS) No. 128, "Earnings
         per  Share,"  and  129,   "Disclosure  of  Information   about  Capital
         Structure."  The Company will have to implement SFAS 128 and 129 by the
         fiscal year ending December 31, 1997. The provisions of SFAS 128 change
         the presentation and computation of earnings per share. The Company has
         not yet had  sufficient  time to evaluate  the  impact,  if any, of the
         provisions of SFAS 128 and 129.
                                       12


<PAGE>



                            PICK Communications Corp.
                   Notes to Consolidated Financial Statements

(8) Revocation of prepaid cellular marketing rights  In February 1997, the 
         Company revoked all the prepaid cellular marketing licenses previously
         granted to Firenze Ltd. and Yakimoto Investments Ltd.

(9)      Stock option plan In February 1996, the Company adopted the "1996 Stock
         Option  Plan." This plan allows the Company to grant options to acquire
         up to 5 million  shares of the  Company's  common  stock by  employees,
         directors,  independent contractors and consultants of the Company. The
         options so granted can be Qualified  Incentive  Stock  Options  (ISOs),
         Non-Qualified  Stock Options (NQSOs),  Stock Appreciation Rights (SARs)
         or combinations  of the three types of options.  In September 1996, the
         Company granted the following  options to directors and officers of the
         Company:
<TABLE>
         <S>                             <C>                                   <C>
 
              Name & Relationship        Incentive options / exercise price    Non-Qualifing Options / exercise price
         ----------------------------    ----------------------------------    --------------------------------------
         D. Leiva, CEO, Chairman                   103,896 / $0.963                          396,104 / $0.875
         R. Brennan, VP & Director                 114,285 / $0.875                          385,715 / $0.875
         K. Quinn, VP                              114,285 / $0.875                          385,715 / $0.875
         K. Petersson, VP                          114,285 / $0.875                          385,715 / $0.875
         R. Sams, Director                           0     /      0                          500,000 / $0.875
         R. Maranon, Director                        0     /      0                          500,000 / $0.875
         G. Manning, Director                        0     /      0                          500,000 / $0.875
</TABLE>

         No options had been exercised at March 31, 1997.  SFAS No. 123 requires
         that companies that continue to account for stock options under APB No.
         25 disclose pro forma net income and earnings per share as if Statement
         123 had been applied. Net income as reported is $948,711 and would have
         been $608,597.  Primary and fully diluted  earnings per share are $0.02
         per share and $0.02 per share and would  have been  $0.02 per share and
         $0.01 per share.

         The  fair  value  of  the  option   grant  was   estimated   using  the
         Black-Scholes option pricing model with the following model assumptions
         for 1997:  risk free rate of 6.26%;  no  dividend  yield for all years;
         expected life of three years and volatility of 68.16%.

(10)     Best efforts  underwriting  In January 1997,  the Company signed a best
         efforts underwriting  agreement with Interbank Capital of New York City
         to raise up to $10 million for the  Company,  either in equity or debt.
         This contract  calls for  compensation  of: 1) for the first $2 million
         raised: 200,000 shares of the Company's common stock, $200,000 in cash,
         and  rights/warrants  for 10% of the stock issued, at an exercise price
         equal to that of the offering; 2) for the second $8 million: a cash fee
         equal to 10% of the amount  raised and a  non-accountable  fee of 3% of
         the amount  raised  and  warrants  equal to 10% of the stock  issued to
         effect the investment.

         Also in January 1997,  the Company  signed a best efforts  underwriting
         agreement with Unity Funding America Corp. Of Englishtown,  NJ to raise
         an amount in excess of $15 million for the Company, either in equity or
         debt.  This  contract  calls  for  compensation  of: 5% of the first $5
         million; 4% of the second $5 million; 3% of the third $5 million and 2%
         of any amount raised in excess of $15 million.

(11)     Working  capital  deficiency 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.  As shown
         in the previously filed consolidated financial statements,  the Company
         incurred net  operating  losses for the years ended  December 31, 1994,
         1995 and 1996.  For the three months ended March 31, 1997,  the Company
         recorded $948,711 net income. This profit was generated  principally as
         a result of  non-cash  reversal of  previously  provided  for  deferred
         income tax expense and loss on sale of marketable  equity securities by
         a consolidated subsidiary. The Company has a working capital deficit of
         $6,013,742 at March 31, 1997.

                                       13


<PAGE>


                            PICK Communications Corp.
                   Notes to Consolidated Financial Statements

(13)     Working  capital  deficiency,  continued  During the three months ended
         March  31,  1996,  the  Company  generated   positive  cash  flow  from
         operations,  which was reduced by investing  activities  and  financing
         activities  by $37,130,  which  resulted in and reflects an increase of
         cash of $29,069.  The Company's plans also include controlling its cash
         expenses, such that this inflow of capital may continue to cover a cash
         shortfall over the next twelve months.

         The Company  believes  that it is in its best  interest to hold the Jet
         Vacations  stock for the  forseeable  future,  in the hope for  capital
         appreciation  over the value  recorded at March 31, 1997, and increased
         liquidity over time.

         The  Company  spent the first  quarter  of 1997  utilizing  some of its
         previous  investments  in prepaid  advertising  and  marketable  equity
         securities to acquire approximately 17.1% of its issued and outstanding
         shares,  as well as an  additional  30% of the issued  and  outstanding
         shares of PCT Prepaid  Telephone,  Inc. The Company believes that these
         transactions will make its offering,  (see note 10), more acceptable to
         potential investors.

         The  Company  also  has  negotiated   lower  telephone  time  rates  in
         conjunction  with higher usage  volumes.  The higher usage  volumes are
         expected  to occur when the  advertising/marketing  programs  now under
         development are instituted.

         The Company  believes  that these plans will enable it to continue as a
         going  concern.  However,  there can be no assurances  that the Company
         will be able to  successfully  implement such plans.  If such plans are
         not  sucessfully  implemented,  the  Company  could be required to seek
         additional financing from sources not currently anticipated.




























                                       14


<PAGE>




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

Results of Operations:

The Company  generates  revenues from the sale of  telecommunications  services.
This includes international long distance service to carriers and resellers, and
revenues derived from the sale of prepaid  telephone debit cards to distributors
for resale to retail outlets.

The  Company's  primary costs of sales are the cost of telephone  services,  for
both the resale of international  long distance services and for Debit Cards. In
addition,  the cost of sales includes the  production of the Debit Cards,  their
printing, fulfillment and distribution, and fixed costs associated
with international long distance service switching and communications.

For the resale of international long distance,  the Company recognizes  revenues
as the  traffic is used by its  customers.  For Debit Card  sales,  the  Company
recognizes  revenues at the time it provides the telephone  services  associated
with its cards.  It defers  revenues until then,  based on customer  patterns of
usage,  and  recognizes the cost of the carrier  telephone  traffic based on the
minutes used in the same periods that  recognizes  revenues.  Other direct costs
(non-traffic  costs  representing  design  royalties,   printing,   fulfillment,
shipping,  sales  commissions,  etc.) are  recognized  as up-front  costs as the
initial  sales  are  made  to   distributors.   The  Company   anticipates  that
substantially  all of the telephone time associated with the Debit Cards will be
used by its customers.  The Company did not sell any prepaid cellular  telephone
licences  during the quarter.  Upon making these  license  sales,  the Company's
policy is to recognize substantially all of the consideration received for those
licenses at the time it is received.

Three Months Ended March 31, 1997 Compared with March 31, 1996:

Total revenues,  excluding licenses, amounted to $2,438,232 for the three months
ended March 31, 1997  compared to $512,666  for the three months ended March 31,
1996.  This  represents an increase of $1,925,566 or 376%.  For the three months
ended March 31, 1997, the Company generated  international long distance revenue
was  $2,150,519.  There were no such revenues in the first quarter of 1996;  the
international  long distance  business began in May of 1996. Debit Card revenues
were  $287,713 for the three  months ended March 31, 1997,  compared to $510,829
for the three  months  ended  March 31,  1996.  This  represents  a decrease  of
$223,116 or 44%. This decrease  reflects switch capacity  limitations which have
resulted in product returns and reductions in repeat sales of debit cards. There
were no prepaid  cellular  license  revenues during the three months ended March
31, 1997 compared to  $3,600,000 in license  revenues for the three months ended
March  31,  1996.  The  cellular   license   revenues  for  1996  were  non-cash
transactions   which  resulted  in  the  acquisition  of  restricted  shares  of
marketable securities.

The direct costs of international long distance and debit card services amounted
to  $2,416,909  for the three months  ending March 31, 1997 compared to $598,662
for the three months ending March
                                       15
 
<PAGE>



31, 1996, an increase of  $1,818,247 or 304%. As a result,  the gross margin was
$21,323 (1% of revenues) for the three months ended March 31, 1997,  compared to
a negative gross margin of $85,996 (17% of revenues), an improvement of $107,319
or 125%.

The Company continues to build the infrastructure necessary to support growth in
both the resale of international long distance traffic and debit cards services.

 Selling and marketing expenses were $1,554 for the three months ended March 31,
1997, compared to $56,383 for the three months ended March 31, 1996,  reflecting
a decrease of $54,829 or 97%.  This  decrease  is  primarily  attributable  to a
planned cut back in the marketing campaign in the first
quarter, while the Company is building its infrastructure.

General and administrative expenses were $381,527 for the three months ended 
March 31, 1997, compared to $502,126 for the three  months  ended March 31,  
1996,  reflecting a decrease  of  $120,599  or 24%.  This  decrease  is 
primarily  attributable  to reductions in employee compensation of $114,862,  
which was 55% lower, and lower expenses of $5,737 across all other 
administrative expense categories.

Amortization  of  $35,575  for  the  three  months  ended  March  31,  1997  was
attributable  to the pre-paid  cellular  telephone  technology  license which is
being expensed over five years  compared to a similar  amount  amortized for the
three month period ended March 31,  1996.  Depreciation  of $6,298 for the three
months ended March 31, 1997 and $8,026 for the three months ended March 31, 1996
is  based  upon  lives  of  3,  5,  7  or  10  years,  depending  on  the  asset
classification. The decrease in depreciation is due to the $100,000 reduction to
the asset base that was written off in 1996.

The   provision   for  bad  debts  was   $26,292   for  the  three   months  
ended   March  31,   1997,   compared to $5,193   for  the  three   months
ended   March  31,   1996.   This   increase   of   $21,099   is  in  place  to
provide for slow paying retail customers. Collection problems are attributable 
to the service capacity and operating limitations experienced by the Company's 
switch, which have adversely impacted its customers. The Company believes it 
has provided for the substantial portion of its potential collection problems
with this increased provision for bad debts.

A provision for federal income taxes made in 1996 was reversed after the Company
had received advice that the net result of the marketable securities acquisition
transactions giving rise to the 1996  provision  and the tax losses  generated
by  exchanging those  securities for the Company's  common stock (as treasury 
stock) and for an additional 33% ownership in PCT will result in no cumulative 
tax liability.  See Note 1j to the financial statements in Item 1, above.

For the reasons listed above,  the Company realized a net profit of $948,711 (or
$0.02 per share on a primary basis and $0.02 per share on a fully diluted basis)
for the  three  months  ended  March  31,  1997,  compared  to a net  profit  of
$5,532,975 (or $0.13 per share on a primary basis and $0.12 per
share on a fully diluted basis) for the three months ended March 31, 1996.


                                       16

<PAGE>



Liquidity and Capital Resources:


The Company had working capital deficit of $6,013,742 as of March 31, 1997 
compared to a working  capital  deficit of  $3,152,216  as of December 31,  
1996.  The working capital  ratio was .22:1 at March 31, 1997  compared  
to .52:1 at  December  31, 1996. The Company has generated retained earnings of
$438,229,  since inception. During the three months ended March 31, 1997,  the 
Company  generated a positive cash flow of $29,069, increasing from $87,712 to 
$116,781.

Operating activities for the three months ended March 31, 1997 generated $66,199
in positive cash flow, primarily composed of net income ($948,711),  an increase
in accounts payable ($1,124,038) and  the  non-cash  loss  on the  sale  of 
marketable  equity  securities  by a subsidiary   ($748,625),   off-set  by  a 
decrease  in  deferred  income  taxes ($1,808,000),  an increase in accounts 
receivable  ($679,548)  and the minority interest  in  the  loss  of a 
consolidated  subsidiary  ($333,203).  All  other categories of cash flows
generated a positive cash flow of $65,576.

Investing activities for the three months ended March 31, 1997 required $11,978,
representing the repurchase by the Company of its own stock in the open market.

Financing   activities   for  the   three   months   ended   March  31,   1997
required   $25,152,   representing the repayment of cash advances made to the 
Company by a stockholder.

The Company  has entered  into a credit  relationship  with Banco  Popular for a
$750,000  direct  line of  credit,  all of which was drawn  down as of March 31,
1997.  The Company has entered into  contracts  with two  investment  bankers to
raise up to $10,000,000 on a best efforts basis.  No other  arrangements  are in
place with respect to any additional financing.  The Company anticipates,  based
on its current plans and assumptions  relating to its operations,  that its cash
balances,  together with  projected cash flows from  operations and  anticipated
financing,  will be  sufficient  to  satisfy  the  Company's  contemplated  cash
requirements  for the next 12  months.  In the event  that the  Company's  plans
change,  its  assumptions  change  or  prove  to be  inaccurate,  or cash  flows
otherwise  prove to be  insufficient  to fund  operations,  the  Company  may be
required to search for additional financing or curtail its proposed growth.

Part II  - Other Information

Item 1 - Legal proceedings:

         During   the   quarter   ended   March   31,   1997,    there   were  
no   material    changes   in   the Company's legal proceedings commenced 
against American Telephone & Telegraph Company.



Item 2 - Changes in securities:

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<PAGE>



On January  21,  1997,  at an Annual  Meeting of  Stockholders,  the Company was
authorized to issue up to 10,000,000  shares of blank check preferred  stock. To
date, no such shares have been
issued.

In addition,  the Company amended the Articles of  Incorporation to increase the
number of  authorized  shares of common stock to  75,000,000,  to change the par
value of common stock to $.001 from $.002,  and  eliminate  the  prohibition  on
cumulative voting of the common stock.


Item 3 - Defaults upon senior securities:
    None to report


Item 4 - Submission of matters to a vote of security holders:

(A) On January  21,  1997,  an Annual  Meeting of  Stockholders  was held at the
offices of PICK Communications Corp., 155 Route 46 West, Wayne, NJ.

(B) The  meeting  placed  in  nomination,  the  names of the  existing  slate of
Directors  of the  Company  for  re-election  until the next  annual  meeting of
stockholders and until their successors have been
duly elected and qualified:

                  Diego Leiva, Chairman
                  Raymond M. Brennan, Secretary
                  Robert R. Sams, Director
                  Ricardo Maranon, Director
                  Greg Manning, Director 

            (Mr. Manning resigned from the Board of Directors
             on March 10, 1997.)

All directors received affirmative votes and were re-elected.

(C) Description of Items Voted Upon:

Proposals Brought to a Vote               For         Against          Withheld

Election of All Directors               33,072,728    373,750            470,000

Ratification of 1996 Stock Option Plan  28,590,620    129,247          1,997,084

Amendment of the Articles of  Incorporation to Increase the Number of authorized
shares of common stock to 75,000,000, to change the par value of common stock to
$.001 from $.002, and to eliminate the prohibition on

                                       18

<PAGE>



cumulative voting of the common stock.  28,006,729     655,638         1,997,084


Authorize up to 10,000,000 shares of
blank check preferred stock.            31,592,426     373,750         1,860,834


Amend the By-Laws to reduce the
minimum number of Directors required
to serve on committees of the Board
of Directors from three to two.         31,615,194     373,750         1,860,834


Ratify the selection of Durland & Company
CPA's, P.A. as auditors of the Company
for 1996                                33,006,028     373,750           470,000


Item 5 - Other information:

         None to report

Item 6 - Exhibits and reports on Form 8-K:

         None to report.














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<PAGE>



Signatures:

In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.




                            PICK Communications Corp.

Date: May 20, 1997       By:    /s/  Diego Leiva
                               ------------------
                                     Diego Leiva
                       President and Chief Executive Officer



Date: May 20, 1997       By:    /s/  Karl R. Petersson
                               ------------------------
                                     Karl R. Petersson
                          Vice President and Chief Financial Officer
                              (Principal Accounting Officer)
























 

 


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