<PAGE>



                                    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 SEPTEMBER 30, 1998

                                       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.)

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

Registrant's Telephone number, including area code:  (973) 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 October 30, 1998
 Common Stock, $.001 Par Value                      37,959,702

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


<PAGE>


                            PICK Communications Corp.

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 timely development and acceptance of new products in a constantly
evolving telecommunications industry, the impact of competitive products and
pricing, government regulations and other risks detailed from time to time in
the Company's SEC reports.

                               Index to Form 10-Q
                                                                   Page Number
PART I            Financial Information

Item 1:  Financial Statements
         Consolidated Balance Sheets                                    3
         Consolidated Statements of Operations                          4
         Consolidated Statements of Stockholders' Equity                5
         Consolidated Statements of Cash Flows                          6
         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                                             21 
Item 2   Changes in Securities                                         21
Item 6   Exhibits and Reports on Form 8-K                              22

SIGNATURES                                                             23

                                       2
<PAGE>


Part I - Financial Information
Item 1 - Financial Statements
                                                              
                            PICK Communications Corp.
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                                December 31,   September 30, 
                                                                                   1997            1998
                                                                               ------------    ------------
        ASSETS                                                                                 (Unaudited)
<S>                                                                            <C>             <C>         
CURRENT ASSETS:
    Cash                                                                       $     44,400    $  2,259,095
    Accounts receivable, net                                                        451,818         582,534
    Inventory                                                                         2,054          92,235
    Prepaid expenses and other current assets                                       123,762       1,810,071
                                                                               ------------    ------------
        Total current assets                                                        622,034       4,743,935
                                                                               ------------    ------------

Furniture, equipment and software, net                                            1,000,083       3,087,305
                                                                               ------------    ------------

OTHER ASSETS:
    Security deposits                                                                24,396         178,146
    Investment in marketable equity securities                                      171,000         128,250
                                                                               ------------    ------------
        Total other assets                                                          195,396         306,396
                                                                               ------------    ------------

Total assets                                                                   $  1,817,513    $  8,137,636
                                                                               ============    ============

        LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Short term debt                                                            $  1,000,000    $ 11,378,773
    Current portion of capital leases                                               146,128         250,622
    Accounts payable                                                              4,480,815       3,216,786
    Deferred revenue - prepaid calling cards                                        681,653       1,632,814
    Reserve for contingent liability                                              1,100,000       1,100,000
    Advances from stockholder                                                       170,000               0
    Accrued compensation due stockholders                                            53,525               0
    Customer deposits and prepayments                                                 6,496         286,841
    Other current liabilities                                                       389,025         855,866
                                                                               ------------    ------------
        Total current liabilities                                                 8,027,642      18,721,702
                                                                               ------------    ------------

Capital leases, less current portion                                                794,905       1,126,770
                                                                               ------------    ------------

        Total liabilities                                                         8,822,547      19,848,472
                                                                               ------------    ------------

Minority interest in consolidated subsidiary                                         88,080          86,018
                                                                               ------------    ------------

STOCKHOLDERS' EQUITY (DEFICIT):
    Common stock, $0.001 par value; authorized 75,000,000 shares; 43,325,317
      issued and 36,059,817 outstanding at December 31, 1997; 37,945,202
      issued and 37,909,702 outstanding at September 30, 1998                        43,325          37,945
    Additional paid in capital in excess of par                                   5,886,825       3,877,786
    Warrants to purchase common stock                                                21,242       2,381,182
    Treasury stock                                                               (3,072,222)        (11,978)
    Unrealized gain (loss) on marketable equity securities                           38,000          (4,750)
    Retained earnings (deficit)                                                 (10,010,284)    (18,077,039)
                                                                               ------------    ------------
        Total stockholders' equity (deficit)                                     (7,093,114)    (11,796,854)
                                                                               ------------    ------------

Total liabilities and stockholders' equity (deficit)                           $  1,817,513    $  8,137,636
                                                                               ============    ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       3
 <PAGE>



                            PICK Communications Corp.
                      Consolidated Statements of Operations
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                    Three Months Ended Sept. 30,     Nine Months Ended Sept. 30,
                                                        1997            1998            1997            1998
                                                    ------------    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>             <C>     
     REVENUES:
Sales of long distance services                     $  1,754,431    $    833,717    $  6,496,645    $  1,796,735
Sales of prepaid calling cards                           541,272       3,128,839       1,093,947       4,442,334
                                                    ------------    ------------    ------------    ------------
     Total revenues                                    2,295,703       3,962,556       7,590,592       6,239,069

     COST AND EXPENSES:
Cost of sales:
     Cost of telephone time purchased                  2,052,189       4,597,125       6,841,047       7,143,518
     Other cost of sales                                 167,698       1,138,441         522,193       1,740,742
     Adjustment to provision for contingent costs       (649,563)              0        (649,563)              0
Selling, general and administrative                      487,170       1,037,780       1,465,907       2,144,766
Depreciation and amortization                             42,128          91,631         126,008         228,980
                                                    ------------    ------------    ------------    ------------
     Total costs and expenses                          2,099,622       6,864,977       8,305,592      11,258,006
                                                    ------------    ------------    ------------    ------------

Income (loss) from operations                            196,081      (2,902,421)       (715,000)     (5,018,937)
                                                    ------------    ------------    ------------    ------------

     OTHER (EXPENSE):
Net interest (expense)                                   (16,597)       (981,606)        (46,793)     (1,523,201)
Debt placement (expenses)                                      0      (1,407,049)              0      (1,525,799)
Net (losses) on marketable equity securities                   0               0      (9,399,079)              0
                                                    ------------    ------------    ------------    ------------
     Total other (expense)                               (16,597)     (2,388,655)     (9,445,872)     (3,049,000)
                                                    ------------    ------------    ------------    ------------

Income (loss) before minority interest in
     subsidiary loss and income taxes                    179,484      (5,291,076)    (10,160,872)     (8,067,937)

Minority interest in subsidiary loss                       2,092           1,148         413,315           2,062
Benefit (provision) for income taxes                           0               0       1,808,000            (880)
                                                    ------------    ------------    ------------    ------------

Net income (loss)                                   $    181,576    $ (5,289,928)   $ (7,939,557)   $ (8,066,755)
                                                    ============    ============    ============    ============

Net (loss) per common share - basic                 $       0.01    $      (0.14)   $      (0.21)   $      (0.22)
                                                    ============    ============    ============    ============

Weighted average shares outstanding -basic            36,013,717      36,954,311      37,261,393      36,543,032
                                                    ============    ============    ============    ============
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       4


<PAGE>


                            PICK Communications Corp.
                 Consolidated Statements of Stockholders' Equity
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                                                       Unrealized                            
                       Number                 Additional                             Gain (Loss) on                       Total
                     of Shares      Common      Paid in                  Treasury       Marketable       Retained     Stockholders'
                    Outstanding     Stock       Capital      Warrants      Stock        Securities       (Deficit)      (Deficit)
                    -----------     -----       -------      --------      -----        ----------       ---------      ---------
<S>                 <C>          <C>          <C>           <C>         <C>              <C>         <C>                <C>        
Balance,
 December 31, 1997  36,059,817   $    43,325  $ 5,886,825   $  21,242   $(3,072,222)     $  38,000   $  (10,010,284)    (7,093,114)
                                                                                                                       
Transactions  A)       455,517           456      179,570           0             0              0                0        180,026
              B)     1,394,368         1,394      864,405           0             0              0                0        865,799
              C)             0             0            0   2,359,940             0              0                0      2,359,940
              D)             0        (7,230)  (3,053,014)          0     3,060,244              0                0              0
              E)             0             0            0           0             0        (42,750)               0        (42,750)
     Net (loss)              0             0            0           0             0              0       (8,066,755)    (8,066,755)
                    ----------    ----------  -----------  ----------   -----------    -----------    -------------   ------------
Balance September,                                                                                                     
        30, 1998    37,909,702    $   37,945  $ 3,877,786  $2,381,182   $   (11,978)   $    (4,750)   $ (18,077,039)  $(11,796,854)
                    ==========    ==========  ===========  ==========   ===========    ===========    =============   ============ 
                                                                                                            
</TABLE>
               
A)  Shares issued to employees and others as compensation.
                                                                    
B)  Shares issued to placement agent and co-financial advisor in conjunction
    with placement of short-term debt.

C)  Warrants for purchase of common stock: (i) 125,000 shares at $0.50 per
    share, exercisable for three years, (ii) 100,000 shares at $0.24 per share
    exercisable for one year, (iii) 200,000 shares at $1.00 per share
    exercisable for one year (iv) 1,250,000 shares at $0.35 per share
    exercisable for three years, (v) 100,000 shares at $0.56 per share
    exercisable for one year, (vi) 1,250,000 shares at $0.25 per share
    exercisable for three years and (vii) 12,409,859 shares at $0.50 exercisable
    for five years.

D)  Cancellation of 7,230,000 shares held in treasury.

E)  Adjustment to unrealized gain (loss) on marketable equity securities.

   The accompanying notes are an integral part of these financial statements.

                                       5

<PAGE>


                            PICK Communications Corp.
                      Consolidated Statements of Cash Flows
                         Nine Months Ended September 30,
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                                                   1997           1998 
                                                                              ------------    ------------
<S>                                                                           <C>             <C>          
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)                                                                    $ (7,939,557)   $ (8,066,755)
Adjustments to reconcile net (loss) to cash (used in) operating activities:
    Non-cash loss on marketable securities                                       9,399,079               0
    Common stock issued for services                                                43,035         180,026
    Amortization of debt discount and debt placement expenses                            0       2,512,356
    Depreciation and amortization                                                  126,008         228,980
    Minority interest in subsidiary loss                                          (413,315)         (2,062)
    Bad debt expense                                                                78,766           2,072
    Adjustment to reserve for contingent liability                                (649,563)              0
    (Benefit) for deferred income taxes                                         (1,808,000)              0
    Changes in operating assets and liabilities:
        Decrease (increase) in accounts receivable                                (396,775)       (132,788)
        Decrease (increase) in inventory                                            15,182         (90,181)
        Decrease (increase) in other operating assets                              (98,111)       (348,808)
        Increase (decrease) in accounts payable                                  2,933,699      (1,257,579)
        Increase (decrease) in deferred revenue                                   (769,534)        951,161
        Increase (decrease) in customer deposits                                         0         280,345
        Increase (decrease) in other operating liabilities                        (699,739)        421,645
                                                                              ------------    ------------
Net cash provided by (used in) operating activities                               (178,825)     (5,321,588)
                                                                              ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets                                                            (6,512)     (1,725,176)
                                                                              ------------    ------------
Net cash (used in) investing activities                                             (6,512)     (1,725,176)
                                                                              ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Acquisition of treasury stock for cash                                             (11,978)              0
Principal paid on capital leases                                                         0        (154,667)
Funds advanced on third-party debt, net of cash placement costs                          0      11,586,126
Payments on third-party debt                                                             0      (2,000,000)
Funds advanced by stockholder                                                      170,000          15,000
Payments of stockholder advances                                                   (25,152)       (185,000)
                                                                              ------------    ------------
Net cash provided by (used in) financing activities                                132,870       9,261,459
                                                                              ------------    ------------

Net increase in cash                                                               (52,467)      2,214,695

CASH, beginning of period                                                           87,712          44,400
                                                                              ------------    ------------

CASH, end of period                                                           $     35,245    $  2,259,095
                                                                              ============    ============

</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       6

<PAGE>


                            PICK Communications Corp.
                Consolidated Statements of Cash Flows (Continued)
                            Six Months Ended June 30,
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                                        1997        1998
                                                                     ----------   ----------
<S>                                                                 <C>           <C>  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid during the period                                      $   46,793   $  483,380
                                                                     ==========   ==========

Non-cash financing activities:

    Assets acquired under capital leases                                      0      591,026
                                                                     ==========   ==========
    Book value of marketable equity securities exchanged for
        common stock of the Company and its subsidiary                6,390,625            0
                                                                     ==========   ==========
    Book value of marketable equity securities exchanged for other
        marketable equity securities                                  4,085,000            0
                                                                     ==========   ==========
    Prepaid advertising exchanged for common stock of
        the Company and its subsidiary                                2,458,155            0
                                                                     ==========   ==========



</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       7

<PAGE>


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




(1)      Summary of Significant Accounting Principles

Description of Business:

PICK Communications Corp. (the "Company") acts as a wholesaler of long distance
telephone services and sells, through distributors, prepaid telephone calling
cards. The Company is headquartered in Wayne, New Jersey and also leases
facilities and telephone switching equipment in Jersey City, New Jersey and
Miami, Florida.

Principles of Consolidation and Presentation

The accompanying consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries, Public Info/Comm Kiosk, Inc.
("PICK"); PICKNET Inc. ("PICKNET"); PICKNET UK, PLC; PICKSat Inc. and P.C.T.
Prepaid Telephone, Inc. ("PCT"). All significant intercompany balances and
transactions have been eliminated.

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

Certain amounts in the Statement of Operations for the three and nine months
ended September 30, 1997 have been reclassified to conform with the 1998
presentation.

Use of Estimates

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 periods then ended. Actual
results could differ from those estimates.

Revenue Recognition

Sales of long distance time are recognized at the time that service is provided,
as reported by the switch. The Company defers revenue related to prepaid calling
cards (which is recorded net of distributor discounts) and recognizes revenue as
the card is used.

Net Loss Per Share

Net loss per share - basic is computed by dividing the net loss by the weighted
average number of common shares outstanding during the period. Net loss per
share - diluted is not presented because the inclusion of common share
equivalents would be anti-dilutive.

Concentration of Credit Risk

In 1998, approximately 65% and 14% of revenues were from two customers; in 1997,
approximately 23% and 14% of revenues were from two customers. The Company
performs periodic credit evaluations of its customers, and may, under certain
circumstances, require deposits or prepayments where deemed appropriate.

Accounts receivable consist of the following:
                                               December 31,     September 30,
                                                   1997             1998
                                                ---------         ---------
        Accounts receivable                     $ 778,315         $ 810,704
        Reserve for bad debts                     326,497           228,170
                                                ---------         ---------
        Accounts receivable - net               $ 451,818         $ 582,534
                                                =========         =========



                                       8
<PAGE>

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

(1)      Summary of Significant Accounting Principles, Continued

Concentration of Credit Risk, Continued

Five customers comprised approximately 29%, 20%, 15%, 15% and 13% of gross
accounts receivable, respectively, at September 30, 1998. Five customers
comprised approximately 36%, 20%, 16%, 13% and 10% of gross accounts receivable,
respectively, at December 31, 1997. At September 30, 1998, the Company has a
reserve for bad debts equal to 28% of the gross accounts receivable. The Company
also purchases telecommunications services from many of its customers.
Frequently, accounts receivable are settled by set-off against liabilities with
the same party.

Inventory

Inventory at December 31, 1997 is composed of costs to produce cards, including
printing and freight, and is valued at the lower of cost or market. Inventory is
relieved and charged to cost of sales when cards are activated. Inventory at
September 30, 1998 consists of computer equipment held for resale. This
inventory is accounted for on the first in, first out ("FIFO") basis.

Fixed Assets

Fixed assets are stated at cost. Depreciation is computed using the straight
line method over the estimated useful lives of the assets (3, 5 or 7 years).
Telephone equipment acquired under capital leases is amortized over five years,
using the straight line method.

Intangible Assets

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

Accounts Payable

Accounts payable at September 30, 1998 includes $1,120,544 payable to WorldCom
Network Services, Inc., which is payable in monthly installments of between
$350,000 and $385,544, plus interest at 18% per annum, through December of 1998.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards ("SFAS") number 109 ("Accounting for Income Taxes").
Current and deferred income tax assets and liabilities are recognized in the
financial statements based upon events that have been recognized in the
financial statements and measured based upon the income tax laws enacted at the
time of the events. Valuation allowances are established to reduce income tax
assets to the amount estimated to be realized, based upon currently available
evidence.


                                       9
<PAGE>


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


(2)      Furniture and Equipment

Furniture, equipment and software consists of the following:
<TABLE>
<CAPTION>

                                                                   December 31,     September 30,
                                                                       1997             1998
                                                                  -----------      ------------
<S>                                                               <C>              <C>         
                  Furniture, equipment  and software - at cost    $   127,538      $  1,852,714
                  Less accumulated depreciation                       (68,488)          (95,888)
                                                                  -----------      ------------
                                    Net                                59,050         1,756,826
                                                                  -----------      ------------

                  Telephone switching equipment
                      acquired under capital leases                   941,033         1,532,059
                  Less accumulated amortization                             0          (201,580)
                                                                  -----------      ------------
                                    Net                               941,033         1,330,479
                                                                  -----------      ------------

                  Net furniture and equipment                     $ 1,000,083       $ 3,087,305
                                                                  ===========      ============
</TABLE>

(3)      Investment in Marketable Equity Securities

In 1996, the Company acquired 4,700,000 restricted shares of the common stock of
Ultimistics,  Inc.  ("Ultimistics").  During  the  first  quarter  of 1997,  the
Company,  in  four  separate  transactions,  disposed  of all of its  shares  of
Ultimistics,  along  with  $420,000  of prepaid  advertising,  in return for (i)
1,000,000 shares of the Company's common stock,  (ii) 10,000,000  shares of PCT,
and (iii)  380,000  restricted  shares of the common  stock of  Fairbanks,  Inc.
(which  subsequently  changed its name to Jet Vacations,  Inc. and then,  Precom
Tech  Inc.  ("PTI")).  The  Company  recorded  losses  of  $9,399,079  on  these
transactions.

At September 30, 1998, the Company owned 380,000 restricted shares of the common
stock of PTI. PTI common stock is traded on the over-the-counter market and
reported on the OTC Bulletin Board. The market value per share of PTI was $1.125
at September 30, 1998, as reflected on the OTC Bulletin Board. Because the
shares are restricted and there is very limited trading activity in PTI stock,
the Company believes the fair value to be approximately 30% of the market price,
or $128,250 at September 30, 1998. 100,000 of the PTI shares are pledged to one
of the Company's vendors.

(4)      Short Term Debt

Short-term debt consists of the following:
                                              December 31,    September 30,
                                                  1997             1998
                                              -----------     ------------
         Borrowings from bank                 $   750,000     $          0
         Short-term loans                         250,000        9,378,773
         Loan from customer/supplier                    0        2,000,000
                                              -----------     ------------
                                              $ 1,000,000     $ 11,378,773
                                              ===========     ============

The bank borrowing was repaid on July 29, 1998 from a portion of the proceeds of
the borrowing discussed below.




                                       10
<PAGE>

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


(4) Short Term Debt, Continued

The $250,000 short-term loan outstanding at December 31, 1997 was repaid in
April 1998 from the borrowing discussed in the following paragraph. As
additional compensation for lending the Company funds, the individual was
initially granted warrants (exercisable over three years) to purchase 250,000
shares of the Company's common stock at $0.50 per share. In return for extending
the maturity date of the loan from March 9, 1998 to April 13, 1998, the
individual was granted warrants for an additional 125,000 shares on the same
terms.

In February of 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. The
loan bears interest at 9% and matures in February 1999. In addition, IDT
received a warrant to purchase one share of the Company's common stock for each
five dollars loaned (or an aggregate of 400,000 warrrants), at an exercise price
equal to the closing price for the Company's common stock at the date
immediately prior to the date of the advance. The Company has issued 100,000
warrants with an exercise price of $0.24 per share, 200,000 warrants with an
exercise price of $1.00 per share and 100,000 warrants with an exercise price of
$0.56 per share. The warrants are exercisable for a period of one year from the
respective dates of grant.

In April 1998, the Company borrowed $1,000,000 from unaffiliated investors. The
loan was unsecured, bore interest at 10% and matured July 1, 1998. In
consideration for advancing the funds, the lenders received warrants to purchase
1,000,000 shares of the Company's common stock at $0.35 per share, which are
exercisable on or before April 1, 2001. The $195,000 of value assigned to these
warrants is reflected in interest expense. The placement agent for this loan
received $75,000 and warrants to purchase 250,000 shares of the Company's common
stock at $0.35 per share. The $43,750 of value assigned to these warrants is
included in debt placement expenses. This borrowing was repaid on July 31, 1998
from a portion of the proceeds of the borrowing discussed below. Because the
borrowing was repaid after maturity date, the interest rate was increased,
effective July 1, 1998, to 18% and the lenders and the placement agent were
granted warrants to purchase 1,250,000 shares of the Company's common stock,
exercisable through August 14, 2001, at $0.25 per share.

Between July 29, 1998 and September 8, 1998, the Company, through Commonwealth
Associates ("Commonwealth"), placed $9,900,000 (face amount) of 10%, 120 day
notes and 9,900,000 warrants to purchase shares of the Company's common stock at
$0.50 per share for five years (the "Placement"). The Company allocated
$8,587,066 of the gross sale proceeds to the debt and $1,312,934 to the
warrants. The $1,312,934 discount applied to the face amount of the notes is
being amortized into income, as interest expense, over the 120-day life of the
notes. The Company has the right to extend the maturity date of the notes for 60
days; in the event the Company exercises this right, the interest rate of the
notes is increased to 18% per annum, retroactive to the issuance of the notes.
For the Placement, the Company paid Commonwealth and Liberty Capital Ltd. (the
Company's co-financial advisor) $1,089,000 in cash, 1,394,368 shares of common
stock (valued at $865,799) and warrants to purchase 2,509,859 shares of common
stock at $0.50 per share for five years (valued at $383,002). The costs related
to the Placement have been deferred and are being amortized into income as debt
placement expenses over the term of the debt.


                                       11
<PAGE>


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


(5)      Commitments

The Company leases facilities and equipment under operating and capital leases.
The future minimum payments under such leases as of September 30, 1998 are as
follows:

                                                          Operating    Capital
                                                           Leases      Leases
                                                           ------      ------

                  1998 (three months)                    $ 101,104  $  103,696
                  1999                                     482,483     414,783
                  2000                                     400,744     414,783
                  2001                                     251,425     414,783
                  2002                                     169,769     414,783
                  2003                                     144,994           0
                                                       -----------  ----------
                                                                     
                  Total payments                       $ 1,550,519   1,762,828
                                                       ===========  

                  Less amounts representing interest                  (385,436)
                  Current portion                                     (250,622)
                                                                    ----------
                  Capital lease obligations, long-term portion      $1,126,770
                                                                    ==========

Rental expense under operating leases was $275,978 and $77,580 for the nine
months ended September 30, 1998 and 1997, respectively. The Company has the
right to renew its operating leases for terms of between three and five years.

At September 30, 1998, the Company has outstanding commitments for the purchase
of telecommunications and computer equipment and for the license of computer
software of approximately $1,500,000.

(6)      Income Taxes

The Company's deferred tax assets at December 31, 1997 consist of the following:

Approximate tax benefit from net operating loss carryforwards:

                  Federal                             $ 1,800,000
                  State                                   300,000
                                                       ----------
                                                        2,100,000
         Less valuation allowance                      (2,100,000)
                                                       ----------
         Net deferred tax assets                      $         0
                                                      ===========

The deferred tax assets are comprised of the tax benefit of net operating loss
carryforwards of approximately $5,500,000 at December 31, 1997, which expires
$1,000,000 in 2009, $1,100,000 in 2010, $1,600,000 in 2011 and $1,800,000 in
2012. Utilization of the net operating loss carryforwards may be limited in the
event of a change in control of the Company.

(7)      Contract with Blackstone Calling Card, Inc.

In February, 1998, the Company entered into a two-year agreement with a major
distributor of prepaid telephone calling cards, Blackstone Calling Card, Inc.
("Blackstone" and the "Blackstone Agreement"). Under the terms of the Blackstone
Agreement, as amended, after a six month phase-in period commencing April 27,
1998, Blackstone will purchase a minimum face value of $5,000,000 per month from




                                       12
<PAGE>

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

(7) Contract with Blackstone Calling Card, Inc., Continued

the Company, which is expected to result in net revenues of approximately
$3,000,000 per month to the Company. While Blackstone's purchases from the
Company have been increasing significantly, it is anticipated that the
Blackstone Agreement will have to be amended to lower the purchase minimum
amount and the corresponding revenue to the Company. The Blackstone Agreement is
also subject to termination by either party without cause at the end of year
one, upon sixty days prior notice, or by Blackstone if the Company fails to
maintain overall network quality.

(8)      Litigation and Reserve for Contingent Liability

The Company is, from time to time, party to litigation that arises in the
ordinary course of its business operations or otherwise. Except as described
below, the Company is not presently a party to any litigation that it believes
would have a material adverse effect on its business.

In February 1997, the Company commenced a mediation action against American
Telephone & Telegraph ("AT&T") seeking $10 million in damages for breach of
contract and fraudulent inducement and malicious conduct under a carrier
agreement (the "Carrier Agreement") entered into in February 1996. The Company
contracted with AT&T under the Carrier Agreement for inbound 800 service and
outbound domestic and international long distance service. The Company claims
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 has claimed that
the Company owes it in excess of $1,000,000. In 1996, the Company provided for a
non-cash 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. 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 million. This arbitration
is tentatively scheduled to be heard in January 1999. There can be no assurance
that the Company will be able to prevail in this arbitration. Any adverse
judgment or settlement could have a material impact on the Company's financial
condition.

(9)      Stock Option Plan

In February, 1996, the Company adopted a stock option plan for employees and
directors. The following summarizes activity under the plan:
<TABLE>
<CAPTION>

                                                Year Ended                      Nine Months Ended
                                             December 31, 1997                 September 30, 1998
                                             -----------------                 ------------------
                                                    Weighted Average                   Weighted Average
                                         Shares      Exercise Price          Shares     Exercise Price
                                         ------      --------------          ------     --------------

<S>                                     <C>                <C>             <C>                <C>    
Outstanding at beginning of period      3,500,000          $ 0.878         4,500,000          $ 0.230

Options cancelled                      (3,500,000)         $ 0.878                 0               -

Options granted                         4,500,000          $ 0.230         1,200,000          $ 0.427
                                        ---------                          ---------

Outstanding at end of period            4,500,000          $ 0.230         5,700,000          $ 0.271
                                        =========                          =========
</TABLE>

The options granted in 1996 were cancelled and most were re-issued at lower
exercise prices in 1997.

The Company applies Accounting Principles Board Opinion number 25, "Accounting
for Stock Issued to Employees," in accounting for stock-based compensation
plans. Accordingly, no compensation expense has been recognized in the
accompanying statements of operations for stock options granted to employees.




                                       13
<PAGE>

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

(10)     Comprehensive Income

Comprehensive income, as defined in Statement of Financial Accounting Standards
number 130, "Reporting Comprehensive Income" ("SFAS 130"), includes all changes
in equity during a period from non-owner sources. Examples of items included in
comprehensive income that are excluded from net income are unrealized gains or
losses on marketable equity securities or foreign currency translation
adjustments. For the nine months ended September 30, 1998, total other
comprehensive income was a loss of $42,750.

(11)     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 operating losses and negative cash flow
from operations in the nine months ended September 30, 1998 as well as the years
ended December 31, 1997, 1996 and 1995. In addition, the Company has a working
capital deficiency of $13,977,767 at September 30, 1998, and as discussed in
Footnote 5, the Company has entered into significant equipment purchase and
software license commitments.

While the Company obtained additional short-term financing during the third
quarter of 1998, it matures in the fourth quarter of 1998 and the first quarter
of 1999. Substantially all of the debts of the Company mature or are subject to
payment agreements calling for payment before the end of February 1999. Without
the Company extending the pay-out terms of the aforementioned liabilities or
obtaining additional long-term financing, as well as increasing revenues and/or
decreasing expenses, the Company may be unable to continue as a going concern
for a reasonable period of time. The financial statements do not include any
adjustments relating to the recoverability of assets or the classification of
liabilities should the Company be unable to continue as a going concern.

The Company is also negotiating with several potential investors to raise
additional funds through private placement of debt and/or equity. The Company
believes that these plans, if successfully implemented, will enable it to
continue as a going concern. However, there can be no assurance that the Company
will be successful in either generating positive operating income or raising
additional funds in the immediate future in amounts sufficient to allow it to
continue as a going concern.

(12)     New Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board (the "FASB") issued SFAS
number 131, "Disclosures about Segments of an Enterprise and Related
Information," which establishes standards for companies to report information
about operating segments in annual financial statements. Management is currently
evaluating the financial statement and disclosure impact of SFAS number 131. The
disclosures prescribed by SFAS number 131 must be made beginning with the year
ended December 31, 1998.

In March 1998, the FASB issued SFAS number 132, "Employers' Disclosures about
Pensions and Other Post Retirement Benefits." The Company does not currently
provide pension or other post retirement benefits. Consequently, this statement
does not currently apply to the Company.

In June 1998, the FASB issued SFAS number 133, "Accounting for Derivative
Instruments and Hedging Activities." Management is currently evaluating the
financial statement and disclosure impact of SFAS number 133. The Statement is
effective for all fiscal quarters in fiscal years beginning after June 15, 1999
or the first quarter of calendar year 2000 for the Company.


                                       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 calling cards to
distributors for resale to retail outlets.

The Company's costs of sales 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 recognizes revenues
as its customers use the traffic. For prepaid telephone calling card sales, the
Company recognizes revenues at the time it provides the telephone services
associated with its cards and recognizes the cost of the carrier telephone
traffic based on the minutes used in the same periods that the Company
recognizes revenues.

Gulfsat Contract

In late 1997, the Company entered into a reciprocal telecommunications agreement
for international traffic termination in Africa, the Middle East and Asia, via
satellite, with Gulfsat Communications Company ("Gulfsat" and the "Gulfsat
Contract"), a communications company located in the Middle East. In March 1998,
the term of the contract was extended to February 28, 2003 and Gulfsat agreed
that its rates to Africa, the Middle East and Asia would be offered in the
United States exclusively through the Company. Under the contract, the Company
is entitled to terminate up to 70 million minutes per month in
telecommunications services into the above regions. Management believes, based
upon its knowledge of the industry, that costs per minute to terminate traffic
through Gulfsat are significantly lower than those currently available to the
Company's competitors.

The Company began to send traffic into one country in the second quarter and
anticipated adding subsequent countries in fairly rapid succession. The Company
then became aware of newer, state-of-the-art technology that would facilitate
the transmission of not only voice traffic but also data, video and Internet
traffic. In order to capitalize on this technology and maximize the benefit the
Company could derive from the Gulfsat Contract, it became necessary to defer
installation. The Company first had to investigate the companies offering the
appropriate asynchronous transmission mode (ATM) equipment and then, in concert
with Gulfsat, select a strategic partner in this global effort. Then the Company
and Gulfsat had to purchase and install the appropriate telephone switching and
compression equipment for the Jersey City hub, the United Kingdom and the first
of several destination countries. To begin installation, the Company required a
portion of the proceeds from the short-term debt financing obtained in the third
quarter to purchase this equipment in August and September. The initial
installation is nearing completion and the Company anticipates that it will be
able to utilize the increased capacity and favorable termination rates to four
or five additional countries starting late in the fourth quarter of 1998. The
Company believes it has sufficient funds available to purchase the necessary
equipment to increase the capacity for delivery of telephone time through
Gulfsat through the end of 1998 and it will require additional funding
thereafter.

                                       15
<PAGE>

Blackstone Contract

In February 1998, the Company entered into a two-year agreement with Blackstone
Calling Card, Inc. ("Blackstone"), a major distributor of prepaid telephone
calling cards (the "Blackstone Agreement"). Under the terms of the Blackstone
Agreement, as amended, after a six month phase-in period ending October 27,
1998, Blackstone was to purchase a minimum face value of $5,000,000 per month
from the Company, which was expected to result in net revenues of approximately
$3,000,000 per month to the Company. The Blackstone Agreement is also subject to
termination by either party without cause at the end of year one upon 60 days'
prior notice, or by Blackstone if the Company fails to maintain overall network
quality.

While Blackstone's purchases from the Company have been increasing significantly
(to approximately $2.2 million, at face value, in September 1998), it is
anticipated that the Blackstone Agreement will have to be amended to lower the
minimum purchase amount and the corresponding revenue to the Company. As
described above, the Company has yet to receive anticipated capacity to
terminate traffic through Gulfsat needed to satisfy Blackstone and other
customers. This has significantly reduced the volume of Blackstone's purchases
and, because the Company has had to purchase time from other carriers (at higher
rates than the Company anticipated paying to Gulfsat) to satisfy the traffic
generated by the users of Blackstone's calling cards, the Company has yet to
achieve the anticipated profit from the Blackstone Agreement. Management
believes that if the Company is able to purchase and install sufficient ATM
equipment by the end of 1998 to increase its capacity to deliver traffic through
Gulfsat, it should be able to satisfy Blackstone's requirements by the middle of
1999.

High Speed Internet Services

Late in the second quarter of 1998, through PICKSat Inc. ("PICKSat"), a
wholly-owned subsidiary, the Company began development of a satellite-delivered,
broadband, international, high-speed Internet and multi-media platform. The
Company anticipates that its customers will begin using this platform for
delivery of data and multi-media in the first quarter of 1999.

                                       16
<PAGE>


Nine Months Ended September 30, 1998 Compared with September 30, 1997

Revenues:

Total revenues amounted to $6,239,069 for the nine months ended September 30,
1998, compared to $7,590,592 for the nine months ended September 30, 1997, a
decrease of $1,351,523, or 18%. The Company significantly curtailed is
operations during the first half of 1998, while it installed and tested two,
leased Siemens Digital Central Office Switches. These switches replaced
switching services previously purchased from third party vendors. Consequently,
the Company decided to curtail its marketing efforts for the sale of
international long distance services until it completed this installation and
until it had the capability to deliver competitively priced traffic through
Gulfsat. Therefore, for the nine months ended September 30, 1998, the Company
generated international long distance revenue of $1,796,735, compared with
$6,496,645 for the nine months ended September 30, 1997, a decrease of
$4,699,910 (72%). Prepaid telephone calling card revenues were $4,442,334 for
the nine months ended September 30, 1998, compared to $1,093,947 for the nine
months ended September 30, 1997. This represents an increase of $3,348,387 or
306% and is attributable to sales to Blackstone.

Costs and Expenses:

The cost of telephone time purchased increased from $6,841,047 to $7,143,518
($302,471 or 4.4%). These costs increased by 4%, even though revenues declined
by 18%, primarily due to the costs of long distance arising from the usage of
prepaid telephone calling cards sold through Blackstone. Other cost of sales
increased from $522,193 to $1,740,742 ($1,218,549 or 233%) primarily due to the
fixed costs associated with the Company's newly-developed network and processing
costs arising from the increased prepaid telephone calling card activity. The
Company believes that it has the capacity to carry significant, additional
traffic without any meaningful increase in the fixed costs associated with the
network. 1997 cost of sales benefited from the reversal of $649,563,
representing a portion of a previous provision of contingent costs. (See Note 8,
Notes to Consolidated Financial Statements.)

Selling, general and administrative expenses were $2,144,766 for the nine months
ended September 30, 1998, compared to $1,465,907 for the nine months ended
September 30, 1997, reflecting an increase of $678,859 or 46%. Approximately
$412,000 of this increase is due to start-up and development expenses of the
Company's newly formed PICKSat subsidiary. The residual increase is primarily
due to other additions to staff.

Loss from Operations:

The Company's loss from operations increased from $715,000 to $5,018,937
primarily due to the increases in cost of sales and general and administrative
expenses discussed above.




                                       17
<PAGE>

Other:

Interest and debt placement expenses increased significantly from the prior year
due to the substantial increase in the amount of short-term debt placed in the
current year.

Three Months Ended September 30, 1998 Compared with September 30, 1997

Revenues:

Total revenues amounted to $3,962,556 for the three months ended September 30,
1998, compared to $2,295,703 for the three months ended September 30, 1997, an
increase of $1,666,853, or 73%.

For the three months ended September 30, 1998, the Company generated
international long distance revenue of $833,717, compared with $1,754,431 for
the three months ended September 30, 1997, a decrease of $920,714 (52%), which
was primarily attributable to delays in available capacity for delivery of
traffic through Gulfsat and the related reduced marketing efforts discussed
above. The Company believes that international long distance revenue growth will
be driven by available capacity through Gulfsat, and, that the Company should
have significantly more capacity available by the end of 1998.

Prepaid telephone calling card revenues were $3,128,839 for the three months
ended September 30, 1998, compared to $541,272 for the three months ended
September 30, 1997. This represents an increase of $2,587,567 or 478% and is
attributable to sales to Blackstone.

Costs and Expenses:

The cost of telephone time purchased increased from $2,052,189 to $4,597,125.
These costs increased by $2,544,936, or 124%, primarily due to the costs of long
distance arising from the usage of prepaid telephone calling cards sold through
Blackstone. Other cost of sales increased from $167,698 to $1,138,441 ($970,743
or 579%) primarily due to the fixed costs associated with the Company's
newly-developed network and processing costs arising from the increased prepaid
telephone calling card activity. 1997 cost of sales benefited from the reversal
of $649,563, representing a portion of a previous provision of contingent costs.
(See Note 8, Notes to Consolidated Financial Statements.)

Selling, general and administrative expenses were $1,037,780 for the three
months ended September 30, 1998, compared to $487,170 for the three months ended
September 30, 1997, reflecting an increase of $550,610, or 113%. Approximately
$412,000 of this increase is due to start-up and development expenses of the
Company's newly formed PICKSat subsidiary. The residual increase is primarily
due to other additions to staff.



                                       18
<PAGE>

Loss from Operations:

The Company's reported income from operations of $196,081 for the three months
ended September 30, 1997 and a loss from operations of $2,902,421 for the three
months ended September 30, 1998. This change is primarily due to the increases
in cost of sales and general and administrative expenses discussed above.

Other:

Interest and debt placement expenses increased significantly from the prior year
due to the substantial increase in the amount of short-term debt placed in the
current year.

Changes in Financial Condition:

Due to the losses discussed above, the Company's working capital deficit
increased from $7,405,608 as of December 31, 1997 to $13,977,767 as of September
30, 1998 (an increase in the working capital deficit of $6,572,159) and the net
worth changed from a negative $7,093,114 at December 31, 1997 to $11,796,854 at
September 30, 1998 (an increase in negative net worth of $4,703,740).

Current assets increased by $4,121,901 primarily due to increases in (i) cash
and (ii) prepaid expenses and other current assets. Prepaid expenses and other
current assets at September 30, 1998 includes $1,491,251 in unamortized expenses
related to the $9.9 million short-term debt placed in the third quarter of 1998.
Current liabilities increased by $10,694,060. This increase is largely due to
net increases in short-term borrowings. The proceeds of the short-term
borrowings were used to fund (i) approximately $1,200,000 in placement costs,
(ii) $2,185,000 in debt repayments, (iii) $1,725,000 in capital expenditures
(iii) a $2,200,000 increase in cash and (iv) the operating losses discussed
above.

Substantially all of the liabilities of the Company mature or are subject to
payment agreements calling for payment before the end of February 1999. In
addition, the Company has committed approximately $1,500,000 to (i) purchase
telecommunications and computer equipment and (ii) license computer software,
payments for which will be due prior to January 31, 1999.

The Company repaid $1,575,000 in short-term debt during July of 1998, consisting
of $575,000 in bank borrowings and $1,000,000 borrowed in April 1998 from
unaffiliated investors. (See Note 4 of Notes to Consolidated Financial
Statements.) The short-term debt was repaid from a portion of the proceeds of a
$9,900,000 short-term debt financing. This replacement, short-term debt
financing matures in the fourth quarter of 1998 and the first quarter of 1999.
The Company is pursuing sources of capital in order to repay the short-term debt
financing and to expand its operations. While the Company believes it will be
successful in its efforts to raise sufficient capital and to restructure its
operations so that it may continue as a going concern, there can be no assurance
that the Company will be successful.




                                       19
<PAGE>

Cash Flows

Cash flow for the nine months ended September 30, 1998 was an increase of
$2,214,695, compared with a decrease of $52,467 for the comparable period in
1997, an improvement of $2,267,162. This improvement is attributable to an
increase in cash provided by financing activities of $9,128,589 off-set by
increases in cash used in operating activities of $5,142,763 and investing
activities of $1,718,664.

Cash Flows from Operating Activities

Operating activities used $5,321,588 in cash for the nine months ended September
30, 1998, compared with a use of $178,825 in 1997. The major reason for this
change is a $4,303,937 increase in the Company's loss from operations. The
operating loss of $5,018,937 for the nine months ended September 30, 1998 was
primarily financed with the proceeds of short-term borrowings, a $951,161
increase in deferred revenues and $701,990 increase in customer deposits and
other operating liabilities, partially off-set by a $571,777 increase in
operating assets and a decrease in accounts payable of $1,257,579. The operating
loss of $715,000 for the nine months September 30, 1997 was primarily financed
by increases in accounts payable, partially off-set by increases in accounts
receivable and reductions in deferred revenue and other operating liabilities.

Cash Flows from Investing Activities

The Company significantly increased its capital expenditures (to $1,725,176) in
1998 to support the development of its international long distance telephone and
high speed Internet services businesses. 1997 capital expenditures were only
$6,512.

 Cash Flows from Financing Activities

During the nine months ended September 30, 1998, the Company closed short-term
borrowings, which netted $11,586,126 and borrowed $15,000 from one of its
stockholders. These inflows were reduced by $2,339,667 in repayments, including
$154,667 applied to the principal due on capital leases. 1997 cash flows from
financing activities primarily consisted of $144,848 in net advances from one of
the Company's stockholders.

Impact of Year 2000:

There have been no material changes since the Company's disclosure in its Annual
Report on Form 10-K that, although the Company believes its software is Year
2000 compliant, it has not yet commenced a program to pursue compliance with its
suppliers, vendors, customers and anyone else with whom it electronically
connects.


                                       20
<PAGE>


Part II - Other Information

Item 1 - Legal Proceedings:

During the quarter ended September 30, 1998, there were no material changes in
the Company's previously reported legal proceeding commenced against American
Telephone & Telegraph Company.

Item 2 - Changes in Securities:

On July 13, 1998, the Company commenced a private placement offering (the
"Offering") of units (the "Units"), each consisted of a $100,000 10% senior
secured note (the "Notes") and warrants (the "Warrants") to purchase 100,000
shares of the Company's Common Stock.

Commonwealth Associates acted as Placement Agent in the sale of the Units
offered and received upon consummation of the Offering: (i) a placement fee
equal to 7% of the gross proceeds of the Units sold in the Offering ($693,000);
and (ii) a structuring fee equal to 2% of the gross proceeds of the Units sold
in the Offering ($198,000). The Placement Agent also received from the Company
(i) 697,184 shares of Common Stock; (ii) warrants to purchase at an exercise
price of $.50 per share 1,394,366 shares of Common Stock (the "Agent's
Warrants") and (iii) reimbursement of legal fees. The Company agreed to
indemnify the Placement Agent and certain other persons against certain
liabilities, including certain liabilities arising under the Securities Act of
1933, as amended (the "Securities Act").

In addition, Liberty Capital, Ltd., a co-financial advisor to the Company with
respect to the Offering ("Liberty"), received: (i) 2% of the offering price of
the Units ($198,000); (ii) 697,184 shares of Common Stock and (iii) warrants to
purchase at an exercise price of $.50 per share 1,115,493 shares of Common
Stock.

Between July 29, 1998 and September 8, 1998, the Company sold 99 Units for cash,
or an aggregate of $9,900,000 in gross proceeds. The Units were offered and sold
only to "accredited investors" as such term is defined in Regulation D
promulgated under the Securities Act and was offered and sold only to
prospective investors who: (i) represented, among other things, that they were
acquiring Units for their own account, for investment only and not with a view
toward the resale or distribution thereof that they were aware that the Units
had not been registered under the Securities Act and that their transfer rights
are restricted by the Securities Act, applicable securities laws and the absence
of a market for the Units and (ii) represented that they were accredited
investors. Therefore, the Offering was exempt from registration pursuant to
Section 4(6) of the Securities Act and Rule 506 of Regulation D promulgated
thereunder.

The principal amount of the Notes, together with accrued interest, is due and
payable on the earlier of (i) completion by the Company of an equity financing
resulting in gross proceeds of $5,000,000 or more or (ii) 120 days from the
placement of the Notes (the "Maturity Date"). The Maturity Date set forth in
(ii) may be extended for up to 60 days (the "Extension Period") solely at the
Company's option (the "Extension Option"). In the event the Company defaults in
the payment of the Notes, and such default continues uncured for five (5)
business days, holders of the Notes will have the option to convert the
principal amount, together with accrued interest, into shares of the Company's
Common Stock at a conversion price per share equal to the lower of (i) 50% of
the closing bid price of the Common Stock on the date of the Event of Default or
(ii) $.25.



                                       21
<PAGE>

Each Warrant is exercisable for a period of five years for one share of Common
Stock at an exercise price equal to $.50 per share. In the event the Company
exercises the Extension Option, the exercise price of the Warrants shall be
reset to the lower of the Closing Bid on the original Maturity Date or $.50. In
the event the Company does not repay the Notes by the end of the Extension
Period, the Company will file a Registration Statement with the Securities and
Exchange Commission within 90 days of the end of the Extension Period (e.g.,
April 25, 1999) registering the shares of Common Stock underlying the Warrants.
In the event the Company fails to file such registration statement on a timely
basis, the Exercise Price of this Warrant shall be adjusted downward 10% per
month until such registration statement is filed. The Warrants will be protected
against dilution upon the occurrence of certain events, including, but not
limited to, sales of shares of Common Stock for less than fair market value or
the exercise price.


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

         (a) Exhibits filed as part of this report are listed below:

10.1     Master Purchase Agreement between PICK Communications Corp. and 
         Northern Telecom Inc., effective as of July 16, 1998.

10.2     Software License and Support Agreement between Portal Software, Inc.
         and PICK Communications Corp., dated July 28, 1998.

27             Financial Data Schedule

         (b) Reports on Form 8-K:
                  Report dated September 18, 1998 concerning change in
                     Registrant's Certifying Accountants.
                  Report dated September 18, 1998 to file Former Accountant's
                     letter re change in Registrant's Certifying Accountants.



                                       22
<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:  November 12, 1998       By:  /s/  Diego Leiva
                                    ------------------------------------------
                                    Diego Leiva
                                    President and Chief Executive Officer


Date:  November 12, 1998       By:  /s/  Robert S. Bingham
                                    -------------------------------------------
                                    Robert S. Bingham
                                    Vice President and Chief Financial Officer
                                    (Principal Accounting Officer)