SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


FORM 10-KSB


[X]Annual report under Section 13 or 15(d)of the Securities Exchange Act of 1934

   For the fiscal year ended December 31, 1999.

[ ]Transition report under section 13 or 15(d) of the Securities Exchange Act
   of 1934, FOR THE TRANSITION PERIOD FROM _______ to ________

                        Commission file number 001-13999

                               HITCOM CORPORATION
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                 Delaware                                 87-0389677
      (State or Other Jurisdiction                      (IRS Employer
     of Incorporation or Organization)                Identification No.)

      85 Scarsdale Road, Suite 202,
      Toronto, Ontario, Canada                                 M3B 2R2
      (Address of Principal Executive Offices)               (Zip Code)

          Issuer's Telephone Number, Including Area Code (416) 441-6720

          Securities registered under Section 12(b)of the Exchange Act:

                                                        Name of Each Exchange
         Title of Each Class                             On Which Registered
                  (None)                                       (None)

         Securities registered under Section 12(g) of the Exchange Act:

                                       Common Stock
                                     (Title of Class)

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

      Yes [X]                 No [ ]


      Check if there is no disclosure  of delinquent  filers in response to Item
      405 of  Regulation  S-B is not  contained in this form,  and no disclosure
      will be contained,  to the best of registerant's  knowledge, in definitive
      proxy or information statements  incorporated by reference in Part IIII of
      this Form 10-KSB or any amendment to this form 10-KSB
      Yes[ ]                  No [X]


      State issuer's revenues for its most recent fiscal year:    $4,405,964


      State the  number of shares  outstanding  of each of the  issuer's  common
      equity, as of the latest practicable date: As of March 15, 2000:

                          Class                      Shares Outstanding
                      Common Stock                        6,607,815


      Traditional Small Business Disclosure Format (check one):
      Yes[ ]                  No [X]

<PAGE>


ITEM 1 --  DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT
Hitcom  Corporation  ("Hitcom" or the "Company") was  incorporated  in 1995. The
Company's   business   activities   were  carried  out  through  two   operating
subsidiaries in 1999:

CHANNEL TELECOM, INC.
Effective May 31, 1998,  Hitcom  acquired  Channel Telecom Inc.  ("Channel"),  a
prepaid  telecommunication  services  company based in Canada.  This acquisition
expanded the  Company's  telecommunication  services and provided  access to the
Canadian  marketplace.  Hitcom  issued  3,975,570  in shares of common stock and
$37,500 in cash for all of the  outstanding  stock of Channel.  Hitcom  issued a
further  309,240  in shares  of common  stock  and  incurred  costs of  $172,615
relating to transaction costs for the Channel acquisition.  Hitcom accounted for
the  acquisition  using the  purchase  method of  accounting.  Accordingly,  the
purchased  assets and  liabilities  have been recorded at their  estimated  fair
value  at the date of  acquisition.  Amounts  in  excess  of the  fair  value of
tangible  assets acquired was attributed to goodwill and is being amortized over
ten years.  The  results of  operations  of Channel  have been  included  in the
consolidated financial statements since the effective date of acquisition.

ONE PLUS MARKETING INC.
Hitcom  acquired 80% of One Plus  Marketing  Inc.  ("One Plus"),  an interactive
voice response  company,  effective April 1, 1997 for 5,837,503 shares of common
stock.  The  acquisition  was  treated  for  accounting  purposes  as a  reverse
takeover,  resulting  in One  Plus  becoming  the  accounting  acquiror  and the
operating activities of the acquiror are presented for historical purposes.

The  remaining  20%  minority  interest  in One  Plus  reverted  back to  Hitcom
effective August 1, 1998.

On December  17,  1999,  the Company  completed  the sale of certain  assets and
liabilities  that  were  primarily  related  to One  Plus to a  former  officer,
director and major shareholder of the Company.  As consideration for the sale of
the assets and liabilities,  the Company  received  5,837,503 shares of Hitcom's
common stock, which are currently being held in treasury.


Therefore,  effective  December 18, 1999,  Hitcom had only one active  operating
subsidiary - Channel.



<PAGE>


BUSINESS OF ISSUER

PREPAID TELECOMMUNICATION SERVICES

OVERVIEW
Channel provides long distance services to consumers through prepaid cards under
the Channel brands and private label brands,  ("Channel  Cards").  Channel Cards
provide  consumers  a  single  point  of  access  to  convenient,  easy  to use,
cost-effective  telecommunications  products and services at a fixed rate charge
per minute  regardless  of the time of day.  Channel  Cards enable  consumers to
place local,  long  distance and  international  calls from  touch-tone  phones,
without  the need for cash,  operator  assistance,  collect or other third party
billed calls.  Consumers can use the Channel Cards to place  international  long
distance calls from the U.S. and Canada to more than 200 countries at rates that
are generally lower than the standard plan rates currently  charged by the major
telecommunication  carriers  such as Bell  Canada,  Sprint  and AT&T or the rate
charged for a direct call from a payphone or hotel room.

Consumers  access the services of the Channel Cards by dialing a local number or
toll-free  number and entering a PIN printed on the back of the card. The system
provides explanation to the services including the time remaining on the card.

SALES AND MARKETING
Channel  targets retail  markets with  substantial  international  long distance
calling requirements,  such as ethnic communities.  Therefore, Channel's primary
marketing and distribution  focus is to target  independent  convenience  stores
serving ethnic communities and alternative distribution channels, which includes
tour and travel, and vending machines.  Channel is refining its retail sales and
marketing  program  to  increase  penetration  of major  national  and  regional
retailers such as department stores, mass merchandisers,  office superstores and
consumer electronics retailers, which the Company had not aggressively targeted.
The  opportunity  to increase the  penetration  into these retail areas provides
excellent growth opportunities.

Channel  markets  its  cards  primarily   through   in-house  sales  agents  and
distributors  to the retail  stores.  Channel  believes  that its Channel  Cards
provide  consumers  with  a  convenient,   attractively  priced  alternative  to
traditional presubscribed long distance services.  Channel Card rates are set to
attract new  customers  and to retain its existing  customers.  While  Channel's
rates to  specific  domestic  and  international  destinations  are  often  more
attractive  to customers  than the rates of the primary  carriers,  Channel does
not,  as a policy,  fix its rates at a  discount  to the  rates  charged  by the
primary  carriers,  or at a discount  to the rates  charged  by other  carriers.
Channel has used its significant retail international  traffic to negotiate very
competitive  rates for  international  termination.  Cards are available in $10,
$20, $30, $50, and $100 denominations.

CHANNEL CARD RECHARGE:
Consumers  can  recharge  their  Channel  Card to increase the number of minutes
available  on the Card  without  purchasing  a new Channel Card by using a major
credit card. Recharge enables Channel to make direct sales to consumers,  and to
create  brand  loyalty.  Currently,  the Channel  Card can only be  recharged by
calling  Channel's  customer service  department.  In 2000, the Company plans to
introduce an on-line  recharge system whereby the consumer can recharge the card
over the internet or telephone.

CUSTOM CARDS:
Channel   has   created   customized   prepaid   phone   cards  for   resale  or
promotional/institutional  use. Custom cards can carry a company image and logo,
product  imaging,  or any custom design or text desired.  Channel can assist and
provide turnkey custom service and advice including market planning, card design
and development,  card  manufacturing,  inventory tracking and fulfillment,  and
production of point-of-sale  marketing  material  available  including  posters,
brochures and displays.


LONG DISTANCE SERVICES

Starting in  December  1999,  Hitcom  commenced  offering  direct from home long
distance  services.  This service is on a post paid basis and is direct with the
consumer.  The customer  establishes  an account  with  Hitcom,  upon which long
distance  services are provided.  On a monthly basis, the customer is billed and
payment is  received.  Revenue  from these  services  was very  minimal in 1999,
however, Hitcom will be aggressively increasing its customer base in fiscal year
2000. This service enables Hitcom to increase its gross margin as it is directly
selling to the customer.


INTERACTIVE VOICE RESPONSE (IVR) /VOICE PROCESSING SERVICES

In 1999, the Company was engaged in the following  products and services through
One Plus, which was disposed of in December 1999:

800LINK(TM)
800Link(TM)  is an IVR / Voice  Processing  Platform  for several  Direct  Sales
Organizations  (DSO's) in the United States. DSO's use the Company's 800Link(TM)
to provide advertising support and communication services to their participants.

For an additional  fee, other  features can be added to an 800Link(TM)  account.
They include calling card capabilities,  call forwarding,  automated  attendant,
extended  greeting time, group  broadcasting,  fax back, fax on demand,  and fax
broadcast.

GAP LINES
The GAP lines allow  subscribers  to pre-record a message that their clients and
prospects  can access using an 800 number and a Personal  Identification  Number
("PIN") to listen to the message.

The marketing effort consists of nationally placed  advertisements  that attract
prospects  to obtain the  Company's  800Link(TM)  services.  The majority of new
business is still  generated  through  referral  in the US and Canada.  One Plus
markets 800Link(TM) service to small businesses and DSOs.

This segment is shown on the consolidated  financial  statements as discontinued
operations.

INTERNET CONNECTIVITY SERVICES

Hitcom marketed an internet  connectivity  service to commercial accounts in the
St. Louis,  Missouri market up until August 1998. The internet  connectivity was
provided using Cisco 7513 router and a direct ATM/ fiber optic connection to the
Internet.  The  Company's  internet  services  were  introduced to the St. Louis
market in 1997. In the third  quarter of 1998,  Hitcom sold the customer list of
this business for $30,000 and is currently in the process of selling the related
hardware  including  the  Cisco  7513  router.  This  segment  is  shown  on the
consolidated  financial statements as discontinued  operations.  HITCOM CUSTOMER
SERVICE

Hitcom believes that effective and convenient  customer  service is essential to
attracting  and  retaining  consumers.  The  customer  service  departments  are
responsible  for  increasing  the prepaid  amount on the customer card through a
major credit card,  assisting  consumers in using Hitcom's  services,  answering
questions  about usage and resolving  billing  related  issues and any technical
problems.  Hitcom provides on-line customer support that is available 24 hours a
day, 7 days a week, at the touch of a button.  Customer service  representatives
can access  detailed usage records through  Hitcom's  systems in order to answer
efficiently  consumers' questions or resolve consumers'  concerns.  In addition,
Hitcom can  identify  calling  activity  by  originating  or  destination  phone
numbers.


INTERNET PROTOCOL (IP) TELEPHONY RELATED SERVICES

IP  Telephony  represents  the  routing of voice and data  traffic  through  the
Internet.  IP  telephony  is now in its infancy  but, by all  indications,  will
quickly become a major factor in the  telecommunications  industry. IP telephony
is the convergence of CTI (Computer  Telephony  Integration)  with the Internet.
CTI represents the  integration  of computers and  telecommunication  functions.
Computers with specialized  software and hardware are used to route phone calls,
handle  messages,  etc. The  resulting  products  and services  enhance both the
telephony and computer  environments and also create new hybrid applications.  A
sampling of existing CTI technologies and applications  include intelligent PBXs
(Private Branch Exchanges),  IVR (Interactive  Voice Response),  ACDs (Automatic
Call  Distribution  centers),  fax servers,  voice mail and messaging,  cellular
phone services, modems and ISDN.

The  Company is looking at  expanding  its  technology  platforms  to support an
aggressive internal growth plan and attract additional strategic acquisitions to
offer new IP telephony driven services.


INDUSTRY OVERVIEW

TELECOMMUNICATIONS INDUSTRY OVERVIEW
Telecommunications  no longer refers only to local and long  distance  telephone
communications. Instead, the industry is now made up of everything from cellular
and satellite or wireless  communications  to  interactive  voice and voice mail
messaging;   from  data   transmission,   including  fax,  to  voice  and  video
conferencing;  and from Internet and intranet  connectivity to cable television.
The industry is currently experiencing an unprecedented  introduction of new and
enhanced communication technology and services.

The way these  services are  purchased  is changing as well.  Not that long ago,
only  select  groups  were  able  to  benefit  from  the  latest   communication
advancements  and  conveniences  available.  Today,  people  from  every  social
economic  background  are familiar with local and  international  communications
services and technologies.  As a result,  prepaid phone cards,  prepaid cellular
and even prepaid dial tone have witnessed explosive acceptance and growth.

In the decade since the mid-1980's, divestiture,  deregulation and the advent of
computer  telephony  integration  (CTI) have "reopened" a virtually  monopolized
industry to promote unparalleled competition and expansion.  Now, in addition to
the major  players - AT&T,  Sprint  and MCI  WorldCom  - other  companies,  like
Hitcom,  are  able  to  successfully   compete  and  thrive  by  developing  new
technologies  and pursuing niche markets and  opportunities.  In 1999,  Canada's
telecommunication services market - including local, long-distance, internet and
data services - was $19 billion,  with the new emerging telephone companies only
capturing  2% of the  market.  The market is  expected to grow to $26 billion by
2002 with the new industry players  capturing 9% of the market.  By focusing and
building  upon the products and services  that employ  computer  telephony,  the
Company has been able to take advantage of the enormous  demand for  alternative
and specialized providers and services.


PREPAID PHONE CARDS MARKET OVERVIEW
The growth of the prepaid phone card market has been extraordinary. According to
industry  research,  the U.S. market was about $500,000 in 1992 and grew to $500
million by 1994. In 1996,  the U.S.  prepaid  calling card market  surpassed the
billion-dollar  mark,  exceeding all  expectations  of industry and analysts.  A
report released in early 1997 by  Atlantic-ACM,  a Boston-based  market research
firm that tracks the telecommunications industry, predicted the sales of prepaid
cards  would  reach  $2.5  billion  by the  millenium.  Later  in  1997,  due to
unanticipated sales growth within the retail segment, Atlantic-ACM increased its
long-term  forecast by more than 50%. The research  firm now  estimates  overall
revenues  for  prepaid  phone cards to be $4.3  billion by 2001.  The shift from
promotional  use to retail as well as the  changing  user  demographics  clearly
indicates that phone cards are now an established and accepted  consumer product
in North America.

There are primarily two types of prepaid card issuers.  SWITCH-BASED,  those who
have their own  platforms and  NON-SWITCH-BASED,  those who market the cards and
outsource  their network needs to  switch-based  companies  that resell  prepaid
phone card network  services  through its own service  bureau.  The Company is a
switch-based card issuer.


TELECOMMUNICATION REGULATION
Canada  is  going   through   the   final   phases   of   deregulation   in  the
telecommunications  industry. There are two specific areas of deregulation which
occurred in 1998 and have created new  opportunities in the phone card industry:
swipe access  functionality  and elimination of Teleglobe's  (Canada's  licensed
company with  exclusivity  to carry  international  voice  traffic)  monopoly on
overseas long distance  services.  Until late 1997,  Bell Canada and the Stentor
Alliance had a monopoly on "swipe" access.  Channel obtained swipe functionality
on its cards in 1998,  allowing  the  Channel  Cards to be swiped on any of Bell
Canada's pay phones (approximately  70,000) eliminating the user having to enter
the  1-800#  and  their  PIN#.  As per  the  CRTC  (Canada's  governing  telecom
regulator)  ruling in 1998,  Teleglobe's  monopoly  on  overseas  long  distance
services  was  eliminated.  This is  driving  down the  price of  overseas  long
distance in Canada to be more in line with the U.S.  Lower pricing will increase
volume and create short-term arbitrage opportunities for companies.  The Company
expects to be  positioned  to take full  marketing  advantage  during  this time
period.

The  Company's  IVR  services  in  USA  is  not  subject  to  specific  industry
regulation.

SWITCH PLATFORM SERVICES

As the  telecommunications  industry and product offerings have changed, so have
the networks that process the communication.  Until recently,  telecommunication
companies used massive switch networks that could perform the more routine,  and
most needed services - predominantly  connecting one caller with another caller.
However,   with  the  influx  of  new  services  -  voice,   data,  fax,  video,
conferencing,  etc. - more  sophisticated and flexible  switching  technology is
required.

Hitcom's  services are delivered  through a carrier class Excel(R)  switch,  LNX
which was  activated  in May 1999.  The Excel  switch has  provided  significant
increases in call volume capacity over the Company's  previous  PC-based switch.
The increased capacity has enabled the Company to significantly increase revenue
and terminated minutes in 1999.  However,  more importantly,  the new switch has
enabled the Company to utilize significantly more long distance carriers thereby
resulting  in greater  choice in  optimizing  least cost  routing  which  should
decrease the  Company's  cost of services  and  correspondingly  increase  gross
margin.


PERSONNEL

Currently,  the Company employs  approximately 30 people  including  managerial,
administration, technical and sales personnel.


COMPETITION

The Company's strategy is to seek to gain a competitive  advantage by continuing
to develop unique and innovative services for its subscribers.

The market for the  Company's  services is  intensely  competitive.  Many of the
Company's  competitors in this market are substantially  larger and have greater
financial,  technical,  engineering,  personnel and marketing resources,  longer
operating histories, greater name recognition and larger customer bases than the
Company. Competitors include Premiere Technologies Inc., Deutsche Telekom, AT&T,
RSL Telecom,  Teleglobe  Canada and Bell Canada.  The Company has  developed and
continues to expand its own distribution network to gain a competitive advantage
by ensuring the development of its product line and the growth of brand loyalty.

The Company expects that the telecommunication  services market will continue to
attract new  competitors and new  technologies,  possibly  offering  alternative
technologies  that are more  sophisticated and cost effective than the Company's
current  technology.  The Company  intends to minimize the likelihood of this by
devoting resources to develop new, more efficient and cost-effective services.

In general, the Company does not have the right,  contractually or otherwise, to
prevent its subscribers from changing to a competing service  provider,  and the
Company's subscribers may terminate their service with the Company at will.


RISK FACTORS

RISKS RELATING TO THE PREPAID CARD BUSINESS
The prepaid card business in general has a number of inherent  risks,  which can
be summarized to include the following:  (a) the increased  penetration into the
market  by  competitive   prepaid  card  vendors,   including   those  that  are
substantially  larger than Hitcom,  (b) the relatively low barriers to entry for
prepaid  card  operators,  (c) the  price-sensitive  nature of  consumer  demand
resulting in relative lack of customer  loyalty to any  particular  prepaid card
company.  These inherent  risks could place  downward  pressure on industry wide
prepaid card pricing.


RAPID TECHNOLOGICAL CHANGE IN THE TELECOMMUNICATION MARKET
The telecommunication market is characterized by rapid technological change, new
product and service  introduction,  new sales  channels  and  evolving  industry
standards.  Hitcom's success will depend,  in significant part, upon its ability
to make timely and  cost-effective  enhancements and additions to its technology
and to introduce new products and services that meet  customer  demands.  Hitcom
expects new  products  and  services to be  developed  and  introduced  by other
companies that compete with its products and services.  The proliferation of new
telecommunications  technology,   including  personal  and  voice  communication
services  over the  Internet,  may  reduce  demand for long  distance  services,
including  prepaid  cards.  There  can  be no  assurance  that  Hitcom  will  be
successful  in  responding  to these or other  technological  changes,  evolving
industry  standards or to new products and services  offered by Hitcom's current
and future  competitors.  The  inability  of Hitcom to respond to these  changes
could  have a  material  adverse  effect on the  Company's  business,  financial
condition or results of operations.

RISKS ASSOCIATED WITH FOREIGN CURRENCY FLUCTUATIONS.
Hitcom's reporting currency is the U.S. dollar, however,  Channel derives almost
all of its revenues, approximately 50% of its cost of services and almost all of
its operating  expenses are in Canadian  Dollars.  Accordingly,  fluctuations in
exchange  rates  between the U.S.  and  Canadian  dollar may have a  significant
effect  on  Hitcom's  results  of  operations.  Hitcom  may  choose to limit its
exposure to foreign  currency  fluctuations in the future by purchasing  forward
foreign  exchange  contracts  or engaging in other  similar  hedging  strategies
although  to date it has not done so. The failure by Hitcom to hedge its foreign
currency  exchange exposure may result in foreign exchange losses to Hitcom from
Channel's operations.  In addition,  there can be no assurance that any currency
hedging  strategy that Hitcom decides to employ,  if any, would be successful in
avoiding currency exchange-related losses.

RISKS OF NETWORK FAILURE; DEPENDENCE ON FACILITIES AND THIRD PARTIES
Any system or network failure that causes  interruptions in Hitcom's  operations
could have a material  adverse  effect on the business,  financial  condition or
results of operations.  Hitcom's operations also are dependent on its ability to
protect its hardware and other equipment from damage from natural disasters such
as fires, floods, hurricanes and earthquakes,  other catastrophic events such as
civil   unrest,   terrorism  and  war  and  other  sources  of  power  loss  and
telecommunications  failures.  Although  Hitcom  has  taken a number of steps to
prevent their  network from being  affected by natural  disasters,  fire and the
like,  such as  building  redundant  systems for power  supply to the  switching
equipment, there can be no assurance that any such systems will prevent Hitcom's
switches from becoming  disabled in the event of an earthquake,  power outage or
otherwise.  The  failure of  Hitcom's  network,  or a  significant  decrease  in
telephone  traffic  resulting  from  effects of a natural or man-made  disaster,
could  have a  material  adverse  effect on  Hitcom's  relationships  with their
customers and their business, operating results and financial condition.

NEED FOR ADDITIONAL CAPITAL TO FINANCE OPERATIONS AND CAPITAL REQUIREMENTS
Hitcom  believes  that it must  continue  to enhance  and expand its network and
build out its telecommunications network infrastructure in order to maintain its
competitive  position  and continue to meet the  increasing  demands for service
quality,  capacity and competitive pricing. Hitcom's ability to grow depends, in
part, on its ability to expand its operations  through the ownership and leasing
of network capacity,  which requires significant capital expenditures,  that are
often incurred prior to Hitcom's receipt of the related revenue.

The Company  has  sustained  losses from  operations  since its  inception.  The
Company's  ability to meet its obligations in the ordinary course of business is
dependent  upon its  ability to raise  additional  financing  through  public or
private  equity  financings,   establish  profitable   operations,   enter  into
collaborative  or other  arrangements  with corporate  sources,  or secure other
sources of financing to fund operations.

Management  intends to raise working  capital through  additional  equity and/or
debt  financings in the upcoming year.  However,  there can be no assurance that
such financings can be successfully completed on terms acceptable to the Company
or at all. If Hitcom is unable to obtain such additional capital,  Hitcom may be
required to reduce the scope of its  anticipated  expansion,  which could have a
material adverse effect on Hitcom's business,  financial condition or results of
operations.

CONTROL OF HITCOM BY NAMED OFFICERS AND DIRECTORS
Executive  officers and directors of Hitcom,  in the aggregate  beneficially own
approximately 63% and 50% of the outstanding and fully-diluted  shares of Hitcom
common  stock.  These  stockholders  may be able to  exercise  control  over all
matters requiring stockholder approval,  including the election of directors and
approval of significant corporate transactions.

<PAGE>

ITEM 2 -- DESCRIPTION OF PROPERTY


The Company's head office is in Toronto,  Ontario, Canada. The 2,990 square feet
office is leased  through to February  28,  2003 at rental  rates  ranging  from
$1,700 to $2,300 per month.

Channel also has the following locations:
-        330 square feet sales office in Vancouver,  British  Columbia  which is
         being rented on a month to month lease for $300 per month.
-        572  Square  feet  switch  room  located in  Toronto,  Canada is leased
         through to February  29, 2004 at rental rates of  approximately  $1,500
         per month

The Company believes its facilities have generally been well maintained,  are in
good   operating   condition  and  are  adequate  for  the   Company's   current
requirements.


ITEM 3 -- LEGAL PROCEEDINGS

The  Company is not  involved  in legal  proceedings  that would have a material
adverse effect on the Company's  financial condition or results of operations if
determined adversely.


ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were  submitted to a vote of security  holders  during the  Company's
fourth quarter.




<PAGE>


                                                      PART II


ITEM 5 -- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's  common stock is quoted on the OTC Bulletin Board  (OTCBB).  As of
December 31, 1999,  there were  approximately  110 shareholders of record of the
Company's  common  stock.  The  following  table sets forth the high and low bid
information for the common stock for the periods  indicated,  as reported by the
OTCBB:

                                            HIGH              LOW

CALENDAR YEAR 1999
4th Quarter                                 0.46              0.30
3rd Quarter                                 0.55              0.38
2nd Quarter                                 0.75              0.52
1st Quarter                                 2.25              0.30

CALENDAR YEAR 1998
4th Quarter                                 2.25              0.38
3rd Quarter                                 1.13              0.69
2nd Quarter                                 2.50              1.13
1st Quarter                                 2.69              0.78


The above  quotations  reflect  inter-dealer  prices,  without  retail  mark-up,
mark-down or commission, and may not represent actual transactions.


DIVIDENDS
No dividends on the Company's  common stock was declared  during fiscal 1999 and
1998. It is not  anticipated  that cash  dividends will be paid on shares of the
Company's common stock in the foreseeable future.


<PAGE>


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATION

OVERVIEW
The Company principally derives its revenues through two operating subsidiaries:

CHANNEL TELECOM INC. (CHANNEL)
Channel is a provider of long  distance  services to retail  customers.  Channel
currently  provides its retail services by marketing prepaid cards under its own
brands and private label  brands,  through an extensive  network of  independent
retail outlets (through  independent  sales agents) and distributors  throughout
Canada.  Channel  targets retail  markets with  substantial  international  long
distance calling requirements, such as ethnic communities, and believes that its
Prepaid  Cards  provide  consumers  with  a  convenient,   attractively   priced
alternative to traditional  presubscribed long distance  services.  Channel sets
its  Prepaid  Card rates to attract  new  customers  and to retain its  existing
customers.  Channel has used its  significant  retail  international  traffic to
negotiate very competitive  rates for international  termination.  Channel sells
its prepaid cards to retail stores and  distributors at a discount to their face
values of $5,  $10,  $20,  $25,  $50 and $100,  and records the sale as deferred
revenue until the card user utilizes the calling time.

Hitcom acquired Channel  effective May 31, 1998. This  acquisition  expanded the
Company's  services and  provided  access to the  Canadian  marketplace.  Hitcom
issued  3,975,570  in shares of Common  stock and $37,500 in cash for all of the
outstanding  stock of  Channel.  Hitcom  issued a further  309,240  in shares of
common stock and incurred costs of $172,615  relating to  transaction  costs for
the Channel acquisition. Hitcom accounted for the acquisition using the purchase
method of accounting.  Accordingly,  the purchased  assets and liabilities  have
been recorded at their estimated fair value at the date of acquisition.  Amounts
in excess of the fair  value of  tangible  assets  acquired  was  attributed  to
Goodwill and is being  amortized  over ten years.  The results of  operations of
Channel have been included in the  consolidated  financial  statements since the
date of acquisition.

ONE PLUS MARKETING INC. (ONE PLUS)
One Plus derives its revenues from the sale of interactive voice  response/voice
processing  services to the  independent  agents of Direct  Sales  Organizations
(DSO).  Therefore,  One Plus is dependent upon the DSOs to provide  referrals of
their  sales  agents  to  use  the  services.   The  Company  offers  customized
interactive  voice-processing  systems  allowing  each  member of a national  or
international  sales  organization  a method by which the response  from a large
advertising  campaign can be handled 24 hours a day and pertinent  data reported
to their  participants  almost  instantly.  The revenues of One Plus are derived
primarily in the United States.


RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1999 COMPARED TO DECEMBER 31, 1998

REVENUE
Revenue  increased  239% to $4,405,964 in the year ended  December 31, 1999 from
$1,301,997  for the  same  period  in  1998.  Revenue  includes  only  Channel's
operation, as One Plus is being shown as a discontinued operation.  The increase
in revenue is due to the  significant  growth in the usage of Channel's  prepaid
cards,  an increase in the number of retail  storefronts  in which the Company's
products are distributed, and greater brand awareness.


COST OF SERVICES:
Cost of services  primarily includes payments to other carriers for origination,
transport and termination of international  and domestic long distance  traffic.
Cost of services  remained  constant at 89% of revenue - $3,923,299  in the year
ended December 31, 1999 as compared to $1,153,508 for the same period in 1998.

With the implementation of the new carrier class switch in May 1999, Channel has
implemented cost saving programs to decrease cost of services as a percentage of
revenue.  These  include  building  private  networks and  utilizing  Voice over
Internet Protocol (IP) gateways to reduce transmission  costs.  Channel has also
continued  to  expand  the  number  of  carriers  it  uses  to   terminate   its
telecommunication  traffic  with the  addition  of five new major  international
carriers in 1999.  The increased  number of carriers and  increased  termination
traffic, has allowed Channel to continually negotiate lower termination rates to
reduce cost of services.

As a result, Channel has improved its gross margin percentage  continuously over
each quarter in 1999. The Company anticipates that its gross margin will improve
in 2000 as it will have the benefit of a full year of its cost  saving  programs
as compared  to only eight  months in 1999.  Hitcom will  continue to expand its
private  network,  implement  voice over IP  gateways,  and expand the number of
carriers it utilizes to reduce transmission costs.


SELLING GENERAL & ADMINISTRATIVE (SG&A) and BAD DEBTS:
SG&A and bad dent expenses decreased to 29% of revenue  ($1,268,142) in the year
ended  December 31, 1999 from 39% of revenue  ($501,909)  for the same period in
1998. The significant  increase in revenue due to Channel's growth,  enabled the
decrease of SG&A expense as a  percentage  of revenue.  The Company  anticipates
that as revenue  continues to grow,  SG&A expense as a percentage  of sales will
continue to decrease.


GOODWILL AMORTIZATION
Goodwill  represents  the  excess  of cost  over  the fair  value of net  assets
acquired  for the  Channel  acquisition  effective  May 31,  1998  and is  being
amortized on a straight-line basis over a ten year period.  Amortization expense
was $399,770 in the year ended December 31, 1999 as compared to $233,199 for the
same period in 1998.


DEPRECIATION OF PROPERTY AND EQUIPMENT
Depreciation  increased  to  $50,225  in the year  ended  December  31,  1999 as
compared to $12,121  for the same period in 1998.  The  increase  was  primarily
attributable  to increased  capital  expenditures  for property and equipment to
support the growth of the business.


NET INTEREST EXPENSE:
Net interest expense was $38,916 in the year ended December 31, 1999 as compared
to net interest expense of $8,258 for the same period in 1998.  Interest expense
was primarily due to the convertible  debenture which was issued in October 1998
and accrues  interest at 8% per annum.  The 1999 expense reflects a full year of
interest as compared to only three months in 1998.


DISCONTINUED OPERATIONS
In  December  1999,  the  Company  completed  the  sale of  certain  assets  and
liabilities  that  were  primarily  related  to One  Plus to a  former  officer,
director  and major  shareholder  of the  Company.  The  Company  also  received
5,837,503  shares of Hitcom's  common  stock from the  purchaser  which has been
returned to treasury and has therefore reduced the outstanding  number of common
stock in Hitcom.  The  transaction  has been recorded at carrying  value and the
resulting gain has been recorded directly to contributed surplus.

Net liabilities disposed:
   Assets disposed:                                                 $  237,807
   Liabilities disposed                                                510,898
--------------------------------------------------------------------------------
Net liabilities disposed                                               273,091
Treasury common stock received                                       1,751,251
Legal expenses relating to closing of transaction                      (11,435)
Income tax expense                                                     (12,000)
--------------------------------------------------------------------------------

Contributed surplus on sale of assets and liabilities               $2,000,907
================================================================================

The disposal of the One Plus segment is reflected as discontinued  operations in
the accompanying consolidated financial statements.  Revenue net of expenses and
associated  overhead earned from these operations,  was $38,157 and $485,483 for
the years ended December 31, 1999 and 1998, respectively.

In  August  1998,  Hitcom  completed  the  sale of all of the  Internet  Service
Provider ("ISP")  division  including  certain  computer  equipment and customer
accounts for $30,000.  This division had focused on providing  various levels of
Internet  access to customers in the St. Louis,  Missouri  area. The disposal of
the ISP  division  is  reflected  as a  discontinued  operations.  Expenses  and
associated  overhead costs net of revenue from these  operations,  was a loss of
$457,212 for the year ended  December 31, 1998.


EBITDA - CONTINUING  OPERATIONS
EBITDA loss for the year ended ended December 31, 1999, increased to $785,477 as
compared to $353,420  in the same  period of 1998.  The  increase in EBITDA loss
dollar amount is due to increase in SG&A expenses to fund the Company's  growth,
however,  gross margin as a percentage of sales  remained the same.  The Company
will continue to implement  initiatives  to increase  gross margin in 2000. As a
percentage  of  revenue,  EBITDA  loss  decreased  to 18% of  revenue in 1999 as
compared to 27% of revenue in 1998.


NET LOSS
Net loss for the year ended  December  31, 1999  increased  to  $1,236,231  from
$578,727  for the same  period in 1998.  The  increase in net loss is due to the
same  reasons  for the  increase  in EBITDA loss as well as increase in goodwill
amortization  to  $399,770  in  1999 as  compared  to  $233,199  in  1998.  As a
percentage of revenue,  net loss decreased to 28% of revenue in 1999 as compared
to 45% of revenue in 1998.


LIQUIDITY AND CAPITAL RESOURCES

Cash and cash  equivalents  at  December  31,  1999  decreased  to $80,047  from
$340,484 at December 31, 1998. The Company's cash requirements were largely used
for investment and financing requirements.     These  requirements  were  funded
primarily by cash reserves and operating activities.

For the year ended December 31, 1999,  operating activities generated $83,537 in
cash as  compared  to  utilization  of  $291,907  for the same  period  in 1998.
Significant  working  capital was  provided  by increase in accounts payable and
accrued  expenses  ($650,742) and deferred  revenue  ($446,114) due to growth at
Channel.  The  EBITDA  loss for the year  ($785,477)  and  increase  in accounts
receivable ($306,763) were the primary usage of cash in 1999.

Cash used for  investing  activities  for the year ended  December  31, 1999 was
$146,605 as compared to $257,936 for the same period in 1998. The 1999 investing
activities were primarily used for the  implementation  of the new carrier-class
switch at Channel while the 1998  investing  activities  were primarily used for
the purchase of Channel.

Cash used by  financing  activities  for the year ended  December  31,  1999 was
$197,370 as compared  to net  proceeds of $701,527  for the same period in 1998.
Repayment of bank term loan ($90,243), purchase of short-term deposit ($50,000),
repayments of capital leases ($28,283), and convertible debenture ($15,000) were
the  primary  usage of cash in  1999.  In 1998,  financing  activities  proceeds
consisted  primarily of increased  bank  borrowings  and issuance of convertible
debenture.

At  December  31,  1999,   the  Company  is  not  committed  to  completing  any
acquisition,   however,   the  Company  is   continually   looking  for  further
acquisitions  which will  expand the  Company's  product  lines and  competitive
position.  Any potential  acquisitions  in the  following  twelve months will be
funded either through stock issuance, new equity financing and/or increased bank
borrowings.


NEED FOR ADDITIONAL CAPITAL TO FINANCE OPERATIONS AND CAPITAL REQUIREMENTS
Hitcom  believes  that it must  continue  to enhance  and expand its network and
build out its telecommunications network infrastructure in order to maintain its
competitive  position  and continue to meet the  increasing  demands for service
quality,  capacity and competitive pricing. Hitcom's ability to grow depends, in
part, on its ability to expand its operations  through the ownership and leasing
of network capacity,  which requires significant capital expenditures,  that are
often incurred prior to Hitcom's receipt of the related revenue.

The Company  has  sustained  losses from  operations  since its  inception.  The
Company's  ability to meet its obligations in the ordinary course of business is
dependent  upon its  ability to raise  additional  financing  through  public or
private  equity  financings,   establish  profitable   operations,   enter  into
collaborative  or other  arrangements  with corporate  sources,  or secure other
sources of financing to fund operations.

Management  intends to raise working  capital through  additional  equity and/or
debt  financings in the upcoming year.  However,  there can be no assurance that
such financings can be successfully completed on terms acceptable to the Company
or at all. If Hitcom is unable to obtain such additional capital,  Hitcom may be
required to reduce the scope of its  anticipated  expansion,  which could have a
material adverse effect on Hitcom's business,  financial condition or results of
operations.


ISSUANCE OF CONVERTIBLE SUBORDINATED DEBENTURES
During 1998,  the Company had received net proceeds of $528,000 from issuance of
convertible  subordinated  debentures.  The debentures were issued on October 1,
1998 and are due on October 1, 2003,  bearing interest at 8% per annum,  payable
semi-annually  commencing on April 1, 1999.  The  debentures may be converted at
the option of the holder into  fully-paid  and  non-assessable  shares of common
stock of  Hitcom at a  conversion  price of $0.50  per  share  (equivalent  to a
conversion rate of 2000 shares per $1,000 principal amount of debenture).  After
September 1, 2000, the Company may force the conversion of all debentures if the
Company's  common stock closes at a price of $2.00 or higher on each trading day
during any 90 consecutive  calendar days.  After October 1, 2000, the debentures
are  subject to  redemption  upon  payment of the  principal  amount and accrued
interest, at the election of the Corporation. The debentures were issued through
a private placement.


NEW COMMERCIAL BANK CREDIT FACILITIES
In February  1999,  Channel  obtained a new  operating  credit  facility  with a
commercial bank in Canada for approximately $100,000. The new credit facility is
secured  by a general  security  agreement  on  Channel  Telecom  Inc.,  $50,000
Guaranteed  Investment  Certificate and corporate  guarantees  from Hitcom.  The
outstanding  balance  drawn  against this  facility was $nil, as at December 31,
1999.

With the disposal of the assets and  liabilities  of One Plus in December  1999,
the Company disposed of all liabilities  relating to a $150,000 operating credit
facility  and a term loan  with an  approved  limit of  $385,000.  These  credit
facilities are no longer available to the Company as of December 31, 1999.


In 1998, the Company  restructured  its then existing  credit  facilities with a
new commercial bank which provided for credit facilities of $535,000.      These
credit facilities consisted of:
-  A  revolving  working  capital  line  of  credit  of  $150,000. The line bore
   interest  at  prime  plus 0.5%.  The outstanding  balance drawn  against this
   facility was $nil and $30,000, as at December 31, 1999 and 1998,respectively.
-  A  term  loan for $385,000 with a commercial  bank  repayable on May 1, 2001,
   which  bore  interest  at 9% per annum,  payable  monthly.  Repayment  was at
   $8,000  per  month  inclusive of interest and  principal.  Proceeds  from the
   term loan were used to  pay  out the existing  $100,000  operating  facility,
   Channel  acquisition   cash   requirements  and for general  working  capital
   purposes.  The balance  on  this  facility at December  31, 1999 and 1998 was
   $nil and $290,638.

These credit facilities were secured by a security agreement covering all of the
assets  of the  Company  and a  personal  guarantee  from  the  Company's  major
shareholder.


NEW ACCOUNTING STANDARDS

ACCOUNTING FOR DERIVATIVES AND HEDGING ACTIVITIES
In June 1998,  the FASB  issued SFAS No. 133  "Accounting  for  derivatives  and
hedging  activities," which establishes  accounting and reporting  standards for
derivative  instruments,  including certain derivative  instruments  embedded in
other  contracts,  (collectively  referred  to as  derivatives)  and for hedging
activities.  SFAS No. 133 is effective for all fiscal  quarters of the Company's
year ending December 31, 2001.  The Company does not expect the adoption of this
statement to have  significant  impact on the Company's  results of  operations,
financial position or cash flows.


VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>

DESCRIPTION                         BALANCE AT   ADDITIONS CHARGED                            BALANCE
                                    BEGINNING    TO COST OF SERVICES                          AT END
                                    OF PERIOD    AND OPERATING EXPENSES     DEDUCTIONS        OF PERIOD
<S>                                <C>               <C>                       <C>               <C>

Allowance for doubtful accounts     $  50,900        $  75,509                 $  60,046 (1)     $  66,363
Accrued liabilities                   205,710          257,636                       -             463,346
</TABLE>

(1) Amounts written off during the year



<PAGE>
ITEM 7--FINANCIAL STATEMENTS

HITCOM CORPORATION
Consolidated Balance Sheet
December 31, 1999
--------------------------------------------------------------------------------
                                ASSETS
                                                               1999

 Current Assets:
   Cash and cash equivalents                               $   80,047
   Short-term deposits                                         50,000
   Accounts receivable, net of allowance for
     doubtful accounts of $66,363                             763,201
   Inventory                                                   28,961
   Other current assets                                        47,843
--------------------------------------------------------------------------------
   Total current assets                                       970,052
--------------------------------------------------------------------------------
 Property and equipment, net (Note 4)                         153,892
 Goodwill, net of amortization of $632,969 (Note 5)         3,364,731
--------------------------------------------------------------------------------
                                                           $4,488,675
================================================================================

                LIABILITIES AND SHAREHOLDERS' EQUITY

 Current Liabilities:
   Accounts payable and accrued liabilities                 1,523,315
   Deferred revenue                                           748,285
   Due to officers and directors (Note 7)                      21,767
   Current portion of obligations under capital lease (Note 17) 9,627
 -------------------------------------------------------------------------------
   Total current liabilities                                2,302,994
--------------------------------------------------------------------------------
 Long term debt (Note 8)                                      513,000
 Obligations under capital lease (Note 17)                      6,218
--------------------------------------------------------------------------------
 Total liabilities                                          2,822,212
--------------------------------------------------------------------------------
 Commitments & contingencies (Notes 16 and 17)

 Shareholders' equity (Note 9)
   Convertible preferred stock $.001 par value,
     liquidation preference of $0.80 per share
     ($818,398 aggregate liquidation preference),
     convertible into 0.25 shares  of  common  stock;
     5,000,000 authorized; 1,022,998 issued and outstanding     1,022
   Common stock $.004 par value, 25,000,000 authorized;
     12,354,061 issued;  6,520,315 outstanding                 49,416
   Additional paid in capital                               4,970,236
   Deficit                                                 (1,552,369)
   Cumulative foreign currency translation adjustment         (30,795)
   Treasury stock - at cost; 5,844,753 common stock        (1,771,047)
--------------------------------------------------------------------------------
                                                            1,666,463
--------------------------------------------------------------------------------

                                                            4,488,675
================================================================================

         See accompanying notes to the consolidated financial statements

<PAGE>

HITCOM CORPORATION
Consolidated Statements of Operations
For the Years Ended December 31,1999 and 1998
--------------------------------------------------------------------------------

                                                         1999            1998
                                                       ---------       ---------

Net service revenues                                  $4,405,964     $1,301,997
Cost of services                                       3,923,299      1,153,508
--------------------------------------------------------------------------------
Gross margin                                             482,665        148,489
--------------------------------------------------------------------------------

Operating expenses:
     Selling, general and administrative               1,192,633        440,267
     Bad debts                                            75,509         61,642
     Amortization of goodwill                            399,770        233,199
     Depreciation of property and equipment               50,225         12,121
--------------------------------------------------------------------------------
     Total operating expenses                          1,718,137        747,229
--------------------------------------------------------------------------------

Operating loss                                        (1,235,472)      (598,740)
--------------------------------------------------------------------------------


Other income (expense)
     Interest expense                                    (44,241)       (10,600)
     Interest income                                       5,325          2,342
--------------------------------------------------------------------------------
 Total other expense                                     (38,916)       ( 8,258)

Loss from continuing operations                       (1,274,388)      (606,998)

Income from discontinued operations,
    net of tax payable (Note 13)                          38,157         28,271
--------------------------------------------------------------------------------
Net loss                                              (1,236,231)      (578,727)
================================================================================


Basic loss per share (Note 12)
    Loss from continuing operations                      $ (0.11)       $ (0.06)
    Loss from discontinued operations                    $    -         $   -
--------------------------------------------------------------------------------
    Net loss                                             $ (0.11)       $ (0.06)
================================================================================

Weighted average shares - basic                       12,139,686      10,442,292
Weighted average shares - diluted                     12,139,686      10,442,292

         See accompanying notes to the consolidated financial statements
<PAGE>
<TABLE>

HITCOM CORPORATION
Consolidated Statements of Shareholders' Equity
For the Years Ended December 31, 1999 and 1998
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>


                                                                                                   Cumulative
                                                                                                   Foreign
                                                                              Additional Retained  Currency
                                         Preferred Stock      Common Stock    Paid in    Earnings/ Translation  Treaury
                                        Shares   Amount   Shares      Amount  Capital    (Deficit) Adjustment   Stock      Total
                                        ---------------   ------------------ ----------  --------- -----------  --------- ---------
<S>                                     <C>        <C>    <C>        <C>     <C>         <C>         <C>       <C>         <C>
Balance, December 31, 1997              1,144,143 $1,144  7,931,014 $31,724 $(1,139,904) $ 372,509  $  -      $ (19,796)  $(754,323)

Net loss                                                                                  (578,727)                        (578,727)
Foreign currency translation adjustment                                                               6,186                   6,186
Comprehensive income

Issuance of common stock in acquisition of
  Channel Telecom Inc.                                    3,975,570  15,902   3,462,598                                   3,478,500
Issuance of common stock for acquisition
     related costs of Channel Telecom Inc.                  309,240   1,237     269,348                                     270,585
Minority Interest repurchase                                                    186,439                                     186,439
Conversion of preferred stock            (143,366)  (143)    35,842     143                                                    -
Preferred stock dividends                  72,600     73                         58,007    (58,080)                            -
Common stock issued                                          41,689     167      40,038                                      40,205
Issuance of warrants                                                             25,200                                      25,200
------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998              1,073,377 $1,074 12,293,355 $49,173 $ 2,901,726  $(264,298)  $6,186   $ (19,796) $2,674,065

Net loss                                                                                (1,236,231)                      (1,236,231)
Foreign currency translation adjustment                                                             (36,981)                (36,981
Comprehensive loss
Conversion of preferred stock            (115,179)  (116)    28,795     116                                                    -
Preferred stock dividends                  64,800     64                         51,776    (51,840)                            -
Common stock issued                                          31,912     127      15,827                                      15,954
Shares of Hitcom held by subsidiary                                                                           (1,751,251)(1,751,251)
Sale of One Plus assets and liabilities                                       2,000,907                                   2,000,907
------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999              1,022,998 $1,022 12,354,062 $49,416 $ 4,970,236 $(1,552,369)$(30,795)$(1,771,047)$1,666,463
====================================================================================================================================
</TABLE>

         See accompanying notes to the consolidated financial statements

<PAGE>
<TABLE>

HITCOM CORPORATION
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1999 and 1998
----------------------------------------------------------------------------------------------------
<CAPTION>
<S>                                                                          <C>           <C>
                                                                                1999          1998

Operating activities:
 Net loss                                                                    $(1,236,231)  $(578,727)
 Adjustments to reconcile net loss to net cash used in operating activities:
   Amortization of goodwill                                                      399,770     233,199
   Depreciation of property & equipment-continuing operations                     50,225      12,121
   Depreciation of property & equipment-discontinued operations                   87,500      90,637
   Writedown on assets held for resale-discontinued operations                       -        60,290
   Minority interest in earnings of subsidiary                                       -        20,332
   Issuance of common shares for services                                         15,827      24,205
   Issuance of warrants for services                                                 -        25,200
   Loss on sale of property & equipment                                              -         6,171
   Equity in loss of affiliated Company                                              -         2,804
   Deferred tax benefit                                                              -           885
   Changes in assets and liabilities, excluding acquisition and disposal
      Accounts receivable--net                                                  (306,763)    (42,661)
      Inventory                                                                   (1,753)    (10,651)
      Other assets                                                               (21,893)     46,855
      Accounts payable and accrued expenses                                      650,742     (55,951)
      Deferred revenue                                                           446,114    (126,616)
-----------------------------------------------------------------------------------------------------
    Net cash used in operating activities                                         83,538    (291,907)
-----------------------------------------------------------------------------------------------------

Investing activities:
  Purchases of property and equipment                                           (146,605)   (102,745)
  Acquisition of Channel Telecom, net of cash acquired                               -      (155,191)
 ----------------------------------------------------------------------------------------------------
    Net cash used in investing activities                                       (146,605)   (257,936)
-----------------------------------------------------------------------------------------------------

Financing activities:
  Repayment of (proceeds from) the issuance of convertible debentures            (15,000)    528,000
  Repayment of (proceeds from) bank term loan                                    (90,243)    290,635
  Purchase of short-term deposit                                                  50,000         -
  Repayment of capital leases                                                    (28,283)    (14,108)
  Repayment on line of credit                                                    (13,844)    (70,000)
  Repayment of notes payable                                                         -       (33,000)
-----------------------------------------------------------------------------------------------------
  Net cash provided (used) in financing activities                              (197,370)    701,527
-----------------------------------------------------------------------------------------------------

Net (decrease) increase in cash and cash equivalents                            (260,437)    151,684
Cash and cash equivalents at beginning of period                                 340,484     188,800
-----------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                    $   80,047  $  340,484
=====================================================================================================

Supplemental disclosure of cash flow information
 Cash paid for interest during the period                                     $   36,108  $   40,440
 Cash paid for income taxes during the period                                        -          -
 Non cash investing and financing activities:
  Common shares issued for acquisition and related costs of Channel Telecom Inc.     -     3,749,085
  Reversion of minority interest                                                     -       186,439
  Property & Equipment acquired through proceeds from capital lease               21,280     105,224
  Preferred dividend paid through issuance of preferred shares                    51,840      58,080
  Repayment of notes payable through issuance of common stock                        -        16,000
  Capital assets disposed of by settlement of capital lease                          -         5,838
  Conversion of preferred shares into common shares                                  116         143

                  See accompanying notes to the consolidated financial statements
</TABLE>
<PAGE>


HITCOM CORPORATION
Consolidated Statement of Comprehensive Loss
For the Years Ended December 31, 1999 and 1998
--------------------------------------------------------------------------------
                                                            1999          1998

Net loss                                                $(1,236,231)  $(578,727)
Foreign currency translation adjustment                     (36,981)      6,186
--------------------------------------------------------------------------------
Comprehensive loss                                      $(1,273,212)  $(572,541)
================================================================================

        See accompanying notes to the consolidated financial statements

<PAGE>
HITCOM  CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------

1.       NATURE OF BUSINESS AND BASIS OF PRESENTATION

Hitcom Corporation and its subsidiaries (collectively referred to as "Hitcom" or
the "Company") is a  telecommunication  company providing two principal services
for businesses and individuals:
i.       Prepaid telecommunication services through its switching platforms.
ii.      800-based services, voice and data messaging.
The Company's  customers are located within North America  without a significant
geographic concentration. The Company extends unsecured credit to its customers.
The  800-based  services  segment  was  disposed  of in  December  1999,  and is
reflected as a discontinued  operation for the years ended December 31, 1999 and
1998.

The Company  has  sustained  losses from  operations  since its  inception.  The
Company's  ability to meet its obligations in the ordinary course of business is
dependent  upon its  ability to raise  additional  financing  through  public or
private  equity  financings,   establish  profitable   operations,   enter  into
collaborative  or other  arrangements  with corporate  sources,  or secure other
sources of financing to fund operations.

Management  intends to raise working  capital through  additional  equity and/or
debt  financings in the upcoming year.  However,  there can be no assurance that
such  financings  can be  successfully  completed  on  terms  acceptable  to the
Company.  The accompanying  financial  statements do not include any adjustments
that might result from the outcome of this uncertainty.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
The consolidated  financial  statements  include the accounts of the Company and
its wholly-owned  subsidiaries.  All intercompany accounts and transactions have
been  eliminated on  consolidation.  The investment in a 50% owned affiliate has
been accounted for using the equity method.

Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States,  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements,  and reported  amounts of revenues and expenses  during the reported
period with consideration given to materiality. Actual results could differ from
those estimates.

Revenue Recognition and Deferred Revenue
The Company recognizes revenue as services are rendered as follows:

Prepaid card services
The  Company's  revenue  originates  from  customer  usage  of (i)  Company  and
co-branded  prepaid  calling  cards sold through  retailers,  (ii)  recharges of
existing  calling  cards,  and  (iii)  cards  sold  for  promotional   marketing
campaigns.  The Company sells cards to  distributors  and retailers  with normal
credit terms. When the distributor or retailer is invoiced,  deferred revenue is
recognized.

The Company recognizes revenue in accordance with the terms of the card - rates,
fees and  expiration  dates of the card - as the  ultimate  card  users  utilize
calling time and service fees. All prepaid cards sold by the Company expire upon
either three or six months after first usage.  Upon usage or  expiration  of the
prepaid  phone card,  the Company  recognizes  the  related  deferred  amount as
revenue.

800-based services
The Company  generally  requires  its  customers to  establish  minimum  account
balances prior to receiving  services.  Revenue  consists of usage fees based on
per minute  rates and  monthly  fees.  Account  balances  in excess of  services
rendered are recorded as deferred  revenue.  Revenue for unused account balances
is recognized when there has been no activity for six months.

Goodwill
Goodwill  represents  the  excess  of cost  over  the fair  value of net  assets
acquired for the Channel  Telecom  acquisition  effective  May 31, 1998,  and is
being  amortized on a straight-line  basis over a ten year period.  Amortization
expense was $399,770, and $233,199 in 1999 and 1998,  respectively.  The Company
evaluates  on an ongoing  basis the  carrying  value of goodwill  for  potential
permanent impairment.  For additional information related to the acquisition see
Note 3, "Acquisitions."

Cash and Cash Equivalents
For financial statement presentation purposes, cash and cash equivalents include
deposits  with initial  maturities of less than three  months,  including  money
market accounts with investments in marketable securities.

Comprehensive Income
The Company has implemented the provisions of Statement of Financial  Accounting
Standards ("SFAS") No. 130,  "Reporting  Comprehensive  Income".  Under SFAS No.
130,  the Company is required to report  comprehensive  income in the  financial
statements,  in addition to net income. For the Company,  the primary difference
between net income and  comprehensive  income is the impact of foreign  currency
translation adjustments.

Concentration of Credit Risk
Financial  instruments which potentially subject the Company to concentration of
credit risk consist principally of accounts receivable from customers. This risk
is mitigated by the large number of  customers in the  Company's  customer  base
with  relatively  small  amounts due from each  individual  customer,  net of an
allowance for uncollectable accounts.

Earnings/Loss Per Common Share
Basic  earnings per share is calculated by dividing net income or loss available
for common shareholders for the period by the weighted-average  number of shares
of common stock  outstanding  during the period.  The assumed  exercise of stock
options,  warrants,  convertible  preferred stock and convertible  debentures is
included in the calculation of diluted earnings per share, if dilutive.

SFAS No.  128,  "Earnings  per  Share"  was  adopted  in  fiscal  1997  with all
prior-period  earnings  per share  data  restated.  SFAS No. 128  requires  dual
presentation  of basic  and  diluted  earnings  per  share  on the  Consolidated
Statements of Operations and other computational  changes.  The adoption of SFAS
No. 128 did not have a  material  effect on  previously  reported  earnings  per
share.

Fair Values of Financial Instruments
Management  believes  that the  carrying  values  of all  financial  instruments
approximate their fair values.

Foreign Currency Translations
Financial  statements of the Company's  Canadian  subsidiary are translated into
U.S.  dollars  using the exchange rate at each balance sheet date for assets and
liabilities and an average exchange rate for the revenues and expenses  reported
in each fiscal period.
The cumulative loss of $30,795 at December 31, 1999 is included in shareholders'
equity.

Income Taxes
Deferred  income tax assets and  liabilities  are  recognized for the future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases  and  operating  loss  and  tax  credit  carry-forwards,   to  the  extent
realizable.  Deferred  income tax  assets and  liabilities  are  measured  using
enacted  tax rates  expected  to apply to  taxable  income in the years in which
those temporary  differences are expected to be recovered or settled. The effect
on  deferred  income  tax  assets  and  liabilities  of a change in tax rates is
recognized in income in the period that includes the enactment date.

Inventory
Inventory  consists  of costs of  external  production  of unsold  phone  cards.
Inventory is valued using the lower of  average-cost or market and is charged to
cost of services when the cards are sold.

Long-Lived Assets
The Company  evaluates  whether  events and  circumstances  have  occurred  that
indicate the  remaining  estimated  useful life of long lived assets may warrant
revision or that the remaining  balance of an asset may not be recoverable.  The
measurement  of  possible  impairment  is based on the  ability to  recover  the
balance of assets from expected  future  operating cash flows on an undiscounted
basis or the estimated fair value of assets held for resale less disposal costs.
In the opinion of management,  no such impairment exists at December 31, 1999 or
December 31, 1998.

Property and Equipment
Property and equipment are recorded at cost.  Depreciation is computed using the
straight-line  method over the  estimated  useful  lives of the related  assets,
ranging from three to seven years.  Expenditures for maintenance and repairs are
charged against earnings as incurred.

Operating Segments
The Company has implemented the provisions of SFAS No. 131,  "Disclosures  about
Segments of an Enterprise  and Related  Information."  SFAS No. 131  establishes
standards  for the way public  business  enterprises  report  information  about
operating  segments  in annual  financial  statements  and  requires  that those
enterprises  report selected  information  about  operating  segments in interim
financial  reports issued to  stockholders.  SFAS No. 131 need not be applied to
interim  financial  statements  in the  initial  year  of its  application.  The
adoption  of SFAS  No.  131 did not  have an  effect  on the  Company's  primary
financial  statements  as the  Company  was  operating  in only one  segment  at
December 31, 1999.

Stock-Based Compensation Plans
The  Company  grants  stock  options  for a fixed  number of shares to  eligible
employees  and  consultants  of the Company  with an exercise  price equal to or
greater  than the quoted  market  price of the shares at the date of grant.  The
Company  accounts for stock options in  accordance  with  Accounting  Principles
Board Opinion No. 25 (APB No. 25)  "Accounting  for Stock Issued to  Employees."
ABP No. 25 requires that  compensation  cost related to fixed stock option plans
be  recognized  only to the extent that the quoted market price of the shares at
the  date  of  grant  exceeds  the  exercise  price.  Accordingly,  the  Company
recognizes no compensation expense for its stock option grants. In October 1995,
the FASB issued SFAS No. 123,  "Accounting for Stock-Based  Compensation."  SFAS
No. 123 allows  companies to continue to account for their stock option plans in
accordance  with APB No. 25, but  encourages  the  adoption of a new  accounting
method  based on the  estimated  market  price of employee  stock  options.  The
Company  will  continue to apply the  intrinsic  value  method of APB No. 25 for
financial reporting purposes. See Note 11 Employee Benefits.

Reclassifications
Certain  reclassifications  have been made to the amounts presented for 1998 and
1997 to conform to the presentation for 1999.

Accounting for Derivatives and Hedging Activities
In June 1998,  the FASB  issued SFAS No. 133  "Accounting  for  derivatives  and
hedging  activities," which establishes  accounting and reporting  standards for
derivative  instruments,  including certain derivative  instruments  embedded in
other  contracts,  (collectively  referred  to as  derivatives)  and for hedging
activities.  The adoption of this statement is not expected to have  significant
impact on the Company's  consolidated results of operations,  financial position
or cash flows.


3.       ACQUISITIONS

Channel Telecom Inc. ("Channel")
Effective May 31, 1998,  Hitcom acquired  Channel,  a prepaid  telecommunication
services  company  based in Canada.  This  acquisition  expanded  the  Company's
services  and  provided  access  to  the  Canadian  marketplace.  Hitcom  issued
3,975,570  shares of Common stock and $37,500 in cash for all of the outstanding
stock of Channel.  Hitcom  issued a further  309,240  shares of Common Stock and
incurred  costs of  $172,615  relating  to  transaction  costs  for the  Channel
acquisition.  Hitcom accounted for the acquisition  using the purchase method of
accounting. Accordingly, the purchased assets and liabilities have been recorded
at their estimated fair values at the date of acquisition.  Amounts in excess of
the fair value of tangible  assets  acquired was  attributed  to goodwill and is
being  amortized over ten years.  The results of operations of Channel have been
included in the consolidated financial statements since May 31, 1998.

Total Consideration Paid:
     Issuance of Common Stock                                $3,478,500
     Cash payment                                                37,500
--------------------------------------------------------------------------------
                                                             $3,516,000

Acquisition related transaction costs:
     Issuance of Common Stock                                $  270,585
     Cash payments:                                             172,615
--------------------------------------------------------------------------------
         `                                                      443,200

Total Cost of Acquisition:                                   $3,959,200
--------------------------------------------------------------------------------

Less net liabilities assumed:
   Assets acquired:
         Cash                                               $    54,924
         Account Receivable                                     336,200
         Inventory                                               16,550
         Property and equipment                                  37,920
         Other assets                                            26,240
--------------------------------------------------------------------------------
                                                                471,834

   Liabilities assumed:
         Account payable and accrued expenses                   370,154
         Deferred Revenue                                        87,300
         Other liabilities                                       52,880
--------------------------------------------------------------------------------
                                                                510,334

Net liabilities assumed                                          38,500
--------------------------------------------------------------------------------

Cost in excess of fair value of tangible assets acquired    $ 3,997,700
================================================================================

The  following  unaudited  pro forma  summary  presents the  Company's  combined
results as if the  acquisition  of Channel had occurred at the  beginning of the
year ended  December  31,  1998,  after  giving  effect to  certain  adjustments
including goodwill  amortization,  depreciation and interest expense.  These pro
forma results are not  necessarily  indicative of those that would have occurred
had the  acquisition  occurred at the  beginning of the year ended  December 31,
1998.

                                                              (unaudited)
                                                                 1998
                                                              ----------
Net service revenues                                          $1,839,000
Cost of services                                               1,475,000
--------------------------------------------------------------------------------
  Gross margin                                               $   364,000
================================================================================

Loss from continuing operations                              $  (773,569)
Income from discontinued operations                               28,271
--------------------------------------------------------------------------------
Net loss                                                     $  (745,298)
================================================================================

Basic and diluted loss per share                             $   (0.07)
================================================================================

One Plus Marketing Inc. ("One Plus").
In  December  1999,  the  Company  completed  the  sale of One  Plus to a former
officer, director and major shareholder of the Company (see Note 13).

Effective  August 1, 1998,  Hitcom acquired the remaining 20% of the outstanding
common stock of One Plus from Hitcom's major  shareholder for $1. The cumulative
Minority  Interest as at July 31, 1998 totaling $186,439 reverted back to Hitcom
and is reflected as an adjustment to Additional Paid in Capital.

Effective  April 1, 1997,  the Company  acquired 80% of the  outstanding  common
stock of One Plus for  5,837,503  shares  of the  Company's  common  stock.  For
accounting  purposes,  the acquisition has been treated as a recapitalization of
One Plus with One Plus as the accounting  acquiror in accordance with APB No. 16
"Business  Combinations."  The  acquisition was accounted for using the purchase
method of accounting.  Accordingly,  the purchased assets and liabilities of the
Company  have  been  recorded  at their  estimated  fair  values  at the date of
acquisition.

A summary of net liabilities assumed is as follows:

Assets acquired:
     Current assets                                         $     2,602
     Property and equipment and other assets                     91,246
--------------------------------------------------------------------------------
                                                                 93,848
--------------------------------------------------------------------------------

Liabilities assumed:
     Debt obligations                                            49,000
     Account payable and accrued expenses                     1,150,960
--------------------------------------------------------------------------------
                                                              1,299,960
--------------------------------------------------------------------------------

Net liabilities assumed                                      $1,206,112
================================================================================


4.       PROPERTY AND EQUIPMENT                                          NET
                                                        ACCUMULATED   BOOK VALUE
                                             COST       DEPRECIATION      1999

Computer equipment                       $   51,640      $  20,670    $  30,970
Switching equipment and software             88,650         16,890       71,760
Office equipment and furniture               73,170         30,343       42,827
Vending Equipment                            15,735          7,400        8,335
--------------------------------------------------------------------------------
                                          $ 229,195     $   75,303    $ 153,892
================================================================================

Depreciation  expense was $137,725 and $102,758 for the years ended December 31,
1999 and  1998,  respectively,  of which  $87,500  and  $90,637  related  to the
discontinued operations which were disposed of in 1999 and 1998.


5.       GOODWILL
                                                                 1999

Goodwill                                                     $3,997,700
Accumulated Amortization                                       (632,969)
--------------------------------------------------------------------------------
                                                             $3,364,731
================================================================================


6.       REVOLVING LINE OF CREDIT

In February 1999, the Company  negotiated a revolving  operating credit facility
with a commercial bank in Canada for approximately $100,000, bearing interest at
the Bank's  prime rate plus  1.75%  which was 8.0% at  December  31,  1999.  The
outstanding  balance  drawn  against the line of credit was $nil at December 31,
1999.  Amounts drawn against the facility are due on demand and are secured by a
general security agreement on Channel, $50,000 Guaranteed Investment Certificate
which is included in short-term deposit,  and corporate  guarantees from Hitcom.
The  average   outstanding   balance  drawn  against  the  line  of  credit  was
approximately $55,650 during 1999 with an average interest rate of 8.25%.

In May 1998, the Company negotiated a $150,000 revolving working capital line of
credit with a commercial  bank to replace its prior  facility.  The  outstanding
balance drawn against the line of credit was $nil at December 31, 1999. The line
of credit  bore  interest  at the Bank's  prime rate plus 0.5% which was 8.5% at
December 31, 1998 and was secured by a general security  agreement  covering all
the assets of the Company and personal guarantees from a major shareholder.  The
average  outstanding  balance drawn against the line of credit was approximately
$45,000 during 1999 with an average interest rate of 8.25%. This credit facility
was part of the net  liabilities  that were  assumed by the former  officer  and
director  in  December  1999 (see Note 13) and was no  longer  available  to the
Company at December 31, 1999.


7.       DUE TO OFFICERS AND DIRECTORS

Due to officers  and  directors  are due to two  officers  and  directors of the
Company, are non-interest bearing and are due on demand.


8.       LONG TERM DEBT

Long Term Debt consists of the following:

Convertible subordinated debentures                          $  513,000
Less: current portion                                              -
--------------------------------------------------------------------------------
Long-term portion                                            $  513,000
================================================================================

Convertible Subordinated Debentures
The  debentures  were  issued on October 1, 1998 and are due on October 1, 2003,
bearing interest at 8% per annum, payable  semi-annually  commencing on April 1,
1999.  They  are  unsecured  general   obligations  of  the  Company  which  are
subordinated  in right of payment.  The debenture may be converted at the option
of the holder into fully-paid and  non-assessable  shares of Common Stock of the
Company at a  conversion  price of $0.50 per share  (equivalent  to a conversion
rate of 2000 shares per $1,000 principal  amount of debenture).  After September
1, 2000, the Company may force the conversion of all debentures if the Company's
common stock closes at a price of $2.00 or higher on each trading day during any
90 consecutive  calendar days. After October 1, 2001, the debentures are subject
to redemption in whole or in part,  substantially pro rata prior to maturity, on
the first day of any  calendar  month upon payment of the  principal  amount and
accrued interest, at the election of the Corporation. The debentures were issued
through a private  placement.  In  December  1999,  $15,000  of the  convertible
debentures  held by a former  officer and director of the Company was repaid and
cancelled.

Bank Term Loan
In May 1998,  the Company  negotiated a new $385,000 term loan with a commercial
bank due on May 1, 2001,  bearing  interest  at 9% per annum,  payable  monthly.
Repayment is at $8,000 per month  inclusive of interest and principal,  with the
remaining  outstanding balance due on May 1, 2001. The term loan is secured by a
general  security  agreement  covering  all of the  assets  of the  Company  and
personal  guarantees from a major shareholder.  This credit facility was part of
the net  liabilities  that were  assumed by the former  officer and  director in
December  1999 (see Note 13) and was no longer  available  to the  Company as at
December 31, 1999.

As of December 31, 1999, the maturities of long-term debt were as follows:
Year Ended December 31,                                            Amount
--------------------------------------------------------------------------------
2000                                                        $        -
2001                                                                 -
2002                                                                 -
2003                                                              513,000
--------------------------------------------------------------------------------
                                                                  513,000
================================================================================

Interest  expense on  long-term  debt was $67,615  and $29,026  during the years
ended December 31, 1999 and 1998, respectively.


9.       SHAREHOLDERS' EQUITY

Preferred Stock
The Convertible  Preferred  Stock  ("Preferred  Stock") is  convertible,  at the
option of the  holder,  at four shares of the  Preferred  Stock for one share of
common stock and is callable at $0.85 per share upon 30 days  written  notice if
the Preferred  Stock is not converted to common  stock.  The Preferred  Stock is
entitled to an $0.80 liquidation  preference subject to certain adjustments that
coincide with the conversion  price. The Preferred Stock accrues dividends at 8%
per annum and may be paid in cash or like kind.  Like kind  dividends  of 64,800
and 72,600  preferred  shares  were  declared  and paid in 1999 and 1998 and are
reflected in the accompanying consolidated statement of shareholders' equity.

Common Stock
No dividends have been declared or paid relating to common stock during 1999 and
1998.

Common Stock Disputed
The  Company  is  vigorously  disputing  150,000  shares  of common  stock  (the
"Disputed  Shares")  issued in January 1997 to a former  officer and director of
the  Company.  The Company  asserts  that the former  officer and  director  was
erroneously  issued the Disputed  Shares  without  appropriately  fulfilling the
conditions for issuance of the Disputed Shares. Furthermore, the Company asserts
that the  issuance  of the  disputed  shares  was not  authorized  by a properly
elected and functioning Board of Directors. As a result of repeated unsuccessful
attempts to recover the Disputed Shares, the Company has filed a lawsuit seeking
cancellation  of the  Disputed  Shares.  Management  believes  that the Disputed
Shares will be ultimately  returned and cancelled  without a material  affect on
the  consolidated  financial  position  of the  Company.  The  Company  has  not
reflected  the  Disputed  Shares as issued or  outstanding  in the  accompanying
consolidated financial statements.

Warrants
The Company has warrants  outstanding  to purchase  155,000 shares of its common
stock at a weighted  average  exercise price of $3.15 per share to the Company's
financial  advisors.  The 100,000 warrants issued in 1998 were valued at $25,200
using the Black-Scholes pricing model. The $25,200 was charged to operations and
additional paid in capital. The warrants expire at various dates between January
2000 and October 2000.

Convertible Subordinated Debentures
The  debentures  were  issued on October 1, 1998 and are due on October 1, 2003,
bearing interest at 8% per annum, payable  semi-annually  commencing on April 1,
1999. At any time while the  debentures are  outstanding,  the debentures may be
converted at the option of the holder into fully-paid and non-assessable  shares
of  Common  Stock of the  Company  at a  conversion  price of  $0.50  per  share
(equivalent to a conversion rate of 2000 shares per $1,000  principal  amount of
debenture). For further reference see Note 8, "Long Term Debt."

Treasury Stock
In December 1999, the Company  received  5,837,503 shares of common stock from a
former officer and director of the Company as part of the sale of certain assets
net of liabilities  assumed.  For further  reference see Note 13,  "Discontinued
Operations."

At December 31, 1999,  the Company holds in treasury stock  5,844,753  shares of
common stock, which is reflected in the accompanying  consolidated  statement of
shareholders' equity.


10.      EQUITY TRANSACTIONS

During 1999,  115,179  shares of the  Preferred  Stock were  converted to 28,795
shares  of common  stock  and are  reflected  in the  accompanying  consolidated
statement of shareholders' equity.

In connection  with the purchase of Channel  effective May 31, 1998, the Company
issued  3,975,570  shares of common stock to the former  shareholders of Channel
and 309,240  shares of common stock to  consultants  who provided  services with
regards to the closing of the acquisition.  All of the issued shares were valued
at $0.875 per share which was the closing  price of Hitcom's  common stock share
price  on  December  22,  1997,  the  date  of the  public  announcement  of the
acquisition. For further reference see Note 3, "Acquisitions"


11.      EMPLOYEE BENEFITS

Stock Option Plans
In  September  1998,  the Board of  Directors  adopted a stock  option plan (the
"1998"  plan)  under  which  options  to  purchase  2,000,000  shares  have been
authorized.  The options may be incentive stock options or  non-qualified  stock
options.  As of  December  31,  1999 there were  457,500  non-qualified  options
granted under the 1998 plan.

Prior to the 1998 plan,  the Company had various  stock option  agreements  that
allowed eligible employees, directors and consultants of the Company to purchase
the  Company's  common  stock at fair  market  value at the date the  option was
granted.  The  options  expired  up to ten years  from the date the  option  was
granted. There were 351,967 options granted in 1998 under these various plans.

The following table summarizes stock option activity during each of the two year
periods ended December 31, 1999 as follows:

                                                  Weighted
                                      Number      Average
                                       of         Exercise
                                      Shares      Price

Balance December 31, 1997             45,700      $  0.49

Granted                              351,967         0.98
Expired                               (4,750)        1.00
--------------------------------------------------------------------------------
Balance December 31, 1998            392,917      $  0.92

Granted                              457,500         0.50
--------------------------------------------------------------------------------
Balance December 31, 1999            850,417      $  0.72
================================================================================


The following table summarizes information about stock options outstanding as at
December 31, 1999:
                          OUTSTANDING OPTIONS            OPTIONS EXERCISABLE
                         Number         Weighted       Number         Weighted
                         Outstanding    Average        Outstanding    Average
Exercise                 and            Years          and            Years
Price                    Exercisable    Remaining      Exercisable    Remaining

$0.40                       40,950        8             40,950           8
$0.50                      457,500        2                -             -
$0.63                       30,000        2             30,000           2
$1.00                      321,967        4            321,967           4
--------------------------------------------------------------------------------
                           850,417                     392,917
================================================================================

The weighted  average value of options  granted  during the years ended December
31,  1999 and 1998 were  $0.11 and $0.66  per share  option,  respectively.  The
pro-forma  effect on  earnings  for the years ended  December  31, 1999 and 1998
giving  effect to the method  consistent  with SFAS No. 123 would be to increase
reported  net loss by  approximately  $50,325  and  $213,845,  to  approximately
$1,286,556  and $792,572,  respectively.  The  pro-forma  effect on earnings per
share for the years ended  December 31, 1999 and 1998 of this method would be to
increase  reported basic and diluted net loss by $0.004 and $0.020 per share, to
$0.11 and $0.08 per share,  respectively.  The significant  assumptions  used to
determine those values using the Black-Scholes option pricing model for 1999 and
1998 were:  volatility of 0.70; dividend yield of 0%; risk-free interest rate of
return  of 6.24%  and  5.19%;  and  expected  option  lives of 2 and 3.4  years,
respectively.

Health and Medical Insurance Plan
The  Company  contributed  to health  and  medical  insurance  programs  for the
employees  of One Plus.  Following  the sale of One  Plus,  the  Company  has no
responsibility  for any further  health and medical  insurance  programs for its
exiting  employees.  Expenses  related to the  program  charged to  discontinued
operations  was  approximately  $19,200 and $27,600 for the years ended December
31, 1999 and 1998, respectively.


12.      LOSS PER SHARE

The  following  table sets forth the  computation  of basic and diluted loss per
share:

                                                       1999              1998
Numerator:
Net loss                                           $(1,236,231)      $( 578,727)
Dividends payable on convertible preferred stock    (   51,840)       (  58,080)
--------------------------------------------------------------------------------
Net loss available to common shareholders          $(1,288,071)      $( 636,807)
================================================================================

Denominator:
Denominator for basic loss per share -
   Weighted-average shares                          12,139,686        10,442,292
Effect of dilutive securities:
    Employee stock options, convertible preferred
        stock and warrants                              -                 -
--------------------------------------------------------------------------------
Dilutive potential common shares - Adjusted weighted-
    average shares and assumed conversions          12,139,686        10,442,292
================================================================================

Basic and diluted loss per share                     $(0.11)            $(0.06)
================================================================================

Employee stock options,  convertible preferred stock, convertible debentures and
warrants,  are not  presented  for the years ended  December  31, 1999 and 1998,
because  they  are  anti-dilutive  due to  the  net  loss  available  to  common
shareholders.


13.      DISCONTINUED OPERATIONS

In  December  1999,  the  Company  completed  the  sale of  certain  assets  and
liabilities  that were  primarily  related to its One Plus operation to a former
officer, director and major shareholder of the Company. As consideration for the
sale of  assets  and  liabilities,  the  Company  received  5,837,503  shares of
Hitcom's common stock which are currently  being held in treasury.  This segment
focused on providing  various levels of 800-based  services  primarily to direct
sales  organizations.  The disposal has been recorded at carrying value with the
resulting gain being recorded directly to additional paid in capital.


The summary of assets and liabilities that were disposed are as follows:

Net liabilities disposed:
   Assets disposed:
         Accounts receivable and other current assets               $    41,007
         Property and equipment, net                                    196,800
--------------------------------------------------------------------------------
                                                                     $  237,807
--------------------------------------------------------------------------------

   Liabilities disposed:
         Bank operating overdraft facility                         $     16,156
         Accounts payable and accrued expenses                          178,821
         Deferred revenue                                               106,400
         Long term debt and capital leases                              209,521
--------------------------------------------------------------------------------
                                                                    $   510,898
--------------------------------------------------------------------------------

Net liabilities disposed                                            $   273,091
Treasury common stock received                                        1,751,251
Legal expenses relating to closing of transaction                    (   11,435)
Income tax expense                                                   (   12,000)
--------------------------------------------------------------------------------
Additional paid in capital on sale of assets and liabilities         $2,000,907
================================================================================

The disposal of the One Plus segment is reflected as discontinued  operations in
the accompanying  consolidated  financial statements.  A summary of discontinued
operations for the years ended December 31, 1999 and 1998,  respectively,  is as
follows:
                                                       1999              1998

One Plus revenue                                    $1,597,000        $2,381,356
================================================================================

Income before minority interest and income taxes        38,157           505,815
Minority interest                                         -               20,332
Income taxes                                              -                 -
--------------------------------------------------------------------------------

Income from discontinued operation                  $   38,157        $  485,483
================================================================================


In August 1998, the Company  completed the sale of the customer accounts related
to the Internet Service Provider (ISP) segment for $30,000. This segment focused
on providing  various  levels of Internet  access to customers in the St. Louis,
Missouri  area.  The disposal of the ISP segment is  reflected  as  discontinued
operations in the accompanying  consolidated financial statements.  A summary of
discontinued operations for the year ended December 31, 1998 is as follows:

                                                                 1998

ISP monthly fee revenue                                       $  115,943
================================================================================

Operating loss, net of ISP monthly fee revenue                   426,922
Loss on disposal                                                  30,290
--------------------------------------------------------------------------------
Loss before income taxes                                      $  457,212
Income taxes                                                        -
--------------------------------------------------------------------------------
Loss from discontinued operations                             $  457,212
================================================================================

Loss on disposal of $30,290,  consists of a writedown on assets held for  resale
of $60,290  netted with $30,000 for the sale of the ISP customer accounts.


14.      INCOME TAXES

The tax benefit for income taxes  consists of the  following  for years  ended
December 31:

                                                    1999              1998
Current:
   Federal income tax                            $ 12,000        $      -
   State Income tax                                   -                 -
--------------------------------------------------------------------------------
                                                   12,000               -
Deferred                                              -                 885
--------------------------------------------------------------------------------
 Total                                           $ 12,000        $      885
================================================================================

The net deferred tax asset consists of the following:
Gross assets                                     $508,145        $  858,270
Gross liabilities                                     -                 -
--------------------------------------------------------------------------------
Gross deferred tax asset                          508,145           858,270
Less: valuation allowance                        (508,145)         (858,270)
--------------------------------------------------------------------------------
Net deferred tax asset                           $     -         $      -
================================================================================

Management  of the Company  believes  more likely than not that the deferred tax
assets  will not be realized  and,  therefore  a  valuation  allowance  has been
recorded at December 31, 1999 and 1998.

The tax effect of significant  temporary  differences  representing deferred tax
assets and liabilities are as follows:
                                        1999                         1998
                                   Current    Non-Current   Current  Non-Current
                                   ---------------------------------------------

Net operating loss carryforwards    $    -     $  508,145   $    -   $  835,284
Other                                    -                    22,986        -
--------------------------------------------------------------------------------
Gross deferred tax asset                 -        508,145     22,986    835,284
Valuation allowance                      -       (508,145)   (22,986)  (835,284)
--------------------------------------------------------------------------------
Net deferred taxes                  $    -     $     -       $   -   $      -
================================================================================


The  provision  for taxes on income as reported  differs from the tax  provision
computed by applying the statutory federal income tax rate of 34% as follows:

                                               Year Ended           Year Ended
                                               December 31          December 31
                                                  1999                 1998
                                               ------------         ------------

  Federal income tax benefit on loss at
     Statutory rates of 34%                    $(431,923)           $ (196,767)
  State tax benefit, net of federal benefit     ( 76,222)              (23,873)
  Valuation allowance                            508,145               354,102
  Other                                              -                (132,577)
--------------------------------------------------------------------------------
  Income tax (benefit) expense                       -                     885
================================================================================

The Company has net operating loss  carryforwards of  approximately  $1,270,363.
Utilization of these net operating loss  carryforwards  is restricted by certain
Internal  Revenue Code sections and  regulations,  and expire  through 2018. The
Company  also has  non-capital  loss  carryforwards  of  approximately  $616,000
incurred in Canada.  The benefit of these loss carryforwards will be recorded in
the year realized. These loss carryforwards expire as follows:

--------------------------------------------------------------------------------
DECEMBER 31,
2002                                                               $    9,000
2003                                                                    3,000
2004                                                                   18,000
2005                                                                  103,000
2006                                                                  483,000
--------------------------------------------------------------------------------
Total                                                              $  616,000
================================================================================


15.      RELATED PARTY TRANSACTIONS

The  Company  disposed  of  assets  and  liabilities  relating  to the One  Plus
operation to a former officer, director and major shareholder (see Note 13).

The Company made purchases of  approximately  $901,000,  and $940,000 during the
years ended December 31, 1999 and 1998, respectively, from Sussex Service Bureau
Inc., a 50% owned affiliate, of which approximately $305,000 remains in accounts
payable at December 31, 1999.

Rent expense paid to an officer and stockholder for office  facilities were $nil
and $27,000 during the years ended December 31, 1999 and 1998, respectively.


16.      LITIGATION

The Company has filed a lawsuit seeking cancellation of 150,000 shares of common
stock (the  "Disputed  Shares")  issued in January 1997 to a former  officer and
director  of  the  Company.   The  former  officer  and  director   submitted  a
counterclaim for unpaid consulting fees relating to services in 1996 and 1997 in
the amount of $25,000.  Management  believes  that the  Disputed  Shares will be
ultimately  returned and canceled  without a material affect on the consolidated
financial  position of the Company.  The Company has not  reflected the Disputed
Shares as issued  or  outstanding  in the  accompanying  consolidated  financial
statements.  Any amount that the  Company may be required to pay for  consulting
fees  will not have a  material  adverse  effect on its  consolidated  financial
position (see Note 9).


17.      LEASES

The Company  leases both office space and equipment  used in its  operations and
classifies  those leases as either  operating or capital  leases  following  the
provisions of SFAS No. 13, "Accounting for Leases".  These leases expire through
February  2003.  Obligations  under  capital  leases  have been  recorded in the
accompanying  consolidated  financial  statements at the present value of future
minimum lease payments, discounted at interest rates ranging from 14% to 15%.

As at December 31, 1999,  future  minimum annual  payments under  non-cancelable
leases are as follows:
                                                               CONTINUING
                                                               OPERATIONS
                                                               CAPITAL LEASE
YEAR ENDED DECEMBER 31,    OPERATING LEASES                    OBLIGATIONS
2000                          $  39,700                        $  13,043
2001                             41,700                            5,149
2002                             44,600                              -
2003                             22,400                              -
2004                              3,000                              -
--------------------------------------------------------------------------------
Total                          $151,400                        $  18,192
============================================
Less: interest                                                     2,347
--------------------------------------------------------------------------------
Total capital lease obligations                                   15,845
Less: current portion of capital lease obligations                 9,627
--------------------------------------------------------------------------------
Long-term portion of capital lease obligations                 $   6,218
================================================================================

Total rent expense was $92,763 and $94,774  during the years ended  December 31,
1999 and 1998, respectively.


<PAGE>




                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors of Hitcom Corporation


We have audited the consolidated balance sheet of Hitcom Corporation (a Delaware
Corporation)  as at  December  31,  1999,  and the  consolidated  statements  of
operations,  shareholders'  equity,  and cash flows for the years ended December
31, 1999 and 1998.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in Canada.  Those standards  require that we plan and perform an audit to obtain
reasonable  assurance  that  the  financial  statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management, as well as evaluating the overall financial statement presentation.

In our opinion,  these  financial  statements  present  fairly,  in all material
respects, the financial position of Hitcom Corporation at December 31, 1999, and
the results of operations  and cash flows for the years ended  December 31, 1999
and 1998 in accordance  with  accounting  principles  generally  accepted in the
United States.



/s/ Deloitte & Touche LLP
Chartered Accountants

Toronto, Canada
March 30, 2000


<PAGE>


COMMENTS BY THE AUDITOR FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCE

In the United States,  reporting  standards for auditors require the addition of
an explanatory  paragraph  (following the opinion  paragraph) when the financial
statements are affected by conditions and events that cast substantial  doubt on
the Company's ability to continue as a going concern, such as those described in
Note 1 to the financial  statements.  Our report to the shareholders dated March
30, 2000 is expressed in accordance with Canadian  reporting  standards which do
not  permit  a  reference  to  such  events  and  conditions  in the  report  of
independent  public  accountants  when  these are  adequately  disclosed  in the
financial statements.



Deloitte & Touche LLP
Chartered Accountant

Toronto, Ontario
Canada

March 30, 2000

ITEM 8-- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE


As of March 6, 2000,  the Board of Directors have  unanimously  agreed to engage
Deloitte & Touche  LLP of  Toronto,  Canada to be the  Company's  new  principal
accountant.

At no time during the past two fiscal  years or any  subsequent  period prior to
engagement  as principal  auditor did the  Registrant  consult  with  Deloitte &
Touche LLP  regarding  either the  application  of  accounting  principles  to a
specified  transaction  or type of audit  opinion which might be rendered on the
Registrant's financial statements or any other matter.

The former accountant's report on the financial  statements for the prior fiscal
year DID NOT  contain an adverse  opinion or  disclaimer  of opinion and WAS NOT
modified as to uncertainty, audit scope, or accounting principles.

There  were NO  disagreements  with the  former  accountant  on any  matters  of
accounting principles,  practices,  financial statement disclosure,  or auditing
scope or procedure.



<PAGE>



                                                     PART III


ITEM 9 -- DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Rajan Arora            35       President and Chief Executive Officer and
                                Director
Jeffrey Shier          38       Executive Vice President and Director
John Nashmi            32       Chief Financial Officer and Corporate Secretary
Ronald K. Mann         49       Director

RAJAN ARORA
Rajan Arora has been  President and Chief  Executive  Officer and Director since
April 1998.  He joined  Hitcom  effective  January 1, 1998 when Hitcom  acquired
Channel. He co-founded Channel Telecom Inc. with Mr. Jeffrey Shier in 1994. From
1990 to 1993,  Mr.  Arora was Vice  President  of  Finance  for  Madison  Avenue
Partners,  Ltd.,  a sports and  promotional  marketing  company.  Mr. Arora is a
Chartered Accountant and spent four years with  PriceWaterhouseCoopers in public
accounting.

JEFFREY SHIER
Jeffrey  Shier has been  Executive  Vice  President and Director of Hitcom since
April 1998.  He joined  Hitcom  effective  January 1, 1998 when Hitcom  acquired
Channel. He co-founded Channel Telecom, Inc. with Rajan Arora in 1994. From 1990
to 1994, Mr. Shier was involved in the sports marketing and high-end memorabilia
and  collectibles  business.  From  1988 to 1990,  Mr.  Shier  was  Director  of
Arbitrage at Counsel Capital Corporation in Toronto.

JOHN NASHMI
John Nashmi became the Company's Chief Financial Officer and Corporate Secretary
in January 1999.  Prior to joining  Hitcom,  Mr. Nashmi was Senior Manager at TD
Capital - Merchant  Banking,  which provided  mezzanine  financing to mid-market
businesses for acquisitions,  expansion and turn-around opportunities. From 1996
to 1998, Mr. Nashmi was Vice President  Finance with Next  Generation  Solutions
Inc., a software Value Added Reseller  (VAR).  From 1994 to 1996, Mr. Nashmi was
with Canadian  Imperial Bank of Commerce (CIBC) in their  Corporate  Lending and
Internal audit groups. Mr. Nashmi is a Chartered Accountant and spent four years
with Deloitte & Touche LLP in public accounting.

RONALD MANN
Ronald Mann has been a Director of Hitcom  since April 1998,  he has acted as an
investment  banking  consultant for Channel  Telecom Inc. since its inception in
1994.  Mr. Mann resides in New York and is involved in  investment  and merchant
banking.  From 1987 to 1989, Mr. Mann was Assistant General Manager of Corporate
Finance  for the  Canadian  Imperial  Bank of  Commerce  in  Toronto,  and Chief
Financial  Officer and Director of CIBC Securities,  Inc., in Toronto.  Mr. Mann
earned his Bachelor of Law degree from the University of Toronto.

In the fiscal year ended  December 31, 1999, the Company did not pay any fees or
other compensation to its directors.

Compliance with section 16(a) of the exchange act
Form 3 was not filed for John Nashmi in fiscal year 1999, it was filed in fiscal
year 2000.

ITEM 10 -- EXECUTIVE COMPENSATION

The  following  table  sets  forth  certain  information   concerning  executive
compensation of the Company:
<TABLE>
<CAPTION>
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------
                                                                                     Securities
Name                                                   Other           Restricted    Underlying
And                                                    Annual          Stock         Options/    LTIP       All     Other
Principal                     Salary       Bonus      Compensation    Award(s)      SARs        Payouts    Compensation
Position                Year    ($)         ($)        ($)             ($            (#)         ($)         ($)
(a)                     (b)    (c)          (d)        (e)             )             (g)         (h)         (i)
                                                                       (f)
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------
<S>                     <C>    <C>          <C>        <C>             <C>           <C>         <C>        <C>
Scott Beil
Chairman and COO        1999   $42,000      $     --   $         --    $        --   $       --  $     --   $          --
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------

                        1998   $49,222      $     --   $         --    $        --   $       --  $     --   $          --
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------

                        1997   $28,000      $     --   $         --    $        --   $       --  $     --   $          --
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------
Rajan Arora
President & CEO         1999   $  -         $     --   $         --    $        --   $       --  $     --   $          --
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------

                        1998   $38,770      $     --   $         --    $        --   $       --  $     --   $          --
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------
Jeffrey Shier
Executive VP            1999   $  -         $     --   $         --    $        --   $       --  $     --   $          --
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------

                        1998   $38,770      $     --   $         --    $        --   $       --  $     --   $          --
----------------------- ------ ------------ ---------- --------------- ------------- ----------- ---------- --------------

</TABLE>

(1) Mr. Scott Beil resigned as Chairman and COO effective December 17, 1999

--------------------------------------------------------------------------------
            OPTION/SAR GRANTS IN FISCAL YEAR ENDING DECEMBER 31, 1999
                               (Individual Grants)
--------------------------------------------------------------------------------
                         Number of       Percent
                         Securities      of Total      Exerrcise
                         Underlying      Options/SARs  of Base
                         Options/SARs    Granted To    Price        Expiration
Name                     Granted         Employees     ($/share)    Date
--------------------------------------------------------------------------------
Rajan Arora
President & CEO         125,000            35%         $0.50        Dec 31, 2001
--------------------------------------------------------------------------------
Jeffrey Shier
Executive VP             75,000            21%         $0.50        Dec 31, 2001
--------------------------------------------------------------------------------
John Nashmi
Chief Financial Officer  75,000            21%         $0.50        Dec 31, 2001
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
     AGGREGATE OPTION/SAR EXERCISES IN FISCAL YEAR ENDING DECEMBER 31, 1999
                     AND DECEMBER 31, 1999 OPTION/SAR VALUES
--------------------------------------------------------------------------------
                                                   Number Of
                                                   Unexercised     Value Of
                                                   Secrurities     Unexercised
                                                   Underlying      In-The-Money
                                                   Options/SARs    Options/SARs
                        Shares                     AT FY-END       AT FY-END
                        Acquired     Value         Exercisable/    Exercisable/
                        On           Realized      Unexercisable   Unexercisable
Name                    Exercise     ($ Amount)    (# Shares)      ($ Amount)
--------------------------------------------------------------------------------
Rajan Arora
President & CEO            -            -            125,000           -
--------------------------------------------------------------------------------
Jeffrey Shier
Vice President             -            -             75,000           -
--------------------------------------------------------------------------------
John Nashmi
Chief Financial Officer    -            -             75,000           -
--------------------------------------------------------------------------------

ITEM 11 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table sets forth the  number of shares of the  Company's  common
stock owned by each person who, as of March 15, 2000 was known by the Company to
own beneficially more than 5% of its outstanding  common stock and the ownership
of all executive  officers and directors of the Company,  individually  and as a
group.

--------------------------------------------------------------------------------
                                                    Number of Shares    Percent
Name and Address of Beneficial Owner                  Beneficially        of
                                                       Owned (1)         Class
--------------------------------------------------------------------------------
Rajan Arora, 85 Scarsdale Road, Suite 202
Toronto, Ontario, Canada                             1,987,785            30.1%
--------------------------------------------------------------------------------
Jeff Shier, 85 Scarsdale Road, Suite 202
Toronto, Ontario, Canada                             1,987,785            30.1%
--------------------------------------------------------------------------------
Ronald Mann, 9A Casmir Road
Toronto, Ontario, Canada                               100,000 (2)         2.5%
--------------------------------------------------------------------------------
John Nashmi, 85 Scarsdale Road, Suite 202
Toronto, Ontario, Canada                                 7,500             0.1%
--------------------------------------------------------------------------------

Officers and Directors as a Group                    4,083,070            62.8%
================================================================================


(1)As of March 15, 2000, the Company had 6,607,815 shares of common stock
   outstanding.
(2)The shares are held indirectly through a holding company controlled by
   Mr.Mann



ITEM 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.


ITEM 13 -- EXHIBITS AND REPORTS ON FORM 8-K


A.       Exhibits

3.1*     Certificate of Incorporation, as amended
3.2*     Bylaws
4.1*     Certificate of Designation for 8% Convertible Preferred Stock
10.1*    Share Exchange Agreement Between HitCom Corporation and Scott Beil
         dated April 14, 1997
10.2*    Stock  Purchase   Agreement   Between  HitCom   Corporation  and  Rajan
         Arora/Jeffrey  Shier and The  Jeffrey  Samuel  Shier  Family  Trust For
         Purchase  of All  Outstanding  Stock  of  Channel  Telecom  Inc.  dated
         February 18, 1998
10.4**   Letter  agreement  between the  registrant,  Rajan  Arora and Jeffrey
         Shier dated June 30,  1998  regarding  forgiveness of indebtedness.
10.5**   Stock Purchase  Agreement  between Scott A. Beil and registrant dated
         August 10, 1998 regarding 20% minority  interest in One Plus Marketing,
         Inc.
10.6**   Letter agreement between registrant and Scott A. Beil dated August 11,
         1998 regarding voting of stock in registrant.
10.7     Assets purchase agreement by and between Hitcom Corporation and Scott
         A. Beil
10.8     Assets purchase agreement by and between One Plus Marketing, Inc., and
         Scott A. Beil
21.1*    List of Subsidiaries of Registrant
23.1     Consent of Independent Accountants Deloitte & Touche LLP
27.0     Financial  Data Schedule

*        Filed as exhibit to the Company's Registration Statement on Form 10-SB
**       Filed as Exhibit to the Company's Quarterly Report on Form 10-QSB for
         the quarter ended September 30, 1998


B.       Form 8-K filings

         The  Registrant  did not file a Form 8-K during the last quarter of the
         period covered by this report.


<PAGE>




SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


             HITCOM CORPORATION
             (Registrant)

By          /s/ Rajan Arora
--------------------------------------------------------------------------------
              Rajan Arora, President, CEO and Director

Date       April   17, 2000

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


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on and behalf of the  registrant and in the capacities and on
the dates indicated.

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

By          /s/ Jeffrey Shier
--------------------------------------------------------------------------------
              Jeffrey Shier, Executive Vice President and Director
Date       April   17, 2000


By          /s/ Ronald Mann
--------------------------------------------------------------------------------
              Ronald Mann, Director
Date       April  17, 2000


By          /s/ John Nashmi
--------------------------------------------------------------------------------
              John Nashmi, Chief Financial Officer and Corporate Secretary
Date       April 17, 2000