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As filed with the Securities and Exchange Commission on August 21, 1997
Registration No. 333-20573
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PICK Communications Corp.
(Exact Name of Registrant as Specified in its Charter)
Nevada
(State or Other Jurisdiction of Incorporation or Organization)
75-2107261
(I.R.S. Employer Identification No.)
Wayne Interchange Plaza II, 155 Route 46 West, Wayne, NJ 07470
(Address of Principal Executive Offices) (Zip Code)
1996 Stock Option Plan
Compensation Agreement dated December 3, 1996
Consulting Agreement dated January 28, 1997
(Full Title of the Plans)
Elliot H. Lutzker, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, N.Y. 10158-0125
(Name and Address of Agent For Service)
(212) 687-3860
(Telephone Number, Including Area Code, of Agent For Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
Title of Each Class Proposed Maximum Proposed
of Securities to be Amount to be Offering Maximum Amount of
Registered Registered Price Aggregate Registration
Per Share Offering Price Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options 5,000,000(1) -- -- (5)
- ------------------------------------------------------------------------------------------------------------------------
Shares of Common 1,250,000(2)(6) $ .27(7) 337,500 $102.27
Stock, par value 2,368,422(2)(6) $ .17(7) 402,632 $122.01
$.001 per share 400,000(3) $ .25 $ 100,000 $ 30.30
- ------------------------------------------------------------------------------------------------------------------------
Shares of Common 131,578(2)(6) $ .19(7) $ 25,000 $ 7.58
Stock, par value 250,000(2)(6) $ .30(7) $ 75,000 $ 22.73
$.001 per share 1,000,000(4)(6) $ .15(8) $ 150,000 $ 45.45
- ------------------------------------------------------------------------------------------------------------------------
Common Shares, par 116,330(9) $ .15(8) $ 17,450 $ 5.28(6)
value $.001 per
share
- ------------------------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $335.62
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
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(1) Represents options authorized to be granted pursuant to the
1996 Stock Option Plan (the "Plan") of PICK Communications
Corp. (the "Registrant," "Corporation"or "Company").
(2) Shares of the Company's common stock, $.001 par value (the
"Common Stock") issuable upon exercise of options previously
granted pursuant to the Plan.
(3) Represents shares of Common Stock issued to the Registrant's
Chief Executive Officer, Mr. Diego Leiva, at a purchase price
of $.25 per share, or an aggregate of $100,000, in lieu of
payment of $100,000 of salary accrued to Mr. Leiva pursuant to
a Compensation Agreement dated December 3, 1996 between the
Registrant and Mr. Leiva (the "Compensation Shares").
(4) Shares issuable upon exercise of stock options available for
grant under the Plan.
(5) No registration fee is required pursuant to Rule 457(h)(2).
(6) Includes an indeterminable number of shares of Common Stock
which may become issuable pursuant to the anti-dilution
provisions of the Plan.
(7) Calculated solely for the purpose of determining the
registration fee pursuant to Rule 457(h)(1) based upon the
average exercise price.
(8) Calculated solely for the purpose of determining the
registration fee pursuant to Rule 457(c) based upon the
average of the last bid and asked prices for the shares of the
Company's Common Stock on the National Association of
Securities Dealers, Inc.'s Electronic Bulletin Board (OTCBB)on
August 4, 1997.
(9) Additional shares registered hereby under this Post-Effective
Amendment, to be issued to Mr. Barry Suskind pursuant to a
Consulting Agreement dated January 28, 1997 (the "Consultant's
Shares").
EXPLANATORY NOTE
The contents of the Company's Registration Statement on Form S-8
(Registration Number 333-20573, filed January 28, 1997), except as amended
hereby, are incorporated herein by reference.
Pursuant to Rule 429 promulgated under the Securities Act of 1933, as
amended (the "Act"), the Prospectus included as a part of this Registration
Statement shall be deemed to be a combined prospectus which shall also relate to
the Registrant's Registration Statement Number 333-20573. This post-effective
amendment and the Registration Statement being amended hereby are collectively
referred to herein as the "Registration Statement."
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SUBJECT TO COMPLETION, DATED AUGUST 21, 1997.
PROSPECTUS
PICK Communications Corp.
5,516,330 Shares of
Common Stock, $.001 par value
This Prospectus has been prepared by PICK Communications Corp., a
Nevada corporation (the "Registrant," or "Company"), for use upon resale of
shares of the Registrant's common stock, $.001 par value (the "Common Stock"),
by certain "affiliates" (as defined in Rule 405 promulgated under the Securities
Act of 1933, as amended (the "Act")) of the Registrant (the "Selling
Stockholders") who have acquired or may acquire up to 5,516,330 shares of Common
Stock (the "Shares") (a) upon exercise of 5,000,000 stock options granted
(4,000,000) or to be granted(1,000,000)under the Registrant's 1996 Stock Option
Plan (the "Plan"); (b)pursuant to a compensation agreement (the "Compensation
Agreement") with the Registrant for 400,000 shares of Common Stock in
consideration of services rendered to the Company, and (c) pursuant to a
consulting agreement with the Company (the "Consulting Agreement") for 116,330
shares of Common Stock. The maximum number of shares of Common Stock which may
be offered or sold hereunder is subject to adjustment in the event of stock
splits or dividends, recapitalization and other similar changes affecting the
Common Stock. It is anticipated that the Selling Stockholders will offer shares
of Common Stock for resale at prevailing prices in the over-the-counter market
on the date of sale. The Registrant's Common Stock has been traded in the
over-the-counter market and is reported on the National Association of
Securities Dealers, Inc.'s Electronic Bulletin Board (OTCBB), under the symbol
"PICK." The Registrant will receive none of the proceeds from the sale of the
shares of Common Stock offered hereby; however, it will receive the exercise
price of all Stock Options exercised. All selling and other expenses incurred by
individual Selling Stockholders will be borne by such stockholders. It is
estimated that the costs of issuance and distribution to be incurred by the
Company will be approximately $5,000 in the aggregate. See "Plan of
Distribution."
See "Risk Factors" beginning on Page 5 for certain risks an
investment in the shares of Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 21, 1997.
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No person is authorized to give any information or to make any
representation other than those contained in this Prospectus in connection with
any offer to sell of the securities to which this Prospectus relates and, if
given or made, such information or representations must not be relied upon as
having been authorized. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, imply that there has ben no
change in the facts herein set forth since the date hereof. This Prospectus does
not constitute an offer to sell to or a solicitation of an offer to buy from any
person in any state in which any such offer or solicitation would be unlawful.
--------
PICK Communications Corp. was incorporated in April 1984 under the
laws of Utah as S.T.V., Inc. ("STV"). In February 1986, STV changed its name to
Adolphus Companies, Inc. ("Adolphus"). In May 1988, Adolphus changed its name to
Prime International Products, Inc. ("Prime"). Prime ceased operations in late
1990.
In July 1995, Prime changed its state of organization from Utah to
Nevada. On September 12, 1995, Prime executed a Stock Purchase Agreement to
exchange 16,500,000 shares of Prime's common stock for all of the outstanding
shares of common stock and warrants of Public Info/Comm Kiosk, Inc. ("PICK"),
which made PICK a subsidiary of Prime. PICK was incorporated under the laws of
the State of New Jersey in August 1992. Prime changed its name to PICK
Communications Corp. in December 1995.
The Registrant's principal executive offices are located at Wayne
Interchange Plaza II, 155 Route 46 West, Wayne, New Jersey 07470, and its
telephone number is (201) 812-7425.
--------
AVAILABLE INFORMATION
The Registrant has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-8 including all amendments
thereto (the "Registration Statement") under the Act via the Electronic Data
Gathering Analysis and Retrieval system ("EDGAR") and may be found on the
Commission's web site at http://www.sec.gov. This Prospectus does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Registrant, reference is
made to the Registration Statement, including the exhibits filed therewith.
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Also, the Registrant is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance, therewith, files reports and other information with the Commission.
Reports, proxy statements and other information filed by the Registrant can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Regional Offices of the Commission at Seven World Trade Center, New
York, New York 10138 and at 500 West Madison Street, Chicago, Illinois 60611.
Copies of all or any part of this Registration Statement (including the exhibits
thereto) also may be obtained from the Public Reference Section of the
Commission at the Commission's principal office in Washington, D.C., at the
Commission's prescribed rates. Electronic filings made via EDGAR are publicly
available through the Commission's web site referenced above.
DOCUMENTS INCORPORATED BY REFERENCE
The Registrant hereby incorporates by reference the following
documents:
1. The Registrant's Registration Statement on Form 10
(File No.0-27604), including the description of
the Registrant's Common Stock, filed pursuant to
Section 12(g) of the Exchange Act, including any
amendment or report filed for the purpose of
updating such information.
2. The Registrant's Annual Report on Form 10-K for
the year ended December 31, 1996.
3. The Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1997.
4. The Registrant's Proxy Statement dated December
17, 1996.
All documents subsequently filed by the Registrant after the date of
this Prospectus pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing such documents. Any statement contained in a
previously filed document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement herein modifies or supersedes such statement; and any statement
contained herein shall be deemed to be modified or superseded to the extent that
a statement in any
3
<PAGE>
document subsequently filed, which is incorporated by reference herein, modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Registrant will provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus is delivered, upon
written or oral request of such person, a copy of any or all of the information
that has been incorporated by reference in this Prospectus (not including
exhibits to such information, unless such exhibits are specifically incorporated
by reference into the information which this Prospectus incorporates). Requests
for copies of such information should be directed to the Registrant at Wayne
Interchange Plaza II, 155 Route 46 West, Wayne, New Jersey 07470; telephone
number (201) 812-7425.
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RISK FACTORS
The Company operates its business in three divisions: (i) Telephone
Debit Cards, (ii) International Long Distance Services which entail the Company
purchasing long distance time from major network based carriers and selling this
time to other carriers and resellers via switch to switch connections, and (iii)
Prepaid Cellular telephones incorporating prepaid debit technology to cellular
telephones and Secured Encryption Devices for Point-of-Sale activation of
products. Unless otherwise indicated, the following Risk Factors apply to all
three divisions of the Company's business. Prospective investors should consider
carefully the following Risk Factors, along with the other documentation
incorporated by reference herein, in evaluating an investment in the Company.
Limited Operating History and Revenues; Significant and Continuing
Losses
The Company was organized in April, 1984 and had no operations prior to
its acquisition of control of PICK in September, 1995 in a reverse merger. PICK
has a limited operating history upon which an evaluation of the Company's future
performance and prospects can be made. The Company's prospects must be
considered in light of the risks, expenses, delays, problems and difficulties
frequently encountered in the establishment of a new business in the
telecommunications industry, which is an evolving industry characterized by
intense competition. The Company incurred consolidated losses of $1,250,580 and
$1,071,041 for the years ended December 31, 1994 and 1995, respectively.
Although the Company had net income of approximately $1,636,000 for the year
ended December 31, 1996, the Company had a loss from operations of approximately
$1,584,000 and a working capital deficiency of $3,152,216. The Company needs to
increase its switching capacity to obtain greater sales. This will assist the
Company in achieving profitability, of which there can be no assurance. Inasmuch
as the Company will continue to have a high level of operating expenses and will
be required to make significant up-front expenditures in connection with its
proposed expansion and development of new products (including, but not limited
to, salaries of executive, creative, marketing and other personnel), the Company
may incur additional losses until such time as the Company is able to generate
sufficient revenues to finance its operations and the costs of continuing
expansion. There can be no assurance that the Company will be able to generate
such revenues and continue to operate profitably.
5
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Competition
The Company faces intense competition in the marketing and sale of its
prepaid Telephone Debit Cards. The Company's prepaid Telephone Debit Cards
compete for consumer recognition with other prepaid Phone cards, at both ends of
the spectrum. Many small, unreliable companies have entered the telephone debit
card market by advertising low calling prices which are extremely attractive to
the buying public. Unfortunately for the entire industry, many of these
companies have already failed and consumers have felt the pain of having a card
that is no longer valid. In 1996, the Company experienced operating difficulties
with its switches which impaired operation of its Telephone Debit Card. Many
other cards are marketed by companies which are well-established and have
significantly greater financial, marketing, distribution, personnel and other
resources than the Company. These large companies can implement extensive
advertising and promotional campaigns, although marketing a retail product to
consumers is not their strength, especially in niche markets. Certain of these
competitors, including AT&T, MCI, Sprint and the "Baby Bells," such as Bell
Atlantic and Bell South, have dominated the telecommunications industry in the
past; however the entire industry is presently undergoing a significant shift
and these "giants" are now facing strong competition from smaller, more agile
and less bureaucratic organizations, such as the Company. Many of these large
telephone companies, as well as retailers, such as Southland Corp., and
companies engaged in the marketing of collectibles, have also entered or have
announced their intention to enter into the Telephone Debit Card segment of the
industry.
The International Long Distance Services business is also highly
competitive and is affected by rapidly changing per minute rates to key
international cities and countries. The Company's future success will depend
upon its ability to compete with other similar-sized carriers, many of which
have considerably greater financial and other resources than the Company. The
ability of the Company to compete effectively will depend on its ability to
provide high quality service at competitive prices, and to fund the cost of
acquiring the use of effective switching. Both of these factors are essential
elements for success.
The prepaid cellular telephone business is another highly competitive
one in which the ability to succeed depends on the quality of the product, the
ease of its use and the resources available to market and continually improve
it. Again, "known" companies and companies which have been able to enter the
market already are perceived as having a strong advantage over their
competitors. However, recent prepaid cellular conferences and
6
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industry articles have indicated consumer dissatisfaction with the constraints
of switch-based services available.
The telecommunications industry is characterized by frequent
introduction of new products and services, and is subject to changing consumer
preferences and industry trends, which may affect the Company's ability to plan
for future design, development and marketing of its products and services. The
markets for telecommunications products and services are also characterized by
rapidly changing technology and evolving industry standards, often resulting in
product obsolescence or short product life cycles. The proliferation of new
telecommunications technologies, including personal communication services,
cellular telephone products and services and telephone Debit Cards employing
alternative technologies, may reduce demand for the Company's current products
which necessitates the continual development of new product or service
offerings.
The Company is not aware of any competitor offering the same
chip-controlled prepaid cellular telephone technology. Although this product has
a patent pending, larger, more established entities with greater financial and
personnel resources than those of the Company may continue to enter into direct
competition with the Company. There can be no assurance that the Company will be
able to capture a meaningful market share and/or compete effectively.
The competition for the Secured Encryption Device is in existing similar
devices such as VeriFone, Hypercom and USW. The Company's advantage in this
market is its already existing penetration of a specific niche which currently
does not have or has only very limited access to, other means of electronic
credit and/or debit transactions because of the prohibitive costs involved.
The Company's success will depend on its ability to anticipate and
respond to rapid changes in consumer preferences and the introduction of new
products. The Company believes it has the ability to do exactly that and,
further, that it can compete on the basis of price, quality and service. There
can be no assurance that the Company will be able to compete successfully in its
markets.
Uncertainty of Market Acceptance
Achieving widespread market acceptance for the Company's products and
services requires significant additional funding to enhance some products (e.g.,
converting the Telephone Debit Cards to non-denominational, rechargeable, Point
of Sale activation
7
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status). Substantial marketing efforts will also be necessary to enhance
consumer awareness and demand for the Company's products and services which, in
turn, might increase the Company's avenues of distribution with large, national
distributors, chain stores, and retailers. There can be no assurance that
substantial markets will develop for prepaid cellular phones or any new product
or service, such as the Secured Encryption Device, nor can there be any
assurance that the Company will be able to meet its current marketing
objectives.
Risks Associated with Marketing Strategy and Rapid Expansion
Although the Company intends to pursue a strategy of growth and will
seek to expand its distribution capabilities to achieve greater market
penetration in both existing and emerging telecommunications markets, the
Company, to date, has achieved only modest growth, and has limited experience in
effecting rapid expansion or managing operations targeting diverse market
segments. Implementation of the Company's proposed expansion will depend on,
among other things, the Company's ability to hire and retain skilled management,
financial, marketing, creative and other personnel; and successfully manage
growth, including monitoring operations, controlling costs and maintaining
effective quality, inventory and service controls.
The Company's marketing strategy and plans are subject to change as a
result of a number of factors, including progress or delays in the Company's
marketing efforts, changes in market conditions (including the emergence of
significant supplementary markets), the nature of possible distribution
arrangements which may become available in the future and competitive factors.
The Company may also seek to expand its operations through the possible
acquisition of companies in businesses which the Company believes are
complementary to its business. However, there can be no assurance that the
Company will be able to successfully implement its business strategy or
otherwise expand its operations, or that the Company will ultimately effect any
acquisition or successfully integrate any acquired business into its operations.
Investment in Jet Vacations, Inc. Common Stock
As of March 31, 1997, the Company owned 380,000 shares of Jet Vacations,
Inc. (formerly Fairbanks, Inc. and Ultimistics Inc.) Common Stock, recorded on
its balance sheet at $2,672,004, net of a valuation reserve of $579,045. This
asset accounts for 62% of the total assets on a pro forma basis as referenced to
in note 17(f) of the December 31, 1996 Consolidated Financial Statements. Jet
Vacations trades on the OTC Bulletin Board under the symbol JETV. There is a
limited market in the shares of JETV. The 52 week high and low trading prices
are $13.00 and $0.187, respectively, on April 24, 1997. No audited financial
information is currently available on Jet Vacations as Jet Vacations is
preparing to become a reporting company.
8
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The shares of Jet Vacations were acquired through a series of stock
exchanges, and represent unrealized gains on these prior transactions. There can
be no assurance that the market price of Jet Vacations shares is reflective of
the underlying value of Jet Vacations, which cannot be determined due to the
lack of audited financial information.
Need for Additional Financing
In the event that the Company's plans change, its assumptions change or
prove to be inaccurate, or its cash flow proves to be insufficient to fund the
Company's operations (due to unanticipated expenses, delays, problems,
difficulties or otherwise), the Company will be required to seek additional
financing sooner than anticipated or curtail its expansion activities. The
Company may determine, depending upon the opportunities available to it, to seek
additional debt or equity financing to fund the cost of continued expansion. To
the extent that the Company finances an acquisition with a combination of cash
and equity securities, any such issuance of equity securities may result in
dilution to the interests of the Company's stockholders. Additionally, to the
extent that the Company incurs indebtedness or issues debt securities in
connection with any acquisition, the Company will be subject to risks associated
with incurring substantial indebtedness, including the risks that interest rates
may fluctuate and cash flow may be insufficient to pay principal and interest on
any such indebtedness. There can be no assurance that additional financing,
particularly the significant amounts of financing which would be required if the
Company is unable to enter into additional strategic marketing or other
distribution arrangements, will be available to the Company on commercially
reasonable terms, if at all.
Dependence on Third-Party Long Distance Carriers; Possible Service
Interruptions and Equipment Failures
The Company is currently dependent on a select number of domestic and
international long distance carriers to provide access to telephone service on a
cost effective basis. The Company has entered into interconnect agreements or
arrangements with long distance carriers, pursuant to which the Company leases
dedicated transmission facilities necessary to process telephone calls. Although
the Company believes that it currently has sufficient access to transmission
facilities and long distance networks on favorable terms and believes that its
relationships with its carriers are satisfactory, any increase in the rates
charged by carriers could adversely affect the Company's operating margins.
Failure to obtain continuing access to such facilities and networks would also
have a material adverse effect on the Company, including possibly requiring the
Company to significantly curtail its operations.
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In addition, the Company's operations require that its switching
facility and its carriers' long distance networks operate on a continuous basis
as defined by industry standards. It is possible that the Company's switching
facility and its carriers' networks may, from time to time, experience service
interruptions or equipment failures. Such interruptions occurred from time to
time during the second and third quarters of 1996, but have stabilized
significantly as the relations have matured. These interruptions had a material
adverse effect on the Company's results of operations and also adversely
affected consumer confidence, as well as the Company's reputation.
Government Regulations
Long distance telecommunication services are subject to regulation by
the FCC and by state regulatory authorities. Among other things, these
regulatory authorities impose regulations governing the rates, terms and
conditions for interstate and intrastate telecommunications services. The
federal laws governing regulation of interstate telecommunications are the
Communications Acts of 1934 and 1996 (the "Communications Acts"), which apply to
all "common carriers," including AT&T, MCI and Sprint, as well as entities, such
as the Company, which resell the transmission services provided through the
facilities of other common carriers. In general, under the Communications Acts,
common carriers are required to charge reasonable rates and are prohibited from
engaging in unreasonable practices in the provision of their services. Common
carriers are also prohibited from engaging in unreasonable discrimination in
their rates, charges and practices.
The Communications Acts require each common carrier to file tariffs with
the FCC. A tariff is a list of services offered, the terms under which the
services are offered, and the rates, or range of rates, charged for services.
Upon filing a tariff, the service provider is required to provide the services
at the rates and under the terms and conditions specified in the tariff. Failure
to file a tariff could result in fines and penalties. The Company believes it
has filed or is in the process of filing all required tariffs with the FCC.
In addition to federal regulation, the Company's operations are subject
to regulation by the various state regulatory authorities. The scope of such
regulation varies from state to state, with certain states requiring the filing
and regulatory approval of various certifications and state tariffs. As the
Company expands the geographic scope of its operations, it intends to continue
to obtain operating authority as may be required to provide products and
services.
The Company believes that it is in compliance with all material laws,
rules and regulations governing its operations and has obtained or is in the
process of obtaining all licenses, tariffs
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and approvals necessary to conduct its business. In the future, legislation
enacted by Congress, court decisions relating to the telecommunications
industry, or regulatory actions taken by the FCC or the states in which the
Company operates could adversely impact the Company's business. Changes in
existing laws and regulations, particularly relaxation of existing regulations
resulting in significantly increased price competition, may have a significant
impact on the Company's activities and on the Company's operating results.
Adoption of new statutes and regulations and the Company's expansion into new
geographic markets could require the Company to alter its methods of operations,
at costs which could be substantial, or otherwise limit the types of services
offered by the Company. There can be no assurance that the Company will be able
to comply with additional applicable laws, regulations and licensing
requirements.
Dependence on Key Personnel
The development of new telecommunications products or improvements of
the Company's existing products is dependent to a significant degree on the
efforts of the Company's Chief Executive Officer, Diego Leiva, as well as
certain other officers of the Company. The loss of Mr. Leiva's services for any
reason would be expected to have a material adverse effect on the Company, thus
the Company has obtained a $1 million key-man life insurance policy on Mr.
Leiva's life. The Company's future success is also dependent on, among other
factors, the successful recruitment and retention of key personnel.
Control by Management
Diego Leiva, the Company's Chief Executive Officer, his affiliates and
other officers and directors of the Company currently own approximately 46% of
the Company's issued and outstanding Common Stock, giving effect to the exercise
of all officers' and directors' options. Therefore, Management will have the
ability to substantially influence the election of all of the Company's
Directors and to control the outcome of all other issues submitted to the
Company's stockholders. See "Selling Stockholders."
Difficulty of Trading and Obtaining Quotations for Common Stock
The Company's Common Stock is currently trading in the over-the-counter
market in the so-called "pink sheets," and is quoted on the National Association
of Securities Dealers, Inc.'s Electronic Bulletin Board (OTCBB)under the symbol
"PICK." As a result of trading in the over-the-counter market, an investor would
likely find it more difficult to dispose of, or to obtain quotations as to, the
price of the Common Stock than a security traded on a national exchange.
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The Nasdaq Stock Market has proposed amendments to its rules increasing
eligibility and maintenance criteria for the Nasdaq SmallCap Market and there
can be no assurance that the Company will be eligible for such a listing in the
future. Existing eligibility criteria for inclusion on the Nasdaq SmallCap
Market require, among other things, that an issuer have total assets of $4
million and total equity of $2 million, and that the security to be listed has a
minimum bid price of $3.00 per share. The proposed amendment would require,
among other things, that an issuer have net tangible assets (i.e., total assets
less total liabilities and intangible assets) of $4 million (or alternatively,
net income in two of the most recent three fiscal years of at least $750,000, or
a market capitalization of $50 million) and that the security to be listed has a
minimum bid price of $4.00 per share. Adoption of the proposed amendments, which
are expected to become effective in 1997, would further increase the risk of not
having the Company's Common Stock listed on Nasdaq. In fact, on a pro forma
basis, accounting for the stock repurchase adjustments subsequent to December
31, 1996, the Company will not meet the proposed Nasdaq Stock Market criteria.
Absence of Trading Market
There will be no public trading market for the company's Preferred Stock
following the effectiveness of this Post-Effective Amendment No. 1, and there
can be no assurance that a public market will ever develop.
Penny Stock Regulation
The trading of the Company's Common Stock is currently subject to Rule
15g-9 promulgated under the Exchange Act for non-NASDAQ and non-exchange listed
securities. Under such rule, broker-dealers who recommend such securities to
persons other than established customers and accredited investors must make a
special written suitability determination for the purchaser and receive the
purchaser's written agreement to a transaction prior to sale. Securities are
exempt from this rule if the market price is at least $5.00 per share.
The Commission has adopted regulations that generally define a "penny
stock" to be an equity security that has a market price of less than $5.00 per
share or an exercise price of less than $5.00 per share subject to certain
exceptions. Such exceptions include equity securities listed on NASDAQ and
equity securities issued by an issuer that has (i) net tangible assets of at
least $2,000,000, if such issuer has been in continuous operation for more than
three years, or (ii) net tangible assets of at least $5,000,000, if such issuer
has been in continuous operation for less than three years, or (iii) average
revenue of at least $6,000,000 for the preceding three years. Unless an
exception is available, the regulations require the delivery, prior to any
transaction involving a penny
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stock, of a risk disclosure schedule explaining the penny stock market and the
risks associated therewith.
The Company's Common Stock is currently a penny stock as defined in the
Exchange Act and as such, the market liquidity for the Common Stock is limited
to the ability of broker-dealers to sell Common Stock in compliance with the
above-mentioned disclosure requirements.
SELLING STOCKHOLDERS
The shares of Common Stock to which this Prospectus relates are being
registered for reoffers and resales by Selling Stockholders of the Company who
have acquired or may acquire such shares pursuant to the exercise of Options or
pursuant to agreements with the Company in connection with services rendered to
the Company. The Selling Stockholders named below may resell all, a portion or
one of such shares of Common Stock from time to time.
Participants under the Plan who are deemed to be "affiliates" of the
Company who may acquire Common Stock under the Plan or other employee benefit
plans may be added from time to time to the Selling Stockholders listed below by
use of a prospectus supplement filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Act"). An "affiliate" is defined in
Rule 405 under the Act as a "person that directly, or indirectly, through one or
more intermediaries, controls or is controlled by, or is under common control
with," the Company.
The table below sets forth with respect to each Selling Stockholder,
based upon information available to the Company as of July 21, 1997, the number
of shares of Common Stock beneficially owned before and after the sale of the
shares of Common Stock offered hereby; the number of shares of Common Stock to
be sold; and the percent of the outstanding shares of Common Stock owned before
and after the sale of the shares of Common Stock offered hereby. Each Selling
Stockholder's relationship to the Company is set forth in a footnote to the
table.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Name Amount and Nature Shares to be Shares Percent of Percent of
of Beneficial Sold(3) Beneficially Class (2)(3) Class (2)(3)
Ownership(1) Owned After Before Offering After Offering
Offering
================================================================================================================
<S> <C> <C> <C> <C> <C>
Diego Leiva 12,716,500(4)(5) 1,150,000 11,566,500 34.6% 32.1%
- ----------------------------------------------------------------------------------------------------------------
Robert R. 915,000(6) 750,000 165,000 2.5% *
Sams
- ----------------------------------------------------------------------------------------------------------------
Ricardo 1,076,000(6)(7) 750,000 326,000 2.9% *
Maranon
- ----------------------------------------------------------------------------------------------------------------
Raymond M. 1,261,500(8)(9) 750,000 511,500 3.4% 1.4%
Brennan
- ----------------------------------------------------------------------------------------------------------------
Karen M. 1,121,250(9) 750,000 371,250 3.1% 1.1%
Quinn
- ----------------------------------------------------------------------------------------------------------------
Marilou C. 257,000(10) 250,000 7,000 * *
Halvorsen
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
* Less than 1% of the issued and outstanding shares of Common Stock.
(1) Unless otherwise noted, all shares are beneficially owned and the sole
voting and investment power is held by the person indicated.
(2) Based on 35,983,346 shares outstanding as of July 21, 1997. Each beneficial
owner's percentage ownership is determined by assuming that options or
warrants that are held by such person and which are convertible or
exercisable within sixty (60) days of such date pursuant to Rule 13d-3
under the Exchange Act have been converted or exercised.
(3) Does not constitute a commitment to sell any or all of the stated number of
shares of Common Stock. The number of shares of Common Stock offered hereby
shall be determined from time to time by each Selling Stockholder at
his/her discretion.
(4) Includes (i) 4,290,000 shares beneficially owned by Mr. Leiva's wife, (ii)
792,000 shares beneficially owned by a trust for Mr. Leiva's son for which
Mr. Leiva serves as trustee, (iii) 792,000 shares beneficially owned by a
trust for Mr. Leiva's daughter for which Mr. Leiva serves as trustee and
(iv) 400,000 shares being registered in this registration statement which
Mr. Leiva and the Company agreed to exchange for $100,000 in accrued and
unpaid compensation due Mr. Leiva for 1994 and 1995, at a price per share
of $.25, pursuant to a Compensation Agreement dated as of December 3, 1996.
(5) Includes incentive stock options to purchase up to 131,578 shares of the
Company's Common Stock at $.19 per share and 250,000 shares at $.30 per
share and non-qualified stock options to purchase up to 368,422 shares of
the Company's Common Stock at $.19 per share pursuant to options under the
Plan.
(6) Includes non-qualified stock options to purchase up to 750,000 shares of
the Company's Common Stock, including 500,000 shares at $.17 per share and
250,000 shares at $.27 per share pursuant to the Plan.
(7) Includes 37,250 shares of the Company's Common Stock beneficially owned by
Mr. Maranon's daughter.
(8) Includes 250,000 shares beneficially owned by Mr. Brennan's wife.
(9) Includes incentive stock options to purchase up to 250,000 shares at $.27
per share and 191,176 shares at $.17 per share and non-qualified stock
options to purchase up to 308,824 shares at $.17 per share.
(10) Includes non-qualified stock options to purchase up to 250,000 shares at
$.27 per share pursuant to the Plan.
PLAN OF DISTRIBUTION
The Options and/or shares of Common Stock (together, the "Securities")
are being sold by the Selling Stockholders for their own accounts. The
Securities may be sold or transferred for value by the Selling Stockholders, or
by pledgees, donees, transferees or other successors in interest to the Selling
Stockholders, in one or more transactions in the over-the-counter
market(reported on the National Association of Securities Dealers, Inc.
Electronic Bulletin Board (OTCBB)under the symbol "PICK") in negotiated
transactions or in a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such
14
<PAGE>
prevailing market prices or at prices otherwise negotiated. The Selling
Stockholders may effect such transactions by selling the Securities to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholders and/or the purchasers of the Securities for whom such
broker-dealers may act as agent (which compensation may be less than or in
excess of customary commissions). The Selling Stockholders and any
broker-dealers that participate in the distribution of the Securities may be
deemed to be "underwriters" within the meaning of Section 2(11) of the Act, and
any commissions received by them and any profit on the resale of the Securities
sold by them may be deemed to be underwriting discounts and commissions under
the Act. All selling and other expenses incurred by individual Selling
Stockholders will be borne by such Selling Stockholders.
There can be no assurance that any of the Selling Stockholders will
sell any or all of the Shares of Common Stock offered by them hereunder.
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Commission, such indemnification is against public policy as expressed in
the Act and is therefore unenforceable.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been
passed upon for the Company by Snow Becker Krauss P.C., 605 Third Avenue, New
York, New York 10158. Snow Becker Krauss P.C. holds 50,000 shares of the
Company's Common Stock, all of which was issued to it in exchange for legal
fees.
EXPERTS
The consolidated financial statements of the Company for the year ended
December 31, 1996, incorporated by reference in this Prospectus have been
included in reliance upon the report of Durland & Company, CPAs, P.A.,
independent auditors, incorporated by reference herein, given upon the authority
of said firm as experts in accounting and auditing.
15
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents By Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the Registrant pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by
reference in this registration statement.
(a) The Registrant's Registration Statement on Form 10 (File
No.0-27604), including the description of the Registrant's Common
Stock, filed pursuant to Section 12(g) of the Exchange Act, including
any amendment or report filed for the purpose of updating such
information.
(b) The Registrant's Annual Report on Form 10-K for the Fiscal year
ended December 31, 1997.
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997.
(d) The Registrant's Proxy Statement dated December 17, 1996.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
registration statement.
II-1
<PAGE>
Item 8. Exhibits.
Page in
Sequentially
Numbered
Registration
Exhibit No. Description of Exhibit Statement
4.1 1996 Employee Stock Option Plan.(1)
4.2 Compensation Agreement dated as of
December 3, 1996 between the Company
and Diego Leiva.(1)
*4.3 Consulting Agreement dated as of
January 28, 1997 by and between the
Company and Barry Suskind.
*5.1 Opinion of Snow Becker Krauss P.C.
*23.1 Consent of Snow Becker Krauss P.C.
(included in Exhibit 5.1 hereto).
*23.2 Consent of Durland & Company, CPAs, P.A.
24.1 Powers of Attorney(1)
- --------------
* Filed with this Post-Effective Amendment.
--------
(1) Incorporated by reference to the Company's Registration Statement
on Form S-8, Registration Number 333-20573, filed January 28, 1997.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Act, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this post-effective amendment to be
signed on its behalf by the undersigned, hereunto duly authorized, in the city
of Wayne, State of New Jersey, on August 21, 1997.
PICK Communications Corp.
By: /s/ Diego Leiva By: /s/ Bruce Staloff
------------------ ------------------------
Diego Leiva Acting Principal Financial
Chairman of the Board, Officer
Principal Executive Officer
and President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Diego Leiva and Raymond M. Brennan, and each of them, his true and lawful
attorneys-in-fact and agents, with power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this registration
statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying all that said attorneys-in-fact and agents or his substitute or
substitutes, or any of them, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Act, this post-effective amendment has
been signed by the following persons in the capacities indicated on August 21,
1997.
Signature Title
--------- -----
/s/ Diego Leiva
- ---------------------- Chairman of the Board,
Diego Leiva Chief Executive Officer,
President and Director
/s/ Bruce Staloff
- ---------------------- Bruce Staloff, Acting
Bruce Staloff Principal Financial Officer
II-3
<PAGE>
/s/ Karen M. Quinn
- ------------------------- Vice President of
Karen M. Quinn Corporate Communications
and Operations
/s/ Raymond M. Brennan
- ------------------------- Vice President, Secretary
Raymond M. Brennan and Director
/s/ Robert R. Sams
- ------------------------- Director
Robert R. Sams
/s/ Ricardo Maranon
- ------------------------- Director
Ricardo Maranon
/s/ Marilou C. Halvorsen
- ------------------------- Director
Marilou C. Halvorsen
II-4
<PAGE>
Exhibit 4.3
As of January 28, 1997
Mr. Barry Suskind
C/O International Technologies & Finance
181 Hudson Street, Penthouse D
New York, NY 10013
Dear Mr. Suskind:
This letter will serve as an agreement between PICK Communications Corp.
("PICK") and you concerning your rendering of consulting services.
1. ENGAGEMENT. PICK hereby engages you, on an independent contractor basis, to
render your services as a consultant and you hereby accept such engagement
on the terms and conditions herein set forth.
2. TERMS OF SERVICES. The Period of this Agreement shall commence on January
28, 1997 and terminate on March 15, 1997.
3. NATURE OF SERVICES. You hereby agree to provide the following consulting
services to PICK:
You will evaluate the prospective countries in Europe and Asia for the
introduction of PICK's prepaid cellular telephone and advise PICK's executive
officers of the viability of each nation's existing cellular systems and your
recommendations as to whether we should seek to partner with existing telecoms
in each country or seek to sell licenses to private companies. It is understood
that you possess experience and knowledge re: international business, and it is
understood that you will perform such services for PICK with that standard of
professional care, skill and diligence that you normally provide in the
performance of similar services. As an independent contractor you will, of
course, be responsible for determining the means and methods of performing your
services hereunder.
4. COMPENSATION. In consideration of the full performance of all of your
services PICK will pay you by giving you a total of 116,330 registered
(free trading) shares of PICK Communications Corp., in the name of Barry
Suskind, at the price of such shares as of the close of the OTC Bulletin
Board market on January 28, 1997.
5. ASSIGNMENT. You shall not have the right to assign any of your obligations
or delegate any of your duties hereunder without the prior written consent
of PICK. Any attempt to assign without such permission shall be void and of
no effect.
6. PERFORMANCE. In performing services under this Agreement, you shall conduct
yourself as an independent contractor at all times during the Period.
Accordingly, you agree not to represent yourself as an agent or employee of
PICK or attempt to bind PICK to any contractual obligations. Any attempt on
your part to do so shall be deemed a material breach of this Agreement.
<PAGE>
7. ENTIRE AGREEMENT. This document contains the entire agreement and
understanding between PICK and you relating to the services you are to
perform. Accordingly, this Agreement may not be altered, amended, modified,
or otherwise changed, nor may any of the terms hereof be waived, except by
an instrument in writing signed by both parties. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York.
If this represents your understanding of our agreement, please sign in the space
provided below and return a copy to my attention.
Sincerely,
PICK COMMUNICATIONS CORP.
By:
----------------------------------
Raymond M. Brennan, Vice President
ACCEPTED and AGREED:
- --------------------------------------
Barry Suskind
SS#
-----------------------------------
<PAGE>
Exhibit 5.1
PICK Communications Corp.
August 21, 1997
Page 1
[SNOW BECKER KRAUSS P.C. LETTERHEAD]
August 21, 1997
PICK Communications Corp.
Wayne Interchange Plaza II
155 Route 46 West
Wayne, New Jersey 07470
RE: Post-Effective Amendment No. 1 To
REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
We have acted as counsel to PICK Communications Corp.,
a Nevada corporation (the "Company"), in connection with Post-Effective
Amendment No. 1 to the Company's Registration Statement on Form S-8 (the
Post-Effective Amendment and the Registration Statement on Form S-8 amended
thereby, together hereinafter the "Registration Statement") to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended. The Registration Statement includes (i) 5,000,000 stock options
authorized to be granted pursuant to the Company's 1996 Stock Option Plan (the
"Plan"); (ii) 4,000,000 shares of the Company's common stock, $.001 par value
(the "Common Stock"), issuable upon the exercise of stock options already
granted to Company employees under the Plan; (iii) 400,000 shares of Common
Stock issued to the Company's Chief Executive Officer, Mr. Diego Leiva, pursuant
to a Compensation Agreement dated December 3, 1996, at a purchase price of $.25
per share, in lieu of $100,000 of accrued and unpaid salary owed Mr. Leiva (the
"Compensation Shares"); (iv) 1,000,000 shares of Common Stock issuable upon the
exercise of stock options authorized and available for future grant under the
Plan; and (v) 116,330 shares of Common Stock to be issued to Mr. Barry Suskind
pursuant to a Consulting Agreement dated January 28, 1997 (the "Consultant's
Shares"). This results in an aggregate of 5,000,000 stock options and 5,516,330
shares of Common Stock being registered in the Registration Statement.
As counsel to the Company, we have examined the
Company's Certificate of Incorporation, By-laws, records of corporate
proceedings, and such other documents as we have deemed necessary or appropriate
as a basis for the opinions set forth
<PAGE>
PICK Communications Corp.
August 21, 1997
Page 2
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the accuracy and
completeness of all documents submitted to us as copies and the authenticity of
the originals of such latter documents. As to any facts material to such
opinions which we did not independently establish or verify, we have relied upon
statements or representations of officers and other representatives of the
Company, public officials or others.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly organized, is validly existing, and
in good standing under the laws of the State of Nevada.
2. The stock options issuable under the Plan have been duly
authorized by the Board of Directors of the Company, and in the
case of the shares of Common Stock issuable upon exercise of the
stock options pursuant to the Plan, they have been duly
authorized and reserved for issuance, and when duly issued and
paid for as contemplated by the Registration Statement, the
shares of Common Stock will be legally issued, fully paid and
non-assessable securities.
3. The Compensation Shares have been duly authorized by the Board
of Directors of the Company and have been duly authorized and
reserved for issuance, and when duly issued and paid for as
contemplated by the Registration Statement, the Compensation
Shares will be legally issued, fully paid and non-assessable
securities.
4. The Consultant's Shares have been duly authorized by the Board
of Directors of the Company and have been duly authorized and
reserved for issuance, and when duly issued and paid for as
contemplated by the Registration Statement, the Consultant's
Shares will be legally issued, fully paid and non-assessable
securities.
We hereby consent to the reference to our name in the Prospectus
under the caption "Legal Opinion" and to inclusion of this opinion as Exhibit
5.1 to the Registration Statement and all amendments thereto.
Very truly yours,
/s/ Snow Becker Krauss P.C.
---------------------------
SNOW BECKER KRAUSS P.C.
<PAGE>
Exhibit 23.2
[LETTER DURLAND & COMPANY]
PICK Communications Corp.
Wayne Interchange Plaza 11
155 Route 46 West
Wayne, New Jersey 07470
Gentlemen:
We hereby consent to the use of our report dated March 7, 1997 on the
financial statements of the company and of the reference to our firm under the
caption "Experts" in the prospectus included in the Registration Statement on
Form S-8 being submitted to the Securities and Exchange Commission by the
company.
/s/ Durland & Company, CPAs, P.A.
----------------------------------
Durland & Company, CPAs, P.A.
Palm Beach, Florida
August 21, 1997
