PICK COMMUNICATIONS CORP
424B3, 1999-11-17
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
Previous: INTRUST FUNDS TRUST, PRES14A, 1999-11-17
Next: QUALMARK CORP, 10QSB, 1999-11-17



<PAGE>

PROSPECTUS                                      Filed Pursuant to Rule 424(b)(3)
- ----------                                 Registration Statement No. 333-85205

                            PICK COMMUNICATIONS CORP.


The Offering:


Shares of common stock offered
    by selling stockholders......................   10,154,083

Offering Price................. On November 12, 1999, the closing sale price of
                                PICK common stock on the OTC Bulletin Board was
                                $1.375 per share. The selling stockholders may
                                offer the shares for sale at the market price at
                                the time of the sale, at a price related to the
                                market price or at a negotiated price. We expect
                                that a significant number of shares of common
                                stock will be sold pursuant to Rule 144 prior to
                                the effective date of this prospectus and will
                                be removed from this prospectus.

         Investing in the common stock involves a high degree of risk. See
"Risks Factors" beginning on page 7.

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.


                The date of this prospectus is November 15, 1999





<PAGE>


                       WHERE YOU CAN FIND MORE INFORMATION

                  We file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC"). You may read and copy any document we file at the SEC's public
reference room at the following locations:

         -        Main Public Reference Room
                  450 Fifth Street, N.W.
                  Washington, D.C.  20549

         -        Regional Public Reference Room
                  75 Park Place, 14th Floor
                  New York, New York  10007

         -        Regional Public Reference Room
                  Northwestern Atrium Center
                  500 West Madison Street, Suite 1400
                  Chicago, Illinois  60661-2511

          You may obtain information on the operation of the SEC's public
reference rooms by calling the SEC at (800) SEC-0330.

          We are required to file these documents with the SEC electronically.
You can access the electronic versions of these filings on the Internet at the
SEC's Web site, located at http://www.sec.gov.

          We have included this prospectus in our registration statement that we
filed with the SEC (the "Registration Statement"). The Registration Statement
provides additional information that we are not required to include in the
prospectus. You can receive a copy of the entire Registration Statement as
described above. Please note that the Registration Statement also includes
complete copies of the documents described in the prospectus.

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

          Certain matters discussed in this prospectus are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934 and are subject
to the safe harbor created thereby. These forward-looking statements can
generally be identified as such because the context of the statement will
include words such as the Company or we "believe," "anticipate," "estimate,"
"expect" or words of similar import as they relate to the Company or the
Company's management. Similarly, statements that describe the Company's future
plans, objectives or goals are forward-looking statements. Such forward-looking
statements are subject to certain risks and uncertainties, including those
described in the section captioned "Risk Factors" below.

          These factors are not exhaustive, and should be read in conjunction
with other cautionary statements that are included in this prospectus. The
forward-looking statements made herein are only made as of the date of this
report and we are not obligated to publicly update forward- looking statements
to reflect subsequent events or circumstances.


                                      -2-
<PAGE>

                               PROSPECTUS SUMMARY

         As used in this prospectus, unless the context otherwise requires, the
terms "we," "us" or "Company" mean PICK Communications Corp. and its
subsidiaries. This summary highlights information contained elsewhere in this
prospectus, and is not complete and may not contain all the information you
should consider before investing in the common stock. You should read the entire
prospectus carefully. All share and per share data in this prospectus give
retroactive effect to the one-for-ten reverse split to holders of record on July
23, 1999.

                                   The Company

         The Company currently has two active subsidiaries, PICK Sat, Inc. and
PICK Online.Com Inc. PICK Sat and PICK Online are both developing companies. Our
current focus is our PICK Sat subsidiary which has just begun commercial
operations. PICK Sat has developed satellite-based, broadband Internet access
and delivery services. One of these services makes it easier and more cost
efficient to send video and large multimedia files to Internet users. We are
marketing our services to media companies, large corporations, cable companies,
Internet Service Providers ("ISPs") and end-users. We are focusing our initial
marketing efforts in certain areas of the United States and Latin America, where
PICK Sat's services have a greater cost advantage due to the higher costs of
terrestrial Internet service in those areas.

         We have entered into our first contract for this service. The customer,
Cadena Latinoamericana de Television, Inc. ("CLT"), is an owner and distributor
of Spanish-language video programming. CLT will utilize PICK Sat services to
transmit video content in Internet Protocol format to cable networks and
broadcast television stations in Latin America. CLT is currently using courier
services to send more than 20,000 Betacam cassettes a year to its affiliates.
CLT, using the PICK Sat service, will now transmit video files to affiliate
stations who will receive the files via satellite dish, store them on a server,
and decode them into Betacam format as needed for local playout. The agreement
provides for up-front fees with continuing revenues thereafter. The agreement is
for three years and if successfully completed would provide us with
approximately $2.1 million in revenues.

         We have also established two beta sites for other PICK Sat services,
one with a wireless cable operator in Mexico, and another with a educational
institution in the United States. These beta tests of PICK Sat service include
testing with both the customer, and end-users.

         Once PICK Sat's service are more mature, and provided we receive
substantial additional financing, we intend to begin marketing our PICK
Online.Com services, which includes multimedia portal services that host radio,
TV and Web-based events.

         On June 23, 1999, our Board of Directors voted to sell or discontinue
the long distance telephone service portion of its business to focus on the
Internet services portion of its business.


         We have terminated marketing and distribution of prepaid telephone
calling cards through PICK US, Inc. We have entered into a definitive agreement
to sell the stock of PICK Net Inc. and PICK Net UK PLC, both of which provide
international long distance services to other carriers and resellers, for
nominal value, and have up to approximately $10 million of their liabilities
assumed. As of October 31, 1999, approximately $1,500,000 of indebtedness of
PICK Net had been paid by a lender.

         We are in need of immediate financing for working capital to finance
our PICK Sat and PICK Online subsidiaries. Neither entity has generated any
revenues to date. We entered into an option agreement with Atlantic
Tele-Network, Inc. ("ATN") to sell them up to a majority of the common stock of
PICK Sat, however, they have advised us that they do not intend to exercise the
option. The repayment of the $1.5 million of PICK Net debt, as well as
approximately $500,000 advanced to PICK Sat for operating expenses in connection
with the option has been guaranteed by PICK Sat. In the event that this
transaction is not completed and we are unable to repay the loans, with third
party funding for which we have no commitments, the assets of PICK Sat may be
foreclosed upon.



                                      -3-
<PAGE>


Should we be unable to obtain interim financing in the near term we will be
forced to cutback or suspend operations and/or seek protection under the
bankruptcy laws. Although we are in discussions with several sources of
financing, there can be no assurance we will obtain such financing.


         We recently relocated our principal executive offices to 8401 N.W. 53rd
Terrace, Suite 119,Miami FL 33166, and our telephone number is (305) 717-1500.

                                   Risk Factors

         An investment in common stock involves certain risks that a potential
investor should carefully evaluate prior to making an investment. A discussion
of certain factors to be considered in evaluating the Company, its business and
an investment in common stock is included in the section titled "Risk Factors"
immediately following this Summary.

          Summary Historical Consolidated Financial and Operating Data

Statement of Operations Data (1):

<TABLE>
<CAPTION>
                                      Six Months Ended
                                           June 30,
                                         (unaudited)                                Years Ended December 31,
                                 ---------------------------               -----------------------------------------
                                    1999              1998                    1998           1997            1996
                                 ---------         ---------               ----------     ----------      ----------
<S>                                  <C>               <C>                     <C>            <C>             <C>

  Cost and expenses             $2,118,013         $468,410                $2,139,830     $  399,448      $  607,890


  Other income (expense)            --                  --                   (133,000)    (9,890,284)      8,436,809
                                 ---------         ---------               ----------     ----------      ----------
  Income (loss) before
   minority interest in
    subsidiary loss,
    income taxes and
    discontinued operations     (2,118,013)        (468,410)               (2,272,830)   (10,289,732)      7,828,919

</TABLE>

                                                   (Continued on following page)


                                      -4-
<PAGE>

<TABLE>
<CAPTION>
                                      Six Months Ended
                                           June 30,
                                         (unaudited)                                Years Ended December 31,
                                 ---------------------------               -----------------------------------------
                                    1999              1998                    1998           1997            1996
                                 ---------         ---------               ----------     ----------      ----------
<S>                           <C>                <C>                     <C>             <C>             <C>
Minority interest in
subsidiary loss                          -               914                    2,062        434,064         260,541

Benefit (provision) for
income taxes                                            (880)                              1,808,000      (1,808,000)

Loss from discontinued
operations                      (4,364,730)       (2,308,451)             (14,792,541)    (1,452,134)     (4,645,670)


Loss on disposal               (47,108,711)                -                        -              -               -
                              ------------       -----------             ------------    -----------     -----------
  Net income (loss)           $(53,591,454)      $(2,776,827)            $(17,063,309)   $(9,499,802)    $ 1,635,790
                              ============       ===========             ============     ==========     ===========
Beneficial conversion
  feature of preferred stock   (25,170,000)                -                        -              -               -
                              ------------       -----------             ------------    -----------     -----------
Net income (loss) applicable
  to common stock             $(78,761,454)      $(2,776,827)            $(17,063,309)   $(9,499,802)    $ 1,635,790
                              ============       ===========             ============    ===========     ===========
Net income (loss) per
  common share - basic        $     (18.39)      $      (.76)            $      (4.62)   $     (2.57)    $       .39
                              ============       ===========             ============    ===========     ===========
Weighted-average shares
  outstanding - basic            4,281,860         3,633,975                3,692,356      3,695,853       4,199,150
                              ============       ===========             ============    ===========     ===========



Balance Sheet Data:


                                          At June 30,
                                         (unaudited)                                    At December 31,
                              ------------------------------             -------------------------------------------
                                  1999               1998                    1998           1997            1996
                              ------------       -----------             ------------    -----------     -----------

Working capital
(deficiency)                  $(16,715,093)      $(9,895,211)            $(14,677,342)   $(7,405,608)    $(3,152,216)
                              ============       ===========             ============    ===========     ===========
Total Assets                  $  7,685,842       $ 2,522,592             $  6,791,156    $ 1,817,513     $ 8,917,149
                              ============       ===========             ============    ===========     ===========
Current Liabilities           $ 17,861,005       $10,805,819             $ 16,241,801    $ 8,027,642     $ 6,582,429
                              ============       ===========             ============    ===========     ===========
Long-term liabilities         $ 10,922,716       $ 1,182,609             $ 10,815,216    $   794,905               -
                              ============       ===========             ============    ===========     ===========
Stockholders' equity
(deficiency)                  $(21,183,897)      $(9,553,002)            $(20,351,879)   $(7,093,114)    $   869,579
                              ============       ===========             ============    ===========     ===========
</TABLE>

(1) The historical financial information in this prospectus is primarily that of
    the three subsidiaries whose business we are terminating, as PICK Sat and
    PICK Online.Com have had limited operations to date and have not generated
    any revenues. On June 23, 1999, the Company formalized its plan to
    discontinue its long distance telephone service and prepaid calling card
    business consisting of PICK US, PICK Net and PICK Net UK. Accordingly, the
    long distance telephone service and prepaid calling card business are
    accounted for as a discontinued operation in the accompanying consolidated
    financial statements.



                                      -5-
<PAGE>

                               NOTE RESTRUCTURING

         Between July 29 and September 8, 1998, the Company sold an aggregate of
99 Units in a bridge loan (the "July Bridge Loan") and 9,900,000 warrants to
purchase 990,000 shares of the Company's common stock at $5.00 per share for
five years, for gross proceeds of $9,900,000. The Company allocated $8,587,066
of the gross sale proceeds to the debt and $1,312,934 to the warrants. The
$1,312,934 discount was amortized as interest expense over the original 120-day
life of the July Bridge Note. A security interest in the Company's assets was
filed on behalf of the investors in the July Bridge Loan. In November 1998, the
interest rate of the July Bridge Loan was increased retroactively to 18% and the
maturity date of the promissory notes evidencing the loan (the "Notes") was
extended to April 27, 1999. The Noteholders had the option to either foreclose
and seek repayment of the Notes or convert their Notes into common stock at
$2.50 per share, or 50% of market if lower, following a default in repayment by
the Company.

         On April 27, 1999, $9,880,000 of the $9,900,000 in principal amount of
the Noteholders consented to a restructuring (the "Restructuring") to amend
their Notes (the "Amended Notes"), which had been conditioned on at least 80%
approval. The Noteholders have agreed for a two-year period to (a) exchange
988,000 shares of common stock registered under this registration statement for
the warrants issued in connection with the original issuance of the Notes,
245,750 shares for the warrants issued in connection with an extension of the
July Bridge Loan and 388,040 shares pursuant to the anti-dilution provisions of
the warrants, and (b) either receive one share of common stock for every ten
dollar ($10.00) principal amount of the Amended Notes, or alternatively elect to
have the conversion price of the Amended Notes reset from $10.00 to $5.00 per
share, subject to further adjustment. Commonwealth Associates and its designees
("Commonwealth"), as agent for the Noteholders, was paid 200,000 shares, plus
warrants to purchase 50,000 shares exercisable at $13.75 per share, with the
exercise price of warrants previously issued to Commonwealth reduced to $1.00
per share.

         The maturity date of the Amended Notes is April 27, 2002. Each Amended
Note is convertible at any time at the option of the holder thereof into shares
of common stock at $10.00 per share. The conversion price of the Amended Notes
will be reset to not lower than $5.00 per share in the event the Company issues
securities (with certain exceptions) for less than $10.00 per share, prior to
April 27, 2000, the first anniversary date of the Restructuring. In addition,
the Company has the option to extend the maturity date for one additional year,
in which event the Conversion Price shall be subject to adjustment.

         The Amended Notes shall be automatically converted into shares of
common stock in the event that the closing bid price for the common stock has
exceeded $15.00 per share for 20 consecutive trading days. Commonwealth is
entitled to designate one nominee to the Board and the Noteholders shall have
the right to nominate one person to a reconstructed Board consisting of a
majority of independent Directors. Neither right to designate a nominee has been
exercised.

         The Company has agreed to register all of the above described shares of
common stock issued or issuable to the Noteholders, Commonwealth and Liberty
Capital, co-placement agent for the July Bridge Loan as part of this
registration statement.


                                      -6-
<PAGE>

                                  RISK FACTORS

         This offering involves a high degree of risk. Before you invest in our
common stock, you should be aware that there are various risks, including those
described below, that may affect our business, financial condition and results
of operations. We caution you, however, that this list of risk factors may not
be all inclusive. If any of the following risks actually occur, our business,
financial condition or results of operations would likely suffer. In this case,
the trading price of our common stock could decline, and you may lose all or
part of your investment.

         We have a history of significant and continuing losses and cannot
guarantee that we will be profitable.

         We have experienced significant operating losses since we commenced
full operations in 1994. Our net losses for each fiscal year since 1994 were:

         1998          $17.1 million
         1997          $9.5 million
         1995          $1.1 million
         1994          $1.3 million

         Although we had net income of approximately $1,636,000 in 1996, this
resulted from non-cash, non-operating income, which was offset in 1997 by
non-cash non-operating losses. Our loss from discontinued operations increased
from $2,308,451 for the six months ended June 30, 1998 to $4,364,730 for the six
months ended June 30, 1999. We also recorded an additional loss on the disposal
of the discontinued operations in the amount of $47,108,711. Of this amount,
$46,033,711 is attributable to the writing off of the deferred interest and debt
placement charges of the restructured notes which amounts are related to the
discontinued operations and therefore will provide no future benefit.


         On June 23, 1999, we formalized a plan to discontinue our long distance
telephone service and prepaid calling card business consisting of PICK US, PICK
Net and PICK Net UK. Accordingly, the Old Business is accounted for as a
discontinued operation in the accompanying consolidated financial statements. We
are in the process of completing the sale of PICK Net and PICK Net UK and the
discontinuance of the operation of PICK US.


         We significantly curtailed our operations during 1998, while we
installed and tested two new switches. Our total revenues, which all arose from
our discontinued operations, amounted to $9,822,903 for the twelve months ended
December 31, 1998, compared to $9,015,903 for the comparable period last year.
Of this amount, however, prepaid telephone calling card revenues were $7,844,462
for 1998, compared to $1,346,660 for 1997. However, our cost of telephone time
purchased increased by a greater amount than our sales and caused us to continue
to lose money. Therefore, we have since shifted the focus of our business away
from the prepaid calling card business, as well as from the resale of long
distance telephone services (collectively, the "Old Business"). We have only
recently started offering our new services. Therefore, we do not expect to be
able to achieve our prior level of sales in the foreseeable future.
Nevertheless, we will continue to have a high level of operating expenses. We
need to incur significant up-front expenses, including capital expenditures, in
connection with the development and marketing of our new services (collectively,
the "New Business"). This


                                      -7-
<PAGE>

includes substantial increases in executive, marketing, sales, finance and other
personnel. We expect to incur additional losses during the foreseeable future
until we are able to generate significant revenues to finance our operations and
the costs of our new services. We cannot guarantee that we will be able to
generate such revenues and operate profitably.

We have an immediate need for additional financing.

         We do not have sufficient cash on hand to meet our current obligations.
We recently received interim loans of approximately $500,000 from ATN and are
seeking additional interim financing. Between March and July 1999, we issued
1,871,000 shares of Series B preferred stock convertible at $1.00 per share for
$1,871,000, and 500,000 shares of Series D preferred stock convertible at $4.20
per share for $5,000,000, subject to adjustment under certain circumstances.
However, we will not be able to sustain our operations without additional
funding. In the event we are unable to obtain interim financing, we will be
forced to cutback or suspend our operations. We are attempting to raise
substantial additional funds. We need additional funding immediately to:

         o  pay our outstanding past due payables;

         o  meet our immediate payroll obligations; and

         o  finance our New Business.


         At June 30, 1999, we had a working capital deficit of approximately
$16.8 million.

As of June 30, 1999, we had approximately $17.9 million of current
liabilities, which mature or is subject to payment agreements before the end of
1999.

         In April 1999, we were successful in converting all but $20,000 (which
we repaid) of the $9.9 Million of the July 1998 Bridge Loan into three-year
obligations. We have also entered into a binding contract to sell the assets of
the Old Business for nominal value and have a substantial portion of their
liabilities assumed. We are attempting to convert the majority of our trade
payables, a portion for which we will be contingently liable, into long-term
obligations, but there can be no assurance we will be successful. We may have to
seek bankruptcy protection for all or part of our "Old Business," if the sale of
the Old Business is not completed. However, unless we are able to obtain
immediate additional financing for the Company, certain of our largest creditors
can declare a default and force us to declare bankruptcy to protect ourselves.
In such event, you may lose your entire investment.

         We have no firm arrangements with respect to additional financing. We
cannot guarantee that additional financing will be available to us on
commercially reasonable or acceptable terms or on terms which would not be
substantially dilutive to stockholders, if at all. If we fail to secure
necessary financing we expect it would have a material adverse impact on
business.


                                      -8-
<PAGE>

Our financial statements are qualified and based on obtaining financing and
attaining successful operations.

         We have incurred operating losses and negative cash flow from our
operations since 1995 and we have an accumulated deficit of approximately $106
million at June 30, 1999. Our operating losses and negative cash flow are
expected to continue until such time, if ever, that our New Business begins to
produce sufficient revenues to cover our expenses. In addition, substantially
all of our debts are short term. Our former accountants issued a qualified
report on the Company's financial statements as at and for the year ended
December 31, 1997. Our current auditors issued a qualified report on our
financial statements as at and for the year ended December 31, 1998. These two
reports state that if we do not:

         o  extend payout terms;


         o  obtain additional long-term financing arrangements and raise
            additional funds; and


         o  increase revenues and/or decrease expenses,

we may be unable to continue as a going concern for a reasonable period of time.

We restated our financial statements in 1998.

         Our financial statements as of March 31, 1997 were restated in June
1998. We initially did not report any gains or losses on the disposition of
marketable equity securities for transactions consummated in the first quarter
of 1997. We believed that it was not appropriate to recognize losses on the
acquisition of our and our subsidiary's common stock or on the exchange of one
investment in marketable equity securities for a similar investment. While we
believed our initial reporting was correct when made, we subsequently determined
that it would have been preferable to record these transactions based upon the
fair value of the assets exchanged, resulting in the recognition of
approximately $9,400,000 in non-cash, non-operating losses. The effect of the
restatement for the quarter ended March 31, 1997, was to reduce net income of
$948,711 to a net loss of $7,626,903. These transactions do not have a cash or
operating effect on our results of operations, and, to date, have not adversely
affected the price of our common stock.

We depend on a limited number of clients.

         Our prepaid telephone calling card business, which we are no longer
marketing, largely depended upon our relationship with Blackstone Calling Card,
Inc. ("Blackstone"). In 1998, approximately 72% and 10% of our revenues were
from Blackstone and IDT Corp., respectively. We have terminated the
Blackstone Agreement, which can be terminated by either party without cause
after the first year. Nevertheless, we expect to initially depend on a limited
number of clients for the New Business until these businesses become
established.

Our limited history of operations may not be a reliable basis for evaluating our
prospects.

         Because the New Business are developing companies, we have no operating
and financial data to give to you to evaluate our future performance and


                                      -9-
<PAGE>

prospects concerning these entities. Our 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 Internet industry, which is an
evolving industry characterized by intense competition. You must consider the
risks, expenses and uncertainties that an early stage business like ours faces.
These risks include our ability to:

         o  establish awareness of our services;

         o  expand the content and services on our network;

         o  attract a larger audience to our network;

         o  attract a large number of advertisers from a variety of industries;

         o  maintain our current, strategic relationships with Microsoft,
            Philips and Harmonic Data Systems and develop new relationships;

         o  respond effectively to competitive pressures; and

         o  continue to develop and upgrade our technology.

         If we are unsuccessful in addressing these risks, our business,
financial condition and results of operations will be materially and adversely
affected.

Significant competition in providing Internet services could reduce the demand
for and profitability of our services.

         The Internet services business is highly competitive and there are few
significant barriers to entry. Currently, we compete with a number of national
and local Internet Service Providers ("ISPs"). In addition, a number of
multinational corporations, including giant communications carriers such as
AT&T, MCI/Worldcom, Sprint and some of the regional Bell operating companies,
are offering, or have announced plans to offer, Internet access or on-line
services. We also face significant competition from Internet access
consolidators and from on-line service firms such as America Online ("AOL"),
CompuServe, and Prodigy.

         Our competitors also include Broadcast.com, the largest aggregator of
Internet audio and Real Networks, an audio streaming software maker. We believe
that new competitors, which may include computer software and services,
telephone, media, publishing, cable television and other companies, are likely
to enter the on-line services market. There are many companies that provide
Internet services targeted to Latin Americans and Spanish and Portuguese
speaking people in general. Competition for visitors, advertisers and electronic
commerce partners is intense and is expected to increase significantly in the
future because there are no substantial barriers to entry in our market.

         In addition, we believe that the Internet service and on-line service
businesses will further consolidate in the future. We believe this could result
in increased price and other competition in the industry and adversely impact
us. In the last year, a number of on-line services have lowered their monthly
service fees. This may cause us to lower our fees in order to compete.


                                      -10-
<PAGE>

         Many of our Internet service competitors possess financial resources
significantly greater than what we might expect to have and, accordingly, could
initiate and support prolonged price competition to gain market share. Many
competitive products and services are marketed by companies which:

         o  are well established;

         o  have reputations for success in the development and sale of product
            and services; and

         o  have significantly greater financial, marketing, distribution,
            personnel and other resources, thereby permitting them to implement
            extensive advertising and promotional campaigns, both general and in
            response to efforts by additional competitors to enter into new
            markets and introduce new products and services.

We believe that the primary competitive factors among Internet access providers
are:

         o  price, both in prices charged and profit margins

         o  quality

         o  customer support and loyalty

         o  technical expertise

         o  speed of service provided

         o  local presence in a market

         o  ease of use

         o  variety of value-added services

         o  reliability

         We believe we will be able to compete favorably in these areas. However
increased competition in any one of these areas could materially adversely
affect our business, financial condition and results of operations. Our success
in the high-speed direct market will depend heavily upon our ability to provide
high quality Internet connectivity and value-added Internet services targeted in
select target markets. Other factors that will affect our success in these
markets include our continued ability to attract additional experienced
marketing, sales and management talent, and the expansion of support, training
and field service capabilities.

         We believe that we compete on the basis of price and service. Our
success will depend on our ability to anticipate and respond to rapid changes in
consumer preferences and the introduction of new services, as well as our
ability to retain our favorable gross margins. We cannot assure you that we will
be able to compete successfully in our markets.

         In addition, our competitors may develop content that is better than
ours or that achieves greater market acceptance. It is also possible that new
competitors may emerge and acquire significant market share. A loss of users


                                      -11-
<PAGE>

to our competitors may have a material and adverse effect on our business,
financial condition and results of operations.

         The Internet industry is characterized by frequent introduction of new
products and services, and is subject to changing consumer preferences and
industry trends, which may adversely affect our ability to plan for future
design, development and marketing of our products and services. The markets for
Internet products and services are also characterized by rapidly changing
technology and evolving industry standards, often resulting in product
obsolescence or short product life cycles.

We are uncertain of our products being accepted by the market.

         Achieving market acceptance for our products and services requires
substantial marketing efforts and the expenditure of significant funds, which we
don=t currently have, to create both awareness and demand.

         Our success depends, in large part, on our ability to attract large
corporations, media companies, cable companies and ISPs to use our services, as
well as the level of acceptance and usage by end-users. Because demand by our
customers may be interrelated, any lack or lessening of demand by any one of
these parties could have a negative affect on our products and services overall
market acceptance. We can not assure you that markets will develop for our New
Business, nor can we assure you that we will be able to meet our current
marketing objectives or succeed in positioning ourselves as a key player in the
Internet industry.

If we do not effectively implement our marketing strategy and effectively manage
our operations, our business could suffer.

         We grew from approximately $1.6 million of net sales from the Old
Business in 1995 to approximately $9.8 million of net sales from the Old
Business in 1998 before we discontinued the Old Business. This placed demands on
our management, employees, operations and physical resources. We were forced to
curtail our unprofitable operations, terminate employees and restructure our
short-term indebtedness and seek to terminate, divest, or reorganize all or a
portion of our Old Business, all of which are currently being carried out.
Implementation of our new business plan will depend on, among other things, the
following:

         o  our ability to establish contractual arrangements targeting several
            market segments for our New Business; and

         o  hire and retain skilled management, financial, marketing, sales and
            other personnel.

Our marketing strategy and plans are subject to change as a result of a number
of factors, including, but not limited to, progress or delays in:

         o  our marketing efforts;

         o  changes in market conditions, including the emergence of significant
            supplementary markets;

         o  the nature of possible strategic alliances which may become
            available to us in the future; and


                                      -12-
<PAGE>

         o  competitive factors.

We cannot assure you that we will be able to implement successfully our business
plan for our New Business or otherwise continue our operations.

         In order to implement our business plan for our New Business, we will
be required to:

         o  improve our operating systems;

         o  attract and retain skilled executive, management and technical
            personnel; and

         o  successfully manage growth, including monitoring operations,
            controlling costs and maintaining effective quality, and service
            controls.

If we are unable to effectively manage our growth, our business, operating
results and financial condition could suffer.


We depend on satellites and third-party long distance carriers


         We currently depend on a limited number of satellites, domestic and
international long distance carriers and Internet Service Providers to provide
our services. Although we believe that we currently have sufficient access to
transmission facilities, satellites and long distance networks, if we fail to
obtain continued access to such facilities, satellites and networks it could
also have a negative impact on our New Business.


We may derive a portion of our revenues from reciprocal advertising agreements,
which do not generate cash revenue


         We may derive a portion of our revenues from reciprocal advertising
arrangements under which we will exchange advertising space on our network
predominantly for advertising space on television and radio stations, rather
than cash payments. In the event that revenues from reciprocal advertising
arrangements account for a portion of our revenues in the foreseeable future, we
will be giving up cash revenues.

Joint ventures, acquisitions or strategic alliances may not be available

         We do not know if we will be able to identify any future joint
ventures, acquisitions or strategic alliances or that we will be able to
successfully finance these transactions. A failure to identify or finance future
transactions may impair our growth. In addition, to finance these transactions,
it may be necessary for us to raise additional funds through public or private
financings. Any equity or debt financings, if available at all, may impact our
operations and, in the case of equity financings, may result in substantial
dilution to existing stockholders.

In the future we will depend on the developing market of the Internet.

         Our ability to derive revenues by providing online commerce and
Internet services will depend, in part, upon a developed and robust industry and
the infrastructure for providing Internet access and carrying Internet traffic.
We cannot assure you that the necessary infrastructure, such as a reliable
network backbone, or complementary products, such as lower cost high speed


                                      -13-
<PAGE>

cable modems, will be developed or that the Internet will become a viable
commercial marketplace in those segments we target. Critical issues concerning
the commercial use of the Internet, including:

         o  security

         o  ease of use and access

         o  reliability

         o  quality of service

         o  cost

remain unresolved and may impact the growth of Internet use. In the event that
the necessary infrastructure or complementary products are not developed or the
Internet does not become a viable commercial marketplace, our future business,
operating results and financial condition could be negatively affected if we
were to expend significant proceeds for the development of Internet services.

         The Internet radio and television market is new and rapidly evolving,
particularly in Latin America. As a result, we cannot measure its effectiveness
or long term market acceptance as compared with traditional media.

         Radio and television stations must direct a portion of their budgets to
the Internet and, specifically, to our network. Many of our current or potential
customers have limited experience using the Internet.


No standards exist for the acceptance of the Internet as a medium for
broadcasting radio and television


         No standards have been widely accepted for the measurement of the
effectiveness of radio and television broadcasting over the Internet. Standards
may not develop sufficiently to support the Internet as an effective broadcast
medium. If these standards do not develop, broadcast stations may choose not to
use our network. This would have a material adverse effect on our business,
financial condition and results of operations.

Latin American Risks

Our operating results may also fluctuate due to seasonal factors

         If we are successful in initially marketing our services in Latin
America, the level of use on our network may be seasonal. This may cause
fluctuations in our revenues and operating results. Visitor traffic on our
network may be significantly lower during the first calendar quarter of the year
because:

         o  it is the summer months in much of Latin America;

         o  our target audience tends to take extended vacations during these
            months; and

         o  schools and universities are generally closed.

         As a result, advertisers have historically spent less in the first and
second calendar quarters. We believe that these seasonal trends will affect our
results of operations.


                                      -14-
<PAGE>

Social and political conditions in Latin America may cause volatility in our
operations and adversely affect our business

         We hope to derive a substantial portion of our initial revenues from
the Latin American markets. Social and political conditions in Latin America are
volatile and may cause our operations to fluctuate. This volatility could make
it difficult for us to effect our business plan, which could have an adverse
effect on our business. Historically, volatility has been caused by:

         o  significant governmental influence over many aspects of local
            economies;

         o  political instability; unexpected changes in regulatory
            requirements;

         o  social unrest;

         o  slow or negative growth;

         o  imposition of trade barriers; and

         o  wage and price controls.

         We have no control over these matters. Volatility resulting from these
matters may decrease Internet availability, create uncertainty regarding our
operating climate and adversely affect our customers' budgets, all of which may
adversely impact our business.

Currency fluctuations and general economic conditions in Latin America may
adversely affect our business

         The currencies of many countries in Latin America, including Brazil and
Argentina, have experienced substantial depreciation and volatility. The
currency fluctuations, as well as high interest rates, inflation and high
unemployment, have materially and adversely affected the economies of these
countries. Poor general economic conditions in Latin American countries may
cause our customers to reduce their spending on Internet services , which could
adversely impact our business.

We may suffer currency exchange losses if local Latin American currencies
depreciate relative to the U.S. dollar

         Our reporting currency is the U.S. dollar. In a number of cases,
however, customers in Latin America may be billed in local currencies. Our
accounts receivable from these customers will decline in value if the local
currencies depreciate relative to the U.S. dollar. Although we may enter into
hedging transactions in the future, we may not be able to do so successfully. In
addition, our currency exchange losses may be magnified if we become subject to
exchange control regulations restricting our ability to convert local currencies
into U.S. dollars.

If Internet use in Latin America does not grow, our business will suffer

         The Latin American Internet market is in an early stage of development.
Our near term prospects depends on the continued growth of the Internet in Latin
America. Our business, financial condition and results of operations will be
materially and adversely affected if Internet usage in Latin America



                                      -15-
<PAGE>
does not continue to grow or grows more slowly than we anticipate. Internet
usage in Latin America may be inhibited for a number of reasons, including:

         o  the cost of Internet access;

         o  concerns about security, reliability, and privacy;

         o  limited amount of content in Spanish or Portugese;

         o  ease of use; and

         o  quality of service.

Underdeveloped telecommunications infrastructure may limit the growth of the
Internet in Latin America and adversely affect our business

         Access to the Internet requires a relatively advanced
telecommunications infrastructure for which we will be relying on a satellite
communications network. The telecommunications infrastructure in many parts of
Latin America is not as well-developed as in the United States. The quality and
continued development of the telecommunications infrastructure in Latin America
may have a substantial impact on our ability to deliver our services and on the
market acceptance of the Internet in Latin America in general. If further
improvements to the Latin American telecommunications infrastructure are not
made, the Internet will not gain broad market acceptance in Latin America. If
access to the Internet in Latin America does not continue to grow or grows more
slowly than we anticipate, our business, financial condition and results of
operations will be materially and adversely affected.

High cost of Internet access may limit the growth of the Internet in Latin
America and impede our growth

         Each country in Latin America has its own telephone rate structure
which, if too expensive, may cause consumers to be less likely to access and
transact business over the Internet. Although rates charged by ISPs and local
telephone companies have been reduced recently in some countries, we do not know
whether this trend will continue. Unfavorable rate developments could decrease
our visitor traffic and our ability to derive revenues from transactions over
the Internet. This could have a material adverse effect on our business,
financial condition and results of operations.

Other Business Risks

         We may not be able to develop the PICK Sat and PICK Online.Com names
and attract users to our network

         Maintaining the PICK Sat and PICK Online.Com names is critical to our
ability to expand our user base and our revenues. We believe that the importance
of brand recognition will increase as the number of Internet sites in Latin
America grows. In order to attract and retain Internet users, advertisers and
electronic commerce partners, we intend to increase substantially our
expenditures for creating and maintaining brand loyalty.

         Our success in promoting and enhancing the PICK Sat and PICK Online.Com
names will also depend on our success in providing high quality content,
features and functionality. If we fail to promote our name successfully or if
visitors to our network or advertisers do not perceive our services to be of


                                      -16-
<PAGE>

high quality, the value of the names could be diminished. This could have a
material and adverse effect on the business, financial condition and results of
operations.

We will not be able to attract broadcasters if we do not continually enhance and
develop the content and features of our network

         To remain competitive, we must continue to enhance and improve our
content. In addition, we must:

         o  continually improve the responsiveness, functionality and features
            of our network; and

         o  develop other products and services that are attractive to users and
            advertisers.

         We may not succeed in developing or introducing features, functions,
products and services that users and advertisers find attractive in a timely
manner. This would likely reduce our visitor traffic and materially and
adversely affect our business, financial condition and results of operations.


If we fail to establish and maintain strategic relationships with content
providers, electronic commerce merchants and technology providers, we may not be
able to attract and retain users


         Our business depends on establishing relationships with leading content
providers, electronic commerce merchants, and technology and infrastructure
providers. Because most of our agreements with these third parties including,
Microsoft and Philips, are not exclusive, our competitors may seek to use the
same partners as we do and attempt to adversely impact our relationships with
our partners. We might not be able to maintain these relationships or replace
them on financially attractive terms. If the parties with which we have these
relationships do not adequately perform their obligations, reduce their
activities with us, choose to compete with us or provide their services to a
competitor, we may have more difficulty attracting and maintaining visitors to
our network and our business, financial condition and results of operations
could be materially and adversely affected. Also, we intend to actively seek
additional relationships in the future. Our efforts in this regard may not be
successful.


Unexpected network interruptions caused by system failures may result in reduced
visitor traffic, reduced revenue and harm to our reputation


         The Internet has been subject to:

         o  system disruptions;

         o  inaccessibility of networks;

         o  long response times;

         o  impaired quality; and

         o  loss of important reporting data.

         Although we will continue to improve our network, we may not be
successful in avoiding the above disruptions. If we experience delays and


                                      -17-
<PAGE>

interruptions, visitor traffic may decrease and our name could be adversely
affected.

         While we have designed our new network operating center in Miami,
Florida, which is still under construction, to safeguard our systems against
damage from fire, hurricanes (which are common where we are based), power loss,
telecommunications failure, break-ins or other events, such events could have a
material adverse effect on our business, financial condition and results of
operations.


Concerns about security of electronic commerce transactions and confidentiality
of information on the Internet may reduce the use of our network and impede our
growth


         A significant barrier to electronic commerce and confidential
communications over the Internet has been the need for security. Internet usage
could decline if any well-publicized compromise of security occurred. We may
incur significant costs to protect against the threat of security breaches or to
alleviate problems caused by these breaches. Unauthorized persons could attempt
to penetrate our network security. If successful, they could misappropriate
proprietary information or cause interruptions in our services. As a result, we
may be required to expend capital and resources to protect against or to
alleviate these problems. Security breaches could have a material adverse effect
on our business, financial condition and results of operations.

Computer viruses may cause our systems to incur delays or interruptions and may
adversely affect our business

         Computer viruses may cause our systems to incur delays or other service
interruptions. In addition, the inadvertent transmission of computer viruses
could expose us to a material risk of loss or litigation and possible liability.
Moreover, if a computer virus affecting our system is highly publicized, our
reputation could be materially damaged and our visitor traffic may decrease.

Year 2000 problems may disrupt our internal operations

         Many currently installed computer systems and software products only
accept two digits to identify the year in any date. Therefore, the year 2000
will appear as "00", which the system might consider to be the year 1900 rather
than the year 2000. This could result in system failures, delays or
miscalculations causing disruptions to our operations. Our failure to correct a
material Year 2000 problem could have a material adverse effect on our business,
financial condition and results of operations.

         We have reviewed our software and current operating systems and believe
that they are Year 2000 compliant. We are currently conducting an inventory, and
developing testing procedures, for all software and other systems that we
believe might be affected by Year 2000 issues. Since third parties developed and
currently support many of the systems that we use, a significant part of this
effort will be to ensure that these third-party systems are Year 2000 compliant.
We plan to confirm this compliance through a combination of the representation
by these third parties of their products' Year 2000 compliance, as well as
specific testing of these systems.


                                      -18-
<PAGE>

We may become subject to burdensome government regulations and legal
uncertainties affecting the Internet which could adversely affect our business

         To date, governmental regulations have not materially restricted use of
the Internet in our markets. However, the legal and regulatory environment that
pertains to the Internet is uncertain and may change. Uncertainty and new
regulations could increase our costs of doing business and prevent us from
delivering our products and services over the Internet. The growth of the
Internet may also be significantly slowed. This could delay growth in demand for
our network and limit the growth of our revenues.

         In addition to new laws and regulations being adopted, existing laws
may be applied to the Internet. New and existing laws may cover issues which
include:

         o  sales and other taxes;

         o  user privacy;

         o  pricing controls;

         o  characteristics and quality of products and services;

         o  consumer protection;

         o  cross-border commerce;

         o  libel and defamation;

         o  copyright, trademark and patent infringement;

         o  pornography; and

         o  other claims based on the nature and content of Internet materials.

We may become subject to claims regarding foreign laws and regulations which may
be expensive, time consuming and distracting

         Because we have employees, property and business operations in the
United States and eventually throughout Latin America, we are subject to the
laws and the court systems of many jurisdictions. We may become subject to
claims based on foreign jurisdictions for violations of their laws. In addition,
these laws may be changed or new laws may be enacted in the future.
International litigation is often expensive, time consuming and distracting.
Accordingly, any of the foregoing could have a material adverse effect on our
business, financial condition and results of operations.

Unauthorized use of our intellectual property by third parties may adversely
affect our business

         We regard our copyrights, service marks, trademarks, trade secrets and
other intellectual property as critical to our success. Unauthorized use of our
intellectual property by third parties may adversely affect our business and our
reputation. We rely on trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with our employees, customers,
partners and others to protect our intellectual property rights.



                                      -19-
<PAGE>

Despite our precautions, it may be possible for third parties to obtain and use
our intellectual property without authorization. Furthermore, the validity,
enforceability and scope of protection of intellectual property in
Internet-related industries is uncertain and still evolving. The laws of some
foreign countries are uncertain or do not protect intellectual property rights
to the same extent as do the laws of the United States.

We may be subject to claims based on the content we provide over our network

         The laws in the United States and in Latin American countries relating
to the liability of companies which provide online services, like ours, for
activities of their visitors are currently unsettled. Claims have been made
against online service providers and networks in the past for defamation,
negligence, copyright or trademark infringement, obscenity, personal injury or
other theories based on the nature and content of information that was posted
online by their visitors. We could be subject to similar claims and incur
significant costs in their defense.

We may be subject to claims based on products sold on our network

         We expect to enter into arrangements to offer third-party products and
services on our network under which we may be entitled to receive a share of
revenues generated from these transactions. These arrangements may subject us to
additional claims including product liability or personal injury from the
products and services, even if we do not ourselves provide the products or
services. These claims may require us to incur significant expenses in their
defense or satisfaction. While our agreements with these parties often provide
that we will be indemnified against such liabilities, such indemnification may
not be adequate.

         Although we carry general liability insurance, our insurance may not
cover all potential claims to which we are exposed or may not be adequate to
indemnify us for all liability that may be imposed. Any imposition of liability
that is not covered by insurance or is in excess of insurance coverage could
have a material adverse effect on our business, financial condition and results
of operations or could result in the imposition of criminal penalties. In
addition, the increased attention focused on liability issues as a result of
these lawsuits and legislative proposals could impact the overall growth of
Internet use.


Our success depends on key personnel and we may not be able to replace key
personnel who leave


         The development of new Internet products and services or improvements
of our existing products depends on the efforts of our Chairman, Diego Leiva, as
well as certain other officers. If we lose any of these person's services for
any reason we expect it would have a material adverse effect on us. We have
obtained a $1 million key-man life insurance policy on Mr. Leiva's life. Our
future success is dependent on, among other factors, the successful recruitment
and retention of key personnel for sales, marketing, finance and operations.
Competition for skilled and technical talent is intense. We cannot assure you
that we will be successful in attracting and retaining such personnel. If we
fail to retain existing key employees or hire new employees when necessary we
could potentially be adversely effected.


                                      -20-
<PAGE>


Our need to comply with government regulations can increase our costs and slow
our growth


         Long distance telecommunication services are subject to regulation by
the Federal Communications Commission (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
telecommunication services. The federal law governing regulation of interstate
telecommunications are the Communications Acts of 1934 and 1996 (the
"Communications Acts"), which applies to all "common carriers," including AT&T,
Worldcom/MCI and Sprint, as well as ourselves, 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. We believe we have filed
all required tariffs with the FCC.

         In addition to federal regulation, resellers of long distance services
may be 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.

         We believe that we are in substantial compliance with all material
laws, rules and regulations governing our operations and have obtained or are in
the process of obtaining all licenses, tariffs and approvals necessary for the
conduct of our 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 we operate could have a negative impact
on our business. Changes in existing laws and regulations, particularly
relaxation of existing regulations resulting in significantly increased price
competition, may have a significant impact on our activities and on our
operating results. Adoption of new statutes and regulations and our expansion
into new geographic markets could require us to alter our methods of operations,
at costs which could be substantial, or otherwise limit the types of services we
offer. We cannot assure you that we will be able to comply with additional
applicable laws, regulations and licensing requirements.

Risks Involving Our Stock


Investors will not be able to exert control over us


         We currently have approximately 5.3 million shares of Common Stock
outstanding. The holders of our Series B and Series D Convertible Stock, which
includes directors and affiliates of the Company, are entitled to vote
approximately 3 million shares on an as converted basis, and there are
approximately 7-8 million additional shares issuable on a fully diluted basis.


                                      -21-
<PAGE>

We are attempting to raise additional funds at prices significantly lower than
our current fair market value. Therefore, our preferred stockholders are
expected to have the ability to elect all of our directors and to control the
outcome of all other issues submitted to our stockholders.

You may have difficulty trading and obtaining quotations for our common stock.

         Our common stock is currently traded 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 under the symbol "PICK." As
a result of trading in this over-the-counter market, you will likely find it
more difficult to dispose of, or to obtain quotations as to the price of our
common stock.


Our quarterly operating results are not an indication of our future results
because they are subject to significant fluctuations


         Our future revenues and results of operations may vary significantly
due to a combination of factors, any of which are outside of our control.
Accordingly, you should not rely on quarter-to-quarter comparisons of our
results of operations as an indication of our future performance. It is possible
that in future periods our results of operations may be below the expectations
of public market analysts, if any, and investors. This could cause the trading
price of our common stock to decline.


Our stock price is likely to be highly volatile and could drop unexpectedly


         Following this offering, the price at which our common stock will trade
is likely to be highly volatile and may fluctuate substantially.

         In addition, the stock market has from time to time experienced
significant price and volume fluctuations that have affected the market prices
for the securities of technology companies, particularly Internet companies. As
a result, investors in our common stock may experience a decrease in the value
of their common stock regardless of our operating performance or prospects.

If our stock price is volatile, we may become subject to securities litigation
which is expensive and could result in a diversion of resources

         In the past, following periods of volatility in the market price of a
particular company's securities, securities class action litigation has often
been brought against that company. Many companies in our industry have been
subject to this type of litigation in the past. We may also become involved in
this type of litigation. Litigation is often expensive and diverts management's
attention and resources, which could have a material adverse effect upon our
business, financial condition and results of operations.


Our common stock is subject to penny stock regulation


         The trading of our common stock is currently subject to SEC rules for
non-Nasdaq and non-exchange listed securities. Under such rules, brokers-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



                                      -22-
<PAGE>

to a transaction prior to sale. Securities are exempt from these rules if the
market price is at least $5.00 per share.

         The SEC 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 annual revenue
of at least $6,000,000 for the preceding three years, the latter of which tests
we meet. Unless an exception is available, the regulations require the delivery,
prior to any transaction involving a penny stock, of a risk disclosure schedule
explaining the penny stock market and the risks associated with the penny stock
market.


There are outstanding shares of our common stock eligible for future sale

         Of the approximately 5.5 million shares of our common stock outstanding
as of November 1, 1999, approximately 3.4 million are "restricted securities,"
as that term is defined in the Securities Act, and may be sold in compliance
with the provisions of Rule 144.

                           FORWARD-LOOKING STATEMENTS

         Many statements made in this prospectus under the captions "Prospectus
Summary", "Risk Factors", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" and elsewhere are
forward-looking statements that are not based on historical facts. Because these
forward-looking statements involve risks and uncertainties, there are important
factors that could cause actual results to differ materially from those
expressed or implied by these forward-looking statements, including those
discussed under "Risk Factors".

         This prospectus contains market data related to the Internet. This
market data includes projections that are based on a number of assumptions. The
assumptions include that:

         o  no catastrophic failure of the Internet will occur;

         o  the number of people online and the total number of hours spent
            online will increase significantly over the next five years;

         o  the demand for download speed of content will increase dramatically;
            and

         o  Internet security and privacy concerns will be adequately addressed.

         If any one or more of the foregoing assumptions turns out to be
incorrect, actual results may differ from the projections based on these
assumptions. The Internet-related markets may not grow over the next three to
four years at the rates projected by these market data, or at all. The failure
of these markets to grow at these projected rates may have a material adverse
effect on our business, results of operations and financial condition, and the
market price of our common stock.


                                      -23-
<PAGE>

         The forward-looking statements made in this prospectus relate only to
events as of the date on which the statements are made.

                                 USE OF PROCEEDS


      We will not receive any of the proceeds from the sale of the shares of
common stock by the selling stockholders. If all the warrants and options are
exercised (on a non-cashless exercise basis), we will receive gross cash
proceeds of $3,134,947 less offering expenses of approximately $200,000. No net
offering proceeds will be paid to NASD members, affiliates, associated persons
or related persons. The proceeds may be used to repay indebtedness and for
working capital purposes.


                                 DIVIDEND POLICY

          We have no present intention of paying any dividends on our common
stock. We expect that we will retain our earnings, if any, to finance
operations.

          The declaration and payment of future dividends to holders of our
common stock will be at the discretion of the Company's Board of Directors and
will depend upon many factors, including the Company's financial condition,
earnings, the capital requirements of its operating subsidiaries, legal
requirements and such other factors as the Board of Directors deems relevant.

                           PRICE RANGE OF COMMON STOCK

         The Company's common stock has been traded in the over-the-counter
market and reported on the OTC Bulletin Board under the symbol "PICK" since
September 1996. The following table sets forth the high and low bid prices of
the Company's common stock as reported on the over-the-counter market for the
last two completed fiscal years and the current fiscal year. These prices give
retroactive effect to a one-for-ten reverse split authorized by the Board of
Directors on July 6, 1999, to stockholders of record on July 23, 1999. The
prices represent inter-dealer quotations, without retail mark-up, mark down or
commission, and may not represent actual transactions.

                                                         Bid Prices
                                           -----------------------------------
         Period                              High                       Low
         ------                              ----                       ---
         Fiscal Year 1997
         ----------------
         First quarter                       $7.80                      $1.60
         Second quarter                       3.30                       1.20
         Third quarter                        2.70                       0.50
         Fourth quarter                       5.10                       1.50

         Period                               High                      Low
         ------                               ----                      ---
         Fiscal Year 1998
         ----------------
         First quarter                       $5.10                      $1.90
         Second quarter                      10.50                       4.10
         Third quarter                        8.80                       4.20
         Fourth quarter                       9.30                       3.90

         Fiscal Year 1999
         ----------------
         First quarter                      $15.20                      $3.60
         Second quarter                     $28.75                      $7.30
         Third quarter                       $8.20                     $1.625

         As of October 31, 1999 we had 5,250,000 shares of common stock issued
and outstanding and approximately 450 record holders of the common stock.


                                      -24-
<PAGE>

                                CAPITALIZATION

The following table sets forth the consolidated capitalization of the Company
and its Subsidiaries as of June 30, 1999 (unaudited), and as adjusted, giving
effect to the exercise of all warrants and options pursuant to which the common
stock offered hereby will be issued and the Company's receipt of net proceeds of
approximately $2,934,947.

<TABLE>
<CAPTION>
                                                                                              June 30, 1999
                                                                                                (unaudited)
                                                                                     ----------------------------------
                                                                                       Actual               As Adjusted(1)
                                                                                     ---------              -----------
<S>                                                                                     <C>                     <C>
Cash                                                                                 $ 465,915              $3,400,862
                                                                                     =========              ==========
Debt obligations:
   Long-term Liabilities from discontinued operations                                1,042,716               1,042,716

   18% Senior Secured Notes                                                          9,880,000                  52,990(2)

   10% Senior Secured Amended Notes
       with interest                                                                       -0-              10,439,022(2)
Stockholders' (deficit):

   Preferred Stock, par value $.001; authorized 10,000,000 shares:

       2,000,000 shares designated as Series B Convertible Preferred Stock,
       aggregate liquidation value $1,871,000, issued and outstanding 1,871,000
       shares, and 1,871,000 shares on a pro forma basis                             1,871,000               1,871,000


       500,000 shares designated as Series D Convertible Preferred Stock,
       aggregate liquidation value $5,000,000, issued and outstanding, 466,000,
       and 500,000 shares on a pro forma basis                                       4,660,000              4,660,000


   Common stock, par value $.01;
   40,000,000 shares authorized, actual and as adjusted,
   respectively; 4,402,698 shares issued and outstanding at June 30, 1999 and
   5,611,958 shares, as adjusted (2)                                                    44,062                  56,119
   Additional paid-in capital                                                       75,367,972              78,220,879
   Options and Warrants                                                              2,720,071               2,720,071
   Treasury stock, at cost, 3,550 shares                                               (11,978)                (11,978)
   Accumulated deficit                                                            (105,835,024)            (105,835,024)
                                                                                  ------------             -----------
Stockholders' deficiency                                                           (21,183,897)            (18,248,950)
                                                                                  ------------             -----------
Total capitalization                                                             $(10,261,181)            $(6,714,222)
                                                                                  ============             ===========

</TABLE>
- -------------

(1) As adjusted gives effect to the exchange of $9,830,000 of l8% Senior Secured
    Notes for 10% Senior Secured Amended Notes and the 200,000 shares of common
    stock issued as placement cost for that transaction.

(2) Includes accrued interest of $612,012 reclassified as non-current for the
    "as adjusted" amount. Includes an aggregate of 709,260 shares of common
    stock upon exercise of all warrants and 500,000 shares of common stock upon
    exercise of all options offered hereby. Does not include any shares issuable
    upon exercise of warrants or stock options outstanding as of the date of
    this prospectus.




                                      -25-
<PAGE>

                 SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

          The following table sets forth the selected historical financial data
of the Company for each of the preceding five years ended December 31, 1998 and
for the six-month periods ended June 30, 1999 and 1998. The selected financial
information for and as of the years ended December 31, 1997, 1996, 1995 and 1994
are derived from the consolidated financial statements of the Company, which
financial statements have been audited by Durland & Company, CPAs, P.A.,
independent certified public accountants. The selected financial information for
and as of the year ended December 31, 1998 have been audited by Goldstein Golub
Kessler LLP. The Consolidated Balance Sheets as of December 31, 1998 and 1997
and the Consolidated Statements of Operations for the years ended December 31,
1998, 1997 and 1996 and the accountants' reports thereon are included elsewhere
in this Report. The selected historical data for each of the six-month periods
ended June 30, 1999 and 1998 are derived from the unaudited interim consolidated
financial statements of the Company. In the opinion of management, the interim
consolidated financial statements reflect all adjustments (consisting only of
normal and recurring adjustments necessary to fairly present the information
presented for such periods). The interim consolidated financial statements are
not necessarily indicative of the results to be expected for the full year. The
selected historical financial data presented herein are qualified in their
entirety by, and should be read in conjunction with, the Company's Consolidated
Financial Statements and Notes thereto included herein.

                                                     Six Months Ended June 30,
                                                             (unaudited)
                                                    ----------------------------
                                                        1999            1998
                                                        ----            ----


Cost and expenses                                  $  2,118,013    $    468,410
                                                   ------------    -------------


Loss before minority
  interest in subsidiary loss,
   income taxes and discontinued
   operations                                        (2,118,013)       (468,410
                                                    ------------    ------------

Minority interest in
   subsidiary loss                                           --             914

Provision for
   income taxes                                              --            (880)


Loss from discontinued
  operations                                         (4,364,730)     (2,308,451)

Loss on disposal                                    (47,108,711)             --
                                                   ------------    ------------
Net loss                                           $(53,591,454)   $ (2,776,827)
                                                   ============    ============
Beneficial conversion
   feature of preferred stock                       (25,170,000)             --
                                                   ------------    ------------
Net loss applicable to
   common stock                                    $(78,761,454)   $ (2,226,827)
                                                   ============    ============
Net loss per common share - basic                  $     (18.39)   $       (.76)
                                                   ============    ============
Weighted-average shares
   outstanding-basic                                  4,281,860       3,633,975
                                                   ============    ============


                                      -26-
<PAGE>

Balance Sheet Data:

                                            At June 30,
                                           ------------
                                           (unaudited)
                                        1999            1998
                                    ------------    ------------
Working capital
(deficiency)                        $(16,715,093)   $ (9,895,211)
                                    ============    ============

    Total Assets                    $  7,685,842    $  2,522,592
                                    ============    ============

Current Liabilities                 $ 17,801,005    $ 10,805,819
                                    ============    ============

Long-term liabilities               $ 10,922,716    $  1,182,609
                                    ============    ============

Stockholders' deficiency            $(21,183,897)   $ (9,553,002)
                                    ============    ============


                                      -27-
<PAGE>

<TABLE>
<CAPTION>
                                                             Years Ended December 31,
                                   -----------------------------------------------------------------------------
                                        1998            1997            1996            1995            1994
                                        ----            ----            ----            ----            ----
<S>                                      <C>              <C>            <C>             <C>             <C>
Cost and expenses                   $  2,139,830    $    399,448     $   607,890     $        --     $        --

Other income (expense)                  (133,000)     (9,890,284)      8,436,809              --              --
                                    ------------    ------------     -----------     -----------     -----------


Income (loss) before minority
  interest in subsidiary loss,
  income taxes and discontinued
  operations                          (2,272,830)    (10,289,732)      7,828,919


Minority interest in
  subsidiary loss                          2,062         434,064         260,541              37              --

Benefit (provision) for
  deferred income taxes                       --       1,808,000      (1,808,000)             --              --


Loss from discontinued operations    (14,792,541)     (1,452,134)     (4,645,670)     (1,071,078)     (1,250,580)
                                     ------------   ------------     -----------     -----------     -----------
Net loss                            $(17,063,309)   $ (9,499,802)    $ 1,635,790    $ (1,071,041)    $(1,250,580)
                                     ===========    ============     ===========    ============     ===========


Net income (loss) per
  common share - basic              $      (4.62)       $  (2.57)    $      0.39    $      (0.26)             --
                                    ============    ============     ===========    ============     ===========

Weighted-average shares
  outstanding-basic                    3,692,356       3,695,853       4,199,150       4,044,252              --
                                    ============    ============     ===========    ============     ===========


Balance Sheet Data:

                                                                    At December 31,
                                   -----------------------------------------------------------------------------
                                       1998             1997             1996            1995            1994
                                   ------------     ------------     -----------     -----------     -----------
Working capital
(deficiency)                       $(14,677,342)    $ (7,405,608)    $(3,152,216)    $(1,074,159)    $(1,127,590)
                                   ============     ============     ===========     ===========     ===========


    Total Assets                   $  6,791,156     $  1,817,513     $ 8,917,149     $ 2,449,024     $   319,835
                                   ============     ============     ===========     ===========     ===========


Current Liabilities                $ 16,241,801     $  8,027,642     $ 6,582,429       2,679,923     $ 1,341,521
                                   ============     ============     ===========     ===========     ===========


Long-term liabilities              $ 10,815,216     $    794,905     $        --     $   400,000     $        --
                                   ============     ============     ===========     ===========     ===========


Stockholders' equity
(deficiency)                       $(20,351,879)    $ (7,093,114)    $   869,579     $  (846,407)    $(1,021,686)
                                   ============     ============     ===========     ===========     ===========
</TABLE>


                                      -28-
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

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

Material Changes in Results of Operations

         On June 23, 1999, the Company's Board of Directors voted to sell or
discontinue the long distance telephone service and prepaid calling card
business portions of its business in order to focus on the Internet services
portion of its business conducted through its PICKSat, Inc. ("PICK Sat") and
PICK Online.Com, Inc. ("PICK Online") subsidiaries. Accordingly, the financial
statements reflect the discontinuance of the Company's PICK US, Inc., PICK Net
Inc., and PICK Net UK PLC. subsidiaries.

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

         For PICK Sat business, the Company will charge its customers monthly
recurring fees based on type of usage and bandwidth contracted for and may
charge an additional amount per reception location. PICK Online expects to
charge a per subscriber or per site fee to its customers in order for them to
receive the broadband content.

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

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

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

Six Months Ended June 30, 1999 Compared with June 30, 1998

Revenues From Discontinued Operations:

         The Company's continuing operation's, PICK Sat and PICK Online have yet
to commence commercial operations and as such have not had any revenues.

Costs and Expenses:


         Selling, general and administrative expenses increased to $2,075,703
for the six months ended June 30, 1999 from $455,217 for the six months ended
June 30, 1998. PICKSat was in the organizational phase through the end of the
second quarter of 1998 and as such had nominal expenditures in the six months
ended June 30, 1998. Approximately $900,000 of the increase is
attributable to the newly formed subsidiaries, PICK Sat and PICK Online's
start-up and development expenses. The Company also had a significant increase
in salaries, outside consultants, accounting, legal, travel and public relations
expense. Contemporaneous with the Board's decision to sell or discontinue its
telecommunications operations, and layoff or fire the associated personnel, it
needed to retain outside professional services on an interim basis to handle the
functions previously performed by salaried employees. Preparation of public
filings and the negotiation of debt arrangements gave rise to the majority of
the increase in expenses.



                                      -29-
<PAGE>


         On September 17, 1999, the Company agreed to sell its PICK Net
operations to Lebow Investments Ltd., a recently formed corporation ("Lebow").
Lebow agreed to be financially responsible for the PICK Net operations which
have begun to receive funding to continue operations. The closing of this
transaction is scheduled to occur in November 1999 subject to obtaining
necessary approvals and consents, however, there can be no assurance this
transaction will be completed. See "Liquidity and Capital Reserves" below.


Discontinued Operations

         Total revenues amounted to approximately $5,380,000 for the six months
ended June 30, 1999, compared to approximately $2,277,000 for the six months
ended June 30, 1998, an increase of approximately $3,103,000 prior to the
discontinuance of operations. (See Note 9 of Notes to Consolidated Financial
Statements for operating results of the discontinued operations.) The Company
significantly curtailed its operations during the first half of 1998, while it
installed and tested two, leased Siemens Digital Central Office Switches. These
switches replaced switching services previously purchased from third party
vendors. Consequently, the Company decided to curtail its marketing efforts for
the sale of international long distance services until it completed this
installation and until it had the capability to deliver traffic through Gulfsat.
Therefore, for the six months ended June 30, 1999, the Company generated
international long distance revenue of $3,164,030, compared with $963,018 for
the six months ended June 30, 1998. Prepaid telephone calling card revenues were
$2,215,485 for the six months ended June 30, 1999, compared to $1,313,495 for
the six months ended June 30, 1998. This latter increase is attributable to
sales to Blackstone Calling Card, Inc. ("Blackstone") under the Company's
agreement with Blackstone, a major marketer and distributor of prepaid telephone
calling cards.

         In the discontinued operations, the cost of telephone time purchased
increased from $3,148,694 to $6,835,866. Due to Gulfsat's inability to provide
countries as originally anticipated, these costs increased by a greater amount
than the sales generated by the Company due primarily to the Company's inability
to obtain preferential rates from the common carriers. Additional increases
resulted primarily from the processing costs arising from the increased prepaid
telephone calling card activity sold through Blackstone and long-distance
services.

Loss from Operations:

         The Company's loss from continuing operations increased from $468,410
to $2,118,013 primarily due to the increases in aggregate salaries, selling,
general and administrative costs as PICK Sat and PICK Online continued the
development of their products and offerings and as PICK Sat began to move into
the commercial deployment phase and other expenses as discussed under "Costs and
Expenses" above.

         Loss from discontinued operations increased from $2,308,451 for the six
months ended June 30, 1998 to $4,364,730 for the six months ended June 30, 1999,
primarily due to the increase in costs discussed above. The Company also
recorded an additional loss on the disposal of the discontinued operations in
the amount of $47,108,711. Of this amount, $46,033,711 is attributable to the
writing off of the deferred interest and debt placement charges of the
restructured notes which amounts are related to the discontinued operations and
therefore will provide no future benefit. See Note 5 of Notes to Consolidated
Financial Statements.


Year Ended December 31, 1998 as Compared with Year Ended December 31, 1997

         Total revenues from discontinued operations amounted to $9,822,903 for
the twelve months ended December 31, 1998 ("1998") compared to $9,015,903 for
the twelve months ended December 31, 1997 ("1997"). The Company significantly
curtailed its operations during the first half of 1998, while it installed and
tested two leased Siemens Digital Central Office Switches. Consequently, the
Company decided to curtail its marketing efforts for the sale of international
long distance services until the switches were installed and enough countries
were hooked into the Gulfsat network to give the Company the capability to
deliver competitively priced traffic through Gulfsat. For 1998, the Company
generated international long distance revenue from discontinued operations of
$1,978,441, compared with $7,669,243 for 1997, a decrease of $5,690,802 or 74%.
Prepaid telephone calling card revenues from discontinued operations were
$7,844,462 for 1998, compared to $1,346,660


                                      -30-
<PAGE>

for 1997. This represents an increase of $6,497,802, or 483%. This increase
reflects beginning of the Blackstone Agreement, even at lower than anticipated
levels.

         The cost of telephone time purchased from discontinued operations
increased from $8,326,318 to $13,322,978, an increase of $4,996,660. These costs
increased by 60%, even though revenues declined by 74%, primarily due to the
costs of long distance arising from the usage of prepaid telephone calling cards
sold through Blackstone. Other cost of sales from discontinued operations
increased from $762,431 to $3,069,566 primarily due to the fixed costs
associated with the Company's newly developed network and processing costs
arising from the increased prepaid telephone calling card activity. In 1997, the
cost of sales from discontinued operations benefitted from the reversal of
$649,563, representing a portion of a previous provision for contingent costs.

         The Company's selling, general and administrative expenses from
continuing and discontinued operations were $3,880,100 for 1998, compared to
$1,836,829 for 1997, reflecting an increase of $2,043,271, or 111%. This
increase is primarily due to increases in staffing.

         The interest and debt placement expenses from discontinued operations
increased significantly from the prior year due to the substantial increase in
the amount of short-term debt placed in 1998.

Year Ended December 31, 1997 as Compared with Year Ended December 31, 1996

         Total revenues from discontinued operations amounted to $9,015,903 for
the twelve months ended December 31, 1997 ("1997") compared to $5,869,682 for
the twelve months ended December 31, 1996 ("1996"). This represents an increase
of $3,146,221, or 54%. For 1997, the Company generated international long
distance revenue from discontinued operations of $7,669,243 compared to
$4,444,342 for 1996; the international long distance business began in May of
1996. Prepaid telephone calling card revenues from discontinued operations were
$1,346,660 for 1997, compared to $1,425,340 for 1996. This represents a decrease
of $78,680, or 5.5%. This decrease reflects reductions in the Company's
advertising and market changes which have resulted in product returns and
reductions in repeat sales of calling cards.

         The direct costs from discontinued operations of international long
distance and calling card services amounted to $9,088,749 (which excludes a
$649,563 credit arising from reversal of a portion of the previously-provided
contingency reserve related to billing disputes with AT&T - see Note 13 of Notes
to the Consolidated Financial Statements) for 1997 compared to $6,401,231 (which
excludes a $1,749,563 provision for contingent costs provided related to billing
disputes with AT&T) for 1996. As a result, the gross margin was negative 0.8% of
revenues for 1997, compared to a negative gross margin of 9.1% in 1996.
Including the adjustments to the contingency reserve, gross margin would be 6.4%
for 1997 and negative 38.9% for 1996.

         The decrease in selling and marketing expenses were a direct result of
a reduction in product advertising, largely due to market changes. The general
and administrative costs increased primarily due to a need for increased outside
professional assistance. In addition, there was a modest increase in personnel
cost. Bad debt expense increased primarily because of the bankruptcy of one of
the Company's international long distance customers.

         The Company's loss from continuing operations and discontinued
operations improved from $5,233,758 for 1996 to $1,693,913 for 1997. The primary
reasons for this improvement are (i) improvement in gross margin (other than
changes to the contingency reserve) of approximately $460,000, (ii) changes in
amounts charged to the contingency reserve of approximately $2,400,000 and (iii)
reductions in advertising expenses of approximately $1,040,000, offset by
increases in general and administrative expenses (primarily rent, salaries and
professional fees) of approximately $350,000. Absent changes in charges to the
contingency reserve, the Company's operating loss would have improved by
approximately $1,140,000.

         The Company recognized approximately $9,900,000 in non-cash,
non-operating losses in 1997 from losses from disposition of marketable equity
securities and a write-off of


                                      -31-
<PAGE>

the Company's investment in prepaid cellular telephone technology. The Company
recognized approximately $8,400,000 in non-cash, non-operating income in 1996
from gains on disposition of marketable equity securities and a one-time license
fee related to the Company's prepaid cellular telephone technology.

         The Company initially did not report any gains or losses on the
disposition of the marketable equity securities referred to above, as the
Company believed that it was not appropriate to recognize losses on the
acquisition of its and its subsidiary's common stock or on exchange of one
investment in marketable equity securities for another. The Company subsequently
determined that it would have been preferable to record these transactions based
upon the fair value of the assets exchanged, resulting in the recognition of
approximately $9,500,000 in losses.

Liquidity and Capital Resources

Material Changes in Financial Condition from December 31, 1998 to June 30, 1999

         We are in need of immediate financing for working capital to finance
its PICK Sat and PICK Online subsidiaries. Neither unit have generated any
revenues to date.


         We entered into an option agreement with Atlantic Tele-Network, Inc.
(ATN) to sell them up to a majority of the common stock of PICK Sat, however,
they have advised us that they do not intend to exercise the option. PICK Sat
has obtained interim loans in the amount of approximately $500,000 from ATN for
the Company and its newly formed subsidiaries' operating expenses. The repayment
of this debt, as well as approximately $1,500,000 advanced to PICK Net for
operating expenses in connection with the sale of such business described below
has been guaranteed by PICK Sat. In the event that this transaction is not
completed and we are unable to repay the loans, with third party funding for
which we have no commitments, the assets of PICK Sat may be foreclosed upon.
Should we be unable to obtain interim financing in the near term we will be
forced to cutback or suspend operations and/or seek protection under the
bankruptcy 1aws. Although the Company is in discussions with several sources of
financing, there can be no assurance we will obtain such financing.

         Due to the losses discussed above, the Company's working capital
deficit increased from approximately $14,570,000 as of December 31, 1998, to
approximately $16,715,000 as of June 30, 1999, an increase of approximately
$2,145,000, and the stockholders' deficiency changed from approximately
$(20,352,000) at December 31, 1998 to approximately $(21,184,000) at June
30, 1999, an increase in negative net worth of approximately $832,000.


         Current assets decreased by approximately $419,000 primarily due to a
decrease in current assets from discontinued operations. Cash increased by
$448,863. This is the remaining cash from the proceeds of the Company's issuance
of Preferred Stock during the second quarter of 1999. Current liabilities
increased by approximately $1,727,000. This increase is largely due to net
increases in accounts payable and accrued expenses as a result of increased
business activity in the newly formed subsidiaries, funding of continued losses
and greater sales volume, and an increase in current liabilities from
discontinued operations offset, in part, by a decrease in deferred revenue for
pre-paid calling cards and a decrease in the current portion of long term debt
of $20,000.

         As of June 30, 1999, approximately $17,861,000 of the liabilities of
the Company mature or are subject to payment agreements calling for payment
before the end of 1999. Management is in the process of negotiating with the
largest trade creditors to restructure a substantial portion of this short-term
debt. The Company has reached certain agreements to make a down payment and
convert the balance of the Company's obligation into long-term indebtedness
and/or equity securities of the Company. See Notes 7, 9(a) and 10 of Notes to
Consolidated Financial Statements.

         We were able to obtain equity investments totaling $6,481,000 during
the six months ended June 30, 1999. Of the total investments, $1,050,000 was
recorded during the first quarter of 1999 and $5,431,000 was record in the
second quarter of 1999.


                                      -32-
<PAGE>

         Due to the restructuring of the $9,900,000 short term notes we recorded
an increase in additional paid in capital of $41,636,097. We also recorded a
beneficial dividend of $25,170,000 associated with the issuance of preferred
stock. Neither of these latter two charges used any cash of the Company.

         The Company is pursuing sources of capital in order to repay short-term
indebtedness and to commence operations of its new businesses. While the Company
believes it will be able to continue as a going concern, there can be no
assurance that the Company will be successful.


         The Company has elected to divest or terminate its long distance
telephone services subsidiaries. We have recorded a charge to retained earnings
of $47,108,711, as the loss on the discontinuance of the long distance telephone
services and prepaid calling card business. This charge did not affect cash.
The Company has entered into an agreement to divest itself of PICK Net, Inc. and
PICK Net UK, PLC, both of which provide international long distance services to
other carriers and resellers. The Company has terminated marketing and
distributing of prepaid telephone calling cards through PICK US Inc. It plans to
dissolve its PICK US, Inc. unit upon the termination of the liability due to the
outstanding prepaid calling cards. We have entered into a definitive agreement
to sell the stock of the two PICK Net subsidiaries for nominal value and have a
substantial portion of their liabilities assumed, but there can be no assurance
such sale will be concluded. As of November 1, 1999, an aggregate of
approximately $1,500,000 of indebtedness of PICK Net had been paid by a lender.
The Company will transfer operating personnel and its office to the buyer of the
PICK Net subsidiaries. Upon the completion of this sale the operations of the
Company will then be those of PICK Sat and PICK Online.


Material Changes in Cash Flows


         Cash increased during the six months ended June 30, 1999, by
approximately $449,000. This increase is attributable to use of cash in
operating activities and investing activities of approximately $4,719,000 and
$1,213,408, respectively, offset by cash provided by financing activities of
approximately $6,381,000 as described below.


Cash Flows from Operating Activities

         Operating activities used approximately $4,719,000 in cash for the six
months ended June 30, 1999, compared with cash provided of approximately
$386,000 for the six months ended June 30, 1998. For the six months ended June
30, 1999, the Company incurred a net loss of approximately $53,591,000, as
compared to approximately $2,777,000 for the six months ended June 30, 1998. The
net loss for the six months ended June 30, 1999 included a loss on disposal of
discontinued operations of approximately $47,109,000. This loss of disposal
included a non-cash debt restructuring charge of approximately $41,636,000 (See
Note 5 of Notes to Consolidated Financial Statements) that related to the
businesses being discontinued; the issuance of stock, options and warrants
issued for services in the amount of approximately $4,722,000; none of which
included a cash expense. The increased use of cash in operations also resulted
from the Company's increased sales from discontinued operations in the prepaid
calling card business under the Blackstone Agreement and sales from discontinued
operations of long distance services, which was partially offset by an increase
in accounts payable and accrued expenses.

Cash Flows from Investing Activities

         The Company's capital expenditures of approximately $1,213,000 for the
six months ended June 30, 1999 increased over the six months ended June 30, 1998
by $10,133. This increase is attributable primarily to the Company's continued
development of the satellite-based Internet access, interactive multimedia
structures for its PICK Sat and PICK Online subsidiaries.

Cash Flows from Financing Activities

         During the six months ended June 30, 1999, the Company had net cash
provided by financing of approximately $6,381,000, as compared to repayments of
approximately $345,000 for the six months ended June 30, 1998. The proceeds are
from the issuance of the Series


                                      -33-
<PAGE>

B and Series D preferred stock during the six months ended June 30, 1999
compared to the repayments of various debts to third parties and shareholders
for the six months ended June 30, 1998. The 1999 amounts were offset by loan
repayments and cost attributable to the issuance the preferred stock.

At December 31, 1998

         The Company's 1998 net loss of $17,063,309 generated negative cash
flow from operations of $5,073,495 for 1998, compared with negative cash flow
from operations of $419,672 and $1,218,381 for 1997 and 1996, respectively.

         Due to the losses discussed above, the Company's working capital
deficiency increased from $7,405,608 at December 31, 1997 to $14,677,342 at
December 31, 1998 (an increase in the working capital deficiency of $7,271,734.
The Company's net worth changed from a negative $7,093,114 at December 31, 1997
to a negative $20,351,879 at December 31, 1998 (an increase in negative net
worth of $13,258,765).

         Current assets increased by $942,425 from December 31, 1997 to 1998,
primarily due to increases in cash, accounts receivable, and prepaid expenses
and other current assets. Current liabilities increased by $8,214,159 largely
due to net increases in debt, accounts payable, deferred revenue and other
current liabilities.

         As of December 31, 1998, the Company had committed approximately
$690,000 to license computer software, payments for which will be due in 1999.

         The Company significantly increased its' capital spending in property
and equipment to $3,817,153 in 1998 from $6,510 in 1997. These expenditures were
to support the development of the Company's international long distance
telephone and high speed broadband Internet service businesses.

         Between July 29 and September 8, 1998, the Company sold an aggregate of
99 Units in a bridge loan (the "July Bridge Loan") for gross proceeds of
$9,900,000. A portion of the net proceeds of the July Bridge Loan was used to
repay a $1,000,000 unsecured bridge loan incurred in April 1998 and a $575,000
bank loan which bore interest at 8% above the bank's prime rate. Upon repayment
of the Bank Loan, the Bank released its security interest and a security
interest on the Company's assets was filed on behalf of the investors in the
July Bridge Loan. In November 1998, the interest rate of the July Bridge Loan
was increased retroactively to 18% and the maturity date of the promissory notes
evidencing the loan (the "Notes") was extended to April 27, 1999.

         All but $20,000 of the Noteholders consented to a restructuring (the
"Restructuring") to amend their Notes (the "Amended Note"), for which the
Company has agreed for a two-year period to allow each consenting Noteholder to
(a) exchange one-tenth of a share of common stock for each warrant issued in
connection with the original issuance of the Notes, and (b) either receive one
share of common stock for every ten dollars principal amount of Notes amended,
or alternatively elect to have the conversion price of the Amended Note reset to
$5.00 per share. Commonwealth, and/or its designees, as agent for the
Noteholders was paid 200,000 shares, plus warrants exercisable at $13.75 per
share to purchase 50,000 shares, and the exercise price of warrants previously
issued to Commonwealth was reduced from $5.00 to $1.00 per share.

         The maturity date of the Amended Notes is April 27, 2002. Each Amended
Note is convertible at any time at the option of the holder thereof into shares
of common stock at $10.00 per share, subject to adjustment under certain
circumstances at the first anniversary date of the Restructuring. In addition,
the Company shall have the option to extend the maturity date for one additional
year, in which event the Conversion Price shall be subject to adjustment.

         The Amended Notes shall be automatically converted into shares of
common stock in the event that the closing bid price for the common stock has
exceeded $15.00 per share for 20 consecutive trading days. Commonwealth shall be
entitled to designate one nominee to the Board and the Noteholders shall have
the right to nominate one person to a reconstructed Board consisting of a
majority of independent directors.


                                      -34-
<PAGE>

         During March 1999, the Company authorized the issuance of Series B and
Series D convertible preferred stock totaling 2,500,000 shares. The Series B
Convertible Preferred Stock has a liquidation preference of $1.00 per share and
is convertible into shares of common stock at the rate of $1.00 per share.
During March and April 1999, the Company sold $1,871,000 of Series B Convertible
Preferred Stock convertible into 1,871,000 shares of common stock. The Series D
Convertible Preferred Stock has a liquidation preference of $10.00 per share and
is convertible into shares of common stock at the rate of $4.20 per share.
Commencing in April 1999, the Company sold $5,000,000 of Series D Convertible
Preferred Stock convertible into 1,190,489 shares of common stock along with
warrants to purchase 70,000 shares of Common Stock. Both of these offerings have
been completed.

Year 2000 Compliance

         Many older computer software programs recognize only the last two
digits of the year and date (e.g.: "98 for "1998"). These programs were designed
and developed without considering the impact of the upcoming change in century.
If the software is not reprogrammed or replaced, many computer applications
could fail or create erroneous results by or at the Year 2000. The Year 2000
("Y2K") issue refers to possible events resulting directly or indirectly from
the inability of digital computer equipment or software to accurately and
without interruption handle dates both before and after January 1, 2000.

         The Company has reviewed its software and current operating systems and
believes that they are Y2K compliant. The Company primarily utilizes operating
systems obtained from Microsoft, which the Company believes, based on
information provided by Microsoft, are Y2K compliant. The Company believes that
none of its equipment is date sensitive or otherwise uses imbedded computer
chips. Accordingly, the Company does not believe that imbedded chip technology
will present any Y2K issues. The Company is, however, checking its equipment to
verify this as part of its overall Y2K program. The Company expects that the
costs of achieving internal Y2K compliance will not have a material adverse
impact on results of operations, liquidity or capital resources.

         The risk to the Company resulting from the failure of suppliers,
customers and other third parties to attain Y2K readiness is the same as other
companies in its industry or other business enterprises generally. The Company
has initiated a program of formally contacting its suppliers and customers to
identify any potential disruption due to Y2K. The Company expects to resolve any
significant Y2K issues before the occurrence of any business disruptions,
although the Company has limited or no control over the actions of its suppliers
and customers.

         The Company expects to identify and adequately prepare for all
significant internal Y2K issues that could adversely affect its business
operations. The Company does not expect the cost of resolving such issues will
have a material impact on its financial position, results of operations or
liquidity. The Company does not believe that it is possible, with complete
certainty, to identify all potential Y2K issues that may affect the Company, its
suppliers and its customers. While the Company believes that its overall efforts
are adequate to address the Y2K issues, there can by no guarantee that all
internal systems as well as those of third parties on which the Company relies,
will converted on a timely basis. These unknown or unresolved Y2K issues may
have a materially adverse affect on the Company's business, financial condition,
cash flows and operations.

                              CHANGE IN ACCOUNTANTS

         Effective September 17, 1998, Goldstein Golub Kessler LLP ("GGK") were
engaged as the Company's independent accountants for the 1998 fiscal year. The
change in the independent accountants has been approved by the Company's Board
of Directors. Upon the engagement of GGK, the Company dismissed Durland &
Company, CPAs, P.A. (the "Former Accountants"), its independent accountant for
the years ended December 31, 1996 and 1997. The Company had no disagreements
with its current and former accountants on accounting and financial disclosures.


                                      -35-
<PAGE>

                                    BUSINESS

         PICK Communications Corp. ("PICK" or the "Company") was incorporated in
April 1984 under the laws of the State of Utah as S.T.V., Inc. In February 1986,
the Company changed its name to Adolphus Companies, Inc. and to Prime
International Products Inc. ("Prime") in May 1988. Prime ceased operations in
late 1990. In July 1995, Prime changed its state of organization from Utah to
Nevada. On September l2, 1995, Prime executed a Stock Purchase Agreement to
exchange 16,500,000 shares of Prime's common stock for all of the common stock
and warrants of Public Info/Comm. Kiosk, Inc. ("Kiosk"), which made Kiosk a
subsidiary of Prime. Kiosk was incorporated under the laws of New Jersey in
August 1992. Prime changed its name to PICK Communications Corp. in December
1995. Unless otherwise indicated, all references to "the Company" or "PICK"
hereinafter include the business and operations of Kiosk prior to the September
12, 1995 transaction and the combined companies thereafter. The transaction was
a reverse acquisition accounted for as a re-organization of Kiosk. On July 6,
1999, the Board of Directors authorized a one-for-ten reverse split to holders
of record on July 23, 1999.

         The Company's subsidiary, PICK US Inc., has terminated the marketing
and distribution of prepaid telephone calling cards, its primary business. We
have entered into a definitive agreement to sell the stock of PICK Net Inc. and
PICK Net UK PLC, both of which provide international long distance services to
other carriers and resellers, for nominal value, thereby having up to
approximately $10 million of their liabilities assumed. As of October 31, 1999,
approximately $1,500,000 of indebtedness of PICK Sat had been paid by the buyer.
Although we expect to close this transaction in November 1999, there can be no
assurance we will be successful.

Satellite Delivered Internet Services

         PICK Sat has developed an Internet delivery platform that leverages the
inherent benefits of satellite transmission. The PICK Sat platform is an
open-platform capable of transmitting unicast and multicast Internet data.
Unicast data transmission is used to rapidly deploy broadband Internet services
at cost effective prices. Multicast Internet Protocol data is used for the
transmission of: streaming media including radio and video; music, software
downloads; and other asymmetric "streams" of data to multiple locations on the
Internet.

         PICK Sat's technologies, which were achieved in collaboration with
Microsoft, Phillips, Harmonic Data, and other partners, also allows for the
delivery of data via satellite directly to routers on the Internet, instead of
moving the data over terrestrial links that exist between these routers.

         PICK will market PICK Sat services initially in certain areas in the
United States and Latin America. The initial primary market penetration will be
to cable, both coaxial and wireless, and TV operators who wish to deploy
broadband Internet access to their customers as a value added product. Future
marketing efforts will target backbone Internet service to network Internet
Service Providers ("ISPs"), corporations, telephone companies and other users of
Internet services. The Company has targeted Latin America and certain exurban
areas of the United States because Internet connectivity can be delivered via
satellite at a lower cast than terrestrial Internet service. Further, there is
also a shortage of adequate backbone facilities in Latin America. This results
in slow speeds, poor transmission quality and high prices to end users. PICK
will collect per subscriber fees or fixed monthly site charges from cable
companies, ISPs and other network services companies who use PICK Sat for
Internet service.

         PICK Sat multicast services are well suited for distance learning
applications, intra-company video events and large file transfers for
enterprises with multiple sites or remote customers. These applications are
designed to leverage the inherent advantages that satellites bring to the
simultaneous transmission of a message or images to a geographically dispersed
audience. PICK Sat will charge one-time and recurring monthly charges to
commercial distance learning customers and file-transfer customers.

         The Company will be unable to complete its' Network Operating Center
("NOC") without additional funding. PICK Sat is operating out of temporary
facilities in Miami, Florida and will be headquartered in a 13,000 sq. ft.
facility in Miami, FL at Koger Park, where an advanced NOC is currently under
construction and is expected to be completed



                                      -36-
<PAGE>

during the fall of 1999. This facility will provide ample room for expansion and
anticipated customer transmission requirements. Additionally, a satellite
broadcast dish farm may be constructed next to the building.

         In September 1998, Mario J. Pino was appointed as President of this new
subsidiary. Mr. Pino was former General Manager of ZakSat General Trading
Company W.L.L., a corporation formed under the laws of Kuwait to deliver global
direct television, cable television and broadband interactive services, which
was a similar, but closed content provider and delivery system.

         The Company is negotiating for satellite transmission arrangements with
satellite operators including New Skies and the Sat Mex subsidiary of Loral and
others. There can be no assurance it will be successful in its efforts.

         PICK Sat presently offers customers three different types of service:
broadband Internet service, asymetric Internet backbone services, data delivery
services, and video broadcast services. Broadband Internet service allows cable
TV operators to deploy high speed Internet service to their customers on a cost
effective, turnkey, basis. Internet backbone services allow users requiring
commercial amounts of bandwidth who are located in geographic regions of high
Internet connectivity cost, a cost effective alternative for additional
bandwidth requirements. Data delivery services allow for the simultaneous
distribution of data, video, audio and multimedia files, to single users or
groups of users over a geographically dispersed area. Broadcast delivery
services allow for the delivery of real time audio and video feeds to single
users or groups of users also over a geographically dispersed area.

         The PICK Sat system provides real time multicast file delivery via
satellite and has accomplished its intended near term goal of true wide band
broadcast satellite distribution ability. As such, our first customer, Cadena
Latinoamericana de Television, Inc. ("CLT"), is an owner and distributor of
Spanish-language video programming. CLT will utilize a PICK Sat service to
transmit video content in Internet Protocol (IP) format to cable networks and
broadcast television stations in Latin America. CLT is currently using courier
services to send more than 20,000 Betacam cassettes a year to its affiliates.
CLT, using the PICK Sat service, will now transmit video files to affiliate
stations who will receive the files via satellite dish, store them on a server,
and decode them into Betacam format as needed for local playout. The agreement
provides for up-front fees with continuing revenues thereafter. The agreement is
for three years and if successfully completed would provide us with
approximately $2.1 million in revenues.

         In addition to the services previously described, PICK Sat has
identified business models which includes: institutional and corporate distance
learning; push technology hosting; newsgroup caching; web page caching; and
secured corporate data file distribution and replication. All of these products
can utilize the same operating platform, personal and technology as PICK Sat's
currently deployed products. Deployment of these products would be subject to
the refinement of the technology, the development of implementation procedures,
the establishment of product pricing and the raising of additional funds to
launch marketing efforts.

         Demand for multicast services that can be provided by the PICK Sat
platform continues to grow as margin conscious distributors and media content
companies search for cost effective solutions to deliver the bandwidth hungry
data. PICK Sat is well positioned to begin servicing content providers including
its sister company, PICK Online.Com.

         In June 1998, PICK Sat entered into agreements for hardware with
Philips and software with Microsoft for the above-described broadband
interactive service. Pursuant to the Company's strategic agreement with Philips,
the Company obtained the right to use the Philips Clevercast(TM) end-to-end data
broadcasting system and the Philips PC-DVB Digital Receiver Cards designed to be
installed into all modern multimedia PCs and to be integrated into PC software
via the Windows 95, 98 and NT features. This will allow PC desktop users to
receive satellite transmissions of digital data, television audio, high speed
Internet, E-commerce and other multimedia applications. Microsoft provided
software solutions to support PICK Sat's services. This is expected to be among
the first satellite interactive platforms that will use the complete range of
Microsoft's server software solutions. The Company's Commitment to Cooperate
with Microsoft provides for Microsoft


                                      -37-
<PAGE>

to license certain equipment and provide technical support, consulting services,
know-how and training to the Company for three years in exchange for a license
fee with an initial platform license fee and monthly fees based on usage.
Microsoft may terminate the commitment to cooperate if the Company does not have
a certain amount of subscribers after two years of commercial operation.

PICK Online.Com

         PICK Online.Com, a recently formed subsidiary, is an aggregator and
delivery provider of audio and video streaming content (broadcasts). Utilizing
the PICK Sat platform, PICK Online intends to deliver its content to the "Edge
of the Internet". PICK Sat will provide the satellite-based platform for PICK
Online.Com and will contract for, assemble and broadcast live streams of audio
and video from broadcast radio stations, broadcast TV stations and other
streaming content from anywhere in the world. PICK intends to concentrate
corporate resources first on PICK Sat when funds become available and then PICK
Online.Com. only if substantial additional funding is obtained.

         The Company's initial goal will be to offer radio and later TV
stations, the ability to reach an audience as IP Multicasting was intended to,
but in a more effective and economical way. Multicasting is a method of
disseminating an audio or video Internet media stream that is normally made
available from a source to a single end user and instead making it available to
an unlimited number of end users.

         Through the use of the PICK Sat platform, PICK Online.Com intends to
present a common sense solution to bringing audio and video streaming to ISPs
and broadband networks such as Cable Modem and Asynchronous Digital Service Line
(ADSL) service providers. Later goals are to further utilize the PICK Sat
platform to provide Internet access and other IP services direct to office and
to home.

         Microsoft has been a critical resource in the development of the PICK
Sat platform and PICK Online.Com. Contributions have included migration of
Microsoft Windows NT Server, Microsoft Commercial Internet Server (MCIS) and the
Windows Media Technology onto the PICK Sat platform.

         PICK Online.Com will have the ability to deliver IP data directly to
ISPs, LANs, Broadband networks and any other IP end user "node" at the Edge of
the Internet. PICK Online.Com will be the portal for end users to access
multicast radio and TV streaming content. The service will use Microsoft Media
Server to encode signals and multicast them efficiently to Internet Edge points.
End users will be able to listen to or watch a stream via their ISP or Broadband
provided through their Microsoft browser not knowing that the stream is
multicast and delivered via satellite.

         Terrestrial technology using increasing quantities of the Internet
backbone has been available for some time, but has only been implemented in a
relatively small number of locations. To work properly, terrestrial multicasting
requires Internet-wide implementation which is both costly and time consuming.
PICK Online.Com "leapfrogs" the Internet infrastructure and delivers streaming
content directly to the Edge of the Internet. This not only gets the streams
there with higher quality, but also without using any of the provider's
expensive and limited backbone bandwidth.

International Long Distance Services

         PICK Net Inc. and PICK Net UK PLC (collectively, "PICK Net") are two
separate subsidiaries both providing international long distance services to
other carriers and resellers. Each of these companies is a facilities based,
switched carrier, with wholesale digital licenses.

         The Company's subsidiary, PICK US Inc., has terminated the marketing
and distribution of prepaid telephone calling cards, its primary business. We
have entered into a definitive agreement to sell the stock of PICK Net Inc. and
PICK Net UK PLC, both of which provide international long distance services to
other carriers and resellers. for nominal value, thereby having up to
approximately $10 million of their liabilities assumed. Although we expect to
close this transaction in November 1999, there can be no assurance we will be
successful.


                                      -38-
<PAGE>

         To gain rapid market entry without investment in major capital
expenditures or a technical staff, PICK initially elected to contract for
services with an experienced switch service provider. In 1997 and 1998 PICK
leased and installed two Siemens Telecom Networks Digital Central Office
switches in Jersey City, New Jersey and Miami, Florida as international
gateways. PICK established a technical staff to bring this segment of its
business under direct Company control rather than relying on third party
providers.

         PICK Net has organized and developed dedicated networks combining
transatlantic fiber and internationally based transponder facilities with
digital satellite delivery into the Gulf, Central and East Asian and North and
Central African regions in association (see agreement below) with Gulfsat
Communications Company ("Gulfsat"), a Kuwait based satellite telecommunications
firm primarily engaged in providing VSAT (Very Small Aperture Terminal)
solutions world wide. Gulfsat teamed with PICK to transform itself from a closed
network corporate communications provider, to a satellite based, international
long distance voice, data, and multimedia services provider. PICK Net agreed
with Gulfsat, to deploy and implement switches internationally, and for PICK Net
to deploy switches in the United States.

         In late 1997, the Company entered into a reciprocal telecommunications
agreement (the "Gulfsat Contract") for international traffic termination in
Africa, the Middle East and Asia, via satellite, with Gulfsat, which agreement,
as amended in March 1998, terminates on February 28, 2003. Under the agreement,
the Company is entitled to terminate up to approximately 70 million minutes per
month in telecommunications services from the United States and Europe into the
above regions, at the most favorable price per minute rates charged by Gulfsat.
Management believed, based on its knowledge of the industry, that these rates
were lower than those currently available to its competitors. However, in the
second half of 1998, the Company became aware of newer, state-of-the-art
technology that would facilitate the transmission of not only voice traffic but
also data and Internet traffic. In order to capitalize on this technology and
maximize the benefit the Company could derive from the Gulfsat Contract, it
became necessary to defer installation. The Company first had to investigate the
companies offering the appropriate asynchronous transmission mode (ATM)
equipment and then, in concert with Gulfsat, select a strategic vendor in this
global effort. The Company and Gulfsat then had to purchase and install the
appropriate telephone switching and compression equipment for the Jersey City,
New Jersey, hub, the United Kingdom and the first of the several destination
countries. To begin installation, the Company required a portion of the proceeds
from the short-term debt financing obtained in the third quarter of 1998 to
purchase this equipment in late 1998. During 1998, the Company was only able to
terminate traffic into one country in the Middle East via Gulfsat and was unable
to satisfy the requirements of its existing customers. The Company believed it
had better long-term prospects in forming PICK Sat and PICK Online.Com and
decided to de-emphasize its PICK Net Services and seek a partner or terminate
those services.

         On July 20, 1998, the Company signed an agreement (the "Nortel
Agreement") with Northern Telecom Inc. ("Nortel") pursuant to which the Company
may purchase Nortel equipment. The equipment purchased from Nortel was expected
to significantly increase the capacity of the Company's network and enable the
Company to transition from a traditional, voice-only network to a network which
supports multimedia services and the Internet protocol. The Nortel Agreement
requires that Nortel and Gulfsat, as a network partner of Nortel, refer to the
Company purchasers of Nortel switches who intend to connect to the Gulfsat
system to connect through the Company's switch network. The Company required
additional financing to increase the Company's ability to capitalize on the
Gulfsat agreement and the Company believed there were better opportunities
available for the New Business.

         In September 1998, PICK Net UK PLC commenced operations in London to
work in tandem with PICK Net, Inc. to grow PICK's international network
infrastructure. PICK Net UK PLC has been granted an International Simple Voice
Reseller Standard License from the United Kingdom to operate as a reseller of
international telephone traffic. PICK Net UK PLC also provides uplink
capabilities to numerous satellites terminating in Africa, Asia, Europe and the
Middle East.

         In late 1996, the Company entered into a reciprocal telecommunications
agreement with IDT Corporation ("IDT"), one of the Company's customers/carriers.
Under the



                                      -39-
<PAGE>

agreement, IDT agreed to purchase certain telecommunication services from the
Company, and the Company agreed to purchase certain telecommunications services
from IDT for one year, renewable with the consent of both parties. In February
1998, the Company amended its agreement with IDT to provide IDT with a preferred
purchasing arrangement for 16 months from February 1998. In return, the Company
agreed to allow IDT to purchase telecommunications services to specified
countries (up to a maximum of 10 million minutes per month) at a preferred rate
per minute and additional capacity available at the same rate charged to the
Company's other customers. Pursuant to the amendment, IDT loaned the Company
$2,000,000 in working capital financing for one year, which matured on February
9, 1999.

         The Company and IDT have reached an agreement to execute a new
six-month note in the principal amount of $2,350,000. The Company has agreed to
issue to IDT 40,000 shares of PICK's common stock in exchange for IDT's warrants
to purchase 40,000 shares of PICK's common stock, which shall be canceled upon
such delivery, plus a restructuring fee of 50,000 shares of PICK common stock.
The Company also agreed to pay $250,000 upon the earlier to occur of 30 days
from the date of execution of the agreement or the completion of additional
financing for at least $5 million for PICK and shall make six monthly principal
payments of $25,000 each on the last business day of each month following the
issue date of this Note, beginning on December 31, 1999. In the event PICK
elects to exercise its option to extend the maturity date of the Note from six
months to three years, it shall deliver to IDT $375,000, payable in immediately
available funds or, at the option of PICK, 37,500 shares of PICK's Common Stock.
Thereafter, PICK agrees to pay IDT in addition to the initial six payments of
$25,000 each, $100,000 per month for 6 months, and six payments of $200,000 each
in months 13-18 and the final payment of principal and interest in the 19th
month. Interest is payable monthly at 9% per annum and the Note will be pre-paid
pro rata in the event the Company prepays any indebtedness over $2 million
including the July 1998 Bridge Notes, as amended. The Note will automatically
convert into common stock at $10.00 per share if the average price of the
Company's common stock exceeds $15.00 per share for at least 20 consecutive
days. All shares of common stock issued or issuable to IDT will be included in
this registration statement.

Prepaid Telephone Calling Cards

         PICK US Inc. is a pre-paid services company currently providing
domestic and international pre-paid calling card services through its dedicated
pre-paid network switching facility. The Company has suspended operations of
this subsidiary and intends to cease doing business in this sector exclusive of
its obligations to existing card holders. PICK provided a prepaid platform,
including a voice response unit, inbound 800 service, data base and customer
service, through a contract with a third-party provider (Innovative Telecom
Corp.) and supplies all domestic and international call termination through its
own switches.

         PICK entered the prepaid telephone calling card business in 1993
utilizing its own branded cards. In February 1998, the Company entered into an
agreement with Blackstone Calling Card, Inc. ("Blackstone"), a major marketer
and distributor of prepaid telephone calling cards (the "Blackstone Agreement")
expiring in April 2000. Under the terms of the Blackstone Agreement, as amended,
after a six month phase-in period ending October 27, 1998, Blackstone was to
purchase prepaid telephone calling cards with a minimum retail face value of
$5,000,000 per month from the Company, which was expected to result in net
revenues of approximately $3,000,000 per month to the Company. These calls
originate in the United States and are directed for termination primarily to
parts of Africa and Asia. The Company and Blackstone are negotiating a
termination agreement whereby the Company will continue to support cards
previously activated until their expiration dates, and payments between the
parties will be reconciled. In consideration of the early termination and mutual
releases the Company has agreed to grant Blackstone a one-year warrant to
purchase 30,000 shares at $7.50 per share.

Customers, Sales and Marketing

         The Company commenced marketing efforts in March 1999 concerning the
New Business. PICK Sat is marketing to companies that transmit large amounts of
data (including video) to multiple locations, including television broadcasters
and programmers, corporations and other institutions, and to ISPs and cable
television


                                      -40-
<PAGE>

companies with existing subscriber bases for the delivery of "customer specific
content" to such customer's end users. PICK Sat believes that this strategy will
enable it to market to a broader base of clients and gain subscribers without
the high costs of direct sales, while retaining its primary focus, service
delivery. As such, a necessary client base will include content providers whose
products can be bundled for distribution through PICK Sat's ISP and cable
television clients or directly to offices and homes. This approach enables PICK
Sat to negotiate with clients on a global basis. For example, European content
providers wishing to deliver content to South and Central America, can do so
through PICK Sat's contracts with South and Central American ISPs and cable
television companies. Both clients benefit since the content provider broadens
its base of distribution and the cable company enhances the quality and volume
of end user choices. In addition, PICK Sat will market to corporations looking
to broadcast presentations and training courses to their locations worldwide.

         PICK Online.Com intends to market its service first to radio stations
already hosted on the Internet. Full marketing activities will not commence,
however, until after PICK Sat has available sufficient funds for marketing and
sales. There will initially be no charge for them to participate. For ISPs, an
initial number of reception cards and dishes will be given away with no charge
for service until a predetermined number of radio stations becomes available.

         Media-rich banner advertising opportunities on the Internet will exist
for both PICK Online.Com and its affiliate broadcasters and IP service
providers. Banners for local ads will alternate with national ads at both the
PICK Online.Com home page, as well as www.pickradio.com radio station page.

         Banner space on the PICK Online.Com home page will be allocated for
local area ISP sales while radio station (destination) banners will be allocated
for radio station ad sales. Advertising space will be made available on
consignment with a share of the revenue going to PICK Online.Com The Company
will sell banner space on both pages and charge for creation and insertion of
banners.

         Once there is an established network of Internet Edge providers, PICK
Online.Com will be able to offer one-to-many closed circuit broadcasts of audio
and video for teleconferencing distant education, pay-per-view events or other
multicast applications.

         In addition to aggregating radio stations and later TV stations for
broadcasting through its Web site portal, PICK Online.Com seeks to partner with
other important content providers to have them see the benefit of making their
content available on PICK Online.Com Microsoft has recognized the potential of
PICK Online.Com as a link to its new Internet Explorer 5.0 browser. Microsoft
Windows Media Server and Player are integral parts of PICK Online.Com services.

         The Company did not perform any meaningful sales or marketing efforts
of its own during 1998, primarily because (a) Blackstone and others marketed the
Company's prepaid telephone calling card products, and (b) the Company has
commitments for most of its capacity for international long distance carrier
services and needs additional funding prior to being able to expand its customer
base. PICK's primary customers for its international long distance carrier
services are carriers and resellers such as ComTech International, IDT
Corporation, World Access Telecommunications Group, Inc. and Teleglobe USA Inc.
Carrier customers require little on-going maintenance, and the carrier segment
of the business shares certain costs with the prepaid telephone calling card
segment. In 1998, approximately 72% and 10% of the Company's revenues were from
two customers, Blackstone and IDT Corporation. In 1997, approximately 19% and
13% of the Company's revenues were derived from two customers, Trescom and DC
Communications Corp. and in 1996, 36% and 25% were from two customers.

Competition

         The Internet services business is highly competitive and there are few
significant barriers to entry. Currently, the Company competes with a number of
national and local ISPs. In addition, a number of multinational corporations,
including giant communications carriers such as AT&T, MCI/Worldcom, Sprint and
some of the regional Bell operating companies, are offering, or have announced
plans to offer, Internet access or


                                      -41-
<PAGE>

on-line services. The Company also faces significant competition from Internet
access consolidators and from on-line service firms such as America Online
(AOL), CompuServe, and Prodigy. The Company believes that new competitors which
may include computer software and services, telephone, media, publishing, cable
television and other companies, are likely to enter the on-line services market.

         In addition, the Company believes that the Internet service and on-line
service businesses will further consolidate in the future, which could result in
increased price and other competition in the industry and adversely impact the
Company. In the last year, a number of on-line services have lowered their
monthly service fees, which may cause the Company to lower its monthly fees in
order to compete.

         The Company believes that the primary competitive factors among
Internet access providers are price, customer support, technical expertise,
local presence in a market, ease of use, variety of value-added services and
reliability. The Company believes it will be able to compete favorably in these
areas. The Company's success in the high-speed Internet market will depend
heavily upon its ability to provide high quality Internet connectivity and
value-added Internet services targeted in select markets. Other factors that
will affect the Company's success in these markets include the Company's
continued ability to attract additional experienced marketing, sales and
management talent, and the expansion of support, training and field service
capabilities.

         PICK Online.Com expects to be able to market its services to radio and
TV stations who want to reach large Internet audiences and by IP service
providers who are experiencing backbone bandwidth limitation and are not able to
deliver good quality streaming due to increased usage by their subscribers to
streaming media services. PICK is not aware of any other company today that can
offer streaming services to any ISPs and, in turn, to end users in the same
manner as PICK Online.Com. The company that has been the most successful in
providing streaming services is Broadcast.com. This operator has well over 300
radio and TV streams available through its Web site and uses terrestrial IP
multicasting over the Internet. However, Broadcast.com multicasts to only a
limited number of member ISPs and through private land line connections. Part of
Broadcast.com's strength has been in using its private terrestrial
infrastructure to sell other specialized high margin services such as
teleconferencing, pay-per view and other types of Web events. Another strength
is its signing of hundreds of exclusive content agreements with broadcasters,
sports teams and a number of music and audio CDs.

         PICK Online.Com's major strength is its ability to send its multicast
signal to an unlimited number of ISPs almost immediately and at a low cost.
There are hundreds of radio and TV stations that are not on Broadcast.com or
even on the Internet at all. More streams to more Edge of the Internet sites and
the ability to roll out quickly are all factors in how the Company will compete
against Broadcast.com. As the Company gains content and as it expands it
presence at the Edge of the Internet, it is expected to become a more effective
competitor to Broadcast.com. Many of the Company's competitors possess financial
resources significantly greater than those of the Company and, accordingly,
could initiate and support prolonged price competition to gain market share. If
significant price competition were to develop, the Company might be forced to
lower its prices, possibly for a protracted period, which would have a material
adverse effect on its financial condition and results of operations and could
threaten its economic viability.

         The international long distance services business is highly competitive
and is characterized by rapidly changing per minute rates, particularly to key
international cities and countries. The Company has not been able to compete
with other carriers, providing high quality service at competitive prices.
PICK's competitors in the sale of international long distance services include
AT&T, MCI/Worldcom and Sprint, as well as British Telecom and other first tier
carriers in deregulated European countries. However, AT&T, MCI/Worldcom and
Sprint are regulated carriers. This means they were the originally deployed long
distance carriers permitted to terminate traffic where government controlled
Post Telephone and Telegraph (PTT's) administrations existed. As such their
rates were and still are significantly higher than those available to the new,
deregulated carriers.

Patents and Trademarks

         The Company has obtained or applied for trademark registrations for the
name PICK and of each of its subsidiaries and has obtained trademark

                                      -42-
<PAGE>

registrations for the names "Communicard by PICK(R)", "LOVE CALL(R)",
"COMMUNICASH(R)", and "las Americas(R)." The Company and a non-affiliate are
joint owners of a patent on the technology for a microprocessor-controlled
prepaid cellular telephone system, which has not been marketed by the Company.

Government Regulation

         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 telecommunication services. The federal
law 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/Worldcom 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 all required tariffs with the FCC.

         In addition to federal regulation, resellers of long distance services
may be 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 long distance
operations, it intends to obtain operating authority as may be required to
provide long distance service.

         The Company is also subject to regulations administered by the
Occupational Safety and Health Administration, various state agencies and county
and local authorities acting in cooperation with federal and state authorities.
The extensive regulatory framework imposes significant compliance burdens and
risks on the Company. Governmental authorities have the power to enforce
compliance with these regulations and to obtain injunctions or impose civil and
criminal fines in the case of violations.

Employees


         As of November 1, 1999, the Company had one full-time employee,
Diego Leiva, its Chairman of the Board. Its subsidiaries PICK Online and
PICK Sat employed 6 and 17 full-time employees, respectively and also employed
independent contractors for various purposes. The employees are not represented
by a labor union.


Properties

         The Company leases office space at Wayne Interchange Plaza II, 155
Route 46 West, Third Floor, Wayne, New Jersey 07470, under a lease that expires
on September 30, 2001, with a monthly rental of $8,000. In addition, the Company
leases space where its digital central office telephone switching equipment is
located in Jersey City, New Jersey (which expires September 1, 2000) and Miami,
Florida (which expires July 1, 2000). On September 13, 1999, the Company
contracted to sell its PICK Net subsidiaries and assign all of the above leases
to the purchaser.

         PICK Sat has signed a lease for its new facilities at 5255 N.W. 87th
Avenue, Miami, FL 33178. The lease as amended, is for approximately 13,280
square feet and expires on February 28, 2004. The rent is as follows: $6,441 per
month from November 1, 1998 to November 30, 1998; $12,883 per month from
December 1, 1998 to December 31, 1999; $16,600 per month from January 1, 2000 to
February 28, 2000; $17,098 per month from March 1, 2000 to February 28, 2001;
$17,611 from March 1, 2001 to February 28, 2002; $18,139 per month


                                      -43-
<PAGE>

from March 1, 2002 to February 28, 2003; $18,683 per month from March 1, 2003 to
February 28, 2004.

Legal Proceedings


         Other than the following lawsuits, the Company is not a party to any
material legal proceedings. In February 1997, the Company commenced a mediation
action against AT&T seeking $10 million in damages for breach of contract and
fraudulent inducement and malicious conduct under a carrier agreement (the
"Carrier Agreement") entered into in February 1996. The Company contracted with
AT&T under the Carrier Agreement for inbound 800 service and outbound domestic
and international long distance service. The Company claims that AT&T reneged on
certain commitments to provide the Company with lower international rates than
the Company was invoiced by AT&T. AT&T has claimed that the Company owes it in
excess of $1,000,000. In 1996, the Company provided for a non-cash reserve of
$1,750,000, which was reduced to $1,100,000 in the third quarter of 1997 and is
a part of the Company's working capital deficiency and is included in other
current liabilities in the Company's consolidated financial statements. After
two mediation sessions, AT&T indicated that it intended to withdraw from the
mediation. Accordingly, on November 5, 1997, the Company filed for arbitration
proceedings against AT&T and reduced its claim to $5 million. The trial began on
April 19, 1999 and ended on April 22, 1999. In October 1999, the arbitrator
found that AT&T was entitled to the gross claim of $1,776,000 minus credits
found in the Company's favor of $399,000 for a net amount of $1,376,447 plus 9%
interest per annum since January 31, 1997. A liability of $1,100,000 is included
in discontinued operations which the Company has contracted to sell. However,
the Company remains contingently liable for the judgment and is without the
funds to satisfy the judgment. Unless it is able to negotiate payment over an
extended period of time this amount could force the Company into curtailing its
operations or seeking protection under the bankruptcy laws.

         On or about March 15, 1999, Worldcom Network Services, Inc., d/b/a
Wiltel, commenced a lawsuit against the Company in the United States District
Court, Southern District of New York demanding a judgment in the amount of
$1,177,734 and interest at 18% per annum plus costs and expenses. The plaintiff
alleges that the Company failed to pay for telecommunications services provided.
The Company and Worldcom have executed a Settlement Agreement. Under the terms
of the Settlement Agreement, the Company agreed to pay Worldcom $1,256,622 (the
"Settlement") in exchange for a full and complete settlement of Worldcom's
lawsuit against the Company. The Company agreed to pay the Settlement with
interest at 16% per annum on or before January 16, 2000 and for Worldcom to
discontinue, without prejudice, the legal proceedings until such date, although
the Company has the option to extend the forbearance through January 16, 2001.
The Company agreed to pay Worldcom a 100,000 share restructuring fee which
shares have been registered as part of this Registration Statement. If the
Company repays the Settlement by January 16, 2000 it shall be entitled to redeem
one-half of the shares for $1.00.


                                   MANAGEMENT

         The following table set forth the names, ages and positions with the
Company as of the date of this prospectus of all of the executive officers of
the Company and its principal subsidiaries and directors of the Company. Also
set forth below is information as to the principal occupation and background for
each named person in the table.

Name                           Age           Position
- ----                           ---           --------
Diego Leiva                    48            Chairman of the Board and Director
Henry Ewen                     44            Acting Chief Financial Officer
Mario Pino                     36            President of PICK Sat Inc.
Robert R. Sams (1)             60            Director
John Tydeman (1)               51            Director
- ----------------
(1) Member of audit committee and compensation committee.

         Diego Leiva founded Public Info/Comm Kiosk, Inc. ("Kiosk"), a New
Jersey corporation, which is currently a wholly-owned subsidiary of the Company,
in August 1992, and has served as the Company's Chairman of the Board, a
Director and President since that time and as Chief Executive Officer until
April 1999. From 1989 through July 1992, Mr.


                                      -44-
<PAGE>

Leiva served as Director of Sales for Apertus Technologies, Inc., a computer
telecommunications sales firm.

         Henry Ewen is a certified public accountant. He has served as Acting
Chief Financial Officer of the Company since June 1999 and as Comptroller of
Pick Sat since April 1999. He has operated a financial and information
technology consulting practice for the last thirteen years. He has assisted
clients in mergers, acquisitions, private placements, initial public offerings,
development of information systems, and other information technology consulting.
During this period he managed offshore banks and mutual funds on behalf of
client companies. He has acted as CFO/CIO for a variety of companies as part of
the consulting practice including: Prepaid Solutions, Goldleaf Technologies,
Capital International Securities Group and others.

         Mario Pino has served as President of PICK Sat Inc. since October 1998.
Prior thereto, Mr. Pino was a division manager of Zaid Al Kazemi Trading from
1995 to 1998. From 1993 to 1995, he was general manager of American Cable
Trading.

         Robert R. Sams has served as a director of the Company since September
1995 and of Kiosk since November 1994. He has been engaged in merchant banking,
corporate finance, acquisitions and financial advisory services since founding
Saicol Limited in 1983.

         John Tydeman has served as a director of the Company since November
1998. He has been a strategic advisor since 1985 to a number of pay television
and satellite ventures worldwide. His expertise is in the commercial design,
restructuring and implementation of such ventures. His positions with these
entities include: SES, operator of ASTRA satellite system; Dolphin Group, a
privately held Middle East multi-business enterprise; CEO of ATL (News
Corporation and Zee Telefilm Joint Venture); CEO Showtime (Kipco/Viacom JV) and
advisor to Kipco; advisor to Zaksat; advisor to TVNZ; Advisor to Shinawatra
Group; advisor to Regional Television Operators (Australia); advisor to Jamison,
a merchant banking organization; advisor to Optus, Australia telco. Dr. Tydeman
holds a PhD in systems engineering and serves on the Board of Directors of
Nostrad Telecommunications, Asia Today Limited and Asia Television Limited and
as advisor to the Dolphin Group.

         Pursuant to the terms of the April 1999 Restructuring Agreement with
Commonwealth Associates, the Board of Directors of the Company is to be
restructured to consist of a majority of independent directors. The proposed
board will be Diego Leiva, Chairman of the Board, two existing independent
directors, a new Chief Executive Officer, one designee of Commonwealth
Associates, one designee of the July 1998 Bridge Loan Noteholders and one other
independent director. Subsequently, Tri-Links Investment Trust purchased Series
D Convertible Stock from the Company and obtained the right to designate a
nominee to the Board or an observer who has the right to attend and observe at
all Board Meetings prior to his actually joining the Board. To date, none of
these persons have joined the Board of Directors.

         Pursuant to Section 16 of the Exchange Act, the Company's Directors and
executive officers and beneficial owners of more than 10% of the Company's
common stock, par value $0.01 ("common stock") or warrants are required to file
certain reports, within specified time periods, indicating their holdings of and
transactions in the common stock and derivative securities. Based solely on a
review of such reports provided to the Company and written representations from
such persons regarding the necessity to file such reports, the Company is not
aware of any failures to file reports or report transactions in a timely manner
during the Company's fiscal year ended December 31, 1998, other than one late
Form 4 filing by both Robert R. Sams and Ricardo Maranon.

Executive Compensation

Summary Compensation Table

         The following table sets forth all compensation awarded to, earned by,
or paid to the executive officers named therein for all services rendered to the
Company during the three fiscal years ending December 31, 1998. No other
executive officer of the Company received total compensation in excess of
$100,000 during any of the last three years:

                                      -45-

<PAGE>
                               Annual Compensation
<TABLE>
<CAPTION>
                                                                                                   Shares
                                                                                                 Underlying
Name and Positions                    Year            Salary($)            Bonus $              Stock Options
- ------------------                    ----            ---------            -------              -------------
<S>                                   <C>            <C>                   <C>                     <C>
Diego Leiva, President, Chief         1998            $162,500(1)          $15,201                 275,000
   Executive Officer and Chairman     1997             150,000                  --                  75,000(1)
   of the Board  of Directors         1996             150,000                  --                      --(1)

Robert Bingham, Vice President        1998            $111,500                  --                   5,000(2)
   and Chief Financial Officer        1997              34,417                  --                  50,000(3)
                                      1996                  --                  --                      --

                                                                                                   Shares
                                                                                                 Underlying
Name and Positions                    Year            Salary($)            Bonus $              Stock Options
- ------------------                    ----            ---------            -------              -------------
Raymond Brennan, Vice President       1998            $138,340                  --                  25,000(4)
   and Secretary                      1997              88,419                  --                  75,000(5)
                                      1996              85,365                  --                      --

Karen M. Quinn                        1998            $100,179                  --                  30,000(6)
   President PICK US Inc.             1997              85,164                  --                  75,000(5)
                                      1996              85,153                  --                      --
</TABLE>
- ------------------
(1) Includes options to purchase 50,000 shares granted in 1996, at prices
    varying from $8.75 to $9.625 per share which were canceled and re-issued in
    1997 at $1.90 per share and 25,000 options granted in 1997 at $3.00 per
    share.

(2) Exercisable at $3.70 per share.

(3) Includes options to purchase 25,000 shares at $2.50 per share and options to
    purchase 25,000 shares at $5.00 per share.

(4) Includes options to purchase 15,000 shares at $3.70 per share and options to
    purchase 10,000 shares at $5.50 per share.

(5) Includes options to purchase 25,000 shares at $2.70 per share and options to
    purchase 50,000 shares at $1.70 per share.

(6) Includes options to purchase 15,000 shares at $3.70 per share and options to
    purchase 15,000 shares at $5.50 per share.

         The Company maintained a $250,000 term life insurance policy for Diego
Leiva for his benefit, for which the Company paid $1,377, $1,257 and $1,186 in
1998, 1997 and 1996, respectively. In addition, the Company maintains a
$1,000,000 key man life insurance policy for Mr. Leiva.

Employment Agreement

         In September 1998, the Company entered into a five-year employment
agreement with Diego Leiva, as President and Chief Executive Officer, which
commenced on January 1, 1999 (the "Commencement Date"). The Agreement is
automatically renewable for additional one-year periods unless terminated on 90
days' prior written notice. Mr. Leiva will be paid $300,000 per annum beginning
on the Commencement Date, increasing by $50,000 increments on January 1, in each
of the four following years and by $75,000 per year in each year after the fifth
anniversary date if the Agreement is automatically extended. The agreement
provided that Mr. Leiva would continue to receive his then current base salary
until the Company's Senior Secured Notes are repaid. Mr. Leiva is entitled to a
monthly car allowance of $1,600 per month for automobiles in Florida and New
Jersey and shall also be reimbursed for reasonable living expenses in the
location which is not his principal residence. Mr. Leiva's agreement precludes
him from soliciting employees of the Company or interfering with PICK's
relationships with other employees for 18 months after termination of
employment. Mr. Leiva is also prohibited from competing with the Company during
the period following termination of employment for which PICK is liable to pay
him his base salary or for one year, whichever is longer.

                                      -46-
<PAGE>
         In April 1999, Mr. Leiva's employment agreement was amended to provide
he would continue solely as Chairman of the Board and a Director. Mr. Leiva
agreed to vote his shares of common stock in favor of Management's nominees,
provided he is a nominee for the Board.

Directors Compensation

         Directors currently receive no cash compensation for serving on the
Board of Directors or any Committee of the Board, other than reimbursement of
travel expenses incurred by them and their spouses in attending Board meetings
held outside the New York Metropolitan area. One of the directors is an employee
of the Company. Each of the Directors has received stock options from the
Company. See "Certain Relationships and Related Transactions."

Option Grants in Last Fiscal Year

         The table below contains certain information concerning stock options
granted to the Named Executive Officers, named in the Summary Compensation
Table, during the year ended December 31, 1998:
<TABLE>
<CAPTION>
                                                                               Potential Realizable Value at
                      Number of     Percent of Total                         Assumed Annual Rates of Stock Price
                      Securities        Options                                  Appreciation for Option Term
                      Underlying      Granted to         Exercise       ---------------------------------------------
                        Options      Employees in          Price        Expiration          5%                 10%
Name                    Granted       Fiscal year        ($/Share)         Date             ($)                ($)
- ----                  -----------   ----------------      ---------     ----------       --------           --------
<S>                   <C>           <C>                  <C>            <C>              <C>                <C>
Diego Leiva              250,000         60%               $5.50          11/2/03        $343,750           $687,500
                          15,000        3.6%                4.10          2/19/01          $9,225            $18,450
                          10,000        2.4%                6.10          11/4/01          $9,150            $18,300

Robert Bingham             5,000        1.2%               $3.70            (1)               (1)                (1)

Raymond Brennan           15,000        3.6%               $3.70            (2)            $8,325            $16,650
                          10,000        2.4%                5.50            (2)            $8,250            $16,500

Karen M. Quinn            15,000        3.6%               $3.70            (2)            $8,325            $16,650
                          15,000        3.6%                5.50            (2)           $12,375            $24,750
</TABLE>
- ----------------
(1)   Forfeited following Mr. Bingham's resignation on February 10, 1999.
(2)   Mr. Brennan and Ms. Quinn's employment were terminated on May 28, 1999 and
      these options will terminate 90 days thereafter.

Option Grants in 1999

         In March 1999, the Company granted an aggregate of 1,150,500 options,
587,000 of which were subsequently forfeited by employees and consultants, all
are currently exercisable at $1.81 per share and vesting over a three-year
period, except Mr. Malone's option vesting over a four-year period. In July
1999, the Company granted an aggregate of 68,000 options to 8 employees of PICK
Sat, none of whom are executive officers of the Company. Included were the
following grants to officers and/or directors: Thomas Malone, Former Chief
Executive Officer (500,000 shares) and Mario Pino, President of PICK Sat
(250,000 shares).

Aggregated Option Exercises in Last Fiscal Year and Year End Option Values

         The table below includes information regarding the value realized on
option exercises and the market value of unexercised options held by the Named
Executive Officers named in the Summary Compensation Table during the year ended
December 31, 1998:

                                      -47-
<PAGE>
<TABLE>
<CAPTION>
                                                                       Number of         Value of Unexercised
                                                                      Unexercised            In-the-Money
                              Shares                                    Options                Options
                             Acquired                                at FY-End(#)            at FY-End (S)
                                on            Value                  Exercisable/             Exercisable/
Name                       Exercise (#)    Realized($)              Unexercisable           Unexercisable(1)
- ----                       -----------     -----------              -------------          -----------------
<S>                           <C>            <C>                   <C>                    <C>
Diego Leiva                   25,000         $95,000               122,500/202,500         $345,750/$321,750
Robert Bingham                     0               0                 30,000/25,000          $120,500/$45,000
Raymond Brennan               25,000        $102,500                      75,000/0                $307,000/0
Karen M. Quinn                25,000        $102,500                      80,000/0                $321,000/0
</TABLE>

- -------------------------------
(1)   As of December 31, 1998, the market value of the shares was $6.80.

Compensation Committee Interlocks and Insider Participation

         No member of the Compensation Committee was an officer or employee of
the Company or any of its subsidiaries during the prior year or was formerly an
officer of the Company or of any of its subsidiaries. None of the Executive
Officers of the Company has served on the Compensation Committee during the last
fiscal year of any other entity, any of whose officers served on the
Compensation Committee of the Company.


Employee Benefit Plans

         Other than stock options, the Company does not currently have, nor
during the 1998 fiscal year did it have, any other long-term incentive plans.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         See "Management-Executive Compensation" for terms and conditions of
employment agreements entered into between the Company and Diego Leiva and
options granted to the Company's Executive Officers and Directors.

         On March 3, 1999, the Company, Diego Leiva ("Leiva"), the Company's
Chairman of the Board, and Commonwealth Associates L.P. ("Commonwealth") the
placement agent for the holders of the Company's outstanding 18% senior secured
notes, entered into an Agreement by which Commonwealth and its designees,
including J.P. Turner & Company, L.L.C. ("Turner") and management of the
Company, would purchase up to $2,000,000 of preferred stock of the Company (the
"Series B Preferred Stock") at a purchase price of $1.00 per share. On March 12,
1999, the Company filed a Certificate of Designation, as later amended, relating
to the Series B Preferred Stock (the "Series B Certificate") with the Secretary
of State for the State of Nevada. The Series B Certificate authorized 2,000,000
shares of Series B Preferred Stock convertible by the holders thereof into the
Company's common stock at $1.00 per share. In addition, the Series B Preferred
Stock has a liquidation preference of $1.00 per share. As of April 22, 1999, the
Company had received $1,871,000 (including part of Mr. Malone's signing bonus)
for 1,871,100 shares of Series B Preferred Stock from Commonwealth, Turner and
officers and directors of the Company convertible into 1,871,000 shares of
common stock. The following officers, directors and former officers and
directors have purchased the respective amounts of Series B Preferred Stock:

               Robert R. Sams                      $160,000
               Alberto M. Delgado                   315,000
               Ricardo Maranon                       21,000
               John Tydeman                          60,000
               Thomas M. Malone                      50,000
                                                   --------
               Total                               $606,000

         On March 3, 1999, the Board of Directors granted to corporations
controlled by each of the Company's then four independent directors, Robert
Sams, Ricardo Maranon, Alberto M. Delgado and John Tydeman, with each abstaining
as to themselves, options to purchase 50,000 shares of common stock at $5.00 per
share (repriced at $1.81 per share

                                      -48-
<PAGE>
on October 1, 1999) in consideration of their substantial efforts in assisting
the Company in obtaining financing and other valuable consideration rendered to
the Company. These options shall be fully vested on March 3, 2000. Upon the
resignation from the Board of Directors on May 17, 1999, Messrs. Delgado and
Maranon entered into Advisory Agreements with the Company and these options, as
well as all other previously granted options, remained in place as long as they
remain consultants to the Company.

         Effective April 1, 1999, Thomas M. Malone became Chief Executive
Officer of the Company. He resigned as of July 8, 1999, to pursue other business
opportunities. Pursuant to the terms of a Confidential Separation Agreement and
Release of all Claims (the "Separation Agreement"), Mr. Malone is to receive six
(6) months severance pay at his pro rated salary of $250,000 per annum; retained
$50,000 of Series B Convertible Preferred Stock which was one-half of his
signing bonus with the other $50,000 being forfeited; and he retained stock
options to purchase 100,000 shares of common stock, which had vested and shall
be exercisable until July 8, 2000, at $5.00 per share. Mr. Malone also entered
into a 12 month consulting agreement with the Company pursuant to which he
retained stock options to purchase 50,000 shares of common stock at $5.00 per
share, until July 8, 2001.

         In July 1999, the Company entered into an Advisory and Management
Services Agreement (the "Advisory Agreement") with Saicol Limited, a corporation
controlled by Robert R. Sams. Pursuant to the terms of the Advisory Agreement,
Saicol is performing services and providing office space for PICK Net UK PLC.
Saicol is to be paid $1,500 and expenses per day retroactive to February 1, 1998
including payment of $25,000 and the provision for cashless option exercises for
retroactive services rendered.

                          SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, as of November 9, 1999, the number of
shares of the Company's outstanding common stock, giving retroactive effect to a
one-for-ten reverse split declared by the Board on July 6, 1999, to holders of
record on July 23, 1999, beneficially owned by (i) each director of the Company,
(ii) each Named Executive Officer named above, (iii) each beneficial owner of
more than 5% of the Company's common stock and (iv) all of the Company's
executive officers and directors as a group:

Name and Address                   Amount and Nature of
of Beneficial Owner(1)            Beneficial Ownership(2)        Percentage(3)
- -----------------------          ------------------------       --------------

Diego Leiva                           1,617,578(4)(5)                27.5%
Henry Ewen                               13,000(6)                       *
Mario Pino                               55,000(7)                       *
Robert R. Sams                          263,368(8)                    4.7%
John Tydeman                             75,500(9)(10)                1.3%
Robert Bingham                            2,500                          *
Raymond Brennan                         144,968(11)                   2.6%
Karen M. Quinn                          137,943(12)                   2.5%

All executive officers and directors
as a group (8 persons)                2,309,857(14)                  41.6%

- --------------------------------
* Less than 1% of the total issued and outstanding shares of Common Stock.

(1) The address of all officers and directors is c/o the Company, 155 Route 46
    West, 3rd Floor, Wayne, New Jersey 07470.

(2) Unless otherwise noted, all shares are beneficially owned and the sole
    voting and investment power is held by the person indicated.

(3) Based on 5,522,128 shares outstanding as of November 9, 1999. 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.

(4) Includes 429,000 shares beneficially owned by Mr. Leiva's wife.

                                      -49-

<PAGE>

 (5) Includes an aggregate of 275,000 shares of common stock issuable upon
     exercise of incentive stock options to purchase up to 15,000 shares at
     $4.10 per share, 6,300 shares at $6.10 per share, and non-qualified stock
     options to purchase up to 3,700 shares at $6.10 per share under the Plan;
     and non-qualified stock options to purchase 250,000 shares at $5.50 per
     share outside of the Plan. Also includes 80,953 shares of common stock
     issuable upon conversion of 340,000 shares of Series D Convertible
     Preferred Stock at $4.20 per share and warrants to purchase an additional
     6,800 shares of Common Stock at $6.30 per share.

 (6) Includes 3,000 shares of common stock currently issuable upon exercise of
     stock options at $1.81 per share and 10,000 shares currently issuable upon
     exercise of stock options at $2.00 per share. Excludes 53,500 shares of
     common stock issuable upon exercise of stock options which are not
     currently exercisable.

 (7) Includes 5,000 shares of common stock issuable upon exercise of stock
     options at $5.50 per share and 50,000 shares of common stock issuable upon
     exercise of stock options at $5.00 per share. Excludes 215,000 shares of
     common stock issuable upon exercise of stock options which are not
     currently exercisable.

 (8) Includes 160,000 shares of common stock issuable upon conversion of 160,000
     shares of Series B Convertible Preferred Stock. Excludes 9,600 shares owned
     by Vulcan Petroleum of which Mr. Sams is a director and minority
     shareholder and 50,000 shares of common stock issuable upon exercise of
     non-qualified stock options at $5.10 per share. See "Certain
     Relationships and Related Transactions."

 (9) Includes 12,500 shares of common stock issuable upon exercise of stock
     options at $5.50 per share. Excludes an aggregate of 62,500 shares of
     common stock issuable upon exercise of stock options which are not
     currently exercisable.

(10) Includes 60,000 shares of common stock issuable upon conversion of 60,000
     shares of Series B Preferred Stock. See "Certain Relationships and Related
     Transactions."

(11) Includes 34,000 shares beneficially owned by Mr. Brennan's wife. Also
     includes an aggregate of 75,001 shares of common stock issuable upon
     exercise of stock options, including incentive stock options to purchase up
     to 19,118 shares at $1.70 per share, 15,000 shares at $3.70 per share,
     8,000 shares at $5.50 per share, non-qualified stock options to purchase
     30,883 shares at $1.70 per share and 2,000 shares at $5.50 per share
     pursuant to the Plan.

(12) Includes an aggregate of 81,950 shares of common stock issuable upon
     exercise of stock options, including incentive stock options to purchase up
     to 19,118 shares at $1.70 per share, 15,000 shares at $3.70 per share,
     8,000 shares at $5.50 per share, and non-qualified stock options to
     purchase 30,883 shares at $1.70 per share, 70,000 shares at $5.50 per share
     and 1,950 shares at $5.00 per share pursuant to the Plan.


(13) Includes non-qualified stock options and incentive stock options to
     purchase up to 512,451 shares by the named executive officers and directors
     above and shares of Series B and D Preferred Stock and Series D warrants to
     purchase up to 307,753 shares of Common Stock at the prices per share
     stated in footnotes (5) - (12), but excludes options to purchase shares
     which are not currently exercisable.


                                   SELLING STOCKHOLDERS

          The following table sets forth the number of shares of common stock
owned and the total number of shares assuming the conversion, exercise or
exchange of all the derivative securities (the "derivative securities") owned by
each of the Selling Shareholders and registered hereunder.

                                      -50-

<PAGE>
          All share data gives retroactive effect to a one-for-ten reverse split
declared by the Board of Directors on July 6, 1999 to Stockholders of record on
July 23, 1999.

          As described above under "Note Restructuring" each of the 9,900,000
warrants issued in connection with the July 1998 Bridge Loan ("Bridge Warrants")
plus an additional 2,475,050 of such warrants issued in connection with an
extension of the Bridge Loan ("Note Extension Warrants" and, together with the
Bridge Warrants, the "Warrants") immediately exchangeable on a one-for-ten basis
for 1,237,505 shares of common stock, plus 390,867 shares issuable upon exercise
of the Warrants pursuant to anti-dilution provisions of the Warrants and are
included under the column "Number of Shares Offered Hereby," together with
1,871,000 shares of common stock on a one-for-one basis for shares of Series B
Preferred Stock, 1,190,489 shares of Common Stock on a one-for-ten basis for
shares of Series D Preferred Stock plus 70,000 shares issuable in connection
with warrants issued to the Series D shareholders, and shares held by other
Selling Stockholders. Also included under "Number of Shares Offered Hereby" are
174,310 shares of Common Stock issuable upon exercise of 1,394,366 Warrants
issued to Commonwealth Associates, as placement agent for the July 1998 Bridge
Loan, now exercisable at $1.00 per share; an aggregate of 69,728 Placement Agent
Shares issued to Commonwealth and its designees in connection with the July 1998
Bridge Loan; an aggregate of 418,350 shares issued or issuable upon conversion
of warrants held by Liberty Capital and its designees, as co-placement agent for
the July 1998 Bridge Loan; an aggregate of 1,976,000 shares consisting of
988,000 shares issuable upon conversion of the $9,880,000 principal amount of
Amended Notes issued in connection with the Note Restructuring at the current
conversion price of $10.00 per share, plus 988,000 additional shares issuable
for no additional consideration as part of the Note Restructuring, or
alternatively, 1,976,000 shares issuable upon conversion of the notes at $5.00
per share; in the event that the conversion price is reduced to $5.00 per share
as per the anti-dilution provisions, the noteholders will receive an additional
988,000 shares which the Company has registered as part of this Registration
Statement which shares are included in the following table for the selling
stockholders who are noteholders under the headings Amount and Nature of
Ownership Before and After Offering, but not under Number of Shares Offered
Hereby. Also included in this prospectus are 200,000 shares of common stock
issued and 50,000 shares of common stock issuable to Commonwealth and its
designees upon exercise of warrants at $13.75 per share received as compensation
for the Note Restructuring; 50,000 shares issued to Commonwealth and its
designees in connection with a note extension; and shares issued or issuable
upon conversion of options and warrants held by vendors, directors and counsel
to the Company.

          Because the selling stockholders may offer all or part of the shares
of common stock received upon conversion or exercise of the derivative
securities (the "Shares"), which they hold pursuant to the offering contemplated
by this prospectus, no estimate can be given as to the amount of the derivative
securities that will be held upon termination of this offering. The Shares
offered by this prospectus may be offered from time to time by the selling
stockholders named below.
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                    Amount and Nature           Number         Amount and
                                                     of Ownership              of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner          Before Offering(1)      Offered Hereby      Ownership      of Class
      ------------------------------------          ------------------      --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
Abraham, Dean                                             8,805(2)                 6,930             1,875          *

Abrams, Jodi                                              4,696(3)                 3,696             1,000          *

Abrams, Richard                                          21,130(4)                16,630             4,500          *

Abrams, Rodney                                           21,130(4)                16,630             4,500          *

Acks, Shannon P.                                         23,477(5)                18,477             5,000          *

Adametz, James Revocable Trust                            7,044(6)                 5,544             1,500          *

Adkins, Daryl-Joy                                        14,087(7)                11,087             3,000          *

A'hearn, Michael F. & Maxine C., JTWROS                   9,392(8)                 7,392             2,000          *
</TABLE>
                                      -51-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
Anderson, Ferdinand, Jr.                                 11,739(9)                 9,239             2,500          *

Anzalone, Joseph                                           238(10)                   238                 0          *

Appelbaum, Michael                                       4,033(11)                 4,033                 0          *

Apploff, Evelyn                                            238(10)                   238                 0          *

Aukstuolis, Jim                                         46,954(12)                36,954            10,000          *

Ballin, Scott J.                                         11,739(9)                 9,239             2,500          *

Beck, Roderick                                           8,850(13)                 8,850                 0          *

Bergholic, Patricia                                        263(14)                   263                 0          *

Berglund, Don, Dr.                                        4,696(3)                 3,696             1,000          *

Berman, Marc G.                                           9,392(8)                 7,392             2,000          *

Bernstein, Howard Dr.                                    23,477(5)                18,477             5,000          *

Better Homes Plastics Corp.                            234,764(15)               184,764             50,00      1.18%

Birchtree Investments                                    11,739(9)                 9,239             2,500          *

BNB Associates Investments, L.P.                       108,692(16)                96,192            12,500          *

Black, Lincoln Edward                                   18,782(17)                14,782             4,000          *

Blank, Gerald                                             9,392(8)                 7,392             2,000          *

Blonmstedt, Jeffrey & Susan LaScala, JTROS               11,739(9)                 9,239             2,500          *

Boatright, Mody K.                                        9,392(8)                 7,392             2,000          *

Bodner, Hans C.                                        117,382(18)                92,382            25,000          *

Bolognue, Joseph T.                                      11,739(9)                 9,239             2,500          *

Bradley, Charles E., Jr.                                 11,739(9)                 9,239             2,500          *

The Burr Family Trust                                    23,477(5)                18,477             5,000          *

Campos, Felix & Joyce, JTROS                              9,392(8)                 7,392             2,000          *

Cardoso, Manuel                                           7,044(6)                 5,544             1,500          *

Cardwell, James A. Jr.                                   11,739(9)                 9,239             2,500          *
Carroll, Brewster B.                                     11,739(9)                 9,239             2,500          *

Chestler, Daniel                                         23,477(5)                18,477             5,000          *

Chestler, Herbert                                        23,477(5)                18,477             5,000          *

Chestler, Steven                                         23,477(5)                18,477             5,000          *
</TABLE>
                                      -52-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
Childhood Resource Corp.                                  9,392(8)                 7,392             2,000          *

Clariden Bank                                           93,907(19)                73,907            20,000          *

Clark, Oliver T. & Sharon L., JTROS                       4,696(3)                 3,696             1,000          *

Cohen, David                                            46,954(12)                36,954            10,000          *

Cohen, Jonathan & Nancy, JTWROS                           9,392(8)                 7,392             2,000          *

Cole, Julia R.                                          46,954(12)                36,954            10,000          *


Commonwealth Associates                                676,523(20)               651,498            25,025      3.35%


Corbin, Bruce                                             4,696(3)                 3,696             1,000          *

Corbin Family Dental Arts                                 4,696(3)                 3,696             1,000          *

Corbin, Dr. Richard                                      11,739(9)                 9,239             2,500          *

Corbin, Richard & Robyn, JTROS                            4,696(3)                 3,696             1,000          *

Cramer Taos Partners                                    70,430(21)                55,430            15,000          *

Cummings, Orman F.                                       23,477(5)                18,477             5,000          *

Dacey, Karen                                               755(22)                   755                 0          *

D'Avanzo, Marie E. IRA BSSC cust. for                     7,044(6)                 5,544             1,500          *

Davenport, James A & Rebecca C., JTROS                   23,477(5)                18,477             5,000          *

Davidow, Peter C.                                         4,696(3)                 3,696             1,000          *

DeAtkine, Jr., David                                    16,434(23)                12,934             3,500          *

Defini, Joseph                                             363(24)                   363                 0          *

Dellaquilla, Peter                                          38(25)                    38                 0          *

Dercher, David J.                                        23,477(5)                18,477             5,000          *

Sidney Deutsch Revocable Trust                          46,954(12)                36,954            10,000          *

Dickey, David L.                                          9,392(8)                 7,392             2,000          *

Dold, Richard J.                                         23,477(5)                18,477             5,000          *

Donahue, Heather                                           540(26)                   540                 0          *

Downe, Edward R. Jr.                                     23,477(5)                18,477             5,000          *

Dreyfuss, Jerome                                          9,392(8)                 7,392             2,000          *

DW Trustees (B.V.I.) Limited as Trustee of               23,477(5)                18,477             5,000          *
Rectory Farm Settlement Main Fund
</TABLE>
                                      -53-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
DW Trustees (B.V.I.) Limited as Trustee of               11,739(9)                 9,239             2,500          *
Rectory Farm Settlement Children's Fund

Eldridge, Cornelia                                       2,439(27)                 2,439                 0          *

Elliott, Seth                                            1,200(28)                 1,200                 0          *

Falk, Else                                                 238(10)                   238                 0          *

Falk, Michael S.                                       187,564(29)               172,564            15,000      1.00%

Faxon, David P., Jr.                                     5,871(30)                 4,621             1,250          *

Feldman, Richard                                        46,954(12)                36,954            10,000          *

Fennikoh, Donna                                            630(31)                   630                 0          *

Fischhoff, Brian (Baruch) & Andrea JTROS                  7,044(6)                 5,544             1,500          *

Fleming, William K.                                       4,696(3)                 3,696             1,000          *

FM Grandchildren's Trust                                46,954(12)                36,954            10,000          *

Fox, Karen A.                                             9,392(8)                 7,392             2,000          *

Friedman, Richard                                       93,907(19)                73,907            20,000          *

Fulton, Peter                                            4,223(50)                 4,223                 0          *

Gaba, Ilya & Alice, JTROS                                 4,696(3)                 3,696             1,000          *

Gajeski, Donald K.                                        9,392(8)                 7,392             2,000          *

Gaylord, Gregg M.                                         4,696(3)                 3,696             1,000          *

Glashow, Jonathan                                       35,215(33)                27,715             7,500          *

Glazier, Edwin M.                                         9,392(8)                 7,392             2,000          *

Goldberg, Ira                                             9,392(8)                 7,392             2,000          *

Goldberg, Mark & Joanna, JTROS                           14,087(7)                11,087             3,000          *

Goldman, Fred                                             4,696(3)                 3,696             1,000          *

Gonchar, Andrew                                          11,739(9)                 9,239             2,500          *

Graves, Eugene H.                                       46,954(12)                36,954            10,000          *

Steven B. Greenman, IRA, Bear Stearns                    11,739(9)                 9,239             2,500         *
Securities Corp. as Custodian for
Gruenwald, Thomas J.                                     23,477(5)                18,477             5,000          *

Hammer, Robert                                           11,739(9)                 9,239             2,500          *

Hart, Steven                                             1,085(34)                 1,085                 0          *
</TABLE>
                                      -54-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
Hatten, Mark                                            46,954(12)                36,954            10,000          *

Herrmann, Timothy                                        3,762(35)                 3,762                 0          *

Hoffman, Susan                                             630(36)                   630                 0          *

Ianazzai, Jeanine                                          275(37)                   275                 0          *

Intercontinental Associates, Inc.                        11,739(9)                 9,239             2,500          *

Isbell, Charles E.                                        4,696(3)                 3,696             1,000          *

Jackson, Kevin L.                                        5,871(30)                 4,621             1,250          *

Jeffers, Robert G. & Theresa W., JTROS                   7,513(38)                 5,913             1,600          *

Jensen, Eric & Julia JTWROS                             46,954(12)                36,954            10,000          *

Jhunjhnuwala, Chatri & Lourdes, JTROS                   46,954(12)                36,954            10,000          *

Jhunjhnuwala, Chatri & Lourdes, JTROS                    1,879(39)                 1,479               400          *
Custodian for Nadia Jhunjhnuwala

Jhunjhnuwala, Chatri & Lourdes, JTROS                    2,349(40)                 1,849               500          *
Custodian for Giselle Jhunjhnuwala

Jhunjhnuwala, Chatri & Lourdes, JTROS                    2,818(41)                 2,218               600          *
Custodian for Jasmine Jhunjhnuwala

Jhunjhnuwala, Ramesh                                      9,392(8)                 7,392             2,000          *

Jimenez, Audrey                                            175(42)                   175                 0          *

Johnson, L. Wayne                                        23,477(5)                18,477             5,000          *

Jordan, Bette Plink                                      5,871(30)                 4,621             1,250          *

Joos-Vandewalle, John                                    11,739(9)                 9,239             2,500          *

Jordan, Edward C.                                         4,696(3)                 3,696             1,000          *

Jordan, Peggy                                           46,954(12)                36,954            10,000          *

K & K Development                                        11,739(9)                 9,239             2,500          *

Kabuki Partners ADD GP                                   23,477(5)                18,477             5,000          *

Karraker, Valerie L.                                     11,739(9)                 9,239             2,500          *

Keating, Patrick N.                                      11,739(9)                 9,239             2,500          *

Kennett, David R. & Joyce A., JTROS                      5,871(30)                 4,621             1,250          *

Khulpateea, Neekianund, M.D.                             11,739(9)                 9,239             2,500          *

Layne, Marlene                                             300(43)                   300                 0          *
</TABLE>
                                      -55-

<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
Lawless, Stephen & Nina, JTWROS                          11,739(9)                 9,239             2,500          *

Leppla, Craig                                            1,810(44)                 1,810                 0          *

Lerner, Brian                                             4,696(3)                 3,696             1,000          *

The Lenox Trust                                           4,696(3)                 3,696             1,000          *

Liebel, C. William & Roberta, JTROS                       7,044(6)                 5,544             1,500          *

Lim, Cassandra                                             475(45)                   475                 0          *

Maerki, Baumann & Co. AG                                46,954(12)                36,954            10,000          *

Mallis, Stephen                                          11,739(9)                 9,239             2,500          *

Malone, Zach                                               339(46)                   339                 0          *

Mansfield, Gary                                            350(47)                   350                 0          *

Marcus, Jed S.                                            4,696(3)                 3,696             1,000          *

Mark, Laurel Lester                                      11,739(9)                 9,239             2,500          *

Markowitz, Jeffery                                      46,954(12)                36,954            10,000          *

Martin, John R. & Victoria, JTROS                        11,739(9)                 9,239             2,500          *

Mazzacchi, Leo F., M.D. & Nancy, JTWROS                  23,477(5)                18,477             5,000          *

McCleary, Robert A.                                      23,477(5)                18,477             5,000          *

McKone, Fiona                                              350(47)                   350                 0          *

Meinershagen, Alan J.                                    23,477(5)                18,477             5,000          *

Messana, Jerry                                           2,798(61)                 2,798                 0          *

Monie, Vijaykumar S.                                     11,739(9)                 9,239             2,500          *

Morfesis, F.A. & Gail, JTWROS                           46,954(12)                36,954            10,000          *

Morley, David                                             7,044(6)                 5,544             1,500          *

David Mulkey II Limited Partnership                    139,685(91)               109,935            29,750          *

Nelson, David R. & Donna L., JTWROS                      11,739(9)                 9,239             2,500          *

Notowitz, Allen                                         46,954(12)                36,954            10,000          *

Norman, Gregory P.                                      46,954(12)                36,954            10,000          *

Nussbaum, Samuel R.                                     46,954(12)                36,954            10,000          *

Ocepek, David B., Ret. Plan                              5,871(30)                 4,621             1,250          *

Orden, Jeremy F.                                        11,270(94)                 8,870             2,400          *
</TABLE>
                                      -56-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
O'Toole, Diana                                             363(62)                   363                 0          *

Pallini, Larry H.                                        23,477(5)                18,477             5,000          *

Pallotta, Joseph                                           350(47)                   350                 0          *

Palmer, Richard & Lynne Marie, JTROS                     11,739(9)                 9,239             2,500          *

Palmieri, Peter                                          2,499(48)                 2,499                 0          *

Pamela Equities                                         46,954(12)                36,954            10,000          *

Pannu, Jaswant & Debra, JTROS                             9,392(8)                 7,392             2,000          *

Partoyan, Garo A.                                        23,477(5)                18,477             5,000          *

Pepe, Danielle                                             175(42)                   175                 0          *

Perreira, Richard                                          238(10)                   238                 0          *

Piccolo, August                                           7,044(6)                 5,544             1,500          *
Piccolo, John                                            23,477(5)                18,477             5,000          *

Pocisk, George Roth IRA                                  11,739(9)                 9,239             2,500          *

Polyviou, P. Tony                                        11,739(9)                 9,239             2,500          *

Poujol, Albert C.                                        11,739(9)                 9,239             2,500          *

Poujol, Michael & Angela, JTROS                          23,477(5)                18,477             5,000          *

Priddy, Robert                                         304,762(49)               254,762            50,000      1.18%

Primo, Joseph C.                                         11,739(9)                 9,239             2,500          *

Progressive Footcare                                     23,477(5)                18,477             5,000          *

Rand, Eric                                               1,999(51)                 1,999                 0          *

Rion, James H.                                            7,044(6)                 5,544             1,500          *

Roberts, Cindy D.                                       46,954(12)                36,954            10,000          *

Rosenfield, Laurence & Janet, JTROS                      11,739(9)                 9,239             2,500          *

Royal Bank of Canada Trust                             117,382(18)                92,382            25,000          *

Rubenstein, Eric                                        16,633(52)                15,633             1,000          *

Salas, Alexandra                                           510(53)                   510                 0          *

Salmon, Robert M. & Margaret, TIC                        7,513(38)                 5,913             1,600          *

Saltzberg, Darren                                          681(54)                   681                 0          *

Sandhu, Avtar S.                                         11,739(9)                 9,239             2,500          *
</TABLE>
                                      -57-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
Scaglione, Domenick G. & Josephine, JTROS                5,871(30)                 4,621             1,250          *

Schoen, William R. & Barbara J. JTROS                    11,739(9)                 9,239             2,500          *

Schorlemmer, Vikki K.                                    23,477(5)                18,477             5,000          *

Schriver, James E. & Jayne A., JTROS                      4,696(3)                 3,696             1,000          *

Schroeder, Charles F.A.                                  5,871(30)                 4,621             1,250          *

Schultz, Gary D. & Barbara A., JTROS                     23,477(5)                18,477             5,000          *

Stellway, David L                                        23,477(5)                18,477             5,000          *

Shea, Edmund                                             8,643(55)                 8,643                 0          *

JF Shea & Co., Inc.                                    351,719(56)               291,719            60,000      1.42%

Sheppard, Matthew P.                                      4,696(3)                 3,696             1,000          *

Simon Asset Management LLC                              46,954(12)                36,954            10,000          *

Singer, Michael A.                                      46,954(12)                36,954            10,000          *

Skoly, Stephen T., Dr.                                   11,739(9)                 9,239             2,500          *

Spencer, Robert J.                                       11,739(9)                 9,239             2,500          *

Stahnke, Ronald                                          11,739(9)                 9,239             2,500          *

Stein, David                                             2,349(57)                 2,349                 0          *

Stern, Theodore & Eliabeth, JTROS                       46,954(12)                36,954            10,000          *

Stollwerk, David & Ida, JTROS                            11,739(9)                 9,239             2,500          *

Stollwerk, David & Susan JTROS                           11,739(9)                 9,239             2,500          *

Swiatek, Nicole                                            275(58)                   275                 0          *

Tachibana, Rick Glen                                      9,392(8)                 7,392             2,000          *

Tsamutalis, George                                       3,409(59)                 3,409                 0          *

Toombs, Walter F.                                       46,954(12)                36,954            10,000          *

TriYar Capital                                           11,739(9)                 9,239             2,500          *

Turbee, Mederic                                            263(14)                   263                 0          *

Vainberg, Vladik                                         6,073(95)                 5,573               500          *

Syd Verbin & Helen Verbin Trustee under                   4,696(3)                 3,696             1,000          *
Trust Agreement dated 12/20/88 FBO Syd
Verbbin

Verdino, Lorraine                                          275(58)                   175               100          *
</TABLE>
                                      -58-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
Voight, Bryon & Jacelyn, JTROS                           23,477(5)                18,477             5,000          *

Voight, Kevin & Cindy JTROS                              23,477(5)                18,477             5,000          *

Ward, Gary                                               11,739(9)                 9,239             2,500          *

Wasserstrum, Seymour                                     11,739(9)                 9,239             2,500          *

Wilkins, Charles P.                                      11,739(9)                 9,239             2,500          *

Winchester Fiduciary Services FBO Conzett               93,907(19)                73,907            20,000          *
Europa Investment

Wisseman, Charles L. III                                 11,739(9)                 9,239             2,500          *

Ashley Cooper                                          170,000(60)               170,000                 0          *

John R. Clarke                                         139,000(60)               139,000                 0          *

Dean A. Vernoia                                         15,000(60)                15,000                 0          *

Craig Blitz                                              1,840(63)                 1,840                 0          *

Craig Blitz and Annette Blitz JTWROS                     7,696(64)                 6,696             1,000          *

Harold Blue                                             16,739(65)                14,239             2,500          *

Saicol Limited (66)                                        313,368          210,000(107)           103,368       2.2%

Anthony S. Mowrer                                       20,000(60)                20,000                 0          *

Timothy Moore                                           10,000(60)                10,000                 0          *

William L. Mello                                        10,000(60)                10,000                 0          *

Brian Megenity                                          10,000(60)                10,000                 0          *
Mark Danieli                                             6,000(67)                 6,000                 0          *

Anthony J. Giardina                                      3,810(68)                 3,810                 0          *

P.A.M.D. Investors, Inc. (69)                              371,250               365,000             6,250          *

Andrea Becker                                          100,000(60)               100,000                 0          *

Tim McAfee                                              10,000(60)                10,000                 0          *

Bruce Glaser                                            10,470(70)                10,470                 0          *

Carl Kleidman (71)                                      17,500(72)                17,500                 0          *

Beth Lipman                                              6,736(73)                 6,736                 0          *

Ron Moschetta                                           64,625(74)                64,625                 0          *

Robert O'Sullivan                                        8,192(75)                 8,192                 0          *

Robert A. O'Sullivan Family Trust                        5,000(60)                 5,000                 0          *
</TABLE>
                                      -59-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
A.G. Rappaport                                          50,000(60)                50,000                 0          *

Richard Rosenblatt                                      16,739(65)                14,239             2,500          *

Keith M. Rosenbloom                                     18,823(76)                18,823                 0          *

Inder Tallur                                            10,725(77)                10,725                 0          *

Joseph P. Wynne (71)                                    14,814(78)                14,814                 0          *

Richard A. Campanella                                    3,810(79)                 3,810                 0          *

Basil Asciutto                                           4,856(80)                 4,856                 0          *

Basil Asciutto Retirement Plan                           5,000(60)                 5,000                 0          *

Dolphin Media Group Inc. (81)                              119,250          110,000(105)             9,250          *

Ricardo Maranon (82)                                       200,468           50,000(106)           150,468       3.3%

Douglas E. Miller                                       10,000(60)                10,000                 0          *

Dawn Becker                                              5,000(60)                 5,000                 0          *

Truxton K. Mann and Nancy W. Mann                        5,000(60)                 5,000                 0          *
JTWROS

Ron Bloom                                                5,000(60)                 5,000                 0          *

Thomas Malone (83)                                         150,000            50,000(60)           100,000      2.26%

Michael Bollag                                         143,907(84)               123,907            20,000          *

Robert Beuret                                            2,536(85)                 2,536                 0          *

J.P. Turner                                             10,000(60)                10,000                 0          *

John La Porta                                            1,000(60)                 1,000                 0          *

Liberty Capital, Ltd. (86)                                 418,350               418,350                 0          *

Innovative Telecom Corp. (87)                              516,826               516,826                 0          *

Michael Binder (88)                                         20,000                20,000                 0          *

The Dilenschneider Group, Inc. (89)                         20,000                20,000                 0          *

AFG Resources Partnership                          127,758(90)(97)               127,758                 0          *

Salahkhalid Al-Fulaij                              148,858(90)(98)               148,858                 0          *

Al Jandool Brides Jewellery                         99,239(90)(99)                99,239                 0          *

Saqer A. Almousherji                                   238,096(90)               238,096                 0          *

E-Cash Card Services Inc.                          25,810(90)(100)                25,810                 0          *
</TABLE>
                                      -60-
<PAGE>
<TABLE>
<CAPTION>
                                                                                               Shares Beneficially Owned
                                                                                                    After Offering
                                                                                               -------------------------
                                                                                Number         Amount and
                                                    Amount and Nature         of Shares         Nature of     Percentage
      Name and Address of Beneficial Owner           of Ownership(1)        Offered Hereby      Ownership      of Class
      ------------------------------------           ----------------       --------------      ---------     ----------
<S>                                                <C>                     <C>                <C>            <C>
James Season                                       16,777(90)(101)                16,777                 0          *

Yaseen Tabtabei                                   129,048(90)(102)               129,048                 0          *


Diego Leiva                                     1,617,578(96)(103)                87,753         1,529,825        30%


Martin Gangel Trust                                         23,477            18,477(92)             5,000          *

Arthur Chase                                                83,391            83,391(93)                 0          *

Tri-Links Investment Trust                        387,150(90)(104)               387,150                 0          *

Jose Garcia                                                  9,500            9,500(109)                 0          *

Felix Lopez                                                  9,500            9,500(109)                 0          *

Pedro Rivero                                                 2,000            2,000(109)                 0          *

Snow Becker Krauss P.C.                               355,000(108)               300,000            55,000          *

Brian Coventry                                           560 (110)                   560                 0          *

John Gruber                                              560 (110)                   560                 0          *

Katelyn LoBue                                            125 (111)                   125                 0          *

Linda Rodriguez                                          125 (111)                   125                 0          *

Gulfsat Communications Company                       100,000 (112)               100,000                 0          *

WorldCom Network Services, Inc.                      100,000 (113)               100,000                 0          *

IDT Corporation                                      127,500 (114)              127,5000                 0          *

</TABLE>
* Less than one percent of the issued and outstanding common stock
- ----------------

(1) Based on 5,103,233 shares of common stock issued and outstanding as of
    October 11, 1999. Unless otherwise noted, we believe that all persons named
    in the table have sole investment power with respect to all shares of common
    stock beneficially owned by them. Under the Federal securities laws, a
    person is deemed to be the beneficial owner of securities that can be
    acquired by that person within 60 days from the date hereof upon the
    conversion of convertible securities or the exercise of warrants or options.
    We have assumed for each person that any exercisable and convertible
    securities that are held by that person (but not those held by any other
    person) and that are exercisable or convertible within 60 days from the date
    hereof have been exercised or converted and that after the offering, all
    underlying shares set forth under "Number of Shares Offered Hereby" have
    been sold. Except where noted, none of the selling stockholders has had any
    position, office or other material relationship with the Company other than
    as a shareholder during the past three years.

(2) Includes 6,930 shares currently issuable and listed under "Number of Shares
    Offered Hereby" upon exchange of 1,875 Bridge Warrants, 469 Note Extension
    Warrants, 741

                                      -61-

<PAGE>

    shares issued pursuant to the Warrants' anti-dilution provisions, 95 shares
    of common stock received in connection with the Note Extension and 3,750
    shares issuable to this person upon conversion of the Amended Note. Also
    includes an additional 1,875 shares issuable to this person as a result of
    the Note Restructuring,

(3) Includes 3,696 shares currently issuable and listed under "Number of Shares
    Offered Hereby" upon exchange of 1,000 Bridge Warrants, 250 Note Extension
    Warrants, 395 shares issued pursuant to the Warrants' anti-dilution
    provisions, 51 shares of common stock received in connection with the Note
    Extension and 2,000 shares issuable to this person upon conversion of the
    Amended Note. Also includes an additional 1,000 shares issuable to this
    person as a result of the Note Restructuring,

(4) Includes 16,630 shares currently issuable and listed under "Number of Shares
    Offered Hereby" upon exchange of 4,500 Bridge Warrants, 1,125 Note Extension
    Warrants, 1,777 shares issued pursuant to the Warrants' anti-dilution
    provisions, 228 shares of common stock received in connection with the Note
    Extension and 9,000 shares issuable to this person upon conversion of the
    Amended Note. Also includes an additional 4,500 shares issuable to this
    person as a result of the Note Restructuring,

(5) Includes 18,477 shares currently issuable and listed under "Number of Shares
    Offered Hereby" upon exchange of 5,000 Bridge Warrants, 1,250 Note Extension
    Warrants, 1,974 shares issued pursuant to the Warrants' anti-dilution
    provisions, 253 shares of common stock received in connection with the Note
    Extension and 10,000 shares issuable to this person upon conversion of the
    Amended Note. Also includes an additional 5,000 shares issuable to this
    person as a result of the Note Restructuring,

(6) Includes 5,544 shares currently issuable and listed under "Number of Shares
    Offered Hereby" upon exchange of 1,500 Bridge Warrants, 375 Note Extension
    Warrants, 593 shares issued pursuant to the Warrants' anti-dilution
    provisions, 76 shares of common stock received in connection with the Note
    Extension and 3,000 shares issuable to this person upon conversion of the
    Amended Note. Also includes an additional 1,500 shares issuable to this
    person as a result of the Note Restructuring,

(7) Includes 11,087 shares currently issuable and listed under "Number of Shares
    Offered Hereby" upon exchange of 3,000 Bridge Warrants, 750 Note Extension
    Warrants, 1,185 shares issued pursuant to the Warrants' anti-dilution
    provisions, 152 shares of common stock received in connection with the Note
    Extension and 6,000 shares issuable to this person upon conversion of the
    Amended Note. Also includes an additional 3,000 shares issuable to this
    person as a result of the Note Restructuring,

(8) Includes 7,392 shares currently issuable and listed under "Number of Shares
    Offered Hereby" upon exchange of 2,000 Bridge Warrants, 500 Note Extension
    Warrants, 790 shares issued pursuant to the Warrants' anti-dilution
    provisions, 102 shares of common stock received in connection with the Note
    Extension and 4,000 shares issuable to this person upon conversion of the
    Amended Note. Also includes an additional 2,000 shares issuable to this
    person as a result of the Note Restructuring,

(9) Includes 9,239 shares currently issuable and listed under "Number of Shares
    Offered Hereby" upon exchange of 2,500 Bridge Warrants, 625 Note Extension
    Warrants, 987

                                      -62-
<PAGE>

     shares of common stock issued pursuant to the Warrants' anti-dilution
     provisions, 127 shares of common stock received in connection with the Note
     Extension and 5,000 shares issuable to this person upon conversion of the
     Amended Note. Also includes an additional 2,500 shares of common stock
     issuable to this person as a result of the Note Restructuring,

(10) Includes 238 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 125 Placement Agent's Warrants, 50
     Placement Agent's Shares, 50 shares of common stock issuable to this person
     as part of the Note Restructuring Agent's Shares and 13 shares of common
     stock issuable to this person upon the exercise of five-year warrants
     issued in connection with a debt restructuring (the "Restructuring
     Warrants").

(11) Includes 4,033 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 979 Placement Agent's Warrants, 391
     Placement Agent's Shares, 533 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 2,130 shares of
     common stock issuable as part of the Note Restructuring Agent's Shares.

(12) Includes 36,954 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 10,000 Bridge Warrants, 2,500 Note
     Extension Warrants, 3,948 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 506 shares of common stock received in
     connection with the Note Extension and 20,000 shares issuable to this
     person upon conversion of the Amended Note. Also includes an additional
     10,000 shares of common stock issuable to this person as a result of the
     Note Restructuring,

(13) Includes 8,850 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 2,750 Placement Agent's Warrants, 1,100
     Placement Agent's Shares, 1,000 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 4,000 shares of
     common stock issuable to this person as part of the Note Restructuring
     Agent's Shares.

(14) Includes 188 Placement Agent's Warrants plus 75 Placement Agent's Shares.

(15) Includes 184,764 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 50,000 Bridge Warrants, 12,500 Note
     Extension Warrants, 19,738 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 2,526 shares of common stock received
     in connection with the Note Extension and 100,000 shares issuable to this
     person upon conversion of the Amended Note. Also includes an additional
     50,000 shares of common stock issuable to this person as a result of the
     Note Restructuring,

(16) Includes 96,192 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 12,500 Bridge Warrants, 3,125 Note
     Extension Warrants, 4,9335 shares issued pursuant to the Warrants'
     anti-dilution provisions, 50,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 632 shares of
     common stock received in connection with the Note Extension and 25,000
     shares issuable to this person upon conversion of the Amended Note. Also
     includes an additional 12,500 shares issuable to this person as a result of
     the Note Restructuring.


(17) Includes 14,782 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 4,000 Bridge Warrants, 1,000 Note
     Extension Warrants, 1,579 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 203 shares of common stock received in
     connection with

                                      -63-
<PAGE>


     the Note Extension and 8,000 shares issuable to this person upon conversion
     of the Amended Note. Also includes an additional 4,000 shares of common
     stock issuable to this person as a result of the Note Restructuring.

(18) Includes 92,382 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 25,000 Bridge Warrants, 6,250 Note
     Extension Warrants, 9,869 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 1,263 shares of common stock received
     in connection with the Note Extension and 50,000 shares issuable to this
     person upon conversion of the Amended Note. Also includes an additional
     25,000 shares of common stock issuable to this person as a result of the
     Note Restructuring.

(19) Includes 73,907 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 20,000 Bridge Warrants, 5,000 Note
     Extension Warrants, 7,896 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 1,011 shares of common stock received
     in connection with the Note Extension and 40,000 shares issuable to this
     person upon conversion of the Amended Note. Also includes an additional
     20,000 shares of common stock issuable to this person as a result of the
     Note Restructuring.

(20) Includes 651,197 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 25,025 Bridge Warrants, 6,257 Note
     Extension Warrants, 9,878 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 83,899 Placement Agent's Warrants,
     34,634 Placement Agent's Shares, 318,000 shares of common stock issuable
     upon conversion of Series B Preferred Stock, at $1.00 per share, 1,264
     shares of common stock received in connection with the Note Extension,
     50,050 shares issuable to this person upon conversion of the Amended Note,
     24,438 shares of common stock issuable upon the exercise of the
     Restructuring Warrants and 97,752 shares of common stock issuable to this
     company as part of the Note Restructuring Agent's Shares. Also includes an
     additional 25,025 shares issuable to this company as a result of the Note
     Restructuring.

(21) Includes 55,430 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 15,000 Bridge Warrants, 3,750 Note
     Extension Warrants, 5,922 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 758 shares of common stock received in
     connection with the Note Extension and 30,000 shares issuable to this
     person upon conversion of the Amended Note. Also includes an additional
     15,000 shares of common stock issuable to this person as a result of the
     Note Restructuring,

(22) Includes 755 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 450 Placement Agent's Warrants, plus 180
     Placement Agent's Shares, 25 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 100 shares of common
     stock issuable as part of the Note Restructuring Agent's Shares.

(23) Includes 12,934 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 3,500 Bridge Warrants, 875 Note
     Extension Warrants, 1,382 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 177 shares of common stock received in
     connection with the Note Extension and 7,000 shares issuable to this person
     upon conversion of the Amended Note. Also includes an additional 3,500
     shares of common stock issuable to this person as a result of the Note
     Restructuring.

                                      -64-
<PAGE>
(24) Includes 363 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 188 Placement Agent's Warrants, plus 75
     Placement Agent's Shares, 20 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 80 shares of common
     stock issuable as part of the Note Restructuring Agent's Shares.

(25) Includes 27 Placement Agent's Warrants, plus 11 Placement Agent's Shares.

(26) Includes 450 Placement Agent's Warrants, plus 90 Placement Agent Shares.

(27) Includes 1,743 Placement Agent's Warrants, plus 696 Placement Agent's
     Shares.

(28) Includes 1,000 Placement Agent's Warrants, plus 200 Placement Agent's
     Shares.

(29) Includes 172,564 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 15,000 Bridge Warrants, 3,750 Note
     Extension Warrants, 30,000 shares issuable to this person upon conversion
     of the Amended Note, 5,922 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 13,068 Placement Agent's Warrants,
     70,000 shares of common stock issuable upon conversion of Series B
     Preferred Stock, at $1.00 per share, 5,205 Placement Agent's Shares, 758
     shares of common stock received in connection with the note extension,
     5,608 shares of common stock issuable upon the exercise of the
     Restructuring Warrants and 23,253 shares of common stock issuable as part
     of the Note Restructuring Agent's Shares. Also includes an additional
     15,000 shares of common stock issuable to this person as a result of the
     Note Restructuring.

(30) Includes 4,621 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 1,250 Bridge Warrants, 313 Note Extension
     Warrants, 494 shares of common stock issued pursuant to the Warrants'
     anti-dilution provisions, 64 shares of common stock received in connection
     with the Note Extension and 2,500 shares issuable to this person upon
     conversion of the Amended Note. Also includes an additional 1,250 shares of
     common stock issuable to this person as a result of the Note Restructuring.

(31) Includes 450 Placement Agent's Warrants, plus 180 Placement Agent's Shares.

(32) Includes 1,130 Placement Agent's Warrants, plus 451 Placement Agent's
     Shares.

(33) Includes 27,715 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 7,500 Bridge Warrants, 1,875 Note
     Extension Warrants, 2,961 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 379 shares of common stock received in
     connection with the Note Extension and 15,000 shares of common stock
     issuable to this person upon conversion of the Amended Note. Also includes
     an additional 7,500 shares of common stock issuable to this person as a
     result of the Note Restructuring.

(34) Includes 1,085 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 375 Placement Agent's Warrants, plus 150
     Placement Agent's Shares, 110 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 450 shares of
     common stock issuable as part of the Note Restructuring Agent's Shares.

(35) Includes 3,762 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 1,007 Placement Agent's Warrants, plus 402
     Placement Agent's Shares, 471 shares of common stock issuable to this
     person upon the

                                      -65-
<PAGE>


     exercise of the Restructuring Warrants and 1,882 shares issuable as part of
     the Note Restructuring Agent's Shares.

(36) Includes 450 Placement Agent's Warrants, plus 180 Placement Agent's Shares.

(37) Includes 275 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 125 Placement Agent's Warrants, plus 50
     Placement Agent's Shares, 20 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 80 shares issuable as
     part of the Note Restructuring Agent's Shares.

(38) Includes 5,913 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 1,600 Bridge Warrants, 400 Note Extension
     Warrants, 632 shares of common stock issued pursuant to the Warrants'
     anti-dilution provisions, 81 shares of common stock received in connection
     with the Note Extension and 3,200 shares of common stock issuable to this
     person upon conversion of the Amended Note. Also includes an additional
     1,600 shares of common stock issuable to this person as a result of the
     Note Restructuring.

(39) Includes 1,479 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 400 Bridge Warrants, 100 Note Extension
     Warrants, 158 shares of common stock issued pursuant to the Warrants'
     anti-dilution provisions, 21 shares of common stock received in connection
     with the Note Extension and 800 shares of common stock issuable to this
     person upon conversion of the Amended Note. Also includes an additional 400
     shares of common stock issuable to this person as a result of the Note
     Restructuring.

(40) Includes 1,849 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 500 Bridge Warrants, 125 Note Extension
     Warrants, 198 shares of common stock issued pursuant to the Warrants'
     anti-dilution provisions, 26 shares of common stock received in connection
     with the note extension and 1,000 shares of common stock issuable to this
     person upon conversion of the Amended Note. Also includes an additional 500
     shares of common stock issuable to this person as a result of the Note
     Restructuring.

(41) Includes 2,218 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 600 Bridge Warrants, 150 Note Extension
     Warrants, 237 shares of common stock issued pursuant to the Warrants'
     anti-dilution provisions, 31 shares of common stock received in connection
     with the note extension and 1,200 shares of common stock issuable to this
     person upon conversion of the Amended Note. Also includes an additional 600
     shares of common stock issuable to this person as a result of the Note
     Restructuring.

(42) Includes 125 Placement Agent's Warrants, plus 50 Placement Agent's Shares.

(43) Includes 300 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 125 Placement Agent's Warrants, plus 50
     Placement Agent's Shares, 25 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 100 shares issuable as
     part of the Note Restructuring Agent's Shares.

(44) Includes 1,810 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 936 Placement Agent's Warrants, plus 374
     Placement Agent's Shares, 100 shares of common stock issuable to this
     person upon the exercise of the

                                      -66-
<PAGE>
     Restructuring Warrants and 400 shares issuable as part of the Note
     Restructuring Agent's Shares.

(45) Includes 475 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 250 Placement Agent's Warrants, plus 100
     Placement Agent's Shares, 25 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 100 shares issuable as
     part of the Note Restructuring Agent's Shares.

(46) Includes 339 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 125 Placement Agent's Warrants, plus 50
     Placement Agent's Shares, 34 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 130 shares issuable as
     part of the Note Restructuring Agent's Shares.

(47) Includes 250 Placement Agent's Warrants plus 100 Placement Agent's Shares.

(48) Includes 2,499 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 669 Placement Agent's Warrants, plus 267
     Placement Agent's Shares, 313 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 1,250 shares
     issuable as part of the Note Restructuring Agent's Shares.

(49) Includes 254,762 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 50,000 Bridge Warrants, 12,500 Note
     Extension Warrants, 19,736 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 70,000 shares of common stock issuable
     upon conversion of Series B Preferred Stock, at $1.00 per share, 2,526
     shares of common stock received in connection with the Note Extension and
     100,000 shares of common stock issuable to this person upon conversion of
     the Amended Note. Also includes an additional 50,000 shares issuable to
     this person as a result of the Note Restructuring.

(50) Includes 4,223 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 1,130 Placement Agent's Warrants, plus 451
     Placement Agent's Shares, 529 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 2,113 shares
     issuable as part of the Note Restructuring Agent's Shares.

(51) Includes 1,999 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 535 Placement Agent's Warrants, plus 214
     Placement Agent's Shares, 250 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 1,000 shares
     issuable as part of the Note Restructuring Agent's Shares.

(52) Includes 15,633 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 1,000 Bridge Warrants, 250 Note
     Extension Warrants, 395 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 3,464 Placement Agent's Warrants, 691
     Placement Agent's Shares, 51 shares of common stock received in connection
     with the Note Extension, 1,557 shares of common stock issuable upon the
     exercise of the Restructuring Warrants, 6,225 shares issuable as part of
     the Note Restructuring Agent's Shares and 2,000 shares of common stock
     issuable to this person upon conversion of the Amended Note. Also includes
     an additional 1,000 shares issuable to this person as a result of the Note
     Restructuring.

                                      -67-
<PAGE>


(53) Includes 510 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 125 Placement Agent's Warrants, plus 50
     Placement Agent's Shares, 70 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 265 shares issuable as
     part of the Note Restructuring Agent's Shares.

(54) Includes 681 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 308 Placement Agent's Warrants, plus 123
     Placement Agent's Shares, 50 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 200 shares issuable as
     part of the Note Restructuring Agent's Shares.

(55) Includes 8,643 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 3,051 Placement Agent's Warrants, plus
     1,217 Placement Agent's Shares, 875 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 3,500 shares
     issuable as part of the Note Restructuring Agent's Shares.

(56) Includes 291,719 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 60,000 Bridge Warrants, 15,000 Note
     Extension Warrants, 23,688 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 70,000 shares of common stock issuable
     upon conversion of Series B Preferred Stock, at $1.00 per share, 3,031
     shares of common stock received in connection with the Note Extension and
     120,000 shares of common stock issuable to this person upon conversion of
     the Amended Note. Also includes an additional 60,000 shares issuable to
     this person as a result of the Note Restructuring.

(57) Includes 2,349 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 629 Placement Agent's Warrants, plus 251
     Placement Agent's Shares, 294 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 1,175 shares
     issuable as part of the Note Restructuring Agent's Shares.

(58) Includes 275 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 125 Placement Agent's Warrants, plus 50
     Placement Agent's Shares, 20 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 80 shares issuable as
     part of the Note Restructuring Agent's Shares.

(59) Includes 3,409 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 913 Placement Agent's Warrants, plus 364
     Placement Agent's Shares, 427 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 1,705 shares
     issuable as part of the Note Restructuring Agent's Shares.

(60) Consists of shares of Common Stock issuable upon conversion of Series B
     Preferred Stock, at $1.00 per share.

(61) Includes 2,798 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 749 Placement Agent's Warrants, plus 299
     Placement Agent's Shares, 350 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 1,400 shares
     issuable as part of the Note Restructuring Agent's Shares.

                                      -68-
<PAGE>
(62) Includes 363 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 188 Placement Agent's Warrants, plus 75
     Placement Agent's Shares, 20 shares of common stock issuable to this person
     upon the exercise of the Restructuring Warrants and 80 shares issuable as
     part of the Note Restructuring Agent's Shares.

(63) Includes 1,840 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 493 Placement Agent's Warrants, plus 197
     Placement Agent's Shares, 230 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 920 shares
     issuable as part of the Note Restructuring Agent's Shares.

(64) Includes 6,696 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 1,000 Bridge Warrants, 250 Note Extension
     Warrants, 395 shares issued pursuant to the Warrants' anti-dilution
     provisions, 3,000 shares of common stock issuable upon conversion of Series
     B Preferred Stock, at $1.00 per share, 51 shares of common stock received
     in connection with the Note Extension and 2,000 shares of common stock
     issuable to this person upon conversion of the Amended Note. Also includes
     an additional 1,000 shares issuable to this person as a result of the Note
     Restructuring.

(65) Includes 14,239 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 2,500 Bridge Warrants, 625 Note
     Extension Warrants, 987 shares issued pursuant to the Warrants'
     anti-dilution provisions, 5,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 127 shares of
     common stock received in connection with the Note Extension and 5,000
     shares of common stock issuable to this person upon conversion of the
     Amended Note. Also includes an additional 2,500 shares issuable to this
     person as a result of the Note Restructuring.

(66) This entity is controlled by Robert R. Sams, a member of PICK's Board of
     Directors. This selling stockholder's beneficial ownership includes shares
     owned by Mr. Sams, but excludes 9,600 shares owned by Vulcan Petroleum of
     which Mr. Sams is a director and minority shareholder. See "Certain
     Relationships and Related Transactions."

(67) Includes 6,000 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 268 Placement Agent's Warrants, 107
     Placement Agent's Shares, 5,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 125 shares of
     common stock issuable to this person upon the exercise of the Restructuring
     Warrants and 500 shares issuable as part of the Note Restructuring Agent's
     Shares.

(68) Includes 3,810 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 936 Placement Agent's Warrants, 374
     Placement Agent's Shares, 2,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 100 shares of
     common stock issuable to this person upon the exercise of the Restructuring
     Warrants and 400 shares issuable as part of the Note Restructuring Agent's
     Shares.

(69) This entity is controlled by Pastor Alberto Delgado, an advisor to the
     Company and a former member of the Board of Directors. This selling
     shareholder's beneficial ownership includes Pastor Delgado's non-qualified
     stock options to purchase up to 6,250 shares at $5.50 per share, 315,000
     shares of Common stock issuable upon conversion of Series B Preferred Stock
     and 50,000 shares of Common stock issuable upon exercise of non-qualified
     stock options which vest on March 3, 2000. Excludes

                                      -69-
<PAGE>

     non-qualified stock options to purchase up to 18,750 shares at $5.50 per
     share, vesting on November 2, 1999. See "Certain Relationships and Related
     Transactions."

(70) Includes 10,470 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 2,122 Placement Agent's Warrants,
     848 Placement Agent's Shares, 5,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 500 shares of
     common stock issuable to this person upon the exercise of the Restructuring
     Warrants and 2,000 shares issuable as part of the Note Restructuring
     Agent's Shares.

(71) This person is an officer of Commonwealth, however his shareholdings
     excludes all shares owned by Commonwealth. See footnote (20) above.

(72) Includes 17,500 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon conversion of Series B Preferred Stock, at
     $1.00 per share, 2,500 shares of common stock issuable to this person upon
     the exercise of the Restructuring Warrants and 10,000 shares issuable as
     part of the Note Restructuring Agent's Shares.

(73) Includes 6,736 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 450 Placement Agent's Warrants, 180
     Placement Agent's Shares, 5,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 275 shares of
     common stock issuable to this person upon the exercise of the Restructuring
     Warrants and 831 shares issuable as part of the Note Restructuring Agent's
     Shares.

(74) Includes 64,625 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 28,960 Placement Agent's Warrants,
     11,555 Placement Agent's Shares, 5,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 3,822 shares of
     common stock issuable to this person upon the exercise of the Restructuring
     Warrants and 15,288 shares issuable as part of the Note Restructuring
     Agent's Shares.

(75) Includes 8,192 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 2,742 Placement Agent's Warrants plus
     1,094 Placement Agent's Shares, 1,032 shares of common stock issuable to
     this person upon the exercise of the Restructuring Warrants and 3,324
     shares issuable as part of the Note Restructuring Agent's Shares.

(76) Includes 18,823 shares currently issuable listed under "Number of Shares
     Offered Hereby" upon exchange of 3,984 Placement Agent's Warrants, 5,000
     shares of common stock issuable upon conversion of Series B Preferred
     Stock, at $1.00 per share, 1,587 Placement Agent's Shares, 1,604 shares of
     common stock issuable upon the exercise of the Restructuring Warrants and
     6,648 shares of common stock issuable as part of the Note Restructuring
     Agent's Shares. Does not include 626,172 shares of common stock
     beneficially owned by Commonwealth Associates, listed above. Mr. Rosenbloom
     is an employee director and shareholder of Commonwealth. When combined with
     his shares, Mr. Rosenbloom would be deemed the beneficial owner of 14.59%
     of the Company's outstanding securities prior to the offering.

(77) Includes 10,725 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 2,750 Placement Agent's Warrants,
     1,100 Placement Agent's Shares, 5,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 375 shares of
     common stock issuable to this person upon the exercise of the Restructuring
     Warrants and 1,500 shares issuable as part of the Note Restructuring
     Agent's Shares.

                                      -70-
<PAGE>
(78) Includes 14,814 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 2,993 Placement Agent's Warrants,
     1,196 Placement Agent's Shares, 5,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 1,125 shares of
     common stock issuable to this person upon the exercise of the Restructuring
     Warrants and 4,500 shares issuable as part of the Note Restructuring
     Agent's Shares.

(79) Includes 3,810 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 936 Placement Agent's Warrants, 374
     Placement Agent's Shares, 2,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 100 shares of
     common stock issuable to this person upon the exercise of the Restructuring
     Warrants and 400 shares issuable as part of the Note Restructuring Agent's
     Shares.

(80) Includes 4,856 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 2,583 Placement Agent's Warrants plus
     1,023 Placement Agent's Shares, 250 shares of common stock issuable to this
     person upon the exercise of the Restructuring Warrants and 1,000 shares
     issuable as part of the Note Restructuring Agent's Shares.

(81) This entity is controlled by John Tydeman, a member of the Company's Board
     of Directors. This selling stockholder's beneficial ownership includes
     non-qualified stock options to purchase up to 6,250 shares at $5.50 per
     share and 60,000 shares of common stock issuable upon conversion of Series
     B Preferred Stock. Excludes non-qualified stock options to purchase up to
     18,750 shares at $5.50 per share, vesting on November 2, 1999, and 50,000
     shares of common stock issuable upon exercise of non-qualified stock
     options which vest on March 3, 2000. See "Certain Relationships and Related
     Transactions."

(82) Mr. Maranon is an advisor to the Company and a former member of the Board
     of Directors. This selling stockholders's beneficial ownership includes
     non-qualified stock options to purchase 25,000 shares of the Company's
     common stock, 15,000 shares at $3.70 per share and 10,000 shares at $5.50
     per share pursuant to the Plan and 50,000 shares of common stock issuable
     upon exercise of non-qualified stock options which vest on March 3, 2000
     and 3,725 shares of the Company's common stock beneficially owned by Mr.
     Maranon's daughter. See "Certain Relationships and Related Transactions."

(83) Mr. Malone is Chief Executive Officer of the Company. He received these
     shares as part of his signing bonus. Includes non-qualified stock options
     to purchase up to 100,000 shares of the Company's Common stock exercisable
     at $5.00 per share, and 50,000 shares of Common stock issuable upon
     conversion of 50,000 shares of Series B Convertible Preferred Stock issued
     to Mr. Malone as a signing bonus. Excludes 400,000 shares of Common stock
     issuable upon exercise of options which vest from April 1, 2000 through
     April, 2003.

(84) Includes 123,907 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 20,000 Bridge Warrants, 5,000 Note
     Extension Warrants, 7,896 shares issued pursuant to the Warrants'
     anti-dilution provisions, 50,000 shares of common stock issuable upon
     conversion of Series B Preferred Stock, at $1.00 per share, 1,011 shares of
     common stock received in connection with the note extension and 40,000
     shares of common stock issuable to this person upon conversion of the
     Amended Note. Also includes an additional 20,000 shares issuable to this
     person as a result of the Note Restructuring.

                                      -71-
<PAGE>
(85) Includes 2,536 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exercise of 1,811 Placement Agent's Warrants plus 725
     Placement Agent's Shares. Does not include 626,172 shares of common stock
     beneficially owned by Commonwealth Associates, listed above. Mr. Beuret is
     an employee, director and shareholder of Commonwealth. When combined with
     his shares, Mr. Beuret would be deemed the beneficial owner of 14.22% of
     the Company's outstanding securities prior to the offering.

(86) Includes 283,400 shares issuable upon the exercise of warrants at $1.00 per
     share, 111,550 shares issuable upon exercise of warrants at $5.00 per share
     issued in connection with the July 1998 Bridge Loan, as well as 23,400
     shares issued to Liberty Capital pursuant to a March 1998, as amended,
     Consulting Agreement.

(87) Includes shares issuable in connection with the satisfaction of
     indebtedness, subject to adjustment for additional shares registered
     hereby.

(88) Includes 10,000 shares of common stock issued to Michael Binder and 10,000
     shares of common stock underlying warrants issued to Michael Binder.

(89) Includes shares of common stock issued to The Dilenschneider Group Inc.

(90) Consists of Common Stock issuable upon conversion of Series D Preferred
     Stock, at $4.20 per share.

(91) Includes 109,935 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 29,750 Bridge Warrants, 7,438 Note
     Extension Warrants, 11,744 shares issued pursuant to the Warrants'
     anti-dilution provisions, 1,503 shares of common stock received in
     connection with the Note Extension and 59,500 shares of common stock
     issuable to this person upon conversion of the Amended Note. Also includes
     an additional 29,750 shares issuable to this person as a result of the Note
     Restructuring.

(92) Includes 18,477 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 5,000 Bridge Warrants, 1,250 Note
     Extension Warrants, 1,974 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 253 shares of common stock received in
     connection with the Note Extension and 10,000 shares of common stock
     issuable to this person upon conversion of the Amended Note. Also includes
     an additional 5,000 shares of common stock issuable to this person as a
     result of the Note Restructuring.

(93) Includes 83,391 shares currently issuable and listed under "Number of
     Shares Offered Hereby" upon exchange of 2,000 Bridge Warrants, 500 Note
     Extension Warrants, 790 shares of common stock issued pursuant to the
     Warrants' anti-dilution provisions, 80,000 shares of common stock issued
     upon conversion of Bridge Notes issued in the July 1998 Bridge Loan which
     were not exchanged for Amended Notes in April 1999 and 101 shares of common
     stock received in connection with the Note Extension.

(94) Includes 8,870 shares currently issuable and listed under "Number of Shares
     Offered Hereby" upon exchange of 2,400 Bridge Warrants, 600 Note Extension
     Warrants, 948 shares of common stock issued pursuant to the Warrants'
     anti-dilution provisions, 122 shares of common stock received in connection
     with the Note Extension and 4,800 shares of common stock issuable to this
     person upon conversion of the Amended Note. Also includes an additional
     2,400 shares of common stock issuable to this person as a result of the
     Note Restructuring.

                                      -72-
<PAGE>
 (95) Includes 5,573 shares currently issuable and listed under "Number of
      Shares Offered Hereby" upon exchange of 500 Bridge Warrants, 125 Note
      Extension Warrants, 198 shares issuable pursuant to the Warrants'
      anti-dilution provisions, 997 Placement Agent's Warrants, 398 Placement
      Agent's Shares, 26 shares of common stock received in connection with the
      Note Extension, 1,000 shares of common stock issuable to this person upon
      conversion of the Amended Note, 466 shares of common stock issuable upon
      the exercise of the Restructuring Warrants and 1,863 shares of common
      stock issuable as part of the Note Restructuring Agent's Shares. Also
      includes an additional 500 shares issuable to this person as a result of
      the Note Restructuring.


 (96) Includes an aggregate of 275,000 stock options consisting of incentive
      stock options to purchase up to 15,000 shares at $4.10 per share, 6,300
      shares at $6.10 per share, 3,700 shares at $6.10 per share under the Plan;
      and non-qualified stock options to purchase 250,000 shares at $5.50 per
      share outside of the Plan. Also includes 80,953 shares of common stock
      issuable upon conversion of 340,000 shares of Series D Convertible
      Preferred Stock at $4.20 per shares and warrants to purchase an additional
      6,800 shares of Common Stock at $6.30 per share.


 (97) Includes 9,900 shares issuable upon exercise of Series D Common Stock
      Purchase Warrants.

 (98) Includes 6,000 shares issuable upon exercise of Series D Common Stock
      Purchase Warrants.

 (99) Includes 4,000 shares issuable upon exercise of Series D Common Stock
      Purchase Warrants.

(100) Includes 2,000 shares issuable upon exercise of Series D Common Stock
      Purchase Warrants.

(101) Includes 1,300 shares issuable upon exercise of Series D Common Stock
      Purchase Warrants.

(102) Includes 10,000 shares issuable upon exercise of Series D Common Stock
      Purchase Warrants.

(103) Includes 6,800 shares issuable upon exercise of Series D Common Stock
      Purchase Warrants.

(104) Includes 30,000 shares issuable upon exercise of Series D Common Stock
      Purchase Warrants.

(105) Includes 60,000 shares of common stock issuable upon conversion of Series
      B Preferred Stock at $1.00 per share and 50,000 shares issuable upon
      exercise of stock options at $1.81 per share, but does not include any
      other shares owned by John Tydeman, a director of the Company, who
      controls this entity.

(106) Includes 50,000 shares issuable upon exercise of stock options at $1.81
      per share held by Mother of Three, Inc., a company controlled by Ricardo
      Maranon, an advisor to the Board of Directors.

                                      -73-
<PAGE>
(107) Includes 160,000 shares of common stock issuable upon conversion of Series
      B Preferred Stock at $1.00 per share and 50,000 shares issuable upon
      exercise of stock options at $1.81 per share, but does not include any
      other shares owned by Robert R. Sams, a director of the Company, who
      controls this entity. See note (66) above.

(108) This entity is counsel to the Company and its shares include 50,000 shares
      issuable upon exercise of non-qualified stock options to purchase 50,000
      shares at $5.00 per share held by SBK Investment Partners, an affiliated
      partnership, and 300,000 shares of common stock issuable upon exercise of
      non-qualified stock options in exchange for legal fees owed to such
      entity.

(109) Represents shares of common stock issued upon conversion of Series B
      Preferred Stock.

(110) Includes 560 shares currently issuable and listed under "Number of Shares
      Offered Hereby" upon exchange of 110 shares of common stock issuable to
      this person upon the exercise of the Restructuring Warrants and 450 shares
      of common stock issuable as part of the Note Restructuring Agent's Shares.

(111) Includes 125 shares currently issuable and listed under "Number of Shares
      Offered Hereby" upon exchange of 25 shares of common stock issuable to
      this person upon the exercise of the Restructuring Warrants and 100 shares
      of common stock issuable as part of the Note Restructuring Agent's Shares.

(112) Shares purchased by Gulfsat Communications Company, a vendor of the
      Company, upon conversion of a loan made to the Company at the rate of
      $10.00 per share.

(113) Shares issued to Worldcom Network Services, Inc., a vendor of the Company,
      in connection with the settlement of a lawsuit.

(114) Consists of 50,000 shares of common stock issued to IDT Corporation as a
      restructuring fee; 40,000 shares issuable in exchange for 400,000 warrants
      currently outstanding and 37,500 shares issuable in the event that a
      short-term note of the Company is extended by the Company into a long-term
      obligation

                          DESCRIPTION OF CAPITAL STOCK

AUTHORIZED

         The Company's authorized capital stock consists of 100,000,000 shares
of common stock, $.01 par value, and 10,000,000 shares of preferred stock, $.001
par value.

COMMON STOCK

         We are authorized to issue 100,000,000 shares of our common stock, $.01
par value per share, of which 5,522,128 shares were issued and outstanding as of
November 9, 1999. All of the outstanding shares of our common stock and those
issuable upon completion of this offering, are and will be, duly authorized,
validly issued, fully paid and non-assessable. Holders of shares of our common
stock are entitled to one vote for each share held of record on all matters to
be voted by shareholders. There are no preemptive, subscription, conversion or
redemption rights pertaining to our common stock. Holders of shares of our
common stock are entitled to receive dividends as they are declared on common
stock by the Board of Directors out of funds legally available therefor and to


                                      -74-
<PAGE>

share ratably in the assets available upon liquidation subject to rights of
creditors and any shares of preferred stock.

PREFERRED STOCK

         The Company is authorized to issue 10,000,000 shares of preferred
stock, $.001 par value per share.

         The preferred stock may be divided by the Board of Directors from time
to time into one or more series. The Board of Directors is authorized to
determine the rights, preferences, privileges and restrictions, including the
dividend rights, conversion rights, voting rights, terms of redemption
(including sinking fund provisions, if any) and liquidation preferences, of any
series of preferred stock and to fix the number of shares of any series without
any further vote or action by stockholders. The Company has no present plans,
proposals, commitments or arrangements to issue any additional shares of
Preferred Stock except in connection with raising additional funds. The
Company's Certificate of Incorporation authorizes the issuance of Preferred
Stock with such designations, rights, and preferences as may be determined from
time to time by the Board of Directors. Accordingly, the Board of Directors is
empowered, without shareholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the holders of the common stock. The Preferred
Stock may be used for any lawful purpose, and under certain circumstances it may
be deemed to be an anti-takeover device that could be utilized as a method of
discouraging, delaying or preventing a change in control of the Company without
approval of the Company's stockholders.

         The Board of Directors of the Company authorized seventy thousand
(70,000) of the ten million (10,000,000) shares of Preferred Stock of the
Company be designated Series A Convertible Preferred Stock, $.001 par value per
share, none of which shares have been issued.

         The Board of Directors of the Company authorized two million
(2,000,000) of the ten million (10,000,000) authorized shares of Preferred Stock
of the Company shall be designated Series B Convertible Preferred Stock, $.001
par value per share, of which 1,871,000 shares have been issued. The shares of
Series B Convertible Preferred Stock are convertible into 1,871,000 shares of
common stock at the rate of $1.00 per share. The shares of Series B Convertible
Preferred Stock have a $1.00 per share liquidation preference or an aggregate of
$1,871,000.

         The Board of Directors of the Company authorized five hundred thousand
(500,000) of the ten million (10,000,000) authorized shares of Preferred Stock
of the Company shall be designated Series D Convertible Preferred Stock, $.001
par value per share, of which 500,000 shares have been issued. The 500,000
shares of Series D Convertible Preferred Stock are convertible into 1,190,476
shares of common stock at the rate of $4.20 per share. The shares of Series D
Convertible Preferred Stock have a $10.00 per share liquidation preference or an
aggregate of $5,000,000.

         The holders of Series B and Series D Convertible Preferred Stock
("Holders") shall be entitled to receive, when, as and if declared by the Board
of Directors of the Company, out of the funds of the Company legally available
therefor, dividends ratably with any declaration or payment of any dividend with
holders of the common stock or other junior securities of the Company, when, as
and if declared by the Board of Directors, based on the number of shares of
common stock into which each share of Series B and Series D Preferred Stock is
then convertible.

                                      -75-
<PAGE>
         In addition to any other rights provided for herein or by law, the
holders of Series B and Series D Convertible Preferred Stock shall be entitled
to vote, together with the holders of common stock as one class, on all matters
as to which holders of common stock shall be entitled to vote, in the same
manner and with the same effect as such common stock holders. In any such vote,
each share of Series B and Series D Convertible Preferred Stock shall entitle
the holder thereof to the number of votes per share that equals the number of
whole shares of common stock into which each such share of Series B and Series D
Convertible Preferred Stock is then convertible, calculated to the nearest
share.

         So long as at least twenty percent (20%) of either the Series B or
Series D Convertible Preferred Stock remains outstanding, the consent of the
holders of two-thirds of the then outstanding Series B or Series D Convertible
Preferred Stock, each voting as one class, either expressed in writing or at a
meeting called for that purpose, shall be necessary to permit effect or validate
the creation and issuance of any series of preferred stock or other security of
the Company which is senior as to distributions to either the Series B or Series
D Convertible Preferred Stock.

         So long as at least twenty percent (20%) of either the Series B or
Series D Convertible Preferred Stock remains outstanding, the consent of
two-thirds of the holders of the then outstanding Series B or Series D
Convertible Preferred Stock, each voting as one class, either expressed in
writing or at a meeting called for that purpose, shall be necessary to repeal,
amend or otherwise change the Company's Certificate of Designation or the
Articles of Incorporation, as amended, in a manner which would alter or change
the powers, preferences, rights, privileges, restrictions and conditions of the
Series B or Series D Convertible Preferred Stock so as to adversely affect
either the Series B or Series D Convertible Preferred Stock.


                              PLAN OF DISTRIBUTION

         The selling stockholders shares may be sold from time to time by the
selling stockholders in one or more transactions in the over-the-counter market,
in negotiated transactions or a combination of those methods of sale at market
prices prevailing at the time of sale, at prices related to such market prices
or at negotiated prices. The selling stockholders may also receive shares
without restrictive legend upon exercise or conversion of outstanding
convertible securities.

         The selling stockholders shares may be sold from time to time directly
to purchasers by the selling stockholders and/or by their assignees,
transferees, pledgees or other successors for their own accounts and not for the
account of the Company. Alternatively, the selling stockholders may from time to
time offer the selling stockholder shares through underwriters, dealers or
agents. The distribution of the selling stockholder shares by the selling
stockholders may be effected from time to time in one or more transactions or a
combination of such methods of sale, that may take place in the over-the-counter
market including:

         o ordinary broker's transactions and transactions in which the broker
           solicits purchasers;

         o privately negotiated transactions or pledges;

         o through sales to one or more broker/dealers for resale of these
           shares for their own account as principals, pursuant to this
           prospectus;

                                      -76-
<PAGE>
         o in a block trade in which the broker or dealer so engaged will
           attempt to sell the securities as agent, but may position and resell
           a portion of the block as principal to facilitate the transaction; or

         o in exchange distributions and/or secondary distributions, at market
           prices prevailing at the time of sale, at prices related to such
           prevailing market prices or at negotiated prices.


         Usual and customary or specifically negotiated brokerage fees or
commissions may be paid by these holders in connection with the sales. In any
event however, the maximum compensation (commission, discount or solicitation
fee) to be received by any underwriter, broker-dealer and/or agent will not be
greater than eight (8) percent for sale of any shares and/or warrants.


         In connection with distributions of the selling stockholder shares or
otherwise, the selling stockholders may enter into hedging transactions with
broker-dealers. In connection with these transactions, broker-dealers may engage
in short sales of the selling stockholder shares in the course of hedging the
positions they assume with selling stockholders. The selling stockholders also
may sell selling stockholder shares short and deliver the selling stockholder
shares to close out short positions. The selling stockholders also may enter
into option or other transactions with broker-dealers which require the delivery
to the broker-dealer of the selling stockholder shares, which the broker-dealer
may resell pursuant to this prospectus. The selling stockholders also may pledge
the selling stockholder shares to a broker or dealer and upon a default, the
broker or dealer may effect sales of the pledged selling stockholder shares
pursuant to this prospectus.

         The selling stockholders and/or their assignees, transferees,
intermediaries, donees, pledgees or other successors in interest through whom
the selling stockholder shares are sold may be deemed "underwriters" within the
meaning of section 2(11) of the Securities Act, with respect to the selling
stockholder shares offered and any profits realized or commissions received may
be deemed to be underwriting compensation. Any broker-dealers that participate
in the distribution of the selling stockholder shares also may be deemed to be
"underwriters," as defined in the Securities Act, and any commissions,
discounts, concessions or other payments made to them, or any profits realized
by them upon the resale of any selling stockholder shares purchased by them as
principals, may be deemed to be underwriting commissions or discounts under the
Securities Act. The selling stockholders have advised us that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there an underwriter or coordinating broker acting in connection with the
proposed sale of selling stockholder shares by the selling stockholders.

         Under states' securities laws, the selling stockholder shares may be
sold only through registered or licensed brokers or dealers. In addition, the
selling stockholder shares may not be sold unless the selling stockholder shares
have been registered or qualified for sale in various states or an exemption
from registration or qualification is available and is complied with.

         Registration of the selling stockholder shares is being made pursuant
to the individual securities purchase agreements between us and each of the
selling stockholders. Pursuant to the terms of these agreements, we will pay all
expenses incident to the offering and sale of the selling stockholder shares to
the public except as described hereinafter. We will not pay, among other
expenses, commissions and discounts of underwriters, dealers or agents or the
fees and expenses of counsel for the selling stockholders. In some cases, we
have agreed to indemnify the selling stockholders and may indemnify any
broker-dealer that participates in transactions involving the sale of selling
stockholder shares against various liabilities, including liabilities under the
Securities Act.

                                      -77-
<PAGE>
         There can be no assurance that we or any of the selling stockholders
will sell any or all of the selling stockholder shares offered by them
hereunder.

         The sale of the selling stockholder shares is subject to the prospectus
delivery and other requirements of the Securities Act. To the extent required,
we will use our best efforts to file and distribute, during any period in which
offers or sales are being made, one or more amendments or supplements to this
prospectus or a new registration statement with respect to the selling
stockholder shares to describe any material information with respect to the plan
of distribution not previously disclosed in this prospectus, including, but not
limited to, the number of shares being offered and the terms of the offering,
including the name or names of any underwriters, dealers or agents, if any, the
purchase price paid by the underwriter for selling stockholder shares purchased
from a selling stockholder, and any discounts, commissions or concessions
allowed or reallowed or paid to dealers and the proposed selling price to the
public, and other facts material to the transaction. In addition, upon the
Company being notified by a selling stockholder that a donee or pledgee intends
to sell more than 500 shares, a supplement to this prospectus will be filed.

         Under the Exchange Act, and the regulations thereunder, any person
engaged in a distribution of the selling stockholder shares offered by this
prospectus may not simultaneously engage in market-making activities with
respect to our common stock during the applicable "cooling off" period five
business days prior to the commencement of such distribution. In addition, and
without limiting the foregoing, the selling stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation, Regulation M, in connection with
transactions in the shares, which provisions may limit the timing of purchases
and sales of selling stockholder shares by the selling stockholders.

         Selling stockholders also may resell all or a portion of the selling
stockholder shares in open market transactions in reliance upon Section 4(l) of
the Securities Act or Rule 144 promulgated thereunder, provided they meet the
criteria and conform to the requirements of such rules.

                                     EXPERTS

         The consolidated financial statements of the Company as of December 31,
1998 appearing in this prospectus and Registration Statement have been audited
by Goldstein Golub Kessler LLP, independent auditors, as indicated in their
report appearing elsewhere herein, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.

         The consolidated financial statements of the Company as of December 31,
1997 appearing in this prospectus and Registration Statement have been audited
by Durland & Company, CPAs, P.A., independent auditors, as indicated in their
report appearing elsewhere herein, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.

         Effective September 17, 1998, Goldstein Golub Kessler LLP were engaged
as the Company's independent accountants for the 1998 fiscal year. The change in
the independent accountants had been approved by the Company's Board of
Directors. Upon the engagement of Goldstein Golub Kessler LLP, the Company
dismissed Durland & Company, CPA's, P.A., its independent accountant for the
years ended December 31, 1996 and 1997. The Company has no disagreements with
its current and former accountants on accounting and financial disclosures.

                                      -78-
<PAGE>


                                  LEGAL MATTERS

         Certain legal matters in connection with the sale of the shares of the
common stock offered hereby will be passed upon for the Company by Snow Becker
Krauss P.C., New York, New York. Snow Becker Krauss P.C. owns an option to
purchase 300,000 shares of common stock of the Company. SBK Investment Partners,
a partnership consisting of members of Snow Becker Krauss P.C. owns 5,000 shares
of common stock and an option to purchase 50,000 shares of common stock of the
Company.

                                      -79-
<PAGE>


                                        PICK COMMUNICATIONS CORP. AND SUBSIDIARY

                                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

                          Year Ended December 31, 1998



Independent Auditor's Report                                             F-2

Independent Auditor's Report                                             F-3


Consolidated Financial Statements:

   Balance Sheet                                                         F-4
   Statement of Operations                                               F-5
   Statement of Stockholders' Deficiency                              F-6 - F-7
   Statement of Cash Flows                                            F-8 - F-9
   Notes to Financial Statements                                     F-10 - F-21













                                                                             F-1


<PAGE>

INDEPENDENT AUDITOR'S REPORT

The Board of Directors
PICK Communications Corp.

We have audited the accompanying consolidated balance sheet of PICK
Communications Corp. and Subsidiaries as of December 31, 1998, and the related
consolidated statements of operations, stockholders' deficiency, and cash flows
for the year then ended. 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 audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of PICK Communications
Corp. and Subsidiaries as of December 31, 1998, and the results of their
operations and cash flows for the year then ended in conformity with generally
accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 16 to
the consolidated financial statements, the Company has incurred substantial
recurring losses from operations, has a net capital deficiency and has a working
capital deficiency that raise substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 16. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


GOLDSTEIN GOLUB KESSLER LLP
New York, New York


March 5, 1999, except for portions of
Notes 13 and 17 as to which the
date is March 26, 1999, Notes 6 and 16
as to which the date is April 28, 1999
and except for the last two paragraphs of
Note 17 as to which the dates are
June 23, 1999 and July 23, 1999



                                                                             F-2



<PAGE>

                     Report of Certified Public Accountants


To:  The Board of Directors
     PICK Communications Corp.
     Wayne, New Jersey

We have audited the accompanying consolidated balance sheets of PICK
Communications Corp. and its Subsidiaries (the "Company") as of December 31,
1997 and the related consolidated statements of operations, stockholders' equity
and cash flows for the years ended December 31, 1997 and 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

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

In our opinion, the 1997 and 1996 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of PICK
Communications Corp. and its Subsidiaries as of December 31, 1997 and the
results of its operations and its cash flows for the years ended December 31,
1997 and 1996, in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 14 to
the consolidated financial statements, the Company has experienced significant
losses, resulting in a deficit equity position. The Company's financial position
and operating results raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 14. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Durland & Company, CPAs, P.A.


Palm Beach, Florida
April 29, 1998

                                                                             F-3



<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                               CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

December 31,                                                                               1998                 1997
- ----------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>                 <C>
ASSETS
Current Assets:
  Cash                                                                               $    248,551         $     44,400
  Accounts receivable, less allowance for doubtful accounts of
   $351,838 and $326,497, respectively                                                    740,886              451,818
  Prepaid expenses and other current assets                                               575,022              125,816
- ----------------------------------------------------------------------------------------------------------------------
      Total current assets                                                              1,564,459              622,034
- ----------------------------------------------------------------------------------------------------------------------
Property and Equipment - at cost, net of accumulated depreciation
 and amortization of $428,199 and $68,488, respectively                                 5,048,551            1,000,083
- ----------------------------------------------------------------------------------------------------------------------
Other Assets:
  Security deposits                                                                       178,146               24,396
  Investment in marketable equity securities                                                    -              171,000
  Deferred income tax asset, net of valuation allowance of $11,000,000
   and 4,800,000 respectively                                                                   -                    -
- ----------------------------------------------------------------------------------------------------------------------
      Total other assets                                                                  178,146              195,396
- ----------------------------------------------------------------------------------------------------------------------
      Total Assets                                                                   $  6,791,156         $  1,817,513
======================================================================================================================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
  Current portion of debt                                                             $ 2,127,500         $  1,000,000
  Current portion of capital leases                                                       271,676              146,128
  Accounts payable and accrued expenses                                                 7,690,978            4,876,336
  Deferred revenue - prepaid calling cards                                              2,183,806              681,653
  Other current liabilities                                                             3,967,841            1,323,525
- ----------------------------------------------------------------------------------------------------------------------
      Total current liabilities                                                        16,241,801            8,027,642
Capital Leases, less current portion                                                    1,042,716              794,905
Short term debt expected to be refinanced, less current portion                         9,772,500                    -
- ----------------------------------------------------------------------------------------------------------------------
      Total liabilities                                                                27,057,017            8,822,547
- ----------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Minority Interest in Consolidated Subsidiary                                               86,018               88,080
- ----------------------------------------------------------------------------------------------------------------------
Stockholders' Deficiency:
  Common stock - $.01 par value; authorized 10,000,000 shares at December 31,
   1998 and 7,500,000 shares at December 31, 1997; 3,820,188 issued and
   3,816,638 outstanding at December 31, 1998;
   4,332,532 issued and 3,605,982 outstanding at December 31, 1997                         38,202               43,325
  Additional paid-in capital                                                            4,008,029            5,886,825
  Options and warrants                                                                  2,687,461               21,242
  Treasury stock, at cost, 3,550 and 726,550 shares at
   December 31, 1998 and 1997, respectively                                               (11,978)          (3,072,222)
  Accumulated other comprehensive income                                                        -               38,000
  Accumulated deficit                                                                 (27,073,593)         (10,010,284)
- ----------------------------------------------------------------------------------------------------------------------
      Stockholders' deficiency                                                        (20,351,879)          (7,093,114)
- ----------------------------------------------------------------------------------------------------------------------
      Total Liabilities and Stockholders' Deficiency                                 $  6,791,156         $  1,817,513
======================================================================================================================
</TABLE>

               The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements



                                                                             F-4

<PAGE>


                                   PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      CONSOLIDATED STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Year ended December 31,                                              1998                 1997                 1996
- ----------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                  <C>                   <C>
Costs and expenses:
  Selling, general and administrative                           $  2,094,025         $    218,917          $   603,840
  Depreciation and amortization                                       45,805              180,531                4,050
- ----------------------------------------------------------------------------------------------------------------------

Loss before other income (expense)                                (2,139,830)            (399,448)            (607,890)
- ----------------------------------------------------------------------------------------------------------------------

Other income (expense):
  Gain on in-substance defeasance                                          -                    -               53,080
  License fees                                                             -                    -            3,650,000
  Loss on disposal of fixed assets                                         -                    -              (50,271)
  Write-off of intangible asset                                            -             (441,205)                   -
  Net gains (losses) on marketable equity securities                (133,000)          (9,449,079)           4,784,000
- ----------------------------------------------------------------------------------------------------------------------
Total other income (expense)                                        (133,000)          (9,890,284)           8,436,809
- ----------------------------------------------------------------------------------------------------------------------

Income (loss) before minority interest in subsidiary
 loss, income taxes and discontinued operations                   (2,272,830)         (10,289,732)           7,828,919

Minority interest in subsidiary loss                                   2,062              434,064              260,541

Benefit (provision) for income taxes                                       -            1,808,000           (1,808,000)

Loss from discontinued operations                                (14,792,541)          (1,452,134)          (4,645,670)
- ----------------------------------------------------------------------------------------------------------------------
Net income (loss)                                               $(17,063,309)        $ (9,499,802)         $ 1,635,790
======================================================================================================================

Net income (loss) per common share - basic                      $      (4.62)        $      (2.57)         $       .39
======================================================================================================================

Weighted average shares outstanding - basic                        3,692,356            3,695,853            4,199,150
======================================================================================================================
</TABLE>

               The accompanying notes and independent auditor's report should
               be read in conjunction with the consolidated financial statements



                                                                             F-5

<PAGE>
                                   PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                              CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                              Common Stock
                                       -----------------------     Additional     Options
                                         Number                     Paid-in         and            Stock          Treasury
                                       of Shares       Amount       Capital       Warrants      Subscription        Stock
- --------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>            <C>            <C>          <C>              <C>             <C>
Balance at December 31, 1995           40,542,516      $81,085     $2,018,780        -           $(800,000)              -
 one for ten reverse stock split
 (See Note 17)                        (36,488,264)           -              -        -                   -               -
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995            4,054,252       81,085      2,018,780                     (800,000)
Issuance of common stock for cash
 and reduction of receivable               25,000          500        249,500        -            (125,000)              -
Issuance of common stock
 for prepaid advertising                  115,000        2,300      2,697,700        -                   -               -
Issuance of common stock for
 500,000 shares of Ultimistics, Inc.      125,000        2,500      1,272,500        -                   -               -
Reacquisition of shares for cash          (23,000)           -              -        -                   -       $ (29,500)
Reacquisition of shares for cash,
 prepaid calling cards and unused
 advertising                              (25,000)           -              -        -                   -        (572,589)
Issuance of common stock for
 compensation and services                 50,500        1,010        161,240        -                   -               -
Collections of subscription
 receivable                                     -            -              -        -             325,000               -
Accumulated other comprehensive
 income (loss)                                  -            -              -        -                   -               -
Net income                                      -            -              -        -                   -               -
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1996            4,321,752       87,395      6,399,720        -            (600,000)       (602,089)
Reduction of $.02 to $.01
 par value                                      -      (43,697)        43,697        -                   -               -
Cancellation of 60,000 shares
 subscribed                               (60,000)        (600)      (599,400)       -             600,000               -
Reacquisition of shares for cash           (3,550)           -              -        -                   -         (11,978)
Reacquisition of shares for
 unused prepaid advertising, with
 a book value of $2,038,155               (75,000)           -              -        -                   -      (2,038,155)

<CAPTION>
                                       Accumulated                           Total
                                          Other                          Stockholders'
                                      Comprehensive     Accumulated         Equity
                                      Income (Loss)       Deficit        (Deficiency)
- --------------------------------------------------------------------------------------
<S>                                        <C>              <C>               <C>
Balance at December 31, 1995                     -      $(2,146,272)       $(846,407)
 one for ten reverse stock split
 (See Note 17)                                   -                -                -
- --------------------------------------------------------------------------------------
Balance at December 31, 1995                     -       (2,146,272)        (846,407)
Issuance of common stock for cash
 and reduction of receivable                     -                -          125,000
Issuance of common stock
 for prepaid advertising                         -                -        2,700,000
Issuance of common stock for
 500,000 shares of Ultimistics, Inc.             -                -        1,275,000
Reacquisition of shares for cash                 -                -          (29,500)
Reacquisition of shares for cash,
 prepaid calling cards and unused
 advertising                                     -                -         (572,589)
Issuance of common stock for
 compensation and services                       -                -          162,250
Collections of subscription
 receivable                                      -                -          325,000
Accumulated other comprehensive
 income (loss)                         $(3,904,965)               -       (3,904,965)
Net income                                       -        1,635,790        1,635,790
- ------------------------------------------------------------------------------------
Balance at December 31, 1996            (3,904,965)        (510,482)         869,579
Reduction of $.02 to $.01
 par value                                       -                -                -
Cancellation of 60,000 shares
 subscribed                                      -                -                -
Reacquisition of shares for cash                 -                -          (11,978)
Reacquisition of shares for
 unused prepaid advertising, with
 a book value of $2,038,155                      -                -       (2,038,155)

                                                                          (continued)
</TABLE>
       The accompanying notes and independent auditor's report should
       be read in conjunction with the consolidated financial statements

                                                                             F-6
<PAGE>


                                  PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                              CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                             Common Stock
                                       -----------------------      Additional      Options
                                         Number                      Paid-in          and            Stock         Treasury
                                       of Shares        Amount        Capital       Warrants      Subscription       Stock
- --------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>             <C>           <C>           <C>             <C>             <C>
Reacquisition of shares for
 Firenze, Ltd. and Ultimistics, Inc.     (600,000)           -              -             -            -         $  (420,000)
Issuance of common stock for
 services                                  22,700      $   227    $    42,808             -            -                   -
Issuance of warrants in connection
 with short-term debt                           -            -              -    $   21,242            -                   -
Accumulated other comprehensive
 income (loss)                                  -            -              -             -            -                   -
Net loss                                        -            -              -             -            -                   -
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997            3,605,902       43,325      5,886,825        21,242            -          (3,072,222)
Issuance of common stock for
 compensation                              66,299          663        296,363             -            -                   -
Issuance of common stock in
 connection with private placement        139,437        1,394        864,405             -            -                   -
Issuance of common stock upon                                                             -            -                   -
 exercise of warrants by director           5,000           50         13,450             -            -                   -
Issuance of warrants in connection
 with short-term debt                           -            -              -     2,359,940            -                   -
Issuance of options for compensation            -            -              -       306,279            -                   -
Cancellation of 723,000
 shares of treasury stock                       -       (7,230)    (3,053,014)            -            -           3,060,244
Accumulated other comprehensive
 income (loss)                                  -            -              -             -            -                   -
Net loss                                        -            -              -             -            -                   -
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998            3,816,638     $38,202    $ 4,008,029    $2,687,461          $-0-     $      (11,978)
================================================================================================================================

<CAPTION>

                                       Accumulated                           Total
                                          Other                          Stockholders'
                                      Comprehensive     Accumulated         Equity
                                      Income (Loss)       Deficit        (Deficiency)
- --------------------------------------------------------------------------------------
<S>                                         <C>             <C>             <C>
Reacquisition of shares for
 Firenze, Ltd. and Ultimistics, Inc.             -                  -     $   (420,000)
Issuance of common stock for
 services                                        -                  -           43,035
Issuance of warrants in connection
 with short-term debt                            -                  -           21,242
Accumulated other comprehensive
 income (loss)                          $3,942,965                  -        3,942,965
Net loss                                         -       $ (9,499,802)      (9,499,802)
- --------------------------------------------------------------------------------------
Balance at December 31, 1997                38,000        (10,010,284)      (7,093,114)
Issuance of common stock for
 compensation                                    -                  -          297,026
Issuance of common stock in
 connection with private placement               -                  -          865,799
Issuance of common stock upon                    -                  -
 exercise of warrants by director                -                  -           13,500
Issuance of warrants in connection
 with short-term debt                            -                  -        2,359,940
Issuance of options for compensation             -                  -          306,279
Cancellation of 723,000
 shares of treasury stock                        -                  -                -
Accumulated other comprehensive
 income (loss)                             (38,000)                 -          (38,000)
Net loss                                         -        (17,063,309)     (17,063,309)
- --------------------------------------------------------------------------------------
Balance at December 31, 1998            $      -0-       $(27,073,593)    $(20,351,879)
======================================================================================

</TABLE>

      The accompanying notes and independent auditor's report should be read in
      conjunction with the consolidated financial statements



                                                                             F-7

<PAGE>


                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                         CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Year ended December 31,                                                      1998           1997               1996
- ----------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>            <C>                <C>
Cash flows from operating activities:
  Net income (loss)                                                    $(17,063,309)    $(9,499,802)       $ 1,635,790
  Adjustments to reconcile net income (loss) to net cash
   used in operating activities:
    Loss (gain) on marketable securities                                    133,000       9,449,079         (4,784,000)
    Revenue from license fees                                                     -               -         (3,650,000)
    Gain on in-substance defeasance                                               -               -            (53,080)
    Advertising expense                                                           -               -            256,845
    Stock, options and warrants issued for compensation
     or services                                                            603,305          64,277            162,250
    Amortization of debt discounts and placement expenses                 4,656,773               -                  -
    Depreciation and amortization                                           359,711         180,531            181,758
    Write-off of intangible asset                                                 -         441,205                  -
    Loss on abandonment of property and equipment                                 -               -             50,271
    Minority interest in subsidiary loss                                     (2,062)       (434,064)          (260,541)
    Bad debt expense                                                        125,740         253,270            219,746
    Adjustment to provision for contingent liabilities                            -        (649,563)         1,749,563
    Provision (benefit) for deferred income taxes                                 -      (1,808,000)         1,808,000
    Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable                           (414,808)         73,092           (163,490)
      Decrease (increase) in other operating assets                        (602,956)        (44,046)           175,716
      Increase in accounts payable and accrued expenses                   2,814,642       3,408,763            880,161
      Increase (decrease) in deferred revenue                             1,502,153        (985,735)           862,005
      Increase (decrease) in other operating liabilities                  2,814,316        (868,679)          (289,375)
- ----------------------------------------------------------------------------------------------------------------------
          Net cash used in operating activities                          (5,073,495)       (419,672)        (1,218,381)
- ----------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Investment in debt securities                                                   -               -           (371,920)
  Purchase of property and equipment                                     (3,817,153)         (6,510)           (65,966)
- ----------------------------------------------------------------------------------------------------------------------
          Cash used in investing activities                              (3,817,153)         (6,510)          (437,886)
- ----------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Common stock issued for cash                                               13,500               -            250,000
  Common stock issued for cash by subsidiary                                      -               -            527,612
  Acquisition of treasury stock for cash                                          -         (11,978)           (44,500)
  Proceeds from stock subscriptions receivable                                    -               -            200,000
  Principal paid on capital leases                                         (217,667)              -                  -
  Proceeds from third-party debt                                         11,468,966         250,000            750,000
  Payments on third-party debt                                           (2,000,000)              -            (75,000)
  Funds advanced by stockholder                                              15,000         170,000             75,152
  Payments on stockholder advances                                         (185,000)        (25,152)           (50,000)
- ----------------------------------------------------------------------------------------------------------------------
          Net cash provided by financing activities                       9,094,799         382,870          1,633,264
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash                                             204,151         (43,312)           (23,003)
Cash at beginning of year                                                    44,400          87,712            110,715
- ----------------------------------------------------------------------------------------------------------------------
Cash at end of year                                                    $    248,551     $    44,400        $    87,712
======================================================================================================================
                                                                                                           (continued)
</TABLE>

      The accompanying notes and independent auditor's report should be read in
      conjunction with the consolidated financial statements




                                                                             F-8
<PAGE>


                   PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Year ended December 31,                                                    1998            1997           1996
- ------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>             <C>             <C>
Supplemental disclosure of cash flow information:

  Cash paid during the year for interest                               $1,167,716      $   75,877       $    8,271
==================================================================================================================


Supplemental schedule of noncash investing and
 financing activities:

  Assets acquired under capital leases                                 $  591,026      $  941,033                -
==================================================================================================================
  Discount on short-term debt                                          $1,312,934               -                -
==================================================================================================================
  Book value of marketable equity securities exchanged
   for common stock of the Company and its subsidiary                           -      $6,390,625                -
==================================================================================================================
  Book value of marketable equity securities exchanged
   for other marketable equity securities                                       -      $4,085,000                -
==================================================================================================================
  Book value of prepaid advertising and telephone cards
   exchanged for common stock of the Company and
   its subsidiary                                                               -      $2,458,155       $  557,589
==================================================================================================================
  Stock issued for investment in marketable equity securities                   -               -       $1,275,000
==================================================================================================================
  Stock issued for suscriptions receivable                                      -               -       $  125,000
==================================================================================================================
  Stock issued to acquire prepaid advertising                                   -               -       $2,700,000
==================================================================================================================
  In-substance defeasance                                                       -               -       $  425,000
==================================================================================================================
</TABLE>

      The accompanying notes and independent auditor's report should be read in
      conjunction with the consolidated financial statements



                                                                             F-9
<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1. PRINCIPAL       PICK Communications Corp. and Subsidiaries acted as a
   BUSINESS        wholesaler of long-distance telephone services and sold
   ACTIVITY AND    prepaid telephone calling cards through distributors.
   SUMMARY OF      Currently, the Company intends to provide satellite-based
   SIGNIFICANT     Internet access and interactive multimedia services to end
   ACCOUNTING      user service providers. Subsequent to the year end, the
   POLICIES:       Company discontinued the operations of its long distance
                   telephone service and prepaid calling card business
                   consisting of PICK US, PICK Net and PICK Net UK. (See note
                   17). The Company is headquartered in Wayne, New Jersey, and
                   also leases facilities and telephone switching equipment in
                   Jersey City, New Jersey, and Miami, Florida.

                   The accompanying consolidated financial statements include
                   the accounts of the Company and its wholly-owned
                   subsidiaries: PICK US Inc. f/k/a PICK Inc. ("PICK US"); PICK
                   Net Inc. ("PICK Net"); PICK Net UK PLC; PICK Sat Inc. and
                   P.C.T. Prepaid Telephone, Inc. ("PCT"), a majority-owned
                   subsidiary (collectively, the "Company"). All significant
                   intercompany balances and transactions have been eliminated.

                   Subsequent to year-end, the Company formed a new subsidiary,
                   PICK Online.Com Inc., a media content aggregator using a
                   satellite-based multicast delivery system for Internet
                   Service Providers and Broadband Networks.

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

                   For comparability, certain 1997 and 1996 amounts have been
                   reclassified, where appropriate, to conform to the
                   consolidated financial statement presentation used in 1998.

                   The consolidated financial statements have been prepared in
                   conformity with generally accepted accounting principles. In
                   preparing the consolidated financial statements, management
                   is required to make estimates and assumptions that affect the
                   reported amounts of assets and liabilities as of the dates of
                   the consolidated balance sheet and revenue and expenses for
                   the periods then ended. Actual results could differ from
                   those estimates.

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

                   Basic net loss per share is computed by dividing the net loss
                   by the weighted-average number of common shares outstanding
                   during the year. Diluted net loss per share is not presented
                   because the inclusion of common share equivalents would be
                   antidilutive.

                   The Company does not believe that any recently issued but not
                   yet effective accounting standards will have a material
                   effect on the Company's consolidated financial position,
                   results of operations or cash flows.

                   In 1998, approximately 72% and 10% of revenue from
                   discontinued operations were from two customers; in 1997,
                   approximately 19% and 13% of revenue from discontinued
                   operations were from two customers; and in 1996,
                   approximately 36% and 25% of revenue from discontinued
                   operations were from two customers. The Company performs
                   periodic credit evaluations of its customers, and may, under
                   certain circumstances, require deposits or prepayments where
                   deemed appropriate.



                                                                            F-10


<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                              Two customers comprised approximately 65% and 11%
                              of gross accounts receivable from discontinued
                              operations, respectively, at December 31, 1998.
                              Five customers comprised approximately 35%, 20%,
                              16%, 13% and 10% of gross accounts receivable from
                              discontinued operations, respectively, at December
                              31, 1997. The Company also purchases
                              telecommunications services from many of its
                              customers. Frequently, accounts receivable from
                              discontinued operations are settled by set-offs
                              against liabilities with the same party.

                              Depreciation of property and equipment is provided
                              for by the straight-line method over the estimated
                              useful lives of the related assets.

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

                              The Company accounts for income taxes in
                              accordance with Statement of Financial Accounting
                              Standards ("SFAS") No. 109, Accounting for Income
                              Taxes. The Company recorded a deferred tax asset
                              for the tax effect of net operating loss
                              carryforwards and temporary differences. In
                              recognition of the uncertainty regarding the
                              ultimate amount of income tax benefits to be
                              derived, the Company has recorded a full valuation
                              allowance.

    2.  PREPAID               Prepaid expense and other current assets consist
        EXPENSES AND          of the following:
        OTHER CURRENT
        ASSETS:
<TABLE>
<CAPTION>
                              December 31,                                                   1998                 1997
                              ----------------------------------------------------------------------------------------
<S>                           <C>                                                        <C>                  <C>
                              Computer equipment for resale                              $100,624             $  2,054
                              Prepaid expenses                                             99,722               27,699
                              Advances and other current assets                           225,020                    -
                              Deposits                                                    149,656               96,063
                              ----------------------------------------------------------------------------------------
                                                                                         $575,022             $125,816
                              ========================================================================================

</TABLE>

                                                                            F-11

<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

    3.  PROPERTY AND          Property and equipment, at cost, consists of the
        EQUIPMENT:            following:

<TABLE>
<CAPTION>
                                                                                                            Estimated
                              December 31,                                      1998           1997        Useful Life
                              ----------------------------------------------------------------------------------------
<S>                           <C>                                       <C>            <C>               <C>
                              Property, equipment and software            $1,186,464    $   127,538      3 and 5 years
                              Telephone switching equipment                1,532,059        941,033            5 years
                              Asset development/installation
                               in process                                  2,758,227              -
                              ----------------------------------------------------------------------------------------
                                                                           5,476,750      1,068,571
                              Less accumulated depreciation and
                               amortization                                  428,199         68,488
                              ----------------------------------------------------------------------------------------
                                                                          $5,048,551     $1,000,083
                              ========================================================================================
</TABLE>

                              Telephone switching equipment was acquired under
                              capital leases costing $1,252,271 and $941,033 at
                              December 31, 1998 and 1997, respectively, net of
                              accumulated depreciation of approximately $280,000
                              at December 31, 1998.

                              Asset development/installation in process consists
                              of (i) hardware and software costs related to the
                              Company's high-speed Internet business, which is
                              under development, and (ii) costs of
                              telecommunication equipment being installed.

                              Depreciation will commence when the development
                              and/or installation is complete and the assets are
                              fully operational.


    4.  PREPAID               In October 1995, the Company acquired the
        CELLULAR              worldwide rights to market, distribute, sell and
        TELEPHONE             manufacture a prepaid cellular telephone
        TECHNOLOGY            technology for $712,500, of which $212,500 was
        AND WRITE-OFF         paid by the issuance of 10,000 shares of the
        OF INTANGIBLE         Company's stock. Although the Company believes
        ASSET:                this technology may prove to have value, the
                              technology generated no revenue in 1997 and the
                              Company elected to write off its remaining
                              investment ($441,205) as of December 31, 1997.


    5.  INVESTMENT IN         In 1996, the Company acquired 4,700,000 restricted
        MARKETABLE            shares of the common stock of  Ultimistics, Inc.
        EQUITY                ("Ultimistics"). During the first quarter of 1997,
        SECURITIES:           the Company, in four separate transactions,
                              disposed of all of its shares of Ultimistics,
                              along with $420,000 of prepaid advertising, in
                              return for (i) 100,000 shares of the Company's
                              common stock, (ii) 10,000,000 shares of PCT, and
                              (iii) 380,000 restricted shares of the common
                              stock of Fairbanks, Inc. (which subsequently
                              changed its name to Jet Vacations, Inc. and then
                              Precom Tech Inc.). The Company recorded losses of
                              $9,399,079 on these transactions. During 1998, the
                              balance of $133,000 was written off.

                                                                            F-12

<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

    6.  SHORT-TERM DEBT      Debt consists of the following:
        EXPECTED TO BE
        REFINANCED:
<TABLE>
<CAPTION>
                              December 31,                                                               1998            1997
                              -----------------------------------------------------------------------------------------------
<S>                           <C>                                                                 <C>             <C>
                              Borrowings from bank                                                          -      $  750,000(a)
                              Loan from customer/supplier                                         $ 2,000,000(c)            -
                              Private placement debt                                                9,900,000(d)      250,000(b)
                              -----------------------------------------------------------------------------------------------
                                                                                                   11,900,000       1,000,000
                              Less current portion of debt                                          2,127,500       1,000,000
                              -----------------------------------------------------------------------------------------------
                              Short-term debt expected to be refinanced, less current portion     $ 9,772,500      $        -
                              ===============================================================================================
</TABLE>
                              (a)   The bank borrowing was repaid on July
                                    29,1998 from a portion of the proceeds of
                                    the borrowing discussed below (d).

                              (b)   The $250,000 short-term loan outstanding at
                                    December 31, 1997 was repaid in April 1998
                                    from the borrowing discussed in the
                                    following paragraph. As additional
                                    compensation for lending the Company funds,
                                    the individual was initially granted
                                    warrants (exercisable over three years) to
                                    purchase 25,000 shares of the Company's
                                    common stock at $5.00 per share. In return
                                    for extending the maturity date of the loan
                                    from March 9, 1998 to April 13, 1998, the
                                    individual was granted warrants for an
                                    additional 12,500 shares on the same terms.
                                    Management estimates the value of these
                                    additional warrants reflected in interest
                                    expense in 1998 at $5,750.

                              (c)   In February 1998, the Company amended its
                                    existing telecommunications agreement with
                                    IDT Corporation ("IDT"), one of its long
                                    distance vendors/customers. Under the terms
                                    of the amendment, the Company agreed to sell
                                    IDT up to 10,000,000 minutes per month of
                                    long distance traffic, through June 9, 1999,
                                    at favorable rates and IDT agreed to lend
                                    the Company $2,000,000. Of this amount,
                                    $500,000 was funded when the transaction was
                                    signed, $1,000,000 was funded in April 1998
                                    and the remaining $500,000 was advanced in
                                    June 1998. Concurrently, the Company has
                                    issued 100,000 warrants with an exercise
                                    price of $2.40 per share to purchase 10,000
                                    shares of common stock, 200,000 warrants
                                    with an exercise price of $10.00 per share
                                    to purchase 20,000 share of common stock
                                    and 100,000 warrants with an exercise price
                                    of $5.60 per share to purchase 10,000
                                    shares of common stock. The warrants are
                                    exercisable for a period of one year from
                                    the respective dates of grant. Management
                                    estimates the value of these warrants
                                    reflected in interest expense in 1998 at
                                    $30,879. The loan bears interest at 9% per
                                    annum and matured on February 9, 1999. In
                                    April 1999 the Company and IDT agreed in
                                    principal to a new note (the "New Note") due
                                    in six months with a principal amount of
                                    $2,060,000 at 12% interest per annum. The
                                    Company is required to make a payment of
                                    $500,000 on May 31, 1999, half of which
                                    shall be applied to the New Note and the
                                    balance against accounts receivable due to
                                    IDT. Thereafter, the Company has agreed to
                                    pay IDT $50,000 per month against the New
                                    Note. In connection with the New Note, the
                                    Company has granted additional shares of
                                    common stock and warrants as defined in the
                                    agreement.

<PAGE>

                                    In April 1998, the Company borrowed
                                    $1,000,000 from unaffiliated investors. The
                                    loan was unsecured, bore interest at 10% per
                                    annum and matured July 1, 1998. In
                                    consideration for advancing the funds, the
                                    lenders received warrants to purchase
                                    100,000 shares of the Company's common
                                    stock at $3.50 per share, which are
                                    exercisable on or before April 1, 2001. The
                                    $175,000 value assigned to these warrants is
                                    reflected in interest expense. The placement
                                    agent for this loan received $75,000 and
                                    warrants to purchase 25,000 shares of the
                                    Company's common stock at $3.50 per share.
                                    The $43,750 value assigned to these warrants
                                    is included in debt placement expenses. This
                                    borrowing was repaid on July 31, 1998 from a
                                    portion of the proceeds of the borrowing
                                    discussed below. Because the borrowing was
                                    repaid after the maturity date, the interest
                                    rate was increased, effective July 1, 1998,
                                    to 18% and the lenders and the placement
                                    agent were granted warrants to purchase
                                    125,000 shares of the Company's common
                                    stock, exercisable through August 14, 2001,
                                    at $2.50 per share. Management estimates the
                                    value of these warrants reflected in
                                    interest and debt placement expense at
                                    $326,900 and $81,725, respectively.

                                                                            F-13

<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                              (d)  Between July 29, 1998 and September 8, 1998,
                                   the Company, through Commonwealth Associates
                                   ("Commonwealth") placed $9,900,000 (face
                                   amount) of 10%, 120-day Senior Secured Notes
                                   (the "Original Notes") and 9,900,000 warrants
                                   to purchase 990,000 shares of the Company's
                                   common stock at $5.00 per share for five
                                   years (the "Placement"). The Notes are
                                   secured by all of the assets of PICK
                                   Communications Corp. The Company allocated
                                   $8,587,066 of the gross sale proceeds to the
                                   debt and $1,312,934 to the warrants. The
                                   $1,312,934 discount was amortized as interest
                                   expense over the original 120-day life of the
                                   Notes. In November and December 1998, the
                                   Company exercised its right to extend the
                                   maturity date of the Notes for 60 days. Under
                                   the terms of the Notes, the interest rate of
                                   the Notes was increased to 18% per annum,
                                   retroactive to the issuance of the Notes. In
                                   January, February and March 1999, the holders
                                   of the Notes agreed to extend the maturity of
                                   the Notes until April 27, 1999. In return for
                                   the extensions, the Company agreed to issue
                                   50,000 shares of its common stock and
                                   warrants to purchase 247,500 shares of the
                                   Company's common stock for five years at
                                   $5.00 per share to the holders of the Notes.
                                   On April 27, 1999, the holders of the
                                   Original Notes, who control in excess of 90%
                                   of the principal which was due on April 27,
                                   1999, consented to restructure their Original
                                   Notes (the "Restructured Notes") and extend
                                   the maturity date until April 27, 2002. In
                                   return, the Company has agreed, for a two
                                   year period, to allow each of the holders of
                                   the Restructured Notes certain rights
                                   regarding the purchase or exchange of the
                                   Company's common stock or warrants as
                                   defined in the agreement.

                              For the Placement of the Original Notes, the
                              Company paid Commonwealth and Liberty Capital (the
                              Company's co-financial advisor) $1,099,000 in
                              cash, issued 139,437 shares of common stock
                              (valued at $865,799) and warrants to purchase
                              250,986 shares of common stock at $5.00 per
                              share for five years (valued at $383,002). The
                              costs related to the Placement were being deferred
                              and amortized as debt placement expenses over the
                              term of the debt. At December 31, 1998, all debt
                              placement expenses were amortized and included in
                              the consolidated statement of operations.

    7.  ACCOUNTS              Accounts payable and accrued expenses consist of
        PAYABLE AND           the following.
        ACCRUED
        EXPENSES:
<TABLE>
<CAPTION>
                             <S>                  <C>                                 <C>                    <C>
                              December 31,                                                   1998                 1997
                              ----------------------------------------------------------------------------------------
                              Accounts payable - operating                             $5,530,511           $4,480,815
                              Accrued expenses - operating                                510,467              395,521
                              Accrued expenses - for equipment                          1,650,000                    -
                              ----------------------------------------------------------------------------------------
                                                                                       $7,690,978           $4,876,336
                              ========================================================================================

</TABLE>
                              Accounts payable at December 31, 1998 include
                              $1,120,544 payable to WorldCom Network Services,
                              Inc., which was payable in monthly installments of
                              between $350,000 and $385,544, plus interest at
                              18% per annum, through December 1998. The Company
                              is in the process of renegotiating payment terms
                              (see Note 13).

                                                                            F-14
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
    8.  OTHER CURRENT      Other current liabilities consist of the following:
        LIABILITIES:


<TABLE>
<CAPTION>
                           December 31,                                                   1998                 1997
                           ----------------------------------------------------------------------------------------
<S>                        <C>                                                      <C>                  <C>
                           Reserve for contingent liability                         $1,100,000           $1,100,000
                           Advance from customer                                     1,000,000                    -
                           Provision for loss on deferred revenue -
                            prepaid calling cards                                    1,580,000                    -
                           Customer deposits                                           287,841                    -
                           Advances from stockholder                                         -              170,000
                           Accrued compensation due to stockholders                          -               53,525
                           ----------------------------------------------------------------------------------------
                                                                                    $3,967,841           $1,323,525
                           ========================================================================================
</TABLE>
    9.  CAPITAL LEASE      The Company leases telephone switching equipment
        OBLIGATIONS:       under capital leases which expire during 2002. The
                           leases require monthly payments of principal and
                           interest imputed at 12% per annum.

                           Future minimum lease payments under capital leases
                           are as follows:
<TABLE>
<CAPTION>
                           Year ending December 31,
<S>                        <C>                                                                        <C>

                                       1999                                                             $   414,783
                                       2000                                                                 414,783
                                       2001                                                                 414,783
                                       2002                                                                 414,783
                           ----------------------------------------------------------------------------------------
                                                                                                          1,659,132
                           Less amount representing interest                                                344,740
                           ----------------------------------------------------------------------------------------
                                                                                                          1,314,392
                           Less current portion                                                             271,676
                           ----------------------------------------------------------------------------------------
                                    Capital leases, less current portion                                 $1,042,716
                           ========================================================================================
</TABLE>
    10. COMMITMENTS:       The Company leases facilities under noncancelable
                           operating leases expiring from July 2000 through
                           October 2003. The future minimum payments due
                           under such leases as of December 31, 1998 are as
                           follows:
<TABLE>
<CAPTION>
                           December 31,
                           ----------------------------------------------------------------------------------------
<S>                        <C>                                                                        <C>
                           1999                                                                         $   482,483
                           2000                                                                             400,744
                           2001                                                                             251,425
                           2002                                                                             169,769
                           2003                                                                             144,994
                           ----------------------------------------------------------------------------------------
                                    Total payments                                                       $1,449,415
                           ========================================================================================
</TABLE>

                                                                         F-15

<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                              Rental expense under operating leases was
                              $356,718, $106,586 and $45,315 for the years ended
                              December 31, 1998, 1997 and 1996, respectively.
                              The Company has the right to renew its operating
                              leases for terms of between three and five years.

                              At December 1998, the Company has outstanding
                              commitments for the purchase of telecommunications
                              and computer equipment and for the license of
                              computer software of approximately $690,000.

                              In September 1998, the Company entered into an
                              employment agreement with a key executive. This
                              agreement commenced January 1, 1999. The agreement
                              provides for annual base salaries of $300,000,
                              $350,000, $400,000, $450,000 and $500,000 for the
                              next five years. In addition, the agreement
                              provides for additional compensation, as defined
                              in the agreement.


    11. INCOME TAXES:         The Company's deferred tax assets at December 31,
                              1998 consist of the following:
<TABLE>
<CAPTION>

<S>                           <C>                                                                        <C>
                              Federal                                                                     $  9,300,000
                              State                                                                          1,700,000
                              ----------------------------------------------------------------------------------------
                                                                                                            11,000,000
                              Less valuation allowance                                                     (11,000,000)
                              ----------------------------------------------------------------------------------------
                                         Net deferred tax assets                                        $      - 0 -
                              ========================================================================================
</TABLE>
                              The deferred tax assets are comprised of the tax
                              benefit of net operating loss carryforwards and
                              capital loss carryforwards of approximately
                              $20,000,000 and $8,300,000, respectively, at
                              December 31, 1998. These losses are available to
                              offset future taxable income through the years
                              2018 and 2003, respectively.


    12. CONTRACT WITH         In February 1998, the Company entered into a
        BLACKSTONE            two-year agreement with Blackstone Calling Card,
        CALLING CARD,         Inc. ("Blackstone" and the "Blackstone
        INC.:                 Agreement"), a major distributor of prepaid
                              telephone calling cards. Under the terms of the
                              Blackstone Agreement, as amended, after a
                              six-month phase-in period commencing April 27,
                              1998, Blackstone would purchase prepaid calling
                              cards with a minimum retail value of $5,000,000
                              per month from the Company, which was expected to
                              result in net revenue of approximately $3,000,000
                              per month to the Company. While Blackstone's
                              purchases from the Company had increased
                              significantly during the first nine months of the
                              contract, it is anticipated that the Blackstone
                              Agreement will have to be amended to raise the per
                              minute rates charged to users of the prepaid
                              telephone calling cards sold through Blackstone
                              and lower the purchase minimum amount and the
                              corresponding revenue to the Company. The
                              Blackstone Agreement is also subject to
                              termination by either party without cause at the
                              end of any year upon 60 days' prior notice, or by
                              Blackstone if the Company fails to maintain
                              overall network quality.

                              Other current liabilities includes a provision of
                              $1,580,000 for anticipated losses from providing
                              future service on prepaid telephone calling cards
                              sold prior to December 31, 1998.

                                                                            F-16



<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

13.  LITIGATION AND           The Company is, from time to time, party to
     RESERVE FOR              litigation that arises in the ordinary course of
     CONTINGENT               its business operations. Except as described
     LIABILITY:               below, the Company is not presently a party to any
                              litigation that it believes would have a material
                              adverse effect on its business.

                              In February 1997, the Company commenced a
                              mediation action against American Telephone &
                              Telegraph ("AT&T") seeking $10,000,000 in damages
                              for breach of contract and fraudulent inducement
                              and malicious conduct under a carrier agreement
                              (the "Carrier Agreement") entered into in February
                              1996. The Company contracted with AT&T under the
                              Carrier Agreement for inbound 800 service and
                              outbound domestic and international long distance
                              service. The Company claims that AT&T reneged on
                              certain commitments to provide the Company with
                              lower international rates than the Company was
                              invoiced by AT&T. AT&T has claimed that the
                              Company owes it in excess of $1,000,000. In 1996,
                              the Company provided for a noncash reserve of
                              $1,750,000, which was reduced to $1,100,000 in the
                              third quarter of 1997. The reserve is included in
                              other current liabilities in the accompanying
                              consolidated financial statements. After two
                              mediation sessions, AT&T indicated that it
                              intended to withdraw from the mediation. On
                              November 5, 1997, the Company filed for
                              arbitration proceedings against AT&T and reduced
                              its claim to $5,000,000. The trial began on April
                              19, 1999 and ended on April 22, 1999. There can be
                              no assurance that the Company will be able to
                              prevail in this arbitration. Any adverse judgement
                              or settlement could have a material impact on the
                              Company's financial condition.

                              During March of 1999, Worldcom Network Services,
                              Inc., d/b/a Wiltel, (Worldcom) commenced a lawsuit
                              against the Company in the United States District
                              Court, Southern District of New York demanding a
                              judgment in the amount of $1,256,622 which
                              includes interest of 18% per annum plus costs and
                              expenses. The plaintiff had previously sued the
                              Company for failure to pay for telecommunications
                              services provided and the parties reached
                              agreement on a settlement. However, the Company
                              has not made the required payments. On April 15,
                              1999 the Company and Worldcom agreed to a 90-day
                              extension of monies due at an interest rate of 16%
                              per annum payable by June 30, 1999. Accounts
                              payable and accrued expenses includes a liability
                              of $1,137,352 for this settlement at December 31,
                              1998.


                                                                            F-17
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

14. STOCK OPTIONS:

                              In February 1996, the Company adopted an incentive
                              stock option plan for employees, directors,
                              independent contractors and consultants of the
                              Company which provides for the grant of stock
                              options and stock appreciation rights. Options may
                              be granted at prices not less than fair market
                              value of the Company's common stock at the date of
                              grant and may not be exercised more than 10 years
                              after the date granted. Unless otherwise provided,
                              options vest at a rate of 20% a year commencing
                              with the date of grant. Pursuant to this plan an
                              aggregate of 750,000 shares of common stock have
                              been reserved for issuance. Of the total number of
                              shares of common stock as of December 31, 1998,
                              395,500 shares of common stock relate to options
                              issued outside of the incentive stock option plan.

                              Transactions related to stock options are as
                              follows:
<TABLE>
<CAPTION>
                                                                                 Number of          Weighted-average
                                                                                  Shares             Price per share
                              ----------------------------------------------------------------------------------------
<S>                                                                              <C>                            <C>
                              Granted during 1996                                  350,000                      $ 8.80
                              ----------------------------------------------------------------------------------------
                              Balance at December 31, 1996                         350,000                        8.80
                              Granted                                              450,000                        2.30
                              Expired/canceled                                    (350,000)                      (8.80)
                              ----------------------------------------------------------------------------------------
                              Balance at December 31, 1997                         450,000                        2.30
                              Granted                                              680,000                        5.20
                              Exercised                                             (5,000)                      (2.70)
                              ----------------------------------------------------------------------------------------
                              Balance at December 31, 1998                       1,125,000                      $ 4.10
                              ========================================================================================
</TABLE>
                              The weighted-average fair value per share of
                              options granted during the years ended December
                              31, 1998, 1997 and 1996 amounted to $1.30, $6.40
                              and $1.00, respectively.

                              Approximately $306,000 is reflected in selling,
                              general and administrative expenses for the year
                              ended December 31, 1998 relating to options
                              granted to nonemployees.

                              The Company has elected, in accordance with the
                              provisions of SFAS No. 123, "Accounting for Stock
                              Based Compensation" to apply the current
                              accounting rules under Accounting Principles Board
                              Opinion No. 25 and related interpretations in
                              accounting for its stock options and, accordingly,
                              has presented the disclosure-only information as
                              required by SFAS No. 123. If the Company had
                              elected to recognize compensation cost based on
                              the fair value of the options granted at the grant
                              date as prescribed by SFAS No. 123, the Company's
                              net income (loss) and net income (loss) per common
                              share for the years ended December 31, 1998, 1997
                              and 1996 would approximate the pro forma amounts
                              indicated in the table below:
<TABLE>
<CAPTION>
                                                                                1998             1997             1996
                              ----------------------------------------------------------------------------------------
<S>                                                                     <C>              <C>                <C>
                              Net income (loss) - as reported           $(17,063,309)    $ (9,499,802)      $1,635,790
                              Net income (loss) - pro forma             $(17,253,914)    $(10,138,680)      $1,295,676
                              Diluted net income (loss) per
                               common share - as reported                     $(4.62)          $(2.57)           $ .39
                              Diluted net income (loss) per
                               common share - pro forma                       $(4.67)          $(2.74)           $ .31
                              ----------------------------------------------------------------------------------------
</TABLE>
                              The fair value of each option grant is estimated
                              on the date of grant using the Black-Scholes
                              option-pricing model with the following
                              weighted-average assumptions used for the years
                              ended December 31, 1998, 1997 and 1996,

                                                                            F-18
<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                              respectively; expected volatility of 18%, 134% and
                              68%, respectively; risk-free interest rates of
                              6.01%, 6.00% and 6.26%, respectively; no
                              annualized dividends paid with respect to a share
                              of common stock at the date of grant, and options
                              have expected lives of between two and five years.
                              The following table summarizes information about
                              fixed stock options outstanding at December 31,
                              1998:

<TABLE>
<CAPTION>
                                                                                          Options              Options
                                                                                        Outstanding          Exercisable
                              ------------------------------------------------------------------------------------------
                                                                      Weighted-
                                                         Number        Average     Weighted-     Number        Weighted-
                                                     Outstanding at   Remaining     Average  Exercisable at     Average
                                                      December 31,   Contractual   Exercise   December 31,     Exercise
                              Range of Exercise Prices    1998      Life (Years)     Price        1998           Price
                              ------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>        <C>        <C>                <C>
                              1 - $1.70-$2.70            395,000         0.6        $2.10         395,000         $2.10
                              2 - $3.00-$4.10            135,000         1.8        $3.60         135,000         $3.70
                              3 - $5.00-$5.50            575,000         4.2        $5.40         270,375         $5.40
                              4 - $6.10-$9.90             20,000         3.8        $8.00          20,000         $8.00
                              ------------------------------------------------------------------------------------------
                                     Total               112,500         2.6        $4.10         820,375         $5.40
                              ==========================================================================================
</TABLE>


15.   COMPREHENSIVE           Comprehensive income, as defined in SFAS No. 130,
      INCOME(LOSS):           "Reporting Comprehensive Income", includes all
                              changes in equity during a period from nonowner
                              sources. An example of items included in
                              comprehensive income that are excluded from net
                              income are unrealized gains or losses on
                              marketable equity securities. For the years ended
                              December 31, 1998, and 1997, changes in
                              accumulated other comprehensive income (loss) were
                              ($38,000) and $3,942,965, respectively and
                              relates to unrealized gains or losses on
                              marketable equity securities.

16.   GOING CONCERN           The accompanying consolidated financial statements
      MATTERS:                have been prepared assuming that the Company will
                              continue as a going concern, which contemplates
                              the realization of assets and the satisfaction of
                              liabilities in the normal course of business. The
                              Company has incurred substantial recurring losses
                              from operations, has a net capital deficiency
                              in the amount of $20,351,879 and has a working
                              capital deficiency of $14,677,342 that raise
                              substantial doubt about its ability to continue as
                              a going concern. In addition, the Company had
                              negative cash flow from operations in the years
                              ended December 31, 1998, 1997 and 1996.

                              Significant short-term obligations exist including
                              the payment of a settlement with Wiltel in the
                              amount of $1,256,622 payable by June 30, 1999 (See
                              Note 13); an agreement with IDT which requires a
                              payment of $500,000 by May 31, 1999 (See Note
                              (6c)) and normal cash flows from operations.
                              Without the Company's ability to extend the
                              pay-out terms of the aforementioned liabilities or
                              obtain additional long-term financing, as well as
                              increasing revenue and/or decreasing expenses, the


                                                                            F-19

<PAGE>
                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                              Company will be unable to continue as a going
                              concern. The financial statements do not include
                              any adjustments relating to the recoverability of
                              assets or the classification of liabilities should
                              the Company be unable to continue as a going
                              concern.

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


17.   SUBSEQUENT              During March 1999, the Company authorized the
      EVENTS:                 issuance of Series B and Series D Convertible
                              Preferred Stock totaling 2,500,000 shares of
                              convertible preferred stock. The Series B
                              Convertible Preferred Stock has a stated par value
                              of $.001 per share and is convertible into
                              2,000,000 shares of the Company's common stock.
                              The Series D Convertible Preferred Stock has a
                              stated par value of $.001 per share and is
                              convertible into 1,190,500 shares of the
                              Company's common stock.

                              During early 1999, the Company formed a 100% -
                              owned subsidiary, PICK Online.Com, Inc. to provide
                              audio and video broadcasting from radio and
                              television stations to be sent over the Internet.
                              This company is in its development stage and
                              management anticipates operations to commence
                              during 1999.

                              On March 3, 1999, the Board of Directors granted
                              each of the four independent directors three year
                              options to purchase 50,000 shares of common stock
                              at $5.10 per share. These options shall be fully
                              vested on March 3, 2000.

                              The Company intends to increase its authorized
                              shares of common stock from 10,000,000 to
                              40,000,000.


                              On June 23, 1999, the Company formalized its plan
                              to discontinue its long distance telephone service
                              and prepaid calling card business consisting of
                              PICK US, Pick Net and PICK Net UK. Accordingly,
                              the long distance telephone service and prepaid
                              calling card business are accounted for as a
                              discontinued operation in the accompanying
                              consolidated financial statements. The Company is
                              in the process of negotiating the sale of PICK Net
                              and PICK Net UK and the discontinuance of the
                              operation of PICK US. Management expects the sale
                              and discontinuance will be completed during 1999
                              and will reduce the Company's debt and working
                              capital deficiency.


<PAGE>


                              Operating results of discontinued long distance
                              telephone service and prepaid calling card
                              business are as follows:

For the year ended December 31,             1998         1997         1996
- --------------------------------------------------------------------------------

Sales of long-distance services       $  1,978,441  $ 7,669,243    $4,444,342
Sales of prepaid calling cards           7,844,462    1,346,660     1,425,340
- --------------------------------------------------------------------------------
Net sales                                9,822,903    9,015,903     5,869,682
- --------------------------------------------------------------------------------

Costs and expenses:
   Cost of sales                        16,392,544    8,439,186     8,150,794
   Selling, general and administrative   1,786,075    1,617,912     1,947,302
   Depreciation and amortization           313,906           --       177,708
   Bad debt expense                        125,740      253,270       219,746
- --------------------------------------------------------------------------------
Total costs and expenses                18,618,265   10,310,368     10,495,550
- --------------------------------------------------------------------------------

Loss before amortization of
   debt placement and
   interest expense                     (8,795,362)  (1,294,465)    (4,625,868)
Amortization of debt placement
   expenses and interest expense         5,997,179      157,669         19,802
- --------------------------------------------------------------------------------
Loss from Discontinued Operations     $(14,792,541) $(1,452,134)   $(4,645,670)
================================================================================


                              During July of 1999, the Company's Board of
                              Directors authorized a one for ten reverse split
                              of its common stock effective July 23, 1999. All
                              shares and per-share amounts in the accompanying
                              consolidated financial statements have been
                              restated to give effect to the reverse stock
                              split.

                                                                            F-20





<PAGE>

                                      PICK COMMUNICATIONS CORP. AND SUBSIDIARIES


                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================


18.  ALLOWANCE FOR            Information relating to the allowance for doubtful
     DOUBTFUL                 accounts is as follows at December 31,:
     ACCOUNTS:


<TABLE>
<CAPTION>
                                                     Balance at
                                                      Beginning        Charged to                         Balance at
                                                       of Year           Expense         Deductions       End of Year
                              ----------------------------------------------------------------------------------------

<S>                                                  <C>                  <C>             <C>                 <C>
                              1996                   $  42,650            $219,746        $  98,233           $164,163
                              ========================================================================================
                              1997                    $164,163            $253,270        $  90,936           $326,497
                              ========================================================================================
                              1998                    $326,497            $125,740         $100,399           $351,838
                              ========================================================================================
</TABLE>



                                                                            F-21

<PAGE>


                                        PICK COMMUNICATIONS CORP. AND SUBSIDIARY

                                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------


                            For the Six Months Ended
                                  June 30, 1999
                                  (unaudited)
                      And The Year ended December 31, 1998, As adjusted(1)

Consolidated Financial Statements:
   Balance Sheet                                            F-23
   Statement of Operations                                  F-24
   Statement of Stockholder' Deficiency                     F-25
   Statement of Cash Flows                                  F-26
   Notes to Financial Statements                        F-27 - F-37

(1) The June 30, 1999 10-Q gives effect to the discontinued operations of the
    long distance telephone service and the prepaid calling card business.
    Accordingly the December 31, 1998 balance sheet, statement of operations,
    and statement of cash flows presentation gives effect to the discontinued
    operations.













                                                                            F-22






<PAGE>

<TABLE>
<CAPTION>

                                                                          PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                                                                          CONSOLIDATED BALANCE SHEET
=======================================================================================================================
                                                                                        June 30,         December 31,
                                                                                         1999                1998
- -----------------------------------------------------------------------------------------------------------------------
                                                                                        (unaudited)
<S>                                                                                <C>                 <C>
ASSETS
Current Assets:
  Cash                                                                             $        465,915    $        17,052
  Prepaid expenses and other current assets                                                 361,082            278,352
  Current assets from discontinued operations                                               318,915          1,269,055
- -----------------------------------------------------------------------------------------------------------------------
      Total current assets                                                                1,145,912          1,564,459
- -----------------------------------------------------------------------------------------------------------------------
Property and Equipment - at cost, net of accumulated depreciation
 of $156,603 and $114,293, respectively                                                   4,366,267          3,195,169
- -----------------------------------------------------------------------------------------------------------------------
Other Assets:
  Security deposits                                                                         250,000            161,796
  Deferred income tax asset, net of valuation allowance of $11,000,000                           -                -
  Long-term assets from discontinued operations                                           1,923,663          1,869,732
- -----------------------------------------------------------------------------------------------------------------------
      Total other assets                                                                  2,173,663          2,031,528
- -----------------------------------------------------------------------------------------------------------------------
      Total Assets                                                                  $     7,685,842      $   6,791,156
=======================================================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
  Current portion of debt                                                           $          -       $        20,000
  Accounts payable and accrued expenses                                                   3,921,691          2,797,133
  Advance from customer                                                                   1,000,000          1,000,000
  Current liabilities from discontinued operations                                       12,939,314         12,317,168
- -----------------------------------------------------------------------------------------------------------------------
      Total current liabilities                                                          17,861,005         16,134,301
Debt, less current portion                                                                9,880,000          9,880,000
Long-term Liabilities from Discontinued Operations                                        1,042,716          1,042,716
- -----------------------------------------------------------------------------------------------------------------------
      Total liabilities                                                                  28,783,721         27,057,017
- -----------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Minority Interest in Consolidated Subsidiary                                                 86,018             86,018
- -----------------------------------------------------------------------------------------------------------------------
Stockholders' Deficiency:
  Preferred stock - $.001 par value; authorized 10,000,000 shares at June 30,
   1999;
   2,000,000 shares designated as Series B convertible preferred stock,
   aggregate liquidation value - $1,871,000, issued and outstanding 1,871,000 shares      1,871,000               -
   500,000 shares designated as Series D convertible preferred stock, aggregate
   liquidation value - $4,660,000, issued and outstanding 466,000 shares                  4,660,000               -
  Common stock - $.01 par value; authorized 40,000,000 and 10,000,000 shares,
   respectively; issued and outstanding 4,402,698 and 3,816,638 shares, respectively         44,062             38,202
  Additional paid-in capital                                                             75,367,972          4,008,029
  Options and warrants                                                                    2,720,071          2,687,461
  Treasury stock, at cost, 3,550 shares                                                     (11,978)           (11,978)
  Accumulated deficit                                                                  (105,835,024)       (27,073,593)
- -----------------------------------------------------------------------------------------------------------------------
      Stockholders' deficiency                                                          (21,183,897)       (20,351,879)
- -----------------------------------------------------------------------------------------------------------------------
      Total Liabilities and Stockholders' Deficiency                                $     7,685,842      $   6,791,156
=======================================================================================================================
</TABLE>

                                                                            F-23
<PAGE>


<TABLE>
<CAPTION>

                                                                            PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                                                                  CONSOLIDATED STATEMENT OF OPERATIONS
                                                                                                           (unaudited)
=======================================================================================================================

                                                                Three-month                       Six-month
                                                                period ended                     period ended
                                                                  June 30,                         June 30,
                                                          1999             1998            1999               1998
- -----------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                <C>             <C>                <C>
Costs and expenses:
  Selling, general and administrative                 $  1,123,212     $    284,118    $    2,075,703     $    455,217
  Depreciation and amortization                             27,736            6,715            42,310           13,193
- -----------------------------------------------------------------------------------------------------------------------

Loss before minority interest in subsidiary loss,
 provision for income tax, and
 discontinued operations                                (1,150,948)        (290,833)       (2,118,013)        (468,410)

Minority interest in subsidiary loss                       -                    457          -                     914
Provision for income tax                                   -                   (880)         -                    (880)
Discontinued operations:
  Loss from discontinued operations                     (2,015,551)      (1,475,805)       (4,364,730)      (2,308,451)
  Loss on disposal                                     (47,108,711)         -             (47,108,711)         -
- -----------------------------------------------------------------------------------------------------------------------

Net loss                                              $(50,275,210)    $ (1,767,061)   $  (53,591,454)    $ (2,776,827)
=======================================================================================================================

Beneficial conversion feature of
 preferred stock                                       (21,600,000)         -             (25,170,000)         -
- -----------------------------------------------------------------------------------------------------------------------

Net loss applicable to common stock                   $(71,875,210)    $ (1,767,061)   $  (78,761,454)    $ (2,776,827)
=======================================================================================================================

Net loss per common share - basic                     $     (15.62)    $       (.49)   $       (18.39)    $       (.76)
=======================================================================================================================

Weighted-average shares outstanding - basic              4,602,698        3,640,391         4,281,860        3,633,975
=======================================================================================================================
</TABLE>


                                                                            F-24
<PAGE>
<TABLE>
<CAPTION>


                                                                                          PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                                                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
                                                                                                                         (unaudited)
====================================================================================================================================

                                              Series B Preferred Stock  Series D Preferred Stock     Common Stock       Additional
                                                 Number                   Number                   Number                Paid-in
                                               of Shares     Amount     of Shares     Amount      of Shares   Amount     Capital
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>         <C>          <C>         <C>           <C>         <C>       <C>
Balance at December 31, 1998                         --          --          --           --      3,816,638   $38,202   $ 4,008,029
Issuance of preferred stock                    1,871,000   $1,871,000     466,000   $4,660,000         --        --            --
Issuance of common stock for services               --           --          --           --        295,012     2,950     3,903,393
Issuance of options for services                    --           --          --           --           --        --            --
Issuance of warrants in connection with debt        --           --          --           --           --        --            --
Expiration of options and warrants                  --           --          --           --           --        --          89,743
Preferred stock issuance cost                       --           --          --           --           --        --         (85,000)
Issuance of common stock upon
 exercise of options and warrants                   --           --          --           --        291,048     2,910       645,710
Loss on Disposal                                    --           --          --           --           --        --      41,636,097
Beneficial dividend                                 --           --          --           --           --        --      25,170,000
Other                                               --           --          --           --           --        --            --
Net loss                                            --           --          --           --           --        --            --
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1999                       1,871,000   $1,871,000     466,000   $4,660,000    4,402,698   $44,062   $75,367,972
====================================================================================================================================
<CAPTION>
                                                  Options          Subscription
                                                    and              and Note       Treasury      Accumulated       Stockholders'
                                                  Warrants          Receivable       Stock          Deficit          Deficiency
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                  <C>          <C>              <C>              <C>
Balance at December 31, 1998                   $   2,687,461             --      $     (11,978)   $ (27,073,593)   $ (20,351,879)
Issuance of preferred stock                             --               --               --               --          6,531,000
Issuance of common stock for services                   --               --               --               --          3,906,343
Issuance of options for services                      31,500             --               --               --             31,500
Issuance of warrants in connection with debt         734,473             --               --               --            734,473
Expiration of options and warrants                   (89,743)            --               --               --               --
Preferred stock issuance cost                           --               --               --               --            (85,000)
Issuance of common stock upon
 exercise of options and warrants                   (643,620)   $      (5,000)            --               --               --
Loss on Disposal                                        --               --               --               --         41,636,097
Beneficial dividend                                     --               --               --        (25,170,000)            --
Other                                                   --              5,000             --                 23            5,023
Net loss                                                --               --               --        (53,591,454)     (53,591,454)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 1999                       $   2,720,071    $        --      $     (11,978)   $(105,835,024)   $ (21,183,897)
====================================================================================================================================
</TABLE>

                                                                            F-25
<PAGE>


<TABLE>
<CAPTION>

                                                                        PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                                                              CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                                       (unaudited)
==================================================================================================================

Six-month period ended June 30,                                                      1999                1998
- ------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                 <C>
Cash flows from operating activities:
  Net loss                                                                       $(53,591,454)       $ (2,776,827)
  Adjustments to reconcile net loss to net cash provided by (used in)
   operating activities:
    Stock, options and warrants issued for compensation or services                 4,722,339             344,439
    Loss on Disposal                                                               41,636,097                --
    Depreciation                                                                       42,310              13,193
    Minority interest in subsidiary loss                                                 --                  (914)
    Changes in operating assets and liabilities:
      Increase in prepaid expenses and other assets                                   (82,730)            (45,310)
      Decrease (increase) in current assets from discontinued operations              950,140            (212,066)
      Increase in security deposits                                                   (88,204)               --
      (Increase) decrease in long-term assets from discontinued operations            (53,931)            100,211
      Increase (decrease) in accounts payable and accrued expenses                  1,124,558            (132,830)
      Increase in other current liabilities                                              --               100,284
      Increase in current liabilities from discontinued operations                    622,146           3,309,581
      Decrease in long-term liabilities from discontinued operations                     --              (313,430)
- ------------------------------------------------------------------------------------------------------------------
      Net cash provided by (used in) operating activities                          (4,718,729)            386,331
- ------------------------------------------------------------------------------------------------------------------

Cash flows used in investing activity - purchase of property and equipment         (1,213,408)            (10,133)
- ------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Proceeds from issuance of Series B preferred stock                                1,821,000                --
  Proceeds from issuance of Series D preferred stock                                4,660,000                --
  Proceeds from stock subscription                                                      5,000                --
  Payment of preferred stock issuance cost                                            (85,000)               --
  Payments on third-party debt                                                        (20,000)           (175,000)
  Funds advanced by stockholder                                                          --                15,000
  Payments of stockholder advances                                                       --              (185,000)
- ------------------------------------------------------------------------------------------------------------------
      Net cash provided by (used in) financing activities                           6,381,000            (345,000)
- ------------------------------------------------------------------------------------------------------------------

Net increase in cash                                                                  448,863              31,198

Cash at beginning of period                                                            17,052              27,671
- ------------------------------------------------------------------------------------------------------------------
Cash at end of period                                                            $    465,915        $     58,869
==================================================================================================================

Supplemental disclosure of cash flow information:

  Cash paid during the period for interest from discontinued operations          $     76,912        $    325,246
==================================================================================================================
Assets from discontinued operations acquired under capital leases                $       --          $    591,026
==================================================================================================================
</TABLE>

                                                                            F-26


<PAGE>
                                    PICK COMMUNICATIONS CORP. AND SUBSIDIARIES


                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                   (unaudited)
===============================================================================
1.  PRINCIPAL      PICK Communications Corp. and Subsidiaries (collectively the
    BUSINESS       "Company") provide satellite-based Internet access and
    ACTIVITY AND   interactive multimedia services to end user service
    SUMMARY OF     providers. In March 1999, the Company formed a new
    SIGNIFICANT    subsidiary, PICK Online.Com Inc., a media content aggregator
    ACCOUNTING     using a satellite-based multicast delivery system for
    POLICIES:      Internet Service Providers and Broadband Networks. The
                   Company is headquartered and leases facilities in Miami,
                   Florida.

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

                   The Company plans to discontinue the operations of its
                   long distance telephone service and prepaid calling card
                   business consisting of PICK US, PICK Net and PICK Net UK.
                   (See note 9).

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

                   The consolidated financial statements have been prepared in
                   conformity with generally accepted accounting principles. In
                   preparing the consolidated financial statements, management
                   is required to make estimates and assumptions that affect the
                   reported amounts of assets and liabilities as of the dates of
                   the consolidated balance sheet and revenue and expenses for
                   the periods then ended. Actual results could differ from
                   those estimates.

                   For comparability, certain 1998 amounts have been
                   reclassified, where appropriate, to conform to the financial
                   statement presentation used in 1999.

                   Basic net loss per share is computed by dividing the net loss
                   by the weighted-average number of common shares outstanding
                   during the period. Diluted net loss per share is not
                   presented because the inclusion of common share equivalents
                   would be antidilutive.

                   The Company does not believe that any recently issued but not
                   yet effective accounting standards will have a material
                   effect on the Company's consolidated financial position,
                   results of operation or cash flows.

                   Depreciation of property and equipment is provided for by the
                   straight-line method over the estimated useful lives of the
                   related assets.

                   The Company accounts for income taxes in accordance with
                   Statement of Financial Accounting Standards No. 109,
                   Accounting for Income Taxes. The Company recorded a deferred
                   tax asset for the tax effect of net operating loss
                   carryforwards and temporary differences. In recognition of
                   the uncertainty regarding the ultimate amount of income tax
                   benefits to be derived, the Company has recorded a full
                   valuation allowance.


                                                                            F-27

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                <C>
                                                               PICK COMMUNICATIONS CORP. AND SUBSIDIARIES


                                                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                               (unaudited)
==========================================================================================================
</TABLE>
2.  PREPAID
    EXPENSES AND
    OTHER CURRENT    Prepaid expenses and other current assets consist of the
    ASSETS:          following:
<TABLE>
<CAPTION>
                                                                June 30,      December 31,
                                                                  1999           1998
                     ----------------------------------------------------------------------
<S>                                                           <C>              <C>
                     Sundry receivable                          $  3,100         $  3,100
                     Computer equipment for resale                48,559           92,235
                     Prepaid expenses                            127,011           96,552
                     Advances and other current assets           170,616           86,465
                     Deposits                                     11,796             --
                     ----------------------------------------------------------------------
                                                                $361,082         $278,352
                     ======================================================================
</TABLE>
3.  PROPERTY AND     Property and equipment, at cost, consists of the following:
    EQUIPMENT:
<TABLE>
<CAPTION>
                                                                 June 30,       December 31,      Estimated
                                                                   1999             1998         Useful Life
                     ----------------------------------------------------------------------------------------
<S>                                                             <C>             <C>             <C>
                     Property, equipment and software           $1,019,291      $   835,674     3 and 5 years
                     Asset development/
                      installation-in-process                    3,503,579        2,473,788
                     ----------------------------------------------------------------------------------------
                                                                 4,522,870        3,309,462
                     Less accumulated depreciation                 156,603          114,293
                     ----------------------------------------------------------------------------------------
                                                                $4,366,267       $3,195,169
                     ========================================================================================
</TABLE>
                     Asset development/installation-in-process consists of
                     hardware and software costs related to the Company's
                     high-speed Internet business, which is under development.

                     Depreciation will commence when the development and/or
                     installation is complete and the assets are fully
                     operational.

4.  INVESTMENT IN    In 1996, the Company acquired 4,700,000 restricted shares
    MARKETABLE       of the common stock of Ultimistics, Inc. ("Ultimistics").
    EQUITY           During the first quarter of 1997, the Company, in four
    SECURITIES:      separate transactions, disposed of all of its shares of
                     Ultimistics, along with $420,000 of prepaid advertising, in
                     return for (i) 100,000 shares of the Company's common
                     stock, (ii) 10,000,000 shares of PCT, and (iii) 380,000
                     restricted shares of the common stock of Fairbanks, Inc.
                     (which subsequently changed its name to Jet Vacations, Inc.
                     and then Precom Tech Inc.). The Company recorded losses of
                     $9,399,079 on these transactions. During 1998, the balance
                     of $133,000 was written off.


                                                                            F-28

<PAGE>
                                    PICK COMMUNICATIONS CORP. AND SUBSIDIARIES


                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                   (unaudited)
===============================================================================
5.  DEBT:  Debt consists of the following:
                                                     June 30,       December 31,
                                                      1999              1998
           ---------------------------------------------------------------------
           Private placement debt (a)               $9,880,000       $9,900,000
           Less current portion of debt                   --             20,000
           ---------------------------------------------------------------------
                   Debt, less current portion       $9,880,000       $9,880,000
           =====================================================================
           (a) Between July 29, 1998 and September 8, 1998, the Company, through
               Commonwealth Associates ("Commonwealth"), placed $9,900,000 (face
               amount) of 10%, 120-day Senior Secured Notes (the "Original
               Notes") and 9,900,000 warrants to purchase 990,000 shares of the
               Company's common stock at $5.00 per share for five years (the
               "Placement"). The Original Notes are secured by all the assets of
               PICK Communications Corp. The Company allocated $8,587,066 of the
               gross sales proceeds to the debt and $1,312,934 to the warrants.
               The $1,312,934 discount was amortized as interest expense over
               the original 120-day life of the Original Notes. In November and
               December 1998, the Company exercised its rights to extend the
               maturity date of the Original Notes for 60 days. Under the terms
               of the Original Notes, the interest rate of the Original Notes
               was increased to 18% per annum, retroactive to the issuance of
               the Original Notes. In January, February and March 1999, the
               holders of the Original Notes agreed to extend the maturity of
               the Original Notes until April 27, 1999. In return for the
               extensions, the Company agreed to issue 50,012 shares of its
               common stock (valued at $265,063) and warrants (valued at
               $485,100) to purchase 247,500 shares of the Company's common
               stock for five years at $5.00 per share to the holders of the
               Original Notes. On April 27,1999, the holders of the Original
               Notes, who control in excess of 99% of the principal which was
               due on April 27, 1999, consented to restructure their Original
               Notes (the "Restructured Notes") and extend the maturity date
               until April 27, 2002. Additionally, the Company has the option to
               extend the maturity date for one additional year. Under the terms
               of the restructuring, the Restructured Notes are convertible to
               shares of common stock at $10.00 or less per share (valued at
               $7,077,600), as defined in the terms of restructuring. The
               Restructured Notes automatically convert to common stock if the
               closing bid price exceeds $15.00 per share, as defined. The
               Conversion Price shall be reset to a minimum of $5.00 per share
               prior to April 27, 2000, if the Company issues any shares of
               Common Stock or derivative securities (other than employee stock
               options) for less than the Conversion Price or the average
               trading price for the 15 trading days preceding April 27, 2000 is
               less than the Conversion Price. In addition, if the Company
               extends the maturity date for an additional year, the Conversion
               Price shall be reduced to 50% of the then market price.

           For the Placement of the Original Notes, the Company paid
           Commonwealth and Liberty Capital (the Company's co-financial advisor)
           $1,099,000 in cash, issued 139,437 shares of common stock (valued at
           $865,799) and warrants to purchase 250,986 shares of common stock at
           $5.00 per share for five years (valued at $383,002). The costs
           related to the Placement were being deferred and amortized as debt
           placement expenses over the term of the debt. At December 31, 1998,
           all debt placement expenses were amortized and included in the
           consolidated statement of operations.

           In consideration for the restructuring, the consenting noteholders
           will receive the following: the right for a two-year period to
           exchange each existing warrant previously issued to the consenting
           noteholders for an aggregate of 988,000 shares of the Company's
           common stock (valued at $15,604,800). Additionally, the consenting
           noteholders may elect the right to receive from the Company an
           aggregate of 988,000 shares of the Company's common stock.

           In lieu of such shares of stock, the consenting noteholders can elect
           to have the conversion price, as defined, reduced to $5.00 per share
           (valued at $16,907,660). The consenting noteholders shall have two
           years to elect whether to receive the shares of common stock or to
           reduce the conversion price.


                                                                            F-29

<PAGE>
                                    PICK COMMUNICATIONS CORP. AND SUBSIDIARIES


                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                   (unaudited)
===============================================================================

                     In consideration of the restructuring of the notes, the
                     Company issued to Commonwealth 200,000 shares of common
                     stock (valued at $3,440,000) plus warrants to purchase
                     50,000 of the Company's common stock at $13.75 per share
                     (valued at $239,477). Additionally, warrants previously
                     issued to Commonwealth will be exercisable at $1.00 per
                     share (valued at $2,046,097).

                     At June 30, 1999, management believes the cost of the
                     restructuring has no future value. All deferred interest
                     and placement charges were written off and included in the
                     loss on disposal of discontinued operations.

6.  ACCOUNTS
    PAYABLE AND
    ACCRUED          Accounts payable and accrued expenses consist of the
    EXPENSES:        following:
<TABLE>
<CAPTION>
                                                                   June 30,           December 31,
                                                                    1999                  1998
                            ----------------------------------------------------------------------
<S>                                                               <C>                 <C>
                            Accounts payable - operating          $1,683,053          $   831,461
                            Accrued expenses - operating           1,172,638              315,672
                            Accrued expenses - for equipment       1,066,000            1,650,000
                            ----------------------------------------------------------------------
                                                                  $3,921,691          $ 2,797,133
                            ======================================================================
</TABLE>
7.  COMMITMENTS:     The Company leases facilities under noncancelable operating
                     leases expiring through February 2004. The future minimum
                     payments due under such leases are as follows:

                     Six-month period ended June 30, 1999              $ 77,682

                     Year ending December 31,

                            2000                                        160,024
                            2001                                        164,825
                            2002                                        169,769
                            2003                                        144,994
                     ----------------------------------------------------------
                                                                       $717,294
                     ==========================================================

                     Rent expense under operating leases was approximately
                     $78,000 and approximately $3,000 for the six-month periods
                     ended June 30, 1999 and 1998, respectively. The Company has
                     the right to renew its operating lease for terms of between
                     five and fifteen years.

                     In September 1998, the Company entered into an employment
                     agreement with a key executive commencing January 1, 1999.
                     The agreement provides for annual base salaries of
                     $300,000, $350,000, $400,000, $450,000 and $500,000 for the
                     next five years and additional compensation, as defined in


                                                                            F-30

<PAGE>


                                    PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                   (unaudited)
===============================================================================
                   the agreement. In April 1999, the agreement was amended to
                   have the key executive continue solely as chairman of
                   the board.


8.  INCOME TAXES:  The Company's deferred tax assets at June 30, 1999 consist of
                   the following:

                   Federal                                       $   9,300,000
                   State                                             1,700,000
                   ------------------------------------------------------------
                                                                    11,000,000
                   Less valuation allowance                        (11,000,000)
                   ------------------------------------------------------------
                   Net deferred tax assets                       $      - 0 -
                   ============================================================

                   The deferred tax assets are comprised of the tax benefit of
                   net operating loss carryforwards and capital loss
                   carryforwards of approximately $20,000,000 and $8,300,000,
                   respectively, at June 30, 1999. Net operating loss
                   carryforwards from discontinued operations are approximately
                   $12,500,000 at June 30, 1999. These losses are available to
                   offset future taxable income through the years 2018 and 2003,
                   respectively.


9.  DISCONTINUED   On June 23, 1999, the Company formalized its plan to
    OPERATIONS:    discontinue its long distance telephone service and prepaid
                   calling card business consisting of PICK US, PICK Net and
                   PICK Net UK. Accordingly, the long distance telephone service
                   and prepaid calling card business are accounted for as a
                   discontinued operation in the accompanying consolidated
                   financial statements. The Company is in the process of
                   negotiating the sale of PICK Net and PICK Net UK and the
                   discontinuance of the operation of PICK US. Management
                   expects the sale and discontinuance will be completed during
                   1999 and will reduce the Company's debt and working captial
                   deficiency.




                                                                            F-31

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                                  <C>


                                                                  PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                                                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                 (unaudited)
============================================================================================================
</TABLE>
              Operating results of discontinued telecommunications and prepaid
              calling card business are as follows:
<TABLE>
<CAPTION>
                   Six-month period ended June 30,                            1999                 1998
                   -----------------------------------------------------------------------------------------
<S>                                                                        <C>                 <C>
                   Sales of long-distance services                         $ 3,164,030         $    963,018
                   Sales of prepaid calling cards                            2,215,485            1,313,495
                   -----------------------------------------------------------------------------------------
                   Net sales                                                 5,379,515            2,276,513
                   -----------------------------------------------------------------------------------------

                     Cost of sales                                           6,835,866            3,148,694
                     Selling, general and administrative expenses              896,372              649,697
                     Depreciation and amortization                             200,496              124,156
                     Bad debt expense                                          128,298                2,072
                   -----------------------------------------------------------------------------------------
                   Total costs and expenses                                  8,061,032            3,924,619
                   -----------------------------------------------------------------------------------------

                   Loss before amortization of debt placement expenses
                     and interest expense                                   (2,681,517)          (1,648,106)

                   Amortization of debt placement expenses
                    and interest expense                                     1,683,213              660,345
                   -----------------------------------------------------------------------------------------
                   Loss from discontinued operations                       $(4,364,730)         $(2,308,451)
                   =========================================================================================
</TABLE>




                                                                            F-32

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                        <C>
                                                                   PICK COMMUNICATIONS CORP. AND SUBSIDIARIES


                                                                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                  (unaudited)
=============================================================================================================
</TABLE>
              Assets and liabilities of discontinued telecommunications and
              prepaid calling card business are as follows:
<TABLE>
<CAPTION>
                                                                               June 30,          December 31,
                                                                                1999                1998
                   ------------------------------------------------------------------------------------------
<S>                                                                        <C>                  <C>
                   Cash                                                    $    29,548          $   231,499
                   Accounts Receivable, less allowance for
                    doubtful accounts of $480,136 and
                    $351,838, respectively                                     157,883              737,786
                   Prepaid Expenses and Other Current Assets                   131,484              299,770
                   ------------------------------------------------------------------------------------------
                   Current Assets from Discontinued Operations                 318,915            1,269,055
                   ------------------------------------------------------------------------------------------
                   Property and Equipment - at cost, net of
                    accumulated depreciation and amortization
                    of $472,522 and $313,910, respectively                   1,887,313            1,853,384
                   Security Deposits                                            36,350               16,348
                   ------------------------------------------------------------------------------------------
                   Long-term Assets from Discontinued Operations             1,923,663            1,869,732
                   ------------------------------------------------------------------------------------------
                   Current Liabilities:
                     Current portion of debt (a)                             2,000,000            2,000,000
                     Current portion of capital leases                         139,892              271,677
                     Accounts payable and accrued expenses                   7,151,359            4,893,844
                     Deferred revenue - prepaid calling cards                  536,930            2,183,806
                     Other current liabilities                               3,111,133            2,967,841
                   ------------------------------------------------------------------------------------------
                   Current Liabilities from Discontinued
                    Operations                                              12,939,314           12,317,168
                   ------------------------------------------------------------------------------------------

                   Long-term Liabilities from Discontinued
                    Operations - capital leases, less current portion        1,042,716            1,042,716
                   ------------------------------------------------------------------------------------------
                           Liabilities, Net of Assets of Discontinued
                            Operations                                     $11,739,452          $10,221,097
                   ==========================================================================================
</TABLE>
              (a) In February 1998, the Company amended its existing
                  telecommunications agreement with IDT Corporation ("IDT"), one
                  of its long distance vendors/customers. Under the terms of the
                  amendment, the Company agreed to sell IDT up to 10,000,000
                  minutes per month of long distance traffic, through June 9,
                  1999, at favorable rates and IDT agreed to lend the Company
                  $2,000,000. Of this amount, $500,000 was funded when the
                  transaction was signed, $1,000,000 was funded in April 1998
                  and the remaining $500,000 was advanced in June 1998.
                  Concurrently, the Company has issued 100,000 warrants with an
                  exercise price of $2.40 per share to purchase 10,000 shares of
                  common stock, 200,000 warrants with an exercise price of
                  $10.00 per share to purchase 20,000 shares of common stock and
                  100,000 warrants with an exercise price of $5.60 per share to
                  purchase 10,000 shares of common stock. The warrants are
                  exercisable for a period of one year from the respective dates
                  of grant. Management estimates the value of these warrants


                                                                            F-33

<PAGE>
                                    PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                   (unaudited)
===============================================================================
                     reflected in interest expense in 1998 at $30,879. The
                     loan bears interest at 9% per annum and matured on
                     February 9, 1999. The Company is currently negotiating
                     with IDT to extend the terms of repayment.

                     The Company and IDT have reached an agreement in principle
                     to execute a new six-month note in the principal amount of
                     $2,336,000. The Company has agreed to issue to IDT 40,000
                     shares of PICK's common stock in exchange for IDT's
                     warrants to purchase 40,000 shares of PICK's common stock,
                     which shall be canceled upon such delivery, plus a
                     restructuring fee of 50,000 shares of PICK common stock.
                     The Company also agreed to pay $250,000 upon the earlier to
                     occur of 60 days from the date of execution of the
                     agreement or the completion of additional financing for at
                     least $10,000,000 for PICK and shall make six monthly
                     principal payments of $25,000 each on the last business day
                     of each month following the issue date of this Note,
                     beginning on August 31, 1999. In the event PICK elects to
                     exercise its option to extend the maturity date of the Note
                     from six months to three years, it shall deliver to IDT
                     $375,000, payable in immediately available funds or, at the
                     option of PICK, 37,500 shares of PICK's Common Stock.
                     Thereafter, PICK agrees to pay IDT $25,000 per month for 12
                     months, including the six monthly payments described above
                     beginning on August 31, 1999. Interest is payable monthly
                     at 8% per annum and the Note will be pre-paid pro rata in
                     the event the Company prepays any indebtedness over
                     $2,000,000 including the July 1998 Bridge Notes, as
                     amended. The Note will automatically convert into common
                     stock at $10.00 per share if the average price of the
                     Company's common stock exceeds $15.00 per share for at
                     least 20 consecutive days. All shares of common stock
                     issued or issuable to IDT will be included in a
                     registration statement filed on or before October 27, 1999.

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

                     In February 1997, the Company commenced a mediation action
                     against American Telephone & Telegraph ("AT&T") seeking
                     $10,000,000 in damages for breach of contract and
                     fraudulent inducement and malicious conduct under a carrier
                     agreement (the "Carrier Agreement") entered into in
                     February 1996. The Company contracted with AT&T under the
                     Carrier Agreement for inbound 800 service and outbound
                     domestic and international long distance service. The
                     Company claims that AT&T reneged on certain commitments to
                     provide the Company with lower international rates than the
                     Company was invoiced by AT&T. AT&T has claimed that the


                                                                            F-34


<PAGE>
                     Company owes it in excess of $1,000,000. In 1996, the
                     Company provided for a non-cash reserve of $1,750,000,
                     which was reduced to $1,100,000 in the third quarter of
                     1997 and is a part of the Company's working capital
                     deficiency. The reserve is included in other current
                     liabilities in the accompanying consolidated financial
                     statements. After two mediation sessions, AT&T indicated
                     that it intended to withdraw from the mediation.
                     Accordingly, on November 5, 1997, the Company filed for
                     arbitration proceedings against AT&T and reduced its claim
                     to $5,000,000. The trial began on April 19, 1999 and ended
                     on April 22, 1999. There can be no assurance that the
                     Company will be able to prevail in this arbitration. Any
                     adverse judgment or settlement could have a material impact
                     on the Company's financial condition.


                     During March 1999, Worldcom Network Services, Inc., d/b/a
                     Wiltel, ("Worldcom") commenced a lawsuit against the
                     Company in the United States District Court, Southern
                     District of New York, demanding a judgment in the amount of
                     $1,177,734 and interest at 18% per annum plus costs and
                     expenses. The plaintiff alleges that the Company failed to
                     pay for telecommunications services provided. On April 15,
                     1999, the Company and Worldcom agreed to a Settlement
                     Agreement. Under the terms of the Settlement Agreement, the
                     Company agreed to pay Worldcom $1,256,622 (the
                     "Settlement") in exchange for a full and complete
                     settlement of Worldcom's lawsuit against the Company. The
                     Company agreed to pay the Settlement with interest at 16%
                     per annum on or before January 16, 2000 and for Worldcom to
                     discontinue, without prejudice, the legal proceedings until
                     such date, although the Company has the option to extend
                     the forbearance through January 16, 2001. The Company
                     agreed to pay Worldcom a 100,000 share restructuring fee.
                     If the Company repays the Settlement by January 16, 2000,
                     it shall be entitled to redeem one-half of the shares for
                     $1.00.

                     In July 1999, L.D. Exchange.com, Inc., a vendor of PICK
                     Net commenced arbitration proceedings against PICK
                     Net before the American Arbitration Association in
                     San Diego, California, alleging breach of contract. These
                     proceedings involve the alleged nonpayment of between
                     $250,000 and $500,000. At June 30, 1999 the Company's
                     current liabilities included approximately $266,000
                     payable to L.D.Exchange.com,inc.


                                                                            F-35

<PAGE>
                                    PICK COMMUNICATIONS CORP. AND SUBSIDIARIES


                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                   (unaudited)
===============================================================================
11. GOING CONCERN    The accompanying consolidated financial statements have
    MATTERS:         been prepared assuming that the Company will continue as a
                     going concern, which contemplates the realization of assets
                     and the satisfaction of liabilities in the normal course of
                     business. The Company has incurred substantial recurring
                     losses from operations, has a net capital deficiency in the
                     amount of approximately $21,180,000 and has a working
                     capital deficiency of approximately $16,715,000 at June 30,
                     1999 that raise substantial doubt about its ability to
                     continue as a going concern. In addition, the Company had
                     negative cash flow from operations in the six-month period
                     ended June 30, 1999 and the years ended December 31, 1998,
                     1997 and 1996.

                     Significant short-term obligations exist including the
                     payment of a settlement with Worldcom in the amount of
                     $1,256,622 (see Note 10) and a settlement with IDT to
                     extend its $2,000,000 loan. (See Note 9(a)) and normal cash
                     flows from operations. Without the Company's ability to
                     extend the payout terms of the aforementioned liabilities
                     or obtain additional long-term financing, as well as
                     increasing revenue and/or decreasing expenses, the Company
                     will be unable to continue as a going concern. The
                     financial statements do not include any adjustments
                     relating to the recoverability of assets or the
                     classifications of liabilities should the Company be unable
                     to continue as a going concern.

                     Furthermore, the Company is in need of immediate financing
                     for working capital. If the Company is able to obtain
                     adequate funding it expects that its operations on a
                     going-forward basis will be primarily through its PICK Sat
                     subsidiary, which has only recently commenced operations
                     and has not generated any revenue to date. The Company has
                     granted an option to Atlantic Tele-Network, Inc. to sell it
                     19.9% of the common stock of PICK Sat for $8,000,000, with
                     an option to acquire an additional 31.1% for up to an
                     additional $15,000,000. The Company believes that these
                     plans, if successfully implemented, will enable it to
                     continue as a going concern. However, there can be no
                     assurance that the Company will be successful in either
                     generating positive operating income or raising additional
                     funds in the immediate future in amounts sufficient to
                     allow it to continue as a going concern.

12. OTHER MATTERS    In March 1999, the board of directors authorized the
    AND SUBSEQUENT   issuance of 2,000,000 shares of Series B convertible
    EVENTS:          preferred stock. The Series B convertible preferred stock
                     has a stated par value of $.001 per share and is
                     convertible into 2,000,000 shares of the Company's common
                     stock at the rate of $1.00 per share.

                     In April 1999, the board of directors authorized the
                     issuance of 500,000 shares of Series D convertible
                     preferred stock. The Series D convertible preferred stock
                     has a stated par value of $.001 per share and is
                     convertible into 1,190,500 shares of the Company's common
                     stock at the rate of $4.20 per share. As of June 30, 1999,
                     the Company had sold an aggregate of 466,000 shares of
                     Series D convertible preferred stock for $4,660,000 prior
                     to the payment of $324,500 of preferred stock placement
                     costs. In
                                                                            F-36

<PAGE>


                                    PICK COMMUNICATIONS CORP. AND SUBSIDIARIES

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                   (unaudited)
===============================================================================
                     addition, the Company issued an aggregate of 700,000 common
                     stock purchase warrants in connection with the sale of
                     Series D convertible preferred stock. Each Warrant is
                     exercisable at $6.30 per share of common stock for a
                     two-year period.

                     On March 3, 1999, the board of directors granted each of
                     the then four independent directors three-year options to
                     purchase 50,000 shares of common stock at $5.10 per share.
                     Those options shall be fully vested on March 3, 2000.

                     On February 26, 1999, the board of directors of the Company
                     authorized an increase of the Company's authorized shares
                     of common stock from 100,000,000 to 400,000,000 shares
                     which was effective on April 13, 1999.

                     On July 15, 1999, the Company sold 34,000 shares of Series
                     D convertible preferred stock for $340,000 to Diego Leiva,
                     chairman of the board. The purchase is evidenced by a
                     recourse promissory note secured by a pledge of the
                     securities.

                     During July of 1999, the Company's Board of Directors
                     authorized a one for ten reverse split of its common stock
                     effective July 23, 1999. All share and per-share amounts in
                     these consolidated financial statements have been restated
                     to give effect to the reverse stock split.



                                                                            F-37






<PAGE>
================================================================================
No person has been authorized to give any information or make any
representations other than those contained in this prospectus, and, if given or
made, such information or representations must not be relied upon as having
been. This prospectus does not constitute an offer to sell or the solicitation
of an offer to buy any securities other than the securities to which it relates
or an offer to sell or the solicitation of an offer to buy such securities in
any circumstances in which such offer or solicitation is unlawful. Neither the
delivery of this prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date.


                                -----------------
                                TABLE OF CONTENTS

                                                     Page
                                                     ----

Where You Can Find More Information.............       2
Special Note Regarding
   Forward-Looking Statements...................       2
Prospectus Summary..............................       3
Note Restructuring..............................       6
Risk Factors....................................       7
Use of Proceeds.................................      24
Dividend Policy.................................      24
Price Range of Common Stock.....................      24
Capitalization..................................      25
Selected Historical Consolidated
    Financial Data..............................      26
Management's Discussion and Analysis of
   Financial Condition and Results of
   Operations...................................      29
Change in Accountants...........................      35
Business........................................      36
Management......................................      44
Certain Relationships and Related
    Transactions................................      48
Security Ownership of Certain Beneficial
    Owners and Management.......................      49
Selling Stockholders............................      50
Description of Capital Stock....................      74
Plan of Distribution............................      76
Experts.........................................      78
Legal Matters...................................      79
Index to Financial Statements...................      F-1


<PAGE>

================================================================================




                            PICK COMMUNICATIONS CORP.





                                10,154,083 Shares






                                  common stock





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


                                   PROSPECTUS


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




                                 November 15, 1999








© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission