NETSHIP FULFILLMENT INC, 10KSB, 2000-04-14

NETSHIP FULFILLMENT INC
10KSB, 2000-04-14
NON-OPERATING ESTABLISHMENTS

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FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999.

Netship Fulfillment, Inc.
---------------------------------------------
(Name of Small Business Issuer in its charter)

OKLAHOMA 52-2000360
- -------------------------- ------------------------------------
(State) (I.R.S. Employer Identification No.)

5550 Northeast 50th Street, Oklahoma City, Oklahoma 73121
----------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Issuer's telephone number (949) 495-7553
--------------

Securities to be registered under Section 12(b) of the Act.
Not applicable

Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value per share

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes .X.. No ...

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

State issuer's revenues for its most recent fiscal year. ....0..................

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days is $0 (See definition of affiliate in
Rule 12b-2 of the Exchange Act.) [Amended in Release No. 33-7419 (P. 85,938),
effective June 13, 1997, 62 F.R. 26387.]

Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.

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(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS)

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.

Yes ... No ... N/A

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

As of April 13, 2000 there were 1,202,000 common shares issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The list
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).

Small Business Disclosure Format (check one):

Yes . X . No . . .

This annual report contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A
of the Securities Act of 1933, as amended, and is subject to the safe harbors
created by those sections. These forward-looking statements are subject to
significant risks and uncertainties, including information included under Items
1 and 2 of this registration statement, which may cause actual results to differ
materially from those discussed in such forward-looking statements. The
forward-looking statements within this registration statement are identified by
words such as "believes", "anticipates", "expects", "intends", "may", "will" and
other similar expressions regarding the Company's intent, belief and current
expectations. However, these words are not the exclusive means of identifying
such statements. In addition, any statements which refer to expectations,
projections or other characterizations of future events or circumstances and
statements made in the future tense are forward-looking statements. Readers are
cautioned that actual results may differ materially from those projected in the
forward looking statements as a result of various factors, many of which are
beyond the control of the Company. The Company undertakes no obligation to
publicly release the results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances occurring
subsequent to the filing of this registration statement with the SEC. Readers
should note that the safe harbor described in the Litigation Reform Act does not
apply to initial public offerings nor does it apply to statements made by a
registrant that has issued penny stock during the three year period preceding
the date on which the statements are made. The Company's stock can be considered
penny stock. Finally, readers are urged to carefully review and consider the
various disclosures made by the Company in this registration statement.

1
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ITEM 1. DESCRIPTION OF BUSINESS:

BUSINESS DEVELOPMENT SINCE INCEPTION:

Organization and Charter Amendments
-----------------------------------

The Company was incorporated in Oklahoma on October 29, 1996 under the
name Premier Partners, Inc.

On March 1, 1999 the Company filed an Amended Certificate of
Incorporation which changed the Company's name to Netship Fulfillment, Inc.

The Company has filed a Registration Statement so that the Company's
stock (which was sold on and before April 7, 1999 pursuant to a Rule 504
Offering) can be quoted on the OTC Bulletin Board of the National Association of
Securities Dealer, Inc. (the NASD).

Copies of the Company's Certificate of Incorporation, Articles of
Incorporation, Amended Certificate of Incorporation, and Bylaws are attached
hereto and are incorporated herein by reference. See Item 15.

General
-------

Netship Fulfillment, Inc. (the "Company") intends to become a full
service fulfillment and distribution company, specializing in promotional,
product, and catalog fulfillment; especially for the Internet industry. It is
the Company's mission to increase clients' productivity and profitability, and
towards that end, the Company is committed to exceeding its clients'
expectations as a strategic partner in their marketing efforts. The Company
intends to accomplish this by responsive customer service, flexible operating
systems and timely solutions.

Although fulfillment is a very complex business, the Company has
constituted a philosophy that its clients will be well informed and stress-free
and the Company has adopted a number of strategies that should enable it to
simplify the fulfillment and production process. The Company will provide its
clients with timely information to insure their orders are properly fulfilled.
The Company intends to have its information systems designed to maximize
production efficiencies and lower operating costs. In addition, the Company's
communication features will grant the customer secured remote access, allowing
for multiple job tracking and reporting.

It is the Company's objective to foster creativity and innovation
through employee growth and personal working relationships and to be the best in
the fulfillment business by adopting the latest technological advancements in
our industry and accurately relaying this knowledge to our clients and
personnel.

On February 1, 1999, the Company changed management.

2
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Rule 504 Offering
-----------------

On April 7, 1999 the Company completed a Rule 504 Offering of 2,000
common shares at $1.00 per share for $2,000 cash and 100,000 common shares for
specified legal services from April, 1999 through October 2,000, which the
Company also valued at $1.00 per share, or $100,000. See Item 10.

Changes of Control During the Past Three Years
----------------------------------------------

See the caption "Security Ownership of Certain Beneficial Owners and
Management", Item 4, for information respecting the beneficial ownership of
securities of the Company by Messrs. Michael Brown and David Kahn; and see the
caption "Directors, Executive Officers, Promoters and Control Persons", Item 5,
for other material information regarding these persons.

Sales of "Unregistered and "Restricted" Securities Over the Past Three
----------------------------------------------------------------------
Years
-----

For information concerning sales of "unregistered" and "restricted"
securities during the past three years, see the caption "Recent Sales of
Unregistered Securities," Item 10.

Business.
- ---------

Risk Factors
------------

In any business venture, there are substantial risks specific to the
particular enterprise which cannot be ascertained in total until the business is
underway. However, at a minimum, the Company's proposed business operations will
be highly speculative and will be subject to the same types of risk inherent in
any new or unproven venture, and will include those types of risk factors stated
below.

Development Stage Company. The Company is a development stage
enterprise, as defined by generally accepted accounting principles, which has
yet to formally commence operations. The Company has generated no revenue to
date. Its primary activities to date have been development and marketing of the
e-commerce fulfillment concept and the raising of capital. The Company's success
is dependent upon the successful development and marketing of its proposed
products and services, as to which there is no assurance. Unanticipated
problems, expenses and delays are frequently encountered in establishing a new
business and developing new products. These include, but are not limited to,
competition, inadequate market expertise, and setbacks in market acceptance and
sales and marketing. The failure of the Company to meet any of these conditions
would have a materially adverse effect upon the Company, and may force the
Company to reduce or curtail operations. No assurance can be given that the
Company can or will ever operate profitably. As a result, persons purchasing the
common stock offered herein may lose their entire investment.

3
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Need for Additional Capital. The $2,000 net cash proceeds from the sale
of the shares of common stock offered pursuant to the Company's 504 Offering are
insufficient to attain the business achievements described herein. To do so,
additional capital will have to be raised, if it can be raised. To date the
Company has relied upon internal financing from its founders, officers and
directors for its operations. The Company's future capital requirements will
depend on many factors, including cash flow from operations, progress in the
development and sale of its products and services, competing market
developments, and the Company's ability to market its products and services
successfully. Any equity financings could result in dilution to the Company's
stockholders. Sources of debt financing may result in higher interest expense.
Any financing, if available, may be on terms unfavorable to the Company. If
adequate funds are not obtained, the Company may be required to reduce or
curtail operations.

Intellectual Property. Management has identified technology necessary
for the operation of the Company's business. This technology, however, is not
subject to any patent protection, and hence, this technology would provide
limited benefit to the Company with respect to potential competitors. The
Company does not own any patents or copyrights protecting its products or
services. The Company treats its technical data as confidential and relies on
internal nondisclosure safeguards, including confidentiality agreements with
employees, and on laws protecting trade secrets, to protect its proprietary
information. There can be no assurance that these measures will adequately
protect the confidentiality of the Company's proprietary information or that
others will not independently develop products or services that are equivalent
or superior to those of the Company. The Company may receive in the future
communications from third parties asserting that the Company's products and
services infringe upon the proprietary rights of third parties. There can be no
assurance that any such claims would not result in protracted and costly
litigation. There can be no assurance that any particular aspect of the
Company's technology will not be found to infringe upon the products of other
companies. Other companies may hold or obtain patents on inventions, or may
otherwise claim proprietary rights to technology useful or necessary to the
Company's business. The extent to which the Company may be required to seek
licenses under such proprietary rights of third parties, and the cost or
availability of such license, cannot be predicted. While it may be necessary or
desirable in the future to obtain licenses relating to one or more of its
products or services relating to current or future technologies, there can be no
assurance that the Company will be able to do so on commercially reasonable
terms.

Dependence on Key Personnel. The Company is greatly dependent on the
services of Michael Brown, the Company's sole officer and director. The loss of
the services provided by this individual would have a materially adverse effect
on the operations of the Company. The Company believes that its future success
will also depend in part upon its ability to attract, retain and motivate
qualified personnel. There can be no assurance that the Company will be
successful in attracting and retaining such personnel. Competition for such
personnel is intense.

4
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Possible Future Issuance of Common Stock. The Company is authorized to
issue up to 50,000,000 shares of common stock, par value $0.001. Presently,
there are 1,202,000 shares of common stock issued and outstanding (as of March
12, 2000). Additional issuances of common stock may be required to raise
capital, to acquire stock or assets of other companies, to compensate employees
or to undertake other activities without stockholder approval. These additional
issuances of common stock will increase outstanding shares and further dilute
stockholders' interests. Since the Company's common stock is currently subject
to the existing rules on penny stocks, the market liquidity for the Company's
common stock may be severely affected. Of the 1,202,000 shares of the Company's
common stock which are outstanding, 460,000 shares are "restricted securities"
owned by the Company's President and sole Director, and under certain
circumstances may, in the future, be sold in compliance with Rule 144 adopted
under the Securities Act. In general, under Rule 144, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company, who has beneficially owned restricted shares of common stock for at
least two years is entitled to sell, within any three-month period, a number of
shares that does not exceed the greater of 1% of the total number of outstanding
shares of the same class, or if the common stock is quoted on NASDAQ or a stock
exchange, the average weekly trading volume during the four calendar weeks
immediately preceding the sale. A person who presently is not and who has not
been an affiliate of the Company for at least three months immediately preceding
the sale and who has beneficially owned the shares of common stock for at least
three years is entitled to sell such shares under Rule 144 without regard to any
of the volume limitations described above.

No Public Market for the Shares of Common Stock. There is currently no
public market for the shares of common stock. The failure of the Company to
create a market for its common stock would result in the purchasers of the
common stock offered herein being unable to dispose of their securities in any
effective commercial manner. One market maker for the Company has filed a Form
15(c)2-11 with the National Association of Securities Dealers ("NASD"), and the
Company thereby anticipates obtaining the right from the NASD to have the
Company's stock quoted on the NASD Bulletin Board. However, there can be no
assurance that such application will be granted by the NASD.

Limited Market for the Company's Common Stock. The Company's common
stock is covered by Securities and Exchange Commission rules that impose
additional sales practice requirements on broker-dealers who sell securities
priced at under $5.00 (so-called "penny stocks") to persons other than
established customers and accredited investors (generally institutions with
assets in excess of $5 million or individuals with net worth in excess of $1
million or annual income exceeding $200,000 or $300,000 jointly with their
spouse). For transactions covered by such rules, the broker-dealer must make a
special suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Moreover, such rules
also require that brokers engaged in secondary sales of penny stocks provide
customers written disclosure documents, monthly statements of the market value
of penny stocks, disclosure of the bid and ask prices, disclosure of the
compensation to the broker-dealer, and disclosure of the salesperson working for
the broker-dealer. Consequently, the rules may affect the ability of
broker-dealers to sell the Company's common stock and also may affect the
ability of persons purchasing such common stock to resell their common stock in
the secondary market, if such a market were to exist. Further, (i) the Company's
common stock may initially be quoted on an NASD inter-dealer system called "the

5
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Bulletin Board," (ii) the Company will not have $4 million in assets or $2
million in stockholders' equity, which are both required for it to qualify for
quotation on NASDAQ, and (iii) the Company's common stock is not being sold at
$5 a share and is not expected to soon trade at a market price of $5 a share in
the foreseeable future, the price required for a non-NASDAQ-quoted security to
escape the trading limitations imposed by the Securities and Exchange Commission
on so-called "penny stocks." These trading limitations tend to reduce
broker-dealer and investor interest in "penny stocks" and could operate to
inhibit the ability of the Company's common stock to reach a $4 per share
trading price that would make them eligible for quotation on NASDAQ, even should
they otherwise qualify for quotation on NASDAQ.

No Dividends. The Company has paid no dividends to its stockholders and
does not plan to pay dividends on its common stock in the foreseeable future.

Competition. Management is aware of many potential competitors that
have larger resources and distribution sources than the Company. Competition
from these very large and well-financed companies may attract potential
customers away from the Company. There may also be other competitors that the
Company has not identified.

Control of Company and Dependence on Management. As stated in Item 4.,
Management of the Company currently owned 38% and one other shareholder of the
Company currently owns 8% of the issued and outstanding common stock of the
Company. See also Item 10., for a list of other shareholders who own significant
amounts of the Company's stock. Cumulative voting for the election of directors
is not allowed under the Articles of Incorporation. Therefore, investors may not
be in a position to control the Board of Directors of the Company and in effect
may have to depend on the judgment and efforts of the current director and
officer to carry out the Company's business strategy and react quickly to make
needed changes. The existing officer is not under any employment agreement with
the Company.

Difficulty of Planned Expansion; Management of Growth. The Company
plans to expand its level of operations. The Company's operating results will be
adversely affected if net sales do not increase sufficiently to compensate for
the increase in operating expenses caused by this expansion. In addition, the
Company's planned expansion of operations may cause significant strain on the
Company's management, financial and other resources. To manage its growth
effectively, the Company must continue to improve and expand its existing
resources and management information systems and must attract, train and
motivate qualified managers and employees. There can be no assurance, however,
that the Company will successfully be able to achieve these goals. If the
Company is unable to manage growth effectively, its operating results will be
adversely affected.

6
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Forward Looking Statements. This Annual Report contains forms of
forward-looking statements that are based on the Company's beliefs as well as on
assumptions made by, and information currently available to, the Company. When
used in this Registration Statement, the words "hope", "believe", "expect",
"anticipate", "estimate" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks,
uncertainties and assumptions, some of which are identified and described in
this "Risk Factors" section. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
will vary materially from those anticipated, estimated, or projected and the
variations may be material. The Company cautions potential investors not to
place undue reliance on any such forward-looking statements; all of which speak
only as of the date made. A number of the matters and subject areas discussed in
this Registration Statement are not historical or current facts, or deal with
potential future circumstances and developments. The discussion of such matters
and subject areas is qualified by the inherent risks and uncertainties
surrounding future expectations generally, and also may materially differ from
the Company's actual future experience involving any one or more of such matters
and subject areas. The Company has attempted to identify, in context, certain
other factors that it currently believes may cause actual future experience and
results to differ from the Company's current expectations regarding the relevant
matter or subject area. The operations and results of the Company's business
also may be subject to the effect of other risks and uncertainties in addition
to the relevant factors identified elsewhere in this Registration Statement,
including, but not limited to, general economic conditions in the geographical
areas and market segments that the Company is targeting for its services, the
availability of adequate equipment and personnel to meet the Company's marketing
plans and customer demand, and access to sufficient equity capital to meet the
Company's operating and financial needs.

Seasonality. Typically e-commerce activity is highest during the last
calendar quarter. The resultant seasonality of the Company's business could
create inconsistent operating results on a quarterly basis and also create cash
flow problems from the operation of the Company's business and the continued
requirement to pay general, administrative, and other expenses.

Government Regulations. Presently, there are no current regulations,
state or federal, affecting doing business on the Internet and neither are any
expected. In the future, governmental regulations may develop, having an adverse
effect on the operations of the Company.

In addition to the foregoing risks, businesses are often subject to
risks that are not foreseen or fully appreciated by management. Potential
investors should keep in mind that other material risks could arise.

7
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Principal Products and Services
-------------------------------

The Company intends to develop the following products and services for
the following purposes:

Internet Commerce - a customized Internet based order entry system to
allow customers complete and direct access to their product line, together with
real time credit card processing and monthly reporting to ensure accurate
accounting of clients' funds.

Custom Kit Assembly - to achieve virtually 100% consistency of custom
kit assembly, in order to ensure an accurate representation of the finished
product.

Pick-n-Pack Assembly - to process and fulfill virtually unlimited
variations of product orders; orders can be as small as 1 item or a large as
100,000.

Premium Fulfillment - to process and fulfill fragile and/or highly
valuable retail or promotional items with care and expedience.

Collateral Literature - to pull, collate, and fulfill a virtually
unlimited quantity of promotional and point-of-purchase literature for
business-to-business, or business-to-consumer, consumption.

Comprehensive Receiving and Reporting Systems - through one of several
chosen counting methods (weight, inch, or physical), to provide accurate product
quantities which can be entered into the customized reporting and tracking
system.

Electronic Record Keeping - to track and record quantities on-hand,
allocated, received, and returned, plus item description, SKU number and
location for every item that enters the Company's facility.

Complete Item History - to maintain a history of transactions
involving a particular inventory item, job order or customer--and disseminate
information electronically.

Job Order Request - to provide a variety of reporting documentation on
the status of specific jobs. Key areas included are date of job order request,
ship date, quantity, item description, client information, job order number,
requested by, client P0, comments or special instructions, ship-to address and
client sales order number.

Reports Generating Capability - to provide a full range of receiving,
inventory, item history and data history reports in order to help the Company's
clients control and manage their business.

Database & Inventory Management - to track incoming and outgoing
inventory and to provide detailed information on the product and job life cycle.

8
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Warehouse & Distribution Services - The Company's planned
state-of-the-art distribution center strategically located in Orange County
should offer ample production and warehouse space to facilitate each project
with expedience. Foremost, the Company's entrepreneurial spirit and anticipated
swift response to clients' needs, should keep the Company at the forefront of
industry standards.

Security Storage - to offer limited secure access in order to provide
heightened security through an enclosed caged storage area; which is ideal for
high value merchandise.

Tele-services (Inbound Calling, Outbound Calling, Fax on Demand, Voice
Mail, Lead Generation) - to develop strategic alliances with dedicated
tele-services providers to allow the Company's clients to benefit from the very
best combination of tele-services and fulfillment. Utilizing the most
sophisticated, state of the art phone technology, the Company intends to quickly
and accurately receive, process, package, and fulfill customer's orders.

Catalog Fulfillment (Catalog Fulfillment, Merchandise, Continuity
Clubs, Reward Redemption) - to develop a proprietary information system to
provide a secure operating environment capable of processing thousands of
multi-sku product lines. It is anticipated that the system will track each
consumer's past purchases to enable real-time upsell and/or replenishment
capabilities based on the consumer's history.

Electronic Data Interface (EDI) - to provide the ability to
electronically exchange and transfer specific data with various trading partners
to enhance productivity.

Custom Corrugate & Packing Materials - to provide customized packing
and shipping containers for promotional, retail or business-to-business use.

Personal Client Service Representative ("CSR") - to provide each
customer with a well- trained client service representative that acts as a
liaison between the operations and the client. The CSR's are an excellent source
of information. Their overall objective is to be the client's in-house advocate.

Local Courier Service - to offer in-house delivery service in order to
provide the ability to respond quickly to the needs of the Company's clients.

Transportation & Logistics Consultation
---------------------------------------

The Company believes that each project is specific and may require a
creative solution. Through transportation and logistics consultation, the
Company intends to provide different strategies that should work to satisfy the
Company's shipping and distribution objectives.

9
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Patents, Trademarks, Licenses, Franchisees, Concessions, Royalty
----------------------------------------------------------------
Payments or Labor Contracts
---------------------------

None.

Need for Government Approval of Principal Products or Services
--------------------------------------------------------------

None, currently; however, see the following caption.

Effect of Existing or Probable Governmental Regulations on Business
-------------------------------------------------------------------

See the heading "Risk Factors," under the caption "Business" of this
Item, specifically, the risk factors entitled "Government Regulations" and
"Limited Market for the Company's Common Stock."

Research and Development
------------------------

See the heading "Risk Factors", under the caption "Business" of this
Item, specifically the risk factor entitled "Intellectual Property".

Number of Employees
-------------------

One.

ITEM 2. PLAN OF OPERATION

10
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The Market. According to new projections from Forrester Research, Inc.
worldwide e-commerce sales will reach as high as $3.2 trillion in 2003,
representing nearly 5% of all global sales. "There is no question that
e-commerce will represent a significant portion of the global economy over the
next five years," said George F. Colony, president of Forrester Research. "To
achieve its full potential, businesses need to move quickly to establish market
leadership, while governments must nurture electronic commerce with supportive
laws and policies. If a favorable climate can be established, Internet commerce
will reshape the global economy."

Underscoring the importance of Internet commerce to their business
plans, 46% of companies surveyed plan to sell more than $1 million in goods and
services on-line in 1999, and 23% expect their on-line sales to exceed $10
million. Similarly, 28% indicated that their companies will purchase more than
$500,000 in goods and services on-line next year.

Based on Forrester's commerce threshold model, worldwide Internet
commerce sales will be between $1.8 trillion and $3.2 trillion in 2003.

As the growth in Internet commerce continues to explode, the demand
for shipping, fulfillment and distribution services will rise as well. It is the
Company's intention to help meet this ever increasing demand caused by the surge
in e-commerce.

Strategy. The Company's business focus includes the following business
and marketing strategies:

o Utilizing technology to create economies and efficiencies
for our customers.
o Take advantage of current e-commerce trends.
o Become the recognized leader in e-commerce fulfillment.
o Create a reliable and scalable fulfillment service.

The Company anticipates satisfying its cash requirements for the next
twelve months from the net cash proceeds of its April 7, 1999 504 Offering and
from possible additional equity and/or debt financing.

The foregoing contains "forward-looking" statements and information,
all of which is modified by reference to the caption "Risk Factors," Item 1.

Results of Operations.
----------------------

There were no operations during the periods covered by the financial
statements of the Company which accompany this Annual Report. See Items 13. and
15.

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Liquidity.
----------

The Company has a very severe liquidity problem, as evidenced by the
facts that as of December 31, 1999 the Company's total cash was only $3,961 and
the Company's total current assets and total assets were only $3,961 compared
with current liabilities and total liabilities of $5,430. See Items 13. and 15.

ITEM 3. DESCRIPTION OF PROPERTY

The Company has identified a fulfillment and distribution facility
which is located in Irvine, California. It is the Company's intention to
negotiate a lease on reasonable terms. In the event additional space is
required, the Company believes that such additional space would be available on
reasonable terms.

ITEM 4. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS: GENERAL

THE FOLLOWING DISCUSSION AND ANALYSIS CONTAINS FORWARD LOOKING
STATEMENTS REGARDING FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF THE
COMPANY THAT INVOLVE CERTAIN RISKS AND UNCERTAINTIES DISCUSSED IN THE "RISK
FACTORS" SECTION OF ITEM 1. UNDER "FORWARD LOOKING STATEMENTS". ACTUAL EVENTS OR
THE ACTUAL FUTURE RESULTS OF THE COMPANY MAY DIFFER MATERIALLY FROM ANY FORWARD
LOOKING STATEMENT DUE TO SUCH RISKS AND UNCERTAINTIES.

OVERVIEW
- --------

Netship Fulfillment, Inc. is a development stage company. A
development stage company is one for which principal operations have not
commenced. Management has devoted most of its activities to establishing the
business. Operating losses have been incurred to date, and will continue to
incur as the Company continues to use, rather than provide, working capital in
its operations. The Company intends to become a full service fulfillment and
distribution company specializing in promotional products and catalog
fulfillment, especially for the Internet industry.

The Company will recognize revenues from the sale of its products upon
shipment.

RESULTS OF OPERATIONS
- ---------------------

NET REVENUES
- ------------

As a development stage company, the Company had no revenues for the
years ended December 31, 1999 and December 31, 1998, nor since inception through
December 31, 1996.

COSTS AND EXPENSES
- ------------------

As a development stage company, for the year ended December 31, 1999,
the Company had general and administrative costs and expenses of $124,029 soley
related to the Company's 504 offering. The Company had no costs and expenses for
the year ended December 31, 1998. From inception through December 31, 1997, the
Company's expenses in the amount of $540 consisted of costs related to the
incorporation of the Company and issuance of common stock.

OTHER INCOME (EXPENSE)
- ----------------------

The Company had no other income or expenses for the years ended
December 31, 1999 and December 31, 1998, nor since inception through December
31, 1997.

PROVISION FOR INCOME TAXES
- --------------------------

The Company had no income nor income taxes for the years ended
December 31, 1999 and December 31, 1998, nor since inception through December
31, 1997.

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LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

The Company's cash and cash equivalents increased to $3,961 at
December 31, 1999 from $100 at December 31, 1998 due to additional equity
capitalization.

The Company's liabilities increased to $5,430 at December 31, 1999
from $0 at December 31, 1998, and December 31, 1997.

The Company's management currently believes that inflation has not had
a material impact on continuing operations.

FACTORS AFFECTING FUTURE PERFORMANCE
- ------------------------------------

In connection with the Private Securities Litigation Reform Act of
1995 (the "Litigation Reform Act"), the Company has disclosed certain cautionary
information to be used in connection with written materials (including this FORM
10-KSB) that may contain "forward-looking statements" within the meaning of the
Litigation Reform Act. Such statements consist of any statement other than a
recitation of historical fact and can be identified by the use of
forward-looking terminology such as "intend", "may", "expect", "anticipate",
"estimate", or "continue" or the negative thereof or other variations thereon or
comparable terminology. The listener or reader is cautioned that all
forward-looking statements are necessarily speculative and there are numerous
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward-looking statements. For
discussion that highlights some of the more important risks identified by
management, but which should not be assumed to be the only factors that could
affect future performance, see the "Risk Factors" section of Item 1., which is
incorporated herein by reference. The reader is cautioned that the Company does
not have a policy of updating or revising forward-looking statements and thus he
or she should not assume that silence by management over time means that actual
events are bearing out as estimated in such forward-looking statements.

ITEM 5. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:

Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------

The following table sets forth the share holdings of those persons who
own more than five percent of the Company's common stock as of the date hereof:

Number of Shares Percentage
Name and Address Beneficially Owned of Class
---------------------- ------------------ -----------
Michael Brown 460,000 38%
5550 Northeast 50th Street
Oklahoma City, Oklahoma 73121

David Kahn 100,000 8%
535 N. Hayworth Ave. #301
Los Angeles, CA 90048

Mr. Kahn is an attorney for the Company.

Security Ownership of Management.
---------------------------------

The following table sets forth the share holdings of the Company's
directors and executive officers as of the date hereof:

Number of Shares Percentage
Name and Address Beneficially Owned of Class
---------------------- ------------------ ----------
Michael Brown 460,000 38%
5550 Northeast 50th Street
Oklahoma City, Oklahoma 73121

Changes in Control.
-------------------

There are no present arrangements or pledges of the Company's
securities which may result in a change in control of the Company.

13
<PAGE>

ITEM 6. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders (held in May of each year) or until their
successors are elected or appointed and qualified, or their prior resignations
or terminations.

Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
---- ---------- ----------- --------------

Michael Brown President, February 1, 1999 *
Secretary,
Treasurer,
and Director

*Mr. Brown currently serves in the capacities indicated.

Business Experience.
--------------------

Mr. Brown is currently the President, Secretary, Treasurer, and a
Director of the Company. From 1995 to 1999 Mr. Brown founded and served as
President of Progressive Design Group, Inc. a design and printing company
located in Santa Ana, California, grossing $6,000,000 in annual revenues. From
1992 to 1995 he was employed by the CDW, Inc. as Senior Sales Rep responsible
for $4,500,000 in revenues.

Family Relationships.
---------------------

There are no family relationships between any director or executive
officer.

Involvement in Certain Legal Proceedings.
-----------------------------------------

During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of the
Company:

(1) was a general partner or executive officer of any
business against which any bankruptcy petition was filed, either at the time of
the bankruptcy or two years prior to that time;

(2) was convicted in a criminal proceeding or named
subject to a pending criminal proceeding (excluding traffic violations and other
minor offenses);

(3) was subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; or

(4) was found by a court of competent jurisdiction
(in a civil action), the Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.

14
<PAGE>

ITEM 7. EXECUTIVE COMPENSATION.

The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:

<TABLE>

SUMMARY COMPENSATION TABLE

Long Term Compensation

Annual Compensation Award Payouts
<CAPTION>

(a) (b) (c) (d) (e) (f) (g) (h) (i)

Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricted lying Pay- Compen-
Position Ended ($) ($) Compen- Stock Options outs sation
sation
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

</TABLE>

No cash compensation, deferred compensation or long-term incentive
plan awards were paid, issued or granted to the Company's management during the
years ended December 31, 1999 or December 31, 1998. Further, no member of the
Company's management has been granted any option or stock appreciation rights;
accordingly, no tables relating to such items have been included within this
Item.

Compensation of Directors.
--------------------------

There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as a director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.

15
<PAGE>

Employment Contracts and Termination of Employment and
------------------------------------------------------
Change-in-Control Arrangements.
-------------------------------

There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or its subsidiaries, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.

ITEM 8. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The only transactions between members of management, nominees to
become a director or executive officer, 5% stockholders, or promoters or persons
who may be deemed to be parents of the Company are:

See Item 10. concerning the sale on or about February 2, 1999 to
Michael Brown, President and Director, of 460,000 shares of the Company's common
stock at its par vaule of $0.001 per share. Pursuant to the Company's 504
Offering, which terminated April 7, 1999, 100,000 shares of the Company's common
stock were issued to David Kahn for certain legal services from April, 1999
through October 2000. Mr. Kahn is a Company attorney.

ITEM 9. DESCRIPTION OF SECURITIES.

Common Stock
- ------------

The Company's authorized common stock consists of fifty million
(50,000,000) shares of $0.001 par value. The holders of the Company's common
stock are entitled to one vote per share on each matter submitted to a vote at a
meeting of stockholders. The shares of common stock do not carry cumulative
voting rights in the election of directors.

Stockholders of the Company's common stock have no pre-emptive rights
to acquire additional shares of common stock or other securities. The common
stock is not subject to redemption rights and carries no subscription or
conversion rights. All shares of the common stock now outstanding are fully paid
and non-assessable.

16
<PAGE>

No Outstanding Options, Warrants or Calls
------------------------------------------

Currently, there are no outstanding options, warrants or calls to
purchase any of the authorized securities of the Company.

No Provisions Limiting Change of Control
----------------------------------------

There is no provision in the Company's Articles of Incorporation or
Bylaws that would delay, defer, or prevent a change in control of the Company.

PART II

ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

There has never been any "established trading market" for shares of
the common stock of the Company. One market maker has filed a Form 15(c)2-11
with the National Association of Securities Dealers ("NASD"), and the Company
thereby hopes to obtain the right from the NASD to have the Company's stock
quoted on the NASD Bulletin Board, at least after the Company has actual
operations. However, there can be no assurance that such application will be
granted by the NASD. No assurance can be given that any current market for the
Company's common stock will develop or be maintained. For any market that
develops for the Company's common stock, the sale of "restricted securities"
(common stock) pursuant to Rule 144 of the Securities and Exchange Commission by
members of management, or any other person to whom any such securities may be
issued in the future may have a substantial adverse impact on any such public
market. A minimum holding period of one year is required for resales under Rule
144, along with other pertinent provisions, including publicly available
information concerning the Company (this requirement will be satisfied by the
filing and effectiveness of the Company's Registration Statement, the passage of
90 days and the continued timely filing by the Company of all reports required
to be filed by it with the SEC(Securities and Exchange Commission); limitations
on the volume of "restricted securities" which can be sold in any 90 day period;
the requirement of nsolicited broker's transactions; and the filing of a Notice
of Sale of Form 44.

Holders.
--------

The number of record holders of the Company's securities as of the
date of this Annual Report is approximately 33.

Dividends.
----------

The Company has not declared any cash dividends with respect to its
common stock, and does not intend to declare dividends in the foreseeable
future.

17
<PAGE>

ITEM 2. LEGAL PROCEEDINGS.

The Company is not a party to any pending legal proceeding. To the
Company's knowledge, no federal, state or local governmental agency is presently
contemplating any proceeding against the Company. No director, executive officer
or persons who may be deemed to be an "affiliate" of the Company or owner of
record, or beneficially, of more than five percent of the Company's common stock
is a party adverse to the Company, or has a material interest adverse to the
Company in any proceeding.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

The Company has not changed accountants since its formation and there
are no disagreements with the findings of its accountants.

ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.

On October 30, 1996 the Company issued its common stock as follows for
the following consideration.

Name Amount of Shares Consideration*
---- ---------------- --------------

AEM Investments, L.P. 50,000 $50
Gary Bryant 50,000 $50
Harvey S. Bryant 50,000 $50
ERM Enterprises, Inc. 50,000 $50
JJS, Ltd. 50,000 $50
Suzanne Kerr 25,000 $25
Michelle Laing 40,000 $40
Melco, Ltd. 50,000 $50
NDG, Inc. 50,000 $50
Holly Palm 25,000 $25
Roxboro Investment Group, Ltd. 50,000 $50
Success Development Group, Inc. 50,000 $50
Swarthmore Associates, Ltd. 50,000 $50
Web Connect Co., Inc. 50,000 $50
----------- --------
Totals 640,000 $640

*All of the above consideration was paid for by cash.

Each of these persons had access to all material information regarding
the Company prior to the offer or sale of the Company's common stock. These
offers and sales of common stock are believed to have been exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, pursuant to Section 4(2) thereof; and, by available state exemptions,
from similar states' securities laws exempting from registration the offer and
sale of such common stock. see "Possible Future Issuance of Common Stock" under
the "Risk Factors" section of Item 1. for a discussion of the restricted and
unrestricted common shares of the Company.

On April 7, 1999 the Company completed a Rule 504 Offering, without an
underwriter, of 2,000 common shares at $1.00 per share for $2,000 cash and
100,000 common shares for specified legal services from April, 1999 through
October, 2000, which the Company also valued at $1.00 per share, or $100,000.

The offers and sales of such common stock are believed to have been
exempt from registration pursuant to Rule 504, and from similar applicable
states' securities laws, rules and regulations exempting the offer and sale of
these securities by available state exemptions from required registration.

There are no relationships or affiliations among and between these
shareholders and the Issuer, its predecessor, its officers and directors, and
other shareholders.

18
<PAGE>

ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

ITEM 6. FINANCIAL STATEMENTS AND EXHIBITS:

(a) Cacciamatta Accountancy Corporation
Index to Financial Statements
Report of Certified Public Accountants

Financial Statements
--------------------

Audited Financial Statements for the years
December 31, 1999 and December 31, 1998
and from October 29, 1996
------------------------------------------

Independent Auditor's Report

Balance Sheet

Statement of Operations

Statements of Stockholders' Equity

Statements of Cash Flows

Notes to the Financial Statements

(b) The following exhibits are filed as a part of this Annual Report.

Exhibit
Number Description*
------- ------------

3.1 Certificate of Incorporation and Initial Articles of
Incorporation filed October 29, 1996.

3.2 Bylaws.

3.3 Certificate of Amendment filed March 1, 1999.

* Summaries of all exhibits contained within this Annual Report
are modified in their entirety by reference to these Exhibits.

19
<PAGE>

NETSHIP FULFILLMENT, INC
(A Development Stage Company)
Financial Statements

December 31, 1999
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------

The Board of Directors and Shareholders
Netship Fulfillment, Inc.

We have audited the accompanying balance sheet of Netship Fulfillment, Inc. (a
development stage company) (the "Company") as of December 31, 1999, and the
related statements of operations, shareholders' deficit and cash flows for each
of the two years in the period ended December 31, 1999 and for the period from
inception (October 29, 1996) to December 31, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Netship Fulfillment, Inc. as of
December 31, 1999, and the results of its operations and cash flows for each of
the two years in the period ended December 31, 1999 and for the period from
inception (October 29, 1996) to December 31, 1999, in conformity with generally
accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has no revenue and remains in the development
stage. These conditions raise substantial doubt about its ability to continue as
a going concern. Management's plans regarding those matters are also described
in Note 4. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/S/ CACCIAMATTA ACCOUNTANCY CORPORATION

Irvine, California
March 22, 2000

20
<PAGE>

NETSHIP FULFILLMENT, INC.
(A DEVELOPMENT STAGE COMPANY)

Balance Sheet

December 31,
1999
------------

ASSETS

Current assets:
Cash and equivalents $ 3,961
------------
Total current assets 3,961

Other -
------------
$ 3,961
============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 5,430
------------
Total current liabilities 5,430
------------
Commitments and contingencies -
------------

Shareholders' equity:
Common stock, 50,000,000 shares authorized, $.001 par value,
1,202,000 shares issued and outstanding 1,202
Additional paid-in capital 121,898
------------
Deficit accumulated during the development stage (124,569)
------------
Net shareholders' equity (1,469)
------------

Total liabilities and shareholders' equity $ 3,961
============

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

21
<PAGE>
<TABLE>

NETSHIP FULFILLMENT, INC.
(A DEVELOPMENT STAGE COMPANY)

Statements of Operations
<CAPTION>

General and administrative $ 124,029 $ - $ 124,569
--------------- --------------- ---------------

Net loss $ (124,029) $ - $ (124,569)
=============== =============== ===============

Basic and diluted net loss per share $ (0.11) $ -
=============== ===============

Basic and diluted weighted average number
of common shares outstanding 1,125,647 640,000
=============== ===============

</TABLE>

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

22
<PAGE>
<TABLE>

NETSHIP FULFILLMENT, INC.
(A DEVELOPMENT STAGE COMPANY)

Statement of Shareholders' Deficit
From inception (October 26, 1996) to December 31, 1999

Common Stock
--------------------------------------- Deficit
Amount Accumulated
------------------------- Additional During the Total
Number Per Paid-in Development Shareholders'
of Shares Share Total Capital Stage Deficit
----------- ----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C> <C>
640,000 $ 0.001 $ 640 $ - $ - $ 640
- - - - (540) (540)
----------- ----------- ----------- ----------- ----------- -----------

December 31, 1996 640,000 640 - (540) 100
- - - - - -
----------- ----------- ----------- ----------- ----------- -----------

December 31, 1997 640,000 - 640 - (540) 100
- - - - - -
----------- ----------- ----------- ----------- ----------- -----------

December 31, 1998 640,000 $ 640 - $ (540) 100
----------- ----------- ----------- ----------- ----------- -----------

Stock issued for cash 460,000 $ 0.001 $ 460 - - 460
Stock issued for services 100,000 $ 1.000 $ 100 99,900 - 100,000
Stock issued for cash 2,000 $ 1.000 $ 2 1,998 - 2,000
Capital Contribution - - - 20,000 - 20,000
Net Loss for 1999 - - - - (124,029) (124,029)
----------- ----------- ----------- ----------- ----------- -----------
December 31, 1999 1,202,000 $ 1,202 $ 121,898 $ (124,569) $ (1,469)
=========== =========== =========== =========== =========== ===========
</TABLE>

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

23
<PAGE>
<TABLE>

NETSHIP FULFILLMENT, INC.
(A DEVELOPMENT STAGE COMPANY)

Statements of Cash Flows
<CAPTION>

Cumulative
from inception
Year ended Year ended October 29, 1996
December 31, December 31, to December 31,
1999 1998 1999
--------------- --------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (124,029) $ - $ (124,569)
Common stock issued for services 100,000 - 100,000
Increase in accounts payable 5,430 - 5,430
--------------- --------------- ---------------
Net cash used by operating activities (18,599) - (19,139)
--------------- --------------- ---------------
Cash flows from financing activities:
Capital contribution 20,000 - 20,000
Issuance of common stock 2,460 - 3,100
--------------- --------------- ---------------
Net cash provided by financing activities 22,460 - 23,100
--------------- --------------- ---------------
Net increase in cash 3,861 - 3,961

Cash, beginning of year 100 100 -
--------------- --------------- ---------------
Cash, end of year $ 3,961 $ 100 $ 3,961
=============== =============== ===============

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -

</TABLE>

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

24
<PAGE>

NETSHIP FULFILLMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS

December 31, 1999

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- -----------------------------------------------------------------

Organization
------------

Netship Fulfillment, Inc., an Oklahoma corporation (the "Company") was
formed on October 29, 1996 under the name Premier Partners, Inc. The Company
changed its name to Netship Fulfillment, Inc. on February 23, 1999. The Company
intends to become a full service fulfillment and distribution company,
specializing in promotional and catalog fulfillment, especially for the internet
industry. The Company is classified as a development stage company because its
principal activities involve obtaining capital. The Company is currently being
funded by its management, through donated minimal time and office space.

Use of estimates
----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

Income taxes
------------

The Company reports certain expenses differently for financial and tax
reporting purposes and, accordingly, provides for the related deferred taxes.
Income taxes are accounted for under the liability method in accordance with
SFAS 109.

Basic and diluted net loss per share
------------------------------------

Net loss per share is calculated in accordance with Statement of Financial
Accounting Standards 128, Earnings Per Share ("SFAS 128"), which superseded
Accounting Principles Board Opinion 15 ("APB 15"). Basic net loss per share is
based upon the weighted average number of common shares outstanding. Diluted net
loss per share is based on the assumption that all dilutive convertible shares
and stock options were converted or exercised. Dilution is computed by applying
the treasury stock method. Under this method, options and warrants are assumed
to be exercised at the beginning of the period (or at the time of issuance, if
later), and as if funds obtained thereby were used to purchase common stock at
the average market price during the period.

Stock-based compensation
------------------------

The Company accounts for compensation costs related to employee stock options
and other forms of employee stock-based compensation plans in accordance with
the requirements of Accounting Principles Board Opinion 25 ("APB 25"). APB 25
requires compensation costs for stock-based compensation plans to be recognized
based on the difference, if any, between the fair market value of the stock on
the date of grant and the option exercise price. In October 1995, the Financial
Accounting Standards Board issue Statement of Financial Accounting Standards
123, Accounting for Stock-Based Compensation ("SFAS 123"). SFAS 123 established
a fair value-based method of accounting for compensation costs related to stock
options and other forms of stock-based compensation plans. However, SFAS 123
allows an entity to continue to measure compensation costs using the principles
of APB 25 if certain pro forma disclosures are made. The Company adopted the
provisions for pro forma disclosure requirements of SFAS 123. Options granted to
non-employees are recognized at their estimated fair value at the date of grant.

25
<PAGE>

SHAREHOLDERS' EQUITY
- --------------------

Common stock

The Company is authorized to issue 50,000,000 shares of common stock, par
value of $.001 per share. In October 1996, the Company issued 640,000 shares of
common stock to founders for initial capitalization. On or about February 2,
1999 the Company issued to Michael Brown, President and Director, of 460,000
shares of the Company's common stock at its par vaule of $0.001 per share

2. BASIC AND DILUTED NET LOSS PER SHARE
- ------------------------------------------

The following table illustrates the required disclosure of the reconciliation
of the numerators and denominators of the basic and diluted earnings per share
computations.

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

Basic and diluted loss per share:

Numerator
Net loss $ (124,029) $ -
----------- -----------

Denominator
Basic and diluted weighted average number of
common shares outstanding during the period 1,125,647 640,000
----------- -----------

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

3. INCOME TAXES
- ------------------

The Company recognizes deferred tax assets and liabilities for temporary
differences between the financial reporting and tax basis of its assets and
liabilities. Deferred tax assets are reduced by a valuation allowance when
deemed appropriate. For 1999 and 1998, no income tax expense has been recorded.
In 1999, the Company recorded a deferred tax asset of $32,000, which has been
offset by a 100% valuation alowance. As of December 31, 1999 the Company had a
federal net operating loss carryforward of $124,000, which expires in 2018.

4. GOING CONCERN
- ----------------------

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. Additional capital infusion is necessary in
order to fund current expenditures and achieve profitable operations. This
factor raises substantial doubt about the Company's ability to continue as a
going concern.

The Company's management intends to continue funding current expenditures
by means of contributions to capital and to raise additional funds through
equity offerings. However, there can be no assurance that management will be
successful in this endeavor.

26
<PAGE>

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

THE FOLLOWING DISCUSSION AND ANALYSIS CONTAINS FORWARD LOOKING STATEMENTS
REGARDING FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF THE COMPANY THAT
INVOLVE CERTAIN RISKS AND UNCERTAINTIES DISCUSSED IN THE "RISK FACTORS" SECTION
OF ITEM 1. UNDER "FORWARD LOOKING STATEMENTS". ACTUAL EVENTS OR THE ACTUAL
FUTURE RESULTS OF THE COMPANY MAY DIFFER MATERIALLY FROM ANY FORWARD LOOKING
STATEMENT DUE TO SUCH RISKS AND UNCERTAINTIES.

OVERVIEW
- --------

Netship Fulfillment, Inc. is a development stage company. A development stage
company is one for which principal operations have not commenced. Management has
devoted most of its activities to establishing the business. Operating losses
have been incurred to date, and will continue to incur as the Company continues
to use, rather than provide, working capital in its operations. The Company
intends to become a full service fulfillment and distribution company
specializing in promotional products and catalog fulfillment, especially for the
Internet industry.

The Company will recognize revenues from the sale of its products upon shipment.

RESULTS OF OPERATIONS
- ---------------------

NET REVENUES
- ------------

As a development stage company, the Company had no revenues for the years ended
December 31, 1999 and December 31, 1998, nor since inception through December
31, 1996.

COSTS AND EXPENSES
- ------------------

As a development stage company, for the year ended December 31, 1999, the
Company had general and administrative costs and expenses of $124,029 soley
related to the Company's 504 offering. The Company had no costs and expenses for
the year ended December 31, 1998. From inception through December 31, 1997, the
Company's expenses in the amount of $540 consisted of costs related to the
incorporation of the Company and issuance of common stock.

OTHER INCOME (EXPENSE)
- ----------------------

The Company had no other income or expenses for the years ended December 31,
1999 and December 31, 1998, nor since inception through December 31, 1997.

PROVISION FOR INCOME TAXES
- --------------------------

The Company had no income nor income taxes for the years ended December 31, 1999
and December 31, 1998, nor since inception through December 31, 1997.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

The Company's cash and cash equivalents increased to $3,961 at December 31, 1999
from $100 at December 31, 1998 due to additional equity capitalization.

The Company's liabilities increased to $5,430 at December 31, 1999 from $0 at
December 31, 1998, and December 31, 1997.

The Company's management currently believes that inflation has not had a
material impact on continuing operations.

27
<PAGE>

FACTORS AFFECTING FUTURE PERFORMANCE
- ------------------------------------

In connection with the Private Securities Litigation Reform Act of 1995 (the
"Litigation Reform Act"), the Company has disclosed certain cautionary
information to be used in connection with written materials (including this FORM
10-KSB) that may contain "forward-looking statements" within the meaning of the
Litigation Reform Act. Such statements consist of any statement other than a
recitation of historical fact and can be identified by the use of
forward-looking terminology such as "intend", "may", "expect", "anticipate",
"estimate", or "continue" or the negative thereof or other variations thereon or
comparable terminology. The listener or reader is cautioned that all
forward-looking statements are necessarily speculative and there are numerous
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward-looking statements. For
discussion that highlights some of the more important risks identified by
management, but which should not be assumed to be the only factors that could
affect future performance, see the "Risk Factors" section of Item 1., which is
incorporated herein by reference. The reader is cautioned that the Company does
not have a policy of updating or revising forward-looking statements and thus he
or she should not assume that silence by management over time means that actual
events are bearing out as estimated in such forward-looking statements.

28
<PAGE>

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant has caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized.

Date: By: /S/ Michael Brown
-------------------------
Michael Brown, Director
and President

Date: By: /S/ Michael Brown
-------------------------
Michael Brown, Director
Secretary/Treasurer

FEE: $1.00 per $1,000.00 FILED
On Authorized Capital OCT 29 1996
MINIMUM FEE: $50.00 OKLAHOMA SECRETARY
OF STATE
FOR OFFICE USE ONLY

CERTIFICATE OF INCORPORATION
(PROFIT)

FILE IN DUPLICATE

PRINT CLEARLY

TO THE SECRETARY OF STATE OF THE STATE OF OKLAHOMA:

1. The name of this corporation is:

PREMIER PARTNERS, INC.
- --------------------------------------------------------------------------------
(Please refer to procedure sheet for statutory words required to be included in
the corporate name.)

2. The address of the registered office in the State of Oklahoma and the name of
the registered agent at such address are

HARVEY S. BRYANT 5550 NORTHEAST 50TH STREET OKLAHOMA CITY OKLAHOMA 73121
- --------------------------------------------------------------------------------
NAME NUMBER & STREET ADDRESS CITY COUNTY ZIP CODE
(P.O. BOXES ARE NOT ACCEPTABLE.)
---

3. The duration of the corporation is: PERPETUAL
------------------------------------------
(Perpetual unless otherwise stated)

4. The purpose or purposes for which the corporation is formed are:

TO ENGAGE IN ANY LAWFUL ACT OR ACTIVITY FOR WHICH CORPORATIONS MAY BE

ORGANIZED UNDER WE THE GENERAL CORPORATION LAW OF OKLAHOMA.

5. The aggregate number of shares which the corporation shall have authority to
issue, the designation of each class, the number of shares of each class, and
the par value of the shares of each class are as follows:

NUMBER OF SHARES SERIES PAR VALUE PER SHARE
(Or, if without par value, so state)

Common 50,000,000 .001
-------------------------- ------------------------
Preferred
---------------------- ------------------------

TOTAL NO. SHARES: 50,000,000 TOTAL AUTHORIZED CAPITAL: $50,000,000
--------------- --------------

<PAGE>

6. If the powers of the incorporator(s) are to terminate upon the filing of the
certificate of incorporation, the names and mailing addresses of the persons who
are to serve as directors:

NAME MAILING ADDRESS CITY STATE ZIP CODE
---- --------------- ---- ----- --------

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

7. The name and mailing address of the undersigned incorporator(s):

NAME MAILING ADDRESS CITY STATE ZIP CODE
---- --------------- ---- ----- --------

HARVEY S. BRYANT 5550 NORTHEAST 50TH STREET OKLAHOMA CITY OK 73121
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THE UNDERSIGNED, for the purpose of forming & corporation under the laws of
the State of Oklahoma does certify that the facts herein stated are true, and
has accordingly hereunder to set my hand this 29th day of OCTOBER, 1996.

/s/ Harvey S. Bryant
-----------------------------------
Signature

-----------------------------------
Signature
<PAGE>

ARTICLES OF INCORPORATION

1. The name of the corporation is PREMIER PARTNERS, INC.

2. The period of its duration is perpetual.

3. The purpose or purposes for which the corporation is formed are: TO ENGAGE
IN ANY LAWFUL ACT 0R ACTIVITY FOR WHICH CORPORATIONS MAY BE ORGANIZED UNDER
THE GENERAL CORPORATION LAW OF OKLAHOMA.

4. The corporation shall have authority to issue 50,000,000 Common shares. all
with par value of .001.

5. The corporation will commence business IMMEDIATELY.

6. The address of its initial registered office is 5550 NORTHEAST 50TH STREET,
OKLAHOMA CITY, OK 73121. The name of its initial registered agent at such
address is HARVEY S. BRYANT.

7. The number of directors constituting the initial board of directors is TWO.
They are: HARVEY S. BRYANT
CLAUDIA BARTEL BRYANT.

8. Every director and officer shall be indemnified against all liabilities,
civil and criminal, incurred in relation to their duties, including all
reasonable expenses of defense, except to the extent that. They shall have
been finally adjudged to be liable for negligence or misconduct in the
matter out of which the liability arises.

OCTOBER 29, 1996

[SEAL HERE]
/s/ Harvey S. Bryant
-------------------------
HARVEY S. BRYANT

/s/ Claudia Bartel Bryant
-------------------------
CLAUDIA BARTEL BRYANT

BYLAWS

PREMIER PARTNERS, INC.

ARTICLE I

OFFICES
-------

SECTION 1. REGISTERED OFFICE. The registered office of the corporation
shall be established and maintained at 5550 Northeast 50th Street, Oklahoma
City, Oklahoma 73121.

SECTION 2. OTHER OFFICES. The corporation may have other offices,
either within or without the State of Oklahoma, at such place or places as the
Board of Directors may from time to time appoint or the business of the
corporation may require.

ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------

SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders for the
election of directors and for such other business as may be stated in the notice
of the meeting, shall be held at such place, either within or without the State
of Oklahoma, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of the meeting. In the event the
Board of Directors fails to so determine the time, date and place of meeting,
the annual meeting of stockholders shall be held at the registered office of the
corporation in Oklahoma on the second Tuesday of May of each year at 11 a.m.,
local time.
If the date of the annual meeting shall fall upon a legal holiday, the
meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders entitled to vote shall elect a Board of Directors and
they may transact such other corporate business as shall be stated in the notice
of the meeting.

SECTION 2. OTHER MEETINGS. Meetings of stockholders for any purpose
other than the election of directors may be held at such time and place as shall
be stated in the notice of the meeting.

SECTION 3. VOTING. Each stockholder entitled to vote an accordance
with the terms of the Certificate of Incorporation and in accordance with the
provisions of these Bylaws shall be entitled to one vote, in person or by proxy,
for each share of stock entitled to vote held by such stockholder, but no proxy
shall be voted after three years from its date unless such proxy provides for a
longer period. Upon the demand of any stockholder, the vote for directors and
the vote upon any question before the meeting shall be by ballot. All elections
for directors shall be decided by plurality vote of the shares present in person
or represented by proxy at the meeting and entitled to vote on the election of
directors, and all other questions shall be decided by the affirmative vote of

<PAGE>

the majority of shares present in person or represented by proxy at the meeting
and entitled to vote on the subject matter, except as otherwise provided by the
Certificate of Incorporation or the laws of the State of Oklahoma. A complete
list of the stockholders entitled to vote at the ensuing election, arranged in
alphabetical order, with the address of each, and the number of shares held by
each, shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.

SECTION 4. QUORUM. Except as otherwise required by law, by the
Certificate of Incorporation or by these Bylaws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders.
In case a quorum shall not be present at any meeting, a majority in interest of
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting until the requisite amount of stock entitled to vote
shall be present. At any such adjourned meeting at which the requisite amount of
stock entitled to vote shall be represented, any business may be transacted
which might have been transacted at the meeting as originally noticed; but only
those stockholders entitled to vote at the meeting as originally noticed shall
be entitled to vote at any adjournment or adjournments thereof.

SECTION 5. SPECIAL MEETINGS. Special meetings of the stockholders for
any purpose or purposes may be called by the President or Secretary, or by
resolution of the directors.

SECTION 6. NOTICE OF MEETINGS. Written notice, stating the place, date
and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than ten (10)
nor more than sixty (60) days before the date of the meeting. No business other
than that stated in the notice shall be transacted at any meeting without the
unanimous consent of all the stockholders entitled to vote thereat.

SECTION 7. ACTION WITHOUT MEETING. Unless otherwise provided by the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken at any annual
or special meeting, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.

<PAGE>

ARTICLE III
DIRECTORS
---------

SECTION 1. NUMBER AND TERM. The number of directors shall be one or
more. The directors shall be elected at the annual meeting of the stockholders
and each director shall be elected to serve until his or her successor shall be
elected and shall qualify. Directors need not be stockholders.

SECTION 2. RESIGNATIONS. Any director, member of a committee or other
office may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time specified therein, and if no time be specified, at
the time of its receipt by the President or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.

SECTION 3. VACANCIES. If the office of any director, member of a
committee or other officer becomes vacant, the remaining directors in office,
though less than a quorum by a majority vote, may appoint any qualified person
to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.

SECTION 4. REMOVAL. Any director or directors may be removed either
for or without cause at any time by the affirmative vote of the holders of a
majority of all the shares of stock outstanding and entitled to vote, at a
special meeting of the stockholders called for the purpose and the vacancies
thus created may be filled, at the meeting held for the purpose of removal, by
the affirmative vote of a majority in interest of the stockholders entitled to
vote.

SECTION 5. INCREASE OF NUMBER. The number of directors may be
increased by amendment of these Bylaws by the affirmative vote of a majority
vote of a majority in interest of the stockholders, at the annual meeting or at
a special meeting called for that purpose, and by like vote the additional
directors may be chosen at such meeting to hold office until the next annual
election and until their successors are elected and qualify.

SECTION 6. POWERS. The Board of Directors shall exercise all of the
powers of the corporation except such as are by law, or by the Certificate of
Incorporation of the corporation or by these Bylaws conferred upon or reserved
to the stockholders.

SECTION 7. COMMITTEES. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole board, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. Any such committee, to the extent provided in the resolution of the
Board of Directors, or in these Bylaws, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to

<PAGE>

be affixed to all papers which may require it; but no such committee shall have
the power or authority in reference to amending the Certificate of
Incorporation, adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
Bylaws of the corporation; and, unless the resolution, these Bylaws or the
Certificate of Incorporation expressly so provide, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
stock.

SECTION 8. ANNUAL MEETINGS. The annual meeting of the Board may be
held at such time and place as shall he fixed by a vote of the shareholders at
the annual meeting and no notice of such meeting shall be necessary to the newly
elected directors in order to legally constitute such meeting.

SECTION 9. REGULAR MEETINGS. Regular meetings of the directors may be
held without notice at such places and times as shall be determined from time to
time by resolution of the directors.

SECTION 10. SPECIAL MEETINGS. Special meetings of the board may be
called by the President or by the Secretary on the written request of any two
(2) directors on at least two (2) days' notice to each director and shall be
held at such place or places as may be determined by the directors, or as shall
be stated in the call of the meeting.

SECTION 11. QUORUM. A majority of the directors shall constitute a
quorum for the transaction of business. If at any meeting of the board there
shall be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting which shall be
so adjourned.

SECTION 12. COMPENSATION. Directors shall not receive any stated
salary for their services as directors or as members of committees, but by
resolution of the board a fixed fee and expenses of attendance may be allowed
for attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.

SECTION 13. ACTION WITHOUT MEETING. Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting, if prior to such action a written
consent thereto is signed by all members of the board, or of such committee as
the case may be, and such written consent is filed with the minutes of
proceedings of the board or committee.

ARTICLE IV
OFFICERS
--------

<PAGE>

SECTION 1. OFFICERS. The officers of the corporation shall be a
President, a Treasurer, and a Secretary, all of whom shall be elected by the
Board of Directors and who shall hold office until their successors are elected
and qualified. In addition, the Board of Directors may elect a Chairman, one (1)
or more Vice Presidents and such Assist Secretaries and Assistant Treasurers as
they may deem proper. None of the officers of the corporation need be directors.
The officers shall be elected at the first meeting of the Board of Directors
after each annual meeting. More than two (2) offices may be held by the same
person.

SECTION 2. OTHER OFFICERS AND AGENTS. The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.

SECTION 3. CHAIRMAN. The Chairman of the Board of Directors, if one be
elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.

SECTION 4. PRESIDENT. The President shall be the chief executive
officer of the corporation and shall have the general powers and duties of
supervision and management usually vested in the office of President of a
corporation. He shall preside at all meetings of the stockholders if present
thereat, and in the absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the corporation. except as
the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages and other contracts in behalf of the
corporation, and shall cause the seal to be affixed to any instrument requiring
it and when so affixed the seal shall be attested by the signature of the
Secretary or an Assistant Secretary.

SECTION 5. VICE PRESIDENT. Each Vice President shall have such powers
and shall perform such duties as shall be assigned to him by the directors.

SECTION 6. TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation. He shall
deposit all monies and other valuables in the name and to the credit of the
corporation in such depositories as may be designed by the Board of Directors.

SECTION 7. SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors, and all other notices
required by law or by these Bylaws, and in case of his absence or refusal or
neglect so to do, any such notice may be given by any person thereunto directed
by the President, or by the directors, or stockholders, upon whose requisition
the meeting is called as provided in these Bylaws. He shall record all the

<PAGE>

proceedings of the meetings of the corporation and of the directors in a book to
be kept for that purpose, and shall perform such other duties as may be assigned
to him by the directors or the President. He shall have custody of the seal of
the corporation and shall affix the same to all instruments requiring it, when
authorized by the directors or the President, and attest the same.

SECTION 8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers arid shall perform such duties as shall be assigned to them,
respectively, by the directors.

SECTION 9. SALARIES. The salaries of all officers of the corporation
shall be fixed by the Board of Directors.

SECTION 10. REMOVAL. Any officer elected or appointed by the Board of
Directors may be removed from office, with or without cause, at any time by the
affirmative vote of a majority of the directors present at any meeting of the
Board at which a quorum is present.

ARTICLE V
MISCELLANEOUS
-------------

SECTION 1. CERTIFICATES OP STOCK. Certificates of stock, signed by the
President or Vice President, and the Treasurer or an Assistant Treasurer, or
Secretary or an Assistant Secretary, shall be issued to each stockholder
certifying the number of shares owned by him in the corporation. Any of or all
the signatures may be facsimiles.

SECTION 2. LOST CERTIFICATES. A new certificate of stock may be issued
in the place of any certificate theretofore issued by the corporation, alleged
to have been lost or destroyed, and the directors may, in their discretion,
require the owner of the lost or destroyed certificate, or his legal
representatives, to give the corporation a bond, in such sum as they may direct,
nor exceeding double the value of the stock, to indemnify the corporation
against any claim that may be made against it on account of the alleged loss of
any such certificate, or the issuance of any such new certificate.

SECTION 3. TRANSFER OP SHARES. The shares of stock of the corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other person as the directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer and whenever a transfer shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer. SECTION 4. STOCKHOLDERS RECORD DATE. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of

<PAGE>

stockholders or any adjournment thereof, or to express consent to corporation
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.

SECTION 5. REGISTERED STOCKHOLDERS. The corporation shall be entitled
to treat the holder of record of any share or shares as the holder in fact
thereof, and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, except as may be
otherwise expressly provided by the laws of Oklahoma.

SECTION 6. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the directors from or as a reserve fund to
meet contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the corporation.

SECTION 7. SEAL. The corporate seal shall be circular in form and
shall contain the name of the corporation and the words "CORPORATE SEAL." Said
seal may be used by causing it or a facsimile thereof to be impressed or affixed
or reproduced or otherwise.

SECTION 8. FISCAL YEAR. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.

SECTION 9. CHECKS. All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers, agent or agents of the
corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.

SECTION 10. NOTICE. Whenever any notice is required by these Bylaws to
be given, personal notice is not meant unless expressly so stated, and any
notice so required shall be deemed to be sufficient if given by depositing the
same in the United States mail, postage prepaid, addressed to the person
entitled thereto at his address as it appears on the records of the corporation,
and such notice shall be deemed to have been given on the day of such mailing.
Stockholders not entitled to vote shall not be entitled to receive notice of any
meetings except as otherwise provided by Statute.

<PAGE>

SECTION 11. WAIVER OF NOTICE. Whenever any notice whatever is required
to be given under the provisions of any law, or under the provisions of the
Certificate of Incorporation of the corporation or these Bylaws, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.

ARTICLE VI
INDEMNIFICATION OF OFFICERS, DIRECTORS,
---------------------------------------
EMPLOYEES AND AGENTS
--------------------

To the extent and in the manner permitted by the laws of the State of Oklahoma,
and specifically as is permitted under Section 1031 of the Oklahoma General
Corporation Act, the corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, other than an action by or in the right of the corporation, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of the corporation, partnership, joint
venture, trust or other enterprise against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement.

ARTICLE VII
AMENDMENTS
----------

These Bylaws may be altered or repealed and Bylaws may be made at any annual
meeting of the stockholders or at any special meeting thereof if notice of the
proposed alteration or repeal or Bylaw or Bylaws to be made be contained in the
notice of such special meeting, by the affirmative vote of a majority of the
stock issued and outstanding and entitled to vote thereat, or by the affirmative
vote of a majority of the Board of Directors, at any regular meeting of the
Board of Directors, or at any special meeting of the Board of Directors, if
notice of the proposed alteration or repeal, or Bylaw or Bylaws to be made, be
contained in the notice of such special meeting.

DATED: OCTOBER 30, 1996
-------------------------

<PAGE>

MINIMUM FEE: $50.00
If the authorized capital is
increased in excess of fifty
thousand dollars
($50,000.00), the filing fee
will be an amount equal to
one-tenth of one percent
(1/10th of 1%) of such
increase.

FILE IN DUPLICATE

PRINT CLEARLY

AMENDED
CERTIFICATE OF INCORPORATION
(AFTER RECEIPT OF PAYMENT OF STOCK)

TO: OKLAHOMA SECRETARY OF STATE
2300 N. Lincoln Blvd. Room 101, State Capitol Building
Oklahoma City, Oklahoma 73105 4897
(405)-522-4560

PLEASE NOTE: This form MUST be filed with a letter from the Oklahoma Tax
Commission, Franchise Tax Department, stating that the franchise tax, due
yearly, has been paid for the current fiscal year.

The undersigned Oklahoma corporation, for the purpose of amending its
certificate of incorporation as provided by Section 1077 of the Oklahoma General
Corporation Act, hereby certifies:

1. A. The name of the corporation is:

PREMIER PARTNERS, INC.
- --------------------------------------------------------------------------------

B. AS AMENDED: The name of the corporation has been changed to:

NETSHIP FULFILLMENT, INC.
- --------------------------------------------------------------------------------
(Please Note: The new name of the corporation MUST contain one of the following
words: association, company, corporation, club, foundation, fund, incorporated,
institute, society, union, syndicate or limited or one of the abbreviations co.,
corp., inc. or ltd.)

2. The name of the registered agent and the street address of the registered
office in the State of Oklahoma is:

HARVEY S. BRYANT, 5550 NORTHEAST 50TH STREET, OKLAHOMA CITY, OK 73121
- --------------------------------------------------------------------------------
Name of Agent Street Address City County Zip Code
(P.O. BOXES ARE NOT ACCEPTABLE)
---

3. The duration of the corporation is: PERPETUAL
------------------------------------------

RECEIVED
OK SEC. OF STATE
MAR - 1 1999

<PAGE>

4. The aggregate number of the authorized shares, itemized by class, par value
of shares, shares without par value, and series, if any, within a class is:

NUMBER OF SHARES SERIES PAR VALUE PER SHARE
(If any) (Or, if without par value, so state)

COMMON 50,000,000 .001
--------------------- ----------------------

PREFERRED
------------------ ----------------------

5. Set forth clearly any and all amendments to the certificate of incorporation
which are desired to be made:

That at a meeting of the Board of Directors, a resolution was duly adopted
setting forth the foregoing proposed amendment(s) to the Certificate of
Incorporation of said corporation, declaring said amendment(s) to be advisable
and calling a meeting of the shareholders of said corporation for consideration
thereof.

That thereafter, pursuant to said resolution of its Board of Directors, a
meeting of the shareholders of said corporation was duly called and held, at
which meeting the necessary number of shares as required by statue were voted in
favor of the amendment(s).

IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by its President or Vice President and attested by its Secretary or
Assistant Secretary, this 24th day of February, 1999.

/s/ Michael Brown
------------------------------
By: President

/s/ Michael Brown
------------------------------
(PLEASE PRINT NAME)

ATTEST:

/s/ Michael Brown
- ---------------------------------
By: Secretary

/s/ Michael Brown
- ---------------------------------
(PLEASE PRINT NAME)

<ARTICLE> 5
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,961
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,961
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,961
<CURRENT-LIABILITIES> 5,430
<BONDS> 0
0
0
<COMMON> 1,202
<OTHER-SE> 121,898
<TOTAL-LIABILITY-AND-EQUITY> 3,961
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 124,029
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (124,029)
<INCOME-TAX> 0
<INCOME-CONTINUING> (124,029)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (124,029)
<EPS-BASIC> (.11)
<EPS-DILUTED> (.11)

</TABLE>