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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
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FlashNet Communications, Inc.
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(NAME OF ISSUER)
Common Stock, no par value
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(TITLE OF CLASS OF SECURITIES)
338527 10 4
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(CUSIP NUMBER)
M. Scott Leslie, 1812 North Forest Park Boulevard,
Fort Worth, Texas 76102 (817) 332-8883
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS)
March 15, 1999
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page should be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP No. 338527 10 4 Page 1 of 4 Pages
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(1) NAMES OF REPORTING PERSONS.
S.S. OR IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ISP Investors, L.P., Kleinheinz Capital Partners, Inc.
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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(3) SEC Use Only
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(4) Source of Funds*
WC
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
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(7) SOLE VOTING POWER
0
NUMBER OF --------------------------------------------------
SHARES (8) SHARED VOTING POWER
BENEFICIALLY 1,666,394
OWNED BY --------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
REPORTING 0
PERSON --------------------------------------------------
WITH (10) SHARED DISPOSITIVE POWER
1,666,394
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,666,394
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.4%
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(14) TYPE OF REPORTING PERSON*
PN, CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the common stock, no par value ("Common
Stock"), of FlashNet Communications, Inc. ("FlashNet"). The address
of the principal executive offices of FlashNet is:
1812 North Forest Park Boulevard
Fort Worth, Texas 76102
ITEM 2. IDENTITY AND BACKGROUND
(a) NAME:
ISP Investors, L.P. and Kleinheinz Capital Partners, Inc., its
general partner ("General Partner").
(b) BUSINESS ADDRESS:
The principal executive offices for ISP Investors, L.P. and
General Partner is 201 Main Street, Suite 2001, Fort Worth, Texas
76102
(c) BUSINESS PURPOSE:
ISP Investors, L.P. and General Partner are in the business of
investing in securities.
(d) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS:
Neither ISP Investors, L.P. nor General Partner has been
convicted in a criminal proceeding during the previous five
years. Neither ISP Investors, L.P. nor General Partner has been
a party in a civil or administrative proceeding involving an
alleged violation of any state or federal securities laws during
the previous five years.
(e) STATE OF ORGANIZATION:
ISP Investors, L.P. is a Texas limited partnership.
General Partner is a Texas corporation.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
In May and August of 1998, ISP Investors, L.P. purchased a total of
490,116 shares of FlashNet's Series A Convertible Preferred Stock.
The source of funds for such
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purchase was working capital. On March 19, 1999, the date of
consummation of FlashNet's initial public offering, ISP Investors,
L.P.'s shares of preferred stock were automatically converted into
1,666,394 shares of FlashNet's Common Stock.
ITEM 4. PURPOSE OF TRANSACTION
ISP Investors, L.P. acquired the FlashNet Common Stock as described
above and holds the Common Stock as an investment. ISP Investors,
L.P. and General Partner intend for FlashNet's Common Stock to
continue to be eligible for trading on the NASDAQ National Market.
ISP Investors, L.P. or General Partner may make purchases of FlashNet
Common Stock from time to time and may dispose of any or all of such
shares held by it at any time following the expiration of a lock-up
period on September 11, 1999 (pursuant to the Lock-Up Agreement
described below). Neither ISP Investors, L.P. nor General Partner has
present plans nor do they contemplate any present proposals that would
result in any of the transactions described in Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Each of ISP Investors, L.P. and General Partner is the beneficial
owner of 1,666,394 shares of FlashNet's Common Stock (or approximately
12.4% of its outstanding shares). ISP Investors, L.P. and General
Partner share the power to vote and dispose of all these shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
ISP Investors, L.P. is a party to a Lock-Up Agreement entered into in
connection with ISP FlashNet's initial public offering which restricts
its disposition of its shares of FlashNet Common Stock for a period of
180 days following March 15, 1999.
Except as set forth above, no contracts, arrangements, understandings
or relationships (legal or otherwise) exist among the persons named in
Item 2 or between such persons and any other persons with respect to
any securities of FlashNet, including, but not limited to transfer or
voting of such securities, finders' fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of property, division
of profits or loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
4.1 Lock-Up Agreement, dated October 15, 1998, among ISP Investors,
LP and FlashNet Communications, Inc.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: March 24, 1999
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ISP INVESTORS, L.P.
By: KLEINHEINZ CAPITAL PARTNERS,
INC., ITS General Partner
By: /s/ John Kleinheinz
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Name: John Kleinheinz
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Title: President
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FLASHNET COMMUNICATIONS, INC.
LOCK-UP AGREEMENT
BancBoston Robertson Stephens Inc.
J.C. Bradford & Co.
EVEREN Securities, Inc.
c/o BancBoston Robertson Stephens Inc.
555 California Street
Suite 2600
San Francisco, California 94104
Ladies/Gentlemen:
The undersigned understands that you, as representatives, propose to enter
into an Underwriting Agreement (the "Underwriting Agreement") on behalf of the
several Underwriters to be named on Schedule A to such agreement (collectively,
the "Underwriters"), with FlashNet Communications, Inc. (the "Company")
providing for an initial public offering (the "Public Offering") of certain
shares of the Common Stock of the Company (the "Shares") pursuant to a
Registration Statement on Form S-1 (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission").
In consideration of the agreement by the Underwriters to offer and sell the
Shares in the Public Offering, and of certain other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees that the undersigned will not, for a period of 180 days from
the date that the Registration Statement is declared effective by the Commission
(the "Lock-Up Period"), offer to sell, contract to sell, or otherwise sell,
dispose of, loan, pledge or grant any rights with respect to (collectively, a
"Disposition") any shares of Common Stock, any options or warrants to purchase
any shares of Common Stock or any securities convertible into or exchangeable
for shares of Common Stock (collectively, "Securities"), now owned directly by
the undersigned or hereafter acquired by the undersigned or with respect to
which the undersigned has the power of disposition or hereafter acquires the
power of disposition, otherwise than (i) as a bona fide gift or gifts, provided
the donee or donees thereof agree in writing to be bound by this restriction,
(ii) as a distribution to partners or shareholders of the undersigned, provided
that the distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) with the prior written consent of BancBoston Robertson
Stephens Inc.
The undersigned agrees that the foregoing restriction expressly precludes
the undersigned from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-Up Period, even if such Securities would be disposed
of by someone other than the undersigned. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including,
without limitation, any put or call option) with
LOCK-UP AGREEMENT Page 1
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respect to any Securities or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from Securities. Furthermore, the undersigned
also agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent against the transfer of the Securities held by the
undersigned except in compliance with this restriction.
In addition, the undersigned agrees that, without the prior written consent
of BancBoston Robertson Stephens Inc., the undersigned will not, during the
Lock-Up Period, make any demand for or exercise any right with respect to, the
registration of Securities.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up
Agreement is irrevocable and shall be binding upon the undersigned's heirs,
legal representatives, successors and assigns.
If for any reason the Underwriting Agreement shall be terminated prior to
the closing of the delivery of the Shares to the Underwriters thereunder, this
Lock-Up Agreement shall likewise be terminated.
Dated: October 15, 1998
Very truly yours,
For Entity: For Individual:
ISP Investors, LP
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By: /s/ John Kleinheinz
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Its: General Partner Additional Signature (if held jointly)
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(Print Name)
LOCK-UP AGREEMENT Page 2
