UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. __1___)*
Datakey Inc.
______________________________________________________
(Name of Issuer)
Common Stock, $0.05 Par Value
______________________________________________________
(Title of Class of Securities)
237909106
____________________________________
(CUSIP Number)
December 31, 1999
-------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which
this Schedule is filed:
-x-- Rule 13d-1(b)
---- Rule 13d-1(c)
---- Rule 13d-1(d)
*The remainder of this cover page shall 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 the disclosures provided
in a prior cover page.
The information required in 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).
CUSIP No. 237909106 13G Page 2 of 13
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(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Special Situations Private Equity Fund, L.P. ("SSPE")
F13-3916551
MG Advisers, L.L.C. ("MG") F13-3916549
- ----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) | |
(b) |X|
- ----------------------------------------------------------------
(3) SEC USE ONLY
- ----------------------------------------------------------------
(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------
NUMBER OF (5) SOLE VOTING POWER See Marxe/Greenhouse
SHARES -------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER None
OWNED BY -------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER See Marxe/Greenhouse
REPORTING -------------------------------------------------
PERSON WITH: (8) SHARED DISPOSITIVE POWER None
- ----------------------------------------------------------------
(9) AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
295,118 (Includes shares of common stock issuable upon
conversion of Series A Preferred Stock and upon the exercise
of warrants)
- ----------------------------------------------------------------
(10) CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES (See Instructions)
- ----------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
9.1
- ----------------------------------------------------------------
(12) TYPE OF REPORTING PERSON (See Instructions)
IV/IA
- ----------------------------------------------------------------
CUSIP No. 237909106 13G Page 3 of 13
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(1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Special Situations Technology Fund, L.P. ("SST") 13-3937585
SST Advisers, LLC ("SST") 13-3937583
- ----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) | |
(b) |X|
- ----------------------------------------------------------------
(3) SEC USE ONLY
- ----------------------------------------------------------------
(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------
NUMBER OF (5) SOLE VOTING POWER See Marxe/Greenhouse
SHARES -------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER None
OWNED BY -------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER See Marxe/Greenhouse
REPORTING -------------------------------------------------
PERSON WITH: (8) SHARED DISPOSITIVE POWER None
- ----------------------------------------------------------------
(9) AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
79,764 (Includes shares of common stock issuable upon
conversion of Series A Preferred Stock and upon the exercise
of warrants)
- ----------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES (See Instructions)
- ----------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
2.3
- ----------------------------------------------------------------
(12) TYPE OF REPORTING PERSON*
IV/IA
- ----------------------------------------------------------------
CUSIP No. 237909106 13G Page 4 of 13
- ----------------------------------------------------------------
(1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Special Situations Cayman Fund, L.P. ("CAY") 98-0132442
AWM Investment Comapny, Inc. ("AWM") 11-3086452
- ----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) | |
(b) |X|
- ----------------------------------------------------------------
(3) SEC USE ONLY
- ----------------------------------------------------------------
(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------
NUMBER OF (5) SOLE VOTING POWER See Marxe/Greenhouse
SHARES -------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER None
OWNED BY -------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER See Marxe/Greenhouse
REPORTING -------------------------------------------------
PERSON WITH: (8) SHARED DISPOSITIVE POWER None
- ----------------------------------------------------------------
(9) AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
9,800
- ----------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES (See Instructions)
- ----------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
.3
- ----------------------------------------------------------------
(12) TYPE OF REPORTING PERSON*
IV/IA
- ----------------------------------------------------------------
CUSIP No. 237909106 13G Page 5 of 13
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(1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY).
Austin W. Marxe
David M. Greenhouse
- ----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) | |
(b) |X|
- ----------------------------------------------------------------
(3) SEC USE ONLY
- ----------------------------------------------------------------
(4) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------
NUMBER OF (5) SOLE VOTING POWER 384,682
SHARES -------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER None
OWNED BY -------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER 384,682
REPORTING -------------------------------------------------
PERSON WITH: (8) SHARED DISPOSITIVE POWER None
- ----------------------------------------------------------------
(9) AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
384,682
- ----------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES (See Instructions)
- ----------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
11.5
- ----------------------------------------------------------------
(12) TYPE OF REPORTING PERSON*
IN
- ----------------------------------------------------------------
Page 6 of 13 Pages
Item 1.
(a) Name of Issuer: Datakey, Inc. (the "Issuer") This
schedule relates to the common stock, Series A Preferred
Stock and warrants convertible and exercisable into
common stock of Datakey, Inc.
(b) Address of Issuer's Principal Executive Offices:
407 West Travelers Trail, Burnsville, MN 55337-2554
Item 2.
(a) Name of Person Filing: This statement is filed on behalf
of (i) Special Situations Private Equity Fund, L.P., a
Delaware limited partnership ("SSPE"); (ii) Special Situations
Technology Fund, L.P. , a Delaware limited partnership
("SST"); (iii) Special Situations Cayman Fund, L.P., a Cayman
Islands limited partnerhsip ("CAY"); (iv) MG Advisers,
L.L.C., a New York limited liability company,("MG"); (v) SST
Advisers, L.L.C., Inc., a Delaware limited liability company
("SSTA"); (vi) AWM Investment Company, Inc., a Delaware
corporation ("AWM"); (vii) Austin W. Marxe and (viii) David
Greenhouse. Each of the foregoing is hereinafter individually
referred to as a "Reporting Person" and collectively as the
"Reporting Persons."
(b) Address of Principal Business Office or, if none,
Residence: The principal office and business address of the
Reporting Persons except the Cayman Fund is 153 East 53
Street, New York, New York 10022. The principal office and
business address of the Cayman Fund is c/o CIBC Bank and Trust
Company (Cayman) limited, P.O. Box 694, Edwards Street, Grand
Page 7 of 13 Pages
Cayman, Cayman Islands, BWI
(c) Citizenship: SSPE and SST are Delaware limited
partnerships. MG is a New York limited liability company and
SSTA is a Delaware limited liability company. CAY is a Cayman
limited partnership and AWM is a Delaware corporation. Austin
W. Marxe and David M. Greenhouse are United States citizens.
The principal business of SSPE, SST and CAY (individually, a
"Fund" and, collectively, the "Funds") is to invest in, sell,
convey, transfer, exchange and otherwise trade in principally
equity and equity related securities. The principal business
of MG is to act as general partner of and investment adviser
to SSPE. The principal business of SSTA is to act as the
general partner of and the investment adviser to the SST. The
principal business of AWM is to act as the general partner of
and the investment adviser to CAY. MG, SSTA and AWM are
referred to herein, individually, as an "Adviser" and,
collectively, as the "Advisers." The principal occupation of
Austin W. Marxe and David Greenhouse is to serve as officers,
directors and members or principal shareholders of the
Advisers.
2(d) Title of Class of Securities: See cover sheets.
2(e) CUSIP Number: See cover sheets.
Item 3. If this statement is filed pursuant to $240.13d-1(b)
or 240.13d-2(b), check whether the person filing is
a:
(a) ( ) Broker or Dealer registered under section 15 of the
Page 8 of 13 Pages
Act;
(b) ( ) Bank as defined in section 3(a) (6) of the Act;
(c) ( ) Insurance Company as defined in section 3(a) (19) of
the Act;
(d) ( ) Investment Company registered under section 8 of the
Investment Company Act of 1940;
(e) (x) An Investment Adviser in accordance with $240.13d
-1(b)(I)(ii)(E);
(f) ( ) An employee benefit plan or endowment fund in
accordance with $240.13d-1(b)(I)(ii)(F);
(g) (x) A parent holding company or control person in
accordance with $240.13d-1(b)(1)(ii)(G);
(h) ( ) A savings association as defined in Section 3(b) of
the Federal Deposit Insurance Act;
(i) ( ) A church plan that is excluded from the definition
of an investment company under section 3(c)(14) of
the Investment Company Act of 1940;
(j) ( ) Group, in accordance with $240.13d-1(b)(1)(ii)(J).
See Exhibit A attached hereto.
Item 4. Ownership:
(a) Amount Beneficially Owned: 384,682 shares of Common
Stock are beneficially owned by Austin W. Marxe and David
Greenhouse; of which 58,544 convertible preferred shares and
110,119 warrants are owned by SSPE; 15,823 convertible
preferred shares and 29,763 warrants are owned by SST and
9,800 common shares are owned by CAY.
Page 9 of 13 Pages
(b) Percent of Class: 11.5 percent of the Common Stock are
beneficially owned by Austin Marxe and David Greenhouse. 9.1
percent of the Common Stock are beneficially owned by SSPE,
2.3 percent are beneficially owned by the SST, and .3 percent
are beneficially owned by CAY.
(c) Number of Shares as to which the person has Rights to
Vote and/or Dispose of Securities: SSPE, MG, SST, SSTA, CAY
and AWM have sole power to vote or to direct the vote and to
dispose or to direct the disposition of all securities
reported hereby which are respectively beneficially owned by
each Fund and its Adviser. Austin Marxe and David Greenhouse
have shared power to vote or to direct the vote of and to
dispose or to direct the disposition of securities reported
hereby which are beneficially owned by Austin Marxe and David
Greenhouse by virtue of being Executive Officers of the
Investment Advisers.
Item 5. Ownership of Five Percent or Less of a Class: If this
statement is being filed to report the fact that as of the
date hereof the reporting person has ceased to be the
beneficial owner of more that five percent of the class of
securities, check the following .
Item 6.Ownership of More than Five Percent on Behalf of
Another Person: SSPE, SST and CAY as owners of the securities
in question, have the right to receive any dividends from, or
proceeds from the sale of, such securities.
Page 10 of 13 Pages
Item 7. Identification and Classification of the Subsidiary
Which Acquired the Security being Reported on By the Parent
Holding Company: See Exhibit A attached hereto.
Item 8. Identification and Classification of Members of the
Group: Not applicable
Item 9. Notices of Dissolution of Group: Not applicable.
Item 10. Certification:
By signing below I certify that, to the best of
my knowledge and belief, the securities referred to above were
acquired and are held in the ordinary course of business and
were not acquired and are not held for the purpose of or with
the effect of changing or influencing the control of the
issuer of the securities and were not acquired and are not
held in connection with or as a participant in any transaction
having that purpose or effect.
Page 11 of 13 Pages
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.
Dated: February 5, 1999
SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.
By:/s/ Austin W. Marxe
Austin W. Marxe
Managing Director
MG ADVISERS, L.L.C.
By:/s/ Austin W. Marxe
Austin W. Marxe
President and Chief Executive Officer
SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.
By: /s/ Austin W. Marxe
Austin W. Marxe
Managing Director
SST ADVISERS, L.L.C.
By: /s/ Austin W. Marxe
Austin W. Marxe
President and CEO
SPECIAL SITUATIONS CAYMAN FUND, L.P.
By: /s/ Austin W. Marxe
Austin W. Marxe
Managing Director
Page 12 of 13 Pages
AWM INVESTMENT COMPANY, INC.
By: /s/ Austin W. Marxe
Austin W. Marxe
President and CEO
/s/ Austin W. Marxe
AUSTIN W. MARXE
/s/David M Greenhouse
P
Page 13 of 13 Pages
EXHIBIT A
This Exhibit explains the relationship between the
Reporting Persons. MG Advisers, L.L.C. (MG), a New York
limited liability company, is the general partner of the
Special Situations Private Equity Fund, L.P. (SSPE), a
Delaware Limited Partnership. SST Advisers, L.L.C.(SSTA), a
Delaware limited liability company, is the general partner of
and investment adviser to the Special Situations Technology
Fund, L.P.(SST). AWM Investment Company, Inc.(AWM), a
Delaware corporation, is a registered investment advisers
under the Investment Advisers Act of 1940 and serves as the
general partner of and investment adviser to the Special
Situations Cayman Fund, L.P.(CAY), a Cayman Islands limited
partnership. Austin W. Marxe and David M. Greenhouse are the
principal owners of MG, SSTA and AWM and are principally
responsible for the selection, acquisition and disposition of
the portfolios securities by the investment advisers on behalf
of their Fund.
