UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __1___)*
LifeRate Systems, Inc
______________________________________________________
(Name of Issuer)
Common Stock, $ No Par Value
______________________________________________________
(Title of Class of Securities)
531936102
____________________________________
(CUSIP Number)
Austin W. Marxe, 153 East 53rd Street, New York, NY 10022
(212) 832-5300
______________________________________________________
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
January 30, 1998
_________________________________________________________
(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-
I(b)(3) or (4), check the following box ___.
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 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 the 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).
SCHEDULE 13D
CUSIP No. 531936102 Page 2 of 9 Pages
- ----------------------------------------------------------------
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Special Situations Fund III, L.P.
F13-3737427
MGP Advisers Limited Partnership *
F13-3263120
- ----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) | |
(b) |X|
- ----------------------------------------------------------------
(3) SEC USE ONLY
- ----------------------------------------------------------------
(4) SOURCE OF FUNDS* 00
________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO 2(d) OR 2(e) ____
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER See Marxe/Greenhouse
SHARES -------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER None
OWNED BY -------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER See Marxe/Greenhouse
REPORTING -------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER None
- ----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
4,400,000 (includes 2,200,000 warrants)
- ----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
- ----------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.9
- ----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IV/IA
- ----------------------------------------------------------------
* AWM Investment Company, Inc., a Delaware corporation is the
General Partner of this entity.
SCHEDULE 13D
CUSIP No.531936102 Page 3 of 9 Pages
- ----------------------------------------------------------------
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Special Situations Private Equity Fund, L.P.
F13-3916551
MG Advisers, L.L.C. F13-3916549
- ----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) | |
(b) |X|
- ----------------------------------------------------------------
(3) SEC USE ONLY
- ----------------------------------------------------------------
(4) SOURCE OF FUNDS* 00
________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO 2(d) OR 2(e) ____
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER See Marxe/Greenhouse
SHARES -------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER None
OWNED BY -------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER See Marxe/Greenhouse
REPORTING -------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER None
- ----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
4,000,000 (includes 2,000,000 warrants)
- ----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
- ----------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.6
- ----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IV/IA
- ----------------------------------------------------------------
SCHEDULE 13D
CUSIP No.531936102 Page 4 of 9 Pages
- ----------------------------------------------------------------
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Special Situations Cayman Fund, L.P.
98-0132442
AWM Investment Company, Inc. 11-3086452
- ----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) | |
(b) |X|
- ----------------------------------------------------------------
(3) SEC USE ONLY
- ----------------------------------------------------------------
(4) SOURCE OF FUNDS* 00
________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO 2(d) OR 2(e) ____
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- ----------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER See Marxe/Greenhouse
SHARES -------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER None
OWNED BY -------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER See Marxe/Greenhouse
REPORTING ------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER None
- ----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
1,640,000 (includes 800,000 warrants)
- ----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
- ----------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.3
- ----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IV/IA
- ----------------------------------------------------------------
SCHEDULE 13D
CUSIP No.531936102 Page 5 of 9 Pages
- ----------------------------------------------------------------
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Austin W. Marxe
David M. Greenhouse
- ----------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) | |
(b) |X|
- ----------------------------------------------------------------
(3) SEC USE ONLY
- ----------------------------------------------------------------
(4) SOURCE OF FUNDS* 00
________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO 2(d) OR 2(e) ____
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ----------------------------------------------------------------
NUMBER OF (7) SOLE VOTING POWER 10,040,000
SHARES -------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER None
OWNED BY -------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER 10,040,000
REPORTING -------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER None
- ----------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICALLY OWNED BY EACH REPORTING PERSON
10,040,000 (includes 5,000,000 warrants)
- ----------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
- ----------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
57.4
- ----------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- ----------------------------------------------------------------
Page 6 of 9 Pages
Item 1. Security and Issuer. This Schedule relates to the
common stock and warrants of LifeRate Systems, Inc.(the
"Issuer"). Each warrant (exercise price of $1.50 per
share) emtitles the holder to purchase one share of
Common Stock. The Issuer's principal executive offices
are located at 7210 Metro Blvd., Minneapolis, MN
55439.
Item 2. Identity and Background. This Schedule is filed on
behalf of (i) Special Situations Fund III, L.P., a
Delaware limited partnership ("SSF III"); (ii) Special
Situations Private Equity Fund, L.P., a Delaware
limited partnership (the "Private Equity Fund"); (iii)
Special Situations Cayman Fund, L.P., a Cayman Islands
limited partnership (the "Cayman Fund"); (iv) MGP
Advisers Limited Partnership , a Delaware limited
partnership ("MGP"); (v) MG Advisers. L.L.C., a New
York limited liability company ("MG"); (vi) AWM
Investment Company, Inc., a Delaware corporation
("AWM"); (vii) Austin W. Marxe and (viii) David
Greenhouse. Each of the foregoing is hereinafter
referred to, individually, as a "Reporting Person" and,
collectively, as the "Reporting Persons."
The principal office and business address of the
Reporting Persons, other than the Cayman Fund, is 153
East 53rd Street, 51st floor, New York, NY 10022. The
principal office and business address of the Cayman
Fund is c/o CIBC Bank and Trust Company (Cayman)
Limited, CIBC Bank Building, P. O. Box 694, Grand
Cayman, Cayman Islands, British West Indies.
The principal business of SSF III, the Private Equity
Fund and the Cayman Fund (individually, a "Fund" and,
collectively, the "Funds") is to invest in equity and
equity related securities. The principal business of
MGP is to act as the general partner of and the
investment adviser to SSF III. The principal business
of MG is to act as general partner of and the
investment adviser to the Private Equity Fund. The
princiap business of AWM is to act as the general
partner of MGP and as the general partner of and the
investment adviser to the Cayman Fund. MGP, MG, 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, both of whom are United States citizens, is
to serve as officers, directors and members or
principal shareholders of the Advisers.
Page 7 of 9 Pages
Neither any Fund, any Adviser, Austin W. Marxe nor
David Greenhouse, during the last 5 years, has been
convicted in any criminal proceeding or was or is
subject to a judgement, decree or final order enjoining
future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws
or finding any violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Each Fund utilized available cash assets to purchase
the Securities.
Item 4. Purpose of the Transaction. Each of the Reporting
Persons has acquired and is holding the Securities
solely for investment purposes and not with the purpose
or the effect of changing or influencing control of the
Issuer. Each Fund acquired the Securities in the
ordinary course of business and is holding such
Securities for the benefit of its third party
investors.
Item 5. Interest in Securities of the Issuer. See pps. 2-5 of
this Schedule, setting forth the aggregate number and
percentage of the Securities beneficially owned by each
Reporting Person, the number of shares as to which
there is sole or shared power to vote, or to direct the
vote, and sole or shared power to dispose or to direct
the disposition.
On January 30, 1998, the following Funds acquired one
common share and one warrant for $.50 in a private
placement transaction directly from the issuer. Each
fund acquired the following total number of shares and
warrants.
Common
Shares Warrants
1. SSF III -- 1,100,000 1,100,000
2. Private Equity Fund -- 1,000,000 1,000,000
3. Cayman Fund -- 400,000 400,000
In addition, the Cayman Fund acquired 40,000 common
shares in open market trades on January 2, 1998 at an
average price of $ .53 per share.
On November 14, 1997 each of the above funds acquired
shares in a private placement transaction disclosed on
the initial form 13D.
No other trades occurred within the last 60 days.
Page 8 of 9 Pages
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
See Item 2 and Item 4 of this Schedule. Based on such
Items. Messrs. Marxe and Greenhouse maintain sole
voting power and sole dispositive power with respect to
the Securities.
Item 7. Material to be Filed as Exhibits.
None
Page 9 of 9 Pages
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.
February 4, 1998
/s/ Austin W. Marxe
-----------------------------
Special Situations Fund III, L.P.
by: Austin W. Marxe, Managing Director
/s/ Austin W. Marxe
_________________________________
Special Situaitons Private Equity Fund, L.P.
by: Austin W. Marxe, Managing Director
/s/ Austin W. Marxe
_____________________________
Special Situations Cayman Fund,L.P.
by: Austin Marxe, Managing Director
/s/ Austin W. Marxe
_____________________________
MGP Advisers Limited Partnership
by: Austin Marxe, President and CEO
/s/ Austin W. Marxe
_____________________________
MG Advisers, L.L.C.
by: Austin Marxe, President and CEO
/s/ Austin W. Marxe
_____________________________
AWM Investment Company, Inc.
by: Austin Marxe, President and CEO
/s/ Austin W. Marxe
_____________________________
Austin W. Marxe
/s/ David Greenhouse
_____________________________
David Greenhouse
