-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HU1eo7IQnzOSf0ZfIQWMLEKsxfkLLvfchtZuUp28pelmNT4LoBbYCJTumytweoFn HWFvSDHR1usODVZGAPsaMg== 0000914190-99-000350.txt : 19991028 0000914190-99-000350.hdr.sgml : 19991028 ACCESSION NUMBER: 0000914190-99-000350 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991025 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATAKEY INC CENTRAL INDEX KEY: 0000704914 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 411291472 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-11447 FILM NUMBER: 99735076 BUSINESS ADDRESS: STREET 1: 407 W TRAVELERS TRAIL CITY: BURNSVILLE STATE: MN ZIP: 55337 BUSINESS PHONE: 6128906850 MAIL ADDRESS: STREET 1: 407 WEST TRAVELERS TRAIL CITY: BURNSVILLE STATE: MN ZIP: 55337 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): October 25, 1999 Datakey, Inc. (Exact Name of Registrant as Specified in its Charter) Minnesota (State or Other Jurisdiction of Incorporation) 0-11447 41-1291472 (Commission File Number) (I.R.S. Employer Identification Number) 407 West Travelers Trail Burnsville, Minnesota 55337 (Address of Principal Executive Offices) (Zip Code) 612-890-6850 (Registrant's Telephone Number, Including Area Code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events. On October 25, 1999, Datakey, Inc. issued a press release announcing its financial results for the quarter ended October 2, 1999. The full text of the press release is set forth in Exhibit 99 attached hereto and is incorporated in this Report as if fully set forth herein. Item 7. Financial Statements and Exhibits. (a) Financial statements: None. (b) Pro forma financial information: None. (c) Exhibits: Exhibit 99. Press release dated October 25, 1999. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 26, 1999 DATAKEY, INC. By /s/ Carl P. Boecher Carl P. Boecher President and Chief Executive Officer SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 DATAKEY, INC. EXHIBIT INDEX TO FORM 8-K Date of Report: Commission File No.: October 25, 1999 0-11447 DATAKEY, INC. EXHIBIT NO. ITEM 99 Press Release dated October 25, 1999 EX-99 2 PRESS RELEASE Date: October 25, 1999 From: Datakey, Inc. 407 West Travelers Trail Burnsville, MN 55337 Alan Shuler, CFO (612) 808-2349 ashuler@datakey.com FOR IMMEDIATE RELEASE DATAKEY, INC. ANNOUNCES THIRD QUARTER RESULTS MINNEAPOLIS, October 25, 1999 - Datakey, Inc. (Nasdaq:DKEY) today reported results for the quarter ended October 2, 1999. Revenue for the third quarter increased eight percent to $1,487,000 from $1,374,000 for the same period last year. Net loss for the quarter was $662,000, or nineteen cents per share, versus $577,000, or twenty-one cents per share, in the year-earlier period. Revenue for the nine-month period declined thirteen percent to $4,001,000 from $4,600,000, in the year earlier period. Net loss increased to $2,295,000, or seventy-one cents per share, from $1,479,000, or sixty-six cents per share, in the year-earlier period. The prior year nine-month period included a one-time adjustment of fourteen cents per share for an assumed preferred stock dividend related to a "beneficial conversion" feature in the series A preferred stock sold in May 1998. "Third quarter revenue increased by 29% over last quarter due to an increase in activity in our electronic products business segment and an increase in revenue from the information security business," said Carl P. Boecher, CEO of Datakey. Mr. Boecher continued, "There is no question that our information security business has developed much slower than we had anticipated. However, there were indications in the third quarter that Datakey's information security products were generating increasing interest. Bookings of new information security product orders in the third quarter exceeded $500,000 for the first time in corporate history. It is too early to determine if this trend will continue on a quarter to quarter basis, but it does mean that we are making progress. If bookings continue to increase in the quarters ahead, we believe that information security product revenue in the year 2000 may increase significantly over 1999 revenues." (More) Mr. Boecher said, "The slower-than-anticipated development of our information business has resulted in the continuation of substantial losses in 1999. Those losses have resulted in significant liquidity issues for Datakey. Datakey has a bank line of credit based upon 80 percent of the Company's domestic accounts receivable which can be terminated by the bank on demand at its discretion. Borrowing availability under this line, based upon the level of domestic accounts receivable and current borrowing outstanding, was $155,000 as of October 22, 1999. Despite a private placement which generated net proceeds of $1,220,000 in June 1999, management believes that Datakey will require at least $600,000 in additional capital to ensure that it will be able to fund its operations over the next six months. The Company is currently in the process of seeking additional private capital and, based on preliminary discussions with investors, believes it will be successful." Datakey, Inc. is an international supplier of electronic products and services. The Company provides product, system and subsystem solutions to record, store, and transmit electronic information. Datakey also provides products and systems directed to the information security market which enable user identification and authentication, secure data exchange, and information validation. It also provides OEM products, consisting of proprietary memory keys, cards, and other custom-shaped tokens, that serve as a convenient way to carry electronic information and are packaged to survive in portable environments. Shares of Datakey's common stock are traded on the Nasdaq/NNM under the symbol DKEY. Web address is http://www.datakey.com. Datakey press releases are available by fax through Company News On-Call at 800-758-5804, ext. 231950, or at http://www.prnewswire.com. This press release contains forward-looking statements relating to an increase in EP revenue, continuing progress in sales of ISS products, and ability to raise additional working capital to fund the Company's operations for six months. Such statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are delays in product development, introduction of new products by competitors, technical difficulties, the inability of the Company to meet information security product sales projections in the fourth quarter of 1999 and the year 2000 resulting in continued material losses and cash flow deficiencies, lack of sufficient investor interest in the Company's current private placement offering and the risk factors detailed from time to time in Datakey's periodic reports and registration statements filed with the Securities and Exchange Commission. (More) DATAKEY, INC. CONDENSED STATEMENTS OF INCOME (UNAUDITED) ($000s)
THREE MONTHS ENDED NINE MONTHS ENDED OCT. 2, 1999 OCT. 3, 1998 OCT. 2, 1999 OCT. 3, 1998 ------------ ------------ ------------ ------------ TOTAL REVENUE $ 1,487 $ 1,374 $ 4,001 $ 4,600 COSTS AND EXPENSES : COST OF SALES 949 859 2,451 2,799 RESEARCH & DEVELOPMENT 501 402 1,542 1,214 SALES & MARKETING 482 500 1,618 1,479 GENERAL & ADMINISTRATIVE 218 210 687 632 ----------- ----------- ----------- ----------- TOTAL COSTS & EXPENSES 2,150 1,971 6,298 6,124 ----------- ----------- ----------- ----------- OPERATING (LOSS) (663) (597) (2,297) (1,524) INTEREST INCOME 1 20 2 45 ----------- ----------- ----------- ----------- NET INCOME BEFORE TAXES (662) (577) (2,295) (1,479) INCOME TAX EXPENSE 0 0 0 0 ----------- ----------- ----------- ----------- NET LOSS $ (662) $ (577) $ (2,295) $ (1,479) =========== =========== =========== =========== LOSS PER SHARE BEFORE $ (0.18) $ (0.20) $ (0.69) $ (0.51) =========== =========== =========== =========== PREFERRED DIVIDENDS LOSS PER SHARE $ (0.19) $ (0.21) $ (0.71) $ (0.66) =========== =========== =========== =========== WEIGHTED AVERAGE 3,651,772 2,949,066 3,308,103 2,918,782 COMMON SHARES
SELECTED BALANCE SHEET DATA (UNAUDITED) ($000s) OCT. 2, 1999 DECEMBER 31, 1998 ------------ ------------- ASSETS CASH & MARKETABLE $ 20 $ 854 SECURITIES OTHER CURRENT ASSETS 2,364 1,924 NON CURRENT ASSETS 1,485 1,758 ----------- ----------- TOTAL ASSETS $ 3,869 $ 4,536 =========== =========== LIABILITIES & EQUITY CURRENT LIABILITIES $ 1,185 $ 732 OTHER LIABILITIES 0 0 EQUITY 2,684 3,804 ----------- ----------- TOTAL LIABILITIES & EQUITY $ 3,869 $ 4,536 =========== =========== -----END PRIVACY-ENHANCED MESSAGE-----