| Filed Pursuant to Rule 424(b)(3) |
PROSPECTUS SUPPLEMENT
(to prospectus dated October 28, 2005
and supplemented on November 30 and
December 1, 2005 and on January 17, 2006)
M-Systems Finance Inc.
$75,000,000
1.0% Convertible Senior Notes due 2035
Payment of all principal, interest and additional amounts, if any, payable on the convertible notes is unconditionally guaranteed by and convertible into ordinary shares of M-Systems Flash Disk Pioneers Ltd.
M-Systems Flash Disk Pioneers Ltd.
2,634,960 ordinary shares issuable upon conversion of the convertible notes
This prospectus supplement supplements the prospectus dated October 28, 2005 and supplemented November 30 and December 1, 2005 and January 17, 2006 (the "prospectus") of M-Systems Finance Inc. and M-Systems Flash Disk Pioneers Ltd. relating to the resale by certain securityholders or their transferees, pledgees, donees or other successors (the "selling securityholders") of up to $75,000,000 aggregate principal amount of the 1.00% Convertible Senior Notes due 2035 of M-Systems Finance Inc. and the ordinary shares of M-Systems Flash Disk Pioneers Ltd. issuable upon conversion of the notes. You should read this prospectus supplement in conjunction with the prospectus, and this prospectus supplement is qualified by reference to the prospectus except to the extent that the information in this prospectus supplement supersedes the information contained in the prospectus.
SELLING SECURITYHOLDERS
Set forth below, among other things, are the names and addresses of certain selling securityholders that have been previously identified in the prospectus, the principal amount of the notes beneficially owned by and that may be offered by such selling securityholders pursuant to the prospectus and the number of ordinary shares into which the notes owned by such selling securityholders are convertible. All information concerning beneficial ownership is based upon information provided to us by the selling securityholders. The information set forth in the table below replaces in its entirety the information about such selling securityholders set forth in the post effective amendment to the prospectus filed on January 17, 2006:
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Name and Address of
| Aggregate
| Percentage | Percentage of | Ordinary | Percentage of
| Ordinary
| Percentage of |
Credit Suisse Securities LLC 7200 Kit Creek Road Research Triangle Park, NC 27709 (4) | $ 3,000,000 | 4.0% | - | 105,398 | * | 0 | 0 |
Deutsche Bank AG London Winchester House 1 Great Winchester Street London EC2N 2 DB (4) | $15,238,000 | 20.3% | - | 535,354 | 1.46% | 0 | 0 |
Deutsche Bank Securities Inc. 1251 Sixth Avenue, 26th Floor New York, NY 10020 (4) | $ 2,000,000 | 2.66% | - | 70,266 | * | 0 | 0 |
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* Less than 1%.
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(1) Assumes $75,000,000 aggregate principal amount of convertible notes outstanding.
(2) Assumes conversion of all of the holder`s convertible notes at a conversion rate of 35.1328 ordinary shares per $1,000 principal amount of convertible notes. This conversion rate will be subject to adjustment as described in the prospectus under "Description of Convertible Notes-Conversion Rights." As a result, the number of ordinary shares issuable upon conversion of the convertible notes may increase or decrease in the future.
(3) Includes ordinary shares issuable upon conversion of the convertible notes beneficially owned by the selling securityholder, as reflected in the fifth column of this table. Calculated based on Rule 13d-3(d)(1) of the Exchange Act, assuming 36,105,102 ordinary shares outstanding as of June 30, 2005.
(4) The selling securityholder has informed us that (i) it is a broker-dealer, (ii) it has purchased the notes as an investment or as transaction-based compensation for investment banking or similar services, (iii) it does not plan to make a market in the notes and the underlying ordinary shares and (iv) it is a wholly-owned subsidiary of a company that is required to file periodic and other reports with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
The date of this prospectus supplement is March 2, 2006
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