Mail Stop 4561
August 17, 2005
Dov Moran
President and Chief Executive Officer
M-Systems, Inc.
555 Mathilda Avenue, Suite 220
Sunnyvale, CA 94560
Re: M-Systems Flash Disk Pioneers Ltd.
M-Systems Finance Inc.
Registration Statement on Form F-3
Filed July 21, 2005
File No. 333-126774
Dear Mr. Moran:
We have limited our review of your filing to those issues we
have addressed in our comments. Where indicated, we think you
should
revise your document in response to these comments. If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. We note that your confidential treatment request filed May 27,
2005 is still pending. Please be advised that we are processing
such
request and may have comments that will need to be cleared prior
to
requesting the acceleration of effectiveness of this registration
statement. Our comments, if any, will be sent shortly, under
separate cover.
Form F-3
Cover page
2. Your prospectus cover page includes a detailed description of
the
1% Convertible Notes. Revise to reference the section of the
prospectus that contains a detailed description of these
securities
and provide only the information set forth in Item 501(b) of
Regulation S-K on the cover page.
Selling Securityholder, page 70
3. We calculate that the aggregate principal amount listed in the
column entitled, "Aggregate Principal Amount of Convertible Notes
Beneficially Owned That May Be Offered For Resale," is
$58,416,548.
However, your cover page indicates that $75,000,000 in aggregate
principal amount of convertible notes is being offered. Please
advise or revise your registration statement appropriately.
Please
note that if you intend to include additional selling shareholders
at
some point in the future, you may do so only via post-effective
amendment, and must include a statement to that effect in your
current Plan of Distribution.
4. Please disclose the individual or individuals who exercise the
voting and dispositive powers with respect to the shares to be
offered for resale by all of the selling securityholders who are
legal entities. See Interpretation I.60 of the July 1997 manual
of
publicly available CF telephone interpretations, as well as
interpretation 4S of the Regulation S-K portion of the March 1999
supplement to the CF telephone interpretation manual.
5. In addition, please tell us whether any of the selling
securityholders that are legal entities are broker-dealers or
affiliates of broker-dealers. We note your disclosure that none
of
the selling securityholders acquired their shares as transaction-
based compensation for the performance of investment banking or
similar services. Accordingly, all selling securityholders that
are
registered broker-dealers should be identified in the prospectus
as
underwriters. With respect to any affiliates of registered broker
dealers, expand the prospectus to identify them, indicate whether
they acquired the securities to be resold in the ordinary course
of
business and whether at the time of the acquisition they had any
agreements, understandings or arrangements with any other persons,
either directly or indirectly, to dispose of the securities. In
this
regard, we note your disclosure in the first paragraph on page 76.
However, this information should be obtained from each selling
securityholder who identifies themselves as an affiliate, not just
those of which you have knowledge.
6. We note that the last paragraph on page 75 indicates that any
selling securityholder that is a broker-dealer or an affiliate of
a
broker-dealer will be deemed to be an underwriter unless such
selling
securityholder purchased in the ordinary course of business and
had
no agreements to distribute the shares at the time of purchase.
Please revise this language consistent with the comment above. In
this regard, we note that any selling securityholders who are
registered broker-dealers and did not receive their securities as
transaction-based compensation for investment banking services,
should be named as underwriters.
Plan of Distribution, page 74
7. In your plan of distribution, you indicate that selling
securityholders may create short positions in the common shares in
connection with the offering. Tell us whether the selling
securityholders have any open short positions. In your response
letter, please advise us that M-Systems and the selling
securityholders are aware of CF Tel. Interp. A.65.
Exhibits
General
8. We note that Section 14.11 of Exhibit 4.2 provides that the
laws
of the state of New York shall be the governing law for the
indenture, the guarantee and the debt securities. Accordingly,
please provide an opinion under New York law that the debt
securities
are legally binding obligations of M-Systems Finance Inc. and that
the guarantee is a legally binding obligation of M-Systems Flash
Disk
Pioneers. See Item 601(b)(5) of Regulation S-K. Additionally,
ensure that your opinion from Maples and Calder is revised to
specifically refer to such opinion instead of merely assuming that
the indenture is a legally binding obligation of the parties
thereto
and under the laws of New York.
Exhibit 5.1
9. Please revise to opine on whether the guarantee is legally
binding
obligation of M-Systems Flash Disk Pioneers under Israeli law.
Exhibit 5.2
10. We note the statement that this opinion was delivered solely
for
your information in connection with the preparation and filing of
this registration statement and "may not be relied upon in any
manner
by any other person and is not to be used, circulated, quoted or
otherwise referred to for any other purpose without [your
counsel`s]
express written permission." Statements implying that investors
are
not entitled to rely on the opinion are inappropriate.
Accordingly,
please revise to remove this language.
* * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendments to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision. Since the company and its
management are in possession of all the facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequately
of
the disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rule 461 regarding requesting
acceleration of a registration statement. Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration. Please provide this
request
at least two business days in advance of the requested effective
date.
If you have any questions regarding these comments, you may
contact Rebekah Toton at (202) 551-3857 or Sara Kalin at (202)
551-
3454. If you need further assistance, you may contact me at (202)
551-3730.
Sincerely,
Mark P. Shuman
Branch Chief - Legal
cc: Via Facsimile (972) 3-610-3111
Clifford M. J. Felig, Adv.
David S. Glatt, Adv.
Meitar Liquornik Geva & Leshem
Telephone: (972) 3-610-3621
Mr. Dov Moran
M-Systems Flash Disk Pioneers Ltd.
M-Systems Finance Inc.
August 17, 2005
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