Mail Stop 4561
September 27, 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.
Amendment No. 1 to Form F-3
Filed September 1, 2005
File No. 333-126774
Dear Mr. Moran:
We have reviewed your amended registration statement and have
the following 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.
General
1. As you know, we issued comments regarding your confidential
treatment request (Control No. 17022), on September 19, 2005. As
a
follow-up to comment 1 of our letter dated August 17, 2005, please
be
advised that the processing of your confidential treatment request
must be completed prior to requesting the acceleration of
effectiveness of this registration statement.
Form F-3, as amended
Selling Securityholders, page 69
2. While we note the revisions you have made in response to
comment 4
of our letter dated August 17, 2005, please further revise your
disclosure to confirm that the individuals named in footnotes (7),
(12), and (17) exercise the voting and dispositive powers with
respect to the shares to be offered for resale by CNH CA Master
Account LP, Highbridge International LLC, and Vicis Capital Master
Fund.
3. We note that in response to comment 6 of our letter dated
August
17, 2005, you expanded your disclosure on page 69 to indicate that
all selling securityholders that are affiliates of broker-dealers
acquired the securities to be resold in the ordinary course of
business and that at the time of the acquisition they had no
agreements, understandings or arrangements with any other persons,
either directly or indirectly, to dispose of the securities.
However, your disclosure on page 75 states that these selling
securityholders may be deemed to be underwriters unless the above
conditions are true. Please revise your disclosure on page 75 to
conform with your disclosure on page 69.
Plan of Distribution, page 74
4. We note that in response to comment 4 of our letter dated
August
17, 2005, you amended your disclosure to state that Tugar Capital
LP
has created a short position with respect to 40,443 ordinary
shares
being registered in this registration statement. Please provide
us
with a detailed analysis as to how this short position is
consistent
with CF Tel. Interp. A.65. You also disclose that Lindin Capital
LP
and Sunrise Partners LP have entered into certain hedging
transactions in connection with certain or all of the convertible
notes purchased and certain or all of the ordinary shares issuable
upon conversion of the notes. Please provide us with a detailed
description of these hedging transactions. We may have further
comment.
Exhibit 5.3
5. We note that in rendering this legal opinion, counsel has
assumed
the due incorporation, valid existence and good standing of M-
Systems
Finance and M-Systems Flash Disk Pioneers and that these parties
have
the requisite power and authority to enter into and perform the
obligations under the Indenture. Please note that it is not
appropriate to assume such legal conclusions. Counsel has also
assumed the due authorization, execution and delivery of the
Indenture by both companies. We will not object to a reference to
reliance upon officers` certificates concerning factual matters
relating to the execution and delivery of the Indenture by both
companies; however, whether both companies were authorized to
enter
into the Indenture in a legal conclusion that may not be assumed.
Finally, if the due authorization, execution and delivery of the
Indenture by the Trustee and the authentication of Notes by the
Trustee are conditions that must be satisfied for counsel to
render
this opinion, counsel should render its opinion on these matters
of
law or may rely upon a separate opinion of counsel who is
identified.
* * * * *
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.
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.
September 27, 2005
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