FLSH M Systems Flash Disk

msystems (Nasdaq:FLSH), a leader in smart personal storage, commented today on recent press reports. There have been reports in the news media concerning a rumored sale of msystems. The Company has no comment on this subject, and investors should make no assumptions concerning the existence or non-existence of discussions concerning a potential transaction or the accuracy of any other information, or statements or purported statements, about such a transaction contained in such reports. In addition, concerning recent press reports on the Company's announcement last week of the results of the investigation of a special committee of the Board with respect to prior stock option grants, the Company, its directors and its executive officers confirmed that the position of the Company concerning such investigation is contained exclusively in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission last week. In this regard, Dov Moran, chief executive officer and president, msystems, commented: "The Form 20-F contains a detailed discussion of this matter. Of course I am not happy that a number of things were not done right, and regret that this has forced us to divert some time from building our business. There are important lessons here, which I and others must and will take into account. While we are proud of our core business and values, our Board has adopted a variety of important corrective measures, which are discussed in the Form 20-F, and we are implementing them to ensure that we do things right and are a stronger company for it." About msystems msystems has been transforming raw flash material into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, msystems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets. More information is available online at www.m-systems.com. msystems. made smarter. Certain statements in this press release are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. There can be no assurance that forward-looking statements will be achieved. msystems makes no commitment to revise or update any forward-looking statements except as otherwise required by law.