Steel Partners Holdings L.P. (together with its affiliates, “Steel”), a significant, long-standing shareholder of InMode Ltd. (“InMode” or the “Company”) (Nasdaq: INMD), today issued an open letter to all InMode stakeholders. The full text of the letter is below.
October 19, 2026
To All InMode Stakeholders:
Steel Partners Holdings L.P. (together with its affiliates, “Steel”) is a significant, long-standing shareholder of InMode Ltd. On July 9, 2026, we proposed to acquire up to 100% of the outstanding shares of InMode for $16.75 per share in cash. More than three months later, that proposal remains in place and we have spent significant time and effort attempting to access information that would enable us to move forward with our offer.
On September 16 the Company disclosed that the competing proposal from the group led by its Chief Executive Officer, Moshe Mizrahy, had expired without a transaction.1 Our proposal is now the only offer outstanding, and today we are setting an expiration date for that proposal of October 30, 2026.
We do not believe the members of this Board have the independence required to fulfill their fiduciary duties in evaluating a proposal from the Company’s own Chief Executive Officer against a competing proposal from an outside shareholder. We have seen firsthand that Mr. Mizrahy and co-founder Dr. Michael Kreindel together control this Company through their conflicted relationships with the other Board members.
The Company Has Not Engaged with Us in Good Faith
In more than three months, the Company has not entered into a non-disclosure agreement, opened a data room or provided any diligence materials. The Special Committee has refused to move forward without a dismissal of our claims against the directors individually. To facilitate productive discussions, we have repeatedly offered to stay those actions for the duration of negotiations.
We believe that conditioning access to diligence information on the discontinuation of our lawsuit surrounding the directors’ own conduct is a blatant breach of their fiduciary duties. The Board and the Special Committee should be using their positions to bring the best available proposal to shareholders, not to secure protection for themselves.
We have been prepared to execute a simple non-disclosure agreement since July. We have spent significant time and effort negotiating with the Special Committee and its advisors in an attempt to obtain information, including flying to Tel Aviv to meet in person with each member of the committee. Every non-disclosure agreement the Company has put in front of us conditions access to basic information on our surrender of our rights as shareholders, including our ability to hold this Board accountable for its conduct.
Over this same period, the Company has not asked us a single question about the details of our offer and has told shareholders nothing about it. The Company has said publicly that it is open to providing information, and that this process would be conducted to the “highest standards of corporate governance, transparency, and objectivity.”2 Its conduct has not matched that statement.
InMode’s Board Is Not Positioned to Evaluate This Proposal
We believe there are significant conflicts of interest on this Board that prevent its members from discharging their fiduciary duties. Evaluating our proposal against the status quo requires directors who are independent of Mr. Mizrahy in substance and not only in title, and the information we have gathered since we first raised these concerns has only reinforced our view that this Board does not meet that standard.
We set out our specific concerns in our prior letters and will not repeat them here. They involve overlapping board service alongside Mr. Mizrahy at other companies, transactions between InMode and companies affiliated with those directors, each approved by those same directors, and a proposed buyer group, led by the Chief Executive Officer, which included InMode’s own manufacturer and its United Kingdom distributor. In our view this Board lacks the independence required to stand up to the Chief Executive Officer and protect the shareholders it is charged with representing.
Management Has Cut Guidance Six Times Since February 2024
The Company last reported results on August 5. Revenue was $95.6 million, flat against the prior year, with gross margin down to 75% from 80% and non-GAAP operating margin down to 17% from 28%.3 The Company also cut full year non-GAAP operating income guidance to a range of $68 million to $73 million, the sixth reduction to earnings guidance since February 20244, and told shareholders it expects these trends to continue for the foreseeable future. At the same time, the Company has significantly curtailed investor communication, including suspending earnings calls, demonstrating the Board’s disregard for the corporate governance and transparency it trumpets.
After a failed strategic review, an expired insider proposal and continued operating uncertainty, shareholders have been given no evidence of a credible plan under current leadership.
Following the Expiration of Our Offer, We Will Hold the Board Accountable
In our view, these directors have breached their duties of loyalty and care. They have failed to supervise a Chief Executive Officer who has run roughshod over the shareholders he is meant to serve, and whose conduct has raised serious questions under U.S. securities laws. A Board that cannot be trusted to oversee management or to run a fair process for a premium, all-cash offer should be replaced by directors the shareholders choose, and we will pursue all available remedies to protect shareholder interests and hold this Board accountable.
Respectfully,
Warren G. Lichtenstein
Executive Chairman
Steel Partners Holdings L.P.
|
________________________________ 1 InMode Ltd. announcement of the expiration of the M.N. Business Strategy Ltd. proposal, September 16, 2026. 2 InMode Ltd. press release, “Update to Shareholders from the Special Committee,” July 20, 2026. 3 InMode Ltd. press release, “InMode Reports Second Quarter 2026 Financial Results,” August 5, 2026. All second quarter figures in this section are from that release. 4 InMode Ltd. press release, May 6, 2026. Prior reductions are set forth in Steel’s July 9, 2026 letter to the Board. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20261019245272/en/
Media gallery
