InMode Responds to Doma Perpetual's Letters

Clarifies Capital Allocation Strategy and Commitment to Shareholder Returns

Refutes Misconceptions on Staffing and Production

Asserts No Justification for Additional Legal Action

YOKNEAM, Israel, March 6, 2025 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today sent a letter to DOMA Perpetual Capital Management LLC ("DOMA") CEO and CIO Pedro Escudero in response to issues presented in his public letter dated January 15, 2025.

The letter can be viewed here

The full text of the letter follows:

March 6, 2025

Mr. Pedro Escudero
CEO and CIO
DOMA Perpetual Capital Management LLC

Dear Mr. Escudero,

As CEO of InMode, I felt it was important to wait until after our earnings call on February 4, 2025, to respond comprehensively to the concerns raised in your recent communications. Over the past year, you have sent several letters, including two public ones, expressing dissatisfaction with InMode's operational management and shareholder relations. Given the significance of these issues, I believe it is my responsibility to address each of your key claims in detail and clarify InMode's position on the matters you've raised.

"InMode does not return capital to its shareholders in the most efficient way"

The claim you raised regarding InMode's efficiency in returning capital to shareholders is not accurate. You are correct that InMode is a profitable company with a positive cashflow. Since the beginning of 2022 until the present, including our ongoing  buy-back program, InMode will have returned approximately $500M to its shareholders through the repurchase of nearly 30% of the company's shares.

In 2023 and 2024, and currently in 2025,  InMode has been conducting buy-backs of 10% of its shares per year, in a tax-efficient manner. Over these 3 years, the entirety of our free cashflow has been, and will continue to be, returned to shareholders through these buy-back programs. In addition, InMode is exploring, in consultation with financial, legal, and tax advisors, the possibility of returning significant additional capital by the end of 2025 to further enhance shareholder value.

"InMode needs to immediately execute a tender offer for 30% of the company."

Since you mentioned that you retained an Israeli law firm, you probably know that a tender offer for 30% of InMode shares will be considered by the Israeli IRS as a dividend, which entails a 20% dividend tax immediately payable to the Israeli government. We believe that this is an inefficient way to return capital to InMode's shareholders. InMode will continue to carefully review and evaluate our approach with regards to capital allocation, with a focus on ensuring that we deliver enhanced value to all shareholders. We will maintain our dialog with all the shareholders throughout this important process.

I believe that InMode's strategy with regards to capital allocations is conducted in a strategic, well-balanced manner, that considers all the business-related parameters to ensure sufficient available cash or M&A opportunities and/or entry into new synergetic areas of activity.

"InMode's CEO has irresponsibly left a crucial sales management position empty, and has arranged for the sales team to report directly to him."

This claim is inaccurate and false. InMode did not change its organizational structure from 2016 (when our first indication was cleared by the FDA) until 2024, when I decided to refresh top management by promoting successful talents from within the organization. I am sure you agree with me that making personnel updates and adopting promotion programs is vital to any organization.

The two new VPs that I nominated in the US for East and West, who report directly to me, are highly professional, with many years of experience in sales in the US.

In addition, all country managers in all our subsidiaries report directly to me, and no position was left unmanned.

"Address crucial business risks by moving a significant portion of production outside Israel."…

Pedro – I don't know how familiar you are with the electronic manufacturing of medical systems, or your experience with regulatory processes for manufacturing facilities of medical devices and platforms.

To minimize the production capacity risk, InMode's three manufacturing facilities are fully capable of manufacturing all InMode platforms. These facilities have received approval from all  regulatory bodies in the countries where we sell our products, including the FDA, CE, TFDA, KFDA and others. I doubt that the facilities you suggested in the Dominican Republic or Costa Rica are regulated for medical manufacturing, and there is no reason to risk this proven method by moving manufacturing elsewhere.

In addition, we manufacture our products in small batches, based on regulatory requirements for each of the 90 countries to which we export. Therefore, it is crucial for our production lines to be physically close to InMode's supply-chain management team, as well as our engineering and regulation departments.

"Continue to invest organically in R&D."

You are correct, and as you probably know, we continue to invest organically in R&D. We launch 2 new platforms/indications every year, which is more than any other competitor. At any given time – we have at least ten new projects in our R&D pipeline.

"Buy or Invest in a new and promising developing technology in the sector."…

Israel is a hub for new medical technologies, from technology incubators to numerous medical startups. InMode continuously evaluates technologies and young companies with promising technologies and products that could be synergetic to our portfolio. In addition, we constantly evaluate complementary patents to enhance our IP portfolio. We recently bought the entire patent portfolio of Viveve (women's health), as well as a patent from the University of California (for SUI).

"Approach large M&A deals with even more patience."…

InMode is exploring potential M&A in a highly patient way. We understand that it is difficult to find an acquisition candidate that possesses synergetic elements to InMode's portfolio, as well as the same level of profitability as InMode. Therefore, any M&A that we evaluate needs to contribute to InMode's EPS. As we stated in our earning call, we made offers to acquire two companies from the injectable sector (fillers and toxins), but our proposals were not accepted. We are well aware that M&A is another way to allocate capital, and therefore we will continue to explore opportunities in the future.

We are also aware that in the event of a strategic acquisition, InMode will need to use its debt capacity in addition to our cash on hand. Therefore, it is important that we have enough cash available when the opportunity presents itself.

In your public letter dated January 15^th, 2025, you mentioned that you have retained legal counsel in the US and a law-firm in Israel to advise DOMA if DOMA is forced to take action to fight for the company's shareholders. Your threat to act against InMode, which appeared in almost every letter that you sent to InMode does not help operations and does  not contribute to shareholder's value. On the contrary, in all of the meetings and discussions with shareholders that we have had so far, InMode has maintained transparency as well as a professional relationship with its shareholders. I see no need to threaten to engage in any type of fight with InMode.

Regards,
Moshe Mizrahy
CEO, InMode

About InMode

InMode is a leading global provider of innovative medical technologies. InMode develops, manufactures, and markets devices harnessing novel radio frequency ("RF") technology. InMode strives to enable new emerging surgical procedures as well as improve existing treatments. InMode has leveraged its medically accepted minimally invasive RF technologies to offer a comprehensive line of products across several categories for plastic surgery, gynecology, dermatology, otolaryngology, and ophthalmology. For more information about InMode, please visit www.inmodemd.com.

Forward-Looking Statements 

The information in this press release includes forward-looking statements within the meaning of the federal securities laws. These statements generally relate to future events or InMode's future financial or operating performance, including the 2025 revenue projection described above. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. In some cases, you can identify these statements because they contain words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would" and similar expressions that concern our expectations, strategic plans or intentions. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Consequently, actual results could differ materially from those indicated in these forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in InMode's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 04, 2025, and our future public filings. InMode undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which pertain only as of the date of this press release.

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SOURCE InMode LTD.