Olmed Solutions: How Much of Theroleaf's Value Really Reaches Shareholders

Not Every Theroleaf Dollar Belongs to Olmed Shareholders

The main article argued that Theroleaf's clinical progress is becoming real, while the financing test is still ahead. This follow-up isolates a different question: even if Theroleaf continues to create value, how much of that value can actually make its way to Olmed's shareholder layer.

That is not a technical footnote. In a small medtech name, the gap between the value of a subsidiary and the value that actually reaches common shareholders can be the whole story. The superficial read says Olmed "owns Theroleaf." The precise read is narrower: Regulation 11 takes Olmed's Theroleaf exposure down to 68.48% on a fully diluted basis; the original mitral-asset purchase agreement preserved a seller participation layer, part of which was later converted into Theroleaf options; and above that sits the Innovation Authority layer, with royalties and constraints on manufacturing, know-how transfers, and out-of-Israel exits.

The implication is straightforward: Theroleaf may end up being worth far more than what Olmed is currently being credited for, and still not all of that value will reach Olmed shareholders. Anyone who skips these layers risks confusing value created inside Theroleaf with value that is truly available to Olmed common equity.

Layer One: Dilution Already Cuts the Economic Exposure

The sharpest number in the report sits in Regulation 11. Olmed owns all of Theroleaf's share capital, but its fully diluted holding falls to 68.48%. The same table presents Theroleaf with 1,000,000 ordinary shares and 400,826 options for ordinary shares. That is the right starting point for the analysis, not 100%.

In other words, before bringing in sellers, royalties, or regulatory restrictions, about 31.52% of Theroleaf's fully diluted economic value is already outside Olmed's shareholder layer. Any future Theroleaf investment, strategic partner deal, or sale therefore has to be read through 68.48%, not through the headline of a wholly owned subsidiary.

That is the only number the report supports without any additional assumption. It is also the number investors should keep in mind whenever the market talks about "Theroleaf value" as if the whole amount automatically belongs to Olmed.

Layer Two: The Seller Layer Did Not Disappear, It Moved Partly Into Dilution

The material-agreements section adds another layer. Under the 2016 agreement to acquire the mitral assets, if Theroleaf is sold to a third party, or if the group as a whole is sold, the company is required to pay the sellers 10% of the net proceeds received by it. If net proceeds exceed $50 million, the rate rises to 15% on the amount above that threshold.

But the disclosure does not stop there, which matters. In 2021, two of the sellers signed waivers with respect to that variable consideration and received 118,802 Theroleaf options each in exchange. At the grant date, each package represented about 8% of Theroleaf on a fully diluted basis. The report also notes that the two remaining sellers currently serve as Theroleaf's CEO and CTO.

That point matters because it blocks a crude reading of the seller layer. You cannot look at 68.48% on a fully diluted basis and then mechanically subtract another 10% or 15% as if nothing changed. Part of the seller economics has already moved from a future-proceeds clause into Theroleaf's cap table. The right conclusion from the filing is therefore not "shareholders are left with exactly X," but that seller economics still sit above common shareholders through a mix of dilution already embedded in the cap table and contractual economics that the report does not fully break down after the waivers.

The filing also does not cleanly quantify the updated position after the death of the third seller. So the hard number is 68.48%, and pretending the report supports a cleaner lower number would be more precise than the evidence allows.

The illustrative scenario is still useful. If the original 10% clause had remained fully in force above the diluted share, Olmed shareholders would be left with 61.63 units out of 100 units of Theroleaf value. If the 15% rate applied in full to the marginal value above the threshold, the marginal shareholder capture would drop to 58.21 units. That is not the number to anchor on, but it is a good illustration of how quickly value erodes once investors stop distinguishing between subsidiary value and shareholder-accessible value.

Layer Three: The Innovation Authority Does Not Reduce Current Book Value, But It Does Constrain Monetization

The third layer is neither dilution nor seller participation. It is regulatory and economic friction. Theroleaf received cumulative R&D grants of NIS 10,566 thousand between 2017 and 2025. For those grants, the filing says royalties of 3% are payable on Theroleaf revenues until the amount of the grant is repaid. It also states that if manufacturing is transferred outside Israel, the repayment ceiling can rise to as much as 150% of the grant amount.

That is still not the full picture. Section 22.4.2 says that because Theroleaf received support from the Innovation Authority, manufacturing outside Israel or selling the know-how, in whole or in part, to a party outside Israel, including through the sale of the company or its assets, requires Research Committee approval and may involve additional payments to the state. At that point the issue stops being an accounting detail and becomes a real deal-structure and bargaining-power constraint.

From an accounting perspective, the company says no liability was recognized for Theroleaf's grants, because there is reasonable assurance that the grants will not be repaid and they were therefore recorded as a reduction of R&D expense. That is exactly why this layer is easy to miss. It does not sit on the balance sheet as debt today, but it clearly sits in the commercialization path, in any manufacturing transfer outside Israel, and in the structure of a future strategic deal.

And the layer is still active. In December 2025, Theroleaf received approval for an additional grant based on an R&D budget of about NIS 4.6 million at a 30% participation rate. No cash was received against it during 2025, but a first payment of NIS 486 thousand came in during January 2026. So even going forward, Theroleaf continues to rely on non-dilutive funding on one side and a rule set that narrows strategic flexibility on the other.

So How Much Value Really Reaches Shareholders

The short answer is that the only number investors can hold with full confidence is 68.48%, and even that is only a ceiling before additional layers. Above it sits the legacy economics of the mitral-asset sellers, part of which has already been absorbed into dilution and part of which remains contractual but is not fully unpacked in the filing. Above that sits the Innovation Authority layer, which is not booked as debt today but still sets royalties, approvals, and a possible price for commercialization or exit.

That is why the right way to read Theroleaf inside Olmed is not "if Theroleaf works, shareholders get all the value." The right read is different: Theroleaf may be Olmed's core value engine, but that value still has to travel through a dilution table, through the history of the seller agreement, and through Innovation Authority terms before it reaches common shareholders.

That does not make Theroleaf less important. It does make Olmed's shareholder layer thinner than the headline of "100% ownership of Theroleaf" suggests.