After Classoos: Is Ram On's Private Portfolio Still Creating Value or Only Consuming Capital

What This Follow-up Is Isolating

The main article already established that Ram On's private holdings had moved from optional upside to a drag on equity. This follow-up isolates the next question: after Classoos was reset, is what remains in the private portfolio now something the company can contain, or is it still a capital sink that weighs on the thesis.

The short answer has two layers. On one hand, after Classoos this book no longer looks like an open-ended hole. The Classoos position was written down to zero, and the remaining accounting exposure is now concentrated mainly in Kando and Ai Theo. In size terms, this is no longer the layer that can dominate the whole balance-sheet reading by itself.

On the other hand, it still is not creating value. Kando, the only private holding that still matters economically, ended 2025 at ILS 7.624 million versus ILS 18.685 million a year earlier. Ai Theo is smaller, but it still relies on shareholder loans and on an unresolved dispute with the Italian partner in AB Energy Israel. So after the reset, the private book looks more like a legacy pocket that has to be managed carefully, and less like a hidden value engine the market is missing.

That reading is reinforced by management's own direction. The company says it is not actively looking for new real investments, and that by the end of 2025 it had materially reduced its financial investments. That is not the language of portfolio expansion. It is the language of contraction, focus, and cleanup.

What Is Actually Left In The Portfolio After Classoos

This chart shows why Classoos changes the nature of the problem. The remaining carrying value of Kando and Ai Theo together, ILS 9.295 million, is still meaningful, but it is smaller than the company's liquid securities book of ILS 18.107 million. Even if Ai Theo's gross shareholder loans are added, the remaining private-book exposure is no longer larger than the liquid cushion.

That is why the right reading now is exposure management rather than existential stress. But it is still not a value-creation reading. To move from the first statement to the second, these holdings would have to hold value without new write-downs and without new rounds of follow-on funding. As of the report date, that is not yet the picture.

Classoos: The Reset Already Happened, So It Can No Longer Be Read As Optionality

Classoos was the clearest example of how optionality can turn into an expensive capital bill. The company explains that in 2025 Classoos did not meet its business plans for the 2025-2026 school year, partly because of the conditions in the markets where it operates and intensifying competition. That warning already showed up in the September 30 2025 accounts, where Ram On cut about ILS 5.8 million from the carrying value of the stake and about ILS 2.9 million from the value of the loans to Classoos.

That was the yellow flag. The red flag came after the balance-sheet date. On March 28 2026, Classoos filed under the Insolvency and Economic Rehabilitation Law in order to convene creditors and approve a debt arrangement under which the business would be sold to an unrelated third party. From that point the ambiguity disappeared. Ram On booked an impairment of about ILS 8.754 million on the investment and an allowance of about ILS 9.305 million on the loans.

What matters here is not only the size of the write-down, but also its nature. This was both equity that disappeared and intercompany debt that did not come back. In other words, Classoos did not only stop looking like an asset. It also proved that Ram On's private portfolio was not just about paper valuation volatility. It involved real capital usage that failed to return.

Another useful signal sits in the preferred-share option that Classoos granted to Ram On on May 13 2025, with a fair value of ILS 1.525 million. That layer was also fully impaired after the insolvency filing. So even an attempt to recreate upside inside 2025 did not survive to the report date.

From here on, Classoos should no longer be described as potential. It should be described as capital that has already been lost and recognized. For reading the remaining portfolio, that is actually useful. It removes the temptation to label a recognized loss as hidden upside.

Kando: The Only Holding That Can Still Create Value, But No Longer Off A Clean Market Anchor

Kando sits at the center of the whole question because it is the only private holding that remains both positive and materially sized. In 2024 Kando raised about USD 2.3 million at a USD 45 million pre-money valuation, in addition to about USD 8 million of SAFE agreements signed in 2023. In 2025 it raised another USD 1.3 million through SAFE agreements. Ram On holds about 14.89% of Kando's equity and voting rights, or about 13.83% on a fully diluted basis.

At first glance that still looks like a reasonable base for optional upside. In practice, the balance-sheet number says something else. The value of the Kando investment fell from ILS 18.685 million at the end of 2024 to ILS 7.624 million at the end of 2025. Ram On itself explains that the decline was about ILS 11.061 million, of which ILS 1.98 million came from dollar weakness. That means most of the hit was not just FX. It was a real decline in the economic value the company is attributing to the holding.

But the more important point sits in the valuation method. In 2024 Kando was valued with an OPM model only, because the value was derived from a financing round. In 2025 Ram On moved to a valuation based on discounted cash flow together with OPM, using a 19.3% weighted average cost of capital, a 2% long-term revenue growth rate, and a 28.3% long-term pre-tax operating margin.

That is a meaningful shift because it means the anchor changed. In the prior year the holding leaned more heavily on a recent market price in the private market. In 2025 it leaned more heavily on a model. Until there is another priced round or a commercial proof point strong enough to validate that model, the quality of Kando's carrying value is weaker than the headline might suggest.

That does not eliminate the upside. Kando still operates with active customers in Israel and abroad, and it is still the only private holding in the book that Ram On carries at more than a token few million shekels. But as of the report date it is not producing proven value. It is producing possibility backed by a fairly demanding valuation model, not by fresh market confirmation.

Ai Theo: Smaller, But Still Consuming Capital And Patience

If Kando is the option that remains alive, Ai Theo is the reminder that even small holdings can keep absorbing attention and capital. Since the start of 2024 Ai Theo has functioned as a holding company only, with a single asset: a 40% stake in AB Energy Israel. The remaining 60% is held by AB Holdings SPA, the Italian partner.

The problem is that this is not just a small holding company. It is a small holding company with an unresolved dispute. Ai Theo is pursuing legal proceedings in the Haifa District Court against the Italian partner and its officers on claims including breach of agreements, breach of fiduciary duty, and minority oppression. As of the report date, the parties were in mediation in an attempt to regulate the continuation of the partnership.

What is still working there? AB Energy Israel remains the representative for selling the Italian partner's equipment and technology in Israel, and it provides service and maintenance for cogeneration, generation, and biogas engines and equipment. The company also describes several projects that were established in Israel and maintenance services for projects at scales of about 17 MW and about 24 MW.

But that is exactly the point. There is operating activity, yet Ram On is still supporting it through the shareholder-funding layer while the governance and control structure around the core asset is under dispute. On April 24 2025 and November 3 2025 the Ai Theo shareholders injected additional shareholder loans, and Ram On's share amounted to ILS 134 thousand and ILS 52.2 thousand respectively. So Ai Theo may be smaller than Kando, but economically it is not a closed issue. It looks more like an investment waiting for a partnership resolution before anyone can even ask whether it can create upstream value.

So Is This Portfolio Still Creating Value Or Only Consuming Capital

As of year-end 2025, the closest answer is the portfolio is less dangerous, but it is still consuming capital more than it is creating value.

The first half of that sentence matters. After Classoos, the remaining private book is smaller, clearer, and more separated from the core story. Kando and Ai Theo together remain at a carrying value of ILS 9.295 million, while the company still holds ILS 18.107 million of short-term financial assets and ILS 3.917 million of cash. This is no longer a picture in which private holdings can by themselves erase the whole room for maneuver.

The second half matters even more. Even after that contraction, the private book still does not show signs of value creation. In 2025 the company reduced its liquid securities portfolio partly in order to provide a loan to an associate. Classoos was wiped out, Kando lost more than half its value, and Ai Theo received additional funding alongside a credit-loss allowance. This is not the picture of a portfolio starting to pay back. It is the picture of a portfolio that is becoming more contained, but still sits on the side of damage control.

That leads to the more precise reading of the thesis. After Classoos, the private book no longer deserves to be described as an uncontrolled threat. It does deserve to be described as contained optionality with capital discipline still unproven. Kando is the only path by which this book can still return to creating meaningful value. Ai Theo is mainly the test of whether the company will stop extending legacy investments through more shareholder funding and more patience.

Conclusion

After Classoos, Ram On's private portfolio no longer looks like a hidden engine on which a bullish thesis can comfortably lean. But it also no longer looks like an open pit without which the whole company cannot be understood. It looks like something in between: a smaller package whose risks are now clearer, but whose value is still not proven.

Kando leaves the door open to upside, but at a value now resting on DCF and OPM rather than on a fresh financing round. Ai Theo remains small, yet it is still tied to shareholder loans and to a legal dispute. So the right reading now is not that the private portfolio has gone back to creating value. The right reading is that it has moved from a thesis-breaking threat to a pocket of tied-up capital that now needs to stop getting worse. If the next reporting cycles show a fresh market anchor for Kando and no further funding need at Ai Theo, the discussion can turn back toward value. Until then, this is still mainly a discipline test.