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OXF - Oxford Technology 4 Venture Capital Trust News Story

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Last Trade - 24/03/21

Micro Cap
Market Cap £2.07m
Enterprise Value £1.61m
Revenue £-1.00m
Position in Universe 1780th / 1818

Half-year report

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Oxford Technology 4 VCT Plc
Unaudited Half-Yearly Report
For the period 1 March 2020 to 31 August 2020

                                         6 Months Ended 31 August 2020  Year Ended 29 February 2020  
 Net Assets At Period End                £3.32m                         £4.15m                       
 Net Asset Value (NAV) Per Share         28.8p                          36.1p                        
 Dividend Paid in Period                 5.0p                           3.0p                         
 Cumulative Dividend Per Share           48.0p                          43.0p                        
 Total NAV Return Per Share              76.8p                          79.1p                        
 Share Price At Period End (Mid-Market)  18.0p                          26.5p                        
 Earnings Per Share                      (2.3)p                         (9.9)p                       

Statement on behalf of the Board  

I am pleased to present the unaudited results for the six month period ended
31 August 2020.  The period under review continues to be dominated by the
Covid-19 pandemic.  Your Investment Adviser and the Directors have continued
to manage the VCT and its portfolio effectively via remote working during

The six months to 31 August 2020 have been a volatile and uncertain period for
the economy and for businesses operating within this environment.  During
this period, your Board has kept the impact of the pandemic on your
Company’s investments closely under review.

On 19 May 2020, when we issued our annual report, we reviewed the portfolio
valuation since the year ended 29 February 2020 and announced a reduction in
the NAV per share from 36.1p to an unaudited 34.3p. Since then, the pandemic
along with the lockdown has continued to impose great uncertainty for UK
companies. However our overall portfolio has remained relatively stable as the
technology sector has been less severely impacted than others. During the six
month period the company’s holding in Castleton Technology Plc
(“Castleton”) was realised, with an interim dividend of 5.0p per share
paid on 31 July.

Results and Dividend

The Company’s net asset value (NAV) per ordinary share has decreased by 7.3p
per share from 36.1p at 29 February 2020 to 28.8p per share as at 31 August
2020.  Operating costs reduced the NAV per share by 0.45p during the period,
the dividend reduced the NAV per share by 5.0p, with the remaining 1.95p
reduction being due to movements in the portfolio, the most significant of
which relate to Select Technology and ImmBio.

As noted above, the current NAV of 28.8p per ordinary share is a reduction of
0.5p net of dividend since the mid-May update of 34.3p per share.

Portfolio Review

The portfolio now containing 12 active investments continues to develop. No
companies have sought funding from the VCT during this period.  The disposal
of Castleton has led to significant portfolio concentration with two
investments representing over 70% of the current portfolio valuation.

Arecor now represents 45% of the portfolio valuation. It has published
excellent phase 1 clinical data for its ultra-rapid insulin.  The trial was
sized to demonstrate equivalence, and on average the Arecor insulin delivered
twice the early glucose lowering effect of the next fastest insulin on the
market.  Arecor will be continuing its clinical insulin programme and is
expected to raise further funds soon to progress this.

Select Technology represents nearly 25% of the value of the portfolio. Select
distributes high quality document management software via its global channel
partners while adding value through its development team by providing
integrations and bespoke solutions.  Sales have been significantly affected
by Covid-19 with sales from February to July, being about 50% of the previous
six months. However, the greatest impact was in April and May and sales have
revived in the most recent months and the hope is that the revival continues.

ImmBio - formally known as ImmunoBiology Ltd has licensed its pneumococcal
vaccine to China National Biotech Group. It has completed parts of its
technology transfer and is now seeking to start a phase 2 study of the same
vaccine. To do this it has been applying for grants. It was rejected for
several grants but has two more applications pending. Coronavirus has again
highlighted the importance of vaccines to the world and in recent years
pneumococcal disease has claimed a similar number of deaths as Covid-19 in
2020. An existing vaccine has reduced the death rate, but existing vaccines
only protect against fewer than 20 of the 90 or so existing strains. As
ImmBio’s ImmBioVax technology utilises heat shock proteins to activate
T-cell responses, it is hoped that it can be used to create vaccines for a
wide range of currently poorly served infectious diseases.

Other investments in the portfolio which individually currently represent a
small proportion of NAV include:

Oxis continues with the development of its battery manufacturing capabilities,
signing a lease on a manufacturing plant in Brazil which is scheduled to come
online in 2023. The factory will require an investment of $50m and be capable
of producing 5 million Lithium Sulphur cells a year. Whilst our holding has
been significantly diluted, Oxis still offers upside potential, although it
may still be several years before it is realised.

Insense is developing a treatment for fungal nail disease. Work is continuing
with formulation and stability testing in preparation for a clinical trial in
late 2022 or possibly in 2023.  Ultimate realisation is therefore likely to
be protracted.

Novacta’s drug targeting Gram-negative bacterial infections continues
through clinical trials in the hands of Spero Therapeutics. Preliminary Phase
1 clinical data has encouraged Spero to plan further trials in 2021. Ultimate
realisation is therefore likely to be protracted.

Diamond Hard Surfaces produces a diamond like coating which, whilst being
extremely hard, is also an electrical insulator but a good conductor of
heat.  The number of customers is growing steadily, but revenue per customer
remains small. Total sales have improved in 2020 with sales in the six months
to June being similar to the whole of 2019.  The major reason for this has a
been a growth in a heat sink application.  If DHS does find a lucrative
niche, then its value could grow rapidly.

Whilst Mirriad is currently a minor proportion of NAV, it has seen revenue
double for the 6 months to the end of June compared to the previous year. 
There has been growth of sales of their inserted advertising in China and the
United States from existing and new customers.  This comes against a backdrop
of falling demand for advertising.

These companies fall into two camps. In some, our holding is so small, that
even if the company is ultimately highly successful, the return to our Company
would be small.  Others remain relatively early stage, so their ultimate
valuation remains unclear.  Directors, in consultation with the Investment
Adviser continue to focus on determining if achieving an early exit from some
of these companies would be in the interest of shareholders.

Overall, as seen in the Income Statement, the net impact of valuation changes
across the portfolio during the first half of the 2020/2021 year was a loss of

The Directors, along with the Investment Adviser, continue to take an active
interest in the companies within the portfolio, supporting  management teams
to achieve company development, but also to prepare companies for realisation
at the appropriate time. It should however be noted that approaches do occur
at other times, and the ability of the Directors and Investment Adviser to be
able to provide support when such approaches occur is essential for maximising

VCT qualifying status

The decreasing size of the VCT means significant focus is required to ensure
we retain sufficient working capital to manage the Company whilst meeting all
the conditions laid down by HMRC for maintaining approval as a VCT. The Board
has procedures in place to ensure that the Company continues to comply with
these conditions, in particular the new 80% qualifying holding limit which has
been in place since 1 March 2020.

Presentation of half-yearly report

In order to reduce the length of this report, we have omitted details of the
Company’s objectives and investment strategy, its Advisers and Registrar and
how to buy and sell shares in the Company. These details are all included in
the Annual Reports, which together with previous half-yearly reports, are
available for viewing on the Oxford Technology website.


Nothing has changed in our plans for your Company. We continue to believe your
VCT is an appropriate structure to hold your Company’s investments, but it
would be preferable to have a larger asset base to share the operating costs.
I have reported previously of our efforts to seek prospective parties who are
potentially interested in entering the VCT industry. This initiative is
currently on hold whilst any such possible organisations are entirely focussed
on more immediate actions within their own businesses as a result of the
Covid-19 pandemic. We have always made clear that there is no certainty such a
route can be achieved, but the Directors will continue seeking such
opportunities when the future outlook has become clearer.  Directors are also
revisiting the economics of a merger with some or all of the other Oxford
Technology VCTs. Such a transaction is not without risk and it is by no means
clear that it would be in your Company’s best interests to participate. We
will update shareholders if and when these discussions reach a conclusion, and
in any event, shareholder approval will be required before any transaction
could proceed.

Apart from the change to investment qualifying levels, there have been no
recent changes to VCT legislation, or their potential impact on both the VCT
and its investee companies. It is still too early to fully assess the impact
of Covid-19, and the resulting government interventions. Whilst the impact of
Brexit remains unclear, your Directors do not expect its eventual outcome to
have a material impact on portfolio valuations.

Your Board and Investment Adviser continue to work so as to best position your
VCT such that, when valuations and liquidity allow, holdings can be exited and
proceeds distributed to shareholders, whilst keeping a keen eye on maintaining
costs as low as possible in the interim.

Finally, I would like to take this opportunity to thank shareholders for their
continued support. We were delighted a significant number of you managed to
attend our zoom AGM, and we will consider the merits of future online forums
which allow a greater number of shareholders to participate. We hope that the
difficulties this year have not been too disruptive to our shareholders and
look forward to a return to an “old normal”.

David Livesley
8 October 2020

Investment Portfolio as at 31 August 2020

 Company                                Description                        Net Cost of investment £’000     Carrying value at 31/08/20 £’000     Change in value for the 6 month period £’000     % Equity held OT4  % Equity held All OTVCTs  % Net Assets  
 Arecor                                 Protein stabilisation              590                              1,289                                -                                                5.6                10.5                      38.9          
 Select – STL Management Ltd            Specialist photocopier interfaces  237                              708                                  (314)                                            18.4               58.6                      21.4          
 ImmBio                                 Novel vaccines                     857                              331                                  (224)                                            13.0               22.6                      10.0          
 Diamond Hard Surfaces                  Diamond coatings                   640                              198                                  63                                               49.9               49.9                      6.0           
 Oxis Energy                            Battery technology                 305                              85                                   43                                               0.2                0.3                       2.6           
 Insense                                Active wound healing dressings     476                              67                                   -                                                2.5                6.8                       2.0           
 Plasma Antennas                        Solid state directional antennas   700                              60                                   20                                               30.9               48.8                      1.8           
 Novacta                                Antibiotics Development            347                              59                                   -                                                2.3                2.3                       1.7           
 Dynamic Extractions                    Separation technology              377                              44                                   (12)                                             30.4               30.4                      1.3           
 MirriAd Advertising (bid price 13.0p)  Virtual product placement          -                                9                                    5                                                0.0                0.0                       0.3           
 Metal Nanopowders                      Production of metal nanopowders    52                               -                                    -                                                16.7               36.7                      -             
 Superhard Materials                    Very hard materials                9                                -                                    -                                                18.2               40.0                      -             
 Total Investments                                                         4,589                            2,850                                (419)                                                                                         86.0          
 Other Net Assets                                                                                           466                                                                                                                                14.0          
 Net Assets                                                                                                 3,316                                                                                                                              100.0         

Responsibility Statement of the Directors in respect of the half-yearly report

We confirm that to the best of our knowledge:
* the half-yearly financial statements have been prepared in accordance with
the statement “Interim Financial Reporting” issued by the Financial
Reporting Council; 
   * the half-yearly report includes a fair review of the information required
by the Financial Services Authority Disclosure and Transparency Rules, being:
   * an indication of the important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
financial statements.
* a description of the principal risks and uncertainties for the remaining six
months of the year.
* a description of related party transactions that have taken place in the
first six months of the current financial year that may have materially
affected the financial position or performance of the Company during that
period and any changes in the related party transactions described in the last
annual report that could do so.
  * The assets of the Company include a cash balance of £466,000.  After
reviewing the forecast for the Company, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. The Company therefore continues to adopt
the going concern basis in preparing the half year accounts
On behalf of the Board:

David Livesley 
8 October 2020

Income Statement

                                                          Six months to 31 Aug 2020        Six months to 31 Aug 2019        Year to 29 February 2020         
                                                          Revenue    Capital    Total      Revenue    Capital    Total      Revenue    Capital    Total      
                                                          £'000      £’000      £’000      £’000      £’000      £’000      £’000      £’000      £’000      
 Gain/(Loss) on disposal of fixed asset investments       -          210        210        -          29         29         -          (198)      (198)      
 Unrealised loss on valuation of fixed asset investments  -          (419)      (419)      -          (266)      (266)      -          (852)      (852)      
 Investment income                                        -          -          -          -          -          -          19         -          19         
 Investment management fees                               (21)       -          (21)       (7)        (21)       (28)       (56)       -          (56)       
 Other expenses                                           (31)       -          (31)       (26)       -          (26)       (54)       -          (54)       
 Return on ordinary activities before tax                 (52)       (209)      (261)      (33)       (258)      (291)      (91)       (1,050)    (1,141)    
 Taxation on ordinary activities                          -          -          -          -          -          -          -          -          -          
 Return on ordinary activities after tax                  (52)       (209)      (261)      (33)       (258)      (291)      (91)       (1,050)    (1,141)    
 Earnings per share – basic and diluted                   (0.5)p     (1.8)p     (2.3)p     (0.3)p     (2.3)p     (2.6)p     (0.8)p     (9.1)p     (9.9)p     

There was no other Comprehensive Income recognised during the year.

The ‘Total’ column of the Income Statement is the Profit and Loss Account
of the Company, the supplementary Revenue and Capital return columns have been
prepared under guidance published by the Association of Investment Companies.

All Revenue and Capital items in the above statement derive from continuing

The Company has only one class of business and derives its income from
investments made in shares and securities and from bank and money market

Balance Sheet

                                                 As at 31 Aug 2020     As at 31 Aug 2019     As at 29 Feb 2020     
                                                 £’000      £’000      £’000      £’000      £'000      £'000      
 Fixed asset investments at fair value                      2,850                 4,675                 3,891      
 Debtors                                         13                    18                    10                    
 Cash at Bank                                    466                   315                   262                   
 Creditors: Amounts falling due within one year  (13)                  (6)                   (10)                  
 Net current assets                                         466                   327                   262        
 Net assets                                                 3,316                 5,002                 4,153      
 Called up share capital                                    1,152                 1,152                 1,152      
 Share premium reserve                                      813                   813                   813        
 Unrealised capital reserve                                 (1,739)               (266)                 (770)      
 Profit and Loss account                                    3,090                 3,303                 2,958      
 Total equity shareholders' funds                           3,316                 5,002                 4,153      
 Net asset value per share                                  28.8p                 43.4p                 36.1p      

Statement of Changes in Equity

                                                     Share Capital £’000     Share Premium Reserve £’000     Unrealised Capital Reserve £’000     Profit & Loss Reserve £’000     Total £’000     
 As at 1 March 2019                                  1,152                   813                             7                                    3,667                           5,639           
 Revenue return on ordinary activities after tax     -                       -                               -                                    (54)                            (54)            
 Current period gains on disposal                    -                       -                               -                                    29                              29              
 Current period losses on fair value of investments  -                       -                               (266)                                -                               (266)           
 Prior years’ unrealised gains now realised          -                       -                               (7)                                  7                               -               
 Dividends paid                                      -                       -                               -                                    (346)                           (346)           
 Balance as at 31 August 2019                        1,152                   813                             (266)                                3,303                           5,002           
 As at 1 March 2019                                  1,152                   813                             7                                    3,667                           5,639           
 Revenue return on ordinary activities after tax     -                       -                               -                                    (91)                            (91)            
 Current period losses on disposal                   -                       -                               -                                    (198)                           (198)           
 Current period losses on fair value of investments  -                       -                               (852)                                -                               (852)           
 Prior years’ unrealised losses now realised         -                       -                               75                                   (75)                            -               
 Dividends paid                                      -                       -                               -                                    (345)                           (345)           
 Balance as at 29 February 2020                      1,152                   813                             (770)                                2,958                           4,153           
 As at 1 March 2020                                  1,152                   813                             (770)                                2,958                           4,153           
 Revenue return on ordinary activities after tax     -                       -                               -                                    (52)                            (52)            
 Current period gains on disposal                    -                       -                               -                                    210                             210             
 Current period losses on fair value of investments  -                       -                               (419)                                -                               (419)           
 Prior years’ unrealised gains now realised          -                       -                               (550)                                550                             -               
 Dividends paid                                      -                       -                               -                                    (576)                           (576)           
 Balance as at 31 August 2020                        1,152                   813                             (1,739)                              3,090                           3,316           

  Statement of Cash Flows

                                                     Six months to 31 Aug 2020  Six months to 31 Aug 2019  Year to 29 Feb 2020  
                                                     £'000                      £’000                      £'000                
 Cash flows from operating activities                                                                                           
 Return on ordinary activities before tax            (261)                      (291)                      (1,141)              
 Adjustments for:                                                                                                               
 (Gain)/loss on disposal of fixed asset investments  (210)                      (29)                       198                  
 Loss on valuation of fixed asset investments        419                        266                        852                  
 Increase/(decrease) in creditors                    3                          (7)                        (3)                  
 Increase in debtors                                 (3)                        (16)                       (7)                  
 Outflow from operating activities                   (52)                       (77)                       (101)                
 Cash flows from investing activities                                                                                           
 Purchase of fixed asset investments                 -                          (38)                       (67)                 
 Sale of fixed asset investments                     832                        492                        491                  
 Inflow from investing activities                    832                        454                        424                  
 Cash flows from financing activities                                                                                           
 Dividends paid                                      (576)                      (346)                      (345)                
 Outflow from financing activities                   (576)                      (346)                      (345)                
 Increase/(decrease) in cash and cash equivalents    204                        31                         (22)                 
 Opening cash and cash equivalents                   262                        284                        284                  
 Closing cash and cash equivalents                   466                        315                        262                  

Notes to the Half-Yearly Report

1.         Basis of preparation

The unaudited half-yearly results which cover the six months to 31 August 2020
have been prepared in accordance with the Financial Reporting Council’s
(FRC) Financial Reporting Standard 104 Interim Financial Reporting (‘FRS
104’) and the Statement of Recommended Practice (SORP) for Investment
Companies re-issued by the Association of Investment Companies in November
2014. Details of the accounting policies and valuation methodologies are
included in the Annual Report.

2.         Publication of non-statutory accounts

The unaudited half-yearly results for the six months ended 31 August 2020 do
not constitute statutory accounts within the meaning of Section 415 of the
Companies Act 2006. The comparative figures for the year ended 29 February
2020 have been extracted from the audited financial statements for that year,
which have been delivered to the Registrar of Companies. The independent
auditor’s report on those financial statements, in accordance with chapter
3, part 16 of the Companies Act 2006, was unqualified. This half-yearly report
has not been reviewed by the Company’s auditor.

3.         Earnings per share

The calculation of earnings per share for the period is based on the return
attributable to shareholders divided by the weighted average number of shares
in issue during the period. There are no potentially dilutive capital
instruments in issue and, therefore, no diluted returns per share figures are

4.         Net asset value per share

The net asset value per share is based on the net assets at the period end
divided by the number of shares in issue at that date (11,516,946 in each

5.         Principal risks and uncertainties

The Company’s assets consist of equity and fixed interest investments, cash
and liquid resources. Its principal risks are therefore market risk, credit
risk and liquidity risk. Other risks faced by the Company include economic,
loss of approval as a Venture Capital Trust, investment and strategic,
regulatory, reputational, operational and financial risks. These risks, and
the way in which they are managed, are described in more detail in the
Company’s Annual Report and Accounts for the year ended 29 February 2020.
The Company’s principal risks and uncertainties have not changed materially
since the date of that report.

6.         Related party transactions

OT4 Managers Ltd, a wholly owned subsidiary, provides investment management
services to the Company for a fee of 1% of net assets per annum.

7.         Copies of this statement are available from Oxford
Technology Management, Magdalen Centre, Oxford Science Park, Oxford OX4 4GA
and on the Company’s website.

Board Directors: David Livesley, Alex Starling, Robin Goodfellow and Richard

Investment Manager: OT4 Managers Ltd with services contracted to Oxford
Technology Management Ltd

Website: www.oxfordtechnologyvct.com/vct4.html

The information above is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU No.
596/2014). Upon the publication of this announcement via a Regulatory
Information Service this inside information is now considered to be in the
public domain.

Enquiries – Lucius Cary
Oxford Technology Management
01865 784466

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