KneoMedia Faces Cash Strain Amid ASX Suspension and Delayed NYC Payments

Financial Performance and Challenges

KneoMedia Limited (ASX: KNM), a digital education platform provider, has released its half-year results for the six months ended 31 December 2025, revealing a challenging period marked by a significant drop in revenue and a widening loss. Total revenue from ordinary activities fell sharply to $387,610, down 51% from $792,247 in the prior corresponding period. This decline was primarily attributed to delayed payments from the New York City Department of Education (NYC DOE) during a mayoral transition, which disrupted the usual cash flow cycle.

Despite these headwinds, the company managed to reduce overall expenditure, including a notable cutback in product development costs as its KneoScience platform matures. Nevertheless, the Group recorded a comprehensive loss of $1,018,045, a 7.9% increase from the previous half-year loss of $941,711. The net current asset deficiency improved but remained substantial at $1,294,519.

Operational Focus and Product Development

KneoMedia’s core business continues to revolve around its KneoScience and KneoAdventures platforms, which deliver interactive science education and assessments to schools primarily in the United States. The KneoScience Content Services Platform (CSP) remains the flagship product, with ongoing enhancements including the recent integration of mandated high school science investigations covering Biology and Earth Science. This expansion increases the addressable market within New York City by approximately 300,000 students, complementing the existing coverage of Grades 3–8.

The company reported sustained usage across five New York City school districts, with over 130,000 students and 10,000 educators actively engaging with the platform. Data indicates improved student outcomes and significant reductions in teacher grading time, reinforcing the platform’s value proposition. Additionally, KneoAdventures continues to generate revenue through deployments in Florida’s Early Learning Coalition market.

Liquidity and Capital Management

Cash flow pressures remain a concern, with net operating cash outflows of $298,767 and a cash balance of just $25,445 at the reporting date. Receipts from customers were nil during the half-year, reflecting the delayed payments from NYC DOE. The company’s financial position is further complicated by outstanding convertible notes and loan facilities, which have been renegotiated to extend maturity dates and ease short-term repayment obligations.

Importantly, the directors have expressed confidence in the company’s ability to continue as a going concern, supported by multiple cash flow forecasts that factor in anticipated receipt of a $450,000 USD invoice from NYC DOE expected in March 2026. Cost-saving measures, deferred director fees converted to equity, and planned capital raising initiatives underpin this outlook.

ASX Suspension and Strategic Outlook

KneoMedia’s shares have been suspended from trading on the ASX since March 2024. The company is actively preparing for reinstatement, which is a critical assumption underpinning its financial forecasts and capital strategy. Post-reporting period plans include a capital raise of approximately $3 million to bolster working capital and potentially acquire a complementary Australian business to enhance its technology and marketing capabilities.

The company’s strategy remains focused on scaling recurring revenue streams in the US education market, leveraging established partnerships and the scalable nature of its digital platforms. The anticipated reinstatement on the ASX is expected to facilitate access to equity markets and support ongoing growth initiatives.