On 1 April 2019, KNeoMedia Limited (ASX: KNM) announced that on its request, the company’s securities will be placed on a trading halt till the earlier of the commencement of normal trading on Wednesday, April 3, 2019, or when there is an announcement to the market. The trading halt request was accepted on the following information:
- The halt is necessary to assist the company in managing its continuous disclosure obligations.
- The company expects to announce to the market about a potentially material partnership.
- KNM believes that the trading halt should be granted to the company as all the requisite reason/information have been provided.
In a previous update, it reported a decrease in its revenues from ordinary activities by ~98% to $4,129 in H1 FY19 from $264,401 in H1 FY18. Its loss from ordinary activities after tax attributable to members increased by 53% to $1,988,318 in H1 FY19 from $1,303,489 in H1 FY18, whereas its net loss for the period attributable to members of the parent (after non-controlling interest) increased by 39% to $1,760,252 in H1 FY19 from $1,264,013 in H1 FY18. This was due to significant investments made by the group to expand the sales team and the product base to broaden sales channels across the United States, the United Kingdom and Philippines markets. The investment program also led to a decrease in the group’s net assets to $1,634,601. Reduction in deferred revenue of $50,482 as well as a reduction in trade receivables of $504,676 led to a decrease in equity of $454,194. The company incurred net operating cash outflows of $1,625,046 and reported cash of $967,402 at the end of December 31, 2018.
KNeoMedia’s net tangible asset backing per ordinary share was reported at 0.17 cps. The Board of Directors did not propose any dividend/distribution for the period.
During the period, the company did not acquire any subsidiary entities, and there was no disposal of subsidiary entities. It broadened sales channels across the global key markets by appointing new and experienced staff, strengthening sales channels and localizing product for specific markets globally.
The company believes that despite revenue attainment being protracted due to education sales cycles, its Software as a Service (SaaS) based content built will deliver sustainable and predictable revenue streams over the long term compared to the company pursuing sales through the highly competitive consumer market. KNM is confident that its steps to establish a ‘top-down’ sales model quickly will lead to a steady stream of recurring sales along with the outstanding sales receivables being paid, despite the disappointment about lack of new seat license sales as compared to the prior period.
The company has its focus to secure seat license sales in all the major international markets in H2 FY19 with priority being the U.S market.
KNM’s shares last traded at $0.018, with a market capitalisation of $11.78 million. Its 52 weeks high was at $0.09 with an average volume of 290,742. Its absolute return for five years, one year, and six months are -40%, -78.31%, and -30.77%, respectively.
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