The application was lodged by the Australian Tax Office in March following the company's non-payment of tax.
On June 23, a Federal Court registrar for the New South Wales district directed KnowIT to be wound up and liquidators, Steven Nichols, appointed.
KnowIT produces Web-based knowledge management software. Former owner and director, Michael Lacie, said its cash flow problem had been caused by a slower development cycle.
He claimed the ATO was its only creditor.
"In the past our developers had not acted professionally and the software was missing back-end components. It had to be redeveloped, with different modules reworked," Lacie said. "This meant our other projects were not completed on time.
"It's not a lot of money. We approached the Tax Office with a payment schedule, but the wind-up application continued."
As a result of the wind-up application, Lacie said he had sold the company to Newcastle-based software development house, KCM Systems, earlier this month.
Some of its staff had been let go, leaving six employees, he said.