Pelatro is facing delays in collecting $1.1 million in outstanding payments from customers in Nepal, Myanmar and Bangladesh. The issues stem from government regulations in those countries requiring approval for payments to foreign companies. Two customers are also disputing $375,000 of the total owed.
Pelatro shares were down around 46% at the time of writing on Tuesday.
The company said the payment delays will impact their working capital but the board remains confident in eventually collecting amounts awaiting government approval.
Investors appear unwilling to hang around and wait for approvals as cash becomes tight for the customer engagement technology firm.
The payment delays, along with routine procedures, prompted Pelatro’s board to review all outstanding payments. The review uncovered unusual payment delays from four customers totaling $1.1 million of Pelatro’s $4.2 million in receivables.
Pelatro remains in discussions with the customers and expects to eventually collect the government-delayed payments. However, Pelatro has no clarity on timing as the payments require individual government approvals.
The company had $700,000 cash on hand at the end of June. Pelatro forecasts collecting $2.6 million from other customers through September. But based on assumptions and forecasts, Pelatro said they likely need external funding in the fourth quarter depending on timing of the outstanding payments.
The mention of external funding has sent investors running for the hills – understandable given the current market conditions.