Mounting Losses Hit Telupay International Inc (OTCMKTS:TLPY) Hard on the Charts

[[tagnumber 0]][[tagnumber 1]]When the stock of Telupay International Inc (OTCMKTS:<a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a>) shot up a staggering 75% in early–March, it fired current shareholders with enthusiasm about the future of the mobile banking service provider. That‘s why, what happened just 10 days later must have been a real shock for pretty much anyone following the stock.[[tagnumber 2]] [[tagnumber 0]]Yesterday, Telupay International Inc (OTCMKTS:<a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a>) suffered yet another humiliating defeat on the charts as <a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a> shares sank a whopping 43 per cent to $0.013 per share. The fall occurred after more than 10 million shares changed hands. As a result, <a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a> shares are now worth 94 percent less than they were on March 6.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]For a company which claims to have developed a ‘proven and secure‘ mobile banking technology, such chart performance is hardly anything to write home about. Rather, it just means that either investors are unaware of the business‘s potential, or the company‘s management has lost touch with reality. In the next lines, we will try to understand which stance stands closer to the truth.[[tagnumber 2]] [[tagnumber 0]]Businesswise, the niche Telupay is occupying provides ample room for success. However, the company‘s financial performance has been poor at best. The most recent 10–Q report rings a few alarming bells. With cash reserves of less than $4 thousand and a working capital deficit in excess of $3 million, <a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a> doesn‘t really look poised for growth any time soon. Even though Telupay does generate revenue, yet it is terribly insufficient to keep the business going when juxtaposed to the net quarterly loss of almost $0.5 million. This must be the reason why <a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a>‘s management team acquired debt in excess of $500 thousand by issuing more than 5 million units priced at $0.10 and $0.15 per unit. Each pair of units contained 2 common shares and a warrant to purchase one common share at $0.20 or $0.30 per share over the forthcoming 24 months.[[tagnumber 2]] [[tagnumber 0]]This practice is likely to continue as long as <a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a> is unable to generate appropriate revenues. As also stated in the Q4 2014 report, the company needs $1 million to keep its current business running in 2015, as well as an additional $3 million to expand it beyond the Philippines. What we‘ve got against these numbers is an average revenue of some $50 thousand over the last four quarters on record. What is more, <a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a>‘s outstanding shares slightly exceed 161 million while the total number of authorized stock is an astonishing 1.5 billion. It doesn‘t take a rocket scientist to sense the serious trouble coming from a grand dilution in the months to come. The size of such dilution will largely depend on the current value of <a href=“http://www.thehotpennystocks.com/Stock–Quotes/?stock=TLPY“>TLPY</a> shares. Should the latter continue their recent free–fall on the charts, the debt well will run dry fast, too.[[tagnumber 2]]