This is a banker mess because the banker is the one selling his warrants for a massive number of shares which are converted with a 30 to 35 % discount. Sure, Bates took the financing that caused this to happen just as Tesla, GM and so many other companies have done with Convertibles. Trouble is when you are a start-up the selection of funding sources are awful (i know from experience) and one has to pick between a rock and a hard spot. So what? The banker that funded the convertible does not have to convert everything without regard to anyone on earth.
Suppose you own shares of WidgetCo that are trading for $10/sh. I own millions of widgets and don't care about WidgetCo or you, just ME, ME, ME and MINE! So I start selling my widgets for $1 because I can and I know I will solely drive the price of WidgetCo down to MY price. That has nothing to do with trading on the exchanges because there is no trading. You are stuck with $10 shares that are now worth $1, I have millions of dollars or shares in WidgetCo at $1 and the company has not done anything. How does my greed and actions have anything to do with the company? It doesn't! Guess what, I am like the banker above.
In the WSTI case just like all Convertibles dilution happens. As far as future scenarios, there are a lot of possibilities. If sales increase to a small positive amount like an EPS of say, $0.01 to $0.10 then a P/E multiple of 10 or more will likely kick in. Point is, things can change rapidly with revenues! I expect to see exponential growth within a reasonably short time after the banker is dissolved.
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