Also, can a company dilute/issue shares to cover debt while dilenquent, or only to cover day to day expenses, or both, or neither.. while dilenquent only that is..
Technically, no. That is, the company can sell convertible notes, but Rule 144 won't be available to the note holders. So they can convert their debt to stock, if they want to, but they can't resell the stock. However, they can sue the company and get a settlement resulting in the issuance of 3(a)(10) stock, which is immediately free trading.
I haven't followed CHIT, so I don't know if that's happening, or will happen.
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