You aren't supposed to be able to convert if a company isn't current - but I have seen John Fife do it on NOHO - I suspect he used a 144 Opinion letter to remove the restrive legend. They are a Form 15 company.
I don't believe it is a "Rule". What may be happening is that Alpine is changing the requirements for clearing new issuances under note conversions. The current version of the rumor is that they will not do so for stocks under 1 cent. Whether that is what is happening or when is the question.
I think that it was a attorney Mark R. Basile who write a article on convertible notes that got a great deal of the rumor started - it seems he was trying to obtain more business because much of what he wrote was accurate - especially about the 3(a)(10) exemption.
Pinkys survive on Toxic financing - it would be great if the financing was more regulated but there wouldn't be as many lotto plays and the OTCM would be devastated. I have always thought it would be a great idea if there weren't any stinky pinkys or dark companies.