Well to be accurate he sold debt to venture capitalists, who in turn received free trading common shares as repayment plus interest. Its also known as money laundering, since he had no cash to pay the original debts. This death spiral financing is common with such penny scams, as those are the only willing lenders out there as Saleen burned the banks, dealerships and vendors.
Saleen cannot directly sell shares into the market to raise cash without a registration and filing of a prospectus for such a cash raise. Couldn't qualify in the first place, the business was already insolvent before becoming a public company and thus why they had to RM into a pennystock shell. It was a money grab scam from the beginning.
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