It appears that Ramos and Ramos, and Ramm Investments directly owned common shares at some point and paid large sums for promotions of the stock. I'm not sure they needed convertible securities as they owned the stock. They could have "shorted against the box" if they had to sell before they actually had unrestricted shares, though I'm not sure that would have been legal.
"Death spiral financing is a process where convertible financing used to fund primarily small cap companies can be used against it in the marketplace to cause the company’s stock to fall dramatically and can lead to the company’s ultimate downfall. Many small companies rely on selling convertible debt to large private investors (see Private investment in public equity) to fund their operations and growth. This convertible debt, often convertible preferred stock or convertible debentures, can be converted to the common stock of the issuing company often at steep discounts to the market value of the common stock. Under the typical “death spiral” scenario the holder of the convertible debt initially shorts the issuer’s common stock which often causes the stock price to decline at which time the debt holder converts some of the convertible debt to common shares with which he then covers his short position. The debt holder continues to sell short and cover with converted stock which along with selling by other shareholders alarmed by the falling price continually weakens the share price making the shares unattractive to new investors and can severely limit the company’s ability to obtain new financing if the need arises. An important characteristic of this kind of convertible debt is that it often carries conditions like a quarterly or semi-annual reset of the conversion price to keep the conversion price more or less close to the actual stock price. But a lower conversion price also increases the number of shares that a bond holder gets in exchange for one bond, increasing the dilution of existing shareholders. A lower price reset can also force investors that have set up a long CB/short stock position to sell more stock ("adjust the delta"), creating a vicious circle, hence the nickname death spiral. Mark Valentine, Chairman of Thompson Kernaghan, a Toronto brokerage firm, has been named in several lawsuits from companies that participated in death spiral financings."
But such convertible debt doesn't issue itself, so this obviously can't be true: "This is not to say that the execs. of GRNO have any control over such a situation."
I don't think that we know how Ramos, etc. got their shares, do we? Only that it had to be from the company or another shareholder, and we only know of one of those that held shares in a quantity that would accommodate such a distribution....the CEO. The woefully incomplete status of the company filings offers no help at all on either the company's current financial condition or such issuances, old or new. We haven't heard anything official from the company on that score. I don't think that you can count this as official....it's from a poster who hadn't posted in 10 months only to return and post this a little over 2 weeks ago: "In my recent conversation with the CEO of GRNO, I was informed the auditor handling the account moved to a new firm in order to receive a higher management position and more pay. The new audit rep re-assessed the account and chose to bill GRNO an additional $20K. The CEO then had to renagotiate the price. GRNO is a money making machine and can pay the $20K but they dont like spending money without a good reason." http://investorshub.advfn.com/boards/read_msg.aspx?message_id=67787088
Even if true, it's not very conclusive, is it?
There were contacts with the company attorney a while back, but I don't recall the expectations gleaned from those being any more specific.
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