I believe your answer is found in this part:
"The Settlement Agreement further provides that in no event shall the number of shares of Common Stock issued to MGP or its designee in connection with the Settlement Agreement, when aggregated with all other shares of Common Stock then beneficially owned by Hanover, MGP and their respective affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder), result in the beneficial ownership by Hanover, MGP and their respective affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.99% of the Common Stock. "
So... basically, every time that they issue stock to Hanover, they need to increase the O/S so that Hanover's total shares do not amount to more than 9.99% of the total number of outstanding shares. This is probably written into the agreement as a protection so that Hanover never owns a majority of shares and can never take control of the company. You don't want to pay so many shares to a lender that the lender then owns the company.
At least that is how I understand it, and I could be wrong. But it makes sense to me. That might be why every time they issue a few million shares to Hanover, the O/S increases much more than the number of shares issued. Right?
I am not a promoter or professional stock trader. I'm a regular guy who enjoys stock trading to make (or lose) a few dollars. I am only responsible for my own trading foibles, not yours...do your own DD.