DDM,for each different financing deals with toxic financers ,at ,or sometimes prior due dates , the Company has the obligation to issue common shares to the Note Holder to cover the loan + the discount as per financial agreement.
At this time , the Note Holder has the right , although not the obligation , to sell these shares at open Market without any restrictions .
When this kind of event occur , the OS is increased by the number of shares the company issued to the toxic financer to cover the financial obligation . The float is also increasing by the same amount as these shares are free to trade by the Note Holder .
Free to trade doesn't mean necessarily that they are instantly sold ! The Note Holder may just hold them , but they are accounted in the float as free to trade .