My opinion on what happened with the roughly 600k increase and corresponding 600k decrease in outstanding shorts was that those shorts were initiated, at a higher price, to raise funds to participate in the offering. The shares from the units purchased were used to settle the short position and the warrants retained. That to me is why there was no share price appreciation in tandem with settling that, relative to daily volume, large short position. JMO

The reason there was a short squeeze and corresponding price appreciation last year around the aborted financing was that investors who shorted to participate in that financing had to scramble to settle their short position in the market instead of stripping the shares out of the anticipated investment units.