Two issues to consider before drawing a connection between low market cap and naked short selling.
The first, it’s very uncommon for an OTC stock that’s not also listed on another major exchange to have a market cap that exceeds $1 billion. So, there’s nothing unusual about NWBO’s mark cap relative to other OTCs. It’s actually quite good, all things considered.
Second, naked shorts can be tracked based on failure to deliver numbers and percentages. Every short sale has a buyer at the other end of the trade that has to be settled by a transfer of shares. It seems highly unlikely the number of FTDs even come close to exceeding the shares already outstanding. I’m sure there are weaknesses in the system, but nothing to that level.
Just consider this logically: if the market provided for such a high percentage of undetected FTDs, that weakness would be exploited across the entire stock market, leading to a breakdown in the entire system.