The shares that are shorted by the financers of the convertible shares get covered when the conversion to normal shares takes place. They will not be buying them on the open market.
the short position helps to establish the overallotment shares called a "geenshoe" - the underwriter establishes a short position to help stablize the share price if needed - the short position is covered buying the "greenshoe" shares issued by the company
"...how does 19.5 million shorted shares get covered?"
By converting the Series D and E convertible preferred shares into common shares. This is considered "covered shorting" and can be done legally.
The number of shares that are eventually converted could be more or less than 19.5 million depending upon the share price and if the company ends up selling any shares for less than $0.19.
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