Freedom I (NYSE:FACT) announced in an 8-K this morning that it has added financing arrangements worth up to about $80 million to its combination with residential solar developer Complete Solaria.

The new money fills a significant funding gap after Freedom I revealed it had 99% of its shares redeemed at the end of its completion vote, leaving it with just 335,492 shares remaining and about $3.5 million in trust. The transaction also included $40 million in bridge financing, but this was still well short covering its $100 million minimum cash condition.

The largest portion of the new funding is to come in the form of an OTC equity prepaid forward transaction. Five investors, including three Meteora Capital Partners affiliates and Polar Multi-Strategy Fund, are to purchase up to 6,300,000 shares through this agreement. They will be prepaid for these purchases at the redemption rate per share and none may exceed a 9.9% stake in the combined company.

These investors may then sell these shares on the open market and terminate the agreements’ coverage of them, returning to the combined company the proceeds based on a 30-day VWAP of the stock subject to a $5 floor. The agreement is to be completed two years after close if not before at the investors’ discretion.

These investors have also subscribed to a $5.6 million PIPE, purchasing 1,126,000 shares for $5 per share and will be issued a further 100,000 ordinary shares in exchange for their participation in the OTC funding. Other PIPE investors have similarly funded a $5.6 million PIPE, albeit at $10 per share, but these will receive 5,630,000 Class B shares for no consideration in addition to their subscribed shares.

In addition to its participation in the above funding arrangements, Polar agreed not to redeem 331,753 shares at the deal’s completion vote and it is to receive an equal number of Class B shares in return.

As such, Freedom I can now more than exceed its minimum funding commitment and it will have enough shares in circulation to avoid low-float disruptions.  But, about $14.7 million of this amount came at effectively half price per share and, by their nature, prepaid OTC structures do not provide all of their cash to a de-SPAC upfront.

The bridge financing was also not free of strings as it came in the form of convertible notes bearing a 5% per annum interest rate with a two-year maturity.

Freedom I’s sponsor cannot be accused of being stingy, however, as these moves cost it 69% of its 8,625,000 promote shares. The parties were also willing to meet investors halfway by cutting the company’s equity valuation in half amid dipping share prices for Complete Solaria’s listed comps in a June deal tweak.

In theory, Freedom I’s fundraising efforts may also not be done just yet as it has not announced a closing timeline for the deal despite securing shareholder approval on July 11. The SPAC has until August 2 to complete a combination under its current transaction deadline and may extend this one month further should it so choose.

Complete Solaria was created from the 2022 merger of two California-based residential solar companies, which made it a vertically integrated developer in the space from panel technology through installation and customer financing. The parties initially announced the business combination in October 2022.