Quarterly report pursuant to Section 13 or 15(d)

Equity and Earnings per Share (Tables)

v3.21.2
Equity and Earnings per Share (Tables)
9 Months Ended
Sep. 30, 2021
Equity [Abstract]  
Warrants At September 30, 2021, Sunlight has authorized Class A Shares to cover the exercise of the following outstanding warrants on its equity:
Type Date of Issuance Exercise Price per Share Shares
Public Warrants Nov-20 $ 11.50  17,250,000 
Private Placement Warrants Nov-20 11.50  9,900,000 
Other Feb-21 7.72  627,780 
Temporary equity activities Activities related to interests in Sunlight Financial LLC’s partnership equity units considered temporary equity were as follows:
Month of Issuance Class A-3 Units Class A-2 Units Class A-1 Units
Units at December 31, 2019 (Predecessor) 326,428  195,973  256,966 
March 2020 11,768  7,065  9,264 
June 2020 12,193  7,320  9,598 
September 2020 12,771  7,667  10,053 
December 2020 13,235  7,947  10,421 
49,967  29,999  39,336 
Units at December 31, 2020 (Predecessor) 376,395  225,972  296,302 
March 2021 13,457  8,079  10,593 
June 2021 14,094  8,461  11,094 
July 2021 1,444  867  1,137 
28,995  17,407  22,824 
Units at July 9, 2021 (Predecessor) 405,390  243,379  319,126 
Noncontrolling interest
The Sunlight Financial LLC portion of non-controlling interests is computed as follows:
Successor
For the Period July 10, 2021 to September 30, 2021
Sunlight Financial LLC net income (loss) before income taxes $ (26,115)
Sunlight Financial LLC as a percent of total(a)
34.9  %
Sunlight Financial LLC net income (loss) attributable to the Class EX unitholders $ (9,108)
a.Represents the weighted average percentage of total Sunlight shareholders' net income (loss) in Sunlight Financial LLC attributable to the Class EX unitholders.
Effects of changes in ownership interest of subsidiary on equity Activities related to Sunlight’s equity-based compensation were as follows:
Successor
Provisionally-Vested RSUs
Class A Shares Class EX Units Directors Employees
Per Share Shares Per Unit Units Per Share Shares Per Share Shares
July 9, 2021 (Successor) $ —  —  $ —  —  $ —  —  $ —  — 
Issued 9.46  512,227  9.46  1,379,401  9.46  75,000  9.46  1,257,966 
Vested 9.46  (38,030) 9.46  (179,813) —  —  —  — 
Forfeited or Cancelled 9.46  (85,278) 9.46  (49,358) —  —  9.46  (149,288)
September 30, 2021 (Successor) 9.46  388,919  9.46  1,150,230  9.46  75,000  9.46  1,108,678 

Predecessor
Class C LTIP
Per Unit Units Per Unit Units
December 31, 2019 (Predecessor) $ 14.45  237,318  $ 19.54  64,046 
Issued 23.62  1,205  23.62  14,678 
Converted to Class C-1 Units 20.66  (959) 43.50  (1,347)
Converted to Class C-2 Units 11.12  (2,268) 17.73  (2,959)
Forfeited —  —  14.70  (1,373)
September 30, 2020 (Predecessor) 14.50  235,296  20.08  73,045 
December 31, 2020 (Predecessor) $ 14.51  234,403  $ 20.06  71,060 
Issued —  —  —  — 
Converted to Class C-1 Units 16.19  (181) 18.96  (377)
Converted to Class C-2 Units 11.12  (1,513) 15.64  (1,285)
July 9, 2021 (Predecessor) 14.53  232,709  20.14  69,398 
Equity based compensation - granted
Sunlight has granted the following outstanding awards (“Compensation Awards”) to certain employees and members of Sunlight’s Board at September 30, 2021:

Service (in Years)
Award Class(a)
Minimum Maximum
Awards(b)
Provisionally-Vested Class A Shares 1.9 3.6 388,919 
Provisionally-Vested Class EX Units 1.9 1.9 1,150,230 
Director RSUs 1.0 1.0 75,000 
Employee RSUs 3.0 4.0 1,108,678 
2,722,827 
a.All awards subject solely to time-based vesting.
b.Net of fully vested awards.
Unrecognized compensation expense At September 30, 2021, Sunlight has not yet recognized compensation expense for the following awards, all of which are subject solely to time-based service vesting conditions:
Type Weighted Average Recognition Period Units/ Shares Amount
Provisionally-Vested Class A Shares 1.3 years 388,919  $ 3,614 
Provisionally-Vested Class EX Units 0.9 years 1,150,230  10,747 
Director RSUs 0.8 years 75,000  550 
Employee RSUs 3.7 years 1,108,678  9,883 
2,722,827  $ 24,794 
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net
The following discloses the effects of changes in Sunlight's ownership interest in Sunlight Financial LLC on Sunlight's equity:
Successor
For the Period July 10, 2021 to September 30, 2021
Transfers (to) from non-controlling interests:
Decrease in Sunlight's shareholders' equity for the delivery of Class EX Units primarily in connection with vested provisionally-vested Class EX Units $ — 
Dilution impact of equity transactions — 
Net income (loss) attributable to Class A shareholders (11,323)
Change from transfers (to) from non-controlling interests and from net income (loss) attributable to Class A shareholders $ (11,323)
Earnings per share calculations
The following table summarizes the basic and diluted earnings per share calculations:
Successor
For the Period July 10, 2021 to September 30, 2021
Net Income (Loss) Per Class A Shareholders, Basic
Net income (loss) available to Class A shareholders $ (11,216)
Total weighted average shares outstanding 84,833,808
Net Income (Loss) Per Class A Shareholders, Basic $ (0.13)
Net Income (Loss) Per Class A Shareholders, Diluted
Net income (loss) available to Class A shareholders $ (20,140)
Total weighted average shares outstanding 131,088,438
Net Income (Loss) Per Class A Shareholders, Diluted $ (0.15)
Net income (loss) available to Class A shareholders
Net Income (Loss) $ (20,431)
Noncontrolling interests in loss of consolidated subsidiaries 9,108 
Other weighting adjustments 107 
Net Income (Loss) Attributable to Class A Shareholders (11,216)
Noncontrolling interests in income (loss) of Sunlight Financial LLC, net of assumed corporate income taxes at enacted rates, attributable to Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares(a)
(8,924)
Net income (loss) available to Class A shareholders, diluted $ (20,140)
Weighted Average Units Outstanding
Class A shares outstanding 84,833,808
Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares(a)
46,254,630
Incremental Class A Shares attributable to dilutive effect of warrants(b)
Total weighted average shares outstanding, diluted 131,088,438
a.The Class EX Units not held by Sunlight (that is, those held by noncontrolling interests) are exchangeable into Class A Shares on a one-to-one basis. These units are not included in the computation of basic earnings per share. These units enter into the computation of diluted net income (loss) per Class A share when the effect is dilutive using the if-converted method. To the extent charges, particularly tax related charges, are incurred by Sunlight Financial Holdings Inc., the effect may be anti-dilutive.
b.Sunlight uses the treasury stock method to determine the dilutive effect, if any, of warrants exercisable in Sunlight’s Class A Shares. Such warrants were out-of-the-money during the Successor period.
Potential common shares excluded from diluted loss per common share The following table summarizes the weighted-average potential common shares excluded from diluted loss per common share as their effect would be anti-dilutive:
Successor
Common Shares From For the Period July 10, 2021 to September 30, 2021
Warrants(a)
27,150,000 
Other warrants 627,780 
Unvested Class EX Units 1,340,825 
RSUs(b)
1,849,355 
30,967,960 
a.Includes Public Warrants and Private Placement Warrants.
b.Includes RSUs awards to directors and employees.