Quarterly report pursuant to Section 13 or 15(d)

Equity and Earnings per Share (Tables)

v3.23.1
Equity and Earnings per Share (Tables)
 3 Months Ended
Mar. 31, 2023
Equity [Abstract]  
Summary of Warrants At March 31, 2023, 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 
Summary of Noncontrolling Interest
The Sunlight Financial LLC portion of noncontrolling interests is computed as follows:
For the Three Months Ended March 31,
2023 2022
Sunlight Financial LLC net income (loss) before income taxes $ (34,512) $ (24,617)
Sunlight Financial LLC as a percent of total(a)
34.6  % 35.1  %
Sunlight Financial LLC net income (loss) attributable to the Class EX unitholders $ (11,862) $ (8,632)
a.Represents the weighted average percentage of total Sunlight shareholders' net income (loss) in Sunlight Financial LLC attributable to the Class EX unitholders.
Summary of Changes in Ownership Interest
The following discloses the effects of changes in Sunlight's ownership interest in Sunlight Financial LLC on Sunlight's equity:
For the Three Months Ended March 31,
2023 2022
Transfers (to) from noncontrolling interests:
Decrease in Sunlight's shareholders' equity for the delivery of Class EX Units $ (7,488) $ (394)
Increase in Sunlight's shareholders' equity for the exchange of Class EX Units for Class A Shares 6,622  — 
Dilution impact of equity transactions (866) (394)
Net income (loss) attributable to Class A shareholders (22,947) (13,974)
Change from transfers (to) from noncontrolling interests and from net income (loss) attributable to Class A shareholders $ (23,813) $ (14,368)
Summary of Equity Based Compensation - Granted
Sunlight has granted the following outstanding awards (“Compensation Awards”) to certain employees and members of Sunlight’s Board at March 31, 2023:

Service (in Years)(b)
Award Class(a)
Minimum Maximum
Awards(c)
Provisionally-Vested Class A Shares 1.9 3.6 112,360 
Provisionally-Vested Class EX Units 1.9 1.9 52,114 
Director RSUs 1.0 1.0 171,624 
Employee RSUs 3.0 4.0 4,188,747 
4,524,845 
a.All awards subject solely to time-based vesting.
b.At time of grant.
c.Net of fully vested and forfeited awards.
Summary of Activities Related to Equity-Based Compensation Activities related to Sunlight’s equity-based compensation were as follows:
Provisionally-Vested RSUs
Class A Shares Class EX Units Directors Employees
Per Share Shares Per Unit Units Per Unit Units Per Unit Units
December 31, 2021 $ 9.46  337,193  $ 9.46  974,447  $ 9.46  75,000  $ 8.97  2,136,129 
Issued —  —  5.04  70,991  —  —  —  — 
Vested 9.46  (38,547) 9.46  (171,959) —  —  —  — 
Forfeited or Cancelled 9.46  (30,915) 9.46  (162,929) —  —  9.22  (343,261)
March 31, 2022 9.46  267,731  9.02  710,550  9.46  75,000  8.92  1,792,868 
December 31, 2022 $ 9.46  145,970  $ 9.46  189,158  $ 4.37  171,624  $ 3.97  5,703,195 
Vested 9.46  (33,610) 9.46  (137,044) —  —  1.55  (1,058,653)
Forfeited or Cancelled —  —  —  —  —  —  3.82  (455,795)
March 31, 2023 9.46  112,360  9.46  52,114  4.37  171,624  4.38  4,188,747 
Summary of Unrecognized Compensation Expense At March 31, 2023, 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 Awards Amount
Provisionally-Vested Class A Shares 0.7 years 112,360  $ 1,063 
Provisionally-Vested Class EX Units 0.1 years 52,114  493 
Director RSUs 0.1 years 171,624  126 
Employee RSUs 1.3 years 4,188,747  11,909 
4,524,845  $ 13,591 
Summary of Earnings Per Share Calculations
The following table summarizes the basic and diluted earnings per share calculations:
For the Three Months Ended March 31,
2023 2022
Net Income (Loss) Per Class A Shareholders, Basic
Net income (loss) available to Class A shareholders $ (22,837) $ (13,756)
Total weighted average shares outstanding 85,123,344 84,798,918
Net Income (Loss) Per Class A Shareholders, Basic $ (0.27) $ (0.16)
Net Income (Loss) Per Class A Shareholders, Diluted
Net income (loss) available to Class A shareholders $ (22,837) $ (13,756)
Total weighted average shares outstanding 85,123,344 84,798,918
Net Income (Loss) Per Class A Shareholders, Diluted $ (0.27) $ (0.16)
Net income (loss) available to Class A shareholders
Net Loss $ (34,809) $ (22,606)
Noncontrolling interests in loss of consolidated subsidiaries 11,862  8,632 
Other weighting adjustments 110  218 
Net Income (Loss) Attributable to Class A Shareholders (22,837) $ (13,756)
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)
—  — 
Net income (loss) available to Class A shareholders, diluted $ (22,837) $ (13,756)
Weighted Average Units Outstanding
Class A shares outstanding 85,123,344 84,798,918
Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares(a)
— —
Incremental Class A Shares attributable to dilutive effect of warrants(b)
— —
Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments)(c)
— —
Total weighted average shares outstanding, diluted 85,123,344 84,798,918
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 three months ended March 31, 2023 and 2022, respectively.
c.Restricted Class A share units granted to directors and employees are eligible to receive dividend or dividend equivalent payments when dividends are declared and paid on Sunlight’s Class A Shares and therefore participate fully in the results of Sunlight’s operations from the date they are granted.
Summary of Potential Common Shares Excluded From Diluted Loss Per Common Share
The following table summarizes the weighted-average potential common shares excluded from diluted income (loss) per common share as their effect would be anti-dilutive:
For the Three Months Ended March 31,
Common Shares From 2023 2022
Class EX Units 44,657,275  46,628,474 
Warrants(a)
27,150,000  27,150,000 
Other warrants 627,780  627,780 
Unvested Class EX Units 315,952  966,981 
RSUs(b)
5,212,382  1,904,217 
ESPP(c)
—  4,355 
77,963,389  77,281,807 
a.Includes Public Warrants and Private Placement Warrants.
b.Includes RSUs awards to directors and employees.
c.Class A Shares deliverable to employees in satisfaction of subscriptions under Sunlight’s ESPP.