Quarterly report pursuant to Section 13 or 15(d)

Equity and Earnings per Share (Tables)

v3.23.2
Equity and Earnings per Share (Tables)
 6 Months Ended
Jun. 30, 2023
Equity [Abstract]  
Summary of Warrants At June 30, 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 
Bank Partner Warrants(a)
Apr-23 0.01  25,944,541 
Other Feb-21 7.72  627,780 
a.Includes 15,258,098 shares immediately-exercisable and 10,686,443 shares contingently-exercisable at June 30, 2023.
Summary of Share Repurchase Program Sunlight repurchased the following Class A common shares:
For the Three Months Ended June 30, For the Six Months Ended June 30,
2023 2022 2023 2022
Amount paid $ —  $ 2,004  $ —  $ 2,004 
Common Class A shares repurchased —  445,232  —  445,232 
Price paid per common Class A share n.a. $ 4.50  n.a. $ 4.50 
Summary of Noncontrolling Interest
The Sunlight Financial LLC portion of noncontrolling interests is computed as follows:
For the Three Months Ended June 30, For the Six Months Ended June 30,
2023 2022 2023 2022
Sunlight Financial LLC net income (loss) before income taxes $ (82,800) $ 4,359  $ (117,312) $ (20,258)
Sunlight Financial LLC as a percent of total(a)
34.4  % 35.2  % 34.5  % 35.1  %
Sunlight Financial LLC net income (loss) attributable to the Class EX unitholders $ (28,487) $ 1,543  $ (40,349) $ (7,089)
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 June 30, For the Six Months Ended June 30,
2023 2022 2023 2022
Transfers (to) from noncontrolling interests:
Increase (Decrease) in Sunlight's shareholders' equity for the delivery of Class EX Units $ 1,222  $ (1,114) $ (6,266) $ (1,508)
Increase in Sunlight's shareholders' equity for the exchange of Class EX Units for Class A Shares —  —  6,622  — 
Dilution impact of equity transactions 1,222  (1,114) 356  (1,508)
Net income (loss) attributable to Class A shareholders (54,657) 4,116  (77,604) (9,858)
Change from transfers (to) from noncontrolling interests and from net income (loss) attributable to Class A shareholders $ (53,435) $ 3,002  $ (77,248) $ (11,366)
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 June 30, 2023:

Service (in Years)(b)
Award Class(a)
Minimum Maximum
Awards(c)
Provisionally-Vested Class A Shares 1.9 3.6 78,188 
Employee RSUs 3.0 4.0 4,059,259 
4,137,447 
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(a)
Per Share Shares Per Unit Units Per Unit Units Per Unit Units
December 31, 2022 $ 9.46  145,970  $ 9.46  189,158  $ 4.37  171,624  $ 3.97  5,703,195 
Issued —  —  —  —  —  —  —  — 
Vested 9.46  (63,221) 9.46  (189,158) 4.37  (171,624) 1.55  (1,058,653)
Forfeited or Cancelled 9.46  (4,561) —  —  —  —  3.82  (585,283)
June 30, 2023 9.46  78,188  —  —  —  —  4.38  4,059,259 
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  4.37  200,228  4.17  880,410 
Vested 9.46  (74,998) 9.46  (345,833) —  —  —  — 
Forfeited or Cancelled 9.46  (30,915) 9.46  (162,929) —  —  7.54  (420,937)
June 30, 2022 9.46  231,280  9.02  536,676  5.76  275,228  7.56  2,595,602 
a.During the six months ended June 30, 2022, Sunlight also granted $11.5 million of RSU awards classified as liabilities, of which $0.6 million was forfeited and $3.7 million was reclassified as equity.
Summary of Unrecognized Compensation Expense At June 30, 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 0.6 years 78,188  $ 740 
Employee RSUs 1.1 years 4,059,259  9,897 
4,137,447  $ 10,637 
Summary of Earnings Per Share Calculations
The following table summarizes the basic and diluted earnings per share calculations:
For the Three Months Ended June 30, For the Six Months Ended June 30,
2023 2022 2023 2022
Net Income (Loss) Per Class A Shareholders, Basic
Net income (loss) available to Class A shareholders $ (54,547) $ 4,232  $ (77,358) $ (9,483)
Total weighted average shares outstanding 95,751,483 84,635,413 90,367,223 84,717,117
Net Income (Loss) Per Class A Shareholders, Basic $ (0.57) $ 0.05  $ (0.86) $ (0.11)
Net Income (Loss) Per Class A Shareholders, Diluted
Net income (loss) available to Class A shareholders $ (83,034) $ 4,232  $ (117,707) $ (14,769)
Total weighted average shares outstanding 140,724,710 84,668,201 135,340,450 131,433,095
Net Income (Loss) Per Class A Shareholders, Diluted $ (0.59) $ 0.05  $ (0.87) $ (0.11)
Net income (loss) available to Class A shareholders
Net Income (Loss) $ (83,144) $ 5,659  $ (117,953) $ (16,947)
Noncontrolling interests in (income) loss of consolidated subsidiaries 28,487  (1,543) 40,349  7,089 
Other weighting adjustments 110  116  246  375 
Net Income (Loss) Attributable to Class A Shareholders (54,547) 4,232  (77,358) $ (9,483)
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)
(28,487) —  (40,349) (5,286)
Net income (loss) available to Class A shareholders, diluted $ (83,034) $ 4,232  $ (117,707) $ (14,769)
Weighted Average Units Outstanding
Class A shares outstanding 85,437,312 84,635,413 85,210,138 84,717,117
Fully vested affiliate warrants 10,314,171 — 5,157,085 —
Total weighted average shares outstanding, basic 95,751,483 84,635,413 90,367,223 84,717,117
Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares(a)
44,973,227 — 44,973,227 46,715,978
Incremental Class A Shares attributable to dilutive effect of warrants(b)
— — — —
Immediately-exercisable Bank Partner warrants(c)
— — — —
Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments)(d)
— 32,788 — —
Total weighted average shares outstanding, diluted 140,724,710 84,668,201 135,340,450 131,433,095
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. Except for the Bank Partner Warrants, such warrants were out-of-the-money during the three and six months ended June 30, 2023 and 2022,
respectively. Sunlight excluded 139,811 and 47,504 treasury shares from the Bank Partner Warrants as they are anti-dilutive to Sunlight’s basic EPS.
c.Immediately-exercisable Bank Partner warrants are eligible to receive dividends when dividends are declared and paid on Sunlight Class A shares and represent a participating security of Sunlight. They are included in the computation of both basic and diluted earnings per Class A share using the two-class method for participating securities, except during periods of net losses.
d.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 June 30, For the Six Months Ended June 30,
Common Shares From 2023 2022 2023 2022
Class EX Units —  46,802,203  —  — 
Warrants(a)
27,150,000  27,150,000  27,150,000  27,150,000 
Other warrants 627,780  627,780  627,780  627,780 
Unvested Bank Partner Warrants 8,711,826  —  4,355,913  — 
Unvested Class EX Units 181,397  793,252  248,170  879,477 
RSUs(b)
4,257,275  1,812,969  4,730,096  2,001,987 
ESPP(c)
—  24,908  —  29,027 
40,928,278  77,211,112  37,111,959  30,688,271 
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.