Cover
Cover | 12 Months Ended |
Dec. 31, 2021 | |
Cover [Abstract] | |
Document Type | POS AM |
Entity Registrant Name | Sunlight Financial Holdings Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001821850 |
Amendment Flag | true |
Amendment Description | This Post-Effective Amendment No. 2 (this “Post-Effective Amendment No. 2”) to the Registration Statement on Form S-1, as amended (File No. 333-258338) (the “Registration Statement”), as originally declared effective by the Securities and Exchange Commission (the “SEC”) on September 7, 2021, is being filed to include information contained in the registrant’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on March 29, 2022, and to update certain other information in the Registration Statement. No additional securities are being registered under this Post-Effective Amendment No. 2 and all applicable registration and filing fees were paid at the time of the original filing of the Registration Statement. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 91,882 | $ 49,583 |
Restricted cash | 2,018 | 3,122 |
Financing receivables, net of allowance for credit losses | 71,152 | 40,613 |
Goodwill | 445,756 | |
Intangible assets, net | 365,839 | 4,533 |
Property and equipment, net | 4,069 | 1,192 |
Other assets | 21,531 | 7,030 |
Total assets | 1,002,247 | 106,073 |
Liabilities | ||
Accounts payable and accrued expenses | 23,386 | 15,782 |
Funding commitments | 22,749 | 18,386 |
Debt | 20,613 | 14,625 |
Distributions payable | 0 | 7,522 |
Deferred tax liabilities | 36,686 | |
Warrants, at fair value | 19,007 | 5,643 |
Other liabilities | 843 | 1,502 |
Total liabilities | 123,284 | 63,460 |
Commitments and Contingencies (Note 10) | ||
Stockholders' Equity | ||
Other ownership interests' capital (Predecessor) | 1,439 | |
Additional paid-in capital | 764,366 | |
Accumulated deficit | (186,022) | (623,342) |
Total capital | 578,353 | (621,903) |
Treasury stock, at cost; 1,569,909 Class A shares as of December 31, 2021 | (15,535) | |
Total stockholders' equity | 562,818 | (621,903) |
Noncontrolling interests in consolidated subsidiaries | 316,145 | |
Total equity | 878,963 | (621,903) |
Total equity | (621,903) | |
Total liabilities, temporary equity, and stockholders' equity | 1,002,247 | 106,073 |
Advances (net of allowance for credit losses of $238 and $121) | ||
Assets | ||
Financing receivables, net of allowance for credit losses | 66,839 | 35,280 |
Financing receivables (net of allowance for credit losses of $148 and $125) | ||
Assets | ||
Financing receivables, net of allowance for credit losses | 4,313 | 5,333 |
Class A-3 Units | ||
Temporary Equity (Predecessor) | ||
Temporary equity | 260,428 | |
Class A-2 Units | ||
Temporary Equity (Predecessor) | ||
Temporary equity | 154,286 | |
Class A-1 Units | ||
Temporary Equity (Predecessor) | ||
Temporary equity | 202,045 | |
Common units | ||
Temporary Equity (Predecessor) | ||
Temporary equity | $ 47,757 | |
Class A common stock | ||
Stockholders' Equity | ||
Common stock | $ 9 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance for credit losses | $ 386 | $ 246 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | |
Preferred stock, authorized (in shares) | 35,000,000 | |
Preferred stock, issued (in shares) | 0 | |
Preferred stock, outstanding (in shares) | 0 | |
Class A-3 Units | ||
Temporary equity, authorized (in shares) | 376,395 | |
Temporary equity, issued (in shares) | 376,395 | |
Temporary equity, outstanding (in shares) | 376,395 | |
Class A-2 Units | ||
Temporary equity, authorized (in shares) | 225,972 | |
Temporary equity, issued (in shares) | 225,972 | |
Temporary equity, outstanding (in shares) | 225,972 | |
Class A-1 Units | ||
Temporary equity, authorized (in shares) | 296,302 | |
Temporary equity, issued (in shares) | 296,302 | |
Temporary equity, outstanding (in shares) | 296,302 | |
Common units | ||
Temporary equity, authorized (in shares) | 78,717 | |
Temporary equity, issued (in shares) | 78,717 | |
Temporary equity, outstanding (in shares) | 78,717 | |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, authorized (in shares) | 420,000,000 | |
Common stock, issued (in shares) | 86,373,596 | |
Common stock, outstanding (in shares) | 84,803,687 | 34,500,000 |
Treasury stock (in shares) | 1,569,909 | |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, authorized (in shares) | 20,000,000 | |
Common stock, issued (in shares) | 0 | |
Common stock, outstanding (in shares) | 0 | 8,625,000 |
Class C common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, authorized (in shares) | 65,000,000 | |
Common stock, issued (in shares) | 47,595,455 | 0 |
Common stock, outstanding (in shares) | 47,595,455 | |
Advances | ||
Allowance for credit losses | $ 238 | $ 121 |
Loans and Loan Participations | ||
Allowance for credit losses | $ 148 | $ 125 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue | $ 61,674,000 | $ 53,064,000 | $ 69,564,000 |
Costs and Expenses | |||
Cost of revenues (exclusive of items shown separately below) | 9,873,000 | 10,556,000 | 13,711,000 |
Compensation and benefits | 44,996,000 | 17,162,000 | 26,174,000 |
Selling, general, and administrative | 7,419,000 | 3,450,000 | 3,806,000 |
Property and technology | 3,088,000 | 2,790,000 | 4,304,000 |
Depreciation and amortization | 43,389,000 | 1,688,000 | 3,231,000 |
Provision for losses | 1,217,000 | 1,172,000 | 1,350,000 |
Goodwill impairment | 224,701,000 | ||
Management fees to affiliate | 204,000 | 400,000 | |
Costs and expenses | 334,683,000 | 37,022,000 | 52,976,000 |
Operating income (loss) | (273,009,000) | 16,042,000 | 16,588,000 |
Other Income (Expense), Net | |||
Interest income | 149,000 | 262,000 | 520,000 |
Interest expense | (554,000) | (604,000) | (829,000) |
Change in fair value of warrant liabilities | 22,583,000 | (5,504,000) | (5,510,000) |
Change in fair value of contract derivatives, net | 638,000 | (662,000) | 1,435,000 |
Realized gains on contract derivatives, net | 2,866,000 | 2,992,000 | 103,000 |
Other realized losses, net | (171,000) | ||
Other income (expense) | (181,000) | 616,000 | (634,000) |
Business combination expenses | (3,080,000) | (7,011,000) | (878,000) |
Other income (expense), net | 22,421,000 | (9,911,000) | (5,964,000) |
Net Income (Loss) Before Income Taxes | (250,588,000) | 6,131,000 | 10,624,000 |
Income tax benefit (expense) | 3,504,000 | ||
Net Income (Loss) | (247,084,000) | 6,131,000 | 10,624,000 |
Noncontrolling interests in loss of consolidated subsidiaries | 87,528,000 | ||
Net Income (Loss) Attributable to Class A Shareholders | $ (159,556,000) | $ 6,131,000 | $ 10,624,000 |
Net loss per Class A share | |||
Basic (in dollars per share) | $ (1.87) | ||
Diluted (in dollars per share) | $ (1.87) | ||
Weighted average number of Class A shares outstanding | |||
Basic (in shares) | 84,824,109 | ||
Diluted (in shares) | 84,824,109 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common StockClass A common stock | Common StockClass C common stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Treasury Stock | Total Stockholders' Equity | Noncontrolling Interests | Member Units | Class A common stock | Class B common stock | Class C common stock | Class A-3 Units | Class A-2 Units | Class A-1 Units | Common units | Total |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Equity-based compensation | $ 126 | $ 126 | ||||||||||||||
Net income (loss) | 10,624 | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 34,500,000 | 8,625,000 | ||||||||||||||
Ending balance at Dec. 31, 2020 | (621,903) | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 326,428 | 195,973 | 256,966 | 78,717 | ||||||||||||
Beginning balance at Dec. 31, 2019 | $ 76,519 | $ 21,867 | $ 27,042 | $ 3,362 | ||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||
Preferred distributions, paid in-kind (in shares) | 49,967 | 29,999 | 39,336 | |||||||||||||
Preferred distributions, paid in-kind | $ 16,810 | $ 7,350 | $ 9,490 | |||||||||||||
Change in temporary equity redemption value | $ 167,099 | $ 125,069 | $ 165,513 | $ 44,395 | 502,076 | |||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 376,395 | 225,972 | 296,302 | 78,717 | ||||||||||||
Ending balance at Dec. 31, 2020 | $ 260,428 | $ 154,286 | $ 202,045 | $ 47,757 | ||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 43,765 | |||||||||||||||
Beginning balance at Dec. 31, 2019 | $ (90,718) | $ 1,313 | (89,405) | |||||||||||||
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||||||||||
Preferred distributions, paid in-kind | (33,650) | (33,650) | ||||||||||||||
Change in temporary equity redemption value | (502,076) | (502,076) | ||||||||||||||
Distributions | 7,522 | 7,522 | ||||||||||||||
Equity-based compensation (in shares) | 9,340 | |||||||||||||||
Equity-based compensation | $ 126 | 126 | ||||||||||||||
Net Income (Loss) | 10,624 | 10,624 | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 53,105 | |||||||||||||||
Ending balance at Dec. 31, 2020 | (623,342) | $ 1,439 | (621,903) | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Equity-based compensation | $ 18 | 18 | ||||||||||||||
Net income (loss) | 6,131 | |||||||||||||||
Ending balance (in shares) at Jul. 09, 2021 | 86,373,596 | 47,595,455 | ||||||||||||||
Ending balance at Jul. 09, 2021 | $ 9 | $ 720,840 | (26,466) | $ 694,383 | $ 427,010 | 1,121,393 | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||
Preferred distributions, paid in-kind (in shares) | 28,995 | 17,407 | 22,824 | |||||||||||||
Preferred distributions, paid in-kind | $ 24,061 | $ 14,994 | $ 19,654 | |||||||||||||
Change in temporary equity redemption value | $ 59,335 | $ 48,989 | $ 64,502 | $ 22,839 | 195,665 | |||||||||||
Ending balance (in shares) at Jul. 09, 2021 | 405,390 | 243,379 | 319,126 | 78,717 | ||||||||||||
Ending balance at Jul. 09, 2021 | $ 343,824 | $ 218,269 | $ 286,201 | $ 70,596 | ||||||||||||
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||||||||||
Preferred distributions, paid in-kind | (58,709) | (58,709) | ||||||||||||||
Change in temporary equity redemption value | (195,665) | (195,665) | ||||||||||||||
Equity-based compensation (in shares) | 3,356 | |||||||||||||||
Equity-based compensation | $ 18 | 18 | ||||||||||||||
Net Income (Loss) | 6,131 | 6,131 | ||||||||||||||
Ending balance (in shares) at Jul. 09, 2021 | 56,461 | |||||||||||||||
Ending balance at Jul. 09, 2021 | (871,585) | $ 1,457 | (870,128) | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Equity-based compensation | 13,147 | 13,147 | 7,042 | 20,189 | ||||||||||||
Shares withheld related to net share settlement of equity awards | $ (15,535) | (15,535) | (15,535) | |||||||||||||
Dilution | 30,379 | 30,379 | (30,379) | |||||||||||||
Net income (loss) | (159,556) | (159,556) | (87,528) | (247,084) | ||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 86,373,596 | 47,595,455 | 84,803,687 | 0 | 47,595,455 | |||||||||||
Ending balance at Dec. 31, 2021 | $ 9 | 764,366 | $ (186,022) | $ (15,535) | 562,818 | 316,145 | 878,963 | |||||||||
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||||||||||
Equity-based compensation | $ 13,147 | $ 13,147 | $ 7,042 | 20,189 | ||||||||||||
Net Income (Loss) | $ (159,556) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Cash Flows From Operating Activities | |||
Net income (loss) | $ (247,084) | $ 6,131 | $ 10,624 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Depreciation and amortization | 43,389 | 1,782 | 3,338 |
Goodwill impairment | 224,701 | ||
Provision for losses | 1,217 | 1,172 | 1,350 |
Change in fair value of warrant liabilities | (22,583) | 5,504 | 5,510 |
Change in fair value of contract derivatives, net | (638) | 662 | (1,435) |
Other expense (income) | 181 | (616) | 634 |
Share-based payment arrangements | 29,646 | 18 | 126 |
Deferred income tax expense (benefit) | (5,524) | ||
Increase (decrease) in operating capital: | |||
Increase in advances | (24,219) | (7,314) | (17,877) |
Decrease (increase) in due from affiliates | 1,839 | (1,839) | |
Decrease (increase) in other assets | (16,367) | 2,129 | (3,000) |
Increase (decrease) in accounts payable and accrued expenses | (3,476) | 2,327 | 6,918 |
Increase (decrease) in funding commitments | 1,263 | 3,100 | (1,123) |
Increase (decrease) in due to affiliates | (761) | 761 | |
Increase (decrease) in other liabilities | (149) | 539 | (40) |
Net cash provided by (used in) operating activities | (18,565) | 14,356 | 5,025 |
Cash Flows From Investing Activities | |||
Return of investments in loan pool participation and loan principal repayments | 710 | 832 | 1,316 |
Payments to acquire loans and participations in loan pools | (716) | (1,170) | (2,839) |
Payments to acquire property and equipment | (3,436) | (1,066) | (3,280) |
Payments to acquire Sunlight Financial LLC, net of cash acquired | (304,570) | ||
Net cash used in investing activities | (308,012) | (1,404) | (4,803) |
Cash Flows From Financing Activities | |||
Proceeds from borrowings under line of credit | 20,746 | 8,713 | |
Repayments of borrowings under line of credit | (14,758) | (5,899) | |
Proceeds from issuance of private placement | 250,000 | ||
Payments of stock issuance costs | (19,618) | ||
Payments for share-based payment tax withholding | (26,424) | ||
Payment of capital distributions | (7,522) | (1,987) | |
Payment of debt issuance costs | (491) | ||
Net cash provided by (used in) financing activities | 203,958 | (2,025) | 827 |
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | (122,619) | 10,927 | 1,049 |
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period | 216,519 | 52,705 | 51,656 |
Cash, Cash Equivalents, and Restricted Cash, End of Period | 93,900 | 216,519 | 52,705 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the period for interest | 527 | 537 | 713 |
Noncash Investing and Financing Activities | |||
Distributions declared, but not paid | 7,522 | ||
Preferred dividends, paid in-kind | 58,709 | 33,650 | |
Change in temporary equity redemption value | 195,665 | $ 502,076 | |
Capital expenditures incurred but not yet paid | 1,156 | ||
Predecessor | |||
Cash Flows From Financing Activities | |||
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period | $ 63,632 | ||
Cash, Cash Equivalents, and Restricted Cash, End of Period | $ 63,632 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Note 1. Organization and Business Sunlight Financial Holdings Inc. (together with its consolidated subsidiaries, the “Company” or “Sunlight”) is a premier, technology-enabled point-of-sale finance company. Sunlight Financial LLC, its accounting predecessor and wholly-owned subsidiary, was organized as a Delaware limited liability company on January 23, 2014. On July 9, 2021 (the “Closing Date”), the Company consummated the transactions contemplated by that certain Business Combination Agreement (the “Business Combination Agreement”), dated as of January 23, 2021, by and among Spartan Acquisition Corp. II, a Delaware corporation incorporated on August 17, 2020 as a publicly-traded special purpose acquisition company sponsored by funds managed by an affiliate of Apollo Global Management, Inc. (the “Sponsor”) and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Spartan”), Sunlight Financial LLC and the Spartan Subsidiaries, FTV Blocker and Tiger Blocker (each as defined in the Business Combination Agreement). On the Closing Date, Spartan changed its name to “Sunlight Financial Holdings Inc.” and Sunlight Financial LLC became the operating subsidiary of Sunlight Financial Holdings Inc., organized in an “Up-C” structure (the “Business Combination”). As a result of the Business Combination, the Company’s trading symbol on the New York Stock Exchange (the “NYSE”) was changed from “SPRQ” to “SUNL.” All activity for the period from August 17, 2020 (Spartan’s inception) to the Closing Date relates to the Company’s formation, initial public offering and private placement of equity (Note 6), and search for a prospective business combination. The Company did not generate any operating revenues until after completion of the Business Combination. Upon completion of the Business Combination, the Company assumed the operations of, and began to consolidate, Sunlight Financial LLC. Refer to “Note 2 — Basis of Presentation” regarding the presentation of the Company’s financial statements before and after the Business Combination. Business Direct Channel Loans Indirect Channel Loans — |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements and related notes, prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), include the accounts of Sunlight and its consolidated subsidiaries. In the opinion of management, all adjustments considered necessary for a fair presentation of Sunlight’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. All intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period’s presentation. Emerging Growth Company Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Consolidation The analysis as to whether to consolidate an entity is subject to a significant amount of judgment. Some of the criteria considered are the determination as to the degree of control over an entity by its various equity holders, the design of the entity, how closely related the entity is to each of its equity holders, the relation of the equity holders to each other and a determination of the primary beneficiary in entities in which Sunlight has a variable interest. These analyses involve estimates, based on the assumptions of management, as well as judgments regarding significance and the design of entities. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated by its primary beneficiary, and only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Sunlight monitors investments in VIEs and analyzes the potential need to consolidate the related entities pursuant to the VIE consolidation requirements. These analyses require considerable judgment in determining whether an entity is a VIE and determining the primary beneficiary of a VIE since they involve subjective determinations of significance, with respect to both power and economics. The result could be the consolidation of an entity that otherwise would not have been consolidated or the deconsolidation of an entity that otherwise would have been consolidated. As a result of the Business Combination, a wholly-owned subsidiary of Sunlight Financial Holdings Inc. is the managing member of Sunlight Financial LLC, in which existing unitholders hold a 35.0% noncontrolling interest at December 31, 2021, net of unvested Class EX Units (Note 6). Through its indirect managing member interest, Sunlight Financial Holdings Inc. directs substantially all of the day-to-day activities of Sunlight Financial LLC. The third-party investors in Sunlight Financial LLC do not possess substantive participating rights or the power to direct the day-to-day activities that most directly affect the operations of Sunlight Financial LLC. However, these third-party investors hold both voting, noneconomic Class C shares in Sunlight Financial Holdings Inc. on a one-for-one basis along with nonvoting, economic Class EX Units issued by Sunlight Financial LLC. No single third-party investor, or group of third-party investors, possesses the substantive ability to remove the managing member of Sunlight Financial LLC. Sunlight considers Sunlight Financial LLC a VIE for consolidation purposes and its managing members holds the controlling interest and is the primary beneficiary. Therefore, Sunlight consolidates Sunlight Financial LLC and reflects Class EX unitholder interests in Sunlight Financial LLC held by third parties as noncontrolling interests. Sunlight conducts substantially all operations through Sunlight Financial LLC and its consolidated subsidiary. Segments Risks and Uncertainties Use of Estimates Fair Value Level Measurement 1 Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. 2 Inputs are other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. 3 Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Sunlight follows this hierarchy for its financial instruments, with classifications based on the lowest level of input that is significant to the fair value measurement. The following summarizes Sunlight’s financial instruments hierarchy at December 31, 2021: Level Financial Instrument Measurement 1 Cash and cash equivalents and restricted cash Estimates of fair value are measured using observable, quoted market prices, or Level 1 inputs Public Warrants Estimates of fair value are measured using observable, quoted market prices of Sunlight’s warrants. 3 Loans and loan participations, held-for-investment Estimated fair value is generally determined by discounting the expected future cash flows using inputs such as discount rates. Contract derivative Estimated fair value based upon discounted expected future cash flows arising from the contract. Private Placement Warrants Estimated fair value based upon quarterly valuation estimates of warrant instruments, based upon quoted prices of Sunlight’s Class A shares and warrants thereon as well as fair value inputs provided by an independent valuation firm. Valuation Process may incorporate assumptions that are management’s best estimates after consideration of a variety of internal and external factors. When an independent valuation firm expresses an opinion on the fair value of a financial instrument in the form of a range, management selects a value within the range provided by the independent valuation firm to assess the reasonableness of management’s estimated fair value for that financial instrument. At December 31, 2021, Sunlight’s valuation process for Level 3 measurements, as described below, were conducted internally or by an independent valuation firm and reviewed by management. Valuation of Loans and Loan Participations Valuation of Contract Derivative Valuation of Warrants Other Valuation Matters See Note 7 for additional information regarding the valuation of Sunlight’s financial assets and liabilities. Sales of Financial Assets and Financing Agreements Balance Sheet Measurement Cash and Cash Equivalents and Restricted Cash Successor Predecessor December 31, December 31, 2021 2020 Cash and cash equivalents $ 91,882 $ 49,583 Restricted cash and cash equivalents 2,018 3,122 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows $ 93,900 $ 52,705 Financing Receivables Advances Loans and Loan Participations Impairment The evaluation of these indicators of impairment requires significant judgment by management to determine whether failure to collect contractual amounts is probable as well as in estimating the resulting loss allowance. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions. These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change. Actual losses, if any, could materially differ from these estimates. If management deems that it is probable that Sunlight will be unable to collect all amounts owed according to the contractual terms of a receivable, impairment of that receivable is indicated. Consistent with this definition, all receivables for which the accrual of interest has been discontinued (nonaccrual loans) are considered impaired. If management considers a receivable to be impaired, management establishes an allowance for losses through a valuation provision in earnings, which reduces the carrying value of the receivable to (a) the amounts management expect to collect, for receivables due within 90 days, or (b) the present value of expected future cash flows discounted at the receivable’s contractual effective rate. Impaired financing receivables are charged off against the allowance for losses when a financing receivable is more than 120 days past due or when management believes that collectability of the principal is remote, if earlier. Sunlight credits subsequent recoveries, if any, to the allowance when received. At December 31, 2021 and December 31, 2020, Sunlight evaluated financing receivables collectively, based upon those financing receivables with similar characteristics. Sunlight individually evaluates nonaccrual loans with contractual balances of $50,000 or more and receivables whose terms have been modified in a troubled debt restructuring with contractual balances of $50,000 or more to establish specific allowances for such receivables, if required. Those financing receivables where impairment is indicated were evaluated individually for impairment, though such amounts were not material. Advances 1 Low The counterparty has demonstrated low risk characteristics. The counterparty is a well-established company within the applicable industry, with low commercial credit risk, excellent reputational risk (e.g. online ratings, low complaint levels), and an excellent financial risk assessment. 2 Low-to- The counterparty has demonstrated low to medium risk characteristics. The counterparty is a well-established company within the applicable industry, with low to medium commercial credit risk, excellent to above average reputational risk (e.g. online ratings, lower complaint levels), and/or an excellent to above average financial risk assessment. 3 Medium The counterparty has demonstrated medium risk characteristics. The counterparty may be a less established company within the applicable industry than risk tier “1” or “2”, with medium commercial credit risk, excellent to average reputational risk (e.g., online ratings, average complaint levels), and/or an excellent to average financial risk assessment. 4 Medium- The counterparty has demonstrated medium to high risk characteristics. The counterparty is likely to be a less established company within the applicable industry than risk tiers “1” through “3,” with medium to high commercial credit risk, excellent to below average reputational risk (e.g. online ratings, higher complaint levels), and/or an excellent to below average financial risk assessment. 5 Higher The counterparty has demonstrated higher risk characteristics. The counterparty is a less established company within the applicable industry, with higher commercial credit risk, and/or below average reputational risk (e.g. online ratings, higher complaint levels), and/or below average financial risk assessment. Tier “5” advance approvals will be approved on an exception basis. Loans and Loan Participations, Held-For-Investment Goodwill July 9, 2021 (Successor) Goodwill $ 670,014 Accumulated impairment losses — 670,014 Impairment losses (224,701) Other (a) 443 December 31, 2021 (Successor) Goodwill 670,457 Accumulated impairment losses (224,701) $ 445,756 (a) Reflects purchase price adjustments related to deferred tax liabilities created at the Closing Date of the Business Combination. Intangible Assets, Net Estimated Useful Life Carrying Value (in Years) Successor Predecessor December 31, December 31, Asset Successor Predecessor 2021 2020 Contractor relationships (a) 11.5 n.a. $ 350,000 $ — Capital provider relationships (b) 0.8 n.a. 43,000 — Trademarks/ trade names (c) 10.0 n.a. 7,900 — Developed technology (d) 3.0 — 5.0 1.0 — 3.0 8,193 11,775 409,093 11,775 Accumulated amortization (e)(f)(g) (43,254) (7,242) $ 365,839 $ 4,533 (a) Represents the value of existing contractor relationships of Sunlight estimated using a multi-period excess earnings methodology. (b) Represents the value of existing relationships with the banks that may be estimated by applying a with-and-without methodology. (c) Represents the trade names that Sunlight originated or acquired and valued using a relief-from-royalty method. (d) Represents technology developed by Sunlight for the purpose of generating income for Sunlight, and valued using a replacement cost method. (e) Amounts include $ 8.2 million and $ 11.8 million of capitalized internally developed software costs at December 31, 2021 and December 31, 2020, respectively. (f) Includes amortization expense of $ 43.3 million for the period July 10, 2021 through December 31, 2021, $ 1.4 million, for the period January 1, 2021 through July 9, 2021, and $ 2.9 million for the year ended December 31, 2020, respectively. (g) At December 31, 2021, the approximate aggregate annual amortization expense for definite-lived intangible assets, including capitalized internally developed software costs as a component of capitalized developed technology are as follows: Developed Other Identified Technology Intangible Assets Total 2022 $ 1,838 $ 46,648 $ 48,486 2023 1,838 31,199 33,037 2024 1,739 31,285 33,024 2025 1,340 31,199 32,539 2026 694 31,199 31,893 Thereafter — 186,860 186,860 $ 7,449 $ 358,390 $ 365,839 Property and Equipment, Net Estimated Useful Life Carrying Value (in Years) Successor Predecessor December 31, December 31, Asset Category Successor Predecessor 2021 2020 Furniture, fixtures, and equipment 5 7 $ 1,020 $ 555 Computer hardware 5 5 1,108 868 Computer software 1—3 1—3 250 197 Leasehold improvements Shorter of life of improvement or lease term 2,829 421 5,207 2,041 Accumulated amortization and depreciation (a) (1,138) (849) $ 4,069 $ 1,192 (a) Includes depreciation expense of $ 0.2 million for the period July 10, 2021 through December 31, 2021, $ 0.2 million, for the period January 1, 2021 through July 9, 2021, and $ 0.3 million for the year ended December 31, 2020, respectively. Funding Commitments Guarantees Warrants The Company classifies as assets or liabilities any equity-linked contracts that (1) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the Company’s control) or (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). For equity-linked contracts that are classified as liabilities, the Company records the fair value of the equity-linked contracts at each balance sheet date and records the change in the statements of operations as a gain (loss) from change in fair value of warrant liability. The Company’s public warrant liability is valued using observable market prices for those public warrants. The Company’s private placement warrants are valued using a binomial lattice pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes pricing model. The Company’s warrants issued to a capital provider are valued using a Black-Scholes pricing model based on observable market prices for public shares and warrants. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free rates. Distributions Payable Other Assets and Accounts Payable, Accrued Expenses, and Other Liabilities Noncontrolling Interests in Consolidated Subsidiaries Class EX Units issued by Sunlight Financial LLC are exchangeable into the Company’s Class A common stock. Class A common stock issued upon exchange of a holder’s noncontrolling interest is accounted for at the carrying value of the surrendered limited partnership interest and the difference between the carrying value and the fair value of the Class A common stock issued is recorded to additional paid-in-capital. Treasury Stock Income Recognition Revenue Recognition Successor Predecessor For the Period For the Period For the Year July 10, 2021 January 1, Ended to December 2021 to July 9, December 31, 31, 2021 2021 2020 Platform fees, net (a) $ 56,783 $ 50,757 $ 66,853 Other revenues (b) 4,891 2,307 2,711 $ 61,674 $ 53,064 $ 69,564 (a) Amounts presented net of variable consideration in the form of rebates to certain contractors. Includes platform fees from affiliates of $ 0.2 million and $ 0.3 million for the period January 1, 2021 through July 9, 2021, and the year ended December 31, 2020, respectively. (Note 9). (b) Includes loan portfolio management, administration, and other ancillary fees Sunlight earns that are incidental to its primary operations. Sunlight earned $ 0.1 million for the period July 10, 2021 through December 31, 2021, $ 0.1 million for the period January 1, 2021 through July 9, 2021, and $ 0.2 million for the year ended December 31, 2020, respectively, in administrative fees from an affiliate. (Note 9). Platform Fees, Net The contracts under which Sunlight (a) arranges Indirect Channel Loans for the purchase and installation of home improvements other than residential solar energy systems and (b) earns income from the prepayment of certain of those Indirect Channel Loans sold to an Indirect Channel Loan Purchaser are considered derivatives under GAAP. As such, Sunlight’s revenues exclude the platform fees that Sunlight earns in connection with these contracts. Instead, Sunlight records realized gains on the derivatives within “Realized Gains on Contract Derivative, Net” in the accompanying Consolidated Statements of Operations. Sunlight realized gains of $2.9 million and $3.0 million for the periods July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021 and $0.1 million for the year ended December 31, 2020, respectively, in connection with these contracts (Note 4). However, Sunlight recognized platform fee revenue of $0.2 million for its facilitation of direct channel home improvement loans. Other Revenues Interest Income Loans are considered past due or delinquent if the required principal and interest payments have not been received as of the date such payments are due. Generally, loans, including impaired loans, are placed on non-accrual status when (i) either principal or interest payments are 90 days or more past due based on contractual terms or (ii) an individual analysis of a borrower’s creditworthiness indicates a loan should be placed on non-accrual status. When a loan owned by Sunlight (each, a “Balance Sheet Loan”) is placed on non-accrual status, Sunlight ceases to recognize interest income on the loans and reverses previously accrued and unpaid interest, if any. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income may only be recorded on a cash basis after recovery of principal is reasonably assured. Sunlight may return a loan to accrual status when repayment of principal and interest is reasonably assured under the terms of the restructured loan. Advances are created at par and do not bear, and therefore do not accrue, interest income. Expense Recognition Cost of Revenues Sunlight Rewards™ Program Compensation and Benefits Equity-Based Compensation Predecessor ● Time-Based Service — Sunlight Financial LLC expensed awards that only requires time-based service conditions ratably over the required service period, or immediately if there was no required service period. ● PIK Vesting Requirement — Sunlight Financial LLC awarded equity-based compensation in the form of anti-dilution units. Such awards vested in an amount generally proportionate to the dilution of related Class C Units or LTIP Units that resulted from the issuance of additional Class A Units. Sunlight Financial LLC expensed awards in the period in which (a) dilution of related Class C Units or LTIP Units would otherwise occur and (b) the award had satisfied other vesting conditions. ● Performance-Based Conditions — Sunlight Financial LLC expensed awards in the period in which (a) it was probable that the performance-based condition was satisfied and (b) the award had satisfied other vesting conditions. For equity-based compensation awards in the form of Class C Units or long-term incentive plan units ( “ LTIP Units ” ) (Note 6), vesting would generally occur upon a qualifying sale of Sunlight ’ s equity. Generally, Sunlight Financial LLC only expensed those awards that only required time-based service conditions since other awards only satisfied vesting requirements upon closing of the Business Combination. Awards that represented services performed prior to the Business Combination reduced the purchase consideration in Sunlight’s calculation of goodwill. Awards that were still subject to time-based service conditions upon closing of the Business Combination and represented future service were replaced with awards of restricted Class A shares and restricted Class EX Units. Sunlight expensed the difference between the value of the existing awards and the replacement awards upon closing of the Business Combination. Sunlight expenses the value of the replacement awards over the remaining service period on a straight-line basis. Selling, General, and Administrative Property and Technology Income Taxes The Company accounts for uncertain tax positions by reporting a liability for unrecognizable tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. In accordance with the operating agreement of Sunlight Financial LLC, to the extent possible without impairing its ability to continue to conduct its business and activities, and in order to permit its member to pay taxes on the taxable income allocated to those members, Sunlight Financial LLC is required to make distributions to the member in the amount equal to the estimated tax liability of the member computed as if the member paid income tax at the highest marginal federal and state rate applicable to a corporate entity or individual resident in New York, New York to the extent Sunlight’s operations generate taxable income for the applicable member. Sunlight did not declare any distributions for the year ended December 31, 2021. During the year ended December 31, 2020, Sunlight Financial LLC declared $7.5 million in distributions to its unitholders. Business Combination The Business Combination among the parties to the Business Combination Agreement was completed on July 9, 2021. Sunlight accounted for the Business Combination as a business combination under ASC 805, Business Combinations ● Sunlight Financial Holdings Inc. is the sole managing member of Sunlight Financial LLC having full and complete authority over of all the affairs of Sunlight Financial LLC while the non-managing member equity holders do not have substantive participating or kick out rights; ● The predecessor controlling unitholders of Sunlight Financial LLC does not have a controlling interest in the Company as it held less than 50% of the voting interests after the Business Combination. These factors support the conclusion that Sunlight Financial Holdings Inc. acquired a controlling interest in Sunlight Financial LLC and is the accounting acquirer. Sunlight Financial Holdings Inc. is the primary beneficiary of Sunlight Financial LLC, which is a variable interest entity, since it has the power to direct the activities of Sunlight Financial LLC that most significantly impact Sunlight Financial LLC’s economic performance through its role as the managing member. Sunlight Financial Holdings Inc.’s variable interest in Sunlight Financial LLC includes ownership of Sunlight Financial LLC, which results in the right and obligation to receive benefits and absorb losses of Sunlight Financial LLC that could potentially be significant to Sunlight Financial Holdings Inc. Therefore, the Business Combination represented a change in control and is accounted for using the acquisition method. Under the acquisition method of accounting, the purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed from Sunlight Financial LLC based on their estimated acquisition-date fair values. The cash consideration in the Business Combination included cash from (a) a trust account held by Spartan in the amount of $345.0 million which Spartan received in its initial public offering of 34,500,000 shares of Class A common stock, less $192.3 million withdrawal of funds from that account to fund the redemption of 19,227,063 shares of Class A common stock at approximately $10.00 per share, and (b) $250.0 million in proceeds from the investors purchasing an aggregate of 25,000,000 Class A common stock in connection with the Business Combination (“PIPE Investment”). The Company received $55.1 million, which includes $5.6 million used to pay tax withholding related to cash compensation paid to the Company’s employees at the closing of the Business Combination. The following is an estimate of the fair value of consideration transferred and a preliminary purchase price allocation in connection with the Business Combination: Amount Purchase Consideration Equity consideration paid to existing Sunlight Financial LLC ownership in Class A Common Stock, net (a) $ 357,800 Rollover of Sunlight Financial LLC historical warrants 2,499 Cash consideration to existing Sunlight Financial LLC interests, net (b) 296,281 Cash paid for seller transaction costs 8,289 $ 664,869 Fair Value of Net Assets Acquired Cash and cash equivalents $ 59,786 Restricted cash 3,844 Advances 42,622 Financing receivables 5,117 Goodwill (c) 670,457 Intangible assets (d) 407,600 Property and equipment 1,047 Due from affiliates 1,839 Other assets 4,561 Accounts payable and accrued expenses (19,210) Funding commitments (21,485) Debt (20,613) Due to affiliates (761) Warrants, at fair value — Deferred tax liability (42,212) Other liabilities (512) Fair value of noncontrolling interests (e) (427,211) $ 664,869 (a) Equity consideration paid to Blocker Holders consisted of the following: Common Class A shares 38,151,192 Fair value per share $ 9.46 Equity consideration paid to existing Blocker Holders $ 360,910 Acceleration of post business combination expense (3,110) Equity consideration paid to Sellers, net $ 357,800 (b) Net of $ 0.0 million acceleration of post business combination expense. (c) Goodwill, as a component of the step-up in tax basis from the Business Combination, is tax deductible for the Company. (d) The fair value of the definite-lived intangible assets is as follows: Weighted Average Useful Lives (in Years) Fair Value Contractor relationships 11.5 $ 350,000 Capital provider relationships 0.8 43,000 Trademarks/ trade names 10.0 7,900 Developed technology 5.0 6,700 $ 407,600 (e) Noncontrolling interests represent the 34.9 % ownership in Sunlight Financial LLC not owned by the Sunlight Financial Holdings Inc. as of the Closing Date. The fair value of the noncontrolling interests follows: Common Class EX units 46,216,054 Fair value per unit $ 9.46 Fair value of Class EX units $ 437,204 Less: Postcombination compensation expenses (9,993) Noncontrolling interests $ 427,211 The preliminary allocation of the purchase price is based on preliminary valuations performed to determine the fair value of the net assets as of the Closing Date. This allocation is subject to revision as the assessment is based on preliminary information subject to refinement. The Company incurred $7.0 million of expenses directly related to the Business Combination from January 1, 2021 through July 9, 2021 which were included in acquisition-related expense in the Consolidated Statements of Operations. On the Closing Date, the Company paid $12.1 million of deferred underwriting costs related to Spartan’s initial public offering. At the closing of the Business Combination, $7.5 million of fees related to the PIPE Investment were paid by the Company. Additionally, Sunlight paid $7.9 million of acquisition-related advisory fees related to the Business Combination at the closing of the Business Combination, which success fees were contingent upon the consummation of the Business Combination and not recognized in the Consolidated Statements of Operations of the Predecessor or Successor. The nature of these fees relate to advisory and investment banker fees that were incurred dependent on the success of the Business Combination. The deferred underwriting commissions and costs pertaining to the cost of raising equity were treated as a reduction of equity while Business Combination costs were expensed in the period incurred. Unaudited Pro Forma Operating Results For the Year Ended December 31, 2021 2020 Total revenues $ 114,738 $ 69,564 Net income (loss) before income taxes (217,023) (99,905) Income tax benefit (expense) 3,038 15,138 Noncontrolling interests 75,646 34,824 Net income (loss) attributable to Common Class A shareholders (138,338) (49,944) Recent Accounting Pronouncements Issued, But Not Yet Adopted The Financial Accounting Standards Board (“FASB”) has issued the following Accounting Standard Updates (“ASUs”) that may materially impact Sunlight’s financial position and results of operations, or may impact the preparation of, but not materially affect, Sunlight’s consolidated financial statements. As an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended ( “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), Sunlight is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Unless otherwise stated, Sunlight elected to adopt recent accounting pronouncements using the extended transition period applicable to private companies. ASU No. 2020-06 Debt ASU No. 202 |
Financing Receivables
Financing Receivables | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Financing Receivables | Note 3. Financing Receivables Sunlight recognizes receivables primarily related to (a) advances that Sunlight remits to contractors to facilitate the installation of residential solar and home improvement equipment and (b) loans and loan participations. Loans and loan participations primarily include Sunlight’s undivided 5.0% participation in certain Indirect Channel Loans and Indirect Channel Loans purchased from its Bank Partner. The following tables summarize Sunlight’s financing receivables and changes thereto: Loans and Loan Advances (a) Participations (b) Total December 31, 2021 (Successor) Amounts outstanding $ 67,077 $ 4,875 $ 71,952 Unamortized discount — (414) (414) Allowance for credit losses (238) (148) (386) Carrying value $ 66,839 $ 4,313 $ 71,152 December 31, 2020 (Predecessor) Amounts outstanding $ 35,401 $ 6,351 $ 41,752 Unamortized discount — (893) (893) Allowance for credit losses (121) (125) (246) Carrying value $ 35,280 $ 5,333 $ 40,613 (a) Represents advance payments made by Sunlight to certain contractors, generally on a short-term basis, in anticipation of a project ’ s substantial completion, including a $ 9.0 million advance to a Sunlight contractor not associated with specific installation projects at December 31, 2021. (b) Represents (i) Sunlight ’ s 5.0 % participation interest in a pool of residential solar loans with an aggregate UPB of $ 4.6 million and $ 6.0 million at December 31, 2021 and December 31, 2020, respectively, and (ii) Indirect Channel Loans purchased by Sunlight with an aggregate UPB of $ 0.3 million and $ 0.4 million at December 31, 2021 and December 31, 2020, respectively. No loans or loan participations were individually evaluated for impairment at December 31, 2021 or December 31, 2020. Successor Predecessor For the Period For the Year July 10, 2021 For the Period Ended to December January 1, 2021 December 31, 31, 2021 to July 9, 2021 2020 Allowance for Credit Losses — Advances Beginning Balance $ — $ 121 $ 215 Provision for credit losses 358 90 (94) Realized losses (120) — — Ending Balance $ 238 $ 211 $ 121 Allowance for Credit Losses — Loans and Loan Participations Beginning Balance $ — $ 125 $ 96 Provision for credit losses 859 1,082 1,444 Realized losses (711) (1,096) (1,415) Ending Balance $ 148 $ 111 $ 125 Changes in Carrying Value — Loans and Loan Participations Beginning Balance $ 5,105 $ 5,333 $ 5,130 Purchases, net (a) 716 1,170 2,839 Proceeds from principal repayments, net (710) (832) (1,316) Accretion of loan discount 61 123 124 Provision for credit losses (859) (1,082) (1,444) Ending Balance $ 4,313 $ 4,712 $ 5,333 (a) During the year ended December 31, 2020, Sunlight purchased (i) 5.0 % participation interests in 1,007 loans with an aggregate UPB of $ 1.6 million as well as (ii) 49 Indirect Channel Loans with an aggregate UPB $ 1.2 million. During the periods July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, Sunlight purchased (i) 5.0 % participation interests in 0 and 54 loans with an aggregate UPB of $ 0.0 million and $ 0.1 million as well as (ii) 20 and 51 Indirect Channel Loans with an aggregate UPB of $ 0.4 million and $ 1.1 million, respectively. Advances Risk Ratings Total Amount % of Amount Risk Tier (a) Contractors Outstanding Outstanding December 31, 2021 (Successor) 1 Low risk 76 $ 14,575 21.7 % 2 Low-to-medium risk 77 38,955 58.1 3 Medium risk 17 13,547 20.2 4 Medium-to-high risk — — — 5 Higher risk — — — 170 $ 67,077 100.0 % December 31, 2020 (Predecessor) 1 Low risk 78 $ 18,072 51.0 % 2 Low-to-medium risk 56 16,700 47.2 3 Medium risk 4 604 1.7 4 Medium-to-high risk — — — 5 Higher risk 3 25 0.1 141 $ 35,401 100.0 % (a) At December 31, 2021 and December 31, 2020, the average risk rating of Sunlight ’ s advances was 2.0 ( “ low-to-medium risk ” ) and 1.5 ( “ low-to-medium risk ” ), weighted by total advance amounts outstanding. Delinquencies Amount % of Amount Payment Delinquency Outstanding (a) Outstanding December 31, 2021 (Successor) Current $ 54,586 94.0 % Less than 30 days 1,956 3.4 30 days 534 0.9 60 days 361 0.6 90+ days (b) 640 1.1 $ 58,077 100.0 % December 31, 2020 (Predecessor) Current $ 29,132 82.3 % Less than 30 days 3,137 8.9 30 days 1,424 4.0 60 days 672 1.9 90+ days (b) 1,036 2.9 $ 35,401 100.0 % (a) Excludes a $ 9.0 million advance to a Sunlight contractor not associated with specific installation projects and was not delinquent at December 31, 2021. (b) As further discussed in Note 2, Sunlight generally evaluates amounts delinquent for 90 days or more for impairment. Advances to contractors may remain outstanding as a result of operational and various other factors that are unrelated to the contractor ’ s creditworthiness. Sunlight assessed advances 90 days or more, along with other factors that included the contractor ’ s risk tier and historical loss experience, and established loss allowances of $ 0.2 million and $ 0.1 million at December 31, 2021 and December 31, 2020, respectively. Concentrations Successor Predecessor December 31, 2021 December 31, 2020 Amount Amount Contractor Outstanding % of Total Outstanding % of Total 1 $ 20,894 31.1 % $ 6,425 18.1 % 2 12,470 18.6 295 0.8 3 9,496 14.2 10,429 29.5 4 2,610 3.9 437 1.2 5 2,571 3.8 36 0.1 6 2,093 3.1 1,812 5.1 7 1,745 2.6 141 0.4 8 855 1.3 712 2.0 9 633 0.9 — — 10 570 0.8 — — Other (a) 13,140 19.7 15,114 42.8 $ 67,077 100.0 % $ 35,401 100.0 % (a) At December 31, 2021 and December 31, 2020, Sunlight recorded advances receivable from 160 and 131 counterparties not individually listed in the table above with average balances of $ 0.1 million and $ 0.1 million, respectively. At December 31, 2020, Sunlight recorded advances receivable from individual counterparties of $ 2.6 million, $ 0.6 million, $ 0.6 million, $ 0.5 million, and $ 0.5 million that represent the largest advance concentrations included in “ Other, ” based on the amount outstanding. Loans and Loan Participations Delinquencies Loan Participations Bank Partner Loans Total Payment Delinquency (a) Loans UPB Loans UPB Loans UPB % of UPB December 31, 2021 (Successor) Current 3,780 $ 4,442 14 $ 268 3,794 $ 4,710 96.6 % Less than 30 days 73 96 1 11 74 107 2.2 30 days 15 23 — — 15 23 0.5 60 days 10 14 — — 10 14 0.3 90+ days 7 9 1 12 8 21 0.4 3,885 $ 4,584 16 $ 291 3,901 $ 4,875 100.0 % December 31, 2020 (Predecessor) Current 4,409 $ 5,760 16 $ 319 4,425 $ 6,079 95.7 % Less than 30 days 116 174 — — 116 174 2.7 30 days 22 38 1 23 23 61 1.0 60 days 7 11 — — 7 11 0.2 90+ days 10 14 1 12 11 26 0.4 4,564 $ 5,997 18 $ 354 4,582 $ 6,351 100.0 % (a) As further described in Note 2, Sunlight places loans delinquent greater than 90 days on nonaccrual status. Such Loans had carrying values of $ 0.0 million and $ 0.0 million at December 31, 2021 and December 31, 2020, respectively. Sunlight does not consider the average carrying values and interest income recognized (including interest income recognized using a cash-basis method) material. Loan Collateral Concentrations Successor Predecessor December 31, 2021 December 31, 2020 State UPB % of Total UPB % of Total Texas $ 930 19.1 % $ 1,203 18.9 % California 867 17.8 1,111 17.5 Florida 423 8.7 555 8.7 New York 325 6.7 403 6.3 New Jersey 302 6.2 376 5.9 Arizona 220 4.5 312 4.9 Pennsylvania 202 4.1 274 4.3 Massachusetts 201 4.1 223 3.5 South Carolina 178 3.7 234 3.7 Missouri 135 2.8 228 3.6 Other (a) 1,092 22.3 1,432 22.7 $ 4,875 100.0 % $ 6,351 100.0 % (a) Sunlight only participates in residential solar loans originated within the United States, including 31 and 31 states not individually listed in the table above, none of which individually amount to more than 2.6 % and 2.7 % of the UPB at December 31, 2021 and December 31, 2020, respectively. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Note 4. Derivatives Sunlight has entered into two agreements considered derivatives under GAAP that are subject to interest rate, credit, and/ or prepayment risks. Interest rate risk is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, as well as other factors. Credit risk include a borrower’s inability or unwillingness to make contractually required payments. Prepayment risk includes a borrower’s payment, or lack of payment, of contractual Loan amounts prior to the date such amounts are contractually due. In January 2019, Sunlight entered into an agreement with its Bank Partner to arrange Indirect Channel Loans for the purchase and installation of home improvements other than residential solar energy systems. The agreement (a) entitles Sunlight to cash flows collected from the portfolio of Indirect Channel Loans held by its Bank Partner in excess of a contractual rate, based upon one-month LIBOR plus a fixed spread, and (b) requires Sunlight to pay its Bank Partner for portfolio cash flows below such contractual rate. This contractual arrangement incorporates interest rate and credit risks related to the risk of default on Indirect Channel Loans held by its Bank Partner that results from a borrower’s inability or unwillingness to make contractually required payments. In February 2021, Sunlight entered into an agreement with an Indirect Channel Loan Purchaser to purchase Indirect Channel Loans for the installation of home improvements other than residential solar energy systems. As part of that agreement, Sunlight is entitled to additional sale proceeds upon the prepayment of certain Indirect Channel Loans sold. This contractual arrangement incorporates prepayment risk related to loan prepayment rates below Sunlight’s expectations. Sunlight’s derivative asset is recorded at fair value in the accompanying Consolidated Balance Sheets as follows: Successor Predecessor December 31, December 31, Balance Sheet Location 2021 2020 Contract derivative 1 Other assets $ 1,076 $ 1,435 Contract derivative 2 Other assets 335 — $ 1,411 $ 1,435 The following table summarizes notional amounts related to derivatives: Successor Predecessor December 31, December 31, 2021 2020 Contract derivative 1 (a) $ 38,879 $ 59,770 Contract derivative 2 (b) 37,891 n.a. (a) Represents the carrying value of Indirect Channel Loans for the purchase and installation of home improvements other than residential solar energy systems held by Sunlight ’ s Bank Partner. (b) Represents the unpaid principal balance of the Loans at time of sale to the Indirect Channel Loan Purchaser for which Sunlight is entitled to income in the event of prepayment of the Indirect Channel Loan. The following table summarizes all income (loss) recorded in relation to derivatives: Successor Predecessor For the Period July 10, 2021 to For the Period For the Year December 31, January 1, 2021 to Ended December 2021 July 9, 2021 31, 2020 Change in fair value of contract derivatives, net Contract derivative 1 $ 573 $ (932) $ 1,435 Contract derivative 2 65 270 n.a. $ 638 $ (662) $ 1,435 Realized gains on contract derivatives, net Contract derivative 1 $ 2,789 $ 2,950 $ 103 Contract derivative 2 77 42 n.a. $ 2,866 $ 2,992 $ 103 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Note 5. Debt Obligations Debt consists of the following: Successor Predecessor December 31, December 31, 2021 2020 Weighted Outstanding Maximum Final Average Month Face Carrying Facility Stated Funding Life Carrying Issued Amount Value Size Maturity Cost (Years) Value (a) Revolving credit facility (a) Apr 2021 $ 20,613 $ 20,613 $ 30,000 Apr 2023 5.1 % 1.3 $ 14,625 (a) In March 2016, Sunlight entered into a Loan and Security Agreement with a lender ( “ Prior Lender ” ). In May 2019, Sunlight and Prior Lender amended and restated the agreement to provide Sunlight a $15.0 million revolving credit facility ( “ Prior Facility ” ). In April 2021, Sunlight paid the Prior Facility in full using proceeds from a Loan and Security Agreement into which Sunlight entered with a Lender and replaced the associated standby letter of credit. Borrowings under the current $30.0 million revolving credit facility, secured by the net assets of Sunlight, bear interest at a per annum rate equal to the sum of (i) a floating rate index and (ii) a fixed margin. The facility includes unused facility costs, and amounts borrowed under this facility are nonrecourse to Sunlight Financial Holdings Inc.. The carrying value at December 31, 2020 reflects Sunlight ’ s borrowings under the Prior Facility. Sunlight’s debt obligations are subject to customary loan covenants and event of default provisions, including event of default provisions triggered by a failure to maintain minimum liquidity and earnings as well as maintaining capacity to fund Loans. Activities Successor Predecessor For the Period For the Period For the Year July 10, 2021 January 1, Ended to December 2021 to July 9, December 31, 31, 2021 2021 2020 Beginning Balance $ 20,613 $ 14,625 $ 11,811 Borrowings — 20,746 8,713 Repayments — (14,758) (5,899) Amortization of deferred financing costs (a) — — — Ending Balance $ 20,613 $ 20,613 $ 14,625 (a) Excludes $0.0 million amortization of deferred financing costs included in “ Other Assets ” in the accompanying Consolidated Balance Sheets for the periods July 10, 2021 through December 31, 2021 as well as $0.0 million and $0.0 million amortization for the period January 1, 2021 through July 9, 2021 and the year ended December 31, 2020, respectively. Sunlight includes amortization of these costs within “ Depreciation and Amortization ” in the accompanying Consolidated Statements of Operations. Unamortized deferred financing costs upon closing of the Business Combination did not qualify as acquired assets; therefore, Sunlight did not have any such unamortized costs at December 31, 2021 and did not amortize any such costs for the period July 10, 2021 through December 31, 2021. Maturities |
Equity and Earnings per Share
Equity and Earnings per Share | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Equity and Earnings per Share | Note 6. Equity and Earnings per Share The registration statement for the Company’s initial public offering (“IPO”) was declared effective on November 24, 2020. On November 30, 2020, the Company consummated its IPO of 34,500,000 units (“IPO Units”), including the issuance of 4,500,000 units as a result of the underwriters’ exercise in full of its over-allotment option, at $10.00 per unit, generating gross proceeds of approximately $345.0 million, and incurring offering costs of approximately $19.7 million, inclusive of approximately $12.1 million in deferred underwriting commissions. Each IPO Unit consisted of one share of the Company’s Class A common stock and one-half of one warrant (“Public Warrant”). Simultaneously with the closing of the IPO, the Company consummated the private placement (the “Private Placement”) of 9,900,000 warrants (“Private Placement Warrant”), at a price of $1.00 per Private Placement Warrant to Sponsor, generating proceeds of $9.9 million. On July 9, 2021, in connection with the closing of the Business Combination, a number of investors (collectively, the “Subscribers”) purchased an aggregate of 25,000,000 shares of Class A common stock, par value $0.0001 per share (“Class A common stock” and such shares purchased by the Subscribers, the “PIPE Shares”), at a purchase price of $10.00 per share for an aggregate purchase price of $250.0 million in a private placement, pursuant to separate subscription agreements, dated as of January 23, 2021 (collectively, the “Subscription Agreements”). Pursuant to the Subscription Agreements, Sunlight gave certain registration rights to the Subscribers with respect to the PIPE Shares. Successor Equity Sunlight has three classes of common stock and no classes of preferred stock. Holders of each of the Class A, Class B, and Class C common stock vote together as a single class on all matters submitted to a vote of the stockholders, except as required by law. Each share of common stock has one vote on all such matters. Class A Common Stock Class B Common Stock In August 2020, 11,500,000 Founder Shares were issued to Sponsor in exchange for the payment of $25,000 of certain offering costs on behalf of the Company, or approximately $0.002 per share. In October 2020, the Sponsor transferred 50,000 Founder Shares to each of the two independent director nominees at their original purchase price. In November 2020, the Sponsor returned to the Company at no cost an aggregate of 4,312,500 Founder Shares, which the Company cancelled. Also in November 2020, the Company effected a stock dividend on the Class B common stock (which receipt of such dividends was waived by the independent director nominees), resulting in an aggregate of 8,625,000 shares of Class B common stock outstanding. At December 31, 2020, there were 8,625,000 shares of Class B common stock issued and outstanding. There were no shares of Class B common stock issued and outstanding at December 31, 2021. The Company cancelled 1,187,759 shares of Class B common stock upon Closing of the Business Combination in connection with the redemption of 19,227,063 shares of Class A common stock issued in the Initial Public Offering, and the remaining 7,437,241 shares of Class B common stock were automatically converted into Class A common stock at the Business Combination on a one-for-one basis. The holders of the Founders Shares agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (a) one year after the completion of the Business Combination, (b) the reported last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and similar activity) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (c) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Class C Common Stock Preferred Stock Warrants Date of Exercise Price Type Issuance 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 Refer to Notes 2 and 7 regarding the accounting treatment for warrants and the valuation thereof, respectively. Public Warrants Private Placement Warrants Other Warrants Company Redemption of Public Warrants and Private Placement Warrants Redemption of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $ 18.00 ● in whole and not in part; ● at a price of $ 0.01 per warrant; ● upon a minimum of 30 days ’ prior written notice of redemption, or the 30-day redemption period, to each warrant holder; and ● if, and only if, the reported last sale price of the Class A common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 - trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. The Company will not redeem the warrants as described above unless a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may fall below the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued. Redemption of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $ 10.00 ● in whole and not in part; ● at a price of $ 0.10 per warrant, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares of Class A common stock determined in part by the redemption date and the “ fair market value ” of the Class A common stock except as otherwise described below; ● upon a minimum of 30 days ’ prior written notice to each warrant holder; and ● if, and only if, the reported last sale price of the Class A common stock equals or exceeds $ 10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends notice of redemption to the warrant holders. The “fair market value” of the Class A common stock for the purpose of the redemption terms above is the average reported last sale price of the Class A common stock for the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 shares of Class A common stock per whole warrant (subject to adjustment). This redemption feature differs from the typical warrant redemption features. Predecessor Equity Prior to the Business Combination, interests in Sunlight Financial LLC’s partnership equity consists of members’ preferred and subordinated units. Sunlight Financial LLC did not have a specific number of preferred or subordinated units authorized at December 31, 2020, but retained the corporate authority to issue sufficient units to meet its obligations. In addition to its partnership equity, Sunlight Financial LLC issued warrants, profits interests, and other economic interests as part of its long-term incentive plan. Upon the closing of the Business Combination, Sunlight became the managing member of Sunlight Financial LLC, which replaced its equity with common equity in the form of Class X units issued to Sunlight and Class EX Units issued to certain selling unitholders according to the Business Combination Agreement. Temporary Equity Activities Class A-3 Class A-2 Class A-1 Month of Issuance Units Units 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 Preferred Units Subordinated Units Other Interests Class C Units LTIP Units Non-Controlling Interests in Consolidated Subsidiaries The Sunlight Financial LLC portion of non-controlling interests is computed as follows: Successor For the Period July 10, 2021 to December 31, 2021 Sunlight Financial LLC net income (loss) before income taxes $ (249,993) Sunlight Financial LLC as a percent of total (a) 35.0 % Sunlight Financial LLC net income (loss) attributable to the Class EX unitholders $ (87,528) (a) Represents the weighted average percentage of total Sunlight shareholders ’ net income (loss) in Sunlight Financial LLC attributable to the Class EX unitholders. 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 December 31, 2021 Transfers (to) from non-controlling interests: Increase in Sunlight's shareholders' equity for the delivery of Class EX Units primarily in connection with vested provisionally-vested Class EX Units $ 30,379 Dilution impact of equity transactions 30,379 Net income (loss) attributable to Class A shareholders (159,556) Change from transfers (to) from non-controlling interests and from net income (loss) attributable to Class A shareholders $ (129,177) Equity-Based Compensation Sunlight has granted the following outstanding awards (“Compensation Awards”) to certain employees and members of Sunlight’s Board at December 31, 2021: Service (in Years) (b) Award Class (a) Minimum Maximum Awards (c) Provisionally-Vested Class A Shares 1.9 3.6 337,193 Provisionally-Vested Class EX Units 1.9 1.9 974,447 Director RSUs 1.0 1.0 75,000 Employee RSUs 3.0 4.0 2,136,129 3,522,769 (a) All awards subject solely to time-based vesting. (b) At time of grant. (c) Net of fully vested awards. Compensation Unit Activities Successor Provisionally-Vested RSUs Class A Shares Class EX Units Directors Employees Per Share Shares Per Unit Units Per Unit Units Per Unit Units July 9, 2021 (Successor) $ — — $ — — $ — — $ — — Issued 9.46 512,227 9.46 1,379,401 9.46 75,000 9.00 2,285,417 Vested 9.46 (78,296) 9.46 (355,596) — — — — Forfeited or Cancelled 9.46 (96,738) 9.46 (49,358) — — 9.46 (149,288) December 31, 2021 (Successor) 9.46 337,193 9.46 974,447 9.46 75,000 8.97 2,136,129 Predecessor Class C LTIP Per Per Unit Units 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 20.11 (1,095) 40.19 (1,607) Converted to Class C-2 Units 11.12 (3,025) 17.36 (3,613) Forfeited — — 18.61 (2,444) December 31, 2020 (Predecessor) 14.51 234,403 20.06 71,060 December 31, 2020 (Predecessor) $ 14.51 234,403 $ 20.06 71,060 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 Unrecognized Compensation Expense Type Weighted Average Awards Amount Provisionally-Vested Class A Shares 1.2 years 337,193 $ 3,101 Provisionally-Vested Class EX Units 0.7 years 974,447 9,218 Director RSUs 0.3 years 75,000 367 Employee RSUs 1.6 years 2,136,129 16,641 3,522,769 $ 29,327 Refer to Notes 2 and 7 regarding the accounting treatment for compensation units and the valuation thereof. Earnings (Loss) Per Share Sunlight’s potentially dilutive equity instruments fall primarily into two general categories: (i) instruments that Sunlight has issued as part of its compensation plan, and (ii) ownership interests in Sunlight’s subsidiary, Sunlight Financial LLC, that are owned by the Class EX unitholders (except the RSUs) and are convertible into Class A shares. Based on the rules for calculating earnings per share, there are two general ways to measure dilution for a given instrument: (a) calculate the net number of shares that would be issued assuming any related proceeds are used to buy back outstanding shares (the treasury stock method), or (b) assume the gross number of shares are issued and calculate any related effects on net income available for shareholders (the if-converted and two-class methods). Sunlight has applied these methods as prescribed by the rules to each of its outstanding equity instruments as shown below. The following table summarizes the basic and diluted earnings per share calculations: Successor For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Per Class A Shareholders, Basic Net income (loss) available to Class A shareholders $ (158,573) Total weighted average shares outstanding 84,824,109 Net Income (Loss) Per Class A Shareholders, Basic $ (1.87) Net Income (Loss) Per Class A Shareholders, Diluted Net income (loss) available to Class A shareholders $ (158,573) Total weighted average shares outstanding 84,824,109 Net Income (Loss) Per Class A Shareholders, Diluted $ (1.87) Net income (loss) available to Class A shareholders Net Income (Loss) $ (247,084) Noncontrolling interests in loss of consolidated subsidiaries 87,528 Other weighting adjustments 983 Net Income (Loss) Attributable to Class A Shareholders (158,573) 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 $ (158,573) Weighted Average Units Outstanding Class A shares outstanding 84,824,109 Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares (a) — Incremental Class A Shares attributable to dilutive effect of warrants (b) — Total weighted average shares outstanding, diluted 84,824,109 (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. The Class C Shares have no net income (loss) per share as they do not participate in Sunlight’s earnings (losses) or distributions. Sunlight determined the presentation of earnings per unit during the predecessor periods is not meaningful. Therefore, the earnings per unit information has not been presented for the predecessor periods. 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 For the Period July 10, 2021 to December Common Shares From 31, 2021 Class EX Units 46,354,679 Warrants (a) 27,150,000 Other warrants 627,780 Unvested Class EX Units 1,240,776 RSUs (b) 2,085,501 77,458,736 (a) Includes Public Warrants and Private Placement Warrants. (b) Includes RSUs awards to directors and employees. There were no dividends declared for Sunlight’s Class A common stock during the period July 10, 2021 through December 31, 2021. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 7. Fair Value Measurement The carrying values and fair values of Sunlight’s assets and liabilities recorded at fair value on a recurring or non-recurring basis, as well as other financial instruments for which fair value is disclosed, at December 31, 2021 and December 31, 2020 were as follows: Principal Balance or Notional Carrying Fair Value Amount Value Level 1 Level 2 Level 3 Total December 31, 2021 (Successor) Assets: Financing Receivables: Loan participations, held-for-investment $ 4,584 $ 4,051 $ — $ — $ 4,260 $ 4,260 Loans, held-for-investment 291 262 — — 250 250 Cash and cash equivalents 91,882 91,882 91,882 — — 91,882 Restricted cash 2,018 2,018 2,018 — — 2,018 Contract derivatives 76,770 1,411 — — 1,411 1,411 Liabilities: Debt 20,613 20,613 — — 20,613 20,613 Warrants 312,225 19,007 — — 19,007 19,007 Guarantee obligation n.a. 418 — — 418 418 December 31, 2020 (Predecessor) Assets: Financing Receivables: Loan participations, held-for-investment 5,997 5,029 — — 5,140 5,140 Loans, held-for-investment 354 304 — — 310 310 Cash and cash equivalents 49,583 49,583 49,583 — — 49,583 Restricted cash 3,122 3,122 3,122 — — 3,122 Contract derivatives 59,770 1,435 — — 1,435 1,435 Liabilities: Debt 14,625 14,625 — — 14,625 14,625 Warrants 4,700 5,643 — — 5,643 5,643 Guarantee obligation n.a. 839 — — 839 839 Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value and such changes could result in a significant increase or decrease in the fair value. Sunlight’s assets and liabilities measured at fair value on a recurring basis using Level 3 inputs changed as follows: Assets Liabilities Contract Derivatives Warrants December 31, 2020 (Predecessor) $ 1,435 $ 5,643 Transfers (a) Transfers to Level 3 — 41,591 Transfers from Level 3 — (11,148) Gains (losses) included in net income (b) Included in change in fair value of warrant liabilities — 5,504 Included in change in fair value of contract derivatives, net (662) — Included in realized gains on contract derivatives, net 2,992 — Payments, net (2,992) — July 9, 2021 (Predecessor) 773 41,590 Transfers (a) Transfers to Level 3 — — Transfers from Level 3 — — Gains (losses) included in net income (b) Included in change in fair value of warrant liabilities — (22,583) Included in change in fair value of contract derivatives, net 638 — Included in realized gains on contract derivatives, net 2,866 — Payments, net (2,866) — December 31, 2021 (Successor) $ 1,411 $ 19,007 December 31, 2019 (Predecessor) $ — $ 133 Transfers (a) Transfers to Level 3 — — Transfers from Level 3 — — Gains (losses) included in net income (b) Included in change in fair value of warrant liabilities — 5,510 Included in change in fair value of contract derivatives, net 1,435 — Included in realized gains on contract derivatives, net 103 — Payments, net (103) — December 31, 2020 (Predecessor) $ 1,435 $ 5,643 (a) Transfers are assumed to occur at the beginning of the respective period, except transfers that occurred at the Closing Date of the Business Combination. (b) Changes in the fair value of liabilities shown as losses included in net income. Contract Derivative Valuation Contract Derivative Significant Inputs 1 Inputs include expected cash flows from the financing and sale of applicable Indirect Channel Loans and discount rates that market participants would expect for the Indirect Channel Loans. Significant increases (decreases) in the discount rates in isolation would result in a significantly lower (higher) fair value measurement. 2 Inputs include expected prepayment rate of applicable Indirect Channel Loans sold to the Indirect Channel Loan Purchaser. Significant increases (decreases) in the expected prepayment rate in isolation would result in a significantly higher (lower) fair value measurement. The following significant assumptions were used to value Sunlight’s contract derivative: Successor Predecessor December 31, December 31, 2021 2020 Contract Derivative 1 Discount rate 10.0 % 8.1 % Weighted average life (in years) 0.2 0.3 Contract Derivative 2 Expected prepayment rate 75.0 % n.a. Compensation Unit and Warrant Valuation Successor December 31, Assumption 2021 Class A common share value per share (a) $ 4.78 Implied volatility (a) 48.0 % Dividend yield (b) — % Time to expiry (in years) (a) 4.5 Risk free rate (a) 1.2 % (a) Significant increases in these assumptions in isolation would result in a higher fair value measurement. (b) Significant increases in these assumptions in isolation would result in a lower fair value measurement. Predecessor To determine the fair value of warrants at December 31, 2020 and the grant-date value of each Class C Unit and LTIP Unit granted prior to the Business Combination during the periods January 1, 2021 through July 9, 2021 and the year ended December 31, 2020, an independent third-party valuation firm (a) used an income valuation approach to determine the fair value of Sunlight’s equity on a quarterly basis and (b) allocated that fair value to each class of interest in Sunlight’s equity and warrants thereon on a per unit basis using an option pricing method. Sunlight determined the grant-date fair value of an award using the value at the quarter-end closest to the grant date of the award. Significant increases (decreases) in the cost of equity, volatility, tax rate, and equity term in isolation would result in a significantly lower (higher) fair value measurement. The following significant assumptions were used to value Sunlight’s equity and warrants thereon, on a weighted-average basis: Predecessor December 31, Assumption 2020 Cost of equity 22.5 % Volatility 46.0 % Tax rate 26.0 % Term (in years) 3.0 At December 31, 2020, Sunlight applied a hybrid probability-weighted expected return valuation method, which incorporated two scenarios: (a) a scenario using a market valuation approach that assumed Sunlight completed the Business Combination and (b) a remain private scenario that used the aforementioned income valuation approach. Goodwill |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Taxes | Note 8. Taxes During the period July 10, 2021 through December 31, 2021, the significant components of income tax expense consisted of the following: For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Before Income Taxes $ (250,588) Income Tax Expense (Benefit) Current Federal $ 1,708 State and local 312 2,020 Deferred Federal (4,603) State and local (921) (5,524) Total Federal (2,895) State and local (609) $ (3,504) Total loss before taxes is $250.6 million The total current federal and state income tax expense is $2.0 million with a total deferred federal and state income tax benefit of $5.5 million, for a total tax benefit of $3.5 million. During the period July 10, 2021 through December 31, 2021, Sunlight’s effective income tax rate varied from the U.S. statutory tax rate that was in effect during the period as follows: For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Before Income Taxes $ (250,588) Statutory U.S Income Tax Rate 21.0 % Income tax expense (benefit), at statutory U.S. federal rate $ (52,623) 21.0 % State and local taxes (674) 0.3 Goodwill impairment 30,658 (12.2) Change in fair value of warrant liabilities (3,081) 1.2 Noncontrolling interests in loss of consolidated subsidiaries 18,390 (7.3) Business Combination compensation expense 3,662 (1.5) Other 164 (0.1) Income tax expense (benefit) $ (3,504) 1.4 Sunlight’s effective income tax rate during the period July 10, 2021 through December 31, 2021 is 1.4%. The difference between Sunlight’s statutory and effective tax rate is primarily due to the permanent adjustments for goodwill impairment of $30.7 million, changes in the value of warrant liabilities of $3.1 million and noncontrolling interest in subsidiaries of $18.4 million. Deferred income taxes are recognized for the future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities. The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities are as follows: For the Period July 10, 2021 to December 31, 2021 Deferred tax liabilities Investment in Sunlight Financial LLC (36,686) Deferred tax asset (liability), net $ (36,686) At December 31, 2021, Sunlight had deferred tax liabilities of $36.7 million, of which the most significant deferred tax liability is depreciation and amortization of $35.4 million. Sunlight recognizes tax benefits for uncertain tax positions only if it is more likely than not that the position is sustainable based on its technical merits. Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes in Sunlight’s Consolidated Statements of Operations. As of December 31, 2021 and December 31, 2020, Sunlight did not have any material uncertain tax positions. Any uncertain tax position taken by any of the Class EX unitholders is not an uncertain tax position of Sunlight Financial LLC. Tax Receivable Agreement The Business Combination did not create a TRA liability, and Sunlight has not recognized a TRA liability through December 31, 2021, as there were no exchanges of Sunlight Financial LLC’s partnership equity held by members prior to the Business Combination for interests in Sunlight Financial Holdings Inc. subject to the TRA. |
Transactions with Affiliates an
Transactions with Affiliates and Affiliated Entities | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates and Affiliated Entities | Note 9. Transactions with Affiliates and Affiliated Entities Sunlight has entered into agreements with the following affiliates, including equity members and those serve on Sunlight’s board of directors. Founder Shares The holders of the Founders Shares agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the Business Combination or (B) subsequent to the Business Combination, (x) if the reported last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Private Placement Warrants Each whole Private Placement Warrant is exercisable for one whole share of the Company’s Class A common stock at a price of $11.50 per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. Related Party Loans In addition, in order to finance transaction costs in connection with the Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. The Company had no such borrowings upon closing of the Business Combination, at which time such loans from the Sponsor are no longer available to the Company. Administrative Support Agreement FTV Management V, LLC (“FTV”) Hudson SL Portfolio Holdings LLC (“HSPH”) Tiger Infrastructure Partners (“Tiger”) Financing Program Agreement Estimated Tax Distributions |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10. Commitments and Contingencies Sunlight was subject to the following commitments and contingencies at December 31, 2021. Litigation At December 31, 2021, Sunlight was not involved in any material legal proceedings regarding claims or legal actions against Sunlight. Indemnifications Advances Funding Commitments Loan Guarantees Tax Receivable Agreement Sunlight Rewards™ Program Non-Cancelable Operating Leases At December 31, 2021, the approximate aggregate annual minimum future lease payments required on the operating leases are as follows: 2022 $ 1,348 2023 1,510 2024 1,553 2025 1,746 2026 1,790 Thereafter 4,856 $ 12,803 During the periods July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, total lease expense was $0.7 million and $0.9 million, respectively, of which Sunlight accrued $0.1 million not yet paid at December 31, 2021. During the year ended December 31, 2020, total lease expense was $1.1 million, which Sunlight paid in full. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11. Subsequent Events The following events occurred subsequent to December 31, 2021 through the issuance date of these Consolidated Financial Statements. Events subsequent to that date have not been considered in these financial statements. Other During the first quarter of 2020, the outbreak of a novel strain of coronavirus (COVID-19) has adversely impacted global commercial activity and contributed to significant declines and volatility in financial markets. Depending on the severity and duration of the outbreak, the novel coronavirus could present material uncertainty and risk with respect to the Company, its performance, and its financial results. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements and related notes, prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), include the accounts of Sunlight and its consolidated subsidiaries. In the opinion of management, all adjustments considered necessary for a fair presentation of Sunlight’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. All intercompany balances and transactions have been eliminated. |
Reclassification | Certain prior period amounts have been reclassified to conform to the current period’s presentation. |
Emerging Growth Company | Emerging Growth Company Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Consolidation | Consolidation The analysis as to whether to consolidate an entity is subject to a significant amount of judgment. Some of the criteria considered are the determination as to the degree of control over an entity by its various equity holders, the design of the entity, how closely related the entity is to each of its equity holders, the relation of the equity holders to each other and a determination of the primary beneficiary in entities in which Sunlight has a variable interest. These analyses involve estimates, based on the assumptions of management, as well as judgments regarding significance and the design of entities. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated by its primary beneficiary, and only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Sunlight monitors investments in VIEs and analyzes the potential need to consolidate the related entities pursuant to the VIE consolidation requirements. These analyses require considerable judgment in determining whether an entity is a VIE and determining the primary beneficiary of a VIE since they involve subjective determinations of significance, with respect to both power and economics. The result could be the consolidation of an entity that otherwise would not have been consolidated or the deconsolidation of an entity that otherwise would have been consolidated. As a result of the Business Combination, a wholly-owned subsidiary of Sunlight Financial Holdings Inc. is the managing member of Sunlight Financial LLC, in which existing unitholders hold a 35.0% noncontrolling interest at December 31, 2021, net of unvested Class EX Units (Note 6). Through its indirect managing member interest, Sunlight Financial Holdings Inc. directs substantially all of the day-to-day activities of Sunlight Financial LLC. The third-party investors in Sunlight Financial LLC do not possess substantive participating rights or the power to direct the day-to-day activities that most directly affect the operations of Sunlight Financial LLC. However, these third-party investors hold both voting, noneconomic Class C shares in Sunlight Financial Holdings Inc. on a one-for-one basis along with nonvoting, economic Class EX Units issued by Sunlight Financial LLC. No single third-party investor, or group of third-party investors, possesses the substantive ability to remove the managing member of Sunlight Financial LLC. Sunlight considers Sunlight Financial LLC a VIE for consolidation purposes and its managing members holds the controlling interest and is the primary beneficiary. Therefore, Sunlight consolidates Sunlight Financial LLC and reflects Class EX unitholder interests in Sunlight Financial LLC held by third parties as noncontrolling interests. Sunlight conducts substantially all operations through Sunlight Financial LLC and its consolidated subsidiary. |
Segments | Segments |
Risks and Uncertainties | Risks and Uncertainties |
Use of Estimates | Use of Estimates |
Fair Value | Fair Value Level Measurement 1 Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. 2 Inputs are other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. 3 Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Sunlight follows this hierarchy for its financial instruments, with classifications based on the lowest level of input that is significant to the fair value measurement. The following summarizes Sunlight’s financial instruments hierarchy at December 31, 2021: Level Financial Instrument Measurement 1 Cash and cash equivalents and restricted cash Estimates of fair value are measured using observable, quoted market prices, or Level 1 inputs Public Warrants Estimates of fair value are measured using observable, quoted market prices of Sunlight’s warrants. 3 Loans and loan participations, held-for-investment Estimated fair value is generally determined by discounting the expected future cash flows using inputs such as discount rates. Contract derivative Estimated fair value based upon discounted expected future cash flows arising from the contract. Private Placement Warrants Estimated fair value based upon quarterly valuation estimates of warrant instruments, based upon quoted prices of Sunlight’s Class A shares and warrants thereon as well as fair value inputs provided by an independent valuation firm. Valuation Process may incorporate assumptions that are management’s best estimates after consideration of a variety of internal and external factors. When an independent valuation firm expresses an opinion on the fair value of a financial instrument in the form of a range, management selects a value within the range provided by the independent valuation firm to assess the reasonableness of management’s estimated fair value for that financial instrument. At December 31, 2021, Sunlight’s valuation process for Level 3 measurements, as described below, were conducted internally or by an independent valuation firm and reviewed by management. Valuation of Loans and Loan Participations Valuation of Contract Derivative Valuation of Warrants Other Valuation Matters See Note 7 for additional information regarding the valuation of Sunlight’s financial assets and liabilities. |
Sales of Financial Assets and Financing Agreements | Sales of Financial Assets and Financing Agreements |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Successor Predecessor December 31, December 31, 2021 2020 Cash and cash equivalents $ 91,882 $ 49,583 Restricted cash and cash equivalents 2,018 3,122 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows $ 93,900 $ 52,705 |
Financing Receivables | Financing Receivables Advances Loans and Loan Participations |
Impairment | Impairment The evaluation of these indicators of impairment requires significant judgment by management to determine whether failure to collect contractual amounts is probable as well as in estimating the resulting loss allowance. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions. These evaluations are inherently subjective, as they require material estimates and may be susceptible to significant change. Actual losses, if any, could materially differ from these estimates. If management deems that it is probable that Sunlight will be unable to collect all amounts owed according to the contractual terms of a receivable, impairment of that receivable is indicated. Consistent with this definition, all receivables for which the accrual of interest has been discontinued (nonaccrual loans) are considered impaired. If management considers a receivable to be impaired, management establishes an allowance for losses through a valuation provision in earnings, which reduces the carrying value of the receivable to (a) the amounts management expect to collect, for receivables due within 90 days, or (b) the present value of expected future cash flows discounted at the receivable’s contractual effective rate. Impaired financing receivables are charged off against the allowance for losses when a financing receivable is more than 120 days past due or when management believes that collectability of the principal is remote, if earlier. Sunlight credits subsequent recoveries, if any, to the allowance when received. At December 31, 2021 and December 31, 2020, Sunlight evaluated financing receivables collectively, based upon those financing receivables with similar characteristics. Sunlight individually evaluates nonaccrual loans with contractual balances of $50,000 or more and receivables whose terms have been modified in a troubled debt restructuring with contractual balances of $50,000 or more to establish specific allowances for such receivables, if required. Those financing receivables where impairment is indicated were evaluated individually for impairment, though such amounts were not material. Advances 1 Low The counterparty has demonstrated low risk characteristics. The counterparty is a well-established company within the applicable industry, with low commercial credit risk, excellent reputational risk (e.g. online ratings, low complaint levels), and an excellent financial risk assessment. 2 Low-to- The counterparty has demonstrated low to medium risk characteristics. The counterparty is a well-established company within the applicable industry, with low to medium commercial credit risk, excellent to above average reputational risk (e.g. online ratings, lower complaint levels), and/or an excellent to above average financial risk assessment. 3 Medium The counterparty has demonstrated medium risk characteristics. The counterparty may be a less established company within the applicable industry than risk tier “1” or “2”, with medium commercial credit risk, excellent to average reputational risk (e.g., online ratings, average complaint levels), and/or an excellent to average financial risk assessment. 4 Medium- The counterparty has demonstrated medium to high risk characteristics. The counterparty is likely to be a less established company within the applicable industry than risk tiers “1” through “3,” with medium to high commercial credit risk, excellent to below average reputational risk (e.g. online ratings, higher complaint levels), and/or an excellent to below average financial risk assessment. 5 Higher The counterparty has demonstrated higher risk characteristics. The counterparty is a less established company within the applicable industry, with higher commercial credit risk, and/or below average reputational risk (e.g. online ratings, higher complaint levels), and/or below average financial risk assessment. Tier “5” advance approvals will be approved on an exception basis. Loans and Loan Participations, Held-For-Investment |
Goodwill | Goodwill July 9, 2021 (Successor) Goodwill $ 670,014 Accumulated impairment losses — 670,014 Impairment losses (224,701) Other (a) 443 December 31, 2021 (Successor) Goodwill 670,457 Accumulated impairment losses (224,701) $ 445,756 (a) Reflects purchase price adjustments related to deferred tax liabilities created at the Closing Date of the Business Combination. |
Intangible Assets, Net | Intangible Assets, Net Estimated Useful Life Carrying Value (in Years) Successor Predecessor December 31, December 31, Asset Successor Predecessor 2021 2020 Contractor relationships (a) 11.5 n.a. $ 350,000 $ — Capital provider relationships (b) 0.8 n.a. 43,000 — Trademarks/ trade names (c) 10.0 n.a. 7,900 — Developed technology (d) 3.0 — 5.0 1.0 — 3.0 8,193 11,775 409,093 11,775 Accumulated amortization (e)(f)(g) (43,254) (7,242) $ 365,839 $ 4,533 (a) Represents the value of existing contractor relationships of Sunlight estimated using a multi-period excess earnings methodology. (b) Represents the value of existing relationships with the banks that may be estimated by applying a with-and-without methodology. (c) Represents the trade names that Sunlight originated or acquired and valued using a relief-from-royalty method. (d) Represents technology developed by Sunlight for the purpose of generating income for Sunlight, and valued using a replacement cost method. (e) Amounts include $ 8.2 million and $ 11.8 million of capitalized internally developed software costs at December 31, 2021 and December 31, 2020, respectively. (f) Includes amortization expense of $ 43.3 million for the period July 10, 2021 through December 31, 2021, $ 1.4 million, for the period January 1, 2021 through July 9, 2021, and $ 2.9 million for the year ended December 31, 2020, respectively. (g) At December 31, 2021, the approximate aggregate annual amortization expense for definite-lived intangible assets, including capitalized internally developed software costs as a component of capitalized developed technology are as follows: Developed Other Identified Technology Intangible Assets Total 2022 $ 1,838 $ 46,648 $ 48,486 2023 1,838 31,199 33,037 2024 1,739 31,285 33,024 2025 1,340 31,199 32,539 2026 694 31,199 31,893 Thereafter — 186,860 186,860 $ 7,449 $ 358,390 $ 365,839 |
Property and Equipment, Net | Property and Equipment, Net Estimated Useful Life Carrying Value (in Years) Successor Predecessor December 31, December 31, Asset Category Successor Predecessor 2021 2020 Furniture, fixtures, and equipment 5 7 $ 1,020 $ 555 Computer hardware 5 5 1,108 868 Computer software 1—3 1—3 250 197 Leasehold improvements Shorter of life of improvement or lease term 2,829 421 5,207 2,041 Accumulated amortization and depreciation (a) (1,138) (849) $ 4,069 $ 1,192 (a) Includes depreciation expense of $ 0.2 million for the period July 10, 2021 through December 31, 2021, $ 0.2 million, for the period January 1, 2021 through July 9, 2021, and $ 0.3 million for the year ended December 31, 2020, respectively. |
Funding Commitments | Funding Commitments |
Guarantees | Guarantees |
Warrant Liabilities | Warrants The Company classifies as assets or liabilities any equity-linked contracts that (1) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the Company’s control) or (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). For equity-linked contracts that are classified as liabilities, the Company records the fair value of the equity-linked contracts at each balance sheet date and records the change in the statements of operations as a gain (loss) from change in fair value of warrant liability. The Company’s public warrant liability is valued using observable market prices for those public warrants. The Company’s private placement warrants are valued using a binomial lattice pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes pricing model. The Company’s warrants issued to a capital provider are valued using a Black-Scholes pricing model based on observable market prices for public shares and warrants. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free rates. |
Distributions Payable | Distributions Payable |
Other Assets and Accounts Payable, Accrued Expenses and Other Liabilities | Other Assets and Accounts Payable, Accrued Expenses, and Other Liabilities |
Noncontrolling Interests in Consolidated Subsidiaries | Noncontrolling Interests in Consolidated Subsidiaries Class EX Units issued by Sunlight Financial LLC are exchangeable into the Company’s Class A common stock. Class A common stock issued upon exchange of a holder’s noncontrolling interest is accounted for at the carrying value of the surrendered limited partnership interest and the difference between the carrying value and the fair value of the Class A common stock issued is recorded to additional paid-in-capital. |
Treasury Stock | Treasury Stock |
Revenue Recognition and Cost of Revenues | Revenue Recognition Successor Predecessor For the Period For the Period For the Year July 10, 2021 January 1, Ended to December 2021 to July 9, December 31, 31, 2021 2021 2020 Platform fees, net (a) $ 56,783 $ 50,757 $ 66,853 Other revenues (b) 4,891 2,307 2,711 $ 61,674 $ 53,064 $ 69,564 (a) Amounts presented net of variable consideration in the form of rebates to certain contractors. Includes platform fees from affiliates of $ 0.2 million and $ 0.3 million for the period January 1, 2021 through July 9, 2021, and the year ended December 31, 2020, respectively. (Note 9). (b) Includes loan portfolio management, administration, and other ancillary fees Sunlight earns that are incidental to its primary operations. Sunlight earned $ 0.1 million for the period July 10, 2021 through December 31, 2021, $ 0.1 million for the period January 1, 2021 through July 9, 2021, and $ 0.2 million for the year ended December 31, 2020, respectively, in administrative fees from an affiliate. (Note 9). Platform Fees, Net The contracts under which Sunlight (a) arranges Indirect Channel Loans for the purchase and installation of home improvements other than residential solar energy systems and (b) earns income from the prepayment of certain of those Indirect Channel Loans sold to an Indirect Channel Loan Purchaser are considered derivatives under GAAP. As such, Sunlight’s revenues exclude the platform fees that Sunlight earns in connection with these contracts. Instead, Sunlight records realized gains on the derivatives within “Realized Gains on Contract Derivative, Net” in the accompanying Consolidated Statements of Operations. Sunlight realized gains of $2.9 million and $3.0 million for the periods July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021 and $0.1 million for the year ended December 31, 2020, respectively, in connection with these contracts (Note 4). However, Sunlight recognized platform fee revenue of $0.2 million for its facilitation of direct channel home improvement loans. Other Revenues Cost of Revenues Sunlight Rewards™ Program |
Interest Income | Interest Income Loans are considered past due or delinquent if the required principal and interest payments have not been received as of the date such payments are due. Generally, loans, including impaired loans, are placed on non-accrual status when (i) either principal or interest payments are 90 days or more past due based on contractual terms or (ii) an individual analysis of a borrower’s creditworthiness indicates a loan should be placed on non-accrual status. When a loan owned by Sunlight (each, a “Balance Sheet Loan”) is placed on non-accrual status, Sunlight ceases to recognize interest income on the loans and reverses previously accrued and unpaid interest, if any. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income may only be recorded on a cash basis after recovery of principal is reasonably assured. Sunlight may return a loan to accrual status when repayment of principal and interest is reasonably assured under the terms of the restructured loan. Advances are created at par and do not bear, and therefore do not accrue, interest income. |
Compensation and Benefits | Compensation and Benefits Equity-Based Compensation Predecessor ● Time-Based Service — Sunlight Financial LLC expensed awards that only requires time-based service conditions ratably over the required service period, or immediately if there was no required service period. ● PIK Vesting Requirement — Sunlight Financial LLC awarded equity-based compensation in the form of anti-dilution units. Such awards vested in an amount generally proportionate to the dilution of related Class C Units or LTIP Units that resulted from the issuance of additional Class A Units. Sunlight Financial LLC expensed awards in the period in which (a) dilution of related Class C Units or LTIP Units would otherwise occur and (b) the award had satisfied other vesting conditions. ● Performance-Based Conditions — Sunlight Financial LLC expensed awards in the period in which (a) it was probable that the performance-based condition was satisfied and (b) the award had satisfied other vesting conditions. For equity-based compensation awards in the form of Class C Units or long-term incentive plan units ( “ LTIP Units ” ) (Note 6), vesting would generally occur upon a qualifying sale of Sunlight ’ s equity. Generally, Sunlight Financial LLC only expensed those awards that only required time-based service conditions since other awards only satisfied vesting requirements upon closing of the Business Combination. Awards that represented services performed prior to the Business Combination reduced the purchase consideration in Sunlight’s calculation of goodwill. Awards that were still subject to time-based service conditions upon closing of the Business Combination and represented future service were replaced with awards of restricted Class A shares and restricted Class EX Units. Sunlight expensed the difference between the value of the existing awards and the replacement awards upon closing of the Business Combination. Sunlight expenses the value of the replacement awards over the remaining service period on a straight-line basis. |
Selling, General, and Administrative | Selling, General, and Administrative |
Property and Technology | Property and Technology |
Income Taxes | Income Taxes The Company accounts for uncertain tax positions by reporting a liability for unrecognizable tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. In accordance with the operating agreement of Sunlight Financial LLC, to the extent possible without impairing its ability to continue to conduct its business and activities, and in order to permit its member to pay taxes on the taxable income allocated to those members, Sunlight Financial LLC is required to make distributions to the member in the amount equal to the estimated tax liability of the member computed as if the member paid income tax at the highest marginal federal and state rate applicable to a corporate entity or individual resident in New York, New York to the extent Sunlight’s operations generate taxable income for the applicable member. Sunlight did not declare any distributions for the year ended December 31, 2021. During the year ended December 31, 2020, Sunlight Financial LLC declared $7.5 million in distributions to its unitholders. |
Business Combination | Business Combination The Business Combination among the parties to the Business Combination Agreement was completed on July 9, 2021. Sunlight accounted for the Business Combination as a business combination under ASC 805, Business Combinations ● Sunlight Financial Holdings Inc. is the sole managing member of Sunlight Financial LLC having full and complete authority over of all the affairs of Sunlight Financial LLC while the non-managing member equity holders do not have substantive participating or kick out rights; ● The predecessor controlling unitholders of Sunlight Financial LLC does not have a controlling interest in the Company as it held less than 50% of the voting interests after the Business Combination. These factors support the conclusion that Sunlight Financial Holdings Inc. acquired a controlling interest in Sunlight Financial LLC and is the accounting acquirer. Sunlight Financial Holdings Inc. is the primary beneficiary of Sunlight Financial LLC, which is a variable interest entity, since it has the power to direct the activities of Sunlight Financial LLC that most significantly impact Sunlight Financial LLC’s economic performance through its role as the managing member. Sunlight Financial Holdings Inc.’s variable interest in Sunlight Financial LLC includes ownership of Sunlight Financial LLC, which results in the right and obligation to receive benefits and absorb losses of Sunlight Financial LLC that could potentially be significant to Sunlight Financial Holdings Inc. Therefore, the Business Combination represented a change in control and is accounted for using the acquisition method. Under the acquisition method of accounting, the purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed from Sunlight Financial LLC based on their estimated acquisition-date fair values. The cash consideration in the Business Combination included cash from (a) a trust account held by Spartan in the amount of $345.0 million which Spartan received in its initial public offering of 34,500,000 shares of Class A common stock, less $192.3 million withdrawal of funds from that account to fund the redemption of 19,227,063 shares of Class A common stock at approximately $10.00 per share, and (b) $250.0 million in proceeds from the investors purchasing an aggregate of 25,000,000 Class A common stock in connection with the Business Combination (“PIPE Investment”). The Company received $55.1 million, which includes $5.6 million used to pay tax withholding related to cash compensation paid to the Company’s employees at the closing of the Business Combination. The following is an estimate of the fair value of consideration transferred and a preliminary purchase price allocation in connection with the Business Combination: Amount Purchase Consideration Equity consideration paid to existing Sunlight Financial LLC ownership in Class A Common Stock, net (a) $ 357,800 Rollover of Sunlight Financial LLC historical warrants 2,499 Cash consideration to existing Sunlight Financial LLC interests, net (b) 296,281 Cash paid for seller transaction costs 8,289 $ 664,869 Fair Value of Net Assets Acquired Cash and cash equivalents $ 59,786 Restricted cash 3,844 Advances 42,622 Financing receivables 5,117 Goodwill (c) 670,457 Intangible assets (d) 407,600 Property and equipment 1,047 Due from affiliates 1,839 Other assets 4,561 Accounts payable and accrued expenses (19,210) Funding commitments (21,485) Debt (20,613) Due to affiliates (761) Warrants, at fair value — Deferred tax liability (42,212) Other liabilities (512) Fair value of noncontrolling interests (e) (427,211) $ 664,869 (a) Equity consideration paid to Blocker Holders consisted of the following: Common Class A shares 38,151,192 Fair value per share $ 9.46 Equity consideration paid to existing Blocker Holders $ 360,910 Acceleration of post business combination expense (3,110) Equity consideration paid to Sellers, net $ 357,800 (b) Net of $ 0.0 million acceleration of post business combination expense. (c) Goodwill, as a component of the step-up in tax basis from the Business Combination, is tax deductible for the Company. (d) The fair value of the definite-lived intangible assets is as follows: Weighted Average Useful Lives (in Years) Fair Value Contractor relationships 11.5 $ 350,000 Capital provider relationships 0.8 43,000 Trademarks/ trade names 10.0 7,900 Developed technology 5.0 6,700 $ 407,600 (e) Noncontrolling interests represent the 34.9 % ownership in Sunlight Financial LLC not owned by the Sunlight Financial Holdings Inc. as of the Closing Date. The fair value of the noncontrolling interests follows: Common Class EX units 46,216,054 Fair value per unit $ 9.46 Fair value of Class EX units $ 437,204 Less: Postcombination compensation expenses (9,993) Noncontrolling interests $ 427,211 The preliminary allocation of the purchase price is based on preliminary valuations performed to determine the fair value of the net assets as of the Closing Date. This allocation is subject to revision as the assessment is based on preliminary information subject to refinement. The Company incurred $7.0 million of expenses directly related to the Business Combination from January 1, 2021 through July 9, 2021 which were included in acquisition-related expense in the Consolidated Statements of Operations. On the Closing Date, the Company paid $12.1 million of deferred underwriting costs related to Spartan’s initial public offering. At the closing of the Business Combination, $7.5 million of fees related to the PIPE Investment were paid by the Company. Additionally, Sunlight paid $7.9 million of acquisition-related advisory fees related to the Business Combination at the closing of the Business Combination, which success fees were contingent upon the consummation of the Business Combination and not recognized in the Consolidated Statements of Operations of the Predecessor or Successor. The nature of these fees relate to advisory and investment banker fees that were incurred dependent on the success of the Business Combination. The deferred underwriting commissions and costs pertaining to the cost of raising equity were treated as a reduction of equity while Business Combination costs were expensed in the period incurred. Unaudited Pro Forma Operating Results For the Year Ended December 31, 2021 2020 Total revenues $ 114,738 $ 69,564 Net income (loss) before income taxes (217,023) (99,905) Income tax benefit (expense) 3,038 15,138 Noncontrolling interests 75,646 34,824 Net income (loss) attributable to Common Class A shareholders (138,338) (49,944) |
Recent Accounting Pronouncements Issued, But Not Yet Adopted | Recent Accounting Pronouncements Issued, But Not Yet Adopted The Financial Accounting Standards Board (“FASB”) has issued the following Accounting Standard Updates (“ASUs”) that may materially impact Sunlight’s financial position and results of operations, or may impact the preparation of, but not materially affect, Sunlight’s consolidated financial statements. As an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended ( “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), Sunlight is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Unless otherwise stated, Sunlight elected to adopt recent accounting pronouncements using the extended transition period applicable to private companies. ASU No. 2020-06 Debt ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ASU No. 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ASU No. 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU No. 2016-02 Leases |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Fair value measurement, GAAP hierarchy | Level Measurement 1 Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. 2 Inputs are other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. 3 Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Sunlight follows this hierarchy for its financial instruments, with classifications based on the lowest level of input that is significant to the fair value measurement. The following summarizes Sunlight’s financial instruments hierarchy at December 31, 2021: Level Financial Instrument Measurement 1 Cash and cash equivalents and restricted cash Estimates of fair value are measured using observable, quoted market prices, or Level 1 inputs Public Warrants Estimates of fair value are measured using observable, quoted market prices of Sunlight’s warrants. 3 Loans and loan participations, held-for-investment Estimated fair value is generally determined by discounting the expected future cash flows using inputs such as discount rates. Contract derivative Estimated fair value based upon discounted expected future cash flows arising from the contract. Private Placement Warrants Estimated fair value based upon quarterly valuation estimates of warrant instruments, based upon quoted prices of Sunlight’s Class A shares and warrants thereon as well as fair value inputs provided by an independent valuation firm. |
Cash and cash equivalents | Successor Predecessor December 31, December 31, 2021 2020 Cash and cash equivalents $ 91,882 $ 49,583 Restricted cash and cash equivalents 2,018 3,122 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows $ 93,900 $ 52,705 |
Restricted cash | Successor Predecessor December 31, December 31, 2021 2020 Cash and cash equivalents $ 91,882 $ 49,583 Restricted cash and cash equivalents 2,018 3,122 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows $ 93,900 $ 52,705 |
Overall risk tiers | 1 Low The counterparty has demonstrated low risk characteristics. The counterparty is a well-established company within the applicable industry, with low commercial credit risk, excellent reputational risk (e.g. online ratings, low complaint levels), and an excellent financial risk assessment. 2 Low-to- The counterparty has demonstrated low to medium risk characteristics. The counterparty is a well-established company within the applicable industry, with low to medium commercial credit risk, excellent to above average reputational risk (e.g. online ratings, lower complaint levels), and/or an excellent to above average financial risk assessment. 3 Medium The counterparty has demonstrated medium risk characteristics. The counterparty may be a less established company within the applicable industry than risk tier “1” or “2”, with medium commercial credit risk, excellent to average reputational risk (e.g., online ratings, average complaint levels), and/or an excellent to average financial risk assessment. 4 Medium- The counterparty has demonstrated medium to high risk characteristics. The counterparty is likely to be a less established company within the applicable industry than risk tiers “1” through “3,” with medium to high commercial credit risk, excellent to below average reputational risk (e.g. online ratings, higher complaint levels), and/or an excellent to below average financial risk assessment. 5 Higher The counterparty has demonstrated higher risk characteristics. The counterparty is a less established company within the applicable industry, with higher commercial credit risk, and/or below average reputational risk (e.g. online ratings, higher complaint levels), and/or below average financial risk assessment. Tier “5” advance approvals will be approved on an exception basis. |
Changes in Carrying Value of Goodwill | July 9, 2021 (Successor) Goodwill $ 670,014 Accumulated impairment losses — 670,014 Impairment losses (224,701) Other (a) 443 December 31, 2021 (Successor) Goodwill 670,457 Accumulated impairment losses (224,701) $ 445,756 (a) Reflects purchase price adjustments related to deferred tax liabilities created at the Closing Date of the Business Combination. |
Intangible assets acquired | Estimated Useful Life Carrying Value (in Years) Successor Predecessor December 31, December 31, Asset Successor Predecessor 2021 2020 Contractor relationships (a) 11.5 n.a. $ 350,000 $ — Capital provider relationships (b) 0.8 n.a. 43,000 — Trademarks/ trade names (c) 10.0 n.a. 7,900 — Developed technology (d) 3.0 — 5.0 1.0 — 3.0 8,193 11,775 409,093 11,775 Accumulated amortization (e)(f)(g) (43,254) (7,242) $ 365,839 $ 4,533 (a) Represents the value of existing contractor relationships of Sunlight estimated using a multi-period excess earnings methodology. (b) Represents the value of existing relationships with the banks that may be estimated by applying a with-and-without methodology. (c) Represents the trade names that Sunlight originated or acquired and valued using a relief-from-royalty method. (d) Represents technology developed by Sunlight for the purpose of generating income for Sunlight, and valued using a replacement cost method. (e) Amounts include $ 8.2 million and $ 11.8 million of capitalized internally developed software costs at December 31, 2021 and December 31, 2020, respectively. (f) Includes amortization expense of $ 43.3 million for the period July 10, 2021 through December 31, 2021, $ 1.4 million, for the period January 1, 2021 through July 9, 2021, and $ 2.9 million for the year ended December 31, 2020, respectively. (g) At December 31, 2021, the approximate aggregate annual amortization expense for definite-lived intangible assets, including capitalized internally developed software costs as a component of capitalized developed technology are as follows: Developed Other Identified Technology Intangible Assets Total 2022 $ 1,838 $ 46,648 $ 48,486 2023 1,838 31,199 33,037 2024 1,739 31,285 33,024 2025 1,340 31,199 32,539 2026 694 31,199 31,893 Thereafter — 186,860 186,860 $ 7,449 $ 358,390 $ 365,839 |
Property and equipment | Estimated Useful Life Carrying Value (in Years) Successor Predecessor December 31, December 31, Asset Category Successor Predecessor 2021 2020 Furniture, fixtures, and equipment 5 7 $ 1,020 $ 555 Computer hardware 5 5 1,108 868 Computer software 1—3 1—3 250 197 Leasehold improvements Shorter of life of improvement or lease term 2,829 421 5,207 2,041 Accumulated amortization and depreciation (a) (1,138) (849) $ 4,069 $ 1,192 (a) Includes depreciation expense of $ 0.2 million for the period July 10, 2021 through December 31, 2021, $ 0.2 million, for the period January 1, 2021 through July 9, 2021, and $ 0.3 million for the year ended December 31, 2020, respectively. |
Disaggregation of revenue | Successor Predecessor For the Period For the Period For the Year July 10, 2021 January 1, Ended to December 2021 to July 9, December 31, 31, 2021 2021 2020 Platform fees, net (a) $ 56,783 $ 50,757 $ 66,853 Other revenues (b) 4,891 2,307 2,711 $ 61,674 $ 53,064 $ 69,564 (a) Amounts presented net of variable consideration in the form of rebates to certain contractors. Includes platform fees from affiliates of $ 0.2 million and $ 0.3 million for the period January 1, 2021 through July 9, 2021, and the year ended December 31, 2020, respectively. (Note 9). (b) Includes loan portfolio management, administration, and other ancillary fees Sunlight earns that are incidental to its primary operations. Sunlight earned $ 0.1 million for the period July 10, 2021 through December 31, 2021, $ 0.1 million for the period January 1, 2021 through July 9, 2021, and $ 0.2 million for the year ended December 31, 2020, respectively, in administrative fees from an affiliate. (Note 9). |
Estimate of fair value of consideration transferred and purchase price allocation | The following is an estimate of the fair value of consideration transferred and a preliminary purchase price allocation in connection with the Business Combination: Amount Purchase Consideration Equity consideration paid to existing Sunlight Financial LLC ownership in Class A Common Stock, net (a) $ 357,800 Rollover of Sunlight Financial LLC historical warrants 2,499 Cash consideration to existing Sunlight Financial LLC interests, net (b) 296,281 Cash paid for seller transaction costs 8,289 $ 664,869 Fair Value of Net Assets Acquired Cash and cash equivalents $ 59,786 Restricted cash 3,844 Advances 42,622 Financing receivables 5,117 Goodwill (c) 670,457 Intangible assets (d) 407,600 Property and equipment 1,047 Due from affiliates 1,839 Other assets 4,561 Accounts payable and accrued expenses (19,210) Funding commitments (21,485) Debt (20,613) Due to affiliates (761) Warrants, at fair value — Deferred tax liability (42,212) Other liabilities (512) Fair value of noncontrolling interests (e) (427,211) $ 664,869 (a) Equity consideration paid to Blocker Holders consisted of the following: Common Class A shares 38,151,192 Fair value per share $ 9.46 Equity consideration paid to existing Blocker Holders $ 360,910 Acceleration of post business combination expense (3,110) Equity consideration paid to Sellers, net $ 357,800 (b) Net of $ 0.0 million acceleration of post business combination expense. (c) Goodwill, as a component of the step-up in tax basis from the Business Combination, is tax deductible for the Company. (d) The fair value of the definite-lived intangible assets is as follows: Weighted Average Useful Lives (in Years) Fair Value Contractor relationships 11.5 $ 350,000 Capital provider relationships 0.8 43,000 Trademarks/ trade names 10.0 7,900 Developed technology 5.0 6,700 $ 407,600 (e) Noncontrolling interests represent the 34.9 % ownership in Sunlight Financial LLC not owned by the Sunlight Financial Holdings Inc. as of the Closing Date. The fair value of the noncontrolling interests follows: Common Class EX units 46,216,054 Fair value per unit $ 9.46 Fair value of Class EX units $ 437,204 Less: Postcombination compensation expenses (9,993) Noncontrolling interests $ 427,211 |
Pro forma operating results | For the Year Ended December 31, 2021 2020 Total revenues $ 114,738 $ 69,564 Net income (loss) before income taxes (217,023) (99,905) Income tax benefit (expense) 3,038 15,138 Noncontrolling interests 75,646 34,824 Net income (loss) attributable to Common Class A shareholders (138,338) (49,944) |
Financing Receivables (Tables)
Financing Receivables (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Financing receivables and changes thereto | Loans and Loan Advances (a) Participations (b) Total December 31, 2021 (Successor) Amounts outstanding $ 67,077 $ 4,875 $ 71,952 Unamortized discount — (414) (414) Allowance for credit losses (238) (148) (386) Carrying value $ 66,839 $ 4,313 $ 71,152 December 31, 2020 (Predecessor) Amounts outstanding $ 35,401 $ 6,351 $ 41,752 Unamortized discount — (893) (893) Allowance for credit losses (121) (125) (246) Carrying value $ 35,280 $ 5,333 $ 40,613 (a) Represents advance payments made by Sunlight to certain contractors, generally on a short-term basis, in anticipation of a project ’ s substantial completion, including a $ 9.0 million advance to a Sunlight contractor not associated with specific installation projects at December 31, 2021. (b) Represents (i) Sunlight ’ s 5.0 % participation interest in a pool of residential solar loans with an aggregate UPB of $ 4.6 million and $ 6.0 million at December 31, 2021 and December 31, 2020, respectively, and (ii) Indirect Channel Loans purchased by Sunlight with an aggregate UPB of $ 0.3 million and $ 0.4 million at December 31, 2021 and December 31, 2020, respectively. No loans or loan participations were individually evaluated for impairment at December 31, 2021 or December 31, 2020. Successor Predecessor For the Period For the Year July 10, 2021 For the Period Ended to December January 1, 2021 December 31, 31, 2021 to July 9, 2021 2020 Allowance for Credit Losses — Advances Beginning Balance $ — $ 121 $ 215 Provision for credit losses 358 90 (94) Realized losses (120) — — Ending Balance $ 238 $ 211 $ 121 Allowance for Credit Losses — Loans and Loan Participations Beginning Balance $ — $ 125 $ 96 Provision for credit losses 859 1,082 1,444 Realized losses (711) (1,096) (1,415) Ending Balance $ 148 $ 111 $ 125 Changes in Carrying Value — Loans and Loan Participations Beginning Balance $ 5,105 $ 5,333 $ 5,130 Purchases, net (a) 716 1,170 2,839 Proceeds from principal repayments, net (710) (832) (1,316) Accretion of loan discount 61 123 124 Provision for credit losses (859) (1,082) (1,444) Ending Balance $ 4,313 $ 4,712 $ 5,333 (a) During the year ended December 31, 2020, Sunlight purchased (i) 5.0 % participation interests in 1,007 loans with an aggregate UPB of $ 1.6 million as well as (ii) 49 Indirect Channel Loans with an aggregate UPB $ 1.2 million. During the periods July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, Sunlight purchased (i) 5.0 % participation interests in 0 and 54 loans with an aggregate UPB of $ 0.0 million and $ 0.1 million as well as (ii) 20 and 51 Indirect Channel Loans with an aggregate UPB of $ 0.4 million and $ 1.1 million, respectively. |
Allocation of advance amount based on internal risk ratings | Total Amount % of Amount Risk Tier (a) Contractors Outstanding Outstanding December 31, 2021 (Successor) 1 Low risk 76 $ 14,575 21.7 % 2 Low-to-medium risk 77 38,955 58.1 3 Medium risk 17 13,547 20.2 4 Medium-to-high risk — — — 5 Higher risk — — — 170 $ 67,077 100.0 % December 31, 2020 (Predecessor) 1 Low risk 78 $ 18,072 51.0 % 2 Low-to-medium risk 56 16,700 47.2 3 Medium risk 4 604 1.7 4 Medium-to-high risk — — — 5 Higher risk 3 25 0.1 141 $ 35,401 100.0 % (a) At December 31, 2021 and December 31, 2020, the average risk rating of Sunlight ’ s advances was 2.0 ( “ low-to-medium risk ” ) and 1.5 ( “ low-to-medium risk ” ), weighted by total advance amounts outstanding. |
Payment status | Delinquencies Amount % of Amount Payment Delinquency Outstanding (a) Outstanding December 31, 2021 (Successor) Current $ 54,586 94.0 % Less than 30 days 1,956 3.4 30 days 534 0.9 60 days 361 0.6 90+ days (b) 640 1.1 $ 58,077 100.0 % December 31, 2020 (Predecessor) Current $ 29,132 82.3 % Less than 30 days 3,137 8.9 30 days 1,424 4.0 60 days 672 1.9 90+ days (b) 1,036 2.9 $ 35,401 100.0 % (a) Excludes a $ 9.0 million advance to a Sunlight contractor not associated with specific installation projects and was not delinquent at December 31, 2021. (b) As further discussed in Note 2, Sunlight generally evaluates amounts delinquent for 90 days or more for impairment. Advances to contractors may remain outstanding as a result of operational and various other factors that are unrelated to the contractor ’ s creditworthiness. Sunlight assessed advances 90 days or more, along with other factors that included the contractor ’ s risk tier and historical loss experience, and established loss allowances of $ 0.2 million and $ 0.1 million at December 31, 2021 and December 31, 2020, respectively. Delinquencies Loan Participations Bank Partner Loans Total Payment Delinquency (a) Loans UPB Loans UPB Loans UPB % of UPB December 31, 2021 (Successor) Current 3,780 $ 4,442 14 $ 268 3,794 $ 4,710 96.6 % Less than 30 days 73 96 1 11 74 107 2.2 30 days 15 23 — — 15 23 0.5 60 days 10 14 — — 10 14 0.3 90+ days 7 9 1 12 8 21 0.4 3,885 $ 4,584 16 $ 291 3,901 $ 4,875 100.0 % December 31, 2020 (Predecessor) Current 4,409 $ 5,760 16 $ 319 4,425 $ 6,079 95.7 % Less than 30 days 116 174 — — 116 174 2.7 30 days 22 38 1 23 23 61 1.0 60 days 7 11 — — 7 11 0.2 90+ days 10 14 1 12 11 26 0.4 4,564 $ 5,997 18 $ 354 4,582 $ 6,351 100.0 % (a) As further described in Note 2, Sunlight places loans delinquent greater than 90 days on nonaccrual status. Such Loans had carrying values of $ 0.0 million and $ 0.0 million at December 31, 2021 and December 31, 2020, respectively. Sunlight does not consider the average carrying values and interest income recognized (including interest income recognized using a cash-basis method) material. |
Risk concentration | Concentrations Successor Predecessor December 31, 2021 December 31, 2020 Amount Amount Contractor Outstanding % of Total Outstanding % of Total 1 $ 20,894 31.1 % $ 6,425 18.1 % 2 12,470 18.6 295 0.8 3 9,496 14.2 10,429 29.5 4 2,610 3.9 437 1.2 5 2,571 3.8 36 0.1 6 2,093 3.1 1,812 5.1 7 1,745 2.6 141 0.4 8 855 1.3 712 2.0 9 633 0.9 — — 10 570 0.8 — — Other (a) 13,140 19.7 15,114 42.8 $ 67,077 100.0 % $ 35,401 100.0 % (a) At December 31, 2021 and December 31, 2020, Sunlight recorded advances receivable from 160 and 131 counterparties not individually listed in the table above with average balances of $ 0.1 million and $ 0.1 million, respectively. At December 31, 2020, Sunlight recorded advances receivable from individual counterparties of $ 2.6 million, $ 0.6 million, $ 0.6 million, $ 0.5 million, and $ 0.5 million that represent the largest advance concentrations included in “ Other, ” based on the amount outstanding. Loan Collateral Concentrations Successor Predecessor December 31, 2021 December 31, 2020 State UPB % of Total UPB % of Total Texas $ 930 19.1 % $ 1,203 18.9 % California 867 17.8 1,111 17.5 Florida 423 8.7 555 8.7 New York 325 6.7 403 6.3 New Jersey 302 6.2 376 5.9 Arizona 220 4.5 312 4.9 Pennsylvania 202 4.1 274 4.3 Massachusetts 201 4.1 223 3.5 South Carolina 178 3.7 234 3.7 Missouri 135 2.8 228 3.6 Other (a) 1,092 22.3 1,432 22.7 $ 4,875 100.0 % $ 6,351 100.0 % (a) Sunlight only participates in residential solar loans originated within the United States, including 31 and 31 states not individually listed in the table above, none of which individually amount to more than 2.6 % and 2.7 % of the UPB at December 31, 2021 and December 31, 2020, respectively. |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative assets and income (loss) related to derivatives | Successor Predecessor December 31, December 31, Balance Sheet Location 2021 2020 Contract derivative 1 Other assets $ 1,076 $ 1,435 Contract derivative 2 Other assets 335 — $ 1,411 $ 1,435 Successor Predecessor For the Period July 10, 2021 to For the Period For the Year December 31, January 1, 2021 to Ended December 2021 July 9, 2021 31, 2020 Change in fair value of contract derivatives, net Contract derivative 1 $ 573 $ (932) $ 1,435 Contract derivative 2 65 270 n.a. $ 638 $ (662) $ 1,435 Realized gains on contract derivatives, net Contract derivative 1 $ 2,789 $ 2,950 $ 103 Contract derivative 2 77 42 n.a. $ 2,866 $ 2,992 $ 103 |
Notional amounts of derivatives | Successor Predecessor December 31, December 31, 2021 2020 Contract derivative 1 (a) $ 38,879 $ 59,770 Contract derivative 2 (b) 37,891 n.a. (a) Represents the carrying value of Indirect Channel Loans for the purchase and installation of home improvements other than residential solar energy systems held by Sunlight ’ s Bank Partner. (b) Represents the unpaid principal balance of the Loans at time of sale to the Indirect Channel Loan Purchaser for which Sunlight is entitled to income in the event of prepayment of the Indirect Channel Loan. |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt obligations and activity | Successor Predecessor December 31, December 31, 2021 2020 Weighted Outstanding Maximum Final Average Month Face Carrying Facility Stated Funding Life Carrying Issued Amount Value Size Maturity Cost (Years) Value (a) Revolving credit facility (a) Apr 2021 $ 20,613 $ 20,613 $ 30,000 Apr 2023 5.1 % 1.3 $ 14,625 (a) In March 2016, Sunlight entered into a Loan and Security Agreement with a lender ( “ Prior Lender ” ). In May 2019, Sunlight and Prior Lender amended and restated the agreement to provide Sunlight a $15.0 million revolving credit facility ( “ Prior Facility ” ). In April 2021, Sunlight paid the Prior Facility in full using proceeds from a Loan and Security Agreement into which Sunlight entered with a Lender and replaced the associated standby letter of credit. Borrowings under the current $30.0 million revolving credit facility, secured by the net assets of Sunlight, bear interest at a per annum rate equal to the sum of (i) a floating rate index and (ii) a fixed margin. The facility includes unused facility costs, and amounts borrowed under this facility are nonrecourse to Sunlight Financial Holdings Inc.. The carrying value at December 31, 2020 reflects Sunlight ’ s borrowings under the Prior Facility. Successor Predecessor For the Period For the Period For the Year July 10, 2021 January 1, Ended to December 2021 to July 9, December 31, 31, 2021 2021 2020 Beginning Balance $ 20,613 $ 14,625 $ 11,811 Borrowings — 20,746 8,713 Repayments — (14,758) (5,899) Amortization of deferred financing costs (a) — — — Ending Balance $ 20,613 $ 20,613 $ 14,625 (a) Excludes $0.0 million amortization of deferred financing costs included in “ Other Assets ” in the accompanying Consolidated Balance Sheets for the periods July 10, 2021 through December 31, 2021 as well as $0.0 million and $0.0 million amortization for the period January 1, 2021 through July 9, 2021 and the year ended December 31, 2020, respectively. Sunlight includes amortization of these costs within “ Depreciation and Amortization ” in the accompanying Consolidated Statements of Operations. Unamortized deferred financing costs upon closing of the Business Combination did not qualify as acquired assets; therefore, Sunlight did not have any such unamortized costs at December 31, 2021 and did not amortize any such costs for the period July 10, 2021 through December 31, 2021. |
Equity and Earnings per Share (
Equity and Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Warrants | Date of Exercise Price Type Issuance 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 | Class A-3 Class A-2 Class A-1 Month of Issuance Units Units 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 December 31, 2021 Sunlight Financial LLC net income (loss) before income taxes $ (249,993) Sunlight Financial LLC as a percent of total (a) 35.0 % Sunlight Financial LLC net income (loss) attributable to the Class EX unitholders $ (87,528) (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: Successor For the Period July 10, 2021 to December 31, 2021 Transfers (to) from non-controlling interests: Increase in Sunlight's shareholders' equity for the delivery of Class EX Units primarily in connection with vested provisionally-vested Class EX Units $ 30,379 Dilution impact of equity transactions 30,379 Net income (loss) attributable to Class A shareholders (159,556) Change from transfers (to) from non-controlling interests and from net income (loss) attributable to Class A shareholders $ (129,177) |
Equity based compensation - granted | Sunlight has granted the following outstanding awards (“Compensation Awards”) to certain employees and members of Sunlight’s Board at December 31, 2021: Service (in Years) (b) Award Class (a) Minimum Maximum Awards (c) Provisionally-Vested Class A Shares 1.9 3.6 337,193 Provisionally-Vested Class EX Units 1.9 1.9 974,447 Director RSUs 1.0 1.0 75,000 Employee RSUs 3.0 4.0 2,136,129 3,522,769 (a) All awards subject solely to time-based vesting. (b) At time of grant. (c) Net of fully vested awards. |
Activities related to equity-based compensation | Successor Provisionally-Vested RSUs Class A Shares Class EX Units Directors Employees Per Share Shares Per Unit Units Per Unit Units Per Unit Units July 9, 2021 (Successor) $ — — $ — — $ — — $ — — Issued 9.46 512,227 9.46 1,379,401 9.46 75,000 9.00 2,285,417 Vested 9.46 (78,296) 9.46 (355,596) — — — — Forfeited or Cancelled 9.46 (96,738) 9.46 (49,358) — — 9.46 (149,288) December 31, 2021 (Successor) 9.46 337,193 9.46 974,447 9.46 75,000 8.97 2,136,129 Predecessor Class C LTIP Per Per Unit Units 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 20.11 (1,095) 40.19 (1,607) Converted to Class C-2 Units 11.12 (3,025) 17.36 (3,613) Forfeited — — 18.61 (2,444) December 31, 2020 (Predecessor) 14.51 234,403 20.06 71,060 December 31, 2020 (Predecessor) $ 14.51 234,403 $ 20.06 71,060 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 |
Unrecognized compensation expense | Type Weighted Average Awards Amount Provisionally-Vested Class A Shares 1.2 years 337,193 $ 3,101 Provisionally-Vested Class EX Units 0.7 years 974,447 9,218 Director RSUs 0.3 years 75,000 367 Employee RSUs 1.6 years 2,136,129 16,641 3,522,769 $ 29,327 |
Earnings per share calculations | The following table summarizes the basic and diluted earnings per share calculations: Successor For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Per Class A Shareholders, Basic Net income (loss) available to Class A shareholders $ (158,573) Total weighted average shares outstanding 84,824,109 Net Income (Loss) Per Class A Shareholders, Basic $ (1.87) Net Income (Loss) Per Class A Shareholders, Diluted Net income (loss) available to Class A shareholders $ (158,573) Total weighted average shares outstanding 84,824,109 Net Income (Loss) Per Class A Shareholders, Diluted $ (1.87) Net income (loss) available to Class A shareholders Net Income (Loss) $ (247,084) Noncontrolling interests in loss of consolidated subsidiaries 87,528 Other weighting adjustments 983 Net Income (Loss) Attributable to Class A Shareholders (158,573) 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 $ (158,573) Weighted Average Units Outstanding Class A shares outstanding 84,824,109 Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares (a) — Incremental Class A Shares attributable to dilutive effect of warrants (b) — Total weighted average shares outstanding, diluted 84,824,109 (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 For the Period July 10, 2021 to December Common Shares From 31, 2021 Class EX Units 46,354,679 Warrants (a) 27,150,000 Other warrants 627,780 Unvested Class EX Units 1,240,776 RSUs (b) 2,085,501 77,458,736 (a) Includes Public Warrants and Private Placement Warrants. (b) Includes RSUs awards to directors and employees. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Carrying values and fair values of assets and liabilities recorded at fair value on a recurring and non-recurring basis | The carrying values and fair values of Sunlight’s assets and liabilities recorded at fair value on a recurring or non-recurring basis, as well as other financial instruments for which fair value is disclosed, at December 31, 2021 and December 31, 2020 were as follows: Principal Balance or Notional Carrying Fair Value Amount Value Level 1 Level 2 Level 3 Total December 31, 2021 (Successor) Assets: Financing Receivables: Loan participations, held-for-investment $ 4,584 $ 4,051 $ — $ — $ 4,260 $ 4,260 Loans, held-for-investment 291 262 — — 250 250 Cash and cash equivalents 91,882 91,882 91,882 — — 91,882 Restricted cash 2,018 2,018 2,018 — — 2,018 Contract derivatives 76,770 1,411 — — 1,411 1,411 Liabilities: Debt 20,613 20,613 — — 20,613 20,613 Warrants 312,225 19,007 — — 19,007 19,007 Guarantee obligation n.a. 418 — — 418 418 December 31, 2020 (Predecessor) Assets: Financing Receivables: Loan participations, held-for-investment 5,997 5,029 — — 5,140 5,140 Loans, held-for-investment 354 304 — — 310 310 Cash and cash equivalents 49,583 49,583 49,583 — — 49,583 Restricted cash 3,122 3,122 3,122 — — 3,122 Contract derivatives 59,770 1,435 — — 1,435 1,435 Liabilities: Debt 14,625 14,625 — — 14,625 14,625 Warrants 4,700 5,643 — — 5,643 5,643 Guarantee obligation n.a. 839 — — 839 839 |
Change in assets measured at fair value on a recurring basis | Sunlight’s assets and liabilities measured at fair value on a recurring basis using Level 3 inputs changed as follows: Assets Liabilities Contract Derivatives Warrants December 31, 2020 (Predecessor) $ 1,435 $ 5,643 Transfers (a) Transfers to Level 3 — 41,591 Transfers from Level 3 — (11,148) Gains (losses) included in net income (b) Included in change in fair value of warrant liabilities — 5,504 Included in change in fair value of contract derivatives, net (662) — Included in realized gains on contract derivatives, net 2,992 — Payments, net (2,992) — July 9, 2021 (Predecessor) 773 41,590 Transfers (a) Transfers to Level 3 — — Transfers from Level 3 — — Gains (losses) included in net income (b) Included in change in fair value of warrant liabilities — (22,583) Included in change in fair value of contract derivatives, net 638 — Included in realized gains on contract derivatives, net 2,866 — Payments, net (2,866) — December 31, 2021 (Successor) $ 1,411 $ 19,007 December 31, 2019 (Predecessor) $ — $ 133 Transfers (a) Transfers to Level 3 — — Transfers from Level 3 — — Gains (losses) included in net income (b) Included in change in fair value of warrant liabilities — 5,510 Included in change in fair value of contract derivatives, net 1,435 — Included in realized gains on contract derivatives, net 103 — Payments, net (103) — December 31, 2020 (Predecessor) $ 1,435 $ 5,643 (a) Transfers are assumed to occur at the beginning of the respective period, except transfers that occurred at the Closing Date of the Business Combination. (b) Changes in the fair value of liabilities shown as losses included in net income. |
Significant inputs and assumptions used in the valuation of contract derivatives, share-based compensation, and warrants | Contract Derivative Significant Inputs 1 Inputs include expected cash flows from the financing and sale of applicable Indirect Channel Loans and discount rates that market participants would expect for the Indirect Channel Loans. Significant increases (decreases) in the discount rates in isolation would result in a significantly lower (higher) fair value measurement. 2 Inputs include expected prepayment rate of applicable Indirect Channel Loans sold to the Indirect Channel Loan Purchaser. Significant increases (decreases) in the expected prepayment rate in isolation would result in a significantly higher (lower) fair value measurement. The following significant assumptions were used to value Sunlight’s contract derivative: Successor Predecessor December 31, December 31, 2021 2020 Contract Derivative 1 Discount rate 10.0 % 8.1 % Weighted average life (in years) 0.2 0.3 Contract Derivative 2 Expected prepayment rate 75.0 % n.a. Compensation Unit and Warrant Valuation Successor December 31, Assumption 2021 Class A common share value per share (a) $ 4.78 Implied volatility (a) 48.0 % Dividend yield (b) — % Time to expiry (in years) (a) 4.5 Risk free rate (a) 1.2 % (a) Significant increases in these assumptions in isolation would result in a higher fair value measurement. (b) Significant increases in these assumptions in isolation would result in a lower fair value measurement. Predecessor To determine the fair value of warrants at December 31, 2020 and the grant-date value of each Class C Unit and LTIP Unit granted prior to the Business Combination during the periods January 1, 2021 through July 9, 2021 and the year ended December 31, 2020, an independent third-party valuation firm (a) used an income valuation approach to determine the fair value of Sunlight’s equity on a quarterly basis and (b) allocated that fair value to each class of interest in Sunlight’s equity and warrants thereon on a per unit basis using an option pricing method. Sunlight determined the grant-date fair value of an award using the value at the quarter-end closest to the grant date of the award. Significant increases (decreases) in the cost of equity, volatility, tax rate, and equity term in isolation would result in a significantly lower (higher) fair value measurement. The following significant assumptions were used to value Sunlight’s equity and warrants thereon, on a weighted-average basis: Predecessor December 31, Assumption 2020 Cost of equity 22.5 % Volatility 46.0 % Tax rate 26.0 % Term (in years) 3.0 |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Significant Components of Income Tax Expense | For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Before Income Taxes $ (250,588) Income Tax Expense (Benefit) Current Federal $ 1,708 State and local 312 2,020 Deferred Federal (4,603) State and local (921) (5,524) Total Federal (2,895) State and local (609) $ (3,504) |
Schedule of Effective Income Tax Rate Reconciliation | For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Before Income Taxes $ (250,588) Statutory U.S Income Tax Rate 21.0 % Income tax expense (benefit), at statutory U.S. federal rate $ (52,623) 21.0 % State and local taxes (674) 0.3 Goodwill impairment 30,658 (12.2) Change in fair value of warrant liabilities (3,081) 1.2 Noncontrolling interests in loss of consolidated subsidiaries 18,390 (7.3) Business Combination compensation expense 3,662 (1.5) Other 164 (0.1) Income tax expense (benefit) $ (3,504) 1.4 |
Components of Deferred Tax Assets and Deferred Tax Liabilities | For the Period July 10, 2021 to December 31, 2021 Deferred tax liabilities Investment in Sunlight Financial LLC (36,686) Deferred tax asset (liability), net $ (36,686) |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum future lease payments | 2022 $ 1,348 2023 1,510 2024 1,553 2025 1,746 2026 1,790 Thereafter 4,856 $ 12,803 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Jul. 09, 2021 | |
Noncontrolling Interest [Line Items] | |||||
Number of operating segments | segment | 1 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Participation interest in loan pool | 5.00% | 5.00% | |||
Nonaccrual loans, threshold for impairment evaluation | $ 50,000 | $ 50,000 | |||
Troubled debt restructuring receivables, threshold for impairment evaluation | 50,000 | 50,000 | |||
Goodwill impairment | $ 224,700,000 | 224,701,000 | |||
Funding commitments | $ 22,749,000 | $ 22,749,000 | $ 18,386,000 | ||
Distributions | $ 7,522,000 | ||||
Sunlight Financial LLC | |||||
Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest percent | 35.00% | 35.00% | 34.90% | ||
Residential solar loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Participation interest in loan pool | 5.00% | 5.00% | 5.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 91,882 | $ 49,583 | ||
Restricted cash and cash equivalents | 2,018 | 3,122 | ||
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows | $ 93,900 | $ 216,519 | $ 52,705 | $ 51,656 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Carrying Value of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2021 | Jul. 09, 2021 | |
Accounting Policies [Abstract] | |||
Goodwill | $ 670,457 | $ 670,014 | |
Accumulated impairment losses | (224,701) | ||
Goodwill | 445,756 | $ 670,014 | |
Goodwill impairment | $ (224,700) | (224,701) | |
Other | $ 443 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | $ 409,093 | $ 409,093 | $ 11,775 | |
Accumulated amortization | (43,254) | (43,254) | (7,242) | |
Intangible assets, net | 365,839 | 365,839 | 4,533 | |
Capitalized internally developed software costs | 8,200 | 8,200 | 11,800 | |
Capitalized internally developed software costs, amortization | 43,300 | $ 1,400 | 2,900 | |
Annual Amortization Expense | ||||
2022 | 48,486 | 48,486 | ||
2023 | 33,037 | 33,037 | ||
2024 | 33,024 | 33,024 | ||
2025 | 32,539 | 32,539 | ||
2026 | 31,893 | 31,893 | ||
Thereafter | 186,860 | $ 186,860 | ||
Contractor relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful life | 11 years 6 months | |||
Intangible assets, gross | 350,000 | $ 350,000 | ||
Capital provider relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful life | 9 months 18 days | |||
Intangible assets, gross | 43,000 | $ 43,000 | ||
Trademarks/trade names | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful life | 10 years | |||
Intangible assets, gross | 7,900 | $ 7,900 | ||
Developed technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, gross | 8,193 | 8,193 | $ 11,775 | |
Intangible assets, net | 7,449 | 7,449 | ||
Annual Amortization Expense | ||||
2022 | 1,838 | 1,838 | ||
2023 | 1,838 | 1,838 | ||
2024 | 1,739 | 1,739 | ||
2025 | 1,340 | 1,340 | ||
2026 | 694 | $ 694 | ||
Developed technology | Minimum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful life | 3 years | 1 year | ||
Developed technology | Maximum | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful life | 5 years | 3 years | ||
Other Identified Intangible Assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net | 358,390 | $ 358,390 | ||
Annual Amortization Expense | ||||
2022 | 46,648 | 46,648 | ||
2023 | 31,199 | 31,199 | ||
2024 | 31,285 | 31,285 | ||
2025 | 31,199 | 31,199 | ||
2026 | 31,199 | 31,199 | ||
Thereafter | $ 186,860 | $ 186,860 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 5,207 | $ 5,207 | $ 2,041 | |
Accumulated amortization and depreciation | (1,138) | (1,138) | (849) | |
Property and equipment, net | 4,069 | $ 4,069 | 1,192 | |
Depreciation | 200 | $ 200 | $ 300 | |
Furniture, fixtures, and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 5 years | 7 years | ||
Property and equipment, gross | 1,020 | $ 1,020 | $ 555 | |
Computer hardware | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 5 years | 5 years | ||
Property and equipment, gross | 1,108 | $ 1,108 | $ 868 | |
Computer software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 250 | $ 250 | $ 197 | |
Computer software | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 1 year | 1 year | ||
Computer software | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 3 years | 3 years | ||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 2,829 | $ 2,829 | $ 421 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Distributions Payable (Details) $ / shares in Units, $ in Millions | 1 Months Ended |
Dec. 31, 2020USD ($)$ / shares | |
Class A-1 Units | |
Dividends Payable [Line Items] | |
Distributions | $ | $ 1.3 |
Distributions (in dollars per share) | $ / shares | $ 4.38 |
Class A-2 Units | |
Dividends Payable [Line Items] | |
Distributions | $ | $ 1.2 |
Distributions (in dollars per share) | $ / shares | $ 5.33 |
Class A-3 Units | |
Dividends Payable [Line Items] | |
Distributions | $ | $ 5 |
Distributions (in dollars per share) | $ / shares | $ 13.34 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 61,674,000 | $ 53,064,000 | $ 69,564,000 | |
Administrative fee income, affiliate | 100,000 | 100,000 | 200,000 | |
Realized gains on contract derivative, net | 2,866,000 | 2,992,000 | 103,000 | |
Platform fees, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 56,783,000 | 50,757,000 | 66,853,000 | |
Administrative fee income, affiliate | 200,000 | $ 200,000 | 300,000 | |
Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 4,891,000 | $ 2,307,000 | $ 2,711,000 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Business Combination (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 09, 2021 | Nov. 30, 2020 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Narrative Disclosures | ||||||
Trust account cash | $ 345,000 | $ 345,000 | ||||
Redemption of common stock | $ 192,300 | |||||
Shares redeemed (in shares) | 19,227,063 | |||||
Shares redeemed, price (in dollars per share) | $ 10 | |||||
Tax withholding paid related to cash compensation paid to the Company's employees | $ 5,600 | |||||
Business combination expenses | $ 3,080 | 7,011 | $ 878 | |||
Payments of stock issuance costs | $ 19,700 | 19,618 | ||||
Purchase Consideration | ||||||
Equity consideration paid to existing Sunlight Financial LLC ownership in Class A Common Stock, net | 357,800 | |||||
Rollover of Sunlight Financial LLC historical warrants | 2,499 | |||||
Cash consideration to Sellers, net | 296,281 | |||||
Cash paid for seller transaction costs | 8,289 | |||||
Purchase consideration | 664,869 | |||||
Fair Value of Net Assets Acquired | ||||||
Goodwill | $ 670,014 | $ 445,756 | $ 670,014 | $ 445,756 | ||
Equity Consideration | ||||||
Fair value per share (in dollars per share) | $ 9.46 | $ 9.46 | ||||
Equity consideration paid to Sellers, net | $ 357,800 | |||||
Noncontrolling Interest | ||||||
Fair value per unit (in dollars per share) | $ 9.46 | $ 9.46 | ||||
Pro Forma Operating Results | ||||||
Total revenues | 114,738 | 69,564 | ||||
Net income (loss) before income taxes | (217,023) | (99,905) | ||||
Income tax benefit | 3,038 | 15,138 | ||||
Noncontrolling interests | 75,646 | 34,824 | ||||
Net income (loss) attributable to Common Class A shareholders | $ (138,338) | $ (49,944) | ||||
IPO | ||||||
Narrative Disclosures | ||||||
Stock issued (in shares) | 34,500,000 | |||||
Consideration received | $ 345,000 | |||||
Payments of stock issuance costs | $ 12,100 | |||||
PIPE | ||||||
Narrative Disclosures | ||||||
Stock issued (in shares) | 25,000,000 | |||||
Consideration received | $ 250,000 | |||||
Payments of stock issuance costs | 7,500 | |||||
Sunlight Financial LLC | ||||||
Narrative Disclosures | ||||||
Cash received | 55,100 | |||||
Business combination expenses | $ 7,000 | |||||
Payment of acquisition-related advisory fees | 7,900 | |||||
Fair Value of Net Assets Acquired | ||||||
Goodwill | 670,457 | 670,457 | ||||
Intangible assets | 407,600 | 407,600 | ||||
Property and equipment | 1,047 | 1,047 | ||||
Due from affiliates | 1,839 | 1,839 | ||||
Other assets | 4,561 | 4,561 | ||||
Accounts payable and accrued expenses | (19,210) | (19,210) | ||||
Funding commitments | (21,485) | (21,485) | ||||
Debt | (20,613) | (20,613) | ||||
Due to affiliates | (761) | (761) | ||||
Deferred tax liability | (42,212) | (42,212) | ||||
Other liabilities | (512) | (512) | ||||
Fair value of noncontrolling interests | (427,211) | (427,211) | ||||
Fair value of net assets acquired | 664,869 | $ 664,869 | ||||
Equity Consideration | ||||||
Acceleration of post business combination expense, cash portion | 0 | |||||
Acquired Intangible Assets | ||||||
Fair value, intangible assets acquired | $ 407,600 | |||||
Noncontrolling Interest | ||||||
Noncontrolling interest percent | 34.90% | 35.00% | 34.90% | 35.00% | ||
Fair value of Class EX units | $ 437,204 | $ 437,204 | ||||
Less: Postcombination compensation expenses | (9,993) | |||||
Noncontrolling interests | $ 427,211 | $ 427,211 | ||||
Sunlight Financial LLC | Contractor relationships | ||||||
Acquired Intangible Assets | ||||||
Weighted average useful lives, intangible assets acquired | 11 years 6 months | |||||
Fair value, intangible assets acquired | $ 350,000 | |||||
Sunlight Financial LLC | Capital provider relationships | ||||||
Acquired Intangible Assets | ||||||
Weighted average useful lives, intangible assets acquired | 9 months 18 days | |||||
Fair value, intangible assets acquired | $ 43,000 | |||||
Sunlight Financial LLC | Trademarks/trade names | ||||||
Acquired Intangible Assets | ||||||
Weighted average useful lives, intangible assets acquired | 10 years | |||||
Fair value, intangible assets acquired | $ 7,900 | |||||
Sunlight Financial LLC | Developed technology | ||||||
Acquired Intangible Assets | ||||||
Weighted average useful lives, intangible assets acquired | 5 years | |||||
Fair value, intangible assets acquired | $ 6,700 | |||||
Sunlight Financial LLC | Class A common stock | ||||||
Purchase Consideration | ||||||
Equity consideration paid to existing Sunlight Financial LLC ownership in Class A Common Stock, net | $ (357,800) | |||||
Equity Consideration | ||||||
Common Class A shares | 38,151,192 | |||||
Fair value per share (in dollars per share) | $ 9.46 | $ 9.46 | ||||
Equity consideration paid to existing Blocker Holders | $ 360,910 | |||||
Acceleration of post business combination expense | (3,110) | |||||
Equity consideration paid to Sellers, net | $ (357,800) | |||||
Noncontrolling Interest | ||||||
Fair value per unit (in dollars per share) | $ 9.46 | $ 9.46 | ||||
Sunlight Financial LLC | Common Class EX | ||||||
Noncontrolling Interest | ||||||
Common Class EX units (in shares) | 46,216,054,000 | |||||
Sunlight Financial LLC | ||||||
Fair Value of Net Assets Acquired | ||||||
Cash and cash equivalents | $ 59,786 | $ 59,786 | ||||
Restricted cash | 3,844 | 3,844 | ||||
Sunlight Financial LLC | Advances | ||||||
Fair Value of Net Assets Acquired | ||||||
Advances and Financing receivables | 42,622 | 42,622 | ||||
Sunlight Financial LLC | Loans and Loan Participations | ||||||
Fair Value of Net Assets Acquired | ||||||
Advances and Financing receivables | $ 5,117 | $ 5,117 |
Financing Receivables - Compone
Financing Receivables - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Jul. 09, 2021 | Jul. 08, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Participation interest in loan pool | 5.00% | ||||
Amounts outstanding | $ 71,952 | $ 41,752 | |||
Unamortized discount | (414) | (893) | |||
Allowance for credit losses | (386) | (246) | |||
Carrying value | 71,152 | 40,613 | |||
Advances | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Amounts outstanding | 67,077 | 35,401 | |||
Allowance for credit losses | (238) | $ (211) | $ (121) | (121) | $ (215) |
Carrying value | 66,839 | 35,280 | |||
Advances, not associated with specific installation projects | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Carrying value | 9,000 | ||||
Loans and Loan Participations | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Amounts outstanding | 4,875 | 6,351 | |||
Unamortized discount | (414) | (893) | |||
Allowance for credit losses | (148) | (111) | $ (125) | (125) | $ (96) |
Carrying value | $ 4,313 | $ 4,712 | $ 5,333 | ||
Residential solar loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Participation interest in loan pool | 5.00% | 5.00% | |||
Amounts outstanding | $ 4,600 | $ 6,000 | |||
Indirect Channel Loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Amounts outstanding | $ 300 | $ 400 |
Financing Receivables - Changes
Financing Receivables - Changes (Details) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2021USD ($)loan | Jul. 09, 2021USD ($)loan | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($)loan | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Beginning Balance | $ 246 | $ 246 | |||
Provision for credit losses | $ 1,217 | 1,172 | $ 1,350 | ||
Ending Balance | 386 | 246 | |||
Financing Receivable [Roll Forward] | |||||
Beginning Balance | 40,613 | 40,613 | |||
Provision for credit losses | (1,217) | (1,172) | (1,350) | ||
Ending Balance | 71,152 | 40,613 | |||
Advances | |||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Beginning Balance | 211 | 121 | 121 | 215 | |
Provision for credit losses | 90 | (94) | |||
Ending Balance | 238 | 211 | 121 | ||
Financing Receivable [Roll Forward] | |||||
Beginning Balance | 35,280 | 35,280 | |||
Provision for credit losses | (90) | 94 | |||
Ending Balance | 66,839 | 35,280 | |||
Advances | Revision Of Prior Period, Including Business Combination Fair Value Adjustments, Adjusted Balance | |||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Provision for credit losses | 358 | ||||
Realized losses | (120) | ||||
Ending Balance | 238 | ||||
Financing Receivable [Roll Forward] | |||||
Provision for credit losses | (358) | ||||
Loans and Loan Participations | |||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Beginning Balance | 111 | 125 | 125 | 96 | |
Provision for credit losses | 1,082 | 1,444 | |||
Realized losses | (1,096) | (1,415) | |||
Ending Balance | 148 | 111 | 125 | ||
Financing Receivable [Roll Forward] | |||||
Beginning Balance | 4,712 | 5,333 | 5,333 | ||
Purchases, net | [1] | 1,170 | 2,839 | ||
Proceeds from principal repayments, net | (832) | (1,316) | |||
Accretion of loan discount | 123 | 124 | |||
Provision for credit losses | (1,082) | (1,444) | |||
Ending Balance | 4,313 | 4,712 | 5,333 | ||
Loans and Loan Participations | Revision Of Prior Period, Including Business Combination Fair Value Adjustments, Adjusted Balance | |||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||
Provision for credit losses | 859 | ||||
Realized losses | (711) | ||||
Ending Balance | 148 | ||||
Financing Receivable [Roll Forward] | |||||
Beginning Balance | 5,105 | 5,333 | 5,333 | 5,130 | |
Purchases, net | [1] | 716 | |||
Proceeds from principal repayments, net | (710) | ||||
Accretion of loan discount | 61 | ||||
Provision for credit losses | (859) | ||||
Ending Balance | 4,313 | 5,105 | 5,333 | ||
Residential solar loans | |||||
Financing Receivable [Roll Forward] | |||||
Purchases, net | $ 0 | $ 100 | $ 1,600 | ||
Number of loans purchased | loan | 0 | 54 | 1,007 | ||
Indirect Channel Loans | |||||
Financing Receivable [Roll Forward] | |||||
Purchases, net | $ 400 | $ 1,100 | $ 1,200 | ||
Number of loans purchased | loan | 20 | 51 | 49 | ||
[1] | During the year ended December 31, 2020, Sunlight purchased (i) 5.0 % participation interests in 1,007 loans with an aggregate UPB of $ 1.6 million as well as (ii) 49 Indirect Channel Loans with an aggregate UPB $ 1.2 million. During the periods July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, Sunlight purchased (i) 5.0 % participation interests in 0 and 54 loans with an aggregate UPB of $ 0.0 million and $ 0.1 million as well as (ii) 20 and 51 Indirect Channel Loans with an aggregate UPB of $ 0.4 million and $ 1.1 million, respectively. |
Financing Receivables - Risk Ra
Financing Receivables - Risk Ratings (Details) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021USD ($)item | Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($)item | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Amount outstanding | $ 71,952,000 | $ 71,952,000 | $ 41,752,000 |
Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of amount outstanding | 100.00% | 100.00% | |
Advances | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Contractors | item | 170 | 170 | 141 |
Amount outstanding | $ 67,077,000 | $ 67,077,000 | $ 35,401,000 |
Average risk rating | 2 | 2 | 1.5 |
Advances | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Amount outstanding | $ 100 | $ 100 | $ 100 |
% of amount outstanding | 100.00% | 100.00% | 100.00% |
Advances | Low risk | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Contractors | item | 76 | 76 | 78 |
Amount outstanding | $ 14,575,000 | $ 14,575,000 | $ 18,072,000 |
Advances | Low risk | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of amount outstanding | 21.70% | 51.00% | |
Advances | Low-to-medium risk | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Contractors | item | 77 | 77 | 56 |
Amount outstanding | $ 38,955,000 | $ 38,955,000 | $ 16,700,000 |
Advances | Low-to-medium risk | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of amount outstanding | 58.10% | 47.20% | |
Advances | Medium risk | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Contractors | item | 17 | 17 | 4 |
Amount outstanding | $ 13,547,000 | $ 13,547,000 | $ 604,000 |
Advances | Medium risk | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of amount outstanding | 20.20% | 1.70% | |
Advances | Higher risk | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Contractors | item | 3 | ||
Amount outstanding | $ 25,000 | ||
Advances | Higher risk | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
% of amount outstanding | 0.10% |
Financing Receivables - Aging o
Financing Receivables - Aging of Advances (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | |||
Participation interest in loan pool | 5.00% | 5.00% | |
Financing Receivable, Past Due [Line Items] | |||
Financing receivables, net of allowance for credit losses | $ 71,152 | $ 71,152 | $ 40,613 |
Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 100.00% | 100.00% | |
Current | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 96.60% | 95.70% | |
Less than 30 days | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 2.20% | 2.70% | |
30 days | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 0.50% | 1.00% | |
60 days | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 0.30% | 0.20% | |
90+ days | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 0.40% | 0.40% | |
Advances | |||
Financing Receivable, Past Due [Line Items] | |||
Amount outstanding | 58,077 | $ 58,077 | $ 35,401 |
Financing receivables, net of allowance for credit losses | 66,839 | 66,839 | 35,280 |
Allowance for credit losses | $ 200 | $ 200 | $ 100 |
Advances | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 100.00% | 100.00% | 100.00% |
Advances | Current | |||
Financing Receivable, Past Due [Line Items] | |||
Amount outstanding | $ 54,586 | $ 54,586 | $ 29,132 |
Advances | Current | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 94.00% | 82.30% | |
Advances | Less than 30 days | |||
Financing Receivable, Past Due [Line Items] | |||
Amount outstanding | 1,956 | $ 1,956 | $ 3,137 |
Advances | Less than 30 days | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 3.40% | 8.90% | |
Advances | 30 days | |||
Financing Receivable, Past Due [Line Items] | |||
Amount outstanding | 534 | $ 534 | $ 1,424 |
Advances | 30 days | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 0.90% | 4.00% | |
Advances | 60 days | |||
Financing Receivable, Past Due [Line Items] | |||
Amount outstanding | 361 | $ 361 | $ 672 |
Advances | 60 days | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 0.60% | 1.90% | |
Advances | 90+ days | |||
Financing Receivable, Past Due [Line Items] | |||
Amount outstanding | 640 | $ 640 | $ 1,036 |
Advances | 90+ days | Customer Concentration Risk | Financing Receivable | |||
Financing Receivable, Past Due [Line Items] | |||
% of amount outstanding | 1.10% | 2.90% | |
Advances, not associated with specific installation projects | |||
Financing Receivable, Past Due [Line Items] | |||
Financing receivables, net of allowance for credit losses | $ 9,000 | $ 9,000 |
Financing Receivables - Concent
Financing Receivables - Concentrations by Counterparty (Details) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021USD ($)customer | Dec. 31, 2021USD ($)customer | Dec. 31, 2020USD ($)customer | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | $ 71,952,000 | $ 71,952,000 | $ 41,752,000 |
Advances receivable, number of counterparties not individually disclosed | customer | 160 | 160 | 131 |
Customer Concentration Risk | Financing Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 100.00% | 100.00% | |
Customer Concentration Risk | Financing Receivable | Other Contractors | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average balance | $ 100,000 | $ 100,000 | $ 100,000 |
Advances | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 67,077,000 | 67,077,000 | 35,401,000 |
Advances | Contractor 1 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 20,894,000 | 20,894,000 | 6,425,000 |
Advances | Contractor 2 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 12,470,000 | 12,470,000 | 295,000 |
Advances | Contractor 3 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 9,496,000 | 9,496,000 | 10,429,000 |
Advances | Contractor 4 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 2,610,000 | 2,610,000 | 437,000 |
Advances | Contractor 5 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 2,571,000 | 2,571,000 | 36,000 |
Advances | Contractor 6 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 2,093,000 | 2,093,000 | 1,812,000 |
Advances | Contractor 7 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 1,745,000 | 1,745,000 | 141,000 |
Advances | Contractor 8 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 855,000 | 855,000 | 712,000 |
Advances | Contractor 9 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 633,000 | 633,000 | |
Advances | Contractor 10 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 570,000 | 570,000 | |
Advances | Other Contractors | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 13,140,000 | 13,140,000 | 15,114,000 |
Advances | Customer Concentration Risk | Financing Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | $ 100 | $ 100 | $ 100 |
% of total | 100.00% | 100.00% | 100.00% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 1 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 31.10% | 18.10% | |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 2 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 18.60% | 0.80% | |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 3 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 14.20% | 29.50% | |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 4 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 3.90% | 1.20% | |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 5 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 3.80% | 0.10% | |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 6 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 3.10% | 5.10% | |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 7 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 2.60% | 0.40% | |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 8 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 1.30% | 2.00% | |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 9 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 0.90% | ||
Advances | Customer Concentration Risk | Financing Receivable | Contractor 10 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 0.80% | ||
Advances | Customer Concentration Risk | Financing Receivable | Other Contractors | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 19.70% | 42.80% | |
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - A | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | $ 2,600,000 | ||
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - B | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 600,000 | ||
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - C | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 600,000 | ||
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - D | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 500,000 | ||
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - E | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | $ 500,000 |
Financing Receivables - Aging_2
Financing Receivables - Aging of Loans and Loan Participations (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
Financing Receivable, Past Due [Line Items] | ||
UPB | $ 71,952 | $ 41,752 |
Loans in nonaccrual status | $ 0 | $ 0 |
Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 100.00% | 100.00% |
Current | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 96.60% | 95.70% |
Less than 30 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 2.20% | 2.70% |
30 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 0.50% | 1.00% |
60 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 0.30% | 0.20% |
90+ days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 0.40% | 0.40% |
Loans and Loan Participations | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3,901 | 4,582 |
UPB | $ 4,875 | $ 6,351 |
Loans and Loan Participations | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3,794 | 4,425 |
UPB | $ 4,710 | $ 6,079 |
Loans and Loan Participations | Less than 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 74 | 116 |
UPB | $ 107 | $ 174 |
Loans and Loan Participations | 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 15 | 23 |
UPB | $ 23 | $ 61 |
Loans and Loan Participations | 60 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 10 | 7 |
UPB | $ 14 | $ 11 |
Loans and Loan Participations | 90+ days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 8 | 11 |
UPB | $ 21 | $ 26 |
Loan Participations | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3,885 | 4,564 |
UPB | $ 4,584 | $ 5,997 |
Loan Participations | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3,780 | 4,409 |
UPB | $ 4,442 | $ 5,760 |
Loan Participations | Less than 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 73 | 116 |
UPB | $ 96 | $ 174 |
Loan Participations | 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 15 | 22 |
UPB | $ 23 | $ 38 |
Loan Participations | 60 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 10 | 7 |
UPB | $ 14 | $ 11 |
Loan Participations | 90+ days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 7 | 10 |
UPB | $ 9 | $ 14 |
Bank Partner Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 16 | 18 |
UPB | $ 291 | $ 354 |
Bank Partner Loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 14 | 16 |
UPB | $ 268 | $ 319 |
Bank Partner Loans | Less than 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 1 | |
UPB | $ 11 | |
Bank Partner Loans | 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 1 | |
UPB | $ 23 | |
Bank Partner Loans | 90+ days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 1 | 1 |
UPB | $ 12 | $ 12 |
Financing Receivables - Conce_2
Financing Receivables - Concentrations by State (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)state | Dec. 31, 2020USD ($)state | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | $ 71,952 | $ 41,752 |
Financing Receivable | Geographic Concentration Risk | Texas | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 19.10% | 18.90% |
Financing Receivable | Geographic Concentration Risk | California | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 17.80% | 17.50% |
Financing Receivable | Geographic Concentration Risk | Florida | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 8.70% | 8.70% |
Financing Receivable | Geographic Concentration Risk | New York | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 6.70% | 6.30% |
Financing Receivable | Geographic Concentration Risk | New Jersey | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 6.20% | 5.90% |
Financing Receivable | Geographic Concentration Risk | Arizona | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 4.50% | 4.90% |
Financing Receivable | Geographic Concentration Risk | Pennsylvania | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 4.10% | 4.30% |
Financing Receivable | Geographic Concentration Risk | Massachusetts | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 4.10% | 3.50% |
Financing Receivable | Geographic Concentration Risk | South Carolina | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 3.70% | 3.70% |
Financing Receivable | Geographic Concentration Risk | Missouri | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 2.80% | 3.60% |
Financing Receivable | Geographic Concentration Risk | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 22.30% | 22.70% |
Loans and Loan Participations | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | $ 4,875 | $ 6,351 |
Loans and Loan Participations | Texas | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 930 | 1,203 |
Loans and Loan Participations | California | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 867 | 1,111 |
Loans and Loan Participations | Florida | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 423 | 555 |
Loans and Loan Participations | New York | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 325 | 403 |
Loans and Loan Participations | New Jersey | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 302 | 376 |
Loans and Loan Participations | Arizona | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 220 | 312 |
Loans and Loan Participations | Pennsylvania | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 202 | 274 |
Loans and Loan Participations | Massachusetts | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 201 | 223 |
Loans and Loan Participations | South Carolina | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 178 | 234 |
Loans and Loan Participations | Missouri | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 135 | 228 |
Loans and Loan Participations | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | $ 1,092 | $ 1,432 |
Loans and Loan Participations | Financing Receivable | Geographic Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 100.00% | 100.00% |
Number of states not individually disclosed | state | 31 | 31 |
Threshold percentage for disclosing individually | 2.60% | 2.70% |
Derivatives - Assets and Notion
Derivatives - Assets and Notional Amounts (Details) $ in Thousands | Dec. 31, 2021USD ($)derivative | Dec. 31, 2020USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Number of agreements | derivative | 2 | |
Derivative [Line Items] | ||
Contract derivatives | $ 1,411 | $ 1,435 |
Other assets | ||
Derivative [Line Items] | ||
Contract derivatives | 1,411 | 1,435 |
Contract Derivative 1 | ||
Derivative [Line Items] | ||
Notional amount | 38,879 | 59,770 |
Contract Derivative 1 | Other assets | ||
Derivative [Line Items] | ||
Contract derivatives | 1,076 | $ 1,435 |
Contract Derivative 2 | ||
Derivative [Line Items] | ||
Notional amount | 37,891 | |
Contract Derivative 2 | Other assets | ||
Derivative [Line Items] | ||
Contract derivatives | $ 335 |
Derivatives - Income (Loss) (De
Derivatives - Income (Loss) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Derivative [Line Items] | |||
Change in fair value of contract derivatives, net | $ 638 | $ (662) | $ 1,435 |
Realized gains on contract derivatives, net | 2,866 | 2,992 | 103 |
Contract Derivative 1 | |||
Derivative [Line Items] | |||
Change in fair value of contract derivatives, net | 573 | (932) | 1,435 |
Realized gains on contract derivatives, net | 2,789 | 2,950 | $ 103 |
Contract Derivative 2 | |||
Derivative [Line Items] | |||
Change in fair value of contract derivatives, net | 65 | 270 | |
Realized gains on contract derivatives, net | $ 77 | $ 42 |
Debt Obligations - Components o
Debt Obligations - Components of obligations (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | May 31, 2019 | |
Line of Credit Facility [Line Items] | |||||
Outstanding face amount/Carrying value | $ 20,613 | $ 14,625 | |||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Outstanding face amount/Carrying value | 20,613 | $ 20,613 | $ 14,625 | $ 11,811 | |
Maximum facility size | $ 30,000 | $ 15,000 | |||
Weighted average funding cost | 5.10% | ||||
Weighted average life | 1 year 3 months 18 days |
Debt Obligations - Activity (De
Debt Obligations - Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Line Of Credit Facility [Roll Forward] | |||
Beginning Balance | $ 14,625 | ||
Borrowings | 20,746 | $ 8,713 | |
Repayments | (14,758) | (5,899) | |
Ending Balance | $ 20,613 | 14,625 | |
Revolving Credit Facility | |||
Line Of Credit Facility [Roll Forward] | |||
Beginning Balance | 20,613 | 14,625 | 11,811 |
Borrowings | 20,746 | 8,713 | |
Repayments | (14,758) | (5,899) | |
Ending Balance | 20,613 | 20,613 | 14,625 |
Amortization of deferred financing costs | $ 0 | $ 0 | $ 0 |
Equity and Earnings per Share -
Equity and Earnings per Share - Narrative (Details) | Jul. 09, 2021USD ($)$ / sharesshares | Nov. 30, 2020USD ($)$ / sharesshares | Nov. 30, 2020USD ($)$ / sharesshares | Oct. 31, 2020shares | Aug. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021$ / sharesshares | Dec. 31, 2021$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021D$ / sharesshares | Dec. 31, 2021$ / sharesshares | Feb. 28, 2021$ / sharesshares | Dec. 31, 2020shares |
Class of Stock [Line Items] | |||||||||||||
Payments of stock issuance costs | $ | $ 19,700,000 | $ 19,618,000 | |||||||||||
Number of shares in each unit (in shares) | 1 | ||||||||||||
Warrants (in shares) | 9,900,000 | 9,900,000 | |||||||||||
Price of warrants (in dollars per share) | $ / shares | $ 1 | $ 1 | |||||||||||
Proceeds from issuance of warrants | $ | $ 9,900,000 | $ 9,900,000 | |||||||||||
Sale of Founders Shares, restriction period | 1 year | ||||||||||||
Sale of Founders Shares, stock price threshold (in dollars per share) | $ / shares | $ 12 | ||||||||||||
Sale of Founders Shares, threshold trading days | 20 | 20 | |||||||||||
Sale of Founders Shares, threshold consecutive trading days | 30 days | ||||||||||||
Sale of Founders Shares, period after Business Combination | 150 days | ||||||||||||
Preferred stock, authorized (in shares) | 35,000,000 | 35,000,000 | 35,000,000 | 35,000,000 | 35,000,000 | 35,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Exercise price per share (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | |||||||||||
Reclassification of warrants as equity | $ | $ 2,500,000 | ||||||||||||
Proceeds from warrant exercises | $ | $ 2,300,000 | ||||||||||||
Stock issued upon exercise of warrants (in shares) | 635,641 | ||||||||||||
Warrants, fair market value, period following notice of redemption | 10 days | ||||||||||||
Warrants, redemption, maximum share issuance ratio | 0.361 | ||||||||||||
Preferred units, preferred return, percentage | 14.50% | ||||||||||||
Dividends declared | $ / shares | 0 | ||||||||||||
Warrant Redemption Scenario One | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Exercise price per share (in dollars per share) | $ / shares | 11.50 | $ 11.50 | 11.50 | 11.50 | 11.50 | $ 11.50 | |||||||
Warrants, redemption price trigger (in dollars per share) | $ / shares | 18 | 18 | 18 | 18 | 18 | 18 | |||||||
Warrants, redemption price (in dollars per share) | $ / shares | 0.01 | $ 0.01 | 0.01 | 0.01 | $ 0.01 | 0.01 | |||||||
Warrants, redemption notice period | 30 days | ||||||||||||
Warrants, redemption period | 30 days | ||||||||||||
Warrants, redemption, threshold trading days | D | 20 | ||||||||||||
Warrants, redemption, threshold consecutive trading days | 30 days | ||||||||||||
Warrant Redemption Scenario Two | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Warrants, redemption price trigger (in dollars per share) | $ / shares | 10 | $ 10 | 10 | 10 | $ 10 | 10 | |||||||
Warrants, redemption price (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | |||||||
Warrants, redemption notice period | 30 days | ||||||||||||
IPO | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued (in shares) | 34,500,000 | ||||||||||||
Price per share (in dollars per share) | $ / shares | $ 10 | $ 10 | |||||||||||
Consideration received | $ | $ 345,000,000 | ||||||||||||
Payments of stock issuance costs | $ | $ 12,100,000 | ||||||||||||
Payment of deferred underwriting commissions | $ | $ 12,100,000 | ||||||||||||
Underwriters' option | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued (in shares) | 4,500,000 | ||||||||||||
PIPE | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued (in shares) | 25,000,000 | ||||||||||||
Price per share (in dollars per share) | $ / shares | $ 10 | ||||||||||||
Consideration received | $ | $ 250,000,000 | ||||||||||||
Payments of stock issuance costs | $ | $ 7,500,000 | ||||||||||||
Public Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Warrants (in shares) | 17,250,000 | 17,250,000 | 17,250,000 | 17,250,000 | 17,250,000 | 17,250,000 | |||||||
Exercise price per share (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | $ 11.50 | $ 11.50 | $ 11.50 | $ 11.50 | |||||||
Term of warrants | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years | |||||||
Other | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Warrants (in shares) | 627,780 | 627,780 | 627,780 | 627,780 | 627,780 | 627,780 | 7,000 | ||||||
Exercise price per share (in dollars per share) | $ / shares | $ 7.715 | $ 7.72 | $ 7.72 | $ 7.72 | $ 7.72 | $ 7.72 | $ 7.72 | $ 691.90 | |||||
Warrant, shares issuable (in shares) | 627,700 | ||||||||||||
Class A common stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Common stock, authorized (in shares) | 420,000,000 | 420,000,000 | 420,000,000 | 420,000,000 | 420,000,000 | 420,000,000 | |||||||
Common stock, outstanding (in shares) | 84,803,687 | 84,803,687 | 84,803,687 | 84,803,687 | 84,803,687 | 84,803,687 | 34,500,000 | ||||||
Common stock, issued (in shares) | 86,373,596 | 86,373,596 | 86,373,596 | 86,373,596 | 86,373,596 | 86,373,596 | |||||||
Class B common stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock issued (in shares) | 11,500,000 | ||||||||||||
Price per share (in dollars per share) | $ / shares | $ 0.002 | ||||||||||||
Consideration received | $ | $ 25,000,000 | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Common stock, authorized (in shares) | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||||
Common stock, outstanding (in shares) | 8,625,000 | 8,625,000 | 0 | 0 | 0 | 0 | 0 | 0 | 8,625,000 | ||||
Stock transferred (in shares) | 50,000 | ||||||||||||
Stock returned (in shares) | 4,312,500 | ||||||||||||
Common stock, issued (in shares) | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Business combination, shares converted (in shares) | 7,437,241 | ||||||||||||
Class B common stock | Sunlight Financial LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Business combination, shares cancelled (in shares) | 1,187,759 | ||||||||||||
Business combination, shares redeemed (in shares) | 19,227,063 | ||||||||||||
Class C common stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Common stock, authorized (in shares) | 65,000,000 | 65,000,000 | 65,000,000 | 65,000,000 | 65,000,000 | 65,000,000 | |||||||
Common stock, outstanding (in shares) | 47,595,455 | 47,595,455 | 47,595,455 | 47,595,455 | 47,595,455 | 47,595,455 | |||||||
Common stock, issued (in shares) | 47,595,455 | 47,595,455 | 47,595,455 | 47,595,455 | 47,595,455 | 47,595,455 | 0 |
Equity and Earnings per Share_2
Equity and Earnings per Share - Warrants (Details) - $ / shares | Dec. 31, 2021 | Jul. 09, 2021 | Feb. 28, 2021 | Nov. 30, 2020 |
Class of Warrant or Right [Line Items] | ||||
Exercise price per share (in dollars per share) | $ 11.50 | |||
Shares | 9,900,000 | |||
Public Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price per share (in dollars per share) | $ 11.50 | |||
Shares | 17,250,000 | |||
Private Placement Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price per share (in dollars per share) | $ 11.50 | |||
Shares | 9,900,000 | |||
Other | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price per share (in dollars per share) | $ 7.72 | $ 7.715 | $ 691.90 | |
Shares | 627,780 | 7,000 |
Equity and Earnings per Share_3
Equity and Earnings per Share - Temporary equity activities (Details) - shares | Jul. 09, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jul. 09, 2021 | Dec. 31, 2020 |
Class A-3 Units | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Temporary equity, issued (in shares) | 376,395 | 326,428 | 376,395 | 326,428 | |||||
Issuance of temporary equity (in shares) | 1,444 | 14,094 | 13,457 | 13,235 | 12,771 | 12,193 | 11,768 | 28,995 | 49,967 |
Temporary equity, issued (in shares) | 405,390 | 376,395 | 405,390 | 376,395 | |||||
Class A-2 Units | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Temporary equity, issued (in shares) | 225,972 | 195,973 | 225,972 | 195,973 | |||||
Issuance of temporary equity (in shares) | 867 | 8,461 | 8,079 | 7,947 | 7,667 | 7,320 | 7,065 | 17,407 | 29,999 |
Temporary equity, issued (in shares) | 243,379 | 225,972 | 243,379 | 225,972 | |||||
Class A-1 Units | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Temporary equity, issued (in shares) | 296,302 | 256,966 | 296,302 | 256,966 | |||||
Issuance of temporary equity (in shares) | 1,137 | 11,094 | 10,593 | 10,421 | 10,053 | 9,598 | 9,264 | 22,824 | 39,336 |
Temporary equity, issued (in shares) | 319,126 | 296,302 | 319,126 | 296,302 |
Equity and Earnings per Share_4
Equity and Earnings per Share - Noncontrolling Interest (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ (159,556) | $ 6,131 | $ 10,624 |
Noncontrolling interests in loss of consolidated subsidiaries | (87,528) | ||
Transfers (to) from non-controlling interests: | |||
Increase in Sunlight's shareholders' equity for the delivery of Class EX Units primarily in connection with vested provisionally-vested Class EX Units | 30,379 | ||
Dilution impact of equity transactions | 30,379 | ||
Net income (loss) attributable to Class A shareholders | (159,556) | $ 6,131 | $ 10,624 |
Change from transfers (to) from non-controlling interests and from net income (loss) attributable to Class A shareholders | $ (129,177) | ||
Sunlight Financial LLC | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest percent | 35.00% | 34.90% | |
Sunlight Financial LLC | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ (249,993) | ||
Transfers (to) from non-controlling interests: | |||
Net income (loss) attributable to Class A shareholders | $ (249,993) |
Equity and Earnings per Share_5
Equity and Earnings per Share - Equity-Based Compensation - Granted (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | |
Employee RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards (in shares) | 2,136,129 | 0 |
Employee RSUs | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service | 3 years | |
Employee RSUs | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service | 4 years | |
Provisionally-Vested Class A Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards (in shares) | 337,193 | |
Provisionally-Vested Class A Shares | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service | 1 year 10 months 24 days | |
Provisionally-Vested Class A Shares | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service | 3 years 7 months 6 days | |
Provisionally-Vested Class EX Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards (in shares) | 974,447 | 0 |
Provisionally-Vested Class EX Units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service | 1 year 10 months 24 days | |
Provisionally-Vested Class EX Units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service | 1 year 10 months 24 days | |
Director RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards (in shares) | 75,000 | |
Director RSUs | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service | 1 year | |
Director RSUs | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service | 1 year | |
Compensation Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards (in shares) | 3,522,769 |
Equity and Earnings per Share_6
Equity and Earnings per Share - Compensation Awards Activity - Successor (Details) | 6 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Provisionally-Vested Class A Shares | |
Per Share | |
Issued (in usd per share) | $ / shares | $ 9.46 |
Vested (in usd per share) | $ / shares | 9.46 |
Forfeited or Cancelled (in usd per share) | $ / shares | 9.46 |
Outstanding (in usd per share) | $ / shares | $ 9.46 |
Shares | |
Issued (in shares) | 512,227 |
Vested (in shares) | (78,296) |
Forfeited or Cancelled (in shares) | (96,738) |
Outstanding (in shares) | 337,193 |
Provisionally-Vested Class EX Units | |
Per Share | |
Issued (in usd per share) | $ / shares | $ 9.46 |
Vested (in usd per share) | $ / shares | 9.46 |
Forfeited or Cancelled (in usd per share) | $ / shares | 9.46 |
Outstanding (in usd per share) | $ / shares | $ 9.46 |
Shares | |
Outstanding (in shares) | 0 |
Issued (in shares) | 1,379,401 |
Vested (in shares) | (355,596) |
Forfeited or Cancelled (in shares) | (49,358) |
Outstanding (in shares) | 974,447 |
Director RSUs | |
Per Share | |
Issued (in usd per share) | $ / shares | $ 9.46 |
Outstanding (in usd per share) | $ / shares | $ 9.46 |
Shares | |
Issued (in shares) | 75,000 |
Outstanding (in shares) | 75,000 |
Employee RSUs | |
Per Share | |
Issued (in usd per share) | $ / shares | $ 9 |
Forfeited or Cancelled (in usd per share) | $ / shares | 9.46 |
Outstanding (in usd per share) | $ / shares | $ 8.97 |
Shares | |
Outstanding (in shares) | 0 |
Issued (in shares) | 2,285,417 |
Forfeited or Cancelled (in shares) | (149,288) |
Outstanding (in shares) | 2,136,129 |
Equity and Earnings per Share_7
Equity and Earnings per Share - Compensation Awards Activity - Predecessor (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jul. 09, 2021 | Dec. 31, 2020 | |
Class C | ||
Per Unit | ||
Outstanding (in usd per share) | $ 14.51 | $ 14.45 |
Issued (in usd per share) | 23.62 | |
Outstanding (in usd per share) | $ 14.53 | $ 14.51 |
Units | ||
Outstanding (in shares) | 234,403 | 237,318 |
Issued (in shares) | 1,205 | |
Outstanding (in shares) | 232,709 | 234,403 |
Class C | Class C-1 Units | ||
Per Unit | ||
Converted (in usd per share) | $ 16.19 | $ 20.11 |
Units | ||
Converted (in shares) | (181) | (1,095) |
Class C | Class C-2 Units | ||
Per Unit | ||
Converted (in usd per share) | $ 11.12 | $ 11.12 |
Units | ||
Converted (in shares) | (1,513) | (3,025) |
LTIP | ||
Per Unit | ||
Outstanding (in usd per share) | $ 20.06 | $ 19.54 |
Issued (in usd per share) | 23.62 | |
Forfeited or Cancelled (in usd per share) | 18.61 | |
Outstanding (in usd per share) | $ 20.14 | $ 20.06 |
Units | ||
Outstanding (in shares) | 71,060 | 64,046 |
Issued (in shares) | 14,678 | |
Forfeited (in shares) | (2,444) | |
Outstanding (in shares) | 69,398 | 71,060 |
LTIP | Class C-1 Units | ||
Per Unit | ||
Converted (in usd per share) | $ 18.96 | $ 40.19 |
Units | ||
Converted (in shares) | (377) | (1,607) |
LTIP | Class C-2 Units | ||
Per Unit | ||
Converted (in usd per share) | $ 15.64 | $ 17.36 |
Units | ||
Converted (in shares) | (1,285) | (3,613) |
Equity and Earnings per Share_8
Equity and Earnings per Share - Unrecognized Compensation Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards | shares | 3,522,769 |
Amount | $ | $ 29,327 |
Provisionally-Vested Class A Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average | 1 year 2 months 12 days |
Awards | shares | 337,193 |
Amount | $ | $ 3,101 |
Provisionally-Vested Class EX Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average | 8 months 12 days |
Awards | shares | 974,447 |
Amount | $ | $ 9,218 |
Director RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average | 3 months 18 days |
Awards | shares | 75,000 |
Amount | $ | $ 367 |
Employee RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average | 1 year 7 months 6 days |
Awards | shares | 2,136,129 |
Amount | $ | $ 16,641 |
Equity and Earnings per Share_9
Equity and Earnings per Share - Earnings per share calculations (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Net Income (Loss) Per Class A Shareholders, Basic | |||
Net income (loss) available to Class A shareholders | $ (158,573) | ||
Total weighted average shares outstanding (in shares) | 84,824,109 | ||
Net Income (Loss) Per Class A Shareholders, Basic (in usd per share) | $ (1.87) | ||
Net Income (Loss) Per Class A Shareholders, Diluted | |||
Net income (loss) available to Class A shareholders | $ (158,573) | ||
Total weighted average shares outstanding (in shares) | 84,824,109 | ||
Net Income (Loss) Per Class A Shareholders, Diluted (in usd per share) | $ (1.87) | ||
Net income (loss) available to Class A shareholders | |||
Net income (loss) | $ (247,084) | $ 6,131 | $ 10,624 |
Noncontrolling interests in loss of consolidated subsidiaries | 87,528 | ||
Other weighting adjustments | 983 | ||
Net Income (Loss) Attributable to Class A Shareholders | (158,573) | ||
Net income (loss) available to Class A shareholders, diluted | $ (158,573) | ||
Weighted average number of Class A shares outstanding | |||
Class A shares outstanding (in shares) | 84,824,109 | ||
Total weighted average shares outstanding, diluted (in shares) | 84,824,109 |
Equity and Earnings per Shar_10
Equity and Earnings per Share - Shares excluded from diluted loss per common share (Details) | 6 Months Ended |
Dec. 31, 2021shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares (in shares) | 77,458,736 |
Class EX Units | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares (in shares) | 46,354,679 |
Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares (in shares) | 27,150,000 |
Other warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares (in shares) | 627,780 |
Unvested Class EX Units | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares (in shares) | 1,240,776 |
RSUs | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares (in shares) | 2,085,501 |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring and Non-recurring (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 91,882 | $ 49,583 |
Restricted cash | 2,018 | 3,122 |
Contract derivatives | 1,411 | 1,435 |
Liabilities: | ||
Debt | 20,613 | 14,625 |
Warrants | 19,007 | 5,643 |
Guarantee obligation | 418 | 839 |
Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 4,260 | 5,140 |
Loans, held-for-investment | ||
Assets: | ||
Financing receivables | 250 | 310 |
Portion at Other than Fair Value Measurement [Member] | ||
Assets: | ||
Cash and cash equivalents | 91,882 | 49,583 |
Restricted cash | 2,018 | 3,122 |
Contract derivatives | 76,770 | 59,770 |
Liabilities: | ||
Debt | 20,613 | 14,625 |
Warrants | 312,225 | 4,700 |
Portion at Other than Fair Value Measurement [Member] | Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 4,584 | 5,997 |
Portion at Other than Fair Value Measurement [Member] | Loans, held-for-investment | ||
Assets: | ||
Financing receivables | 291 | 354 |
Reported Value Measurement [Member] | ||
Assets: | ||
Cash and cash equivalents | 91,882 | 49,583 |
Restricted cash | 2,018 | 3,122 |
Contract derivatives | 1,411 | 1,435 |
Liabilities: | ||
Debt | 20,613 | 14,625 |
Warrants | 19,007 | 5,643 |
Guarantee obligation | 418 | 839 |
Reported Value Measurement [Member] | Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 4,051 | 5,029 |
Reported Value Measurement [Member] | Loans, held-for-investment | ||
Assets: | ||
Financing receivables | 262 | 304 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 91,882 | 49,583 |
Restricted cash | 2,018 | 3,122 |
Level 3 | ||
Assets: | ||
Contract derivatives | 1,411 | 1,435 |
Liabilities: | ||
Debt | 20,613 | 14,625 |
Warrants | 19,007 | 5,643 |
Guarantee obligation | 418 | 839 |
Level 3 | Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 4,260 | 5,140 |
Level 3 | Loans, held-for-investment | ||
Assets: | ||
Financing receivables | $ 250 | $ 310 |
Fair Value Measurement - Change
Fair Value Measurement - Changes in Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Assets | |||
Balance | $ 1,435 | ||
Included in change in fair value of contract derivatives, net | $ 638 | (662) | $ 1,435 |
Included in realized gains on contract derivatives, net | 2,866 | 2,992 | 103 |
Payments, net | (2,866) | (2,992) | (103) |
Balance | 1,411 | 773 | 1,435 |
Liabilities | |||
Balance | 5,643 | 133 | |
Transfers to Level 3 | 41,591 | ||
Transfers from Level 3 | (11,148) | ||
Included in change in fair value of warrant liabilities | (22,583) | 5,504 | 5,510 |
Balance | $ 19,007 | $ 41,590 | $ 5,643 |
Fair Value Measurement - Signif
Fair Value Measurement - Significant Inputs (Details) | Dec. 31, 2021$ / shares | Dec. 31, 2020 | ||
Discount rate | Contract Derivative 1 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative asset, measurement input | 10 | 8.1 | ||
Life | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 4.5 | [1] | 3 | |
Life | Contract Derivative 1 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative asset, measurement input | 0.2 | 0.3 | ||
Expected prepayment rate | Contract Derivative 2 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative asset, measurement input | 75 | |||
Share price | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | [1] | 4.78 | ||
Volatility | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 48 | [1] | 46 | |
Risk free rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | [1] | 1.2 | ||
Cost of equity | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 22.5 | |||
Tax rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants, measurement input | 26 | |||
[1] | Significant increases in these assumptions in isolation would result in a higher fair value measurement. |
Taxes - Components of Income Ta
Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Net Income (Loss) Before Income Taxes | $ (250,588) | $ 6,131 | $ 10,624 |
Current | |||
Federal | 1,708 | ||
State and local | 312 | ||
Current income tax expense (benefit) | 2,020 | ||
Deferred | |||
Federal | (4,603) | ||
State and local | (921) | ||
Deferred income tax expense (benefit) | (5,524) | ||
Federal | (2,895) | ||
State and local | (609) | ||
Income tax benefit (expense) | $ (3,504) |
Taxes - Narrative (Details)
Taxes - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Loss before taxes | $ 250,588 | $ (6,131) | $ (10,624) |
Current income tax expense | 2,020 | ||
Deferred income tax benefit | 5,524 | ||
Income tax benefit | $ 3,504 | ||
Effective tax rate | 1.40% | ||
Goodwill impairment | $ 30,658 | ||
Change in fair value of warrant liabilities | (3,081) | ||
Noncontrolling interests in loss of consolidated subsidiaries | 18,390 | ||
Deferred tax liabilities | (36,686) | ||
Deferred tax liabilities, depreciation and amortization | $ 35,400 |
Taxes - Effective Income Tax Ra
Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Net Income (Loss) Before Income Taxes | $ (250,588) | $ 6,131 | $ 10,624 |
Statutory U.S Income Tax Rate | 21.00% | ||
Effective Income Tax Rate Reconciliation, Amount | |||
Income tax expense (benefit), at statutory U.S. federal rate | $ (52,623) | ||
State and local taxes | (674) | ||
Goodwill impairment | 30,658 | ||
Change in fair value of warrant liabilities | (3,081) | ||
Noncontrolling interests in loss of consolidated subsidiaries | 18,390 | ||
Business Combination compensation expense | 3,662 | ||
Other | 164 | ||
Income tax benefit (expense) | $ (3,504) | ||
Effective Income Tax Rate Reconciliation, Percent | |||
Income tax expense (benefit), at statutory U.S. federal rate | 21.00% | ||
State and local taxes | 0.30% | ||
Goodwill impairment | (12.20%) | ||
Change in fair value of warrant liabilities | 1.20% | ||
Noncontrolling interests in loss of consolidated subsidiaries | (7.30%) | ||
Business Combination compensation expense | (1.50%) | ||
Other | (0.10%) | ||
Effective tax rate | 1.40% |
Taxes - Deferred Tax Assets and
Taxes - Deferred Tax Assets and Deferred Tax Liabilities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Deferred tax liabilities | |
Investment in Sunlight Financial LLC | $ (36,686) |
Deferred tax asset (liability), net | $ (36,686) |
Transactions with Affiliates _2
Transactions with Affiliates and Affiliated Entities (Details) | Nov. 30, 2020USD ($)$ / sharesshares | Nov. 30, 2020USD ($)$ / sharesshares | Oct. 31, 2020shares | Aug. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Jul. 09, 2021USD ($) | Dec. 31, 2021USD ($)D$ / sharesshares | Dec. 31, 2020USD ($)shares | Aug. 17, 2020USD ($) |
Related Party Transaction [Line Items] | |||||||||
Founders Shares as a percentage of total shares outstanding after forfeiture | 20.00% | 20.00% | |||||||
Shares not subject to forfeiture (in shares) | shares | 1,125,000 | 1,125,000 | |||||||
Sale of Founders Shares, restriction period | 1 year | ||||||||
Sale of Founders Shares, stock price threshold (in dollars per share) | $ / shares | $ 12 | ||||||||
Sale of Founders Shares, threshold trading days | 20 | ||||||||
Sale of Founders Shares, threshold consecutive trading days | 30 days | ||||||||
Sale of Founders Shares, period after Business Combination | 150 days | ||||||||
Warrants (in shares) | shares | 9,900,000 | 9,900,000 | |||||||
Price of warrants (in dollars per share) | $ / shares | $ 1 | $ 1 | |||||||
Proceeds from issuance of warrants | $ 9,900,000 | $ 9,900,000 | |||||||
Exercise price per share (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | |||||||
Related party loan | $ 235,000,000 | $ 235,000,000 | $ 300,000,000 | ||||||
Quarterly management fee | $ 50,000 | ||||||||
Administrative fee income, affiliate | $ 100,000 | $ 100,000 | $ 200,000 | ||||||
Distributions payable | $ 0 | 0 | 7,522,000 | ||||||
Tax distributions paid | $ 7,500,000 | $ 2,000,000 | |||||||
Administrative Support Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Monthly support fee, affiliate | 10,000 | ||||||||
Expenses, affiliate | $ 60,000 | ||||||||
Class B common stock | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stock issued (in shares) | shares | 11,500,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Consideration received | $ 25,000,000 | ||||||||
Price per share (in dollars per share) | $ / shares | $ 0.002 | ||||||||
Stock transferred (in shares) | shares | 50,000 | ||||||||
Stock returned (in shares) | shares | 4,312,500 | ||||||||
Common stock, outstanding (in shares) | shares | 8,625,000 | 8,625,000 | 0 | 0 | 8,625,000 | ||||
Shares subject to forfeiture (in shares) | shares | 1,125,000 | 1,125,000 | |||||||
Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Administrative fee income, affiliate | $ 200,000 | $ 200,000 | |||||||
Affiliated Entity | Tiger | Management Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Expenses, affiliate | 400,000 | 0 | |||||||
Quarterly management fee | $ 50,000,000 | ||||||||
Affiliated Entity | Lumina Solar | Financing Program Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Administrative fee income, affiliate | $ 200,000 | $ 300,000 |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021USD ($)loan | Jul. 09, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
Other Commitments [Line Items] | |||
Amounts outstanding | $ 71,952 | $ 41,752 | |
Funding commitments | $ 22,749 | $ 18,386 | |
Guaranteed loans, number written off | loan | 20 | 60 | 49 |
Guaranteed loans, written off | $ 400 | $ 1,300 | $ 1,100 |
Maximum potential guarantee | 52,800 | ||
Guarantee liability | 400 | ||
Guaranteed loans, delinquent | 100 | ||
Maximum rewards program liability | 3,000 | ||
Rewards program liability | 1,800 | ||
Lease expense | 700 | $ 900 | 1,100 |
Operating leases accrued | 100 | ||
Unfunded loan commitment | |||
Other Commitments [Line Items] | |||
Amounts outstanding | 230,600 | ||
Advances | |||
Other Commitments [Line Items] | |||
Amounts outstanding | $ 67,077 | $ 35,401 |
Commitment and Contingencies _2
Commitment and Contingencies - Minimum Future Lease Payments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 1,348 |
2023 | 1,510 |
2024 | 1,553 |
2025 | 1,746 |
2026 | 1,790 |
Thereafter | 4,856 |
Total | $ 12,803 |