Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 26, 2023 | Jun. 30, 2022 | |
Entity Addresses [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-39739 | ||
Entity Registrant Name | Sunlight Financial Holdings Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 85-2599566 | ||
Entity Address, Address Line One | 101 North Tryon Street | ||
Entity Address, Address Line Two | Suite 1000 | ||
Entity Address, City or Town | Charlotte | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 28246 | ||
City Area Code | 888 | ||
Local Phone Number | 315-0822 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 122.3 | ||
Central Index Key | 0001821850 | ||
Current Fiscal Year End Date | --12-31 | ||
Fiscal Year Focus | 2022 | ||
Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Entity Addresses [Line Items] | |||
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | ||
Trading Symbol | SUNL | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 85,401,353 | ||
Warrants | |||
Entity Addresses [Line Items] | |||
Title of 12(b) Security | Warrants, each whole warrant is exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | ||
Trading Symbol | SUNL.WS | ||
Security Exchange Name | NYSE | ||
Class C Common Stock | |||
Entity Addresses [Line Items] | |||
Entity Common Stock, Shares Outstanding | 44,973,227 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | RSM US LLP |
Auditor Firm ID | 49 |
Auditor Location | New York, New York |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 47,515 | $ 91,882 |
Restricted cash | 4,272 | 2,018 |
Financing receivables, net of allowance for credit losses | 48,925 | 71,152 |
Goodwill | 0 | 445,756 |
Intangible assets, net | 319,920 | 365,839 |
Property and equipment, net | 1,489 | 4,069 |
Other assets | 30,074 | 21,531 |
Total assets | 452,195 | 1,002,247 |
Liabilities | ||
Accounts payable and accrued expenses | 20,674 | 23,386 |
Funding commitments | 20,400 | 22,749 |
Debt | 20,613 | 20,613 |
Deferred tax liabilities | 688 | 36,686 |
Warrants, at fair value | 4,297 | 19,007 |
Other liabilities | 17,196 | 843 |
Total liabilities | 83,868 | 123,284 |
Commitments and Contingencies (Note 10) | ||
Stockholders' Equity | ||
Preferred stock | 0 | 0 |
Additional paid-in capital | 761,698 | 764,366 |
Accumulated deficit | (501,635) | (186,022) |
Total capital | 260,071 | 578,353 |
Treasury stock, at cost; 1,312,155 and 1,569,909 Class A shares as of December 31, 2022 and December 31, 2021, respectively | (15,307) | (15,535) |
Total stockholders' equity | 244,764 | 562,818 |
Noncontrolling interests in consolidated subsidiaries | 123,563 | 316,145 |
Total equity | 368,327 | 878,963 |
Total liabilities and stockholders' equity | 452,195 | 1,002,247 |
Advances (net of allowance for credit losses of $6,736 and $238) | ||
Assets | ||
Financing receivables, net of allowance for credit losses | 45,393 | 66,839 |
Financing receivables (net of allowance for credit losses of $102 and $148) | ||
Assets | ||
Financing receivables, net of allowance for credit losses | 3,532 | 4,313 |
Class A Common Stock | ||
Stockholders' Equity | ||
Common stock | $ 8 | $ 9 |
Common stock, authorized (in shares) | 420,000,000 | 420,000,000 |
Common stock, issued (in shares) | 83,619,915 | 86,373,596 |
Common stock, outstanding (in shares) | 82,307,760 | 84,803,687 |
Class C Common Stock | ||
Stockholders' Equity | ||
Common stock | $ 0 | $ 0 |
Common stock, authorized (in shares) | 65,000,000 | 65,000,000 |
Common stock, issued (in shares) | 47,287,370 | 47,595,455 |
Common stock, outstanding (in shares) | 47,287,370 | 47,595,455 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Allowance for credit losses | $ 6,838 | $ 386 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 35,000,000 | 35,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Treasury stock (in shares) | 1,312,155 | 1,569,909 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 420,000,000 | 420,000,000 |
Common stock, issued (in shares) | 83,619,915 | 86,373,596 |
Common stock, outstanding (in shares) | 82,307,760 | 84,803,687 |
Class C Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 65,000,000 | 65,000,000 |
Common stock, issued (in shares) | 47,287,370 | 47,595,455 |
Common stock, outstanding (in shares) | 47,287,370 | 47,595,455 |
Advances | ||
Allowance for credit losses | $ 6,736 | $ 238 |
Loans and Loan Participations | ||
Allowance for credit losses | $ 102 | $ 148 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | |
Income Statement [Abstract] | |||
Revenue | $ 61,674 | $ 53,064 | $ 98,506 |
Costs and Expenses | |||
Cost of revenues (exclusive of items shown separately below) | 9,873 | 10,556 | 27,095 |
Compensation and benefits | 44,996 | 17,162 | 51,746 |
Selling, general, and administrative | 7,419 | 3,450 | 24,871 |
Property and technology | 3,088 | 2,790 | 7,447 |
Depreciation and amortization | 43,389 | 1,688 | 49,394 |
Provision for losses | 1,217 | 1,172 | 51,293 |
Goodwill impairment | 224,701 | 0 | 445,756 |
Management fees to affiliate | 0 | 204 | 0 |
Costs and expenses | 334,683 | 37,022 | 657,602 |
Operating income (loss) | (273,009) | 16,042 | (559,096) |
Other Income (Expense), Net | |||
Interest income | 149 | 262 | 3,485 |
Interest expense | (554) | (604) | (1,404) |
Change in fair value of warrant liabilities | 22,583 | (5,504) | 14,710 |
Change in fair value of contract derivatives, net | 638 | (662) | (962) |
Realized gains on contract derivatives, net | 2,866 | 2,992 | 2,601 |
Other realized losses, net | 0 | 0 | (703) |
Other income (expense) | (181) | 616 | (7,488) |
Business combination expenses | (3,080) | (7,011) | 0 |
Other income (expense), net | 22,421 | (9,911) | 10,239 |
Net Income (Loss) Before Income Taxes | (250,588) | 6,131 | (548,857) |
Income tax benefit (expense) | 3,504 | 0 | 36,921 |
Net Income (Loss) | (247,084) | 6,131 | (511,936) |
Noncontrolling interests in loss of consolidated subsidiaries | 87,528 | 0 | 196,085 |
Net Income (Loss) Attributable to Class A Shareholders | $ (159,556) | $ 6,131 | $ (315,851) |
Net loss per Class A share | |||
Basic (in dollars per share) | $ (1.87) | $ (3.76) | |
Diluted (in dollars per share) | $ (1.87) | $ (3.89) | |
Weighted average number of Class A shares outstanding | |||
Basic (in shares) | 84,824,109 | 83,804,659 | |
Diluted (in shares) | 84,824,109 | 130,618,205 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | 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 Stockholders' Equity | Total Stockholders' Equity Cumulative Effect, Period of Adoption, Adjustment | Preferred Stock | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Common Stock Class C Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Treasury Stock | Noncontrolling Interests | Noncontrolling Interests Cumulative Effect, Period of Adoption, Adjustment | Member Units |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||
Equity-based compensation (in shares) | 3,356 | |||||||||||||||||||||
Equity-based compensation | $ 18 | $ 18 | ||||||||||||||||||||
Equity repurchase (in shares) | 0 | |||||||||||||||||||||
Equity repurchase | $ 0 | |||||||||||||||||||||
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 | 1,121,393 | $ 694,383 | $ 0 | $ 9 | $ 0 | $ 0 | $ 720,840 | $ (26,466) | $ 0 | $ 427,010 | ||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 376,395 | 225,972 | 296,302 | 78,717 | ||||||||||||||||||
Beginning balance at Dec. 31, 2020 | $ 260,428 | $ 154,286 | $ 202,045 | $ 47,757 | ||||||||||||||||||
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 | 195,665 | $ 59,335 | $ 48,989 | $ 64,502 | $ 22,839 | |||||||||||||||||
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 | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 53,105 | |||||||||||||||||||||
Beginning balance at Dec. 31, 2020 | (621,903) | (623,342) | $ 1,439 | |||||||||||||||||||
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 | $ (870,128) | (871,585) | $ 1,457 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-02 [Member] | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 84,803,687 | 0 | 47,595,455 | 86,373,596 | 47,595,455 | |||||||||||||||||
Ending balance at Dec. 31, 2021 | $ 878,963 | $ 279 | 562,818 | $ 238 | 0 | $ 9 | 0 | $ 0 | 764,366 | (186,022) | $ 238 | (15,535) | 316,145 | $ 41 | ||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 376,395 | 225,972 | 296,302 | 78,717 | ||||||||||||||||||
Beginning balance at Dec. 31, 2020 | $ 260,428 | $ 154,286 | $ 202,045 | $ 47,757 | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 53,105 | |||||||||||||||||||||
Beginning balance at Dec. 31, 2020 | (621,903) | (623,342) | $ 1,439 | |||||||||||||||||||
Beginning balance (in shares) at Jul. 09, 2021 | 86,373,596 | 47,595,455 | ||||||||||||||||||||
Beginning balance at Jul. 09, 2021 | 1,121,393 | 694,383 | 0 | $ 9 | 0 | $ 0 | 720,840 | (26,466) | 0 | 427,010 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||
Equity-based compensation | 20,189 | 13,147 | 13,147 | 7,042 | ||||||||||||||||||
Shares withheld related to net share settlement of equity awards | (15,535) | (15,535) | (15,535) | |||||||||||||||||||
Equity repurchase (in shares) | 0 | |||||||||||||||||||||
Equity repurchase | $ 0 | |||||||||||||||||||||
Dilution | 0 | 30,379 | 30,379 | (30,379) | ||||||||||||||||||
Net income (loss) | (247,084) | (159,556) | (159,556) | |||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 84,803,687 | 0 | 47,595,455 | 86,373,596 | 47,595,455 | |||||||||||||||||
Ending balance at Dec. 31, 2021 | 878,963 | $ 279 | 562,818 | $ 238 | 0 | $ 9 | 0 | $ 0 | 764,366 | (186,022) | $ 238 | (15,535) | 316,145 | $ 41 | ||||||||
Beginning balance (in shares) at Jul. 09, 2021 | 405,390 | 243,379 | 319,126 | 78,717 | ||||||||||||||||||
Beginning balance at Jul. 09, 2021 | $ 343,824 | $ 218,269 | $ 286,201 | $ 70,596 | ||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||||||
Change in temporary equity redemption value | 0 | |||||||||||||||||||||
Beginning balance (in shares) at Jul. 09, 2021 | 56,461 | |||||||||||||||||||||
Beginning balance at Jul. 09, 2021 | (870,128) | (871,585) | $ 1,457 | |||||||||||||||||||
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||||||||||||||||
Equity-based compensation | 20,189 | 13,147 | 13,147 | 7,042 | ||||||||||||||||||
Net Income (Loss) | (159,556) | (87,528) | ||||||||||||||||||||
Equity-based compensation (in shares) | 282,578 | |||||||||||||||||||||
Equity-based compensation | 14,519 | 10,141 | 10,141 | 4,378 | ||||||||||||||||||
Shares withheld related to net share settlement of equity awards | (341) | (341) | (187) | (154) | ||||||||||||||||||
Equity repurchase (in shares) | (3,036,259) | (3,036,259) | ||||||||||||||||||||
Equity repurchase | (10,452) | $ (10,452) | (10,452) | $ (1) | (10,451) | |||||||||||||||||
Class EX unit & Class C share exchange (in shares) | (308,085) | |||||||||||||||||||||
Class EX unit & Class C share exchange | 0 | 382 | 382 | (382) | ||||||||||||||||||
Dilution | 0 | (2,171) | (2,171) | 2,171 | ||||||||||||||||||
Distribution | (2,705) | (2,705) | ||||||||||||||||||||
Net income (loss) | (511,936) | (315,851) | (315,851) | (196,085) | ||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 82,307,760 | 47,287,370 | 83,619,915 | 47,287,370 | ||||||||||||||||||
Ending balance at Dec. 31, 2022 | 368,327 | 244,764 | $ 0 | $ 8 | $ 0 | $ 0 | 761,698 | $ (501,635) | $ (15,307) | 123,563 | ||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||||||
Change in temporary equity redemption value | 0 | |||||||||||||||||||||
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||||||||||||||||
Equity-based compensation (in shares) | 282,578 | |||||||||||||||||||||
Equity-based compensation | 14,519 | $ 10,141 | $ 10,141 | $ 4,378 | ||||||||||||||||||
Net Income (Loss) | $ (315,851) |
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, 2022 | |
Cash Flows From Operating Activities | |||
Net income (loss) | $ (247,084) | $ 6,131 | $ (511,936) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Depreciation and amortization | 43,389 | 1,782 | 49,394 |
Goodwill impairment | 224,701 | 0 | 445,756 |
Provision for losses | 1,217 | 1,172 | 51,293 |
Change in fair value of warrant liabilities | (22,583) | 5,504 | (14,710) |
Change in fair value of contract derivatives, net | (638) | 662 | 962 |
Other expense (income) | 181 | (616) | 6,984 |
Share-based payment arrangements | 29,646 | 18 | 17,851 |
Deferred income tax benefit | (5,524) | 0 | (35,823) |
Increase (decrease) in operating capital: | |||
Increase in advances | (24,219) | (7,314) | (21,782) |
Decrease (increase) in due from affiliates | 1,839 | (1,839) | 0 |
Decrease (increase) in other assets | (16,367) | 2,129 | (4,619) |
Increase (decrease) in accounts payable and accrued expenses | (3,476) | 2,327 | (4,234) |
Increase (decrease) in funding commitments | 1,263 | 3,100 | (3,039) |
Increase (decrease) in due to affiliates | (761) | 761 | 0 |
Increase (decrease) in other liabilities | (149) | 539 | (1,736) |
Net cash provided by (used in) operating activities | (18,565) | 14,356 | (25,639) |
Cash Flows From Investing Activities | |||
Return of investments in loan pool participation and loan principal repayments | 710 | 832 | 931 |
Payments to acquire loans and participations in loan pools | (716) | (1,170) | (3,296) |
Payments to acquire property and equipment | (3,436) | (1,066) | (2,321) |
Payments to acquire Sunlight Financial LLC, net of cash acquired | (304,570) | 0 | 0 |
Net cash used in investing activities | (308,012) | (1,404) | (4,686) |
Cash Flows From Financing Activities | |||
Proceeds from borrowings under line of credit | 0 | 20,746 | 0 |
Repayments of borrowings under line of credit | 0 | (14,758) | 0 |
Proceeds from issuance of private placement | 250,000 | 0 | 0 |
Payments of stock issuance costs | (19,618) | 0 | 0 |
Payments for share-based payment tax withholding | (26,424) | 0 | (154) |
Payments for repurchase of common stock | 0 | 0 | (10,452) |
Payment of capital distributions | 0 | (7,522) | (1,182) |
Payment of debt issuance costs | 0 | (491) | 0 |
Net cash provided by (used in) financing activities | 203,958 | (2,025) | (11,788) |
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | (122,619) | 10,927 | (42,113) |
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period | 216,519 | 52,705 | 93,900 |
Cash, Cash Equivalents, and Restricted Cash, End of Period | 93,900 | 216,519 | 51,787 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the period for interest | 527 | 537 | 1,407 |
Cash paid during the period for income taxes, net | 0 | 0 | 4,973 |
Noncash Investing and Financing Activities | |||
Distributions declared, but not paid | 0 | 0 | 1,521 |
Preferred dividends, paid in-kind | 0 | 58,709 | 0 |
Change in temporary equity redemption value | 0 | 195,665 | 0 |
Capital expenditures incurred but not yet paid | 1,156 | 0 | $ 278 |
Sunlight Financial LLC | |||
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, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | 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 — Sunlight operates a technology-enabled financial services platform within the United States of America, using a nationwide network of contractors at the point-of-sale, to offer homeowners secured and unsecured loans (“Loans”), originated by third-party lenders, for the purchase and installation of residential solar energy systems and other home improvements. Sunlight arranges for the origination of Loans by third-party lenders in two distinct ways: Direct Channel Loans — Sunlight arranges for certain Loans (“Direct Channel Loans”) to be originated and retained by third parties (“Direct Channel Partners”). The Direct Channel Partners originate the Direct Channel Loans directly, using their own credit criteria. These Direct Channel Partners pay for Direct Channel Loans by remitting funds to Sunlight, and Sunlight is thereafter responsible for making the appropriate payments to the relevant contractor. Sunlight earns income from the difference between the cash amount paid by a Direct Channel Partner to Sunlight for a given Direct Channel Loan and the dollar amount due to the contractor for such Direct Channel Loan. Sunlight does not participate in the ongoing economics of the Direct Channel Loans and, generally, does not retain any obligations with respect thereto except for certain ongoing fee-based administrative services and loan servicing performed by Sunlight. Indirect Channel Loans — Sunlight arranges for other Loans (“Indirect Channel Loans”) to be originated by Sunlight’s issuing bank partner (“Bank Partner”). Sunlight has entered into program agreements with its Bank Partner that govern the terms and conditions with respect to originating and servicing the Indirect Channel Loans and Sunlight pays its Bank Partner a fee based on the principal balance of Loans originated by Sunlight’s Bank Partner. Sunlight’s Bank Partner funds these Loans by remitting funds to Sunlight, and Sunlight is thereafter responsible for making the appropriate payments to the relevant contractor. Sunlight arranges for the sale of certain Indirect Channel Loans, or participations therein, to third parties (“Indirect Channel Loan Purchasers”). Liquidity and Going Concern — Sunlight has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. As more fully described in Note 5, Sunlight borrows under a revolving credit facility with Silicon Valley Bank (“SVB”) that was due to mature on April 26, 2023. Prior to the SVB receivership and entry into a new Secured Term Loan with the Bank Partner (Note 11), Sunlight was in negotiations with SVB to extend the maturity date and to address Sunlight defaults under the revolving credit facility. Prior to the issuance of Sunlight’s financial statements as of and for the year ended December 31, 2022, these negotiations and the ability of Sunlight to amend and extend (or to replace) this revolving credit facility were uncertain, which could have had a material impact on Sunlight’s liquidity, cash and ability to attract new capital if not resolved on a timely basis. Additionally, Sunlight’s Bank Partner holds Indirect Channel Loans on its balance sheet until directed by Sunlight in the ordinary course of its business to sell them to investors, including credit funds, insurance companies, and pension funds. While Sunlight’s Bank Partner is the owner of the loans, Sunlight retains economic exposure to them until they are sold. Sunlight profits when the price that investors pay for the Indirect Channel Loans exceeds the Bank Partner’s cost basis in the loans and incurs a loss when the price that investors pay for the Indirect Channel Loans is less than the Bank Partner’s cost basis in the loans. Prior to the execution of amendments (Note 11) to the loan agreements between Sunlight and its Bank Partner (“Bank Partner Agreements”), the Bank Partner Agreements capped the total amount of Indirect Channel Loans held by the Bank Partner at $450.0 million. However, the Indirect Channel Loans held by Sunlight’s Bank Partner included a significant amount of funded but unsold loans which were credit approved prior to certain pricing actions that Sunlight took in the third and fourth quarters of 2022 (the “Backbook Loans”). Despite the completion of the previously disclosed loan sale in December 2022, Sunlight was not in compliance with certain provisions of the Bank Partner Agreements, including the total loan cap. Sunlight believes that the aforementioned conditions, considered in the aggregate, raised substantial doubt about its ability to continue as a going concern; however, on April 2, 2023, Sunlight entered into a Commitment and Transaction Support Agreement (“Commitment & Transaction Support Agreement”) with Sunlight’s Bank Partner and effective April 25, 2023 consummated the transactions agreed to under the agreement including, among other things, amendments to the Bank Partner Agreements (“Amended Bank Partner Agreements”) and entry into a Secured Term Loan with the Bank Partner (the “Secured Term Loan”), after December 31, 2022 that Sunlight believes alleviates such conditions as the Secured Term Loan, among other things, replaces the revolving credit facility with SVB with increased borrowing amounts and was used to pay off the SVB facility and the Amended Bank Partner Agreements increase the total amount of Indirect Channel Loans that Sunlight’s Bank Partner may hold (Note 11). Sunlight believes such transactions, in addition to pricing actions that Sunlight took in the third and fourth quarters of 2022, provide cash and cash equivalents that will be reasonably sufficient to fund its operating expenses, capital expenditure requirements, and debt service payments through at least twelve months from the date that these consolidated financial statements were issued. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes Sunlight will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation — As a result of the Business Combination, for accounting purposes, Sunlight Financial Holdings Inc. is the acquirer and Sunlight Financial LLC is the acquiree and accounting predecessor. The financial statement presentation includes the financial statements of Sunlight Financial LLC as “Predecessor” for periods prior to the Closing Date and of the Company as “Successor” for the periods after the Closing Date, including the consolidation of Sunlight Financial LLC. 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 — The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. 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 an accounting 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 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 — Sunlight consolidates those entities over which it controls significant operating, financial, and investing decisions of the entity as well as those entities deemed to be variable interest entities (“VIEs”) in which the Company is determined to be the primary beneficiary. 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 35.9% and 35.0% noncontrolling interest, net of unvested Class EX Units (Note 6), at December 31, 2022 and December 31, 2021, respectively. 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 member 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 — Sunlight operates through one operating and reportable segment, which reflects how the chief operating decision maker allocates resources and assesses performance. Sunlight arranges for the origination of Loans by third-party lenders using a predominately single expense pool. Risks and Uncertainties — In the normal course of business, Sunlight primarily encounters credit risk, which is the risk of default on Sunlight’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments. Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management makes subjective estimates of pending loan originations and sales, which significantly impacts revenues; determinations of fair value, including goodwill, derivatives, and servicing rights; estimates regarding loan performance, which impacts impairments and allowances for loan losses; project installations, which impacts guarantee obligations; and the useful lives of intangible assets. Actual results may differ from those estimates. Fair Value — GAAP requires the categorization of the fair value of financial instruments into three broad levels that form a hierarchy based on the transparency of inputs to the valuation. 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, 2022: 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. 2 Servicing liabilities Estimates of fair value are measured based upon observable market data. 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 — On a quarterly basis, with assistance from an independent valuation firm, management estimates the fair value of Sunlight’s Level 3 financial instruments. Sunlight’s determination of fair value is based upon the best information available for a given circumstance and 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, 2022, Sunlight’s valuation process for Level 3 measurements, as described below, was conducted internally or by an independent valuation firm and reviewed by management. Valuation of Loans and Loan Participations — Management generally considers Sunlight's loans and loan participations Level 3 assets in the fair value hierarchy as such assets are illiquid investments that are specific to the loan product, for which there is limited market activity. On a quarterly basis, management engages an independent valuation firm to estimate the fair value of each loan or loan participation categorized as a Level 3 asset. Valuation of Contract Derivative — Management considers Sunlight's contracts under which Sunlight (a) arranged Indirect Channel Loans for the purchase and installation of home improvement other than residential solar energy systems until December 2022 (“Contract Derivative 1”) and (b) earns income from the prepayment of certain of those Loans sold to an Indirect Channel Loan Purchaser (“Contract Derivative 2”), both considered derivatives under GAAP, as Level 3 financial instruments in the fair value hierarchy as such instruments represent bilateral, nontraded agreements for which there is limited market activity. On a quarterly basis, management engages an independent valuation firm to estimate the fair value of the contracts. Valuation of Servicing Liabilities — Sunlight assumes an obligation to service certain loans when originated. Sunlight evaluates compensation it receives to service these loans, if any, against the servicing costs a willing market participant would require to service loans with similar characteristics to service such loans. At December 31, 2022, Sunlight determined that the compensation it receives for certain servicing agreements are less than the estimated market cost to service and recognized a liability reported within Other Liabilities in the accompanying Consolidated Balance Sheet. Servicing liabilities are considered Level 2 financial instruments, as the primary components of the fair value are obtained from observable inputs based on market data, reasonably adjusted for assumptions that would be used by market participants to service our Bank Partner loans, for which market data is not available. Valuation of Warrants — Management considers the Private Placement Warrants (Note 6) redeemable for Sunlight’s equity as Level 3 liabilities in the fair value hierarchy as liquid markets do not exist for such liabilities. On a quarterly basis, management engages an independent valuation firm to estimate the fair value of Sunlight’s warrants, which includes models that include estimates of volatility, contractual terms, discount rates, dividend rates, expiration dates, and risk-free rates. Other Valuation Matters — For Level 3 financial assets acquired and financial liabilities assumed during the calendar month immediately preceding a quarter end that were conducted in an orderly transaction with an unrelated party, management generally believes that the transaction price provides the most observable indication of fair value given the illiquid nature of these financial instruments, unless management is aware of any circumstances that may cause a material change in the fair value through the remainder of the reporting period. For instance, significant changes in a counterparty’s intent or ability to make payments on a financial asset may cause material changes in the fair value of that financial asset. See Note 7 for additional information regarding the valuation of Sunlight's financial assets and liabilities. Sales of Financial Assets and Financing Agreements — Sunlight will, from time to time, facilitate the sale of Indirect Channel Loans. In each case, the transferred loans are legally isolated from Sunlight and control of the transferred loans passes to the transferee, who may pledge or exchange the transferred asset without constraint of Sunlight. Sunlight neither recognizes any financial assets nor incurs any liabilities as a result of the sale, but does recognize revenue based upon the difference between proceeds received from the transferee and the proceeds paid to the transferor. Leases — Sunlight recognizes right-of-use assets and lease liabilities at the commencement date of the lease based on the present value of remaining fixed and determinable lease payments over the lease term. Sunlight calculates the present value of future payments by using an estimated incremental borrowing rate, which approximates the rate at which Sunlight would borrow on a secured basis and over a similar term, and recognizes lease expense for operating leases on a straight-line basis over the lease term. Right-of-use assets represent Sunlight’s right to control the use of an identified asset for the lease term and lease liabilities represent Sunlight’s obligation to make lease payments arising from the lease. Sunlight uses the incremental borrowing rate on the commencement date in determining the present value of the lease payments. Balance Sheet Measurement Cash and Cash Equivalents and Restricted Cash — Cash and cash equivalents consist of bank checking accounts and money market accounts. Sunlight considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Sunlight maintains cash in restricted accounts pursuant to various lending agreements and considers other cash amounts restricted under certain agreements with other counterparties. Substantially all amounts on deposit with major financial institutions exceed insured limits. Cash and cash equivalents and restricted cash are carried at cost, which approximates fair value. Sunlight reported cash and cash equivalents and restricted cash in the following line items of its Consolidated Balance Sheets, which totals the aggregate amount presented in Sunlight’s Consolidated Statements of Cash Flows: Successor December 31, 2022 December 31, 2021 Cash and cash equivalents $ 47,515 $ 91,882 Restricted cash and cash equivalents 4,272 2,018 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows $ 51,787 $ 93,900 Financing Receivables — Sunlight records financing receivables for (a) advances that Sunlight remits to contractors to facilitate the installation of residential solar systems and the construction or installation of other home improvement projects and (b) loans and loan participations. Advances — In certain circumstances, Sunlight will provide a contractually agreed upon percentage of cash to a contractor related to a Loan that has not yet been funded by either a Direct Channel Partner or its Bank Partner as well as amounts funded to contractors in anticipation of loan funding. Such advances are generally repaid upon the earlier of (a) a specified number of days from the date of the advance outlined within the respective contractor contract or (b) the substantial installation of the residential solar system or the construction or installation of other home improvement projects. In either case, Sunlight will net such amounts advanced from payments otherwise due to the related contractor. Sunlight carries advances at the amount advanced, net of allowances for losses and charge-offs. Loans and Loan Participations — Sunlight recognizes Indirect Channel Loans purchased from Sunlight’s Bank Partner as well as its 5.0% participation interests in Indirect Channel Loans as financing receivables held-for-investment based on management's intent, and Sunlight's ability, to hold those investments through the foreseeable future or contractual maturity. Financing receivables that are held‑for‑investment are carried at their aggregate outstanding face amount, net of applicable (a) unamortized acquisition premiums and discounts, (b) allowance for losses and (c) charge-offs or write-downs of impaired receivables. Upon consummation of the Business Combination, Sunlight adjusted the carrying value of loans and loan participations to their fair values at the Closing Date. If management determines a loan or loan participation is impaired, management writes down the loan or loan participation through a charge to the provision for losses. See “— Impairment” for additional discussion regarding management’s determination for loan losses. Sunlight applies the interest method to amortize acquisition premiums and discounts or on a straight-line basis when it approximates the interest method. Sunlight has not acquired any material loans with deteriorated credit quality that were not charged off upon purchase. Impairment — Sunlight holds financing receivables that management evaluates for impairment indicators at least quarterly using information obtained at least annually. In conjunction with this review, management assesses such factors as historical losses, changes in the nature and volume of financing receivables, overall portfolio quality, and existing economic conditions that may affect the customer’s ability to pay. In certain cases, management assigns a risk rating based on certain aforementioned factors. 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 expects 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, 2022 and December 31, 2021, 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 — For advances made by Sunlight, management performs an evaluation of impairment indicators using financial information obtained from its counterparties and third parties as well as historical experience. Such indicators may include the borrower’s financial wherewithal and recent operating performance as well as macroeconomic trends. Management rates the potential for advance receivables by reviewing the counterparty. The counterparty is rated by overall risk tier on a scale of “1” through “5,” from least to greatest risk, which management reviews and updates on at least an annual basis. Counterparties may be granted advance approval within any overall risk tier, however tier “5” advance approvals are approved on an exception basis. A subset category of the overall risk tier is the financial risk of the counterparty. As with the overall risk tier, counterparties may be granted advance approval within any financial risk tier; however financial risk tier “5” advance approvals are approved on an exception basis. As part of that approval, management will set an individual counterparty advance dollar limit, which cannot be exceeded prior to additional review and approval. The overall risk tiers are defined as follows: 1 Low Risk 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-Medium Risk 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 Risk 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-to-High Risk 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 Risk 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 — Sunlight aggregates performing loans and loan participations into pools for the evaluation of impairment based on like characteristics, such as loan type and acquisition date. Pools of loans are evaluated based on criteria such as an analysis of borrower performance, credit ratings of borrowers, and historical trends in defaults and loss severities for the type and seasoning of loans and loan participations under evaluation. Goodwill — Goodwill represents the excess of the purchase price over the estimated fair values of the net tangible and intangible assets of acquired entities. Sunlight performs a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include, but are not limited to, significant adverse changes in customer demand or business climate and related competitive considerations. Sunlight first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, Sunlight performs a two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized by the applicable reporting unit(s). If Sunlight determines that the implied fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. Sunlight has one reporting unit and, as part of its most recent annual impairment test during the fourth quarter of 2022 and at December 31, 2022, determined that it was more likely than not that the implied fair value of the reporting unit in which Sunlight recorded goodwill was less than its carrying value primarily based upon market activities impacting public companies similar to Sunlight, and further impaired its goodwill by $384.4 million and $61.4 million at September 30, 2022 and December 31, 2022, respectively, for a total of $445.8 million impairment charges during the year ended December 31, 2022, reflecting challenges in the macro-economic environment, such as rapidly rising interest rates that impacted the financial and market performance of Sunlight and its peers though December 31, 2022 (see Note 11 for events subsequent to December 31, 2022). The carrying value of Sunlight’s goodwill changed by the following amounts: December 31, 2021 (Successor) Goodwill $ 670,457 Accumulated impairment losses (224,701) 445,756 Impairment losses (445,756) December 31, 2022 (Successor) Goodwill 670,457 Accumulated impairment losses (670,457) $ — Intangible Assets, Net — Sunlight identified the following intangible assets, recorded at fair value at the Closing Date of the Business Combination, and carried at a value net of amortization over their estimated useful lives on a straight-line basis. Sunlight’s intangible assets are evaluated for impairment on at least a quarterly basis: Estimated Useful Life Carrying Value Successor Asset December 31, 2022 December 31, 2021 Contractor relationships (a) 11.5 $ 350,000 $ 350,000 Capital provider relationships (b) 0.8 — 43,000 Trademarks/ trade names (c) 10.0 7,900 7,900 Developed technology (d) 3.0 — 5.0 11,163 8,193 369,063 409,093 Accumulated amortization (e)(f)(g) (49,143) (43,254) $ 319,920 $ 365,839 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 Direct Channel Partners and Indirect Channel Loan Purchasers 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 amortization expense of $0.9 million, $0.6 million, and $1.5 million related to capitalized internally developed software costs for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, respectively. f. Includes amortization expense of $48.9 million, $43.3 million, and $1.4 million for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, respectively. g. At December 31, 2022, 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 Technology Other Identified Intangible Assets Total 2023 $ 2,828 $ 31,199 $ 34,027 2024 2,730 31,285 34,015 2025 1,925 31,199 33,124 2026 694 31,199 31,893 2027 — 31,199 31,199 Thereafter — 155,662 155,662 $ 8,177 $ 311,743 $ 319,920 Property and Equipment, Net — Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Carrying Value Successor Asset Category December 31, 2022 December 31, 2021 Furniture, fixtures, and equipment 5 $ 1,512 $ 1,020 Computer hardware 5 1,328 1,108 Computer software 1 — 3 338 250 Leasehold improvements Shorter of life of improvement or lease term — 2,829 3,178 5,207 Accumulated amortization and depreciation (a) (1,689) (1,138) $ 1,489 $ 4,069 a. Includes depreciation expense of $0.6 million, $0.2 million, $0.2 million, for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021, and January 1, 2021 through July 9, 2021, respectively. Funding Commitments — Pursuant to Sunlight’s contractual arrangements with its Bank Partner, Direct Channel Partners, and contractors, each of Sunlight’s Direct Channel Partners and its Bank Partner periodically remits to Sunlight the cash related to loans the funding source has originated. Sunlight has committed to funding such amounts, less any amounts Sunlight is entitled to retain, to the relevant contractor when certain milestones relating to the installation of residential solar systems or the construction of installation of other home improvement projects underlying the consumer receivable have been reached. Sunlight presents any amounts that Sunlight retains in anticipation of a contractor completing an installation milestone as “Funding Commitments” on the accompanying Consolidated Balance Sheets, which totaled $20.4 million and $22.7 million at December 31, 2022 and December 31, 2021, respectively. Guarantees — Sunlight records a liability for the guarantees it makes for certain Loans if it determines that it is probable that it will have to repurchase those loans, in an amount based on the likelihood of such repurchase and the loss, if any, Sunlight expects to incur in connection with its repurchase of Loans that may have experienced credit deterioration since the time of the loan’s origination. Warrants — The |
Financing Receivables
Financing Receivables | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Financing Receivables | 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: Advances (a) Loans and Loan Participations (b) Total December 31, 2022 (Successor) Amounts outstanding $ 52,129 $ 3,944 $ 56,073 Unamortized discount — (310) (310) Allowance for credit losses (6,736) (102) (6,838) Carrying value $ 45,393 $ 3,532 $ 48,925 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 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 advances of $1.5 million and $9.0 million, net of allowances of $0.1 million and $0.0 million, to Sunlight contractors not associated with specific installation projects at December 31, 2022 and December 31, 2021, respectively. b. Represents (i) Sunlight’s 5.0% participation interest in a pool of residential solar loans with an aggregate UPB of $3.6 million and $4.6 million at December 31, 2022 and December 31, 2021, respectively, and (ii) Indirect Channel Loans purchased by Sunlight with an aggregate UPB of $0.3 million and $0.3 million at December 31, 2022 and December 31, 2021, respectively. No loans or loan participations were individually evaluated for impairment at December 31, 2022 or December 31, 2021. Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Allowance for Credit Losses — Advances Beginning Balance $ 238 $ — $ 121 Provision for credit losses 48,050 358 90 Realized losses (a) (41,552) (120) — Ending Balance $ 6,736 $ 238 $ 211 Allowance for Credit Losses — Loans and Loan Participations Beginning Balance $ 148 $ — $ 125 Provision for credit losses 3,243 859 1,082 Realized losses (3,289) (711) (1,096) Ending Balance $ 102 $ 148 $ 111 Changes in Carrying Value — Loans and Loan Participations Beginning Balance $ 4,313 $ 5,105 $ 5,333 Purchases, net (b) 3,296 716 1,170 Proceeds from principal repayments, net (931) (710) (832) Accretion of loan discount 97 61 123 Provision for credit losses (3,243) (859) (1,082) Ending Balance $ 3,532 $ 4,313 $ 4,712 a. Sunlight charged-off advances totaling $32.4 million for the year ended December 31, 2022 attributable to the insolvency of one of Sunlight’s largest contractors as well as $9.2 million charged off in connection with three other contractors. b. 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, respectively, as well as (ii) 20 and 51 Indirect Channel Loans with an aggregate UPB of $0.4 million and $1.1 million, respectively. During the year ended December 31, 2022, Sunlight purchased 113 Indirect Channel Loans with an aggregate UPB of $3.0 million. In September 2022, one of Sunlight’s largest contractors experienced a liquidity shortfall that caused the installer to substantially wind down its business by the end of that month and to begin liquidation of its business in October 2022. As a result, Sunlight determined it would be unable to collect $32.4 million Sunlight advanced to the contractor at September 30, 2022, representing the total net amounts advanced to the contractor at that time. Advances — The following section presents certain characteristics of Sunlight’s advances. Risk Ratings — As further described in Note 2, management evaluates Sunlight’s advances for impairment using risk ratings assigned on a scale of “1” (low risk) through “5” (higher risk). The following table allocates the advance amount outstanding based on Sunlight’s internal risk ratings: Total Risk Tier (a) Contractors Amount Outstanding % of Amount Outstanding December 31, 2022 (Successor) 1 Low risk 130 $ 14,585 28.0 % 2 Low-to-medium risk 152 23,686 45.4 3 Medium risk 70 3,868 7.4 4 Medium-to-high risk 28 9,793 18.8 5 Higher risk 8 197 0.4 388 $ 52,129 100.0 % 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 % a. At December 31, 2022 and December 31, 2021, the average risk rating of Sunlight’s advances was 2.2 (“low-to-medium risk”) and 2.0 (“low-to-medium risk”), weighted by total advance amounts outstanding, respectively. Delinquencies — The following table presents the payment status of advances held by Sunlight: Payment Delinquency Amount Outstanding (a) % of Amount Outstanding December 31, 2022 (Successor) Current $ 27,257 53.8 % Less than 30 days 7,456 14.7 30 days 5,197 10.3 60 days 3,099 6.1 90+ days (b) 7,620 15.1 $ 50,629 100.0 % 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 % a. Excludes advances of $1.5 million and $9.0 million to Sunlight contractors not associated with specific installation projects and was not delinquent at December 31, 2022 and December 31, 2021, respectively. 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 $2.0 million and $0.2 million at December 31, 2022 and December 31, 2021, respectively. Concentrations — The following table presents the concentration of advances, by counterparty: Successor December 31, 2022 December 31, 2021 Contractor Amount Outstanding % of Total Amount Outstanding % of Total 1 $ 7,348 14.1 % $ 9,496 14.2 % 2 4,326 8.3 20,894 31.1 3 4,098 7.9 2,093 3.1 4 3,902 7.5 2,610 3.9 5 2,711 5.2 855 1.3 6 1,410 2.7 302 0.5 7 1,004 1.9 25 — 8 992 1.9 436 0.6 9 929 1.8 99 0.1 10 802 1.5 — — Other (a) 24,607 47.2 30,267 45.2 $ 52,129 100.0 % $ 67,077 100.0 % a. At December 31, 2022 and December 31, 2021, Sunlight recorded advances receivable from 378 and 160 counterparties not individually listed in the table above with average balances of $0.1 million and $0.1 million, respectively. At December 31, 2021, Sunlight recorded advances receivable from individual counterparties of $12.5 million, $2.6 million, $1.7 million, $0.6 million, and $0.6 million that represent the largest advance concentrations included in “Other,” based on the amount outstanding. Loans and Loan Participations — The following section presents certain characteristics of Sunlight’s investments in loans and loan participations. Unless otherwise indicated, loan participation amounts are shown at Sunlight’s 5.0% interest in the underlying loan pool. Delinquencies — The following table presents the payment status of loans and loan participations held by Sunlight: Payment Delinquency (a) Loan Participations Bank Partner Loans Total Loans UPB Loans UPB Loans UPB % of UPB December 31, 2022 (Successor) Current 3,302 $ 3,502 14 $ 240 3,316 $ 3,742 94.9 % Less than 30 days 89 101 3 69 92 170 4.3 30 days 15 17 — — 15 17 0.4 60 days 6 9 — — 6 9 0.2 90+ days 6 6 — — 6 6 0.2 3,418 $ 3,635 17 $ 309 3,435 $ 3,944 100.0 % 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 % 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, 2022 and December 31, 2021, 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 — The following table presents the UPB of Balance Sheet Loans, including Sunlight’s relevant participation percentage of the Indirect Channel Loans underlying the participation interests held by Sunlight, based upon the state in which the borrower lived at the time of loan origination: Successor December 31, 2022 December 31, 2021 State UPB % of Total UPB % of Total Texas $ 732 18.6 % $ 930 19.1 % California 698 17.7 867 17.8 Florida 371 9.4 423 8.7 New York 269 6.8 325 6.7 New Jersey 256 6.5 302 6.2 Arizona 178 4.5 220 4.5 Massachusetts 174 4.4 201 4.1 Pennsylvania 159 4.0 202 4.1 South Carolina 137 3.5 178 3.7 Missouri 111 2.8 135 2.8 Other (a) 859 21.8 1,092 22.3 $ 3,944 100.0 % $ 4,875 100.0 % 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 2.6% of the UPB at December 31, 2022 and December 31, 2021, respectively. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 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 includes 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 December 2022, Sunlight and Bank Partner amended the agreement, which removed the indexed contractual rate and the agreement was no longer considered a derivative under GAAP. 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 contract derivatives are recorded at fair value in the accompanying Consolidated Balance Sheets as follows: Successor Balance Sheet Location December 31, 2022 December 31, 2021 Contract derivative 1 (a) Other assets n.a. $ 1,076 Contract derivative 2 Other assets 449 335 $ 449 $ 1,411 a. The agreement was amended in December 2022 and no longer meets the definition of a derivative under GAAP. The following table summarizes notional amounts related to derivatives: Successor December 31, 2022 December 31, 2021 Contract derivative 1 (a) n.a. $ 38,879 Contract derivative 2 (b) 38,805 37,891 a. At December 31, 2021, amount 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. Starting December, 2022, the amended agreement no longer meets the definition of a derivative under GAAP. 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 Loans. The following table summarizes all income (loss) recorded in relation to derivatives: Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Change in fair value of contract derivatives, net Contract derivative 1 $ (1,076) $ 573 $ (932) Contract derivative 2 114 65 270 $ (962) $ 638 $ (662) Realized gains/(losses) on contract derivatives, net Contract derivative 1 $ 2,245 $ 2,789 $ 2,950 Contract derivative 2 356 77 42 $ 2,601 $ 2,866 $ 2,992 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Debt consists of the following: Successor December 31, 2022 December 31, 2021 Month Issued Outstanding Face Amount Carrying Value Maximum Facility Size Final Stated Maturity Weighted Average Carrying Value (a) Funding Cost Life (Years) Revolving credit facility (a) Apr 2021 $ 20,613 $ 20,613 $ 30,000 Apr 2023 9.3 % 0.3 $ 20,613 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 SVB and replaced the associated standby letter of credit. Borrowings under the current revolving credit facility, secured by the net assets of Sunlight Financial LLC, 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. 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 — Activities related to the carrying value of Sunlight’s debt obligations were as follows: Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Beginning Balance $ 20,613 $ 20,613 $ 14,625 Borrowings — — 20,746 Repayments — — (14,758) Amortization of deferred financing costs (a) — — — Ending Balance $ 20,613 $ 20,613 $ 20,613 a. Excludes $0.0 million, $0.0 million and $0.0 million amortization of deferred financing costs for the periods July 10, 2021 through December 31, 2021, July 1, 2021 through July 9, 2021, and January 1, 2021 through July 9, 2021, 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, 2022 or December 31, 2021 and did not amortize any such costs for the year ended December 31, 2022. Maturities — At December 31, 2022, all of Sunlight’s debt obligations contractually mature in 2023. Covenants — Sunlight is required to maintain minimum liquidity, EBITDA and available takeout commitment levels on a quarterly basis under the Loan and Security Agreement. As a result of the platform fee losses in the fourth quarter of 2022, Sunlight did not meet the EBITDA requirement at December 31, 2022. Additionally, breaches of other significant agreements, including agreements between Sunlight and its Bank Partner, may trigger cross default provisions under the Loan and Security Agreement. At December 31, 2022, Sunlight was not in compliance with its debt covenants (Note 11). As of December 31, 2022, Sunlight’s financial covenants and calculated amounts were as follows (in millions): Successor December 31, 2022 Covenant Minimum Amount EBITDA Covenant (a) $ 5 $ (14) Liquidity (b) 10 48 Available takeout commitment (c) 200 1,125 a. EBITDA Covenant for the six-month period ended each quarter of at least $5.0 million. b. Unrestricted cash equal to, or greater than, the greater of (i) 35% of amounts borrowed under the revolving credit facility and (ii) $10.0 million. c. Aggregate Direct Channel Partners' and Bank Partner's unused committed obligation to purchase and hold Loans of at least $200.0 million. |
Equity and Earnings per Share
Equity and Earnings per Share | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Equity and Earnings per Share | 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 — The Company is authorized to issue 420,000,000 shares of Class A common stock with a par value of $0.0001 per share (“Class A Share”). There were 82,307,760 and 84,803,687 shares of Class A common stock issued and outstanding at December 31, 2022 and December 31, 2021, respectively. Class B Common Stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share (“Class B Share” or “Founder Share”). 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. 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. There were no shares of Class B common stock issued and outstanding at December 31, 2022 and December 31, 2021, respectively. 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 — The Company is authorized to issue 65,000,000 shares of Class C common stock with a par value of $0.0001 per share (“Class C Common Stock”). There were 47,287,370 and 47,595,455 shares of Class C Common Stock issued and outstanding at December 31, 2022 and December 31, 2021, respectively. Each Class C share, along with one Class EX Unit, can be exchanged for one Class A Share, subject to certain limitations. Upon exchange, Sunlight redeems and cancels the Class C Common Stock and Sunlight Financial LLC redeems and cancels the Class EX Unit. Class C shares have no dividend or liquidation rights, but do have voting rights on a pari passu basis with the Class A Shares. In October 2022, holders of 308,085 Class EX units of Sunlight Financial LLC exchanged their Class EX units, along with a corresponding number of Class C shares of the Company, for 308,085 Class A shares of the Company at $1.25 per Class A share. Preferred Stock — The Company is authorized to issue 35,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Sunlight’s board of directors. Sunlight’s board of directors is able, without stockholder approval, to issue Preferred Stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The Company has not issued any shares of preferred stock. Warrants — At December 31, 2022, Sunlight has authorized Class A Shares to cover the exercise of the following outstanding warrants on its equity: Type Date of Issuance Exercise Price per Share Shares Public Warrants Nov-20 $ 11.50 17,250,000 Private Placement Warrants Nov-20 11.50 9,900,000 Other Feb-21 7.72 627,780 Refer to Notes 2 and 7 regarding the accounting treatment for warrants and the valuation thereof, respectively, and refer to Note 11 for information regarding the issuance of warrants after December 31, 2022. Public Warrants — Public Warrants may only be exercised for a whole number of shares of common stock. No fractional Public Warrants are issued upon separation of the Units and only whole Public Warrants trade. The Public Warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire upon the earlier of redemption or five years after the completion of the Business Combination. The warrants are exercisable, provided the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). Notwithstanding the above, if the Company’s shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Private Placement Warrants — The Private Placement Warrants are not redeemable by the Company, subject to certain limited exceptions, so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants for cash or on a cashless basis. Except as described in “— Company Redemption of Public Warrants and Private Placement Warrants,” the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants, including as to exercise price, exercisability, and exercise period. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants. 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. Other Warrants — In February 2021, Sunlight Financial LLC issued a warrant exercisable for 7,000 of its Class A-3 Units at an exercise price of $691.90 per unit that expires upon the earlier of redemption or ten years from date of issuance. In connection with the Business Combination, Sunlight and the holder of that warrant amended the warrant to permit the holder to exercise its warrant for 627,700 Class A common stock at an exercise price of $7.715 per share. Sunlight reclassified the warrant, historically classified as a liability but no longer exercisable for redeemable equity, as equity at a fair value of $2.5 million just prior to reclassification. Upon Closing of the Business Combination, holders of warrants exercisable in Sunlight Financial LLC’s Class A-1 and A-2 Units exercised their warrants for an aggregate of $2.3 million in cash and 635,641 Class A common shares. Company Redemption of Public Warrants and Private Placement Warrants — Sunlight may redeem Public Warrants and Private Placement Warrants on terms that vary according to the trading price of its Class A Shares. Redemption of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company may redeem the outstanding warrants: • 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 redemption period. If and when the warrants become redeemable by the Company, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. 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 — Once the warrants become exercisable, the Company may redeem the outstanding warrants: • 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. Share Repurchase Program — On May 16, 2022, Sunlight’s Board of Directors authorized a share repurchase program pursuant to which Sunlight may repurchase up to $50.0 million of Sunlight’s Class A common stock over an eighteen-month period from the date of authorization. Under the share repurchase program, Sunlight may purchase common stock in open market transactions, block, or privately-negotiated transactions, and may from time to time purchase shares pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act or by any combination of such methods, in each case subject to compliance with all SEC rules and other legal requirements. The number of shares to be purchased and the timing of the purchases are based on a variety of factors, including, but not limited to, the level of cash balances, debt covenant restrictions, general business conditions, the market price of Sunlight’s stock, self-imposed trading blackout periods, and the availability of alternative investment opportunities. There is no minimum number of shares required to be repurchased under the share repurchase program, and the share repurchase program may be suspended or discontinued at any time. In September 2022, the Company suspended share repurchases under the program to preserve liquidity in the current environment. The table below sets forth the Class A common shares that Sunlight has repurchased: Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Amount paid $ 10,452 $ — $ — Common Class A shares repurchased 3,036,259 — — Price paid per common Class A share $ 3.44 n.a. n.a. 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 — Activities related to interests in Sunlight Financial LLC’s partnership equity units considered temporary equity were as follows: Month of Issuance Class A-3 Units Class A-2 Units Class A-1 Units Units at December 31, 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 — Prior to the Business Combination, the Class A-1, A-2 and A-3 Units (collectively, the “Class A Units”) were the most senior classes of equity units of Sunlight Financial LLC and represented convertible preferred securities that earn a preferred return. Sunlight Financial LLC’s board of directors elected to pay the preferred return by issuing additional Class A Units equal to 14.5%, on an annualized basis, of the members’ outstanding Class A Units (“Class A PIK Units”). At the Closing of the Business Combination, holders of Preferred Units sold certain Class A-2 Units and Class A-3 Units to wholly-owned subsidiaries of Sunlight in exchange for cash and Class A Shares while remaining Class A unitholders received cash and Class EX Units. Subordinated Units — Prior to the Business Combination, the Class B Units were a class of equity units subordinate to Class A Units with regard to liquidation, and Sunlight’s payment of the preferred return to the Class A Units, in Class A PIK Units, diluted Class B Units’ interests in Sunlight’s equity. No Class B Units were issued, redeemed, or cancelled during the period January 1, 2021 through July 9, 2021. At the Closing of the Business Combination, holders of Class B Units exchanged their Class B Units for cash and Class EX Units. Other Interests — Prior to the Business Combination, Sunlight had issued the following subordinated interests upon conversion of equity-based compensation awards upon vesting. Class C Units — Sunlight Financial LLC had issued Class C Units that did not have voting rights or certain other equity-like features, were subordinate to the Class A Units and Class B Units, and only received distributions from Sunlight Financial LLC’s profits, based on the total number of outstanding units at such time, after Sunlight Financial LLC distributed the liquidation preference of Class A Units. At the Closing of the Business Combination, which occurred at a price above the Threshold Equity Value of each equity award, holders of vested Class C Units received cash and Class EX Units. Holders of unvested Class C Units received awards of Class C shares, Class EX Units, and cash subject to time vesting. LTIP Units — In February 2016, Sunlight Financial LLC established a program pursuant to which it granted units to certain employees in a long-term incentive plan. In December 2017, Sunlight Financial LLC, at the direction of its board of directors, amended and restated its long-term incentive plan to provide clarity around certain items and to allow for the issuance of various classes of LTIP Units. All LTIP units issued between February 2018 and the Closing Date of the Business Combination were economically equivalent to corresponding classes of Class C units. At the Closing of the Business Combination, holders of vested LTIP Units received cash and Class A Shares. Holders of unvested LTIP Units received awards of Class A Shares and cash subject to time vesting. Non-Controlling Interests in Consolidated Subsidiaries — These amounts relate to equity interests in Sunlight's consolidated, but not wholly-owned subsidiaries, which are held by the Class EX unitholders. The Sunlight Financial LLC portion of noncontrolling interests is computed as follows: Successor For the Year Ended December 31, For the Period July 10, 2021 to December 31, 2021 2022 Sunlight Financial LLC net income (loss) before income taxes $ (547,370) $ (249,993) Sunlight Financial LLC as a percent of total (a) 35.4 % 35.0 % Sunlight Financial LLC net income (loss) attributable to the Class EX unitholders $ (196,085) $ (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 Year Ended December 31, For the Period July 10, 2021 to December 31, 2021 2022 Transfers (to) from noncontrolling interests: Decrease in Sunlight's shareholders' equity for the delivery of Class EX Units primarily in connection with vested provisionally-vested Class EX Units $ (2,171) $ 30,379 Dilution impact of equity transactions (2,171) 30,379 Net income (loss) attributable to Class A shareholders (315,851) (159,556) Change from transfers (to) from noncontrolling interests and from net income (loss) attributable to Class A shareholders $ (318,022) $ (129,177) Equity-Based Compensation — On June 17, 2021, the board of directors of the Company adopted the Equity Plan and the Sunlight Financial Holdings Inc. Employee Stock Purchase Plan (“ESPP”), both of which the Company's stockholders approved on July 8, 2021. 25,500,000 shares of Class A common stock are reserved for issuance under the Equity Plan, which amount is increased annually pursuant to an “evergreen” provision in the Equity Plan which provides that on the first day of each fiscal year, an additional number of shares equal to the lesser of (a) two percent (2.0%) of the total issued and outstanding common shares of Sunlight on the first day of such fiscal year, or (b) such lesser amount determined by the board of directors, will be added to the shares of Class A common stock authorized for issuance under the Equity Plan. In addition, 3,400,000 shares of Class A common stock are reserved for issuance under the ESPP. Sunlight has granted the following outstanding awards (“Compensation Awards”) to certain employees and members of Sunlight’s Board at December 31, 2022: Service (in Years) (b) Award Class (a) Minimum Maximum Awards (c) Provisionally-Vested Class A Shares 1.9 3.6 145,970 Provisionally-Vested Class EX Units 1.9 1.9 189,158 Director RSUs 1.0 1.0 171,624 Employee RSUs 3.0 4.0 5,703,195 6,209,947 a. All awards subject solely to time-based vesting. b. At time of grant. c. Net of fully vested and forfeited awards. Compensation Unit Activities — Activities related to Sunlight’s equity-based compensation were as follows: Successor Provisionally-Vested RSUs Class A Shares Class EX Units Directors Employees Per Share Shares Per Unit Units Per Unit Units Per Unit Units December 31, 2021 (Successor) $ 9.46 337,193 $ 9.46 974,447 $ 9.46 75,000 $ 8.97 2,136,129 Issued — — 5.04 70,991 4.37 171,624 2.45 4,695,642 Vested 9.46 (148,704) 9.01 (693,351) 9.46 (75,000) 9.03 (473,372) Forfeited or Cancelled 9.46 (42,519) 9.46 (162,929) — — 4.47 (655,204) December 31, 2022 (Successor) 9.46 145,970 9.46 189,158 4.37 171,624 3.97 5,703,195 Predecessor Class C LTIP Per Unit Units Per Unit Units 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 — At December 31, 2022, Sunlight has not yet recognized compensation expense for the following awards, all of which are subject solely to time-based service vesting conditions: Type (a) Weighted Average Recognition Period Awards Amount Provisionally-Vested Class A Shares 0.7 years 145,970 $ 1,381 Provisionally-Vested Class EX Units 0.2 years 189,158 1,789 Director RSUs 0.4 years 171,624 439 Employee RSUs 1.4 years 5,703,195 14,687 6,209,947 $ 18,296 a. In addition to the above, Sunlight has not yet recogniz ed $0.1 million of compensation expense associated with employee subscriptions under Sunlight’s ESPP with a weighted-average recognition period of 0.1 years. Refer to Notes 2 and 7 regarding the accounting treatment for compensation units and the valuation thereof. Earnings (Loss) Per Share — Sunlight is required to present both basic and diluted earnings per share (“EPS”). Basic EPS is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding plus the additional dilutive effect, if any, of common stock equivalents during each period. Sunlight does not present earnings per unit of Sunlight Financial LLC, Sunlight’s accounting predecessor, for periods prior to the Business Combination. Sunlight’s potentially dilutive equity instruments fall primarily into three general categories: (a) instruments that Sunlight has issued as part of its compensation plan, (b) 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, and (c) derivatives exercisable in 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 Year Ended December 31, For the Period July 10, 2021 to December 31, 2021 2022 Net Income (Loss) Per Class A Shareholders, Basic Net income (loss) available to Class A shareholders $ (315,110) $ (158,573) Total weighted average shares outstanding 83,804,659 84,824,109 Net Income (Loss) Per Class A Shareholders, Basic $ (3.76) $ (1.87) Net Income (Loss) Per Class A Shareholders, Diluted Net income (loss) available to Class A shareholders $ (507,583) $ (158,573) Total weighted average shares outstanding 130,618,205 84,824,109 Net Income (Loss) Per Class A Shareholders, Diluted $ (3.89) $ (1.87) Net income (loss) available to Class A shareholders Net Income (Loss) $ (511,936) $ (247,084) Noncontrolling interests in loss of consolidated subsidiaries 196,085 87,528 Other weighting adjustments 741 983 Net Income (Loss) Attributable to Class A Shareholders (315,110) $ (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) (192,473) — Net income (loss) available to Class A shareholders, diluted $ (507,583) $ (158,573) Weighted Average Units Outstanding Class A shares outstanding 83,804,659 84,824,109 Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares (a) 46,813,546 — Incremental Class A Shares attributable to dilutive effect of warrants (b) — — Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments) (c) — — Total weighted average shares outstanding, diluted 130,618,205 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 years ended December 31, 2022. c. Restricted Class A share units granted to directors and employees are eligible to receive dividend or dividend equivalent payments when dividends are declared and paid on Sunlight’s Class A Shares and therefore participate fully in the results of Sunlight’s operations from the date they are granted. 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 income (loss) per common share as their effect would be anti-dilutive: Successor For the Year Ended December 31, For the Period July 10, 2021 to December 31, 2021 Common Shares From 2022 Class EX Units — 46,354,679 Warrants (a) 27,150,000 27,150,000 Other warrants 627,780 627,780 Unvested Class EX Units 706,580 1,240,776 RSUs (b) 2,416,070 2,085,501 ESPP (c) 115,501 — 31,015,931 77,458,736 a. Includes Public Warrants and Private Placement Warrants. b. Includes RSUs awards to directors and employees. c. Class A Shares deliverable to employees in satisfaction of subscriptions under Sunlight’s ESPP. There were no dividends declared for Sunlight’s Class A common stock during the years ended December 31, 2022 and December 31, 2021, respectively. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The carrying values and fair values of Sunlight’s assets or 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, 2022 and December 31, 2021 were as follows: Principal Balance or Notional Amount Carrying Value Fair Value Level 1 Level 2 Level 3 Total December 31, 2022 (Successor) Assets: Financing Receivables: Loan participations, held-for-investment $ 3,635 $ 3,254 $ — $ — $ 3,110 $ 3,110 Loans, held-for-investment 309 278 — — 260 260 Cash and cash equivalents 47,515 47,515 47,515 — — 47,515 Restricted cash 4,272 4,272 4,272 — — 4,272 Contract derivatives 38,805 449 — — 449 449 Liabilities: Debt 20,613 20,613 — — 20,613 20,613 Warrants 312,225 4,297 — — 4,297 4,297 Guarantee obligation n.a. 8,024 — — 8,024 8,024 Servicing liability n.a. 512 — 512 512 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 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 Contract Derivatives Warrants December 31, 2021 (Successor) $ 1,411 $ — $ 19,007 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 — — (14,710) Included in change in fair value of contract derivatives, net (962) — — Included in realized gains on contract derivatives, net 356 2,245 — Payments, net (356) (2,245) — December 31, 2022 (Successor) $ 449 $ — $ 4,297 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 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. Increases in the fair value of liabilities represent losses included in net income. Contract Derivative Valuation — Fair value estimates of Sunlight's contract derivatives are based on an internal pricing model that uses a discounted cash flow valuation technique, incorporates significant unobservable inputs, and includes assumptions that are inherently subjective and imprecise. Significant inputs used in the valuation of Sunlight’s contract derivatives include: 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 December 31, 2022 December 31, 2021 Contract Derivative 1 Discount rate n.a. 10.0 % Weighted average life (in years) n.a. 0.2 Contract Derivative 2 Expected prepayment rate 75.0 % 75.0 % Compensation Unit and Warrant Valuation — Sunlight uses the observed market price of its publicly-traded Class A Shares and the warrants thereon to measure the value of RSU awards on the grant date and the value of Public Warrants, respectively. For Private Placement Warrants, Sunlight uses an independent third-party valuation firm to value those warrants using a Monte Carlo option pricing model, which includes the following estimates of underlying asset value, volatility, dividend rates, expiration dates, and risk-free rates: Successor Assumption December 31, 2022 Class A common share value per share (a) $ 1.29 Implied volatility (a) 83.9 % Dividend yield (b) — % Time to expiry (in years) (a) 3.5 Risk free rate (a) 4.2 % 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 grant-date value of each Class C Unit and LTIP Unit granted prior to the Business Combination, 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. To determine the fair value of warrants prior to the Business Combination, 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 — In connection with Sunlight’s goodwill assessment (Note 2), the Company valued its single reporting unit using an equal-weighted valuation methodology, which incorporated (a) an income approach using a discounted cash flow analysis (b) a market approach using publicly-traded companies similar to Sunlight and (c) a market capitalization approach. |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Taxes | Taxes The components of income tax expense (benefit) consisted of the following: Successor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Before Income Taxes $ (548,857) $ (250,588) Income Tax Expense (Benefit) Current Federal $ (1,525) $ 1,708 State and local 427 312 (1,098) 2,020 Deferred Federal (35,405) (4,603) State and local (418) (921) (35,823) (5,524) Total Federal (36,930) (2,895) State and local 9 (609) $ (36,921) $ (3,504) Sunlight’s effective income tax rate varied from the U.S. statutory tax rate that was in effect during the periods as follows: Successor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Before Income Taxes $ (548,857) $ (250,588) Statutory U.S Income Tax Rate 21.0 % 21.0 % Income tax expense (benefit), at statutory U.S. federal rate $ (115,260) 21.0 % $ (52,623) 21.0 % State and local taxes (2,654) 0.5 (674) 0.3 Valuation Allowance on Deferred Provision 10,359 (1.9) — — Goodwill impairment 31,648 (5.8) 30,658 (12.2) Change in fair value of warrant liabilities (1,971) 0.4 (3,081) 1.2 Noncontrolling interests in loss of consolidated subsidiaries 41,593 (7.6) 18,390 (7.3) Business Combination compensation expense — — 3,662 (1.5) Other (636) 0.1 164 (0.1) Income tax benefit $ (36,921) 6.7 % $ (3,504) 1.4 % Sunlight’s effective income tax rate during the year ended December 31, 2022 is 6.7%, compared to 1.4% for the period July 10, 2021 to December 31, 2021. The increase in the effective income tax rate is primarily due to the permanent adjustments for goodwill impairment of $31.6 million, changes in the value of warrant liabilities of $2.0 million, and noncontrolling interest in subsidiaries of $41.6 million. The components of federal and state income taxes payable or receivable consisted of the following: Successor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 Income tax receivable (payable) Federal $ 1,918 $ (1,708) State 651 (312) Total income tax receivable (payable) $ 2,569 $ (2,020) The components of net deferred tax assets or liabilities consisted of the following: Successor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 Deferred tax assets Net operating loss carryforward $ 13,345 $ — Basis step-up from Class EX exchange 177 — Excess business interest expense carryforward 468 — Deferred tax assets, gross 13,990 — Less: valuation allowance (10,359) — Deferred tax assets, net 3,631 — Deferred tax liabilities Investment in Sunlight Financial LLC 4,319 36,686 Deferred tax asset (liability), net $ (688) $ (36,686) Deferred income taxes are recognized for the future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities. As of December 31, 2022 Sunlight had net deferred tax liabilities of $0.7 million, comprised of $14.0 million gross deferred tax asset, less a valuation allowance of $10.4 million, and $4.3 million of gross deferred tax liability. The most significant deferred tax asset is associated with various federal and state net operating loss carryforwards totaling $61.5 million of which $51.8 million relate to federal and $9.7 million relate to various state jurisdictions, that expire at various dates starting in 2036. The net operating loss carryforwards post 2017 can be carried forward indefinitely. Certain of these federal, state and city net operating loss carryforwards may be subject to Internal Revenue Code Section 382 or similar provisions, which impose limitations on the amounts Sunlight may use to offset its tax obligations. ASC 740, Income Tax ("ASC 740") requires deferred tax assets to be reduced by a valuation allowance, if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In accordance with this requirement, Sunlight regularly reviews the recoverability of its deferred tax assets and establishes a valuation allowance, if appropriate. In determining the amount of any required valuation allowance, Sunlight considers the history of profitability, projections of future profitability, the reversal of future taxable temporary differences, the overall amount of deferred tax assets, and the timeframe necessary to utilize the deferred tax assets prior to their expiration. Based on the weight of all positive and negative quantitative and qualitative evidence available as outlined above, management has concluded that it is more likely than not that Sunlight will not be able to realize a portion of its federal and state deferred tax assets in the foreseeable future and has recorded a valuation allowance of $10.4 million against these assets at December 31, 2022. 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, 2022 and December 31, 2021, 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. As of December 31, 2022, the earliest tax year open to federal and state examinations is 2019 and no years are currently under examination in any jurisdiction. Sunlight believes based on the recognition and measurement principles of ASC 740 that the unrecognized tax benefits recorded for all remaining open years in all jurisdictions, including those currently under audit, is appropriate. Sunlight does not expect its unrecognized tax benefits to significantly change in the next 12 months. Tax Receivable Agreement — Sunlight entered into a tax receivable agreement (“TRA”) with selling equity holders of Sunlight Financial LLC that requires Sunlight to pay 85.0% of the tax savings that are realized primarily as a result of increases in Sunlight Financial LLC managing member’s tax basis in the partnership’s assets as a result of the sale and exchange of Sunlight Financial LLC’s Class EX units and Sunlight Financial Holdings Inc.’s Class C shares for Sunlight Financial Holdings Inc.’s Class A shares, as well as certain other tax benefits related to tax benefits attributable to payments under the TRA (“TRA Liability”). Sunlight retains the benefit of the remaining 15.0% of these tax savings. The Business Combination did not create a TRA Liability, and Sunlight had 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. As of December 31, 2022, Sunlight has recognized a TRA Liability of $0.2 million as a result of exchanges of Sunlight Financial LLC’s Class EX units and Sunlight Financial Holdings Inc.’s Class C shares for Sunlight Financial Holdings Inc.’s Class A shares, that occurred in October 2022. |
Transactions with Affiliates an
Transactions with Affiliates and Affiliated Entities | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates and Affiliated Entities | Transactions with Affiliates and Affiliated Entities Sunlight has entered into agreements with the following affiliates, including equity members and those who serve on Sunlight’s board of directors. Founder Shares — In August 2020, 11,500,000 Founder Shares were issued to the 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. Of the 8,625,000 Founder Shares outstanding, up to 1,125,000 shares were subject to forfeiture to the extent that the over-allotment option was not exercised by the underwriters, so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. On November 30, 2020, the underwriters fully exercised the over-allotment option; thus, these 1,125,000 shares were no longer subject to forfeiture. Private Placement Warrants — Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 9,900,000 Private Placement Warrants, at a price of $1.00 per Private Placement Warrant to the Sponsor, generating proceeds of $9.9 million. 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. Administrative Support Agreement — Commencing on the date the IPO Units were first listed on the NYSE, the Company agreed to pay the Sponsor a total of $10,000 per month for office space, utilities, and secretarial and administrative support. The Company paid the Sponsor $60,000 for such services during the period of January 1, 2021 through July 9, 2021. Upon closing of the Business Combination, the Administrative Support Agreement was terminated. FTV Management V, LLC (“FTV”) — In May 2018, Sunlight entered into a management agreement with FTV. Under the terms of the agreement, FTV provided strategic financial services to Sunlight in exchange for a management fee of $50,000 per calendar quarter. This management agreement terminated upon closing of the Business Combination. Hudson SL Portfolio Holdings LLC (“HSPH”) — In February 2018, Sunlight entered into an administrative services agreement with HSPH, indirectly owned by members of Sunlight and SL Investor III LLC, where Sunlight agreed to provide certain services to Solar Loan Management LLC, an affiliate of Hudson Sustainable Investment Management, LLC and HSPH. These services generally include special servicing administration, ongoing accounting work, all calculations related to the purchase and financing of certain Loans under the forward flow agreement and the senior financing, and other services that would be expected of the sponsor of a securitized pool of loans. For the year ended December 31, 2021, Sunlight was paid $0.2 million for such services. Upon departure of the former member of Sunlight’s board of directors upon closing of the Business Combination, Sunlight no longer considers HSPH a related party. Tiger Infrastructure Partners (“Tiger”) — In September 2015, Sunlight entered into a management agreement with Tiger. Under the terms of the agreement, Sunlight pays Tiger a management fee of $50,000 per calendar quarter for strategic financial services provided by Tiger to Sunlight. In addition to the management fee, Sunlight reimbursed $0.4 million during the year ended December 31, 2021. This management agreement terminated upon closing of the Business Combination. Financing Program Agreement — In May 2018, Sunlight entered into a financing program agreement with Lumina Solar, Inc. (“Lumina”), pursuant to which Sunlight facilitates financing for consumers that purchase residential solar energy power systems from Lumina. A former member of Sunlight’s board of directors and a former officer of Sunlight are stockholders of, and actively involved in the management of, Lumina. Sunlight received approximately $0.2 million in revenue for the period July 10, 2021 through December 31, 2021. Upon departure of the former member of Sunlight’s board of directors upon closing of the Business Combination, Sunlight no longer considers Lumina a related party. Estimated Tax Distributions — Sunlight Financial LLC distributes cash to its unitholders using allocations of estimated taxable income it expects to generate. As Sunlight revises its estimate of taxable income or loss, the allocation of taxable income to its unitholders may change, resulting in amounts due to, or from, certain unitholders. For the year ended December 31, 2022, Sunlight Financial LLC did not generate taxable income and expects to use tax distributions already declared during the current tax year to offset future estimated tax liability distributions, if any. At December 31, 2022 and December 31, 2021, Sunlight Financial LLC declared tax distributions of $1.5 million and $0.0 million, respectively, that it had not yet paid, shown as “Other Liabilities” in the accompanying Consolidated Balance Sheets. Sunlight paid estimated tax distributions of $1.2 million and $7.5 million for the years ended December 31, 2022 and 2021, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Sunlight was subject to the following commitments and contingencies at December 31, 2022. Litigation — Sunlight may be involved in various claims and legal actions arising in the ordinary course of business. Sunlight establishes an accrued liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. At December 31, 2022, Sunlight was not involved in any material legal proceedings regarding claims or legal actions against Sunlight. Indemnifications — In the normal course of business, Sunlight enters into contracts that contain a variety of representations and warranties and that provide general indemnifications. Sunlight’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against Sunlight that have not yet occurred. However, based on Sunlight’s experience, Sunlight expects the risk of material loss to be remote. Advances — Sunlight provides a contractually agreed upon percentage of cash to a contractor related to a Loan that has not yet been funded by either a Direct Channel Partner or its Bank Partner as well as amounts funded to contractors in anticipation of loan funding. At December 31, 2022, Sunlight has committed to advance up to $163.0 million for unfunded, approved Loans submitted by eligible contractors and other contingently committed amounts, of which $52.1 million of outstanding advances are included in “Advances” in the accompanying Consolidated Balance Sheets. Funding Commitments — Pursuant to Sunlight’s contractual arrangements with contractors, Direct Channel Partners, and Bank Partner, the funding source periodically remits to Sunlight the cash related to Loans it has originated. Sunlight has committed to funding such amounts to the relevant contractor when certain milestones have been reached relating to the installation of residential solar system, or other home improvement equipment, underlying the consumer receivable. Any amounts retained by Sunlight in anticipation of an installation milestone being reached are included in “Funding Commitments” in the accompanying Consolidated Balance Sheets, totaling $20.4 million at December 31, 2022. Loan Guarantees — Sunlight is required to guarantee the performance of certain Indirect Channel Loans, which it is required to repurchase in the event Sunlight is unable to facilitate the sale of such loans, and certain Direct Channel Loans. Upon repurchase, Sunlight may attempt to recover any contractual amounts owed by the borrower or from the contractor (in the event of a contractor’s nonperformance). Sunlight repurchased and wrote off 117 and 20 loans, totaling $2.9 million and $0.4 million, for the year ended December 31, 2022 and the period from July 10, 2021 through December 31, 2021, respectively, as well as 60, totaling $1.3 million for the period ended January 1, 2021 through July 9, 2021 associated with these guarantees. At December 31, 2022, the maximum potential amount of undiscounted future payments Sunlight could be required to make under these guarantees totaled $317.5 million, and Sunlight recorded a $2.1 million liability presented within “Other Liabilities” in the accompanying Consolidated Balance Sheets. At December 31, 2022, the unpaid principal balance of loans, net of applicable discounts, for guaranteed loans held by Sunlight’s Bank Partner and certain Direct Channel Partners that were delinquent more than 90 days was $1.3 million. Additionally, Sunlight may be required to repurchase solar loans from Indirect Channel Loan Purchasers, or refund platform fees to Direct Channel Partners, when contractors do not complete solar installations within a certain period of time. Generally, solar contractors are responsible to return loan proceeds they receive for such Loans. At December 31, 2022, the maximum potential amount of undiscounted future payments Sunlight could be required to make under these guarantees totaled $45.6 million, and Sunlight recorded a $5.9 million liability presented within “Other Liabilities” in the accompanying Consolidated Balance Sheets. TRA Liability — If Sunlight were to exercise its right to terminate the TRA or certain other acceleration events occur, Sunlight would be required to make immediate cash payments. Such cash payments will be equal to the present value of the assumed future realized tax benefits based on a set of assumptions and using an agreed upon discount rate, as defined in the TRA. The early termination payment may be made significantly in advance of the actual realization, if any, of those future tax benefits. Such payments will be calculated based on certain assumptions, including that Sunlight expects to have sufficient taxable income to utilize the full amount of any tax benefits subject to the TRA over the period specified therein. The payments that Sunlight would be required to make will generally reduce the amount of the overall cash flow that might have otherwise been available, but Sunlight expects the cash tax savings it would realize from the utilization of the related tax benefits will exceed the amount of any required payments. Sunlight Rewards™ Program — Sunlight Rewards™ allows salespeople to earn points for selling Sunlight-facilitated loans. These individuals can gain “status” for their own overall loyalty, track their points, and choose to redeem points for quality awards. If all points earned under the Sunlight Rewards™ Program were redeemed at December 31, 2022, Sunlight would be obligated to pay $3.1 million, and Sunlight recorded a liability of $1.8 million. Non-Cancelable Operating Leases — Sunlight's non-cancelable operating leases consist of office space leases at two locations: (a) 101 N. Tryon Street, Suite 1000, Charlotte, North Carolina 28246 (the “North Carolina Office Space”) that expires in June 2029 and (b) 234 West 39th Street, 7th Floor, New York, New York 10018 (the “New York Office Space”) that expires in October 2023. Certain lease agreements include rent concessions and leasehold improvement incentives. In addition to base rentals, certain lease agreements are subject to escalation provisions and rent expense is recognized on a straight‑line basis over the term of the lease agreement. None of Sunlight’s leases contain extension options. On January 1, 2022, Sunlight recorded $7.6 million of right-of-use assets, included in “ Other Assets Other Liabilities Successor For the Year Ended December 31, 2022 Lease cost Operating $ 2,140 $ 2,140 Other information Operating leases Operating cash flows $ 1,735 Successor December 31, 2022 Right-of-use assets obtained in exchange for new lease liabilities Operating leases 7,012 Weighted-average remaining lease term (in years) Operating leases 6.2 Weighted-average discount rate Operating leases 7.2% At December 31, 2022, the approximate aggregate annual minimum future lease payments required on the operating leases are as follows: 2023 $ 1,909 2024 1,553 2025 1,672 2026 1,790 2027 1,839 Thereafter 3,017 Total future minimum lease payments 11,780 Less: imputed interest (4,891) Present value of future minimum lease payments $ 6,889 During the year ended December 31, 2022 total lease expense was $2.1 million, which Sunlight paid in full. During the periods from July 10, 2021 through December 31, 2021, and January 1, 2021 through July 9, 2021, total lease expense wa s $0.7 million and $0.9 million, respectively, which Sunlight paid in full. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The following events occurred subsequent to December 31, 2022 through the issuance date of these Consolidated Financial Statements. Events subsequent to that date have not been considered in these financial statements. Strategic Alternatives Sunlight has engaged a financial advisory firm to help explore available strategic alternatives. As part of the strategic alternatives process, Sunlight entered into transactions with the Bank partner described below under Commitment & Transaction Support Agreement, Amended Bank Partner Agreements, Secured Term Loan, and Bank Partner Warrant. These transactions align with the goals of the strategic alternatives process and the Board is continuing to review additional actions to maximize value for shareholders. Commitment & Transaction Support Agreement On April 2, 2023 Sunlight Financial LLC, Sunlight and the Bank Partner, entered the Commitment & Transaction Support Agreement pursuant to which the parties agreed to undertake the transactions (“Transactions”) described in the Commitment & Transaction Support Agreement, including amendments to the Bank Partner Agreements, entry into a new secured term loan facility with the Bank Partner, and issuance of equity warrants entitling the Bank Partner or its designees to purchase shares of Sunlight’s Class A common stock. Effective April 25, 2023 (the “CRB Closing Date”), Sunlight, Sunlight LLC, and other subsidiary entities, as applicable, closed the Transactions contemplated by the Commitment & Transaction Support Agreement and entered into a Secured Term Loan with the Bank Partner, the Amended Bank Partner Agreements, a Warrant Purchase Agreement with CRB Group, Inc. (the “Purchaser”), an affiliate of the Bank Partner (the “Warrant Purchase Agreement”) and issued the associated warrant to purchase shares of Sunlight’s Class A common stock (the “Warrant”) to the Purchaser. Amended CRB Agreements The Amended CRB Agreements provide, among other things: • a requirement that the Company establish a pricing and capital markets committee responsible for setting dealer discounts, interest rates, capital markets activity, policies relating to hedging, and other terms related to the Company’s loan products and executing any sales of loans held by CRB pursuant to the Amended CRB Agreements, and to provide the Bank Partner with observer rights and a right to attend all meetings held by the committee, subject to exclusions where CRB is the loan purchaser. • modifications to the procedures for submitting credit approvals. • a modification to the cap on the total loans held by CRB at any time as provided below, measured on the last day of the calendar month, with a grace period election for loan sales executed during the seven (7) business days following the last day of a calendar month. The Company will be entitled to six (6) grace period elections in any twelve-month period: Month(s) Ending Bank Cap April 30, 2023 and May 31, 2023 Waived June 30, 2023 and July 31, 2023 $550 million August 31, 2023, September 30, 2023, and October 31, 2023 $500 million November 30, 2023 and each month thereafter $400 million (plus the Additional Capacity, if any). Additional Capacity is the lesser of (i) the Cash Collateral Amount divided by 5% and (ii) $100 million. • modifications to the Loan Purchase Trigger Date (as defined in the Amended Solar Loan Sale Agreement) related to each loan held on CRB’s balance sheet. • a revised tiered fee structure and provision for certain fees accrued through June 30, 2023 to be payable in additional Tranche 1 Loans (as defined below). • the Company will use best efforts to amend the Master Services Agreement dated January 13, 2020, between CRB, the Company, and Turnstile Capital Management, LLC (the “Servicer”) on or before July 1, 2023 to cause the Servicer to remit various cash payments associated with loans into an account held by CRB. • effective on the Closing Date and continuing until full repayment to CRB of all outstanding obligations, the Company will provide CRB with a pari passu first lien security interest in all assets of Sunlight as defined in the Secured Term Loan. • waiver by CRB of any defaults known by CRB to be existing under the CRB Agreements. Secured Term Loan On the Closing Date, Sunlight, as borrower, entered into a Loan and Security Agreement with CRB, and with SL Financial Holdings Inc., (“SL Financial”) as guarantor (the “Secured Term Loan”). The Secured Term Loan consists of loan commitments for two tranches of loans providing for Tranche 1 Loans and Tranche 2 Loans (each as defined below). The Secured Term Loan, and all other obligations of Sunlight to CRB are secured by a first lien perfected security interest in all Sunlight’s and SL Financial’s assets. The Secured Term Loan matures on October 25, 2025 (the “Maturity Date”). The Secured Term Loan provides loan commitments under two sub- facilities. The $38.8 million Tranche 1 facility (the “Tranche 1 Loans”) will be used to repay all outstanding borrowings under the SVB Facility, pay fees and accrued interest due under the Loan Program Agreements and for general corporate purposes. The $49.8 million Tranche 2 facility (the “Tranche 2 Loans” and, collectively with the “Tranche 1 Loans” the “Facility Loans”) will be used for deferred loan sale proceeds and to pay fees and capitalized interest. No scheduled principal payments are due until the first anniversary of the Closing Date. Commencing with the first full month after the first anniversary of the Closing Date, Sunlight is required to make equal monthly principal payments in an amount equal to 4% of the aggregate amount of the Facility Loans funded or deemed funded through the first anniversary of the CRB Closing Date. On the Maturity Date, all remaining unpaid amounts of principal and interest must be repaid in full. An upfront fee equal to $2,658,000, payable upon the closing date of the Secured Term Loan will be paid in kind and added to the outstanding amount of the Facility Loans. An unused fee equal to 14% per annum of the difference between (a) the Maximum Covered Loan Sale Amount (as defined in the Secured Term Loan) minus any commitment reductions with respect to Tranche 2 Term Loans since the Closing Date and (b) the aggregate principal amount of Tranche 2 Term Loans then outstanding will be payable monthly in kind and added to the outstanding amount of Tranche 2 Loans. The aggregate principal outstanding amount of loans under the Secured Term Loan (including capitalized or accrued and unpaid interest and any fees, the upfront fee and the unused fee) shall not exceed $100 million. The Secured Term Loan is subject to mandatory prepayment under certain conditions, which prepayments may be allocated to Tranche 1 or Tranche 2 loans at the option of the Company and Sunlight. Additionally, the Company and Sunlight will be required to prepay the Secured Term Loan in full upon a liquidation, winding up, change of control, merger, sale of all or substantially all of the assets of Sunlight, or a transaction that results in the Company becoming privately held. Sunlight may, at its option, prepay the Secured Term Loan and/or permanently reduce and terminate unused loan commitments, in each case, in part or full at any time prior to the maturity date with no penalties; which prepayments and/or commitment reductions may be allocated to Tranche 1 Loans and/or Tranche 2 loans at the option of Sunlight. The Secured Term Loan contains customary restrictive covenants for facilities of its type, which include, among other things, limitations on use of proceeds, dispositions, changes in business, management or business locations, change of control, mergers or acquisitions, indebtedness, liens, restricted payments, dividends or any other payments to equity, investments, transactions with affiliates, and capital expenditures, subject to certain customary baskets and exceptions. The Secured Term Loan also includes a financial covenant requiring minimum liquidity (unrestricted and unencumbered cash and cash equivalents held by Sunlight) in deposit accounts or securities accounts in an amount equal to or greater than $20 million, measured as of the end of each calendar month and requires that Sunlight maintain unrestricted cash in an aggregate amount of not less than (a) during the two-week period after the Closing Date, $20 million, and (b) thereafter, the greater of (x) $20 million and (y) 75% of Sunlight’s cash, in accounts with CRB or its affiliates. The Secured Term Loan also contains customary events of default that would permit the lenders to accelerate the loans, including, among other things, the failure to make timely payments when due under the Secured Term Loan or other material indebtedness as described in the Secured Term Loan, the failure to satisfy covenants contained in the Secured Term Loan, specified events of bankruptcy and insolvency, a material event of default under the Amended Loan Program Documents or any other agreement with CRB. CRB Warrant On the Closing Date the Company entered into the Warrant Purchase Agreement (the “Purchase Agreement”) with CRB Group, Inc. (“Purchaser”), pursuant to which the Company issued to Purchaser a stock purchase warrant (the “Warrant”) exercisable for up to 25,944,541 shares (“Warrant Shares”) subject to certain adjustments, of Class A common stock, par value $0.0001 per share, of the Company (the “Common Stock”) at a per share price of $0.01, subject to certain adjustments and vesting as described below. On the Closing Date, the Warrant vested and became exercisable with respect to 12,907,080 Warrant Shares. The remaining portion of the Warrant with respect to 13,037,461 Warrant Shares, subject to certain adjustments, will vest and become exercisable on April 27, 2024; provided, however, if the payment in full of the Secured Term is paid in full prior to such date or a Change of Control (as defined in the Secured Term Loan) occurs prior to such date, such number of Warrant Shares equal to the product of the following equation shall immediately vest and become exercisable and the remainder of the unvested Warrant Shares shall be forfeited and not be exercisable: (i) (A) the number of days that elapsed between the date hereof and the Acceleration Date (inclusive of the Acceleration Date) divided by (B) 366, multiplied by (ii) 13,037,461. Silicon Valley Bank Receivership On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (the “FDIC”) was appointed as receiver of SVB. SVB is Sunlight’s primary bank and the sole lender for Sunlight’s revolving credit facility (Note 5). Most of Sunlight’s unrestricted cash as of March 10, 2023 was deposited with SVB ($64.0 million out of a total of $73.2 million). On March 12, 2023, the Department of the Treasury, Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation issued a joint statement noting that, among other things, the resolution of SVB would fully protect all depositors and that depositors would have full access to all of their money on deposit with SVB on Monday, March 13, 2023. While SVB’s receivership had a short-term impact on Sunlight’s business and its ability to make payments to its installer base, Sunlight resumed payments to installers within a few days. Indirect Channel Loan Sale On April 28, 2023, Sunlight arranged for the sale of Indirect Channel Loans totaling $296.0 million, reducing the quantity of Backbook Loans held by Sunlight’s Bank Partner. Partnership Unit Exchange In January 2023, holders of 2,314,143 Class EX units of Sunlight Financial LLC exchanged their Class EX units, along with a corresponding number of Class C shares of the Company, for 2,305,426 Class A shares of the Company at $1.29 per Class A share. The Company issued 997,399 Class A shares, net of applicable tax withholding, and delivered 1,308,027 Class A shares held in treasury in connection with this exchange. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | As a result of the Business Combination, for accounting purposes, Sunlight Financial Holdings Inc. is the acquirer and Sunlight Financial LLC is the acquiree and accounting predecessor. The financial statement presentation includes the financial statements of Sunlight Financial LLC as “Predecessor” for periods prior to the Closing Date and of the Company as “Successor” for the periods after the Closing Date, including the consolidation of Sunlight Financial LLC. 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. |
Consolidation | Sunlight consolidates those entities over which it controls significant operating, financial, and investing decisions of the entity as well as those entities deemed to be variable interest entities (“VIEs”) in which the Company is determined to be the primary beneficiary. 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 35.9% and 35.0% noncontrolling interest, net of unvested Class EX Units (Note 6), at December 31, 2022 and December 31, 2021, respectively. 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 member 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. |
Segments | Sunlight operates through one operating and reportable segment, which reflects how the chief operating decision maker allocates resources and assesses performance. Sunlight arranges for the origination of Loans by third-party lenders using a predominately single expense pool. |
Risks and Uncertainties | In the normal course of business, Sunlight primarily encounters credit risk, which is the risk of default on Sunlight’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management makes subjective estimates of pending loan originations and sales, which significantly impacts revenues; determinations of fair value, including goodwill, derivatives, and servicing rights; estimates regarding loan performance, which impacts impairments and allowances for loan losses; project installations, which impacts guarantee obligations; and the useful lives of intangible assets. Actual results may differ from those estimates. |
Fair Value | GAAP requires the categorization of the fair value of financial instruments into three broad levels that form a hierarchy based on the transparency of inputs to the valuation. 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, 2022: 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. 2 Servicing liabilities Estimates of fair value are measured based upon observable market data. 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 — On a quarterly basis, with assistance from an independent valuation firm, management estimates the fair value of Sunlight’s Level 3 financial instruments. Sunlight’s determination of fair value is based upon the best information available for a given circumstance and 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, 2022, Sunlight’s valuation process for Level 3 measurements, as described below, was conducted internally or by an independent valuation firm and reviewed by management. Valuation of Loans and Loan Participations — Management generally considers Sunlight's loans and loan participations Level 3 assets in the fair value hierarchy as such assets are illiquid investments that are specific to the loan product, for which there is limited market activity. On a quarterly basis, management engages an independent valuation firm to estimate the fair value of each loan or loan participation categorized as a Level 3 asset. Valuation of Contract Derivative — Management considers Sunlight's contracts under which Sunlight (a) arranged Indirect Channel Loans for the purchase and installation of home improvement other than residential solar energy systems until December 2022 (“Contract Derivative 1”) and (b) earns income from the prepayment of certain of those Loans sold to an Indirect Channel Loan Purchaser (“Contract Derivative 2”), both considered derivatives under GAAP, as Level 3 financial instruments in the fair value hierarchy as such instruments represent bilateral, nontraded agreements for which there is limited market activity. On a quarterly basis, management engages an independent valuation firm to estimate the fair value of the contracts. Valuation of Servicing Liabilities — Sunlight assumes an obligation to service certain loans when originated. Sunlight evaluates compensation it receives to service these loans, if any, against the servicing costs a willing market participant would require to service loans with similar characteristics to service such loans. At December 31, 2022, Sunlight determined that the compensation it receives for certain servicing agreements are less than the estimated market cost to service and recognized a liability reported within Other Liabilities in the accompanying Consolidated Balance Sheet. Servicing liabilities are considered Level 2 financial instruments, as the primary components of the fair value are obtained from observable inputs based on market data, reasonably adjusted for assumptions that would be used by market participants to service our Bank Partner loans, for which market data is not available. Valuation of Warrants — Management considers the Private Placement Warrants (Note 6) redeemable for Sunlight’s equity as Level 3 liabilities in the fair value hierarchy as liquid markets do not exist for such liabilities. On a quarterly basis, management engages an independent valuation firm to estimate the fair value of Sunlight’s warrants, which includes models that include estimates of volatility, contractual terms, discount rates, dividend rates, expiration dates, and risk-free rates. Other Valuation Matters — For Level 3 financial assets acquired and financial liabilities assumed during the calendar month immediately preceding a quarter end that were conducted in an orderly transaction with an unrelated party, management generally believes that the transaction price provides the most observable indication of fair value given the illiquid nature of these financial instruments, unless management is aware of any circumstances that may cause a material change in the fair value through the remainder of the reporting period. For instance, significant changes in a counterparty’s intent or ability to make payments on a financial asset may cause material changes in the fair value of that financial asset. |
Sales of Financial Assets and Financing Agreements | Sunlight will, from time to time, facilitate the sale of Indirect Channel Loans. In each case, the transferred loans are legally isolated from Sunlight and control of the transferred loans passes to the transferee, who may pledge or exchange the transferred asset without constraint of Sunlight. Sunlight neither recognizes any financial assets nor incurs any liabilities as a result of the sale, but does recognize revenue based upon the difference between proceeds received from the transferee and the proceeds paid to the transferor. |
Leases | Sunlight recognizes right-of-use assets and lease liabilities at the commencement date of the lease based on the present value of remaining fixed and determinable lease payments over the lease term. Sunlight calculates the present value of future payments by using an estimated incremental borrowing rate, which approximates the rate at which Sunlight would borrow on a secured basis and over a similar term, and recognizes lease expense for operating leases on a straight-line basis over the lease term. Right-of-use assets represent Sunlight’s right to control the use of an identified asset for the lease term and lease liabilities represent Sunlight’s obligation to make lease payments arising from the lease. Sunlight uses the incremental borrowing rate on the commencement date in determining the present value of the lease payments. |
Cash and Cash Equivalents and Restricted Cash | Cash and cash equivalents consist of bank checking accounts and money market accounts. Sunlight considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Sunlight maintains cash in restricted accounts pursuant to various lending agreements and considers other cash amounts restricted under certain agreements with other counterparties. Substantially all amounts on deposit with major financial institutions exceed insured limits. Cash and cash equivalents and restricted cash are carried at cost, which approximates fair value. |
Financing Receivables | Sunlight records financing receivables for (a) advances that Sunlight remits to contractors to facilitate the installation of residential solar systems and the construction or installation of other home improvement projects and (b) loans and loan participations. Advances — In certain circumstances, Sunlight will provide a contractually agreed upon percentage of cash to a contractor related to a Loan that has not yet been funded by either a Direct Channel Partner or its Bank Partner as well as amounts funded to contractors in anticipation of loan funding. Such advances are generally repaid upon the earlier of (a) a specified number of days from the date of the advance outlined within the respective contractor contract or (b) the substantial installation of the residential solar system or the construction or installation of other home improvement projects. In either case, Sunlight will net such amounts advanced from payments otherwise due to the related contractor. Sunlight carries advances at the amount advanced, net of allowances for losses and charge-offs. Loans and Loan Participations — Sunlight recognizes Indirect Channel Loans purchased from Sunlight’s Bank Partner as well as its 5.0% participation interests in Indirect Channel Loans as financing receivables held-for-investment based on management's intent, and Sunlight's ability, to hold those investments through the foreseeable future or contractual maturity. Financing receivables that are held‑for‑investment are carried at their aggregate outstanding face amount, net of applicable (a) unamortized acquisition premiums and discounts, (b) allowance for losses and (c) charge-offs or write-downs of impaired receivables. Upon consummation of the Business Combination, Sunlight adjusted the carrying value of loans and loan participations to their fair values at the Closing Date. If management determines a loan or loan participation is impaired, management writes down the loan or loan participation through a charge to the provision for losses. See “— Impairment” for additional discussion regarding management’s determination for loan losses. Sunlight applies the interest method to amortize acquisition premiums and discounts or on a straight-line basis when it approximates the interest method. Sunlight has not acquired any material loans with deteriorated credit quality that were not charged off upon purchase. |
Impairment | Sunlight holds financing receivables that management evaluates for impairment indicators at least quarterly using information obtained at least annually. In conjunction with this review, management assesses such factors as historical losses, changes in the nature and volume of financing receivables, overall portfolio quality, and existing economic conditions that may affect the customer’s ability to pay. In certain cases, management assigns a risk rating based on certain aforementioned factors. 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 expects 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, 2022 and December 31, 2021, 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 — For advances made by Sunlight, management performs an evaluation of impairment indicators using financial information obtained from its counterparties and third parties as well as historical experience. Such indicators may include the borrower’s financial wherewithal and recent operating performance as well as macroeconomic trends. Management rates the potential for advance receivables by reviewing the counterparty. The counterparty is rated by overall risk tier on a scale of “1” through “5,” from least to greatest risk, which management reviews and updates on at least an annual basis. Counterparties may be granted advance approval within any overall risk tier, however tier “5” advance approvals are approved on an exception basis. A subset category of the overall risk tier is the financial risk of the counterparty. As with the overall risk tier, counterparties may be granted advance approval within any financial risk tier; however financial risk tier “5” advance approvals are approved on an exception basis. As part of that approval, management will set an individual counterparty advance dollar limit, which cannot be exceeded prior to additional review and approval. The overall risk tiers are defined as follows: 1 Low Risk 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-Medium Risk 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 Risk 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-to-High Risk 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 Risk 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 — Sunlight aggregates performing loans and loan participations into pools for the evaluation of impairment based on like characteristics, such as loan type and acquisition date. Pools of loans are evaluated based on criteria such as an analysis of borrower performance, credit ratings of borrowers, and historical trends in defaults and loss severities for the type and seasoning of loans and loan participations under evaluation. |
Goodwill | Goodwill represents the excess of the purchase price over the estimated fair values of the net tangible and intangible assets of acquired entities. Sunlight performs a goodwill impairment test annually during the fourth quarter of the fiscal year and more frequently if an event or circumstance indicates that impairment may have occurred. Triggering events that may indicate a potential impairment include, but are not limited to, significant adverse changes in customer demand or business climate and related competitive considerations. Sunlight first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, Sunlight performs a two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized by the applicable reporting unit(s). If Sunlight determines that the implied fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. |
Intangible Assets, Net | Sunlight identified the following intangible assets, recorded at fair value at the Closing Date of the Business Combination, and carried at a value net of amortization over their estimated useful lives on a straight-line basis. Sunlight’s intangible assets are evaluated for impairment on at least a quarterly basis |
Property and Equipment, Net | Property and equipment are recorded at cost, less accumulated depreciation and amortization. |
Funding Commitments | Pursuant to Sunlight’s contractual arrangements with its Bank Partner, Direct Channel Partners, and contractors, each of Sunlight’s Direct Channel Partners and its Bank Partner periodically remits to Sunlight the cash related to loans the funding source has originated. Sunlight has committed to funding such amounts, less any amounts Sunlight is entitled to retain, to the relevant contractor when certain milestones relating to the installation of residential solar systems or the construction of installation of other home improvement projects underlying the consumer receivable have been reached. Sunlight presents any amounts that Sunlight retains in anticipation of a contractor completing an installation milestone as “Funding Commitments” on the accompanying Consolidated Balance Sheets, which totaled $20.4 million and $22.7 million at December 31, 2022 and December 31, 2021, respectively. |
Guarantees | Sunlight records a liability for the guarantees it makes for certain Loans if it determines that it is probable that it will have to repurchase those loans, in an amount based on the likelihood of such repurchase and the loss, if any, Sunlight expects to incur in connection with its repurchase of Loans that may have experienced credit deterioration since the time of the loan’s origination. |
Warrants | The Company has public and private placement warrants classified as liabilities as well as warrants issued to a capital provider classified as equity. The Company classifies as equity any equity-linked contracts that (a) require physical settlement or net-share settlement or (b) give the Company a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement). Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity. The Company classifies as assets or liabilities any equity-linked contracts that (a) 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 (b) 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. |
Other Assets and Accounts Payable, Accrued Expenses and Other Liabilities | At each of December 31, 2022 and December 31, 2021, (a) other assets included Sunlight’s contract derivatives, prepaid expenses, accounts receivable, and interest receivable, and (b) accounts payable, accrued expenses, and other liabilities included Sunlight’s guarantee liability, accrued compensation, and other payables. Other assets at December 31, 2022 also included right-of-use assets arising from operating leases, and other liabilities at December 31, 2022 also included associated lease liabilities, and servicing liabilities. |
Noncontrolling Interests in Consolidated Subsidiaries | Noncontrolling interests represent the portion of Sunlight Financial LLC that the Company controls and consolidates but does not own. The Company recognizes each noncontrolling holder’s respective share of the estimated fair value of the net assets at the date of formation or acquisition. Noncontrolling interests are subsequently adjusted for the noncontrolling holder’s share of additional contributions, distributions, and their share of the net earnings or losses of each respective consolidated entity. The Company allocates net income or loss to noncontrolling interests based on the weighted average ownership interest during the period. The net income or loss that is not attributable to the Company is reflected in net income (loss) attributable to noncontrolling interests in the Consolidated Statements of Operations. The Company does not recognize a gain or loss on transactions with a consolidated entity in which it does not own 100% of the equity, but the Company reflects the difference in cash received or paid from the noncontrolling interests carrying amount as additional paid-in-capital.Class EX Units issued by Sunlight Financial LLC are exchangeable, along with the Company’s Class C shares on a one-for-one basis, 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 | Sunlight accounts for treasury stock under the cost method. When treasury stock is re-issued at a price higher than its cost, the difference is recorded as a component of additional paid-in-capital. When treasury stock is re-issued at a price lower than its cost, the difference is recorded as a component of additional paid-in-capital to the extent that there are previously recorded gains to offset the losses. If there are no treasury stock gains in additional paid-in-capital, the losses upon re-issuance of treasury stock are recorded as a reduction of retained earnings. |
Revenue Recognition and Cost of Revenues | Sunlight recognizes revenue from (a) platform fees on the Direct Channel Loans when the Direct Channel Partner funds the Loans and on the Indirect Channel Loans when the Indirect Channel Loan Purchaser buys the Loans from the balance sheet of Sunlight’s Bank Partner and (b) loan portfolio management, servicing, and administration services on a monthly basis as Sunlight provides such services for that month. Platform Fees, Net — Sunlight arranges Loans for the purchase and installation of residential solar energy systems on behalf of its Direct Channel Partners, Bank Partner, and Indirect Channel Loan Purchasers. As agent, Sunlight presents platform fees on a net basis at the time that Direct Channel Partners or Indirect Channel Loan Purchasers obtain control of the service provided to facilitate their origination or purchase of a Loan, which is no earlier than when Sunlight delivers loan documentation to the customer. Sunlight wholly satisfies its performance obligation to Direct Channel Partners, Bank Partner, and Indirect Channel Loan Purchasers, as it relates to such platform fees, upon origination or purchase of a Loan. Sunlight considers rebates offered by Sunlight to certain contractors in exchange for volume commitments as variable components to transaction prices; such variability resolves upon the contractor’s satisfaction of their volume commitment. The contracts under which Sunlight (a) arranges Indirect Channel Loans for the purchase and installation of home improvements other than residential solar energy systems until December 2022 and (b) earns income from the prepayment of certain Indirect Channel Loans for the purchase and installation of home improvements other than residential solar energy systems 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 (losses) of $2.6 million, $2.9 million, $3.0 million, for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, respectively (Note 4). Sunlight recognized platform fee revenue for its facilitation of Direct Channel Loans for the purchase and installation of home improvements other than residential solar energy systems of $5.5 million, $0.2 million, $0.0 million, for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021, and January 1, 2021 through July 9, 2021, respectively. Other Revenues — Sunlight provides monthly services in connection with the portfolio management, servicing, and administration of Loans originated by certain Direct Channel Partners, Sunlight’s Bank Partner, and an Indirect Channel Loan Purchaser. Such services may include the reporting of loan performance information, administration of servicing performed by third parties, and portfolio management services. Sunlight Rewards™ Program — The Sunlight Rewards™ Program is a proprietary loyalty program that Sunlight offers to salespeople selling residential solar systems for Sunlight’s network of contractors. Sunlight records a contingent liability using the estimated incremental cost of each point based upon the points earned, the redemption value, and an estimate of probability of redemption consistent with Sunlight’s historical redemption experience under the program. When a salesperson redeems points from Sunlight’s third-party loyalty program vendor, Sunlight pays the stated redemption value of the points redeemed to the vendor. |
Interest Income | Loans where management expects to collect all contractually required principal and interest payments are considered performing loans. Sunlight accrues interest income on performing loans based on the unpaid principal balance (“UPB”) and contractual terms of the loan. Interest income also includes discounts associated with the loans purchased as a yield adjustment using the effective interest method over the loan term. Sunlight expenses direct loan acquisition costs for loans acquired by Sunlight as incurred. Sunlight does not accrue interest on loans placed on non-accrual status or on loans where the collectability of the principal or interest of the loan are deemed uncertain.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 (a) either principal or interest payments are 90 days or more past due based on contractual terms or (b) 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. In addition to loans and loan participations, Sunlight recognizes interest income on a specified proportion of the contractual interest and original issue discount on Indirect Channel Loans held by Sunlight’s Bank Partner. |
Compensation and Benefits | Management expenses salaries, benefits, and equity-based compensation as services are provided. “Compensation and Benefits” in the accompanying Consolidated Statements of Operations includes expenses not otherwise included in Sunlight’s cost of revenues, such as compensation costs associated with information technology, sales and marketing, product management, and overhead. Equity-Based Compensation — Sunlight granted awards of restricted stock units (“RSUs”) to employees and directors under Sunlight’s 2021 Equity Incentive Plan (“Equity Plan”). RSUs are Class A restricted share units which entitle the holder to receive Class A Shares on various future dates if the applicable service conditions, if any, are met. Sunlight expenses the grant-date fair value of awards on a straight-line basis over the requisite service period. Sunlight does not estimate forfeitures, and records actual forfeitures as they occur. Predecessor — Prior to the Business Combination, Sunlight Financial LLC granted equity-based compensation awards that vested contingent upon one or more of the following conditions: (a) time-based service, (b) performance conditions based upon Sunlight Financial LLC’s equity value, as determined by Sunlight Financial LLC’s board or directors or a qualifying sale of Sunlight Financial LLC’s equity, achieving certain contractual thresholds (“Threshold Equity Value”), and (c) whether Sunlight Financial LLC issued Class A Units in-kind to satisfy the preferred return on Class A Units during the award’s vesting period until May 25, 2023 (“PIK Vesting Requirement”). Sunlight generally expensed the grant-date fair value of these equity-based compensation awards using the following methods, recognizing forfeitures as they occur, based upon the following vesting contingencies: • 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. |
Selling, General, and Administrative | Management expenses selling, general, and administrative costs, including legal, audit, other professional service fees, travel and entertainment, and insurance premiums as incurred. Sunlight recognizes expenses associated with co-marketing agreements when earned by the counterparty. |
Property and Technology | Management expenses rent, information technology and telecommunication services, and noncapitalizable costs to internally develop software as incurred. |
Income Taxes | The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statement carrying amounts and tax bases of assets and liabilities and operating loss and tax credit carryforwards and are measured using the enacted tax rates that are expected to be in effect when the differences reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to an amount that, in the opinion of management, is more likely than not to be realized.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. |
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 . The acquisition of Sunlight Financial LLC constitutes the acquisition of a business for purposes of ASC 805, and due to the change in control, has been accounted for using the acquisition method with Sunlight Financial Holdings Inc. as the accounting acquirer and Sunlight Financial LLC as the accounting acquiree based on evaluation of the following factors: • 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; and • 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. |
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 — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity — In August 2020, the FASB issued ASU No. 2020-06, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP, removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and simplifies the diluted earnings per share calculations. While Sunlight remains a smaller reporting company, this guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023, with early adoption permitted. Sunlight is currently evaluating the impact of the adoption of ASU 2020-06 on its consolidated financial statements. ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting — In March 2020, the FASB issued ASU No. 2020-04, which provides optional expedients for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective for all entities as of March 12, 2020 through December 31, 2024. An entity can elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to that date that the financial statements are available to be issued. Sunlight is currently evaluating the impact of the adoption of ASU 2020-04, as updated by ASU 2021-01 Reference Rate Reform (Topic 848): Scope , and ASU 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 on its consolidated financial statements. ASU No. 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments — The FASB issued ASU No. 2016-13 in June 2016. The standard amends the existing credit loss model to reflect a reporting entity’s current estimate of all expected credit losses and requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at a net amount expected to be collected through deduction of an allowance for credit losses from the amortized cost basis of the financial asset(s). ASU No. 2016-13, as amended, is effective for Sunlight in the fiscal year ended December 31, 2023. Early adoption was permitted beginning in the first quarter of 2018. With limited exceptions, an entity should apply ASU No. 2016-13 by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Sunlight is finalizing its evaluation of the guidance to determine the impact it may have on its consolidated financial statements, but it does not anticipate the adoption of this ASU will have a material effect on the Sunlight’s consolidated financial statements or related disclosures. ASU No. 2022-02 Financial Instruments — Credit Losses (Topic 326) — Troubled Debt Restructuring and Vintage Disclosures — The FASB issued final guidance amending ASC 310 to eliminate the recognition and measurement guidance for a troubled debt restructuring for creditors that have adopted ASC 326 and requiring them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The guidance also requires public business entities to present gross write-offs by year of origination in their vintage disclosures. For Sunlight, the guidance is effective for fiscal years beginning after December 15, 2022, and interim periods therein. Early adoption is permitted. Sunlight is currently evaluating the impact it may have on its consolidated financial statements. Recently Adopted Accounting Pronouncements ASU No. 2016-02 Leases — In February 2016, FASB issued ASU No. 2016-02. The standard requires that lessees recognize a right-of-use asset and corresponding lease liability on the balance sheet for most leases. The guidance applied by a lessor under ASU No. 2016-02 is substantially similar to existing GAAP. ASU No. 2016-02, as amended, and was effective for Sunlight for the quarter ended March 31, 2022. Sunlight adopted ASU No. 2016-02 using the simplified transition method. As a result, Sunlight did not restate comparative periods and used a modified retrospective approach to apply the standard beginning on January 1, 2022. Sunlight’s cumulative adjustment to the opening balance of retained earnings was not material and adoption of the standard did not have a material effect on the statements of operations or statements of cash flows. Sunlight applied available practical expedient options, elected as a package whereby, among other things, Sunlight did not reassess historical conclusions related to contracts that contain leases, lease classification, and initial direct costs for leases that commenced prior to the adoption date. See Note 10 for additional information regarding Sunlight's leases. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Fair Value Measurement, GAAP Hierarchy | GAAP requires the categorization of the fair value of financial instruments into three broad levels that form a hierarchy based on the transparency of inputs to the valuation. 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, 2022: 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. 2 Servicing liabilities Estimates of fair value are measured based upon observable market data. 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. |
Summary of Cash and Cash Equivalents | Sunlight reported cash and cash equivalents and restricted cash in the following line items of its Consolidated Balance Sheets, which totals the aggregate amount presented in Sunlight’s Consolidated Statements of Cash Flows: Successor December 31, 2022 December 31, 2021 Cash and cash equivalents $ 47,515 $ 91,882 Restricted cash and cash equivalents 4,272 2,018 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows $ 51,787 $ 93,900 |
Summary of Restricted Cash | Sunlight reported cash and cash equivalents and restricted cash in the following line items of its Consolidated Balance Sheets, which totals the aggregate amount presented in Sunlight’s Consolidated Statements of Cash Flows: Successor December 31, 2022 December 31, 2021 Cash and cash equivalents $ 47,515 $ 91,882 Restricted cash and cash equivalents 4,272 2,018 Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows $ 51,787 $ 93,900 |
Summary of Overall Risk Tiers | The overall risk tiers are defined as follows: 1 Low Risk 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-Medium Risk 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 Risk 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-to-High Risk 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 Risk 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. |
Summary of Changes in Carrying Value of Goodwill | The carrying value of Sunlight’s goodwill changed by the following amounts: December 31, 2021 (Successor) Goodwill $ 670,457 Accumulated impairment losses (224,701) 445,756 Impairment losses (445,756) December 31, 2022 (Successor) Goodwill 670,457 Accumulated impairment losses (670,457) $ — |
Summary of Intangible Assets Acquired | Sunlight identified the following intangible assets, recorded at fair value at the Closing Date of the Business Combination, and carried at a value net of amortization over their estimated useful lives on a straight-line basis. Sunlight’s intangible assets are evaluated for impairment on at least a quarterly basis: Estimated Useful Life Carrying Value Successor Asset December 31, 2022 December 31, 2021 Contractor relationships (a) 11.5 $ 350,000 $ 350,000 Capital provider relationships (b) 0.8 — 43,000 Trademarks/ trade names (c) 10.0 7,900 7,900 Developed technology (d) 3.0 — 5.0 11,163 8,193 369,063 409,093 Accumulated amortization (e)(f)(g) (49,143) (43,254) $ 319,920 $ 365,839 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 Direct Channel Partners and Indirect Channel Loan Purchasers 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 amortization expense of $0.9 million, $0.6 million, and $1.5 million related to capitalized internally developed software costs for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, respectively. f. Includes amortization expense of $48.9 million, $43.3 million, and $1.4 million for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021 and January 1, 2021 through July 9, 2021, respectively. g. At December 31, 2022, 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 Technology Other Identified Intangible Assets Total 2023 $ 2,828 $ 31,199 $ 34,027 2024 2,730 31,285 34,015 2025 1,925 31,199 33,124 2026 694 31,199 31,893 2027 — 31,199 31,199 Thereafter — 155,662 155,662 $ 8,177 $ 311,743 $ 319,920 |
Summary of Property and Equipment | Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Carrying Value Successor Asset Category December 31, 2022 December 31, 2021 Furniture, fixtures, and equipment 5 $ 1,512 $ 1,020 Computer hardware 5 1,328 1,108 Computer software 1 — 3 338 250 Leasehold improvements Shorter of life of improvement or lease term — 2,829 3,178 5,207 Accumulated amortization and depreciation (a) (1,689) (1,138) $ 1,489 $ 4,069 a. Includes depreciation expense of $0.6 million, $0.2 million, $0.2 million, for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021, and January 1, 2021 through July 9, 2021, respectively. |
Summary of Disaggregation of Revenue | Sunlight’s contracts include the following groups of similar services, which do not include any significant financing components: Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Platform fees, net (a) $ 90,158 $ 56,783 $ 50,757 Other revenues (b) 8,348 4,891 2,307 $ 98,506 $ 61,674 $ 53,064 a. Amounts presented net of variable consideration in the form of rebates to certain contractors. Includes platform fees from affiliates of $0.0 million, $0.0 million, $0.2 million, for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021, and January 1, 2021 through July 9, 2021, respectively. (Note 9). b. Includes loan portfolio management, administration, and other ancillary fees Sunlight earns that are incidental to its primary operations. Sunlight earned $0.2 million, $0.1 million, $0.1 million, for the year ended December 31, 2022 and the periods from July 10, 2021 through December 31, 2021, and January 1, 2021 through July 9, 2021, respectively, in administrative fees from an affiliate. (Note 9). |
Summary of Estimate of Fair Value of Consideration Transferred and Purchase Price Allocation | The following is an estimate of the fair value of consideration transferred and the 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 existing Sunlight Financial LLC members, 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 in the estimated amount $149.7 million. d. The fair value of the definite-lived intangible assets is as follows: Weighted Average Useful Lives 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 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: Post-combination compensation expenses (9,993) Noncontrolling interests $ 427,211 |
Summary of Pro Forma Operating Results | The following unaudited pro forma financial information presents the results of operations for each of the years ended December 31, 2022 and 2021, respectively, as if the Business Combination on July 9, 2021 had occurred as of January 1, 2021. The unaudited pro forma results may not necessarily reflect actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma results reflect the step-up amortization adjustments for the fair value of intangible assets acquired, transaction expenses, nonrecurring post-combination compensation expense and the related adjustment to the income tax provision. For the Year Ended December 31, 2022 2021 Revenue $ 98,506 $ 114,738 Net income (loss) before income taxes (527,471) (217,023) Income tax benefit 35,482 3,038 Noncontrolling interests in (income) loss of consolidated subsidiaries 186,725 75,646 Net income (loss) attributable to Class A shareholders (305,264) (138,338) |
Financing Receivables (Tables)
Financing Receivables (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Summary of Financing Receivables and Changes ThereTo | The following tables summarize Sunlight’s financing receivables and changes thereto: Advances (a) Loans and Loan Participations (b) Total December 31, 2022 (Successor) Amounts outstanding $ 52,129 $ 3,944 $ 56,073 Unamortized discount — (310) (310) Allowance for credit losses (6,736) (102) (6,838) Carrying value $ 45,393 $ 3,532 $ 48,925 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 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 advances of $1.5 million and $9.0 million, net of allowances of $0.1 million and $0.0 million, to Sunlight contractors not associated with specific installation projects at December 31, 2022 and December 31, 2021, respectively. b. Represents (i) Sunlight’s 5.0% participation interest in a pool of residential solar loans with an aggregate UPB of $3.6 million and $4.6 million at December 31, 2022 and December 31, 2021, respectively, and (ii) Indirect Channel Loans purchased by Sunlight with an aggregate UPB of $0.3 million and $0.3 million at December 31, 2022 and December 31, 2021, respectively. No loans or loan participations were individually evaluated for impairment at December 31, 2022 or December 31, 2021. Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Allowance for Credit Losses — Advances Beginning Balance $ 238 $ — $ 121 Provision for credit losses 48,050 358 90 Realized losses (a) (41,552) (120) — Ending Balance $ 6,736 $ 238 $ 211 Allowance for Credit Losses — Loans and Loan Participations Beginning Balance $ 148 $ — $ 125 Provision for credit losses 3,243 859 1,082 Realized losses (3,289) (711) (1,096) Ending Balance $ 102 $ 148 $ 111 Changes in Carrying Value — Loans and Loan Participations Beginning Balance $ 4,313 $ 5,105 $ 5,333 Purchases, net (b) 3,296 716 1,170 Proceeds from principal repayments, net (931) (710) (832) Accretion of loan discount 97 61 123 Provision for credit losses (3,243) (859) (1,082) Ending Balance $ 3,532 $ 4,313 $ 4,712 a. Sunlight charged-off advances totaling $32.4 million for the year ended December 31, 2022 attributable to the insolvency of one of Sunlight’s largest contractors as well as $9.2 million charged off in connection with three other contractors. b. 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, respectively, as well as (ii) 20 and 51 Indirect Channel Loans with an aggregate UPB of $0.4 million and $1.1 million, respectively. During the year ended December 31, 2022, Sunlight purchased 113 Indirect Channel Loans with an aggregate UPB of $3.0 million. |
Summary of Allocation of Advance Amount Based on Internal Risk Ratings | The following table allocates the advance amount outstanding based on Sunlight’s internal risk ratings: Total Risk Tier (a) Contractors Amount Outstanding % of Amount Outstanding December 31, 2022 (Successor) 1 Low risk 130 $ 14,585 28.0 % 2 Low-to-medium risk 152 23,686 45.4 3 Medium risk 70 3,868 7.4 4 Medium-to-high risk 28 9,793 18.8 5 Higher risk 8 197 0.4 388 $ 52,129 100.0 % 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 % a. At December 31, 2022 and December 31, 2021, the average risk rating of Sunlight’s advances was 2.2 (“low-to-medium risk”) and 2.0 (“low-to-medium risk”), weighted by total advance amounts outstanding, respectively. |
Summary of Payment Status | The following table presents the payment status of advances held by Sunlight: Payment Delinquency Amount Outstanding (a) % of Amount Outstanding December 31, 2022 (Successor) Current $ 27,257 53.8 % Less than 30 days 7,456 14.7 30 days 5,197 10.3 60 days 3,099 6.1 90+ days (b) 7,620 15.1 $ 50,629 100.0 % 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 % a. Excludes advances of $1.5 million and $9.0 million to Sunlight contractors not associated with specific installation projects and was not delinquent at December 31, 2022 and December 31, 2021, respectively. 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 $2.0 million and $0.2 million at December 31, 2022 and December 31, 2021, respectively. Payment Delinquency (a) Loan Participations Bank Partner Loans Total Loans UPB Loans UPB Loans UPB % of UPB December 31, 2022 (Successor) Current 3,302 $ 3,502 14 $ 240 3,316 $ 3,742 94.9 % Less than 30 days 89 101 3 69 92 170 4.3 30 days 15 17 — — 15 17 0.4 60 days 6 9 — — 6 9 0.2 90+ days 6 6 — — 6 6 0.2 3,418 $ 3,635 17 $ 309 3,435 $ 3,944 100.0 % 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 % 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, 2022 and December 31, 2021, respectively. Sunlight does not consider the average carrying values and interest income recognized (including interest income recognized using a cash-basis method) material. |
Summary of Risk Concentration | The following table presents the concentration of advances, by counterparty: Successor December 31, 2022 December 31, 2021 Contractor Amount Outstanding % of Total Amount Outstanding % of Total 1 $ 7,348 14.1 % $ 9,496 14.2 % 2 4,326 8.3 20,894 31.1 3 4,098 7.9 2,093 3.1 4 3,902 7.5 2,610 3.9 5 2,711 5.2 855 1.3 6 1,410 2.7 302 0.5 7 1,004 1.9 25 — 8 992 1.9 436 0.6 9 929 1.8 99 0.1 10 802 1.5 — — Other (a) 24,607 47.2 30,267 45.2 $ 52,129 100.0 % $ 67,077 100.0 % a. At December 31, 2022 and December 31, 2021, Sunlight recorded advances receivable from 378 and 160 counterparties not individually listed in the table above with average balances of $0.1 million and $0.1 million, respectively. At December 31, 2021, Sunlight recorded advances receivable from individual counterparties of $12.5 million, $2.6 million, $1.7 million, $0.6 million, and $0.6 million that represent the largest advance concentrations included in “Other,” based on the amount outstanding. Successor December 31, 2022 December 31, 2021 State UPB % of Total UPB % of Total Texas $ 732 18.6 % $ 930 19.1 % California 698 17.7 867 17.8 Florida 371 9.4 423 8.7 New York 269 6.8 325 6.7 New Jersey 256 6.5 302 6.2 Arizona 178 4.5 220 4.5 Massachusetts 174 4.4 201 4.1 Pennsylvania 159 4.0 202 4.1 South Carolina 137 3.5 178 3.7 Missouri 111 2.8 135 2.8 Other (a) 859 21.8 1,092 22.3 $ 3,944 100.0 % $ 4,875 100.0 % 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 2.6% of the UPB at December 31, 2022 and December 31, 2021, respectively. |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Derivative Assets and Income (Loss) Related To Derivatives | Sunlight’s contract derivatives are recorded at fair value in the accompanying Consolidated Balance Sheets as follows: Successor Balance Sheet Location December 31, 2022 December 31, 2021 Contract derivative 1 (a) Other assets n.a. $ 1,076 Contract derivative 2 Other assets 449 335 $ 449 $ 1,411 a. The agreement was amended in December 2022 and no longer meets the definition of a derivative under GAAP. The following table summarizes all income (loss) recorded in relation to derivatives: Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Change in fair value of contract derivatives, net Contract derivative 1 $ (1,076) $ 573 $ (932) Contract derivative 2 114 65 270 $ (962) $ 638 $ (662) Realized gains/(losses) on contract derivatives, net Contract derivative 1 $ 2,245 $ 2,789 $ 2,950 Contract derivative 2 356 77 42 $ 2,601 $ 2,866 $ 2,992 |
Summary of Notional Amounts of Derivatives | The following table summarizes notional amounts related to derivatives: Successor December 31, 2022 December 31, 2021 Contract derivative 1 (a) n.a. $ 38,879 Contract derivative 2 (b) 38,805 37,891 a. At December 31, 2021, amount 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. Starting December, 2022, the amended agreement no longer meets the definition of a derivative under GAAP. 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 Loans. |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Debt Obligations and Activity | Debt consists of the following: Successor December 31, 2022 December 31, 2021 Month Issued Outstanding Face Amount Carrying Value Maximum Facility Size Final Stated Maturity Weighted Average Carrying Value (a) Funding Cost Life (Years) Revolving credit facility (a) Apr 2021 $ 20,613 $ 20,613 $ 30,000 Apr 2023 9.3 % 0.3 $ 20,613 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 SVB and replaced the associated standby letter of credit. Borrowings under the current revolving credit facility, secured by the net assets of Sunlight Financial LLC, 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. Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Beginning Balance $ 20,613 $ 20,613 $ 14,625 Borrowings — — 20,746 Repayments — — (14,758) Amortization of deferred financing costs (a) — — — Ending Balance $ 20,613 $ 20,613 $ 20,613 a. Excludes $0.0 million, $0.0 million and $0.0 million amortization of deferred financing costs for the periods July 10, 2021 through December 31, 2021, July 1, 2021 through July 9, 2021, and January 1, 2021 through July 9, 2021, 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, 2022 or December 31, 2021 and did not amortize any such costs for the year ended December 31, 2022. Maturities — At December 31, 2022, all of Sunlight’s debt obligations contractually mature in 2023. |
Schedule of covenants | As of December 31, 2022, Sunlight’s financial covenants and calculated amounts were as follows (in millions): Successor December 31, 2022 Covenant Minimum Amount EBITDA Covenant (a) $ 5 $ (14) Liquidity (b) 10 48 Available takeout commitment (c) 200 1,125 a. EBITDA Covenant for the six-month period ended each quarter of at least $5.0 million. b. Unrestricted cash equal to, or greater than, the greater of (i) 35% of amounts borrowed under the revolving credit facility and (ii) $10.0 million. c. Aggregate Direct Channel Partners' and Bank Partner's unused committed obligation to purchase and hold Loans of at least $200.0 million. |
Equity and Earnings per Share (
Equity and Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Summary of Warrants | At December 31, 2022, Sunlight has authorized Class A Shares to cover the exercise of the following outstanding warrants on its equity: Type Date of Issuance Exercise Price per Share Shares Public Warrants Nov-20 $ 11.50 17,250,000 Private Placement Warrants Nov-20 11.50 9,900,000 Other Feb-21 7.72 627,780 |
Summary of Repurchase of Class A Common Shares | Successor Predecessor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 For the Period January 1, 2021 to July 9, 2021 Amount paid $ 10,452 $ — $ — Common Class A shares repurchased 3,036,259 — — Price paid per common Class A share $ 3.44 n.a. n.a. |
Summary of Temporary Equity Activities | Activities related to interests in Sunlight Financial LLC’s partnership equity units considered temporary equity were as follows: Month of Issuance Class A-3 Units Class A-2 Units Class A-1 Units Units at December 31, 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 |
Summary of Noncontrolling Interest | The Sunlight Financial LLC portion of noncontrolling interests is computed as follows: Successor For the Year Ended December 31, For the Period July 10, 2021 to December 31, 2021 2022 Sunlight Financial LLC net income (loss) before income taxes $ (547,370) $ (249,993) Sunlight Financial LLC as a percent of total (a) 35.4 % 35.0 % Sunlight Financial LLC net income (loss) attributable to the Class EX unitholders $ (196,085) $ (87,528) |
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 Year Ended December 31, For the Period July 10, 2021 to December 31, 2021 2022 Transfers (to) from noncontrolling interests: Decrease in Sunlight's shareholders' equity for the delivery of Class EX Units primarily in connection with vested provisionally-vested Class EX Units $ (2,171) $ 30,379 Dilution impact of equity transactions (2,171) 30,379 Net income (loss) attributable to Class A shareholders (315,851) (159,556) Change from transfers (to) from noncontrolling interests and from net income (loss) attributable to Class A shareholders $ (318,022) $ (129,177) |
Summary of Equity Based Compensation - Granted | Sunlight has granted the following outstanding awards (“Compensation Awards”) to certain employees and members of Sunlight’s Board at December 31, 2022: Service (in Years) (b) Award Class (a) Minimum Maximum Awards (c) Provisionally-Vested Class A Shares 1.9 3.6 145,970 Provisionally-Vested Class EX Units 1.9 1.9 189,158 Director RSUs 1.0 1.0 171,624 Employee RSUs 3.0 4.0 5,703,195 6,209,947 a. All awards subject solely to time-based vesting. b. At time of grant. c. Net of fully vested and forfeited awards. |
Summary of Activities Related to Equity-Based Compensation | Activities related to Sunlight’s equity-based compensation were as follows: Successor Provisionally-Vested RSUs Class A Shares Class EX Units Directors Employees Per Share Shares Per Unit Units Per Unit Units Per Unit Units December 31, 2021 (Successor) $ 9.46 337,193 $ 9.46 974,447 $ 9.46 75,000 $ 8.97 2,136,129 Issued — — 5.04 70,991 4.37 171,624 2.45 4,695,642 Vested 9.46 (148,704) 9.01 (693,351) 9.46 (75,000) 9.03 (473,372) Forfeited or Cancelled 9.46 (42,519) 9.46 (162,929) — — 4.47 (655,204) December 31, 2022 (Successor) 9.46 145,970 9.46 189,158 4.37 171,624 3.97 5,703,195 Predecessor Class C LTIP Per Unit Units Per Unit Units 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 |
Summary of Unrecognized Compensation Expense | At December 31, 2022, Sunlight has not yet recognized compensation expense for the following awards, all of which are subject solely to time-based service vesting conditions: Type (a) Weighted Average Recognition Period Awards Amount Provisionally-Vested Class A Shares 0.7 years 145,970 $ 1,381 Provisionally-Vested Class EX Units 0.2 years 189,158 1,789 Director RSUs 0.4 years 171,624 439 Employee RSUs 1.4 years 5,703,195 14,687 6,209,947 $ 18,296 a. In addition to the above, Sunlight has not yet recogniz |
Summary of Earnings Per Share Calculations | The following table summarizes the basic and diluted earnings per share calculations: Successor For the Year Ended December 31, For the Period July 10, 2021 to December 31, 2021 2022 Net Income (Loss) Per Class A Shareholders, Basic Net income (loss) available to Class A shareholders $ (315,110) $ (158,573) Total weighted average shares outstanding 83,804,659 84,824,109 Net Income (Loss) Per Class A Shareholders, Basic $ (3.76) $ (1.87) Net Income (Loss) Per Class A Shareholders, Diluted Net income (loss) available to Class A shareholders $ (507,583) $ (158,573) Total weighted average shares outstanding 130,618,205 84,824,109 Net Income (Loss) Per Class A Shareholders, Diluted $ (3.89) $ (1.87) Net income (loss) available to Class A shareholders Net Income (Loss) $ (511,936) $ (247,084) Noncontrolling interests in loss of consolidated subsidiaries 196,085 87,528 Other weighting adjustments 741 983 Net Income (Loss) Attributable to Class A Shareholders (315,110) $ (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) (192,473) — Net income (loss) available to Class A shareholders, diluted $ (507,583) $ (158,573) Weighted Average Units Outstanding Class A shares outstanding 83,804,659 84,824,109 Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares (a) 46,813,546 — Incremental Class A Shares attributable to dilutive effect of warrants (b) — — Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments) (c) — — Total weighted average shares outstanding, diluted 130,618,205 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 years ended December 31, 2022. c. Restricted Class A share units granted to directors and employees are eligible to receive dividend or dividend equivalent payments when dividends are declared and paid on Sunlight’s Class A Shares and therefore participate fully in the results of Sunlight’s operations from the date they are granted. |
Summary of Potential Common Shares Excluded From Diluted Loss Per Common Share | The following table summarizes the weighted-average potential common shares excluded from diluted income (loss) per common share as their effect would be anti-dilutive: Successor For the Year Ended December 31, For the Period July 10, 2021 to December 31, 2021 Common Shares From 2022 Class EX Units — 46,354,679 Warrants (a) 27,150,000 27,150,000 Other warrants 627,780 627,780 Unvested Class EX Units 706,580 1,240,776 RSUs (b) 2,416,070 2,085,501 ESPP (c) 115,501 — 31,015,931 77,458,736 a. Includes Public Warrants and Private Placement Warrants. b. Includes RSUs awards to directors and employees. c. Class A Shares deliverable to employees in satisfaction of subscriptions under Sunlight’s ESPP. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of 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 or 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, 2022 and December 31, 2021 were as follows: Principal Balance or Notional Amount Carrying Value Fair Value Level 1 Level 2 Level 3 Total December 31, 2022 (Successor) Assets: Financing Receivables: Loan participations, held-for-investment $ 3,635 $ 3,254 $ — $ — $ 3,110 $ 3,110 Loans, held-for-investment 309 278 — — 260 260 Cash and cash equivalents 47,515 47,515 47,515 — — 47,515 Restricted cash 4,272 4,272 4,272 — — 4,272 Contract derivatives 38,805 449 — — 449 449 Liabilities: Debt 20,613 20,613 — — 20,613 20,613 Warrants 312,225 4,297 — — 4,297 4,297 Guarantee obligation n.a. 8,024 — — 8,024 8,024 Servicing liability n.a. 512 — 512 512 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 |
Summary of 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 Contract Derivatives Warrants December 31, 2021 (Successor) $ 1,411 $ — $ 19,007 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 — — (14,710) Included in change in fair value of contract derivatives, net (962) — — Included in realized gains on contract derivatives, net 356 2,245 — Payments, net (356) (2,245) — December 31, 2022 (Successor) $ 449 $ — $ 4,297 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 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. |
Summary of Change in Liabilities 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 Contract Derivatives Warrants December 31, 2021 (Successor) $ 1,411 $ — $ 19,007 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 — — (14,710) Included in change in fair value of contract derivatives, net (962) — — Included in realized gains on contract derivatives, net 356 2,245 — Payments, net (356) (2,245) — December 31, 2022 (Successor) $ 449 $ — $ 4,297 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 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. |
Summary of Significant Inputs And Assumptions Used in The Valuation of Contract Derivatives, Share-Based Compensation And Warrants | Significant inputs used in the valuation of Sunlight’s contract derivatives include: 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 December 31, 2022 December 31, 2021 Contract Derivative 1 Discount rate n.a. 10.0 % Weighted average life (in years) n.a. 0.2 Contract Derivative 2 Expected prepayment rate 75.0 % 75.0 % Successor Assumption December 31, 2022 Class A common share value per share (a) $ 1.29 Implied volatility (a) 83.9 % Dividend yield (b) — % Time to expiry (in years) (a) 3.5 Risk free rate (a) 4.2 % 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. |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Significant Components of Income Tax Expense | The components of income tax expense (benefit) consisted of the following: Successor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Before Income Taxes $ (548,857) $ (250,588) Income Tax Expense (Benefit) Current Federal $ (1,525) $ 1,708 State and local 427 312 (1,098) 2,020 Deferred Federal (35,405) (4,603) State and local (418) (921) (35,823) (5,524) Total Federal (36,930) (2,895) State and local 9 (609) $ (36,921) $ (3,504) The components of federal and state income taxes payable or receivable consisted of the following: Successor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 Income tax receivable (payable) Federal $ 1,918 $ (1,708) State 651 (312) Total income tax receivable (payable) $ 2,569 $ (2,020) |
Schedule of Effective Income Tax Rate Reconciliation | Sunlight’s effective income tax rate varied from the U.S. statutory tax rate that was in effect during the periods as follows: Successor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 Net Income (Loss) Before Income Taxes $ (548,857) $ (250,588) Statutory U.S Income Tax Rate 21.0 % 21.0 % Income tax expense (benefit), at statutory U.S. federal rate $ (115,260) 21.0 % $ (52,623) 21.0 % State and local taxes (2,654) 0.5 (674) 0.3 Valuation Allowance on Deferred Provision 10,359 (1.9) — — Goodwill impairment 31,648 (5.8) 30,658 (12.2) Change in fair value of warrant liabilities (1,971) 0.4 (3,081) 1.2 Noncontrolling interests in loss of consolidated subsidiaries 41,593 (7.6) 18,390 (7.3) Business Combination compensation expense — — 3,662 (1.5) Other (636) 0.1 164 (0.1) Income tax benefit $ (36,921) 6.7 % $ (3,504) 1.4 % |
Components of Deferred Tax Assets and Deferred Tax Liabilities | The components of net deferred tax assets or liabilities consisted of the following: Successor For the Year Ended December 31, 2022 For the Period July 10, 2021 to December 31, 2021 Deferred tax assets Net operating loss carryforward $ 13,345 $ — Basis step-up from Class EX exchange 177 — Excess business interest expense carryforward 468 — Deferred tax assets, gross 13,990 — Less: valuation allowance (10,359) — Deferred tax assets, net 3,631 — Deferred tax liabilities Investment in Sunlight Financial LLC 4,319 36,686 Deferred tax asset (liability), net $ (688) $ (36,686) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Lease Cost and Other Information | Successor For the Year Ended December 31, 2022 Lease cost Operating $ 2,140 $ 2,140 Other information Operating leases Operating cash flows $ 1,735 Successor December 31, 2022 Right-of-use assets obtained in exchange for new lease liabilities Operating leases 7,012 Weighted-average remaining lease term (in years) Operating leases 6.2 Weighted-average discount rate Operating leases 7.2% |
Summary of Minimum Future Lease Payments | At December 31, 2022, the approximate aggregate annual minimum future lease payments required on the operating leases are as follows: 2023 $ 1,909 2024 1,553 2025 1,672 2026 1,790 2027 1,839 Thereafter 3,017 Total future minimum lease payments 11,780 Less: imputed interest (4,891) Present value of future minimum lease payments $ 6,889 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Schedule Of Bank Cap | Month(s) Ending Bank Cap April 30, 2023 and May 31, 2023 Waived June 30, 2023 and July 31, 2023 $550 million August 31, 2023, September 30, 2023, and October 31, 2023 $500 million November 30, 2023 and each month thereafter $400 million (plus the Additional Capacity, if any). Additional Capacity is the lesser of (i) the Cash Collateral Amount divided by 5% and (ii) $100 million. |
Organization and Business (Deta
Organization and Business (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Total amount of loans held by the bank partner | $ 450 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Jul. 09, 2021 USD ($) | Dec. 31, 2022 USD ($) reporting_unit segment | Dec. 31, 2021 USD ($) | |
Noncontrolling Interest [Line Items] | |||
Debt Instrument, convertible, conversion ratio | 1 | ||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Participation interest in loan pool | 5% | ||
Nonaccrual loans, threshold for impairment evaluation | $ 50,000 | ||
Troubled debt restructuring receivables, threshold for impairment evaluation | $ 50,000 | ||
Number of reporting units | reporting_unit | 1 | ||
Funding commitments | $ 20,400,000 | $ 22,749,000 | |
Payments For Redemption Of Common Stock | $ 192,300,000 | ||
Distributed Earnings | $ 2,700,000 | ||
Class C common stock; $0.0001 par value; 65,000,000 shares authorized; 47,287,370 and 47,595,455 issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | |||
Noncontrolling Interest [Line Items] | |||
Debt Instrument, convertible, conversion ratio | 1 | ||
Sunlight Financial LLC | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest percent | 34.90% | 35.90% | 35% |
Residential Solar Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Participation interest in loan pool | 5% | 5% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 47,515 | $ 91,882 | ||
Restricted cash and cash equivalents | 4,272 | 2,018 | ||
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statement of Cash Flows | $ 51,787 | $ 93,900 | $ 216,519 | $ 52,705 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Carrying Value of Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||||
Goodwill | $ 670,457 | $ 670,457 | $ 670,457 | ||
Accumulated impairment losses | (670,457) | (224,701) | (670,457) | ||
Goodwill | 0 | 445,756 | 0 | ||
Goodwill impairment | $ (61,400) | $ (384,400) | $ (224,701) | $ 0 | $ (445,756) |
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, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | $ 409,093 | $ 369,063 | |
Accumulated amortization | (43,254) | (49,143) | |
Intangible assets, net | 365,839 | 319,920 | |
Capitalized internally developed software costs, amortization | 600 | $ 1,500 | 900 |
Amortization expense | 43,300 | $ 1,400 | 48,900 |
Annual Amortization Expense | |||
2023 | 34,027 | ||
2024 | 34,015 | ||
2025 | 33,124 | ||
2026 | 31,893 | ||
2027 | 31,199 | ||
Thereafter | $ 155,662 | ||
Contractor relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in Years) | 11 years 6 months | ||
Intangible assets, gross | 350,000 | $ 350,000 | |
Capital provider relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in Years) | 9 months 18 days | ||
Intangible assets, gross | 43,000 | $ 0 | |
Trademarks/ trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in Years) | 10 years | ||
Intangible assets, gross | 7,900 | $ 7,900 | |
Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | $ 8,193 | 11,163 | |
Intangible assets, net | 8,177 | ||
Annual Amortization Expense | |||
2023 | 2,828 | ||
2024 | 2,730 | ||
2025 | 1,925 | ||
2026 | 694 | ||
2027 | 0 | ||
Thereafter | $ 0 | ||
Developed technology | Minimum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in Years) | 3 years | ||
Developed technology | Maximum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life (in Years) | 5 years | ||
Other Identified Intangible Assets | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 311,743 | ||
Annual Amortization Expense | |||
2023 | 31,199 | ||
2024 | 31,285 | ||
2025 | 31,199 | ||
2026 | 31,199 | ||
2027 | 31,199 | ||
Thereafter | $ 155,662 |
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, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 5,207 | $ 3,178 | |
Accumulated amortization and depreciation | (1,138) | (1,689) | |
Property and equipment, net | 4,069 | 1,489 | |
Depreciation | 200 | $ 200 | $ 600 |
Furniture, fixtures, and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 5 years | ||
Property and equipment, gross | 1,020 | $ 1,512 | |
Computer hardware | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 5 years | ||
Property and equipment, gross | 1,108 | $ 1,328 | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 250 | $ 338 | |
Computer software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 1 year | ||
Computer software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 3 years | ||
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 2,829 | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Distributions Payable (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Dividends Payable [Line Items] | ||||||
Distributions | $ 0 | |||||
Distributions paid | $ 0 | $ 7,522 | $ 1,182 | $ 7,500 | ||
Class A-1 Units | ||||||
Dividends Payable [Line Items] | ||||||
Distributions | $ 1,300 | |||||
Distribution per unit (in dollars per share) | $ 4.38 | |||||
Class A-2 Units | ||||||
Dividends Payable [Line Items] | ||||||
Distributions | $ 1,200 | |||||
Distribution per unit (in dollars per share) | $ 5.33 | |||||
Class A-3 Units | ||||||
Dividends Payable [Line Items] | ||||||
Distributions | $ 5,000 | |||||
Distribution per unit (in dollars per share) | $ 13.34 | |||||
Class EX Unit | ||||||
Dividends Payable [Line Items] | ||||||
Distributions | $ 1,500 | |||||
Distribution per unit (in dollars per share) | $ 0.03 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 61,674 | $ 53,064 | $ 98,506 |
Administrative fee income, affiliate | 100 | 100 | 200 |
Realized gains on contract derivative, net | 2,866 | 2,992 | 2,601 |
Platform Fees, Net | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 56,783 | 50,757 | 90,158 |
Administrative fee income, affiliate | 0 | 200 | 0 |
Platform Fees, Net | Direct channel, home improvement loans | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 200 | 0 | 5,500 |
Other Revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 4,891 | $ 2,307 | $ 8,348 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Income Taxes (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Accounting Policies [Abstract] | |
Distributions | $ 0 |
Dividend distributions paid | $ 1.2 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Business Combination (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jul. 09, 2021 | Nov. 30, 2020 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Narrative Disclosures | ||||||
Trust account cash | $ 345,000 | $ 345,000 | ||||
Redemption of common stock | $ 0 | 0 | $ 10,452 | |||
Shares redeemed (in shares) | 19,227,063 | |||||
Shares redeemed, price (in dollars per share) | $ 10 | |||||
Business combination expenses | 3,080 | 7,011 | 0 | |||
Payments of stock issuance costs | 19,618 | $ 0 | 0 | |||
Fair Value of Net Assets Acquired | ||||||
Goodwill | $ 445,756 | 0 | $ 445,756 | |||
Pro Forma Operating Results | ||||||
Revenue | 98,506 | 114,738 | ||||
Net income (loss) before income taxes | (527,471) | (217,023) | ||||
Income tax benefit | 35,482 | 3,038 | ||||
Noncontrolling interests in (income) loss of consolidated subsidiaries | 186,725 | 75,646 | ||||
Net income (loss) attributable to Class A shareholders | $ (305,264) | $ (138,338) | ||||
IPO | ||||||
Narrative Disclosures | ||||||
Stock issued (in shares) | 34,500,000 | |||||
Consideration received | $ 345,000 | |||||
Payments of stock issuance costs | $ 12,100 | $ 19,700 | ||||
PIPE | ||||||
Narrative Disclosures | ||||||
Stock issued (in shares) | 25,000,000 | |||||
Consideration received | $ 250,000 | |||||
Payments of stock issuance costs | $ 7,500 | |||||
Class A Common Stock | ||||||
Narrative Disclosures | ||||||
Shares redeemed (in shares) | 0 | 0 | 3,036,259 | |||
Sunlight Financial LLC | ||||||
Noncontrolling Interest | ||||||
Noncontrolling interest percent | 34.90% | 35% | 34.90% | 35.90% | 35% | |
Sunlight Financial LLC | ||||||
Narrative Disclosures | ||||||
Cash received | $ 55,100 | |||||
Tax withholding paid related to cash compensation paid to the Company's employees | 5,600 | |||||
Business combination expenses | $ 7,000 | |||||
Payment of acquisition-related advisory fees | 7,900 | |||||
Purchase Consideration | ||||||
Rollover of Sunlight Financial LLC historical warrants | 2,499 | |||||
Cash consideration to existing Sunlight Financial LLC interests, net | 296,281 | |||||
Cash paid for seller transaction costs | 8,289 | |||||
Purchase consideration | 664,869 | |||||
Fair Value of Net Assets Acquired | ||||||
Cash and cash equivalents | 59,786 | 59,786 | ||||
Restricted cash | 3,844 | 3,844 | ||||
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) | ||||
Warrants, at fair value | 0 | 0 | ||||
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 | (3,110) | |||||
Acceleration of post business combination expense, cash portion | 0 | |||||
Goodwill expected to be tax deductible | 149,700 | 149,700 | ||||
Acquired Intangible Assets | ||||||
Fair Value | 407,600 | |||||
Noncontrolling Interest | ||||||
Fair value of Class EX units | 437,204 | 437,204 | ||||
Less: Post-combination compensation expenses | (9,993) | |||||
Noncontrolling interests | $ 427,211 | $ 427,211 | ||||
Sunlight Financial LLC | Contractor relationships | ||||||
Acquired Intangible Assets | ||||||
Weighted Average Useful Lives (in Years) | 11 years 6 months | |||||
Fair Value | $ 350,000 | |||||
Sunlight Financial LLC | Capital provider relationships | ||||||
Acquired Intangible Assets | ||||||
Weighted Average Useful Lives (in Years) | 9 months 18 days | |||||
Fair Value | $ 43,000 | |||||
Sunlight Financial LLC | Trademarks/ trade names | ||||||
Acquired Intangible Assets | ||||||
Weighted Average Useful Lives (in Years) | 10 years | |||||
Fair Value | $ 7,900 | |||||
Sunlight Financial LLC | Developed technology | ||||||
Acquired Intangible Assets | ||||||
Weighted Average Useful Lives (in Years) | 5 years | |||||
Fair Value | $ 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 | ||||||
Stock issued during period, shares, acquisitions (in 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 | |||||
Equity consideration paid to existing Sunlight Financial LLC members, net | $ 357,800 | |||||
Noncontrolling Interest | ||||||
Fair value per unit (in dollars per share) | $ 9.46 | 9.46 | ||||
Sunlight Financial LLC | Common Class EX | ||||||
Equity Consideration | ||||||
Fair value per share (in dollars per share) | $ 9.46 | 9.46 | ||||
Noncontrolling Interest | ||||||
Common Class EX units (in shares) | 46,216,054 | |||||
Fair value per unit (in dollars per share) | $ 9.46 | $ 9.46 | ||||
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, 2022 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Participation interest in loan pool | 5% | |||
Amounts outstanding | $ 56,073 | $ 71,952 | ||
Unamortized discount | (310) | (414) | ||
Allowance for credit losses | (6,838) | (386) | ||
Carrying value | 48,925 | 71,152 | ||
Advances | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amounts outstanding | 52,129 | 67,077 | ||
Unamortized discount | 0 | 0 | ||
Allowance for credit losses | (6,736) | (238) | $ (211) | $ (121) |
Carrying value | 45,393 | 66,839 | ||
Advances, Not Associated with Specific Installation Projects | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Allowance for credit losses | (100) | 0 | ||
Carrying value | 1,500 | 9,000 | ||
Loans and Loan Participations | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amounts outstanding | 3,944 | 4,875 | ||
Unamortized discount | (310) | (414) | ||
Allowance for credit losses | (102) | (148) | (111) | (125) |
Carrying value | $ 3,532 | $ 4,313 | $ 4,712 | $ 5,333 |
Residential Solar Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Participation interest in loan pool | 5% | 5% | ||
Amounts outstanding | $ 3,600 | $ 4,600 | ||
Indirect Channel Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amounts outstanding | $ 300 | $ 300 |
Financing Receivables - Changes
Financing Receivables - Changes (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | Jul. 09, 2021 USD ($) loan | Dec. 31, 2022 USD ($) | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 386 | |||
Realized losses | (32,400) | |||
Ending Balance | $ 6,838 | $ 386 | 6,838 | |
Financing Receivable [Roll Forward] | ||||
Beginning Balance | 71,152 | |||
Provision for losses | 1,217 | $ 1,172 | 51,293 | |
Ending Balance | $ 48,925 | 71,152 | $ 48,925 | |
Participation interest in loan pool | 5% | 5% | ||
Three Other Contractors | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Realized losses | $ (9,200) | |||
Advances | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 211 | 121 | 238 | |
Provision for credit losses | 90 | 48,050 | ||
Realized losses | 0 | (41,552) | ||
Realized losses | (120) | |||
Ending Balance | $ 6,736 | 238 | 211 | 6,736 |
Financing Receivable [Roll Forward] | ||||
Beginning Balance | 66,839 | |||
Provision for losses | 358 | |||
Ending Balance | 45,393 | 66,839 | 45,393 | |
Advances | Revision of Prior Period, Adjustment | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 0 | |||
Ending Balance | 0 | |||
Loans and Loan Participations | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 111 | 125 | 148 | |
Provision for credit losses | 1,082 | 3,243 | ||
Realized losses | (1,096) | (3,289) | ||
Realized losses | (711) | |||
Ending Balance | 102 | 148 | 111 | 102 |
Financing Receivable [Roll Forward] | ||||
Beginning Balance | 4,712 | 5,333 | 4,313 | |
Purchases, net | 716 | |||
Purchases, net | 1,170 | 3,296 | ||
Proceeds from principal repayments, net | (710) | (832) | (931) | |
Accretion of loan discount | 61 | 123 | 97 | |
Provision for losses | 859 | |||
Ending Balance | $ 3,532 | 4,313 | 4,712 | $ 3,532 |
Loans and Loan Participations | Revision of Prior Period, Adjustment | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 0 | |||
Ending Balance | 0 | |||
Financing Receivable [Roll Forward] | ||||
Beginning Balance | 5,105 | |||
Ending Balance | 5,105 | |||
Residential Solar Loans | ||||
Financing Receivable [Roll Forward] | ||||
Purchases, net | $ 0 | $ 100 | ||
Participation interest in loan pool | 5% | 5% | 5% | |
Number of loans purchased | loan | 0 | 54 | ||
Indirect Channel Loans | ||||
Financing Receivable [Roll Forward] | ||||
Purchases, net | $ 3,000 | $ 400 | $ 1,100 | |
Number of loans purchased | loan | 113 | 20 | 51 |
Financing Receivables - Risk Ra
Financing Receivables - Risk Ratings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) contractor | Dec. 31, 2021 USD ($) contractor | |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Amount outstanding | $ 56,073 | $ 71,952 |
Advances | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Contractors | contractor | 388 | 170 |
Amount outstanding | $ 52,129 | $ 67,077 |
Average risk rating | 2.2 | 2 |
Advances | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
% of amount outstanding | 100% | 100% |
Advances | Low risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Contractors | contractor | 130 | 76 |
Amount outstanding | $ 14,585 | $ 14,575 |
Advances | Low risk | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
% of amount outstanding | 28% | 21.70% |
Advances | Low-to-medium risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Contractors | contractor | 152 | 77 |
Amount outstanding | $ 23,686 | $ 38,955 |
Advances | Low-to-medium risk | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
% of amount outstanding | 45.40% | 58.10% |
Advances | Medium risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Contractors | contractor | 70 | 17 |
Amount outstanding | $ 3,868 | $ 13,547 |
Advances | Medium risk | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
% of amount outstanding | 7.40% | 20.20% |
Advances | Medium-to-high risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Contractors | contractor | 28 | 0 |
Amount outstanding | $ 9,793 | $ 0 |
Advances | Medium-to-high risk | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
% of amount outstanding | 18.80% | 0% |
Advances | Higher risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Contractors | contractor | 8 | 0 |
Amount outstanding | $ 197 | $ 0 |
Advances | Higher risk | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
% of amount outstanding | 0.40% | 0% |
Financing Receivables - Aging o
Financing Receivables - Aging of Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, net of allowance for credit losses | $ 48,925 | $ 71,152 |
Advances | ||
Financing Receivable, Past Due [Line Items] | ||
Amount outstanding | 50,629 | 58,077 |
Financing receivables, net of allowance for credit losses | 45,393 | 66,839 |
Allowance for credit loss | $ 2,000 | $ 200 |
Advances | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of amount outstanding | 100% | 100% |
Advances | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Amount outstanding | $ 27,257 | $ 54,586 |
Advances | Current | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of amount outstanding | 53.80% | 94% |
Advances | Less than 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Amount outstanding | $ 7,456 | $ 1,956 |
Advances | Less than 30 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of amount outstanding | 14.70% | 3.40% |
Advances | 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Amount outstanding | $ 5,197 | $ 534 |
Advances | 30 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of amount outstanding | 10.30% | 0.90% |
Advances | 60 days | ||
Financing Receivable, Past Due [Line Items] | ||
Amount outstanding | $ 3,099 | $ 361 |
Advances | 60 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of amount outstanding | 6.10% | 0.60% |
Advances | 90+ days | ||
Financing Receivable, Past Due [Line Items] | ||
Amount outstanding | $ 7,620 | $ 640 |
Advances | 90+ days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of amount outstanding | 15.10% | 1.10% |
Advances, Not Associated with Specific Installation Projects | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivables, net of allowance for credit losses | $ 1,500 | $ 9,000 |
Financing Receivables - Concent
Financing Receivables - Concentrations by Counterparty (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) customer | Dec. 31, 2021 USD ($) customer | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | $ 56,073 | $ 71,952 |
Advances receivable, number of counterparties not individually disclosed | customer | 378 | 160 |
Participation interest in loan pool | 5% | |
Customer Concentration Risk | Financing Receivable | Other Contractors | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Average balance | $ 100 | $ 100 |
Advances | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 52,129 | 67,077 |
Advances | Contractor 1 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 7,348 | 9,496 |
Advances | Contractor 2 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 4,326 | 20,894 |
Advances | Contractor 3 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 4,098 | 2,093 |
Advances | Contractor 4 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 3,902 | 2,610 |
Advances | Contractor 5 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 2,711 | 855 |
Advances | Contractor 6 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 1,410 | 302 |
Advances | Contractor 7 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 1,004 | 25 |
Advances | Contractor 8 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 992 | 436 |
Advances | Contractor 9 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 929 | 99 |
Advances | Contractor 10 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 802 | 0 |
Advances | Other Contractors | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | $ 24,607 | $ 30,267 |
Advances | Customer Concentration Risk | Financing Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 100% | 100% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 1 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 14.10% | 14.20% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 2 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 8.30% | 31.10% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 3 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 7.90% | 3.10% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 4 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 7.50% | 3.90% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 5 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 5.20% | 1.30% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 6 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 2.70% | 0.50% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 7 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 1.90% | 0% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 8 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 1.90% | 0.60% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 9 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 1.80% | 0.10% |
Advances | Customer Concentration Risk | Financing Receivable | Contractor 10 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 1.50% | 0% |
Advances | Customer Concentration Risk | Financing Receivable | Other Contractors | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of total | 47.20% | 45.20% |
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - A | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | $ 12,500 | |
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - B | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 2,600 | |
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - C | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 1,700 | |
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - D | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | 600 | |
Advances | Customer Concentration Risk | Financing Receivable | Largest Other Contractors - E | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amounts outstanding | $ 600 |
Financing Receivables - Aging_2
Financing Receivables - Aging of Loans and Loan Participations (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | |
Financing Receivable, Past Due [Line Items] | ||
UPB | $ 56,073 | $ 71,952 |
Loans in nonaccrual status | $ 0 | $ 0 |
Loans and Loan Participations | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3,435 | 3,901 |
UPB | $ 3,944 | $ 4,875 |
Loans and Loan Participations | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 100% | 100% |
Loans and Loan Participations | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3,316 | 3,794 |
UPB | $ 3,742 | $ 4,710 |
Loans and Loan Participations | Current | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 94.90% | 96.60% |
Loans and Loan Participations | Less than 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 92 | 74 |
UPB | $ 170 | $ 107 |
Loans and Loan Participations | Less than 30 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 4.30% | 2.20% |
Loans and Loan Participations | 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 15 | 15 |
UPB | $ 17 | $ 23 |
Loans and Loan Participations | 30 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 0.40% | 0.50% |
Loans and Loan Participations | 60 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 6 | 10 |
UPB | $ 9 | $ 14 |
Loans and Loan Participations | 60 days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 0.20% | 0.30% |
Loans and Loan Participations | 90+ days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 6 | 8 |
UPB | $ 6 | $ 21 |
Loans and Loan Participations | 90+ days | Customer Concentration Risk | Financing Receivable | ||
Financing Receivable, Past Due [Line Items] | ||
% of UPB | 0.20% | 0.40% |
Loan Participations | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3,418 | 3,885 |
UPB | $ 3,635 | $ 4,584 |
Loan Participations | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3,302 | 3,780 |
UPB | $ 3,502 | $ 4,442 |
Loan Participations | Less than 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 89 | 73 |
UPB | $ 101 | $ 96 |
Loan Participations | 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 15 | 15 |
UPB | $ 17 | $ 23 |
Loan Participations | 60 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 6 | 10 |
UPB | $ 9 | $ 14 |
Loan Participations | 90+ days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 6 | 7 |
UPB | $ 6 | $ 9 |
Bank Partner Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 17 | 16 |
UPB | $ 309 | $ 291 |
Bank Partner Loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 14 | 14 |
UPB | $ 240 | $ 268 |
Bank Partner Loans | Less than 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 3 | 1 |
UPB | $ 69 | $ 11 |
Bank Partner Loans | 30 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 0 | 0 |
UPB | $ 0 | $ 0 |
Bank Partner Loans | 60 days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 0 | 0 |
UPB | $ 0 | $ 0 |
Bank Partner Loans | 90+ days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans | loan | 0 | 1 |
UPB | $ 0 | $ 12 |
Financing Receivables - Conce_2
Financing Receivables - Concentrations by State (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2022 USD ($) state | Dec. 31, 2021 USD ($) state | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | $ 56,073 | $ 71,952 | |
Financing Receivable | Geographic Concentration Risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 100% | 100% | |
Financing Receivable | Geographic Concentration Risk | Texas | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 19.10% | 18.60% | |
Financing Receivable | Geographic Concentration Risk | California | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 17.80% | 17.70% | |
Financing Receivable | Geographic Concentration Risk | Florida | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 8.70% | 9.40% | |
Financing Receivable | Geographic Concentration Risk | New York | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 6.70% | 6.80% | |
Financing Receivable | Geographic Concentration Risk | New Jersey | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 6.20% | 6.50% | |
Financing Receivable | Geographic Concentration Risk | Arizona | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 4.50% | 4.50% | |
Financing Receivable | Geographic Concentration Risk | Massachusetts | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 4.10% | 4.40% | |
Financing Receivable | Geographic Concentration Risk | Pennsylvania | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 4.10% | 4% | |
Financing Receivable | Geographic Concentration Risk | South Carolina | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 3.70% | 3.50% | |
Financing Receivable | Geographic Concentration Risk | Missouri | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 2.80% | 2.80% | |
Financing Receivable | Geographic Concentration Risk | Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
% of total | 22.30% | 21.80% | |
Loans and Loan Participations | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | $ 3,944 | 4,875 | |
Loans and Loan Participations | Texas | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 732 | 930 | |
Loans and Loan Participations | California | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 698 | 867 | |
Loans and Loan Participations | Florida | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 371 | 423 | |
Loans and Loan Participations | New York | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 269 | 325 | |
Loans and Loan Participations | New Jersey | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 256 | 302 | |
Loans and Loan Participations | Arizona | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 178 | 220 | |
Loans and Loan Participations | Massachusetts | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 174 | 201 | |
Loans and Loan Participations | Pennsylvania | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 159 | 202 | |
Loans and Loan Participations | South Carolina | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 137 | 178 | |
Loans and Loan Participations | Missouri | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | 111 | 135 | |
Loans and Loan Participations | Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amounts outstanding | $ 859 | $ 1,092 | |
Loans and Loan Participations | Financing Receivable | Geographic Concentration Risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of states not individually disclosed | state | 31 | 31 | |
Threshold percentage for disclosing individually | 2.60% | 2.60% |
Derivatives - Assets and Notion
Derivatives - Assets and Notional Amounts (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Contract derivatives | $ 449 | $ 1,411 |
Contract Derivative 1 | ||
Derivative [Line Items] | ||
Contract derivatives | $ 1,076 | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | |
Notional amount | $ 38,879 | |
Contract Derivative 2 | ||
Derivative [Line Items] | ||
Contract derivatives | $ 449 | $ 335 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Notional amount | $ 38,805 | $ 37,891 |
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, 2022 | |
Derivative [Line Items] | |||
Change in fair value of contract derivatives, net | $ 638 | $ (662) | $ (962) |
Realized gains/(losses) on contract derivatives, net | 2,866 | 2,992 | 2,601 |
Contract Derivative 1 | |||
Derivative [Line Items] | |||
Change in fair value of contract derivatives, net | 573 | (932) | (1,076) |
Realized gains/(losses) on contract derivatives, net | 2,789 | 2,950 | 2,245 |
Contract Derivative 2 | |||
Derivative [Line Items] | |||
Change in fair value of contract derivatives, net | 65 | 270 | 114 |
Realized gains/(losses) on contract derivatives, net | $ 77 | $ 42 | $ 356 |
Debt Obligations - Components o
Debt Obligations - Components of Obligations (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | May 31, 2019 | |
Line of Credit Facility [Line Items] | |||||
Outstanding face amount/Carrying value | $ 20,613,000 | $ 20,613,000 | |||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Outstanding face amount/Carrying value | 20,613,000 | $ 20,613,000 | $ 20,613,000 | $ 14,625,000 | |
Maximum facility size | $ 30,000,000 | $ 15,000,000 | |||
Weighted average funding cost | 9.30% | ||||
Weighted average life | 3 months 18 days |
Debt Obligations - Activity (De
Debt Obligations - Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jul. 09, 2021 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | |
Line Of Credit Facility [Roll Forward] | ||||
Beginning Balance | $ 20,613 | |||
Borrowings | $ 0 | $ 20,746 | 0 | |
Repayments | 0 | (14,758) | 0 | |
Ending Balance | 20,613 | 20,613 | ||
Revolving Credit Facility | ||||
Line Of Credit Facility [Roll Forward] | ||||
Beginning Balance | 20,613 | 14,625 | 20,613 | |
Borrowings | 0 | 20,746 | 0 | |
Repayments | 0 | (14,758) | 0 | |
Amortization of deferred financing costs | $ 0 | 0 | 0 | 0 |
Ending Balance | $ 20,613 | $ 20,613 | $ 20,613 | $ 20,613 |
Debt Obligations - Financial Co
Debt Obligations - Financial Covenants and Calculated Amounts (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Line of Credit Facility [Line Items] | |
Borrowed debt percent | 35% |
Borrowed debt | $ 10,000,000 |
Unused committed obligation to purchase and hold loans | 200,000,000 |
Minimum | |
Line of Credit Facility [Line Items] | |
EBITDA Covenant | 5,000,000 |
Liquidity | 10,000,000 |
Available takeout commitment | 200,000,000 |
Maximum | |
Line of Credit Facility [Line Items] | |
EBITDA Covenant | (14,000,000) |
Liquidity | 48,000,000 |
Available takeout commitment | $ 1,125,000,000 |
Equity and Earnings per Share -
Equity and Earnings per Share - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Oct. 01, 2022 shares | Jul. 09, 2021 USD ($) $ / shares shares | Nov. 30, 2020 USD ($) $ / shares shares | Nov. 30, 2020 $ / shares shares | Oct. 31, 2020 shares | Aug. 31, 2020 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jul. 09, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) classOfCommonStock day vote $ / shares shares | Feb. 28, 2021 $ / shares shares | |
Class of Stock [Line Items] | ||||||||||
Payments of stock issuance costs | $ | $ 19,618 | $ 0 | $ 0 | |||||||
Number of shares in each unit (in shares) | 1 | |||||||||
Number of warrants in each unit (in shares) | 0.5 | |||||||||
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 | |||||||||
Number of classes of common stock | classOfCommonStock | 3 | |||||||||
Number of votes on each share of common stock | vote | 1 | |||||||||
Debt Instrument, convertible, conversion ratio | 1 | |||||||||
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 | day | 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 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 11.50 | 11.50 | ||||||||
Reclassification of warrants as equity | $ | $ 2,500 | |||||||||
Proceeds from warrant exercises | $ | $ 2,300 | |||||||||
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 | |||||||||
Deferred tax assets, gross | $ | $ 0 | $ 13,990 | ||||||||
Investment in Sunlight Financial LLC | $ | $ (36,686) | $ (4,319) | ||||||||
Warrant Redemption Scenario One | ||||||||||
Class of Stock [Line Items] | ||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 11.50 | |||||||||
Warrants, redemption price trigger (in dollars per share) | $ / shares | 18 | |||||||||
Warrants, redemption price (in dollars per share) | $ / shares | $ 0.01 | |||||||||
Warrants, redemption notice period | 30 days | |||||||||
Warrants, redemption period | 30 days | |||||||||
Warrants, redemption, threshold trading days | day | 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 | |||||||||
Warrants, redemption price (in dollars per share) | $ / shares | $ 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 | |||||||||
Payments of stock issuance costs | $ | $ 12,100 | 19,700 | ||||||||
Payment of deferred underwriting commissions | $ | $ 12,100 | |||||||||
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 | $ 10 | ||||||||
Consideration received | $ | $ 250,000 | |||||||||
Payments of stock issuance costs | $ | $ 7,500 | |||||||||
Public Warrants | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrants (in shares) | 17,250,000 | |||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 11.50 | |||||||||
Term of warrants | 5 years | |||||||||
Other | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrants (in shares) | 627,780 | 7,000 | ||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 7.715 | $ 7.715 | $ 7.72 | $ 691.90 | ||||||
Term of warrants | 10 years | |||||||||
Warrant, shares issuable (in shares) | 627,700 | 627,700 | ||||||||
Class A Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of warrants in each unit (in shares) | 1 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, authorized (in shares) | 420,000,000 | 420,000,000 | ||||||||
Common stock, outstanding (in shares) | 84,803,687 | 82,307,760 | ||||||||
Debt Instrument, convertible, conversion ratio | 1 | |||||||||
Common stock, issued (in shares) | 86,373,596 | 83,619,915 | ||||||||
Exchangeable unit of common class stock | classOfCommonStock | 1 | |||||||||
Shares reserved for issuance (in shares) | 3,400,000 | |||||||||
Conversion of stock, shares issued (in shares) | 308,085 | |||||||||
Class A Common Stock | Equity Plan | ||||||||||
Class of Stock [Line Items] | ||||||||||
Units authorized (in shares) | 25,500,000 | |||||||||
Increase in shares authorized pursuant to evergreen provision (as a percent) | 0.020 | |||||||||
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 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, authorized (in shares) | 20,000,000 | 20,000,000 | ||||||||
Common stock, outstanding (in shares) | 8,625,000 | 8,625,000 | 0 | |||||||
Stock transferred (in shares) | 50,000 | |||||||||
Stock returned (in shares) | 4,312,500 | |||||||||
Business combination, shares converted (in shares) | 7,437,241 | |||||||||
Common stock, issued (in shares) | 0 | |||||||||
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 | ||||||||
Common stock, authorized (in shares) | 65,000,000 | 65,000,000 | ||||||||
Common stock, outstanding (in shares) | 47,595,455 | 47,287,370 | ||||||||
Debt Instrument, convertible, conversion ratio | 1 | |||||||||
Common stock, issued (in shares) | 47,595,455 | 47,287,370 | ||||||||
Common Class EX | ||||||||||
Class of Stock [Line Items] | ||||||||||
Business combination, shares converted (in shares) | 308,085 | |||||||||
Exchangeable unit of common class stock | classOfCommonStock | 1 |
Equity and Earnings per Share_2
Equity and Earnings per Share - Warrants (Details) - $ / shares | Dec. 31, 2022 | 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 (in shares) | 9,900,000 | |||
Public Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price per share (in dollars per share) | $ 11.50 | |||
Shares (in 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 (in 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 (in shares) | 627,780 | 7,000 |
Equity and Earnings per Share_3
Equity and Earnings per Share - Repurchase of Class A Common Shares (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
May 16, 2022 | Jul. 09, 2021 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||||
Stock repurchase program, period | 18 months | ||||
Amount paid | $ 10,452,000 | ||||
Common Class A shares repurchased (in shares) | 19,227,063 | ||||
Price paid per common Class A share (in dollars per share) | $ 3.44 | ||||
Class A Common Stock | |||||
Class of Stock [Line Items] | |||||
Authorized amount of stock repurchase program | $ 50,000,000 | ||||
Amount paid | $ 0 | $ 0 | $ 10,452,000 | ||
Common Class A shares repurchased (in shares) | 0 | 0 | 3,036,259 |
Equity and Earnings per Share_4
Equity and Earnings per Share - Temporary Equity Activities (Details) - shares | 1 Months Ended | 6 Months Ended | ||
Jul. 08, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jul. 09, 2021 | |
Class A-3 Units | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Temporary equity, issued, beginning balance (in shares) | 376,395 | |||
Issuance of temporary equity (in shares) | 1,444 | 14,094 | 13,457 | 28,995 |
Temporary equity, issued, ending balance (in shares) | 405,390 | |||
Class A-2 Units | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Temporary equity, issued, beginning balance (in shares) | 225,972 | |||
Issuance of temporary equity (in shares) | 867 | 8,461 | 8,079 | 17,407 |
Temporary equity, issued, ending balance (in shares) | 243,379 | |||
Class A-1 Units | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Temporary equity, issued, beginning balance (in shares) | 296,302 | |||
Issuance of temporary equity (in shares) | 1,137 | 11,094 | 10,593 | 22,824 |
Temporary equity, issued, ending balance (in shares) | 319,126 |
Equity and Earnings per Share_5
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, 2022 | |
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ (159,556) | $ 6,131 | $ (315,851) |
Noncontrolling interests in loss of consolidated subsidiaries | (87,528) | 0 | (196,085) |
Transfers (to) from noncontrolling interests: | |||
Decrease in Sunlight's shareholders' equity for the delivery of Class EX Units primarily in connection with vested provisionally-vested Class EX Units | (2,171) | ||
Decrease 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 | (2,171) | |
Net income (loss) attributable to Class A shareholders | (159,556) | $ 6,131 | (315,851) |
Change from transfers (to) from noncontrolling interests and from net income (loss) attributable to Class A shareholders | $ (129,177) | $ (318,022) | |
Sunlight Financial LLC | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest percent | 35% | 35.40% | |
Sunlight Financial LLC | |||
Noncontrolling Interest [Line Items] | |||
Net Income (Loss) | $ (249,993) | $ (547,370) | |
Transfers (to) from noncontrolling interests: | |||
Net income (loss) attributable to Class A shareholders | $ (249,993) | $ (547,370) |
Equity and Earnings per Share_6
Equity and Earnings per Share - Equity-Based Compensation - Granted (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Compensation Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards (in shares) | 6,209,947 | |
Provisionally-Vested Class A Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards (in shares) | 145,970 | 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) | 189,158 | 974,447 |
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) | 171,624 | 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 | |
Employee RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards (in shares) | 5,703,195 | 2,136,129 |
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 |
Equity and Earnings per Share_7
Equity and Earnings per Share - Compensation Awards Activity - Successor (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Provisionally-Vested Class A Shares | |
Per Share | |
Outstanding (in usd per share) | $ / shares | $ 9.46 |
Issued (in usd per share) | $ / shares | 0 |
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) | shares | 337,193 |
Issued (in shares) | shares | 0 |
Vested (in shares) | shares | (148,704) |
Forfeited or Cancelled (in shares) | shares | (42,519) |
Outstanding (in shares) | shares | 145,970 |
Provisionally-Vested Class EX Units | |
Per Share | |
Outstanding (in usd per share) | $ / shares | $ 9.46 |
Issued (in usd per share) | $ / shares | 5.04 |
Vested (in usd per share) | $ / shares | 9.01 |
Forfeited or Cancelled (in usd per share) | $ / shares | 9.46 |
Outstanding (in usd per share) | $ / shares | $ 9.46 |
Shares | |
Outstanding (in shares) | shares | 974,447 |
Issued (in shares) | shares | 70,991 |
Vested (in shares) | shares | (693,351) |
Forfeited or Cancelled (in shares) | shares | (162,929) |
Outstanding (in shares) | shares | 189,158 |
Director RSUs | |
Per Share | |
Outstanding (in usd per share) | $ / shares | $ 9.46 |
Issued (in usd per share) | $ / shares | 4.37 |
Vested (in usd per share) | $ / shares | 9.46 |
Forfeited or Cancelled (in usd per share) | $ / shares | 0 |
Outstanding (in usd per share) | $ / shares | $ 4.37 |
Shares | |
Outstanding (in shares) | shares | 75,000 |
Issued (in shares) | shares | 171,624 |
Vested (in shares) | shares | (75,000) |
Forfeited or Cancelled (in shares) | shares | 0 |
Outstanding (in shares) | shares | 171,624 |
Employee RSUs | |
Per Share | |
Outstanding (in usd per share) | $ / shares | $ 8.97 |
Issued (in usd per share) | $ / shares | 2.45 |
Vested (in usd per share) | $ / shares | 9.03 |
Forfeited or Cancelled (in usd per share) | $ / shares | 4.47 |
Outstanding (in usd per share) | $ / shares | $ 3.97 |
Shares | |
Outstanding (in shares) | shares | 2,136,129 |
Issued (in shares) | shares | 4,695,642 |
Vested (in shares) | shares | (473,372) |
Forfeited or Cancelled (in shares) | shares | (655,204) |
Outstanding (in shares) | shares | 5,703,195 |
Equity and Earnings per Share_8
Equity and Earnings per Share - Compensation Awards Activity - Predecessor (Details) | 6 Months Ended |
Jul. 09, 2021 $ / shares shares | |
Class C | |
Per Unit | |
Outstanding (in usd per share) | $ / shares | $ 14.51 |
Outstanding (in usd per share) | $ / shares | $ 14.53 |
Units | |
Outstanding (in shares) | shares | 234,403 |
Outstanding (in shares) | shares | 232,709 |
Class C | Class C-1 Units | |
Per Unit | |
Converted (in usd per share) | $ / shares | $ 16.19 |
Units | |
Converted (in shares) | shares | (181) |
Class C | Class C-2 Units | |
Per Unit | |
Converted (in usd per share) | $ / shares | $ 11.12 |
Units | |
Converted (in shares) | shares | (1,513) |
LTIP | |
Per Unit | |
Outstanding (in usd per share) | $ / shares | $ 20.06 |
Outstanding (in usd per share) | $ / shares | $ 20.14 |
Units | |
Outstanding (in shares) | shares | 71,060 |
Outstanding (in shares) | shares | 69,398 |
LTIP | Class C-1 Units | |
Per Unit | |
Converted (in usd per share) | $ / shares | $ 18.96 |
Units | |
Converted (in shares) | shares | (377) |
LTIP | Class C-2 Units | |
Per Unit | |
Converted (in usd per share) | $ / shares | $ 15.64 |
Units | |
Converted (in shares) | shares | (1,285) |
Equity and Earnings per Share_9
Equity and Earnings per Share - Unrecognized Compensation Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards | shares | 6,209,947 |
Amount | $ 18,296 |
Provisionally-Vested Class A Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average recognition period | 8 months 12 days |
Awards | shares | 145,970 |
Amount | $ 1,381 |
Provisionally-Vested Class EX Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average recognition period | 2 months 12 days |
Awards | shares | 189,158 |
Amount | $ 1,789 |
Director RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average recognition period | 4 months 24 days |
Awards | shares | 171,624 |
Amount | $ 439 |
Employee RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average recognition period | 1 year 4 months 24 days |
Awards | shares | 5,703,195 |
Amount | $ 14,687 |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average recognition period | 1 month 6 days |
Amount | $ 100 |
Equity and Earnings per Shar_10
Equity and Earnings per Share - Earnings per Share Calculations (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 USD ($) $ / shares shares | Jul. 09, 2021 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | |
Net Income (Loss) Per Class A Shareholders, Basic | |||
Net income (loss) available to Class A shareholders | $ (158,573) | $ (315,110) | |
Total weighted average shares outstanding (in shares) | shares | 84,824,109 | 83,804,659 | |
Net Income (Loss) Per Class A Shareholders, Basic (in usd per share) | $ / shares | $ (1.87) | $ (3.76) | |
Net Income (Loss) Per Class A Shareholders, Diluted | |||
Net income (loss) available to Class A shareholders | $ (158,573) | $ (507,583) | |
Total weighted average shares outstanding (in shares) | shares | 84,824,109 | 130,618,205 | |
Net Income (Loss) Per Class A Shareholders, Diluted (in usd per share) | $ / shares | $ (1.87) | $ (3.89) | |
Net income (loss) available to Class A shareholders | |||
Net income (loss) | $ (247,084) | $ 6,131 | $ (511,936) |
Noncontrolling interests in loss of consolidated subsidiaries | 87,528 | $ 0 | 196,085 |
Other weighting adjustments | 983 | 741 | |
Net Income (Loss) Attributable to Class A Shareholders | (158,573) | (315,110) | |
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 | 0 | (192,473) | |
Net income (loss) available to Class A shareholders, diluted | $ (158,573) | $ (507,583) | |
Weighted Average Units Outstanding | |||
Class A shares outstanding (in shares) | shares | 84,824,109 | 83,804,659 | |
Class EX units exchangeable into Sunlight Financial Holdings Inc. Class A shares (in shares) | shares | 0 | 46,813,546 | |
Incremental Class A Shares attributable to dilutive effect of warrants (in shares) | shares | 0 | 0 | |
Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments) (in shares) | shares | 0 | 0 | |
Total weighted average shares outstanding, diluted (in shares) | shares | 84,824,109 | 130,618,205 | |
Debt Instrument, convertible, conversion ratio | 1 |
Equity and Earnings per Shar_11
Equity and Earnings per Share - Shares Excluded from Diluted Loss per Common Share (Details) - shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares (in shares) | 77,458,736 | 31,015,931 |
Class EX Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares (in shares) | 46,354,679 | 0 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares (in shares) | 27,150,000 | 27,150,000 |
Other Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares (in shares) | 627,780 | 627,780 |
Unvested Class EX Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares (in shares) | 1,240,776 | 706,580 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares (in shares) | 2,085,501 | 2,416,070 |
ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares (in shares) | 0 | 115,501 |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring and Non-recurring (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Cash and cash equivalents | $ 47,515 | $ 91,882 |
Restricted cash | 4,272 | 2,018 |
Contract derivatives | 449 | 1,411 |
Liabilities: | ||
Debt | 20,613 | 20,613 |
Warrants | 4,297 | 19,007 |
Guarantee obligation | 8,024 | 418 |
Servicing liability | 512 | |
Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 3,110 | 4,260 |
Loans, held-for-investment | ||
Assets: | ||
Financing receivables | 260 | 250 |
Principal Balance or Notional Amount | ||
Assets: | ||
Cash and cash equivalents | 47,515 | 91,882 |
Restricted cash | 4,272 | 2,018 |
Contract derivatives | 38,805 | 76,770 |
Liabilities: | ||
Debt | 20,613 | 20,613 |
Warrants | 312,225 | 312,225 |
Principal Balance or Notional Amount | Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 3,635 | 4,584 |
Principal Balance or Notional Amount | Loans, held-for-investment | ||
Assets: | ||
Financing receivables | 309 | 291 |
Carrying Value | ||
Assets: | ||
Cash and cash equivalents | 47,515 | 91,882 |
Restricted cash | 4,272 | 2,018 |
Contract derivatives | 449 | 1,411 |
Liabilities: | ||
Debt | 20,613 | 20,613 |
Warrants | 4,297 | 19,007 |
Guarantee obligation | 8,024 | 418 |
Servicing liability | 512 | |
Carrying Value | Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 3,254 | 4,051 |
Carrying Value | Loans, held-for-investment | ||
Assets: | ||
Financing receivables | 278 | 262 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 47,515 | 91,882 |
Restricted cash | 4,272 | 2,018 |
Contract derivatives | 0 | 0 |
Liabilities: | ||
Debt | 0 | 0 |
Warrants | 0 | 0 |
Guarantee obligation | 0 | 0 |
Servicing liability | 0 | |
Level 1 | Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 0 | 0 |
Level 1 | Loans, held-for-investment | ||
Assets: | ||
Financing receivables | 0 | 0 |
Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Contract derivatives | 0 | 0 |
Liabilities: | ||
Debt | 0 | 0 |
Warrants | 0 | 0 |
Guarantee obligation | 0 | 0 |
Servicing liability | 512 | |
Level 2 | Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 0 | 0 |
Level 2 | Loans, held-for-investment | ||
Assets: | ||
Financing receivables | 0 | 0 |
Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Contract derivatives | 449 | 1,411 |
Liabilities: | ||
Debt | 20,613 | 20,613 |
Warrants | 4,297 | 19,007 |
Guarantee obligation | 8,024 | 418 |
Servicing liability | ||
Level 3 | Loan participations, held-for-investment | ||
Assets: | ||
Financing receivables | 3,110 | 4,260 |
Level 3 | Loans, held-for-investment | ||
Assets: | ||
Financing receivables | $ 260 | $ 250 |
Fair Value Measurement - Change
Fair Value Measurement - Changes in Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | |
Assets | |||
Balance | $ 773 | $ 1,435 | $ 1,411 |
Included in change in fair value of contract derivatives, net | 638 | (662) | (962) |
Included in realized gains on contract derivatives, net | 2,866 | 2,992 | 356 |
Payments, net | (2,866) | (2,992) | (356) |
Balance | 1,411 | 773 | 449 |
Liabilities | |||
Balance | 41,590 | 5,643 | 19,007 |
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 | $ (14,710) |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Change in fair value of warrant liabilities | Change in fair value of warrant liabilities | Change in fair value of warrant liabilities |
Included in change in fair value of contract derivatives, net | $ 0 | ||
Included in realized gains on contract derivatives, net | 2,245 | ||
Payments, net | (2,245) | ||
Balance | 0 | ||
Balance | $ 19,007 | $ 41,590 | $ 4,297 |
Fair Value Measurement - Signif
Fair Value Measurement - Significant Inputs (Details) | Dec. 31, 2022 yr $ / shares | Dec. 31, 2021 |
Discount rate | Contract Derivative 1 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative asset, measurement input | 0.100 | |
Life | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | yr | 3.5 | |
Life | Contract Derivative 1 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative asset, measurement input | 0.2 | |
Expected prepayment rate | Contract Derivative 2 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative asset, measurement input | 0.750 | 0.750 |
Share Price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | $ / shares | 1.29 | |
Volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.839 | |
Dividend Yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0 | |
Risk Free Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.042 |
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, 2022 | |
Income Tax Disclosure [Abstract] | |||
Net Income (Loss) Before Income Taxes | $ (250,588) | $ 6,131 | $ (548,857) |
Current | |||
Federal | 1,708 | (1,525) | |
State and local | 312 | 427 | |
Current income tax expense (benefit) | 2,020 | (1,098) | |
Deferred | |||
Federal | (4,603) | (35,405) | |
State and local | (921) | (418) | |
Deferred income tax benefit | (5,524) | 0 | (35,823) |
Federal | (2,895) | (36,930) | |
State and local | (609) | 9 | |
Income tax benefit (expense) | (3,504) | $ 0 | (36,921) |
Income Tax Examination [Line Items] | |||
Total income tax receivable (payable) | (2,020) | 2,569 | |
Federal | |||
Income Tax Examination [Line Items] | |||
Total income tax receivable (payable) | (1,708) | 1,918 | |
State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Total income tax receivable (payable) | $ (312) | $ 651 |
Taxes - Narrative (Details)
Taxes - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2022 | |
Income Tax Examination [Line Items] | ||
Effective tax rate | 1.40% | 6.70% |
Goodwill impairment | $ 30,658 | $ 31,648 |
Change in fair value of warrant liabilities | (3,081) | (1,971) |
Noncontrolling interests in loss of consolidated subsidiaries | 18,390 | 41,593 |
Deferred tax asset (liability), net | (36,686) | (688) |
Deferred tax assets, gross | 0 | 13,990 |
Valuation allowance | 0 | 10,359 |
Deferred tax liabilities, gross | $ 36,686 | 4,319 |
Operating loss carryforwards | 61,500 | |
Tax receivable agreement | 200 | |
Federal | ||
Income Tax Examination [Line Items] | ||
Operating loss carryforwards | 51,800 | |
State | ||
Income Tax Examination [Line Items] | ||
Operating loss carryforwards | $ 9,700 |
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, 2022 | |
Income Tax Disclosure [Abstract] | |||
Net Income (Loss) Before Income Taxes | $ (250,588) | $ 6,131 | $ (548,857) |
Statutory U.S Income Tax Rate | 21% | 21% | |
Effective Income Tax Rate Reconciliation, Amount | |||
Income tax expense (benefit), at statutory U.S. federal rate | $ (52,623) | $ (115,260) | |
State and local taxes | (674) | (2,654) | |
Valuation Allowance on Deferred Provision | 0 | 10,359 | |
Goodwill impairment | 30,658 | 31,648 | |
Change in fair value of warrant liabilities | (3,081) | (1,971) | |
Noncontrolling interests in loss of consolidated subsidiaries | 18,390 | 41,593 | |
Business Combination compensation expense | 3,662 | 0 | |
Other | 164 | (636) | |
Income tax benefit (expense) | $ (3,504) | $ 0 | $ (36,921) |
Effective Income Tax Rate Reconciliation, Percent | |||
Income tax expense (benefit), at statutory U.S. federal rate | 21% | 21% | |
State and local taxes | 0.30% | 0.50% | |
Valuation Allowance on Deferred Provision | 0% | (1.90%) | |
Goodwill impairment | (12.20%) | (5.80%) | |
Change in fair value of warrant liabilities | 1.20% | 0.40% | |
Noncontrolling interests in loss of consolidated subsidiaries | (7.30%) | (7.60%) | |
Business Combination compensation expense | (1.50%) | 0% | |
Other | (0.10%) | 0.10% | |
Effective tax rate | 1.40% | 6.70% |
Taxes - Deferred Tax Assets and
Taxes - Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Net operating loss carryforward | $ 13,345 | $ 0 |
Basis step-up from Class EX exchange | 177 | 0 |
Excess business interest expense carryforward | 468 | 0 |
Deferred tax assets, gross | 13,990 | 0 |
Less: valuation allowance | (10,359) | 0 |
Deferred tax assets, net | 3,631 | 0 |
Deferred tax liabilities | ||
Deferred tax liabilities, gross | 4,319 | 36,686 |
Deferred tax asset (liability), net | $ (688) | $ (36,686) |
Transactions with Affiliates _2
Transactions with Affiliates and Affiliated Entities (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Nov. 30, 2020 | Nov. 30, 2020 | Oct. 31, 2020 | Aug. 31, 2020 | Dec. 31, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||||||
Founders Shares as a percentage of total shares outstanding after forfeiture | 20% | 20% | ||||||
Shares not subject to forfeiture (in shares) | 1,125,000 | 1,125,000 | ||||||
Warrants (in shares) | 9,900,000 | 9,900,000 | ||||||
Price of warrants (in dollars per share) | $ 1 | $ 1 | ||||||
Proceeds from issuance of warrants | $ 9,900 | |||||||
Exercise price per share (in dollars per share) | $ 11.50 | $ 11.50 | ||||||
Administrative fee income, affiliate | $ 100 | $ 100 | $ 200 | |||||
Distributions | 0 | |||||||
Tax distributions paid | 1,200 | $ 7,500 | ||||||
Distributions declared, but not paid | $ 0 | 0 | 1,521 | $ 0 | ||||
Administrative Support Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Monthly support fee, affiliate | 10 | |||||||
Expenses, affiliate | $ 60 | |||||||
Class B Common Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock issued (in shares) | 11,500,000 | |||||||
Consideration received | $ 25 | |||||||
Price per share (in dollars per share) | $ 0.002 | |||||||
Stock transferred (in shares) | 50,000 | |||||||
Stock returned (in shares) | 4,312,500 | |||||||
Common stock, outstanding (in shares) | 8,625,000 | 8,625,000 | 0 | 0 | ||||
Shares subject to forfeiture (in shares) | 1,125,000 | 1,125,000 | ||||||
Affiliated Entity | FTV | ||||||||
Related Party Transaction [Line Items] | ||||||||
Quarterly management fee | 50 | |||||||
Affiliated Entity | HSPH | ||||||||
Related Party Transaction [Line Items] | ||||||||
Administrative fee income, affiliate | $ 200 | |||||||
Affiliated Entity | Tiger | Management Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Quarterly management fee | $ 50 | $ 400 | ||||||
Affiliated Entity | Lumina Solar | Financing Program Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Administrative fee income, affiliate | $ 200 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 USD ($) loan | Jul. 09, 2021 USD ($) loan | Dec. 31, 2022 USD ($) loan lease | Jan. 01, 2022 USD ($) | |
Other Commitments [Line Items] | ||||
Amounts outstanding | $ 71,952 | $ 56,073 | ||
Funding commitments | $ 22,749 | $ 20,400 | ||
Guaranteed loans, number written off | loan | 20 | 60 | 117 | |
Guaranteed loans, written off | $ 400 | $ 1,300 | $ 2,900 | |
Guaranteed loans, delinquent | 1,300 | |||
Maximum rewards program liability | 3,100 | |||
Rewards program liability | $ 1,800 | |||
Number of leases | lease | 2 | |||
Right-of-use assets | $ 7,600 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | |||
Present value of future minimum lease payments | $ 6,889 | $ 7,600 | ||
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities | ||
Total lease expense | $ 2,140 | |||
Lease expense | 700 | $ 900 | ||
Loan Repurchase, Indirect Channel Loans | ||||
Other Commitments [Line Items] | ||||
Maximum potential guarantee | 317,500 | |||
Guarantee liability | 2,100 | |||
Loan Repurchase, Contractor Installation Timeline | ||||
Other Commitments [Line Items] | ||||
Maximum potential guarantee | 45,600 | |||
Guarantee liability | 5,900 | |||
Unfunded Loan Commitment | ||||
Other Commitments [Line Items] | ||||
Amounts outstanding | 163,000 | |||
Advances | ||||
Other Commitments [Line Items] | ||||
Amounts outstanding | $ 67,077 | $ 52,129 |
Commitments and Contingencies_2
Commitments and Contingencies - Lease Cost (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease cost, operating | $ 2,140 | |
Operating cash flows | $ 1,735 | |
Right-of-use assets | $ 7,012 | |
Weighted-average remaining lease term, operating leases (in years) | 6 years 2 months 12 days | 6 years 2 months 12 days |
Weighted-average discount rate, operating leases | 7.20% | 7.20% |
Commitments and Contingencies_3
Commitments and Contingencies - Minimum Future Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 | $ 1,909 | |
2024 | 1,553 | |
2025 | 1,672 | |
2026 | 1,790 | |
2027 | 1,839 | |
Thereafter | 3,017 | |
Total future minimum lease payments | 11,780 | |
Less: imputed interest | (4,891) | |
Present value of future minimum lease payments | $ 6,889 | $ 7,600 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Subsequent Events - Schedule Of
Subsequent Events - Schedule Of Bank Cap (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Subsequent Events [Abstract] | |
June 30, 2023 and July 31, 2023 | $ 550,000 |
August 31, 2023, September 30, 2023, and October 31, 2023 | 500,000 |
November 30, 2023 and each month thereafter | $ 400,000 |
Related party, basis spread on additional capacity amount | 5% |
Related party, additional capacity trigger if basis spread larger | $ 100,000 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) | 1 Months Ended | |||||||
Apr. 25, 2023 | Oct. 01, 2022 | Jan. 31, 2023 | Apr. 28, 2023 | Mar. 10, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2020 | |
Subsequent Event [Line Items] | ||||||||
Outstanding face amount/Carrying value | $ 20,613,000 | $ 20,613,000 | ||||||
Exercise price per share (in dollars per share) | $ 11.50 | |||||||
Shares (in shares) | 9,900,000 | |||||||
Common Class EX | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion of stock, shares converted (in shares) | 308,085 | |||||||
Class A Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||
Convertible, conversion price (in dollars per share) | $ 1.25 | |||||||
Conversion of stock, shares issued (in shares) | 308,085 | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Deposits with other federal home loan banks | $ 64,000,000 | |||||||
Cash | $ 73,200,000 | |||||||
Subsequent Event | Loan Repurchase, Indirect Channel Loans | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Subsequent Event [Line Items] | ||||||||
Disposal group, including discontinued operation, consideration | $ 296,000,000 | |||||||
Subsequent Event | CRB | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants exercisable (in shares) | 25,944,541 | |||||||
Exercise price per share (in dollars per share) | $ 0.01 | |||||||
Shares (in shares) | 12,907,080 | |||||||
Remaining warrants (in shares) | 13,037,461 | |||||||
Subsequent Event | CRB | Secured Term Loan | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of principal amount | 4% | |||||||
Upfront fee | $ 2,658,000 | |||||||
Commitment fee percentage | 14% | |||||||
Maximum facility size | $ 100,000,000 | |||||||
Financial covenants | $ 20,000,000 | |||||||
Percentage of cash with CRB and affiliates | 75% | |||||||
Subsequent Event | Secured Term Loan, Tranche One | CRB | Secured Term Loan | ||||||||
Subsequent Event [Line Items] | ||||||||
Outstanding face amount/Carrying value | $ 38,800,000 | |||||||
Subsequent Event | Secured Term Loan, Tranche Two | CRB | Secured Term Loan | ||||||||
Subsequent Event [Line Items] | ||||||||
Outstanding face amount/Carrying value | $ 49,800,000 | |||||||
Subsequent Event | Common Class EX | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion of stock, shares converted (in shares) | 2,314,143 | |||||||
Convertible, conversion price (in dollars per share) | $ 1.29 | |||||||
Subsequent Event | Class A Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Convertible, number of equity instruments (in shares) | 2,305,426 | |||||||
Conversion of stock, shares issued (in shares) | 997,399 | |||||||
Share held in treasury delivered (in shares) | 1,308,027 | |||||||
Subsequent Event | Class A Common Stock | CRB | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ 0.0001 |