SUNLIGHT FINANCIAL HOLDINGS INC. : Material Impairments, FD Settlement Disclosure, Financial Statements and Supporting Documentation (Form 8-K)

Section 2.06. Material deficiency.

Sunlight Financial Holdings Inc. (the “Company” or “Sunlight”) records financing receivables for advances Sunlight makes to contractors to facilitate the installation of residential solar systems to provide such contractors with initial working capital to pay certain expenses related to the installation or construction of solar systems and home improvement. In
September 2022, the Company has been informed of certain measures taken by one of its installer partners to resolve the liquidity problems encountered by the installer. As a result of this information and the Company’s analysis that these actions would likely result in the Company’s inability to collect the advances due to this installer, the Company has determined the September 23, 2022 that it was appropriate to depreciate his advances to be received. The audit committee of the company’s board of directors has reviewed the company’s decision and the company has concluded to take an impairment charge for the non-monetary advance receivables of $30 million at $33 million during the Company’s fiscal quarter ending September 30, 2022. Although the Company does not anticipate that impairment charges will result in future cash outlays, as impairment is a non-cash charge, the Company expects to incur certain one-time expenses in connection with its facilitation of solar loans where the installation may not have been fully completed.

Section 7.01 Disclosure of FD Rules.

On September 28, 2022the Company has issued a press release announcing that it (1) has concluded that significant impairment charges are required under generally accepted accounting principles and (2) withdraws its most recently provided fiscal 2022 earnings guidance the August 15, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Section 7.01 of this current report on Form 8-K is furnished and not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”). ), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (“Securities Act”), or the Exchange Act, regardless of any language of general incorporation in this deposit.

Forward-looking statements

Certain statements contained in this current report on Form 8-K may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements can generally be identified by the use of words such as “could”, “should”, “should”, “should”, “could”, “believe”, “anticipate”, “outlook”, “guidance for 2022”. ,” “intend”, “estimate”, “expect”, “project”, “plan”, “go ahead” or the negative form of these terms and other similar expressions are intended to identify forward-looking statements , although not all looking statements contain such identifying words.These forward-looking statements are based on management’s current expectations and assumptions regarding future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, Sunlight disclaims any obligation to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect current events or circumstances after the date hereof. Sunlight cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond Sunlight’s control. These risks and uncertainties include, among others: risks relating to the uncertainty of projected operational and financial information regarding Sunlight; risks related to Sunlight’s business and the timing of milestones or expected business results; global supply chain shortages, competition for skilled labor and clearance delays; the effects of competitive and regulatory risks, and the impacts of changes in laws or regulations on Sunlight’s future business; the expiration, renewal, modification or replacement of the federal solar investment tax credit, rebates and other incentives; the effects of the COVID-19 pandemic on Sunlight’s future business or results; Sunlight’s ability to maintain profitability and attract and retain relationships with third parties, including Sunlight’s capital providers and solar contractors; the financial performance of Sunlight’s capital providers and contractors; the willingness of Sunlight’s capital providers to fund loans on terms desired by the relevant markets and economically favorable to Sunlight; the impact of inflation and rising interest rates on Sunlight’s capital providers and the cost and availability of credit from our capital providers as well as demand for solar panel installation and home improvement; changes in retail prices for electricity produced by traditional utilities; the availability of solar panels, batteries and other components and raw materials; and the other risks and uncertainties referred to in the “Risk Factors” section of Sunlight’s Form 10-K as filed with the Security and Exchange Commission (“SEC”) on March 29, 2022Form 10-Q as filed with the SECOND on May 16, 2022 and Form 10-Q as filed with the SECOND on August 15, 2022and other Sunlight documents filed or to be filed with the SECOND. Should one or more of the risks or uncertainties described herein materialize, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in the forward-looking statements. The sunlight SECOND the deposits are accessible to the public on the DRY website at www.sec.gov.

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Section 9.01. Financial statements and supporting documents.

(d)  Exhibits.

Exhibit Number          Description
      99.1                Press Release dated September 28, 2022.
       104              Cover Page Interactive Data File (embedded within the Inline XBRL document).

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