NEW YORK, Dec. 20, 2022 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Sunlight Financial Holdings, Inc. (“Sunlight” or the “Company”) (NYSE: SUNL) in the United States on behalf of all persons and entities who purchased or otherwise acquired Sunlight securities between January 25, 2021 and September 28, 2022, both dates inclusive (the “Class Period”). Investors have until February 14 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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Sunlight claims to be a business-to-business-to-consumer point-of-sale (“POS”) financing platform that provides residential solar and home improvement contractors the ability to offer seamless POS financing to their customers when purchasing residential solar systems or other home improvements. The Company claims the resulting loans are facilitated by Sunlight’s proprietary technology platform, Orange® (“Orange®” or the “Platform”), through which Sunlight offers instant credit decisions to homeowners at the POS on behalf of Sunlight’s various capital providers.
Sunlight became a publicly traded company in July 2021 via the business combination of Spartan Acquisition Corp. II, a publicly traded special purpose acquisition company, with Sunlight Financial LLC (“Legacy Sunlight”) (the “Business Combination”).
On September 28, 2022, after the market closed, Sunlight disclosed that it would record a “non-cash advance receivables impairment charge of $30 million to $33 million during the Company’s fiscal quarter ending September 30, 2022.” The Company explained that “the Company was informed of certain actions taken by one of its installer partners to address liquidity issues faced by the installer” which “would likely result in an inability of the Company to collect on advances outstanding to such installer.”
The same day, the Company also issued a press release withdrawing its full-year 2022 outlook due to the “installer liquidity event.” Defendant Matthew Potere was quoted stating, “While our risk exposure with other contractor advances is much smaller (the next three largest partner advances being $10 million, $7 million, and $5 million respectively), we are reunderwriting all contractor partners' advances to further mitigate risk going forward.” (Emphasis added.)
On this news, the Company’s stock price fell $1.44 per share, or 57.1%, to close at $1.08 per share on September 29, 2022, thereby injuring investors.
Throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company lacked effective underwriting and risk evaluation with respect to its contractor advance program; (2) that Sunlight lacked the oversight and periodic monitoring systems necessary to timely detect bad debt associated with its contractor advance program; (3) that the Company lacked effective internal controls over accounting and reporting of non-cash advance receivables; (4) that, as a result, the Company would be forced to take a non-cash advance receivables impairment charge exceeding $30 million; and (5) that, as a result of the foregoing, Defendant’s positive statements about the Company’s business, operations, and prospects were materially misleading
and/or lacked a reasonable basis.
If you purchased or otherwise acquired Sunlight shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
