Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review
Wilhelmina International, Inc. ("Wilhelmina" or the "Company") has historically
presented service revenues on a gross basis in its annual audited and interim
consolidated statements of operations and comprehensive income (loss) on the
basis of the good faith judgment of both its management and audit committee of
its board of directors ("Audit Committee") that the Company is the principal in
the contractual relationships with its end-user clients. However, the Staff of
the Securities and Exchange Commission ("SEC") has recently objected to this
presentation and communicated that service revenues should be presented net of
model costs based on their conclusion that the Company is only an agent in the
arrangements with its end-user clients.
On November 30, 2022, the Audit Committee determined that accepting the position
of the SEC Staff was in the best interest of Wilhelmina's shareholders. As a
result, the Audit Committee concluded that the consolidated statements of
operations and comprehensive income (loss) included in its Annual Report on Form
10-K for the year ended December 31, 2021, and in its Quarterly Report on Form
10-Q for the interim period ended September 30, 2022, should no longer be relied
upon.
The Company intends to amend its Annual Report on Form 10-K for the year ended
December 31, 2021, and its Quarterly Report on Form 10-Q for the interim period
ended September 30, 2022, to reflect the presentation of service revenue on a
net basis as agent. This change in presentation will result in reducing
previously reported service revenues by an amount equal to model costs. Since
model costs have historically been shown as a deduction from total revenue,
amounts previously reported as revenues net of model costs will become total
revenue. This change in presentation will have no impact on operating expenses,
other expense (income), income before provision for income taxes, provision for
income taxes, net income, net income per share, or total comprehensive income
(loss) for any period. Similarly, this change in income statement presentation
will have no impact on the consolidated balance sheets, consolidated statements
of shareholders' equity, or consolidated statements of cash flows of the
Company.
The Audit Committee of the Company has discussed the foregoing matters with the
Company's independent registered public accounting firm, Baker Tilly US, LLP.
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WILHELMINA INTERNATIONAL, INC. 
