Quarterlytics / Industrials / Specialty Business Services / Wilhelmina International, Inc.

Wilhelmina International, Inc.

whlm · NASDAQ Industrials
Claim this profile
Ticker whlm
Exchange NASDAQ
Sector Industrials
Industry Specialty Business Services
Employees 51-200
← All annual reports
FY2022 Annual Report · Wilhelmina International, Inc.
Sign in to download
Loading PDF…
20 22  ANNUAL REPORT

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 
_______________ 

FORM 10-K 

(Mark One) 
[x] 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the Fiscal Year Ended December 31, 2022 

[  ] 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 
1934 
For the Transition Period from ________ to ________ 

Commission File Number 001-36589 
_______________ 

WILHELMINA INTERNATIONAL, INC. 
(Exact name of registrant as specified in its charter) 

Delaware 
(State or other jurisdiction of 
incorporation or organization) 

5420 Lyndon B Johnson Freeway, Box #25, Dallas, Texas 
(Address of principal executive offices) 

74-2781950 
(IRS Employer 
Identification Number) 

75240 
(Zip Code) 

(214) 661-7488 
(Registrant’s telephone number, including area code) 

Securities Registered Pursuant to Section 12(b) of the Act: 

Title of each class 

Trading Symbol(s) 

Name of each exchange on which registered 

Common Stock, $0.01 par value 

WHLM 

Nasdaq Capital Market 

Securities Registered Pursuant to Section 12(g) of the Act: None 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   [  ] 

Yes   [x] No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   [  ] 

Yes   [x] No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), 
and (2) has been subject to such filing requirements for the past 90 days.   [x] Yes   [  ] No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the 
registrant was required to submit such files).   [x] Yes   [  ] No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller 
reporting  company  or  an  emerging  growth  company. See  the  definitions  of  “large  accelerated  filer,”  “accelerated  filer,”  “smaller 

 
 
 
  
 
  
 
 
 
 
 
   
   
 
 
 
 
 
  
  
  
 
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large Accelerated Filer [  ] 
Non-Accelerated Filer [x] 

            Emerging growth company [  ] 

Accelerated Filer [  ] 
Smaller Reporting Company [x] 

           If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period 
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ] 

           Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the 
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by 
the registered public accounting firm that prepared or issued its audit report. [  ] 

            If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the 
registrant included in the filing reflect the correction of an error to previously issued financial statements.      ☐ 

            Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-
1(b).  ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   [  ] 

Yes   [x] No 

The aggregate market value of the registrant’s outstanding common stock held by non-affiliates of the registrant computed by 
reference to the price at which the common stock was last sold, as of the last business day of the registrant’s most recently completed 
second fiscal quarter was approximately $7.8 million. 

As of March 22, 2023, the registrant had 5,157,344 shares of common stock outstanding. 

DOCUMENTS INCORPORATED BY REFERENCE 

The information required by Part III is incorporated by reference from the registrant’s definitive proxy statement to be filed 

with the Commission pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this report. 

2 

 
  
 
 
 
 
 
  
  
  
 
  
  
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES 

Annual Report on Form 10-K 

For the Year Ended December 31, 2022 

BUSINESS 

ITEM 1. 
ITEM 1A.  RISK FACTORS 
ITEM 1B.  UNRESOLVED STAFF COMMENTS 
ITEM 2. 
ITEM 3. 
ITEM 4.  MINE SAFETY DISCLOSURES 

PROPERTIES 
LEGAL PROCEEDINGS 

PART I 

PART II 

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS 

AND ISSUER PURCHASES OF EQUITY SECURITIES 
RESERVED 

ITEM 6. 
ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 

OF OPERATIONS 

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
ITEM 8. 
ITEM 9. 

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL DISCLOSURE 

ITEM 9A.  CONTROLS AND PROCEDURES 
ITEM 9B. 
ITEM 9C. 

OTHER INFORMATION 
DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 

PART III 

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 
ITEM 11.  EXECUTIVE COMPENSATION 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND 

RELATED STOCKHOLDER MATTERS 

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR 

INDEPENDENCE 

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES 

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 
ITEM 16.  FORM 10-K SUMMARY 

PART IV 

SIGNATURES 

3 

PAGE

5
8
8
8
9
10

11

11
12

20
21
22

22
22
22

23
23
23

23

23

24
27

28

FORWARD LOOKING STATEMENTS 

This Annual Report on Form 10-K contains certain “forward-looking statements” as such term is defined in Section 
27A  of  the  Securities  Act  of  1933,  as  amended,  Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended  (the 
“Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relating to 
Wilhelmina International, Inc. (together with its subsidiaries the “Company” or “Wilhelmina”) are based on the beliefs of 
the Company’s management as well as information currently available to the Company’s management. When used in this 
report, the words “anticipate,” “believe,” “estimate,” “expect” and “intend” and words or phrases of similar import, as 
they relate to the Company or Company management, are intended to identify forward-looking statements. Such forward-
looking  statements  include,  in  particular,  projections  about  the  Company’s  future  results,  statements  about  its  plans, 
strategies,  business  prospects,  changes  and  trends  in  its  business  and  the  markets  in  which  it  operates.  Additionally, 
statements  concerning  future  matters  such  as  gross  billing  levels,  revenue  levels,  expense  levels,  and  other  statements 
regarding matters that are not historical are forward-looking statements. Management cautions that these forward-looking 
statements relate to future events or the Company’s future financial performance and are subject to business, economic, 
and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance, 
or achievements of its business or its industry to be materially different from those expressed or implied by any forward-
looking  statements.  Should  any  one  or  more  of  these  risks  or  uncertainties  materialize,  or  should  any  underlying 
assumptions  prove  incorrect,  actual  results  may  vary  materially  from  those  described  herein  as  anticipated,  believed, 
estimated, expected or intended. The Company does not undertake any obligation to publicly update these forward-looking 
statements. As a result, you should not place undue reliance on these forward-looking statements. 

4 

   
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 PART I 

ITEM 1. 

BUSINESS 

DESCRIPTION OF THE WILHELMINA BUSINESS 

Overview 

The primary business of Wilhelmina is fashion model management. These business operations are headquartered 
in New York City. The Company’s predecessor was founded in 1967 by Wilhelmina Cooper, a renowned fashion model, 
and became one of the oldest, best known and largest fashion model management companies in the world. Since its founding, 
Wilhelmina has grown to include operations located in Los Angeles, Miami, and London, as well as a network of licensees. 
Wilhelmina  provides  traditional,  full-service  fashion  model  and  talent  management  services,  specializing  in  the 
representation  and  management  of  models,  entertainers,  athletes  and  other  talent  to  various  clients,  including  retailers, 
designers, advertising agencies, print and electronic media and catalog companies.  The Company was incorporated in the 
State of Delaware in 1996. 

 Organization and Operating Divisions 

The Company acquired the predecessor companies constituting its current primary business in 2008. The Company 
conducts  its  business  through  operating  divisions  and  subsidiaries  engaged  in  fashion  model  management  and  other 
complementary businesses.  These business activities are focused on the following key areas: 

  Fashion model and social media influencer management 
  Celebrity management 
  Licensing and branding associations 

Fashion Model and Social Media Influencer Management 

Wilhelmina is focused on providing fashion modeling talent and social media influencer services to clients such as 
advertising  agencies,  branded  consumer  goods  companies,  fashion  designers,  Internet  sites,  retailers,  department  stores, 
product catalogs and magazine publications. 

The  fashion  model/talent/influencer  management  industry  can  be  divided  into  many  subcategories,  including 
advertising campaigns, catalog/e-commerce, runway, showroom and editorial work. Advertising work involves modeling 
for advertisements featuring consumer products such as cosmetics, clothing and other items to be placed in magazines and 
newspapers, on billboards and with other types of media. Catalog and e-commerce work involves modeling of products to 
be  sold  through  promotional  catalogs  and  Internet  commerce  sites. Runway  work  involves  modeling  at  fashion  shows, 
which primarily take place in Paris, Milan, London and New York City. Showroom work involves on-site modeling of 
products at client showrooms and other events and production “fit” work whereby a model serves as the sizing model for 
apparel items. Editorial work involves modeling for the cover and editorial sections of magazines and websites.   

Clients pay for talent to appear in photo shoots for Internet sites, magazine features, print advertising, direct mail 
marketing, and product catalogs, as well as to appear in runway shows to present new designer collections, fit modeling, 
and  on-location  presentations  and  events.  In  addition,  talent  may  also  appear  in  film  and  television  commercials. 
Wilhelmina develops and diversifies its talent portfolio through a combination of ongoing local, regional and international 
scouting and talent-search efforts to source new talent, as well as cooperating with other agencies that represent talent. 

Within its fashion model management business, Wilhelmina’s primary source of service revenue is from model fees 
and  services  charges  paid  by  the  client  for  bookings  directly  negotiated  by  the  Company.    The  Company  also  receives 
commissions  paid  on  bookings  by  third-party  agencies.    Wilhelmina  believes  that  its  model  fees,  service  charges  and 
commission rates are competitive with those of its principal competitors. 

5 

   
 
  
 
  
  
 
  
 
 
  
  
 
  
  
 
Wilhelmina’s fashion model management operations are organized into divisions called “boards,” each of which 

specializes by the type of models it represents. Wilhelmina’s boards are generally described in the table below. 

Board Name 
Women 
Men 
Direct 
Curve 
Showroom 
Fitness 

Location 
NYC, LA, Miami, London 
NYC, LA, Miami, London 
NYC, LA, Miami, London 
NYC, LA, Miami, London 
NYC, LA, Miami 
NYC, LA, Miami 

Target Market 
High-end female fashion models 
High-end male fashion models 
Established/commercial male/female fashion models 
Full-figured female fashion models 
Live modeling and designer fit clothing modeling 
Athletic models 

Each major board is headed by a director who manages the agents assigned to the board. The agents of each board 
act both as bookers (including promoting models, negotiating fees and contracting work) and as talent scouts/managers 
(including providing models with career and development guidance and helping them better market themselves). Although 
agents individually develop professional relationships with models, models are represented by a board collectively and not 
by a specific agent. Wilhelmina’s organization into boards enables Wilhelmina to provide clients with services tailored to 
their particular needs, to allow models to benefit from agents’ specialized experience in their particular markets, and to limit 
Wilhelmina’s dependency on any specialty market or agent. 

Most senior agents are employed pursuant to employment agreements that include noncompetition provisions such 
as a prohibition from working with Wilhelmina’s models and clients for a certain period of time after the end of the agent’s 
employment with Wilhelmina. Wilhelmina typically signs its models to three-year exclusive contracts, which it actively 
enforces. 

The Aperture division operates in New York, Los Angeles and Miami, representing actors and models, for film, 

television, and commercials.  Aperture also represents influencers for brand campaigns and endorsements.   

Wilhelmina  London  Limited  (“London”),  a  wholly  owned  subsidiary  of  Wilhelmina  International,  Inc.,  was 
acquired in January 2015. The London subsidiary establishes a footprint for the Company in Western Europe, provides a 
base of operations to service the Company’s European clients, and serves as a new talent development office for European 
models and artists.  

Celebrity Management 

Wilhelmina’s Celebrity division seeks to secure endorsement and spokesperson work for celebrities from the worlds 
of sports, music and entertainment. The Celebrity division has two primary sources of revenue: (i) commissions paid by 
talent as a percentage of their gross earnings; and (ii) royalties or a service charge paid by clients.  Wilhelmina’s Celebrity 
division  management  works  with  emerging  artists  and  established  celebrity  names  to  match  them  with  leading  fashion 
brands and companies. 

Licensing & Branding Associations 

Wilhelmina Licensing, LLC is a wholly-owned subsidiary that collects third-party licensing fees in connection with 
the licensing of the “Wilhelmina” name. Third-party licensees include leading fashion model agencies in local markets in 
the U.S. and internationally. The film and television business consists of occasional television syndication royalties and 
production series contracts. Also, from time to time, the Company conducts other events, such as model search contests, in 
an effort to expand the Wilhelmina brand and recruit talent. 

Competition 

The fashion model/talent management business is highly competitive. New York City, Los Angeles, and Miami, as 
well  as  London,  Paris,  and  Milan,  are  considered  the  most  important  markets  for  the  fashion  talent  management 
industry.  Most of the leading international firms are headquartered in New York City. Wilhelmina’s principal competitors 

6 

   
 
  
 
  
  
  
 
 
 
 
  
 
  
include other large fashion model management businesses in the U.S., including IMG Models, Elite Model Management, 
Ford Models, Inc., DNA Model Management, NEXT Model Management, The Lions Model Management, The Society 
Management, Women 360 Management, and New York Model Management. However, Wilhelmina is the only publicly-
owned fashion talent management company in the world. 

Competition also includes foreign agencies and smaller U.S. agencies in local markets that recruit local talent and 
cater to local market needs.  Several of the larger fashion talent firms operate offices in multiple cities and countries or have 
chosen to partner with local or foreign agencies. 

The Company believes that its sources of revenue, mainly generated from commissions and service charges, are 
comparable to those of its principal competitors.  Therefore, for the Company to obtain a competitive advantage, it must 
develop and maintain a deep pool of talent and deliver high quality service to its clients.  The Company believes that through 
its  scouting  efforts,  name  recognition,  and  licensing  network,  it  is  able  to  recruit  a  deeper  pool  of  talent  relative  to  its 
competitors. These recruitment tools, coupled with the broad range of fashion boards available to the Company’s talent, 
enable the Company to develop talent and generate a broader range of revenues relative to its principal competitors. While 
a broad range of talent and boards provides a level of stability to the business, certain talent may be more inclined to work 
with a boutique agency that may appear to tailor more specifically to their needs. 

For  more  than  55  years,  Wilhelmina  and  its  predecessors  have  created  long-standing  client  relationships  and 
business  activities  related  to  the  fashion  model  management  business  that  provide  exposure  to  diverse  markets  and 
demographics. The Company has also developed a professional workforce with years of talent management experience. 

Clients and Customers 

As  of  December  31,  2022,  Wilhelmina  represented  a  roster  of  approximately  1,600  active  models  and 
talent. Wilhelmina’s  active  models  include  Karolína  Kurková,  Ana  Maria  Figueroa,  Francisco  Lachowski,  Daniel  Shin, 
Douglas Dillon, Fernando Cabral, Hella Tall, Asya Rosh, Yumi Nu, Francisco Henriques, Aubrey Hill, Astrid Voss, Elvina 
Patrick, Lamich Kirabo, Penny Lane, Kylie Lauren, Jessieann Lachowski, Africa Perez, Carmen Fozzard, Carla Pereira, 
Bojana Krsmanović, Cyrielle Lalande, Mitchell Slaggert, Anne de Paula, Jan Baiboon, Ottawa Efoe, Rainer Andreesen, 
Erik Van Gils, Kate King, Malik Lindo, Malcolm Jackson, Milena Feuerer, Haejin Lee, Moon Young, Isabela Grutman, 
Sabey Dantsira, Lauren Auerbach, Davidson Obennebo, Sasha Melnychuk, Armando Cabral, Jennae Quisenberry, Vanessa 
Cruz,  Pure,  Akito  Mizutani,  Mariana  Dantec,  Nayara  Oliveira,  Fernando  Lindez,  Dachuan  Jin,  Claudio  Monteiro,  and 
Nathan Owens.  

Wilhelmina serves approximately 2,700 external clients. Wilhelmina’s customer base is highly diversified, with no 
one customer accounting for more than 3% of overall gross revenues. The top 100 clients of Wilhelmina together accounted 
for approximately 34.1% of overall gross revenues during 2022. 

Governmental Regulations 

Certain jurisdictions in which Wilhelmina operates, such as California and Florida, require that companies maintain 
a  Talent  Agency  License  in  order  to  engage  in  the  “talent  agency”  business. The  talent  agency  business  is  generally 
considered the business of procuring engagements or any employment or placement of a talent, where the talent performs 
in his or her artistic capacity.  Where required, the Wilhelmina subsidiaries operating in these jurisdictions maintain Talent 
Agency Licenses issued by those jurisdictions.   

Trends and Opportunities 

The Company expects that the combination of Wilhelmina’s main operating base in New York City, the industry’s 
capital, with the depth and breadth of its talent pool, client roster and its diversification across various talent management 
segments, together with its name recognition and geographical reach, should make Wilhelmina’s operations more resilient 
to industry changes and economic swings than those of many of the smaller firms operating in the industry. Similarly, in 
the  segments  where  Wilhelmina  competes  with  other  leading  full  service  agencies,  Wilhelmina  believes  it  competed 
successfully in 2022.   

7 

   
 
  
  
  
 
  
  
 
 
  
 
  
With  total  advertising  expenditures  on  major  media  (television,  Internet,  outdoor,  cinema,  magazines,  and 
newspapers) estimated to have exceeded $280 billion in 2022, North America is the world’s largest advertising market.  For 
the fashion talent management industry, including Wilhelmina, advertising expenditures on television, Internet, magazines, 
and outdoor are of particular relevance. 

Strategy 

Management’s strategy is to increase value to shareholders through the following initiatives: 

• 
• 
• 
• 
• 
• 

increase Wilhelmina’s brand awareness among advertisers and potential talent; 
expand the women’s high end fashion board; 
expand the Aperture division’s representation in commercials, film, and television; 
expand celebrity and social media influencer representation;  
expand the Wilhelmina network through strategic geographic market development; and 
promote model search contests and events and partner on media projects (television, film, books, etc.). 

The  Company  makes  use  of  digital  technology  to  effectively  connect  with  clients  and  talent,  utilizing  video 
conferencing and other digital tools to best position our team to identify opportunities to grow the careers of the talent we 
represent  and  expand  our  business.    The  Company  has  made  significant  investments  in  technology,  infrastructure,  and 
personnel, to support our clients and talent.  

EMPLOYEES 

As of December 31, 2022, the Company had 85 employees, 48 of whom were located in New York City, 10 of 
whom were located at Wilhelmina’s Miami office, 16 of whom were located at Wilhelmina’s Los Angeles office, 9 of whom 
were located at Wilhelmina’s London office and two of whom were located at the corporate headquarters in Dallas. 

TRADEMARKS AND LICENSING 

The “Wilhelmina” brand is essential to the success and competitive position of the Company. The “Wilhelmina” 
trademark  is  vital  to  the  licensing  business  because  licensees  pay  for  the  right  to  use  the  trademark. The  Company  has 
invested significant resources in the “Wilhelmina” brands in order to obtain the public recognition that these brands currently 
enjoy. Wilhelmina relies upon domestic and international trademark laws, license agreements and nondisclosure agreements 
to protect the “Wilhelmina” brand name used in its business. Trademarks registered in the U.S. have a duration of ten years 
and are generally subject to an indefinite number of renewals for a like period on continued use and appropriate application. 

ITEM 1A. 

RISK FACTORS 

Not applicable to smaller reporting company. 

ITEM 1B. 

UNRESOLVED STAFF COMMENTS 

None. 

ITEM 2. 

PROPERTIES 

The Company’s corporate headquarters are currently located at 5420 Lyndon B Johnson Freeway, Dallas, Texas 
75240,  which  are  also  the  offices  of  Newcastle  Capital  Management,  L.P.  (“NCM”).  NCM  is  the  general  partner  of 
Newcastle  Partners  L.P.  (“Newcastle”),  the  Company’s  largest  shareholder. The  Company  utilizes  a  portion  of  NCM’s 
facilities on a month-to-month basis at $2,500 per month, pursuant to a services agreement between the parties. 

8 

   
 
 
  
  
  
 
  
 
  
 
  
 
  
 
 
  
 
 
The following table summarizes information with respect to the material facilities of the Company for leased office 

space and model apartments: 

Description of Property 

Area (sq. feet) 

Lease Expiration 

Office for California-based operations – Los Angeles, CA 
Office for Florida-based operations – Miami, FL 
Office for London-based operations – London, UK 
Office for New York-based operations – New York, NY 
One model apartment – London, UK 
Two model apartments – New York, NY 
Two model apartments – Miami, FL 

3,887 
2,100 
995 
7,847 
1,400 
3,000 
2,000 

January 31, 2027 
March 31, 2023 
July 19, 2023 
May 31, 2030 
July 28, 2023 
2023-2024 
March 31, 2023 

On May 17, 2022, the Company entered into an Agreement of Lease with respect to approximately 7,847 

square feet of office space comprising the 15th Floor of 192 Lexington Avenue, New York, New York.  In November 
2022 the Company took possession of the premises with an initial term of 91 months.   

ITEM 3. 

LEGAL PROCEEDINGS 

On October 24, 2013, a putative class action lawsuit was brought against the Company by former Wilhelmina model 
Alex Shanklin and others, including Louisa Raske, Carina Vretman, Grecia Palomares and Michelle Griffin Trotter (the 
“Shanklin Litigation”), in New York State Supreme Court (New York County) by the same lead counsel who represented 
plaintiffs in a prior, now-dismissed action brought by Louisa Raske (the “Raske Litigation”).  The claims in the Shanklin 
Litigation initially included breach of contract and unjust enrichment allegations arising out of matters similar to the Raske 
Litigation,  such  as  the  handling  and  reporting  of  funds  on  behalf of  models  and  the  use  of  model  images.   Other 
parties named as defendants in the Shanklin Litigation included other model management companies, advertising firms, and 
certain advertisers.  On January 6, 2014, the Company moved to dismiss the Amended Complaint in the Shanklin Litigation 
for failure to state a claim upon which relief can be granted and other grounds, and other defendants also filed motions to 
dismiss.  On August 11, 2014, the court denied the motion to dismiss as to Wilhelmina and other of the model management 
defendants.  Separately, on March 3, 2014, the judge assigned to the Shanklin Litigation wrote the Office of the New York 
Attorney  General  bringing  the  case  to its  attention,  generally  describing  the  claims  asserted  therein  against  the  model 
management  defendants,  and  stating  that  the  case  “may  involve  matters  in  the  public  interest.” The  judge’s  letter  also 
enclosed a copy of his decision in the Raske Litigation, which dismissed that case.   

             Plaintiffs  retained  substitute  counsel,  who  filed  a  Second  and  then  Third  Amended  Complaint. Plaintiffs’  Third 
Amended  Complaint  asserts  causes  of  action  for  alleged  breaches  of  the  plaintiffs'  management  contracts  with  the 
defendants,  conversion,  breach  of  the  duty  of  good  faith  and  fair  dealing,  and  unjust  enrichment.   The  Third  Amended 
Complaint also alleges that the plaintiff models were at all relevant times employees, and not independent contractors, of 
the model management defendants, and that defendants violated the New York Labor Law in several respects, including, 
among other things, by allegedly failing to pay the models the minimum wages and overtime pay required thereunder, not 
maintaining accurate payroll records, and not providing plaintiffs with full explanations of how their wages and deductions 
therefrom were computed.  The Third Amended Complaint seeks certification of the action as a class action, damages in an 
amount to be determined at trial, plus interest, costs, attorneys’ fees, and such other relief as the court deems proper.  On 
October 6, 2015, Wilhelmina filed a motion to dismiss as to most of the plaintiffs’ claims.  The Court entered a decision 
granting in part and denying in part Wilhelmina’s motion to dismiss on May 26, 2017.  The Court (i) dismissed three of the 
five New York Labor Law causes of action, along with the conversion, breach of the duty of good faith and fair dealing and 
unjust enrichment causes of action, in their entirety, and (ii) permitted only the breach of contract causes of action, and some 
plaintiffs’ remaining two New York Labor Law causes of action to continue, within a limited time frame.  The plaintiffs and 
Wilhelmina each appealed, and the decision was affirmed on May 24, 2018. On August 16, 2017, Wilhelmina timely filed 
its Answer to the Third Amended Complaint. 

            On June 6, 2016, another putative class action lawsuit was brought against the Company by former Wilhelmina 
model Shawn Pressley and others, including Roberta Little (the “Pressley Litigation”), in New York State Supreme Court 

9 

   
 
  
   
   
   
 
 
 
  
(New  York  County)  by  the  same  counsel  representing  the  plaintiffs  in  the  Shanklin  Litigation,  and  asserting  identical, 
although more recent, claims as those in the Shanklin Litigation.  The Amended Complaint, asserting essentially the same 
types of claims as in the Shanklin action, was filed on August 16, 2017.  Wilhelmina filed a motion to dismiss the Amended 
Complaint on September 29, 2017, which was granted in part and denied in part on May 10, 2018.  Some New York Labor 
Law  and  contract  claims  remain  in  the  case.   Pressley  has  withdrawn  from  the  case,  leaving  Roberta  Little  as  the  sole 
remaining named plaintiff in the Pressley Litigation.  On July 12, 2019, the Company filed its Answer and Counterclaim 
against Little. 

            On May 1, 2019, the Plaintiffs in the Shanklin Litigation (except Raske) and the Pressley Litigation filed motions 
for  class  certification  on  their  contract  claims  and  the  remaining  New  York  Labor  Law  Claims.    On  July  12,  2019, 
Wilhelmina filed its opposition to the motions for class certification and filed a cross-motion for summary judgment against 
Shanklin, Vretman, Palomares, Trotter and Little, and a motion for summary judgment against Raske.   

By Order dated May 8, 2020 (the “Class Certification Order”), the Court denied class certification in the Pressley 
case,  denied  class  certification  with  respect  to  the  breach  of  contract  and  alleged  unpaid  usage  claims,  granted  class 
certification as to the New York Labor Law causes of action asserted by Vretman, Palomares and Trotter, and declined to 
rule on Wilhelmina’s motions for summary judgment, denying them without prejudice to be re-filed at a later date.  Currently 
the parties are engaging in merits discovery.  

The Company believes the claims asserted in the Shanklin Litigation and Pressley Litigation are without merit and 
intends to continue to vigorously defend the actions.  Nonetheless, an adverse outcome in either case is at least reasonably 
possible.  However, the Company is presently unable to reasonably estimate the amount or range of possible loss in either 
case.  Therefore, no amount has been accrued as of December 31, 2022 related to these matters. 

In addition to the legal proceedings disclosed herein, the Company is also engaged in various legal proceedings that 
are routine in nature and incidental to its business. None of these routine proceedings, either individually or in the aggregate, 
are believed likely, in the Company's opinion, to have a material adverse effect on its consolidated financial position or its 
results of operations. 

ITEM 4. 

MINE SAFETY DISCLOSURES 

Not applicable. 

10 

   
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II 

ITEM 5. 

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND 
ISSUER PURCHASES OF EQUITY SECURITIES 

Market Information  

The Company’s $0.01 par value common stock has traded on the Nasdaq Capital Market under the symbol 
“WHLM” since September 2014. Previously, the common stock was quoted in the over-the-counter market on the 
OTC Bulletin Board.  As of March 22, 2023 there were 5,157,344 shares of the Company’s common stock outstanding 
held by 435 holders of record.    

Equity Compensation Plan Information 

The following table provides information with respect to the Company’s equity compensation plans as of December 

31, 2022: 

Number of 
securities to be 
issued upon 
exercise of 
outstanding options, 
warrants and rights 
(a) 
180,000 
- 
180,000 

Weighted-average 
exercise price of 
outstanding options, 
warrants and rights 
(b) 
$5.93 
- 
$5.93 

Number of 
securities remaining 
available for future 
issuance under 
equity 
compensation plans 
(excluding 
securities reflected 
in column (a)) 
(c) 
220,000 
- 
220,000 

Plan Category 

Equity compensation plans approved by security holders 
Equity compensation plans not approved by security holders 
Total 

Additional  information  regarding  equity  compensation  can  be  found  in  the  notes  to  the  consolidated  financial 

statements. 

Issuer Repurchases 

During 2012, the Board of Directors authorized a stock repurchase program whereby the Company could repurchase 
up to 500,000 shares of its outstanding common stock. During 2013, the Board of Directors renewed and extended the 
Company’s share repurchase authority to enable it to repurchase up to an aggregate of 1,000,000 shares of common stock.  
In 2016, the Board of Directors increased by an additional 500,000 shares the number of shares of the Company’s common 
stock which may be repurchased under its stock repurchase program to an aggregate of 1,500,000 shares. The shares may 
be repurchased from time to time in the open market or through privately negotiated transactions at prices the Company 
deems appropriate. The program does not obligate the Company to acquire any particular amount of common stock and 
may be modified or suspended at any time at the Company’s discretion.  The Company did not make any purchases pursuant 
to the stock repurchase program during the quarter ended December 31, 2022. 

Dividend Policy 

The Company has not declared or paid any cash dividends on its common stock during the past two completed 
fiscal years, but may decide to do so in the future depending on an evaluation of the Company’s cash needs and best uses 
of shareholders’ capital.   

ITEM 6. 

RESERVED 

11 

   
 
  
  
 
 
 
 
 
 
 
 
 
 
 
  
 
  
 
ITEM 7. 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS 

The following is a discussion of the Company’s financial condition and results of operations comparing the calendar 
years ended December 31, 2022 and 2021. This section should be read in conjunction with the Company’s consolidated 
financial  statements  and  the  notes  thereto  that  are  incorporated  herein  by  reference  and  the  other  financial  information 
included herein and the notes thereto. 

OVERVIEW 

The  Company’s  primary  business  is  fashion  model  management  and  complementary  business  activities.  The 
business  of  talent  management  firms,  such  as  Wilhelmina,  depends  heavily  on  the  state  of  the  advertising  industry,  as 
demand for talent is driven by digital, mobile, print and television advertising campaigns for consumer goods, e-commerce, 
and retail clients. Wilhelmina believes it has strong brand recognition, which enables it to attract and retain top agents and 
talent to service a broad universe of clients. In order to take advantage of these opportunities and support its continued 
growth, the Company will need to continue to successfully allocate resources and staffing in a way that enhances its ability 
to respond to new opportunities. The Company continues to focus on tightly managing costs, recruiting top agents, and 
scouting and developing talent. 

Although Wilhelmina has a large and diverse client base, it is not immune to global economic conditions, such as 
the impact from the COVID-19 pandemic. The Company closely monitors economic conditions, client spending, and other 
industry factors and continually evaluates opportunities to increase the market share of its existing boards and further expand 
its  geographic  reach. There  can  be  no  assurance  as  to  the  effects  on  Wilhelmina  of  future  economic  circumstances, 
technological developments, client spending patterns, client creditworthiness and other developments and whether, or to 
what extent, Wilhelmina’s efforts to respond to them will be effective. 

RESULTS OF OPERATIONS OF THE COMPANY FOR THE YEAR ENDED DECEMBER 31, 2022 
COMPARED TO YEAR ENDED DECEMBER 31, 2021 

In addition to net income, the key financial indicators that the Company reviews to monitor its business are revenues, 

operating expenses and cash flows. 

The Company analyzes revenue by reviewing the mix of revenues generated by the different boards, by geographic 
locations and from significant clients. Wilhelmina’s primary sources of revenue include service revenues from the provision 
of model and talent services and licensing fees from third-party agencies licensing the use of the “Wilhelmina” trademark.  
Service  revenues  are  primarily  derived  from  talent  fees  and  services  charges  paid  by  the  client  for  bookings  directly 
negotiated  by  the  Company,  which  are  recognized  as  revenues  when  earned  and  collectability  is  reasonably  assured.  
Wilhelmina also receives commissions paid on bookings by third-party agencies which are recognized when earned and 
collectability is reasonably assured.  See “Critical Accounting Policies - Revenue Recognition. 

Wilhelmina  provides  professional  services.  Therefore,  salary  and  service  costs  represent  the  largest  part  of  the 
Company’s operating expenses. Salary and service costs are comprised of payroll and related costs and travel, meals and 
entertainment (“T&E”) to deliver the Company’s services and to enable new business development activities. 

12 

   
 
  
 
  
  
 
  
  
  
 
 
 
 
 
 
 
 
 
 
 
Analysis of Consolidated Statements of Income 
 For the Years Ended December 31, 2022 and 2021 

(in thousands) 
Service revenues 
License fees and other income 

TOTAL REVENUES 

Salaries and service costs 
Office and general expenses 
Amortization and depreciation 
Cybersecurity incident expenses 
Corporate overhead 
OPERATING INCOME 
OPERATING MARGIN 
Foreign exchange (gain) loss 
Gain on forgiveness of loan 
Employee retention credit 
Interest expense 
INCOME BEFORE INCOME TAXES 
Current income tax expense 
Deferred tax benefit (expense) 
Effective tax rate 
NET INCOME  

Supplemental Non-GAAP Information 

(in thousands) 
Gross billings 
EBITDA 
Adjusted EBITDA 
Pre-Corporate EBITDA 

             2022      

         2021 

17,750
30  

17,780

10,907
3,168
193
-  
1,093  
2,419  
13.6%
(164)
-
-
8
2,575
(109)
1,063
(37.0%)
3,529

16,069     
33     

16,102     

8,644     
2,973     
855     
575   
897     
2,158     
13.4%     
80    
(1,994)    
(1,320)    
51     
5,341     
(224)     
(599)     
15.4%     
4,518     

             2022      

         2021 

66,984
2,776
2,802
3,895  

56,813     
6,247     
3,649     
4,546   

See  pages  14  to  15  for  a  reconciliation  of  these  non-GAAP  financial  measures  to  the  most  comparable  GAAP 

financial measures and for other important information. 

Service Revenues 

The Company’s service revenues fluctuate in response to its clients’ willingness to spend on advertising and the 
Company’s ability to have the desired talent available.  The revenue increase of 10.5% for the year ended December 31, 
2022, when compared to the year ended December 31, 2021, was primarily due to increased bookings as the cities where 
Wilhelmina  operates  reopened  and  business  activity  increased  as  COVID-19  pandemic  restrictions  were  moderated  or 
rescinded. 

License Fees and Other Income 

License fees and other income include franchise revenues from independently owned model agencies that use the 
Wilhelmina trademark and various services provided by the Company.  License fees decreased by 9.1% for the year ended 
December 31, 2022, when compared to the year ended December 31, 2021, primarily due to the timing of income from 
licensing agreements. 

13 

   
 
 
 
    
 
   
 
 
 
   
  
  
  
 
  
     
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
    
 
 
    
 
 
 
   
  
  
  
  
 
 
    
 
 
    
 
  
 
  
 
 
 
 
Salaries and Service Costs 

Salaries and service costs consist of payroll related costs and travel and entertainment expenses required to deliver 
the  Company’s  services  to  its  clients  and  talents. The  26.2%  increase  in  salaries  and  service  costs  for  the  year  ended 
December 31, 2022, when compared to the year ended December 31, 2021, was primarily due to temporary reductions in 
staff salaries in the prior year, which returned to full salary in July 2021 as well as personnel hires and payroll changes to 
better align Wilhelmina staffing with the needs of each office and geographical region. 

Office and General Expenses 

Office and general expenses consist of office and equipment rents, advertising and promotion, insurance expenses, 
administration and technology cost.  During the year ended December 31, 2022, office and general expenses increased 6.6% 
when compared to the year ended December 31, 2021, primarily due to increased legal expense and rent expense, partially 
offset by decreased computer expense, utilities, and other office expenses.   

Amortization and Depreciation 

Amortization  and  depreciation  expense  is  incurred  with  respect  to  certain  assets,  including  computer  hardware, 
software, office equipment, furniture and finance leases. Amortization and depreciation expense decreased by 77.4% for 
the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to reduced depreciation 
of assets that became fully amortized in 2021.  Fixed asset purchases (mostly related to furniture, leasehold improvements, 
and computer equipment) totaled approximately $268 thousand in 2022 and $19 thousand in 2021. 

Cybersecurity Incident Expenses 

In November 2021, the Company determined that it had recently been the victim of criminal fraud known to law 
enforcement  authorities  as  “business  e-mail  compromise  fraud”  which  involved  employee  e-mail  impersonation  and 
fraudulent  payment  requests  targeting  the  finance  department  of  a  division  of  the  Company.  The  fraud  resulted  in 
unauthorized  transfers  of  funds  aggregating approximately  $0.7  million,  as  well  as  approximately  $10  thousand  of 
professional service fees to address the fraud, of which the Company recovered $0.2 million.  As a result, the Company 
recorded a charge of $0.6 million in 2021 within operating expenses on the consolidated statements of income. 

Corporate Overhead  

Corporate  overhead  expenses  include  director  and  executive  officer  compensation,  corporate  legal,  audit  and 
professional fees, corporate office rent, and travel. Corporate overhead increased by 21.9% for the year ended December 
31, 2022, when compared to the year ended December 31, 2021, primarily due to costs related to the filing of two SEC 
restatement filings in December 2022, temporary reduction in fees paid to corporate employees and the Company’s directors 
in the prior year that returned to full fee in July 2021, and the timing of audit costs incurred earlier than in the prior year.   

Operating Income and Operating Margin 

Operating  income  was  $2.4  million  and  operating  margin  was  13.6%  for  the  year  ended  December  31,  2022, 
compared to operating income of $2.2 million and operating margin of 13.4% for the year ended December 31, 2021.  These 
improvements were primarily the result of increased revenue outpacing the increase in operating expenses.   

Foreign Currency Loss 

The Company realized a gain of $164 thousand from foreign currency exchange during the year ended December 
31, 2022, compared to a loss of $80 thousand from foreign currency exchange during the year ended December 31, 2021.  
Foreign currency gain and loss is due to fluctuations in currencies from Great Britain, Europe, and Latin America. 

14 

   
 
  
 
  
 
  
 
  
 
  
 
 
 
 
 
 
 
Gain on Forgiveness of Loan 

During 2021, the Company received notice from the SBA that $2.0 million of loans under the PPP were forgiven.  

The Company recorded these gains on forgiveness of loans during 2021. 

Employee Retention Credit 

During 2021, the Company was eligible for a one-time employee retention payroll tax credit as a refundable credit 
against certain employment taxes of up to $7,000 per employee.  The Company recorded $1.3 million of employee retention 
credit income during 2021. 

Interest Expense 

Interest  expense  for  the  years  ended  December  31,  2022  and  December  31,  2021  was  primarily  attributable  to 
accrued interest on term loans drawn during 2016 and 2018 and on finance leases.  Interest expense decreased in 2022 due 
to the repayment of the balance on the Amegy term loan in August 2021.  See, “Liquidity and Capital Resources.” 

Income before Income Taxes 

Income before income taxes decreased to $2.6 million for the year ended December 31, 2022, compared to a gain 
of $5.3 million for the year ended December 31, 2021.  The higher pre-tax income in 2021 was primarily due to the gain on 
forgiveness of PPP loans and employee retention credit income.   

Income Taxes 

Generally, the Company’s combined effective tax rate is high relative to reported net income as a result of foreign 
taxes, and income being attributable to certain states in which it operates. The Company operates in three states, which have 
relatively high tax rates: California, New York, and Florida. In addition, foreign taxes in the United Kingdom related to our 
London office are not deductible for U.S. federal taxes.  In 2021, the effective tax rate was lower due to PPP loan forgiveness, 
which was not subject to income tax.  The Company had income tax benefit of $1.0 million in 2022 compared to $0.8 
million of income tax expense in 2021. 

The income tax benefit in 2022 was primarily the result of the full release of a previous $1.5 million valuation 
allowance against deferred tax assets.  As of each reporting date, management considers new evidence, both positive and 
negative, that could affect its view of the future realization of deferred tax assets. In connection with its assessment for 
2022, management determined that there was sufficient evidence to conclude that it was more likely than not that all deferred 
tax assets were realizable.  This evidence included three years of cumulative pretax income, excluding nonrecurring items.  
The Company will continue to assess the evidence used to determine the need for a valuation allowance and may reinstate 
the valuation allowance in future periods if warranted by changes in estimated future income and other factors. 

Net Income 

The Company had net income of $3.5 million for the year ended December 31, 2022, compared to net income of 
$4.5 million for the year ended December 31, 2021.  In 2022, the net income was significantly impacted by the release of 
the valuation allowance on the Company’s deferred tax assets.  In 2021, the net income was significantly impacted by the 
gain on forgiveness of PPP loans and employee retention payroll tax credits. 

Gross Billings 

Gross billings is a non-GAAP financial measure that represents the gross amount billed to customers on behalf of 
its clients (models and talent) for services performed.  Gross billings increased 18% for the year ended December 31, 2022, 
when compared to the year ended December 31, 2021, primarily due to increased bookings as the cities where Wilhelmina 
operates reopened and business activity increased as COVID-19 pandemic restrictions were moderated or rescinded.  See 
pages 14 to 15 for more information regarding non-GAAP financial measures. 

15 

   
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
Liquidity and Capital Resources 

The Company’s cash balance increased to $12.0 million at December 31, 2021 from $10.3 million at December 31, 
2021. The cash balance increased primarily as a result of $2.4 million net cash provided by operating activities partially 
offset by $0.3 million cash used in investing activities, $0.1 million cash used in financing activities, and the $0.4 million 
adverse effect of exchange rate on cash flow. 

Net cash provided by operating activities of $2.5 million was primarily the result of net income and increases in 
amounts due to models and accounts payable and accrued liabilities, partially offset by increases in accounts receivable and 
other assets and decreases in deferred income tax liabilities and contract liabilities.  The $0.3 million cash used in investing 
activities  was  attributable  to  purchases  of  property  and  equipment,  including  furniture,  leasehold  improvements,  and 
software  and  computer  equipment.    The  $0.1  million  of  cash  used  in  financing  activities  was  primarily  attributable  to 
payments on finance leases.  

The Company’s primary liquidity needs are for working capital associated with performing services under its client 
contracts.  Generally,  the  Company  incurs  significant  operating  expenses  with  payment  terms  shorter  than  its  average 
collections on billings.  Based on budgeted and year-to-date cash flow information, management believes that the Company 
has sufficient liquidity to meet its projected operational expenses and capital expenditure requirements for the next twelve 
months and beyond. 

Amegy Bank Credit Agreement 

The Company previously had a credit agreement with Amegy Bank which provided a $3.0 million revolving line 
of credit, subject to a borrowing base derived from 80% of eligible accounts receivable (as defined) and the Company’s 
minimum net worth covenant. The revolving line of credit bore interest at prime plus 0.50% payable monthly. The revolving 
line of credit expired October 24, 2022.    

On July 16, 2018, the Company amended its credit agreement with Amegy Bank to provide for a term loan of up 
to $1.0 million that could be drawn by the Company through July 12, 2019, for the purpose of repurchases of its common 
stock.  On August 1, 2018, the Company drew $0.7 million of the additional term loan and used the proceeds to fund the 
purchase of 100,000 shares of its common stock in a private transaction.  On December 12, 2018, the Company drew $0.3 
million of the additional term loan and used the proceeds to partially fund a purchase of 50,000 shares of its common stock 
in a private transaction.  On August 31, 2021, the Company prepaid, without penalty, the $0.6 million remaining balance of 
the additional term loan.  As of December 31, 2022, there was no outstanding balance on the term loan. 

Paycheck Protection Program Loans 

On April 15, 2020, Wilhelmina International, Ltd. (the “Borrower”), a wholly-owned subsidiary of the Company, 
executed a Business Loan Agreement and a Promissory Note each dated April 13, 2020 (collectively, the “Sub PPP Loan 
Documents”), with respect to a loan in the amount of $1.8 million (the “Sub PPP Loan”) from Amegy Bank. The Sub PPP 
Loan was obtained pursuant to the federal Paycheck Protection Program (the “PPP”). The Sub PPP Loan originally matured 
on April 13, 2022 and bore interest at a rate of 1.00% per annum. As allowed under the Paycheck Protection Flexibility Act, 
the Sub PPP Loan was extended to mature on April 13, 2025.  On March 27, 2021, the Company received notice from the 
SBA that the Sub PPP loan, including $17 thousand accrued interest, had been fully forgiven, resulting in $1.9 million of 
gain on forgiveness of loan recorded within other (income) expenses during the quarter ended March 31, 2021. 

On April 18, 2020, the Company executed a Business Loan Agreement and a Promissory Note each dated April 17, 
2020 (collectively, the “Parent PPP Loan Documents”), with respect to a loan in the amount of $128 thousand (the “Parent 
PPP Loan”) from Amegy Bank. The Parent PPP Loan was also obtained pursuant to the PPP. The Parent PPP Loan originally 
matured  on  April  17,  2022  and  bore  interest  at  a  rate  of  1.00%  per  annum.  As  allowed  under  the  Paycheck  Protection 
Flexibility Act, the Parent PPP Loan was extended to mature on April 17, 2025.  On April 3, 2021, the Company received 
notice from the SBA that the Parent PPP Loan, including $1 thousand accrued interest, had been fully forgiven, resulting in 
$0.1 million of gain on forgiveness of loan recorded within other (income) expense during the quarter ended June 30, 2021.  

16 

   
 
  
 
 
 
  
 
 
 
  
Under the PPP, the SBA reserves the right to audit any PPP loan forgiveness application for a period of six years from the 
date of loan forgiveness. 

Important Information Regarding Non-GAAP Financial Measures  

The Company reports its financial results in accordance with GAAP. However, management believes that certain 
non-GAAP financial measures provide users of the Company's financial information with additional useful information in 
evaluating operating performance.  The Company considers Gross Billings, EBITDA, Adjusted EBITDA and Pre-Corporate 
EBITDA to be important measures of performance because they are key operating metrics of the Company's business, are 
used by management in its planning and budgeting processes and to monitor and evaluate its financial and operating results 
and provide stockholders and potential investors with a means to evaluate the Company's financial and operating results 
against other companies within the Company's industry.  

Gross  Billings  represents  the  gross  amount  billed  to  customers  on  behalf  of  its  models  and  talent  for  services 
performed.  The Company calculates Gross Billings as total revenue plus model costs, which includes amounts owed to 
talent,  including  taxes  required  to  be  withheld  and  remitted  directly  to  taxing  authorities,  commissions  owed  to  other 
agencies, and related costs such as those paid for photography.   The Company calculates EBITDA as net income plus 
interest  expense,  income  tax  expense,  and  depreciation  and  amortization  expense.    The  Company  calculates  “Adjusted 
EBITDA” as EBITDA plus foreign exchange gain/loss, share-based payment expense and certain significant non-recurring 
items that the Company may include from time to time. For 2021, these non-recurring items represented gain on forgiveness 
of PPP loans, employee retention payroll tax credit, and cybersecurity incident expenses.  The Company calculates “Pre-
Corporate  EBITDA”  as  Adjusted  EBITDA  plus  corporate  overhead  expense,  which  includes  director  compensation, 
securities laws compliance costs, audit and professional fees, and other public company costs.  

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the 
Company's financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in 
non-GAAP  financial  measures  may  be  significant  items  that  could  impact  the  Company's  financial  position,  results  of 
operations or cash flows and should therefore be considered in assessing the Company's actual and future financial condition 
and performance. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly 
from  methods  used  by  other  companies  to  compute  similar  measures.  As  a  result,  any  non-GAAP  financial  measures 
presented herein may not be comparable to similar measures provided by other companies. 

Gross Billings 

The  following  is  a  tabular  reconciliation  of  the  non-GAAP  financial  measure  Gross  Billings  to  GAAP  total 

revenues, which the Company believes to be the most comparable GAAP measure 

 (in thousands) 
Total revenues 
Model costs 

Gross Billings 

             2022      

         2021 

17,780
49,204  

66,984

16,102     
40,711     

56,813     

Model costs include amounts owed to talent, including taxes required to be withheld and remitted directly to taxing 

authorities, commissions owed to other agencies, and related costs such as those paid for photography.   

17 

   
 
 
 
 
 
 
 
 
 
 
 
   
  
  
  
 
  
     
 
 
 
 
 
 
 
 
 
EBITDA, Adjusted EBITDA, and Pre-Corporate EBITDA 

The following is a tabular reconciliation of the non-GAAP financial measures EBITDA, Adjusted EBITDA, and 

Pre-Corporate EBITDA to GAAP net income, which the Company believes to be the most comparable GAAP measure 

(in thousands) 

Net income 
Interest expense 
Income tax (benefit) expense 
Amortization and depreciation 
EBITDA 
Foreign exchange (gain) loss 
Non-recurring items (1) 
Share based payment expense 
Adjusted EBITDA 
Corporate overhead 
Pre-Corporate EBITDA 

             2022      

         2021 

$ 3,529
8
(954)
193  
$ 2,776  
(164)  
-
190
$ 2,802
1,093
$ 3,895

4,518     
51     
823     
855   
$6,247     
80     
(2,739)     
61    
$ 3,649    
897    
$ 4,546     

(1) Non-recurring items include gain on forgiveness of loans, employee retention credit and cybersecurity incident expenses during 2021 

Critical Accounting Policies and Estimates 

The  consolidated  financial  statements  of  the  Company  are  prepared  in  accordance  with  generally  accepted 
accounting  practices  in  the  United  States  of  America  (“U.S.  GAAP”).    The  preparation  of  these  consolidated  financial 
statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, 
costs,  and  expenses  and  related  disclosures.    We  base  our  estimates  on  historical  experience  and  on  various  other 
assumptions that we believe to be reasonable under the circumstances.  In many instances, we could have reasonably used 
different accounting estimates, and in other instances, changes in the accounting estimates are reasonably likely to occur 
from period to period.  Accordingly, actual results could differ significantly from the estimates made by our management.  
To the extent that there are material differences between these estimates and actual results, our future financial statement 
presentation, financial condition, results of operations and cash flows may be affected. 

The following items require significant estimation or judgement.  For additional information about our accounting 
policies, refer to “Note 2, Summary of Significant Accounting Policies” in the audited consolidated financial statements 
included herewith. 

Revenue Recognition 

The Company has adopted the requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from 
Contracts with Customers (Topic 606) (“ASC 606”). ASC 606 establishes a principle for recognizing revenue upon the 
transfer  of  promised  goods  or  services  to  customers,  in  an  amount  that  reflects  the  expected  consideration  received  in 
exchange for those goods or services. 

Our revenues are derived primarily from fashion model bookings, and representation of social media influencers and 
actors for commercials, film, and television. Our performance obligations are primarily satisfied at a point in time when the 
talent has completed the contractual requirements.   

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or 
as, the performance obligation is satisfied. The performance obligations for most of the Company’s core modeling bookings 
are satisfied on the day of the event, and the “day rate” total fee is agreed in advance when the customer books the model 
for a particular date.  For contracts with multiple performance obligations, we allocate the contract’s transaction price to 
each performance obligation based on the estimated relative standalone selling price.  

18 

   
 
 
 
 
    
 
   
 
 
 
   
 
  
     
  
  
  
  
  
  
  
  
  
  
  
 
 
    
 
  
 
 
 
 
We  report  service  revenues  on  a  net  basis,  which  represents  gross  amounts  billed  net  of  amounts  owed  to  talent, 
including taxes required to be withheld and remitted directly to taxing authorities, commissions owed to other agencies, and 
related costs such as those paid for photography.  The Company typically enters into contractual agreements with models 
under which the Company is obligated to pay talent upon collection of fees from the customer. 

Although service revenues are reported on a net basis, accounts receivable are recorded at the amount of gross amounts 
billed to customers, inclusive of model costs.  As a result, both accounts receivable and amounts due to models appear large 
relative to total revenue. 

Amounts billed that have not yet met the applicable revenue recognition criteria are recorded as deferred revenue 

within accrued expenses and the related talent costs are recorded as contract liability. 

Share Based Compensation 

Share-based compensation expense is estimated at the grant date based on the award’s fair value as calculated by the 
Black-Scholes option pricing model and is recognized on a straight line basis as an expense over the requisite service period, 
which is generally the vesting period. The determination of the fair value of share-based awards on the date of grant using 
an option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective 
variables.  These  variables  include  the  estimated  volatility  over  the  expected  term  of  the  awards,  actual  and  projected 
employee stock option exercise behaviors, risk-free interest rates, estimated forfeitures and expected dividends.   

Income Taxes 

We are subject to income taxes in the United States, the United Kingdom, and numerous local jurisdictions.  

Deferred tax assets are recognized for unused tax losses, unused tax credits, and deductible temporary differences to 
the extent that it is probable that future taxable profits will be available against which they can be used. Unused tax loss 
carry-forwards are reviewed at each reporting date and a valuation allowance is established if it is doubtful we will generate 
sufficient future taxable income to utilize the loss carry-forwards. 

In determining the amount of current and deferred income tax, we take into account whether additional taxes, interest, 
or penalties may be due. Although we believe that we have adequately reserved for our income taxes, we can provide no 
assurance that the final tax outcome will not be materially different. To the extent that the final tax outcome is different than 
the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination 
is made and could have a material impact on our financial condition and operating results. 

Accounts Receivable and Allowance for Doubtful Accounts 

Accounts receivable are accounted for at net realizable value, do not bear interest and are short-term in nature. The 
Company  maintains  an  allowance  for  doubtful  accounts  for  estimated  losses  resulting  from  the  inability  to  collect  on 
accounts  receivable. Based  on  management’s  assessment,  the  Company  provides  for  estimated  uncollectible  amounts 
through a charge to earnings and a credit to the allowance.  Balances that remain outstanding after the Company has used 
reasonable collection efforts are written  off through a charge to the allowance  and a credit to accounts receivable.  The 
Company generally does not require collateral. 

Although service revenues are reported on a basis net of model costs, accounts receivable are recorded at the amount 
of gross amounts billed to customers inclusive of model costs.  As a result, both accounts receivable and amounts due to 
models appear large relative to total revenue. 

Goodwill and Intangible Asset Impairment Testing 

  The  Company  performs  impairment  testing  at  least  annually  and  more  frequently  if  events  and  circumstances 
indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds 
the  reporting  unit’s  fair  value.  The  Company  sometimes  utilizes  an  independent  valuation  specialist  to  assist  with  the 

19 

   
 
 
 
 
 
 
 
 
 
 
determination  of  fair  value.    In  accordance  with  ASU  2017-03,  effective  January  1,  2020,  only  a  one-step  quantitative 
impairment test is performed, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s 
carrying  amount  over  its  fair  value.    If  the  carrying  amount  of  the  reporting  unit’s  goodwill  exceeds  its  fair  value,  an 
impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill.   

Whenever events or circumstances change, entities have the option to first make a qualitative evaluation about the 
likelihood of goodwill impairment. If impairment is deemed more likely than not, management would perform the goodwill 
impairment test. Otherwise, the goodwill impairment test is not required. In assessing the qualitative factors, the Company 
assesses relevant events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The 
identification  of  relevant  events  and  circumstances  and  how  these  may  impact  a  reporting  unit’s  fair  value  or  carrying 
amount  involve  significant  judgments  and  assumptions.  The  judgment  and  assumptions  include  the  identification  of 
macroeconomic conditions, industry and market considerations, overall financial performance, Company specific events 
and  share  price  trends,  an  assessment  of  whether  each  relevant  factor  will  impact  the  impairment  test  positively  or 
negatively, and the magnitude of any such impact. 

The Company evaluates indefinite lived trademark and trade name intangible assets for impairment using the relief 
from royalty method.  This valuation approach requires that the Company make a number of assumptions to estimate fair 
value, including projections of future revenues, royalty rates, tax rates, discount rates, and other relevant variables.  The 
projections in this model are updated annually and will change over time based on historical performance and changing 
business conditions.  If the carrying value exceeded the estimated fair value, an impairment charge would be recognized for 
the excess amount.   

ITEM 7A. 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

Not applicable to smaller reporting company. 

20 

   
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 8. 

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

The  consolidated  financial  statements  of  the  Company  and  the  related  report  of  the  Company’s  independent 

registered public accounting firm thereon are included in this report at the pages indicated. 

Report of Independent Registered Public Accounting Firm 
Consolidated Balance Sheets as of December 31, 2022 and 2021 
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2022 and 2021 
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2022 and 2021 
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 
Notes to the consolidated Financial Statements 

Page
F-2
F-4
F-5
F-6
F-7
F-8

21 

   
 
  
  
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 9. 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL 
DISCLOSURE 

None. 

ITEM 9A. 

CONTROLS AND PROCEDURES 

Evaluation of Disclosure Controls and Procedures 

As of the end of the period covered by this report, the Company’s principal executive officer and principal financial 
officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 
15d-15(e) under the Exchange Act). Based on their evaluation of the Company’s disclosure controls and procedures, the 
Company’s principal executive officer and principal financial officer, with the participation of the Company’s management, 
have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2022, to ensure 
that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is 
(a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) 
accumulated  and  communicated  to  management,  including  the  Company’s  principal  executive  officer  and  principal 
financial officer, as appropriate to allow for timely decisions regarding required disclosure.   
Management’s Annual Report on Internal Control over Financial Reporting 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial 
reporting,  as  such  term  is  defined  in  Exchange  Act  Rules  13a-15(f)  and  15d-15(f).  Under  the  supervision  and  with  the 
participation of the Company’s management, including the Company’s principal executive officer and principal financial 
officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting 
as of December 31, 2021 based on the framework in Internal Control - Integrated Framework 2013 issued by the Committee 
of  Sponsoring  Organizations  of  the  Treadway  Commission.  Based  on  that  evaluation,  the  Company’s  management 
concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022.  

Remediation of Material Weakness 

As discussed in the Company’s restated Annual Report on Form 10-K/A (Amendment No. 1) for the period ended 
December 31, 2021 and restated Quarterly Report on Form 10-Q/A (Amendment No. 1) for the period ended September 
30, 2022, the Company’s management previously determined that a material weakness existed in its internal control over 
financial reporting relating to the prior interpretation of GAAP that service revenues should be reported on a gross basis 
rather than a net basis.   

During the fourth quarter of 2022, management addressed the control deficiency by implementing a remediation 
plan, including new training of key accounting staff on technical accounting topics, updated documentation requirements, 
and  increased  review  of  new  and  changes  in  accounting  standards  between  the  Company’s  management  and  the  audit 
committee of the Board of Directors.  As a result of these changes and subsequent review and testing, management has 
concluded that the previously reported material weakness has been remediated. 

ITEM 9B. 

OTHER INFORMATION 

None. 

ITEM 9C. 

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 

None. 

22 

   
 
  
 
 
  
 
  
 
 
 
  
 
 
 
 
  
 
 
 
 
 
PART III 

ITEM 10. 

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 

The information required by Item 10 is incorporated by reference from the Company’s definitive proxy statement 
to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report. 

ITEM 11. 

EXECUTIVE COMPENSATION 

The information required by Item 11 is incorporated by reference from the Company’s definitive proxy statement 
to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report. 

ITEM 12. 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED 
STOCKHOLDER MATTERS 

The information required by Item 12 is incorporated by reference from the Company’s definitive proxy statement 
to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report. 

ITEM 13. 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 

The information required by Item 13 is incorporated by reference from the Company’s definitive proxy statement 
to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report. 

ITEM 14. 

PRINCIPAL ACCOUNTANT FEES AND SERVICES 

The information required by Item 14 is incorporated by reference from the Company’s definitive proxy statement 
to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end 
of the fiscal year covered by this report. 

23 

   
 
  
  
 
  
 
  
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 15. 

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 

PART IV 

(a) Documents Filed as Part of Report 

1.  Financial Statements: 

The consolidated financial statements of the Company and the related report of the Company’s independent public 
accountants thereon have been filed under Item 8 hereof. 

2.  Financial Statement Schedules: 

The information required by this item is not applicable. 

3.  Exhibits: 

The exhibits listed below are filed as part of or incorporated by reference in this report.   

24 

   
 
 
  
  
  
  
 
  
  
 
 
 
 
Exhibit 
Number 

3.1 

3.2 

3.3 

3.4 

4.1 

Description of Exhibits 

   Restated Certificate of Incorporation of Wilhelmina International, Inc. (incorporated by reference from Exhibit 3.1 

to Form S-1/A, filed January 30, 2012). 

   Certificate  of  Amendment  of  the  Restated  Certificate  of  Incorporation  of  Wilhelmina  International,  Inc. 

(incorporated by reference from Exhibit 3.1 to the Form 8-K, filed July 15, 2014). 

  Certificate  of  Amendment  of  the  Restated  Certificate  of  Incorporation  of  Wilhelmina  International,  Inc.

(incorporated by reference from Exhibit 3.1 to Form 8-K filed July 12, 2017). 

  Amended and Restated Bylaws of Wilhelmina International, Inc. (incorporated by reference from Exhibit 3.2 to 

Form 8-K, filed May 24, 2011). 

   Form of Stock Certificate of Common Stock of Billing Concepts Corp. (incorporated by reference from Exhibit 4.1 

to Form 10-Q, filed May 15, 1998). 

10.1 

   Credit Agreement, dated as of April 20, 2011, by and between Wilhelmina International, Inc. and Amegy Bank 

National Association (incorporated by reference from Exhibit 10.1 to Form 8-K filed May 5, 2011). 

10.2 

   Promissory Note, dated as of April 20, 2011, by and between Wilhelmina International, Inc. for the benefit of Amegy 

Bank National Association (incorporated by reference from Exhibit 10.2 to Form 8-K filed May 5, 2011). 

10.3 

   Pledge and Security Agreement, dated as of April 20, 2011, by and between Wilhelmina International, Inc., the 
guarantor signatories thereto and Amegy Bank National Association (incorporated by reference from Exhibit 10.3 
to Form 8-K filed May 5, 2011). 

10.4 

   Guaranty, dated as of April 20, 2011, by the guarantor signatories thereto for the benefit of Amegy Bank National

Association (incorporated by reference from Exhibit 10.4 to Form 8-K filed May 5, 2011). 

10.5 

10.6 

10.7 

10.8 

10.9 

10.10 

10.11 

   First Amendment to Credit Agreement, dated January 1, 2012, by and among Wilhelmina International, Inc., the
guarantor signatories thereto and Amegy Bank National Association (incorporated by reference from Exhibit 10.1 
to Form 8-K filed January 19, 2012). 

   Amended and Restated Line of Credit Promissory Note, dated as of January 1, 2012, by Wilhelmina International,
Inc. for the benefit of Amegy Bank National Association (incorporated by reference from Exhibit 10.2 to Form 8-K 
filed January 19, 2012). 

   First  Amendment  to  Pledge  and  Security  Agreement,  dated  as  of  January  1,  2012,  by  and  among  Wilhelmina
International,  Inc.,  the  guarantor  signatories  thereto  and  Amegy  Bank  National  Association  (incorporated  by
reference from Exhibit 10.3 to Form 8-K filed January 19, 2012). 

   Second Amendment to Credit Agreement, dated as of October 24, 2012, by and between Wilhelmina International,
Inc. and Amegy Bank National Association (incorporated by reference from Exhibit 10.1 to Form 8-K filed October 
30, 2012). 

   Second  Amended  and  Restated  Line  of  Credit  Promissory  Note,  dated  as  of  October  24,  2012,  by  Wilhelmina
International, Inc. for the benefit of Amegy Bank National Association (incorporated by reference from Exhibit 10.2 
to Form 8-K filed October 30, 2012). 

   Second Amendment to Pledge and Security Agreement, dated as of October 24, 2012, by and among Wilhelmina
International,  Inc.,  the  guarantor  signatories  thereto  and  Amegy  Bank  National  Association  (incorporated  by
reference from Exhibit 10.3 to Form 8-K filed October 30, 2012). 

   Third  Amendment  to  Pledge  and  Security  Agreement,  dated  as  of  July  31,  2014,  by  and  among  Wilhelmina 
International,  Inc.,  the  guarantor  signatories  thereto  and  Amegy  Bank  National  Association  (incorporated  by 
reference from Exhibit 10.30 to Form 10-K filed March 27, 2015). 

25 

   
 
  
  
  
  
 
  
 
  
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
 
  
  
10.12 

10.13 

10.14 

10.15 

10.16 

10.17 

10.18 

10.19 

10.20 

10.21 

10.22 

10.23 

10.24 

10.25 

10.26 

  Fourth Amendment to Credit Agreement, dated November 10, 2015, by and among Wilhelmina International, Inc.,
the guarantor signatories thereto and Amegy Bank National Association (incorporated by reference from Exhibit
10.32 to Form 10-Q filed November 16, 2015). 

   Third Amended and Restated Line of Credit Promissory Note, dated November 10, 2015, by and among Wilhelmina
International,  Inc.,  the  guarantor  signatories  thereto  and  Amegy  Bank  National  Association  (incorporated  by 
reference from Exhibit 10.33 to Form 10-Q filed November 16, 2015). 

   Term Loan Promissory Note, dated November 10, 2015, by and among Wilhelmina International, Inc., the guarantor
signatories thereto and Amegy Bank National Association (incorporated by reference from Exhibit 10.34 to Form
10-Q filed November 16, 2015). 

   Third  Amendment  to  Pledge  and  Security  Agreement,  dated  November  10,  2015,  by  and  among  Wilhelmina
International,  Inc.,  the  guarantor  signatories  thereto  and  Amegy  Bank  National  Association  (incorporated  by 
reference from Exhibit 10.35 to Form 10-Q filed November 16, 2015). 

   Fifth Amendment to Credit Agreement dated May 13, 2016, by and among Wilhelmina International, Inc., Amegy
Bank National Association and the guarantors signatory thereto (incorporated by reference from Exhibit 10.1 to
Form 8-K filed May 17, 2016). 

   Sixth  Amendment  to  Credit  Agreement  and  First  Amendment  to  Line  of  Credit  Note  dated  November  9,  2016,
between Wilhelmina International, Inc. and Amegy Bank (incorporated by reference from Exhibit 10.2 to Form 10-
Q filed November 14, 2016). 

  Seventh Amendment to Credit Agreement dated May 4, 2017, by and among Wilhelmina International, Inc., the
guarantor signatories thereto, and Amegy Bank (incorporated by reference from Exhibit 10.1 to Form 8-K filed May 
8, 2017). 

  Eighth Amendment to Credit Agreement and Waiver dated August 1, 2017, by and among Wilhelmina International,
Inc., the guarantor signatories thereto, and Amegy Bank (incorporated by reference from Exhibit 10.1 to Form 8-K 
filed August 4, 2017). 

  Ninth Amendment to Credit Agreement and Second Amendment to Line of Credit Note dated October 24, 2017, by
and  among  Wilhelmina  International,  Inc.,  the  guarantor  signatories  thereto,  and  Amegy  Bank  (incorporated  by 
reference from Exhibit 10.2 to Form 10-Q filed November 9, 2017). 

Tenth Amendment to Credit Agreement dated July 12, 2018, by and among Wilhelmina International, Inc., ZB,
N.A. dba Amegy Bank and the guarantors signatory thereto (incorporated by reference to Exhibit 10.1 to Form 8-K 
filed July 17, 2018). 

Promissory Note dated July 12, 2018, by and between Wilhelmina International, Inc. and ZB, N.A. dba Amegy
Bank (incorporated by reference to Exhibit 10.2 to Form 8-K files July 17, 2018). 

Eleventh Amendment to Credit Agreement and Third Amendment to Line of Credit Note dated October 24, 2018,
by  and  among  Wilhelmina  International,  Inc.,  ZB,  N.A.  dba  Amegy  Bank  and  the  guarantors  signatory  thereto
(incorporated by reference to Exhibit 10.3 to Form 10-Q filed November 9, 2018). 

Twelfth Amendment to Credit Agreement and Fourth Amendment to Line of Credit Note dated October 24, 2019,
by  and  among  Wilhelmina  International,  Inc.,  ZB,  N.A.  dba  Amegy  Bank  and  the  guarantors  signatory  thereto
(incorporated by reference to Exhibit 10.1 to Form 10-Q filed November 12, 2019). 

Thirteenth Amendment to Credit Agreement dated March 26, 2020, by and among Wilhelmina International, Inc.,
ZB, N.A. dba Amegy Bank and the guarantors signatory thereto (incorporated by reference to Exhibit 10.27 to Form
10-K filed March 30, 2020) 

Fourteenth Amendment to Credit Agreement and Fourth Amendment to Line of Credit Note dated May 12, 2020,
by  and  among  Wilhelmina  International,  Inc.,  ZB,  N.A.  dba  Amegy  Bank  and  the  guarantors  signatory  thereto
(incorporated by reference to Exhibit 10.1 to Form 10-Q filed May 14, 2020). 

26 

   
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.27 

*10.28

*10.29

*10.30

14.1 

21.1 

31.1 

31.2 

32.1 

32.2 

Fifteenth Amendment to Credit Agreement and Fourth Amendment to Line of Credit Note dated November 10,
2020, by and among Wilhelmina International, Inc., ZB, N.A. dba Amegy Bank and the guarantors signatory thereto
(incorporated by reference to Exhibit 10.1 to Form 10-Q filed November 12, 2020). 

Wilhelmina International, Inc. 2015 Incentive Plan (incorporated by reference from Exhibit 10.1 to Form 8-K filed 
June 16, 2015). 

Form of Stock Option Grant Agreement (incorporated by reference from Exhibit 10.21 to Form 10-K filed March 
23, 2017). 

Letter agreement dated April 4, 2016 between Wilhelmina International, Inc. and James McCarthy (incorporated by
reference from Exhibit 10.1 to Form 8-K filed April 25, 2016). 

Registrant’s Code of Ethics (filed herewith). 

List of Subsidiaries (filed as Exhibit 21.1 to the Form 10-K filed on March 16, 2022). 

Certification  of  Principal  Executive  Officer  in  Accordance  with  Section  302  of  the  Sarbanes-Oxley  Act  (filed 
herewith). 

Certification  of  Principal  Financial  Officer  in  Accordance  with  Section  302  of  the  Sarbanes-Oxley  Act  (filed 
herewith). 

Certification  of  Principal  Executive  Officer  in  Accordance  with  Section  906  of  the  Sarbanes-Oxley  Act  (filed 
herewith). 

Certification  of  Principal  Financial  Officer  in  Accordance  with  Section  906  of  the  Sarbanes-Oxley  Act  (filed 
herewith). 

101.INS

XBRL Instance Document (filed herewith) 

101.SCH

XBRL Taxonomy Extension Schema Document (filed herewith) 

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith) 

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document (filed herewith) 

101.LAB

XBRL Taxonomy Extension Label Linkbase Document (filed herewith) 

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith) 

*

Includes compensatory plan or arrangement.

ITEM 16. 

FORM 10-K SUMMARY 

Not applicable. 

27 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has 

duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

SIGNATURES 

WILHELMINA INTERNATIONAL, INC. 

(Registrant) 

Date:  March 22, 2023 

/s/ Mark E. Schwarz 

By: 
Name  Mark E. Schwarz 
Title: 

Executive Chairman 
(principal executive officer) 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the 

following persons on behalf of the registrant and in the capacities indicated on the 22nd day of March, 2023. 

/s/ Mark E. Schwarz 
Mark E. Schwarz 

/s/ James A. McCarthy 
James A. McCarthy 

/s/ Clinton J. Coleman 
Clinton J. Coleman 

/s/ James A. Dvorak
James A. Dvorak 

/s/ Maya Burkenroad
Maya Burkenroad 

/s/ Mark E. Pape 
Mark E. Pape 

/s/ Aimee J. Nelson 
Aimee J. Nelson 

/s/ Alexander F. Mehr
Alexander F. Mehr

Director and 
Executive Chairman 
(principal executive officer) 

Chief Financial Officer 
(principal financial officer) 

Director 

Director 

Director 

Director 

Director 

Director 

___________________________________________________________________________________  

28

WILHELMINA INTERNATOINAL, INC. AND SUBSIDIARIES 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 

Report of Independent Registered Public Accounting Firm (PCAOB ID: 23) 
Consolidated Balance Sheets as of December 31, 2022 and 2021 
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2022 and 2021 
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2022 and 2021 
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 
Notes to Consolidated Financial Statements 

Page
F-2
F-4
F-5
F-6
F-7
F-8

F-1   
   
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

To the shareholders and board of directors  
of Wilhelmina International, Inc. and Subsidiaries: 

Opinion on the Financial Statements 

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Wilhelmina  International,  Inc.  and  Subsidiaries  (the 
"Company")  as  of  December  31,  2022  and  2021,  the  related  consolidated  statements  of  operations  and  comprehensive 
income,  shareholders’  equity,  and  cash  flows,  for  the  years  ended  December  31,  2022  and  2021,  and  the  related  notes 
(collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements 
present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the 
results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally 
accepted in the United States of America. 

Basis for Opinion 

These  consolidated  financial  statements  are  the  responsibility  of  the  Company's  management.  Our  responsibility  is  to 
express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting 
firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be 
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and 
regulations of the Securities and Exchange Commission and the PCAOB. 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform 
the  audit  to  obtain  reasonable  assurance  about  whether  the  consolidated  financial  statements  are  free  of  material 
misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an 
audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of 
internal  control  over  financial  reporting  but  not  for  the  purpose  of  expressing  an  opinion  on  the  effectiveness  of  the 
Company's internal control over financial reporting. Accordingly, we express no such opinion. 

Our  audits  included  performing  procedures  to  assess  the  risks  of  material  misstatement  of  the  consolidated  financial 
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included 
examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our 
audits also included evaluating the accounting principles used and significant estimates made by management, as well as 
evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable 
basis for our opinion. 

Critical Audit Matter 
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial 
statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts 
or  disclosures  that  are  material  to  the  consolidated  financial  statements  and  (2)  involved  our  especially  challenging, 
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the 
consolidated  financial  statements,  taken  as  a  whole,  and  we  are  not,  by  communicating  the  critical  audit  matter  below, 
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 

F-2   
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trademarks and Trade Name Impairment Assessment - Refer to Note 2 to the Consolidated Financial Statements 

Critical Audit Matter Description 

As described in Note 2 to the consolidated financial statements, the Company's trademarks and trade name are tested for 
impairment at least annually. The Company elected not to perform the qualitative assessment (Step 0) in connection with 
testing its trademarks and trade name for impairment.  Instead, a quantitative assessment (Step 1) was performed using the 
royalty-relief method, which is based upon projected revenues and estimated royalty and discount rates.   The determination 
of the fair value of the trademarks and trade name requires management to make significant estimates and assumptions 
related  to  forecasts  of  future  revenues  and  royalty  and  discount  rates.   As  disclosed  by  management,  changes  in  these 
assumptions could have a significant impact on the fair value of the trademarks and trade name and the amount of any 
impairment expense recognized.     

We  identified  the  Step  1  trademarks  and  trade  name  impairment  assessment  as  a  critical  audit  matter,  as  auditing 
management’s judgments regarding forecasts for future revenue and royalty and discount rates involve a high degree of 
subjectivity and an increased extent of audit effort, including the need to involve our fair value specialists. 

How the Critical Audit Matter Was Addressed in the Audit 

Our audit procedures related to the critical audit matter included the following: 

•  We obtained an understanding and evaluated the design and implementation of internal controls over the estimates and 
assumptions used by management in the determination of the fair value of the trademarks and trade name including 
controls addressing: 

o  Management’s  review  and  approval  of  key  assumptions  and  inputs,  including  financial  projections,  projected 
growth rates of revenues, capitalization, royalty and discount rates and peer information used in the model.  

o  The completeness and accuracy of the model. 

•  We performed, with the assistance of an auditor employed valuation specialist, substantive procedures on management’s 

estimates and assumptions used in determining the fair value of the trademarks and trade name including:   

o  We evaluated the reasonableness of management’s forecasts of future revenues by comparing these forecasts to 
historical operating results and industry growth, and considered whether such assumptions were consistent with 
evidence obtained in other areas of the audit. 

o  We tested the mathematical accuracy of the model, as well as the completeness and accuracy of the information 

used in it. 

o  We evaluated the appropriateness of the methodology used, as well as the capitalization, royalty and discount rate 

assumptions. 

o  We  prepared  a  benchmarking  analysis  comparing  the  royalty  rate  used  in  the  model  with third  party  licensing 
transactions and developed an independent estimate using an implied royalty rate based on a profit split method. 
o  We performed sensitivity analysis of the significant  assumptions  (i.e. projected revenues, royalty and discount 
rates)  to  evaluate  the  changes  in  the  fair  value  of  the  trademarks  and  trade  name  that  would  result  from  such 
changes in the assumptions. 

We have served as the Company's auditor since 2012. 

Baker Tilly US, LLP 
New York, New York 
March 22, 2023 

F-3   
   
 
 
 
 
 
 
 
 
 
 
  
 
 
 
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES 
CONSOLIDATED BALANCE SHEETS 
As of December 31, 2022 and 2021 
(In thousands, except share data)  

ASSETS 
Current assets: 
    Cash and cash equivalents 
    Accounts receivable, net of allowance for doubtful accounts of $1,664 and $1,580, respectively 
    Prepaid expenses and other current assets 
    Total current assets 

$ 

Property and equipment, net of accumulated depreciation of $1,216 and $4,094, respectively 
Right of use assets-operating 
Right of use assets-finance 
Trademarks and trade names with indefinite lives 
Goodwill 
Other assets 

 2022 

 2021 

11,998    $
9,467     
181     
21,646     

307     

3,565
138
8,467     
7,547     
322     

10,251  
8,858  
91  
19,200  

168  
1,745
199
8,467  
7,547  
98  

TOTAL ASSETS 

 $

41,992   $

37,424  

LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current liabilities: 
   Accounts payable and accrued liabilities 
   Due to models 
   Contract liabilities 
   Lease liabilities – operating, current  
   Lease liabilities – finance, current 
   Total current liabilities 

Long term liabilities: 
   Deferred income tax, net 
   Lease liabilities – operating, non-current  
   Lease liabilities – finance, non-current 
   Total long-term liabilities 

Total liabilities 

Shareholders’ equity: 
   Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares     
     issued at December 31, 2022 and December 31, 2021 
   Treasury stock, 1,314,694 shares at December 31, 2022 and December 31, 2021, at cost 
   Additional paid-in capital 
   Accumulated deficit 
   Accumulated other comprehensive loss 
Total shareholders’ equity 

 $

4,306   $
8,378     
270
385
62
13,401     

985     

3,310
85  
4,380     

3,761  
8,090
481
463
64
12,859  

2,048
1,361
143
3,552

17,781  

16,411

65
(6,371)    
88,770     
(57,709)    
(544)    
24,211     

65
(6,371)  
88,580
(61,238)
(23)  
21,013  

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 

 $

41,992   $

37,424

The accompanying notes are an integral part of these consolidated financial statements 

F-4   
   
 
 
 
  
  
 
   
 
      
  
   
   
    
  
   
    
 
     
      
  
   
   
   
   
   
    
 
   
   
   
   
   
   
    
 
   
   
    
 
   
    
 
   
    
 
   
   
 
   
    
 
   
   
 
 
 
 
   
    
 
 
    
 
   
   
   
   
   
   
   
     
 
 
 
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME 
For the Years Ended December 31, 2022 and 2021 
(In thousands, except per share data) 

Revenues: 
    Service revenues 
    License fees 
    Total revenues 

Operating expenses: 
    Salaries and service costs 
    Office and general expenses 
    Amortization and depreciation 
    Cybersecurity incident expenses 
    Corporate overhead 
    Total operating expenses 
Operating income  

Other (income) expense: 
   Foreign exchange (gain) loss 
   Gain on forgiveness of loan 
   Employee retention payroll tax credit 
   Interest expense 
Total other income, net 

   2022 

 2021 

 $ 

17,750  

 $ 
30        

17,780  

16,069  
33  
16,102  

10,907  
3,168  
193  

-     
1,093        
15,361        
2,419        

(164)     
-     
-     
8     
(156)       

8,644  
2,973  
855  
575 
897  
13,944  
2,158  

80 
(1,994) 
(1,320) 
51 
(3,183) 

Income before provision for income taxes   

2,575        

5,341  

Benefit (provision) for income taxes: 
   Current 
   Deferred 
Benefit (provision) for income taxes, net 

Net income   

Other comprehensive loss: 
    Foreign currency translation adjustment   
Total comprehensive income 

Basic net income per common share 
Diluted net income per common share  

Weighted average common shares outstanding-basic 
Weighted average common shares outstanding-diluted 

(109)        
1,063        
954  

(224) 
(599)  
(823)  

   $ 

3,529      $ 

4,518  

  $ 

   $ 
   $ 

(521)     
3,008    $ 

0.68      $ 
0.68      $ 

5,157        
5,157        

(104) 
4,414 

0.88  
0.88  

5,157  
5,157 

The accompanying notes are an integral part of these consolidated financial statements.

F-5   
   
 
 
 
  
   
  
 
     
 
  
     
        
  
     
   
   
   
     
        
  
     
        
  
   
   
   
   
   
   
   
     
     
     
   
     
        
  
     
        
  
 
 
 
 
     
 
   
     
 
     
 
     
        
  
     
        
 
     
     
   
   
 
    
     
 
 
   
     
  
   
     
 
   
  
   
     
 
 
    
     
 
   
  
 
 
 
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY  
For the Years Ended December 31, 2022 and 2021 
(In thousands) 

Balances at December 31, 2020 
  Share-based payment expense 
  Net income to common shareholders      
  Short swing profit disgorgement 
  Foreign currency translation 
Balances at December 31, 2021 
  Share-based payment expense 
  Net income to common shareholders  
  Foreign currency translation 
Balances at December 31, 2022 

Common 
Shares    

Stock 
Amount  
65
-
-
-
-
65
-
-
-
65

6,472 $
-
-
-
-

  6,472 $

-
-
-
6,472 $

Treasury 
Shares 

(1,315)
-
-
-
-
(1,315)
-
-
-
(1,315)

Stock 
Amount    
$ (6,371)
-
-
-
-
$ (6,371)
-
-
-
$ (6,371)

Additional 
Paid-in 
Capital 
$  88,487 $

61
-
32
-

$  88,580 $

190
-
-

$  88,770 $

    Accumulated 

Other 
Comprehensive 
Income (Loss) 

Accumulated 
Deficit 
(65,756)  $

-
4,518
-
-

- 
- 
- 
(104) 

Total    
81  $ 16,506  
61 
4,518  
32  
(104)  
(61,238) $                  (23)   $ 21,013  
190  
- 
3,529  
- 
(521) 
(521)  
(544)  $ 24,211  

-
3,529
-

(57,709) $ 

The accompanying notes are an integral part of these consolidated financial statements. 

F-6   
   
 
 
 
 
 
  
   
  
    
 
 
  
 
    
     
 
 
     
 
   
 
 
 
 
 
 
 
     
 
    
 
 
 
  
 
  
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
For the Years Ended December 31, 2022 and 2021 
 (In thousands) 

Cash flows from operating activities: 
Net income: 
Adjustments to reconcile net income to net cash provided by operating activities: 
   Amortization and depreciation 
   Share based payment expense 
   Gain on forgiveness of loan 
   (Gain) loss on foreign exchange rates 
   Deferred income taxes 
   Bad debt expense   
Changes in operating assets and liabilities: 
   Accounts receivable 
   Prepaid expenses and other current assets 
   Right of use assets-operating 
   Other assets 
   Due to models 
   Lease liabilities-operating 
   Contract liabilities 
   Accounts payable and accrued liabilities 
Net cash provided by operating activities 

Cash flows from investing activities: 
   Purchases of property and equipment 
Net cash used in investing activities 

Cash flows from financing activities: 
   Shareholder short swing profit disgorgement 
   Payments on finance leases 
   Repayment of term loan 
Net cash used in financing activities 

Foreign currency effect on cash flows: 

Net change in cash and cash equivalents: 
   Cash and cash equivalents, beginning of year 
   Cash and cash equivalents, end of year 

Supplemental disclosures of cash flow information: 
   Cash paid for interest 
   Cash paid for income taxes 

Noncash investing and financing activities 
   Gain on forgiveness of loan 

Year Ended 

   2022 

2021 

$ 

3,529   $ 

4,518 

193    
190      
-    
(164)    
(1,063)     
174    

(747)      
(98)      
500    
(227)    
398    
(470)    
(211)    
515    
2,519      

(268)
(268)    

-    
(62)    
-    
(62)      

(442)    

1,747      
10,251    
11,998   $ 

855 
61 
(1,994) 
80 
599 
168 

(1,961) 
16
375
(6)
1,753 
(326) 
481 
917 
5,536 

(19)
(19) 

32 
(76) 
(743) 
(787) 

(35) 

4,695 
5,556 
10,251 

-   $ 
268   $ 

23 
198 

-    

1,994 

$ 

$ 
$ 

$ 

The accompanying notes are an integral part of these consolidated financial statements 

F-7   
   
 
 
 
                                                
 
  
 
   
   
   
 
 
 
    
 
 
 
 
    
 
 
 
   
   
 
 
 
 
  
  
 
 
 
 
    
 
   
   
   
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
 
   
 
 
 
 
    
 
 
 
    
 
 
 
 
 
 
 
   
   
 
 
 
    
 
 
 
 
 
 
    
 
   
   
 
 
 
 
 
 
    
 
   
 
    
 
 
 
 
 
 
    
 
 
 
    
 
 
 
   
    
 
   
    
 
   
    
 
 
   
 
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the Years Ended December 31, 2022 and 2021 

Note 1.  Business Activity 

Overview 

The  primary  business  of  Wilhelmina  International,  Inc.  and  its  subsidiaries  (collectively,  “Wilhelmina”  or  the 
“Company”)  is  fashion  model  management.  These  business  operations  are  headquartered  in  New  York  City. The 
Company’s predecessor was founded in 1967 by Wilhelmina Cooper, a renowned fashion model, and became one of the 
oldest,  best  known and  largest  fashion  model  management  companies  in  the  world. Since  its  founding,  Wilhelmina  has 
grown to include operations located in Los Angeles, Miami, and London, as well as a network of licensees. Wilhelmina 
provides  traditional,  full-service  fashion  model  and  talent  management  services,  specializing  in  the  representation  and 
management of models, entertainers, athletes and other talent, to various clients, including retailers, designers, advertising 
agencies, print and electronic media and catalog companies. 

 Note 2.  Summary of Significant Accounting Policies 

The consolidated financial statements are prepared in conformity with generally accepted accounting principles in 
the United States of America (“GAAP”). The following is a summary of significant policies used in the preparation of the 
accompanying financial statements.   

Principles of Consolidation and Basis of Presentation 

The financial statements include the consolidated accounts of Wilhelmina and its wholly-owned subsidiaries.  All 
significant inter-company accounts and transactions have been eliminated in consolidation.  Certain prior period amounts 
on the Consolidated Balance Sheets and Consolidated Statement of Cash Flows have been reclassified to conform to the 
current period presentation.  

Revenue Recognition 

The Company has adopted the requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from 
Contracts with Customers (Topic 606) (“ASC 606”). ASC 606 establishes a principle for recognizing revenue upon the 
transfer  of  promised  goods  or  services  to  customers,  in  an  amount  that  reflects  the  expected  consideration  received  in 
exchange for those goods or services.   

Under the revenue standard, the Company recognizes revenues when its customer obtains control of promised goods 
or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods 
or  services.  The  Company  recognizes  revenues  following  the  five-step  model  prescribed  under  ASU  No.  2014-09:  (i) 
identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction 
price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or 
as) the Company satisfies the performance obligation. 

Service Revenues 

Our service revenues are derived primarily from fashion model bookings and representation of social media influencers 
and actors for commercials, film, and television. Revenues from services are recognized net of amounts owed to model 
talent,  including  taxes  required  to  be  withheld  and  remitted  directly  to  taxing  authorities,  commissions  owed  to  other 
agencies, and related costs such as those paid for photography, when the customer obtains control of the Company’s product, 
which occurs at a point in time, typically when the talent has completed the contractual requirement. The Company expenses 
incremental costs of obtaining a contract as and when incurred because the expected amortization period of the asset that it 

F-8 
 
   
   
 
 
  
  
  
 
 
  
  
 
   
 
 
 
would have recognized is one year or less or the amount is immaterial. Our performance obligations are primarily satisfied 
at a point in time when the talent has completed the contractual requirements.   

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or 
as, the performance obligation is satisfied. The performance obligations for most of the Company’s core modeling bookings 
are satisfied on the day of the event, and the “day rate” total fee is agreed in advance, when the customer books the model 
for a particular date.  For contracts with multiple performance obligations (which are typically all satisfied within 1 to 3 
days), we allocate the contract’s transaction price to each performance obligation based on the estimated relative standalone 
selling price.  

Wilhelmina operates broadly as a modeling and talent agency.  The models and talent represented by the Company 
have discretion in agreeing to the price for a photoshoot or other service and may decline any job opportunity for any reason.  
After bookings are arranged by the Company, models and talent provide their personal services directly to the Company’s 
clients.  The Company charges commissions to both models/talent and customers, which is a fixed percentage of the billing 
rate for the model or talent.  Based on these and other factors, the Company acts as an agent in the service transaction and, 
therefore, reports service revenues on a basis net of pass-through model or talent cost. 

  Although  service  revenues  are  reported  on  a  net  basis,  accounts  receivable  are  recorded  at  the  amount of  gross 
amounts billed to customers, inclusive of model costs.  As a result, both accounts receivable and amounts due to models 
appear large relative to total revenue. 

  Service revenues from international sales accounted for 7.8% and 12.1% of the Company’s consolidated services 

revenues for the years ended December 31, 2022 and 2021, respectively. 

License Fees 

License fees, in connection with the licensing of the “Wilhelmina” name, are collected on a quarterly basis under 
the  terms  of  Wilhelmina’s  agreements  with  licensees.    The  Company  recognizes  revenue  relating  to  license  fees  where 
payment is deemed to be probable, over the license period. 

Contract Assets 

Contract assets, which primarily relate to the Company’s right to consideration for work completed but not billed 
at the reporting date are included within accounts receivable and approximated $1.9 million and $0.8 million at December 
31, 2022 and 2021, respectively. 

Advances to Models 

Advances to models for the cost of initial portfolios and other out-of-pocket costs, which are reimbursable only 
from collections from the Company’s clients as a result of future work, are expensed to model costs as incurred net of such 
costs that are expected to be recouped. 

Use of Estimates 

The preparation of the consolidated financial statements in conformity with GAAP requires management to make 
estimates that affect the amounts reported in the consolidated financial statements and the accompanying notes. Accounting 
estimates and assumptions discussed herein are those that management considers to be the most critical to an understanding 
of the consolidated financial statements because they inherently involve significant judgments and uncertainties. Estimates 
are  used  for,  but  not  limited  to  revenue  recognition,  allowance  for  doubtful  accounts,  useful  lives  for  depreciation  and 
amortization,  income  taxes,  the  assumptions  used  for  share-based  compensation,  and  impairments  of  goodwill  and 
intangible assets.  All of these estimates reflect management’s judgment about current economic and market conditions and 
their effects  based on information available as of the date of these  consolidated financial  statements. If such conditions 
persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, 
which may result in future impairments of assets among other effects. 

F-9 
 
   
   
 
 
 
 
 
 
 
  
  
 
Cash and Cash Equivalents 

As of December 31, 2022, the Company held cash in banks of $12.0 million.  The Company considers all highly 
liquid investments purchased with original maturities of three months or less to be cash equivalents.  There were no cash 
equivalents as of December 31, 2022 and 2021. 

Accounts Receivable and Allowance for Doubtful Accounts 

Accounts receivable are accounted for at net realizable value, do not bear interest and are short-term in nature. The 
Company  maintains  an  allowance  for  doubtful  accounts  for  estimated  losses  resulting  from  the  inability  to  collect  on 
accounts  receivable. Based  on  management’s  assessment,  the  Company  provides  for  estimated  uncollectible  amounts 
through a charge to earnings and a credit to the allowance. At December 31, 2022, the Company had an allowance of $1.7 
million, and recorded a $0.2 million bad debt charge to earnings. Balances that remain outstanding after the Company has 
used reasonable collection efforts are written off through a charge to the allowance and a credit to accounts receivable.  The 
Company generally does not require collateral. 

Although service revenues are reported on a basis net of model costs, accounts receivable are recorded at the amount 
of gross amounts billed to customers inclusive of model costs.  As a result, both accounts receivable and amounts due to 
models appear large relative to total revenue. 

 Concentrations of Credit Risk 

The balance sheet items that potentially subject the Company to concentrations of credit risk are primarily cash and 
cash  equivalents  and  accounts  receivable.  The  Company  maintains  its  cash  balances  in  several  different  financial 
institutions  in  New  York,  Los  Angeles,  Miami,  and  London.  Balances  in  accounts  other  than  “noninterest-bearing 
transaction  accounts”  are  insured  up  to  Federal  Deposit  Insurance  Corporation  (“FDIC”)  limits  of  $250  thousand  per 
institution. At December 31, 2022, the Company had cash balances in excess of FDIC insurance coverage of approximately 
$7.1 million. Balances in London accounts are covered by Financial Services Compensation Scheme (“FSCS”) limits of 
£75  thousand  or  approximately  $0.1  million per  institution.  At  December  31,  2022,  the  Company  had  cash  balances  in 
excess of FSCS coverage of approximately $3.7 million. Concentrations of credit risk with accounts receivable are mitigated 
by  the  Company’s  large  number  of  clients  and  their  dispersion  across  different  industries  and  geographical  areas. The 
Company performs ongoing credit evaluations of its clients and maintains an allowance for doubtful accounts based upon 
the expected collectability of all accounts receivable. 

Property and Equipment 

Property and equipment are stated at cost. Depreciation and amortization, based upon the shorter of the estimated 
useful lives (ranging from two to seven years) of the assets or terms of the leases, are computed by use of the straight-line 
method. Leasehold  improvements  are  amortized  based  upon  the  shorter  of  the  terms  of  the  leases  or  asset  lives. When 
property and equipment are retired or sold, the cost and accumulated depreciation and amortization are eliminated from the 
related accounts and gains or losses, if any, are reflected in the consolidated statement of operations. 

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that 
the carrying amount of an asset may not be recoverable. If it is determined that impairment has occurred, the amount of the 
impairment is charged to operations.  No such events or changes in circumstances were noted for the years ended December 
31, 2022 and 2021. 

 Goodwill and Intangible Assets 

Goodwill represents the excess of the purchase price in a business combination over the fair value of the tangible 
and intangible assets acquired and the liabilities assumed. The Company’s intangible assets other than goodwill consist of 
trademarks and trade name.  Goodwill and intangible assets with indefinite lives are not subject to amortization, but rather 
to an annual assessment of impairment by applying a fair-value based test. A significant amount of judgment is required in 

F-10 
 
   
   
 
 
  
 
  
 
 
  
  
  
  
  
  
estimating fair value and performing goodwill impairment tests.   

There  were  no  changes  to  the  $7.5  million  carrying  amount  of  goodwill  during  2021  or  2022.    There  were  no 

changes to the carrying amount of $8.5 million trademarks and trade names intangible assets during 2021 or 2022. 

No asset impairment charges were incurred relating to the Company’s goodwill or intangible assets during 2021 

and 2022. 

The process of estimating the fair value of goodwill is subjective and requires the Company to make estimates that 
may significantly impact the outcome of the analysis.  A qualitative assessment considers events and circumstances such as 
macroeconomic  conditions,  industry  and  market  conditions,  cost  factors,  and  overall  financial  performance.    If  after 
performing this assessment, the Company concludes it is more likely than not that the fair value of the reporting unit is less 
than  its  carrying  amount,  then  the  Company  performs  the  quantitative  test.  Under  the  quantitative  test,  a  goodwill 
impairment is identified by comparing the fair value to the carrying amount, including goodwill.  If the carrying amount 
exceeds the fair value, goodwill is considered impaired and an impairment charge is recognized in an amount equal to the 
excess, not to exceed the carrying amount of goodwill.   

At least annually, the Company assesses whether the carrying value of its goodwill and intangible assets exceeds 
their fair value and, if necessary, records an impairment loss equal to any such excess. Declines in the Company’s stock 
price  could  result  in  future  goodwill  impairment  charges.    The  Company  sometimes  utilizes  an  independent  valuation 
specialist to assist with the determination of fair value.  Each interim reporting period, the Company assesses whether events 
or circumstances have occurred which indicate that the carrying amount of an intangible asset exceeds its fair value. If the 
carrying amount of the intangible asset exceeds its fair value, an asset impairment charge will be recognized in an amount 
equal to that excess.  No such events or changes in circumstances were noted for the year ended December 31, 2022.   

Due to Models 

Due to models represents the liability for amounts owed to talent for jobs that have taken place, but where the model 
or talent fee has not yet been paid, typically due to the Company awaiting receipt of payment from the customer.   The due 
to model liabilities are accrued in the period in which the event takes place consistent with when the revenue is recognized.  
The Company’s contractual agreements with models typically condition payment to talent after the collection of fees from 
the customer. 

Although service revenues are reported on a basis net of model costs, accounts receivable are recorded at the amount 
of gross amounts billed to customers inclusive of model costs.  As a result, both accounts receivable and amounts due to 
models appear large relative to total revenue. 

Contract Liabilities 

We record deferred revenue, which is a contract liability, when we have entered into a contract with a customer 

and cash payments are received prior to satisfaction of the related performance obligation. 

Advertising 

The  Company  expenses  all  advertising  costs  as  incurred.  Advertising  expense,  included  in  office  and  general 
expense in the consolidated statements of operations and comprehensive income, was $22 thousand and $11 thousand in 
the years ended December 31, 2022 and 2021, respectively.  

Income Taxes 

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are 
recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of 
existing assets and liabilities and their respective tax base and operating loss and tax credit carryforwards. Deferred income 

F-11 
 
   
   
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which 
those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities 
of a change in tax rates is recognized in income in the period that includes the enactment date. The Company continually 
assesses the need for a tax valuation allowance based on all available information.   

Accounting for uncertainty in income taxes recognized in an enterprise’s financial statements requires a recognition 
threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or 
expected  to  be  taken  in  a  tax  return. Also,  consideration  should  be  given  to  de-recognition,  classification,  interest  and 
penalties, accounting in interim periods, disclosure and transition. Tax positions are subject to change in the future, as a 
number  of  years  may  elapse  before  a  particular  matter  for  which  an  established  reserve  is  audited  and  finally 
resolved. Federal tax returns for tax years 2019 through 2021 remained open for examination as of December 31, 2022. 

Share-Based Compensation 

The Company utilizes share-based awards as a form of compensation for certain officers. The Company records 
compensation  expense  for  all  awards  granted. The  Company  uses  the  Black-Scholes  valuation  model  and  straight-line 
amortization of compensation expense over the requisite service period for each separately vesting portion of the grants. 

Fair Value Measurements 

The  Company  has  adopted  the  provisions  of  ASC  820,  “Fair  Value  Measurements”  (“ASC  820”),  for  financial 
assets and financial liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value under GAAP, 
and expands disclosure about fair value measurements. ASC 820 applies to all financial instruments that are being measured 
and reported on a fair value basis. ASC 820 defines fair value as the price that would be received to sell an asset or paid to 
transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes 
a fair value hierarchy that prioritizes the inputs used in valuation methodologies into the following three levels: 

• 
• 

• 

Level 1 Inputs-Unadjusted: quoted prices in active markets for identical assets or liabilities. 
Level 2 Inputs-Observable: inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; 
quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable 
market data for substantially the full term of the assets or liabilities. 
Level 3 Inputs-Unobservable: inputs that are supported by little or no market activity and that are significant to the 
fair  value  of  the  assets  or  liabilities. Level  3  assets  and  liabilities  include  financial  instruments  whose  value  is 
determined  using  pricing  models,  discounted cash  flow  methodologies,  or  other  valuation  techniques,  as  well  as 
instruments for which the determination of fair value requires significant management judgment or estimation. 

Recent Accounting Pronouncements 

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments -Credit Losses (Topic 326): Measurement of 
Credit Losses on Financial Instruments”. ASU 2016-13 replaces the incurred loss impairment model with a methodology 
that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information 
to determine credit loss estimates. The Company believes the primary impact of ASU 2016-13 will relate to the Company’s 
assessment of its allowance of doubtful accounts on trade receivables.  The guidance was effective for fiscal years beginning 
after December 15, 2022, and interim periods within those fiscal years.  The Company adopted this standard in the first 
quarter  of  2023,  and  does  not  expect  the  adoption  to  have  a  material  impact  on  the  Company’s  consolidated  financial 
statements. 

Note 3.  Debt 

The Company previously had a credit agreement with Amegy Bank which provided a $3.0 million revolving line 
of credit, subject to a borrowing base derived from 80% of eligible accounts receivable (as defined) and the Company’s 
minimum net worth covenant. The revolving line of credit bore interest at prime plus 0.50% payable monthly. The revolving 
line of credit expired October 24, 2022.    

F-12 
 
   
   
 
 
 
 
  
  
  
  
 
 
 
 
On July 16, 2018, the Company amended its credit agreement with Amegy Bank to provide for a term loan of up 
to $1.0 million that could be drawn by the Company through July 12, 2019, for the purpose of repurchases of its common 
stock.  On August 1, 2018, the Company drew $0.7 million of the additional term loan and used the proceeds to fund the 
purchase of 100,000 shares of its common stock in a private transaction.  On December 12, 2018, the Company drew $0.3 
million of the additional term loan and used the proceeds to partially fund a purchase of 50,000 shares of its common stock 
in a private transaction.  On August 31, 2021, the Company prepaid, without penalty, the $0.6 million remaining balance of 
the additional term loan.  As of December 31, 2022, there was no outstanding balance on the term loan. 

On April 15, 2020, Wilhelmina International, Ltd. (the “Borrower”), a wholly-owned subsidiary of the Company, 
executed a Business Loan Agreement and a Promissory Note each dated April 13, 2020 (collectively, the “Sub PPP Loan 
Documents”), with respect to a loan in the amount of $1.8 million (the “Sub PPP Loan”) from Amegy Bank. The Sub PPP 
Loan was obtained pursuant to the federal Paycheck Protection Program (the “PPP”). The Sub PPP Loan originally matured 
on April 13, 2022 and bore interest at a rate of 1.00% per annum. As allowed under the Paycheck Protection Flexibility Act, 
the Sub PPP Loan was extended to mature on April 13, 2025.  On March 27, 2021, the Company received notice from the 
SBA that the Sub PPP loan, including $17 thousand accrued interest, had been fully forgiven, resulting in $1.9 million of 
gain on forgiveness of loan recorded within other (income) expenses during the quarter ended March 31, 2021. 

On April 18, 2020, the Company executed a Business Loan Agreement and a Promissory Note each dated April 17, 
2020 (collectively, the “Parent PPP Loan Documents”), with respect to a loan in the amount of $128 thousand (the “Parent 
PPP Loan”) from Amegy Bank. The Parent PPP Loan was also obtained pursuant to the PPP. The Parent PPP Loan originally 
matured  on  April  17,  2022  and  bore  interest  at  a  rate  of  1.00%  per  annum.  As  allowed  under  the  Paycheck  Protection 
Flexibility Act, the Parent PPP Loan was extended to mature on April 17, 2025.  On April 3, 2021, the Company received 
notice from the SBA that the Parent PPP Loan, including $1 thousand accrued interest, had been fully forgiven, resulting in 
$0.1 million of gain on forgiveness of loan recorded within other (income) expense during the quarter ended June 30, 2021.  
Under the PPP, the SBA reserves the right to audit any PPP loan forgiveness application for a period of six years from the 
date of loan forgiveness. 

Note 4.  Property and Equipment 

Property and equipment at December 31, 2022 and 2021 was comprised of the following (in thousands): 

Furniture and fixtures 
Software and software development costs 
Computer and equipment 
Leasehold improvements 
Total 
Less: Accumulated depreciation 
Property and equipment, net 

December 31, 2022 
$422 
- 
1,033 
68 
1,523 
(1,216) 
$307 

December 31, 2021 
 $392 
2,944 
   890 
   36 
   4,262 
    (4,094) 
   $168 

During 2022, $3.0 million of fully depreciated assets were disposed compared to $2.1 million during 2021.  For the 
years  ended  December  31,  2022  and  2021,  depreciation  expense  totaled  $0.1  million  and  $0.8  million,  respectively. 
Depreciation expense decreased primarily due to reduced depreciation of assets that became fully amortized in 2021. 

 Note 5.  Leases 

The Company is obligated under non-cancelable lease agreements for the rental of office space and various other 
lease  agreements  for  the  leasing  of  office  equipment. These  operating  leases  expire  at  various  dates  through  2030. In 
addition to the minimum base rent, the office space lease agreements provide that the Company shall pay its pro-rata share 
of real estate taxes and operating costs as defined in the lease agreements. The Company also leases certain corporate office 
facilities from an affiliate. 

F-13 
 
   
   
 
 
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
During 2022, $0.1 million of lease payments were classified as amortization expense, and included within cash used 
in financing activities on the Company’s statement of cash flows.  At December 31, 2022, the weighted-average remaining 
lease term was 6.1 years for operating leases and 2.5 years for finance type leases.  At December 31, 2022, the weighted 
average discount rate was 5.6% for operating leases and 4.8% for finance type leases.  

The following table presents additional information regarding the Company’s financing and operating leases for the 

years ended December 31, 2022 and 2021 (in thousands): 

Year ended 
December 31, 2022  
Finance lease expense                                                                           
    Amortization of ROU assets                                                 $   64                                     $      77 
    Interest on lease liabilities                                                        8                                             9 
Operating lease expense                                                              608                                            629  
Short term lease expense                                                             353                                            279 

                             Year ended 
                      December 31, 2021 

Cash paid for amounts included in the measurement of lease 
liabilities for finance leases 

    Financing cash flows                                                                68                                             87 

Cash paid for amounts included in the measurement of lease 
liabilities for operating leases 
    Operating cash flows                                                                523                                            580 

ROU assets obtained in exchange for lease liabilities 
    Finance leases                                                                           - 
    Operating leases                                                                    2,341                                            1,749 

                                             58 

As of December 31, 2022, future maturities of lease liabilities were as follows (in thousands): 

2023 
2024 
2025 
2026 
2027 
Thereafter 
Total 
Less: Present value discount 
Lease liability 

Operating 
$586 
 723 
 801 
 813 
478 
  1,081 
              4,482 
(767) 
            $3,715 

Finance 
$68 
 63 
 13 
 11 
 - 
- 
155 
 (8) 
                $147 

The following table summarizes future minimum payments under the current lease agreements: 

Years Ending 
December 31 
2023 
2024 
2025 
2026 
2027 
Thereafter 
Total 

Amount 
(in thousands) 

$803  
818 
814 
825 
479 
1,081  
$4,820  

 $  

F-14 
 
   
   
 
 
 
 
 
   
                                            
 
   
   
 
   
   
 
   
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
  
    
  
  
  
  
    
 
 
Rent expense totaled approximately $1.0 million and $0.9 million for the years ended December 31, 2022 and 

2021. 

Note 6.  Commitments and Contingencies  

On October 24, 2013, a putative class action lawsuit was brought against the Company by former Wilhelmina model 
Alex Shanklin and others, including Louisa Raske, Carina Vretman, Grecia Palomares and Michelle Griffin Trotter (the 
“Shanklin Litigation”), in New York State Supreme Court (New York County) by the same lead counsel who represented 
plaintiffs in a prior, now-dismissed action brought by Louisa Raske (the “Raske Litigation”).  The claims in the Shanklin 
Litigation initially included breach of contract and unjust enrichment allegations arising out of matters similar to the Raske 
Litigation,  such  as  the  handling  and  reporting  of  funds  on  behalf of  models  and  the  use  of  model  images.   Other 
parties named as defendants in the Shanklin Litigation included other model management companies, advertising firms, and 
certain advertisers.  On January 6, 2014, the Company moved to dismiss the Amended Complaint in the Shanklin Litigation 
for failure to state a claim upon which relief can be granted and other grounds, and other defendants also filed motions to 
dismiss.  On August 11, 2014, the court denied the motion to dismiss as to Wilhelmina and other of the model management 
defendants.  Separately, on March 3, 2014, the judge assigned to the Shanklin Litigation wrote the Office of the New York 
Attorney  General  bringing  the  case  to its  attention,  generally  describing  the  claims  asserted  therein  against  the  model 
management  defendants,  and  stating  that  the  case  “may  involve  matters  in  the  public  interest.” The  judge’s  letter  also 
enclosed a copy of his decision in the Raske Litigation, which dismissed that case.   

             Plaintiffs  retained  substitute  counsel,  who  filed  a  Second  and  then  Third  Amended  Complaint. Plaintiffs’  Third 
Amended  Complaint  asserts  causes  of  action  for  alleged  breaches  of  the  plaintiffs'  management  contracts  with  the 
defendants,  conversion,  breach  of  the  duty  of  good  faith  and  fair  dealing,  and  unjust  enrichment.   The  Third  Amended 
Complaint also alleges that the plaintiff models were at all relevant times employees, and not independent contractors, of 
the model management defendants, and that defendants violated the New York Labor Law in several respects, including, 
among other things, by allegedly failing to pay the models the minimum wages and overtime pay required thereunder, not 
maintaining accurate payroll records, and not providing plaintiffs with full explanations of how their wages and deductions 
therefrom were computed.  The Third Amended Complaint seeks certification of the action as a class action, damages in an 
amount to be determined at trial, plus interest, costs, attorneys’ fees, and such other relief as the court deems proper.  On 
October 6, 2015, Wilhelmina filed a motion to dismiss as to most of the plaintiffs’ claims.  The Court entered a decision 
granting in part and denying in part Wilhelmina’s motion to dismiss on May 26, 2017.  The Court (i) dismissed three of the 
five New York Labor Law causes of action, along with the conversion, breach of the duty of good faith and fair dealing and 
unjust enrichment causes of action, in their entirety, and (ii) permitted only the breach of contract causes of action, and some 
plaintiffs’ remaining two New York Labor Law causes of action to continue, within a limited time frame.  The plaintiffs and 
Wilhelmina each appealed, and the decision was affirmed on May 24, 2018. On August 16, 2017, Wilhelmina timely filed 
its Answer to the Third Amended Complaint. 

            On June 6, 2016, another putative class action lawsuit was brought against the Company by former Wilhelmina 
model Shawn Pressley and others, including Roberta Little (the “Pressley Litigation”), in New York State Supreme Court 
(New  York  County)  by  the  same  counsel  representing  the  plaintiffs  in  the  Shanklin  Litigation,  and  asserting  identical, 
although more recent, claims as those in the Shanklin Litigation.  The Amended Complaint, asserting essentially the same 
types of claims as in the Shanklin action, was filed on August 16, 2017.  Wilhelmina filed a motion to dismiss the Amended 
Complaint on September 29, 2017, which was granted in part and denied in part on May 10, 2018.  Some New York Labor 
Law  and  contract  claims  remain  in  the  case.   Pressley  has  withdrawn  from  the  case,  leaving  Roberta  Little  as  the  sole 
remaining named plaintiff in the Pressley Litigation.  On July 12, 2019, the Company filed its Answer and Counterclaim 
against Little. 

            On May 1, 2019, the Plaintiffs in the Shanklin Litigation (except Raske) and the Pressley Litigation filed motions 
for  class  certification  on  their  contract  claims  and  the  remaining  New  York  Labor  Law  Claims.    On  July  12,  2019, 
Wilhelmina filed its opposition to the motions for class certification and filed a cross-motion for summary judgment against 
Shanklin, Vretman, Palomares, Trotter and Little, and a motion for summary judgment against Raske.   

F-15 
 
   
   
 
 
 
  
By Order dated May 8, 2020 (the “Class Certification Order”), the Court denied class certification in the Pressley 
case,  denied  class  certification  with  respect  to  the  breach  of  contract  and  alleged  unpaid  usage  claims,  granted  class 
certification as to the New York Labor Law causes of action asserted by Vretman, Palomares and Trotter, and declined to 
rule on Wilhelmina’s motions for summary judgment, denying them without prejudice to be re-filed at a later date.  Currently 
the parties are engaging in merits discovery.  

The Company believes the claims asserted in the Shanklin Litigation and Pressley Litigation are without merit and 
intends to continue to vigorously defend the actions.  Nonetheless, an adverse outcome in either case is at least reasonably 
possible.  However, the Company is presently unable to reasonably estimate the amount or range of possible loss in either 
case.  Therefore, no amount has been accrued as of December 31, 2022 related to these matters. 

In addition to the legal proceedings disclosed herein, the Company is also engaged in various legal proceedings that 
are routine in nature and incidental to its business. None of these routine proceedings, either individually or in the aggregate, 
are believed likely, in the Company's opinion, to have a material adverse effect on its consolidated financial position or its 
results of operations. 

Note 7.  Income Taxes 

The following table summarizes the income tax benefit (expense) for the years ended December 31, 2022 and 2021 

(in thousands):  

Current: 
       Federal 
       State 
       Foreign 
       Current Total 
Deferred: 
       Federal 
       State 
       Deferred Total 
       Total 

 $ 

$

2022 

2021 

(62)       $                 - 
(47)

-       
(109)       

(34) 
(190) 
(224) 

1,057       
6       

(552) 
(47) 
(599) 
954  $             (823)  

1,063  

The income tax benefit (expense) differs from the amount  computed by applying the statutory federal and state 
income  tax  rates  to  the  net  income  before  income  tax.  The  following  table  shows  the  reasons  for  these  differences  (in 
thousands): 

Computed income tax expense at statutory rate 
Decrease (increase) in taxes resulting from: 
       Permanent and other deductions, net 
       Global intangible low-taxed income 
       Foreign income taxes 
       State income taxes, net of federal benefit 
Deferred tax effects 
Valuation allowance 
Total income tax benefit (expense) 
Effective tax rate 

2022 

2021 

 $             (540)       $          (1,122) 

(12)
(80)       
196       
(104)       
-       
1,494       

419 
(204) 
156  
(119) 
55 
(8) 
954   $            (823) 
(34.9%)                 15.4%  

$ 

The Company’s effective tax rate was -34.9% and 15.4% for the years ended December 31, 2022 and 2021.  The 
income tax benefit in 2022 and low effective tax rate was primarily the result of the full release of a previous $1.5 million 
valuation allowance against deferred tax assets. In 2021, the effective tax rate was primarily driven by $2.0 million non-
taxable  gain  on  forgiveness  of  PPP  loans,  which  was  the  result  of  governmental  actions  to  mitigate  the  impacts  of  the 
COVID-19 pandemic.  

F-16 
 
   
   
 
 
 
  
 
 
 
 
 
 
      
 
   
       
 
    
     
   
    
    
       
 
    
    
 
 
 
 
 
 
 
 
      
 
 
  
 
        
 
    
     
    
    
    
    
  
 
 
 
Generally, the Company’s combined effective tax rate is high relative to reported income before taxes as a result of 
valuation  allowances  on  deferred  tax  assets,  certain  amortization  expense,  stock  based  compensation,  and  corporate 
overhead not being deductible and income being attributable to certain states in which it  operates.  In  recent years,  the 
majority of taxes paid by the Company were state and foreign taxes, not U.S. federal taxes. The Company operates in three 
states which have relatively high tax rates: California, New York, and Florida.  In 2021, the effective tax rate was lower 
than in typical years due to PPP loan forgiveness, which was not subject to income tax.  Realization of net operating loss 
carryforwards, foreign tax credits, and other deferred tax temporary differences are contingent upon future taxable earnings. 
The Company’s deferred tax assets are reviewed for expected utilization by assessing the available positive and negative 
factors  surrounding  recoverability,  including  projected  future  taxable  income,  reversal  of  existing  taxable  temporary 
differences, tax-planning strategies, and results of recent operations. A valuation allowance is recorded when it is more 
likely than not that a deferred tax asset will not be realized.  

For the year ended December 31, 2021, Wilhelmina maintained a full $1.5 million valuation allowance against its 
deferred tax assets.  As of each reporting date, management considers new evidence, both positive and negative, that could 
affect its view of the future realization of deferred tax assets. In connection with its assessment for the third quarter of 2022, 
management determined that there was sufficient evidence to conclude that it was more likely than not that all deferred tax 
assets were realizable.  This evidence included three years of cumulative pretax income, excluding nonrecurring items, and 
expected reversal of existing taxable temporary differences.  Consequently, the full valuation allowance against our deferred 
tax assets was released in 2022, resulting in a $1.5 million income tax benefit.  The Company will continue to assess the 
evidence used to determine the need for a valuation allowance and may reinstate the valuation allowance in future periods 
if warranted by changes in estimated future income and other factors. 

As of December 31, 2022, the Company had no federal income tax loss carryforwards. 

The following table shows the tax effect of significant temporary differences, which comprise the deferred tax asset 

and liability (in thousands): 

Deferred tax asset: 

Net operating loss carryforward 

       Foreign tax credits 
Accrued expenses 

       Allowance for doubtful accounts 

Lease liability 

       Share-based compensation 
Other intangible assets 
Less: Valuation allowance 
       Total deferred income tax asset 
Deferred tax liability: 
       Property and equipment 
       Right of use asset 
       Intangible assets-brand name 
       Goodwill 
       Other intangible assets 
       Total deferred income tax liability 
       Deferred income tax, net 

    2022 

      2021 

$ 

$ 

63    $ 
474       
573       
82       

1,008 

117       
11
- 
2,328 

(77) 
(971) 
(1,183) 
(395) 
(687) 
(3,313) 
(985) 

 $ 

293 
495 
552 
78 
493 
66 
20
(1,494) 
503 

(39) 
(469) 
(1,183) 
(340) 
(520) 
(2,551) 
(2,048) 

Net deferred tax assets and liabilities are presented as noncurrent within the Company’s consolidated balance sheets.  
Deferred  income  tax  balances  reflect  the  effects  of  temporary  differences  between  the  carrying  amounts  of  assets  and 
liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when the taxes are actually paid or 
recovered.  The Company recognizes a valuation allowance for deferred tax assets when it is more likely than not that these 
assets will not be realized.  In making this determination, all positive and negative evidence is considered, including future 

F-17 
 
   
   
 
 
 
 
 
 
 
 
 
 
 
 
 
   
  
     
 
  
  
       
 
   
   
   
 
  
   
 
  
 
  
 
 
  
 
 
  
 
  
 
  
 
  
 
  
 
  
 
 
 
  
 
  
reversals of existing taxable temporary differences, tax planning strategies, future taxable income, and taxable income in 
prior carryback years.   

At  December  31,  2021,  the  Company  had  $1.1  million  of  U.S.  federal  net  operating  loss  carryforwards.      At 
December 31, 2022, the Company had no U.S. federal net operating loss carryforwards and has $0.5 million of foreign tax 
credit carryforwards which expire between 2023 and 2031.     

The Company does not believe that it had any significant uncertain tax positions at December 31, 2022 and 

December 31, 2021, nor is this expected to change within the next twelve months due to the settlement and expiration of 
statutes of limitation. 

The U.S. Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017 and introduced significant 
changes to U.S. income tax law. Effective in 2018, the Tax Act reduced the U.S. statutory tax rate from 35% to 21% and 
created new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global 
intangible low-taxed income tax and base erosion tax, respectively. In January 2018, the FASB released guidance on the 
accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Tax Act.  The GILTI provisions 
impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations.  The Company 
elected to treat any potential GILTI inclusions as a period cost. 

Note 8.  Treasury Stock 

During 2012, the Board of Directors authorized a stock repurchase program whereby the Company could repurchase 
up to 500,000 shares of its outstanding common stock. During 2013, the Board of Directors renewed and extended the 
Company’s share repurchase authority to enable it to repurchase up to an aggregate of 1,000,000 shares of common stock.  
In 2016, the Board of Directors increased by an additional 500,000 shares the number of shares of the Company’s common 
stock, which may be repurchased under its stock repurchase program to an aggregate of 1,500,000 shares. The shares may 
be repurchased from time to time in the open market or through privately negotiated transactions at prices the Company 
deems appropriate. The program does not obligate the Company to acquire any particular amount of common stock and 
may be modified or suspended at any time at the Company’s discretion. 

From 2012 through December 31, 2022, the Company repurchased an aggregate of 1,314,694 shares of common 
stock at an average price of approximately $4.85 per share, for a total of approximately $6.4 million in repurchases under 
the stock repurchase program. During the year ended December 31, 2022, no shares were repurchased.  The repurchase of 
an additional 185,306 shares is presently authorized under the stock repurchase program. 

Note 9.  Related Parties 

The  Executive  Chairman  of  the  Company,  Mark  E.  Schwarz,  is  also  the  chairman,  chief  executive  officer  and 
portfolio manager of Newcastle Capital Management, L.P. (“NCM”). NCM is the general partner of Newcastle Partners 
L.P. (“Newcastle”), which is the largest shareholder of the Company. 

The Company’s corporate headquarters are located at the offices of NCM. The Company utilizes NCM facilities on 
a month-to-month basis at $2.5 thousand per month, pursuant to a services agreement entered into between the parties. The 
Company incurred expenses pursuant to the services agreement totaling $30 thousand for each of the years ended December 
31, 2022 and 2021. The Company did not owe NCM any amounts under the services agreement as of December 31, 2022. 

In the second quarter of 2021, the Company recorded $32 thousand related to the recovery of short-swing profits 
disgorged from one of the Company’s shareholders under Section 16(b) of the Securities Exchange Act of 1934, as amended.  
The  Company  recognized  these  related  party  proceeds  as  an  increase  to  additional  paid-in  capital  in  the  accompanying 
consolidated balance sheet, as well as cash provided by financing activities in the accompanying consolidated statement of 
cash flows for 2021. 

F-18 
 
   
   
 
 
 
 
 
  
  
 
 
 
Note 10.  Stock Options and Stock Purchase Warrants 

During 2015, shareholders of the Company approved the 2015 Incentive Plan which authorized the issuance of up 
to 500,000 shares of the common stock pursuant to stock options, restricted stock, stock appreciation rights and other equity 
incentives awarded to directors, officers, consultants, advisors and employees of the Company. Stock option awards under 
the 2015 Incentive Plan are granted at the market value of the common stock on the date of grant, vest over service periods 
of one to five years and terminate not more than ten years from the date of grant.   

Under the 2015 Incentive Plan, no stock option awards were granted during 2022.  Stock option awards covering 
120,000 shares of the common stock were granted during 2021.  No stock options were exercised during either 2022 or 
2021.  

The following table shows a summary of stock option transactions under the 2015 Incentive Plan during 2022 and 2021: 

Outstanding, January 1, 2021                                                                           

Granted 
Exercised 
Forfeited or expired 

Outstanding, December 31, 2021 

Granted 
Exercised 
Forfeited or expired 

Outstanding, December 31, 2022 

Weighted 
Average 
Exercise 
Price 

Number 
of Shares 

60,000    $ 
120,000       
-     
-       
180,000    $ 

-
-     
-       
180,000    $ 

6.93   
5.43   
- 
 -  
5.93   
-
-   
- 
5.93   

Weighted average remaining contractual life was 5.85 years at December 31, 2022 and 6.85 years at December 31, 
2021.  The exercise price of all stock options was below the market value at both December 31, 2022 and 2021.  Therefore, 
there  is  no  intrinsic  value  at  December  31,  2022  and  2021.    Total  unrecognized  compensation  expense  on  options 
outstanding  as  of  December  31,  2022  was  $0.1  million.    Options  to  purchase  98,500  shares  of  common  stock  were 
exercisable as of December 31, 2022. 

The Company estimates the fair value of each stock option granted on the date of grant using the Black-Scholes 
option pricing model. Expected volatilities are based on the historical volatility of Wilhelmina’s and similar companies’ 
common stock for a period equal to the expected term. The risk-free interest rates for periods within the contractual term of 
the options are based on rates for U.S. Treasury Notes with maturity dates corresponding to the options’ expected lives on 
the dates of grant. Expected term is determined based on the option term. 

The following table lists the inputs to the Black-Scholes model used for the fair value measurement of the stock 

options granted during 2021. No stock options were granted during 2022. 

Weighted average fair value at the measurement date ($) 

       Dividend yield (%) 

Expected volatility of the share prices (%) 

       Risk-free interest rate (%) 

Expected life of share options (years) 

       Weighted average share price ($) 

Year Ended 

        December 31, 2021 

3.1 
0 
68.9 
1.3 
4.0 to 6.3 
5.4 

F-19 
 
   
   
 
 
 
 
 
  
   
   
    
   
      
      
   
      
      
   
      
      
 
   
     
   
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
           
 
        
 
        
 
        
 
        
 
        
 
 
 
 
Note 11.  Benefit Plans 

The Company has established a 401(k) Plan for eligible employees of the Company. Generally, all employees of 
the Company who are at least twenty-one years of age are eligible to participate in the 401(k) Plan. The 401(k) Plan is a 
defined contribution plan, which provides that participants may make voluntary salary deferral contributions, on a pretax 
basis, between 1% and 100% of their compensation in the form of voluntary payroll deductions, up to a maximum amount 
as  indexed  for  cost-of-living  adjustments. The  Company  may  make  discretionary  contributions. No  discretionary 
contributions were made during the years ended December 31, 2022 and 2021. 

Note 12.  Cybersecurity Incident 

In November 2021, the Company determined that it had recently been the victim of criminal fraud known to law 
enforcement  authorities  as  “business  e-mail  compromise  fraud”  which  involved  employee  e-mail  impersonation  and 
fraudulent  payment  requests  targeting  the  finance  department  of  a  division  of  the  Company.  The  fraud  resulted  in 
unauthorized  transfers  of  funds  aggregating approximately  $0.7  million,  as  well  as  approximately  $10  thousand  of 
professional service fees to address the fraud.  The Company recovered $0.2 million.  As a result, the Company recorded a 
charge of $0.6 million in 2021 within operating expenses on the consolidated statements of operations. 

The  Company  is  continuing  to  pursue  the  recovery  of  the  remaining  $0.6  million  and  is  cooperating  with  U.S. 
federal law enforcement authorities who are actively pursuing an investigation.  It is presently unclear whether or to what 
extent any additional amounts will be recovered.  Any additional recoveries will be recognized as a gain on recovery in the 
period that the funds are received. 

F-20 
 
   
   
 
 
  
 
  
 
C ORPORATE INFORMATION

Mark E. Schwarz
Executive Chairman and Director
Chairman and Chief Executive Officer of Newcastle Capital Management, L.P.

James A. McCarthy
Chief Financial Officer

OT HER  D IREC TO RS

AGENCY OFFICES

Maya Burkenroad
President of Retail Ecommerce Ventures LLC

Clinton J. Coleman
Chairman and Chief Executive Officer of Novo 
Labs, Inc.

James A. Dvorak
Senior Vice President – Investments of Hallmark 
Financial Services, Inc.

Alexander F. Mehr
Chief Executive Officer of Retail Ecommerce 
Ventures LLC

Mark E. Pape
Managing Director, Brookview Advisors, Inc.

Aimee Nelson
Chief Executive Officer of Ajay Ventures Inc. 

CO RP O RAT E  OFFICE

Wilhelmina International, Inc.
Two Lincoln Centre
5420 Lyndon B Johnson Freeway
Box #25
Dallas, TX 75240
(214) 661-7488
www.wilhelmina.com

New York
Los Angeles
London
Miami

STOCK EXCHANGE AND TRADING 
SYMBOL

Wilhelmina International, Inc.
Common stock is traded on the NASDAQ 
Capital Market under trading symbol “WHLM”

STOCK TRANSFER AGENT

Securities Transfer Corporation
2901 N. Dallas Parkway, Suite 380
Frisco, Texas

INDEPENDENT REGISTERED PUB LIC 
ACCOUTING FIRM

Baker Tilly US, LLP
New York, New York

EXTERNAL LEGAL COUNSEL

Faust Law Group
Joplin, Missouri 

IN VESTOR INFORMATION

For further information visit www.wilhelmina.com/investor-relations/