UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 4.02 | Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review |
Wilhelmina International, Inc. (“Wilhelmina” or the “Company”) has historically presented service revenues on a gross basis in its annual audited and interim consolidated statements of operations and comprehensive income (loss) on the basis of the good faith judgment of both its management and audit committee of its board of directors (“Audit Committee”) that the Company is the principal in the contractual relationships with its end-user clients. However, the Staff of the Securities and Exchange Commission (“SEC”) has recently objected to this presentation and communicated that service revenues should be presented net of model costs based on their conclusion that the Company is only an agent in the arrangements with its end-user clients.
On November 30, 2022, the Audit Committee determined that accepting the position of the SEC Staff was in the best interest of Wilhelmina’s shareholders. As a result, the Audit Committee concluded that the consolidated statements of operations and comprehensive income (loss) included in its Annual Report on Form 10-K for the year ended December 31, 2021, and in its Quarterly Report on Form 10-Q for the interim period ended September 30, 2022, should no longer be relied upon.
The Company intends to amend its Annual Report on Form 10-K for the year ended December 31, 2021, and its Quarterly Report on Form 10-Q for the interim period ended September 30, 2022, to reflect the presentation of service revenue on a net basis as agent. This change in presentation will result in reducing previously reported service revenues by an amount equal to model costs. Since model costs have historically been shown as a deduction from total revenue, amounts previously reported as revenues net of model costs will become total revenue. This change in presentation will have no impact on operating expenses, other expense (income), income before provision for income taxes, provision for income taxes, net income, net income per share, or total comprehensive income (loss) for any period. Similarly, this change in income statement presentation will have no impact on the consolidated balance sheets, consolidated statements of shareholders’ equity, or consolidated statements of cash flows of the Company.
The Audit Committee of the Company has discussed the foregoing matters with the Company’s independent registered public accounting firm, Baker Tilly US, LLP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: December 6, 2022 | WILHELMINA INTERNATIONAL, INC. | ||
| By: | /s/ James A. McCarthy | ||
| Name: | James A. McCarthy | ||
| Title: | Chief Financial Officer | ||