Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Share Name	Share Symbol	Market	Type
Wilhelmina International Inc	NASDAQ:WHLM	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	-0.30	-9.40%	2.89	2.56	5.20	3.20	3.03	3.20	41,702	05:00:09

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2024

	OR

☐	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	74-2781950
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5420 Lyndon B Johnson Freeway, Box #25, Dallas, Texas	75240
(Address of principal executive offices)	(Zip Code)

(214) 661-7488

(Registrant’s telephone number, including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

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

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. ☒ 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). ☒ 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 ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of May 15, 2024, the registrant had 5,157,344 shares of common stock outstanding.

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q

For the Three Months Ended March 31, 2024

PART I	FINANCIAL INFORMATION		3

	Item 1.	Financial Statements	3

		Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	3

		Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	4

		Condensed Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	5

		Condensed Consolidated Statements of Cash Flow for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	6

		Notes to Condensed Consolidated Financial Statements (Unaudited)	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19

	Item 4.	Controls and Procedures	19

PART II	OTHER INFORMATION		20

	Item 1.	Legal Proceedings	20

	Item 1.A.	Risk Factors	21

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

	Item 3.	Defaults Upon Senior Securities	21

	Item 4.	Mine Safety Disclosures	21

	Item 5.	Other Information	21

	Item 6.	Exhibits	22

SIGNATURES			23

PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	(Unaudited)
	March 31, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	4,734		$	6,117
Short term investments		6,670			6,596
Accounts receivable, net of allowance for doubtful accounts of $1,777 and $1,901, respectively		8,585			8,505
Prepaid expenses and other current assets		228			203
Total current assets		20,217			21,421

Property and equipment, net of accumulated depreciation of $568 and $534, respectively		291			320
Right of use assets-operating		3,285			3,457
Right of use assets-finance		143			152
Trademarks and trade names with indefinite lives		8,467			8,467
Goodwill		7,547			7,547
Other assets		301			301

TOTAL ASSETS	$	40,251		$	41,665

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	3,722		$	3,941
Due to models		6,528			7,645
Lease liabilities – operating, current		727			712
Lease liabilities – finance, current		33			32
Total current liabilities		11,010			12,330

Long term liabilities:
Deferred income tax, net		1,261			1,215
Lease liabilities – operating, non-current		2,898			3,102
Lease liabilities – finance, non-current		114			122
Total long term liabilities		4,273			4,439

Total liabilities		15,283			16,769

Shareholders’ equity:
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued at March 31, 2024 and December 31, 2023		65			65
Treasury stock, 1,314,694 shares at March 31, 2024 and December 31, 2023, at cost		(6,371	)		(6,371	)
Additional paid-in capital		88,865			88,854
Accumulated deficit		(57,185	)		(57,276	)
Accumulated other comprehensive loss		(406	)		(376	)
Total shareholders’ equity		24,968			24,896

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	40,251		$	41,665

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

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the Three Months Ended March 31, 2024 and 2023

(In thousands, except per share data)

(Unaudited)


	Three Months Ended
	March 31,
	2024			2023
Revenues:
Service revenues	$	4,163		$	4,476
License fees and other income		8			8
Total revenues		4,171			4,484

Operating expenses:
Salaries and service costs		2,966			2,880
Office and general expenses		835			1,080
Amortization and depreciation		44			51
Corporate overhead		253			244
Total operating expenses		4,098			4,255

Operating income		73			229

Other (income) expense:
Foreign exchange loss		7			18
Interest income		(86	)		–
Interest expense		3			1
Total other (income) expense		(76	)		19

Income before provision for income taxes		149			210

Provision for income taxes:
Current		(12	)		(56	)
Deferred		(46	)		5
Provision for income taxes, net		(58	)		(51	)

Net income		91			159

Other comprehensive income (loss):
Foreign currency translation adjustment		(30	)		86
Total comprehensive income	$	61		$	245

Basic net income per common share	$	0.02		$	0.03
Diluted net income per common share	$	0.02		$	0.03

Weighted average common shares outstanding-basic		5,157			5,157
Weighted average common shares outstanding-diluted		5,157			5,157

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

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Three Months Ended March 31, 2024 and 2023

(In thousands)

(Unaudited)


	Common Shares		Stock Amount		Treasury Shares			Stock Amount			Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
Balances at December 31, 2022		6,472	$	65		(1,315	)	$	(6,371	)	$	88,770	$	(57,709	)	$	(544	)	$	24,211
Share based payment expense		–		–		–			–			24		–			–			24
Net income to common shareholders		–		–		–			–			–		159			–			159
Foreign currency translation		–		–		–			–			–		–			86			86
Balances at March 31, 2023		6,472	$	65		(1,315	)	$	(6,371	)	$	88,794	$	(57,550	)	$	(458	)	$	24,480

	Common Shares		Stock Amount		Treasury Shares			Stock Amount			Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
Balances at December 31, 2023		6,472	$	65		(1,315	)	$	(6,371	)	$	88,854	$	(57,276	)	$	(376	)	$	24,896
Share based payment expense		–		–		–			–			11		–			–			11
Net income to common shareholders		–		–		–			–			–		91			–			91
Foreign currency translation		–		–		–			–			–		–			(30	)		(30	)
Balances at March 31, 2024		6,472	$	65		(1,315	)	$	(6,371	)	$	88,865	$	(57,185	)	$	(406	)	$	24,968

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

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

For the Three Months Ended March 31, 2024 and 2023

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024			2023
Cash flows from operating activities:
Net income	$	91		$	159
Adjustments to reconcile net income to net cash used in operating activities:
Amortization and depreciation		44			51
Share based payment expense		11			24
Loss on foreign exchange rates		7			15
Deferred income taxes		46			(5	)
Bad debt expense		29			45
Changes in operating assets and liabilities:
Accounts receivable		(191	)		(312	)
Prepaid expenses and other current assets		(25	)		(117	)
Right of use assets-operating		172			205
Other assets		–			15
Due to models		(1,116	)		(621	)
Lease liabilities - operating		(190	)		(91	)
Lease liabilities - finance		25			–
Contract liabilities		–			(270	)
Accounts payable and accrued liabilities		(219	)		(233	)
Net cash used in operating activities		(1,316	)		(1,135	)

Cash flows from investing activities:
Purchases of property and equipment		(6	)		(73	)
Purchases of short term investments		(6,149	)		–
Maturities of short term investments		6,150			–
Net cash used in investing activities		(5	)		(73	)

Cash flows from financing activities:
Payments on finance leases		(32	)		(15	)
Net cash used in financing activities		(32	)		(15	)

Foreign currency effect on cash flows		(30	)		86

Net change in cash and cash equivalents:		(1,383	)		(1,137	)
Cash and cash equivalents, beginning of period		6,117			11,998
Cash and cash equivalents, end of period	$	4,734		$	10,861

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	7		$	–

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

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The interim consolidated financial statements included herein have been prepared by Wilhelmina International, Inc. (together with its subsidiaries, “Wilhelmina” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Although certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to those rules and regulations, all adjustments considered necessary in order to make the consolidated financial statements not misleading have been included. In the opinion of the Company’s management, the accompanying interim unaudited consolidated financial statements reflect all adjustments, of a normal recurring nature, that are necessary for a fair presentation of the Company’s consolidated balance sheets, statements of operations and comprehensive income, statements of shareholders’ equity, and cash flows for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Results of operations for the interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year.

Note 2. Business Activity

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.

Note 3. Foreign Currency Translation

The functional currency of our subsidiary in the United Kingdom is the British Pound. Assets and liabilities are translated into U.S. dollars at the exchange rates in effect at each balance sheet date. Results of operations are translated using the weighted average exchange rates during reporting periods. Related translation adjustments are accumulated in a separate component of stockholder’s equity and transaction gains and losses are recognized in the consolidated statements of operations and comprehensive income when realized.

Note 4. 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.

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 March 31, 2024 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 5. Income Taxes

Generally, the Company’s combined effective tax rate is high relative to reported income before taxes as a result of 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. 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. The Company will continue to assess the evidence used to determine the need for a valuation allowance if warranted by changes in estimated future income and other factors.

As of March 31, 2024, the Company had no federal income tax loss carryforwards.

Note 6. Treasury Shares

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 that 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 March 31, 2024, the Company had repurchased 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 first three months of 2024, no shares were repurchased under the stock repurchase program.

Note 7. 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 $7.5 thousand for the three months ended both March 31, 2024 and 2023. The Company did not owe NCM any amounts under the services agreement as of March 31, 2024.

Note 8. Fair Value Measurements

A three-level valuation hierarchy, based upon observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. These two types of inputs create the following fair value hierarchy:

	·	Level 1 – Quoted prices for identical instruments in active markets
	·	Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose significant inputs are observable
	·	Level 3 – Instruments with model-derived valuations whose significant inputs are unobservable

Cash and cash equivalents include cash on hand, cash in banks, and short-term, highly liquid investments with maturities of three months or less. Short-term investments with maturities of over three and up to twelve months are recorded in Short-term investments on the Condensed Consolidated Balance Sheets.

The following table presents the fair value of the Company’s cash and cash equivalents and short-term investments and their corresponding level within the fair value hierarchy:

Schedule of Fair Value of Assets
	March 31, 2024				December 31, 2023
	Level		Amount		Level		Amount
Cash and cash equivalents
Cash			$	4,713			$	6,107
Money market funds		1		21		1		10
Total			$	4,734			$	6,117

Short-term investments
United States Treasury securities		1	$	6,670		1	$	6,596
Total			$	6,670			$	6,596

Total cash and cash equivalents and short-term investments			$	11,404			$	12,713

As of March 31, 2024 and December 31, 2023, the fair value of cash equivalents and short-term investments approximated their cost.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following is a discussion of the interim unaudited consolidated financial condition and results of operations for the Company and its subsidiaries for the three months ended March 31, 2024 and 2023. It should be read in conjunction with the financial statements of the Company, the notes thereto and other financial information included elsewhere in this report, and the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 the Company and its subsidiaries 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 statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, the interest rate environment, governmental regulation and supervision, seasonality, changes in industry practices, one-time events and other factors described herein and in other filings made by the Company with the SEC. 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.

OVERVIEW

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.

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

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 and client roster and its diversification across various talent management segments, together with its 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.

With total annual advertising expenditures on major media (newspapers, magazines, television, cinema, outdoor and Internet) estimated to have exceeded $400 billion in recent years, North America 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.

Traditional retail clients in the fashion and beauty industry have had increased competition from digital, social, and new media, reducing their budgets for advertising and model talent. Wilhelmina reviews the mix of talent and resources available to best operate in this changing environment.

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

Strategy

Management’s long-term 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 social media influencer representation;
	·	evaluate opportunities to expand the Wilhelmina network through strategic geographic market development; and
	·	evaluate opportunities to 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.

Key Financial Indicators

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,” each a specific division of the fashion model management operations which specializes by the type of model it represents, by geographic locations and from significant clients. Within its fashion model management business, Wilhelmina’s primary source of service revenue is from model fees and service charges paid by the client for bookings directly negotiated by the Company. The Company also receives commissions paid on bookings by third-party agencies. 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.

Analysis of Consolidated Statements of Operations and Service Revenues

	Three Months Ended
(in thousands)	March 31, 2024			March 31, 2023			% Change
Service revenues	$	4,163		$	4,476			(7.0%	)
License fees and other income		8			8			0%
TOTAL REVENUES		4,171			4,484			(7.0%	)

Salaries and service costs		2,966			2,880			3.0%
Office and general expenses		835			1,080			(22.7%	)
Amortization and depreciation		44			51			(13.7%	)
Corporate overhead		253			244			3.7%
OPERATING INCOME		73			229			(68.1%	)
OPERATING MARGIN		1.8%			5.1%			(64.7%	)
Foreign exchange loss		7			18			(61.1%	)
Interest income		(86	)		–			–
Interest expense		3			1			200%
INCOME BEFORE INCOME TAXES		149			210			(29.0%	)
Current income tax expense		(12	)		(56	)		(78.6%	)
Deferred tax expense		(46	)		5			(1020%	)
Effective tax rate		38.9%			24.3%			60.1%
NET INCOME	$	91		$	159			(42.8%	)

Supplemental Non-GAAP Information

	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023		% Change
Gross Billings	$	15,824	$	17,587		(10.1%	)
EBITDA		110		262		(58.0%	)
Adjusted EBITDA		128		304		(57.9%	)
Pre Corporate EBITDA		381		548		(30.5%	)

See pages 15 to 16 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 decrease of 7.0% for the three months ended March 31, 2024, when compared to the three months ended March 31, 2023, were primarily due to decreased commissions from core model and Aperture bookings.

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 remained the same for both the three months ended March 31, 2024 and 2023, primarily due to the aligned timing of income from licensing agreements.

Salaries and Service Costs

Salaries and service costs consist of payroll related costs and T&E required to deliver the Company’s services to its clients and talents. The 3.0% increase in salaries and service costs during the three months ended March 31, 2024, when compared to the three months ended March 31, 2023, were primarily due to 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, legal expenses, advertising and promotion, insurance expenses, administration and technology cost. The decrease in office and general expenses of 22.7% for the three months ended March 31, 2024, when compared to the three months ended March 31, 2023, was primarily due to decreased legal expense, computer expenses, and other office related 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 13.7% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to reduced depreciation of assets that became fully amortized in 2023. Fixed asset purchases (mostly related to technology and computer equipment) totaled approximately $6 thousand during the three months ended March 31, 2024, compared to $73 thousand for the three months ended March 31, 2023.

Corporate Overhead

Corporate overhead expenses include director and executive officer compensation, legal, audit and professional fees, corporate office rent and travel. Corporate overhead increased by 3.7% for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to increased legal costs.

Operating Income and Operating Margin

Operating income was $73 thousand for the three months ended March 31, 2024 compared to $229 thousand in the three months ended March 31, 2023. Operating margin decreased to 1.8% for the three months ended March 31, 2024, compared to 5.1% for the three months ended March 31, 2023, due to the decrease in revenue outpacing the decrease in operating expenses.

Foreign Currency Exchange

The Company realized a $7 thousand foreign currency exchange loss during the three months ended March 31, 2024, and loss of $18 thousand from foreign currency exchange during the three months ended March 31, 2023. Foreign currency gain and loss is due to fluctuations in currencies from Great Britain, Europe, and Latin America.

Interest Income

Interest income is primarily attributable to interest from short term investments. Interest income was $86 thousand for the three months ended March 31, 2024. There was no interest income in the three months ended March 31, 2023.

Interest Expense

Interest expense is primarily attributable to interest on finance leases. Interest expense was $3 thousand for the three months ended March 31, 2024 and $1 thousand for the three months ended March 31, 2023.

Income before Income Taxes

Income before income taxes decreased to $149 thousand for the three months ended March 31, 2024, compared to $210 thousand for the three months ended March 31, 2023. The lower pre-tax income in 2024 was primarily due to a decrease in operating income.

Income Taxes

Generally, the Company’s combined effective tax rate is high relative to reported net income as a result of amortization expense, foreign taxes, and corporate overhead not being deductible 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 from U.S. federal taxes. The Company had income tax expense of $0.1 million for the three months ended March 31, 2024 and 2023.

Net Income

The Company had net income of $0.1 million for the three months ended March 31, 2024, compared to net income of $0.2 million for the three months ended March 31, 2023. The decrease in net income was primarily due to the decrease in operating income.

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 decreased 10.1% for the three months ended March 31, 2024, when compared to the three months ended March 31, 2023, primarily due to decreased core model bookings with decreased bookings at the Aperture division. See below and page 16 for more information regarding non-GAAP financial measures.

Liquidity and Capital Resources

The Company’s cash balance decreased to $4.7 million at March 31, 2024 from $6.1 million at December 31, 2023. The cash balances decreased as a result of $1.3 million net cash used in operating activities, $5 thousand net cash used in investing activities, $32 thousand cash used in financing activities, and the $30 thousand effect of exchange rate on cash flow during the three months ended March 31, 2024.

Net cash used in operating activities of $1.3 million was primarily the result of increases in accounts receivable and prepaid expenses, decreases in amounts due to models, accounts payable and accrued liabilities, and lease liabilities, partially offset by net income and an increase in deferred income taxes. The $5 thousand cash used in investing activities was attributable to purchases of short term investments and property and equipment, including furniture and fixtures, leasehold improvements, software and computer equipment, offset by maturities of short term investments. The $32 thousand cash used in financing activities was 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.

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. These metrics are used by management in its planning and budgeting processes, 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, and to 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. 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

	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023
Total revenues	$	4,171	$	4,484
Model costs		11,653		13,103
Gross Billings	$	15,824	$	17,587

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.

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

	Three Months Ended
(in thousands)	March 31, 2024			March 31, 2023
Net income	$	91		$	159
Interest income		(86	)		–
Interest expense		3			1
Income tax expense		58			51
Amortization and depreciation		44			51
EBITDA		110			262
Foreign exchange loss		7			18
Share based payment expense		11			24
Adjusted EBITDA		128			304
Corporate overhead		253			244
Pre-Corporate EBITDA	$	381		$	548

Critical Accounting Policies and Estimates

Basis of Presentation

The consolidated financial statements include the accounts of Wilhelmina and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

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.

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 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.

Subsequent Events

On April 15, 2024, Wilhelmina International, Inc. (the “Company”) engaged Mr. Gaurav Pahwa as the Company’s Chief Financial Officer to serve as its “principal financial officer” and “principal accounting officer,” as those terms are defined under the rules and regulations promulgated by the Securities and Exchange Commission.

On April 15, 2024, Mr. Jim McCarthy resigned from his position as the Company’s Chief Financial Officer, effective as of such date.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting company

Item 4.

Controls and Procedures.

The Company maintains disclosure controls and procedures designed to ensure that information it is required to disclose in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. The Company’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, including the Company’s principal executive officer and principal financial officer have evaluated the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

During the most recent fiscal quarter, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1.

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 include 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.

Item 1.A.

Risk Factors.

Not required for smaller reporting company.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

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 March 31, 2024.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

During the quarter ended March 31, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 6.

Exhibits.

The following is a list of exhibits filed as part of this Form 10-Q:

Exhibit No.	Description

3.1	Restated Certificate of Incorporation of Wilhelmina International, Inc. (incorporated by reference from Exhibit 3.1 to Form S-1/A, filed January 30, 2012).
3.2	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).
3.3	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).
3.4	Amended and Restated Bylaws of Wilhelmina International, Inc. (incorporated by reference from Exhibit 3.2 to Form 8-K, filed May 24, 2011).
4.1	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	Letter Agreement dated April 13, 2024, between Wilhelmina International, Inc. and Gaurav Pahwa (incorporated by reference from Exhibit 10.1 to Form 8-K, filed April 19, 2024)
31.1	Certification of Principal Executive Officer in accordance with Section 302 of the Sarbanes-Oxley Act. *
31.2	Certification of Principal Financial Officer in accordance with Section 302 of the Sarbanes-Oxley Act. *
32.1	Certification of Principal Executive Officer in accordance with Section 906 of the Sarbanes-Oxley Act. *
32.2	Certification of Principal Financial Officer in accordance with Section 906 of the Sarbanes-Oxley Act. *
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase *
101.DEF	XBRL Taxonomy Extension Definition Linkbase *
101.LAB	XBRL Taxonomy Extension Label Linkbase *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase *

________________

* Filed herewith

SIGNATURES

Pursuant to the requirements 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.

	WILHELMINA INTERNATIONAL, INC.
	(Registrant)


Date: May 15, 2024	By:	/s/ Gaurav Pahwa
	Name:	Gaurav Pahwa
	Title:	Chief Financial Officer (principal financial officer)

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark E. Schwarz, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Wilhelmina International, Inc. for the quarterly period ended March 31, 2024;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 15, 2024

/s/ Mark E. Schwarz

Name:

Mark E. Schwarz

Title:

Executive Chairman

(principal executive officer)

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gaurav Pahwa, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Wilhelmina International, Inc. for the quarterly period ended March 31, 2024;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 15, 2024

/s/ Gaurav Pahwa

Name:

Gaurav Pahwa

Title:

Chief Financial Officer

(principal financial officer)

Exhibit 32.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Wilhelmina International, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark E. Schwarz, Executive Chairman of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented.

May 15, 2024

/s/ Mark E. Schwarz

Name:

Mark E. Schwarz

Title:

Executive Chairman

(principal executive officer)

Exhibit 32.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Wilhelmina International, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gaurav Pahwa, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented.

May 15, 2024

/s/ Gaurav Pahwa

Name:

Gaurav Pahwa

Title:

Chief Financial Officer

(principal financial officer)

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 15, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-36589
Entity Registrant Name	WILHELMINA INTERNATIONAL, INC.
Entity Central Index Key	0001013706
Entity Tax Identification Number	74-2781950
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	5420 Lyndon B Johnson Freeway
Entity Address, Address Line Two	Box #25
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75240
City Area Code	(214)
Local Phone Number	661-7488
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	WHLM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,157,344

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 4,734	$ 6,117
Short term investments	6,670	6,596
Accounts receivable, net of allowance for doubtful accounts of $1,777 and $1,901, respectively	8,585	8,505
Prepaid expenses and other current assets	228	203
Total current assets	20,217	21,421
Property and equipment, net of accumulated depreciation of $568 and $534, respectively	291	320
Right of use assets-operating	3,285	3,457
Right of use assets-finance	143	152
Trademarks and trade names with indefinite lives	8,467	8,467
Goodwill	7,547	7,547
Other assets	301	301
TOTAL ASSETS	40,251	41,665
Current liabilities:
Accounts payable and accrued liabilities	3,722	3,941
Due to models	6,528	7,645
Lease liabilities – operating, current	727	712
Lease liabilities – finance, current	33	32
Total current liabilities	11,010	12,330
Long term liabilities:
Deferred income tax, net	1,261	1,215
Lease liabilities – operating, non-current	2,898	3,102
Lease liabilities – finance, non-current	114	122
Total long term liabilities	4,273	4,439
Total liabilities	15,283	16,769
Shareholders’ equity:
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued at March 31, 2024 and December 31, 2023	65	65
Treasury stock, 1,314,694 shares at March 31, 2024 and December 31, 2023, at cost	(6,371)	(6,371)
Additional paid-in capital	88,865	88,854
Accumulated deficit	(57,185)	(57,276)
Accumulated other comprehensive loss	(406)	(376)
Total shareholders’ equity	24,968	24,896
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 40,251	$ 41,665

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Accounts Receivable, Allowance for Credit Loss, Current	$ 1,777	$ 1,901
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 568	$ 534
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	9,000,000	9,000,000
Common stock, shares issued	6,472,038	6,472,038
Treasury Stock, Common Shares	1,314,694	1,314,694

CONDENSED CONSOLIDATED STATEMENTS OF OPERATION AND COMPRENENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenues:
Service revenues	$ 4,163	$ 4,476
License fees and other income	8	8
Total revenues	4,171	4,484
Operating expenses:
Salaries and service costs	2,966	2,880
Office and general expenses	835	1,080
Amortization and depreciation	44	51
Corporate overhead	253	244
Total operating expenses	4,098	4,255
Operating income	73	229
Other (income) expense:
Foreign exchange loss	7	18
Interest income	(86)	0
Interest expense	3	1
Total other (income) expense	(76)	19
Income before provision for income taxes	149	210
Provision for income taxes:
Current	(12)	(56)
Deferred	(46)	5
Provision for income taxes, net	(58)	(51)
Net income	91	159
Other comprehensive income (loss):
Foreign currency translation adjustment	(30)	86
Total comprehensive income	$ 61	$ 245
Basic net income per common share	$ 0.02	$ 0.03
Diluted net income per common share	$ 0.02	$ 0.03
Weighted average common shares outstanding-basic	5,157	5,157
Weighted average common shares outstanding-diluted	5,157	5,157

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Treasury Stock, Common [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Comprehensive Income [Member]	Total
Beginning balance, value at Dec. 31, 2022	$ 65	$ (6,371)	$ 88,770	$ (57,709)	$ (544)	$ 24,211
Beginning balance, shares at Dec. 31, 2022	6,472	1,315
Beginning balance, shares at Dec. 31, 2022	(6,472)	(1,315)
Share based payment expense			24			24
Net income to common shareholders				159		159
Foreign currency translation					86	86
Ending balance, value at Mar. 31, 2023	$ 65	$ (6,371)	88,794	(57,550)	(458)	24,480
Ending balance, shares at Mar. 31, 2023	6,472	1,315
Beginning balance, shares at Mar. 31, 2023	(6,472)	(1,315)
Beginning balance, value at Dec. 31, 2023	$ 65	$ (6,371)	88,854	(57,276)	(376)	24,896
Beginning balance, shares at Dec. 31, 2023	6,472	1,315
Beginning balance, shares at Dec. 31, 2023	(6,472)	(1,315)
Share based payment expense			11			11
Net income to common shareholders				91		91
Foreign currency translation					(30)	(30)
Ending balance, value at Mar. 31, 2024	$ 65	$ (6,371)	$ 88,865	$ (57,185)	$ (406)	$ 24,968
Ending balance, shares at Mar. 31, 2024	6,472	1,315
Beginning balance, shares at Mar. 31, 2024	(6,472)	(1,315)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net income	$ 91	$ 159
Adjustments to reconcile net income to net cash used in operating activities:
Amortization and depreciation	44	51
Share based payment expense	11	24
Loss on foreign exchange rates	7	15
Deferred income taxes	46	(5)
Bad debt expense	29	45
Changes in operating assets and liabilities:
Accounts receivable	(191)	(312)
Prepaid expenses and other current assets	(25)	(117)
Right of use assets-operating	172	205
Other assets	0	15
Due to models	(1,116)	(621)
Lease liabilities - operating	(190)	(91)
Lease liabilities - finance	25	0
Contract liabilities	0	(270)
Accounts payable and accrued liabilities	(219)	(233)
Net cash used in operating activities	(1,316)	(1,135)
Cash flows from investing activities:
Purchases of property and equipment	(6)	(73)
Purchases of short term investments	(6,149)	0
Maturities of short term investments	6,150	0
Net cash used in investing activities	(5)	(73)
Cash flows from financing activities:
Payments on finance leases	(32)	(15)
Net cash used in financing activities	(32)	(15)
Foreign currency effect on cash flows	(30)	86
Net change in cash and cash equivalents:	(1,383)	(1,137)
Cash and cash equivalents, beginning of period	6,117	11,998
Cash and cash equivalents, end of period	4,734	10,861
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$ 7	$ 0

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ 91	$ 159

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual [Table]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Basis of Presentation

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

Business Activity

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Activity

Note 2. Business Activity

Foreign Currency Translation

3 Months Ended

Mar. 31, 2024

Foreign Currency [Abstract]

Foreign Currency Translation

Note 3. Foreign Currency Translation

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 4. Commitments and Contingencies

Note 5. Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Note 5. Income Taxes

Note 5. Income Taxes

As of March 31, 2024, the Company had no federal income tax loss carryforwards.

Treasury Shares

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Treasury Shares

Note 6. Treasury Shares

Related Parties

3 Months Ended

Mar. 31, 2024

Related Parties

Note 7. Related Parties

Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8. Fair Value Measurements

	·	Level 1 – Quoted prices for identical instruments in active markets
	·	Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose significant inputs are observable
	·	Level 3 – Instruments with model-derived valuations whose significant inputs are unobservable

The following table presents the fair value of the Company’s cash and cash equivalents and short-term investments and their corresponding level within the fair value hierarchy:

Schedule of Fair Value of Assets
	March 31, 2024				December 31, 2023
	Level		Amount		Level		Amount
Cash and cash equivalents
Cash			$	4,713			$	6,107
Money market funds		1		21		1		10
Total			$	4,734			$	6,117

Short-term investments
United States Treasury securities		1	$	6,670		1	$	6,596
Total			$	6,670			$	6,596

Total cash and cash equivalents and short-term investments			$	11,404			$	12,713

As of March 31, 2024 and December 31, 2023, the fair value of cash equivalents and short-term investments approximated their cost.

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets

Schedule of Fair Value of Assets
	March 31, 2024				December 31, 2023
	Level		Amount		Level		Amount
Cash and cash equivalents
Cash			$	4,713			$	6,107
Money market funds		1		21		1		10
Total			$	4,734			$	6,117

Short-term investments
United States Treasury securities		1	$	6,670		1	$	6,596
Total			$	6,670			$	6,596

Total cash and cash equivalents and short-term investments			$	11,404			$	12,713

Note 5. Income Taxes (Details Narrative)	Mar. 31, 2024 USD ($)
Income Tax Disclosure [Abstract]
Federal Income Tax Loss Carryforwards	$ 0

Treasury Shares (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended	141 Months Ended
Treasury Shares (Details Narrative) - USD ($)	Mar. 31, 2024	Dec. 31, 2016	Sep. 30, 2023	Dec. 31, 2013	Dec. 31, 2012
Equity [Abstract]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased		1,500,000		1,000,000	500,000
Stock Repurchase Program Additional Shares Authorized		500,000
Treasury Stock, Shares, Acquired			1,314,694
Shares Acquired, Average Cost Per Share			$ 4.85
Treasury Stock, Value, Acquired, Cost Method	$ 0		$ 6,400,000

Related Parties (Details Narrative) - USD ($)	3 Months Ended
Related Parties (Details Narrative) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Newcastle Partners [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Contractual Obligation	$ 0
Corporate Offices [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Operating Lease, Expense	$ 7,500	$ 7,500

Schedule of Fair Value Asset Measurements (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	$ 11,404	$ 12,713
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	4,734	6,117
Investments, Fair Value Disclosure	6,670	6,596
Fair Value, Inputs, Level 1 [Member] \| Cash [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	4,713	6,107
Fair Value, Inputs, Level 1 [Member] \| Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	21	10
Fair Value, Inputs, Level 1 [Member] \| Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments, Fair Value Disclosure	$ 6,670	$ 6,596

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WHLM Wilhelmina International Inc