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U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Mark One)

|    |  |                                                                                  
|--- |  | ---------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2002

|      |  |                                                                                   
|----- |  | ----------------------------------------------------------------------------------
|[   ] |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ____________

Commission File Number 0-20866

WILSHIRE TECHNOLOGIES, INC.(Exact name of small business issuer as specified in its charter)

|                                                                          |  |                                                
|------------------------------------------------------------------------- |  | -----------------------------------------------
|California
(State or other jurisdiction of incorporation or organization) |  | 33-0433823
(I.R.S. Employer Identification No.)

5861 Edison Place
Carlsbad, California 92008
(Address of principal executive offices)

(760) 929-7200
(Issuers telephone number)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [X] No [   ]

The number of shares outstanding of the registrants only class of Common
Stock, no par value, were 20,964,423 on April 7, 2002.

Transitional Small Business Disclosure Format. Yes [   ] No [X]



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|                            |                                                                   |                                                      |  |  |  |  |  | 
|--------------------------- | ----------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|                            |                                                                   | Condensed Consolidated Balance Sheets               
|PART 1                     
|                            | Item 1.                                                          
|                            |                                                                   | Condensed Consolidated Statements of Operations     
|                            |                                                                   | Condensed Consolidated Statements of Cash Flows     
|                            |                                                                   | Notes to Condensed Consolidated Financial Statements
|                            | Item 2. Managements Discussion and Analysis or Plan of Operation
|PART II  OTHER INFORMATION
|                            | Item 1. Legal Proceedings:                                       
|                            | Item 2. Changes in Securities and Use of Proceeds:               
|                            | Item 3. Defaults Upon Senior Securities:                         
|                            | Item 4. Submission of Matters to a Vote of Security Holders:     
|                            | Item 5. Other Information:                                       
|                            | Item 6. Exhibits and Reports on Form 8-K                         
|SIGNATURES                 
|EXHIBIT 10.213             
|EXHIBIT 10.214             
|EXHIBIT 10.215             
|EXHIBIT 10.21.6            



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WILSHIRE TECHNOLOGIES, INC.

INDEX TO FORM 10-QSB

|                                           |                                                           |                                                                                                                              |    |  
|------------------------------------------ | --------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | -- | -
|                                          
|PART 1 - FINANCIAL INFORMATION (UNAUDITED) |                                                           | PAGE                                                                                                                        
|                                          
|                                           |                                                           |                                                                                                                              |    |  
|Item 1.                                    | Financial Statements:                                     |                                                                                                                              |   
|                                           |                                                           |                                                                                                                              |    |  
|                                           |                                                           | Condensed Consolidated Balance Sheets as of
February 28, 2002 and November 30, 2001                                          |    | 3
|                                           |                                                           |                                                                                                                              |    |  
|                                           |                                                           | Condensed Consolidated Unaudited Statements of Operations
for the Three Months Ended February 28, 2002 and
February 28, 2001 |    | 4
|                                           |                                                           |                                                                                                                              |    |  
|                                           |                                                           | Condensed Consolidated Unaudited Statements of Cash Flows
for the Three Months Ended February 28, 2002 and February 28, 2001 |    | 5
|                                           |                                                           |                                                                                                                              |    |  
|                                           |                                                           | Notes to Condensed Consolidated Unaudited Financial
Statements                                                               |    | 6
|                                           |                                                           |                                                                                                                              |    |  
|Item 2.                                    | Managements Discussion and Analysis or Plan of Operation |                                                                                                                              | 10
|                                           |                                                           |                                                                                                                              |    |  
|                                          
|PART II - OTHER INFORMATION                |                                                           |                                                                                                                             
|                                          
|                                           |                                                           |                                                                                                                              |    |  
|Item 1.                                    | Legal Proceedings                                         |                                                                                                                              | 17
|                                           |                                                           |                                                                                                                              |    |  
|Item 2.                                    | Changes in Securities                                     |                                                                                                                              | 17
|                                           |                                                           |                                                                                                                              |    |  
|Item 3.                                    | Defaults Upon Senior Securities                           |                                                                                                                              | 17
|                                           |                                                           |                                                                                                                              |    |  
|Item 4.                                    | Submission of Matters to a Vote of Security Holders       |                                                                                                                              | 17
|                                           |                                                           |                                                                                                                              |    |  
|Item 5.                                    | Other Information                                         |                                                                                                                              | 17
|                                           |                                                           |                                                                                                                              |    |  
|Item 6.                                    | Exhibits and Reports on Form 8-K                          |                                                                                                                              | 17
|                                           |                                                           |                                                                                                                              |    |  
|Signatures                                 |                                                           | 18                                                                                                                          

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Wilshire Technologies, Inc.
Condensed Consolidated Balance Sheets
(See Note 2)

PART 1

Item 1.

|                                              |                                                                                                                         |             |              |             |              |   |             |             |  
|--------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ----------- | ------------ | ----------- | ------------ | - | ----------- | ----------- | -
|                                              |                                                                                                                         |             | February 28, |             | November 30,
|                                              |                                                                                                                         |             | 2002         |             | 2001        
|                                              |                                                                                                                         |             |              |             |             
|Assets                                        |                                                                                                                         | (Unaudited) |              | (Note 1)   
|Current assets:                               |                                                                                                                         |             |              |             |              |   |             |            
|                                              | Cash                                                                                                                    |             | $            | 728,000     |              |   | $           | 314,000     |  
|                                              | Accounts receivable trade, less
allowance for doubtful accounts of
$375 at both February 28, 2002 and
November 30, 2001 |             |              | 56,000      |              |   |             | 46,000      |  
|                                              | Inventories (Note 3)                                                                                                    |             |              | 24,000      |              |   |             | 38,000      |  
|                                              | Other current assets                                                                                                    |             |              | 865,000     |              |   |             | 320,000     |  
|                                              |                                                                                                                         |             |              |             |              |   |             |            
|Total current assets                          |                                                                                                                         |             | 1,673,000    |             |              |   | 718,000     |            
|Property and equipment, net                   |                                                                                                                         |             | 2,891,000    |             |              |   | 2,644,000   |            
|Patents and trademarks, net                   |                                                                                                                         |             | 32,000       |             |              |   | 29,000      |            
|Receivable due from sale of division (Note 4) |                                                                                                                         |             | 687,000      |             |              |   | 687,000     |            
|                                              |                                                                                                                         |             |              |             |              |   |             |            
|                                              |                                                                                                                         | $           | 5,283,000    |             |              | $ | 4,078,000   |            
|                                              |                                                                                                                         |             |              |             |              |   |             |            
|Liabilities and shareholders deficit         |                                                                                                                         |             |              |             |              |   |             |            
|Current liabilities:                          |                                                                                                                         |             |              |             |              |   |             |            
|                                              | Accounts payable                                                                                                        |             | $            | 102,000     |              |   | $           | 171,000     |  
|                                              | Accrued expenses                                                                                                        |             |              | 520,000     |              |   |             | 390,000     |  
|                                              | Interest
payable-related party (Note 5)                                                                                 |             |              | 5,611,000   |              |   |             | 5,164,000   |  
|                                              | Line of credit  related party (Note 5)                                                                                 |             |              | 20,068,000  |              |   |             | 18,704,000  |  
|                                              |                                                                                                                         |             |              |             |              |   |             |            
|Total current liabilities                     |                                                                                                                         |             | 26,301,000   |             |              |   | 24,429,000  |            
|                                              |                                                                                                                         |             |              |             |              |   |             |            
|Commitments and contingencies                 |                                                                                                                         |             |              |             |              |   |             |            
|Shareholders deficit                         |                                                                                                                         |             |              |             |              |   |             |            
|                                              | Preferred stock, no par value,
2,000,000 shares authorized and none
issued or outstanding                               |             |              |            |              |   |             |            |  
|                                              | Common stock, no par value, 50,000,000
shares authorized; 20,964,423 shares
issued and outstanding                      |             |              | 27,204,000  |              |   |             | 25,912,000  |  
|                                              | Common stock warrants and options                                                                                       |             |              | 870,000     |              |   |             | 495,000     |  
|                                              | Accumulated deficit                                                                                                     |             |              | (49,092,000 | )            |   |             | (46,758,000 | )
|                                              |                                                                                                                         |             |              |             |              |   |             |            
|Total shareholders deficit                   |                                                                                                                         |             | (21,018,000  | )           |              |   | (20,351,000 | )          
|                                              |                                                                                                                         |             |              |             |              |   |             |            
|                                              |                                                                                                                         | $           | 5,283,000    |             |              | $ | 4,078,000   |            
|                                              |                                                                                                                         |             |              |             |              |   |             |            

See accompanying notes to financial statements.

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Wilshire Technologies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(See Note 2)

|                                       |                            |   |                           |         |              |   |            |         | 
|-------------------------------------- | -------------------------- | - | ------------------------- | ------- | ------------ | - | ---------- | ------- | 
|                                       |                            |   | Three-Month Periods Ended
|                                       |                            |   |                          
|                                       |                            |   | February 28,              |         | February 28,
|                                       |                            |   | 2002                      |         | 2001        
|                                       |                            |   |                           |         |             
|Net sales                              |                            | $ | 79,000                    |         |              | $ | 11,000     |        
|Cost of sales                          |                            |   | 997,000                   |         |              |   | 529,000    |        
|                                       |                            |   |                           |         |              |   |            |        
|Gross loss                             |                            |   | (918,000                  | )       |              |   | (518,000   | )      
|                                       |                            |   |                           |         |              |   |            |        
|Operating expenses:                    |                            |   |                           |         |              |   |            |        
|                                       | Marketing and selling      |   |                           | 194,000 |              |   |            | 145,000 | 
|                                       | General and administrative |   |                           | 442,000 |              |   |            | 441,000 | 
|                                       | Research and development   |   |                           | 1,000   |              |   |            | 21,000  | 
|                                       |                            |   |                           |         |              |   |            |        
|Total operating expenses               |                            |   | 637,000                   |         |              |   | 607,000    |        
|                                       |                            |   |                           |         |              |   |            |        
|Loss from operations                   |                            |   | (1,555,000                | )       |              |   | (1,125,000 | )      
|Other income, net                      |                            |   | 57,000                    |         |              |   | 87,000     |        
|Interest expense, net                  |                            |   | (835,000                  | )       |              |   | (444,000   | )      
|                                       |                            |   |                           |         |              |   |            |        
|Loss before provision for income taxes |                            |   | (2,333,000                | )       |              |   | (1,482,000 | )      
|Provision for income taxes             |                            |   | 1,000                     |         |              |   | 1,000      |        
|                                       |                            |   |                           |         |              |   |            |        
|Net loss                               |                            | $ | (2,334,000                | )       |              | $ | (1,483,000 | )      
|                                       |                            |   |                           |         |              |   |            |        
|Weighted average shares outstanding    |                            |   | 17,634,000                |         |              |   | 12,953,000 |        
|                                       |                            |   |                           |         |              |   |            |        
|Basic and diluted loss per share       |                            | $ | (0.13                     | )       |              | $ | (0.11      | )      
|                                       |                            |   |                           |         |              |   |            |        

See accompanying notes to financial statements.

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Wilshire Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(See Note 2)

|                                                                            |                                     |                                                |                                                              |           |                           |          |              |           |         |         |  
|--------------------------------------------------------------------------- | ----------------------------------- | ---------------------------------------------- | ------------------------------------------------------------ | --------- | ------------------------- | -------- | ------------ | --------- | ------- | ------- | -
|                                                                            |                                     |                                                |                                                              |           | Three-Month Periods Ended
|                                                                            |                                     |                                                |                                                              |           |                          
|                                                                            |                                     |                                                |                                                              |           | February 28,              |          | February 28,
|                                                                            |                                     |                                                |                                                              |           | 2002                      |          | 2001        
|                                                                            |                                     |                                                |                                                              |           |                           |          |             
|Operating activities                                                        |                                     |                                                |                                                              |           |                           |          |              |          
|Net loss                                                                    |                                     | $                                              | (2,334,000                                                   | )         |                           | $        | (1,483,000   | )        
|Adjustments to reconcile net loss to net cash used in
operating activities: |                                     |                                                |                                                              |           |                           |          |              |          
|                                                                            |                                     | Depreciation and amortization                  |                                                              |           | 170,000                   |          |              |           | 165,000 |        
|                                                                            |                                     | Options Issued to Majority Shareholder         |                                                              |           | 375,000                   |          |              |           |        |        
|                                                                            |                                     | Provision for inventory obsolescence           |                                                              |           | (14,000                   | )        |              |           |        |        
|                                                                            |                                     | Net change in operating assets and liabilities |                                                              |           |                           |          |              |           |         |        
|                                                                            |                                     |                                                | Decrease (increase) in accounts receivable                   |           |                           | (10,000  | )            |           |         | 1,000   |  
|                                                                            |                                     |                                                | Decrease (increase) in inventories                           |           |                           | 27,000   |              |           |         |        |  
|                                                                            |                                     |                                                | Decrease (increase) in other current assets                  |           |                           | (545,000 | )            |           |         | (15,000 | )
|                                                                            |                                     |                                                | Increase (decrease) in accounts payable
and accrued expenses |           |                           | 61,000   |              |           |         | 72,000  |  
|                                                                            |                                     |                                                | Increase in interest payable                                 |           |                           | 447,000  |              |           |         | 446,000 |  
|                                                                            |                                     |                                                |                                                              |           |                           |          |              |          
|Net cash used in operating activities                                       |                                     |                                                | (1,823,000                                                   | )         |                           |          | (814,000     | )        
|                                                                            |                                     |                                                |                                                              |           |                           |          |              |          
|Investing activities                                                        |                                     |                                                |                                                              |           |                           |          |              |          
|                                                                            | Purchases of equipment              |                                                |                                                              | (416,000  | )                         |          |              | (19,000   | )      
|                                                                            | Increase (decrease) in other assets |                                                |                                                              | (2,000    | )                         |          |              |          |        
|                                                                            |                                     |                                                |                                                              |           |                           |          |              |          
|Net cash used in investing activities                                       |                                     |                                                | (418,000                                                     | )         |                           |          | (19,000      | )        
|                                                                            |                                     |                                                |                                                              |           |                           |          |              |          
|Financing activities                                                        |                                     |                                                |                                                              |           |                           |          |              |          
|                                                                            | Proceeds from line of credit        |                                                |                                                              | 2,643,000 |                           |          |              | 1,000,000 |        
|                                                                            | Forgiveness of debt                 |                                                |                                                              | 12,000    |                           |          |              |          |        
|                                                                            |                                     |                                                |                                                              |           |                           |          |              |          
|Net cash provided by financing activities                                   |                                     |                                                | 2,655,000                                                    |           |                           |          | 1,000,000    |          
|                                                                            |                                     |                                                |                                                              |           |                           |          |              |          
|Net increase (decrease) in cash                                             |                                     |                                                | 414,000                                                      |           |                           |          | 167,000      |          
|Cash  beginning of period                                                  |                                     |                                                | 314,000                                                      |           |                           |          | 413,000      |          
|                                                                            |                                     |                                                |                                                              |           |                           |          |              |          
|Cash  end of period                                                        |                                     | $                                              | 728,000                                                      |           |                           | $        | 580,000      |          
|                                                                            |                                     |                                                |                                                              |           |                           |          |              |          

See accompanying notes to financial statements.

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Wilshire Technologies, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(See Note 2)

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Wilshire Technologies, Inc. (the Company) operates in one business segment,
which is to develop, manufacture and market engineered polymer products for
industrial cleanroom use. The Company has historically developed, manufactured
and marketed engineered polymer products for industrial cleanroom use. In 1996,
the Company divested its Medical Products and Transdermal Products divisions
and focused primarily on products used in industrial cleanrooms, such as gloves
and contamination control products. From 1996 through 2000, substantially all
of the Companys reported historic revenues have been related to sales of its
contamination control products. On May 19, 2000, the Company completed the sale
of certain assets and selected liabilities of the Companys Wilshire
Contamination Control division (the division) to Foamex Asia Co. LTD. (see
Note 4). During the third quarter of fiscal 2000, sales of the Companys
polyurethane glove ceased and the Company focused upon securing a strategic
partner for the new product development. Effective September 18, 2000, the
Company signed a Product Development, Purchase and License Agreement (the
Agreement) with the Lycra® division of E. I. DuPont de Nemours and Company
(DuPont). Under the Agreement, DuPont developed and began to supply a new
proprietary polyurethane material which is used by Wilshire to manufacture and
sell a disposable polyurethane glove for industrial cleanroom applications. The
Company, based in Carlsbad, California manufactures its products at the
Tijuana, Mexico facility of its wholly owned subsidiary, Wilshire International
de Mexico S.A. de C.V.

Basis of Presentation

The Company has incurred substantial losses since its inception in 1990, and
has relied on working capital provided by Trilon Dominion Partners, LLC
(Trilon Dominion - previously Dominion Capital, Inc.) in the form of both debt
and equity to fund its operations. Management believes that Trilon Dominion
will continue to support the Company as necessary through the end of fiscal
year 2002.

The accompanying condensed consolidated unaudited financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB for
quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of
1934. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended February 28, 2002
are not necessarily indicative of the results that may be expected for the
fiscal year ending November 30, 2002. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Companys annual report on Form 10-KSB for the fiscal year ended November 30,
2001.

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary. Significant intercompany amounts and transactions
have been eliminated.

NOTE 2. GOING CONCERN

The Companys consolidated financial statements included elsewhere herein have
been prepared assuming that the Company will continue as a going concern. The
Company has a working capital deficiency of $24,628,000; shareholders deficit
of $21,018,000 as of February 28, 2002, has suffered substantial recurring
losses from operations and is economically dependent on its majority
shareholder to finance operations. These matters, among others, raise
substantial doubt about the Companys ability to continue as a going concern.
Continuation of the Company is dependent on the Companys ability to negotiate
additional arrangements with its majority shareholder, raise additional capital
and to achieve profitability. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Although management has been successful in obtaining working capital from its
majority shareholder to fund operations to date, there can be no assurance that
the Company will be able to raise additional capital in the future.

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The Company anticipates continuing substantial negative cash flow from
operating and investing activities through the next twelve months. The Company
has projected its cash flow needs to be approximately $9 million for fiscal
2002. Trilon Dominion, the Companys largest shareholder with over 87% of the
shares outstanding, has acknowledged the Companys cash flow needs and has
indicated its commitment to provide financial support to the Company through
the next twelve months to the extent of such budgeted cash flow requirements.
However given that no written commitment exists, the Company is exposed to the
substantial risk that it will not receive the funds from Trilon Dominion to
fund present and future working capital needs. In the event that such funds are
not received it is unlikely that the Company will be successful in raising
capital from other sources. If adequate funds are not available to finance
current operations, the Company will be unable to execute its business
development efforts and may be unable to continue as a going concern.

The Companys continuation as a going concern is dependent upon its ability to
(a) generate sufficient cash flow to fund working capital and investment
activities, (b) to obtain additional outside financing, and (c) ultimately
sustain profitability. Managements recent actions in regard to these matters
are as follows:

1) During fiscal 2000, the Company sold selected assets and liabilities
totaling $945,000 related to the Companys Wilshire Contamination Control to
Foamex Asia Co. LTD. (the Buyer), an affiliate of Foamex International (FMX:
NASDAQ) for a potential sales price up to $2,500,000. (See Note 4). Payments
of the sale price are due from the Buyer on a quarterly basis based on a fixed
percentage of sales by the Buyer of certain products. Foamex International is
an international developer, manufacturer and supplier of high-quality foam,
including key materials utilized in contamination control environments. Foamex
Asia Co. Ltd., located in Singapore and in Thailand, is currently a major
supplier of specialty foam products to the Asian market.

As part of the sale agreement, Foamex Asia Co. Ltd. agreed to invest $1,000,000
of capital in equipment and machinery which, the Company believes, will lead to
lower manufacturing costs of the Buyer over the term of the agreement. The
Company further believes the transaction was in its best interests as the
likelihood of increased sales due to the lower manufacturing costs may provide
not only a return of the initial investment of $945,000, but additional
payments from the Buyer up to a total of $2,500,000.

In accordance with the terms of the sale agreement, a payment in the amount of
$258,000 was received from Foamex Asia Co. Ltd., on November 29, 2001 and
applied against the receivable. In March of 2002, the Company received another
payment of approximately $242,000 from Foamex Asia Co. Ltd., which further
reduced the principal balance to $445,000.

In addition to receiving the November 29, 2001 payment, Foamex Asia Co. Ltd.,
confirmed an additional unpaid deferred payment balance of over $400,000, which
is included in the receivable due from sale of division balance. Under the
terms of the Agreement, this deferred payment is to be paid in full by November
30, 2002.

2) In addition to the sale of assets to Foamex Asia Co. Ltd., the Company
entered into an agreement with Foamex to provide, for due consideration,
certain labor, facilities, services, personnel and other items with respect to
Foamexs ongoing operation of the Divisions business. The agreement, which
commenced on May 19, 2000, has been amended to extend through December 31, 2002
and will provide additional funds to offset operating expenses of approximately
$550,000 for fiscal year 2002.

3) In September 2000, the Company signed a Product Development, Purchase and
License Agreement (the Agreement) with the Lycra® division of E. I. DuPont de
Nemours and Company (DuPont). Under the Agreement, DuPont developed and
began to supply a new proprietary polyurethane material, which is used by
Wilshire to manufacture and sell a disposable polyurethane glove for industrial
and non-industrial cleanroom applications.

The Company began production of the new gloves in the second quarter of 2001
and believes that the new, improved DuraCLEAN® gloves using Lycra® eglantine
fiber will offer the market a glove with improved cleanliness, durability and
comfort. The glove will also have excellent ESD properties. The glove has the
distinct advantage of being able to be used as a one time disposable product
or, because of its durability, can be relaundered and used multiple times. The
relaunderability benefit is a significant factor as it allows for a reduction
in the cost of the glove and a large reduction in the waste stream of the
customer, which is a growing concern in the market.

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Although the new gloves will be premium priced, management believes they will
be cost effective for users because the enhanced cleanliness will reduce
contamination and increase yield. Also, because of excellent abrasion
resistance they can be worn longer and changed less frequently than less
expensive gloves.

Because of the inherent cleanliness and the absence of chemical accelerators,
the new DuraCLEAN® with Lycra® glove has expanded applications outside
traditional cleanroom markets. Some of the fastest growing market-segments for
Wilshire Technologies Inc. are medical device manufacturing,
telecommunications, biotechnology and highly sensitive laboratories. The
ability to re-launder and re-use the DuraCLEAN® glove has appeal in waste
sensitive markets in Japan.

The Glove will be marketed under the trademark DuraCLEAN® with Lycra®. DuPont
will be active with the Company in the marketing of the product. The Company
will distribute the product through a variety of channels both in the US and
overseas.

The Company believes that with the potential of a return of $2,500,000 million
on the sale of its contamination control division to Foamex Asia Co., Ltd.,
with the cost-sharing agreements in place to lower operating costs, and with
the sales of its new glove, the Company will position itself to begin
generating sufficient cash flow to fund working capital and investment
activities by early 2003. If the Company does attain its sales goals, it
believes that it will be able to raise additional capital, as needed in the
future. There can be no assurances, however, that the Company will be
successful in any of the above mentioned actions or plans on a timely basis, or
at all.

NOTE 3. FINANCIAL STATEMENT INFORMATION

Inventories consist of the following:

|                   |  |              |         |              |  |   |         |  
|------------------ |  | ------------ | ------- | ------------ |  | - | ------- | -
|                   |  | February 28, |         | November 30,
|                   |  | 2002         |         | 2001        
|                   |  |              |         |             
|Raw materials      |  | $            | 27,000  |              |  | $ | 40,000  |  
|Finished goods     |  |              | 15,000  |              |  |   | 30,000  |  
|Inventory reserves |  |              | (18,000 | )            |  |   | (32,000 | )
|                   |  |              |         |              |  |   |         |  
|                   |  | $            | 24,000  |              |  | $ | 38,000  |  
|                   |  |              |         |              |  |   |         |  

NOTE 4. SALE OF DIVISION

On May 19, 2000, the Company completed the sale of certain assets and selected
liabilities of the Companys Wilshire Contamination Control division (the
division) to Foamex Asia Co. LTD. (the Buyer), an affiliate of Foamex
International (FMX:NASDAQ) for a potential sales price up to $2,500,000.
Substantially all of the historic revenues reported by the Company related to
this division.

Payments are due from the Buyer on a quarterly basis based on a fixed
percentage of sales by the Buyer of certain products, as defined in the asset
purchase agreement, subject to certain cash flow provisions.

As no proceeds were due to the Company on the date of closing, the Company has
recorded a receivable, which equates to the net book value of the net assets
sold. Such receivable totals $945,000. The Company has a secured interest in
the net assets sold. All payments of the sales price will be applied against
the receivable, under the cost recovery method, with no recognition of gain
until the receivable is paid in full. The Company believes that the asset
recorded is not impaired. On November 29, 2001, the Company received a payment
of $258,000 from Foamex Asia Co. Ltd., in compliance with the terms of the
Agreement, which was applied against the receivable. In March of 2002, the
Company received another payment of approximately $242,000 from Foamex Asia Co.
Ltd., which further reduced the principal balance to $445,000.

The Buyer has made all payments as required by the sale agreement on a timely
basis, and has represented both verbally and in writing to the Company that it
has the financial ability to meet its payment obligations. Management has not
received any financial information with which to evaluate the Buyers ability
to pay the receivable, as the Buyer is not obligated to provide the financial
statements. As such, while uncertainty exists as to the collectibility of the
receivable, management has no reason to believe that the receivable will not be
collected on a timely basis.

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In addition to the sale of assets, the Buyer and Seller entered into an
agreement (the Ongoing Service Agreement) where the Company agreed to provide
Foamex, for due consideration, certain labor, facilities, services, personnel
and other items with respect to Foamexs ongoing operation of the Divisions
business. The agreement commenced on May 19, 2000 and has been subsequently
amended to continue until December 31, 2002. The Company anticipates receiving
approximately $550,000 in consulting fees from the agreement during fiscal year
2002. The Company received payments totaling $110,000 and $89,000 for
services provided under this agreement during the 3 month periods
ended February 28, 2002 and 2001, respectively.

NOTE 5. LINE OF CREDIT

On March 31, 1998, the Company and Trilon Dominion completed an Amended and
Restated Credit Agreement and Revolving Line of Credit (the Amended
Agreement) secured by the Companys assets.

The Agreement has been extended through a number of amendments to January 31,
2003. Through fiscal 1999, the Company issued $11,935,000 of demand notes
bearing interest at rates of 11.5% and prime plus 3%.

In fiscal 2000, the Company issued demand notes totaling $2,813,000 under the
line of credit agreement. The notes issued in fiscal 2000 bear interest at a
rate of prime plus 3% (13.0% at November 30, 2000).

For the first nine months of fiscal 2001, the Company issued demand notes
totaling $3,165,000 at a rate of prime plus 3%. All of the notes are due on
demand. On October 5, 2001, November 5, 2001 and December 7, 2001, the Company
issued additional demand notes totaling $1,279,000 at a prime rate of prime
plus 3%.

On December 17, 2001, the Company signed a Stock Option Agreement with Trilon.
Under the Trilon agreement, the Company issued to Trilon 8,011,038 shares of
the Companys unissued authorized stock in cancellation of three demand notes
plus respective interest which totaled $1,291,000.

The Agreement also granted to Trilon the following three options: (i) an
option, issued on December 17, 2001, to purchase 16,445,900 shares of Common
Stock at $0.14 per share, exercisable at any time before 2003; (ii) an option,
to be issued upon approval of an increase in the Companys authorized stock, to
purchase an additional 1,600,000 shares of Common Stock, which may also be
purchased at $0.14 per share at any time before 2003; and (iii) an additional
option to purchase from the Company at $0.14 per share that number of shares of
Common Stock necessary to increase Trilons beneficial ownership of the
Companys Common Stock to 90% of the shares outstanding after exercise of all
options granted in the Agreement and after the deemed exercise of all other
then outstanding options and warrants. The options granted to Trilon under the
Agreement may be exercised for cash or, at Trilons election, by canceling
outstanding indebtedness of the Company to Trilon in an amount equal to the
exercise price. The fair value of the options granted was estimated to be
$375,000, which was recorded as a charge to earnings in the first quarter of
2002.

The Company issued two additional demand notes during the first three months of
fiscal 2002. On January 9, 2002 and February 13, 2002, demand notes totaling
$2,155,000 were issued at a rate of prime plus 3% (7.75% at February 28, 2002).

NOTE 6. COMMITMENTS AND CONTINGENCIES

Breast Implant Litigation

During the first three months of 2002, there have been no significant
developments in the Breast Implant Litigation. For information regarding legal
proceedings, refer to the information contained in the Companys Annual Report
on Form 10-KSB for the fiscal year ended November 30, 2001, under Note 7 to the
consolidated financial statements included therein.

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Item 2. Managements Discussion and Analysis or Plan of Operation

With the exception of discussions regarding historical information,
Managements Discussion and Analysis or Plan of Operation contains forward
looking statements. Such statements are based on current expectations subject
to uncertainties and other factors which may involve known and unknown risks
that could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are based
upon assumptions about future events which may not prove to be accurate.

Risks and uncertainties inherent in forward looking statements include, but are
not limited to, the Companys future cash flows and ability to obtain
sufficient financing, timing and volume of sales orders, level of gross margins
and operating expenses, lack of market acceptance or demand for new product
lines, price competition, conditions in the contamination control industry and
the economy in general, as well as legal proceedings. The economic risk
associated with material cost fluctuations and inventory obsolescence is
significant to the Company. The ability to manage inventories through
procurement and utilization of component materials and the ability to generate
new glove sales could have a significant impact on future results of operations
or financial condition. Historical results are not necessarily indicative of
the operating results for any future period.

Subsequent written and oral forward looking statements attributable to the
Company or persons acting on the Companys behalf are expressly qualified in
their entirety by cautionary statements in this Form 10-QSB and in other
reports that have been filed with the Securities and Exchange Commission. The
following discussion should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto included elsewhere in this filing.

Overview

The Company has incurred substantial losses since its inception in 1990, and
has relied on working capital provided by Trilon Dominion (previously Dominion
Capital, Inc.) in the form of both debt and equity to fund its operations.
Management believes that Trilon Dominion will continue to support the Companys
working capital needs as necessary through the end of fiscal year 2002. (See
discussion on Going Concern in Note 2 of the Notes to the Consolidated
Financial Statements).

Accordingly, the accompanying condensed consolidated financial statements have
been prepared assuming the Company will continue to operate as a going concern.
Should Trilon Dominion discontinue providing working capital support to the
Company, the Company would have insufficient working capital to meet its
operational needs for the foreseeable future.

In May of fiscal year 2000, the Company sold certain assets and selected
liabilities of the Companys Wilshire Contamination Control division (the
Division) to Foamex Asia Co. Ltd. (the Buyer), an affiliate of Foamex
International (FMX:NASDAQ) for a potential sales price of $2,500,000 or more.
The sale was finalized on May 19, 2000. Substantially all of the historic
revenues reported by the Company related to this division.

Payments are due from the Buyer on a quarterly basis based on a fixed
percentage of sales by the Buyer of certain products, as defined in the asset
purchase agreement, subject to certain cash flow provisions.

As no proceeds were due to the Company on the date of closing, the Company
recorded a receivable in the amount of $945,000, which equates to the net book
value of the net assets sold. The Company has a secured interest in the net
assets sold. All payments of the sales price will be applied against the
receivable, under the cost recovery method, with no recognition of gain until
the receivable is paid in full. The Company believes that the asset recorded is
not impaired. On November 29, 2001, the Company received a payment of $258,000
from Foamex Asia Co. Ltd., in compliance with the terms of the Agreement, which
was applied against the receivable. In March of 2002, the Company received
another payment of approximately $242,000 from Foamex Asia Co. Ltd., which
further reduced the principal balance to $445,000.

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In addition to the sale of assets, the Buyer and Seller entered into an
agreement (the Ongoing Service Agreement) where the Company agreed to provide
Foamex, for due consideration, certain labor, facilities, services, personnel
and other items with respect to Foamexs ongoing operation of the Divisions
business. The agreement commenced on May 19, 2000 and has been subsequently
amended to continue until December 31, 2002. The Company anticipates receiving
approximately $550,000 in consulting fees from the agreement during fiscal year
2002.

The Company believes the transaction was in its best interests due to the
likelihood of increased sales over the next three years from lower
manufacturing costs that could be achieved by Foamex Asia Co. Ltd. Furthermore,
the sale of the Division to Foamex Asia Co. Ltd., allowed the Company to better
focus its efforts on the polyurethane glove business.

Effective September 18, 2000, the Company signed a Product Development,
Purchase and License Agreement (the Agreement) with the Lycra® division of E.
I. DuPont de Nemours and Company (DuPont). Under the Agreement, DuPont
developed and began to supply a new proprietary polyurethane material (the
Material) used by Wilshire to manufacture and sell a disposable polyurethane
glove for industrial and non-industrial cleanroom applications.

The Agreement grants the Company an exclusive two-year license to purchase the
Material for the manufacture of its glove for sale into the cleanroom,
non-medical glove markets of North America, Asia (ex-Japan) and Japan. The
Agreement allows for up to three annual extensions of the exclusivity period
for the purchasing rights and for the selling rights into North America and
Asia (ex-Japan) upon the Company meeting certain performance criteria. In
order to maintain the exclusivity of the purchasing and selling rights beyond
the initial two-year period, the Company is required to meet annual revenue
thresholds of $6.9M, $16.3M and $26.5M for the 12-month periods ending June 30,
2003, 2004 and 2005, respectively. If the Company does not meet the stated
minimum revenue requirement, the Company can obtain annual non-exclusive rights
in these markets upon achievement of lesser annual thresholds of $3.45M, $8.15M
and $13.25M for the 12-month periods ending June 30, 2003, 2004 and 2005,
respectively. There can be no assurance that the Company will achieve these
revenue levels to satisfy the minimum revenue requirements to extend its rights
to use DuPonts Material, on an exclusive basis, for periods beyond the initial
two-year period.

Under the Agreement, the Company is required to purchase all its polyurethane
requirements from DuPont through the end of 2005, if the extensions are
exercised. In conjunction with the Agreement, the Company also entered into a
Trademark License Agreement with Dupont that allows the Company to market the
new polyurethane glove under the Lycra trademark.

As partial consideration, in fiscal year 2000, the Company granted a stock
option to DuPont to purchase up to 2,000,000 shares of its common stock at an
exercise price of $.50 a share. This option was cancelled effective December
17, 2001 at which time the Company granted DuPont a different option with an
exercise price of $1 million.

Upon exercise of the new option, DuPont would receive 10% of the proceeds (as
defined in the option) from (i) any voluntary or involuntary liquidation,
dissolution or winding up of the Company, (ii) the sale of substantially all of
the Companys assets by the Company, or (iii) the acquisition of the Company by
another entity, not affiliated with Trilon Dominion, by means of a merger or
other form of corporate reorganization in which the outstanding shares of the
Company are exchanged for securities or other consideration issued by or on
behalf of the acquiring corporation (collectively a Liquidation).

In the event of Liquidation before December 31, 2004, the option becomes
exercisable on the day the Liquidation occurs. If there has been no
Liquidation before December 31, 2004, the option becomes exercisable on
December 30, 2004 and, if not exercised, expires at the close of business on
that day. The Company, may in its sole discretion, extend the December 31,
2004 date on at least 15 calendar days prior written notice to DuPont.

During fiscal year 2001, the Company finalized a commercial version of
DuraCLEAN® with Lycra® glove. The Company began a controlled production ramp as
it focused on process and yield improvement programs.

The process and yield improvement programs were completed in the last half of
fiscal year 2001, along with the completion of extensive tests for cleanliness,
durability, strength and comfort.

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The Company initially targeted its glove sales to the Japanese semiconductor
and diskdrive industries and introduced the glove for evaluations at key
customer sites. In the second half of 2001, the Company introduced the new
glove into the US Medical Device market.

In October 2001, the Company finished a retrofit of its glove dipping line to
maximize production capacity for the new glove. As part of the retrofit
program, the Company made a strategic decision to design new glove formers in
order to improve the fit of the glove and thus improve product yields. Vendor
design changes pushed the delivery of the formers from the first quarter of
fiscal year 2002 to the second quarter, respectively. Consequently, during the
first quarter of fiscal 2002, the Company experienced lower production levels
than planned as it continued to produce gloves on the old glove formers.

The Company received orders from key Japanese semiconductor and diskdrive
customers totaling $155,000 during the first three months of fiscal 2002, and
shipped $79,000 of product against those orders. The Company has received
additional orders for the glove totaling $246,000 during the second quarter to
date of fiscal 2002. Even though the delay of the new formers has reduced the
Companys production levels, the Company believes it will be able to meet all
open purchase order commitments.

The sale of the Companys Wilshire Contamination Control Division along with
the extensive development cycle of the new glove has continued to impact the
Companys ability to generate cash. The Company further anticipates that
additional funding of working capital totaling approximately $9 Million through
fiscal year 2002, will be required as the Company focuses on ramping up sales
of its new polyurethane glove.

As of November 30, 2001, the Company had used its current credit facilities.
Consequently, in order to raise funds to support its working capital needs for
fiscal 2002, the Company signed a Stock Option Agreement with Trilon Dominion
Partners, L.L.C. (Trilon).

Under the Trilon agreement, on December 17, 2001 the Company issued to Trilon
(the Companys largest shareholder owning over 87% of the Companys outstanding
shares), 8,011,038 shares of the Companys unissued authorized stock in
cancellation of $1,291,000 of indebtedness and interest. The Agreement also
granted to Trilon the following three options: (i) an option, issued on
December 17, 2001, to purchase 16,445,900 shares of Common Stock at $0.14 per
share, exercisable at any time before 2003; (ii) an option, to be issued upon
approval of an increase in the Companys authorized stock, to purchase an
additional 1,600,000 shares of Common Stock, which may also be purchased at
$0.14 per share at any time before 2003; and (iii) an additional option to
purchase from the Company at $0.14 per share that number of shares of Common
Stock necessary to increase Trilons beneficial ownership of the Companys
Common Stock to 90% of the shares outstanding after exercise of all options
granted in the Agreement and after the deemed exercise of all other then
outstanding options and warrants. The options granted to Trilon under the
Agreement may be exercised for cash or, at Trilons election, by canceling
outstanding indebtedness of the Company to Trilon in an amount equal to the
exercise price.

The Agreement contains certain covenants regarding corporation events which
restrict the Company, without the prior written consent of Trilon, from (a)
issuing any shares of its Preferred Stock, (b) issuing any shares of its Common
Stock except pursuant to warrants or options outstanding on the date hereof,
(c) paying any dividend payable in stock (of any class or classes) or in any
obligations or stock convertible into or exchangeable for shares of Common
Stock, upon its Common Stock or make any distribution (other than ordinary cash
dividends) to holders of its Common Stock, (d) granting to holders of its
Common Stock generally any rights or options, (e) effecting any capital
reorganization or reclassification of capital stock of the Company, (f)
consolidating with, or merging into, any other corporation or to transfer its
property as an entirety or substantially as an entirety, or (g) effecting the
liquidation, dissolution or winding up of the Company. These covenants remain
in effect until the above mentioned options have been exercised or expired. In
connection with any consent of Trilon to the foregoing, Trilon may require
adjustments to the exercise price in order to protect its purchase rights with
respect to the option. The fair value of the options granted was estimated to
be $375,000, which was recorded as a charge to earnings in the first quarter of
2002.

Trilon Dominion has advised the Company that it will continue to support the
Company as necessary through the end of fiscal year 2002 through the exercise
of options under this agreement; however no assurance of their support can be
given. (See discussion on Going Concern in Note 2 of the Notes to the
Consolidated Financial Statements).

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Results of Operations

Net Sales

The Company markets its products directly to end-users through a limited number
of internal sales personnel as well as through international, national and
regional distributors. Revenue for all sales is recognized when title
transfers, generally when products are shipped.

Net sales increased by $68,000 (618%) to $79,000 for the first three months of
fiscal year of 2002 as compared to sales of $11,000 for the comparable period
in 2001. The increase in sales for the year was due to the sales of the
Companys DuraCLEAN® with Lycra® glove to key Japanese semiconductor and
diskdrive customers. In the first quarter of fiscal 2002, the Company received
orders from key Japanese semiconductor and diskdrive customers totaling
$155,000 during the first three months of fiscal 2002, and shipped $79,000 of
product against those orders.

Gross Margin

For the first quarter of fiscal 2002, the Company recorded a negative gross
margin of $918,000 as compared to a negative gross margin of $518,000 for the
first quarter of fiscal 2001. The losses for each of the quarters presented
were primarily attributable to high-unabsorbed operating costs of its glove
manufacturing plant as the Company focused upon the development of a new
polyurethane glove made with proprietary material supplied by Dupont.

Marketing and Selling Expenses

Marketing and selling expenses increased by $49,000 (34%) to $194,000 for the
quarter ended February 28, 2002 from $145,000 for the comparable period of
2001. The 2002 increase, as compared to 2001, was primarily attributable to an
increase in headcount as well as an increase in marketing, tradeshow and travel
expenses associated with the introduction of the new glove to customers.

General and Administrative Expenses

General and administrative expenses include costs related to the Companys
administrative costs such as executive and office salaries, related payroll
expenses, investor relations, professional fees, supplies and utilities.

General and administrative expenses remained essentially unchanged (increased
by $1,000) to $442,000 for the first quarter of fiscal year 2002 from $441,000
for the first fiscal quarter of 2001. The increase in expense was due to the
accrual of a company bonus plan for 2002 mitigated by decreases in executive
headcount.

Research and Development

Research and development expenses decreased by $20,000 (95.0%) to $1,000 for
the first three months of fiscal 2002 from $21,000 for the comparable period in
2001. The decrease was primarily due to the commercialization of the Companys
DuraCLEAN® with Lycra® glove during the last half of fiscal year 2001.

Other Income/Expense

Other Income of $57,000 decreased by $30,000 (35%) for the first three months
of fiscal year 2002 as compared to $87,000 of Other Income for the comparable
period in 2001. The decrease is primarily due to the payment of $44,000 for the
purchase of a new automobile for Mr. Steve Scibelli, a former President and CEO
of the Company, as dictated by Mr. Scibellis Employment Agreement

The Company recorded royalty expense of $8,000 to DuPont in the first three
months of fiscal 2002 related to sales of its new glove as stipulated by the
Product Development, Purchase and License Agreement (the Agreement) with the
Lycra® division of E. I. DuPont de Nemours and Company
(DuPont ).

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Interest Expense, Net

Interest Expense increased by $391,000 (114%) to $835,000 for the first three
months of fiscal year 2002 as compared to $444,000 of Interest Expense for
2001. The increase in Interest Expense is due to a charge of $375,000 related
to the fair value of a stock option agreement entered into with Trilon on
December 17, 2001 as well as due to an increase in debt outstanding. The
interest expense was related primarily to the line of credit due to Trilon
Dominion Partners, LLC. (See Note 5).

Income Taxes

For the quarters ended February 28, 2002, and February 28, 2001, the Company
sustained losses for both financial reporting and income tax purposes. A tax
provision of $1,000 related to state income taxes was recorded in the condensed
financial statements for 2001 and 2002.

Going Concern

The Companys consolidated financial statements included elsewhere herein have
been prepared assuming that the Company will continue as a going concern. The
Company has a working capital deficiency of $24,628,000; shareholders deficit
of $21,018,000 as of February 28, 2002, has suffered substantial recurring
losses from operations and is economically dependent on its majority
shareholder to finance operations. These matters, among others, raise
substantial doubt about the Companys ability to continue as a going concern.
Continuation of the Company is dependent on the Companys ability to negotiate
additional arrangements with its majority shareholder, raise additional capital
and to achieve profitability. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Although management has been successful in obtaining working capital from its
majority shareholder to fund operations to date, there can be no assurance that
the Company will be able to raise additional capital in the future.

The Company anticipates continuing substantial negative cash flow from
operating and investing activities through the next twelve months. The Company
has projected its cash flow needs to be approximately $9 million for fiscal
2002. Trilon Dominion, the Companys largest shareholder with over 87% of the
shares outstanding, has acknowledged the Companys cash flow needs and has
indicated its commitment to provide financial support to the Company through
the next twelve months to the extent of such budgeted cash flow requirements.
However given that no written commitment exists, the Company is exposed to the
substantial risk that it will not receive the funds from Trilon Dominion to
fund present and future working capital needs. In the event that such funds are
not received it is unlikely that the Company will be successful in raising
capital from other sources. If adequate funds are not available to finance
current operations, the Company will be unable to execute its business
development efforts and may be unable to continue as a going concern.

The Companys continuation as a going concern is dependent upon its ability to
(a) generate sufficient cash flow to fund working capital and investment
activities, (b) to obtain additional outside financing, and (c) ultimately
sustain profitability. Managements recent actions in regard to these matters
are as follows:

1) During fiscal 2000, the Company sold selected assets and liabilities
totaling $945,000 related to the Companys Wilshire Contamination Control to
Foamex Asia Co. LTD. (the Buyer), an affiliate of Foamex International (FMX:
NASDAQ) for a potential sales price up to $2,500,000. (See Note 4). Payments
of the sale price are due from the Buyer on a quarterly basis based on a fixed
percentage of sales by the Buyer of certain products. Foamex International is
an international developer, manufacturer and supplier of high-quality foam,
including key materials utilized in contamination control environments. Foamex
Asia Co. Ltd., located in Singapore and in Thailand, is currently a major
supplier of specialty foam products to the Asian market.

As part of the sale agreement, Foamex Asia Co. Ltd. agreed to invest $1,000,000
of capital in equipment and machinery which, the Company believes, will lead to
lower manufacturing costs of the Buyer over the term of the agreement. The
Company further believes the transaction was in its best interests as the
likelihood of increased sales due to the lower manufacturing costs may provide
not only a return of the initial investment of $945,000, but additional
payments from the Buyer up to a total of $2,500,000.

In accordance with the terms of the sale agreement, a payment in the amount of
$258,000 was received from Foamex Asia Co. Ltd., on November 29, 2001 and
applied against the receivable. In March of 2002, the Company received another
payment of approximately $242,000 from Foamex Asia Co. Ltd., which further
reduced the principal

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balance to $445,000.

In addition to receiving the November 29, 2001 payment, Foamex Asia Co. Ltd.,
confirmed an additional unpaid deferred payment balance of over $400,000, which
is included in the receivable due from sale of division balance. Under the
terms of the Agreement, this deferred payment is to be paid in full by November
30, 2002.

2) In addition to the sale of assets to Foamex Asia Co. Ltd., the Company
entered into an agreement with Foamex to provide, for due consideration,
certain labor, facilities, services, personnel and other items with respect to
Foamexs ongoing operation of the Divisions business. The agreement, which
commenced on May 19, 2000, has been amended to extend through December 31, 2002
and will provide additional funds to offset operating expenses of approximately
$550,000 for fiscal year 2002.

3) In September 2000, the Company signed a Product Development, Purchase and
License Agreement (the Agreement) with the Lycra® division of E. I. DuPont de
Nemours and Company (DuPont). Under the Agreement, DuPont developed and
began to supply a new proprietary polyurethane material, which is used by
Wilshire to manufacture and sell a disposable polyurethane glove for industrial
and non-industrial cleanroom applications.

The Company began production of the new gloves in the second quarter of 2001
and believes that the new, improved DuraCLEAN® gloves using Lycra® eglantine
fiber will offer the market a glove with improved cleanliness, durability and
comfort. The glove will also have excellent ESD properties. The glove has the
distinct advantage of being able to be used as a one time disposable product
or, because of its durability, can be relaundered and used multiple times. The
relaunderability benefit is a significant factor as it allows for a reduction
in the cost of the glove and a large reduction in the waste stream of the
customer, which is a growing concern in the market.

Although the new gloves will be premium priced, management believes they will
be cost effective for users because the enhanced cleanliness will reduce
contamination and increase yield. Also, because of excellent abrasion
resistance they can be worn longer and changed less frequently than less
expensive gloves.

Because of the inherent cleanliness and the absence of chemical accelerators,
the new DuraCLEAN® with Lycra® glove has expanded applications outside
traditional cleanroom markets. Some of the fastest growing market-segments for
Wilshire Technologies Inc. are medical device manufacturing,
telecommunications, biotechnology and highly sensitive laboratories. The
ability to re-launder and re-use the DuraCLEAN® glove has appeal in waste
sensitive markets in Japan.

The Glove will be marketed under the trademark DuraCLEAN® with Lycra®. DuPont
will be active with the Company in the marketing of the product. The Company
will distribute the product through a variety of channels both in the US and
overseas.

The Company believes that with the potential of a return of $2,500,000 million
on the sale of its contamination control division to Foamex Asia Co., Ltd.,
with the cost-sharing agreements in place to lower operating costs, and with
the sales of its new glove, the Company will position itself to begin
generating sufficient cash flow to fund working capital and investment
activities by early 2003. If the Company does attain its sales goals, it
believes that it will be able to raise additional capital, as needed in the
future. There can be no assurances, however, that the Company will be
successful in any of the above mentioned actions or plans on a timely basis, or
at all.

Liquidity and Capital Resources

Management assesses the Companys liquidity by its ability to generate cash to
fund its operations. Significant factors in the management of liquidity are:
funds generated by operations; levels of accounts receivable, inventories,
accounts payable and capital expenditures; adequate lines of credit; and
financial flexibility to attract long-term capital on satisfactory terms.

During 2001 and for the first three months of 2002, the Company has not
generated sufficient cash from operations to fund its working capital and
equipment purchase requirements. Net cash used in the Companys operating
activities was $1,823,000 for the quarter ended February 28, 2002 versus net
cash used in operating activities of $814,000 for the corresponding period in
2001. The increase in the cash used in operating activities was primarily due
to the capital expansion of the Companys glove factory during the first
quarter ended February 28, 2002.

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Net cash used in investing activities was $418,000 for the first quarter of
2002, versus net cash used in investing activities of $19,000 for the first
three months of 2001. The higher investing activities for fiscal 2002 were
related to upgrades to the glove production equipment related to the
manufacture of the new glove.

Net cash provided by financing activities was $2,655,000 for the first three
months of fiscal 2002 versus $1,000,000, for 2001, respectively. The debt
financing in both years was obtained from Trilon Dominion Partners, LLC.

On March 31, 1998, the Company and Trilon Dominion completed an Amended and
Restated Credit Agreement and Revolving Line of Credit (the Amended
Agreement) secured by the Companys assets.

The Agreement has been extended through a number of amendments to January 31,
2003. Through fiscal 1999, the Company issued $11,935,000 of demand notes
bearing interest at rates of 11.5% and prime plus 3%.

In fiscal 2000, the Company issued demand notes totaling $2,813,000 under the
line of credit agreement. The notes issued in fiscal 2000 bear interest at a
rate of prime plus 3% (13.0% at November 30, 2000).

For the first nine months of fiscal 2001, the Company issued demand notes
totaling $3,165,000 at a rate of prime plus 3%. All of the notes are due on
demand. On October 5, 2001, November 5, 2001 and December 7, 2001, the Company
issued an additional demand notes totaling $1,279,000 at a prime rate of prime
plus 3%.

On December 17, 2001, the Company signed a Stock Option Agreement with Trilon.
Under the Trilon agreement, the Company issued to Trilon 8,011,038 shares of
the Companys unissued authorized stock in cancellation of three demand notes
plus respective interest which totaled $1,291,000. The fair value of the option
granted was estimated to be $375,000, which was recorded as a charge to
earnings in the first quarter of 2002.

The Company issued two additional demand notes during the first three months of
fiscal 2002. On January 9, 2002 and February 13, 2002, demand notes totaling
$2,155,000 were issued at a rate of prime plus 3% (7.75% at February 28, 2002).

As of April 7, 2002, the Company has used its current credit facilities and
anticipates continuing negative cash flow from operating and investing
activities through fiscal 2002. The Company has projected its cash flow needs
to be approximately $9 Million for the year ending November 2002. Trilon
Dominion, the Companys largest shareholder
with over 87% of the shares outstanding, has acknowledged the Companys cash
flow needs and has indicated its commitment to provide financial support to the
Company through fiscal year 2002 to the extent of such budgeted cash flow
requirements. However, given that no written commitment exists, the Company is
exposed to the substantial risk that it will not receive the funds from Trilon
Dominion to fund present and future working capital needs. If such commitment
is not met, it is probable that the Company will not have the necessary resources
to fund its operations for the next 12 months.

Risk Factors

The Companys business depends on the free flow of products and services
through the channels of commerce. Recently, in response to terrorists
activities and threats aimed at the United States, transportation, mail,
financial and other services have been slowed or stopped altogether. Further
delays or stoppages in transportation, mail, financial or other services could
have a material adverse effect on the Companys business, results of operations
and financial condition. Furthermore, the Company may experience an increase in
operating costs, such as costs for transportation, insurance and security as a
result of the activities and potential activities. The Company may also
experience delays in receiving payments from payers that have been affected by
the terrorist activities and potential activities. The U.S. economy, in
general, is being adversely affected by the terrorist activities and potential
activities and any economic downturn could adversely impact the Companys
results of operations, impair its ability to raise capital or otherwise
adversely affect its ability to grow the business.

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 141 (SFAS 141), Business Combinations,
which eliminates the pooling method of accounting for intangible assets and
goodwill acquired in a business combinations initiated after June 30, 2001. In
addition, SFAS 141 addresses the accounting for intangible assets and goodwill
acquired in a business combination. This portion of SFAS 141 is effective for
business combinations completed after June 30, 2001. The Company does not
expect

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SFAS 141 will have material impact on its financial position or results of
operations.

In July 2001, The FASB issued Statement of Financial Accounting Standards No.
142 (SFAS 142), Goodwill and Intangible Assets, which revises the accounting
for purchased goodwill and intangible assets. Under SFAS 142, goodwill and
intangible assets with indefinite lives will no longer be amortized and will be
tested for impairment at least annually. SFAS 142 is effective for fiscal
years beginning after December 15, 2001, with earlier adoption permitted. The
Company does not expect SFAS 142 will have a material impact on the Companys
financial position and results of operations.

In August 2001, FASB issued SFAS No. 144, Impairment or Disposal of Long-Lived
Assets, which addresses accounting and financial reporting for the impairment
or disposal of long-lived assets. This standard is effective for the Companys
financial statements beginning December 1, 2002. The Company is currently
evaluating the impact, if any, the implementation of this Statement will have
on the Companys financial position and results of operations.




PART II  OTHER INFORMATION




|        |  |                                                                                                                                                                                                                                                                 
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 1. |  | Legal Proceedings:                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                 
|        |  | For information regarding legal proceedings, refer to the information
contained in the Companys annual report on Form 10-KSB for the fiscal
year ended November 30, 2001 under the heading, Legal Proceedings and
Note 7 to the financial statements therein.




|        |  |                                                                                                                                                                                                                                                                                                                                                                                                           
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 2. |  | Changes in Securities and Use of Proceeds:                                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  | On December 17, 2001, the Company signed a Stock Option Agreement
with Trilon Dominion Partners LLP (Trilon) in order to raise
funds to support its working capital needs for fiscal 2002. Under the
Trilon agreement, the Company issued to Trilon 8,011,038 shares of the
Companys unissued authorized stock in cancellation of three demand
notes plus respective interest which totaled $1,291,000.
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  | The Agreement also granted to Trilon three options. The shares, the
options and the shares underlying the options were exempt from
registration under the Securities Act of 1933 by virtue of Section 4(2)
of such Act. (See further discussion in the Overview section of Item 2.
Managements Discussion and Analysis or Plan of Operation.)                                                            




|        |  |                                 
|------- |  | --------------------------------
|Item 3. |  | Defaults Upon Senior Securities:
|        |  |                                 
|        |  | None.                           




|        |  |                                                     
|------- |  | ----------------------------------------------------
|Item 4. |  | Submission of Matters to a Vote of Security Holders:
|        |  |                                                     
|        |  | None.                                               




|        |  |                   
|------- |  | ------------------
|Item 5. |  | Other Information:
|        |  |                   
|        |  | None.             




|        |  |                                 
|------- |  | --------------------------------
|Item 6. |  | Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits:
| | --- |  | ---------

| |        |  |                                                                                               
| | ------ |  | ----------------------------------------------------------------------------------------------
| | 10.213 |  | Demand note dated December 7, 2001 between the Registrant and
Trilon Dominion Partners, L.L.C.
| |        |  |                                                                                               
| | 10.214 |  | Demand note dated January 9, 2002 between the Registrant and
Trilon Dominion Partners, L.L.C. 

17



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##### Table of Contents



| |        |  |                                                                                                                                                                   
| | ------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.215 |  | Demand note dated February 13, 2002 between the Registrant and
Trilon Dominion Partners, L.L.C.                                                                   
| |        | 
| | 10.216 |  | Letter dated April 5, 2002 to Holders of the Warrants expiring
November 28, 2002 re: change in Warrant Exercise Price and
in number of shares issuable on exercise



| | (b) |  | Reports on Form 8-K:
| | --- |  | --------------------
|
| |     |  | None.               




SIGNATURES

In accordance with requirements of the Securities Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

|                      |  |                            |  |                                                                                                         
|--------------------- |  | -------------------------- |  | --------------------------------------------------------------------------------------------------------
|                      |  | WILSHIRE TECHNOLOGIES, INC
|                      |  |                            |  |                                                                                                         
|                      |  |                            |  |                                                                                                         
|Dated: April 12, 2002 |  | By:                        |  | /S/ Kathleen E. Terry                                                                                   
|                      |  |                            |  |                                                                                                         
|                      |  |                            |  | Kathleen E. Terry
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)

18