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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, 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 August 31, 2001

|      |  |                                                                                   
|----- |  | ----------------------------------------------------------------------------------
|[   ] |  | 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 12,953,385 on October 6, 2001.

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



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TABLE OF CONTENTS



|                            |                                                                   |                                                      |  |  |  |  |  | 
|--------------------------- | ----------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|                            |                                                                   | Condensed Consolidated Balance Sheets               
|PART 1                     
|                            | Item 1.                                                          
|                            |                                                                   | Condensed Consolidated Statements of Operations     
|                            |                                                                   | 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:                                   
|                            | 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 10.199             
|EXHIBIT 10.200             
|EXHIBIT 10.201             



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WILSHIRE TECHNOLOGIES, INC.

INDEX TO FORM 10-QSB

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|                                           |  |                                                           |  |                                                                                                                          |  | PAGE
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|PART 1 - FINANCIAL INFORMATION (UNAUDITED) |  |                                                          
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|Item 1.                                    |  | Financial Statements:                                     |  |                                                                                                                         
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|                                           |  |                                                           |  | Condensed Consolidated Balance Sheets as of
August 31, 2001 and November 30, 2000                                        |  | 3   
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|                                           |  |                                                           |  | Condensed Consolidated Unaudited Statements of Operations
for the Three Months Ended August 31, 2001 and
August 31, 2000 |  | 4   
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|                                           |  |                                                           |  | Condensed Consolidated Unaudited Statements of Operations
for the Nine Months Ended August 31, 2001 and
August 31, 2000  |  | 5   
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|                                           |  |                                                           |  | Condensed Consolidated Unaudited Statements of Cash Flows
for the Nine Months Ended August 31, 2001 and
August 31, 2000  |  | 6   
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|                                           |  |                                                           |  | Notes to Condensed Consolidated Unaudited Financial
Statements                                                           |  | 7   
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|Item 2.                                    |  | Managements Discussion and Analysis or Plan of Operation |  | 11                                                                                                                      
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|PART II - OTHER INFORMATION                |  |                                                          
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|Item 1.                                    |  | Legal Proceedings                                         |  | 15                                                                                                                      
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|Item 2.                                    |  | Changes in Securities                                     |  | 15                                                                                                                      
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|Item 3.                                    |  | Defaults Upon Senior Securities                           |  | 15                                                                                                                      
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|Item 4.                                    |  | Submission of Matters to a Vote of Security Holders       |  | 15                                                                                                                      
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|Item 5.                                    |  | Other Information                                         |  | 16                                                                                                                      
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|Item 6.                                    |  | Exhibits and Reports on Form 8-K                          |  | 16                                                                                                                      
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|Signatures                                 |  |                                                           |  |                                                                                                                          |  | 16  



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




PART 1




Item 1.

|                                              |                                                                                                                                          |   |             |             |              |   |             |             |  
|--------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | ----------- | ------------ | - | ----------- | ----------- | -
|                                              |                                                                                                                                          |   | August 31,  |             | November 30,
|                                              |                                                                                                                                          |   | 2001        |             | 2000        
|                                              |                                                                                                                                          |   |             |             |             
|                                              |                                                                                                                                          |   | (Unaudited) |             | (Note 1)    
|Assets                                        |                                                                                                                                          |   |             |             |              |   |             |            
|Current assets:                               |                                                                                                                                          |   |             |             |              |   |             |            
|                                              | Cash                                                                                                                                     |   | $           | 525,000     |              |   | $           | 413,000     |  
|                                              | Accounts receivable trade, less
allowance for doubtful accounts of
$100 at August 31, 2001 and $2,000 at
November 30, 2000, respectively |   |             | 19,000      |              |   |             | 1,000       |  
|                                              | Inventories (Note 3)                                                                                                                     |   |             | 100,000     |              |   |             |            |  
|                                              | Other current assets                                                                                                                     |   |             | 305,000     |              |   |             | 244,000     |  
|                                              |                                                                                                                                          |   |             |             |              |   |             |            
|Total current assets                          |                                                                                                                                          |   | 949,000     |             |              |   | 658,000     |            
|Property and equipment, net                   |                                                                                                                                          |   | 2,575,000   |             |              |   | 2,781,000   |            
|Patents and trademarks, net                   |                                                                                                                                          |   | 30,000      |             |              |   | 26,000      |            
|Receivable due from sale of division (Note 4) |                                                                                                                                          |   | 945,000     |             |              |   | 945,000     |            
|                                              |                                                                                                                                          |   |             |             |              |   |             |            
|                                              |                                                                                                                                          | $ | 4,499,000   |             |              | $ | 4,410,000   |            
|                                              |                                                                                                                                          |   |             |             |              |   |             |            
|Liabilities and shareholders deficit         |                                                                                                                                          |   |             |             |              |   |             |            
|Current liabilities:                          |                                                                                                                                          |   |             |             |              |   |             |            
|                                              | Accounts payable                                                                                                                         |   | $           | 130,000     |              |   | $           | 73,000      |  
|                                              | Accrued expenses                                                                                                                         |   |             | 403,000     |              |   |             | 226,000     |  
|                                              | Interest payable-related party (Note 5)                                                                                                  |   |             | 4,686,000   |              |   |             | 3,301,000   |  
|                                              | Line of credit  related party (Note 5)                                                                                                  |   |             | 17,913,000  |              |   |             | 14,748,000  |  
|                                              |                                                                                                                                          |   |             |             |              |   |             |            
|Total current liabilities                     |                                                                                                                                          |   | 23,132,000  |             |              |   | 18,348,000  |            
|                                              |                                                                                                                                          |   |             |             |              |   |             |            
|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; 12,953,385 shares
issued and outstanding                                       |   |             | 25,912,000  |              |   |             | 25,912,000  |  
|                                              | Common stock warrants and options                                                                                                        |   |             | 495,000     |              |   |             | 495,000     |  
|                                              | Accumulated deficit                                                                                                                      |   |             | (45,040,000 | )            |   |             | (40,345,000 | )
|                                              |                                                                                                                                          |   |             |             |              |   |             |            
|Total shareholders deficit                   |                                                                                                                                          |   | (18,633,000 | )           |              |   | (13,938,000 | )          
|                                              |                                                                                                                                          |   |             |             |              |   |             |            
|                                              |                                                                                                                                          | $ | 4,499,000   |             |              | $ | 4,410,000   |            
|                                              |                                                                                                                                          |   |             |             |              |   |             |            

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
|                                       |                            |   |                          
|                                       |                            |   | August 31,                |         | August 31,
|                                       |                            |   | 2001                      |         | 2000      
|                                       |                            |   |                           |         |           
|Net sales                              |                            | $ | 25,000                    |         |            | $ | 25,000     |        
|Cost of sales                          |                            |   | 824,000                   |         |            |   | 419,000    |        
|                                       |                            |   |                           |         |            |   |            |        
|Gross loss                             |                            |   | (799,000                  | )       |            |   | (394,000   | )      
|                                       |                            |   |                           |         |            |   |            |        
|Operating expenses:                    |                            |   |                           |         |            |   |            |        
|                                       | Marketing and selling      |   |                           | 214,000 |            |   |            | 124,000 | 
|                                       | General and administrative |   |                           | 315,000 |            |   |            | 332,000 | 
|                                       | Research and development   |   |                           | 10,000  |            |   |            | 2,000   | 
|                                       |                            |   |                           |         |            |   |            |        
|Total operating expenses               |                            |   | 539,000                   |         |            |   | 458,000    |        
|                                       |                            |   |                           |         |            |   |            |        
|Loss from operations                   |                            |   | (1,338,000                | )       |            |   | (852,000   | )      
|Other income, net                      |                            |   | 81,000                    |         |            |   | 80,000     |        
|Interest expense, net                  |                            |   | (475,000                  | )       |            |   | (398,000   | )      
|                                       |                            |   |                           |         |            |   |            |        
|Loss before provision for income taxes |                            |   | (1,732,000                | )       |            |   | (1,170,000 | )      
|Provision for income taxes             |                            |   |                          |         |            |   |           |        
|                                       |                            |   |                           |         |            |   |            |        
|Net loss                               |                            | $ | (1,732,000                | )       |            | $ | (1,170,000 | )      
|                                       |                            |   |                           |         |            |   |            |        
|Weighted average shares outstanding    |                            |   | 12,953,000                |         |            |   | 12,953,000 |        
|                                       |                            |   |                           |         |            |   |            |        
|Basic and diluted loss per share       |                            | $ | (0.13                     | )       |            | $ | (0.09      | )      
|                                       |                            |   |                           |         |            |   |            |        

See accompanying notes to financial statements.



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

|                                       |                            |   |                          |           |            |   |            |           | 
|-------------------------------------- | -------------------------- | - | ------------------------ | --------- | ---------- | - | ---------- | --------- | 
|                                       |                            |   | Nine-Month Periods Ended
|                                       |                            |   |                         
|                                       |                            |   | August 31,               |           | August 31,
|                                       |                            |   | 2001                     |           | 2000      
|                                       |                            |   |                          |           |           
|Net sales                              |                            | $ | 155,000                  |           |            | $ | 1,297,000  |          
|Cost of sales                          |                            |   | 1,991,000                |           |            |   | 2,540,000  |          
|                                       |                            |   |                          |           |            |   |            |          
|Gross loss                             |                            |   | (1,836,000               | )         |            |   | (1,243,000 | )        
|                                       |                            |   |                          |           |            |   |            |          
|Operating expenses:                    |                            |   |                          |           |            |   |            |          
|                                       | Marketing and selling      |   |                          | 504,000   |            |   |            | 390,000   | 
|                                       | General and administrative |   |                          | 1,216,000 |            |   |            | 1,068,000 | 
|                                       | Research and development   |   |                          | 34,000    |            |   |            | 9,000     | 
|                                       |                            |   |                          |           |            |   |            |          
|Total operating expenses               |                            |   | 1,754,000                |           |            |   | 1,467,000  |          
|                                       |                            |   |                          |           |            |   |            |          
|Loss from operations                   |                            |   | (3,590,000               | )         |            |   | (2,710,000 | )        
|Other income, net                      |                            |   | 280,000                  |           |            |   | 90,000     |          
|Loss on sale of assets                 |                            |   |                         |           |            |   | (314,000   | )        
|Interest expense, net                  |                            |   | (1,384,000               | )         |            |   | (1,125,000 | )        
|                                       |                            |   |                          |           |            |   |            |          
|Loss before provision for income taxes |                            |   | (4,694,000               | )         |            |   | (4,059,000 | )        
|Provision for income taxes             |                            |   | 1,000                    |           |            |   | 1,000      |          
|                                       |                            |   |                          |           |            |   |            |          
|Net loss                               |                            | $ | (4,695,000               | )         |            | $ | (4,060,000 | )        
|                                       |                            |   |                          |           |            |   |            |          
|Weighted average shares outstanding    |                            |   | 12,953,000               |           |            |   | 12,953,000 |          
|                                       |                            |   |                          |           |            |   |            |          
|Basic and diluted loss per share       |                            | $ | (0.36                    | )         |            | $ | (0.31      | )        
|                                       |                            |   |                          |           |            |   |            |          

See accompanying notes to financial statements.



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

|                                                                            |                              |                                                |                                                                 |           |                          |           |            |           |         |           |  
|--------------------------------------------------------------------------- | ---------------------------- | ---------------------------------------------- | --------------------------------------------------------------- | --------- | ------------------------ | --------- | ---------- | --------- | ------- | --------- | -
|                                                                            |                              |                                                |                                                                 |           | Nine-Month Periods Ended
|                                                                            |                              |                                                |                                                                 |           |                         
|                                                                            |                              |                                                |                                                                 |           | August 31,               |           | August 31,
|                                                                            |                              |                                                |                                                                 |           | 2001                     |           | 2000      
|                                                                            |                              |                                                |                                                                 |           |                          |           |           
|Operating activities                                                        |                              |                                                |                                                                 |           |                          |           |            |          
|Net loss                                                                    |                              | $                                              | (4,695,000                                                      | )         |                          | $         | (4,060,000 | )        
|Adjustments to reconcile net loss to net cash used in operating
activities: |                              |                                                |                                                                 |           |                          |           |            |          
|                                                                            |                              | Depreciation and amortization                  |                                                                 |           | 486,000                  |           |            |           | 528,000 |          
|                                                                            |                              | Provision for inventory obsolescence           |                                                                 |           |                         |           |            |           | 118,000 |          
|                                                                            |                              | Loss from sale of assets to Foamex             |                                                                 |           |                         |           |            |           | 314,000 |          
|                                                                            |                              | Net change in operating assets and liabilities |                                                                 |           |                          |           |            |           |         |          
|                                                                            |                              |                                                | Decrease in (increase) in accounts receivable                   |           |                          | (18,000   | )          |           |         | 303,000   |  
|                                                                            |                              |                                                | Decrease in (increase) in inventories                           |           |                          | (100,000  | )          |           |         | 315,000   |  
|                                                                            |                              |                                                | Decrease in (increase) in other current assets                  |           |                          | (65,000   | )          |           |         | 132,000   |  
|                                                                            |                              |                                                | Increase in (decrease) in accounts payable
and accrued expenses |           |                          | 234,000   |            |           |         | (515,000  | )
|                                                                            |                              |                                                | Increase in interest payable                                    |           |                          | 1,385,000 |            |           |         | 1,123,000 |  
|                                                                            |                              |                                                |                                                                 |           |                          |           |            |          
|Net cash used in operating activities                                       |                              |                                                | (2,773,000                                                      | )         |                          |           | (1,742,000 | )        
|                                                                            |                              |                                                |                                                                 |           |                          |           |            |          
|Investing activities                                                        |                              |                                                |                                                                 |           |                          |           |            |          
|                                                                            | Purchases of equipment       |                                                |                                                                 | (280,000  | )                        |           |            | (62,000   | )      
|                                                                            |                              |                                                |                                                                 |           |                          |           |            |          
|Net cash used in investing activities                                       |                              |                                                | (280,000                                                        | )         |                          |           | (62,000    | )        
|                                                                            |                              |                                                |                                                                 |           |                          |           |            |          
|Financing activities                                                        |                              |                                                |                                                                 |           |                          |           |            |          
|                                                                            | Proceeds from line of credit |                                                |                                                                 | 3,165,000 |                          |           |            | 1,763,000 |        
|                                                                            |                              |                                                |                                                                 |           |                          |           |            |          
|Net cash provided by financing activities                                   |                              |                                                | 3,165,000                                                       |           |                          |           | 1,763,000  |          
|                                                                            |                              |                                                |                                                                 |           |                          |           |            |          
|Net increase (decrease) in cash                                             |                              |                                                | 112,000                                                         |           |                          |           | (41,000    | )        
|Cash  beginning of period                                                  |                              |                                                | 413,000                                                         |           |                          |           | 167,000    |          
|                                                                            |                              |                                                |                                                                 |           |                          |           |            |          
|Cash  end of period                                                        |                              | $                                              | 525,000                                                         |           |                          | $         | 126,000    |          
|                                                                            |                              |                                                |                                                                 |           |                          |           |            |          

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 2001.

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 and nine months ended August
31, 2001 are not necessarily indicative of the results that may be expected for
the fiscal year ending November 30, 2001. 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,
2000.

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 accompanying Condensed Consolidated Unaudited Financial statements have
been prepared assuming that the Company will continue as a going concern. The
Company has a working capital deficiency of $22,183,000; shareholders deficit
of $18,633,000 as of August 31, 2001, has suffered 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 Condensed Consolidated Unaudited 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 assurances
that the Company will be able to raise additional capital in the future.



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NOTE 2. GOING CONCERN, continued

The Company anticipates continuing negative cash flow from operating and
investing activities through the next 12 months. The Company has projected its
cash flow needs to be approximately $3.4 million for the year ending November
2001 and has projected its cash flow needs to be approximately $5 to $7 million
for fiscal 2002. Trilon Dominion, the Companys largest shareholder with over
73% 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 12 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 in the acquired business
which, the Company believes, will lead to lower manufacturing costs of the
Buyer over the next three years. 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.

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 and will continue until December 31, 2001, will
provide additional funds to offset operating expenses of approximately $480,000
for fiscal year 2001.

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
cleanroom applications. The Company began production of the new gloves in the second quarter
of 2001.

The Company believes that with the potential of a return of $2.5 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 late
2002. 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.



8



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##### Table of Contents



NOTE 3. FINANCIAL STATEMENT INFORMATION

Inventories consist of the following:

|                   |  |            |         |              |  |   |          |  
|------------------ |  | ---------- | ------- | ------------ |  | - | -------- | -
|                   |  | August 31, |         | November 30,
|                   |  | 2001       |         | 2000        
|                   |  |            |         |             
|Raw materials      |  | $          | 71,000  |              |  | $ | 113,000  |  
|Work in process    |  |            |        |              |  |   |         |  
|Finished goods     |  |            | 34,000  |              |  |   | 5,000    |  
|Inventory reserves |  |            | (5,000  | )            |  |   | (118,000 | )
|                   |  |            |         |              |  |   |          |  
|                   |  | $          | 100,000 |              |  | $ |         |  
|                   |  |            |         |              |  |   |          |  

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.

In addition to the sale of assets, the Buyer and Seller entered into an
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 will continue until December 31, 2001.

The sale agreement gives the Buyer the option to delay payment through November
29, 2001; accordingly to date no payments have been made by the Buyer. The
Buyer has made all other 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.

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, which included principal of
$4,000,000 from a previous agreement, $750,000 from Demand Notes, accrued
interest and management fees of $543,297 on the Agreement and Demand Notes, and
a new credit line commitment of $2,200,000. Under the terms of the Amended
Agreement, the principal of $7,493,297 was due on December 31, 1998, and
interest was payable quarterly at an annual rate of 11.5%. From March 1998 to
November 1998, the Company issued Demand notes totaling $930,000 at an interest
rate of 11.5% under the credit line agreement.



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##### Table of Contents



NOTE 5. LINE OF CREDIT, continued

In December of 1998, the Company amended the credit line agreement to extend
the terms to January 31, 2000, which was extended to June 30, 2000, January 31,
2001 and January 31, 2002, in December 31, 1999, June 30, 2000 and January 17,
2001 amendments to the credit line agreement. In fiscal 1999, the Company
issued demand notes totaling $3,510,000 under the line of credit agreement and
capitalized debt issuance costs of $18,000. Of the notes issued in fiscal 1999,
$2,010,000 of notes bear interest at a rate of 11.5% annually; the remaining
$1,500,000 of demand notes bear interest at a rate of 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%. For the first nine months of fiscal 2001, the Company issued
demand notes totaling $3,165,000 at a rate of prime plus 3% (9.75% at August
31, 2001). All of the notes are due on demand. On October 5, 2001, the Company
issued an additional demand note in the amount of $433,000. Such note bears
interest at a rate of prime plus 3%.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Breast Implant Litigation

During the first nine months of 2001, 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, 2000, under Note 7 to the
consolidated financial statements included therein.

NOTE 7. SUBSEQUENT EVENT

On October 5, 2001, the Company issued an additional demand note to Trilon
Dominion in the amount of $433,000. Such note bears interest at a rate of
prime plus 3%. The Company and Trilon Dominion have recently begun negotiation
of an option agreement. If an agreement is reached and Trilon Dominion
exercises the options, Trilon Dominion would make a substantial new equity
investment in the Company in exchange for a substantial increase in its
ownership percentage.



10



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##### Table of Contents






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 Condensed
Consolidated Unaudited 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 2001.

Accordingly, the accompanying Condensed Consolidated Unaudited 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.

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.

In the second quarter of fiscal year 2001, the Company began production of the
new polyurethane glove and introduced the glove into selected foreign customer
accounts for evaluation and testing.

In the third quarter of fiscal 2001, the Company focused on process and yield
improvement programs for the new polyurethane glove and expanded the
introduction of the glove into selected domestic customer accounts for
evaluation and testing.

Net Sales

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

Net sales of $25,000 for the third quarter of 2001 were comparable to sales of
$25,000 for the third quarter of 2000. Net sales decreased by $1,142,000
(88.0%) to $155,000 for the first nine months of 2001 as compared to $1,297,000
for the first nine months of 2000. The decrease in sales for the first nine
months was due to the sale of the Wilshire Contamination Control Division to
Foamex Asia Co. Ltd. on May 19, 2000. Sales essentially ceased at that time
while the Company focused on development of a new polyurethane glove made with
proprietary material supplied by DuPont.



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Gross Margin

For the third quarter, the Company recorded a negative gross margin of $799,000
as compared to a negative gross margin of $394,000 in the same period of 2000.
For the first nine months of 2001, the Company recognized a negative gross
margin of $1,836,000 as compared to a negative gross margin of $1,243,000 for
the comparable period in 2000. The gross margin losses for the third quarter
and first nine months were primarily attributable to high-unabsorbed operating
costs of its glove manufacturing plant, in addition to an increased headcount
in 2001 as the Company commenced production.

Marketing and Selling Expenses

Marketing and selling expenses increased by $90,000 (73.0%) to $214,000 in the
third quarter of 2001 from $124,000 for the comparable period of 2000. The
first nine months of expense increased by $114,000 (29.0%) to $504,000 from
$390,000 for the first nine months of 2000. The increase for the quarter and
first nine months 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 decreased $17,000 (5.0%) to $315,000 in the
third quarter of 2001 from $332,000 in the third quarter of 2000. The decrease
for the quarter was primarily due to lower legal and audit fees. For the first
nine months of 2001, General and administrative expense increased by $148,000
(14.0%) to $1,216,000 from $1,068,000 for the first nine months of 2000. The
increase in expense for the first nine months was due to increases in
professional fees, recruiting fees, travel associated with the introduction of
the new glove, and an increase of administrative personnel and professional
services at the Companys glove facility in Tijuana, Mexico of its wholly owned
subsidiary, Wilshire International de Mexico S.A. de C.V.

Research and Development

Research and development expenses of $10,000 increased by $8,000 (400.0%) as
compared to the third quarter of 2000 expenses of $2,000. For the first nine
months of 2001, Research and development expense of $34,000 increased by
$25,000 as compared to Research and development expense of $9,000 for the
comparable period in 2000. The overall increase in Research and development
expense was due to outside testing of the Companys new polyurethane glove.

Other income, Net

The Company recorded other income of $81,000 in the third quarter of 2001 as
compared to other income of $80,000 for 2000. Other income of $280, 000 for the
first nine months of 2001 increased by $190,000 from other income of $90,000
for the first nine months 2000. The increase in other income is due to an
increase of consulting income from the Ongoing Service Agreement with Foamex
Asia, which was entered into on May 19, 2000.

The Company recorded royalty expense of $27,000 to DuPont in the third quarter
of 2001 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 ).

Interest Expense, Net

The Company reported higher interest expense in the third quarter of 2001
compared with the third quarter of 2000 due to an increase in debt outstanding.
Interest expense is related primarily to interest on the line of credit due to
Trilon Dominion Partners, LLC. (See Note 5 to the Condensed Consolidated
Unaudited Financial Statements).



12



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##### Table of Contents



Income Taxes

For the quarters ended August 31, 2001, and August 31, 2000, 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 2000 and 2001.

Liquidity and Capital Resources

The accompanying condensed unaudited consolidated financial statements have
been prepared assuming that the Company will continue as a going concern. The
Company has a working capital deficiency of $22,183,000; shareholders deficit
of $18,633,000 as of August 31, 2001, has suffered 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 condensed unaudited 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 assurances
that the Company will be able to raise additional capital in the future.

The Company anticipates continuing negative cash flow from operating and
investing activities through the next twelve months. The Company has projected
its cash flow needs to be approximately $3.4 million for the year ending
November 2001 and has projected its cash flow needs to be approximately $5 to
$7 million for fiscal 2002. Trilon Dominion, the Companys largest shareholder
with over 73% 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 next three years.
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.

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 and will continue until December 31, 2001, will
provide additional funds to offset operating expenses of approximately $480,000
for fiscal year 2001.



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##### Table of Contents



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
cleanroom applications. The Company began production of the new gloves in the second quarter
of 2001.

The Company believes that with the potential of a return of $2.5 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 late
2002. 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.

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 2000 and the first nine months of 2001, the Company has not generated
sufficient cash from operations to fund its working capital and equipment
purchase requirements. Net cash used in operating activities was $ 2,773,000
in the first nine months of 2001 versus net cash used in operating activities
of $1,742,000 in the first nine months of 2000. The increase in the cash used
in operating activities was primarily due to the sale of the Companys Wilshire
Contamination Control division to Foamex Asia, Co. Ltd. in May 2000, which
resulted in a substantial reduction in cash generated from operations.

Net cash used in investing activities was $280,000 in the first nine months of
2001, versus net cash used by investing activities of $62,000 in the first nine
months of 2000. The higher investing activities for the first nine months of
2001 were related to upgrades to the glove production equipment related to the
manufacture of the new glove.

Net cash provided by financing activities was $3,165,000 in the first nine
months of 2001 versus $1,763,000 in the first nine months of 2000. The debt
financing in both years was obtained from Trilon Dominion Partners, LLC. The
Companys need for financing increased in 2001 due to the sale of the Companys
Wilshire Contamination Control division.

For the first nine months of fiscal 2001, the Company issued additional demand
notes totaling $3,165,000 at a rate of prime plus 3% (9.75% at August 31,
2001). All of the notes are due on demand.

For the nine-month period ended August 31, 2001, the Company has used its
current credit facilities with Trilon Dominion to fund its continuing negative
cash flows from operating and investing activities. The Company expects to
continue to have negative cash flow from operating and investing activities
through the next 12 months. Management believes that Trilon Dominion, the
Companys largest shareholder with over 73% of the shares outstanding, will
continue to support the Company as necessary through the end of fiscal year
2001. 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.



14



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##### Table of Contents



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.

New 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 SFAS 141 will have material impact on our financials 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 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 our financial position
or results of operations.

Item 3. Quantitative and qualitative disclosures about market risk

The Company maintains a floating interest rate on its related party line of
credit ($17.9 million outstanding balance at August 31, 2001). Therefore, the
Company is subject to a certain amount of risk arising from increases to the
prime rate.




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, 2000 under the heading, Legal Proceedings and
Note 7 to the financial statements therein.






|Item 2. |  | Changes in Securities:
|------- |  | ----------------------
|       
|        |  | None.                 






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






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



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






|Item 6. |  | Exhibits and Reports on Form 8-K
|------- |  | --------------------------------
|       
|        |  | (a) Exhibits:                   

|       |  |                                                                                              
|------ |  | ---------------------------------------------------------------------------------------------
|10.199 |  | Demand Note dated June 28, 2001 between the Registrant and Trilon
Dominion Partners, L.L.C.  
|      
|      
|      
|      
|      
|      
|      
|      
|      
|      
|      
|      
|10.200 |  | Demand Note dated August 1, 2001 between the Registrant and
Trilon Dominion Partners, L.L.C. 
|      
|      
|      
|      
|      
|      
|      
|      
|10.201 |  | Demand Note dated August 28, 2001 between the Registrant and
Trilon Dominion Partners, L.L.C.

(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: October 12, 2001 | By:                         | /S/ Kathleen E. Terry                                                                 
|                        |                             |                                                                                       
|                        |                             | Kathleen E. Terry                                                                     
|                        |                             | Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)



16