<PAGE>   1
================================================================================


                     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, 1997

[ ]  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)



<TABLE>
<S>                                                                   <C>       
               CALIFORNIA                                                         33-0433823
(State or other jurisdiction of incorporation or organization)        (I.R.S. Employer Identification No.)
</TABLE>

                          5441 AVENIDA ENCINAS, STE. A
                           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, was 12,943,385 on September 30, 1997.

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


================================================================================

<PAGE>   2
                           WILSHIRE TECHNOLOGIES, INC.

                              INDEX TO FORM 10-QSB


<TABLE>
<S>                                                                     <C>                                 
PART 1 - FINANCIAL INFORMATION                                          PAGE


Item 1.  Financial Statements:

               Condensed Consolidated Balance Sheets as of                3
               August 31, 1997 and November 30, 1996

               Condensed Consolidated Statements of Operations            4
               for the Quarters ended August 31, 1997 and
               August 31, 1996

               Condensed Consolidated Statements of Operations            5
               for the Nine Months ended August 31, 1997 and
               August 31, 1996

               Condensed Consolidated Statements of Cash Flows            6
               for the Nine Months ended August 31, 1997 and
               August 31, 1996

               Notes to Condensed Consolidated Financial Statements       7

Item 2.  Management's Discussion and Analysis or Plan of Operation       10

PART II - OTHER INFORMATION


Item 1.        Legal Proceedings                                         14

Item 2.        Changes in Securities                                     14

Item 3.        Defaults Upon Senior Securities                           14

Item 4.        Submission of Matters to a Vote of Security Holders       14

Item 5.        Other Information                                         14

Item 6.        Exhibits and Reports on Form 8-K                          14

Signatures                                                               15
</TABLE>


                                       2
<PAGE>   3
                           WILSHIRE TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                       August 31,      November 30,
                                                                         1997              1996
                                                                     ------------      ------------
<S>                                                                  <C>               <C>         
ASSETS                                                                (Unaudited)         (Note)
Current assets:
     Cash                                                            $    137,000      $    189,000
     Accounts receivable trade, less allowance for doubtful
        accounts of $16,000 and $17,000 at August 31,
        1997 and  November 30, 1996, respectively                         568,000           571,000
     Inventories (Note 2)                                               1,101,000           591,000
     Current portion of note receivable (Note 3)                          196,000           204,000
     Other current assets                                                 222,000           231,000
                                                                     ------------      ------------
Total current assets                                                    2,224,000         1,786,000

Property and equipment, less accumulated depreciation
     of $768,000 and $637,000 at August 31, 1997 and
     November 30, 1996, respectively                                      890,000           723,000
Note receivable from the sale of discontinued business
     less current portion (Note 3)                                        158,000           280,000
Goodwill, less accumulated amortization of $312,000
     and $281,000 at August 31, 1997 and November 30,
     1996, respectively                                                   430,000           461,000
Patents and trademarks, net                                               113,000           104,000
                                                                     ------------      ------------
                                                                     $  3,815,000      $  3,354,000
                                                                     ============      ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                $    452,000      $    393,000
     Accrued expenses                                                     412,000           454,000
     Interest payable                                                     228,000            31,000
     Line of credit from Trilon Dominion Partners LLC (Note 4)          3,000,000         1,500,000
                                                                     ------------      ------------
Total current liabilities                                               4,092,000         2,378,000

Shareholders' equity:
     Preferred stock, no par value, 2,000,000 shares authorized;
        none issued and outstanding                                          --                --
     Common stock, no par value, 50,000,000 shares
        authorized; 12,943,385 shares issued and
        outstanding at August 31, 1997 and
        November 30, 1996                                              25,857,000        25,857,000
     Common stock warrants                                                275,000           275,000
     Accumulated deficit                                              (26,409,000)      (25,156,000)
                                                                     ------------      ------------
Total shareholders' equity                                               (277,000)          976,000
                                                                     ------------      ------------
                                                                     $  3,815,000      $  3,354,000
                                                                     ============      ============
</TABLE>


Note:   The condensed consolidated balance sheet at November 30, 1996 has been
        derived from the audited financial statements at that date but does not
        include all of the information and footnotes required by generally
        accepted accounting principles for complete financial statements.

                            See accompanying notes.


                                       3
<PAGE>   4
                           WILSHIRE TECHNOLOGIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                     Three Months Ended August 31
                                                    ------------------------------
                                                        1997              1996
                                                    ------------      ------------
<S>                                                 <C>               <C>         

Continuing operations:
     Net sales                                      $  1,011,000      $    712,000
     Cost of sales                                       765,000           639,000
                                                    ------------      ------------
     Gross profit                                        246,000            73,000

     Operating expenses:
        Marketing and selling                            147,000           146,000
        General and administrative                       340,000           526,000
        Research and development                         123,000           138,000
                                                    ------------      ------------
     Total operating expenses                            610,000           810,000
                                                    ------------      ------------

     Loss from operations                               (364,000)         (737,000)
     Other expense                                          --              (2,000)
     Interest income (expense), net                      (76,000)          (27,000)
                                                    ------------      ------------
     Loss before provision
        for state income taxes                          (440,000)         (766,000)

     Provision for state income taxes - current             --                --
                                                    ------------      ------------

     Loss from continuing operations                    (440,000)         (766,000)

Gain from discontinued operations (Note 6)                  --              33,000
                                                    ------------      ------------

Net loss                                            $   (440,000)     $   (733,000)
                                                    ============      ============

Weighted average shares outstanding                   12,943,000        12,932,000
                                                    ============      ============

Loss per share:
     Loss from continuing operations                $      (0.03)     $      (0.06)
     Loss from discontinued operations                      --                --
                                                    ------------      ------------
     Net loss per share                             $      (0.03)     $      (0.06)
                                                    ============      ============
</TABLE>


                             See accompanying notes.


                                       4
<PAGE>   5
                           WILSHIRE TECHNOLOGIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                      Nine Months Ended August 31
                                                    ------------------------------
                                                        1997              1996
                                                    ------------      ------------
<S>                                                 <C>               <C>         

Continuing operations:
     Net sales                                      $  2,602,000      $  2,434,000
     Cost of sales                                     1,976,000         2,112,000
                                                    ------------      ------------
     Gross profit                                        626,000           322,000

     Operating expenses:
        Marketing and selling                            424,000           428,000
        General and administrative                       946,000         1,461,000
        Research and development                         313,000           394,000
                                                    ------------      ------------
     Total operating expenses                          1,683,000         2,283,000
                                                    ------------      ------------

     Loss from operations                             (1,057,000)       (1,961,000)
     Other income                                           --             190,000
     Interest expense                                   (195,000)          (96,000)
                                                    ------------      ------------
     Loss before provision
        for state income taxes                        (1,252,000)       (1,867,000)

     Provision for state income taxes - current            1,000             1,000
                                                    ------------      ------------

     Loss from continuing operations                  (1,253,000)       (1,868,000)

Gain from discontinued operations (Note 6)                  --              27,000
                                                    ------------      ------------

Net loss                                            $ (1,253,000)     $ (1,841,000)
                                                    ============      ============


Weighted average shares outstanding                   12,943,000        11,827,000
                                                    ============      ============


Loss per share:
     Loss from continuing operations                $      (0.10)     $      (0.16)
     Loss from discontinued operations                      --                --
                                                    ------------      ------------
     Net loss per share                             $      (0.10)     $      (0.16)
                                                    ============      ============
</TABLE>


                             See accompanying notes.


                                       5
<PAGE>   6
                           WILSHIRE TECHNOLOGIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                     Nine Months Ended August 31,
                                                                     ----------------------------
                                                                         1997             1996
                                                                     -----------      -----------
<S>                                                                  <C>              <C>         
OPERATING ACTIVITIES
Net loss                                                             $(1,253,000)     $(1,841,000)
Adjustments to reconcile net loss to net cash
        used in operating activities:
            Depreciation and amortization                                168,000          261,000
            Provision for loss on accounts receivable                     (1,000)         (23,000)
            Gain on sale of discontinued operations                         --            (27,000)
            Gain on settlement of note receivable                           --           (190,000)
            Net change in operating assets and liabilities:
                Decrease in accounts receivable                            4,000           16,000
                Increase in inventories                                 (510,000)        (122,000)
                Decrease in other current assets                           9,000          408,000
                Increase (decrease) in accounts payable and
                 accrued expenses                                         17,000         (761,000)
                Increase in interest payable                             197,000          108,000
                                                                     -----------      -----------
Net cash used in operating activities                                 (1,369,000)      (2,171,000)
                                                                     -----------      -----------

INVESTING ACTIVITIES
Purchase of equipment                                                   (298,000)        (104,000)
Decrease in note receivable from sale of discontinued operations         130,000             --
(Increase) decrease in other assets                                      (15,000)         320,000
                                                                     -----------      -----------
Net cash (used in) provided by investing activities                     (183,000)         216,000
                                                                     -----------      -----------

FINANCING ACTIVITIES
Proceeds from line of credit                                           1,500,000        1,000,000
Proceeds from settlement of note receivable                                 --          1,190,000
                                                                     -----------      -----------
Net cash provided by financing activities                              1,500,000        2,190,000
                                                                     -----------      -----------

NET (DECREASE) INCREASE IN CASH                                          (52,000)         235,000
CASH - BEGINNING OF PERIOD                                               189,000           18,000
                                                                     -----------      -----------
CASH - END OF PERIOD                                                 $   137,000      $   253,000
                                                                     ===========      ===========
</TABLE>


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
In January, 1996, the Company completed an Exchange Agreement with Trilon
Dominion Partners,LLC pursuant to which the Company exchanged long-term debt and
accrued interest for common stock (Note 4).

In June, 1996, the Company completed the sale of certain assets of the Medical
Products division (Note 6).


                             See accompanying notes.


                                       6
<PAGE>   7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Wilshire Technologies, Inc. (the "Company") develops, manufactures and markets
engineered polymer products for industrial clean room use. The Company, based in
Carlsbad, California, operates through two divisions - - Wilshire Contamination
Control ("WCC"), and Wilshire Gloves ("WGL") and a wholly-owned subsidiary.
During 1996, the Company divested its Medical Products and Transdermal Products
divisions. In 1997, the Company will focus primarily on products used in
industrial clean rooms, such as gloves and contamination control products.

BASIS OF PRESENTATION

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 quarter and nine months ended August 31, 1997 are not
necessarily indicative of the results that may be expected for the fiscal year
ending November 30, 1997. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-KSB for the fiscal year ended November 30, 1996.

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

In March 1996, the Board of Directors authorized management to proceed with the
sale of the assets of the Medical Products division which was completed on June
30, 1996, pursuant to a Purchase of Assets and Assumption of Sublease Agreement
with Acacia Laboratories of Texas, Inc., (See Note 6). The disposition of this
business has been accounted for as a discontinued operation. Accordingly, the
financial statements of all prior periods have been restated to exclude the
results of the Medical Products division from the results of continuing
operations.


2.    FINANCIAL STATEMENT INFORMATION

Inventories consist of the following:

<TABLE>
<CAPTION>
                    AUGUST 31,     NOVEMBER 30,
                       1997           1996
                    ----------     ----------
<S>                 <C>            <C>       
Raw materials       $  346,000     $  141,000
Work in process        164,000        175,000
Finished goods         591,000        275,000
                    ==========     ==========
                    $1,101,000     $  591,000
                    ==========     ==========
</TABLE>


                                       7
<PAGE>   8
3.    NOTE RECEIVABLE

Pursuant to the sale of its Medical Products division, the Company received a
$540,000 secured note, payable over 36 months, and bearing interest at a rate of
5% per annum (see Note 6).

4.    LINE OF CREDIT

On January 5, 1996, the Company and Trilon Dominion Partners LLC ("Trilon
Dominion") entered into a Credit Agreement (the "Agreement") for a credit line
of $1,000,000 secured by the Company's assets. Under the terms of the Agreement,
which was subsequently amended, the principal was due on June 30, 1996 and the
interest was payable monthly at a rate of prime plus 3.75%. In connection with
the loan, the Company issued Trilon Dominion a five-year warrant that entitles
Trilon Dominion to purchase 100,000 shares of the Company's authorized but
unissued common stock at an exercise price of $0.75 per share, subject to
adjustment to protect against dilution. The warrant is exercisable immediately
and expires on January 5, 2001. Also, under the terms of the Agreement, the
Company issued Trilon Dominion a second five-year warrant which became
exercisable when the Company amended the Agreement ("First Amendment") to extend
the termination date of the Agreement from June 30, 1996 to December 31, 1996.
The second warrant entitles Trilon Dominion to purchase 25,000 shares of the
Company's authorized but unissued common stock at an exercise price equal to the
closing price on June 30, 1996, which was $1.75 per share and it expires on
January 5, 2001. The holder of each of such five-year warrants may, without
payment to the Company, convert the warrant in whole or in part into shares of
the Company's common stock having a market value equal to the difference between
(x) the market value per share of common stock multiplied by the number of
warrants that are converted and (y) the warrant exercise price, multiplied by
the number of warrants that are converted. Pursuant to the Agreement, the
Company used part of the proceeds of the credit line to repay the $400,000
borrowed from Trilon Dominion under the sixth amendment to the November 18, 1994
Credit Agreement, plus the interest accrued on that amount.

On September 30, 1996, the Company and Trilon Dominion entered into a Second
Amendment to the Agreement ("Second Amendment") whereby the amount of the credit
line was increased from $1,000,000 to $2,000,000 and the termination date was
extended from December 31,1996 to June 30, 1997. Pursuant to the Second
Amendment, the Company drew on the additional credit line upon achievement of
certain milestones. In addition, two warrants were issued in connection with the
Second Amendment. The first warrant entitles Trilon Dominion to purchase 100,000
shares of the Company's authorized but unissued common stock at an exercise
price of $1.31 per share, subject to adjustment to protect against dilution. The
warrant is exercisable immediately and expires on September 30, 2001. Also,
under the terms of the Agreement, the Company issued Trilon Dominion a second
five-year warrant which became exercisable when the Company entered the Third
Amendment to the Agreement and extended the termination date of the Agreement
from June 30, 1997 to December 31, 1997. The second warrant entitles Trilon
Dominion to purchase 25,000 shares of the Company's authorized but unissued
common stock at an exercise price equal to the closing price on June 30, 1997,
which was $0.84 per share, and it expires on September 30, 2001. All other terms
of the two warrants are the same as those issued under the Agreement.

On April 15, 1997, the Company and Trilon Dominion entered into a Third
Amendment to the Agreement ("Third Amendment") whereby the amount of the credit
line was increased from $2,000,000 to $3,000,000 and the termination date was
extended from June 30, 1997 to December 31, 1997. In addition, two warrants were
issued in connection with the Third Amendment. The first warrant entitles Trilon
Dominion to purchase 100,000 shares of the Company's authorized but unissued
common stock at an exercise price of $0.44 per share, subject to adjustment to
protect against dilution. The warrant is exercisable immediately and expires on
April 15, 2002. Also, under the terms of the Agreement, the Company issued
Trilon Dominion a second five-year warrant which only becomes exercisable if the
Company does not pay Trilon Dominion the principal and interest due on December
31, 1997. The second warrant entitles Trilon Dominion to purchase 25,000 shares
of the Company's authorized but unissued 


                                       8
<PAGE>   9
common stock at an exercise price equal to the closing price on December 31,
1997, and it expires on April 15, 2002. All other terms of the two warrants are
the same as those issued under the Agreement.

On September 19, 1997, the Company and Trilon Dominion entered into a Fourth
Amendment to the Agreement ("Fourth Amendment") whereby the amount of the credit
line was increased from $3,000,000 to $4,000,000 and the termination date was
extended from December 31, 1997 to June 30, 1998. In addition, two warrants were
issued in connection with the Fourth Amendment. The first warrant entitles
Trilon Dominion to purchase 100,000 shares of the Company's authorized but
unissued common stock at an exercise price of $0.95 per share, subject to
adjustment to protect against dilution. The warrant is exercisable immediately
and expires on September 19, 2002. Also, under the terms of the Agreement, the
Company issued Trilon Dominion a second five-year warrant which only becomes
exercisable if the Company does not pay Trilon Dominion the principal and
interest due on June 30, 1998. The second warrant entitles Trilon Dominion to
purchase 25,000 shares of the Company's authorized but unissued common stock at
an exercise price equal to the closing price on June 30, 1998, and it expires on
September 19, 2002. All other terms of the two warrants are the same as those
issued under the Agreement.

5.    COMMITMENTS AND CONTINGENCIES

BREAST IMPLANT LITIGATION

During the first nine months of 1997, 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, 1996, under Note 6 to the
Financial Statements included therein.

SUPPLIER LAWSUIT

On October 22, 1996, Powell Products, Inc. ("Powell") sued the Company in state
court in Dallas County, Texas alleging a variety of claims, all centered upon
Powell's assertion that the Company has wrongfully obtained and used Powell's
trade secrets for manufacturing foam-tipped applicators. On November 5, 1996,
the Company removed the case to the U.S. District court for the Northern
District of Texas. The Company denied any wrongdoing and filed a counterclaim
for wrongful injunction.

On July 31, 1997, Powell and the Company entered into a Settlement Agreement
including a Mutual Release and Injunction ("Settlement Agreement"). Pursuant to
the Settlement Agreement, the Company paid Powell $75,000, and the Company and
Powell released each other from all claims or causes of action related to the
case. In addition, the Company is prevented from (a) making foam-tipped
applicators for the cosmetic industry for 5 years; (b) building cosmetic
applicator or swab-making equipment for sale to third parties for 8 years; (c)
making automated swab-making equipment materially different from its present
equipment for 3 years; and (d) participating in any way with Wormser
Corporation, Accessories Plus, North-Plex Tool, and Micro Designs, and also from
participating with any present and certain former employees of these entities.
Except for these restrictions the Company may continue to conduct its
swab-making business as it wants. The Company anticipates that the Settlement
Agreement will have no material effect on revenues.

6.    DISCONTINUED OPERATIONS

On June 30, 1996, pursuant to a Purchase of Assets and Assumption of Sublease
Agreement, the Company sold certain assets of the Wilshire Medical Products
division ("WMP") to Acacia Laboratories of Texas, Inc. ("Acacia"), a
wholly-owned subsidiary of Acacia Laboratories, Inc., a California corporation,
that does business under the name of Horizon Medical, Inc. The assets sold
consisted of equipment, inventory, accounts receivable, patents, trademarks,
trade names, 


                                       9
<PAGE>   10
and regulatory approvals used in the Medical Products business. The purchase
price of $1,082,000 consisted of $200,000 cash at closing, $342,000 in accounts
receivable to be collected by the Company, and $540,000 in a secured, fully
amortized, 36 month promissory note in favor of the Company, bearing interest at
the rate of 5% per annum.

There were no sales for WMP in the quarter ended August 31, 1996. Sales of WMP
for the nine months ended August 31, 1996, were $888,000. The effect on the
results of operations from the operations of the WMP division for the quarter
and nine months ended August 31, 1996 was $33,000 and $27,000, respectively.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

During the first nine months of 1997, the Company has made significant progress
on its business plan for both contamination control products and gloves. In the
first quarter, the Company's contamination control swab manufacturing equipment
was successfully moved from Texas to the Company's facility in Tijuana, Mexico,
thus lowering future production costs. In addition, the developmental glove
equipment moved from the UK to the Tijuana, Mexico, facility in the fourth
quarter of 1996 began producing gloves at the rate of 40,000 gloves per month at
a significantly lower cost. Customer response based on their testing of the
gloves produced in Mexico has been excellent.

In the second quarter, the Company achieved sales of $1 million which set a
record for the highest quarterly sales. In addition, the Company completed a
distributor agreement for Singapore, Malaysia, Thailand, and Indonesia, an
important milestone for servicing the Company's customers in the computer
component industry in Southeast Asia. Also, in April the Company arranged
financing for the first full-scale glove production line and for working capital
needs in the second half of fiscal year 1997.

In the third quarter, the Company achieved another sales record of over $1
million including the sales benefit of the restocking by a major distributor of
contamination control wipers to bring its inventory levels back to normal. In
addition, the Company completed a development and supply agreement for an
improved glove polymer, and made further progress on the design and manufacture
of the first full-scale glove production line.

In the fourth quarter, the Company plans to move its warehouse operation from
Dallas, Texas to Carlsbad, California into a combined facility with its
headquarters office. This will save the Company the time and expense of
maintaining two facilities and related freight costs. Also, the Company is
looking for a larger facility in Tijuana, Mexico for its full-scale glove
production line. It expects to lease a building for that line and the Company's
other equipment by the end of fiscal year 1997.

From time to time the Company may report, through its press releases and/or
Securities and Exchange Commission filings, certain forward-looking statements
that are subject to risks and uncertainties. Important factors that could cause
actual results to differ materially from those projected by such forward-looking
statements are set forth in Exhibit 99 to the Company's Annual Report on Form
10-KSB for the fiscal year ended November 30, 1996. These include operating
losses, liquidity, reliance on major distributors, new product development,
competition, technological change, patents, trade secrets, product liability,
dependence on key suppliers, and dependence on key personnel.


                                       10
<PAGE>   11
RESULTS OF OPERATIONS

NET SALES

Wilshire Contamination Control and Wilshire Gloves market their products
directly to end users through an internal sales force utilizing outside
distributors. Revenue for all sales is recognized when title transfers,
generally when products are shipped.

Quarter

Net sales set a quarterly record, and increased by $299,000 (42.0%) to
$1,011,000 in the third quarter of 1997 from $712,000 in the third quarter of
1996. Sales were favorably impacted by significant new orders from a
contamination control wiper customer and the restocking by a major distributor
of contamination control wipers to bring its inventory levels back to normal.

Nine Months

Net sales increased by $168,000 (6.9%) to $2,602,000 in the first nine months of
1997 from $2,434,000 in the same period of 1996. The sales increase was related
to the impact of third quarter sales of contamination control wipers discussed
above.

GROSS PROFIT

Quarter

Gross profit increased by $173,000 to $246,000 in the third quarter of 1997 from
$73,000 in the third quarter of 1996, primarily due to increased sales of
contamination control products and reduced costs of the developmental glove
plant. Gross profit margin as a percent of sales increased to 24.3% in the third
quarter of 1997 from 10.3% in the third quarter of 1996.

Nine Months

Gross profit increased by $304,000 to $626,000 in the first nine months of 1997
from $322,000 in the same period of 1996, primarily due to increased sales of
contamination control products and reduced costs of the developmental glove
plant. Gross profit margin as a percent of sales increased to 24.1% in the first
nine months of 1997 from 13.2% in the same period of 1996.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses include additional costs related to
the Company's marketing activities and administrative costs (such as executive
and office salaries, related payroll expenses, investor relations, professional
fees, supplies and utilities).

Selling, general and administrative expenses decreased $185,000 (27.5%) to
$487,000 in the third quarter of 1997 from $672,000 in the third quarter of
1996. In the first nine months of 1997, selling, general and administrative
expenses decreased $519,000 (27.5%) to $1,370,000 from $1,889,000 in the same
period of 1996. The expense reduction in both periods primarily resulted from
reductions in personnel, lower professional fees, and non-recurring expenses in
1996 related to the move of the developmental glove plant from the U.K.
to Mexico.

RESEARCH AND DEVELOPMENT

Research and development expenses decreased $15,000 (10.9%) to $123,000 in the
third quarter of 1997 from $138,000 in the third quarter of 1996. In the first
nine months of 1997, research and development expenses decreased $81,000 (20.6%)
to $313,000 from $394,000 in 


                                       11
<PAGE>   12
the same period of 1996. The expense reduction in both periods primarily was due
to the divestiture of the Transdermal Products business.

As a percentage of sales, research and development expenses were 12.2% in the
third quarter of 1997, compared to 19.4% in the third quarter of 1996. For the
first nine months of 1997, research and development expenses as a percentage of
sales were 12.0%, compared to 16.2% in the same period of 1996.

OTHER INCOME

The other income in the third quarter and nine months of 1996 was related
primarily to the gain from the payment of the note receivable by Advanced
Materials, Inc.

INTEREST INCOME (EXPENSE), NET

The Company reported higher interest expense in the third quarter and nine
months of 1997 versus the same period of 1996 due to increased debt outstanding.
The interest expense was related primarily to the line of credit due to Trilon
Dominion Partners, LLC. (see Note 4).

INCOME TAXES

For the quarters and nine months ended August 31, 1997 and August 31, 1996, 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
financial statements for 1997 and 1996.

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 1996 and the first nine months of 1997, the Company has not generated
sufficient cash from operations to fund its working capital requirements. Net
cash used in operating activities was $1,369,000 in the first nine months of
1997 versus $2,171,000 in the first nine months of 1996. The decrease in the
cash used in operating activities was primarily due to lower operating expenses,
and increased gross profit.

Net cash used in investing activities was $183,000 in the first nine months of
1997, versus $216,000 provided by investing activities in the first nine months
of 1996. The use of cash in 1997 was primarily due to the purchase of glove
manufacturing equipment. The decrease in other assets in 1996 was related to the
cancellation of the License Agreement with Innovative Technologies, Ltd.

Net cash provided by financing activities was $1,500,000 in the first nine
months of 1997 versus $2,190,000 in the first nine months of 1996. The debt
financing in both years was obtained from Trilon Dominion Partners, LLC. The
settlement of the note receivable in 1996 is related to the payment of the note
receivable by Advanced Materials, Inc.

On January 5, 1996, the Company and Trilon Dominion entered into a Credit
Agreement (the "Agreement") for a credit line of $1,000,000 secured by the
Company's assets. Under the terms of the Agreement, the principal was due on
June 30, 1996 and the interest was payable monthly at a rate of prime plus
3.75%. The Agreement was amended on June 30, 1996 ("First 


                                       12
<PAGE>   13
amendment") to extend the termination date of the Agreement from June 30, 1996
to December 31, 1996. See Note 4 to the financial statements for details of the
Agreement.

Pursuant to the Agreement, the Company used part of the proceeds of the credit
line to repay the $400,000 borrowed from Trilon Dominion under the sixth
amendment to the November 18, 1994 Credit Agreement, plus the interest accrued
on that amount. Also, the Company used an additional $400,000 of the credit line
in January 1996 to pay past due accounts payable, and the final $200,000
available under the credit line in February 1996 to fund working capital
requirements.

On September 30, 1996, the Company and Trilon Dominion entered into a Second
Amendment to the Agreement ("Second Amendment") whereby the amount of the credit
line was increased from $1,000,000 to $2,000,000 and the termination date was
extended from December 31,1996 to June 30, 1997. Pursuant to the Second
Amendment, the Company drew on the additional credit line upon achievement of
certain milestones. See Note 4 to the financial statements for details of the
Amendments.

On April 15, 1997, the Company and Trilon Dominion entered into a Third
Amendment to the Agreement ("Third Amendment") whereby the amount of the credit
line was increased from $2,000,000 to $3,000,000, and the termination date was
extended from June 30, 1997 to December 31, 1997. See Note 4 to the financial
statements for details of the Amendments.

On September 19, 1997, the Company and Trilon Dominion entered into a Fourth
Amendment to the Agreement ("Fourth Amendment") whereby the amount of the credit
line was increased from $3,000,000 to $4,000,000, and the termination date was
extended from December 31, 1997 to June 30, 1998. See Note 4 to the financial
statements for details of the Amendments.


                                       13
<PAGE>   14
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, 1996 under the heading, "Legal Proceedings" and
         Note 6 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

ITEM 5.  OTHER INFORMATION:

          None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  EXHIBITS:

         10.97   Equipment Supply Agreement, dated July 28, 1997, between ACC
                 Automation Company and the Registrant.

         10.98   Settlement Agreement, Mutual Release, and Injunction, dated 
                 July 31, 1997, between Powell Products, Inc. and the 
                 Registrant.

         10.99   Equipment Supply Agreement, dated September 16, 1997, between
                 the Vara International Division of Calgon Carbon Corporation
                 and the Registrant.

         10.100  Development and Supply Agreement, dated September 18, 1997,
                 between PTG Medical LLC and the Registrant.

         10.101  Fourth Amendment, dated September 19, 1997, to Credit Agreement
                 and to Grid Promissory Note dated January 5, 1996 between
                 Trilon Dominion Partners LLC, and the Registrant.

         (b)  REPORTS ON FORM 8-K:

              None


                                       14
<PAGE>   15
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 10, 1997               By: /s/ James W. Klingler
                                           ------------------------------------
                                           James W. Klingler
                                           Chief Financial Officer
                                           (Principal Financial Officer and
                                           Principal Accounting Officer)


                                       15
<PAGE>   16
                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit                                                                        Sequentially
Number                                   Description                           Numbered Page
------                                   -----------                           -------------

<S>              <C>                                                           <C>                      
10.97            Equipment Supply Agreement, dated July 28, 1997, between ACC        
                 Automation Company and the Registrant.                              17

10.98            Settlement Agreement, Mutual Release, and Injunction, dated  
                 July 31, 1997, between Powell Products, Inc. and the 
                 Registrant.                                                         43

10.99            Equipment Supply Agreement, dated September 16, 1997,  
                 between the Vara International Division of Calgon Carbon 
                 Corporation and the Registrant.                                     54

10.100           Development and Supply Agreement, dated September 18, 1997,
                 between PTG Medical LLC and the Registrant.                         59

10.101           Fourth Amendment, dated September 19, 1997, to Credit  
                 Agreement and to Grid Promissory  Note dated January 5, 
                 1996 between Trilon Dominion Partners LLC, and the Registrant.      96
</TABLE>