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

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

(MARK ONE)
  [X]    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 For the fiscal year ended November 30, 1998.

  [ ]    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.
                 (Name of small business issuer in its charter)

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

                                5861 EDISON PLACE
                           CARLSBAD, CALIFORNIA 92008
                    (Address of principal executive offices)

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

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:  Common Stock, no
                                                                par value -
                                                                Quoted on the 
                                                                OTC Bulletin 
                                                                Board
                                                                ---------------
                                                                (Title of Class)

        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 ____

        Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

        The issuer's revenues for its most recent fiscal year were $3,846,000.

        The aggregate market value of the voting stock held by non-affiliates of
the registrant on January 31, 1999 was approximately $1.7 million.

        The number of shares outstanding of the registrant's only class of
Common Stock, no par value, was 12,943,385 on January 31, 1999.

        Transitional Small Business Disclosure Format.    Yes   No  X__


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

<PAGE>   2
WILSHIRE TECHNOLOGIES, INC.
--------------------------------------------------------------------------------

Annual Report on Form 10-KSB -- November 30, 1998

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PART I                                                                           PAGE
-------------------------------------------------------------------------------------
<S>            <C>                                                               <C>
Item 1.        Description of Business                                            2

Item 2.        Description of Property                                            5

Item 3.        Legal Proceedings                                                  5

Item 4.        Submission of Matters to a Vote of Security Holders                6
-------------------------------------------------------------------------------------
PART II
-------------------------------------------------------------------------------------
Item 5.        Market for Common Equity and Related Stockholder Matters           7

Item 6.        Management's Discussion and Analysis or Plan of Operation          7

Item 7.        Financial Statements                                              11

Item 8.        Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure                               26
-------------------------------------------------------------------------------------
Part III
-------------------------------------------------------------------------------------
Item 9.        Directors, Executive Officers, Promoters and Control Persons;
               Compliance with Section 16(a) of the Exchange Act                 27

Item 10.       Executive Compensation                                            27

Item 11.       Security Ownership of Certain Beneficial Owners and Management    27

Item 12.       Certain Relationships and Related Transactions                    27

-------------------------------------------------------------------------------------
Part IV
-------------------------------------------------------------------------------------
Item 13.       Exhibits, List and Reports on Form 8-K                            27
-------------------------------------------------------------------------------------
</TABLE>



                                       1
<PAGE>   3

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

THE COMPANY

Wilshire Technologies, Inc. (the "Company"), incorporated in California on
October 17, 1990, develops, manufactures and markets engineered polymer products
for industrial clean room use. The Company, based in Carlsbad, California,
markets its products through its Wilshire Contamination Control Division, and
manufactures certain of its products in its wholly-owned subsidiary, Wilshire
International de Mexico S.A. de C.V. During 1996, the Company divested its
Medical Products and Transdermal Products divisions, and has since focused
primarily on products used in industrial clean rooms, such as gloves and
contamination control products.


MARKET OVERVIEW 

The need for extraordinary cleanliness in various manufacturing and
high-technology processes has resulted in a requirement for products to be
manufactured in Class 1, 10 and 100 clean rooms. A "clean room" is an
environment in which particulate fluid and biological contaminants are monitored
and controlled. In the microelectronics, semiconductor and aerospace industries,
clean rooms are essential to the manufacturing process to prevent minute
particles from contaminating sensitive and expensive products. In the
pharmaceutical, biotechnology and medical device industries, clean rooms are
used to reduce the level of particulate and biological contamination
("bioburden") or to ensure the sterility and pyrogen-free nature of products.
Clean rooms are classified according to the allowable level of particulate
contamination per cubic foot. A "Class I " clean room may have just one particle
of more than 0.5 microns per cubic foot.

The Company uses engineered materials and proprietary polyurethane formulations
to produce products specifically for the requirements of Class I, 10 and 100
clean rooms. For these clean rooms, the particulate compliance requirements are
extremely stringent, and the total cost of disposables represents only a small
percentage of the total cost of the customer's manufactured product. Clean room
users are generally willing to pay premium prices for products which reduce
particulate contamination, thereby reducing labor costs and increasing the
yields of their manufactured products. Disposable supplies used in clean rooms
consist predominantly of garments, gloves, swabs and wipers. Traditionally, most
clean room suppliers have adapted existing products from other applications,
e.g., medical, which may have inherent limitations. The Company intends to
satisfy the needs of clean room operators with advanced products designed and
manufactured specifically for clean room use.


PRODUCTS

The Company specializes in the development, manufacture and marketing of
disposable cleaning and contamination control products for use in clean rooms.
The Company markets swabs, wipers and other disposable products used to help
reduce particulate contamination in the semiconductor, disk drive and
microelectronics industry clean rooms, which help to increase the yield and
effectiveness of the manufactured products. The Company also manufactures and
markets a proprietary synthetic glove for use in clean rooms in both the
electronics and medical industries. All of the Company's products are sold under
its brand names, including UltraSORB(R) and UltraSOLV(R) for wipers and swabs,
and DuraCLEAN(R) and PolyDERM(TM) for gloves. The Company has received one
patent and applied for two other patents on hydrophilic foam articles and
cleaning methods for clean rooms including all UltraSOLV(R) and UltraSORB(R)
products.

WIPERS. Clean room personnel use wipers for many applications, including the
cleaning of manufacturing and processing equipment and production components,
the decontamination of work surfaces and the removal of solvent or acid spills.
The most important considerations in the selection of the proper wiper are the
level of potential contamination contributed by the wiper, the wiper's
absorbency and its cost. Since no wiper material is best for all purposes, the
Company markets a variety of clean room wipers made of polyester and
polyurethane, covering a wide range of characteristics, under its various brand
names such as UltraSORB(R), UltraSOLV(R) and PolyClean(R).



                                       2
<PAGE>   4

Management believes that UltraSORB(R) is the first polyurethane foam wiper that
is hydrophilic. i.e., able to absorb water and other aqueous solutions. These
wipers provide the highly-absorbent, particle-trapping performance and
abrasion-resistance of the UltraSORB(R) material at a price competitive with
that of other foam wipers. Both the UltraSORB(R) and UltraSOLV(R) wipers are
processed and packaged using proprietary methods in a Class 10 clean room to
ensure that the wipers have an initial low-particulate level.

SWABS. The Company markets a broad range of clean room swabs fabricated from
various materials including polyurethane foam. Swabs are used to clean surface
areas when a wiper is too large or when a wiper would add more particulate
contamination than a swab. The important considerations in swab selection are
the level of particulate contamination, absorbency and cost. Although cotton
swabs dominate the market due to lower cost and higher absorbency, cotton tends
to degenerate during use, thereby increasing the likelihood of contaminating the
clean room and the materials being produced in the clean room. Typically, users
in Class I and 10 clean rooms purchase synthetic swabs because their
non-shedding, non-friable nature offers superior cleanliness, while users in
Class 100-10,000 clean rooms purchase significantly more cotton swabs due to
their lower cost and higher absorbency.

To meet the demand for an absorbent, clean, synthetic swab, the Company has
developed a line of swabs fabricated from its UltraSOLV(R) polyurethane
material. Similar to the UltraSOLV(R) wiper, the UltraSOLV(R) swab is the first
polyurethane-foam swab that is hydrophilic and meets Class 1 and Class 10
specifications. UltraSOLV(R) has an open cellular structure which is
highly-absorbent and has excellent particle trapping capability. Also, because
of its abrasion resistance, the UltraSOLV(R) material does not generate
particulate contamination during use.

SCRUBPADS. In 1998 the Company began commercial shipments of its UltraSOLV(R)
ScrubPADs which provide a clean replacement for commercial abrasive pads
constructed of tangled fibers frequently used in wet-clean procedures for
process equipment used in the semiconductor, disk media, magnetic head and flat
panel display industries. Highly cleaned and uniform silicon carbide grit is
bonded to an inter-liner that attaches to UltraSOLV(R) foam, providing uniform
abrasion and controlled moisture release for thorough removal of hardened
residues without scoring. UltraSOLV(R) ScrubPADs have been designed to reduce
cleaning times, pump-down times and contamination levels of wet-clean
procedures.

GLOVES. Most of the gloves purchased in the United States for use in Class 1, 10
and 100 clean rooms are latex or polyvinyl chloride ("PVC") medical gloves
post-processed to be cleaner than the typical hospital or surgeon's glove.
Latex-based and PVC-based gloves have several disadvantages: (1) the gloves are
prone to deterioration during use, thereby generating excessive particulate
contamination; (2) the gloves are not breathable; and (3) users may suffer from
latex sensitivity.

The Company has developed the DuraCLEAN(R) clean room glove composed of a
proprietary polyurethane material which the Company believes addresses these
problems. The Company believes that its polyurethane gloves are superior to
latex gloves in many ways, including breathability, durability, biocompatibility
and resistance to tearing, yet will be less expensive to manufacture than other
non-latex gloves. For semiconductor markets, the added benefit of the glove's
electrostatic dissipative (ESD) properties is a great advantage. Also, the
gloves have the lowest total non-volatile residues and total organic carbon
levels in the industry. Although these gloves are premium priced, management
believes they are cost effective for clean room users because they can be worn
longer and changed less frequently than less expensive latex gloves. The Company
has been testing these gloves with several major semiconductor customers and is
currently operating a developmental glove line in its Tijuana, Mexico plant
facility to supply test sites. The Company's first full-scale glove production
line is expected to begin operation in the first quarter of 1999.

PATENTS, LICENSES AND PROPRIETARY RIGHTS

The Company has applied for three patents on various products and one of those
patents has been issued. The Company will apply for additional patents where
deemed appropriate.

The Company also relies upon trade secrets, technical know-how and continuing
technological innovation to develop and maintain its competitive position. The
Company typically requires its employees and consultants to execute appropriate
confidentiality and assignment of inventions agreements in connection with their
employment or consulting relationships with the Company.



                                       3
<PAGE>   5

No assurance can be given that competitors will not independently develop
substantially equivalent or superior proprietary materials and techniques or
otherwise gain access to the Company's proprietary technology, or that the
Company can meaningfully protect its rights in unpatented proprietary
technology.


TECHNOLOGY

Many of the Company's current products use polymers, particularly polyurethane.
Polyurethane is a versatile synthetic material which can be produced to exhibit
a wide range of characteristics. By varying the underlying molecular structure
and manufacturing methods, polyurethane materials may be created with varying
degrees of absorbency, moisture vapor transfer, flexibility, elasticity,
structural integrity and stability. Polyurethane may also be fabricated with a
variety of techniques, including injection, extrusion or blow molding, which
allows easy variation of the physical form of products.


MANUFACTURING

The Company purchases UltraSORB(R) and UltraSOLV(R), the breathable, hydrophilic
polyurethane foams currently used in its swabs and wipers, from Time Release
Sciences, Inc. Management believes that it can secure an alternative source of
supply if required. Further, Management believes that satisfactory substitutes
can be developed, over time, for use in its UltraSORB(R) and UltraSOLV(R)
products should the foam cease to be available.

Certain of the Company's products are made for the Company by Advanced Materials
Group, Inc. ("Advanced Materials"). Although the Company expects to encounter no
difficulties in obtaining products from Advanced Materials, it believes that it
could manufacture those products itself or have them manufactured by any of a
number of other foam fabricators. The foam products industry has several major
fabrication suppliers, one of which is Advanced Materials. Because competition
among these companies is intense, the prices charged by Advanced Materials to
the Company must be competitive.

The Company manufactures the DuraCLEAN(R) gloves on its own equipment, using a
proprietary process in its leased facility in Tijuana, Mexico. The Company
purchases the polymer for the gloves from The Polymer Technology Group, Inc.
under the terms of an exclusive supply agreement. Certain processes required to
finish the product are performed in Mexico by Advanced Barrier Technologies,
Inc. in accordance with Company procedures.

Raw Materials. The materials that the Company uses, such as polypropylene,
polyurethane, plastic and metal, are generally available from multiple sources.
The Company has not experienced difficulty in obtaining raw materials.

Quality Assurance. Under the Company's quality assurance program, visual,
dimensional and functional inspections are performed and recorded on all raw
materials and finished goods based on product specifications as governed by the
Device Master Record. Additionally, Statistical Process Control and other Total
Quality Management methods are used in the manufacturing process.

SALES, MARKETING AND DISTRIBUTION

The Company's swabs, wipers, gloves and other specialty products are marketed
directly to end-users through a limited number of internal sales personnel and
are sold through international, national and regional distributors. During 1998
the Company sold approximately 33% of its products through VWR Scientific
Products and approximately 16% of its products through international
distributors.


COMPETITION

The Company is engaged in rapidly-evolving and highly-competitive fields. Many
major clean room companies in the United States and abroad currently produce and
will seek to develop competitive products. Competition from contamination
control manufacturers and others is intense and expected to increase. Many of
these companies have substantially greater capital resources and facilities, and
more experience in marketing and distributing products than the Company. In
addition, many of these companies employ large research and development staffs,
while the Company has traditionally had a small research and development budget.



                                       4
<PAGE>   6

The Company believes the clean room market has a large number of competitors,
some of which, such as Johnson & Johnson are much larger than the Company. Other
competitors include Texwipe, Berkshire Corporation, Contec Inc., Coventry
Manufacturing Co., Kimberly Clark Corp., and Baxter International.

A number of major corporations manufacture and sell latex and non-latex gloves
to the clean room markets. These include Baxter International, Smith and Nephew
Perry, and Ansell Edmont.


EMPLOYEES

As of November 30, 1998, the Company had 19 full-time employees, of whom 8 were
employed in manufacturing and shipping, 5 in sales and marketing, 1 in
engineering, and 5 in administration.

ITEM 2.  DESCRIPTION OF PROPERTY.

In August 1997, the Company completed a five-year Lease Agreement with Messrs.
Frank Naliboff and Nathan Morton for a 25,500 square-foot office and warehouse
facility in Carlsbad, California. Under the terms of the lease, the Company will
pay rent of $17,500 per month for the first year, beginning January 1, 1998 with
annual rent increases of $500 per month in each of the following four years. The
lease expires on December 31, 2002 and can be renewed by mutual agreement of the
parties.

In November 1997, the Company completed a five-year Lease Agreement with Mr.
Rafael Mizrachi for a 23,500 square foot manufacturing facility and a 15,000
square foot adjacent lot in Tijuana, Mexico. Under the terms of the lease, the
Company will pay rent of $10,000 per month for the first year beginning January
1, 1998, with annual rent adjustments for the San Diego area Consumer Price
Index. The lease expires on December 31, 2002 and can be renewed by mutual
agreement of the parties.

In December, 1998, the Company completed two sublease agreements, one with
Software of the Month Club, Inc ("SOMC"), and the other with Intecon Systems,
Inc. ("Intecon") for space in the Company's leased facility in Carlsbad,
California. The SOMC sublease is for 7,170 square feet for 24 months beginning
January 1, 1999 at a monthly rent of $3,872, plus utilities. The Intecon
sublease is for 800 square feet for 6 months beginning February 1, 1999 at a
monthly rent of $432, plus utilities. Both subleases can be renewed by mutual
agreement of the parties.

ITEM 3.  LEGAL PROCEEDINGS

BREAST IMPLANT LITIGATION

The Company and its alleged predecessor company, Wilshire Foam Products, Inc.
("Wilshire Foam"), have been named as defendants in hundreds of bodily injury
lawsuits involving breast implants pending in Alabama, Arizona, California,
Connecticut, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana,
Kansas, Louisiana, Michigan, Mississippi, Missouri, Nevada, New Jersey, New
Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South
Carolina, Tennessee, Texas, Utah and Washington, and in a federal multi-district
litigation ("MDL") venued in Birmingham, Alabama. These suits seek compensatory
and punitive damages under a variety of legal theories. The allegations against
Wilshire Foam concern the use by some implant manufacturers of polyurethane
products purportedly supplied by Wilshire Foam which were apparently
incorporated into the implants and placed in the plaintiffs' bodies. Plaintiffs
allege that they have suffered adverse effects of having polyurethane in their
bodies, in addition to the alleged adverse effects of silicone and other
components of the implants.

The Company believes it has several layers of protection from exposure in these
cases. First, the Company and Wilshire Foam carried insurance. Second, recent
developments in the MDL and in related negotiations have resulted in the
probable resolution of most of the pending and possible future claims against
the Company. Third, there are a great number of co-defendants, some of which are
large corporations with significant resources, that may be required to
contribute to any award or indemnify the Company. Fourth, the Company has
asserted a number of legal defenses in the lawsuits as described below. Fifth,
these claims relate to products sold prior to the acquisition of Wilshire Foam,
in which product liabilities were expressly not assumed and the Company was
indemnified by the shareholders of Wilshire Foam. In many, if not most of the
cases, the Company believes it did not sell any product to the implant
manufacturers in question or during the 



                                       5
<PAGE>   7

relevant time period. The Company has been dismissed by approximately 2000
plaintiffs because it was shown that a Wilshire Foam product was not involved or
in connection with a related resolution of the case. This litigation is
discussed fully in Note 6 of the notes to the financial statements, which is
hereby incorporated by reference.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Company solicited proxies pursuant to Regulation 14 under the Securities
Exchange Act (Proxy Statement dated March 20, 1998) for the Annual Meeting of
Shareholders held on April 30, 1998. The only matter submitted to the
shareholders was the election of five directors. There was no solicitation in
opposition to management's nominees for directors, listed in the Proxy
Statement. The number of shares entitled to vote at the meeting was 12,943,385.
Of these 11,890,432 were represented. Holders of 5,100 shares withheld voting
authority. All nominees were elected by the affirmative vote of 11,885,332
shares.


                                       6
<PAGE>   8

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock was initially quoted on NASDAQ under the trading
symbol "WITE". On March 9, 1993, the Company began trading on the American Stock
Exchange ("AMEX") under the trading symbol "WIL". On December 19, 1996, the AMEX
filed an application to delist the Company's common stock from the AMEX because
the Company had not met certain financial guidelines necessary for continued
listing. The final day of trading was Friday, January 17, 1997. On Monday,
January 20, 1997, the Company's common stock was quoted and traded on the OTC
Bulletin Board ("OTCBB") under the symbol "WILK". On January 31, 1999, there
were approximately 120 holders of record of the Company's Common Stock and in
excess of 500 beneficial holders. The Company has not paid any cash dividends on
its Common Stock and does not anticipate paying cash dividends in the
foreseeable future.

The following table sets forth by fiscal quarters the high and low daily closing
sales prices quoted for one share of the Company's Common Stock on the AMEX and
OTCBB in FY1997, and on the OTCBB in FY 1998.

<TABLE>
<CAPTION>
    FY1997                                  HIGH          LOW
    ------                                  ----          ---
    <S>                                     <C>          <C>
        First Quarter                       1-3/16        3/8
        Second Quarter                       15/16        7/16
        Third Quarter                        15/16       19/32
        Fourth Quarter                      1-1/16        7/16

    FY1998
    ------
        First Quarter                        11/16        5/16
        Second Quarter                       19/32        9/32
        Third Quarter                        21/32        7/32
        Fourth Quarter                       11/16        9/32
</TABLE>


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS.

OVERVIEW

The Company achieved record sales of $3.8 million in fiscal year 1998 and
recorded the lowest loss from operations in its 6 years as a public company.

During 1998, the Company focused on completing construction of the equipment for
the new glove production line and installing the equipment in the Company's
leased plant facility in Tijuana, Mexico. The installation phase has been
completed, and the equipment is now in the start-up phase. Management expects
the line to begin production of the Company's DuraCLEAN(R) polyurethane gloves
in the first quarter of fiscal year 1999.

Also, the Company has improved the performance of its contamination control
business during fiscal year 1998 by introducing the new UltraSOLV(R) ScrubPAD
and Chamber Cleaning Kit for maintenance of equipment used in the industrial
electronics industry, increasing sales of the UltraSOLV(R) Rollers to a major
computer disk drive manufacturer, and reducing production costs by moving some
manufacturing operations to Tijuana, Mexico. As a result, sales of contamination
control products are up 10%, gross profit is up 57% and gross profit margin
improved by 9.5% points for fiscal year 1998 versus 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 Annual Report on Form 10-KSB for
the year ended November 30, 1996, which is herein incorporated by reference.
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.



                                       7
<PAGE>   9

RESULTS OF OPERATIONS

NET SALES

The Company markets 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.

Net Sales increased by $387,000 (11.2%) to $3,846,000 in 1998 from $3,459,000 in
1997, due to increased sales of contamination control products. Increased sales
of rollers and scrubpads offset a decline in sales of swabs and wipers in 1998
versus 1997.

GROSS PROFIT

Gross profit increased by $115,000 to $551,000 in 1998 from $436,000 in 1997,
primarily due to increased sales and a favorable product mix in contamination
control products, partially offset by costs of the developmental glove line.
Gross profit margin as a percent of sales increased to 14.3% in 1998 from 12.6%
in 1997. Excluding the impact of the glove sales and cost of sales on gross
profit, the gross profit margin as a percentage of sales was 31.4% in 1998, and
21.9% in 1997.

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 increased $283,000 (14.8%) to
$2,194,000 in 1998 from $1,911,000 in 1997, primarily due to additions in sales
personnel and higher professional fees.

RESEARCH AND DEVELOPMENT

Research and development expenses decreased $248,000 (56.8%) to $189,000 in 1998
from $437,000 in 1997 primarily due to reductions in research and development
personnel and in project expense. As a percentage of sales, research and
development expenses were 4.9% in 1998, compared to 12.6% in 1997.

INTEREST INCOME (EXPENSE), NET

Net interest expense increased by $562,000 to $871,000 in 1998 from $309,000 in
1997. The interest expense was related primarily to the line of credit with
Trilon Dominion Partners, LLC ("Trilon Dominion") (see Note 4 to notes to the
consolidated financial statements).

INCOME TAXES

For the fiscal years ended November 30, 1998 and 1997, 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 1998 and 1997.

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 1997 and 1998, the Company has not generated sufficient cash from
operations to fund its working capital requirements. Net cash used in operating
activities was $2,497,000 in 1998 versus $1,692,000 in 



                                       8
<PAGE>   10

1997. The increase in the cash used in operating activities in 1998 was
primarily due to an increase in losses in 1998, and to payment of past due
accounts payable.

Net cash used in investing activities was $2,324,000 in 1998 versus $636,000 in
1997, primarily due to the purchase of equipment in 1998 for the new glove
production line in Mexico.

Net cash provided by financing activities was $4,726,000 in 1998 versus
$2,276,000 in 1997. Debt financing in 1998 and 1997 was obtained from Trilon
Dominion. The details of the debt financing are provided in Note 4 to the
consolidated financial statements.

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, September 30, 1996, April 15,
1997, and September 19, 1997, to a total credit line of $4,000,000 and a
termination date of June 30, 1998. See Note 4 to the consolidated financial
statements for details of the Agreement and Amendments.

On January 7, 1998, February 17, 1998 and March 10, 1998, the Company and Trilon
Dominion completed Demand Notes, each for $250,000 at an interest rate of
12.25%, to fund the Company's ongoing operations until a new credit facility
could be completed.

On March 31, 1998 the Company and Trilon Dominion completed an Amended and
Restated Credit Agreement and Revolving Line of Credit (the "Amended
Agreement":) which included the principal of $4,000,000 from the previous
Agreement and Amendments, the principal of $750,000 from the three Demand Notes,
the accrued interest and management fees of $543,297 on the Agreement and 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 the
interest was payable quarterly at an annual rate of 11.5%. In connection with
the Amendment Agreement, the Company paid Trilon $100,000 for debt issuance
costs and issued Trilon Dominion a five-year warrant that entitles Trilon
Dominion to purchase 650,000 shares of the Company's authorized but unissued
common stock at an exercise price of $0.41 per share, subject to adjustment to
protect against dilution. The warrant is exercisable immediately and expires on
March 31, 2003. The Company recorded the estimated fair value of the warrant to
purchase 650,000 shares as a debt issuance cost in the second quarter of fiscal
year 1998 at $0.07 per underlying common share. Also, under the terms of the
Amended Agreement, the Company issued Trilon Dominion a second five-year warrant
which became exercisable when the Company and Trilon Dominion agreed to extend
the due date of the principal and interest from December 31, 1998 to January 31,
2000. The second warrant entitles Trilon Dominion to purchase 250,000 shares of
the Company's authorized but unissued common stock at an exercise price of $0.42
per underlying common share and expires on March 31, 2003.

On August 5, 1998, September 1, 1998, October 1, 1998, November 2, 1998,
December 1, 1998, January 4, 1999, and February 1, 1999, the Company and Trilon
Dominion completed Demand Notes at an interest rate of 11.5% to fund the
Company's ongoing operations. The August and September notes each were in the
amount of $220,000, the October, January and February notes each were in the
amount of $250,000, the November note was in the amount of $240,000 and the
December note was in the amount of $260,000.

As of January 31, 1999, the Company has used its current credit facilities and
anticipates continuing negative cash flow through at least the first half of
fiscal year 1999. Trilon Dominion, the Company's largest shareholder with over
72% of the shares outstanding, has continued to provide financial support to the
Company during 1998, and management believes that Trilon Dominion will continue
to support the Company as necessary through the end of fiscal year 1999.



                                       9
<PAGE>   11

YEAR 2000 ISSUE

The Company has assessed its readiness for the Year 2000 by focusing on four key
areas: (1) internal infrastructure readiness, addressing internal hardware and
software, and non-information technology systems; (2) product readiness,
addressing the functionality of the Company's products; (3) supplier readiness,
addressing the preparedness of key suppliers to the Company, and (4) customer
readiness, addressing customer support and transactional activity. For each
readiness area, the Company is performing a risk assessment, conducting testing
and remediation, developing contingency plans to mitigate unknown risk, and
communicating with employees, suppliers, customers and other third parties to
raise awareness of the Year 2000 issue.

Internal Infrastructure Readiness. The Company, assisted by third parties, has
conducted an assessment of internal applications and computer hardware. Some
software applications have been made Year 2000 compliant, and resources have
been assigned to address other applications based on their importance and the
time required to make them Year 2000 compliant. All software remediation is
expected to be completed no later than May 1999. The Year 2000 compliance
evaluation of hardware, including servers, desktops, telecommunication equipment
and non-information technology systems, has been completed. All hardware
remediation is expected to be completed no later than August 1999.

Product Readiness. The Company has conducted an assessment to identify and
resolve possible Year 2000 issues existing in the Company's products. To date,
the Company has not identified any Year 2000 issues with its products.

Supplier Readiness. The Company has identified and contacted key suppliers to
solicit information on their Year 2000 readiness. To date, the responses the
Company has received indicate that the Company's key suppliers are in compliance
with Year 2000 requirements. Based on the Company's assessment of each
supplier's progress to adequately address the Year 2000 issue, the Company will
develop a supplier action list and contingency plans.

Customer Readiness. The Company will be contacting its customers to assess their
Year 2000 readiness. Based on the Company's assessment of each customer's
progress to adequately address the Year 2000 issue, the Company will develop a
customer action list and contingency plans.

The Company estimates that the cost of complying with the Year 2000 requirements
will be approximately $35,000 in additional software and hardware purchases. The
Company is continuing its assessments and developing alternatives that will
necessitate refinement of this estimate over time. There can be no assurance,
however, that there will not be a delay in, or increased costs associated with,
the remedial actions described in this section.

Since the efforts described above are ongoing, all potential Year 2000
complications have not yet been identified. Therefore, while the Company
continues to believe the Year 2000 issues discussed above will not have a
materially adverse impact on its business, financial condition or results of
operations, it is not possible to determine with certainty whether or to what
extent the Company may be affected.



                                       10
<PAGE>   12

ITEM 7.    FINANCIAL STATEMENTS.

                   Index to Consolidated Financial Statements


                     Years ended November 30, 1998 and 1997

                                      Index


<TABLE>
<S>                                                                          <C>
Report of Ernst & Young LLP, Independent Auditors.............................12


Audited Financial Statements

Consolidated Balance Sheets...................................................13
Consolidated Statements of Operations.........................................14
Consolidated Statements of  Shareholders' Equity (Net Capital Deficiency).....15
Consolidated Statements of Cash Flows.........................................16
Notes to Consolidated Financial Statements....................................17
</TABLE>



                                       11
<PAGE>   13

                Report of Ernst & Young LLP, Independent Auditors



The Board of Directors and Shareholders
Wilshire Technologies, Inc.

We have audited the accompanying consolidated balance sheets of Wilshire
Technologies, Inc. as of November 30, 1998 and 1997 and the related consolidated
statements of operations, shareholders' equity (net capital deficiency) and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Wilshire
Technologies, Inc. at November 30, 1998 and 1997, and the consolidated results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.


                                        /s/ ERNST & YOUNG LLP

San Diego, California
January 15, 1999



                                       12
<PAGE>   14

                           WILSHIRE TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                       November 30,
                                                                             -------------------------------
                                                                                  1998              1997
                                                                             ------------       ------------
<S>                                                                          <C>                <C>         
ASSETS (Note 4)
Current assets:
      Cash                                                                   $     42,000       $    137,000
      Accounts receivable trade, less allowance for doubtful
           accounts of $5,000 at November 30, 1998 and
           November 30, 1997, respectively                                        310,000            335,000
      Inventories (Note 2)                                                      1,228,000          1,037,000
      Current portion of note receivable (Note 3)                                 127,000            198,000
      Other current assets                                                        246,000            262,000
                                                                             ------------       ------------
Total current assets                                                            1,953,000          1,969,000

Property and equipment, less accumulated depreciation (Note 2)                  3,565,000          1,293,000
Note Receivable from the sale of discontinued business
      less current portion (Note 3)                                                    --            111,000
Goodwill, less accumulated amortization of $365,000
      and $323,000 at November 30, 1998 and November 30,
      1997, respectively                                                          377,000            419,000
Patents and trademarks, net                                                       116,000            115,000
                                                                             ------------       ------------
                                                                             $  6,011,000       $  3,907,000
                                                                             ============       ============
LIABILITIES AND NET CAPITAL DEFICIENCY 
Current liabilities:
      Accounts payable                                                       $    412,000       $    625,000
      Accrued expenses                                                            416,000            372,000
      Interest payable                                                            578,000            330,000
      Line of credit, net of debt issue costs (Note 4)                          8,407,000          3,750,000
                                                                             ------------       ------------
Total current liabilities                                                       9,813,000          5,077,000

Commitments and contingencies (Note 6) 
Net capital deficiency (Note 7):
      Preferred stock, no par value, 2,000,000 shares authorized
           and none issued and outstanding                                             --                 --
      Common stock, no par value, 50,000,000 shares
           authorized; 12,943,385 shares issued and
           outstanding at November 30, 1998 and
           November 30, 1997, respectively                                     25,907,000         25,907,000
      Common stock warrants and options                                           370,000            301,000
      Accumulated deficit                                                     (30,079,000)       (27,378,000)
                                                                             ------------       ------------
Net capital deficiency                                                         (3,802,000)        (1,170,000)
                                                                             ------------       ------------
                                                                             $  6,011,000       $  3,907,000
                                                                             ============       ============
</TABLE>


                             See accompanying notes.



                                       13
<PAGE>   15

                           WILSHIRE TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                          Years Ended November 30,
                                                      -------------------------------
                                                         1998                1997
                                                      ------------       ------------
<S>                                                   <C>                <C>         
      Net sales                                       $  3,846,000       $  3,459,000
      Cost of sales                                      3,295,000          3,023,000
                                                      ------------       ------------
      Gross profit                                         551,000            436,000

      Operating expenses:
           Marketing and selling                           553,000            568,000
           General and administrative                    1,641,000          1,343,000
           Research and development                        189,000            437,000
                                                      ------------       ------------
      Total operating expenses                           2,383,000          2,348,000
                                                      ------------       ------------

      Loss from operations                              (1,832,000)        (1,912,000)
      Other income                                           3,000                 --
      Interest income (expense), net                      (871,000)          (309,000)
                                                      ------------       ------------
      Loss before provision
           for state income taxes                       (2,700,000)        (2,221,000)

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

Net loss                                              $ (2,701,000)      $ (2,222,000)
                                                      ============       ============
Weighted average shares outstanding                     12,943,000         12,943,000
                                                      ============       ============
Basic and diluted loss per share                      $      (0.21)      $      (0.17)
                                                      ============       ============
</TABLE>


                             See accompanying notes.



                                       14
<PAGE>   16

                           WILSHIRE TECHNOLOGIES, INC.
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
                     YEARS ENDED NOVEMBER 30, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                     Common stock
                                        Common stock              warrants and options 
                                 -------------------------      ------------------------    Accumulated
                                   Shares        Amount          Warrants      Amount         deficit         Total
                                 ------------------------       ------------------------   -------------   ------------
<S>                              <C>          <C>               <C>         <C>            <C>             <C>         
Balances - November 30, 1996     12,943,385   $25,857,000       2,975,000      $275,000   $(25,156,000)    $   976,000

     Issuance of warrants                --            --         375,000        26,000             --          26,000

     Contribution to capital             --        50,000              --            --             --          50,000

     Net loss                            --            --              --            --     (2,222,000)     (2,222,000)
                                 ----------    ----------       ---------      --------   ------------     -----------
Balances - November 30, 1997     12,943,385    25,907,000       3,350,000       301,000    (27,378,000)     (1,170,000)

     Issuance of warrants                --            --         790,000        69,000             --          69,000
         and options

     Net loss                            --            --              --            --     (2,701,000)     (2,701,000)
                                 ----------   -----------       ---------      --------   ------------     -----------
Balances - November 30, 1998     12,943,385   $25,907,000       4,140,000      $370,000   $(30,079,000)    $(3,802,000)
                                 ==========   ===========       =========      ========   ============     ===========
</TABLE>


                             See accompanying notes.



                                       15
<PAGE>   17
                           WILSHIRE TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                           Years Ended November 30,
                                                                        -----------------------------
                                                                           1998             1997
                                                                        -----------       -----------
<S>                                                                     <C>               <C>         
OPERATING ACTIVITIES
Net loss                                                                $(2,701,000)      $(2,222,000)
Adjustments to reconcile net loss to net cash
           used in operating activities:
               Depreciation and amortization                                275,000           234,000
               Warrants and options issued to majority shareholder
                 and suppliers                                               23,000            26,000
               Provision for loss on accounts receivable                         --           (12,000)
               Loss on disposal of equipment                                     --            38,000
               Expense paid by majority shareholder                              --            50,000
               Net change in operating assets and liabilities:
                    Decrease in accounts receivable                          25,000           248,000
                    Increase in inventories                                (191,000)         (446,000)
                    Increase (decrease) in other current assets              16,000           (31,000)
                    (Increase) decrease in accounts payable and
                     accrued expenses                                      (169,000)          150,000
                    Increase in interest payable                            248,000           299,000
                                                                        -----------       -----------
Net cash used in operating activities                                    (2,474,000)       (1,666,000)
                                                                        -----------       -----------
INVESTING ACTIVITIES
Purchase of equipment                                                    (2,497,000)         (792,000)
Decrease in note receivable from sale of discontinued operations            182,000           175,000
Increase in other assets                                                     (9,000)          (19,000)
                                                                        -----------       -----------
Net cash used in investing activities                                    (2,324,000)         (636,000)
                                                                        -----------       -----------
FINANCING ACTIVITIES
Proceeds from line of credit                                              4,673,000         2,250,000
Warrants issued to majority shareholder                                      46,000                --
Debt issue costs, net                                                       (16,000)               --
                                                                        -----------       -----------
Net cash provided by financing activities                                 4,703,000         2,250,000
                                                                        -----------       -----------
NET DECREASE IN CASH                                                        (95,000)          (52,000)
CASH - BEGINNING OF PERIOD                                                  137,000           189,000
                                                                        -----------       -----------
CASH - END OF PERIOD                                                    $    42,000       $   137,000
                                                                        ===========       ===========
</TABLE>


                             See accompanying notes.



                                       16
<PAGE>   18

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, markets its products through its Wilshire Contamination
Control Division, and manufactures certain of its products in its wholly-owned
Mexican subsidiary, Wilshire International de Mexico S.A. de C.V. During 1996,
the Company divested its Medical Products and Transdermal Products divisions and
has since focused primarily on products used in industrial clean rooms, such as
gloves and contamination control products.

BASIS OF PRESENTATION

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. The
Company is attempting to raise additional capital to fund its ongoing operations
and capital requirements, and management believes that Trilon Dominion will
continue to support the Company as necessary through the end of fiscal year
1999.

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

INVENTORIES

Inventories are stated at the lower of first in, first out cost or market.

REVENUE RECOGNITION

Sales are recognized when the product is shipped and customer acceptance is
received pursuant to applicable customer contracts or purchase orders.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
about the future that affect the amounts reported in the financial statements
and disclosures made in the accompanying notes to the financial statements. The
actual results could differ from those estimates.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and are being depreciated on a
straight-line basis over their estimated useful lives, which range from three to
seven years. Property and equipment under capital leases are amortized over the
life of the asset or the term of the lease, whichever is shorter.

INTANGIBLE ASSETS

Goodwill is being amortized over 17 years. For each of the years ended November
30, 1998 and 1997, amortization was $42,000.

CONCENTRATION OF CREDIT RISK

Sales to a national distributor accounted for 33% and 49% of total sales during
1998 and 1997, respectively. Otherwise, the Company's customers are dispersed
across different industries and geographic locations. The Company reviews a
potential customer's credit history before extending credit. The Company
establishes an allowance for doubtful accounts based upon factors surrounding
the credit risk of specific customers, historical trends and other information.
Management does not believe significant credit risks exist.



                                       17
<PAGE>   19

LOSS PER SHARE

Net loss per common share in fiscal 1998 and 1997 was computed using the
weighted average number of common shares outstanding during the period which
excludes all common equivalent shares since they are antidilutive.

During the period ending February 28, 1998, the Company adopted Statement of
Financial Standards (SFAS) No. 128, Earnings Per Share. The adoption of this
statement did not have a material impact since the Company has reported losses
and the impact of common stock equivalents is not included in the net loss per
share calculations as their effect is anti-dilutive or not required.

NEW ACCOUNTING STANDARDS

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income, and SFAS No. 131, Segment Information. Both of
these standards are effective for fiscal years beginning after December 15,
1997. SFAS No. 130 requires that all components of comprehensive income,
including net income, be reported in the financial statements in the period in
which they are recognized. Comprehensive income is defined as the change in
equity during a period from transactions and other events and circumstances from
non-owner sources. Net income and other comprehensive income, including foreign
currency translation adjustments, and unrealized gains and losses on
investments, shall be reported, net of their related tax effect, to arrive at
comprehensive income. The Company does not believe that comprehensive income or
loss will be materially different than net income or loss. SFAS No. 131 amends
the requirements for public enterprises to report financial and descriptive
information about its reportable operating segments. Operating segments, as
defined in SFAS No. 131, are components of an enterprise for which separate
financial information is available and is evaluated regularly by the Company in
deciding how to allocate resources and in assessing performance. The financial
information is required to be reported on the basis that is used internally for
evaluating the segment performance. The Company believes it operates in one
business and operating segment and does not believe adoption of this standard
will have a material impact on the company's financial statements.

STOCK-BASED COMPENSATION

As permitted by Statement of Financial Accounting Standards No. 123, the Company
has elected to follow Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations ("APB 25"), in accounting
for its employee stock options. Under APB 25, when the exercise price of the
Company's employee stock options is not less than the fair value of the
underlying stock on the date of grant, no compensation expense is recognized.

2.   FINANCIAL STATEMENTS INFORMATION 

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                     NOVEMBER 30,
                                               ------------------------
                                                   1998           1997
                                               -----------   ----------
<S>                                            <C>           <C>       
Raw materials                                  $  604,000    $  156,000
Work in process                                   239,000       265,000
Finished goods                                    385,000       616,000
                                               ----------    ----------
                                               $1,228,000    $1,037,000
                                               ==========    ==========
</TABLE>


Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                     NOVEMBER 30,
                                               ------------------------
                                                   1998         1997
                                               -----------   ----------
<S>                                            <C>           <C>       
Machinery and equipment                        $ 4,007,000   $1,008,000
Furniture and office equipment                     372,000      370,000
Leasehold improvements                             144,000       45,000
Construction in progress                                --      648,000
                                               -----------   ----------
                                                 4,523,000    2,071,000
Less accumulated depreciation and
amortization                                      (958,000)    (778,000)
                                               -----------   ----------
                                               $ 3,565,000   $1,293,000
                                               ===========   ==========
</TABLE>



                                       18
<PAGE>   20

3.   NOTE RECEIVABLE

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. The disposition of this business has
been accounted for as a discontinued operation. 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.


4.   LINE OF CREDIT

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%. 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 and Trilon Dominion amended the
Agreement to extend the termination date of the Agreement 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 of $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.

The Agreement was amended further on September 30, 1996, April 15, 1997, and
September 19, 1997. Each amendment increased the credit line by $1,000,000, up
to a total of $4,000,000, and extended the termination date, to June 30, 1998.
Trilon Dominion received a warrant to purchase 100,000 shares at the market
price with each credit line increase, and a warrant to purchase 25,000 shares at
the market price with each termination date extension. Warrants for 225,000
shares were issued in each of fiscal years 1996 and 1997 and warrants for 50,000
shares were issued in fiscal year 1998. The Company recorded the estimated fair
value of the warrants issued in fiscal year 1997 and fiscal year 1998 at $0.07
per underlying common share with a corresponding charge to earnings of $16,000
in fiscal 1997 and $3,500 in fiscal year 1998.

On January 7, 1998, February 17, 1998 and March 10, 1998, the Company and Trilon
Dominion completed Demand Notes, each for $250,000 at an interest rate of
12.25%, to fund the Company's ongoing operations until a new credit facility
could be completed.

On March 31, 1998 the Company and Trilon Dominion completed an Amended and
Restated Credit Agreement and Revolving Line of Credit (the "Amended
Agreement":) which included the principal of $4,000,000 from the previous
Agreement and Amendments, the principal of $750,000 from the three Demand Notes,
the accrued interest and management fees of $543,297 on the Agreement and 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 the
interest was payable quarterly at an annual rate of 11.5%. In connection with
the Amendment Agreement, the Company paid Trilon $100,000 for debt issuance
costs and issued Trilon Dominion a five-year warrant that entitles Trilon
Dominion to purchase 650,000 shares of the Company's authorized but unissued
common stock at an exercise price of $0.41 per share, subject to adjustment to
protect against dilution. The warrant is exercisable immediately and expires on
March 31, 2003. The Company recorded the estimated fair value of the warrant to
purchase 650,000 shares as a debt issuance cost in the second quarter of fiscal
year 1998 at $0.07 per underlying common share. On December 31, 1998, under the
terms of the Amended Agreement, the Company issued Trilon Dominion a second
five-year warrant which became exercisable when the Company and Trilon Dominion
agreed to extend the due date of the principal 



                                       19
<PAGE>   21

and interest from December 31, 1998 to January 31, 2000. The second warrant
entitles Trilon Dominion to purchase 250,000 shares of the Company's authorized
but unissued common stock at an exercise price of $0.42 per underlying common
share and expires on March 31, 2003.

On August 5, 1998, September 1, 1998, October 1, 1998, November 2, 1998,
December 1, 1998, January 4, 1999, and February 1, 1999, the Company and Trilon
Dominion completed Demand Notes at an interest rate of 11.5% to fund the
Company's ongoing operations. The August and September notes each were in the
amount of $220,000, the October, January and February notes each were in the
amount of $250,000, the November note was in the amount of $240,000 and the
December note was in the amount of $260,000.


5.   INCOME TAXES

At November 30, 1998, the Company had federal net operating loss carryforwards
of approximately $26,863,000 which will begin to expire in 2006 unless
previously utilized. In addition, the Company had California and Texas net
operating loss carryforwards of approximately $12,275,000 which will begin to
expire in 1999 (approximately $204,000 expired in 1998). Research and
development tax credits of $92,000 will begin to expire in 2009.

As a result of ownership changes that occurred in February 1993 from a private
placement of common stock and in January 1996 from the exchange of common stock
for the outstanding debt and accrued interest, the Company's federal net
operating loss carryforwards will be subject to an annual limitation regarding
utilization against taxable income in future periods. The Company estimates that
approximately $6,800,000 of its federal net operating loss carry forward will be
unavailable for future tax benefit. Accordingly, the federal tax net operating
loss carry forward has been reduced, including the related deferred tax asset.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts for income tax purposes. Due to the uncertainty
surrounding future realization of favorable tax attributes, a valuation
allowance was recorded against deferred tax assets. Significant components of
the Company's deferred tax assets and liabilities for federal and state income
taxes are as follows:

<TABLE>
<CAPTION>
                                             YEARS ENDED NOVEMBER 30
                                              1998            1997
                                           -----------    -------------
<S>                                       <C>             <C>
Deferred tax assets:
Depreciation and amortization             $         --      $    18,000
Installment Sale                             1,058,000        1,058,000
Warrants                                       113,000          113,000
Accrued liabilities                             25,000           87,000
Inventory reserves                             140,000           24,000
Other                                          213,000          220,000
Net operating loss carryforwards            10,112,000        6,696,000
                                          ------------      -----------
Total deferred assets                       11,661,000        8,216,000
Valuation allowance for deferred assets    (11,626,000)      (8,216,000)
                                          ------------      -----------
Net deferred tax assets                   $     35,000      $        --
                                          ============      ===========

Deferred tax liabilities:
Depreciation and amortization             $    (35,000)     $        --
                                          ------------      -----------
Net deferred tax asset (liability)        $         --      $        --
                                          ============      ===========
</TABLE>



                                       20
<PAGE>   22

The reconciliation of income tax computed at the federal statutory tax rate to
income tax expense for the years ended November 30, 1998 and 1997 are as
follows:

<TABLE>
<CAPTION>
                                                YEARS ENDED NOVEMBER 30
                                              1998                       1997
                                     ------------------------   ----------------------
                                      Amount     Percentage      Amount     Percentage
                                     ---------   ----------     ---------   ----------
<S>                                  <C>         <C>            <C>         <C> 
Tax at Federal Rate                  $ 918,000       34 %       $ 761,000       34 %
Change in Valuation Allowance         (918,000)     (34)%        (761,000)     (34)%
                                     ---------   ----------     ---------   ----------
                                     $      --       -- %       $      --       -- %
                                     ---------   ----------     ---------   ----------
</TABLE>

6.   COMMITMENTS AND CONTINGENCIES

BREAST IMPLANT LITIGATION

The Company and its alleged predecessor company, Wilshire Foam, have been named
as defendants in thousands of bodily injury lawsuits involving breast implants
pending in Alabama, Arizona, California, Colorado, Connecticut, District of
Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Louisiana,
Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Jersey, New Mexico,
New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina,
Tennessee, Texas, Utah and Washington, and in a federal multi-district
litigation ("MDL") venued in Birmingham, Alabama. These suits seek compensatory
and punitive damages under a variety of legal theories. The allegations against
Wilshire Foam concern the use by some implant manufacturers of polyurethane
products purportedly supplied by Wilshire Foam which were apparently
incorporated into the implants and placed in the plaintiffs' bodies. Plaintiffs
allege that they have suffered adverse effects of having polyurethane in their
bodies, in addition to the alleged adverse effects of silicone and other
components of the implants.

The Company believes it has several layers of protection from exposure in these
cases. First, as described in greater detail below, the Company and Wilshire
Foam carried insurance. Second, also discussed below, recent developments in the
MDL and in related negotiations have resulted in the probable resolution of most
of the pending and possible future claims against the Company. Third, there are
a great number of co-defendants, some of which are large corporations with
significant resources, that may be required to contribute to any award or
indemnify the Company. Fourth, the Company has asserted a number of legal
defenses in the lawsuits as described below. Fifth, these claims relate to
products sold prior to the acquisition of Wilshire Foam, in which product
liabilities were expressly not assumed and the Company was indemnified by the
shareholders of Wilshire Foam. In many, if not most of the cases, the Company
believes it did not sell any product to the implant manufacturers in question or
during the relevant time period. The Company has been dismissed by approximately
2,400 plaintiffs because it was shown that a Wilshire Foam product was not
involved or in connection with a related resolution of the case.

Management believes the Company is adequately covered by insurance for these
suits under one or more commercial general liability ("CGL") and excess
liability insurance policies. Between 1974 and 1980, Fireman's Fund Insurance
Company provided the CGL coverage; from 1980 through 1987, affiliates of the
Chubb Group provided both CGL and excess coverage. The CGL policies for
1987-1992 were underwritten by Allstate Insurance Company affiliates; excess
coverage for those years has been provided by Fireman's Fund. While Wilshire
Foam's greatest number of relevant sales appear to have taken place during the
early to mid-1980's, there appears to be over $100 million in combined potential
insurance coverage for the Company and/or Wilshire Foam during and after that
time period. To date, all of the claims have been tendered to the insurance
carriers, who have accepted defense of the litigation, subject to customary
reservations of rights. No assurance can be given that any future lawsuits will
be accepted by carriers. The cost of defense of the suits is generally not
applied toward the policy limits. The Company and its insurers are exploring
additional excess coverage which appears to have been in place during the 1970's
until 1980.

Many of the lawsuits have only recently been filed, and therefore all of the
facts and circumstances surrounding the various allegations have yet to be
determined. Consequently, it is difficult to predict the ultimate outcome 



                                       21
<PAGE>   23

and extent of the Company's involvement. Nevertheless, the Company presently
believes that numerous legal defenses to potential liability exist, including,
but not limited to, the absence of causation, lack of identification, fault of
others, absence of defect, superseding cause, the component manufacturer
defense, statutes of limitations, the absence of successor liability, learned
intermediary, contribution and indemnity, and has in fact included these
defenses in its answers to the lawsuits. As with any litigation, there is a risk
of adverse judgments against the Company. The Company is actively cooperating
with its insurers and counsel in the defense of these lawsuits.

Previously, a number of defendants, including the Company, entered into a global
settlement agreement ("Global Settlement") in the MDL. Under the terms of the
Global Settlement, the Company would be required to contribute $8 million to the
global settlement fund, which the Company's insurers have agreed to pay. The
judge presiding over the MDL approved the Global Settlement and found it to be
fair; however, in September of 1995 that judge announced that the Global
Settlement is under funded, in part due to an unexpected number of registrants
and other reasons. The Company understands that efforts to resurrect or replace
the Global Settlement are ongoing but that the Global Settlement may not become
effective. The Company is to be a released party in the current draft of the
replacement for the Global Settlement without any additional funding
requirements from the Company or its insurers.

Separately, the Company has reached agreement with Medical Engineering
Corporation and Bristol-Myers Squibb ("MEC"), whereby, in essence, MEC has
agreed to indemnify the Company in all cases where a plaintiff, whose implant is
within MEC's chain of distribution, opts out of the Global Settlement. The MEC
indemnification also covers Wilshire for plaintiffs who opted into the Global
Settlement in the event that the Global Settlement does not become effective, so
that the Company remains protected in most cases even if the Global Settlement
cannot be resurrected. The Company's insurers have funded the initial amount the
Company agreed to pay to MEC in consideration of MEC's providing such
indemnification, and have agreed to pay the balance which would become due to
MEC if the Global Settlement does not become effective. These funding payments
reduced the limits of coverage under various CGL policies, but none of these
payments or funding commitments exhausted or will exhaust any of the policies'
limits or reached any excess policy.

The Company believes that the indemnification by MEC, with or without the Global
Settlement, would eliminate the great majority of implant-related cases pending
against the Company. However, even if the Global Settlement is finally approved,
cases will remain pending against the Company involving plaintiffs who opt out
of the Global Settlement and whose implants are outside of the MEC chain of
distribution and hence not covered by the MEC indemnification.

CONTINGENT LIABILITIES RELATED TO THE SALE OF THE GENERAL FOAM DIVISION

The Company remains contingently liable for certain deferred compensation due
through 2025 aggregating $1,238,000 in connection with the sale of the general
foam division to Advanced Materials effective on November 30, 1992.

LEASE COMMITMENTS

The following is a schedule of the future minimum rental payments, net of future
sublease rental income, required under operating leases which have remaining non
cancelable lease terms in excess of one year at November 30, 1998:

<TABLE>
<S>                                         <C>
1999                                        $ 301,000
2000                                          293,000
2001                                          234,000
2002                                          233,000
2003                                           20,000
                                           ----------
       Total minimum payments              $1,081,000
                                           ==========
</TABLE>

Rent expense was $461,000 and $337,000 for the years ended November 30, 1998 and
1997, respectively. During 1998, the Company received $35,000 of sublease rental
income.



                                       22
<PAGE>   24

7.   SHAREHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)

COMMON STOCK

During 1997, Trilon Dominion paid $50,000 of the President and Chief Executive
Officer's salary and did not charge the Company. The Company has recorded that
amount as a contribution to capital and a corresponding charge to general and
administrative expenses.

PREFERRED STOCK

On December 3, 1992, 2,000,000 shares of undesignated Preferred Stock were
authorized. The Board of Directors is authorized to provide for the issuance of
the undesignated Preferred Stock in one or more series, to establish from time
to time the number of shares to be included in each series, to fix or alter the
rights, preferences and privileges of the shares of each wholly unissued series
and any restrictions thereon, and to increase or decrease the number of shares
of any series.

COMMON STOCK WARRANTS

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%. 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 and Trilon Dominion amended the
Agreement to extend the termination date of the Agreement 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 of $1.75 per
share, and it expires on January 5, 2001.

The Agreement was amended further on September 30, 1996, April 15, 1997, and
September 19, 1997. Each amendment increased the credit line by $1,000,000, up
to a total of $4,000,000 and extended the termination date to June 30, 1998.
Trilon Dominion received a warrant to purchase 100,000 shares at the market
price with each credit line increase, and a warrant to purchase 25,000 shares at
the market price with each termination date extension. Warrants for 225,000
shares were issued in each of fiscal years 1996 and 1997. The Company recorded
the estimated fair value of the warrants issued to Trilon Dominion in fiscal
year 1997 at $0.07 per underlying common share and recorded a corresponding
charge to interest expense of $16,000 in fiscal 1997.

On September 18, 1997, the Company completed a Development and Supply Agreement
for glove polymer with PTG Medical LLC, an affiliate of Polymer Technology
Group, Inc. Under that Agreement, the Company issued a five-year warrant for
100,000 shares of common stock at an exercise price of $1.09, which was $0.25
above the average market price for the five days prior to the date of the
Agreement.

On November 25, 1997 the Company completed a Lease Agreement for a manufacturing
facility in Tijuana, Mexico with Mr. Rafael Mizrachi. Under that Agreement, the
Company issued a five-year warrant for 50,000 shares of common stock at an
exercise price of $0.60, which was the market price on the date of the
Agreement.

The Company recorded the estimated fair value of the warrants issued to PTG
Medical LLC and Mr. Rafael Mizrachi in fiscal year 1997 at $0.07 per underlying
common share and recorded a corresponding charge to earnings of $10,000 in
fiscal 1997.

On December 31, 1997 and on June 30, 1998 warrants issued to Trilon Dominion,
each to purchase 25,000 shares, became exercisable at the respective market
prices of $0.47 and $0.34 per share. The Company recorded the estimated fair
value of these warrants in fiscal year 1998 at $0.07 per underlying common share
and recorded a corresponding charge to interest expense of $3,500 in fiscal year
1998.



                                       23
<PAGE>   25

On March 31, 1998 the Company and Trilon Dominion completed an Amended and
Restated Credit Agreement and Revolving Line of Credit (the "Amended Agreement")
which included the principal of $4,000,000 from the previous Agreement and
Amendments, the principal of $750,000 from the three Demand Notes, the accrued
interest and management fees of $543,297 on the Agreement and 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 the interest was
payable quarterly at an annual rate of 11.5%. In connection with the Amended
Agreement, the Company paid Trilon $100,000 for debt issuance costs and issued
Trilon Dominion a five-year warrant that entitles Trilon Dominion to purchase
650,000 shares of the Company's authorized but unissued common stock at an
exercise price of $0.41 per share, subject to adjustment to protect against
dilution. The warrant is exercisable immediately and expires on March 31, 2003.
The Company recorded the estimated fair value of the warrant to purchase 650,000
shares as a debt issuance cost in the second quarter of fiscal year 1998 at
$0.07 per underlying common share. Also, under the terms of the Amended
Agreement, the Company issued Trilon Dominion a second five-year warrant which
became exercisable on December 31, 1998 when the Company and Trilon Dominion
agreed to extend the termination date of the Amended Agreement from December 31,
1998 to January 31, 2000. The second warrant entitles Trilon Dominion to
purchase 250,000 shares of the Company's authorized but unissued common stock at
an exercise price of $0.42 per underlying common share and expires on March 31,
2003.

STOCK OPTIONS

On April 27, 1992, the Company's Board of Directors approved a stock option plan
for 150,000 options ("the 1992 Plan") and on December 1, 1993, approved a second
stock option plan for 250,000 options ("the 1993 Plan"). On December 6, 1994,
the Board of Directors approved a third stock option plan ("the 1995 Plan") for
options on 500,000 shares. The 1995 Plan was approved by the shareholders at the
Annual Meeting on August 1, 1995. An amendment to the 1995 Plan was approved by
the shareholders at the Annual Meeting on May 20, 1996, to increase the number
of shares that may be issued under such plan to 1,750,000 shares. As of November
30, 1998, the following options were outstanding under each respective Stock
Option Plan: none under the 1992 Plan, 14,000 under the 1993 Plan, and 1,371,000
under the 1995 Plan. In addition, there were 280,000 options outstanding which
were not issued under any of the above-mentioned Plans.

Under the Plans, the Company may grant incentive stock options ("ISOs"), as
defined under the Internal Revenue Code or nonqualified stock options ("NQOs").
Options may be granted at not less than 100% of the fair market value on the
date of grant for ISOs. The option period cannot exceed 10 years from the date
an option is granted or five years in the case in which an option is granted to
a 10% shareholder of both classes of stock at the time the option is granted.
Generally, if an optionee's employment is terminated, all unvested options
granted to such employee under the Plans shall terminate and may no longer be
exercised.

On November 21, 1997 the Board of Directors approved a grant of stock options on
701,000 shares under the 1995 Plan at the market price on that date of $0.625
per share which included options on 157,500 new shares, and options on 543,500
shares to the Company's employees who were willing to surrender their currently
owned options.

On October 7, 1998 the Board of Directors approved six grants of stock options
on a total of 670,000 shares under the 1995 Plan at the market price on the
respective date of each grant. Two of these six grants, on a total of 90,000
shares, were issued to outside consultants of the Company and were recorded in
fiscal year 1998 at their estimated fair value of $19,000 with a corresponding
charge to administrative expense.



                                       24
<PAGE>   26

A summary of stock option activity is as follows:

<TABLE>
<CAPTION>
                                                                   Weighted
                                                  Number        Average Exercise
                                                of Shares       Price Per Share
                                               -----------      ----------------
<S>                                            <C>              <C> 
Outstanding at November 30, 1996                 1,405,600          2.51
        Granted...........................         853,000          0.65
        Canceled..........................      (1,083,100)         2.58
                                                ----------
Outstanding at November 30, 1997                 1,175,500          1.10
        Granted...........................         688,000          0.49
        Canceled..........................        (198,500)         1.16
                                                ----------
 Outstanding at November 30, 1998                1,665,000          0.84
                                                ==========
</TABLE>

As of November 30, 1998, 615,000 shares are available for future grant under the
Stock Option Plans.

Following is a further breakdown of the options outstanding as of November 30,
1998:

<TABLE>
<CAPTION>
                                                                                       Weighted
                                    Weighted                                           Average
                                     Average       Weighted                          Exercise
   Range of                         Remaining       Average                          Price of
   Exercise          Options           Life        Exercise         Options            Options
    Prices         Outstanding       in Years       Price         Exercisable        Exercisable
   --------        -----------      ---------      --------       -----------        -----------
<S>                <C>              <C>            <C>            <C>                <C>  
      $.34              8,000          4.58         $0.34             8,000            $0.34
      0.38              5,000          9.56          0.38             1,666             0.38
      0.48            145,000          9.49          0.48            84,999             0.48
      0.50            540,000          9.66          0.50            10,000             0.50
      0.63            740,000          5.29          0.63           722,499             0.63
      0.75            126,000          3.56          0.75            63,000             0.75
      0.84              6,000          3.58          0.84             6,000             0.84
      0.88             15,000          6.92          0.88            15,000             0.88
      6.00             80,000          3.41          6.00            80,000             6.00
 ----------         ---------          ----         -----           -------            -----
 $0.34-6.00         1,665,000          6.87         $0.84           991,164            $1.06
 ==========         =========          ====         =====           =======            =====
</TABLE>


Adjusted proforma information regarding net loss is required by SFAS 123 and has
been determined as if the Company had accounted for its employee stock options
under the fair value method of SFAS 123. The fair value for these options was
estimated at the date of grant using the Black Scholes method for option pricing
with the following assumptions for 1998 and 1997: a risk free interest rate of
5.88%, a dividend yield of 0%, a weighted-average expected life of the option of
three years and expected volatility of 60 percent.

For purposes of adjusted proforma disclosures, the estimated fair value of the
options is amortized to expense over the vesting period. The Company's adjusted
proforma information is as follows:

<TABLE>
<CAPTION>
                                                                     Years Ended November 30,
                                                                    1998                 1997
                                                                    ----                 ----
<S>                                                             <C>                  <C>         
Adjusted proforma net loss.............................         $(2,944,00           $(2,564,000)
Adjusted proforma net loss per share...................             $(0.23)               $(0.20)
</TABLE>


The weighted average fair value of options granted during 1997 and 1998 was
$0.98 and $0.73, respectively.

At November 30, 1998, 5,715,000, shares were reserved for the issuance of
options and warrants.



                                       25
<PAGE>   27

8.   RELATED PARTY TRANSACTIONS

On November 30, 1998, the Company had short-term debt outstanding to Trilon
Dominion of $8,423,000 plus accrued interest (see Note 4). In addition, Trilon
Dominion owned 9,416,430 shares, or 72.8%, of the Company's common stock and
warrants entitling it to purchase an additional 1,150,000 shares (before
dilution adjustments). Mr. Ronald Cantwell, who is President of Trilon Dominion,
has been a director and Chairman of the Board of the Company since December 6,
1996.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

None.


                                       26
<PAGE>   28

PART III


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT.

The information required in this Item is incorporated herein by reference to the
Company's Proxy Statement dated March 26, 1999

ITEM 10. EXECUTIVE COMPENSATION.

The information required in this Item is incorporated herein by reference to the
Company's Proxy Statement dated March 26, 1999

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required in this Item is incorporated herein by reference to the
Company's Proxy Statement dated March 26, 1999

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required in this Item is incorporated herein by reference to the
Company's Proxy Statement dated March 26, 1999

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K.

<TABLE>
<CAPTION>
        (a)  EXHIBITS:
<S>            <C>
        10.1   Settlement Agreement dated November 23, 1993 between the Company
               and Wilshire Advanced Materials, Inc. ("Advanced Materials") (1)

        10.2   Asset Purchase Agreement dated November 23, 1993, between the
               Company and Advanced Materials (forms of bill of sale and
               assignment, secured promissory note, amended and restated secured
               subordinated promissory note, and amendment to security agreement
               attached thereto) (1)

        10.3   Maturity Date Extension to Secured Promissory Note dated January
               24, 1994 between the Company and Advanced Materials (1)

        10.4   Amendment to Manufacturers Sales Representative Agreement dated
               January 27, 1994 between the Company and Professional Health
               Sales, Inc. (1)

        10.5   Mutual Release to terminate Joint Venture Agreement dated August
               2, 1993 between the Company and Tillotson Healthcare Corporation
               (1)

        10.6   Release by the Company to terminate License and Sales Agreement
               dated August 1, 1993 between the Company and Tyndale
               Plains-Hunter, Ltd. ("TPH") (1)

        10.7   Release by the Company to terminate Evaluation Agreement dated
               August 19, 1993 between the Company and TPH (1)

        10.8   Release by the TPH to terminate License and Sales Agreement dated
               August 23, 1993 between the Company and TPH (1)

        10.9   Release by the TPH to terminate Evaluation Agreement dated August
               23, 1993 between the Company and TPH (1)

        10.10  Product Development and License Agreement dated May 25, 1993
               between the Company and Innovative Technologies Limited ("IT")
               (1)
</TABLE>



                                       27
<PAGE>   29

<TABLE>
<S>            <C>
        10.11  Product Development and License Agreement for Gloves dated June
               20, 1993 between the Company and IT (1)

        10.12  Amendment to Joint Venture Agreement dated January 5, 1994
               between the Company and Intelligent Pharmaceuticals Corporation
               (1)

        10.13  Lease Agreement dated January 14, 1993 among the Company,
               Ridgecrest Properties, R and B Properties and Hindry West
               Development (1)

        10.14  Lease Amendment dated June 30, 1993 among the Company, Ridgecrest
               Properties, R and B Properties and Hindry West Development (1)

        10.15  International Distribution Agreement dated July 16, 1993 between
               WTP and B&R Consulting Limited, Inc. (1)

        10.16  International Distribution Agreement dated August 11, 1993
               between WTP and Dagal, Inc. (1)

        10.17  International Distribution Agreement dated January 3, 1994
               between WTP and Windsor Group, Ltd. (1)

        10.18  First Amendment to Credit and Security Agreement dated January
               11, 1994 between the Company and City National Bank ("CNB") (1)

        10.19  Revolving Credit Note dated January 11, 1994 between the Company
               and CNB (1)

        10.20  Equipment Acquisition Note dated January 11, 1994 between the
               Company and CNB (1)

        10.21  Credit Agreement dated May 13, 1994 between the Company and
               Dominion (2)

        10.22  Warrant to Purchase Common Stock of Company dated May 13, 1994
               (3)

        10.23  Security Agreement dated May 13, 1994 between the Registrant and
               Dominion (4)

        10.24  Promissory Note in the principal amount of $5,000,000 dated May
               13, 1994 made by the Registrant to the order of Dominion (5)

        10.25  Fairness Opinion dated November 24, 1993 regarding the sale by
               the Company of certain assets related to WMP's OEM private-label
               business to Advanced Materials prepared for the Company by
               Laidlaw Holdings, Inc. (6)

        10.26  Settlement Agreement and Release dated November 1, 1994 between
               Coating Sciences, Inc. and the Registrant. (7)

        10.27  Settlement Agreement dated May 12, 1994 between Time Release
               Sciences, Inc. and the Registrant. (7)

        10.28  Amendment thereto dated September 17, 1994. (7)

        10.29  Agreement dated as of January 16, 1995 among Medical Engineering
               Corporation, Wilshire Advanced Materials, Inc. and the
               Registrant, concerning breast implant claims. (7)

        10.30  Stipulation of Partial Settlement dated as of October 26, 1994 in
               re Wilshire Technologies Securities Litigation Master File
               94-0400-B (AJB), United States District Court for the Southern
               District of California among the Registrant and the
               Representative Plaintiffs named therein, exclusive of the
               exhibits thereto. (7)
</TABLE>



                                       28
<PAGE>   30

<TABLE>
<S>     <C>
        10.31  Articles of Incorporation (8)

        10.32  Credit Agreement dated November 18, 1994 between the Registrant
               and Dominion Capital, Inc., including form of Warrant and form of
               Note. (9)

        10.33  First Amendment, dated December 30, 1994 to such Credit
               Agreement, including form of Promissory Note. (10)

        10.34  Second Amendment, dated February 14, 1995, to such Credit
               Agreement, including form of Promissory Note. (11)

        10.35  1995 Stock Option Plan (12)

        10.36  Form of Non-Qualified Stock Option Agreement. (13)

        10.37  Third Amendment, dated May 23, 1995, to the Credit Agreement
               dated November 18, 1994 between the Registrant and Dominion
               Capital, Inc. (14)

        10.38  Agreement between the Registrant and Dominion Capital, Inc. dated
               June 29, 1995, on payment of interest. (15)

        10.39  Second Amendment dated May 17, 1995, to the Settlement Agreement
               dated May 12, 1994 between Time Release Sciences, Inc. and the
               Registrant. (16)

        10.40  Letter Agreement dated June 29, 1995 between Dominion Capital,
               Inc. ("Dominion") and the Registrant notifying Registrant of
               Dominion's intent to transfer certain securities to Venture
               Capital Equities, LLC (the "LLC"). (17)

        10.41  Agreement dated June 30, 1995 among Dominion, the LLC and the
               Registrant referred to in the preceding Letter Agreement with the
               following Exhibits: (a) Lender Assignment and Assumption
               Agreement dated June 30, 1995. (b) Grid Promissory Note dated May
               23, 1995. (c) Assignment of Warrant by Dominion to the LLC. (18)

        10.42  Amendment dated June 30, 1995 to Warrant Agreement dated May 13,
               1994 between Wilshire and Dominion. (19)

        10.43  Advice by Dominion and the LLC to the Registrant of the transfer
               of the securities by Dominion to the LLC and of the proposed name
               change of the LLC to Trilon Dominion Partners, LLC. (20)

        10.44  Bylaw Amendment, effective July 31, 1995, fixing exact number of
               directors at five. (21)

        10.45  Registrant's Bylaws as in effect on October 9, 1995. (22)

        10.46  Letter dated May 12, 1995 by Ministry of Health of the Republic
               of Mexico granting Sanitary Registration No. 245M95 SSA for the
               appetite suppressant ("TrimPatch(TM)"). (23)

        10.47  English translation of Exhibit 10.7. (24)

        10.48  Employment Agreement dated August 31, 1995 and effective April
               17, 1995 between the Registrant and Mr. Stephen P. Scibelli, Jr.
               (25)

        10.49  Amendment to Asset Purchase Agreement, dated May 19, 1995 between
               the Registrant and Wilshire Advanced Materials, Inc. (26)

</TABLE>



                                       29
<PAGE>   31

<TABLE>
<S>            <C>
        10.50  Form of stock option granted on September 16, 1994 to directors
               Black, Davis, Landry and Widder. (27)

        10.51  Form of stock option granted on December 6, 1994 to director
               William J. Hopke. (28)

        10.52  Form of stock option granted on April 17, 1995 to directors
               Black, Davis, Hopke, Landry and Widder. (29)

        10.53  Form of stock option granted on September 16, 1994 to Mr. Stephen
               P. Scibelli, Jr. (30)

        10.54  Form of stock option granted on April 17, 1995 to Mr. Stephen P.
               Scibelli, Jr. (31)

        10.55  Technology and Peripheral Technology Rights Agreement dated June
               30, 1995, among the Registrant, James A. Eisenstock, and Mikki
               Rossin, relating to Bloodstopper products. (32)

        10.56  Fourth Amendment, dated September 1, 1995, to the Credit
               Agreement dated November 18, 1994 between the Registrant and
               Trilon Dominion Partners, LLC. (33)

        10.57  Industrial Sublease Agreement dated August 31, 1995 between the
               Registrant and Advanced Materials, Inc. (34)

        10.58  Fifth Amendment dated as of November 1, 1995 to the Credit
               Agreement dated November 18, 1994 (the "Credit Agreement")
               between the Registrant and Trilon Dominion Partners LLC
               ("Trilon"). (35)

        10.59  Sixth Amendment dated as of December 5, 1995 to the
               above-mentioned Credit Agreement. (36)

        10.60  Exchange Agreement dated as of January 5, 1996 between the
               Registrant and Trilon. (37)

        10.61  Credit Agreement (the "Trilon Agreement") dated January 5, 1996
               between the Registrant and Trilon, exclusive of certain
               schedules. (38)

        10.62  Grid Promissory Note for not to exceed $1,000,000 to evidence
               borrowings under the Trilon Agreement. (39)

        10.63  Amendment No. 1 dated January 5, 1996 to Security Agreement dated
               May 13, 1995 which secures borrowings under the Trilon Agreement.
               (40)

        10.64  Warrant dated January 5, 1996 to purchase 100,000 shares of the
               Registrant's Common Stock, issued to Trilon pursuant to the
               Trilon Agreement. (41)

        10.65  Springing Warrant dated January 5, 1996 to purchase 25,000 shares
               of the Registrant's Common Stock, issued to Trilon pursuant to
               the Trilon Agreement. (42)

        10.66  Consulting Agreement dated January 5, 1996 between the Registrant
               and Trilon. (43)

        10.67  Form of Stock Option granted on December 12, 1995 to Mr. James W.
               Klingler. (44)

        10.68  Agreement of Purchase and Sale of Joint Venture Interest and
               Terminating Joint Venture, between the Company and Intelligent
               Pharmaceuticals Corporation, dated November 1, 1995. (45)

        10.69  Employment Agreement, dated October 3, 1994 between the Company
               and James W. Klingler. (45)
</TABLE>



                                       30
<PAGE>   32

<TABLE>
<S>     <C>
        10.70  Employment Agreement, dated August 15, 1995 between the Company
               and David R. Byck. (45)

        10.71  Bylaw Amendment adopted February 19, 1996. (45)

        10.72  Bylaws as in effect on February 20, 1996. (45)

        10.73  Principal/Agent Agreement dated March 13, 1996 between
               Intelligent Pharmaceuticals Corporation and the Registrant. (46)

        10.74  Manufacturing and Supply Agreement dated April 11, 1996, between
               Advanced Barrier Technologies, Inc., and the Registrant. (47)

        10.75  Agreement dated April 15, 1996, between Dagal, Inc., and the
               Registrant. (47)

        10.76  Agreement related to Wound Care Products, dated April 18, 1996,
               between Innovative Technologies Ltd. and the Registrant. (47)

        10.77  Agreement related to Gloves, dated April 18, 1996, between
               Innovative Technologies Ltd. and the Registrant. (47)

        10.78  Finder Agreement dated May 1, 1996, between Innovative Research
               Associates, inc., and the Registrant. (47)

        10.79  Product Rights Transfer Agreement, dated May 24, 1996, between
               Advanced Materials, inc., and the Registrant. (47)

        10.80  Release Agreement dated July 3, 1996, between Advanced Materials,
               Inc., and the Registrant. (47)

        10.81  Purchase of Assets and Assumption of Sublease Agreement with
               certain Exhibits dated June 30, 1996, between Acacia
               Laboratories, inc., (dba Horizon Medical, Inc.,) and the
               Registrant. (47)

        10.82  Amendment dated June 30, 1996, to Credit Agreement and Grid
               Promissory Note dated January 5, 1996, between Trilon Dominion
               Partners, LLC, and the Registrant. (47)

        10.83  Addendum Agreement dated July 26, 1996 to the Manufacturing and
               Supply Agreement dated April 11, 1996 between Advanced Barrier
               Technologies, Inc. and the Registrant. (48)

        10.84  Bailment Agreement dated September 6, 1996 between Coastline de
               Mexico S.A. de C.V., Advanced Barrier Technologies, Inc. and the
               Registrant. (48)

        10.85  Offer of Settlement of Wilshire Technologies, Inc. dated August
               5, 1996 to the U.S. Securities and Exchange Commission. (48)

        10.86  Order Instituting Proceedings Pursuant to Section 21C of the
               Securities Exchange Act of 1934, Making Findings and Imposing a
               Cease and desist Order, dated September 24, 1996 entered by the
               U.S. Securities and Exchange Commission against the Registrant.
               (48)

        10.87  Agreement of Purchase and Sale of TrimPatch(TM) Business and
               Assets dated September 30, 1996 between Intelligent
               Pharmaceuticals Corporation and the Registrant. (48)

        10.88  Restated Articles of Incorporation filed in the office of the
               Secretary of State of California on May 24, 1996. (49)
</TABLE>



                                       31
<PAGE>   33

<TABLE>
<S>     <C>
        10.89  Certificate of Amendment of Articles of Incorporation filed in
               the office of the Secretary of State of California on June 10,
               1996. (50)

        10.90  Second Amendment dated September 30, 1996 to Credit Agreement and
               Grid Promissory Note dated January 5, 1996, between Trilon
               Dominion Partners, LLC, and the Registrant. (51)

        10.91  Second Addendum, dated February 3, 1997, to the Manufacturing and
               Supply Agreement dated April 11, 1996 between Advanced Barrier
               Technologies, Inc. and the Registrant. (52)

        10.92  Bailment Agreement, dated February 3, 1997, between Advanced
               Barrier Technologies de Mexico S.A. de C.V., Advanced Barrier
               Technologies, Inc. and the Registrant. (52)

        10.93  Certificate, dated February 28, 1997, regarding the dissolution
               of Wilshire Transdermal Products, Ltd. (52)

        10.94  Distributor Agreement, dated March 5, 1997, between Armstrong
               Industrial Corporation and the Registrant. (53)

        10.95  Third Amendment, dated April 15, 1997, to Credit Agreement and to
               Grid Promissory Note dated January 5, 1996 between Trilon
               Dominion Partners LLC, and the Registrant. (53)

        10.96  Agreement related to Gloves, dated April 29, 1997, between
               Innovative Technologies Ltd. and the Registrant. (53)

        10.97  Equipment Supply Agreement, dated July 28, 1997, between ACC
               Automation Company and the Registrant. (54)

        10.98  Settlement Agreement, Mutual Release, and Injunction, dated July
               31, 1997, between Powell Products, Inc. and the Registrant. (54)

        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. (54)

        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. (54)

        10.102 Lease Agreement dated August 30, 1997 between the Registrant and
               Messrs. Frank Naliboff and Nathan Morton. (55)

        10.103 Lease Agreement dated November 25, 1997 among the Registrant,
               Wilshire International de Mexico S.A. de C.V., and Mr. Rafael
               Mizrachi. (55)

        10.104 Warrant Agreement, dated November 24, 1997, between the
               Registrant and American Stock Transfer and Trust Company. (55)

        10.105 Employment Agreement, dated January 1, 1998 between the
               Registrant and Mr. John Van Egmond. (55)

        10.106 Demand Note, dated January 7, 1998, between the Registrant and
               Trilon Dominion Partners, L.L.C. (55)

        10.107 Demand Note dated February 17, 1998, between the Registrant and
               Trilon Dominion Partners, L.L.C. (55)

</TABLE>



                                       32
<PAGE>   34

<TABLE>
<S>            <C>
        10.108 Articles of Incorporation and by-laws granted May 9, 1997 and
               recorded May 22, 1997 of Wilshire International de Mexico, S.A.
               de C.V. (55)

        10.109 Management Services Agreement dated October 8, 1997 among
               Wilshire International de Mexico S.A. de C.V., Tecnicas Mexicanas
               de Ensamble, S.A. de C.V., and Made in Mexico, Inc. (55)

        10.110 Assembly (Maquila) Agreement and Commodatum Agreement dated
               February 3, 1998, between the Registrant and Wilshire
               International de Mexico S.A. de C.V. (55)

        10.111 Demand Note dated March 10, 1998 between the Registrant and
               Trilon Dominion Partners, L.L. C., (56)

        10.112 Amended and Restated Credit Agreement and Revolving Line of
               Credit (the "Amended Agreement") dated March 31, 1998 between the
               Registrant and Trilon Dominion Partners, L.L.C., exclusive of
               certain schedules. (56)

        10.113 Warrant dated March 31, 1998 to purchase 650,000 shares of the
               Registrant's Common Stock, issued to Trilon Dominion Partners,
               L.L.C. pursuant to the Amended Agreement. (56)

        10.114 Springing Warrant dated March 31, 1998 to purchase 250,000 shares
               of the Registrant's Common Stock, issued to Trilon Dominion
               Partners, L.L.C. pursuant to the Amended Agreement. (56)

        10.115 Grid Promissory Note dated March 31, 1998 between the Registrant
               and Trilon Dominion Partners L.L.C. issued under the Amended
               Agreement. (56)

        10.116 Employment Agreement dated May 18, 1998 between the Registrant
               and Mr. Paul Fennell. (57)

        10.117 Sales Representative Agreement dated June 1, 1998 between the
               Registrant and Exxustech, Inc. (57)

        10.118 Exclusive Product Supply Agreement dated July 28, 1998 between
               the Registrant and Time Release Sciences, Inc. (57)

        10.119 Independent Consultant Agreement dated August 5, 1998 between the
               Registrant and Percura, Inc. (57)

        10.120 Employment Agreement dated August 17, 1998 between the Registrant
               and Mr. Kevin Mulvihill. (57)

        10.121 Demand Note dated August 5, 1998 between the Registrant and
               Trilon Dominion Partners, L.L.C. (57)

        10.122 Demand Note dated September 1, 1998 between the Registrant and
               Trilon Dominion Partners, L.L.C. (57)

        10.123 Demand Note dated October 1, 1998 between the Registrant and
               Trilon Dominion Partners, L.L.C. (57)

        10.124 Distributor Agreement dated October 15, 1998 between the
               Registrant and Foamex Asia Company, Ltd.
</TABLE>



                                       33
<PAGE>   35

<TABLE>
<S>     <C>
        10.125 Demand Note dated November 2, 1998 between the Registrant and
               Trilon Dominion Partners, L.L.C.

        10.126 Demand Note dated December 1, 1998 between the Registrant and
               Trilon Dominion Partners, L.L.C.

        10.127 Demand Note dated January 4, 1999 between the Registrant and
               Trilon Dominion Partners, L.L.C.

        10.128 Demand Note dated February 1, 1999 between the Registrant and
               Trilon Dominion Partners, L.L.C.

        10.129 Amendment dated December 31, 1998, to the Amended Agreement dated
               March 31, 1998 between the Registrant and Trilon Dominion
               Partners, L.L.C.

        10.130 Sublease Agreement dated December 9, 1998 between the Registrant
               and Software of the Month Club, Inc.

        10.131 Sublease Agreement dated December 14, 1998 between the Registrant
               and Intecon Systems, Inc.

        10.132 Distributor Agreement, dated January 1, 1999, between the
               Registrant and VWR Scientific Products Corporation.

        21     Subsidiaries of the Registrant. (55)

        99     Risks and Uncertainties in Forward-Looking Statements (51)
</TABLE>
----------

NOTE:  Certain of the Exhibits listed above are incorporated herein by
       reference to other documents previously filed with the Commission as
       follows:

<TABLE>
<CAPTION>
                                                               Exhibit
           Document to which                                 Designation
  Note     Cross Reference                                     in such
Reference       is Made                                        Document
---------  -----------------                                 -----------
<S>        <C>                                               <C>
   1       Incorporated to the identically numbered
           Exhibit to Form 10-KSB for fiscal 1993

   2       Form 8-K dated May 23, 1994 
           (the "1994 8-K")                                       1

   3       1994 8-K                                               4

   4       1994 8-K                                               2

   5       1994 8-K                                               3

   6       Form 10-KSB for fiscal 1993                           28

   7       Incorporated to the                          identically numbered
</TABLE>


                                       34
<PAGE>   36

<TABLE>
<S>        <C>                                               <C>
           Exhibit in Form 10-KSB for fiscal 1994 
           (the "1994 KSB")

   8       1994 KSB                                               3(i)

   9       1994 KSB                                               4(a)

  10       1994 KSB                                               4(b)

  11       1994 KSB                                               4(c)

  12       1994 KSB                                               4(d)

  13       1994 KSB                                               4(e)
</TABLE>



                                       35
<PAGE>   37

<TABLE>
<CAPTION>
                                                               Exhibit
           Document to which                                 Designation
  Note     Cross Reference                                     in such
Reference       is Made                                        Document
---------  -----------------                                 -----------
<S>        <C>                                               <C>
  14       Form 10-QSB dated July 12, 1995 
           (the "July 1995 QSB")                                 10.1

  15       July 1995 QSB                                         10.2

  16       July 1995 QSB                                         10.3

  17       Form 10-QSB dated October 10, 1995
           (the "October 1995 QSB")                              10.1

  18       October 1995 QSB                                      10.2

  19       Form 8-K dated August 7, 1995                          2

  20       October 1995 QSB                                      10.4

  21       October 1995 QSB                                      10.5

  22       October 1995 QSB                                      10.6

  23       October 1995 QSB                                      10.7

  24       October 1995 QSB                                      10.8

  25       October 1995 QSB                                      10.9

  26       October 1995 QSB                                      10.10

  27       October 1995 QSB                                      10.11

  28       October 1995 QSB                                      10.12

  29       October 1995 QSB                                      10.13

  30       October 1995 QSB                                      10.14

  31       October 1995 QSB                                      10.15

  32       October 1995 QSB                                      10.16

  33       October 1995 QSB                                      10.17

  34       October 1995 QSB                                      10.18

  35       Form 8-K dated January 10, 1996
           (the "January, 1996 8-K")                              1

  36       January, 1996 8-K                                      2
</TABLE>



                                       36
<PAGE>   38

<TABLE>
<CAPTION>
                                                               Exhibit
            Document to which                                Designation
  Note      Cross Reference                                    in such
Reference        is Made                                       Document
---------   -----------------                                -----------
<S>         <C>                                              <C>
  37        January, 1996 8-K                                     3

  38        January, 1996 8-K                                     4

  39        January, 1996 8-K                                     5

  40        January, 1996 8-K                                     6

  41        January, 1996 8-K                                     7

  42        January, 1996 8-K                                     8

  43        January, 1996 8-K                                     9

  44        January, 1996 8-K                                    10

  45        Incorporated to the identically numbered 
            Exhibit in Form 10-KSB for fiscal 1995

  46        Incorporated to the identically numbered 
            Exhibit in Form 10-QSB dated April 10, 1996

  47        Incorporated to the identically numbered 
            Exhibit in Form 10-QSB dated July 10, 1996

  48        Incorporated to the identically numbered 
            Exhibit in Form 10-QSB dated October 11, 1996

  49        Form 8-K dated May 24, 1996 
            (the "May, 1996 8-K")                                 3(i)(a)

  50        May, 1996 8-K                                         3(i)(b)

  51        Incorporated to the identically numbered 
            Exhibit in Form 10-KSB dated February 24, 1997.

  52        Incorporated to the identically numbered 
            Exhibit in Form 10-QSB dated April 11, 1997.
</TABLE>



                                       37
<PAGE>   39

<TABLE>
<CAPTION>
                                                               Exhibit
            Document to which                                Designation
  Note      Cross Reference                                    in such
Reference        is Made                                       Document
---------   -----------------                                -----------
<S>         <C>                                              <C>
  53        Incorporated to the identically numbered 
            Exhibit in Form 10-QSB dated July 9, 1997

  54        Incorporated to the identically numbered 
            Exhibit in Form 10-QSB dated October 10, 1997.

  55        Incorporated to the identically numbered 
            Exhibit in Form 10-KSB dated February 25, 1998.

  56        Incorporated to the identically numbered 
            Exhibit in Form 10-QSB dated April 10, 1998.

  57        Incorporated to the identically numbered 
            Exhibit in Form 10-QSB dated October 12, 1998.
</TABLE>


     (b)  REPORTS ON FORM 8-K. 

          None



                                       38
<PAGE>   40

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        WILSHIRE TECHNOLOGIES, INC.


Dated: January 29, 1999                 By: /s/ John Van Egmond
                                            ------------------------------------
                                        John Van Egmond,
                                        President and Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
             Name                        Title                                      Date
             ----                        -----                                      ----
<S>                                      <C>                                        <C>

   /s/Ronald W. Cantwell                 Director and                                         
------------------------------------     Chairman of the Board                  January 29, 1999 
         Ronald W. Cantwell


                                         Director, and
   /s/John Van Egmond                    President and Chief Executive Officer
------------------------------------     (Principal Executive Officer)          January 29, 1999
           John Van Egmond


    /s/James W. Klingler                 Chief Financial Officer,
------------------------------------     Treasurer and Secretary                January 29, 1999  
          James W. Klingler              (Principal Financial Officer and
                                         Principal Accounting Officer)


   /s/Charles H. Black                   Director                               January 29, 1999
------------------------------------
          Charles H. Black


   /s/Joe E. Davis                       Director                               January 29, 1999
------------------------------------
            Joe E. Davis


   /s/Ralph V. Whitworth                 Director                               January 29, 1999
------------------------------------
         Ralph V. Whitworth
</TABLE>



                                       39
<PAGE>   41

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                                           Sequentially
Exhibit Number                   Description                               Numbered Page
--------------                   -----------                               -------------
<S>            <C>                                                         <C>
 10.124        Distributor Agreement dated October 15, 1998 between             41
               the Registrant and Foamex Asia Company, Ltd.

 10.125        Demand Note dated November 2, 1998 between                       54
               the Registrant and Trilon Dominion Partners, L.L.C.

 10.126        Demand Note dated December 1, 1998 between                       55
               the Registrant and Trilon Dominion Partners, L.L.C.

 10.127        Demand Note dated January 4, 1999 between                        56
               the Registrant and Trilon Dominion Partners, L.L.C.

 10.128        Demand Note dated February 1, 1999 between                       57
               the Registrant and Trilon Dominion Partners, L.L.C.

 10.129        Amendment dated December 31, 1998, to the                        58
               Amended Agreement dated March 31, 1998 between
               the Registrant and Trilon Dominion Partners, L.L.C.

 10.130        Sublease Agreement dated December 9, 1998  between               62
               the Registrant and Software of the Month Club, Inc.

 10.131        Sublease Agreement dated December 14, 1998 between               69
               the Registrant and Intecon Systems, Inc.

 10.132        Distributor Agreement, dated January 1, 1999, between            75
               the Registrant and VWR Scientific Products Corporation.
</TABLE>



                                       40