**FORM      10-K**

| x |   | ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF                THE |
|---|--------|------------------------------------------------------------------------------------|

| o |   | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF                THE |
|---|--------|----------------------------------------------------------------------------------------|

**WILSHIRE      ENTERPRISES, INC. **

| **Delaware**                                            | **84-0513668**                     |
|---------------------------------------------------------|------------------------------------|
| (State                or other jurisdiction of          | (IRS                Employer       |
| incorporation                or organization)           | Identification                No.) |
|                                                    |                               |
| **1                Gateway Center**                     |                               |
| **Newark,                New Jersey**                   | **07102**                          |
| (Address                of principal executive offices) | (Zip                Code)          |

|                                      | Name                of each exchange   |
|-------------------------------------------|----------------------------------------|
| Title                of each class        | on                which registered     |
| Common                Stock, $1 par value | American                Stock Exchange |

----

|                    |                                                                                                    | Page                No. |
|-------------------------|---------------------------------------------------------------------------------------------------------|-------------------------|
|                    |                                                                                                    |                    |
| Part                I   |                                                                                                    |                    |
|                    |                                                                                                    |                    |
| Item                1.  | Business                                                                                                | 3                       |
| Item                1A. | Risk                Factors                                                                             | 7                       |
| Item                1B. | Unresolved                Staff Comments                                                                | 8                       |
| Item                2.  | Properties                                                                                              | 8                       |
| Item                3.  | Legal                Proceedings                                                                        | 10                      |
| Item                4.  | Submission                of Matters to a Vote of Security Holders                                      | 10                      |
| Item                4A. | Executive                Officers of the Registrant                                                     | 11                      |
|                    |                                                                                                    |                    |
| Part                II  |                                                                                                    |                    |
|                    |                                                                                                    |                    |
| Item                5.  | Market                for Registrant’s Common Equity, Related Stockholder                         |                    |
|                    | Matters                and Issuer Purchases of Equity Securities                                        | 12                      |
| Item                6.  | Selected                Financial Data                                                                  | 13                      |
| Item                7.  | Management’s                Discussion and Analysis of Financial Condition                        |                    |
|                    | and                Results of Operation                                                                 | 15                      |
| Item                7A. | Quantitative                and Qualitative Disclosures About Market Risk                               | 31                      |
| Item                8.  | Financial                Statements and Supplementary Data                                              | 33                      |
| Item                9.  | Changes                in and Disagreements with Accountants on Accounting                              |                    |
|                    | and                Financial Disclosure                                                                 | 61                      |
| Item                9A. | Controls                and Procedures                                                                  | 61                      |
| Item                9B. | Other                Information                                                                        | 61                      |
|                    |                                                                                                    |                    |
| Part                III |                                                                                                    |                    |
|                    |                                                                                                    |                    |
| Item                10. | Directors,                Executive Officers and Corporate Goverance                                    | 62                      |
| Item                11. | Executive                Compensation                                                                   | 62                      |
| Item                12. | Security                Ownership of Certain Beneficial Owners and Management                           |                    |
|                    | and                Related Stockholder Matters                                                          | 62                      |
| Item                13. | Certain                Relationships and Related Transactions, and Director                Independence | 62                      |
| Item                14. | Principal                Accountant Fees and Services                                                   | 62                      |
|                    |                                                                                                    |                    |
| Part                IV  |                                                                                                    |                    |
|                    |                                                                                                    |                    |
| Item                15. | Exhibits,                Financial Statement Schedules                                                  | 63                      |
|                    | Signatures                                                                                              | 68                      |

----

**PART      I**

**Item      1.**
**Business**

|  | · | The                  Company remains committed to maximizing shareholder value and is                  continually exploring all possible alternatives to accomplish this                  goal.                  On November 7, 2005, Wilshire announced that the Board of Directors                  would                  engage an investment bank to conduct a strategic review regarding                  alternatives to maximize stockholder value. On January 27, 2006,                  Wilshire                  announced that Friedman, Billings, Ramsey & Co., Inc. (“FBR”) had been                  retained to conduct a strategic review regarding alternatives to                  maximize                  stockholder value. The Company is seeking to increase the value                  of its                  real estate portfolio by implementing improvements to its existing                  properties, completing the opportunistic divestiture of select                  real estate                  assets and possibly acquiring properties. The Company cannot assure                  investors of any actions or of the timing of potential                  actions. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | The                    Company is actively exploring opportunities to sell or merge                    its                    business. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

**Real      Estate Operations**

| Name                                 |   | City                          |   | State  |   | Asset                Class         |   | Size                       |
|--------------------------------------|--------|-------------------------------|--------|--------|--------|------------------------------------|--------|----------------------------|
|                                 |   |                          |   |   |   |                               |   |                       |
| Sunrise                Ridge         |   | Tucson                        |   | AZ     |   | Apartments                         |   | 340                units   |
| Van                Buren             |   | Tucson                        |   | AZ     |   | Apartments                         |   | 70                units    |
| Royal                Mall Plaza      |   | Mesa                          |   | AZ     |   | Office                & retail |   | 66,552                SF   |
| Tempe                Corporate       |   | Tempe                         |   | AZ     |   | Office                             |   | 50,700                SF   |
| Tamarac                Office Plaza  |   | Tamarac                       |   | FL     |   | Office                             |   | 26,990                SF   |
| Alpine                Village        |   | Sussex                        |   | NJ     |   | Apartments                         |   | 132                units   |
| Jefferson                Gardens (a) |   | Jefferson                     |   | NJ     |   | Condominiums                       |   | 18                units    |
| Amboy                Tower           |   | Perth                Amboy    |   | NJ     |   | Office                & Retail |   | 75,000                SF   |
| Alpine                Village (c)    |   | Sussex                        |   | NJ     |   | Land                               |   | 0.51                acres  |
| Alpine                Village (c)    |   | Wantage                       |   | NJ     |   | Land                               |   | 17.32                acres |
| Lake                Hopatcong (b)    |   | Lake                Hopatcong |   | NJ     |   | Land                               |   | 1.8                acres   |
| West                Orange           |   | West                Orange    |   | NJ     |   | Land                               |   | 0.6                acres   |
| Summercreek                          |   | San                Antonio    |   | TX     |   | Apartments                         |   | 180                units   |
| Wellington                Estates    |   | San                Antonio    |   | TX     |   | Apartments                         |   | 228                units   |

| *(a)                The Company closed on the sale of 2 condominium units on January                22, 2007                and February 12, 2007. Gross proceeds related to the 2 units were                approximately $339,000 and resulted in an after-tax gain of approximately                $139,000.* |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                             |
| *(b)                The Company closed on the sale of the Lake Hopatcong land on February15,                2007 for gross proceeds of $850,000 that resulted in an after-tax                gain of                approximately $288,000.*                                                                     |
|                                                                                                                                                                                                                                                                                                             |
| *(c)                Alpine Village land parcels are adjacent to the Alpine Village                Apartments.*                                                                                                                                                                                                   |

**Business      Strategy**

----

**Divestiture      of Assets**

| Name                (State)(asset                class)       |   | Date                Sold |      | Selling                Price |   | Net                Book Value |   | Mortgage                Value |       | Taxes                Payable on Sale |   | Net                Proceeds (a) |   |
|---------------------------------------------------------------|--------|--------------------------|-----------|------------------------------|--------|-------------------------------|--------|-------------------------------|------------|--------------------------------------|--------|---------------------------------|--------|
|                                                          |   |                     |      |                         |   |                          |   |                          |       |                                 |   |                            |   |
| Galsworthy                Arms (NJ)                           |   |                     |      |                         |   |                          |   |                          |       |                                 |   |                            |   |   |   |   |   |   |   |
| (29                1-bedroom and 12 2-bedroom condominiums)   |   |                     | 1/18/2006 |                         | $      | 6,905,000                     |   | $                             | 1,941,000  |                                 | $      | 835,000                         |   |   | 1,854,000 |   | $ | 3,914,000 |   |
| Rutherford                Bank Branch                         |   |                     |      |                         |   |                          |   |                          |       |                                 |   |                            |   |   |   |   |   |   |   |
| Triple                Net Lease                               |   |                     | 1/13/2006 |                         | $      | 1,603,000                     |   | $                             | 604,000    |                                 | $      | 455,000                         |   | $ | 373,000 |   | $ | 690,000 |   |
| Galsworthy                Arms (NJ)                           |   |                     |      |                         |   |                          |   |                          |       |                                 |   |                            |   |   |   |   |   |   |   |
| (1                2-bedroom condominium)                      |   |                     | 3/10/2006 |                         | $      | 292,000                       |   | $                             | 34,000     |                                 | $      | -                               |   | $ | 95,000 |   | $ | 171,000 |   |
| Wilshire                Hotel & Banquet Facility (NJ) (b) |   |                     | 5/4/2006  |                         | $      | 12,750,000                    |   | $                             | 11,585,000 |                                 | $      | -                               |   | $ | 329,000 |   | $ | 6,037,000 |   |
| Twelve                Oaks Apartment                          |   |                     |      |                         |   |                          |   |                          |       |                                 |   |                            |   |   |   |   |   |   |   |
| Complex                (GA)                                   |   |                     | 9/14/2006 |                         | $      | 2,180,000                     |   | $                             | 1,305,000  |                                 | $      | 1,561,000                       |   | $ | 289,000 |   | $ | 195,000 |   |

| *(a)                Net proceeds is defined as selling price less mortgage value and                transaction costs such as commissions, legal fees, taxes and other                expenses.*                                                                                                                                                                                                                                                                                                                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| *(b)                The Wilshire Grand Hotel and Banquet Facility was owned by a limited                liability company in which the Company owns 50% and is the managing                partner. The selling price, net book value, mortgage value and taxes                payable on sale presented in the table above represent 100% of the                amounts                for this transaction. The net proceeds presented in the table above                represents the 50% portion that was received by the Company from                the                sale.* |

| Name                (State) (asset                class) |   | Date                Sold |      | Selling                Price |   | Net                Book Value |   | Mortgage                Value |    | Taxes                Payable on                Sale |   | Net                Proceeds (a) |   |
|----------------------------------------------------------|--------|--------------------------|-----------|------------------------------|--------|-------------------------------|--------|-------------------------------|---------|-----------------------------------------------------|--------|---------------------------------|--------|
|                                                     |   |                     |      |                         |   |                          |   |                          |    |                                                |   |                            |   |
| Jefferson                Gardens (NJ)                    |   |                     |      |                         |   |                          |   |                          |    |                                                |   |                            |   |   |   |   |   |   |   |
| (1-bedroom                condominium)                   |   |                     | 1/22/2007 |                         | $      | 144,000                       |   | $                             | 34,000  |                                                | $      | 10,000                          |   | $ | 38,000 |   | $ | 81,000 |   |
| Jefferson                Gardens (NJ)                    |   |                     |      |                         |   |                          |   |                          |    |                                                |   |                            |   |   |   |   |   |   |   |
| (2-bedroom                condominium)                   |   |                     | 2/12/2007 |                         | $      | 195,000                       |   | $                             | 50,000  |                                                | $      | 2,000                           |   | $ | 51,000 |   | $ | 128,000 |   |
| Lake                Hopatcong Land (b)                   |   |                     |      |                         |   |                          |   |                          |    |                                                |   |                            |   |   |   |   |   |   |   |
| (1.8                acres)                               |   |                     | 2/15/2007 |                         | $      | 850,000                       |   | $                             | 355,000 |                                                | $      | -                               |   | $ | 177,000 |   | $ | 648,000 |   |

| *(a)* *Net                proceeds is defined as selling price less mortgage value and transaction                costs such as commissions, legal fees, taxes and other                expenses.* (b) *Taxes                payable on this property may be deferred as a result of a Internal                Revenue                Service Section 1031 tax deferred exchange for which the Company                has                identified a replacement                property.* |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Employees**

**Property      Management**

----

**Insurance      **

**Competition**

**Environmental      Matters**

**Investment      in Marketable Securities**

----

**Item      1A.**
**Risk      Factors**

**An      acceptable price may not be obtained in our attempt to sell or merge our      company.**

**Our      announced plans of exploring alternatives for maximizing shareholder value      may      have resulted in an increase in the market price of our common stock over the      market price that would be quoted in the absence of such an      announcement.**

**Our      properties held for sale may not realize the sales prices anticipated by      us.**

**Environmental      concerns may limit our ability to operate our real estate      properties.**

**Competition      in our markets limits rental income from tenants.**

**Certain      properties may require substantial capital expenditures to remain      competitive.**

**Economic      change in our marketplaces may impact our ability to locate suitable      tenants.**

----

**Interest      rate fluctuations impact our ability to raise funds for investment and the      desire of tenants to rent versus buy housing.**

**Government      regulations may hinder our ability to dispose of our properties held for sale      and may limit our ability to construct improvements at our existing      properties.**

**Item      1B.**
**Unresolved      Staff Comments**

**Item      2.**
**Properties**

|                                    |   |                         |   |                                       |   | Apartment                Unit Type                  |   |                |   |                |
|-----------------------------------------|--------|------------------------------|--------|--------------------------------------------|--------|-----------------------------------------------------|--------|---------------------|--------|---------------------|
| Name                (State)             |   | Date                Acquired |   | No.                of                Units |   | Studio                /                Efficiencies |   | 1                BR |   | 2                BR |   | 3                BR |   | Acreage |   | Rentable                Sq.                Ft. |
| **Apartments:**                         |   |                         |   |                                       |   |                                                |   |                |   |                |   |   |   |   |   |   |
| Alpine                Village (NJ)      |   | 10/29/95                     |   | 132                                        |   | -                                                   |   | 48                  |   | 84                  |   | - |   | 13.73 |   | 101,724 |
| Summercreek                (TX)         |   | 3/29/01                      |   | 180                                        |   | -                                                   |   | 84                  |   | 96                  |   | - |   | 8.17 |   | 142,452 |
| Sunrise                Ridge (AZ)       |   | 10/24/97                     |   | 340                                        |   | -                                                   |   | 144                 |   | 196                 |   | - |   | 17.73 |   | 291,674 |
| Van                Buren (AZ)           |   | 6/11/98                      |   | 70                                         |   | -                                                   |   | 42                  |   | 28                  |   | - |   | 1.41 |   | 81,404 |
| Wellington                (TX)          |   | 7/30/98                      |   | 228                                        |   | 24                                                  |   | 60                  |   | 116                 |   | 28 |   | 8.69 |   | 214,744 |
| **Condominiums:**                       |   |                         |   |                                       |   |                                                |   |                |   |                |   |   |   |   |   |   |
| Jefferson                Gardens (a)(b) |   | 3/31/94                      |   | 18                                         |   | -                                                   |   | 15                  |   | 3                   |   | - |   | - |   | 14,056 |

| *(a)                Classified by the Company as Discontinued Operations. See Note 2                to the                Consolidated Financial Statements in Item 8 of this Annual Report                on Form                10-K*             |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                |
| *(b)                The Jefferson Gardens condominium complex has a total of 50 units,                34 one                bedroom and 16 two bedroom, of which the Company owned 18 units as                of                December 31, 2006.* |

----

| Name                (State)                     |   | Date                Acquired |   | Rentable                Sq. Ft. |   | Acreage |
|-------------------------------------------------|--------|------------------------------|--------|---------------------------------|--------|---------|
| **Office                & Retail:**         |   |                         |   |                            |   |    |
| Amboy                Tower (NJ) (a)             |   | 3/31/98                      |   | 75,000                          |   |         |
| Royal                Mall Plaza (AZ)            |   | 3/31/94                      |   | 66,552                          |   |    |
| Tamarac                Office Plaza (FL) (a)    |   | 12/31/92                     |   | 26,990                          |   |    |
| Tempe                Corporate (AZ)             |   | 12/31/92                     |   | 50,700                          |   |    |
| **Land:**                                       |   |                         |   |                            |   |    |
| Alpine                Village, Sussex (NJ) (a)  |   | 10/28/98                     |   | -                               |   | 0.51    |
| Alpine                Village, Wantage (NJ) (a) |   | 2/16/01                      |   | -                               |   | 17.32   |
| Lake                Hopatcong (NJ) (a)(b)       |   | 3/31/94                      |   | -                               |   | 1.81    |
| West                Orange (NJ) (a)             |   | 3/31/94                      |   | -                               |   | 0.60    |

| *(a)                Classified by the Company as Discontinued Operations. See Note 2                to the                Consolidated Financial Statements in Item 8 of this Annual Report                on Form                10-K.* |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                     |
| *(b)                Lake Hopatcong land was sold in February 2007 for                $850,000.*                                                                                                                                          |

|                                    |   | As                of December 31, 2006       |       | For                the Year Ended December 31, 2006 |   |
|-----------------------------------------|--------|----------------------------------------------|------------|-----------------------------------------------------|--------|
| Name                (State)             |   | Net                Book                Value |       | Mortgage                Principal                   |   | Net                Operating                Income |   | Interest                Expense |   | Capital                Expenditures |   |
| **Apartments:**                         |   |                                         |       |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Sunrise                Ridge (AZ)       |   | $                                            | 5,396,000  |                                                | $      | 10,168,000 |   | $ | 1,271,000 |   | $ | 598,000 |   | $ | 223,000 |   |
| Van                Buren (AZ)           |   |                                         | 1,740,000  |                                                |   | 1,996,000 |   |   | 177,000 |   |   | 117,000 |   |   | 94,000 |   |
| Summercreek                (TX)         |   |                                         | 5,114,000  |                                                |   | 4,018,000 |   |   | 274,000 |   |   | 324,000 |   |   | 117,000 |   |
| Wellington                (TX)          |   |                                         | 3,788,000  |                                                |   | 4,181,000 |   |   | 585,000 |   |   | 246,000 |   |   | 174,000 |   |
| Alpine                Village (NJ)      |   |                                         | 3,318,000  |                                                |   | 4,751,000 |   |   | 507,000 |   |   | 280,000 |   |   | 175,000 |   |
| **Office                & Retail:** |   |                                         |       |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Royal                Mall Plaza (AZ)    |   |                                         | 1,392,000  |                                                |   | - |   |   | 330,000 |   |   | - |   |   | 242,000 |   |
| Tempe                Corporate (AZ)     |   |                                         | 2,577,000  |                                                |   | 3,745,000 |   |   | 415,000 |   |   | 246,000 |   |   | 304,000 |   |
|                                    |   |                                         |       |                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Total:                                  |   | $                                            | 23,325,000 |                                                | $      | 28,859,000 |   | $ | 3,559,000 |   | $ | 1,811,000 |   | $ | 1,329,000 |   |

----

**Item      3.**
**Legal      Proceedings**

*Other      Matters*

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

----

**Item      4A.**
**Executive      Officers of the Registrant**

** **

|  Name                and Age        |   | Executive                Officer of The Company Since |   | Position                with the Companyand                Business Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|------------------------------------------|--------|-------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                     |   |                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| S.                Wilzig Izak, Age 48    |   | 1987                                                  |   | Chairman                of the Board of the Company since September 20, 1990; Chief Executive                Officer since May 1991; Executive Vice President (1987-1990); prior                thereto, Senior Vice President                                                                                                                                                                                                                                                                                                                                  |
|                                     |   |                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Francis                J. Elenio, Age 41 |   | September                2006                         |   | Chief                Financial Officer, Secretary and Treasurer of the Company since September                2006; Chief Financial Officer of Webcollage, Inc. (March 2006 - August                2006); Interim Chief Financial Officer of TWS Holdings, Inc. (November                2005 - March 2006); Chief Financial Officer and Director of Roomlinx,                Inc.                (April 2004 - November 2005); Chief Financial Officer, Secretary                and                Treasurer of GoAmerica, Inc. (January 1999 - August 2003) |

----

**PART      II**

**Item      5.**
**Market      for Registrant’s Common Equity, Related Stockholder Matters**
**and      Issuer Purchases of Equity Securities**

|   |   | Quarter                1 |   | Quarter                2 |   | Quarter                3 |   | Quarter                4 |   |
|--------|--------|--------------------------|--------|--------------------------|--------|--------------------------|--------|--------------------------|--------|
|   |   | High                     |   | -                        |   | Low                      |   | High                     |   | - |   | Low |   | High |   | - |   | Low |   | High |   | - |   | Low |   |
|   |   |                     |   |                     |   |                     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2006   |   | $                        | 8.48   |                     |   | -                        |   |                     | 7.70   |   | $ | 9.39 |   |   | - |   |   | 5.80 |   | $ | 5.86 |   |   | - |   |   | 4.00 |   | $ | 5.00 |   |   | - |   |   | 4.55 |   |
| 2005   |   |                     | 9.70   |                     |   | -                        |   |                     | 6.00   |   |   | 8.05 |   |   | - |   |   | 7.10 |   |   | 9.00 |   |   | - |   |   | 7.21 |   |   | 8.35 |   |   | - |   |   | 7.40 |   |

----

**Equity      Compensation Plan Information**

|                                                                      |   | (a)Number                      ofSecurities                      To BeIssued                      Upon Exercise                      Of Outstanding |    | (b)WeightedAverage                      ExercisePrice                      Of Outstanding                      Options, |   | (c)Number                          ofSecuritiesRemaining                          AvailableFor                          Future IssuanceUnder                          Equity Compensation                          Plans (Excluding) |   |
|---------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|---------|-------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                      |   | Options,                Warrants                                                                                                                    |    | Warrants                and                                                                                             |   | Securities                Reflected                                                                                                                                                                                                  |   |
| Plan                Category                                              |   | and                Rights                                                                                                                           |    | Rights                                                                                                                  |   | In                Column (a))                                                                                                                                                                                                        |   |
|                                                                      |   |                                                                                                                                                |    |                                                                                                                    |   |                                                                                                                                                                                                                                 |   |
| Equity                compensation plans approved by security holders     |   |                                                                                                                                                | 120,000 |                                                                                                                    | $      | 6.15                                                                                                                                                                                                                                 |   |   | 600,424 |   |
|                                                                      |   |                                                                                                                                                |    |                                                                                                                    |   |                                                                                                                                                                                                                                 |   |   |   |   |
| Equity                compensation plans not approved by security holders |   |                                                                                                                                                | -       |                                                                                                                    |   | -                                                                                                                                                                                                                                    |   |   | - |   |
|                                                                      |   |                                                                                                                                                |    |                                                                                                                    |   |                                                                                                                                                                                                                                 |   |   |   |   |
| Total                                                                     |   |                                                                                                                                                | 120,000 |                                                                                                                    | $      | 6.15                                                                                                                                                                                                                                 |   |   | 600,424 |   |

**Item      6.**
**Selected      Financial Data**

----

|                                                |   | As                of December 31, |   |
|-----------------------------------------------------|--------|-----------------------------------|--------|
|                                                |   | (In                thousands)     |   |
|                                                |   | 2006                              |   | 2005 |   | 2004 |   | 2003 |   | 2002 |   |
| **Balance                Sheet Data at Year-End:**  |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets                         |   | $                                 | 46,915 |   | $ | 88,915 |   | $ | 86,916 |   | $ | 98,997 |   | $ | 107,920 |   |
| Long-term                debt                       |   |                              | 29,618 |   |   | 33,352 |   |   | 46,855 |   |   | 58,494 |   |   | 65,706 |   |
| Stockholders'                equity                 |   |                              | 13,923 |   |   | 41,852 | (1) |   | 28,474 |   |   | 24,527 |   |   | 24,239 |   |
| Weighted                average shares outstanding: |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   |                              | 7,888  |   |   | 7,864 |   |   | 7,796 |   |   | 7,810 |   |   | 7,832 |   |
| Diluted                                             |   |                              | 8,015  |   |   | 7,966 |   |   | 7,955 |   |   | 7,810 |   |   | 7,832 |   |

|                                                      |   | For                the Year Ended December 31,                    |   |
|-----------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                      |   | (In                thousands of dollars except per share amounts) |   |
|                                                      |   | 2006                                                              |   | 2005 |   | 2004 |   | 2003 |   | 2002 |   |
| **Income                Statement Data:**                 |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                  |   | $                                                                 | 8,834  |   | $ | 8,186 |   | $ | 8,114 |   | $ | 7,911 |   | $ | 8,004 |   |
| Costs                and expenses:                        |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                         |   |                                                              | 5,275  |   |   | 4,708 |   |   | 4,441 |   |   | 4,519 |   |   | 4,415 |   |
| Depreciation                                              |   |                                                              | 1,987  |   |   | 1,215 |   |   | 1,427 |   |   | 1,533 |   |   | 1,366 |   |
| General                and administrative                 |   |                                                              | 2,475  |   |   | 3,493 |   |   | 2,143 |   |   | 2,349 |   |   | 2,131 |   |
| Total                costs and expenses                   |   |                                                              | 9,737  |   |   | 9,416 |   |   | 8,011 |   |   | 8,401 |   |   | 7,912 |   |
| Dividend                and interest income               |   |                                                              | 836    |   |   | 700 |   |   | 685 |   |   | 743 |   |   | 877 |   |
| Gain                on sale of marketable securities      |   |                                                              | -      |   |   | 134 |   |   | - |   |   | 2,621 |   |   | 711 |   |
| Gain                on sale of real estate related assets |   |                                                              | -      |   |   | 675 |   |   | - |   |   | - |   |   | - |   |
| Life                insurance proceeds                    |   |                                                              | -      |   |   | - |   |   | - |   |   | 1,000 |   |   | - |   |
| Other                income                               |   |                                                              | 7      |   |   | 32 |   |   | - |   |   | 232 |   |   | 540 |   |
| Interest                expense including amortization of |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| deferred                financing costs                   |   |                                                              | (1,811 | ) |   | (1,911 | ) |   | (1,916 | ) |   | (2,403 | ) |   | (2,000 | ) |
| Income                (loss) before provision for taxes   |   |                                                              | (1,871 | ) |   | (1,600 | ) |   | (1,128 | ) |   | 1,703 |   |   | 220 |   |
| Income                tax expense (benefit)               |   |                                                              | (829   | ) |   | (1,019 | ) |   | (409 | ) |   | 169 |   |   | 83 |   |
| Income                (loss) from continuing operations   |   |                                                              | (1,042 | ) |   | (581 | ) |   | (719 | ) |   | 1,534 |   |   | 137 |   |
| Discontinued                operations - real estate      |   |                                                              | 3,212  |   |   | 8,577 |   |   | 4,068 |   |   | 271 |   |   | (69 | ) |
| Discontinued                operations - oil & gas    |   |                                                              | 115    |   |   | (1,105 | ) |   | (1,322 | ) |   | (3,178 | ) |   | 1,008 |   |
| Net                income (loss)                          |   | $                                                                 | 2,285  |   | $ | 6,891 |   | $ | 2,027 |   | $ | (1,373 | ) | $ | 1,076 |   |
| Basic                earnings (loss) per share:           |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                      |   | $                                                                 | (0.13  | ) | $ | (0.07 | ) | $ | (0.09 | ) | $ | 0.20 |   | $ | 0.02 |   |
| Discontinued                operations                    |   |                                                              | 0.42   |   |   | 0.95 |   |   | 0.35 |   |   | (0.38 | ) |   | 0.12 |   |
| Net                income (loss) per share                |   | $                                                                 | 0.29   |   | $ | 0.88 |   | $ | 0.26 |   | $ | (0.18 | ) | $ | 0.14 |   |
| Diluted                earnings (loss) per share:         |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                      |   | $                                                                 | (0.13  | ) | $ | (0.07 | ) | $ | (0.09 | ) | $ | 0.20 |   | $ | 0.02 |   |
| Discontinued                operations                    |   |                                                              | 0.41   |   |   | 0.94 |   |   | 0.34 |   |   | (0.38 | ) |   | 0.12 |   |
| Net                income (loss) per share                |   | $                                                                 | 0.28   |   | $ | 0.87 |   | $ | 0.25 |   | $ | (0.18 | ) | $ | 0.14 |   |

| (1)                Includes $6.7 million representing the non-controlling interest of                a joint                venture partner. See Item 7, “Management’s Discussion and Analysis of                Financial Condition and Results of Operations - Effect of Recent                Financial                Pronouncements.” |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item      7.**
**Management’s      Discussion and Analysis of Financial Condition and Results of      Operations**

**Critical      Accounting Policies**

----

**Impairment      of Property and Equipment**

**Revenue      Recognition**

**Foreign      Operations**

**Stock-Based      Compensation**

**Effects      of Recent Accounting Pronouncements**

*Accounting      for Uncertainty in Income Taxes.*
*Accounting      for Income Taxes*

----

**Results      of Operations**

|                                                                   |   | **Increase                  (Decrease) in Consolidated Statements** |       |
|------------------------------------------------------------------------|--------|---------------------------------------------------------------------|------------|
|                                                                   |   | **of                  Income Categories for the Periods:**          |       |
|                                                                   |   | **2006                  v. 2005**                                   |       | **2005                  v. 2004** |   |
|                                                                   |   | Amount                  ($)                                         |       | % |   | Amount                  ($) |   | % |   |
|                                                                   |   |                                                                |       |   |   |   |   |   |   |
| **Revenues**                                                           |   | $                                                                   | 648,000    |   |   | 7.9 | % | $ | 72,000 |   |   | 0.9 | % |
| **Costs                  and expenses:**                               |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses                                    |   |                                                                | 567,000    |   |   | 12.0 | % |   | 267,000 |   |   | 6.0 | % |
| Depreciation                                                           |   |                                                                | 772,000    |   |   | 63.5 | % |   | (212,000 | ) |   | (14.9 | %) |
| General                  and administrative                            |   |                                                                | (1,018,000 | ) |   | (29.1 | %) |   | 1,350,000 |   |   | 63.0 | % |
| Total                  costs and expenses                              |   |                                                                | 321,000    |   |   |   |   |   | 1,405,000 |   |   |   |   |
| **Income                  (loss) from Operations**                     |   |                                                                | 327,000    |   |   |   |   |   | (1,333,000 | ) |   |   |   |
| **Other                  Income**                                      |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Dividend                  and interest income                          |   |                                                                | 136,000    |   |   | 19.4 | % |   | 15,000 |   |   | 2.2 | % |
| Gain                  on sale of marketable securities                 |   |                                                                | (134,000   | ) |   | (100.0 | %) |   | 134,000 |   |   | 100.0 | % |
| Gain                  on sale of real estate related assets            |   |                                                                | (675,000   | ) |   | (100.0 | %) |   | 675,000 |   |   | 100.0 | % |
| Other                  income                                          |   |                                                                | (25,000    | ) |   | (78.1 | %) |   | 32,000 |   |   | 100.0 | % |
| Interest                  expense                                      |   |                                                                | 100,000    |   |   | (5.2 | %) |   | 5,000 |   |   | (0.3 | %) |
| **Loss                  before provision for taxes**                   |   |                                                                | (271,000   | ) |   |   |   |   | (472,000 | ) |   |   |   |
| **Income                  tax expense (benefit)**                      |   |                                                                | 190,000    |   |   | (18.6 | %) |   | (610,000 | ) |   | 149.1 | % |
| **Income                  (loss) from continuing operations**          |   |                                                                | (461,000   | ) |   |   |   |   | 138,000 |   |   |   |   |
| Discontinued                  operations - real estate                 |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Loss                  from operations                                  |   |                                                                | (322,000   | ) |   | 46.1 | % |   | (642,000 | ) |   | 1126.3 | % |
| Gain                  from sales                                       |   |                                                                | (5,043,000 | ) |   | (54.4 | %) |   | 5,151,000 |   |   | 124.9 | % |
| Discontinued                  operations - oil & gas, net of taxes |   |                                                                |       |   |   |   |   |   | - |   |   |   |   |
| Loss                  from operations                                  |   |                                                                | 1,220,000  |   |   | (110.4 | %) |   | 784,000 |   |   | (41.5 | %) |
| Gain                  from sale                                        |   |                                                                | -          |   |   | - |   |   | (567,000 | ) |   | (100.0 | %) |
| Net                  income                                            |   | $                                                                   | (4,606,000 | ) |   | (66.8 | %) | $ | 4,864,000 |   |   | 240.0 | % |
| Basic                  earnings (loss) per share:                      |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                       |   | $                                                                   | (0.06      | ) |   | 85.7 | % | $ | 0.02 |   |   | (22.2 | %) |
| Income                  from discontinued operations                   |   |                                                                | (0.53      | ) |   | (55.8 | %) |   | 0.60 |   |   | 171.4 | % |
| Net                  income applicable to common shareholders          |   | $                                                                   | (0.59      | ) |   | (67.0 | %) | $ | 0.62 |   |   | 238.5 | % |
| Diluted                  earnings (loss) per share:                    |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Loss                  from continuing operations                       |   | $                                                                   | (0.06      | ) |   | 85.7 | % | $ | 0.02 |   |   | (22.2 | %) |
| Income                  from discontinued operations                   |   |                                                                | (0.53      | ) |   | (56.4 | %) |   | 0.60 |   |   | 176.5 | % |
| Net                  income applicable to common shareholders          |   | $                                                                   | (0.59      | ) |   | (67.8 | %) | $ | 0.62 |   |   | 248.0 | % |

----

**Results      of Operations - For the year ended December 31, 2006 as compared to the year      ended December 31, 2005**

**Overview**

**Continuing      Operations: **

**Segment      Information**

|                                |   | **Residential                Real Estate** |   | **Commercial                Real Estate** |   | **Total**                       |   | **Total**                      |   |
|-------------------------------------|--------|--------------------------------------------|--------|-------------------------------------------|--------|---------------------------------|--------|--------------------------------|--------|
|                                |   | **Year                ended**              |   | **Increase**                              |   | **Year                ended**   |   | **Increase**                   |   | **Year                ended** |   | **Increase** |   |
|                                |   | **December                31,**            |   | **(Decrease)**                            |   | **December                31,** |   | **(Decrease)**                 |   | **December                31,** |   | **(Decrease)** |   |
|                                |   | **2006**                                   |   | **2005**                                  |   | **$**                           |   | **%**                          |   | **2006** |   | **2005** |   | **$** | ** ** | **%** | ** ** | **2006** | ** ** | **2005** | ** ** | **$** | ** ** | **%** |   |
|                                |   | (In                000's of $)             |   |                                      |   |                            |   | (In                000's of $) |   |   |   |   |   | (In                000's of $) |   |   |   |   |   |
|                                |   |                                       |   |                                      |   |                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rental                income        |   | $                                          | 7,384  |                                      | $      | 6,902                           |   | $                              | 482    |   |   | 7.0 | % | $ | 1,447 |   | $ | 1,279 |   | $ | 168 |   |   | 13.1 | % | $ | 8,831 |   | $ | 8,181 |   | $ | 650 |   |   | 7.9 | % |
|                                |   |                                       |   |                                      |   |                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Vending                income       |   |                                       | 2      |                                      |   | 5                               |   |                           | -3     |   |   | (60.0 | %) |   | 0 |   |   | 0 |   |   | 0 |   |   | 0.0 | % |   | 2 |   |   | 5 |   |   | (3 | ) |   | (60.0 | %) |
|                                |   |                                       |   |                                      |   |                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                               |   |                                       | 1      |                                      |   | 0                               |   |                           | 1      |   |   | 0.0 | % |   | 0 |   |   | 0 |   |   | 0 |   |   | 0.0 | % |   | 1 |   |   | 0 |   |   | 1 |   |   | 0.0 | % |
|                                |   |                                       |   |                                      |   |                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                revenues       |   |                                       | 7,387  |                                      |   | 6,907                           |   |                           | 480    |   |   | 6.9 | % |   | 1,447 |   |   | 1,279 |   |   | 168 |   |   | 13.1 | % |   | 8,834 |   |   | 8,186 |   |   | 648 |   |   | 7.9 | % |
|                                |   |                                       |   |                                      |   |                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses   |   |                                       | 4,572  |                                      |   | 4,143                           |   |                           | 429    |   |   | 10.4 | % |   | 703 |   |   | 565 |   |   | 138 |   |   | 24.4 | % |   | 5,275 |   |   | 4,708 |   |   | 567 |   |   | 12.0 | % |
|                                |   |                                       |   |                                      |   |                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                operating income |   | $                                          | 2,815  |                                      | $      | 2,764                           |   | $                              | 51     |   |   | 1.8 | % | $ | 744 |   | $ | 714 |   | $ | 30 |   |   | 4.2 | % | $ | 3,559 |   | $ | 3,478 |   | $ | 81 |   |   | 2.3 | % |

----

|  Reconciliation              to consolidated loss from continuing operations: |   |
|------------------------------------------------------------------------------------|--------|
|                                                                               |   |
| Net                operating income                                                |   | $ | 3,559 |   | $ | 3,478 |   |
| Depreciation              expense                                                  |   |   | (1,987 | ) |   | (1,215 | ) |
| General                and administrative expense                                  |   |   | (2,475 | ) |   | (3,493 | ) |
| Other                income                                                        |   |   | 843 |   |   | 1,541 |   |
| Interest                expense                                                    |   |   | (1,811 | ) |   | (1,911 | ) |
| Income                tax benefit                                                  |   |   | 829 |   |   | 1,019 |   |
| Loss                from continuing operations                                     |   | $ | (1,042 | ) | $ | (581 | ) |

----

**Residential      Segment**

**Commercial      Segment**

**Revenues**

|                                              |   | Years                Ended December 31, |      |   |   |
|---------------------------------------------------|--------|-----------------------------------------|-----------|--------|--------|
|                                              |   | 2006                                    |      | 2005   |   | Increase                (Decrease) |   |
| Sunrise                Ridge, Arizona             |   | $                                       | 2,737,000 |   | $      | 2,435,000 |   | $ | 302,000 |   |
| Van                Buren Apartments, Arizona      |   |                                    | 620,000   |   |   | 584,000 |   |   | 36,000 |   |
| Wellington                Estates, Texas          |   |                                    | 1,736,000 |   |   | 1,639,000 |   |   | 97,000 |   |
| Alpine                Village, New Jersey         |   |                                    | 1,225,000 |   |   | 1,163,000 |   |   | 62,000 |   |
| Summercreek,                Texas                 |   |                                    | 1,069,000 |   |   | 1,086,000 |   |   | (17,000 | ) |
| Sub-total                - Residential Properties |   |                                    | 7,387,000 |   |   | 6,907,000 |   |   | 480,000 |   |
|                                              |   |                                    |      |   |   |   |   |   |   |   |
| Royal                Mall Plaza, Arizona          |   |                                    | 643,000   |   |   | 606,000 |   |   | 37,000 |   |
| Tempe                Corporate Center, Arizona    |   |                                    | 804,000   |   |   | 673,000 |   |   | 131,000 |   |
| Sub-total-                Commercial Properties   |   |                                    | 1,447,000 |   |   | 1,279,000 |   |   | 168,000 |   |
|                                              |   |                                    |      |   |   |   |   |   |   |   |
| Total                Revenues                     |   | $                                       | 8,834,000 |   | $      | 8,186,000 |   | $ | 648,000 |   |

----

**Operating      Expenses**

|                                              |   | Years                Ended December 31, |      |   |   |
|---------------------------------------------------|--------|-----------------------------------------|-----------|--------|--------|
|                                              |   | 2006                                    |      | 2005   |   | Increase |   |
| Sunrise                Ridge, Arizona             |   | $                                       | 1,465,000 |   | $      | 1,277,000 |   | $ | 188,000 |   |
| Van                Buren Apartments, Arizona      |   |                                    | 443,000   |   |   | 387,000 |   |   | 56,000 |   |
| Wellington                Estates, Texas          |   |                                    | 1,151,000 |   |   | 1,105,000 |   |   | 46,000 |   |
| Alpine                Village, New Jersey         |   |                                    | 718,000   |   |   | 633,000 |   |   | 85,000 |   |
| Summercreek,                Texas                 |   |                                    | 795,000   |   |   | 741,000 |   |   | 54,000 |   |
| Sub-total                - Residential Properties |   |                                    | 4,572,000 |   |   | 4,143,000 |   |   | 429,000 |   |
|                                              |   |                                    |      |   |   |   |   |   |   |   |
| Royal                Mall Plaza, Arizona          |   |                                    | 313,000   |   |   | 224,000 |   |   | 89,000 |   |
| Tempe                Corporate Center, Arizona    |   |                                    | 390,000   |   |   | 341,000 |   |   | 49,000 |   |
| Sub-total-                Commercial Properties   |   |                                    | 703,000   |   |   | 565,000 |   |   | 138,000 |   |
|                                              |   |                                    |      |   |   |   |   |   |   |   |
| Total                Operating Expenses           |   | $                                       | 5,275,000 |   | $      | 4,708,000 |   | $ | 567,000 |   |

----

**Discontinued      Operations, Net of Taxes:**

**Real      Estate**

**Oil      and Gas**

----

**Results      of Operations - For the year ended December 31, 2005 as compared to the year      ended December 31, 2004**

**Overview**

**Continuing      Operations: **

----

**Segment      Information**

|                                  |   | Residential                  Real Estate |   | Commercial                  Real Estate |   | Total                         |   | Total                           |   |
|---------------------------------------|--------|------------------------------------------|--------|-----------------------------------------|--------|-------------------------------|--------|---------------------------------|--------|
|                                  |   | Year                  ended              |   | Increase                                |   | Year                  ended   |   | Increase                        |   | Year                  ended |   | Increase |   |
|                                  |   | December                  31,            |   | (Decrease)                              |   | December                  31, |   | (Decrease)                      |   | December                  31, |   | (Decrease) |   |
|                                  |   | 2005                                     |   | 2004                                    |   | $                             |   | %                               |   | 2005 |   | 2004 |   | $ |   | % |   | 2005 |   | 2004 |   | $ |   | % |   |
|                                  |   | (In                  000s of $)          |   |                                    |   |                          |   | (In                  000s of $) |   |   |   |   |   | (In                  000s of $) |   |   |   |   |   |
|                                  |   |                                     |   |                                    |   |                          |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rental                  income        |   | $                                        | 6,902  |                                    | $      | 6,775                         |   | $                               | 127    |   |   | 1.9 | % | $ | 1,279 |   | $ | 1,339 |   | $ | (60 | ) |   | (4.5 | %) | $ | 8,181 |   | $ | 8,114 |   | $ | 67 |   |   | 0.8 | % |
|                                  |   |                                     |   |                                    |   |                          |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Vending                  income       |   |                                     | 5      |                                    |   | -                             |   |                            | 5      |   |   | 100.0 | % |   | - |   |   | - |   |   | - |   |   | 0.0 | % |   | 5 |   |   | - |   |   | 5 |   |   | 100.0 | % |
|                                  |   |                                     |   |                                    |   |                          |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  revenues       |   |                                     | 6,907  |                                    |   | 6,775                         |   |                            | 132    |   |   | 1.9 | % |   | 1,279 |   |   | 1,339 |   |   | (60 | ) |   | (4.5 | %) |   | 8,186 |   |   | 8,114 |   |   | 72 |   |   | 0.9 | % |
|                                  |   |                                     |   |                                    |   |                          |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses   |   |                                     | 4,143  |                                    |   | 3,879                         |   |                            | 264    |   |   | 6.8 | % |   | 565 |   |   | 562 |   |   | 3 |   |   | 0.5 | % |   | 4,708 |   |   | 4,441 |   |   | 267 |   |   | 6.0 | % |
|                                  |   |                                     |   |                                    |   |                          |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  operating income |   | $                                        | 2,764  |                                    | $      | 2,896                         |   | $                               | (132   | ) |   | (4.6 | %) | $ | 714 |   | $ | 777 |   | $ | (63 | ) |   | (8.1 | %) | $ | 3,478 |   | $ | 3,673 |   | $ | (195 | ) |   | (5.3 | %) |

| Reconciliation                to consolidated loss from continuing                operations: |
|-----------------------------------------------------------------------------------------------|

| Net                operating income               |   | $      | 3,478  |   | $      | 3,673  |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Depreciation                expense               |   |   | (1,215 | )      |   | (1,427 | )      |
| General                and administrative expense |   |   | (3,493 | )      |   | (2,143 | )      |
| Other                income                       |   |   | 1,541  |   |   | 685    |   |
| Interest                expense                   |   |   | (1,911 | )      |   | (1,916 | )      |
| Income                tax benefit                 |   |   | 1,019  |   |   | 409    |   |
| Loss                from continuing operations    |   | $      | (581   | )      | $      | (719   | )      |

----

**Residential      Segment**

**Commercial      Segment**

**Revenues**

|                                              |   | Years                Ended December 31, |      |   |   |
|---------------------------------------------------|--------|-----------------------------------------|-----------|--------|--------|
|                                              |   | 2005                                    |      | 2004   |   | Increase                (Decrease) |   |
| Sunrise                Ridge, Arizona             |   | $                                       | 2,435,000 |   | $      | 2,388,000 |   | $ | 47,000 |   |
| Van                Buren Apartments, Arizona      |   |                                    | 584,000   |   |   | 588,000 |   |   | (4,000 | ) |
| Wellington                Estates, Texas          |   |                                    | 1,639,000 |   |   | 1,588,000 |   |   | 51,000 |   |
| Alpine                Village, New Jersey         |   |                                    | 1,163,000 |   |   | 1,120,000 |   |   | 43,000 |   |
| Summercreek,                Texas                 |   |                                    | 1,086,000 |   |   | 1,091,000 |   |   | (5,000 | ) |
| Sub-total                - Residential Properties |   |                                    | 6,907,000 |   |   | 6,775,000 |   |   | 132,000 |   |
|                                              |   |                                    |      |   |   |   |   |   |   |   |
| Royal                Mall Plaza, Arizona          |   |                                    | 606,000   |   |   | 655,000 |   |   | (49,000 | ) |
| Tempe                Corporate Center, Arizona    |   |                                    | 673,000   |   |   | 684,000 |   |   | (11,000 | ) |
| Sub-total-                Commercial Properties   |   |                                    | 1,279,000 |   |   | 1,339,000 |   |   | (60,000 | ) |
|                                              |   |                                    |      |   |   |   |   |   |   |   |
| Total                Rental Revenues              |   | $                                       | 8,186,000 |   | $      | 8,114,000 |   | $ | 72,000 |   |

**Operating      Expenses**

|                                              |   | Years                Ended December 31, |      |   |   |
|---------------------------------------------------|--------|-----------------------------------------|-----------|--------|--------|
|                                              |   | 2005                                    |      | 2004   |   | Increase                (Decrease) |   |
| Sunrise                Ridge, Arizona             |   | $                                       | 1,277,000 |   | $      | 1,249,000 |   | $ | 28,000 |   |
| Van                Buren Apartments, Arizona      |   |                                    | 387,000   |   |   | 358,000 |   |   | 29,000 |   |
| Wellington                Estates, Texas          |   |                                    | 1,105,000 |   |   | 1,045,000 |   |   | 60,000 |   |
| Alpine                Village, New Jersey         |   |                                    | 633,000   |   |   | 584,000 |   |   | 49,000 |   |
| Summercreek,                Texas                 |   |                                    | 741,000   |   |   | 647,000 |   |   | 94,000 |   |
| Sub-total                - Residential Properties |   |                                    | 4,143,000 |   |   | 3,883,000 |   |   | 260,000 |   |
|                                              |   |                                    |      |   |   |   |   |   |   |   |
| Royal                Mall Plaza, Arizona          |   |                                    | 224,000   |   |   | 228,000 |   |   | (4,000 | ) |
| Tempe                Corporate Center, Arizona    |   |                                    | 341,000   |   |   | 330,000 |   |   | 11,000 |   |
| Sub-total-                Commercial Properties   |   |                                    | 565,000   |   |   | 558,000 |   |   | 7,000 |   |
|                                              |   |                                    |      |   |   |   |   |   |   |   |
| Total                Operating Expenses           |   | $                                       | 4,708,000 |   | $      | 4,441,000 |   | $ | 267,000 |   |

----

**Discontinued      Operations, Net of Taxes:**

**Real      Estate**

----

**Oil      and Gas**

**Effects      of Inflation**

**Liquidity      and Capital Resources**

----

----

| **Name                of property**                            |   | **Years                ended December 31,** |      |
|----------------------------------------------------------------|--------|---------------------------------------------|-----------|
|                                                           |   | **2006**                                    |      | **2005** |   | **2004** |   |
|                                                           |   |                                        |      |   |   |   |   |
| Residential                continuing operations:              |   |                                        |      |   |   |   |   |   |   |   |
| Sunrise                Ridge                                   |   | $                                           | 223,000   |   | $ | 294,000 |   | $ | 258,000 |   |
| Van                Buren                                       |   |                                        | 94,000    |   |   | 102,000 |   |   | 126,000 |   |
| Wellington                                                     |   |                                        | 174,000   |   |   | 156,000 |   |   | 257,000 |   |
| Alpine                                                         |   |                                        | 175,000   |   |   | 67,000 |   |   | 85,000 |   |
| Summercreek                                                    |   |                                        | 117,000   |   |   | 54,000 |   |   | 207,000 |   |
|                                                           |   |                                        |      |   |   |   |   |   |   |   |
| Commercial                continuing operations:               |   |                                        |      |   |   |   |   |   |   |   |
| Royal                Mall Plaza                                |   |                                        | 242,000   |   |   | 59,000 |   |   | 50,000 |   |
| Tempe                Corporate (a)                             |   |                                        | 305,000   |   |   | 173,000 |   |   | 278,000 |   |
|                                                           |   |                                        |      |   |   |   |   |   |   |   |
| Discontinued                operations - residential:          |   |                                        |      |   |   |   |   |   |   |   |
| Biltmore                Club (b)                               |   |                                        | -         |   |   | 132,000 |   |   | 195,000 |   |
| Galsworthy                Arms (c)                             |   |                                        | -         |   |   | 35,000 |   |   | 424,000 |   |
| Jefferson                Gardens                               |   |                                        | 2,000     |   |   | 14,000 |   |   | 13,000 |   |
| Twelve                Oaks (e)                                 |   |                                        | -         |   |   | 92,000 |   |   | 56,000 |   |
|                                                           |   |                                        |      |   |   |   |   |   |   |   |
| Discontinued                operations - commercial:           |   |                                        |      |   |   |   |   |   |   |   |
| Amboy                Towers                                    |   |                                        | 893,000   |   |   | 140,000 |   |   | 298,000 |   |
| Tamarac                Office Plaza                            |   |                                        | 23,000    |   |   | 14,000 |   |   | 4,000 |   |
| Wilshire                Grand Hotel & Banquet Facility (d) |   |                                        | -         |   |   | 5,486,000 |   |   | - |   |
|                                                           |   |                                        |      |   |   |   |   |   |   |   |
| Total                capital expenditures                      |   | $                                           | 2,248,000 |   | $ | 6,818,000 |   | $ | 2,251,000 |   |

| (a)                2005 includes commissions paid to leasing agents related to multiple                year                leases. |
|------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                               |
| (b)                The Biltmore Club Apartments was sold on December 23,                2005.                                      |
|                                                                                                                               |
| (c)                The Galsworthy Arms condominiums were sold in the first quarter of                2006.                         |
|                                                                                                                               |
| (d)                The Wilshire Grand Hotel & Banquet Facility was sold on May 4,                2006.                         |
|                                                                                                                               |
| (e)                Twelve Oaks apartment complex was sold in September                2006.                                        |

----

----

**Item      7A.**
**Quantitative      and Qualitative Disclosures About Market Risk**

|                                    |   |   | 2006       |   |   | 2005       |   |
|-----------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Mortgage                notes payable   |   | $      | 29,617,000 |   | $      | 32,952,000 |   |
| Note                payable             |   |   | -          |   |   | 400,000    |   |
| Total                debt               |   |   | 29,617,000 |   |   | 33,352,000 |   |
| Less-current                portion (1) |   |   | 535,000    |   |   | 1,862,000  |   |
| Long                term portion (2)    |   | $      | 29,082,000 |   | $      | 31,490,000 |   |

| (1) | Includes                debt associated with discontinued operations of $58,000 in 2006 and                $1,408,000 in 2005. |
|-----|--------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|
| (2) | Includes                debt associated with discontinued operations of $699,000 in 2006                and                $2,660,000 in 2005. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|

| Year       |   | Amount |       |
|------------|--------|--------|------------|
| 2007       |   | $      | 535,000    |   |
| 2008       |   |   | 561,000    |   |
| 2009       |   |   | 4,431,000  |   |
| 2010       |   |   | 553,000    |   |
| 2011       |   |   | 548,000    |   |
| Thereafter |   |   | 22,989,000 |   |
|       |   | $      | 29,617,000 |   |

----

| Year   |   | Amount |       |
|--------|--------|--------|------------|
| 2009   |   | $      | 3,870,000  |   |
| 2010   |   |   | 239,000    |   |
| 2013   |   |   | 23,511,000 |   |
|   |   | $      | 27,620,000 |   |

----

**Item      8.**
**Financial      Statements and Supplementary Data**

**Report      of Independent Registered Public Accounting Firm**

----

**WILSHIRE      ENTERPRISES, INC.**

**CONSOLIDATED      BALANCE SHEETS**

**As      of December 31, 2006 and 2005**

|                                                                                                                  |   | 2006   |       | 2005   |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|
| **ASSETS**                                                                                                            |   |   |       |   |   |   |   |
| Current                assets:                                                                                        |   |   |       |   |   |   |   |
| Cash                and cash equivalents                                                                              |   | $      | 9,602,000  |   | $      | 6,081,000 |   |
| Restricted                cash                                                                                        |   |   | 212,000    |   |   | 175,000 |   |
| Marketable                debt securities, available for sale, at fair value                                          |   |   | 4,275,000  |   |   | 22,006,000 |   |
| Marketable                equity securities, available for sale, at fair value                                        |   |   | 1,672,000  |   |   | 1,801,000 |   |
| Accounts                receivable, net                                                                               |   |   | 235,000    |   |   | 297,000 |   |
| Income                taxes receivable                                                                                |   |   | 567,000    |   |   | 1,359,000 |   |
| Prepaid                expenses and other current assets                                                              |   |   | 1,665,000  |   |   | 1,929,000 |   |
|  Total                current assets                                                                             |   |   | 18,228,000 |   |   | 33,648,000 |   |
| Noncurrent                assets:                                                                                     |   |   |       |   |   |   |   |
| Restricted                cash                                                                                        |   |   | -          |   |   | 10,559,000 |   |
| Mortgage                notes and loans receivable                                                                    |   |   | -          |   |   | 123,000 |   |
| Other                assets                                                                                           |   |   | -          |   |   | 413,000 |   |
| Property                and equipment:                                                                                |   |   |       |   |   |   |   |
| Real                estate properties                                                                                 |   |   | 38,191,000 |   |   | 36,865,000 |   |
| Real                estate properties - Held for sale                                                                 |   |   | 6,162,000  |   |   | 21,989,000 |   |
|                                                                                                                  |   |   | 44,353,000 |   |   | 58,854,000 |   |
| Less:                                                                                                                 |   |   |       |   |   |   |   |
| Accumulated                depreciation and amortization                                                              |   |   | 14,734,000 |   |   | 12,797,000 |   |
| Accumulated                depreciation and amortization - Property held for sale                                     |   |   | 932,000    |   |   | 1,885,000 |   |
|                                                                                                                  |   |   | 28,687,000 |   |   | 44,172,000 |   |
| Total                Assets                                                                                           |   | $      | 46,915,000 |   | $      | 88,915,000 |   |
|                                                                                                                  |   |   |       |   |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                         |   |   |       |   |   |   |   |
| Current                liabilities:                                                                                   |   |   |       |   |   |   |   |
| Current                portion of long-term debt                                                                      |   | $      | 477,000    |   | $      | 454,000 |   |
| Accounts                payable                                                                                       |   |   | 1,642,000  |   |   | 1,340,000 |   |
| Income                taxes payable                                                                                   |   |   | 81,000     |   |   | 2,695,000 |   |
| Deferred                income taxes                                                                                  |   |   | 48,000     |   |   | 99,000 |   |
| Accrued                liabilities                                                                                    |   |   | 330,000    |   |   | 702,000 |   |
| Deferred                income                                                                                        |   |   | 130,000    |   |   | 105,000 |   |
| Current                liabilities associated with discontinued operations                                            |   |   | 480,000    |   |   | 1,862,000 |   |
|  Total                current liabilities                                                                        |   |   | 3,188,000  |   |   | 7,257,000 |   |
| Noncurrent                liabilities:                                                                                |   |   |       |   |   |   |   |
| Long-term                debt, less current portion                                                                   |   |   | 28,383,000 |   |   | 28,830,000 |   |
| Deferred                income taxes                                                                                  |   |   | 552,000    |   |   | 7,466,000 |   |
| Deferred                income                                                                                        |   |   | 138,000    |   |   | 166,000 |   |
| Noncurrent                liabilities associated with discontinued operations                                         |   |   | 731,000    |   |   | 3,344,000 |   |
| Total                liabilities                                                                                      |   |   | 32,992,000 |   |   | 47,063,000 |   |
|                                                                                                                  |   |   |       |   |   |   |   |
| Commitments                and Contingencies                                                                          |   |   |       |   |   |   |   |
|                                                                                                                  |   |   |       |   |   |   |   |
| Stockholders'                equity:                                                                                  |   |   |       |   |   |   |   |
| Non-controlling                interest of joint venture partner                                                      |   |   | 2,000      |   |   | 6,680,000 |   |
| Preferred                stock, $1 par value, 1,000,000 shares authorized; none issued and                outstanding |   |   |       |   |   |   |   |
|  in                2006 and 2005                                                                                 |   |   | -          |   |   | - |   |
| Common                stock, $1 par value, 15,000,000 shares authorized; issued 10,013,544                shares      |   |   |       |   |   |   |   |
|  In                2006 and 2005                                                                                 |   |   | 10,014,000 |   |   | 10,014,000 |   |
| Capital                in excess of par value                                                                         |   |   | 8,984,000  |   |   | 9,029,000 |   |
| Treasury                stock, 2,097,296 and 2,159,030 shares at December 31, 2006 and                                |   |   |       |   |   |   |   |
|  December                31, 2005, respectively, at cost                                                         |   |   | (9,918,000 | )      |   | (10,067,000 | ) |
| Retained                earnings                                                                                      |   |   | 4,773,000  |   |   | 26,185,000 |   |
| Unearned                compensation                                                                                  |   |   |       |   |   | (133,000 | ) |
| Accumulated                other comprehensive income                                                                 |   |   | 68,000     |   |   | 144,000 |   |
|  Total                stockholders’ equity                                                                 |   |   | 13,923,000 |   |   | 41,852,000 |   |
|  Total                liabilities and stockholders' equity                                                       |   | $      | 46,915,000 |   | $      | 88,915,000 |   |

----

**WILSHIRE      ENTERPRISES, INC.**

**CONSOLIDATED      STATEMENTS OF INCOME**

**For      the years ended December 31, 2006, 2005 and 2004**

|                                                                      |   | 2006   |       | 2005   |   | 2004       |   |
|---------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| **Revenues**                                                              |   |   | 8,834,000  |   | $      | 8,186,000  |   | $ | 8,114,000 |   |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Costs                and Expenses**                                     |   |   |       |   |   |       |   |   |   |   |
| Operating                expenses                                         |   |   | 5,275,000  |   |   | 4,708,000  |   |   | 4,441,000 |   |
| Depreciation                expense                                       |   |   | 1,987,000  |   |   | 1,215,000  |   |   | 1,427,000 |   |
| General                and administrative                                 |   |   | 2,475,000  |   |   | 3,493,000  |   |   | 2,143,000 |   |
|  Total                costs and expenses                             |   |   | 9,737,000  |   |   | 9,416,000  |   |   | 8,011,000 |   |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Income                (Loss) from Operations**                          |   |   | (903,000   | )      |   | (1,230,000 | )      |   | 103,000 |   |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Other                Income**                                           |   |   |       |   |   |       |   |   |   |   |
| Dividend                and interest income                               |   |   | 836,000    |   |   | 700,000    |   |   | 685,000 |   |
| Gain                on sale of marketable securities                      |   |   |       |   |   | 134,000    |   |   |   |   |
| Gain                on sale of real estate and real estate related assets |   |   |       |   |   | 675,000    |   |   |   |   |
| Other                income                                               |   |   | 7,000      |   |   | 32,000     |   |   |   |   |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Interest                Expense**                                       |   |   | (1,811,000 | )      |   | (1,911,000 | )      |   | (1,916,000 | ) |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
|  **Loss                before provision for income taxes**           |   |   | (1,871,000 | )      |   | (1,600,000 | )      |   | (1,128,000 | ) |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Income                Tax Benefit**                                     |   |   | (829,000   | )      |   | (1,019,000 | )      |   | (409,000 | ) |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Loss                from Continuing Operations**                        |   |   | (1,042,000 | )      |   | (581,000   | )      |   | (719,000 | ) |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Discontinued                Operations - Real Estate, Net of Taxes**    |   |   |       |   |   |       |   |   |   |   |
| **Loss                from operations**                                   |   |   | (1,021,000 | )      |   | (699,000   | )      |   | (57,000 | ) |
| **Gain                from sales**                                        |   |   | 4,233,000  |   |   | 9,276,000  |   |   | 4,125,000 |   |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Discontinued                Operations - Oil & Gas, Net of Taxes**  |   |   |       |   |   |       |   |   |   |   |
| **Income                (Loss) from operations**                          |   |   | 115,000    |   |   | (1,105,000 | )      |   | (1,889,000 | ) |
| **Gain                from sale**                                         |   |   | -          |   |   | -          |   |   | 567,000 |   |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Net                income**                                             |   |   | 2,285,000  |   | $      | 6,891,000  |   | $ | 2,027,000 |   |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Basic                earnings (loss) per share:**                       |   |   |       |   |   |       |   |   |   |   |
| Loss                from continuing operations                            |   | $      | (0.13      | )      | $      | (0.07      | )      | $ | (0.09 | ) |
| Income                (loss) from discontinued operations -               |   |   |       |   |   |       |   |   |   |   |
|  Real                estate - loss from operations                   |   |   | (0.13      | )      |   | (0.09      | )      |   | (0.01 | ) |
|  Real                estate - gain on sales                          |   |   | 0.54       |   |   | 1.18       |   |   | 0.53 |   |
|  Oil                and gas - income (loss) from operations          |   |   | 0.01       |   |   | (0.14      | )      |   | (0.24 | ) |
|  Oil                and gas - gain on sale                           |   |   | 0.00       |   |   | 0.00       |   |   | 0.07 |   |
| Net                income applicable to common stockholders               |   | $      | 0.29       |   | $      | 0.88       |   | $ | 0.26 |   |
|                                                                      |   |   |       |   |   |       |   |   |   |   |
| **Diluted                earnings (loss) per share:**                     |   |   |       |   |   |       |   |   |   |   |
| Loss                from continuing operations                            |   | $      | (0.13      | )      | $      | (0.07      | )      | $ | (0.09 | ) |
| Income                (loss) from discontinued operations -               |   |   |       |   |   |       |   |   |   |   |
|  Real                estate - loss from operations                   |   |   | (0.13      | )      |   | (0.09      | )      |   | (0.01 | ) |
|  Real                estate - gain on sales                          |   |   | 0.53       |   |   | 1.17       |   |   | 0.52 |   |
|  Oil                and gas - income (loss) from operations          |   |   | 0.01       |   |   | (0.14      | )      |   | (0.24 | ) |
|  Oil                and gas - gain on sale                           |   |   | 0.00       |   |   | 0.00       |   |   | 0.07 |   |
| Net                income applicable to common stockholders               |   | $      | 0.28       |   | $      | 0.87       |   | $ | 0.25 |   |

----

**WILSHIRE      ENTERPRISES, INC.**

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS’ EQUITY**

**December      31, 2006, 2005 and 2004**

|                                        |   | Non-Controlling                  Interest                  in Joint                  Venture |            | Preferred                Stock |         | Common                Stock |         | Capital                  in Excess                  of |   | Unearned     |         | Retained                 |         | Treasury     |       | Accumulated                  Other                    Comprehensive |                       | Comprehensive |         | Total                  Stockholders' |     |
|---------------------------------------------|--------|----------------------------------------------------------------------------------------------|-----------------|--------------------------------|--------------|-----------------------------|--------------|--------------------------------------------------------|--------|--------------|--------------|--------------------------|--------------|--------------|------------|---------------------------------------------------------------------|----------------------------|---------------|--------------|--------------------------------------|----------|
|                                        |   | Partner                                                                                      |            | Shares                         |         | Amount                      |         | Shares                                                 |   | Amount       |         | Par                Value |         | Compensation |       | Earnings                                                            |                       | Stock         |         | Income                (Loss)         |     | Income                (Loss) |   | Equity |   |
|                                        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |
| Balance,                December 31, 2003   |   |                                                                                         | -               |                           |         | -                           |         |                                                   | -      |         |         | 10,013,544               |         | $            | 10,014,000 |                                                                | $                          | 9,029,000     |         |                                 | -        |   | $ | 17,267,000 |   | $ | (10,355,000 | ) | $ | (1,428,000 | ) |   |   |   | $ | 24,527,000 |   |
| Net                income                   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   | 2,027,000 |   |   |   |   |   |   |   | $ | 2,027,000 |   |   | 2,027,000 |   |
| Foreign                currency             |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| translation                adjustment       |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   | 1,536,000 |   |   | 1,536,000 |   |   | 1,536,000 |   |
| Change                in unrealized loss on |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| marketable                securities, net   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                income tax benefit        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                $301,000                  |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   | 456,000 |   |   | 456,000 |   |   | 456,000 |   |
| Comprehensive                income         |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   | $ | 4,019,000 |   |   |   |   |
|                                        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of shares of common |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stock                for services           |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         | $                                    | (24,000  | ) |   |   |   |   | 28,000 |   |   |   |   |   |   |   |   | 4,000 |   |
| Compensation                associated      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with                stock options           |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       | 495,000       |         |                                 | (495,000 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Amortization                of              |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                associated      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with                stock and stock         |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| option                awards                |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 | 88,000   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 88,000 |   |
| Exercise                of stock options    |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   | 34,000 |   |   |   |   |   |   |   |   | 34,000 |   |
| Purchase                of treasury stock   |   |                                                                                         |            |                           |    |                        |    |                                              |   |    |    |                     |    |    |       |                                                           |                  |          |    |                            |     |    |    |   |    |    | (198,000 | ) |    |   |    |    |    |    |    |  (198,000 | ) |
|                                        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                December 31, 2004   |   |                                                                                         | -               |                           |         | -                           |         |                                                   | -      |         |         | 10,013,544               |         |         | 10,014,000 |                                                                |                       | 9,524,000     |         |                                 | (431,000 | ) |   | 19,294,000 |   |   | (10,491,000 | ) |   | 564,000 |   |   |   |   |   | 28,474,000 |   |
| Net                income                   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   | 6,891,000 |   |   |   |   |   |   |   | $ | 6,891,000 |   |   | 6,891,000 |   |
| Reclassification                adjustment  |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                gains on marketable      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                sold, net of tax  |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                $(53,000)                 |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   | (76,000 | ) |   | (76,000 | ) |   | (76,000 | ) |
| Change                in unrealized loss on |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| marketable                securities, net   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                income tax benefit        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                $141,000                  |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   | (344,000 | ) |   | (344,000 | ) |   | (344,000 | ) |
| Comprehensive                income         |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   | $ | 6,471,000 |   |   |   |   |
|                                        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                of shares of common |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stock                for services, net      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                forfeitures               |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 | (302,000 | ) |   |   |   |   | 741,000 |   |   |   |   |   |   |   |   | 439,000 |   |
| Compensation                associated      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with                stock options           |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       | (495,000      | )            |                                 | 495,000  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Amortization                of              |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                associated      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with                stock and stock         |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| option                awards                |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 | 105,000  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 105,000 |   |
| Exercise                of stock options    |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   | 40,000 |   |   |   |   |   |   |   |   | 40,000 |   |
| Purchase                of treasury stock   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   | (357,000 | ) |   |   |   |   |   |   |   | (357,000 | ) |
| Acquisition                of interest in   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| joint                venture                |   | $                                                                                            | 6,680,000  |                      |    |                        |    |                                              |   |    |    |                     |    |    |       |                                                           |                  |          |    |                            |     |    |    |   |    |    |   |    |    |   |    |    |    |                  |    | 6,680,000 |   |
|                                        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                December 31, 2005   |   |                                                                                         | 6,680,000       |                           |         | -                           |         |                                                   | -      |         |         | 10,013,544               |         |         | 10,014,000 |                                                                |                       | 9,029,000     |         |                                 | (133,000 | ) |   | 26,185,000 |   |   | (10,067,000 | ) |   | 144,000 |   |   |   |   |   | 41,852,000 |   |
| Net                income                   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   | 2,285,000 |   |   |   |   |   |   |   | $ | 2,285,000 |   |   | 2,285,000 |   |
| Change                in unrealized loss on |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| marketable                securities, net   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                income tax benefit        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                $301,000                  |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   | (76,000 | ) |   | (76,000 | ) |   | (76,000 | ) |
| Comprehensive                income         |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   | $ | 2,209,000 |   |   |   |   |
|                                        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                dividend                |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   | (23,697,000 | ) |   |   |   |   |   |   |   |   |   |   | (23,697,000 | ) |
| Issuance                of shares of common |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stock                for services, net      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of                forfeitures               |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       | (146,000      | )            |                                 |     |   |   |   |   |   | 321,000 |   |   |   |   |   |   |   |   | 175,000 |   |
| Compensation                associated      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with                stock options           |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       | (133,000      | )            |                                 | 133,000  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Amortization                of              |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                associated      |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| with                stock and stock         |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| option                awards                |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       | 234,000       |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 234,000 |   |
| Exercise                of stock options    |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   | 290,000 |   |   |   |   |   |   |   |   | 290,000 |   |
| Purchase                of treasury stock   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   | (462,000 | ) |   |   |   |   |   |   |   | (462,000 | ) |
| Disposition                of interest in   |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| joint                venture                |   |                                                                                         | (6,678,000      | )                              |         |                        |    |                                              |   |    |    |                     |    |    |       |                                                           |                  |          |    |                            |     |    |    |   |    |    |   |    |    |   |    |    |                   |    |    | (6,678,000 | ) |
|                                        |   |                                                                                         |            |                           |         |                        |         |                                                   |   |         |         |                     |         |         |       |                                                                |                       |          |         |                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                December 31, 2006   |   | $                                                                                            | 2,000           |                           |         |                        |         |                                                   | -      |         |         | 10,013,544               |         | $            | 10,014,000 |                                                                | $                          | 8,984,000     |         |                                 | -        |   | $ | 4,773,000 |   | $ | (9,918,000 | ) | $ | 68,000 |   |   |   |   | $ | 13,923,000 |   |

----

**WILSHIRE      ENTERPRISES, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**For      the Years Ended December 31, 2006, 2005 and 2004**

|                                                                                                         |   |  **2006** |        | **2005** |   | **2004**    |   |
|--------------------------------------------------------------------------------------------------------------|--------|----------------|-------------|----------|--------|-------------|--------|
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                         |   |           |        |     |   |        |   |   |   |   |
| Net                income                                                                                    |   | $              | 2,285,000   |     | $      | 6,891,000   |   | $ | 2,027,000 |   |
| Adjustments                to reconcile net income to net cash provided by (used in)                -        |   |           |        |     |   |        |   |   |   |   |
| Depreciation,                depletion and amortization                                                      |   |           | 2,021,000   |     |   | 1,289,000   |   |   | 1,687,000 |   |
| Stock                based compensation expense                                                              |   |           | 235,000     |     |   | 258,000     |   |   | 88,000 |   |
| Write                off of foreign currency translation adjustment                                          |   |           | -           |     |   | -           |   |   | 1,615,000 |   |
| Deferred                income tax (benefit)                                                                 |   |           | (6,965,000  | )        |   | 5,612,000   |   |   | (7,328,000 | ) |
| Increase                (decrease) in deferred income                                                        |   |           | (3,000      | )        |   | (27,000     | )      |   | 146,000 |   |
| Other                expense - non-controlling interest of joint venture                partner              |   |           | 549,000     |     |   | 185,000     |   |   | - |   |
| Gain                on sales of marketable securities                                                        |   |           | -           |     |   | (134,000    | )      |   | - |   |
| Gain                on sales of real estate assets                                                           |   |           | (7,055,000  | )        |   | (16,018,000 | )      |   | (7,039,000 | ) |
| Gain                on sale of oil and gas properties                                                        |   |           | -           |     |   | -           |   |   | (768,000 | ) |
| Changes                in operating assets and liabilities -                                                 |   |           |        |     |   |        |   |   |   |   |
| Decrease                (increase) in accounts receivable                                                    |   |           | 62,000      |     |   | (108,000    | )      |   | 1,613,000 |   |
| Decrease                (increase) in income taxes receivable                                                |   |           | 792,000     |     |   | 2,393,000   |   |   | (3,208,000 | ) |
| Decrease                (increase) in prepaid expenses and other current assets                              |   |           | 264,000     |     |   | (515,000    | )      |   | 154,000 |   |
| Increase                (decrease) in accounts payable, accrued liabilities and taxes                payable |   |           | (3,618,000  | )        |   | (2,155,000  | )      |   | 2,535,000 |   |
| Net                cash used in operating activities                                                         |   |           | (11,433,000 | )        |   | (2,329,000  | )      |   | (8,478,000 | ) |
|                                                                                                         |   |           |        |     |   |        |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                         |   |           |        |     |   |        |   |   |   |   |
| Net                capital expenditures - real estate                                                        |   |           | (3,499,000  | )        |   | (2,201,000  | )      |   | (2,295,000 | ) |
| Net                capital expenditures - oil & gas                                                      |   |           | (5,000      | )        |   | -           |   |   | - |   |
| Proceeds                from sales and redemptions of marketable securities                                  |   |           | -           |     |   | 374,000     |   |   | - |   |
| Purchase                of mortgage notes and loans receivable                                               |   |           | -           |     |   | (123,000    | )      |   | - |   |
| Proceeds                from mortgage notes receivable                                                       |   |           | 536,000     |     |   | 1,113,000   |   |   | 1,673,000 |   |
| Proceeds                from sales of real estate                                                            |   |           | 22,669,000  |     |   | 20,615,000  |   |   | 19,874,000 |   |
| Proceeds                from sale of oil and gas properties                                                  |   |           | -           |     |   | -           |   |   | 28,131,000 |   |
| (Increase)                decrease in short-term marketable securities                                       |   |           | 17,731,000  |     |   | (10,859,000 | )      |   | (11,147,000 | ) |
| (Increase)                decrease in restricted cash                                                        |   |           | 10,522,000  |     |   | (6,652,000  | )      |   | (3,755,000 | ) |
| Net                cash provided by investing activities                                                     |   |           | 47,954,000  |     |   | 2,267,000   |   |   | 32,481,000 |   |
|                                                                                                         |   |           |        |     |   |        |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES:                                                         |   |           |        |     |   |        |   |   |   |   |
| Proceeds                from issuance of debt                                                                |   |           | 416,000     |     |   | 400,000     |   |   | 0 |   |
| Principal                payments of long-term debt                                                          |   |           | (4,150,000  | )        |   | (13,903,000 | )      |   | (11,639,000 | ) |
| Proceeds                from exercise of stock options                                                       |   |           | 290,000     |     |   | 40,000      |   |   | 21,000 |   |
| Purchase                of treasury stock                                                                    |   |           | (462,000    | )        |   | (357,000    | )      |   | (185,000 | ) |
| Non-controlling                interest of joint venture partner                                             |   |           | (5,397,000  | )        |   | -           |   |   | - |   |
| Payment                of cash dividend                                                                      |   |           | (23,697,000 | )        |   | -           |   |   | - |   |
| Net                cash used in financing activities                                                         |   |           | (33,000,000 | )        |   | (13,820,000 | )      |   | (11,803,000 | ) |
|                                                                                                         |   |           |        |     |   |        |   |   |   |   |
| EFFECT                OF EXCHANGE RATE CHANGES ON CASH                                                       |   |           | -           |     |   | -           |   |   | - |   |
|                                                                                                         |   |           |        |     |   |        |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents                                          |   |           | 3,521,000   |     |   | (13,882,000 | )      |   | 12,200,000 |   |
| CASH                AND CASH EQUIVALENTS, beginning of year                                                  |   |           | 6,081,000   |     |   | 19,963,000  |   |   | 7,763,000 |   |
| CASH                AND CASH EQUIVALENTS, end of year                                                        |   | $              | 9,602,000   |     | $      | 6,081,000   |   | $ | 19,963,000 |   |
|                                                                                                         |   |           |        |     |   |        |   |   |   |   |
| SUPPLEMENTAL                DISCLOSURES TO THE STATEMENTS OF CASH FLOWS:                                     |   |           |        |     |   |        |   |   |   |   |
|                                                                                                         |   |           |        |     |   |        |   |   |   |   |
| Cash                paid during the period for -                                                             |   |           |        |     |   |        |   |   |   |   |
| Interest                                                                                                     |   |           | 1,993,000   |     |   | 2,903,000   |   |   | 3,025,000 |   |
| Income                taxes, net                                                                             |   |           | 9,868,000   |     |   | (2,702,000  | )      |   | 7,567,000 |   |

| SUPPLEMENTAL                DISCLOSURE OF NONCASH INFORMATION: |
|----------------------------------------------------------------|
|                                                           | On                May 4, 2006, a joint venture in which the Company owned a 50% interest                and                was the controlling shareholder, sold its principal asset, the Wilshire                Grand Hotel. As a result of this sale, the other partner to the joint                venture, Proud Three LLC, received a cash distribution of $5.4 million                and                wrote-down its remaining interest in the joint venture by $1.8 million                to                $2,000, an amount equal to its expected share of future cash distributions                from the joint venture. |

----

**WILSHIRE      ENTERPRISES, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Organization                and significant accounting policies:**  |
|--------|----------------------------------------------------------------------------|

**Principles      of consolidation:**

**Use      of estimates:**

**Cash      and cash equivalents and marketable debt securities:**

----

**Marketable      equity securities:**

**Deferred      loan costs:**

**Real      estate and other properties:**

----

|                                                |   | December                31, |        |
|-----------------------------------------------------|--------|-----------------------------|-------------|
|                                                |   | 2006                        |        | 2005 |   |
|                                                |   |                        |        |   |   |
| Real                estate and other properties:    |   |                        |        |   |   |   |   |
| Land                                                |   | $                           | 3,378,000   |   | $ | 3,378,000 |   |
| Building                                            |   |                        | 26,149,000  |   |   | 25,711,000 |   |
| Furniture,                fixtures and equipment    |   |                        | 8,664,000   |   |   | 7,775,000 |   |
|                                                |   |                        |        |   |   |   |   |
| Accumulated                depreciation             |   |                        | (14,734,000 | ) |   | (12,797,000 | ) |
|                                                |   |                        |        |   |   |   |   |
| Net                real estate and other properties |   |                        | 23,457,000  |   |   | 24,067,000 |   |
|                                                |   |                        |        |   |   |   |   |
| Real                estate held for sale:           |   |                        |        |   |   |   |   |
| Land                                                |   |                        | 1,486,000   |   |   | 2,724,000 |   |
| Building                                            |   |                        | 4,253,000   |   |   | 16,965,000 |   |
| Furniture,                fixtures and equipment    |   |                        | 423,000     |   |   | 2,301,000 |   |
|                                                |   |                        |        |   |   |   |   |
| Accumulated                depreciation             |   |                        | (932,000    | ) |   | (1,885,000 | ) |
|                                                |   |                        |        |   |   |   |   |
| Net                real estate held for sale        |   |                        | 5,230,000   |   |   | 20,105,000 |   |
|                                                |   |                        |        |   |   |   |   |
| Net                real estate and other properties |   | $                           | 28,687,000  |   | $ | 44,172,000 |   |

**Revenue      recognition:**

----

**Income      taxes:**

**Foreign      operations:**

**Earnings      (loss) per share:**

----

|                                           |   | 2006   |      | 2005   |   | 2004      |   |
|------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Numerator-                                     |   |   |      |   |   |      |   |   |   |   |
| Net                income                      |   | $      | 2,285,000 |   | $      | 6,891,000 |   | $ | 2,027,000 |   |
|                                           |   |   |      |   |   |      |   |   |   |   |
| Denominator-                                   |   |   |      |   |   |      |   |   |   |   |
| Weighted                average common         |   |   |      |   |   |      |   |   |   |   |
| shares                outstanding - Basic      |   |   | 7,887,777 |   |   | 7,863,886 |   |   | 7,795,843 |   |
| Incremental                shares from assumed |   |   |      |   |   |      |   |   |   |   |
| conversions                of stock options    |   |   | 127,234   |   |   | 102,512   |   |   | 159,242 |   |
| Weighted                average common shares  |   |   |      |   |   |      |   |   |   |   |
| outstanding                - Diluted           |   |   | 8,015,011 |   |   | 7,966,398 |   |   | 7,955,085 |   |
|                                           |   |   |      |   |   |      |   |   |   |   |
| Basic                earnings per share:       |   | $      | 0.29      |   | $      | 0.88      |   | $ | 0.26 |   |
|                                           |   |   |      |   |   |      |   |   |   |   |
| Diluted                earnings per share:     |   | $      | 0.28      |   | $      | 0.87      |   | $ | 0.25 |   |

**Stock-based      compensation:**

----

|   | · | Expected                volatility - the Company estimates the volatility of common stock                at the                date of grant using historical                volatility. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | · | Expected                term - the Company estimates the expected term of options granted                based on                a combination of vesting schedules, term of the option and historical                experience. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|

|   | · | Risk-free                interest rate - the Company estimates the risk-free interest rate                using                the U.S. Treasury yield curve for periods equal to the expected term                of                the options in effect at the time of                grant. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|

|   | · | Dividends                - the Company uses an expected dividend yield of zero despite the                fact                that the Company paid a one-time distribution of $3.00 per share                during                2006. The Company intends to retain any earnings to fund future operations                and potentially invest in additional real estate activities and,                therefore, does not anticipate paying any cash dividends in the                foreseeable future. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                   |   | 2006   |                    | 2005   |   | 2004                   |   |
|----------------------------------------|--------|--------|-------------------------|--------|--------|------------------------|--------|
|                                   |   |   |                    |   |   |                   |   |
| Risk                free interest rate |   |   | 5.03                    | %      |   | 4.09                   | %      |   | 3.97 | % |
| Volatility                             |   |   | 18.90                   | %      |   | 40.30                  | %      |   | 37.40 | % |
| Dividend                yield          |   |   | -                       | %      |   | -                      | %      |   | - | % |
| Expected                option life    |   |   | 10                years |   |   | 5                years |   |   | 5                years |   |

| Year                  ending December 31, 2007 |   | $ | 97,000  |   |
|------------------------------------------------|--------|---|---------|--------|
| Year                  ending December 31, 2008 |   | $ | 66,000  |   |
| Year                  ending December 31, 2009 |   | $ | 38,000  |   |
| Year                  ending December 31, 2010 |   | $ | 9,000   |   |
|                                           |   | $ | 210,000 |   |

**Accumulated      other comprehensive income (loss):**

----

|                                      |   | Unrealized                Gains (Losses) on Available-for-Sale Securities |     | Cumulative                Foreign Currency Translation Adjustment |   | Accumulated                Other Comprehensive Income (Loss) |   |
|-------------------------------------------|--------|---------------------------------------------------------------------------|----------|-------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|
| BALANCE,                December 31, 2003 |   | $                                                                         | 108,000  |                                                              | $      | (1,536,000                                                   | )      | $ | (1,428,000 | ) |
| Change                for the year 2004   |   |                                                                      | 456,000  |                                                              |   | 1,536,000                                                    |   |   | 1,992,000 |   |
| BALANCE,                December 31, 2004 |   |                                                                      | 564,000  |                                                              |   | -                                                            |   |   | 564,000 |   |
| Change                for the year 2005   |   |                                                                      | (420,000 | )                                                                 |   | -                                                            |   |   | (420,000 | ) |
| BALANCE,                December 31, 2005 |   |                                                                      | 144,000  |                                                              |   | -                                                            |   |   | 144,000 |   |
| Change                for the year 2006   |   |                                                                      | (76,000  | )                                                                 |   | -                                                            |   |   | (76,000 | ) |
|                                      |   |                                                                      |     |                                                              |   |                                                         |   |   |   |   |
| BALANCE,                December 31, 2006 |   | $                                                                         | 68,000   |                                                              | $      | -                                                            |   | $ | 68,000 |   |

**Advertising      expense: **

**Reclassifications:**

| **2.** | **Discontinued                operations:** |
|--------|---------------------------------------------|

----

----

| **3.** | **Long-term                debt:** |
|--------|------------------------------------|

|                                                                 |   | 2006   |       | 2005   |   |
|----------------------------------------------------------------------|--------|--------|------------|--------|--------|
|                                                                 |   |   |       |   |   |
| Mortgage                notes payable (a)                            |   | $      | 4,504,000  |   | $      | 7,474,000 |   |
| Mortgage                notes payable (b)                            |   |   | 21,096,000 |   |   | 21,410,000 |   |
| Mortgage                notes payable (c)                            |   |   | 4,018,000  |   |   | 4,068,000 |   |
| Mortgage                notes payable (d)                            |   |   | -          |   |   | 400,000 |   |
|                                                                 |   |   |       |   |   |   |   |
| Total                                                                |   |   | 29,618,000 |   |   | 33,352,000 |   |
| Less:                Current portion                                 |   |   | 535,000    |   |   | 1,862,000 |   |
|                                                                 |   |   |       |   |   |   |   |
| Long-term                debt                                        |   | $      | 29,083,000 |   | $      | 31,490,000 |   |
|                                                                 |   |   |       |   |   |   |   |
| Long-term                debt applicable to discontinued operations: |   |   |       |   |   |   |   |
| Included                in current liabilities                       |   | $      | 58,000     |   | $      | 1,407,452 |   |
| Included                in non-current liabilities                   |   |   | 700,000    |   |   | 2,659,723 |   |
|                                                                 |   |   |       |   |   |   |   |
| Total                                                                |   | $      | 758,000    |   | $      | 4,067,175 |   |

|   | (a) | Mortgage                notes payable to North Fork Bank payable in monthly installments,                bearing                interest at a weighted average effective rate of 6.375%. These mortgage                notes were secured by a first mortgage interest in various residential                and                commercial real estate properties in Arizona, Florida, and New Jersey.                The                notes are being amortized over a 25-year period and mature in February                2013, with a balloon principal payment due at maturity. At December                31,                2006, the properties securing the notes had an approximate net book                value                of $3,634,000. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | (b) | Mortgage                notes payable to five real estate mortgage conduits arranged by Wachovia                Bank that are payable in monthly installments of principal and interest,                bearing interest at a weighted average effective rate of 5.75%, a                30-year                amortization and a ten year term, maturing in March 2013, with a                balloon                principal payment due at maturity. The residential properties securing                the                mortgage conduit loans are located in Arizona, New Jersey and Texas                and at                December 31, 2006 had an approximate net book value of                $13,161,000. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|

|   | (c) | Mortgage                note payable to Orix Real Estate Capital Markets that is payable                in                monthly installments of principal and interest, bearing interest                at 7.9%.                The note is being amortized over a 30-year period and matures in                June                2009, with a balloon principal payment due at maturity. The note                is                secured by residential property located in Texas that at December                31, 2006                had an approximate net book value of                $4,880,000. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (d) | During                  June 2005, WO Grand Hotel, L.L.C., a limited liability company                  that is 50%                  owned by Wilshire and where Wilshire is the manager of the limited                  liability company, borrowed $400,000 from Wilshire and $400,000                  from the                  other 50% owner of WO Grand Hotel, LLC, Proud Three, L.L.C. Interest                  accrued on the note at a rate of 8% per annum and was payable monthly.                  The                  note had a 10 year amortization period and a five year payment                  period. The                  note was originally scheduled to mature on May 2, 2010 with a balloon                  principal payment due at maturity. The amount borrowed from Wilshire                  was                  eliminated in consolidation. The WO Grand was sold on May 4, 2006                  at which                  time the debt was repaid. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year       |   | Amount |       |
|------------|--------|--------|------------|
| 2007       |   | $      | 535,000    |   |
| 2008       |   |   | 561,000    |   |
| 2009       |   |   | 4,431,000  |   |
| 2010       |   |   | 553,000    |   |
| 2011       |   |   | 548,000    |   |
| Thereafter |   |   | 22,989,000 |   |
|       |   |   |       |   |
|       |   | $      | 29,617,000 |   |

| **4.** | **Mortgage                notes receivable:** |
|--------|-----------------------------------------------|

----

| **5.** | **Commitments                and contingencies:** |
|--------|---------------------------------------------------|

**Commercial      leases:**

| Year       |   |                  Amount |      |
|------------|--------|------------------------------|-----------|
| 2007       |   | $                            | 1,935,000 |   |
| 2008       |   |                         | 1,278,000 |   |
| 2009       |   |                         | 804,000   |   |
| 2010       |   |                         | 555,000   |   |
| 2011       |   |                         | 198,000   |   |
| Thereafter |   |                         | 53,000    |   |
|       |   | $                            | 4,823,000 |   |

**Residential      leases:**

**City      of Perth Amboy, New Jersey:**

**Headquarters      lease:**

----

**Rights      plan:**

**Share      repurchase authorization:**

----

| **6.** | **Stock                option plans:** |
|--------|----------------------------------------|

----

|                                                                       |   | Shares |    | Weighed                  Average Exercise                  Price |   | Weighted                  Average Remaining Contractual                  Term |   | Aggregate                  Intrinsic                  Value |   |
|----------------------------------------------------------------------------|--------|--------|---------|------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|
| Options                  Outstanding at January                  1, 2006   |   |   | 160,450 |                                                             | $      | 4.97                                                                          |   |                                                        | 6.9    |   | $ | 452,000 |   |
| Options                  granted                                           |   |   | 25,000  |                                                             |   | 9.20                                                                          |   |                                                        | 9.4    |   |   | 116,000 |   |
| Options                  exercised                                         |   |   | (65,450 | )                                                                |   | 3.48                                                                          |   |                                                        | 4.8    |   |   | 290,000 |   |
| Options                  terminated and expired                            |   |   | -       |                                                             |   | -                                                                             |   |                                                        | -      |   |   | - |   |
| Options                  outstanding at December                  31, 2006 |   |   | 120,000 |                                                             | $      | 6.15                                                                          |   |                                                        | 7.5    |   | $ | 192,000 |   |
|                                                                       |   |   |    |                                                             |   |                                                                          |   |                                                        |   |   |   |   |   |
| Options                  exercisable at December 31, 2006                  |   |   | 36,250  |                                                             | $      | 5.12                                                                          |   |                                                        | 6.3    |   | $ | 21,000 |   |

| Nonvested                  Shares                      |   | Shares |    | Weighed-Average                  Grant-Date                  Fair Value |   |
|--------------------------------------------------------|--------|--------|---------|-------------------------------------------------------------------------|--------|
| Nonvested                  shares at January 1, 2006   |   |   | 48,066  |                                                                    | $      | 6.36 |   |
|                                                   |   |   |    |                                                                    |   |   |   |
| Shares                  Granted                        |   |   | 29,500  |                                                                    |   | 8.67 |   |
| Shares                  Vested                         |   |   | (15,800 | )                                                                       |   | 6.36 |   |
| Shares                  Forfeited                      |   |   | (2,666  | )                                                                       |   | 6.97 |   |
|                                                   |   |   |    |                                                                    |   |   |   |
| Nonvested                  shares at December 31, 2006 |   |   | 59,100  |                                                                    | $      | 7.48 |   |

----

| **7.** | **Income                taxes** |
|--------|---------------------------------|

|                                                |   | 2006   |      | 2005   |   | 2004       |   |
|-----------------------------------------------------|--------|--------|-----------|--------|--------|------------|--------|
|                                                |   |   |      |   |   |       |   |
| United                States operations             |   | $      | 3,874,000 |   | $      | 11,969,000 |   | $ | 2,688,000 |   |
| Operations                outside the United States |   |   | (46,000   | )      |   | 100,000    |   |   | 1,866,000 |   |
|  Total                                         |   | $      | 3,828,000 |   | $      | 12,069,000 |   | $ | 4,554,000 |   |

----

|                                   |   | 2006   |      | 2005   |   | 2004       |   |
|----------------------------------------|--------|--------|-----------|--------|--------|------------|--------|
| Continuing                Operations   |   |   |      |   |   |       |   |   |   |   |
| Federal                                |   |   |      |   |   |       |   |   |   |   |
| Current                                |   | $      | (264,000  | )      | $      | (700,000   | )      | $ | (782,000 | ) |
| Deferred                               |   |   | (416,000  | )      |   | (41,000    | )      |   | 189,000 |   |
|                                   |   |   | (680,000  | )      |   | (741,000   | )      |   | (593,000 | ) |
| State                                  |   |   |      |   |   |       |   |   |   |   |
| Current                                |   |   | (159,000  | )      |   | (277,000   | )      |   | 670,000 |   |
| Deferred                               |   |   | 10,000    |   |   | (1,000     | )      |   | (486,000 | ) |
|                                   |   |   | (149,000  | )      |   | (278,000   | )      |   | 184,000 |   |
|                                   |   |   |      |   |   |       |   |   |   |   |
| Total                Continuing        |   | $      | (829,000  | )      | $      | (1,019,000 | )      | $ | (409,000 | ) |
|                                   |   |   |      |   |   |       |   |   |   |   |
| Discontinued                Operations |   |   |      |   |   |       |   |   |   |   |
| Real                Estate             |   |   |      |   |   |       |   |   |   |   |
| Federal                                |   |   |      |   |   |       |   |   |   |   |
| Current                                |   | $      | 2,262,000 |   | $      | (320,000   | )      | $ | 2,463,000 |   |
| Deferred                               |   |   | (347,000  | )      |   | 4,744,000  |   |   | (247,000 | ) |
|                                   |   |   | 1,915,000 |   |   | 4,424,000  |   |   | 2,216,000 |   |
| State                                  |   |   |      |   |   |       |   |   |   |   |
| Current                                |   |   | 831,000   |   |   | 211,000    |   |   | 222,000 |   |
| Deferred                               |   |   | (159,000  | )      |   | 910,000    |   |   | (176,000 | ) |
|                                   |   |   | 672,000   |   |   | 1,121,000  |   |   | 46,000 |   |
|                                   |   |   |      |   |   |       |   |   |   |   |
| Total                Real Estate       |   | $      | 2,587,000 |   | $      | 5,545,000  |   | $ | 2,262,000 |   |
|                                   |   |   |      |   |   |       |   |   |   |   |
| Oil                and Gas             |   |   |      |   |   |       |   |   |   |   |
| Federal                                |   |   |      |   |   |       |   |   |   |   |
| Current                                |   | $      | 0         |   | $      | (59,000    | )      | $ | 3,235,000 |   |
| Deferred                               |   |   | 0         |   |   | 0          |   |   | (3,488,000 | ) |
|                                   |   |   | 0         |   |   | (59,000    | )      |   | (253,000 | ) |
| State                                  |   |   |      |   |   |       |   |   |   |   |
| Current                                |   |   | 0         |   |   | 191,000    |   |   | 3,000 |   |
| Deferred                               |   |   | 0         |   |   | 0          |   |   | 0 |   |
|                                   |   |   | 0         |   |   | 191,000    |   |   | 3,000 |   |
| Foreign                                |   |   |      |   |   |       |   |   |   |   |
| Current                                |   |   | (215,000  | )      |   | 452,000    |   |   | 4,044,000 |   |
| Deferred                               |   |   | 0         |   |   | 0          |   |   | (3,120,000 | ) |
|                                   |   |   | (215,000  | )      |   | 452,000    |   |   | 924,000 |   |
|                                   |   |   |      |   |   |       |   |   |   |   |
| Total                Oil & Gas     |   | $      | (215,000  | )      | $      | 584,000    |   | $ | 674,000 |   |
|                                   |   |   |      |   |   |       |   |   |   |   |
| Total                                  |   | $      | 1,543,000 |   | $      | 5,110,000  |   | $ | 2,527,000 |   |

----

|                                                                           |   | 2006   |     | 2005    |   | 2004   |   |
|--------------------------------------------------------------------------------|--------|--------|----------|---------|--------|--------|--------|
|                                                                           |   | Amount |     | %  |   | Amount |   |  % |   | Amount |   | %  |   |
|                                                                           |   |   |     |    |   |   |   |   |   |   |   |   |   |
| Federal                  income tax provision (benefit) at statutory rate      |   | $      | (607,000 | )       |   | 35.0   | %      | $ | (630,000 | ) |   | 35.0 | % | $ | (595,000 | ) |   | 35.0 | % |
| State                  tax expense (benefit) net of (including) Federal impact |   |   | (96,000  | )       |   | 5.6    |   |   | (180,000 | ) |   | 10.0 |   |   | 120,000 |   |   | (7.1 | ) |
| Dividend                  exclusion                                            |   |   | (29,000  | )       |   | 1.7    |   |   | (37,000 | ) |   | 2.1 |   |   | (50,000 | ) |   | 2.9 |   |
| Tax-exempt                  interest                                           |   |   | (96,000  | )       |   | 5.5    |   |   | (113,000 | ) |   | 6.3 |   |   | (68,000 | ) |   | 4.0 |   |
| Other                                                                          |   |   | (1,000   | )       |   | 0.0    |   |   | 9,000 |   |   |   |   |   | 0 |   |   | 0.0 |   |
| Total                  tax expense (benefit) / Effective tax rate (benefit)    |   | $      | (829,000 | )       |   | 47.8   | %      | $ | (951,000 | ) |   | 53.4 | % | $ | (593,000 | ) |   | 34.8 | % |

| Significant                components of deferred tax liabilities as of December 31, 2006 and                2005                were as follows: |
|---------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                      |   | 2006   |     | 2005   |   |
|---------------------------------------------------------------------------|--------|--------|----------|--------|--------|
|                                                                      |   |   |     |   |   |
| Tax                  over book depreciation, depletion and amortization - |   |   |     |   |   |   |   |
| Oil                  and gas and real estate properties - U.S.            |   | $      | 602,000  |   | $      | 1,672,000 |   |
| Deferred                  gains on sales of real estate properties - U.S. |   |   | 0        |   |   | 5,794,000 |   |
| Deferred                  income                                          |   |   | (106,000 | )      |   |   |   |
| Restricted                  stock                                         |   |   | 56,000   |   |   |   |   |
| Unrealized                  gain on marketable securities                 |   |   | 48,000   |   |   | 99,000 |   |
|                                                                      |   |   |     |   |   |   |   |
| Net                  deferred tax liability                               |   |   | 600,000  |   |   | 7,565,000 |   |
| Current                  portion of deferred tax liability                |   |   | (48,000  | )      |   | (99,000 | ) |
|                                                                      |   |   |     |   |   |   |   |
| Noncurrent                  deferred tax liability                        |   | $      | 552,000  |   | $      | 7,466,000 |   |

| **8.** | **Segment                information:** |
|--------|-----------------------------------------|

----

|                                                                                                     |   | 2006   |       | 2005   |   | 2004       |   |
|----------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Real                estate revenue:                                                                      |   |   |       |   |   |       |   |   |   |   |
| Residential                                                                                              |   | $      | 7,387,000  |   | $      | 6,907,000  |   | $ | 6,775,000 |   |
| Commercial                                                                                               |   |   | 1,447,000  |   |   | 1,279,000  |   |   | 1,339,000 |   |
| Totals                                                                                                   |   | $      | 8,834,000  |   | $      | 8,186,000  |   | $ | 8,114,000 |   |
|                                                                                                     |   |   |       |   |   |       |   |   |   |   |
| Real                estate operating expenses:                                                           |   |   |       |   |   |       |   |   |   |   |
| Residential                                                                                              |   | $      | 4,572,000  |   | $      | 4,143,000  |   | $ | 3,879,000 |   |
| Commercial                                                                                               |   |   | 703,000    |   |   | 565,000    |   |   | 562,000 |   |
| Totals                                                                                                   |   | $      | 5,275,000  |   | $      | 4,708,000  |   | $ | 4,441,000 |   |
|                                                                                                     |   |   |       |   |   |       |   |   |   |   |
| Net                operating income (“NOI”):                                                 |   |   |       |   |   |       |   |   |   |   |
| Residential                                                                                              |   | $      | 2,815,000  |   | $      | 2,764,000  |   | $ | 2,896,000 |   |
| Commercial                                                                                               |   |   | 744,000    |   |   | 714,000    |   |   | 777,000 |   |
| Totals                                                                                                   |   | $      | 3,559,000  |   | $      | 3,478,000  |   | $ | 3,673,000 |   |
|                                                                                                     |   |   |       |   |   |       |   |   |   |   |
| Capital                improvements:                                                                     |   |   |       |   |   |       |   |   |   |   |
| Residential                                                                                              |   | $      | 783,000    |   | $      | 673,000    |   | $ | 111,000 |   |
| Commercial                                                                                               |   |   | 546,000    |   |   | 231,000    |   |   | 314,000 |   |
| Totals                                                                                                   |   | $      | 1,329,000  |   | $      | 904,000    |   | $ | 425,000 |   |
|                                                                                                     |   |   |       |   |   |       |   |   |   |   |
| Reconciliation                of NOI to consolidated net loss from continuing                operations: |   |   |       |   |   |       |   |   |   |   |
| Segment                NOI                                                                               |   | $      | 3,559,000  |   | $      | 3,478,000  |   | $ | 3,673,000 |   |
| Total                other income, including net investment income                                       |   |   | 843,000    |   |   | 1,541,000  |   |   | 685,000 |   |
| Depreciation                expense                                                                      |   |   | (1,987,000 | )      |   | (1,215,000 | )      |   | (1,427,000 | ) |
| General                and administrative expense                                                        |   |   | (2,475,000 | )      |   | (3,493,000 | )      |   | (2,143,000 | ) |
| Interest                expense                                                                          |   |   | (1,811,000 | )      |   | (1,911,000 | )      |   | (1,916,000 | ) |
| Income                tax benefit                                                                        |   |   | 829,000    |   |   | 1,019,000  |   |   | 409,000 |   |
|                                                                                                     |   |   |       |   |   |       |   |   |   |   |
| Loss                from continuing operations                                                           |   | $      | (1,042,000 | )      | $      | (581,000   | )      | $ | (719,000 | ) |

| **9.** | **Preferred                Stock** |
|--------|------------------------------------|

----

| **10.** | **Fair                value of financial                instruments** |
|---------|-----------------------------------------------------------------------|

| **11.** | **Other                matters** |
|---------|----------------------------------|

----

| **12.** | **Subsequent                events** |
|---------|--------------------------------------|

----

**13.**
**Quarterly      data (Unaudited)**

|                                                                               |   | Quarter                ended  |      |
|------------------------------------------------------------------------------------|--------|------------------------------------|-----------|
|                                                                               |   | March                31            |      | June                30 |   | September                30 |   | December                31 |   |
|                                                                               |   |                               |      |   |   |   |   |   |   |
| **2006:**                                                                          |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                           |   | $                                  | 2,109,000 |   | $ | 2,234,000 |   | $ | 2,248,000 |   | $ | 2,243,000 |   |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Costs                and expenses:                                                 |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                                                  |   |                               | 1,212,000 |   |   | 1,233,000 |   |   | 1,423,000 |   |   | 1,407,000 |   |
| Depreciation                                                                       |   |                               | 224,000   |   |   | 922,000 |   |   | 558,000 |   |   | 283,000 |   |
| General                and administrative                                          |   |                               | 512,000   |   |   | 840,000 |   |   | 396,000 |   |   | 727,000 |   |
| Total                costs and expenses                                            |   |                               | 1,948,000 |   |   | 2,995,000 |   |   | 2,377,000 |   |   | 2,417,000 |   |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from operations                                       |   |                               | 161,000   |   |   | (761,000 | ) |   | (129,000 | ) |   | (174,000 | ) |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Dividend                and interest income                                        |   |                               | 252,000   |   |   | 300,000 |   |   | 160,000 |   |   | 124,000 |   |
| Other                income                                                        |   |                               | 3,000     |   |   | 2,000 |   |   | - |   |   | 2,000 |   |
| Interest                expense including amortization of deferred financing costs |   |                               | (454,000  | ) |   | (472,000 | ) |   | (431,000 | ) |   | (454,000 | ) |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) before provision for taxes                            |   |                               | (38,000   | ) |   | (931,000 | ) |   | (400,000 | ) |   | (502,000 | ) |
| Income                tax expense (benefit)                                        |   |                               | (71,000   | ) |   | (323,000 | ) |   | (213,000 | ) |   | (222,000 | ) |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                            |   |                               | 33,000    |   |   | (608,000 | ) |   | (187,000 | ) |   | (280,000 | ) |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - real estate                               |   |                               | 3,544,000 |   |   | 26,000 |   |   | 255,000 |   |   | (613,000 | ) |
| Discontinued                operations - oil & gas                             |   |                               | (153,000  | ) |   | (347,000 | ) |   | (6,000 | ) |   | 621,000 |   |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                                                   |   | $                                  | 3,424,000 |   | $ | (929,000 | ) | $ | 62,000 |   | $ | (272,000 | ) |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:                                    |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                               |   | $                                  | -         |   | $ | (0.07 | ) | $ | (0.02 | ) | $ | (0.03 | ) |
| Discontinued                operations                                             |   |                               | 0.44      |   |   | (0.05 | ) |   | 0.03 |   |   | 0.00 |   |
| Net                income (loss)                                                   |   | $                                  | 0.44      |   | $ | (0.12 | ) | $ | 0.01 |   | $ | (0.03 | ) |
|                                                                               |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:                                  |   |                               |      |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                               |   | $                                  | -         |   | $ | (0.07 | ) | $ | (0.02 | ) | $ | (0.03 | ) |
| Discontinued                operations                                             |   |                               | 0.43      |   |   | (0.05 | ) |   | 0.03 |   |   | 0.00 |   |
| Net                income (loss)                                                   |   | $                                  | 0.43      |   | $ | (0.12 | ) | $ | 0.01 |   | $ | (0.03 | ) |

----

|                                                                                 |   | Quarter                  Ended |      |
|--------------------------------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                                                 |   | March                  31      |      | June                  30 |   | September                  30 |   | December                  31 |   |
|                                                                                 |   |                           |      |   |   |   |   |   |   |
| **2005:**                                                                            |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                             |   | $                              | 1,562,000 |   | $ | 1,162,000 |   | $ | 1,149,000 |   | $ | 1,179,000 |   |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses                                                  |   |                           | 862,000   |   |   | 564,000 |   |   | 653,000 |   |   | 677,000 |   |
| Depreciation                                                                         |   |                           | 346,000   |   |   | 205,000 |   |   | 244,000 |   |   | 255,000 |   |
| General                  and administrative                                          |   |                           | 535,000   |   |   | 1,594,000 |   |   | 602,000 |   |   | 791,000 |   |
| Total                  costs and expenses                                            |   |                           | 1,743,000 |   |   | 2,363,000 |   |   | 1,499,000 |   |   | 1,723,000 |   |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from operations                                       |   |                           | (181,000  | ) |   | (1,201,000 | ) |   | (350,000 | ) |   | (544,000 | ) |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Dividend                  and interest income                                        |   |                           | 102,000   |   |   | 185,000 |   |   | 188,000 |   |   | 225,000 |   |
| Gain                  on sale of marketable securities                               |   |                           | 134,000   |   |   | - |   |   | - |   |   | - |   |
| Gain                  on sale of real estate related assets                          |   |                           | 675,000   |   |   | - |   |   | - |   |   | - |   |
| Other                  income                                                        |   |                           | 7,000     |   |   | 24,000 |   |   | - |   |   | 1,000 |   |
| Interest                  expense including amortization of deferred financing costs |   |                           | (341,000  | ) |   | (259,000 | ) |   | (258,000 | ) |   | (315,000 | ) |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) before provision for taxes                            |   |                           | 396,000   |   |   | (1,251,000 | ) |   | (420,000 | ) |   | (633,000 | ) |
| Income                  tax expense (benefit)                                        |   |                           | 137,000   |   |   | (505,000 | ) |   | (169,000 | ) |   | (600,000 | ) |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) from continuing operations                            |   |                           | 259,000   |   |   | (746,000 | ) |   | (251,000 | ) |   | (33,000 | ) |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Discontinued                  operations - real estate                               |   |                           | 85,000    |   |   | (58,000 | ) |   | 70,000 |   |   | 8,669,000 |   |
| Discontinued                  operations - oil & gas                             |   |                           | 668,000   |   |   | (532,000 | ) |   | 133,000 |   |   | (616,000 | ) |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss)                                                   |   | $                              | 1,012,000 |   | $ | (1,336,000 | ) | $ | (48,000 | ) | $ | 8,020,000 |   |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Basic                  earnings (loss) per share:                                    |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Continuing                  operations                                               |   | $                              | 0.04      |   | $ | (0.09 | ) | $ | (0.03 | ) | $ | (0.01 | ) |
| Discontinued                  operations                                             |   |                           | (0.01     | ) |   | (0.08 | ) |   | 0.03 |   |   | 1.03 |   |
| Net                  income (loss)                                                   |   | $                              | 0.03      |   | $ | (0.17 | ) | $ | - |   | $ | 1.02 |   |
|                                                                                 |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Diluted                  earnings (loss) per share:                                  |   |                           |      |   |   |   |   |   |   |   |   |   |   |
| Continuing                  operations                                               |   | $                              | 0.04      |   | $ | (0.09 | ) | $ | (0.03 | ) | $ | - |   |
| Discontinued                  operations                                             |   |                           | (0.01     | ) |   | (0.08 | ) |   | 0.03 |   |   | 1.01 |   |
| Net                  income (loss)                                                   |   | $                              | 0.03      |   | $ | (0.17 | ) | $ | - |   | $ | 1.01 |   |

----

**Schedule      XI - Real Estate and Accumulated Depreciation**

**December      31, 2006**

**($      in 000s)**

| Column                A                           |   | Column                B |   | Column                C Initial Cost |   | Column                D Costs Capitalized Subsequent To Acquisition |   | Column                E Gross Amount At Which Carried as of December 31, 2006 |   | Column                F                     |   | Column                H |   | Column                I                     |   |
|---------------------------------------------------|--------|-------------------------|--------|--------------------------------------|--------|---------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|---------------------------------------------|--------|-------------------------|--------|---------------------------------------------|--------|
| Description                                       |   | Encum-brances           |   | Land                                 |   | Building                & Improve-ments                         |   | Land                                                                          |   | Building                & Improve-ments |   | Land                    |   | Building                & Improve-ments |   | Total |   | Accumulated                Depreciation |   | Date                Acquired |   | Life                on Which Depreciation is                Computed |   |
|                                              |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |
| **Arizona**                                       |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 340                unit garden apartment complex  |   | $                       | 10,167 |                                 | $      | 800                                                                 |   | $                                                                             | 5,600  |                                        | $      | -0-                     |   | $                                           | 3,404  |   | $ | 800 |   | $ | 9,004 |   | $ | 9,804 |   | $ | 4,409 |   |   | 1992 |   |   | Various |   |
| 53,000                square foot office building |   | $                       | 3,746  |                                 | $      | 313                                                                 |   | $                                                                             | 2,384  |                                        | $      | -0-                     |   | $                                           | 2,178  |   | $ | 313 |   | $ | 4,562 |   | $ | 4,875 |   | $ | 2,297 |   |   | 1992 |   |   | Various |   |
|                                              |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Texas**                                         |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 228                unit apartment complex         |   | $                       | 4,181  |                                 | $      | 620                                                                 |   | $                                                                             | 3,015  |                                        | $      | -0-                     |   | $                                           | 3,051  |   | $ | 620 |   | $ | 6,066 |   | $ | 6,686 |   | $ | 2,898 |   |   | 1992 |   |   | Various |   |
| 180                unit apartment complex         |   | $                       | 4,018  |                                 | $      | 805                                                                 |   | $                                                                             | 4,450  |                                        | $      | -0-                     |   | $                                           | 828    |   | $ | 805 |   | $ | 5,278 |   | $ | 6,083 |   | $ | 969 |   |   | 2001 |   |   | Various |   |
|                                              |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **New                Jersey**                     |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 132                unit apartment complex         |   | $                       | 4,751  |                                 | $      | 480                                                                 |   | $                                                                             | 3,541  |                                        | $      | -0-                     |   | $                                           | 808    |   | $ | 480 |   | $ | 4,349 |   | $ | 4,829 |   | $ | 1,511 |   |   | 1997 |   |   | Various |   |
|                                              |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                residential                  |   | $                       | 2,168  |                                 | $      | 301                                                                 |   | $                                                                             | 2,530  |                                        | $      | -0-                     |   | $                                           | 1,581  |   | $ | 301 |   | $ | 3,661 |   | $ | 3,962 |   | $ | 1,547 |   |   | Various |   |   | Various |   |
|                                              |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                office/retail                |   | $                       | 586    |                                 | $      | 637                                                                 |   | $                                                                             | 2,686  |                                        | $      | -0-                     |   | $                                           | 3,883  |   | $ | 637 |   | $ | 6,569 |   | $ | 7,206 |   | $ | 2,035 |   |   | Various |   |   | Various |   |
|                                              |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Land                held for development          |   | $                       | -0-    |                                 | $      | 908                                                                 |   | $                                                                             | -0-    |                                        | $      | -0-                     |   | $                                           | -0-    |   | $ | 908 |   | $ | -0- |   | $ | 908 |   | $ | -0- |   |   | Various |   |   | Various |   |
|                                              |   |                    |   |                                 |   |                                                                |   |                                                                          |   |                                        |   |                    |   |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   | $                       | 29,617 |                                 | $      | 4,864                                                               |   | $                                                                             | 24,206 |                                        | $      | -0-                     |   | $                                           | 15,733 |   | $ | 4,864 |   | $ | 39,489 |   | $ | 44,353 |   | $ | 15,666 |   |   |   |   |   |   |   |

----

|                                        |   | 2006   |    | 2005   |   | 2004   |   |
|---------------------------------------------|--------|--------|---------|--------|--------|--------|--------|
| Balance                at beginning of year |   | $      | 58,854  |   | $      | 58,937 |   | $ | 72,069 |   |
| Property                acquisitions        |   |   | -       |   |   | 6,765  |   |   | - |   |
| Improvements                                |   |   | 3,504   |   |   | 1,339  |   |   | 2,251 |   |
| Retirements/disposals                       |   |   | (18,005 | )      |   | (8,187 | )      |   | (15,383 | ) |
| Balance                at end of year       |   | $      | 44,353  |   | $      | 58,854 |   | $ | 58,937 |   |

|                                        |   | 2006   |   | 2005   |   | 2004   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                        |   |   |   |   |   |   |   |
| Balance                at beginning of year |   | $      | 14,682 |   | $      | 16,900 |   | $ | 17,731 |   |
| Depreciation                for year        |   |   | 2,021  |   |   | 1,288  |   |   | 1,928 |   |
| Retirements/disposals                       |   |   | (1,036 | )      |   | (3,506 | )      |   | (2,759 | ) |
| Balance                at end of year       |   | $      | 15,667 |   | $      | 14,682 |   | $ | 16,900 |   |

| **Item              9.** | **Changes                in and Disagreements with Accountants on Accounting and Financial                Disclosure** |
|--------------------------|------------------------------------------------------------------------------------------------------------------------|

| **Item              9A.** | **Controls                and Procedures** |
|---------------------------|--------------------------------------------|

* *

**Item      9B.**
**Other      Information**

----

**PART      III**

| **Item              10.** | **Directors,                Executive Officers and Corporate                Governance** |
|---------------------------|------------------------------------------------------------------------------------------|

| **Item              11.** | **Executive                Compensation** |
|---------------------------|-------------------------------------------|

| **Item              12.** | **Security                Ownership of Certain Beneficial Owners and Management and Related                Stockholder Maters** |
|---------------------------|---------------------------------------------------------------------------------------------------------------------------------|

| **Item              13.** | **Certain                Relationships and Related Transactions, and Director                Independence** |
|---------------------------|-------------------------------------------------------------------------------------------------------------|

| **Item              14.** | **Principal                Accounting Fees and                Services** |
|---------------------------|--------------------------------------------------------------------------|

----

**PART      IV**

| **Item              15.** | **Exhibits                and Financial Statement                Schedules** |
|---------------------------|------------------------------------------------------------------------------|

| (a) | Financial                Statements |
|-----|-------------------------------------|

|   | (i) | Report                of Independent Registered Public Accounting                Firm |
|--------|-----|---------------------------------------------------------------------------------------|

|   | (ii) | Consolidated                Balance Sheets as of December 31, 2006 and 2005 |
|--------|------|-----------------------------------------------------------------------------|

|   | (iii) | Consolidated                Statements of Operations for the years ended December 31, 2006, 2005                and                2004 (as restated) |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Consolidated                Statements of Changes in Stockholders’ Equity for the years ended December                31, 2006, 2005 and 2004 (as                restated) |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Consolidated                Statements of Cash Flows for the years ended December 31, 2006, 2005                and                2004 (as restated) |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | Notes                to Consolidated Financial                Statements |
|--------|------|--------------------------------------------------------------------------|

|   | (i) | Real                Estate and Accumulated Depreciation December 31,                2006 |
|--------|-----|------------------------------------------------------------------------------------------|

| (b) | Exhibits |
|-----|----------|

| **Exhibit                  #** |   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 3.1                            |   | Restated                  Certificate of Incorporation of Wilshire Enterprises, Inc. (formerly                  known                  as Wilshire Oil Company of Texas) dated December 24, 1983, Certificate                  of                  Correction of Restated Certificate of Incorporation of Wilshire                  Enterprises, Inc. (formerly known as Wilshire Oil Company of Texas)                  dated                  March 24, 1987, Certificate of Amendment of Restated Certification                  of                  Incorporation dated July 29, 1987, Certificate of Amendment of                  Certificate                  of Incorporation of Wilshire Enterprises, Inc. (formerly known                  as Wilshire                  Oil Company of Texas) dated August 20, 1991,  Certificate of                  Amendment of Restated Certificate of Incorporation of Wilshire                  Enterprises, Inc. (formerly known as Wilshire Oil Company of Texas)                  dated                  June 30, 2003 and Certificate of  Designations and Terms of Series A                  Participating Preferred Stock of Wilshire Enterprises, Inc, dated                  June 22,                  2006 (Incorporated by reference to Exhibits 3.1 and 3.2 of the                   Registrant's Quarterly Report on Form 10-Q for the period ended                  June                  30, 2006.) |
|                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 3.2                            |   | By-laws,                  as amended and restated through December 4, 2006.  (Incorporated by                  reference to Exhibit 3.2 of the Registrant's Current Report on                  Form 8-K                  filed with the SEC on December 7, 2006.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.1                            |   | Amended                  and Restated Stockholder Protection Rights Agreement, dated as                  of December                  6, 2006, between Wilshire Enterprises, Inc. and Continental Stock                  Transfer                  & Trust Company, as Rights Agent.  (Incorporated by reference to                  Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed with                  the SEC on December 7, 2006.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.1                           |   | Wilshire                  Enterprises, Inc. 1995 Stock Option and Incentive Plan. (Incorporated                  by                  reference to Exhibit A of the Registrant’s Definitive Proxy Statement for                  its 1995 Annual Meeting of Stockholders.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.2                           |   | Wilshire                  Enterprises, Inc. 1995 Non-Employee Director Stock Option Plan.                  (Incorporated by reference to Exhibit B of the Registrant’s Definitive                  Proxy Statement for its 1995 Annual Meeting of                  Stockholders.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

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| 10.3   |   | Wilshire                  Enterprises, Inc. 2004 Stock Option and Incentive Plan. (Incorporated                  by                  reference to Appendix C of the Registrant’s Definitive Proxy Statement for                  its 2004 Annual Meeting of Stockholders.)                                                                                                                                                                                                                                                        |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.4   |   | Wilshire                  Enterprises, Inc. 2004 Non-Employee Director Stock Option Plan.                  (Incorporated by reference to Appendix D of the Registrant’s Definitive                  Proxy Statement for its 2004 Annual Meeting of                  Stockholders.)                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.5   |   | Promissory                  Note given by Alpine Village Apartments, L.L.C., a subsidiary of                  Wilshire                  Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated                  February                  28, 2003. (Incorporated by reference to the similarly numbered                  exhibit to                  the Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.)                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.6   |   | Environmental                  Indemnity Agreement between Alpine Village Apartments, L.L.C.,                  a                  subsidiary of Wilshire Enterprises, Inc., and Merrill Lynch Mortgage                  Lending, Inc. dated February 28, 2003. (Incorporated by reference                  to the                  similarly numbered exhibit to the Company’s Annual Report on Form 10-K for                  the year ended December 31, 2002.)                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.7   |   | Indemnity                  and Guaranty Agreement between Alpine Village Apartments, L.L.C.,                  a                  subsidiary of Wilshire Enterprises, Inc., and Merrill Lynch Mortgage                  Lending, Inc. dated February 28, 2003. (Incorporated by reference                  to the                  similarly numbered exhibit to the Company’s Annual Report on Form 10-K for                  the year ended December 31, 2002.)                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.8   |   | Multifamily                  Mortgage, Security Agreement, Assignment of Rents and Fixture Filing                  between Alpine Village Apartments, L.L.C., a subsidiary of Wilshire                  Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated                  February                  28, 2003. (Incorporated by reference to the similarly numbered                  exhibit to                  the Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.) |

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| 10.9   |   | Promissory                  Note given by Sunrise Ridge, L.L.C., a subsidiary of Wilshire Enterprises,                  Inc., and Merrill Lynch Mortgage Lending, Inc. dated February 27,                  2003.                  (Incorporated by reference to the similarly numbered exhibit to                  the                  Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.)                                                                                                        |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.10  |   | Environmental                  Indemnity Agreement between Sunrise Ridge, L.L.C., a subsidiary                  of                  Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending,                  Inc. dated                  February 27, 2003. (Incorporated by reference to the similarly                  numbered                  exhibit to the Company’s Annual Report on Form 10-K for the year ended                  December 31, 2002.)                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.11  |   | Indemnity                  and Guaranty Agreement between Sunrise Ridge, L.L.C., a subsidiary                  of                  Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending,                  Inc. dated                  February 27, 2003. (Incorporated by reference to the similarly                  numbered                  exhibit to the Company’s Annual Report on Form 10-K for the year ended                  December 31, 2002.)                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.12  |   | Multifamily                  Deed of Trust, Security Agreement, Assignment of Rents and Fixture                  Filing                  between Sunrise Ridge, L.L.C., a subsidiary of Wilshire Enterprises,                  Inc.,                  and Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.                  (Incorporated by reference to the similarly numbered exhibit to                  the                  Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.) |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.13  |   | Promissory                  Note given by Van Buren, L.L.C., a subsidiary of Wilshire Enterprises,                  Inc., and Merrill Lynch Mortgage Lending, Inc. dated February 27,                  2003.                  (Incorporated by reference to the similarly numbered exhibit to                  the                  Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.)                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.14  |   | Environmental                  Indemnity Agreement between Van Buren, L.L.C., a subsidiary of                  Wilshire                  Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated                  February                  27, 2003. (Incorporated by reference to the similarly numbered                  exhibit to                  the Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.)                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.15  |   | Indemnity                  and Guaranty Agreement between Van Buren, L.L.C., a subsidiary                  of Wilshire                  Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated                  February                  27, 2003. (Incorporated by reference to the similarly numbered                  exhibit to                  the Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.)                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.16  |   | Multifamily                  Deed of Trust, Security Agreement, Assignment of Rents and Fixture                  Filing                  between Van Buren, L.L.C., a subsidiary of Wilshire Enterprises,                  Inc., and                  Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.                  (Incorporated by reference to the similarly numbered exhibit to                  the                  Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.)     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.17  |   | Promissory                  Note given by Wellington Apartments, L.L.C., a subsidiary of Wilshire                  Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated                  February                  27, 2003. (Incorporated by reference to the similarly numbered                  exhibit to                  the Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.)                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.18  |   | Environmental                  Indemnity Agreement between Wellington Apartments, L.L.C., a subsidiary                  of                  Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending,                  Inc. dated                  February 27, 2003. (Incorporated by reference to the similarly                  numbered                  exhibit to the Company’s Annual Report on Form 10-K for the year ended                  December 31, 2002.)                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.19  |   | Indemnity                  and Guaranty Agreement between Wellington Apartments, L.L.C., a                  subsidiary                  of Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending,                  Inc.                  dated February 27, 2003. (Incorporated by reference to the similarly                  numbered exhibit to the Company’s Annual Report on Form 10-K for the year                  ended December 31, 2002.)                                                                                |

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| 10.20  |   | Multifamily                  Deed of Trust, Security Agreement, Assignment of Rents and Fixture                  Filing                  between Wellington Apartments, L.L.C., a subsidiary of Wilshire                  Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated                  February                  27, 2003. (Incorporated by reference to the similarly numbered                  exhibit to                  the Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.) |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.21  |   | Agreement                  dated March 17, 2004 between Wilshire Enterprises, Inc. and Crow                  Creek                  Energy L.L.C. to sell the U.S. Oil and Gas business. (Incorporated                  by                  reference to the similarly numbered exhibit to the Company’s Annual Report                  on Form 10-K for the year ended December 31, 2003.)                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.22  |   | Contract                  of sale dated January 23, 2004 between Wilshire Enterprises, Inc.                  and                  Economic Properties 2004 L.L.C. for the sale of eleven properties                  in                  Jersey City, New Jersey. (Incorporated by reference to the similarly                  numbered exhibit to the Company’s Annual Report on Form 10-K for the year                  ended December 31, 2003.)                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.23  |   | Employment                  agreement between the Company and Philip Kupperman dated as of                  July 1,                  2002. (Incorporated by reference to Exhibit 10.1 to the Company’s Current                  Report on Form 8-K dated September 4, 2002.)                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.24  |   | Severance                  Letter Agreement between the Company and Sherry Wilzig Izak dated                  as of                  March 29, 2004. (Incorporated by reference to the similarly numbered                  exhibit to the Company’s Annual Report on Form 10-K for the year ended                  December 31, 2003.)                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.25  |   | Employment                  agreement between the Company and Daniel C. Pryor dated as of April                  24,                  2004. (Incorporated by reference to Exhibit 10.32 to the Company’s Annual                  Report on Form 10-K for the year ended December 31,                  2004.)                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.26  |   | Letter                  agreement between the Company and Philip Kupperman dated as of                  April 18,                  2005 terminating the employment agreement between the Company and                  Philip                  Kupperman. (Incorporated by reference to Exhibit 10.1 to the Company’s                  Current Report on Form 8-K dated April 19, 2005.)                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.27  |   | Purchase                  agreement and escrow instructions between Biltmore Club Apartments,                  L.L.C.                  (a subsidiary of Wilshire Enterprises, Inc.) and GDG Partners L.L.C.                  dated                  February 2, 2005. (Incorporated by reference to Exhibit 10.34 to                  the                  Company’s Annual Report on Form 10-K for the year ended December 31,                  2004.)                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.28  |   | Operating                  agreement of WO Grand Hotel, LLC dated as of June 2, 2005. (Incorporated                  by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form                  10-Q for the quarter ended June 30, 2005.)                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.29  |   | Hotel                  purchase agreement dated as of September 30, 2005, by and between                  WO GRAND                  HOTEL, LLC, a New Jersey limited liability company, and 350 PLEASANT                  VALLEY HOTEL ASSOCIATES, L.L.C., a New Jersey limited liability                  company.                  (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly                  Report on Form 10-Q for the quarter ended September 30,                  2005.)                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.30  |   | Form                  of Indemnification Agreement of Directors and Chief Financial Officer                  (Incorporated by reference to Exhibit 10.1 of the Registrant's                  Current                  Report on Form 8-K filed with the SEC on January 18,                  2007).                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 21     |   | List                  of significant subsidiaries of the Registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

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| 23.1   |   | Consent                  of J.H. Cohn LLP, Independent Registered Public Accounting                  Firm.                                                                                                                 |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                       |
| 24     |   | Power                  of attorney.                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                       |
| 31.1   |   | Certification                  of the Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley                  Act of 2002.                                                                                      |
|   |   |                                                                                                                                                                                                                       |
| 31.2   |   | Certification                  of the Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley                  Act of 2002.                                                                                      |
|   |   |                                                                                                                                                                                                                       |
| 32.1   |   | Certification                  of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,                  as                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002. |
|   |   |                                                                                                                                                                                                                       |
| 32.2   |   | Certification                  of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,                  as                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002. |

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**SIGNATURES**

|                                           |                                                           |                                         |
|------------------------------------------------|----------------------------------------------------------------|----------------------------------------------|
|                                           | WILSHIRE              ENTERPRISES, INC. (Registrant)           |
|                                      |                                                      |                                    |
| Date:              April              30, 2007 | By:                                                  | /s/              S.              Wilzig Izak |
|                                           | S.              Wilzig Izak                                    |
|                                           | Chairman              of the Board and Chief Executive Officer |

**Directors:**

| By:    |   | *                                     |   | Date:                April 30,                2007 |
|--------|--------|---------------------------------------|--------|----------------------------------------------------|
|   |   | Miles                Berger           |   |                                               |
|   |   |                                  |   |                                               |
| By:    |   | *                                     |   | Date:                April 30, 2007                |
|   |   | Milton                Donnenberg      |   |                                               |
|   |   |                                  |   |                                               |
| By:    |   | /s/                S. Wilzig Izak     |   | Date:                April 30, 2007                |
|   |   | S.                Wilzig Izak         |   |                                               |
|   |   |                                  |   |                                               |
| By:    |   | *                                     |   | Date:                April 30, 2007                |
|   |   | Eric                J. Schmertz, Esq. |   |                                               |
|   |   |                                  |   |                                               |
| By:    |   | *                                     |   | Date:                April 30, 2007                |
|   |   | Ernest                Wachtel         |   |                                               |
|   |   |                                  |   |                                               |
| By:    |   | *                                     |   | Date:                April 30, 2007                |
|   |   | Martin                Willschick      |   |                                               |
|   |   |                                  |   |                                               |

| **Officers:** |
|---------------|

|   |   |                                                               |   |                                |
|--------|--------|--------------------------------------------------------------------|--------|-------------------------------------|
| By:    |   | /s/                S. Wilzig Izak                                  |   | Date:                April 30, 2007 |
|   |   | S.                Wilzig Izak                                      |   |                                |
|   |   | *Chairman                of the Board and Chief Executive Officer* |   |                                |
|   |   |                                                               |   |                                |
| By:    |   | /s/                Francis J. Elenio                               |   | Date:                April 30, 2007 |
|   |   | Francis                J. Elenio                                   |   |                                |
|   |   | *Chief                Financial Officer*                           |   |                                |

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**Exhibit      Index**

| **Exhibit                  #** |   | **Description**                                                                                                                                                                                                            |
|--------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |   |                                                                                                                                                                                                                       |
| 21                             |   | List                  of significant subsidiaries.                                                                                                                                                                         |
|                           |   |                                                                                                                                                                                                                       |
| 23.1                           |   | Consent                  of J.H. Cohn LLP, Independent Registered Public Accounting                  Firm.                                                                                                                 |
|                           |   |                                                                                                                                                                                                                       |
| 24                             |   | Power                  of attorney.                                                                                                                                                                                        |
|                           |   |                                                                                                                                                                                                                       |
| 31.1                           |   | Certification                  of the Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley                  Act of 2002.                                                                                      |
|                           |   |                                                                                                                                                                                                                       |
| 31.2                           |   | Certification                  of the Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley                  Act of 2002.                                                                                      |
|                           |   |                                                                                                                                                                                                                       |
| 32.1                           |   | Certification                  of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,                  as                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002. |
|                           |   |                                                                                                                                                                                                                       |
| 32.2                           |   | Certification                  of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,                  as                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002. |

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