UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D. C. 20549





FORM
10-K


(Mark
One)





x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES
      EXCHANGE ACT OF 1934




For the
fiscal year ended December 31, 2008




Or





o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES
      EXCHANGE ACT OF 1934




For the
transition period from ___________ to __________





Commission
file number 1-4673




WILSHIRE
ENTERPRISES, INC.


(Exact
name of registrant as specified in its charter)





Delaware
            
            84-0513668(State
      or other jurisdiction of
            
            (IRS
      Employerincorporation
      or organization)
            
            Identification
      No.)1
      Gateway CenterNewark,
      New Jersey
            
            07102(Address
      of principal executive offices)
            
            (Zip
      Code)





Registrant’s
telephone number, including area code:   (201) 420-2796





Securities
registered pursuant to section 12(b) of the Act:





Name
      of each exchangeTitle of each class
            
            on which registeredCommon
      Stock, $1 par value
            
            American
      Stock Exchange





Securities
registered pursuant to section 12(g) of the Act:





None


(Title of
each class)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   Yes  o  No  x





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.   Yes  o No x





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.   Yes x No o




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x








Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large
accelerated filer   o      
Accelerated filer   o      
Non-accelerated filer   x   Smaller
reporting company   o





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).


Yes 
o No x





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant computed by reference to the price at which the
common equity was last sold, or the average bid and asked price of such common
equity, as of the last business day of the registrant’s most recently completed
second fiscal quarter (June 30, 2008), was $14,519,000.





The
number of shares outstanding of the registrant’s $1 par value common stock, as
of March 19, 2009, was 8,051,248.







WILSHIRE
ENTERPRISES, INC.


INDEX




Page No.Part IItem
      1.
                                  Business
                                  3Item
      1A.
                                  Risk
      Factors
                                  7Item
      1B.
                                  Unresolved
      Staff Comments
                                  8Item
      2.
                                  Properties
                                  8Item
      3.
                                  Legal
      Proceedings
                                  10Item
      4.
                                  Submission
      of Matters to a Vote of Security Holders
                                  10Item
      4A.
                                  Executive
      Officers of the Registrant
                                  11Part IIItem
      5.
                                  Market
      for Registrant’s Common Equity, Related Stockholder
                                  12Matters
      and Issuer Purchases of Equity SecuritiesItem
      6.
                                  Selected
      Financial Data
                                  14Item
      7.
                                  Management’s
      Discussion and Analysis of Financial Conditionand
      Results of OperationItem
      7A.
                                  Quantitative
      and Qualitative Disclosures About Market Risk
                                  30Item
      8.
                                  Financial
      Statements and Supplementary Data
                                  31Item
      9.
                                  Changes
      in and Disagreements with Accountants on Accounting
                                  57and
      Financial DisclosureItem
      9A.
                                  Controls
      and Procedures
                                  57Item
      9B.
                                  Other
      Information
                                  57Part IIIItem
      10.
                                  Directors,
      Executive Officers and Corporate Governance
                                  58Item
      11.
                                  Executive
      Compensation
                                  58Item
      12.
                                  Security
      Ownership of Certain Beneficial Owners and Management
                                  58and
      Related Stockholder MattersItem
      13.
                                  Certain
      Relationships and Related Transactions, and Director
      Independence
                                  58Item
      14.
                                  Principal
      Accountant Fees and Services
                                  58Part IVItem
      15.
                                  Exhibits,
      Financial Statement Schedules
                                  59Signatures
                                  62


2





PART
I




Item 1.     Business





This
report contains “forward-looking statements” within the meaning of the federal
securities laws. These statements relate to future economic performance, plans
and objectives of management for future operations and projections of revenues
and other financial items that are based on the beliefs of our management, as
well as assumptions made by, and information currently available to, our
management. The words “expect,” “estimate,” “anticipate,” “believe” and similar
expressions are intended to identify forward-looking statements. Those
statements involve risks, uncertainties and assumptions, including industry and
economic conditions, competition and other factors discussed in this and our
other filings with the SEC. If one or more of these risks or uncertainties
materialize or underlying assumptions prove incorrect, actual outcomes could
vary materially from those indicated. We have made forward-looking statements in
Items 1, 2, 5, 7 and 7A of this report. See Item 1A “Risk Factors” for a
description of some of the important risk factors that may affect actual
outcomes.





Background





Wilshire
Enterprises, Inc. (“Wilshire” or the “Company”) is a Delaware corporation
founded on December 7, 1951. The Company changed its name from Wilshire Oil
Company of Texas to its current name on June 30, 2003. The Company’s principal
executive offices are located at 1 Gateway Center, Newark, New Jersey 07102. Its
main telephone number is (201) 420-2796. Wilshire maintains a website at www.wilshireenterprisesinc.com
..





Wilshire
is principally engaged in acquiring, owning and operating real estate
properties. As further described below, the Company currently owns multi-family
properties, office space, retail space, and land located in the states of
Arizona, Texas, and New Jersey.





On June
13, 2008, Wilshire entered into an Agreement and Plan of Merger with NWJ
Apartment Holdings Corp. and its wholly owned subsidiary, NWJ Acquisition Corp.
(“Merger Sub”), both of which are affiliates of NWJ Companies,
Inc.  The merger agreement provided that Merger Sub would merge with
and into the Company and each outstanding share of the Company’s common stock
would receive $3.88 in cash.  On December 3, 2008, the parties entered
into a Termination Agreement, which terminated the merger agreement, because NWJ
was not able to secure the financing required to close the merger.





After the
termination of the merger agreement and in light of declines in the real estate
market and the general economic downturn, management adopted a strategy,
described below under “Business Strategy,” to grow the Company and enhance
stockholder value.  The following additions were made to the Company’s
management team to spearhead these efforts:





Kevin B.
Swill was named President and COO, and a member of the Company’s Board of
Directors and the Board’s Strategic Planning Committee in December
2008.  Mr. Swill joined Wilshire after serving as president of
Westminster Capital, the financing arm of The Kushner Companies, a multi-billion
dollar real estate development and management company based in New York, and
president of Kushner Properties, which oversees an eight-million square foot
portfolio of office and industrial properties in New York, New Jersey and
Pennsylvania.





James M.
Orphanides was appointed to the Board in January 2009.  Mr. Orphanides
is former chairman, president and CEO of First American Title Insurance Company
of New York, the largest subsidiary of First American Title
Insurance.


3




Real
Estate Operations





Wilshire
is engaged principally in acquiring, owning and operating real estate
properties. As of December 31, 2008, Wilshire owned the properties described
below:





Name
                      
                      City
                      
                      State
                      
                      Asset
      Class
                      
                      SizeSunrise
      Ridge
                      
                      Tucson
                      
                      AZ
                      
                      Apartments
                      
                      340
      unitsVan
      Buren
                      
                      Tucson
                      
                      AZ
                      
                      Apartments
                      
                      70
      unitsRoyal
      Mall Plaza
                      
                      Mesa
                      
                      AZ
                      
                      Office
      & retail
                      
                      66,552
      SFTempe
      Corporate
                      
                      Tempe
                      
                      AZ
                      
                      Office
                      
                      50,700
      SFAlpine
      Village
                      
                      Sussex
                      
                      NJ
                      
                      Apartments
                      
                      132
      unitsJefferson
      Gardens
                      
                      Jefferson
                      
                      NJ
                      
                      Condominiums
                      
                      10
      unitsAmboy
      Tower
                      
                      Perth
      Amboy
                      
                      NJ
                      
                      Office
      & Retail
                      
                      75,000
      SFAlpine
      Village (a)
                      
                      Sussex
                      
                      NJ
                      
                      Land
                      
                      0.51
      acresAlpine
      Village (a)
                      
                      Wantage
                      
                      NJ
                      
                      Land
                      
                      17.32
      acresAlpine
      Village (a)
                      
                      Sussex
                      
                      NJ
                      
                      Land
                      
                      0.49
      acresAlpine
      Village (a)
                      
                      Sussex
                      
                      NJ
                      
                      Land
                      
                      0.22
      acresWest
      Orange
                      
                      West
      Orange
                      
                      NJ
                      
                      Land
                      
                      0.6
      acresSummercreek
                      
                      San
      Antonio
                      
                      TX
                      
                      Apartments
                      
                      180
      unitsWellington
      Estates
                      
                      San
      Antonio
                      
                      TX
                      
                      Apartments
                      
                      228
      units





(a)
      Alpine Village land parcels are adjacent to the Alpine Village
      Apartments.




Business
Strategy





Wilshire’s
strategy is to seize opportunities presented by the current chaos in the real
estate market.  In light of the decrease in value of real estate in
many parts of the United States, the Company is focused on making strategic
acquisitions to enhance stockholder value.  To that end, the Company’s
strategy is to:


·
            Strengthen
      Wilshire’s existing portfolio by making capital improvements to targeted
      properties, which management believes will help increase occupancy
      rates.


·
            Pursue
      off-market opportunities that provide acquisition opportunities at
      significant discounts.


·
            Purchase
      discounted loans, which can yield attractive returns on
      investment.


·
            Buy
      and hold multi-family properties at attractive
  prices.




Management
believes that prudent acquisitions of real estate assets will grow the Company
and enhance stockholder value.





The
Company would look to assets that offer attractive financial returns. In
general, it seeks multifamily properties with 100 units or more in strategic
geographic regions in which the Company or its contracted property management
company (see below) has or will have operations. However, the Company may
evaluate other asset classes such as office buildings, senior independent living
facilities, retail centers and real estate securities and other geographic
regions and may invest in one or more of these asset classes in lieu of a
multifamily property.





Wilshire’s
principal investment objective is to increase the net asset value of its
investment portfolio through effective management, growth, financing and
investment strategies. Wilshire is currently focused on optimizing the valuation
potential and cash flow from many of its assets, repositioning or selling select
assets, and potentially acquiring assets in targeted geographic regions. The
Company is also focused on increasing long-term growth in cash and cash
equivalents generated from operations. On May 4, 2006, the Company’s Board of
Directors declared a special cash dividend of $3.00 per common share that was
paid on June 29, 2006 to stockholders of record on May 25, 2006. In accordance
with the American Stock Exchange rules, the ex-dividend date was June 30, 2006.
The aggregate dividend amounted to $23,697,000. See Item 5 of this Annual Report
on Form 10-K.


4




Divestiture
of Assets





The
Company divested the following real estate properties in 2008:





TaxesName
      (State)
                                            (asset
      class)
                                          
                                          Date
      Sold
                                          
                                          Selling
      Price
                                          
                                          Net Book
                                            Value
                                          
                                          Mortgage
                                            Value
                                          
                                          Payable
                                            on Sale
                                          
                                          Net Proceeds
                                            (a)Jefferson
      Gardens (NJ)(1-bedroom
      condominium)
                                          
                                          1/28/2008
                                          
                                          $
                                          150,000
                                          
                                          $
                                          
                                          36,000
                                          
                                          $
                                          
                                          -
                                          
                                          $
                                          
                                          39,000
                                          
                                          $
                                          
                                          98,000Tamarac
      Office Plaza (FL)(26,990
      SF Office complex)
                                          
                                          5/23/2008
                                          
                                          $
                                          2,000,000
                                          
                                          $
                                          
                                          763,000
                                          
                                          $
                                          
                                          566,000
                                          
                                          $
                                          
                                          446,000
                                          
                                          $
                                          
                                          895,000Jefferson
      Gardens (NJ)(1-bedroom
      condominium)
                                          
                                          12/08/2008
                                          
                                          $
                                          154,000
                                          
                                          $
                                          
                                          39,000
                                          
                                          $
                                          
                                          -
                                          
                                          $
                                          
                                          39,000
                                          
                                          $
                                          
                                          100,000





(a)   Net proceeds is defined as
      selling price less mortgage value and transaction costs such as
      commissions, legal fees, taxes and other
  expenses.




Employees





As of
December 31, 2008, the Company had a total of seven employees in its corporate
office.





Property
Management





Wilshire
contracts with a property management company (the “PMC”) located in Phoenix,
Arizona to assist in the management of the Company’s properties, including
providing onsite personnel, regional supervision, and bookkeeping functions. The
PMC has managed nearly all of Wilshire’s properties located outside of New
Jersey since 1998. In January of 2005 Wilshire contracted with the PMC to assist
in the management of the Company’s New Jersey properties obligating the PMC to
provide onsite personnel and bookkeeping functions and regional supervision for
the New Jersey properties. Wilshire believes that the PMC can provide
cost-efficient bookkeeping functions in part because it is located in Arizona, a
state that generally has lower wage expense than that experienced in New Jersey.
As of December 31, 2008 the PMC employed 588 full time and 25 part time people
and managed property on behalf of Wilshire in the states of Arizona, New Jersey,
and Texas. To Wilshire’s knowledge, the PMC does not currently own real estate
assets for its own investment purposes. PMC has advised Wilshire that in 2008,
Wilshire accounted for approximately 7.2% of PMC’s total revenues.





Insurance





The
Company carries comprehensive property, general liability, fire, extended
coverage and rental loss insurance on all of its existing properties, with
policy specifications, insured limits and deductibles customarily carried for
similar properties. The Terrorism Risk Insurance Act of 2002 was signed into law
on November 26, 2002. The law provides that losses resulting from certified acts
of terrorism will be partially reimbursed by the United States after the
insurance company providing coverage pays a statutory deductible amount. The law
also requires that the insurance company offer coverage for terrorist acts for
an additional premium. We accepted the offer to include this coverage in our
property and casualty policies.





We
believe that our properties are adequately covered by insurance. There are,
however, some types of losses (such as losses arising from mold and acts of war)
that are not generally insured because they are either uninsurable or not
economically insurable. If an uninsured loss or a loss in excess of insured
limits occurs, we could lose our capital invested in a property, as well as the
anticipated future revenues from the property, and we would continue to be
obligated on any mortgage indebtedness or other obligations related to the
property. Any loss of that kind could materially adversely affect
us.





Competition





All of
the properties owned by the Company are in areas where there is substantial
competition with other multifamily properties, single-family housing that is
either owned or leased by potential tenants and other commercial properties. The
Company’s principal method of competition is to offer competitive rental rates.
In order to maintain occupancy rates and attract quality tenants, the Company
may offer rental concessions, such as free rent to new tenants for a stated
period. The Company also competes by offering properties in attractive locations
and providing residential and commercial tenants with amenities such as covered
parking, recreational facilities, garages and pleasant landscaping. The Company
intends to continue upgrading and improving the physical condition of its
existing properties and may consider selling existing properties, which the
Company believes have realized their potential.  The Company will be
re-investing in existing properties that may require renovation, resulting in
greater appreciation potential.


5





Environmental
Matters





The
Company believes that each of its properties is in compliance, in all material
respects, with federal, state and local regulations regarding hazardous waste
and other environmental matters and is not aware of any environmental
contamination at any of its properties that would require any material capital
expenditure by the Company for the remediation thereof. No assurance can be
given that environmental regulations will not, in the future, have a materially
adverse effect on the Company’s operations.





Investment
in Marketable Securities




In 2008
the Company held investments in certain marketable equity securities and
short-term marketable debt securities, including auction rate securities (“ARS”)
with interest rate resets ranging from every seven days to every 45 days. As of
December 31, 2008, the Company held $2.0 million of auction rate securities,
classified as available-for-sale. These securities were then valued at par and
subsequently redeemed in January 2009 at par. Available-for-sale securities are
carried at estimated fair value, based on available information. Consistent with
our policy, all ARS investments were rated at the time of purchase and at the
time of disposition AAA or the equivalent thereto.   Beginning in February
2008, with the liquidity issues in the global credit and capital markets, the
Company was informed that there was insufficient demand at auction for its ARS
investments. As a result, auctions for these securities began to fail and by
March 31, 2008, all normal market activity had essentially ceased. During the
second and third quarters of 2008, the Company sold $1.2 million and $250,000,
respectively, of its ARS at par value through successful redemptions. In
addition, during the second quarter of 2008, the Company sold $3.7 million of
its ARS in a private transaction for $3.3 million.  As a result of
this transaction, the Company recorded a $365,000 loss on the sale of these
securities in the second quarter of 2008.  During the fourth quarter
of 2008, as a result of a settlement between government entities and our
investment advisor, the Company was reimbursed for its $365,000
loss.    This reimbursement offset the loss,  and,
accordingly, no gain or loss is reflected on the Company’s consolidated
financial statements for the year ended December 31, 2008 for these
transactions.  The sale of the ARS in a private transaction was
considered a one-time transaction by the Company.


During
June 2008, the Company sold its investment of marketable equity securities which
consisted of common shares in one real estate company for gross proceeds of $1.3
million.  As a result of this sale, the Company recognized a loss from
the sale of securities of $188,000.





The
Company periodically reviews available-for-sale securities for impairment that
is other than temporary. At December 31, 2008 and 2007, no write down was
required to record other than temporary impairment of
securities.


6




Item 1A.   Risk Factors





In the
normal course of operating our business and executing our business strategies,
we are subject to several risks and uncertainties that could impede our ability
to achieve our goals, including the risks described below. If any of the
following risks actually occur, our financial condition and results of
operations and / or the market price of our common stock could be materially and
adversely affected.





Prolonged disruptions in the
financial markets could affect our ability to obtain financing on reasonable
terms and have other adverse effects on us and the market price of our common
stock.





Global
stock and credit markets have recently experienced significant price volatility,
dislocations and liquidity disruptions, which have caused market prices of many
stocks to fluctuate substantially and the spreads on prospective debt financings
to widen considerably. These circumstances have materially impacted
liquidity in the financial markets, making terms for certain financings less
attractive, and, in certain cases, have resulted in the unavailability of
certain types of financing. If these conditions persist, additional lending
institutions may be forced to exit markets such as repurchase lending, become
insolvent or further tighten their lending standards or increase the amount of
equity capital required to obtain financing, and in such event, could make it
more difficult for us to obtain financing on favorable terms or at all. Our
profitability will be adversely affected if we are unable to obtain
cost-effective financing for our investments. If the current downturn in the
stock or credit markets is prolonged, it may cause us to seek alternative
sources of potentially less attractive financing, and may require us to adjust
our business plan accordingly. These events in the stock and credit markets may
also make it more difficult or unlikely for us to raise capital through the
issuance of our common stock or preferred stock. These disruptions in the
financial markets also have had, and may continue to have, a material adverse
effect on the market value of our common stock and other adverse effects on us
or the economy generally.





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





We are
holding various properties that are available for sale. It is our intent to sell
such properties at a price that we have determined represents their intrinsic
value. However, there is no guarantee that a buyer will be found to purchase
such properties at prices we will set. In this event, our options include
continuing to operate the properties, with potentially significant capital
expenditures, or to reduce the selling price of the property.





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





Our
ability to operate our continuing real estate operations and sell our
discontinued operations are impacted by potential environmental issues
including: asbestos removal at certain properties, clean-up of spills from
leaking heating oil tanks, faulty sewerage treatment, disposal of cleaning,
painting and other potential contaminants and other items. Laws protecting the
environment typically are strictly enforced and carry with them substantial
monetary penalties for non-compliance. Any action by a federal or state agency
could result in substantial penalties and other enforcement measures which could
materially and adversely affect us.





Competition
in our markets limits rental income from tenants.





The
rental income that we may earn from our properties is limited to the local
market conditions where the properties are located. This impacts actual rent
that may be charged and concessions that may be granted to entice new tenants
and tenants renewing their leases to continue to occupy our
properties.





Certain
properties may require substantial capital expenditures to remain
competitive.





As our
properties age, they require capital expenditures to remain competitive in their
marketplaces. Such capital expenditures could be significant and could include
but are not limited to, roofing, replacement of boilers and air conditioning
equipment, paving of parking lots, painting of buildings.





Changes in marketconditions could adversely affect the
market price of our common stock.




As with
other publicly traded equity securities, the value of our common stock depends
on various market conditions which may change from time to time. Among the
market conditions that may affect the value of our common stock are the
following:




•
            the
      attractiveness of our equity securities in comparison to other equity
      securities, including securities issued by other real estate-based
      companies;•
            our
      financial performance; and•
            general
      stock and bond market
conditions.


7





The
market value of our common stock is based primarily upon the market’s perception
of our growth potential and our current and potential future earnings and cash
dividends. Consequently, our common stock may trade at prices that are higher or
lower than our book value per share of common stock. If our future earnings are
less than expected, it is likely that the market price of our common stock will
diminish.





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





Our
properties are concentrated in the Southwest, and New Jersey. A continuing or
prolonged decline in the economic environment in those areas of the country may
impact the ability of existing tenants to remain current on their rental
payments and our ability to attract qualified new tenants.




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





We are
susceptible to changes in interest rates. Increasing interest rates are
detrimental to our ability to raise capital for investment purposes at suitable
interest rates. Declining interest rates generally make home ownership more
affordable than renting for tenants and may cause vacancy rates at our
properties to increase. A continuing or prolonged decline in general economic
conditions may cause an increase in vacancy rates at our office and retail
properties.





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.





Government
regulations concerning zoning, property use, environmental regulations and
taxation, among other things, could affect our decisions to sell various
properties and to attempt to construct improvements to make the properties more
desirable for tenants and investors.




Item 1B.   Unresolved Staff
Comments





None.




Item 2.   Properties





The
executive and administrative office of the Company consists of approximately
4,000 square feet, located at 1 Gateway Center, Suite 1030, Newark, New Jersey.
Beginning on April 1, 2005, Wilshire leased this office pursuant to a five year
lease, with two renewal options of five years each. The base monthly rental is
$10,880.





The
following table provides summary information regarding the Company’s apartment
and condominium properties as of December 31, 2008.





Apartment Unit TypeName (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
                    
                    101,724Summercreek
      (TX)
                    
                    
                    3/29/01
                    
                    180
                    
                    
                    -
                    
                    84
                    
                    
                    96
                    
                    -
                    
                    
                    8.17
                    
                    142,452Sunrise
      Ridge (AZ)
                    
                    
                    10/24/97
                    
                    340
                    
                    
                    -
                    
                    144
                    
                    
                    196
                    
                    -
                    
                    
                    17.73
                    
                    291,674Van
      Buren (AZ)
                    
                    
                    6/11/98
                    
                    70
                    
                    
                    -
                    
                    42
                    
                    
                    28
                    
                    -
                    
                    
                    1.41
                    
                    81,404Wellington
      (TX)
                    
                    
                    7/30/98
                    
                    228
                    
                    
                    24
                    
                    60
                    
                    
                    116
                    
                    28
                    
                    
                    8.69
                    
                    214,744Condominiums:Jefferson
      Gardens (a)(b)
                    
                    
                    3/31/94
                    
                    10
                    
                    
                    -
                    
                    8
                    
                    
                    2
                    
                    -
                    
                    
                    -
                    
                    7,785




(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 10 units as of
      December 31, 2008.


8




The
following table provides summary information regarding the Company’s commercial
properties and vacant land as of December 31, 2008.





Name
      (State)
                  
                  Date Acquired
                  
                  Rentable Sq. Ft.
                  
                  AcreageOffice
      & Retail:Amboy
      Tower (NJ) (a)
                  
                  
                  3/31/98
                  
                  75,000Royal
      Mall Plaza (AZ)
                  
                  
                  3/31/94
                  
                  66,552Tempe
      Corporate (AZ)
                  
                  
                  12/31/92
                  
                  50,700Land:Alpine
      Village, Sussex (NJ) (a)
                  
                  
                  10/28/98
                  
                  -
                  
                  
                  0.51Alpine
      Village, Wantage (NJ) (a)
                  
                  
                  2/16/01
                  
                  -
                  
                  
                  17.32Alpine
      Village, Center Street, Sussex (NJ) (a)
                  
                  
                  6/13/07
                  
                  -
                  
                  
                  0.49Alpine
      Village, Unionville Ave., Sussex (NJ) (a)
                  
                  
                  11/26/07
                  
                  -
                  
                  
                  0.22West
      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.





Discontinued
operations contain properties that may have excellent cash flow or valuation
characteristics but may not be in a geographic region that is currently being
targeted by the Company. Discontinued operations include properties that either
are under contracts for sale or the Company has identified as properties
potentially for sale depending on market conditions, including Jefferson Gardens
(NJ), Amboy Tower (NJ), and the West Orange, New Jersey land parcels. The
Company may or may not sell some or all of such assets.





The
following table provides summary financial information for the Company’s
properties that are not carried as discontinued operations:





As of December 31, 2008
                  
                  
                  For the Year Ended December 31, 2008Name (State)
                  
                  Net Book
                    Value
                  
                  
                  Mortgage
                    Principal
                  
                  
                  Net
                    Operating
                    Income
                  
                  
                  Interest
                    Expense
                  
                  
                  Capital
                    ExpendituresApartments:Sunrise
      Ridge (AZ)
                  
                  $
                  5,057,000
                  
                  
                  $
                  9,838,000
                  
                  
                  $
                  1,114,000
                  
                  
                  $
                  580,000
                  
                  
                  $
                  77,000Van
      Buren (AZ)
                  
                  
                  1,517,000
                  
                  
                  
                  1,931,000
                  
                  
                  
                  223,000
                  
                  
                  
                  114,000
                  
                  
                  
                  2,000Summercreek
      (TX)
                  
                  
                  4,769,000
                  
                  
                  
                  3,893,000
                  
                  
                  
                  267,000
                  
                  
                  
                  315,000
                  
                  
                  
                  27,000Wellington
      (TX)
                  
                  
                  3,516,000
                  
                  
                  
                  4,046,000
                  
                  
                  
                  509,000
                  
                  
                  
                  239,000
                  
                  
                  
                  60,000Alpine
      Village (NJ)
                  
                  
                  3,013,000
                  
                  
                  
                  4,597,000
                  
                  
                  
                  466,000
                  
                  
                  
                  271,000
                  
                  
                  
                  13,000Office
      & Retail:Royal
      Mall Plaza (AZ)
                  
                  
                  1,264,000
                  
                  
                  
                  -
                  
                  
                  
                  275,000
                  
                  
                  
                  -
                  
                  
                  
                  -Tempe
      Corporate (AZ)
                  
                  
                  2,366,000
                  
                  
                  
                  3,540,000
                  
                  
                  
                  458,000
                  
                  
                  
                  199,000
                  
                  
                  
                  62,000Total:
                  
                  $
                  21,502,000
                  
                  
                  $
                  27,845,000
                  
                  
                  $
                  3,312,000
                  
                  
                  $
                  1,718,000
                  
                  
                  $
                  241,000


9




Item 3.     Legal Proceedings





Other
Matters





A
complaint was filed on August 8, 2008 in the Superior Court of New Jersey,
Chancery Division, Essex County, by Pennsylvania Avenue Funds as plaintiff
individually and on behalf of the public stockholders of the Company, in
connection with the proposed merger of the Company with a wholly-owned
subsidiary of NWJ Apartment Holdings Corp., an affiliate of NWJ Companies, Inc.,
a privately owned real estate development company.  The Company, its
directors, NWJ Apartment Holdings Corp. and NWJ Acquisition Corp. are named as
defendants.  The complaint alleges, among other things, three causes
of action:  (i) breach of fiduciary duty by the directors as a result
of their alleged failure to maximize shareholder value, (ii) breach of fiduciary
duty by the directors as a result of their alleged failure to disclose to the
Company’s stockholders all information material to the stockholder’s decision
about the merger and (iii) aiding and abetting by the NWJ entities of the
directors’ alleged breach of fiduciary duties.  The Company regards
the complaint as completely without merit. Although the parties had entered into
a Memorandum of Understanding, dated September 9, 2008 (the “MOU”) as a first
step toward a settlement of the litigation, the stipulation of settlement
contemplated by the MOU was never executed.  The contemplated
transaction with NWJ was never consummated, thus mooting the
litigation.  In February 2009, the plaintiff’s counsel applied for an
award of attorneys’ fees and expenses in the amount of $215,000, even though the
contemplated transaction with NWJ was never consummated and by the terms of the
MOU, the plaintiff was therefore not entitled to any attorneys’
fees.  Following oral argument on March 27, 2009, the court denied
plaintiff’s motion in its entirety.




On
December 5, 2008, the Company commenced litigation in the Superior Court of
New Jersey, Chancery Division, Essex County, against David Gorman, Kern,
Suslow Securities, Inc., KSS Capital Markets and Don Brenner for,
among other things, breach of a contract and the rescission of the
sale of approximately 6% of the Company’s shares from Mr. Brenner
to Bulldog Investors General Partnership ("Bulldog").  The
Company believes that Mr. Gorman, Kern, Suslow Securities, Inc. and KSS
Capital Markets breached a confidentiality agreement with the Company by trading
in the stock of the Company and/or facilitating the sale of Mr.
Brenner's shares to Bulldog in violation of that
agreement.  On December 30, 2008, the Company amended its
complaint to add Bulldog, Phillip Goldstein and Andrew Dakos as defendants
in the action.  On January 9, 2009, the Court issued an Order to Show
Cause temporarily enjoining and restraining Mr. Gorman, Kern, Suslow Securities,
Inc. and KSS Capital Markets from assisting any person in acquiring any
securities or assets of the Company, and from further violating the terms of
their confidentiality agreement with the Company.  The Court declined to
issue temporary restraints with respect to the approximately 6% of the
Company's shares that were sold from Mr. Brenner to Bulldog.  The Company's
application for a preliminary injunction is currently scheduled to be heard by
the Court on April 28, 2009.




Although
the Company cannot provide complete assurances regarding matters outside of
its control, the Company does not expect to incur any additional expenses
in connection with the preliminary investigation previously undertaken by
the Company and disclosed in its reports filed with the Securities and Exchange
Commission.





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





No
matters were submitted to a vote of security holders during the fourth quarter
of fiscal 2008.


10




Item 4A.   Executive Officers of the
Registrant





The
following table sets forth the name and age of each executive officer of the
Company. Each officer is appointed by the Company's Board of Directors. Unless
otherwise indicated, the persons named below have held the position indicated
for more than the past five years.





Name and Age
                  
                  Executive Officer of The
                    Company Since
                  
                  Position with the Company
                    and Business ExperienceS.
      Wilzig Izak, Age 50
                  
                  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 PresidentKevin
      B. Swill, Age 43
                  
                  December
      2008
                  
                  President,
      Chief Operating Officer since January 2009; President of Westminster
      Capital (financing arm of The Kushner Companies) from 2001 until September
      2008.Francis
      J. Elenio, Age 43
                  
                  September
      2006
                  
                  Chief
      Financial Officer, Secretary and Treasurer of the Company since September
      2006; Chief Financial Officer of Premier Wealth Management, Inc. since
      September 2007; 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)


11





PART
II




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





The
Company’s common stock is traded on the American Stock Exchange. The following
table indicates the high and low sales prices of the Company’s common stock for
the quarters indicated during the years ended December 31, 2008 and
2007:





Quarter
      1
                                                      
                                                      Quarter
      2
                                                      
                                                      Quarter
      3
                                                      
                                                      Quarter
      4High
                                                      
                                                      -
                                                      
                                                      Low
                                                      
                                                      High
                                                      
                                                      -
                                                      
                                                      Low
                                                      
                                                      High
                                                      
                                                      -
                                                      
                                                      Low
                                                      
                                                      High
                                                      
                                                      -
                                                      
                                                      Low2008
                                                      
                                                      $
                                                      3.71
                                                      
                                                      -
                                                      
                                                      2.50
                                                      
                                                      $
                                                      3.84
                                                      
                                                      -
                                                      
                                                      2.53
                                                      
                                                      $
                                                      3.80
                                                      
                                                      -
                                                      
                                                      2.88
                                                      
                                                      $
                                                      3.24
                                                      
                                                      -
                                                      
                                                      
                                                      .842007
                                                      
                                                      $
                                                      5.10
                                                      
                                                      -
                                                      
                                                      4.50
                                                      
                                                      $
                                                      5.95
                                                      
                                                      -
                                                      
                                                      4.90
                                                      
                                                      $
                                                      5.99
                                                      
                                                      -
                                                      
                                                      3.97
                                                      
                                                      $
                                                      4.35
                                                      
                                                      -
                                                      
                                                      
                                                      3.07




As of
March 23, 2009, there were 3,480 common shareholders of record.





On May 4,
2006, the Company’s Board of Directors declared a special cash dividend of $3.00
per common share that was paid on June 29, 2006 to stockholders of record on May
25, 2006. In accordance with the American Stock Exchange rules, the ex-dividend
date was June 30, 2006. The aggregate dividend amounted to $23,697,000. The
Company currently does not have a plan to pay any additional
dividends.





In June
2004, the Company’s Board of Directors authorized management to conduct a
buyback of up to 1,000,000 common shares. The authorization to repurchase common
shares has no expiration date and the Company has not determined when, or if,
the program will be discontinued. Under this authorization, the Company
conducted an odd-lot share repurchase program, which offered shareholders who
owned a small number of common shares the opportunity to sell their shares
without paying a broker’s commission. The Company also benefited under the
odd-lot share repurchase program by lowering its administrative costs through
the closing of approximately 1,900 shareholder accounts. Under the Board
authorization, the Company also allowed other shareholders the opportunity to
sell their shares to the Company. No shares were repurchased during the period
October 1, 2008 through December 31, 2008.


12




Equity
Compensation Plan Information





The
following table provides information as of December 31, 2008 with respect to
shares of the Company’s common stock that may be issued under the Company’s
existing equity compensation plans, which consist of the (i) 1995 Stock Option
and Incentive Plan, (ii) 1995 Non-Employee Director Stock Option Plan, (iii)
2004 Stock Option and Incentive Plan, and (iv) 2004 Non-Employee Director Stock
Option Plan, each of which has been approved by the Company’s
shareholders.





(a)
                          Number of
                          Securities To Be
                          Issued Upon
                          Exercise Of
                          Outstanding
                          Options, Warrants
                          and
      Rights
                        
                        (b)
                          Weighted
                          Average Exercise
                          Price Of
                          Outstanding
                          Options, Warrants
                          and
      Rights
                        
                        (c)
                          Number of
                          Securities
                          Remaining
                          Available
                          For Future
                          Issuance
                          Under Equity
                          Compensation
                          Plans
                          (Excluding
                          Securities
                          Reflected
                          In Column (a))Equity
      compensation plans approved by security holders
                        
                        130,000
                        
                        $
                        6.27
                        
                        580,424Equity
      compensation plans not approved by security holders
                        
                        -
                        
                        
                        -
                        
                        -Total
                        
                        130,000
                        
                        $
                        6.27
                        
                        580,424




Performance
Graph





The
following line graph compares the cumulative total stockholder return on our
common stock with the cumulative total return on the Russell 3000 Index and the
Standard & Poor’s Composite Index for the five years ended December 31,
2008.  The stock performance shown on the graph below is not
indicative of future price performance.  The graph is calculated
assuming that all dividends are reinvested during the relevant
periods.  The graph shows how a $100 investment would increase or
decrease in value over time, based on dividends and increases or decreases in
market price.





Company/Market/Index
                  
                  Fiscal
      Years Ended December 31,2003
                  
                  
                  2004
                  
                  
                  2005
                  
                  
                  2006
                  
                  
                  2007
                  
                  
                  2008Wilshire
      Enterprises, Inc.
                  
                  
                  100.00
                  
                  
                  
                  106.56
                  
                  
                  
                  127.70
                  
                  
                  
                  113.17
                  
                  
                  
                  81.33
                  
                  
                  
                  24.62Russell
      3000 Index
                  
                  
                  100.00
                  
                  
                  
                  110.08
                  
                  
                  
                  114.79
                  
                  
                  
                  130.62
                  
                  
                  
                  139.50
                  
                  
                  
                  85.52Standard
      & Poor’s Composite Index
                  
                  
                  100.00
                  
                  
                  
                  110.88
                  
                  
                  
                  116.33
                  
                  
                  
                  134.70
                  
                  
                  
                  142.10
                  
                  
                  
                  89.53


13











Item 6.     Selected Financial
Data





The
selected consolidated financial data for the Company for each of the five (5)
fiscal years in the period ended December 31, 2008 are derived from the
consolidated financial statements that have been audited. J.H. Cohn LLP, an
Independent Registered Public Accounting Firm, has reported upon the
consolidated financial statements as of and for the years ended December 31,
2008, 2007, 2006, 2005 and 2004.





The
following table sets forth the Company’s selected financial data and should be
read in conjunction with the Consolidated Financial Statements and notes thereto
included in Item 8, “Financial Statements and Supplementary Data” and Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in this Annual Report on Form 10-K.


14
  As
      of December 31,(In
      thousands)2008
                      
                      
                      2007
                      
                      
                      2006
                      
                      
                      2005
                      
                      
                      2004Balance
      Sheet Data at Year-End:Total
      assets
                      
                      $
                      43,343
                      
                      
                      $
                      45,384
                      
                      
                      $
                      46,915
                      
                      
                      $
                      88,915
                      
                      
                      $
                      86,916Long-term
      debt
                      
                      
                      27,845
                      
                      
                      
                      28,952
                      
                      
                      
                      29,618
                      
                      
                      
                      33,352
                      
                      
                      
                      46,855Stockholders'
      equity
                      
                      
                      11,976
                      
                      
                      
                      13,136
                      
                      
                      
                      13,923
                      
                      
                      
                      41,852
                      
                      
                      
                      28,474Weighted
      average shares outstanding:Basic
                      
                      
                      7,924
                      
                      
                      
                      7,922
                      
                      
                      
                      7,888
                      
                      
                      
                      7,864
                      
                      
                      
                      7,796Diluted
                      
                      
                      7,924
                      
                      
                      
                      7,922
                      
                      
                      
                      8,015
                      
                      
                      
                      7,966
                      
                      
                      
                      7,955




For
      the Year Ended December 31,(In
      thousands of dollars except per share amounts)2008
                  
                  
                  2007
                  
                  
                  2006
                  
                  
                  2005
                  
                  
                  2004Income
      Statement Data:Revenues
                  
                  $
                  9,203
                  
                  
                  $
                  9,420
                  
                  
                  $
                  8,834
                  
                  
                  $
                  8,186
                  
                  
                  $
                  8,114Costs
      and expenses:Operating
      expenses
                  
                  
                  5,892
                  
                  
                  
                  5,863
                  
                  
                  
                  5,275
                  
                  
                  
                  4,708
                  
                  
                  
                  4,441Depreciation
                  
                  
                  1,188
                  
                  
                  
                  1,368
                  
                  
                  
                  1,987
                  
                  
                  
                  1,215
                  
                  
                  
                  1,427General
      and administrative
                  
                  
                  3,816
                  
                  
                  
                  3,617
                  
                  
                  
                  2,475
                  
                  
                  
                  3,493
                  
                  
                  
                  2,143Total
      costs and expenses
                  
                  
                  10,896
                  
                  
                  
                  10,848
                  
                  
                  
                  9,737
                  
                  
                  
                  9,416
                  
                  
                  
                  8,011Dividend
      and interest income
                  
                  
                  415
                  
                  
                  
                  540
                  
                  
                  
                  836
                  
                  
                  
                  700
                  
                  
                  
                  685Sale
      of marketable securities
                  
                  
                  (188
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  134
                  
                  
                  
                  -Sale
      of real estate related assets
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  675
                  
                  
                  
                  -Other
      income
                  
                  
                  -
                  
                  
                  
                  36
                  
                  
                  
                  7
                  
                  
                  
                  32
                  
                  
                  
                  -Interest
      expense including amortization of deferred financing costs
                  
                  
                  (1,776
                  )
                  
                  
                  (1,837
                  )
                  
                  
                  (1,811
                  )
                  
                  
                  (1,911
                  )
                  
                  
                  (1,916
                  )Loss
      before provision for taxes
                  
                  
                  (3,242
                  )
                  
                  
                  (2,689
                  )
                  
                  
                  (1,871
                  )
                  
                  
                  (1,600
                  )
                  
                  
                  (1,128
                  )Income
      tax benefit
                  
                  
                  (1,343
                  )
                  
                  
                  (1,321
                  )
                  
                  
                  (829
                  )
                  
                  
                  (1,019
                  )
                  
                  
                  (409
                  )Loss
      from continuing operations
                  
                  
                  (1,899
                  )
                  
                  
                  (1,368
                  )
                  
                  
                  (1,042
                  )
                  
                  
                  (581
                  )
                  
                  
                  (719
                  )Discontinued
      operations - real estate
                  
                  
                  214
                  
                  
                  
                  176
                  
                  
                  
                  3,212
                  
                  
                  
                  8,577
                  
                  
                  
                  4,068Discontinued
      operations - oil & gas
                  
                  
                  324
                  
                  
                  
                  300
                  
                  
                  
                  115
                  
                  
                  
                  (1,105
                  )
                  
                  
                  (1,322
                  )Net
      income (loss)
                  
                  $
                  (1,361
                  )
                  
                  $
                  (892
                  )
                  
                  $
                  2,285
                  
                  
                  $
                  6,891
                  
                  
                  $
                  2,027Basic
      earnings (loss) per share:Continuing
      operations
                  
                  $
                  (0.24
                  )
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.13
                  )
                  
                  $
                  (0.07
                  )
                  
                  $
                  (0.09
                  )Discontinued
      operations
                  
                  
                  0.07
                  
                  
                  
                  0.06
                  
                  
                  
                  0.42
                  
                  
                  
                  0.95
                  
                  
                  
                  0.35Net
      income (loss) per share
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.11
                  )
                  
                  $
                  0.29
                  
                  
                  $
                  0.88
                  
                  
                  $
                  0.26Diluted
      earnings (loss) per share:Continuing
      operations
                  
                  $
                  (0.24
                  )
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.13
                  )
                  
                  $
                  (0.07
                  )
                  
                  $
                  (0.09
                  )Discontinued
      operations
                  
                  
                  0.07
                  
                  
                  
                  0.06
                  
                  
                  
                  0.41
                  
                  
                  
                  0.94
                  
                  
                  
                  0.34Net
      income (loss) per share
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.11
                  )
                  
                  $
                  0.28
                  
                  
                  $
                  0.87
                  
                  
                  $
                  0.25


15




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





In 2008,
Wilshire primarily engaged in the real estate business. During 2008, 2007 and
2006, the Company also conducted activities related to winding up its oil and
gas business which was sold in April 2004.





The real
estate business consists of residential and commercial properties in Arizona,
New Jersey and Texas. Within this portfolio of properties, certain properties
have been designated as being held for sale and have been classified as
discontinued operations. Discontinued operations contain properties that may
have excellent cash flow or valuation characteristics but that may be positioned
for sale at an optimal valuation or may not be in a geographic region that is
currently being targeted by the Company. The following discussion takes an
income statement approach and discusses the results of operations first for the
properties comprising “continuing operations” and then discusses the
discontinued operations.





The
assets comprising Wilshire’s oil and gas business were sold in April 2004,
effective March 1, 2004. Oil and gas operations for all periods presented in
this report have been classified as discontinued operations.





The
Company’s activities are reviewed and analyzed in the following discussion,
which should be read in conjunction with the financial statements and notes
contained in Item 8 of this Annual Report on Form 10-K. Certain statements in
this discussion may constitute “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements reflect Wilshire’s current expectations regarding future results of
operations, economic performance, financial condition and achievements of
Wilshire, and do not relate strictly to historical or current facts. Wilshire
has tried, wherever possible, to identify these forward looking statements by
using words such as “believe,” “expect,” “anticipate,” “intend,” “plan,”
“estimate,” or words of similar meaning. Although Wilshire believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, such statements are subject to risks and uncertainties,
which may cause the actual results to differ materially from those projected.
Such factors include, but are not limited to the risks described in Item 1A of
this Annual Report.





Critical
Accounting Policies





Pursuant
to the Securities and Exchange Commission (“SEC”) disclosure guidance for
“Critical Accounting Policies,” the SEC defines Critical Accounting Policies as
those that require the application of management’s most difficult, subjective,
or complex judgments, often because of the need to make estimates about the
effects of matters that are inherently uncertain and may change in subsequent
periods.





Wilshire’s
discussion and analysis of its financial condition and results of operations is
based upon Wilshire’s consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires Wilshire
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. Wilshire bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.


16





Impairment
of Property and Equipment





On a
periodic basis, the Company assesses whether there are any indicators that the
value of its real estate properties may be impaired. A property’s value is
considered impaired if management’s estimate of the aggregate future cash flows
(undiscounted and without interest charges) to be generated by the property is
less than the carrying value of the property. To the extent impairment has
occurred, the loss shall be measured as the excess of the carrying amount of the
property over the fair value of the property. The Company does not believe that
at December 31, 2008 or 2007 the value of any of its properties was
impaired.





Revenue
Recognition





Revenue
from real estate properties is recognized during the period in which the
premises is occupied and rent is due from tenants. For commercial properties,
rental revenue is recognized on a straight-line basis over the term of the
lease. The excess of rents recognized over amounts contractually due pursuant to
the underlying leases are included in accounts receivable. For residential
properties where lease agreements are almost exclusively for one-year terms,
rental revenue is recognized in accordance with the contractual terms of the
underlying leases. The Company follows a policy of aggressively pursuing its
rental tenants to ensure timely payment of amounts due. When a tenant becomes 30
days in arrears on paying rent, the amount is written-off and turned over to a
collection agency for action. Accordingly, no allowance for uncollectible
accounts is maintained for the Company’s real estate tenants.





Foreign
Operations





The
assets and liabilities of Wilshire’s substantially liquidated Canadian
subsidiary have been translated at year-end exchange rates. The related revenues
and expenses have been translated at average annual exchange rates. Translation
gains or losses are included in the Company’s results of
operations.





As a
result of the sale of the Canadian oil and gas assets in 2004, Wilshire provided
for at December 31, 2005 and paid during 2006, $2.1 million of United States
taxes. During 2005, the Company’s Canadian subsidiary declared and paid to
Wilshire dividends amounting to $11.5 million, resulting in the payment of
$576,000 of Canadian taxes. See Note 1 “Foreign Operations” of the Notes to the
Consolidated Financial Statements in Item 8 of this Annual Report on Form
10-K.





Stock-Based
Compensation





Wilshire
followed the disclosure-only provisions of Statement of Financial Accounting
Standards (“SFAS”) 123 and SFAS 148. In December 2004, the Financial Accounting
Standards Board (“FASB”) issued SFAS No. 123R, “Accounting for Stock-Based
Compensation.” The provisions of SFAS 123R were adopted commencing January 1,
2006. SFAS 123R establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or services. This
Statement focuses primarily on accounting for transactions in which an entity
obtains employee services in share-based payment transactions. SFAS 123R
requires that the fair value of such equity instruments be recognized as an
expense in the historical financial statements as services are performed. Prior
to SFAS 123R, only certain pro forma disclosures of fair value were required.
The adoption of this new accounting pronouncement did not have a material impact
on Wilshire’s consolidated financial statements with respect to previously
granted equity compensation.





Effects
of Recent Accounting Pronouncements




In
September 2006, the FASB issued SFAS No. 157, “Fair Value
Measurements” (“SFAS 157”), which defines fair value, establishes a framework
for measuring fair value in U.S. generally accepted accounting principles, and
expands disclosures about fair value measurements. SFAS 157 applies under other
accounting pronouncements that require or permit fair value measurements, the
FASB having previously concluded in those accounting pronouncements that fair
value is the relevant measurement attribute. SFAS 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. The Company’s adoption of SFAS 157 in
2008 did not have a material impact on its consolidated financial
statements.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities, Including an Amendment of FASB
Statement No. 115” (“SFAS 159”), which is effective for fiscal years
beginning after November 15, 2007. SFAS 159 permits entities to measure
eligible financial assets, financial liabilities and firm commitments at fair
value, on an instrument-by-instrument basis, that are otherwise not permitted to
be accounted for at fair value under other U.S. generally accepted accounting
principles. The fair value measurement election is irrevocable and subsequent
changes in fair value must be recorded in earnings. The Company’s adoption of
SFAS 159 in 2008 did not have a material impact on its consolidated financial
statements.


17




In
December 2007, the FASB issued SFAS No. 141 (R), “Business
Combinations” (“SFAS 141(R)”) and SFAS No. 160, “Noncontrolling Interests
in Consolidated Financial Statements” (“SFAS 160”). The standards are intended
to improve, simplify, and converge internationally the accounting for business
combinations and the reporting of noncontrolling interests in consolidated
financial statements. SFAS 141(R) requires the acquiring entity in a business
combination to recognize all (and only) the assets acquired and liabilities
assumed in the transaction; establishes the acquisition-date fair value as the
measurement objective for all assets acquired and liabilities assumed; and
requires the acquirer to disclose to investors and other users all of the
information they need to evaluate and understand the nature and financial effect
of the business combination. SFAS 141(R) is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after
December 15, 2008. SFAS 141(R) applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008.
Earlier adoption is prohibited.




SFAS 160
is designed to improve the relevance, comparability, and transparency of
financial information provided to investors by requiring all entities to report
noncontrolling (minority) interests in subsidiaries in the same way—as equity in
the consolidated financial statements. Moreover, SFAS 160 eliminates the
diversity that currently exists in accounting for transactions between an entity
and noncontrolling interests by requiring they be treated as equity
transactions. SFAS 160 is effective for fiscal years, and interim periods within
those fiscal years, beginning on or after December 15, 2008. Earlier
adoption is prohibited. In addition, SFAS 160 shall be applied prospectively as
of the beginning of the fiscal year in which it is initially applied, except for
the presentation and disclosure requirements. The presentation and disclosure
requirements shall be applied retrospectively for all periods presented. The
Company does not have an outstanding noncontrolling interest in one or more
subsidiaries and therefore, SFAS 160 is not applicable to the Company at this
time.




In April
2008, the FASB issued FASB Staff Position ("FSP") FAS 142-3, "Determination of
Useful Life of Intangible Assets" ("FSP FAS 142-3"). FSP FAS 142-3 amends the
factors that should be considered in developing the renewal or extension
assumptions used to determine the useful life of a recognized intangible asset
under SFAS 142, "Goodwill and Other Intangible Assets." FSP FAS 142-3 also
requires expanded disclosure related to the determination of intangible asset
useful lives. FSP FAS 142-3 is effective for fiscal years beginning after
December 15, 2008. Earlier adoption is not permitted. The Company does not
expect FSP FAS 142-3 to have a material impact on its consolidated financial
statements.





In
May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally
Accepted Accounting Principles” (“SFAS 162”). SFAS 162 is effective 60 days
following the SEC’s approval of the Public Company Accounting Oversight Board
Auditing amendments to AU Section, 411 “The Meaning of‘Present Fairly in
Conformity with Generally Accepted Accounting Principles’”. The statement is
intended to improve financial reporting by identifying a consistent hierarchy
for selecting accounting principles to be used in preparing financial statements
that are presented in conformity with accounting principles generally accepted
in the United States of America (“GAAP”). The Company has not completed its
evaluation of the effects, if any, that SFAS 162 may have on its
consolidated financial position, results of operations and cash
flows.


18




Results
of Operations





The
following table presents the increases (decreases) in each major statement of
income category for the year ended December 31, 2008 (“2008”) compared with the
year ended December 31, 2007 (“2007”) and 2007 compared with the year ended
December 31, 2006 (“2006”).





Increase
      (Decrease) in Consolidated Statementsof
      Operations Categories for the Periods:2008
      v. 2007
                                                            
                                                            2007
      v. 2006Amount
      ($)
                                                            
                                                            %
                                                            
                                                            Amount
      ($)
                                                            
                                                            %Revenues
                                                            
                                                            $
                                                            (217,000
                                                            )
                                                            
                                                            (2.3
                                                            )%
                                                            $
                                                            586,000
                                                            
                                                            
                                                            6.6
                                                            %Costs
      and expenses:Operating
      expenses
                                                            
                                                            
                                                            29,000
                                                            
                                                            
                                                            0.5
                                                            %
                                                            
                                                            588,000
                                                            
                                                            
                                                            11.1
                                                            %Depreciation
                                                            
                                                            
                                                            (180,000
                                                            )
                                                            
                                                            (13.2
                                                            )%
                                                            
                                                            (619,000
                                                            )
                                                            
                                                            (31.2
                                                            )%General
      and administrative
                                                            
                                                            
                                                            199,000
                                                            
                                                            
                                                            5.5
                                                            %
                                                            
                                                            1,142,000
                                                            
                                                            
                                                            46.1
                                                            %Total
      costs and expenses
                                                            
                                                            
                                                            48,000
                                                            
                                                            
                                                            0.4
                                                            %
                                                            
                                                            1,111,000
                                                            
                                                            
                                                            11.4
                                                            %Loss
      from Operations
                                                            
                                                            
                                                            (265,000
                                                            )
                                                            
                                                            18.6
                                                            %
                                                            
                                                            (525,000
                                                            )
                                                            
                                                            58.1
                                                            %Other
      IncomeDividend
      and interest income
                                                            
                                                            
                                                            (125,000
                                                            )
                                                            
                                                            (23.1
                                                            )%
                                                            
                                                            (296,000
                                                            )
                                                            
                                                            (35.4
                                                            )%Sale
      of marketable securities
                                                            
                                                            
                                                            (188,000
                                                            )
                                                            
                                                            -
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            -Other
      income
                                                            
                                                            
                                                            (36,000
                                                            )
                                                            
                                                            (100.0
                                                            )%
                                                            
                                                            29,000
                                                            
                                                            
                                                            414.3
                                                            %Interest
      expense
                                                            
                                                            
                                                            61,000
                                                            
                                                            
                                                            (3.3
                                                            )%
                                                            
                                                            (26,000
                                                            )
                                                            
                                                            (1.4
                                                            )%Loss
      before provision for taxes
                                                            
                                                            
                                                            (553,000
                                                            )
                                                            
                                                            20.6
                                                            %
                                                            
                                                            (818,000
                                                            )
                                                            
                                                            43.7
                                                            %Income
      tax benefit
                                                            
                                                            
                                                            (22,000
                                                            )
                                                            
                                                            1.7
                                                            %
                                                            
                                                            (492,000
                                                            )
                                                            
                                                            59.3
                                                            %Loss
      from continuing operations
                                                            
                                                            
                                                            (531,000
                                                            )
                                                            
                                                            38.8
                                                            %
                                                            
                                                            (326,000
                                                            )
                                                            
                                                            31.3
                                                            %Discontinued
      operations - real estateLoss
      from operations
                                                            
                                                            
                                                            (80,000
                                                            )
                                                            
                                                            15.6
                                                            %
                                                            
                                                            509,000
                                                            
                                                            
                                                            (49.9
                                                            )%Gain
      from sales
                                                            
                                                            
                                                            118,000
                                                            
                                                            
                                                            17.2
                                                            %
                                                            
                                                            (3,545,000
                                                            )
                                                            
                                                            (83.7
                                                            )%Discontinued
      operations - oil & gas
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            -Loss
      from operations
                                                            
                                                            
                                                            24,000
                                                            
                                                            
                                                            8.0
                                                            %
                                                            
                                                            185,000
                                                            
                                                            
                                                            160.9
                                                            %Net
      loss
                                                            
                                                            $
                                                            (469,000
                                                            )
                                                            
                                                            (52.6
                                                            )%
                                                            $
                                                            (3,177,000
                                                            )
                                                            
                                                            (139.0
                                                            )%Basic
      earnings (loss) per share:Loss
      from continuing operations
                                                            
                                                            $
                                                            (0.07
                                                            )
                                                            
                                                            41.2
                                                            %
                                                            $
                                                            (0.04
                                                            )
                                                            
                                                            30.8
                                                            %Income
      from discontinued operations
                                                            
                                                            
                                                            0.01
                                                            
                                                            
                                                            16.7
                                                            %
                                                            
                                                            (0.36
                                                            )
                                                            
                                                            (85.7
                                                            )%Net
      income (loss) applicable to common stockholders
                                                            
                                                            $
                                                            (0.06
                                                            )
                                                            
                                                            54.5
                                                            %
                                                            $
                                                            (0.40
                                                            )
                                                            
                                                            (137.9
                                                            )%Diluted
      earnings (loss) per share:Loss
      from continuing operations
                                                            
                                                            $
                                                            (0.07
                                                            )
                                                            
                                                            41.2
                                                            %
                                                            $
                                                            (0.04
                                                            )
                                                            
                                                            30.8
                                                            %Income
      from discontinued operations
                                                            
                                                            
                                                            0.01
                                                            
                                                            
                                                            16.7
                                                            %
                                                            
                                                            (0.35
                                                            )
                                                            
                                                            (85.4
                                                            )%Net
      income (loss) applicable to common stockholders
                                                            
                                                            $
                                                            (0.06
                                                            )
                                                            
                                                            54.5
                                                            %
                                                            $
                                                            (0.39
                                                            )
                                                            
                                                            (139.3
                                                            )%


19





Results
of Operations - For the year ended December 31, 2008 as compared to the year
ended December 31, 2007





Overview





Net loss
for the year ended December 31, 2008 was $1,361,000 or $0.17 per basic and
diluted share, an increase of $469,000 from a net loss of $892,000 or $0.11 per
basic and diluted share for the year ended December 31, 2007. Results of
operations are shown as continuing and discontinued, with discontinued
operations comprised of the results of operations from the Company’s oil and gas
businesses, the results of the sale of the oil and gas properties, the operating
results from real estate properties held for sale and the gain from real estate
properties held for sale that were sold during the year.





Continuing
Operations:





Loss from
continuing operations was $1,899,000 during 2008 as compared to a loss of
$1,368,000 during 2007. Results per basic and diluted share from continuing
operations were $(0.24) for the year ended December 31, 2008 as compared to
$(0.17) per basic and diluted share during 2007. The increased loss from
continuing operations during 2008 as compared to 2007 primarily relates to an
increase in general and administrative expense of $199,000, a decrease in
dividend and interest income of $125,000 and a loss on the sale of marketable
securities of $188,000 during the year end December 31, 2008.





Reported
loss from continuing operations in 2008 compared with 2007 reflects an increased
loss from operations (defined as revenues reduced by operating expenses,
depreciation and general and administrative expenses), that was partially offset
by the other factors described herein. These factors are discussed
below.




Segment
Information





Wilshire
presently conducts business in the residential (including condominiums that it
owns and rents) and commercial real estate segments. The following table sets
forth comparative data for Wilshire’s real estate segments in continuing
operations.





Residential
      Real Estate
                                                                                  
                                                                                  
                                                                                  Commercial
      Real Estate
                                                                                  
                                                                                  Total
                                                                                  
                                                                                  TotalYear
      ended
                                                                                  
                                                                                  Increase
                                                                                  
                                                                                  
                                                                                  Year
      ended
                                                                                  
                                                                                  Increase
                                                                                  
                                                                                  Year
      ended
                                                                                  
                                                                                  IncreaseDecember
      31,
                                                                                  
                                                                                  (Decrease)
                                                                                  
                                                                                  
                                                                                  December
      31,
                                                                                  
                                                                                  (Decrease)
                                                                                  
                                                                                  December
      31,
                                                                                  
                                                                                  (Decrease)2008
                                                                                  
                                                                                  2007
                                                                                  
                                                                                  $
                                                                                  
                                                                                  %
                                                                                  
                                                                                  
                                                                                  2008
                                                                                  
                                                                                  2007
                                                                                  
                                                                                  $
                                                                                  
                                                                                  %
                                                                                  
                                                                                  2008
                                                                                  
                                                                                  2007
                                                                                  
                                                                                  $
                                                                                  
                                                                                  %(In
      000's of $)
                                                                                  
                                                                                  
                                                                                  
                                                                                  
                                                                                  
                                                                                  
                                                                                  (In
      000's of $)
                                                                                  
                                                                                  
                                                                                  
                                                                                  
                                                                                  
                                                                                  (In
      000's of $)Total
      revenues
                                                                                  
                                                                                  $
                                                                                  7,770
                                                                                  
                                                                                  $
                                                                                  7,765
                                                                                  
                                                                                  $
                                                                                  5
                                                                                  
                                                                                  
                                                                                  0.1
                                                                                  %
                                                                                  
                                                                                  $
                                                                                  1,433
                                                                                  
                                                                                  $
                                                                                  1,655
                                                                                  
                                                                                  $
                                                                                  (222
                                                                                  )
                                                                                  
                                                                                  (13.4
                                                                                  )%
                                                                                  $
                                                                                  9,203
                                                                                  
                                                                                  $
                                                                                  9,420
                                                                                  
                                                                                  $
                                                                                  (217
                                                                                  )
                                                                                  
                                                                                  (2.3
                                                                                  )%Operating
      expenses
                                                                                  
                                                                                  
                                                                                  5,192
                                                                                  
                                                                                  
                                                                                  5,174
                                                                                  
                                                                                  
                                                                                  18
                                                                                  
                                                                                  
                                                                                  0.3
                                                                                  %
                                                                                  
                                                                                  
                                                                                  700
                                                                                  
                                                                                  
                                                                                  689
                                                                                  
                                                                                  
                                                                                  11
                                                                                  
                                                                                  
                                                                                  1.6
                                                                                  %
                                                                                  
                                                                                  5,892
                                                                                  
                                                                                  
                                                                                  5,863
                                                                                  
                                                                                  
                                                                                  29
                                                                                  
                                                                                  
                                                                                  0.5
                                                                                  %Net
      operating income
                                                                                  
                                                                                  $
                                                                                  2,578
                                                                                  
                                                                                  $
                                                                                  2,591
                                                                                  
                                                                                  $
                                                                                  (13
                                                                                  )
                                                                                  
                                                                                  (.0.5
                                                                                  )%
                                                                                  
                                                                                  $
                                                                                  733
                                                                                  
                                                                                  $
                                                                                  966
                                                                                  
                                                                                  $
                                                                                  (233
                                                                                  )
                                                                                  
                                                                                  (24.1
                                                                                  )%
                                                                                  $
                                                                                  3,311
                                                                                  
                                                                                  $
                                                                                  3,557
                                                                                  
                                                                                  $
                                                                                  (246
                                                                                  )
                                                                                  
                                                                                  (6.9
                                                                                  )%





Reconciliation
      to consolidated loss from continuing operations:Net
      operating income
                
                $
                3,311
                
                
                $
                3,557Depreciation
      expense
                
                
                (1,188
                )
                
                
                (1,368
                )General
      and administrative expense
                
                
                (3,816
                )
                
                
                (3,617
                )Other
      income
                
                
                227
                
                
                
                576Interest
      expense
                
                
                (1,776
                )
                
                
                (1,837
                )Income
      tax benefit
                
                
                1,343
                
                
                
                1,321Loss
      from continuing operations
                
                $
                (1,899
                )
                
                $
                (1,368
                )


20





The above
table details the comparative net operating income (“NOI”) for Wilshire’s
residential and commercial real estate segments, and reconciles the combined NOI
to consolidated loss from continuing operations. NOI is based on operating
revenue and expenses directly associated with the operations of the real estate
properties, but excludes depreciation and interest expense. Wilshire assesses
and measures segment operating results based on NOI, which is a direct measure
of each property’s contribution to the results of the Company before considering
revenues from treasury activities, overhead expenses and other costs that are
not directly related to the performance of a property. The Company believes NOI
is a more descriptive measure of the Company’s performance than loss from
continuing operations. NOI is not a measure of operating results or cash flow as
measured by accounting principles generally accepted in the United States of
America and is not necessarily indicative of cash available to fund cash needs
and should not be considered an alternative to cash flows as a measure of
liquidity.





Residential
Segment





The
residential segment is comprised of Sunrise Ridge Apartments and Van Buren
Apartments, both in Arizona, Wellington Estates and Summercreek Apartments, both
in Texas, and Alpine Village Apartments in New Jersey. During 2008, NOI
decreased by $13,000 or .5% to $2,578,000 as a result of an increase in
operating expenses of $18,000 or .4% to $5,192,000 which was partially offset by
an increase in revenues of $5,000 or .1% to $7,770,000.





The
increase in revenues primarily relates to an overall increase in rental rates.
Significant and successful efforts have been made at the Texas and New Jersey
properties to increase occupancy and related revenues. The Arizona properties
were impacted by the economic downturn in 2008.  Vacancy levels
increased in Arizona, while supplemental revenues decreased due to the inability
to collect early lease termination fees.





The
increase in operating expenses related to the residential properties in Texas
and New Jersey and was related to occupancy turnover and required repairs to
these properties.  The reduced costs at the Arizona properties are a
result of costs controls and reduced revenues which had a direct impact on
operating expenses.  All residential properties experienced reduced
insurance costs during 2008 as a result of effective risk management control at
the properties.





Commercial
Segment





The
commercial segment is comprised of Royal Mall Plaza in Mesa, Arizona and Tempe
Corporate Center in Tempe, Arizona. During 2008, NOI decreased $233,000 or 24.1%
to $733,000, primarily due to a decrease in revenues of $222,000 or 13.4% to
$1,433,000 and a slight increase in operating expenses of $11,000 or 1.6% to
$700,000.  The revenue decrease was attributable to a $133,000
decrease in revenue at Royal Mall (Arizona) and an $89,000 decrease at Tempe
Corporate Center (Arizona).  The decrease in revenue is directly
related to increased vacancy levels during part of 2008 as compared to 2007, as
well as the impact of tenant space reductions.




Revenues





Years
      Ended December 31,
                  
                  
                  Increase2008
                  
                  
                  2007
                  
                  
                  (Decrease)Sunrise
      Ridge, Arizona
                  
                  $
                  2,732,000
                  
                  
                  $
                  2,870,000
                  
                  
                  $
                  (138,000
                  )Van
      Buren Apartments, Arizona
                  
                  
                  655,000
                  
                  
                  
                  662,000
                  
                  
                  
                  (7,000
                  )Wellington
      Estates, Texas
                  
                  
                  1,825,000
                  
                  
                  
                  1,775,000
                  
                  
                  
                  50,000Alpine
      Village, New Jersey
                  
                  
                  1,394,000
                  
                  
                  
                  1,327,000
                  
                  
                  
                  67,000Summercreek,
      Texas
                  
                  
                  1,164,000
                  
                  
                  
                  1,131,000
                  
                  
                  
                  33,000Sub-total
      - Residential Properties
                  
                  
                  7,770,000
                  
                  
                  
                  7,765,000
                  
                  
                  
                  5,000Royal
      Mall Plaza, Arizona
                  
                  
                  577,000
                  
                  
                  
                  710,000
                  
                  
                  
                  (133,000
                  )Tempe
      Corporate Center, Arizona
                  
                  
                  856,000
                  
                  
                  
                  945,000
                  
                  
                  
                  (89,000
                  )Sub-total-
      Commercial Properties
                  
                  
                  1,433,000
                  
                  
                  
                  1,655,000
                  
                  
                  
                  (222,000
                  )Total
      Revenues
                  
                  $
                  9,203,000
                  
                  
                  $
                  9,420,000
                  
                  
                  $
                  (217,000
                  )


21




Revenues
from rental properties amounted to $9,203,000 in 2008, a decrease of $217,000 or
2.3%, from $9,420,000 in 2007. The decrease during 2008 is attributable to
Sunrise Ridge Apartments, which had a decrease in rental revenues of $138,000 or
4.8%, Royal Mall Plaza, which had a decrease in rental income of $133,000 or
18.7% and Tempe Corporate Center which had a decrease in rental income of
$89,000 or 9.4%, which was partially offset by increased rental income at Alpine
Village which experienced a $67,000 increase in rental income or 5.0%,
Wellington Estates, which had an increase in rental income of $50,000 or 2.8%
and Summercreek, which had an increase in rental income of $33,000 or
2.9%.





Operating
Expenses





Years
      Ended December 31,
                      
                      
                      Increase2008
                      
                      
                      2007
                      
                      
                      (Decrease)Sunrise
      Ridge, Arizona
                      
                      $
                      1,619,000
                      
                      
                      $
                      1,627,000
                      
                      
                      $
                      (8,000
                      )Van
      Buren Apartments, Arizona
                      
                      
                      433,000
                      
                      
                      
                      453,000
                      
                      
                      
                      (20,000
                      )Wellington
      Estates, Texas
                      
                      
                      1,316,000
                      
                      
                      
                      1,303,000
                      
                      
                      
                      13,000Alpine
      Village, New Jersey
                      
                      
                      927,000
                      
                      
                      
                      914,000
                      
                      
                      
                      13,000Summercreek,
      Texas
                      
                      
                      897,000
                      
                      
                      
                      877,000
                      
                      
                      
                      20,000Sub-total
      - Residential Properties
                      
                      
                      5,192,000
                      
                      
                      
                      5,174,000
                      
                      
                      
                      18,000Royal
      Mall Plaza, Arizona
                      
                      
                      301,000
                      
                      
                      
                      300,000
                      
                      
                      
                      1,000Tempe
      Corporate Center, Arizona
                      
                      
                      399,000
                      
                      
                      
                      389,000
                      
                      
                      
                      10,000Sub-total-
      Commercial Properties
                      
                      
                      700,000
                      
                      
                      
                      689,000
                      
                      
                      
                      11,000Total
      Operating Expenses
                      
                      $
                      5,892,000
                      
                      
                      $
                      5,863,000
                      
                      
                      $
                      29,000





Operating
expenses were $5,892,000 in 2008, which is an increase of $29,000 or .5% as
compared to $5,863,000 during 2007. The overall increase in operating expenses
during 2008 was primarily related to professional fees associated with
collections and lease transactions at our residential properties.





Depreciation
expense amounted to $1,188,000 in 2008, a decrease of $180,000 or 13.2% as
compared to $1,368,000 during 2007. The decrease relates to fully depreciated
assets in 2008.




General
and administrative expense increased $199,000, or 5.5%, to $3,816,000 in 2008 as
compared to $3,617,000 during 2007. This increase was primarily the result of
the legal costs associated with the proposed sale of the Company which was
partially offset by a decrease in personnel related costs.





Other
income decreased by $349,000 to $227,000 in 2008 as compared to $576,000 in
2007. The decrease primarily relates to a decline in interest and dividend
income as a result of the declining interest rates during 2008.





Interest
expense decreased to $1,776,000 in 2008 from $1,837,000 during 2007. The
decrease primarily relates to the reduction in the Company’s mortgage liability
and the payoff of the mortgage on the Tamarac Office Plaza which was sold in May
2008.  In addition, during 2008 the interest rate on the mortgage at
Tempe Corporate Center experienced a one-time rate adjustment which resulted in
a reduction in interest expense of $41,000 on this property as compared to
2007.  The current interest rate on the Tempe Corporate Center
mortgage will be maintained until maturity.




The
provision for income taxes amounted to a tax benefit of $1,343,000 in 2008
compared to a tax benefit of $1,321,000 during 2007. The change in the provision
for income taxes is related to the level of loss from continuing operations in
2008 compared to 2007.





Discontinued
Operations, Net of Taxes:





Real
Estate





Income
from discontinued operations amounted to after tax income of $214,000 during
2008 and $176,000 during 2007. The income during the 2008 period reflects the
sale of two condominium units at Jefferson Gardens and the sale of the Tamarac
Office Plaza resulting in gross proceeds of $2.3 million and after tax gain of
$806,000.


22





The loss
on operating discontinued real estate properties increased to $592,000 during
2008 from $512,000 during 2007. The increased loss is primarily attributable to
the operating losses at the Company’s office building in Perth Amboy, New Jersey
where many units were left vacant in anticipation of the sale of the
Company.





Oil
and Gas





The
Company announced in July 2003 its intention to sell its oil and gas businesses.
The Canadian oil and gas business was sold in April 2004 to Addison Energy Inc.,
a wholly owned subsidiary of Exco Resources, Inc., for $15 million in gross
proceeds. The United States oil and gas business was sold in April 2004 to Crow
Creek Energy LLC, a Tulsa, Oklahoma based privately held portfolio company of
Natural Gas Partners of Dallas, Texas, for $13.3 million in gross proceeds.
During 2008, the Company recognized after-tax income from the wind down of its
former oil and gas business, of $324,000 as compared to $300,000 during 2007.
The net income from the wind down of the oil and gas business during 2008 and
2007 relates to a foreign currency gain and interest income during the
years.


23





Results
of Operations - For the year ended December 31, 2007 as compared to the year
ended December 31, 2006





Overview





Net loss
for the year ended December 31, 2007 was $892,000 or $0.11 per basic and diluted
share, a decrease of $3,177,000 from net income of $2,285,000 or $0.28 per
diluted share for the year ended December 31, 2006. Results of operations are
shown as continuing and discontinued, with discontinued operations comprised of
the results of operations from the Company’s oil and gas businesses, the results
of the sale of the oil and gas properties, the operating results from real
estate properties held for sale and the gain from real estate properties held
for sale that were sold during the year.





Continuing
Operations:





Loss from
continuing operations was $1,368,000 during 2007 as compared to a loss of
$1,042,000 during 2006. Results per diluted share from continuing operations
were $(0.17) for the year ended December 31, 2007 as compared to $(0.13) per
diluted share during 2006. The increased loss from continuing operations during
2007 as compared to 2006 primarily relates to an increase in general and
administrative expense of $1,142,000, which primarily relates to certain legal
costs, which amounted to $569,000 during 2007, and professional fees incurred in
connection with negotiating merger agreements with potential bidders, which
amounted to $367,000, which was partially offset by a decrease in personnel
related costs, and a decrease in depreciation expense of $619,000 related to the
reclassification of Alpine Village Apartments, New Jersey, Summercreek
Apartments, Texas and Wellington Estates, Texas, into continuing operations from
discontinued operations during the second quarter of 2006.





Reported
loss from continuing operations in 2007 compared with 2006 reflects an increased
loss from operations (defined as revenues reduced by operating expenses,
depreciation and general and administrative expenses), that was partially offset
by the other factors described herein. These factors are discussed
below.


Segment
Information





Wilshire
presently conducts business in the residential (including condominiums that it
owns and rents) and commercial real estate segments. The following table sets
forth comparative data for Wilshire’s real estate segments in continuing
operations.




Residential
      Real Estate
                                                                          
                                                                          
                                                                          Commercial
      Real Estate
                                                                          
                                                                          
                                                                          Total
                                                                          
                                                                          TotalYear
      ended
                                                                          
                                                                          Increase
                                                                          
                                                                          
                                                                          Year
      ended
                                                                          
                                                                          Increase
                                                                          
                                                                          
                                                                          Year
      ended
                                                                          
                                                                          IncreaseDecember
      31,
                                                                          
                                                                          (Decrease)
                                                                          
                                                                          
                                                                          December
      31,
                                                                          
                                                                          (Decrease)
                                                                          
                                                                          
                                                                          December
      31,
                                                                          
                                                                          (Decrease)2007
                                                                          
                                                                          2006
                                                                          
                                                                          $
                                                                          
                                                                          %
                                                                          
                                                                          
                                                                          2007
                                                                          
                                                                          2006
                                                                          
                                                                          $
                                                                          
                                                                          %
                                                                          
                                                                          
                                                                          2007
                                                                          
                                                                          2006
                                                                          
                                                                          $
                                                                          
                                                                          %(In
      000's of $)
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          (In
      000's of $)
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          
                                                                          (In
      000's of $)Total
      revenues
                                                                          
                                                                          $
                                                                          7,765
                                                                          
                                                                          $
                                                                          7,387
                                                                          
                                                                          $
                                                                          378
                                                                          
                                                                          
                                                                          5.1
                                                                          %
                                                                          
                                                                          $
                                                                          1,655
                                                                          
                                                                          $
                                                                          1,447
                                                                          
                                                                          $
                                                                          208
                                                                          
                                                                          
                                                                          14.4
                                                                          %
                                                                          
                                                                          $
                                                                          9,420
                                                                          
                                                                          $
                                                                          8,834
                                                                          
                                                                          $
                                                                          586
                                                                          
                                                                          
                                                                          6.6
                                                                          %Operating
      expenses
                                                                          
                                                                          
                                                                          5,174
                                                                          
                                                                          
                                                                          4,572
                                                                          
                                                                          
                                                                          602
                                                                          
                                                                          
                                                                          13.2
                                                                          %
                                                                          
                                                                          
                                                                          689
                                                                          
                                                                          
                                                                          703
                                                                          
                                                                          
                                                                          (14)
                                                                          
                                                                          
                                                                          (2.0)
                                                                          %
                                                                          
                                                                          
                                                                          5,863
                                                                          
                                                                          
                                                                          5,275
                                                                          
                                                                          
                                                                          588
                                                                          
                                                                          
                                                                          11.1
                                                                          %Net
      operating income
                                                                          
                                                                          $
                                                                          2,591
                                                                          
                                                                          $
                                                                          2,815
                                                                          
                                                                          $
                                                                          (224)
                                                                          
                                                                          
                                                                          (8.0)
                                                                          %
                                                                          
                                                                          $
                                                                          966
                                                                          
                                                                          $
                                                                          744
                                                                          
                                                                          $
                                                                          222
                                                                          
                                                                          
                                                                          29.8
                                                                          %
                                                                          
                                                                          $
                                                                          3,557
                                                                          
                                                                          $
                                                                          3,559
                                                                          
                                                                          $
                                                                          (2)
                                                                          
                                                                          
                                                                          (0.1)
                                                                          %




Reconciliation to consolidated loss from continuing
      operations:Net
      operating income
                
                $
                3,557
                
                
                $
                3,559Depreciation
      expense
                
                
                (1,368
                )
                
                
                (1,987
                )General
      and administrative expense
                
                
                (3,617
                )
                
                
                (2,475
                )Other
      income
                
                
                576
                
                
                
                843Interest
      expense
                
                
                (1,837
                )
                
                
                (1,811
                )Income
      tax benefit
                
                
                1,321
                
                
                
                829Loss
      from continuing operations
                
                $
                (1,368
                )
                
                $
                (1,042
                )





The above
table details the comparative net operating income (“NOI”) for Wilshire’s
residential and commercial real estate segments, and reconciles the combined NOI
to consolidated income (loss) from continuing operations. NOI is based on
operating revenue and expenses directly associated with the operations of the
real estate properties, but excludes depreciation and interest expense. Wilshire
assesses and measures segment operating results based on NOI, which is a direct
measure of each property’s contribution to the results of the Company before
considering revenues from treasury activities, overhead expenses and other costs
that are not directly related to the performance of a property. The Company
believes NOI is a more descriptive measure of the Company’s performance than
income (loss) from continuing operations. NOI is not a measure of operating
results or cash flow as measured by accounting principles generally accepted in
the United States of America and is not necessarily indicative of cash available
to fund cash needs and should not be considered an alternative to cash flows as
a measure of liquidity.


24





Residential
Segment





The
residential segment is comprised of Sunrise Ridge Apartments and Van Buren
Apartments, both in Arizona, Wellington Estates and Summercreek Apartments, both
in Texas, and Alpine Village Apartments in New Jersey. During 2007 NOI decreased
by $224,000 or 8.0% to $2,591,000 as a result of an increase in operating
expenses of $602,000 or 13.2% to $5,174,000 which was partially offset by an
increase in revenues of $378,000 or 5.1% to $7,765,000.





The
increase in operating expenses was related to all residential properties and was
comprised of increased upgrades and maintenance costs related to occupancy
turnover and required repairs to the properties.  In addition, during
the first quarter of 2007 operating expense increased at our Texas properties
resulting from severe weather damage requiring non-recurring repairs of
approximately $60,000 and increased real estate taxes of $24,000.





The
increase in revenues primarily relates to an overall increase in rental
rates.  Significant and successful efforts have been made at the Texas
properties to increase occupancy and related revenues.  The Arizona
and New Jersey properties have maintained steady results by maintaining high
occupancy levels and obtaining modest rental increases.





Commercial
Segment





The
commercial segment is comprised of Royal Mall Plaza in Mesa, Arizona and Tempe
Corporate Center in Tempe, Arizona. During 2007 NOI increased $222,000 or 29.8%
to $966,000 primarily due to an increase in revenues of $208,000 or 14.4% to
$1,655,000 and a slight decrease in operating expenses of $14,000 or 2.0% to
$689,000.  The revenue increase was primarily attributable to a
$141,000 increase in revenue at Tempe Corporate Center (Arizona) and a $67,000
increase at Royal Mall (Arizona).





Revenues





Years
      Ended December 31,2007
                    
                    
                    2006
                    
                    
                    IncreaseSunrise
      Ridge, Arizona
                    
                    $
                    2,870,000
                    
                    
                    $
                    2,737,000
                    
                    
                    $
                    133,000Van
      Buren Apartments, Arizona
                    
                    
                    662,000
                    
                    
                    
                    620,000
                    
                    
                    
                    42,000Wellington
      Estates, Texas
                    
                    
                    1,775,000
                    
                    
                    
                    1,736,000
                    
                    
                    
                    39,000Alpine
      Village, New Jersey
                    
                    
                    1,327,000
                    
                    
                    
                    1,225,000
                    
                    
                    
                    102,000Summercreek,
      Texas
                    
                    
                    1,131,000
                    
                    
                    
                    1,069,000
                    
                    
                    
                    62,000Sub-total
      - Residential Properties
                    
                    
                    7,765,000
                    
                    
                    
                    7,387,000
                    
                    
                    
                    378,000Royal
      Mall Plaza, Arizona
                    
                    
                    710,000
                    
                    
                    
                    643,000
                    
                    
                    
                    67,000Tempe
      Corporate Center, Arizona
                    
                    
                    945,000
                    
                    
                    
                    804,000
                    
                    
                    
                    141,000Sub-total-
      Commercial Properties
                    
                    
                    1,655,000
                    
                    
                    
                    1,447,000
                    
                    
                    
                    208,000Total
      Revenues
                    
                    $
                    9,420,000
                    
                    
                    $
                    8,834,000
                    
                    
                    $
                    586,000




Revenues
from rental properties amounted to $9,420,000 in 2007, an increase of $586,000
or 6.6%, from $8,834,000 in 2006. The majority of the increase during 2007 is
attributable to Sunrise Ridge Apartments, which had an increase in rental
revenues of $133,000 or 4.9%, Tempe Corporate Center, which had an increase in
rental income of $141,000 or 17.5%, and Alpine Village, which experienced a
$102,000 increase in rental revenue of 8.3%.


25


Operating
Expenses





Years
      Ended December 31,
                    
                    
                    Increase2007
                    
                    
                    2006
                    
                    
                    (Decrease)Sunrise
      Ridge, Arizona
                    
                    $
                    1,627,000
                    
                    
                    $
                    1,465,000
                    
                    
                    $
                    162,000Van
      Buren Apartments, Arizona
                    
                    
                    453,000
                    
                    
                    
                    443,000
                    
                    
                    
                    10,000Wellington
      Estates, Texas
                    
                    
                    1,303,000
                    
                    
                    
                    1,151,000
                    
                    
                    
                    152,000Alpine
      Village, New Jersey
                    
                    
                    914,000
                    
                    
                    
                    718,000
                    
                    
                    
                    196,000Summercreek,
      Texas
                    
                    
                    877,000
                    
                    
                    
                    795,000
                    
                    
                    
                    82,000Sub-total
      - Residential Properties
                    
                    
                    5,174,000
                    
                    
                    
                    4,572,000
                    
                    
                    
                    602,000Royal
      Mall Plaza, Arizona
                    
                    
                    300,000
                    
                    
                    
                    313,000
                    
                    
                    
                    (13,000
                    )Tempe
      Corporate Center, Arizona
                    
                    
                    389,000
                    
                    
                    
                    390,000
                    
                    
                    
                    (1,000
                    )Sub-total-
      Commercial Properties
                    
                    
                    689,000
                    
                    
                    
                    703,000
                    
                    
                    
                    (14,000
                    )Total
      Operating Expenses
                    
                    $
                    5,863,000
                    
                    
                    $
                    5,275,000
                    
                    
                    $
                    588,000





Operating
expenses were $5,863,000 in 2007, which is an increase of $588,000, or 11.1%, as
compared to $5,275,000 during 2006. The increase for 2007 was primarily related
to all residential properties and was comprised of increased upgrades and
maintenance costs related to occupancy turnover and required repairs to the
properties.  In addition, during the first quarter of 2007 operating
expense increased at our Texas properties resulting from severe weather damage
requiring non-recurring repairs of approximately $60,000 and increased real
estate taxes of $24,000.





Depreciation
expense amounted to $1,368,000 in 2007, a decrease of $619,000 or 31.2% as
compared to $1,987,000 during 2006. The decrease primarily relates to the
reclassification in 2006 of Alpine Village Apartments, New Jersey, Summercreek
Apartments, Texas, and Wellington Estates, Texas, into continuing operations
from discontinued operations. Additionally, during 2006 the Company invested in
capital expenditures throughout its network of residential and commercial
properties. These expenditures were undertaken as part of a program to
reposition and strengthen the Company’s properties within their targeted
markets. Depreciation expense is not included in the operating expenses shown in
the preceding table and discussion.




General
and administrative expense increased $1,142,000, or 46.1%, to $3,617,000 in 2007
as compared to $2,475,000 during 2006. This increase was primarily the result of
certain legal costs, which amounted to $569,000, and professional fees
associated with the contemplated sale of the Company, which amounted to
$367,000, which was partially offset by a decrease in personnel related
costs.





Other
income decreased by $267,000 to $576,000 in 2007 as compared to $843,000 in
2006. The decrease primarily relates to a decline in interest and dividend
income as a result of the payment of a special distribution on June 29, 2006 to
stockholders of $3.00 per share or $23.7 million, which was partially offset by
increased interest rates during 2007.





Interest
expense increased to $1,837,000 in 2007 from $1,811,000 during 2006. The
increase primarily relates to the amortization of deferred financing costs
associated with the mortgages on the properties.




The
provision for income taxes amounted to a tax benefit of $1,321,000 in 2007
compared to a tax benefit of $829,000 during 2006. The change in the provision
for income taxes is related to the level of loss from continuing operations in
2007 compared to 2006 and the change in the mix between taxable and tax-exempt
income.





Discontinued
Operations, Net of Taxes:





Real
Estate





Income
from discontinued operations amounted to after tax income of $176,000 during
2007 and $3,212,000 during 2006. The income during the 2007 period reflects the
sale of six condominium units at Jefferson Gardens and the sale of the Lake
Hopatcong land resulting in gross proceeds of $1.8 million and after tax gain of
$699,000.





During
2006, the Company sold all its condominium units at Galsworthy Arms in Long
Branch, New Jersey, for gross proceeds of $7,197,000 which resulted in an
after-tax gain of $2,975,000, and its triple net lease on a bank branch in
Rutherford, New Jersey, for gross proceeds of $1,603,000 which resulted in an
after-tax gain of $550,000. The Company also sold its Twelve Oaks apartment
complex in Riverdale, Georgia, for gross proceeds of $2,180,000, which resulted
in an after-tax gain of $444,000. Additionally, the Company sold the Wilshire
Grand Hotel during 2006. The Wilshire Grand Hotel was owned by WO Grand Hotel,
L.L.C., which is 50% owned by the Company and 50% owned by Proud Three, L.L.C.
The hotel was sold for gross proceeds of $12.8 million, including adjustments to
the purchase price for fees extending the closing date. The sale resulted in an
after-tax gain to the Company of $264,000 and approximately $6.0 million of
proceeds from the transaction, including the repayment of debt.


26





The loss
on operating discontinued real estate properties decreased to $512,000 during
2007 from $1,021,000 during 2006. The decreased loss is primarily attributable
to the operating losses at the Company’s office building in Perth Amboy, New
Jersey and Jefferson Gardens Condominiums where many units were left vacant in
2006 in anticipation of their sale to private investors.





Oil
and Gas





The
Company announced in July 2003 its intention to sell its oil and gas businesses.
The Canadian oil and gas business was sold in April 2004 to Addison Energy Inc.,
a wholly owned subsidiary of Exco Resources, Inc., for $15 million in gross
proceeds. The United States oil and gas business was sold in April 2004 to Crow
Creek Energy LLC, a Tulsa, Oklahoma based privately held portfolio company of
Natural Gas Partners of Dallas, Texas, for $13.3 million in gross proceeds.
During 2007, the Company recognized after-tax income from the wind down of its
former oil and gas business of $300,000 as compared to $115,000 during
2006.  The net income from the wind down of the oil and gas business
during 2007 relates to a foreign currency gain and interest income during the
period.  The income in 2006 is a result of an over provision of
withholding taxes related to cash maintained in Canada.





Effects
of Inflation





The
effects of inflation on the Company’s financial condition are not considered to
be material by management.




Liquidity
and Capital Resources





At
December 31, 2008 and 2007, the Company had working capital, including
restricted cash, of $10.3 and $14.6 million, respectively.





The
Company had $15.2 million of cash and cash equivalents, including restricted
cash, and short-term marketable debt and equity securities at December 31, 2008.
This balance is comprised of working capital accounts for its real estate
properties and corporate needs, short-term investments in government and
corporate securities, including auction rate debt securities, and money market
funds and marketable equity securities. In the short-term, the Company will
continue to invest these funds in high quality investments that are consistent
with its investment policy.




Regarding
the investments in short-term marketable debt securities, the Company invests
its available funds in high quality investments that are consistent with the
Company’s investment policy which includes the following objectives: a) To
maintain liquidity which is sufficient to meet any reasonably forecasted cash
requirements; b) To preserve principal through investment in products and
entities that are consistent with the Company’s risk tolerance; and c) To
maximize income consistent with the Company’s liquidity and risk tolerance.
Consistent with this investment policy, the Company only invests in approved
securities such as obligations of the U.S. Treasury, the U.S. Government and
agencies with obligations guaranteed by the U.S. Government and highly rated
municipal and corporate issuers. As it relates to the Company's investment in
marketable equity securities, which it sold during 2008, the Company had
invested in a publicly traded real estate company. The Company generally does
not invest in marketable equity securities and such current investment is
considered non-recurring.




The
Company held investments in certain marketable equity securities and short-term
marketable debt securities, including auction rate securities (“ARS”) with
interest rate resets ranging from every seven days to every 45 days. As of
December 31, 2008, the Company held $2.0 million of auction rate securities,
classified as available-for-sale. These securities were then valued at par and
subsequently redeemed in January 2009 at par. Available-for-sale securities are
carried at estimated fair value, based on available information. Consistent with
our policy, all ARS investments were rated at the time of purchase and at the
time of disposition AAA or the equivalent thereto.   Beginning in February
2008, with the liquidity issues in the global credit and capital markets, the
Company was informed that there was insufficient demand at auction for its ARS
investments. As a result, auctions for these securities began to fail and by
March 31, 2008, all normal market activity had essentially ceased. During the
second and third quarters of 2008, the Company sold $1.2 million and $250,000,
respectively, of its ARS at par value through successful redemptions. In
addition, during the second quarter of 2008, the Company sold $3.7 million of
its ARS in a private transaction for $3.3 million.  As a result of
this transaction, the Company recorded a $365,000 loss on the sale of these
securities.  During the fourth quarter of 2008, as a result of recent
settlements between government entities and our investment advisor, the Company
was reimbursed for its $365,000 loss.    This reimbursement
offset the loss  and, accordingly, no gain or loss is reflected on the
Company’s consolidated financial statements for the year ended December 31,
2008.  The sale of the ARS in a private transaction is considered a
one-time transaction by the Company.




The
Company continues to explore opportunities to invest in its real estate
properties to enhance value and is investigating corporate and real estate
property transactions, both as buyer and seller, as they arise. The timing of
such transactions, if any, will depend upon, among other criteria, economic
conditions and the favorable evaluation of specific opportunities presented to
the Company. Management considers its liquidity position adequate to fulfill the
Company’s current business plans.


27


Net cash
provided by operating activities amounted to $42,000 during 2008, while cash
flow used in operating activities during 2007 was $1.4 million and $11.4 million
in 2006. The 2008 provision of net cash primarily relates to a decrease in
prepaid income taxes and income tax receivables of $877,000 and depreciation
expense of $1.2 million, which was partially offset by the gain on real estate
assets of $1.3 million.  The 2007 use of net cash primarily relates to
gains on sales of real estate assets of $1.1 million, a net loss of $0.9 million
and an increase in prepaid income taxes and income taxes receivable of $1.1
million, partially offset by depreciation expense of $1.4 million. The 2006 use
of net cash primarily relates to gains on sales of real estate assets of $7.1
million and a deferred tax benefit of $7.0 million, partly offset by net income
of $2.3 million and a depreciation expense of $2.0 million.





Net cash
provided by (used in) investing activities amounted to $9.2 million in 2008,
$(2.8) million in 2007, and $48.0 million in 2006. The cash provided by
investing activities during 2008 is primarily due to the sale and redemption of
marketable securities of $7.3 million and the net proceeds from the sale of real
estate assets of $2.2 million.  The cash used in investing activities
during 2007 is due to an increase in short-term marketable securities of $3.6
million and capital expenditures related to our real estate properties of $0.9
million, partially offset by proceeds from the sales of real estate assets of
$1.7 million.





The cash
provided by investing activities during 2006 is due to the proceeds from the
sale of real estate of $22.7 million, a decrease in short-term marketable
securities of $17.7 million and a decrease in restricted cash of $10.5 million.
This was partially offset by capital expenditures of $3.5 million. The decrease
in marketable securities and restricted cash related to the special cash
dividend paid on June 29, 2006.





Net cash
used in financing activities amounted to $1.1 million in 2008, $0.6 million in
2007, and $33.0 million in 2006. The 2008 and 2007 use of cash reflects the
normal annual amortization of long-term debt from debt service payments. The
2006 use of cash reflects the payment of the special dividend of $23.7 million
paid to stockholders on June 29, 2006, a cash distribution of $5.4 million paid
to the non-controlling joint venture partner related to the sale of the Wilshire
Grand Hotel and the repayment of long-term debt of $4.2 million as a result of
sales of real estate properties and normal amortization of long-term debt from
monthly debt service payments.




The
Company does not have any sources of working capital outside of its business
operations. It does not have any bank lines of credit or contingently available
sources of funds. The Company believes it has adequate capital resources to fund
its operations for the foreseeable future.





The
Company is committed to investing in its properties to maintain their
competitiveness within their markets and for the purposes of upgrading and
repositioning in more upscale markets. The following table sets forth the
amounts of capital expenditures made in each property within the past three
years, exclusive of those properties which were sold.




Name
      of property
                                  
                                  Years
      ended December 31,2008
                                  
                                  
                                  2007
                                  
                                  
                                  2006Residential continuing
      operations:Sunrise
      Ridge
                                  
                                  $
                                  78,000
                                  
                                  
                                  $
                                  220,000
                                  
                                  
                                  $
                                  223,000Van
      Buren
                                  
                                  
                                  2,000
                                  
                                  
                                  
                                  9,000
                                  
                                  
                                  
                                  94,000Wellington
                                  
                                  
                                  60,000
                                  
                                  
                                  
                                  50,000
                                  
                                  
                                  
                                  174,000Alpine
                                  
                                  
                                  13,000
                                  
                                  
                                  
                                  12,000
                                  
                                  
                                  
                                  175,000Summercreek
                                  
                                  
                                  27,000
                                  
                                  
                                  
                                  21,000
                                  
                                  
                                  
                                  117,000Commercial continuing
      operations:Royal
      Mall Plaza
                                  
                                  
                                  -
                                  
                                  
                                  
                                  100,000
                                  
                                  
                                  
                                  242,000Tempe
      Corporate
                                  
                                  
                                  63,000
                                  
                                  
                                  
                                  32,000
                                  
                                  
                                  
                                  305,000Discontinued operations -
      residential:Jefferson
      Gardens
                                  
                                  
                                  -
                                  
                                  
                                  
                                  4,000
                                  
                                  
                                  
                                  2,000Alpine
      Land (a)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  355,000
                                  
                                  
                                  
                                  -Discontinued operations -
      commercial:Amboy
      Towers
                                  
                                  
                                  12,000
                                  
                                  
                                  
                                  60,000
                                  
                                  
                                  
                                  893,000Tamarac
      Office Plaza(b)
                                  
                                  
                                  2,000
                                  
                                  
                                  
                                  21,000
                                  
                                  
                                  
                                  23,000Total
      capital expenditures
                                  
                                  $
                                  257,000
                                  
                                  
                                  $
                                  884,000
                                  
                                  
                                  $
                                  2,248,000




(a)
            Alpine
      Land represents land and a residential building bought in
      2007.


(b)
            Tamarac
      Office Plaza was sold in May 2008.




On June
3, 2004, the Company’s Board of Directors approved the repurchase of up to
1,000,000 shares of its common stock on the open market, in privately negotiated
transactions or otherwise. This purchasing activity may occur from time to time,
in one or more transactions. At December 31, 2008, the Company had purchased
138,231 shares at an aggregate cost of $1,017,000 under this
program.


28





In
February 2005, the Company concluded negotiations with the city of Perth Amboy,
New Jersey concerning the redevelopment zone status of its office building
(Amboy Towers). The City agreed to name Wilshire as the redeveloper for Amboy
Towers and the Company agreed to invest at least $750,000 in capital
improvements in the building over the next 18 months (following February 2005),
which the Company complied with during 2006.





During
March 2005, Wilshire negotiated a long-term lease for new offices in Newark, New
Jersey. The lease is for a 65 month term with two renewal options, each for a
five-year term, and covers 4,502 rentable square feet at a base rate of $29.00
per square foot.





In
January 2008 and December 2008, the Company closed on the sale of two 1 bedroom
condominiums at Jefferson Gardens, New Jersey for gross proceeds of
approximately $150,000 and $154,000, respectively. After payments of closing
costs and providing for taxes, the Company realized a gain during the first
quarter of 2008 of approximately $62,000 and a gain during the fourth quarter of
2008 of approximately $61,000 from these sales.





In May
2008, the Company closed on the sale of its Tamarac Office Plaza, Florida,
office complex for gross proceeds of $2 million.  After payments of
closing costs and providing for taxes, the Company realized a net gain of
approximately $683,000 from this sale.




See Item
7A of this Annual Report for information regarding certain long-term
commitments.


29





Item 7A.   Quantitative and Qualitative
Disclosures About Market Risk





After the
sale of its Canadian oil and gas assets, the Company has cash and cash
equivalents at its Canadian subsidiary, whose value is exposed to fluctuations
in the value of the Canadian dollar / U.S. dollar exchange rate. The change in
value in the Canadian dollar denominated accounts is reported in the Statement
of Operations. The Company repatriated substantially all of its assets, net of
liabilities, during 2008.  The Company anticipates that the wind down
of its Canadian subsidiary will be completed during 2009.





Long-term
debt, consisting solely of mortgage notes payable, totaled the following as of
December 31, 2008 and December 31, 2007 –




2008
                
                
                2007Total
      debt
                
                
                27,845,000
                
                
                
                28,952,000Less-current
      portion (1)
                
                
                4,378,000
                
                
                
                518,000Long
      term portion (2)
                
                $
                23,467,000
                
                
                $
                28,434,000





(1)
            Includes
      debt associated with discontinued operations of $0 on 2008 and $14,000 in
      2007.(2)
            Includes
      debt associated with discontinued operations of $0 in 2008 and $559,000 in
      2007.





The
aggregate maturities of the long-term debt in each of the five years subsequent
to December 31, 2008 are -




Year
                
                Amount2009
                
                $
                4,378,0002010
                
                
                513,0002011
                
                
                543,0002012
                
                
                571,0002013
                
                
                21,840,000$
                27,845,000




At
December 31, 2008, the Company had $27,845,000 of mortgage debt and notes
outstanding which all bear interest at an average fixed rate of 5.97% and an
average remaining life of approximately 3.7 years. The fixed rate mortgages and
notes are subject to repayment (amortization) schedules that are longer than the
term of the mortgages. As such, the approximate amount of balloon payments for
all mortgage debt and notes that will be required is as follows:





Year
                  
                  Amount2009
                  
                  $
                  3,870,0002013
                  
                  
                  21,743,000$
                  25,613,000





Wilshire
expects to re-finance the individual mortgages and notes with new mortgages and
notes when their terms expire. To this extent, we have exposure to interest rate
risk on our fixed rate mortgage debt and note obligations. If interest rates, at
the time any individual debt instrument is due, are higher than the current
fixed interest rate, higher debt service may be required, and/or re-financing
proceeds may be less than the amount of mortgage debt or notes being
retired.





We
believe that the values of our properties will be adequate to command
re-financing proceeds equal to, or higher than, the mortgage debt to be
re-financed. This expectation represents a forward-looking statement. Factors
that could cause actual results to differ materially from the Company’s forward
looking statement include economic conditions in the markets where such
properties are located and the level of market interest rates at the time the
Company is seeking to re-finance the properties.


30




Item 8.     Financial Statements and
Supplementary Data




Report
of Independent Registered Public Accounting Firm





The Board
of Directors and Stockholders


Wilshire
Enterprises, Inc.





We have
audited the accompanying consolidated balance sheets of Wilshire Enterprises,
Inc. and Subsidiaries as of December 31, 2008 and 2007, and the related
consolidated statements of operations, stockholders’ equity and cash flows and
financial statement schedule listed in the index at Item 15 for each of the
three years in the period ended December 31, 2008. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on our
audits.





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





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Wilshire Enterprises, Inc.
and Subsidiaries as of December 31, 2008 and 2007, and their results of
operations and cash flows for each of the three years in the period ended
December 31, 2008, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, the financial statement
schedule referred to above, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.





/s/ J.H.
Cohn LLP





Roseland,
New Jersey


March 31,
2009


31




WILSHIRE ENTERPRISES, INC.


CONSOLIDATED
BALANCE SHEETS


As
of December 31, 2008 and 2007





2008
                
                
                2007ASSETSCurrent
      assets:Cash
      and cash equivalents
                
                $
                13,023,000
                
                
                $
                4,843,000Restricted
      cash
                
                
                195,000
                
                
                
                257,000Marketable
      debt securities, available-for-sale, at fair value
                
                
                2,000,000
                
                
                
                7,925,000Marketable
      equity securities, available-for-sale, at fair value
                
                
                -
                
                
                
                1,432,000Accounts
      receivable, net
                
                
                173,000
                
                
                
                201,000Prepaid
      income taxes and income taxes receivable
                
                
                773,000
                
                
                
                1,650,000Deferred
      income taxes
                
                
                -
                
                
                
                26,000Prepaid
      expenses and other current assets
                
                
                1,329,000
                
                
                
                1,431,000Total
      current assets
                
                
                17,493,000
                
                
                
                17,765,000Property
      and equipment:Real
      estate properties
                
                
                38,876,000
                
                
                
                38,632,000Real
      estate properties - held for sale
                
                
                4,638,000
                
                
                
                5,947,00043,514,000
                
                
                
                44,579,000Less:Accumulated
      depreciation and amortization
                
                
                17,293,000
                
                
                
                16,104,000Accumulated
      depreciation and amortization – property held for sale
                
                
                371,000
                
                
                
                856,00025,850,000
                
                
                
                27,619,000Total
      assets
                
                $
                43,343,000
                
                
                $
                45,384,000LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Current
      portion of long-term debt
                
                $
                4,378,000
                
                
                $
                503,000Accounts
      payable
                
                
                1,342,000
                
                
                
                1,528,000Income
      taxes payable
                
                
                77,000
                
                
                
                81,000Accrued
      liabilities
                
                
                1,066,000
                
                
                
                556,000Deferred
      income
                
                
                87,000
                
                
                
                147,000Current
      liabilities associated with discontinued operations
                
                
                264,000
                
                
                
                292,000Total
      current liabilities
                
                
                7,214,000
                
                
                
                3,107,000Noncurrent
      liabilities:Long-term
      debt, less current portion
                
                
                23,467,000
                
                
                
                27,861,000Deferred
      income taxes
                
                
                597,000
                
                
                
                595,000Deferred
      income
                
                
                89,000
                
                
                
                112,000Noncurrent
      liabilities associated with discontinued operations
                
                
                -
                
                
                
                573,000Total
      liabilities
                
                
                31,367,000
                
                
                
                32,248,000Commitments
      and contingenciesStockholders'
      equity:Preferred
      stock, $1 par value, 1,000,000 shares authorized; none issued and
      outstanding in 2008 and 2007
                
                
                -
                
                
                
                -Common
      stock, $1 par value, 15,000,000 shares authorized; issued 10,013,544
      shares in 2008 and 2007
                
                
                10,014,000
                
                
                
                10,014,000Capital
      in excess of par value
                
                
                9,309,000
                
                
                
                9,202,000Treasury
      stock, 2,087,296 shares at December 31, 2008 and 2007, at
    cost
                
                
                (9,867,000
                )
                
                
                (9,885,000
                )Retained
      earnings
                
                
                2,520,000
                
                
                
                3,881,000Accumulated
      other comprehensive loss
                
                
                -
                
                
                
                (76,000
                )Total
      stockholders’ equity
                
                
                11,976,000
                
                
                
                13,136,000Total
      liabilities and stockholders' equity
                
                $
                43,343,000
                
                
                $
                45,384,000





The
accompanying notes to consolidated financial statements are an integral part of
these financial statements.


32





WILSHIRE ENTERPRISES, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


For
the years ended December 31, 2008, 2007 and 2006





2008
                
                
                2007
                
                
                2006Revenues
                
                $
                9,203,000
                
                
                $
                9,420,000
                
                
                $
                8,834,000Costs
      and expensesOperating
      expenses
                
                
                5,892,000
                
                
                
                5,863,000
                
                
                
                5,275,000Depreciation
      expense
                
                
                1,188,000
                
                
                
                1,368,000
                
                
                
                1,987,000General
      and administrative
                
                
                3,816,000
                
                
                
                3,617,000
                
                
                
                2,475,000Total
      costs and expenses
                
                
                10,896,000
                
                
                
                10,848,000
                
                
                
                9,737,000Loss
      from operations
                
                
                (1,693,000
                )
                
                
                (1,428,000
                )
                
                
                (903,000
                )Other
      incomeDividend
      and interest income
                
                
                415,000
                
                
                
                540,000
                
                
                
                836,000Loss
      on sale of marketable securities
                
                
                (188,000
                )Other
      income
                
                
                -
                
                
                
                36,000
                
                
                
                7,000Interest
      expense
                
                
                (1,776,000
                )
                
                
                (1,837,000
                )
                
                
                (1,811,000
                )Loss
      before benefit for income taxes
                
                
                (3,242,000
                )
                
                
                (2,689,000
                )
                
                
                (1,871,000
                )Income
      tax benefit
                
                
                (1,343,000
                )
                
                
                (1,321,000
                )
                
                
                (829,000
                )Loss
      from continuing operations
                
                
                (1,899,000
                )
                
                
                (1,368,000
                )
                
                
                (1,042,000
                )Discontinued
      operations - real etate, net of taxesLoss
      from operations
                
                
                (592,000
                )
                
                
                (512,000
                )
                
                
                (1,021,000
                )Gain
      from sales
                
                
                806,000
                
                
                
                688,000
                
                
                
                4,233,000Discontinued
      operations - oil & gas, net of taxesIncome
      from operations
                
                
                324,000
                
                
                
                300,000
                
                
                
                115,000Net
      income (loss)
                
                $
                (1,361,000
                )
                
                $
                (892,000
                )
                
                $
                2,285,000Basic
      earnings (loss) per share:Loss
      from continuing operations
                
                $
                (0.24
                )
                
                $
                (0.17
                )
                
                $
                (0.13
                )Income
      (loss) from discontinued operations -Real
      estate - loss from operations
                
                
                (0.07
                )
                
                
                (0.06
                )
                
                
                (0.13
                )Real
      estate - gain on sales
                
                
                0.10
                
                
                
                0.09
                
                
                
                0.54Oil
      and gas – income from operations
                
                
                0.04
                
                
                
                0.03
                
                
                
                0.01Net
      income (loss) applicable to common stockholders
                
                $
                (0.17
                )
                
                $
                (0.11
                )
                
                $
                0.29Diluted
      earnings (loss) per share:Loss
      from continuing operations
                
                
                (0.24
                )
                
                
                (0.17
                )
                
                $
                (0.13
                )Income
      (loss) from discontinued operations -Real
      estate - loss from operations
                
                
                (0.07
                )
                
                
                (0.06
                )
                
                
                (0.13
                )Real
      estate - gain on sales
                
                
                0.10
                
                
                
                0.09
                
                
                
                0.53Oil
      and gas – income from operations
                
                
                0.04
                
                
                
                0.03
                
                
                
                0.01Net
      income (loss) applicable to common stockholders
                
                $
                (0.17
                )
                
                $
                (0.11
                )
                
                $
                0.28




The
accompanying notes to consolidated financial statements are an integral part of
these financial statements.


33


WILSHIRE
ENTERPRISES, INC.


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY


December
31, 2008, 2007 and 2006


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)
                                                      
                                                      
                                                      EquityBalance,
      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
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      41,852,000Net
      income
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      2,285,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      2,285,000
                                                      
                                                      
                                                      
                                                      2,285,000Change
      in unrealized loss on marketable securities, net of income tax benefit of
      $301,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (76,000
                                                      )
                                                      
                                                      
                                                      (76,000
                                                      )
                                                      
                                                      
                                                      (76,000
                                                      )Comprehensive
      income
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      2,209,000Cash
      dividend
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (23,697,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (23,697,000
                                                      )Issuance
      of shares of common stock for services, net of forfeitures
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (146,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      321,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      175,000Compensation
      associated with stock options
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (133,000
                                                      )
                                                      
                                                      
                                                      133,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      -Amortization
      of compensation associated with stock and stock option
    awards
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      234,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      234,000Exercise
      of stock options
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      290,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      290,000Purchase
      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
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      13,923,000Net
      loss
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (892,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      (892,000
                                                      )
                                                      
                                                      
                                                      (892,000
                                                      )Change
      in unrealized loss on marketable securities, net of income tax benefit of
      $77,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (144,000
                                                      )
                                                      
                                                      
                                                      (144,000
                                                      )
                                                      
                                                      
                                                      (144,000
                                                      )Comprehensive
      loss
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      (1,036,000
                                                      )Amortization
      of compensation associated with stock and stock option
    awards
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      218,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      218,000Exercise
      of stock options
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      33,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      33,000Disposition
      of interest in joint venture
                                                      
                                                      
                                                      (2,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (2,000
                                                      )Balance,
      December 31, 2007
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      10,013,544
                                                      
                                                      
                                                      
                                                      10,014,000
                                                      
                                                      
                                                      
                                                      9,202,000
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      3,881,000
                                                      
                                                      
                                                      
                                                      (9,885,000
                                                      )
                                                      
                                                      
                                                      (76,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      13,136,000Net
      loss
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (1,361,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      (1,361,000
                                                      )
                                                      
                                                      
                                                      (1,361,000
                                                      )Change
      in unrealized loss on marketable securities, net of income tax benefit of
      $50,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      76,000
                                                      
                                                      
                                                      
                                                      76,000
                                                      
                                                      
                                                      
                                                      76,000Comprehensive
      loss
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      (1,285,000
                                                      )Grant
      of 6,133 shares of restricted stock
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (18,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      18,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      -Amortization
      of compensation associated with stock and stock option
    awards
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      125,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      125,000Balance,
      December 31, 2008
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      
                                                      10,013,544
                                                      
                                                      
                                                      $
                                                      10,014,000
                                                      
                                                      
                                                      $
                                                      9,309,000
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      $
                                                      2,520,000
                                                      
                                                      
                                                      $
                                                      (9,867,000
                                                      )
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      11,976,000




The
accompanying notes to consolidated financial statements are an integral part of
these financial statements.


34







WILSHIRE
ENTERPRISES, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


For
the Years Ended December 31, 2008, 2007 and 2006





2008
                    
                    
                    2007
                    
                    
                    2006CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                    
                    $
                    (1,361,000
                    )
                    
                    $
                    (892,000
                    )
                    
                    $
                    2,285,000Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
                    
                    
                    1,188,000
                    
                    
                    
                    1,368,000
                    
                    
                    
                    2,021,000Stock-based
      compensation expense
                    
                    
                    125,000
                    
                    
                    
                    218,000
                    
                    
                    
                    235,000Deferred
      income tax (benefit)
                    
                    
                    28,000
                    
                    
                    
                    (31,000
                    )
                    
                    
                    (6,965,000
                    )Decrease
      in deferred income
                    
                    
                    (83,000
                    )
                    
                    
                    (9,000
                    )
                    
                    
                    (3,000
                    )Other
      expense – non-controlling interest of joint venture
      partner
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    549,000Loss
      on sales of marketable securities
                    
                    
                    188,000
                    
                    
                    
                    -
                    
                    
                    
                    -Gain
      on sales of real estate assets
                    
                    
                    (1,344,000
                    )
                    
                    
                    (1,147,000
                    )
                    
                    
                    (7,055,000
                    )Changes
      in operating assets and liabilities -Decrease  in
      accounts receivable
                    
                    
                    28,000
                    
                    
                    
                    34,000
                    
                    
                    
                    62,000Decrease
      (increase) in prepaid income taxes and income taxes
    receivable
                    
                    
                    877,000
                    
                    
                    
                    (1,083,000
                    )
                    
                    
                    792,000Decrease  in
      prepaid expenses and other current assets
                    
                    
                    102,000
                    
                    
                    
                    234,000
                    
                    
                    
                    264,000(Decrease)
      increase in accounts payable, accrued liabilities and income taxes
      payable
                    
                    
                    294,000
                    
                    
                    
                    (64,000
                    )
                    
                    
                    (3,618,000
                    )Net
      cash provided by (used in) operating activities
                    
                    
                    42,000
                    
                    
                    
                    (1,372,000
                    )
                    
                    
                    (11,433,000
                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Net
      capital expenditures - real estate
                    
                    
                    (257,000
                    )
                    
                    
                    (882,000
                    )
                    
                    
                    (3,499,000
                    )Net
      capital expenditures - oil & gas
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (5,000
                    )Proceeds
      from sales and redemptions of marketable securities
                    
                    
                    7,257,000
                    
                    
                    
                    -
                    
                    
                    
                    -Purchase
      of mortgage notes and loans receivable
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Proceeds
      from mortgage notes receivable
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    536,000Proceeds
      from sales of real estate
                    
                    
                    2,182,000
                    
                    
                    
                    1,729,000
                    
                    
                    
                    22,669,000(Increase)
      decrease in short-term marketable securities
                    
                    
                    -
                    
                    
                    
                    (3,554,000
                    )
                    
                    
                    17,731,000(Increase)
      decrease in restricted cash
                    
                    
                    62,000
                    
                    
                    
                    (45,000
                    )
                    
                    
                    10,522,000Net
      cash provided by (used in) investing activities
                    
                    
                    9,244,000
                    
                    
                    
                    (2,752,000
                    )
                    
                    
                    47,954,000CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of debt
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    416,000Principal
      payments of long-term debt
                    
                    
                    (1,106,000
                    )
                    
                    
                    (666,000
                    )
                    
                    
                    (4,150,000
                    )Proceeds
      from exercise of stock options
                    
                    
                    -
                    
                    
                    
                    33,000
                    
                    
                    
                    290,000Purchase
      of treasury stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (462,000
                    )Cash
      distributions to non-controlling interest of joint venture
      partner
                    
                    
                    -
                    
                    
                    
                    (2,000
                    )
                    
                    
                    (5,397,000
                    )Payment
      of cash dividend
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (23,697,000
                    )Net
      cash used in financing activities
                    
                    
                    (1,106,000
                    )
                    
                    
                    (635,000
                    )
                    
                    
                    (33,000,000
                    )Net
      increase (decrease) in cash and cash equivalents
                    
                    
                    8,180,000
                    
                    
                    
                    (4,759,000
                    )
                    
                    
                    3,521,000CASH
      AND CASH EQUIVALENTS, beginning of year
                    
                    
                    4,843,000
                    
                    
                    
                    9,602,000
                    
                    
                    
                    6,081,000CASH
      AND CASH EQUIVALENTS, end of year
                    
                    $
                    13,023,000
                    
                    
                    $
                    4,843,000
                    
                    
                    $
                    9,602,000SUPPLEMENTAL DISCLOSURES TO THE STATEMENTS
      OF CASH FLOWS:Cash
      paid during the period for -Interest
                    
                    $
                    1,732,000
                    
                    
                    $
                    1,824,000
                    
                    
                    $
                    1,993,000Income
      taxes, net
                    
                    $
                    (2,135,000
                    )
                    
                    $
                    580,000
                    
                    
                    $
                    9,868,000




35


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.  The joint
venture was dissolved during 2007.





The
accompanying notes to consolidated financial statements are an integral part of
these financial statements.


36




WILSHIRE ENTERPRISES, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





1.
            Organization and significant
      accounting policies:




Wilshire
Enterprises, Inc. (“Wilshire” or “the Company”) is engaged in acquiring, owning
and managing real estate properties and real estate related securities. The
Company’s real estate holdings are located in the states of Arizona, New Jersey
and Texas. The Company’s real estate holdings are owned both in its own name and
through holding companies and limited liability companies. The Company also
maintains investments in marketable securities, which are classified as
available-for-sale.





The
Company had been engaged in oil and gas exploration and production in the United
States and Canada. In April 2004, the Company sold its oil and gas operations
and received net proceeds of $28,131,000, recording a gain of $567,000 (after
taxes) on the transaction. Since the sale was effective as of March 1, 2004, the
2008, 2007 and 2006 consolidated financial statements include the continuing
reconciliation process between the Company and its joint interest partners,
final assessments from various governmental bodies for tax audits and other
matters and changes in estimates for the remaining obligations related to the
wind-up of the oil and gas businesses.





Principles
of consolidation:





The
consolidated financial statements include the accounts of the Company and its
subsidiaries and controlled joint venture for the years ended December 31, 2008,
2007 and 2006. All significant intercompany account balances and transactions
have been eliminated in consolidation. At December 31, 2006, the Company had a
50% ownership in a joint venture that was consolidated under the provisions of
Financial Accounting Standards Board (“FASB”) Interpretation No. 46 (revised
December 2003) (“FIN 46R”), “Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin No. 51.” The “minority interest”
in this investment is included in Stockholders’ Equity under the caption
“Non-controlling interest of joint venture partner.” This joint venture was
dissolved as of December 31, 2007.





Use
of estimates:





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.





Cash
and cash equivalents and marketable debt securities:





Financial
instruments that potentially subject Wilshire to concentrations of credit risk
consist primarily of cash and cash equivalents and marketable investments.
Wilshire considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents. Marketable debt investments consist
primarily of auction rate interest bearing securities whose interest rates reset
every seven to 45 days. These securities are redeemable at each interest rate
reset date. Wilshire maintains its cash in the United States in bank accounts
($6,063,000) and brokerage and securities accounts ($9,048,000). The balances
maintained in bank accounts may, at times, exceed Federally insured limits. At
December 31, 2008, cash balances in banks that exceeded Federally insured limits
amounted to $5,085,000. Investments in accounts maintained at brokerage houses
consist of funds held in highly liquid money market accounts ($7,048,000) and
short-term, mainly tax-exempt or tax advantaged, investments ($2,000,000) that
are subject to the Company’s investment policy guidelines concerning credit
rating, concentrations and size of transaction. At December 31, 2008, these
short-term securities were comprised principally of auction rate securities that
have short-term interest rate reset and redemption features, usually every seven
to 45 days. The Company also has $106,000 in cash with its Canadian subsidiary
that is being invested in short-term deposits at a major Canadian bank. The
funds at the Canadian subsidiary are expected to be repatriated to the United
States during 2009, and represent principally the only assets currently held
outside of the United States.


37




Restricted
cash represents $195,000 of residential tenant deposits for Company properties
located in New Jersey.





Marketable
equity securities:




The
Company held investments in certain marketable equity securities and short-term
marketable debt securities, including auction rate securities (“ARS”) with
interest rate resets ranging from every seven days to every 45 days. As of
December 31, 2008, the Company held $2.0 million of auction rate securities,
classified as available-for-sale. These securities were then valued at par and
subsequently redeemed in January 2009 at par. Available-for-sale securities are
carried at estimated fair value, based on available information. Consistent with
our policy, all ARS investments were rated at the time of purchase and at the
time of disposition AAA or the equivalent thereto.   Beginning in February
2008, with the liquidity issues in the global credit and capital markets, the
Company was informed that there was insufficient demand at auction for its ARS
investments. As a result, auctions for these securities began to fail and by
March 31, 2008, all normal market activity had essentially ceased. During the
second and third quarters of 2008, the Company sold $1.2 million and $250,000,
respectively, of its ARS at par value through successful redemptions. In
addition, during the second quarter of 2008, the Company sold $3.7 million of
its ARS in a private transaction for $3.3 million.  As a result of
this transaction, the Company recorded a $365,000 loss on the sale of these
securities.  During the fourth quarter of 2008, as a result of recent
settlements between government entities and our investment advisor, the Company
was reimbursed for its $365,000 loss.     This
reimbursement offset the loss recorded during the second quarter
2008,  and, accordingly, no gain or loss is reflected on the Company’s
consolidated financial statements for the year ended December 31,
2008.  The sale of the ARS in a private transaction is considered a
one-time transaction by the Company.




During
June 2008, the Company sold its investment of marketable equity securities which
consisted of common shares in one real estate company for gross proceeds of $1.3
million.  As a result of this sale, the Company recognized a loss from
the sale of securities of $188,000.





The
Company periodically reviews available-for-sale securities for impairment that
is other than temporary. At December 31, 2008 and 2007, no write down was
required to record other than temporary impairment of securities.





Assets
measured at fair value on a recurring basis:





On
January 1, 2008, the Company adopted Statement of Financial Accounting
Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS
157 provides a single definition of fair value and a common framework for
measuring fair value as well as new disclosure requirements for fair value
measurements used in financial statements. Under SFAS 157, fair value is
determined based upon the exit price that would be received by a company to sell
an asset or paid a company to transfer a liability in an orderly transaction
between market participants, exclusive of any transaction costs. Fair value
measurements are determined by either the principal market or the most
advantageous market. The principal market is the market with the greatest level
of activity and volume for the asset or liability. Absent a principal market to
measure fair value, the Company has used the most advantageous market, which is
the market where the Company would receive the highest selling price for the
asset or pay the lowest price to settle the liability, after considering
transaction costs. However, when using the most advantageous market, transaction
costs are only considered to determine which market is the most advantageous and
these costs are then excluded when applying a fair value measurement. Adoption
of SFAS 157 did not have a material effect on the Company’s consolidated
financial position, results of operations or cash flows.




SFAS 157
creates a three-level hierarchy to prioritize the inputs used in the valuation
techniques to derive fair values. The basis for fair value measurements for each
level within the hierarchy is described below, with Level 1 having the highest
priority and Level 3 having the lowest.




Level 1:
Quoted prices in active markets for identical assets or
liabilities.




Level 2:
Quoted prices for similar assets or liabilities in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations in which all significant inputs are observable in
active markets.




Level 3:
Valuations derived from valuation techniques in which one or more significant
inputs are unobservable.





Following
are the major categories of assets measured at fair value on a recurring basis
during the year ended December 31, 2008 using quoted prices in active markets
for identical assets (Level 1); significant other observable inputs (Level 2);
and significant unobservable inputs (Level 3):




Level 1
                    
                    
                    Level 2
                    
                    
                    Level 3
                    
                    
                    TotalCash
      and cash equivalents and restricted cash
                    
                    $
                    13,218,000
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    13,218,000Marketable
      debt securities
                    
                    
                    -
                    
                    
                    
                    2,000,000
                    
                    
                    
                    -
                    
                    
                    
                    2,000,000$
                    13,218,000
                    
                    
                    $
                    2,000,000
                    
                    
                    $
                    -
                    
                    
                    $
                    15,218,000




38




The
Company’s investment in cash equivalents consists of short-term (less than 90
days) investments in commercial paper, money market funds, asset-backed
securities and corporate bonds. The major portion of the cash equivalents is
invested in money market funds and are priced at fair value and actively traded,
thus recorded in Level 1 above.




The
Company’s investments in short-term and long-term investment securities are
exposed to price fluctuations. The fair value measurements for short-term and
long-term investment securities are based upon the quoted price in active
markets multiplied by the number of shares owned exclusive of any transaction
costs and without any adjustments to reflect discounts that may be applied to
selling a large block of the securities at one time. The Company sold the
marketable debt securities in January 2009 at par.





Deferred
loan costs:





Prepaid
expenses and other current assets include deferred loan costs of $196,000 at
December 31, 2008 and $254,000 at December 31, 2007. Deferred loan costs are
amortized on the straight-line method by annual charges to operations over the
terms of the loans. Amortization of such costs is included in interest expense
and amounted to approximately $57,000 in 2008, $56,000 in 2007 and $52,000 in
2006. Deferred loan costs relate to mortgage loans for continuing real estate
properties.





Real
estate and other properties:





Real
estate properties and other property and equipment are stated at cost. Costs
incurred to maintain and repair the property are expensed as incurred.
Depreciation is provided on the straight-line method using an estimated useful
life of 30 to 35 years for real estate buildings and seven years for furniture,
fixtures and equipment at the properties, which approximates their estimated
useful life.





The
Company has designated certain real estate properties as held for sale and
reports results of operating the properties, including interest expense, and the
gain or loss on the sale of such real estate properties as “Discontinued
Operations”. The Company ceases depreciating a property when it is designated as
held for sale.


39





The
composition of the Company’s real estate and other properties
follows:





December 31,2008
                        
                        
                        2007Real
      estate and other properties:Land
                        
                        $
                        3,378,000
                        
                        
                        $
                        3,378,000Building
                        
                        
                        26,779,000
                        
                        
                        
                        26,563,000Furniture,
      fixtures and equipment
                        
                        
                        8,720,000
                        
                        
                        
                        8,691,000Accumulated
      depreciation
                        
                        
                        (17,293,000
                        )
                        
                        
                        (16,104,000
                        )Net
      real estate and other properties
                        
                        
                        21,584,000
                        
                        
                        
                        22,528,000Real
      estate held for sale:Land
                        
                        
                        1,043,000
                        
                        
                        
                        1,259,000Building
                        
                        
                        3,400,000
                        
                        
                        
                        4,283,000Furniture,
      fixtures and equipment
                        
                        
                        194,000
                        
                        
                        
                        405,000Accumulated
      depreciation
                        
                        
                        (371,000
                        )
                        
                        
                        (856,000
                        )Net
      real estate held for sale
                        
                        
                        4,266,000
                        
                        
                        
                        5,091,000Net
      real estate and other properties
                        
                        $
                        25,850,000
                        
                        
                        $
                        27,619,000





On a
periodic basis, management assesses whether there are any indicators that the
value of the real estate properties may be impaired. A property’s value is
considered impaired if management’s estimate of the aggregate future cash flows
(undiscounted and without interest charges) to be generated by the property are
less than the carrying value of the property. To the extent impairment has
occurred, the loss shall be measured as the excess of the carrying amount of the
property over the fair value of the property.





Management
does not believe at December 31, 2008 and 2007 that the value of any of its
properties is impaired.





Revenue
recognition:





Revenue
from real estate properties is recognized during the period in which the
premises are occupied and rent is due from tenants. For commercial properties,
rental revenue is recognized on a straight-line basis over the term of the
lease. The excess of rents recognized over amounts contractually due pursuant to
the underlying leases are included in accounts receivable. For residential
properties where lease agreements are almost exclusively for one-year terms,
rental revenue is recognized in accordance with the contractual terms of the
underlying leases. The Company follows a policy of aggressively pursuing its
rental tenants to ensure timely payment of amounts due. When a tenant becomes 30
days in arrears on paying rent, the amount is generally written-off and turned
over to a collection agency for action. Accordingly, no allowance for
uncollectible accounts is maintained for the Company’s real estate
tenants.





An
allowance for uncollectible accounts was maintained based on the Company’s
estimate of the inability of its joint interest partners in the oil and gas
division to make required payments. With the sale of the oil and gas division,
the Company no longer maintains an allowance for uncollectible
accounts.


40





Income
taxes:





Deferred
taxes are provided for the net tax effect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. The primary temporary differences are
those related to like kind exchanges, tax over book depreciation and unrealized
gains and losses on marketable securities.




Deferred
tax benefits are evaluated for realizability and a determination is made, taking
into account tax planning strategies, on whether the deferred tax benefit is
more likely than not to be realized. Based upon this evaluation, a valuation
allowance is established to reduce the deferred tax benefit to the level where
it is more likely than not to be ultimately realized. At December 31, 2008 and
2007, the Company had a zero valuation allowance.




On
January 1, 2007, the Company adopted FASB Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes” (“FIN 48”) . FIN 48 clarifies the
criteria for recognizing tax benefits related to uncertain tax positions under
SFAS 109 and requires additional financial statement disclosure. FIN 48 requires
that the Company recognize, in its consolidated financial statements, the impact
of a tax position if that position is more likely than not to be sustained upon
examination, based on the technical merits of the position. FIN 48 also requires
explicit disclosure about the Company’s uncertainties related to the income tax
position, including a detailed roll-forward of tax benefits taken that do
qualify for financial statement recognition. Adoption of FIN 48 had no impact on
the Company’s consolidated results of operations or financial
position.





Foreign
operations:





The
assets and liabilities of the Company’s substantially liquidated Canadian
subsidiary have been translated at year-end exchange rates. The related revenues
and expenses have been translated at average annual exchange rates. In 2008,
2007 and 2006, foreign currency translation losses totaling $82,000, $272,000
and $26,000, respectively were included in the statements of
operations.





Earnings
(loss) per share:





Basic
earnings (loss) per share are calculated by dividing net income (loss) by the
weighted average number of shares outstanding during each period. The
calculation of diluted earnings per share is similar to that of basic earnings
per share, except that the denominator is increased to include the number of
additional shares that would have been outstanding if all potentially dilutive
shares, such as those issuable upon the exercise of stock options, were issued
during the period.





In
computing diluted earnings (loss) per share for the years ended December 31,
2008, 2007 and 2006, the assumed exercise of all of Wilshire’s outstanding stock
options, adjusted for application of the treasury stock method, would have
increased the weighted average number of shares outstanding as shown in the
earnings (loss) per share calculation table below.


41





2008
                    
                    
                    2007
                    
                    
                    2006Numerator-Net
      income (loss) – Basic and Diluted
                    
                    $
                    (1,361,000
                    )
                    
                    $
                    (892,000
                    )
                    
                    $
                    2,285,000Denominator-Weighted
      average common
                      shares
      outstanding – Basic
                    
                    
                    7,924,299
                    
                    
                    
                    7,922,303
                    
                    
                    
                    7,887,777Incremental
      shares from assumed
                      conversions
      of stock options
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    127,234Weighted
      average common shares
                      outstanding –
      Diluted
                    
                    
                    7,924,299
                    
                    
                    
                    7,922,303
                    
                    
                    
                    8,015,011Basic
      earnings (loss) per share:
                    
                    $
                    (0.17
                    )
                    
                    $
                    (0.11
                    )
                    
                    $
                    0.29Diluted
      earnings (loss) per share:
                    
                    $
                    (0.17
                    )
                    
                    $
                    (0.11
                    )
                    
                    $
                    0.28





For the
year ended December 31, 2008, 110,880 of potentially dilutive securities have
been excluded from the calculation of net loss per share since the effects of
such potentially dilutive securities would be anti-dilutive because the Company
incurred a net loss during the year ended December 31, 2008. For the year ended
December 31, 2007, 33,032 of potentially dilutive securities have been excluded
in the calculation of net loss per share since the effects of such potentially
dilutive securities would be anti-dilutive because the Company incurred a net
loss during the year ended December 31, 2007.





Stock-based
compensation:





In
December 2004, the FASB issued Statement on Financial Accounting Standards
(“SFAS”) No. 123R (“SFAS 123R”), “Accounting for Stock-Based Compensation.” SFAS
123(R) establishes standards for the accounting for transactions in which an
entity exchanges its equity instruments for goods or services. This Statement
focuses primarily on accounting for transactions in which an entity obtains
employee services in share-based payment transactions. SFAS 123(R) requires that
the fair value of such equity instruments be recognized as an expense in the
historical financial statements as services are performed. Prior to SFAS 123(R),
only certain pro forma disclosures of fair value were required.





The
Company has adopted the provisions of SFAS 123(R) effective January 1, 2006.
During 2008, 2007 and 2006, the Company recorded charges of $90,000, $107,000
and $94,000 , respectively, in connection with the issuance of stock
options to employees and non-employee directors. The effect of applying SFAS
123(R) on basic and diluted earnings (loss) per share was $0.01 for the years
ended December 31, 2008 and 2007.








The fair value of each option award is estimated on the date of
grant using the Black-Scholes option valuation model. The Company recognizes the
fair value of each option as compensation expense ratably using the
straight-line attribution method over the service period, which is generally the
vesting period. The Black-Scholes model incorporates the following
assumptions:





·
            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.




42


The
following table outlines the variables used in the Black-Scholes option-pricing
model.




2007
                
                
                2006Risk
      free interest rate
                
                
                5.04
                %
                
                
                5.03
                %Volatility
                
                
                51.51
                %
                
                
                18.90
                %Dividend
      yield
                
                
                -
                
                
                
                -Expected
      option life
                
                10
      years
                
                
                10
      years





As of
December 31, 2008 and 2007, the Company had total unrecognized compensation
expense related to options granted to non-employee directors of $109,000 and
$199,000, respectively, which will be recognized over a remaining average period
of 1.6 years. The expected future amortization expense for unrecognized
compensation expense for stock option grants to non-employee directors at
December 31, 2008 is as follows:




Year
      ending December 31, 2009
                
                $
                62,000Year
      ending December 31, 2010
                
                
                33,000Year
      ending December 31, 2011
                
                
                14,000$
                109,000




Accumulated
other comprehensive income (loss):





Comprehensive
income (loss) includes net income (loss) and unrealized gain (loss) on
available-for-sale securities.





Comprehensive
loss for the year ended December 31, 2008 is as follows:





Before Tax
                    
                    
                    Income Tax
                      Benefit
                      (Expense)
                    
                    
                    After TaxNet
      loss
                    
                    $
                    (1,361,000
                    )
                    
                    $
                    -
                    
                    
                    $
                    (1,361,000
                    )Reclassification
      adjustment
                    
                    
                    553,000
                    
                    
                    
                    (219,000
                    )
                    
                    
                    334,000Unrealized
      loss arising during year
                    
                    
                    (427,000
                    )
                    
                    
                    169,000
                    
                    
                    
                    (258,000
                    )Total
      comprehensive loss
                    
                    $
                    (1,235,000
                    )
                    
                    $
                    (50,000
                    )
                    
                    $
                    (1,285,000
                    )




43





Changes
in the components of accumulated other comprehensive income (loss), net of taxes
for the years 2008, 2007 and 2006 are as follows:




Unrealized
                        Gains (Losses)
                        on Available-
                        for-Sale
                        SecuritiesBALANCE,
      December 31, 2005
                      
                      $
                      144,000Change
      for the year 2006
                      
                      
                      (76,000
                      )BALANCE,
      December 31, 2006
                      
                      
                      68,000Change
      for the year 2007
                      
                      
                      (144,000
                      )BALANCE,
      December 31, 2007
                      
                      
                      (76,000
                      )Change
      for the year 2008
                      
                      
                      76,000BALANCE,
      December 31, 2008
                      
                      $
                      -




Advertising
expense:





The
Company advertises for tenants for its properties through various media,
including print and internet. Advertising costs are expensed as incurred and
amounted to $141,000 in 2008, $150,000 in 2007 and $112,000 in
2006.





2.
            Discontinued
      operations:





During
2008, the Company sold two condominiums at Jefferson Gardens in Sussex, New
Jersey and its Tamarac Office Plaza in Florida for a gross sales price of
$2,303,000 and an after tax-tax gain of $806,000.





During
2007, the Company sold its 1.8 acres of land in Lake Hopatcong, New Jersey and
six condominium units at Jefferson Gardens Condominiums in Sussex, New Jersey
for a gross sales price of $1,814,000 and an after-tax gain of $699,000. In
2006, the Company sold its triple net lease on a bank branch in Rutherford,
New Jersey, its hotel known as the Wilshire Grand Hotel and Banquet Facility in
New Jersey, its forty two (42) condominium units at Galsworthy Arms Condominiums
in Long Branch, New Jersey and Twelve Oaks apartment complex in Riverdale,
Georgia for gross proceeds of $22,669,000 and an after-tax gain of
$4,233,000.




On
September 30, 2005, the Company, as managing member of WO Grand Hotel, LLC (the
“Seller”), entered into a definitive agreement (the “Purchase Agreement”) with
350 Pleasant Valley Hotel Associates, L.L.C. (the “Acquirer”) to sell the
Wilshire Grand Hotel & Banquet Facility (the “Hotel”) to the Acquirer for
$12.75 million. The Acquirer is an investor group with which Wilshire has no
prior relationship. The sale closed on May 4, 2006.As a result of the closing of the sale of the Hotel
on May 4, 2006, the Company received a distribution of $6.1
million.





The
Company has designated certain of its properties as held for sale, which under
accounting principles generally accepted in the United States requires that the
Company report the results of operating these properties as discontinued
operations. At December 31, 2008, the Company’s residential apartment complex
known as Jefferson Gardens Condominiums (Sussex, New Jersey) and its office
buildings Amboy Towers (Perth Amboy, New Jersey) and several parcels of
undeveloped land in New Jersey have been classified as discontinued
operations.




During 2008, 2007 and 2006, the Company recorded income, net of
taxes from operating its oil and gas businesses of $324,000, $300,000 and
$115,000, respectively. The income from operating the oil and gas business in
2008, 2007 and 2006 reflects the foreign currency exchange gains which were
partially offset by professional fees associated with the wind down of the oil
and gas businesses, the continuing reconciliation process between the Company
and its partners for periods prior to the effective date of the sale and
adjustments to the accruals recorded in prior years for the liquidation of the
oil and gas business.


44




3.
            Long-term
      debt:





Long-term
debt as of December 31 consists of the following:





2008
                  
                  
                  2007Mortgage
      notes payable (a)
                  
                  $
                  3,540,000
                  
                  
                  $
                  4,234,000Mortgage
      notes payable (b)
                  
                  
                  20,412,000
                  
                  
                  
                  20,762,000Mortgage
      notes payable (c)
                  
                  
                  3,893,000
                  
                  
                  
                  3,956,000Totals
                  
                  
                  27,845,000
                  
                  
                  
                  28,952,000Less
      current portion
                  
                  
                  4,378,000
                  
                  
                  
                  518,000Long-term
      debt
                  
                  $
                  23,467,000
                  
                  
                  $
                  28,434,000Long-term
      debt applicable to discontinued operations:Included
      in current liabilities
                  
                  $
                  -
                  
                  
                  $
                  14,000Included
      in non-current liabilities
                  
                  
                  -
                  
                  
                  
                  559,000Totals
                  
                  $
                  -
                  
                  
                  $
                  573,000




(a)
            Mortgage note payable to Capital
      One NA payable in monthly installments, bearing interest at a weighted
      average effective rate of 5.125%. This mortgage note is secured by a first
      mortgage interest in a  commercial real estate property in
      Arizona. The note is being amortized over a 25-year period and matures in
      February 2013, with a balloon principal payment due at maturity. At
      December 31, 2008, the property securing this note had an approximate net
      book value of $2,366,000.





(b)
            Mortgage notes payable to four
      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, 2008, had
      an approximate net book value of
  $13,103,000.





(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, 2008 had an approximate net
      book value of $4,769,000.




The aggregate maturities of the long-term debt in each of the
five years subsequent to December 31, 2008 are as follows:





Year
                    
                    Amount2009
                    
                    $
                    4,378,0002010
                    
                    
                    513,0002011
                    
                    
                    543,0002012
                    
                    
                    571,0002013
                    
                    
                    21,840,000$
                    27,845,000




45




4.
            Commitments and
      contingencies:





Commercial
leases:





Wilshire
leases commercial space to tenants for periods of up to seven years. Most of the
leases contain clauses for reimbursement of real estate taxes, maintenance,
insurance and certain other operating expenses of the properties. Minimum rental
income to be received from non-cancelable operating leases in the five years
subsequent to December 31, 2008 is as follows:




Year
                  
                  Amount2009
                  
                  $
                  1,631,0002010
                  
                  
                  1,311,0002011
                  
                  
                  742,0002012
                  
                  
                  429,0002013
                  
                  
                  214,000$
                  4,327,000





The above
amounts assume that all leases which expire are not renewed and, accordingly,
neither minimum rentals nor rentals from replacement tenants are
included.





Minimum
future rentals do not include contingent rentals, which may be received under
certain leases on the basis of the percentage of tenants’ reported sales volume
or other factors. Rental income that is contingent on future events is not
included in income until the contingency is resolved. Contingent rentals
included in income for each of the three years in the period ended December 31,
2008 were not material.





Residential
leases:





Lease
terms for residential tenants are usually one year or less.





City
of Perth Amboy, New Jersey:





Wilshire
achieved a settlement agreement with the City of Perth Amboy, New Jersey,
regarding the redevelopment zone status of its office building, Amboy Towers. In
an agreement signed in February 2005, the City agreed to name the Company as the
redeveloper for Amboy Towers and Wilshire agreed to invest at least $750,000 in
capital improvements in the building over the 18-month period commencing with
the signing of the agreement. The Company satisfied its commitment during 2006
and has spent approximately $970,000 through December 31, 2008 on capital
improvements since reaching this agreement.





Headquarters
lease:





Wilshire
entered into an agreement to lease office space for its headquarters at 1
Gateway Center in Newark, New Jersey. The effective date of the lease is April
1, 2005 and it is for a 65 month period with two renewal options, each for a
five-year period. The base rent in the lease is $29.00 per square foot, with
Wilshire receiving five months of free rent in the third year of the lease
agreement. Base rental expense is recognized on a straight-line basis and
amounts to $121,000 per year. The future minimum rental payments are $131,000
for the year ending December 31, 2009 and $87,000 for the year ending December
31, 2010.





During
2007, the Company received a rent abatement in accordance with the lease for
five months. Rental expense for all of the Company’s offices amounted to
approximately $148,000 in 2008, $93,000 in 2007 and $140,000 in 2006.


46




Rights
plan:





On
December 3, 2008, the Board of Directors of the Company declared a dividend of
one preferred share purchase right (a “Right”) for each outstanding share of
common stock.  The dividend was paid on December 15, 2008 to the
stockholders of record on that date.  Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series B Junior Participating Preferred Stock, par value $1.00 per share, of the
Company (the “Preferred Stock”) at a price of $6.50 per one one-thousandth of a
share of Preferred Stock, subject to adjustment.  The description and
terms of the Rights are set forth in a Qualified Offer Plan Rights Agreement
dated as of December 4, 2008, as the same may be amended from time to time (the
“Rights Agreement”), between the Company and Continental Stock Transfer &
Trust Company, as Rights Agent (the “Rights Agent”).  The Rights will
expire on December 4, 2018 (the “Final Expiration Date”), unless the Final
Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company.




Under the
Rights Agreement, the rights are exercisable upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons has become an "Acquiring Person" or (ii) 10 business days (or
such later date as may be determined by action of the Board of Directors prior
to such time as any person or group of affiliated or associated persons becomes
an Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 20% or more of
the outstanding shares of common stock.  Except in certain situations,
a person or group of affiliated or associated persons becomes an Acquiring
Person upon acquiring beneficial ownership of 20% or more of the outstanding
shares of common stock.  Subject to certain exceptions, any person or
group of affiliated or associated persons owning 20% or more of such shares as
of the time the execution of the Rights Agreement was announced in December 2008
shall not be deemed to be an Acquiring Person unless and until such time as such
person or group shall, after the time of such announcement, become the
beneficial owner of any additional shares of common stock.





In the
event that any person or group of affiliated or associated persons becomes an
Acquiring Person, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereupon become void), will thereafter have
the right to receive upon exercise of a Right that number of shares of common
stock having a market value of two times the exercise price of the
Right.





The
Rights will not become exercisable in connection with a “Qualified Offer,” which
is an all-cash tender offer for all outstanding common stock that is fully
financed, remains open for a period of at least 60 business days, results in the
offeror owning at least 85% of the common stock after consummation of the offer,
assures a prompt second-step acquisition of shares not purchased in the initial
offer at the same price as the initial offer and meets certain other
requirements.





In
connection with the adoption of the Rights Agreement, the Board of Directors
also adopted an annual independent director evaluation
mechanism.  Under this mechanism, an independent Board committee will
review, on an ongoing basis, the Rights Agreement and developments in rights
plans generally, and, if it deems appropriate, recommend modification or
termination of the Rights Agreement.  This independent committee will
report to the Company’s Board at least once each year as to whether the Rights
Agreement continues to be in the best interests of the Company’s
stockholders.




The
Company's prior rights plan  expired on August 31, 2008, pursuant to
its terms.  The Prior Agreement was scheduled to expire on August 31,
2008, unless extended by stockholders at the Company's 2008 annual
meeting.





Share
repurchase authorization:





On June
3, 2004, the Company announced that the Board of Directors had authorized the
purchase of up to 1,000,000 shares of its common stock on the open market, in
privately negotiated transactions or otherwise. This purchasing activity may
occur from time to time, in one or more transactions. Through December 31, 2008,
the Company had purchased 138,231 shares under this program at an approximate
cost of $1,017,000 or $7.35 per share.


47




5.
            Stock option
      plans:





In June
2004, the Company’s stockholders approved the 2004 Stock Option and Incentive
Plan (the “2004 Incentive Plan”). The purpose of the 2004 Incentive Plan is to
encourage stock ownership by key employees and consultants of the Company, to
provide additional incentive for them to promote the successful business
operations of the Company, to encourage them to continue providing services to
the Company, and to attract new employees and consultants to the Company. Awards
under the 2004 Incentive Plan may be granted in any one or all of the following
forms, as those terms are defined under the 2004 Incentive Plan: (i) incentive
stock options; (ii) non-qualified stock options; (iii) stock appreciation
rights; (iv) restricted shares of common stock; (v) performance shares; (vi)
performance units; and (vii) unrestricted shares of common stock. The maximum
aggregate number of shares of common stock available for award under the 2004
Incentive Plan is 600,000, subject to adjustment under the terms of the 2004
Incentive Plan.





In June
2004, the Company’s stockholders approved the 2004 Non-Employee Director Stock
Option Plan (the “2004 Director Plan”). The purpose of the 2004 Director Plan is
to attract qualified personnel to accept positions of responsibility as
directors of the Company, to provide incentives for persons to remain on the
Board and to induce such persons to maximize the Company’s performance during
the terms of their options. Only non-qualified stock options may be granted
under the 2004 Director Plan. The maximum aggregate number of shares of common
stock available for grant under the 2004 Director Plan is 150,000, subject to
adjustment under the terms of the 2004 Director Plan. Upon adoption of the 2004
Director Plan, each non-employee director was granted 10,000 options to purchase
common shares of the Company at fair market value on the date of grant and on
each anniversary date of the 2004 Director Plan’s adoption will receive an
additional 5,000 options to purchase common shares of the Company at fair market
value on the date of grant.





In June
1995, the Company adopted two stock-based compensation plans (1995 Stock Option
and Incentive Plan, the “Incentive Plan”; and 1995 Non-employee Director Stock
Option Plan, the “Director Plan”) under which, up to 450,000 and 150,000 shares,
respectively were available for grant. In 2003, 50,000 options were granted
under the Incentive Plan and 5,000 options were granted under the Director Plan.
In 2004, 5,000 options were granted under the Director Plan. The Incentive Plan
and Director Plan expired ten years after their date of adoption. Accordingly,
no additional awards may be granted under either of these plans.





Stock
option grants under the 2004 Director Plan amounted to 25,000 options in 2007
and 2006. No options were granted under the 2004 Incentive Plan in 2008, 2007 or
2006.





The
number and terms of the options granted under these plans are determined by the
Company’s Compensation Committee (the Committee) based on the fair market value
of the Company’s common stock on the date of grant. The period during which an
option may be exercised varies, but no option may be exercised after ten years
from the date of grant.


48





A summary
of option activity under the option plans as of December 31, 2008, and changes
during the year then ended is presented below:





Shares
                  
                  
                  Weighted
                    Average
                    Exercise Price
                  
                  
                  Weighted Average
                    Remaining
                    Contractual Term
                  
                  
                  Aggregate
                    Intrinsic ValueOptions
      Outstanding at January 1, 2008
                  
                  
                  135,000
                  
                  
                  $
                  6.26
                  
                  
                  
                  7.2
                  
                  
                  $
                  -Options
      granted
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Options
      exercised
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Options
      terminated and expired
                  
                  
                  (5,000
                  )
                  
                  
                  6.00
                  
                  
                  
                  -
                  
                  
                  
                  -Options
      outstanding at December 31, 2008
                  
                  
                  130,000
                  
                  
                  $
                  6.27
                  
                  
                  
                  6.5
                  
                  
                  $
                  -Options
      exercisable at December 31, 2008
                  
                  
                  91,500
                  
                  
                  $
                  5.95
                  
                  
                  
                  5.9
                  
                  
                  $
                  -




Options
for 33,250 shares had vested during 2008 with a weighted average remaining
contractual life of 7.7 years and a weighted average grant date fair value of
$1.93 per share.




Options
for 19,750 shares will vest during 2009 with a weighted average grant date fair
value of $1.40 per share.





A summary
of the status of the Company’s nonvested restricted shares as of December 31,
2008, and changes during the year ended December 31, 2008, is presented below:




Nonvested Shares
            
            Shares
            
            
            Weighted-Average
              Grant-Date Fair ValueNonvested
      shares at January 1, 2008
            
            
            34,467
            
            
            $
            7.65Shares
      Granted
            
            
            6,133
            
            
            
            3.05Shares
      Vested
            
            
            (26,834
            )
            
            
            5.24Shares
      Forfeited
            
            
            (6,133
            )
            
            
            6.30Nonvested
      shares at December 31, 2008
            
            
            7,633
            
            
            $
            3.90




During
2006, 29,500 restricted shares of common stock were granted to employees under
the 2004 Incentive Plan. The employee’s right to receive these restricted shares
vests over a three-year period. Compensation expense for the year ended December
31, 2006 includes $42,000 related to the issuance of restricted shares in 2006.
Also during 2006, 22,465 shares of common stock were granted to employees under
the 2004 Incentive Plan without any restrictions. These shares were issued in
satisfaction of incentive bonus awards that had been accrued and expensed in
2005.  The Company recognized compensation expense associated with the
issuance of restricted shares of $35,000, $111,000 and $140,000 for the years
ended December 31, 2008, 2007 and 2006, respectively.


49




6.
            Income
    taxes





The
Company did not have any foreign operations included in continuing operations
for the years ended December 31, 2008, 2007 and 2006.




Provision (benefit) for income taxes consists of the
following:




2008
                
                
                2007
                
                
                2006Continuing
      Operations:Federal:Current
                
                $
                (1,310,000
                )
                
                $
                (1,194,000
                )
                
                $
                (264,000
                )Deferred
                
                
                100,000
                
                
                
                34,000
                
                
                
                (416,000
                )(1,210,000
                )
                
                
                (1,160,000
                )
                
                
                (680,000
                )State:Current
                
                
                (10,000
                )
                
                
                25,000
                
                
                
                (159,000
                )Deferred
                
                
                (123,000
                )
                
                
                (186,000
                )
                
                
                10,000(133,000
                )
                
                
                (161,000
                )
                
                
                (149,000
                )Total
      Continuing
                
                $
                (1,343,000
                )
                
                $
                (1,321,000
                )
                
                $
                (829,000
                )Discontinued
      Operations:Real
      Estate:FederalCurrent
                
                $
                200,000
                
                
                $
                107,000
                
                
                $
                2,262,000Deferred
                
                
                0
                
                
                
                0
                
                
                
                (347,000
                )200,000
                
                
                
                107,000
                
                
                
                1,915,000State:Current
                
                
                44,000
                
                
                
                21,000
                
                
                
                831,000Deferred
                
                
                0
                
                
                
                0
                
                
                
                (159,000
                )44,000
                
                
                
                21,000
                
                
                
                672,000Total
      Real Estate
                
                $
                244,000
                
                
                $
                128,000
                
                
                $
                2,587,000Oil
      and Gas:Federal:Current
                
                $
                0
                
                
                $
                0
                
                
                $
                0Deferred
                
                
                0
                
                
                
                0
                
                
                
                00
                
                
                
                0
                
                
                
                0State:Current
                
                
                0
                
                
                
                0
                
                
                
                0Deferred
                
                
                0
                
                
                
                0
                
                
                
                00
                
                
                
                0
                
                
                
                0Foreign:Current
                
                
                (85,000
                )
                
                
                0
                
                
                
                (215,000
                )Deferred
                
                
                0
                
                
                
                0
                
                
                
                0(85,000
                )
                
                
                0
                
                
                
                (215,000
                )Total
      Oil & Gas
                
                $
                (85,000
                )
                
                $
                0
                
                
                $
                (215,000
                )Totals
                
                $
                (1,184,000
                )
                
                $
                (1,193,000
                )
                
                $
                1,543,000


50




A
reconciliation of the differences between the effective tax rate and the
statutory U.S. income tax rate from continuing operations is as follows:





2008
                
                
                2007
                
                
                2006Amount
                
                
                %
                
                
                Amount
                
                
                %
                
                
                Amount
                
                
                %Federal
      income tax benefit at statutory rate
                
                $
                (1,135,000
                )
                
                
                35.0
                %
                
                $
                (941,000
                )
                
                
                35.0
                %
                
                $
                (607,000
                )
                
                
                32.4
                %State
      tax benefit including Federal impact
                
                
                (130,000
                )
                
                
                4.0
                
                
                
                (105,000
                )
                
                
                3.9
                
                
                
                (96,000
                )
                
                
                5.1Dividend
      exclusion
                
                
                (22,000
                )
                
                
                0.7
                
                
                
                (41,000
                )
                
                
                1.5
                
                
                
                (29,000
                )
                
                
                1.5Tax-exempt
      interest
                
                
                (67,000
                )
                
                
                2.1
                
                
                
                (88,000
                )
                
                
                3.3
                
                
                
                (96,000
                )
                
                
                5.1Other
                
                
                11,000
                
                
                
                (0.3
                )
                
                
                (146,000
                )
                
                
                5.4
                
                
                
                (1,000
                )
                
                
                0.1Total
      tax benefit / Effective tax rate (benefit)
                
                $
                (1,343,000
                )
                
                
                41.5
                %
                
                $
                (1,321,000
                )
                
                
                49.1
                %
                
                $
                (829,000
                )
                
                
                44.2
                %





Significant
components of deferred tax liabilities as of December 31, 2008 and 2007 were as
follows:





2008
                
                
                2007Tax
      over book depreciation, depletion and amortization - Oil and gas and real
      estate properties - U.S.
                
                $
                923,000
                
                
                $
                748,000State
      net loss carryover
                
                
                (265,000
                )
                
                
                (119,000
                )Deferred
      gains on sales of real estate properties - U.S.
                
                
                -
                
                
                
                80,000Deferred
      income
                
                
                (70,000
                )
                
                
                (104,000
                )Restricted
      stock
                
                
                5,000
                
                
                
                11,000Unrealized
      loss on marketable securities
                
                
                4,000
                
                
                
                (47,000
                )Net
      deferred tax liabilities
                
                
                597,000
                
                
                
                569,000Current
      of deferred tax asset
                
                
                -
                
                
                
                26,000Noncurrent
      deferred tax liabilities
                
                $
                597,000
                
                
                $
                595,000




The
Company believes that there are no uncertain tax positions that fail to meet the
more likely than not recognition threshold under FIN 48 to be sustained upon
examination. As such, a tabular presentation of those tax benefits taken that do
not qualify for recognition is not presented.





From time
to time, the Company may be assessed interest or penalties by its tax
jurisdictions, although, historically, there have been no such assessments and
the Company believes that any potential future assessments would be minimal and
immaterial to the Company’s results of operations and financial position. In the
event the Company receives an assessment for interest and/or penalties, it would
be classified in the consolidated financial statements as general and
administrative expense.





7.
            Segment
      information:




SFAS No.
131, “Disclosures about Segments of an Enterprise and Related Information,”
established standards for reporting financial information about operating
segments in interim and annual financial reports and provides for a “management
approach” in identifying the reportable segments.





Wilshire
has determined that it has two reportable segments within its continuing
operations: residential properties and commercial properties. These reportable
segments have different types of customers and are managed separately because
each requires different operating strategies and management expertise. The
residential property segment has two separate properties and the commercial
segment has three properties. The accounting policies of the segments are the
same as those described in Note 1.





Wilshire
assesses and measures segment operating results based on net operating income
(“NOI”), which is a direct measure of each property’s contribution to the
results of the Company before considering revenues from treasury activities,
overhead expenses and other costs that are not directly related to the
performance of a property. The Company believes NOI is a more descriptive
measure of the Company’s performance than income (loss) from continuing
operations. NOI is not a measure of operating results or cash flow as measured
by generally accepted accounting principles, and is not necessarily indicative
of cash available to fund cash needs and should not be considered an alternative
to cash flows as a measure of liquidity.


51




Continuing real estate revenue, operating expenses, NOI and
recurring capital improvements for the reportable segments are summarized below
and reconciled to consolidated income (loss) from continuing operations for each
of the three years in the period ended December 31, 2008. Asset information is
not reported since Wilshire does not use this measure to assess
performance.





2008
                  
                  
                  2007
                  
                  
                  2006Real
      estate revenue:Residential
                  
                  $
                  7,770,000
                  
                  
                  $
                  7,765,000
                  
                  
                  $
                  7,387,000Commercial
                  
                  
                  1,433,000
                  
                  
                  
                  1,655,000
                  
                  
                  
                  1,447,000Totals
                  
                  $
                  9,203,000
                  
                  
                  $
                  9,420,000
                  
                  
                  $
                  8,834,000Real
      estate operating expenses:Residential
                  
                  $
                  5,192,000
                  
                  
                  $
                  5,174,000
                  
                  
                  $
                  4,572,000Commercial
                  
                  
                  700,000
                  
                  
                  
                  689,000
                  
                  
                  
                  703,000Totals
                  
                  $
                  5,892,000
                  
                  
                  $
                  5,863,000
                  
                  
                  $
                  5,275,000Net
      operating income (“NOI”):Residential
                  
                  $
                  2,578,000
                  
                  
                  $
                  2,591,000
                  
                  
                  $
                  2,815,000Commercial
                  
                  
                  733,000
                  
                  
                  
                  966,000
                  
                  
                  
                  744,000Totals
                  
                  $
                  3,311,000
                  
                  
                  $
                  3,557,000
                  
                  
                  $
                  3,559,000Capital
      improvements:Residential
                  
                  $
                  180,000
                  
                  
                  $
                  312,000
                  
                  
                  $
                  783,000Commercial
                  
                  
                  77,000
                  
                  
                  
                  132,000
                  
                  
                  
                  546,000Totals
                  
                  $
                  257,000
                  
                  
                  $
                  444,000
                  
                  
                  $
                  1,329,000Reconciliation
      of NOI to consolidated loss from continuing operations:Segment
      NOI
                  
                  $
                  3,311,000
                  
                  
                  $
                  3,557,000
                  
                  
                  $
                  3,559,000Total
      other income, including net investment income
                  
                  
                  227,000
                  
                  
                  
                  576,000
                  
                  
                  
                  843,000Depreciation
      expense
                  
                  
                  (1,188,000
                  )
                  
                  
                  (1,368,000
                  )
                  
                  
                  (1,987,000
                  )General
      and administrative expense
                  
                  
                  (3,816,000
                  )
                  
                  
                  (3,617,000
                  )
                  
                  
                  (2,475,000
                  )Interest
      expense
                  
                  
                  (1,776,000
                  )
                  
                  
                  (1,837,000
                  )
                  
                  
                  (1,811,000
                  )Income
      tax benefit
                  
                  
                  1,343,000
                  
                  
                  
                  1,321,000
                  
                  
                  
                  829,000Loss
      from continuing operations
                  
                  $
                  (1,899,000
                  )
                  
                  $
                  (1,368,000
                  )
                  
                  $
                  (1,042,000
                  )




8.
            Preferred
      Stock





The
Company is authorized to issue up to 1,000,000 shares of preferred stock, par
value $1.00 per share. At December 31, 2008 and 2007, there were no shares of
preferred stock outstanding. The preferred stock may be issued in one or more
series, from time to time, with each such series to have such designation,
powers, preferences and relative participating, optional or other special
rights, and qualifications, limitations or restriction thereof, as shall be
stated and expressed in the resolution or resolutions providing for the issue of
such series adopted by the Board of Directors of the Company, subject to the
limitations prescribed by law and in accordance with the provisions set forth in
the Certificate of Incorporation of the Company.


52


9.
              Fair value of financial
      instruments
  The
following disclosures of estimated fair value were determined by management,
using available market information and appropriate valuation methodologies.
Considerable judgment is necessary to interpret market data and develop
estimated fair values. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts the Company could realize on disposition
of the financial instruments. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.
 
 Cash
equivalents, accounts receivable, and accounts payable reasonably approximate
their fair values due to the short maturities of these items.
 
 Mortgage
notes payable have an estimated fair value based on discounted cash flow models
of approximately $29.3 million at December 31, 2008, which is greater than the
carrying value by $1.4 million. At December 31, 2007, mortgage notes payable had
an estimated fair value based on discounted cash flow models of approximately
$28.8 million, which is lower than the carrying value by $0.1
million.
 
 Disclosure
about fair value of financial instruments is based on pertinent information
available to management as of December 31, 2008.
  10.
              Other
    matters
  A
complaint was filed on August 8, 2008 in the Superior Court of New Jersey,
Chancery Division, Essex County, by Pennsylvania Avenue Funds as plaintiff
individually and on behalf of the public stockholders of the Company, in
connection with the proposed merger of the Company with a wholly-owned
subsidiary of NWJ Apartment Holdings Corp., an affiliate of NWJ Companies, Inc.,
a privately owned real estate development company.  The Company, its
directors, NWJ Apartment Holdings Corp. and NWJ Acquisition Corp. are named as
defendants.  The complaint alleges, among other things, three causes
of action:  (i) breach of fiduciary duty by the directors as a result
of their alleged failure to maximize shareholder value, (ii) breach of fiduciary
duty by the directors as a result of their alleged failure to disclose to the
Company’s stockholders all information material to the stockholder’s decision
about the merger and (iii) aiding and abetting by the NWJ entities of the
directors’ alleged breach of fiduciary duties.  The Company regards
the complaint as completely without merit. Although the parties had entered into
a Memorandum of Understanding, dated September 9, 2008 (the “MOU”) as a first
step toward a settlement of the litigation, the stipulation of settlement
contemplated by the MOU was never executed.  The contemplated
transaction with NWJ was never consummated, thus mooting the
litigation.  In February 2009, the plaintiff’s counsel applied for an
award of attorneys’ fees and expenses in the amount of $215,000, even though the
contemplated transaction with NWJ was never consummated and by the terms of the
MOU, the plaintiff was therefore not entitled to any attorneys’
fees.  Following oral argument on March 27, 2009, the court denied
plaintiff’s motion in its entirety.
  On
December 5, 2008, the Company commenced litigation in the Superior Court of
New Jersey, Chancery Division, Essex County, against David Gorman, Kern,
Suslow Securities, Inc., KSS Capital Markets and Don Brenner for,
among other things, breach of a contract and the rescission of the
sale of approximately 6% of the Company’s shares from Mr. Brenner
to Bulldog Investors General Partnership ("Bulldog").  The
Company believes that Mr. Gorman, Kern, Suslow Securities, Inc. and KSS
Capital Markets breached a confidentiality agreement with the Company by trading
in the stock of the Company and/or facilitating the sale of Mr.
Brenner's shares to Bulldog in violation of that
agreement.  On December 30, 2008, the Company amended its
complaint to add Bulldog, Phillip Goldstein and Andrew Dakos as defendants
in the action.  On January 9, 2009, the Court issued an Order to Show
Cause temporarily enjoining and restraining Mr. Gorman, Kern, Suslow Securities,
Inc. and KSS Capital Markets from assisting any person in acquiring any
securities or assets of the Company, and from further violating the terms of
their confidentiality agreement with the Company.  The Court declined to
issue temporary restraints with respect to the approximately 6% of the
Company's shares that were sold from Mr. Brenner to Bulldog.  The Company's
application for a preliminary injunction is currently scheduled to be heard by
the Court on April 28, 2009.
  Although
the Company cannot provide complete assurances regarding matters outside of
its control, the Company does not expect to incur any additional expenses
in connection with the preliminary investigation previously undertaken by
the Company and disclosed in its reports filed with the Securities and Exchange
Commission.
  53
 
 11.
              Quarterly data
      (Unaudited)
  The
following represents the Company’s consolidated results of operations for each
quarter for the years ended December 31, 2008 and 2007. The earnings per share
amounts may not total to the earnings per share for the full year.
 
 Quarter EndedMarch 31
                        
                        
                        June 30
                        
                        
                        September 30
                        
                        
                        December 312008:Revenues
                        
                        $
                        2,251,000
                        
                        
                        $
                        2,323,000
                        
                        
                        $
                        2,334,000
                        
                        
                        $
                        2,295,000Costs
      and expenses:Operating
      expenses
                        
                        
                        1,432,000
                        
                        
                        
                        1,472,000
                        
                        
                        
                        1,469,000
                        
                        
                        
                        1,519,000Depreciation
      expense
                        
                        
                        326,000
                        
                        
                        
                        292,000
                        
                        
                        
                        284,000
                        
                        
                        
                        286,000General
      and administrative
                        
                        
                        743,000
                        
                        
                        
                        1,054,000
                        
                        
                        
                        1,051,000
                        
                        
                        
                        968,000Total
      costs and expenses
                        
                        
                        2,501,000
                        
                        
                        
                        2,818,000
                        
                        
                        
                        2,804,000
                        
                        
                        
                        2,773,000Loss
      from operations
                        
                        
                        (250,000
                        )
                        
                        
                        (495,000
                        )
                        
                        
                        (470,000
                        )
                        
                        
                        (478,000
                        )Dividend
      and interest income
                        
                        
                        138,000
                        
                        
                        
                        134,000
                        
                        
                        
                        80,000
                        
                        
                        
                        63,000Gain
      (loss) on sale of marketable securities
                        
                        
                        
                        
                        
                        
                        (553,000
                        )
                        
                        
                        
                        
                        
                        
                        365,000Other
      income (loss)
                        
                        
                        1,000
                        
                        
                        
                        0
                        
                        
                        
                        0
                        
                        
                        
                        (1,000
                        )Interest
      expense including amortization of deferred financing costs
                        
                        
                        (465,000
                        )
                        
                        
                        (428,000
                        )
                        
                        
                        (443,000
                        )
                        
                        
                        (440,000
                        )Loss
      before benefit from income taxes
                        
                        
                        (576,000
                        )
                        
                        
                        (1,342,000
                        )
                        
                        
                        (833,000
                        )
                        
                        
                        (491,000
                        ).Income
      tax benefit
                        
                        
                        (263,000
                        )
                        
                        
                        (476,000
                        )
                        
                        
                        (380,000
                        )
                        
                        
                        (224,000
                        )Loss
      from continuing operations
                        
                        
                        (313,000
                        )
                        
                        
                        (866,000
                        )
                        
                        
                        (453,000
                        )
                        
                        
                        (267,000
                        )Discontinued
      operations - real estate gain from sales
                        
                        
                        61,000
                        
                        
                        
                        686,000
                        
                        
                        
                        0
                        
                        
                        
                        59,000Discontinued
      operations - real estate
                        
                        
                        (92,000
                        )
                        
                        
                        (178,000
                        )
                        
                        
                        (120,000
                        )
                        
                        
                        (202,000
                        )Discontinued
      operations - oil & gas
                        
                        
                        40,000
                        
                        
                        
                        (130,000
                        )
                        
                        
                        277,000
                        
                        
                        
                        137,000Net
      loss
                        
                        $
                        (304,000
                        )
                        
                        $
                        (488,000
                        )
                        
                        $
                        (296,000
                        )
                        
                        $
                        (273,000
                        )Basic
      earnings (loss) per share:Continuing
      operations
                        
                        $
                        (0.04
                        )
                        
                        $
                        (0.11
                        )
                        
                        $
                        (0.06
                        )
                        
                        $
                        (0.03
                        )Discontinued
      operations
                        
                        
                        0.00
                        
                        
                        
                        0.05
                        
                        
                        
                        0.02
                        
                        
                        
                        (
      0.00
                        )Net
      loss
                        
                        $
                        (0.04
                        )
                        
                        $
                        (0.06
                        )
                        
                        $
                        (0.04
                        )
                        
                        $
                        (0.03
                        )Diluted
      earnings (loss) per share:Continuing
      operations
                        
                        $
                        (0.04
                        )
                        
                        $
                        (0.11
                        )
                        
                        $
                        (0.06
                        )
                        
                        $
                        (0.03
                        )Discontinued
      operations
                        
                        
                        0.00
                        
                        
                        
                        0.05
                        
                        
                        
                        0.02
                        
                        
                        
                        (
      0.00
                        )Net
      loss
                        
                        $
                        (0.04
                        )
                        
                        $
                        (0.06
                        )
                        
                        $
                        (0.04
                        )
                        
                        $
                        (0.03
                        )
  54
 
 Quarter endedMarch 31
                    
                    
                    June 30
                    
                    
                    September 30
                    
                    
                    December 312007:Revenues
                    
                    $
                    2,280,000
                    
                    
                    $
                    2,352,000
                    
                    
                    $
                    2,412,000
                    
                    
                    $
                    2,376,000Costs
      and expenses:Operating
      expenses
                    
                    
                    1,490,000
                    
                    
                    
                    1,416,000
                    
                    
                    
                    1,435,000
                    
                    
                    
                    1,522,000Depreciation
      expense
                    
                    
                    381,000
                    
                    
                    
                    353,000
                    
                    
                    
                    364,000
                    
                    
                    
                    270,000General
      and administrative
                    
                    
                    1,018,000
                    
                    
                    
                    727,000
                    
                    
                    
                    892,000
                    
                    
                    
                    980,000Total
      costs and expenses
                    
                    
                    2,889,000
                    
                    
                    
                    2,496,000
                    
                    
                    
                    2,691,000
                    
                    
                    
                    2,772,000Loss
      from operations
                    
                    
                    (609,000
                    )
                    
                    
                    (144,000
                    )
                    
                    
                    (279,000
                    )
                    
                    
                    (396,000
                    )Dividend
      and interest income
                    
                    
                    125,000
                    
                    
                    
                    144,000
                    
                    
                    
                    137,000
                    
                    
                    
                    134,000Other
      income (loss)
                    
                    
                    3,000
                    
                    
                    
                    1,000
                    
                    
                    
                    48,000
                    
                    
                    
                    (16,000
                    )Interest
      expense including amortization of deferred financing costs
                    
                    
                    (442,000
                    )
                    
                    
                    (446,000
                    )
                    
                    
                    (447,000
                    )
                    
                    
                    (502,000
                    )Loss
      before provision for taxes
                    
                    
                    (923,000
                    )
                    
                    
                    (445,000
                    )
                    
                    
                    (541,000
                    )
                    
                    
                    (780,000
                    )Income
      tax benefit
                    
                    
                    (363,000
                    )
                    
                    
                    (229,000
                    )
                    
                    
                    (175,000
                    )
                    
                    
                    (554,000
                    )Loss
      from continuing operations
                    
                    
                    (560,000
                    )
                    
                    
                    (216,000
                    )
                    
                    
                    (366,000
                    )
                    
                    
                    (226,000
                    )Discontinued
      operations – real estate gain from sales
                    
                    
                    426,000
                    
                    
                    
                    61,000
                    
                    
                    
                    123,000
                    
                    
                    
                    78,000Discontinued
      operations - real estate
                    
                    
                    (186,000
                    )
                    
                    
                    (167,000
                    )
                    
                    
                    (168,000
                    )
                    
                    
                    9,000Discontinued
      operations - oil & gas
                    
                    
                    92,000
                    
                    
                    
                    179,000
                    
                    
                    
                    205,000
                    
                    
                    
                    (176,000
                    )Net
      loss
                    
                    $
                    (228,000
                    )
                    
                    $
                    (143,000
                    )
                    
                    $
                    (206,000
                    )
                    
                    $
                    (315,000
                    )Basic
      earnings (loss) per share:Continuing
      operations
                    
                    $
                    (0.07
                    )
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.05
                    )
                    
                    $
                    (0.02
                    )Discontinued
      operations
                    
                    
                    0.04
                    
                    
                    
                    0.01
                    
                    
                    
                    0.02
                    
                    
                    
                    (0.01
                    )Net
      loss
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.02
                    )
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.03
                    )Diluted
      earnings (loss) per share:Continuing
      operations
                    
                    $
                    (0.07
                    )
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.05
                    )
                    
                    $
                    (0.02
                    )Discontinued
      operations
                    
                    
                    0.04
                    
                    
                    
                    0.01
                    
                    
                    
                    0.02
                    
                    
                    
                    (0.01
                    )Net
      loss
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.02
                    )
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.03
                    )
  55
  Item
15
  Real
Estate and Accumulated Depreciation
 December
31, 2008
 ($
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, 2008
                                                                                                      
                                                                                                      
                                                                                                      Column F
                                                                                                      
                                                                                                      Column H
                                                                                                      
                                                                                                      Column IDescription
                                                                                                      
                                                                                                      Encum- brances
                                                                                                      
                                                                                                      Land
                                                                                                      
                                                                                                      Building &
                                                                                                        Improvements
                                                                                                      
                                                                                                      Land
                                                                                                      
                                                                                                      
                                                                                                      Building &
                                                                                                        Improvements
                                                                                                      
                                                                                                      
                                                                                                      Land
                                                                                                      
                                                                                                      
                                                                                                      Building &
                                                                                                        Improvements
                                                                                                      
                                                                                                      
                                                                                                      Total
                                                                                                      
                                                                                                      
                                                                                                      Accumulated
                                                                                                        Depreciation
                                                                                                      
                                                                                                      Date
                                                                                                        Acquired
                                                                                                      
                                                                                                      Life on Which
                                                                                                        Depreciation is
                                                                                                        ComputedArizona340 unit garden
      apartment complex
                                                                                                      
                                                                                                      $
                                                                                                      9,838
                                                                                                      
                                                                                                      $
                                                                                                      800
                                                                                                      
                                                                                                      $
                                                                                                      5,600
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      3,702
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      800
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      9,302
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      10,102
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      5,045
                                                                                                      
                                                                                                      1992
                                                                                                      
                                                                                                      Various51,000
      square foot office building
                                                                                                      
                                                                                                      $
                                                                                                      3,540
                                                                                                      
                                                                                                      $
                                                                                                      313
                                                                                                      
                                                                                                      $
                                                                                                      2,384
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      2,272
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      313
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      4,656
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      4,969
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      2,604
                                                                                                      
                                                                                                      1992
                                                                                                      
                                                                                                      VariousTexas228
      unit apartment complex
                                                                                                      
                                                                                                      $
                                                                                                      4,046
                                                                                                      
                                                                                                      $
                                                                                                      620
                                                                                                      
                                                                                                      $
                                                                                                      3,015
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      3,161
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      620
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      6,176
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      6,796
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      3,281
                                                                                                      
                                                                                                      1992
                                                                                                      
                                                                                                      Various180
      unit apartment complex
                                                                                                      
                                                                                                      $
                                                                                                      3,893
                                                                                                      
                                                                                                      $
                                                                                                      805
                                                                                                      
                                                                                                      $
                                                                                                      4,450
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      876
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      805
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      5,326
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      6,131
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      1,362
                                                                                                      
                                                                                                      2001
                                                                                                      
                                                                                                      VariousNew
      Jersey132
      unit apartment complex
                                                                                                      
                                                                                                      $
                                                                                                      4,597
                                                                                                      
                                                                                                      $
                                                                                                      480
                                                                                                      
                                                                                                      $
                                                                                                      3,541
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      833
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      480
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      4,374
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      4,854
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      1,841
                                                                                                      
                                                                                                      1997
                                                                                                      
                                                                                                      VariousOther
      residential
                                                                                                      
                                                                                                      $
                                                                                                      1,931
                                                                                                      
                                                                                                      $
                                                                                                      312
                                                                                                      
                                                                                                      $
                                                                                                      2,397
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      1,121
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      312
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      3,518
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      3,830
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      1,683
                                                                                                      
                                                                                                      Various
                                                                                                      
                                                                                                      VariousOther
      office/retail
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      $
                                                                                                      435
                                                                                                      
                                                                                                      $
                                                                                                      1,948
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      3,595
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      435
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      5,543
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      5,978
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      1,731
                                                                                                      
                                                                                                      Various
                                                                                                      
                                                                                                      VariousLand
      held for development
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      $
                                                                                                      655
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      655
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      655
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      Various
                                                                                                      
                                                                                                      Various$
                                                                                                      27,845
                                                                                                      
                                                                                                      $
                                                                                                      4,420
                                                                                                      
                                                                                                      $
                                                                                                      23,335
                                                                                                      
                                                                                                      $
                                                                                                      -0-
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      15,560
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      4,420
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      38,895
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      43,315
                                                                                                      
                                                                                                      
                                                                                                      $
                                                                                                      17,547
  The
changes in real estate for the three years ended December 31, 2008, are as
follows ($ in 000s) :
 
 2008
                  
                  
                  2007
                  
                  
                  2006Balance
      at beginning of year
                  
                  $
                  44,579
                  
                  
                  $
                  44,353
                  
                  
                  $
                  58,854Property
      acquisitions
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Improvements
                  
                  
                  258
                  
                  
                  
                  882
                  
                  
                  
                  3,504Retirements/disposals
                  
                  
                  (1,322
                  )
                  
                  
                  (656
                  )
                  
                  
                  (18,005
                  )Balance
      at end of year
                  
                  $
                  43,515
                  
                  
                  $
                  44,579
                  
                  
                  $
                  44,353
 
 The
aggregate cost of land, buildings and improvements, before depreciation, for
Federal income tax purposes at December 31, 2008 was approximately
$42,762.
 
 The
changes in accumulated depreciation, for the three years ended December 31,
2008, are as follows:
  2008
                    
                    
                    2007
                    
                    
                    2006Balance
      at beginning of year
                    
                    $
                    16,960
                    
                    
                    $
                    15,666
                    
                    
                    $
                    14,682Depreciation
      for year
                    
                    
                    1,188
                    
                    
                    
                    1,373
                    
                    
                    
                    2,021Retirements/disposals
                    
                    
                    (484
                    )
                    
                    
                    (79
                    )
                    
                    
                    (1,037
                    )Balance
      at end of year
                    
                    $
                    17,664
                    
                    
                    $
                    16,960
                    
                    
                    $
                    15,666
  56
 
 Item
9.       Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure
 
 None.
 
 Item
9A.    Controls and
Procedures
  Disclosure
controls and procedures (as defined in Exchange Act Rule 13a-15(e)) are designed
only to provide reasonable assurance that they will meet their objectives that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosures. As of the end of the period covered by this report, we carried
out an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e)) pursuant to Exchange Act Rule
13a-15. Based upon that evaluation and subject to the foregoing, our Chief
Executive Officer and Chief Financial Officer have concluded that our disclosure
controls and procedures were effective as of December 31,
2008.
  Changes
in internal control over financial reporting.
  Management
has determined that, as of December 31, 2008, there were no changes in our
internal control over financial reporting that occurred during our fiscal
quarter then ended that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
  Management’s
Report on Internal Control Over Financial Reporting
 Management
is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934. The Company’s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with accounting principles generally
accepted in the United States of America.
 
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
 
 Management
assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2008. Management based this assessment on
criteria for effective internal control over financial reporting described in
“Internal Control-Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Management’s assessment included an
evaluation of the design of the Company’s internal control over financial
reporting and testing of the operational effectiveness of its internal control
over financial reporting. Management reviewed the results of its assessment with
the Audit Committee.
  Based on
this assessment, management determined that, as of December 31, 2008, the
Company’s internal control over financial reporting was effective to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of
America.
 
 This
Annual Report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to
provide only management's report in this Annual Report.
 
 Item9B.      Other Information
 
 None
  57
 
 PART
III
 
 Certain
information required by Part III is incorporated by reference to Wilshire’s
definitive proxy statement for its 2009 Annual Meeting of Stockholders (the
“Proxy Statement”). Only those sections of the Proxy Statement that specifically
address the items set forth in this Annual Report are incorporated by reference
from the Proxy Statement into this Annual Report.
  Item 10.    Directors, Executive Officers and
Corporate Governance
 
 The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.
  The
information concerning Wilshire’s executive officers required by this item is
included in Item 4A of this Annual Report on Form 10-K.
 
 The
Company has adopted a Code of Conduct for its officers and employees. A copy of
the Code of Conduct is available on the Company’s website (http://www.wilshireenterprisesinc.com)
under the caption “Corporate Policies.”
  Item 11.    Executive
Compensation
 
 The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.
  Item 12.    Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder
Maters
 
 The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.
  Item 13.    Certain Relationships and Related
Transactions, and Director Independence
 
 The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.
  Item 14.    Principal Accountant Fees and
Services
 
 The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.
  58
  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, 2008 and 2007(iii)
                  Consolidated
      Statements of Operations for the years ended December 31, 2008, 2007 and
      2006(iv)
                  Consolidated
      Statements of Changes in Stockholders’ Equity for the years ended December
      31, 2008, 2007 and 2006(v)
                  Consolidated
      Statements of Cash Flows for the years ended December 31, 2008, 2007 and
      2006(vi)
                  Notes
      to Consolidated Financial
Statements
  Financial
Statement Schedules:
 
 (i)
                Real
      Estate and Accumulated Depreciation December 31,
  2008
  (b)
                Exhibits
 
 Exhibit
      #
                    
                    Description3.1
                    
                    Restated
      Certificate of Incorporation of Wilshire Enterprises, Inc., as
      amended.   (Incorporated by referenced to Exhibit 3.1 of
      the Registrant’s Current Report on Form 8-K filed with the SEC on December
      8, 2008.)3.2
                    
                    By-laws,
      as amended and restated through December 5, 2008.  (Incorporated by
      reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K
      filed with the SEC on December 8, 2008.)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.)4.2
                    
                    First
      Amendment to Amended and Restated Stockholder Protection Rights Agreement,
      dated as of June 13, 2008, between Wilshire Enterprises, Inc. and
      Continental Stock Transfer & Trust Company, as Rights
      Agent.  (Incorporated by referenced to Exhibit 4.1 of the
      Registrant’s Current Report on Form 8-K filed with the SEC on June 16,
      2008.)4.3
                    
                    Qualified
      Offer Plan Rights Agreement, dated as of December 4, 2008, between
      Wilshire Enterprises, Inc. and Continental Stock Transfer & Trust
      Company, as Rights Agent.  (Incorporated by referenced to
      Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the
      SEC on December 4, 2008.)10.1
                    
                    Agreement
      and Plan of Merger, dated as of June 13, 2008, among Wilshire Enterprises,
      Inc., NWJ Apartment Holdings Corp. and NWJ Acquisition Corp. (Incorporated
      by referenced to Exhibit 2.1 of the Registrant’s Current Report on Form
      8-K filed with the SEC on June 16, 2008.)10.2
                    
                    Termination
      Agreement, dated as of December 3, 2008, between Wilshire Enterprises,
      Inc., NWJ Apartment Holdings Corp. and NWJ Acquisition Corp. (Incorporated
      by referenced to Exhibit 10.1 of the Registrant’s Current Report on Form
      8-K filed with the SEC on December 4, 2008.)10.3
                    
                    Employment
      Agreement, dated as of December 8, 2008, between Wilshire Enterprises,
      Inc. and Kevin B. Swill.  (Incorporated by referenced to Exhibit
      10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on
      December 8, 2008.)10.4
                    
                    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.)10.5
                    
                    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.)10.6
                    
                    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.)
  59
 
 10.7
                
                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.)10.8
                
                Promissory
      Note given by Alpine Village Apartments, L.L.C., a subsidiary of Wilshire
      Enterprises, Inc., to Merrill Lynch Mortgage Lending, Inc. dated February
      28, 2003.  (Incorporated by reference to Exhibit 10.74 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2002.)10.9
                
                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
      Exhibit 10.75 of the Company’s Annual Report on Form 10-K for the year
      ended December 31, 2002.)10.10
                
                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
      Exhibit 10.76 of the Company’s Annual Report on Form 10-K for the year
      ended December 31, 2002.)10.11
                
                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 Exhibit 10.77 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.12
                
                Promissory
      Note given by Sunrise Ridge, L.L.C., a subsidiary of Wilshire Enterprises,
      Inc., to Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.
      (Incorporated by reference to Exhibit 10.78 of the Company’s Annual Report
      on Form 10-K for the year ended December 31, 2002.)10.13
                
                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 Exhibit 10.79 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2002.)10.14
                
                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 Exhibit 10.80 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2002.)10.15
                
                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 Exhibit 10.81 of the Company’s Annual Report
      on Form 10-K for the year ended December 31, 2002.)10.16
                
                Promissory
      Note given by Van Buren, L.L.C., a subsidiary of Wilshire Enterprises,
      Inc., to Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.
      (Incorporated by reference to Exhibit 10.82 of the Company’s Annual Report
      on Form 10-K for the year ended December 31, 2002.)10.17
                
                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 Exhibit 10.83 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.18
                
                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 Exhibit 10.84 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.19
                
                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 Exhibit 10.85 of the Company’s Annual Report
      on Form 10-K for the year ended December 31, 2002.)10.20
                
                Promissory
      Note given by Wellington Apartments, L.L.C., a subsidiary of Wilshire
      Enterprises, Inc., to Merrill Lynch Mortgage Lending, Inc. dated February
      27, 2003. (Incorporated by reference to Exhibit 10.86 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.21
                
                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 Exhibit 10.87 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2002.)10.22
                
                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 Exhibit 10.88 of the Company’s Annual Report on Form 10-K for the year
      ended December 31, 2002.)
  60
 
 10.23
                
                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 Exhibit 10.89 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.24
                
                Letter
      Agreement, dated as of September 4, 2007, between Wilshire Enterprises,
      Inc. and Frank Elenio. (Incorporated by reference to Exhibit 10.1 of the
      Registrant’s Current Report on Form 8-K filed with the SEC on September 5,
      2007.)10.25
                
                Severance
      Letter Agreement between the Company and Sherry Wilzig Izak, dated as of
      March 29, 2004. (Incorporated by reference to Exhibit 10.94 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2003.)10.26
                
                Amendment
      to Severance Letter Agreement between the Company and Sherry Wilzig Izak,
      dated December 31, 2008, in order to comply with Section 409A of the
      Internal Revenue Code of 1986, as amended.10.27
                
                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.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 the
      Sarbanes-Oxley Act of 2002.31.2
                
                Certification
      of the Chief Financial Officer Pursuant to Section 302 of the
      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.
  The
Company agrees to furnish the Commission upon request any agreements with
respect to long-term debt not referenced herein.
  61
  SIGNATURES
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
  WILSHIRE
      ENTERPRISES, INC.
                      (Registrant)Date:
      March 31, 2009
                    By:
                    /s/
      S. Wilzig IzakS.
      Wilzig IzakChairman
      of the Board and Chief Executive
Officer
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
 
 Directors:
 
 By:
                                  
                                  *
                                  
                                  Date:
      March 31, 2009Miles
      BergerBy:
                                  
                                  *
                                  
                                  Date:
      March 31, 2009Milton
      DonnenbergBy:
                                  
                                  /s/
      S. Wilzig Izak
                                  
                                  Date:
      March 31, 2009S.
      Wilzig IzakBy:
                                  
                                  *
                                  
                                  Date:
      March 31, 2009James
      M. OrphanidesBy:
                                  
                                  *
                                  
                                  Date:
      March 31, 2009Eric
      J. Schmertz, Esq.By:
                                  
                                  *
                                  
                                  Date:
      March 31, 2009Kevin
      B. SwillBy:
                                  
                                  *
                                  
                                  Date:
      March 31, 2009Martin
      Willschick
  Officers:
  By:
                      
                      /s/
      S. Wilzig Izak
                      
                      Date:
      March 31, 2009S.
      Wilzig IzakChairman
      of the Board and Chief Executive OfficerBy:
                      
                      /s/
      Francis J. Elenio
                      
                      Date:
      March 31, 2009Francis
      J. ElenioChief
      Financial Officer
 
 *  
Signed under power of attorney dated March 31, 2009 and filed herewith as
Exhibit 24.
  62
  Exhibit
Index
 
 Exhibit
      #
                    
                    Description10.26
                    
                    Amendment
      to Severance Letter Agreement between the Company and Sherry Wilzig Izak,
      dated December 31, 2008, in order to comply with Section 409A of the
      Internal Revenue Code of 1986, as amended.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.
  63