**FORM      10-K**

**ANNUAL          REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE **

**SECURITIES        EXCHANGE ACT OF 1934**

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

**WILSHIRE      ENTERPRISES, INC. **

----

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

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

| Large accelerated                filer  o | Accelerated                filer                 o | Non-accelerated                filer  x |
|------------------------------------------------|---------------------------------------------------------|----------------------------------------------|

----

**WILSHIRE      ENTERPRISES, INC.**

**INDEX**

|                      |   |                                                                                                                                                 | **Page                  No.** |
|---------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|
|                      |   |                                                                                                                                                 |                          |
| Part                  I   |   |                                                                                                                                                 |                          |
|                      |   |                                                                                                                                                 |                          |
| Item                  1.  |   | Business                                                                                                                                             | 3                             |
| Item                  1A. |   | Risk                  Factors                                                                                                                        | 7                             |
| Item                  1B. |   | Unresolved                  Staff Comments                                                                                                           | 9                             |
| Item                  2.  |   | Properties                                                                                                                                           | 9                             |
| Item                  3.  |   | Legal                  Proceedings                                                                                                                   | 11                            |
| Item                  4.  |   | Submission                  of Matters to a Vote of Security Holders                                                                                 | 11                            |
| Item                  4A. |   | Executive                  Officers of the Registrant                                                                                                | 12                            |
|                      |   |                                                                                                                                                 |                          |
| Part                  II  |   |                                                                                                                                                 |                          |
|                      |   |                                                                                                                                                 |                          |
| Item                  5.  |   | Market                  for Registrant’s Common Equity, Related Stockholder Matters                  and Issuer Purchases of Equity Securities | 13                            |
| Item                  6.  |   | Selected                  Financial Data                                                                                                             | 14                            |
| Item                  7.  |   | Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operation                         | 16                            |
| Item                  7A. |   | Quantitative                  and Qualitative Disclosures About Market Risk                                                                          | 32                            |
| Item                  8.  |   | Financial                  Statements and Supplementary Data                                                                                         | 34                            |
| Item                  9.  |   | Changes                  in and Disagreements with Accountants on Accounting and Financial                  Disclosure                               | 67                            |
| Item                  9A. |   | Controls                  and Procedures                                                                                                             | 67                            |
| Item                  9B. |   | Other                  Information                                                                                                                   | 68                            |
|                      |   |                                                                                                                                                 |                          |
| Part                  III |   |                                                                                                                                                 |                          |
|                      |   |                                                                                                                                                 |                          |
| Item                  10. |   | Directors                  of the Registrant                                                                                                         | 69                            |
| Item                  11. |   | Executive                  Compensation                                                                                                              | 69                            |
| Item                  12. |   | Security                  Ownership of Certain Beneficial Owners and Management and Related                  Stockholder Matters                     | 69                            |
| Item                  13. |   | Certain                  Relationships and Related Transactions                                                                                      | 69                            |
| Item                  14. |   | Principal                  Accountant Fees and Services                                                                                              | 69                            |
|                      |   |                                                                                                                                                 |                          |
| Part                  IV  |   |                                                                                                                                                 |                          |
|                      |   |                                                                                                                                                 |                          |
| Item                  15. |   | Exhibits,                  Financial Statement Schedules                                                                                             | 70                            |
|                      |   | Signatures                                                                                                                                           | 75                            |

----

**PART      I**

| **Item                    1.** | **Business** |
|--------------------------------|--------------|

----

**Real      Estate Operations**

| Name                                                           | City                          | State  | Asset                Class                   | Size                                              |
|----------------------------------------------------------------|-------------------------------|--------|----------------------------------------------|---------------------------------------------------|
|                                                           |                          |   |                                         |                                              |
| Sunrise                Ridge                                   | Tucson                        | AZ     | Apartments                                   | 340                units                          |
| Van                Buren                                       | Tucson                        | AZ     | Apartments                                   | 70                units                           |
| Royal                Mall Plaza                                | Mesa                          | AZ     | Office                & retail           | 66,552                SF                          |
| Tempe                Corporate                                 | Tempe                         | AZ     | Office                                       | 50,700                SF                          |
| Tamarac                Office Plaza                            | Tamarac                       | FL     | Office                                       | 26,990                SF                          |
| Twelve                Oaks                                     | Atlanta                       | GA     | Apartments                                   | 72                units                           |
| Alpine                Village                                  | Sussex                        | NJ     | Apartments                                   | 132                units                          |
| Galsworthy                Arms (a)                             | Long                Branch    | NJ     | Condominiums                                 | 42                units                           |
| Jefferson                Gardens                               | Jefferson                     | NJ     | Condominiums                                 | 18                units                           |
| Amboy                Tower                                     | Perth                Amboy    | NJ     | Office                & Retail           | 75,000                SF                          |
| Wilshire                Grand Hotel & Banquet Facility (b) | West                Orange    | NJ     | Hotel                & Catering facility | 89                rooms; 50,000                SF |
| Rutherford                Bank (c)                             | Rutherford                    | NJ     | Triple                Net Lease              | 4,000                SF                           |
| Alpine                Village (d)                              | Sussex                        | NJ     | Land                                         | 0.51                acres                         |
| Alpine                Village (d)                              | Wantage                       | NJ     | Land                                         | 17.32                acres                        |
| Lake                Hopatcong                                  | Lake                Hopatcong | NJ     | Land                                         | 1.8                acres                          |
| West                Orange                                     | West                Orange    | NJ     | Land                                         | 0.6                acres                          |
| Summercreek                                                    | San                Antonio    | TX     | Apartments                                   | 180                units                          |
| Wellington                Estates                              | San                Antonio    | TX     | Apartments                                   | 228                units                          |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *(a)                    The Company closed on the sale of 41 of the 42 condominium units                    on                    January 18, 2006 and the remaining unit was sold on March 10,                    2006. Gross                    proceeds for the 42 units was $7.2 million and resulted in an                    after-tax                    gain of $3.0 million.*                                                                                                                                 |
| *(b)                    The property is owned by a limited liability company in which                    the Company                    has a 50% interest and is the managing partner. The hotel is                    under a sales                    contract and it is anticipated that this transaction will close                    in April                    2006. The limited liability company is expected to realize gross                    proceeds                    on the sale of $12.8 million.* |
| *(c)                    The Company closed on the sale of the Rutherford Bank branch                    triple net                    lease on January 13, 2006 for gross proceeds of $1.6 million                    that resulted                    in an after-tax gain of $0.6 million.*                                                                                                                                                                                                                          |
| *(d)                    Alpine Village land parcels are adjacent to the Alpine Village                    Apartments.*                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

**Business      Strategy**

----

**Acquisition      of Assets**

**Divestiture      of Assets**

| **Name                  (State)****(asset                  class)**                                                                                                                                    | ** ** | **Date                  Sold** | ** ** | **Selling                  Price** | ** ** | **Net                  Book                  Value** | ** ** | **Mortgage                  Value** | ** ** | **Taxes****Payable                  on                  Sale** | ** ** | **Net                  Proceeds (a)** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|------------|------------------------------------|------------|------------------------------------------------------|------------|-------------------------------------|------------|----------------------------------------------------------------|------------|---------------------------------------|--------|
|                                                                                                                                                                                                   |       |                           |       |                               |       |                                                 |       |                                |       |                                                           |       |                                  |   |   |   |   |   |   |   |
| Biltmore                  Club Apartments (AZ)                                                                                                                                                         |       |                           | 12/23/05   |                               | $          | 20,956,000                                           |       | $                                   | 4,975,000  |                                                           | $          | 8,979,000                             |   | $ | 5,852,000 |   | $ | 4,775,000 |   |
| Galsworthy                  Arms (NJ) (2-bedroom condominium)                                                                                                                                          |       |                           | 1/26/05    |                               | $          | 270,000                                              |       | $                                   | 57,000     |                                                           | $          | 34,000                                |   | $ | 77,000 |   | $ | 140,000 |   |
| Galsworthy                  Arms (NJ) (1-bedroom condominium)                                                                                                                                          |       |                           | 5/5/05     |                               | $          | 240,000                                              |       | $                                   | 78,000     |                                                           | $          | 29,000                                |   | $ | 58,000 |   | $ | 136,000 |   |
| Galsworthy                  Arms (NJ) (1-bedroom condominium)                                                                                                                                          |       |                           | 9/28/05    |                               | $          | 249,000                                              |       | $                                   | 76,000     |                                                           | $          | 25,000                                |   | $ | 61,000 |   | $ | 144,000 |   |
| Jefferson                  Gardens (NJ) (1-bedroom condominium)                                                                                                                                        |       |                           | 8/3/05     |                               | $          | 150,000                                              |       | $                                   | 34,000     |                                                           | $          | 19,000                                |   | $ | 41,000 |   | $ | 77,000 |   |
| Jefferson                  Gardens (NJ) (2-bedroom condominium)                                                                                                                                        |       |                           | 8/31/05    |                               | $          | 186,000                                              |       | $                                   | 50,000     |                                                           | $          | 40,000                                |   | $ | 47,000 |   | $ | 81,000 |   |
|                                                                                                                                                                                                   |       |                           |       |                               |       |                                                 |       |                                |       |                                                           |       |                                  |   |   |   |   |   |   |   |
| *(a)                  Net proceeds is defined as selling price less mortgage value and                  transaction costs such as commissions, legal fees, taxes and other                  expenses.* |

----

| **Name                (State)****(asset                class)**                                    | ** ** | **Date                Sold** | ** ** | **Selling                Price** | ** ** | **Net                Book                Value** | ** ** | **Mortgage                Value** | ** ** | **Taxes****Payable                on                Sale** | ** ** | **Net                Proceeds (a)** |   |
|----------------------------------------------------------------------------------------------------|------------|------------------------------|------------|----------------------------------|------------|--------------------------------------------------|------------|-----------------------------------|------------|------------------------------------------------------------|------------|-------------------------------------|--------|
|                                                                                               |       |                         |       |                             |       |                                             |       |                              |       |                                                       |       |                                |   |   |   |   |   |   |   |
| Galsworthy                Arms (NJ)(29                1-bedroom and 12 2-bedroom condominiums) (b) |       |                         | 1/18/06    |                             | $          | 6,905,000                                        |       | $                                 | 1,941,000  |                                                       | $          | 835,000                             |   | $ | 1,854,000 |   | $ | 3,974,000 |   |
| Rutherford                Bank Branch Triple Net Lease                                             |       |                         | 1/13/06    |                             | $          | 1,603,000                                        |       | $                                 | 604,000    |                                                       | $          | 454,000                             |   | $ | 373,000 |   | $ | 695,000 |   |
| Galsworthy                Arms (NJ) (1 2-bedroom condominium)                                      |       |                         | 3/10/06    |                             | $          | 292,000                                          |       | $                                 | 34,000     |                                                       | $          | -0-                                 |   | $ | 95,000 |   | $ | 179,000 |   |
| Wilshire                Grand Hotel & Banquet Facility (NJ)                                    |       |                         | (c         | )                                | $          | 12,750,000                                       |       | $                                 | 10,962,000 |                                                       | $          | -0-                                 |   | $ | 613,000 |   | $ | 5,700,000 |   |

| *(a)                Net proceeds is defined as selling price less mortgage value and                transaction costs such as commissions, legal fees, taxes and other                expenses.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *(b)                The bulk sale of units at Galsworthy Arms were sold “as is,” while the                individual units sold in 2004 and 2005 had benefited from significant                renovation and upgrade work.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| *(c)The                Wilshire Grand Hotel and Banquet Facility is owned by a limited liability                company in which the Company owns 50% and is the managing partner.                The                limited liability company has entered into a definitive agreement                to sell                the hotel with the closing date scheduled for April 2006. The selling                price, net book value, mortgage value and taxes payable on sale presented                in the table above represent 100% amounts for this transaction. The                net                proceeds presented in the table above represents the 50% portion                that is                expected to be received by the Company from the                sale.* |

**Employees**

**Property      Management**

**Insurance      **

----

**Competition**

**Environmental      Matters**

**Investment      in Marketable Securities**

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

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

----

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

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

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

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

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

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

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

----

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

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

| **Item                      2.** | **Properties** |
|----------------------------------|----------------|

|                                     |       |                             |       |                                           |       | **Apartment                Unit Type**                  |       |                    |       |
|------------------------------------------|------------|----------------------------------|------------|------------------------------------------------|------------|---------------------------------------------------------|------------|-------------------------|------------|
| **Name                (State)**          | ** ** | **Date                Acquired** | ** ** | **No.                of                Units** | ** ** | **Studio                /                Efficiencies** | ** ** | **1                BR** | ** ** | **2                BR** | ** ** | **3                BR** | ** ** | **Acreage** | ** ** | **Rentable****Sq.                Ft.** |   |
| **Apartments:**                          |       |                             |       |                                           |       |                                                    |       |                    |       |   |   |   |   |   |   |   |   |
|                                     |       |                             |       |                                           |       |                                                    |       |                    |       |   |   |   |   |   |   |   |   |
| Alpine                Village (NJ) (a)   |       |                             | 10/29/95   |                                           |       | 132                                                     |       |                    | —    |   |   | 48 |   |   | 84 |   |   | — |   |   | 13.73 |   |  101,724 |   |
| Biltmore                Club (AZ) (a)(b) |       |                             | 10/23/97   |                                           |       | 378                                                     |       |                    | 192        |   |   | 186 |   |   | — |   |   | — |   |   | 8.08 |   |  193,716 |   |
| Summercreek                (TX) (a)      |       |                             | 3/29/01    |                                           |       | 180                                                     |       |                    | —    |   |   | 84 |   |   | 96 |   |   | — |   |   | 8.17 |   |  142,452 |   |
| Sunrise                Ridge (AZ)        |       |                             | 10/24/97   |                                           |       | 340                                                     |       |                    | —    |   |   | 144 |   |   | 196 |   |   | — |   |   | 17.73 |   |  291,674 |   |
| Twelve                Oaks (GA) (a)      |       |                             | 4/10/96    |                                           |       | 72                                                      |       |                    | —    |   |   | — |   |   | 42 |   |   | 30 |   |   | 10.04 |   |  91,404 |   |
| Van                Buren (AZ)            |       |                             | 6/11/98    |                                           |       | 70                                                      |       |                    | —    |   |   | 42 |   |   | 28 |   |   | — |   |   | 1.41 |   |  81,404 |   |
| Wellington                (TX) (a)       |       |                             | 7/30/98    |                                           |       | 228                                                     |       |                    | 24         |   |   | 60 |   |   | 116 |   |   | 28 |   |   | 8.69 |   |  214,744 |   |
| **Condominiums:**                        |       |                             |       |                                           |       |                                                    |       |                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Galsworthy                Arms (a)(c)(e) |       |                             | 3/31/94    |                                           |       | 42                                                      |       |                    | —    |   |   | 29 |   |   | 13 |   |   | — |   |   | — |   |  36,210 |   |
| Jefferson                Gardens (a)(d)  |       |                             | 3/31/94    |                                           |       | 18                                                      |       |                    | —    |   |   | 15 |   |   | 3 |   |   | — |   |   | — |   |  14,056 |   |

| *(a)                Classified by the Company as Discontinued Operations. See Note 2                to the                Consolidated Financial Statements in Item 8 of this Annual Report                on Form                10-K.* |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *(b)                The Company closed on the sale of this property in December 2005                for $21.0                million.*                                                                                                   |
| *(c)                The Galsworthy Arms condominium complex has a total of 64 units,                44 one                bedroom and 20 two bedroom, of which the Company owned 42                units..*                              |
| *(d)                The Jefferson Gardens condominium complex has a total of 50 units,                34 one                bedroom and 16 two bedroom, of which the Company owned 18                units.*                             |
| *(e)                The 42 units at Galsworthy Arms were sold in the first quarter of                2006 for                $7.2 million.*                                                                                              |

----

| **Name                (State)**                                        |   | **Date                Acquired** |     | **Rentable                Sq. Ft.** |   | **Acreage**                                                              |   |
|------------------------------------------------------------------------|--------|----------------------------------|----------|-------------------------------------|--------|--------------------------------------------------------------------------|--------|
|                                                                   |   |                             |     |                                |   |                                                                     |   |
| **Office                & Retail:**                                |   |                             |     |                                |   |                                                                     |   |
| Amboy                Tower (NJ) (a)                                    |   |                             | 3/31/98  |                                |   | 75,000                                                                   |   |   |   |   |
| Royal                Mall Plaza (AZ)                                   |   |                             | 3/31/94  |                                |   | 66,552                                                                   |   |   |   |   |
| Tamarac                Office Plaza (FL)                               |   |                             | 12/31/92 |                                |   | 26,990                                                                   |   |   |   |   |
| Tempe                Corporate (AZ)                                    |   |                             | 12/31/92 |                                |   | 50,700                                                                   |   |   |   |   |
| **Triple                Net Lease:**                                   |   |                             |     |                                |   |                                                                     |   |   |   |   |
| Rutherford                Bank (NJ) (a)(b)                             |   |                             | 3/31/94  |                                |   | 4,000                                                                    |   |   |   |   |
| Wilshire                Grand Hotel & Banquet Facility (NJ) (a)(c) |   |                             | 12/31/97 |                                |   | 89                hotel rooms; 50,000 SF                banquet facility |   |   | 12.29 |   |
| **Land:**                                                              |   |                             |     |                                |   |                                                                     |   |   |   |   |
| Alpine                Village, Sussex (NJ) (a)                         |   |                             | 10/28/98 |                                |   | —                                                                  |   |   | 0.51 |   |
| Alpine                Village, Wantage (NJ) (a)                        |   |                             | 2/16/01  |                                |   | —                                                                  |   |   | 17.32 |   |
| Lake                Hopatcong (NJ) (a)                                 |   |                             | 3/31/94  |                                |   | —                                                                  |   |   | 1.81 |   |
| West                Orange (NJ) (a)                                    |   |                             | 3/31/94  |                                |   | —                                                                  |   |   | 0.60 |   |
|                                                                   |   |                             |     |                                |   |                                                                     |   |   |   |   |

| *(a)                Classified by the Company as Discontinued Operations. See Note 2                to the                Consolidated Financial Statements in Item 8 of this Annual Report                on Form                10-K.*                                                                                                                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *(b)                Rutherford was sold in January 2006 for $1.6                million.*                                                                                                                                                                                                                                                                         |
| *(c)                The sale of the Wilshire Grand Hotel & Banquet Facility is expected to                close in April 2006 for $12.8 million. The Company expects to receive                net                proceeds of $5.7 million and record a gain on sale of approximately                $460,000 upon consummation of this                sale.* |

|                                     |       | **As                of 12/31/05**                | ** ** | **For                the Year 2005**  |       |
|------------------------------------------|------------|--------------------------------------------------|------------|---------------------------------------|------------|
| **Name              (State)**            | ** ** | **Net                Book                Value** | ** ** | **Mortgage                Principal** | ** ** | **Net                Operating                Income** | ** ** | **Interest                Expense** | ** ** | **Capital                Expenditures** |   |
|                                     |       |                                             |       |                                  |       |   |   |   |   |   |   |
| **Apartments:**                          |       |                                             |       |                                  |       |   |   |   |   |   |   |
| Sunrise                Ridge (AZ)        |       |                                             | 5,562,000  |                                  |       | 10,320,000 |   |   | 1,157,000 |   |   | 616,000 |   |   | 294,000 |   |
| Van                Buren (AZ)            |       |                                             | 1,775,000  |                                  |       | 2,025,000 |   |   | 198,000 |   |   | 128,000 |   |   | 102,000 |   |
| **Office                & Retail:**  |       |                                             |       |                                  |       |   |   |   |   |   |   |   |   |   |   |   |
| Royal                Mall Plaza (AZ)     |       |                                             | 1,327,000  |                                  |       | — |   |   | 382,000 |   |   | — |   |   | 59,000 |   |
| Tamarac                Office Plaza (FL) |       |                                             | 747,000    |                                  |       | 596,000 |   |   | 111,000 |   |   | 39,000 |   |   | 14,000 |   |
| Tempe                Corporate (AZ)      |       |                                             | 2,478,000  |                                  |       | 3,806,000 |   |   | 332,000 |   |   | 293,000 |   |   | 173,000 |   |
|                                     |       |                                             |       |                                  |       |   |   |   |   |   |   |   |   |   |   |   |
| Total:                                   |       | $                                                | 11,889,000 |                                  | $          | 16,747,000 |   | $ | 2,180,000 |   | $ | 1,076,000 |   | $ | 642,000 |   |

----

| **Item                  3.** | **Legal                  Proceedings** |
|------------------------------|----------------------------------------|

*Actions      and Proceedings*

*Other      Matters*

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

----

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

** **

|  **Name                and Age**  | ** ** | **Executive                Officer of The Company Since** | ** ** | **Position                with the Company****and                Business Experience**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------------------|------------|-----------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                   |       |                                                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| S.                Wilzig Izak, Age 47  |       | 1987                                                      |       | Chairman                of the Board of the Company since September 20, 1990; Chief Executive                Officer since May 1991; Executive Vice President (1987-1990); prior                thereto, Senior Vice President                                                                                                                                                                                                                                                                                                                                                                 |
|                                   |       |                                                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Daniel                C. Pryor, Age 45 |       | June,                2004                                 |       | President                and Chief Operating Officer of the Company since June 2004; Investment                Banker from 1993 - 2004 including at D&T Corporate Finance (2001 -                2004), Lehman Brothers (1999 - 2001), and Salomon Smith Barney (Citigroup)                (1993 - 1999); developer, property manager and investor in the real                estate                industry (1985 - 1991)                                                                                                                                                                 |
|                                   |       |                                                      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Seth                H. Ugelow, Age 53  |       | June,                2004                                 |       | Chief                Financial Officer of the Company since June 2004; Senior Vice President                and Controller of The Trust Company of New Jersey (January 2003 -                June                2004); Consultant (June 2002 - January 2003); Vice President and                Head of                Accounting at The Bank of Tokyo-Mitsubishi (New York Office) (June                2001 -                June 2002); Vice President and Controller of Credit Agricole Indosuez                (New                York Office ) (April 1995 - June                2001) |

----

**PART      II**

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

|       |       | **Quarter                1** | ** ** | **Quarter                2** | ** ** | **Quarter                3** | ** ** | **Quarter                4** | ** ** |
|------------|------------|------------------------------|------------|------------------------------|------------|------------------------------|------------|------------------------------|------------|
| ** ** | ** ** | **High**                     | ** ** | **—**                  | ** ** | **Low**                      | ** ** | **High**                     | ** ** | **—** | ** ** | **Low** | ** ** | **High** | ** ** | **—** | ** ** | **Low** | ** ** | **High** | ** ** | **—** | ** ** | **Low** |   |
|       |       |                         |       |                         |       |                         |       |                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2005       |       | $                            | 9.70       |                         |       | —                      |       |                         | 6.00       |   | $ | 8.05 |   |   | — |   |   | 7.10 |   | $ | 9.00 |   |   | — |   |   | 7.21 |   | $ | 8.35 |   |   | — |   |   | 7.40 |   |
| 2004       |       |                         | 6.80       |                         |       | —                      |       |                         | 5.25       |   |   | 5.86 |   |   | — |   |   | 4.61 |   |   | 5.30 |   |   | — |   |   | 4.90 |   |   | 7.60 |   |   | — |   |   | 5.00 |   |
|       |       |                         |       |                         |       |                         |       |                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Equity      Compensation Plan Information**

| **Plan                Category**                                          |   |   | **(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     |   |   | 160,450                                                                                                                                                                                                                                                  |       | $          | 4.97                                                                                                                                                                      |       |       | 625,424                                                                                                                                                                                                                                                                                                                                        |   |
|                                                                      |   |   |                                                                                                                                                                                                                                                     |       |       |                                                                                                                                                                      |       |       |                                                                                                                                                                                                                                                                                                                                           |   |
| Equity                compensation plans not approved by security holders |   |   | —                                                                                                                                                                                                                                                  |       |       | —                                                                                                                                                                   |       |       | —                                                                                                                                                                                                                                                                                                                                        |   |
|                                                                      |   |   |                                                                                                                                                                                                                                                     |       |       |                                                                                                                                                                      |       |       |                                                                                                                                                                                                                                                                                                                                           |   |
| Total                                                                     |   |   | 160,450                                                                                                                                                                                                                                                  |       | $          | 4.97                                                                                                                                                                      |       |       | 625,424                                                                                                                                                                                                                                                                                                                                        |   |

| **Item                6.** | **Selected                Financial                Data** |
|----------------------------|-----------------------------------------------------------|

----

|                                                    |       | **As                    of December 31 ** | ** ** |
|---------------------------------------------------------|------------|------------------------------------------------|------------|
| ** **                                              | ** ** | **2005 **                                 | ** ** | **2004****(Restated) ** | ** ** | **2003 ** | ** ** | **2002 ** | ** ** | **2001** |   |
|                                                    |       | (In                    thousands)         |       |
| **Balance                    Sheet Data at Year-End:**  |       |                                           |       |   |   |   |   |   |   |   |   |
| Total                    assets                         |       | $                                              | 88,915     |   | $ | 86,916 |   | $ | 98,997 |   | $ | 107,920 |   | $ | 107,903 |   |
| Long-term                    debt                       |       |                                           | 33,352     |   |   | 46,855 |   |   | 58,494 |   |   | 65,706 |   |   | 67,948 |   |
| Stockholders’                    equity           |       |                                           | 41,852     | (1) |   | 28,474 |   |   | 24,527 |   |   | 24,239 |   |   | 23,693 |   |
| Weighted                    average shares outstanding: |       |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                   |       |                                           | 7,864      |   |   | 7,796 |   |   | 7,810 |   |   | 7,832 |   |   | 7,914 |   |
| Diluted                                                 |       |                                           | 7,966      |   |   | 7,955 |   |   | 7,810 |   |   | 7,832 |   |   | 7,914 |   |
|                                                    |       |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                   |       | **For                    the Year Ended December 31, **          | ** ** |
|----------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------|------------|
| ** **                                                                             | ** ** | **2005**                                                              | ** ** | **2004**** (Restated)** | ** ** | **2003** | ** ** | **2002** | ** ** | **2001** |   |
|                                                                                   |       | (In                    thousands of dollars except per share amounts) |       |
| **Income                    Statement Data:**                                          |       |                                                                  |       |   |   |   |   |   |   |   |   |
| Revenues                                                                               |       | $                                                                     | 4,624      |   | $ | 4,628 |   | $ | 4,494 |   | $ | 4,630 |   | $ | 4,525 |   |
| Costs                    and expenses:                                                 |       |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                    expenses                                                  |       |                                                                  | 2,444      |   |   | 2,341 |   |   | 2,287 |   |   | 2,432 |   |   | 2,313 |   |
| Depreciation                                                                           |       |                                                                  | 957        |   |   | 873 |   |   | 995 |   |   | 874 |   |   | 818 |   |
| General                    and administrative                                          |       |                                                                  | 3,493      |   |   | 2,143 |   |   | 2,349 |   |   | 2,131 |   |   | 1,690 |   |
| Total                    costs and expenses                                            |       |                                                                  | 6,894      |   |   | 5,357 |   |   | 5,631 |   |   | 5,437 |   |   | 4,821 |   |
| Dividend                    and interest income                                        |       |                                                                  | 700        |   |   | 685 |   |   | 743 |   |   | 877 |   |   | 867 |   |
| Sale                    of marketable securities                                       |       |                                                                  | 134        |   |   | — |   |   | 2,621 |   |   | 711 |   |   | (1,684 | ) |
| Sale                    of real estate related assets                                  |       |                                                                  | 675        |   |   | — |   |   | — |   |   | — |   |   | — |   |
| Life                    insurance proceeds                                             |       |                                                                  | —    |   |   | — |   |   | 1,000 |   |   | — |   |   | — |   |
| Other                    income                                                        |       |                                                                  | 32         |   |   | — |   |   | 232 |   |   | 540 |   |   | 87 |   |
| Interest                    expense including amortization of deferred financing costs |       |                                                                  | (1,090     | ) |   | (1,083 | ) |   | (1,305 | ) |   | (1,123 | ) |   | (1,047 | ) |
| Income                    (loss) before provision for taxes                            |       |                                                                  | (1,819     | ) |   | (1,127 | ) |   | 2,154 |   |   | 198 |   |   | (2,073 | ) |
| Income                    tax expense (benefit)                                        |       |                                                                  | (1,104     | ) |   | (409 | ) |   | 343 |   |   | 76 |   |   | (798 | ) |
| Income                    (loss) from continuing operations                            |       |                                                                  | (715       | ) |   | (718 | ) |   | 1,811 |   |   | 122 |   |   | (1,275 | ) |
| Discontinued                    operations - real estate                               |       |                                                                  | 8,711      |   |   | 4,067 |   |   | (6 | ) |   | (54 | ) |   | (114 | ) |
| Discontinued                    operations - oil & gas                             |       |                                                                  | (1,105     | ) |   | (1,322 | ) |   | (3,178 | ) |   | 1,008 |   |   | 1,841 |   |
| Net                    income (loss)                                                   |       | $                                                                     | 6,891      |   | $ | 2,027 |   | $ | (1,373 | ) | $ | 1,076 |   | $ | 452 |   |
|                                                                                   |       |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                    earnings (loss) per share:                                    |       |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                    operations                                               |       | $                                                                     | (0.09      | ) | $ | (0.09 | ) | $ | 0.23 |   | $ | 0.02 |   | $ | (0.16 | ) |
| Discontinued                    operations                                             |       |                                                                  | 0.97       |   |   | 0.35 |   |   | (0.41 | ) |   | 0.12 |   |   | 0.22 |   |
| Net                    income (loss) per share                                         |       | $                                                                     | 0.88       |   | $ | 0.26 |   | $ | (0.18 | ) | $ | 0.14 |   | $ | 0.06 |   |
|                                                                                   |       |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                    earnings (loss) per share:                                  |       |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                    operations                                               |       | $                                                                     | (0.09      | ) | $ | (0.09 | ) | $ | 0.23 |   | $ | 0.02 |   | $ | (0.16 | ) |
| Discontinued                    operations                                             |       |                                                                  | 0.96       |   |   | 0.34 |   |   | (0.41 | ) |   | 0.12 |   |   | 0.22 |   |
| Net                    income (loss) per share                                         |       | $                                                                     | 0.87       |   | $ | 0.25 |   | $ | (0.18 | ) | $ | 0.14 |   | $ | 0.06 |   |
|                                                                                   |       |                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |

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

----

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

**Critical      Accounting Policies**

----

**Impairment      of Property and Equipment**

**Revenue      Recognition**

**Foreign      Operations**

**Stock-Based      Compensation**

**Effects      of Recent Accounting Pronouncements**

----

----

**Results      of Operations**

|                                                                     |   | **Increase                (Decrease) in Consolidated Statements of Income Categories for the                periods:** |       |
|--------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------|------------|
|                                                                     |   | **2005                v. 2004**                                                                                        | ** ** | **2004                v. 2003** | ** ** |
|                                                                     |   | **Amount                ($)**                                                                                          |       | **% ** |   | **Amount                ($)** |   | **% ** |   |
|                                                                     |   |                                                                                                                   |       |   |   |   |   |   |   |
| **Revenues**                                                             |   | $                                                                                                                      | (4,000     | ) |   | (0.1 | )% | $ | 134,000 |   |   | 3.0 | % |
| **Costs                and Expenses**                                    |   |                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                                        |   |                                                                                                                   | 103,000    |   |   | 4.4 |   |   | 54,000 |   |   | 2.4 |   |
| Depreciation                expense                                      |   |                                                                                                                   | 84,000     |   |   | 9.6 |   |   | (122,000 | ) |   | (12.3 | ) |
| General                and administrative                                |   |                                                                                                                   | 1,350,000  |   |   | 63.0 |   |   | (206,000 | ) |   | (8.8 | ) |
|  Total                costs and expenses                            |   |                                                                                                                   | 1,537,000  |   |   | 28.7 |   |   | (274,000 | ) |   | (4.9 | ) |
| **Income                (Loss) from Operations**                         |   |                                                                                                                   | (1,541,000 | ) |   | (211.4 | ) |   | 408,000 |   |   | 35.9 |   |
| **Other                Income**                                          |   |                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |
| Dividend                and interest income                              |   |                                                                                                                   | 15,000     |   |   | 2.2 |   |   | (58,000 | ) |   | (7.8 | ) |
| Gain                on sale of marketable securities                     |   |                                                                                                                   | 134,000    |   |   | 100.0 |   |   | (2,621,000 | ) |   | (100.0 | ) |
| Gain                on sale of real estate related assets                |   |                                                                                                                   | 675,000    |   |   | 100.0 |   |   | — |   |   | — |   |
| Insurance                proceeds                                        |   |                                                                                                                   | —    |   |   | — |   |   | (1,000,000 | ) |   | (100.0 | ) |
| Other                income                                              |   |                                                                                                                   | 32,000     |   |   | 100.0 |   |   | (232,000 | ) |   | (100.0 | ) |
| **Interest                Expense**                                      |   |                                                                                                                   | (7,000     | ) |   | (0.6 | ) |   | 222,000 |   |   | 17.0 |   |
| **Income                (loss) before provision for income taxes**       |   |                                                                                                                   | (692,000   | ) |   | (61.4 | ) |   | (3,281,000 | ) |   | (152.3 | ) |
| **Income                Tax Expense (Benefit)**                          |   |                                                                                                                   | (695,000   | ) |   | (169.9 | ) |   | (752,000 | ) |   | (219.2 | ) |
| **Income                (Loss) from Continuing Operations**              |   |                                                                                                                   | 3,000      |   |   | (0.4 | ) |   | (2,529,000 | ) |   | (139.6 | ) |
| **Discontinued                Operations - Real Estate, Net of Taxes**   |   |                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |
| **Loss                from operations**                                  |   |                                                                                                                   | (507,000   | ) |   | (874.1 | ) |   | 1,029,000 |   |   | 94.7 |   |
| **Gain                from sales**                                       |   |                                                                                                                   | 5,151,000  |   |   | 124.9 |   |   | 3,044,000 |   |   | 281.6 |   |
| **Discontinued                Operations - Oil & Gas, Net of Taxes** |   |                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |
| **Income                (loss) from operations**                         |   |                                                                                                                   | 784,000    |   |   | 41.5 |   |   | 1,289,000 |   |   | 40.6 |   |
| **Gain                from sales**                                       |   |                                                                                                                   | (567,000   | ) |   | (100.0 | ) |   | 567,000 |   |   | 100.0 |   |
| **Net                Income (Loss)**                                     |   | $                                                                                                                      | 4,864,000  |   |   | 240.0 |   | $ | 3,400,000 |   |   | 247.6 |   |
| **Basic                earnings (loss) per share:**                      |   |                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                  |   | $                                                                                                                      | —    |   |   | — |   | $ | (0.32 | ) |   | (139.1 | ) |
| Income                (loss) from discontinued operations                |   |                                                                                                                   | 0.62       |   |   | 177.1 |   |   | 0.76 |   |   | 185.4 |   |
| Net                income (loss) applicable to common stockholders       |   | $                                                                                                                      | 0.62       |   |   | 238.5 |   | $ | 0.44 |   |   | 244.4 |   |
| **Diluted                earnings (loss) per share:**                    |   |                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                  |   | $                                                                                                                      | —    |   |   | — |   | $ | (0.32 | ) |   | (139.1 | ) |
| Income                from discontinued operations                       |   |                                                                                                                   | 0.62       |   |   | 182.4 |   |   | 0.75 |   |   | 182.9 |   |
| Net                income (loss) applicable to common stockholders       |   | $                                                                                                                      | 0.62       |   |   | 248.0 |   | $ | 0.43 |   |   | 238.9 |   |
|                                                                     |   |                                                                                                                   |       |   |   |   |   |   |   |   |   |   |   |
|                                                                     |

----

**Results      of Operations - 2005 v. 2004**

**Overview**

**Continuing      Operations: **

**Segment      Information**

|                                                                                    |   | **Residential                Real Estate**               |   | **Commercial                Real Estate** |   | **Total**                                                |   |
|-----------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|-------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                                                    |   | **Year                ended December                31** |   | **Increase                (Decrease)**    |   | **Year                ended December                31** |   | **Increase                (Decrease)** |   | **Year                ended December                31** |   | **Increase                (Decrease)** |   |
|                                                                                    |   | **2005**                                                 |   | **2004**                                  |   | **$ **                                              |   | **%** |   | **2005** |   | **2004** |   | **$ ** | ** ** | **%** | ** ** | **2005** | ** ** | **2004** |   | **$ ** | ** ** | **%** |   |
|                                                                                    |   | (In                000s of $)                            |   |                                      |   | (In                000s of $)                            |   |   |   | (In                000s of $) |   |   |   |
| Rental                income                                                            |   | $                                                        | 2,782  |                                      | $      | 2,754                                                    |   | $ | 28 |   |   | 1.0 |   | $ | 1,456 |   | $ | 1,447 |   | $ | 9 |   |   | 0.6 |   | $ | 4,238 |   | $ | 4,201 |   | $ | 37 |   |   | 0.9 |   |
| Vending                income                                                           |   |                                                     | 5      |                                      |   | 18                                                       |   |   | (13 | ) |   | (72.2 | ) |   | — |   |   | — |   |   | — |   |   | — |   |   | 5 |   |   | 18 |   |   | (13 | ) |   | (72.2 | ) |
| Other                                                                                   |   |                                                     | 231    |                                      |   | 204                                                      |   |   | 27 |   |   | 13.2 |   |   | 150 |   |   | 205 |   |   | (55 | ) |   | (26.8 | ) |   | 381 |   |   | 409 |   |   | (28 | ) |   | (6.8 | ) |
| Total                revenues                                                           |   |                                                     | 3,018  |                                      |   | 2,976                                                    |   |   | 42 |   |   | 1.4 |   |   | 1,606 |   |   | 1,652 |   |   | (46 | ) |   | (2.8 | ) |   | 4,624 |   |   | 4,628 |   |   | (4 | ) |   | (0.1 | ) |
| Operating                expenses                                                       |   |                                                     | 1,664  |                                      |   | 1,607                                                    |   |   | 57 |   |   | 3.5 |   |   | 780 |   |   | 734 |   |   | 46 |   |   | 6.3 |   |   | 2,444 |   |   | 2,341 |   |   | 103 |   |   | 4.4 |   |
| Net                operating income                                                     |   | $                                                        | 1,354  |                                      | $      | 1,369                                                    |   | $ | (15 | ) |   | (1.1 | ) | $ | 826 |   | $ | 918 |   | $ | (92 | ) |   | (10.0 | ) | $ | 2,180 |   | $ | 2,287 |   | $ | (107 | ) |   | (4.7 | ) |
|                                                                                    |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation                to consolidated income (loss) from continuing operations: |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                operating income                                                     |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   | $ | 2,180 |   | $ | 2,287 |   |   |   |   |   |   |   |
| Depreciation                expense                                                     |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (957 | ) |   | (873 | ) |   |   |   |   |   |   |
| General                and administrative expenses                                      |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   | (3,493 | ) |   | (2,143 | ) |   |   |   |   |   |   |
| Other                income                                                             |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,541 |   |   | 685 |   |   |   |   |   |   |   |
| Interest                expense                                                         |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,090 | ) |   | (1,083 | ) |   |   |   |   |   |   |
| Income                tax benefit                                                       |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,104 |   |   | 409 |   |   |   |   |   |   |   |
|                                                                                    |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations                                          |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   | $ | (715 | ) | $ | (718 | ) |   |   |   |   |   |   |
|                                                                                    |   |                                                     |   |                                      |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Residential      Segment**

**Commercial      Segment**

----

**Revenues**

|                                              |       | **Years                Ended December 31,** | ** ** | ** ** | ** ** |
|---------------------------------------------------|------------|---------------------------------------------|------------|------------|------------|
| ** **                                        | ** ** | **2005**                                    | ** ** | **2004**   | ** ** | **Increase                (Decrease)** |   |
|                                              |       |                                        |       |       |       |   |   |
| Sunrise                Ridge, Arizona             |       | $                                           | 2,434,000  |       | $          | 2,388,000 |   | $ | 46,000 |   |
| Van                Buren Apartments, Arizona      |       |                                        | 584,000    |       |       | 588,000 |   |   | (4,000 | ) |
| Sub-total                - Residential Properties |       |                                        | 3,018,000  |       |       | 2,976,000 |   |   | 42,000 |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Royal                Mall Plaza, Arizona          |       |                                        | 606,000    |       |       | 655,000 |   |   | (49,000 | ) |
| Tamarac,                Florida                   |       |                                        | 327,000    |       |       | 313,000 |   |   | 14,000 |   |
| Tempe                Corporate Center, Arizona    |       |                                        | 673,000    |       |       | 684,000 |   |   | (11,000 | ) |
| Sub-total                - Commercial Properties  |       |                                        | 1,606,000  |       |       | 1,652,000 |   |   | (46,000 | ) |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Total                Revenues                     |       | $                                           | 4,624,000  |       | $          | 4,628,000 |   | $ | (4,000 | ) |

**Operating      Expenses**

|                                              |       | **Years                Ended December 31,** | ** ** | ** ** | ** ** |
|---------------------------------------------------|------------|---------------------------------------------|------------|------------|------------|
| ** **                                        | ** ** | **2005**                                    | ** ** | **2004**   | ** ** | **Increase                (Decrease)** |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Sunrise                Ridge, Arizona             |       | $                                           | 1,277,000  |       | $          | 1,249,000 |   | $ | 28,000 |   |
| Van                Buren Apartments, Arizona      |       |                                        | 387,000    |       |       | 358,000 |   |   | 29,000 |   |
| Sub-total                - Residential Properties |       |                                        | 1,664,000  |       |       | 1,607,000 |   |   | 57,000 |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Royal                Mall Plaza, Arizona          |       |                                        | 224,000    |       |       | 212,000 |   |   | 12,000 |   |
| Tamarac,                Florida                   |       |                                        | 215,000    |       |       | 176,000 |   |   | 39,000 |   |
| Tempe                Corporate Center, Arizona    |       |                                        | 341,000    |       |       | 346,000 |   |   | (5,000 | ) |
| Sub-total                - Commercial Properties  |       |                                        | 780,000    |       |       | 734,000 |   |   | 46,000 |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Total                Operating Expenses           |       | $                                           | 2,444,000  |       | $          | 2,341,000 |   | $ | 103,000 |   |

----

**Discontinued      Operations, Net of Taxes:**

**Real      Estate**

----

**Oil      and Gas**

**Results      of Operations - 2004 v. 2003**

**Overview**

**Continuing      Operations: **

----

**Segment      Information**

|                                                                                    |   | **Residential                Real Estate**               |   | **Commercial                Real Estate** |   | **Total**                                                |       |
|-----------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|-------------------------------------------|--------|----------------------------------------------------------|------------|
|                                                                                    |   | **Year                ended December                31** |   | **Increase                (Decrease)**    |   | **Year                ended December                31** |       | **Increase                (Decrease)** |   | **Year                ended December                31** |   | **Increase                (Decrease)** |   |
|                                                                                    |   | **2004**                                                 |   | **2003**                                  |   | **$ **                                              | ** ** | **%** | ** ** | **2004** | ** ** | **2003** | ** ** | **$** | ** ** | **%** | ** ** | **2004** | ** ** | **2003** | ** ** | **$** | ** ** | **%** |   |
|                                                                                    |   | (In                000s of $)                            |   |                                      |   | (In                000s of $)                            |       |   |   | (In                000s of $) |   |   |   |
| Rental                income                                                            |   | $                                                        | 2,754  |                                      | $      | 2,696                                                    |       | $ | 58 |   |   | 2.2 |   | $ | 1,447 |   | $ | 1,403 |   | $ | 44 |   |   | 3.1 |   | $ | 4,201 |   | $ | 4,099 |   | $ | 102 |   |   | 2.5 |   |
| Vending                income                                                           |   |                                                     | 18     |                                      |   | 7                                                        |       |   | 11 |   |   | 157.1 |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 18 |   |   | 7 |   |   | 11 |   |   | 157.1 |   |
| Other                                                                                   |   |                                                     | 204    |                                      |   | 199                                                      |       |   | 5 |   |   | 2.5 |   |   | 205 |   |   | 189 |   |   | 16 |   |   | 8.5 |   |   | 409 |   |   | 388 |   |   | 21 |   |   | 5.4 |   |
| Total                revenues                                                           |   |                                                     | 2,976  |                                      |   | 2,902                                                    |       |   | 74 |   |   | 2.5 |   |   | 1,652 |   |   | 1,592 |   |   | 60 |   |   | 3.8 |   |   | 4,628 |   |   | 4,494 |   |   | 134 |   |   | 3.0 |   |
| Operating                expenses                                                       |   |                                                     | 1,607  |                                      |   | 1,592                                                    |       |   | 15 |   |   | 0.9 |   |   | 734 |   |   | 695 |   |   | 39 |   |   | 5.6 |   |   | 2,341 |   |   | 2,287 |   |   | 54 |   |   | 2.4 |   |
| Net                operating income                                                     |   | $                                                        | 1,369  |                                      | $      | 1,310                                                    |       | $ | 59 |   |   | 4.5 |   | $ | 918 |   | $ | 897 |   | $ | 21 |   |   | 2.3 |   | $ | 2,287 |   | $ | 2,207 |   | $ | 80 |   |   | 3.6 |   |
|                                                                                    |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation                to consolidated income (loss) from continuing operations: |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |
| Net              operating income                                                       |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 2,287 |   | $ | 2,207 |   |   |   |   |   |   |   |
| Depreciation                expense                                                     |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (873 | ) |   | (995 | ) |   |   |   |   |   |   |
| General                and administrative expenses                                      |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (2,143 | ) |   | (2,349 | ) |   |   |   |   |   |   |
| Other                income                                                             |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 685 |   |   | 4,596 |   |   |   |   |   |   |   |
| Interest                expense                                                         |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,083 | )  |   | (1,305 | ) |   |   |   |   |   |   |
| Income              tax (expense) benefit                                               |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 409 |   |   | (343 | ) |   |   |   |   |   |   |
|                                                                                    |   |                                                     |   |                                      |   |                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                                 |   |                                                     |   |                                      |   |                                                     |       |   |   |   | $ | (718 | ) | $ | 1,811 |   |   |   |   |   |   |   |

**Residential      Segment**

**Commercial      Segment**

----

**Revenues**

|                                              |       | **Years                Ended December 31,** | ** ** | ** ** | ** ** |
|---------------------------------------------------|------------|---------------------------------------------|------------|------------|------------|
| ** **                                        | ** ** | **2004**                                    | ** ** | **2003**   | ** ** | **Increase                (Decrease)** |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Sunrise                Ridge, Arizona             |       | $                                           | 2,388,000  |       | $          | 2,341,000 |   |   | 47,000 |   |
| Van                Buren Apartments, Arizona      |       |                                        | 588,000    |       |       | 561,000 |   |   | 27,000 |   |
| Sub-total                - Residential Properties |       |                                        | 2,976,000  |       |       | 2,902,000 |   |   | 74,000 |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Royal                Mall Plaza, Arizona          |       |                                        | 655,000    |       |       | 619,000 |   |   | 36,000 |   |
| Tamarac,                Florida                   |       |                                        | 313,000    |       |       | 281,000 |   |   | 32,000 |   |
| Tempe                Corporate Center, Arizona    |       |                                        | 684,000    |       |       | 692,000 |   |   | (8,000 | ) |
| Sub-total                - Commercial Properties  |       |                                        | 1,652,000  |       |       | 1,592,000 |   |   | 60,000 |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Total                Rental Revenues              |       | $                                           | 4,628,000  |       | $          | 4,494,000 |   | $ | 134,000 |   |

**Operating      Expenses**

|                                              |       | **Years                Ended December 31,** | ** ** | ** ** | ** ** |
|---------------------------------------------------|------------|---------------------------------------------|------------|------------|------------|
| ** **                                        | ** ** | **2004**                                    | ** ** | **2003**   | ** ** | **Increase                (Decrease)** |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Sunrise                Ridge, Arizona             |       | $                                           | 1,249,000  |       | $          | 1,243,000 |   | $ | 6,000 |   |
| Van                Buren Apartments, Arizona      |       |                                        | 358,000    |       |       | 349,000 |   |   | 9,000 |   |
| Sub-total                - Residential Properties |       |                                        | 1,607,000  |       |       | 1,592,000 |   |   | 15,000 |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Royal                Mall Plaza, Arizona          |       |                                        | 212,000    |       |       | 228,000 |   |   | (16,000 | ) |
| Tamarac,                Florida                   |       |                                        | 176,000    |       |       | 137,000 |   |   | 39,000 |   |
| Tempe                Corporate Center, Arizona    |       |                                        | 346,000    |       |       | 330,000 |   |   | 16,000 |   |
| Sub-total                - Commercial Properties  |       |                                        | 734,000    |       |       | 695,000 |   |   | 39,000 |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |
| Total                Operating Expenses           |       | $                                           | 2,341,000  |       | $          | 2,287,000 |   | $ | 54,000 |   |
|                                              |       |                                        |       |       |       |   |   |   |   |   |

----

**Discontinued      Operations, Net of Taxes:**

**Real      Estate**

----

**Oil      and Gas**

**Effects      of Inflation**

**Liquidity      and Capital Resources**

----

----

|                                                  |       | ** Years                    Ended December 31,** | ** ** |
|-------------------------------------------------------|------------|-------------------------------------------------------|------------|
| **Name                    of property**               | ** ** | ** **                                            | **2005**   | ** ** | ** ** | **2004** | ** ** | ** ** | **2003** |   |
|                                                  |       |                                                  |       |   |   |   |   |   |   |   |
| Residential                    continuing operations: |       |                                                  |       |   |   |   |   |   |   |   |
| Sunrise                    Ridge                      |       | $                                                     | 294,000    |   | $ | 258,000 |   | $ | 204,000 |   |
| Van                    Buren                          |       |                                                  | 102,000    |   |   | 126,000 |   |   | 107,000 |   |
|                                                  |       |                                                  |       |   |   |   |   |   |   |   |

| Commercial                    continuing operations: |   |   |    |   |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|
| Royal                    Mall Plaza                  |   |   | 59,000  |   |   | 50,000 |   |   | 22,000 |   |
| Tamarac                    Office Plaza              |   |   | 14,000  |   |   | 4,000 |   |   | 4,000 |   |
| Tempe                    Corporate (a)               |   |   | 173,000 |   |   | 278,000 |   |   | 97,000 |   |
|                                                 |   |   |    |   |   |   |   |   |   |   |

| Discontinued                operations - residential:          |   |   |      |   |   |      |   |
|----------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Alpine                Village                                  |   |   | 67,000    |   |   | 85,000    |   |   | 177,000 |   |
| Biltmore                Club (b)                               |   |   | 132,000   |   |   | 195,000   |   |   | 55,000 |   |
| Galsworthy                Arms (c)                             |   |   | 35,000    |   |   | 424,000   |   |   | 87,000 |   |
| Jefferson                Gardens                               |   |   | 14,000    |   |   | 13,000    |   |   | 18,000 |   |
| Summercreek                                                    |   |   | 54,000    |   |   | 207,000   |   |   | 88,000 |   |
| Twelve                Oaks                                     |   |   | 92,000    |   |   | 56,000    |   |   | 90,000 |   |
| Wellington                                                     |   |   | 156,000   |   |   | 257,000   |   |   | 575,000 |   |
|                                                           |   |   |      |   |   |      |   |   |   |   |
| Discontinued                operations - commercial:           |   |   |      |   |   |      |   |   |   |   |
| Amboy                Towers                                    |   |   | 140,000   |   |   | 298,000   |   |   | 55,000 |   |
| Rutherford                Bank                                 |   |   | —   |   |   | —   |   |   | — |   |
| Wilshire                Grand Hotel & Banquet Facility (d) |   |   | 5,486,000 |   |   | —   |   |   | 316,000 |   |
|                                                           |   |   |      |   |   |      |   |   |   |   |
| Total                capital expenditures                      |   | $      | 6,818,000 |   | $      | 2,251,000 |   | $ | 1,895,000 |   |
|                                                           |   |   |      |   |   |      |   |   |   |   |

| (a)                2005 includes commissions paid to leasing agents related to multiple                year                leases.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)                Biltmore Club Apartments was sold on December 23, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (c)                The Galsworthy Arms condominiums were sold in the first quarter of                2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (d)                Reflects assets acquired upon the foreclosure of the Wilshire Grand                Hotel                & Banquet Facility on June 2, 2005 in a cashless transaction and                improvements made by WO Grand Hotel, L.L.C. , the owner of the Hotel                that                is 50% owned by the Company, since that date. The owner has agreed                to sell                the Wilshire Grand Hotel & Banquet Facility pursuant to a transaction                which is expected to close in April                2006. |

----

----

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

|                                    |   | ** 2005** | ** ** | **2004** |   |
|-----------------------------------------|--------|----------------|------------|----------|--------|
| Mortgage                notes payable   |   | $              | 32,952,000 |     | $      | 46,855,000 |   |
| Note                payable             |   |           | 400,000    |     |   | - |   |
| Total                debt               |   |           | 33,352,000 |     |   | 46,855,000 |   |
| Less-current                portion (1) |   |           | 1,862,000  |     |   | 729,000 |   |
| Long                term portion (2)    |   | $              | 31,490,000 |     | $      | 46,126,000 |   |

| (1)   | Includes                debt associated with discontinued operations of $1,581,000 in 2005                and                $462,000 in 2004. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes                debt associated with discontinued operations of $15,024,000 in 2005                and                $29,381,000 in 2004. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| **Year**   |   | **Amount** |       |
|------------|--------|------------|------------|
| 2006       |   | $          | 1,862,000  |   |
| 2007       |   |       | 596,000    |   |
| 2008       |   |       | 631,000    |   |
| 2009       |   |       | 4,503,000  |   |
| 2010       |   |       | 863,000    |   |
| Thereafter |   |       | 24,897,000 |   |
|       |   | $          | 33,352,000 |   |

----

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

----

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

**Report      of Independent Registered Public Accounting Firm**

----

**Report      of Independent Registered Public Accounting Firm**

----

**WILSHIRE      ENTERPRISES, INC.**

**CONSOLIDATED      BALANCE SHEETS**

**As      of December 31, 2005 and 2004**

| **Assets**                                                                                                                                                  |   | **2005** |        | **2004                (Restated)** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------|------------------------------------|--------|
|                                                                                                                                                        |   |     |        |                               |   |
| Current                assets:                                                                                                                              |   |     |        |                               |   |
| Cash                and cash equivalents                                                                                                                    |   | $        | 6,081,000   |                               | $      | 19,963,000 |   |
| Restricted                cash                                                                                                                              |   |     | 175,000     |                               |   | 178,000 |   |
| Marketable                debt securities, available for sale, at fair value                                                                                |   |     | 22,006,000  |                               |   | 11,147,000 |   |
| Marketable                equity securities, available for sale, at fair value                                                                              |   |     | 1,801,000   |                               |   | 2,754,000 |   |
| Accounts                receivable, net                                                                                                                     |   |     | 297,000     |                               |   | 189,000 |   |
| Income                taxes receivable                                                                                                                      |   |     | 1,359,000   |                               |   | 3,752,000 |   |
| Prepaid                expenses and other current assets                                                                                                    |   |     | 2,342,000   |                               |   | 1,827,000 |   |
|  Total                current assets                                                                                                                   |   |     | 34,061,000  |                               |   | 39,810,000 |   |
| Noncurrent                assets:                                                                                                                           |   |     |        |                               |   |   |   |
| Restricted                cash                                                                                                                              |   |     | 10,559,000  |                               |   | 3,904,000 |   |
| Mortgage                notes and loans receivable                                                                                                          |   |     | 123,000     |                               |   | 957,000 |   |
| Other                assets                                                                                                                                 |   |     | —     |                               |   | 208,000 |   |
| Property                and equipment:                                                                                                                      |   |     |        |                               |   |   |   |
| Real                estate properties                                                                                                                       |   |     | 20,910,000  |                               |   | 20,113,000 |   |
| Real                estate properties - Held for sale                                                                                                       |   |     | 37,944,000  |                               |   | 38,824,000 |   |
|                                                                                                                                                        |   |     | 58,854,000  |                               |   | 58,937,000 |   |
| Less:                                                                                                                                                       |   |     |        |                               |   |   |   |
| Accumulated                depreciation and amortization                                                                                                    |   |     | 8,860,000   |                               |   | 7,903,000 |   |
| Accumulated                depreciation, depletion and amortization - Property held for                sale                                                 |   |     | 5,822,000   |                               |   | 8,997,000 |   |
|                                                                                                                                                        |   |     | 44,172,000  |                               |   | 42,037,000 |   |
| Total                Assets                                                                                                                                 |   | $        | 88,915,000  |                               | $      | 86,916,000 |   |
|                                                                                                                                                        |   |     |        |                               |   |   |   |
|                                                                                                                                                        |   |     |        |                               |   |   |   |
| **Liabilities                and Stockholders’ Equity**                                                                                               |   |     |        |                               |   |   |   |
| Current                liabilities:                                                                                                                         |   |     |        |                               |   |   |   |
| Current                portion of long-term debt                                                                                                            |   | $        | 281,000     |                               | $      | 267,000 |   |
| Accounts                payable                                                                                                                             |   |     | 779,000     |                               |   | 792,000 |   |
| Income                taxes payable                                                                                                                         |   |     | 2,695,000   |                               |   | 3,623,000 |   |
| Deferred                income taxes                                                                                                                        |   |     | 99,000      |                               |   | 2,465,000 |   |
| Accrued                liabilities                                                                                                                          |   |     | 703,000     |                               |   | 606,000 |   |
| Deferred                income                                                                                                                              |   |     | 56,000      |                               |   | 350,000 |   |
| Current                liabilities associated with discontinued operations                                                                                  |   |     | 2,644,000   |                               |   | 1,682,000 |   |
|  Total                current liabilities                                                                                                              |   |     | 7,257,000   |                               |   | 9,785,000 |   |
| Noncurrent                liabilities:                                                                                                                      |   |     |        |                               |   |   |   |
| Long-term                debt, less current portion                                                                                                         |   |     | 16,466,000  |                               |   | 16,745,000 |   |
| Deferred                income taxes                                                                                                                        |   |     | 7,466,000   |                               |   | 1,855,000 |   |
| Deferred                income                                                                                                                              |   |     | 95,000      |                               |   | 556,000 |   |
| Noncurrent                liabilities associated with discontinued operations                                                                               |   |     | 15,779,000  |                               |   | 29.501,000 |   |
|  Total                liabilities                                                                                                                      |   |     | 47,063,000  |                               |   | 58,442,000 |   |
|                                                                                                                                                        |   |     |        |                               |   |   |   |
| Commitments                and Contingencies                                                                                                                |   |     |        |                               |   |   |   |
|                                                                                                                                                        |   |     |        |                               |   |   |   |
| Stockholders’                equity:                                                                                                                  |   |     |        |                               |   |   |   |
| Non-controlling                interest of joint venture partner                                                                                            |   |     | 6,680,000   |                               |   | — |   |
| Preferred                  stock, $1 par value, 1,000,000 shares authorized; none issued and                  outstanding in                  2005 and 2004 |   |     | —     |                               |   | — |   |
| Common                stock, $1 par value, 15,000,000 shares authorized; issued 10,013,544                shares in                2005 and 2004            |   |     | 10,014,000  |                               |   | 10,014,000 |   |
| Capital                in excess of par value                                                                                                               |   |     | 9,029,000   |                               |   | 9,524,000 |   |
| Retained                earnings                                                                                                                            |   |     | 26,185,000  |                               |   | 19,294,000 |   |
| Unearned                compensation                                                                                                                        |   |     | (133,000    | )                                  |   | (431,000 | ) |
| Treasury                stock, 2,159,030 and 2,234,732 shares at 2005 and 2004, respectively,                at                cost                         |   |     | (10,067,000 | )                                  |   | (10,491,000 | ) |
| Accumulated                other comprehensive income                                                                                                       |   |     | 144,000     |                               |   | 564,000 |   |
|  Total                stockholders’ equity                                                                                                       |   |     | 41,852,000  |                               |   | 28,474,000 |   |
| Total                Liabilities and Stockholders’ Equity                                                                                             |   | $        | 88,915,000  |                               | $      | 86,916,000 |   |

----

**WILSHIRE      ENTERPRISES, INC.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**For      the years ended December 31, 2005, 2004 and 2003**

|                                                                                                                                         |   |  **2005** |       | **2004****(Restated****)** |   |  **2003** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|----------------------------|--------|----------------|--------|
|                                                                                                                                         |   |           |       |                       |   |           |   |
| **Revenues**                                                                                                                                 |   | $              | 4,624,000  |                       | $      | 4,628,000      |   | $ | 4,494,000 |   |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Costs                and Expenses**                                                                                                        |   |           |       |                       |   |           |   |   |   |   |
| Operating                expenses                                                                                                            |   |           | 2,444,000  |                       |   | 2,341,000      |   |   | 2,287,000 |   |
| Depreciation                expense                                                                                                          |   |           | 957,000    |                       |   | 873,000        |   |   | 995,000 |   |
| General                and administrative                                                                                                    |   |           | 3,493,000  |                       |   | 2,143,000      |   |   | 2,349,000 |   |
|  Total                costs and expenses                                                                                                |   |           | 6,894,000  |                       |   | 5,357,000      |   |   | 5,631,000 |   |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Loss                from Operations**                                                                                                      |   |           | (2,270,000 | )                          |   | (729,000       | )      |   | (1,137,000 | ) |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Other                Income**                                                                                                              |   |           |       |                       |   |           |   |   |   |   |
| Dividend                and interest income                                                                                                  |   |           | 700,000    |                       |   | 685,000        |   |   | 743,000 |   |
| Gain                on sale of marketable securities                                                                                         |   |           | 134,000    |                       |   | —        |   |   | 2,621,000 |   |
| Gain                on sale of real estate related assets                                                                                    |   |           | 675,000    |                       |   | —        |   |   | — |   |
| Insurance                proceeds                                                                                                            |   |           | —    |                       |   | —        |   |   | 1,000,000 |   |
| Other                income                                                                                                                  |   |           | 32,000     |                       |   | —        |   |   | 232,000 |   |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Interest                Expense**                                                                                                          |   |           | (1,090,000 | )                          |   | (1,083,000     | )      |   | (1,305,000 | ) |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
|  **Income                (loss) before provision for income taxes**                                                                     |   |           | (1,819,000 | )                          |   | (1,127,000     | )      |   | 2,154,000 |   |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Income                Tax Expense (Benefit)**                                                                                              |   |           | (1,104,000 | )                          |   | (409,000       | )      |   | 343,000 |   |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Income                (Loss) from Continuing Operations**                                                                                  |   |           | (715,000   | )                          |   | (718,000       | )      |   | 1,811,000 |   |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Discontinued                Operations - Real Estate, Net of Taxes of $5,698,000, $2,262,000                and                $(89,000)** |   |           |       |                       |   |           |   |   |   |   |
| **Loss                from operations**                                                                                                      |   |           | (565,000   | )                          |   | (58,000        | )      |   | (1,087,000 | ) |
| **Gain                from sales**                                                                                                           |   |           | 9,276,000  |                       |   | 4,125,000      |   |   | 1,081,000 |   |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Discontinued                Operations - Oil & Gas, Net of Taxes of $584,000, $674,000, and                $(1,811,000)**              |   |           |       |                       |   |           |   |   |   |   |
| **Income                (loss) from operations**                                                                                             |   |           | (1,105,000 | )                          |   | (1,889,000     | )      |   | (3,178,000 | ) |
| **Gain                from sales**                                                                                                           |   |           | —    |                       |   | 567,000        |   |   | — |   |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Net                income (loss)**                                                                                                         |   | $              | 6,891,000  |                       | $      | 2,027,000      |   | $ | (1,373,000 | ) |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Basic                earnings (loss) per share:**                                                                                          |   |           |       |                       |   |           |   |   |   |   |
| Income                (loss) from continuing operations                                                                                      |   | $              | (0.09      | )                          | $      | (0.09          | )      | $ | 0.23 |   |
| Income                (loss) from discontinued operations -                                                                                  |   |           |       |                       |   |           |   |   |   |   |
| Real                estate - loss from operations                                                                                            |   |           | (0.07      | )                          |   | (0.01          | )      |   | (0.14 | ) |
| Real                estate - gain on sales                                                                                                   |   |           | 1.18       |                       |   | 0.53           |   |   | 0.14 |   |
| Oil                and gas - loss from operations                                                                                            |   |           | (0.14      | )                          |   | (0.24          | )      |   | (0.41 | ) |
| Oil                and gas - gain on sale                                                                                                    |   |           | —    |                       |   | 0.07           |   |   | — |   |
| Net                income (loss) applicable to common stockholders                                                                           |   | $              | 0.88       |                       | $      | 0.26           |   | $ | (0.18 | ) |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |
| **Diluted                earnings (loss) per share:**                                                                                        |   |           |       |                       |   |           |   |   |   |   |
| Income                (loss) from continuing operations                                                                                      |   | $              | (0.09      | )                          | $      | (0.09          | )      | $ | 0.23 |   |
| Income                (loss) from discontinued operations -                                                                                  |   |           |       |                       |   |           |   |   |   |   |
| Real                estate - loss from operations                                                                                            |   |           | (0.07      | )                          |   | (0.01          | )      |   | (0.14 | ) |
| Real                estate - gain on sales                                                                                                   |   |           | 1.17       |                       |   | 0.52           |   |   | 0.14 |   |
| Oil                and gas - loss from operations                                                                                            |   |           | (0.14      | )                          |   | (0.24          | )      |   | (0.41 | ) |
| Oil                and gas - gain on sale                                                                                                    |   |           | —    |                       |   | 0.07           |   |   | — |   |
| Net                income (loss) applicable to common stockholders                                                                           |   | $              | 0.87       |                       | $      | 0.25           |   | $ | (0.18 | ) |
|                                                                                                                                         |   |           |       |                       |   |           |   |   |   |   |

----

**WILSHIRE      ENTERPRISES, INC.**

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS’ EQUITY**

**December      31, 2005, 2004 (Restated) and 2003**

|                                                                                                                                   |   | **Non-Controlling                Interest in Joint Venture** |        | **Preferred                Stock** |   | **Common                Stock** |   | **Capital                in Excess of** |        | **Unearned** |   | **Retained**                 |   | **Treasury**     |       | **Accumulated                Other Comprehensive** |   | **Comprehensive** |   | **Total                Stockholders’** |     |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|-------------|------------------------------------|--------|---------------------------------|--------|-----------------------------------------|-------------|--------------|--------|------------------------------|--------|------------------|------------|----------------------------------------------------|--------|-------------------|--------|----------------------------------------------|----------|
|                                                                                                                                   |   | **Partner**                                                  |        | **Shares**                         |   | **Amount**                      |   | **Shares**                              |        | **Amount**   |   | **Par                Value** |   | **Compensation** |       | **Earnings**                                       |   | **Stock**         |   | **Income                (Loss)**             |     | **Income                (Loss)** |   | **Equity** |   |
| Balance,                December 31, 2002                                                                                              |   | $                                                            | —     |                               |   | —                         |   | $                                       | —     |         |   | 10,013,544                   |   | $                | 10,014,000 |                                               | $      | 9,029,000         |   | $                                            | —  |   | $ | 18,640,000 |   | $ | (10,355,000 | ) | $ | (3,089,000 | ) |   |   |   | $ | 24,239,000 |   |
| Net                income                                                                                                              |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   | (1,373,000 | ) |   |   |   |   |   |   | $ | (1,373,000 | ) |   | (1,373,000 | ) |
| Foreign                currency translation adjustment                                                                                 |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   |   |   |   |   |   |   | 2,206,000 |   |   | 2,206,000 |   |   | 2,206,000 |   |
| Change                in unrealized loss on marketable securities, net of income tax benefit                of                $98,000  |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   |   |   |   |   |   |   | (545,000 | ) |   | (545,000 | ) |   | (545,000 | ) |
| Comprehensive                income                                                                                                    |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   |   |   |   |   |   |   |   |   | $ | 288,000 |   |   |   |   |
|                                                                                                                                   |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                December 31, 2003                                                                                              |   |                                                         | **—** |                               |   | **—**                     |   |                                    | **—** |         |   | 10,013,544                   |   |             | 10,014,000 |                                               |   | 9,029,000         |   |                                         | —  |   |   | 17,267,000 |   |   | (10,355,000 | ) |   | (1,428,000 | ) |   |   |   |   | 24,527,000 |   |
| Net                income                                                                                                              |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   | 2,027,000 |   |   |   |   |   |   |   | $ | 2,027,000 |   |   | 2,027,000 |   |
| Foreign                currency translation adjustment                                                                                 |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   |   |   |   |   |   |   | 1,536,000 |   |   | 1,536,000 |   |   | 1,536,000 |   |
| Change                in unrealized loss on marketable securities, net of income tax benefit                of                $301,000 |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   |   |   |   |   |   |   | 456,000 |   |   | 456,000 |   |   | 456,000 |   |
| Comprehensive                income                                                                                                    |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         |     |   |   |   |   |   |   |   |   |   |   | $ | 4,019,000 |   |   |   |   |
| Issuance                of shares of common stock for services                                                                         |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         | (24,000  | ) |   |   |   |   | 28,000 |   |   |   |   |   |   |   |   | 4,000 |   |
| Compensation                associated with stock options                                                                              |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   | 495,000           |   |                                         | (495,000 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | — |   |
| Amortization                of compensation associated with stock and stock option                awards                               |   |                                                         |        |                               |   |                            |   |                                    |        |         |   |                         |   |             |       |                                               |   |              |   |                                         | 88,000   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 88,000 |   |

----

| Exercise                of stock options                                                                                               |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   | 34,000      |   |   |     |   |   |      |   |   | 34,000     |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|---------|--------|--------|---------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|--------|----------|--------|--------|------------|--------|--------|-------------|--------|--------|----------|--------|--------|-----------|--------|--------|------------|--------|
| Purchase                of treasury stock                                                                                              |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   | (198,000    | )      |   |     |   |   |      |   |   | (198,000   | )      |
|                                                                                                                                   |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   |        |   |   |     |   |   |      |   |   |       |   |
| Balance,                December 31, 2004                                                                                              |   |   | —   |   |   | — |   |   | — |   |   | 10,013,544 |   |   | 10,014,000 |   |   | 9,524,000 |   |   | (431,000 | )      |   | 19,294,000 |   |   | (10,491,000 | )      |   | 564,000  |   |   |      |   |   | 28,474,000 |   |
| Net                income                                                                                                              |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   | 6,891,000  |   |   |        |   |   |     |   | $      | 6,891,000 |   |   | 6,891,000  |   |
| Reclassification                adjustment for gains on marketable securities sold, net of tax of                $(53,000)             |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   |        |   |   | (76,000  | )      |   | (76,000   | )      |   | (76,000    | )      |
| Change                in unrealized loss on marketable securities, net of income tax benefit                of                $141,000 |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   |        |   |   | (344,000 | )      |   | (344,000  | )      |   | (344,000   | )      |
| Comprehensive                income                                                                                                    |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   |        |   |   |     |   | $      | 6,471,000 |   |   |       |   |
| Issuance                of shares of common stock for services, net of forfeitures                                                     |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   | (302,000 | )      |   |       |   |   | 741,000     |   |   |     |   |   |      |   |   | 439,000    |   |
| Compensation                associated with stock options                                                                              |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   | (495,000  | )      |   | 495,000  |   |   |       |   |   |        |   |   |     |   |   |      |   |   | —    |   |
| Amortization                of compensation associated with stock and stock option                awards                               |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   | 105,000  |   |   |       |   |   |        |   |   |     |   |   |      |   |   | 105,000    |   |
| Exercise                of stock options                                                                                               |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   | 40,000      |   |   |     |   |   |      |   |   | 40,000     |   |
| Purchase                of treasury stock                                                                                              |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   | (357,000    | )      |   |     |   |   |      |   |   | (357,000   | )      |
| Acquisition                of interest in joint venture                                                                                |   |   | 6,680,000 |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   |        |   |   |     |   |   |      |   |   | 6,680,000  |   |
|                                                                                                                                   |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   |        |   |   |     |   |   |      |   |   |       |   |
| Balance,                December 31, 2005                                                                                              |   | $      | 6,680,000 |   |   | — |   | $      | — |   |   | 10,013,544 |   | $      | 10,014,000 |   | $      | 9,029,000 |   | $      | (133,000 | )      | $      | 26,185,000 |   | $      | (10,067,000 | )      | $      | 144,000  |   |   |      |   | $      | 41,852,000 |   |
|                                                                                                                                   |   |   |      |   |   |    |   |   |    |   |   |       |   |   |       |   |   |      |   |   |     |   |   |       |   |   |        |   |   |     |   |   |      |   |   |       |   |

----

**WILSHIRE      ENTERPRISES, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**December      31, 2005, 2004 and 2003**

|                                                                                                                                             |   | **2005** |        | **2004****(Restated)** |   | **2003**    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------|------------------------|--------|-------------|--------|
|                                                                                                                                             |   |     |        |                   |   |        |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES:                                                                                             |   |     |        |                   |   |        |   |
| Net                income (loss)                                                                                                                 |   | $        | 6,891,000   |                   | $      | 2,027,000   |   | $ | (1,373,000 | ) |
| Adjustments                to reconcile net income (loss) to net cash provided by (used in)                operating                activities - |   |     |        |                   |   |        |   |   |   |   |
| Depreciation,                depletion and amortization                                                                                          |   |     | 1,289,000   |                   |   | 1,687,000   |   |   | 6,244,000 |   |
| Write-off                of foreign currency translation adjustment                                                                              |   |     | —     |                   |   | 1,615,000   |   |   | — |   |
| Amortization                of compensation expense                                                                                              |   |     | 258,000     |                   |   | 88,000      |   |   | — |   |
| Impairment                loss on oil and gas assets                                                                                             |   |     | —     |                   |   | —     |   |   | 7,000,000 |   |
| Deferred                income tax (benefit) provision                                                                                           |   |     | 5,612,000   |                   |   | (7,328,000  | )      |   | (594,000 | ) |
| Increase                (decrease) in deferred income                                                                                            |   |     | (27,000     | )                      |   | 146,000     |   |   | (445,000 | ) |
| Gain                on sales of real estate assets                                                                                               |   |     | (16,018,000 | )                      |   | (7,039,000  | )      |   | (1,693,000 | ) |
| Gain                on sale of oil and gas properties                                                                                            |   |     | —     |                   |   | (768,000    | )      |   | — |   |
| Gain                on sale of marketable securities                                                                                             |   |     | (134,000    | )                      |   | —     |   |   | (2,621,000 | ) |
| Other                expense - non-controlling interest of joint venture                partner                                             |   |     | 185,000     |                   |   | —     |   |   | — |   |
| Changes                in operating assets and liabilities:                                                                                      |   |     |        |                   |   |        |   |   |   |   |
| Decrease                (increase) in accounts receivable                                                                                        |   |     | (108,000    | )                      |   | 1,613,000   |   |   | (897,000 | ) |
| Decrease                (increase) in income taxes receivable                                                                                    |   |     | 2,393,000   |                   |   | (3,208,000  | )      |   | 83,000 |   |
| Decrease                (increase) in prepaid expenses and other current assets                                                                  |   |     | (515,000    | )                      |   | 154,000     |   |   | 539,000 |   |
| Increase                (decrease) in accounts payable, accrued liabilities, taxes payable                and                other liabilities   |   |     | (2,448,000  | )                      |   | 2,535,000   |   |   | 1,177,000 |   |
| Net                cash provided by (used in) operating activities                                                                               |   |     | (2,622,000  | )                      |   | (8,478,000  | )      |   | 7,420,000 |   |
|                                                                                                                                             |   |     |        |                   |   |        |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES:                                                                                             |   |     |             |                   |   |        |   |   |   |   |
| Capital                expenditures - real estate                                                                                                |   |     | (2,201,000  | )                      |   | (2,295,000  | )      |   | (2,415,000 | ) |
| Capital                expenditures - oil & gas                                                                                              |   |     | —     |                   |   | —     |   |   | (8,705,000 | ) |
| Proceeds                from sale of oil and gas properties                                                                                      |   |     | —     |                   |   | 28,131,000  |   |   | — |   |
| Proceeds                from sale of real estate properties                                                                                      |   |     | 20,615,000  |                   |   | 19,874,000  |   |   | 3,107,000 |   |
| Purchase                of mortgage notes and loans receivable                                                                                   |   |     | (123,000    | )                      |   | —     |   |   | — |   |
| Proceeds                from mortgage notes receivable                                                                                           |   |     | 1,113,000   |                   |   | 1,673,000   |   |   | 531,000 |   |
| Proceeds                from sales and redemptions of marketable securities                                                                      |   |     | 374,000     |                   |   | —     |   |   | 9,494,000 |   |
| (Increase)                decrease in marketable debt securities                                                                                 |   |     | (10,859,000 | )                      |   | (11,147,000 | )      |   | — |   |
| (Increase)                decrease in restricted cash                                                                                            |   |     | (6,652,000  | )                      |   | (3,755,000  | )      |   | 78,000 |   |
| Net                cash provided by investing activities                                                                                         |   |     | 2,267,000   |                   |   | 32,481,000  |   |   | 2,090,000 |   |
|                                                                                                                                             |   |     |        |                   |   |        |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES:                                                                                             |   |     |        |                   |   |        |   |   |   |   |
| Principal                payments of long-term debt                                                                                              |   |     | (13,903,000 | )                      |   | (11,639,000 | )      |   | (47,868,000 | ) |
| Loan                payable to stockholder                                                                                                       |   |     | —     |                   |   | —     |   |   | (500,000 | ) |
| Proceeds                from issuance of debt                                                                                                    |   |     | 400,000     |                   |   | —     |   |   | 40,656,000 |   |
| Issuance                of unrestricted stock                                                                                                    |   |     | 293,000     |                   |   | —     |   |   | — |   |
| Purchase                of treasury stock                                                                                                        |   |     | (357,000    | )                      |   | (185,000    | )      |   | — |   |
| Proceeds                from exercise of stock options                                                                                           |   |     | 40,000      |                   |   | 21,000      |   |   | — |   |
| Net                cash used in financing activities                                                                                             |   |     | (13,527,000 | )                      |   | (11,803,000 | )      |   | (7,712,000 | ) |
|                                                                                                                                             |   |     |        |                   |   |        |   |   |   |   |
| EFFECT                OF EXCHANGE RATE CHANGES ON CASH                                                                                           |   |     | —     |                   |   | —     |   |   | 2,206,000 |   |
|                                                                                                                                             |   |     |        |                   |   |        |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents                                                                              |   |     | (13,882,000 | )                      |   | 12,200,000  |   |   | 4,004,000 |   |
|                                                                                                                                             |   |     |        |                   |   |        |   |   |   |   |
| CASH                AND CASH EQUIVALENTS, beginning of year                                                                                      |   |     | 19,963,000  |                   |   | 7,763,000   |   |   | 3,759,000 |   |
| CASH                AND CASH EQUIVALENTS, end of year                                                                                            |   | $        | 6,081,000   |                   | $      | 19,963,000  |   | $ | 7,763,000 |   |
|                                                                                                                                             |   |     |        |                   |   |        |   |   |   |   |
| SUPPLEMENTAL                DISCLOSURES TO THE STATEMENTS OF CASH FLOWS:                                                                         |   |     |        |                   |   |        |   |   |   |   |
| Cash                paid during the year for -                                                                                                   |   |     |        |                   |   |        |   |   |   |   |
| Interest                                                                                                                                         |   | $        | 2,903,000   |                   | $      | 3,025,000   |   | $ | 4,716,000 |   |
| Income                taxes, net                                                                                                                 |   | $        | (2,702,000  | )                      | $      | 7,567,000   |   | $ | 543,000 |   |
| Noncash                transaction:                                                                                                              |   |     |        |                   |   |        |   |   |   |   |

|   | On                June 2, 2005, the Company acquired the Wilshire Grand Hotel and Banquet                Facility through its 50% ownership in WO Grand Hotel, L.L.C. (the“LLC”).                The other 50% of the LLC is owned by a third party investor in which                the                chairman of Wilshire has an interest. Wilshire contributed land and                improvements valued at $4,843,000 to the LLC and the minority owners                contributed a mortgage note with a face value of $11.9 million to                the LLC                that was valued at $6,495,000. The fixed assets obtained in this                transaction were also valued at                $6,495,000. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**WILSHIRE      ENTERPRISES, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

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

**Principles      of consolidation:**

**Use      of estimates:**

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

----

**Marketable      equity securities:**

**Deferred      loan costs:**

**Real      estate and other properties:**

----

|                                                |       | **December                31,** | ** ** |
|-----------------------------------------------------|------------|---------------------------------|------------|
| ** **                                          | ** ** | **2005**                        | ** ** | **2004** |   |
|                                                |       |                            |       |   |   |
| Real                estate and other properties:    |       |                            |       |   |   |
| Land                                                |       | $                               | 1,675,000  |   | $ | 1,719,000 |   |
| Building                                            |       |                            | 13,560,000 |   |   | 13,223,000 |   |
| Furniture,                fixtures and equipment    |       |                            | 5,675,000  |   |   | 5,171,000 |   |
|                                                |       |                            |       |   |   |   |   |
| Accumulated                depreciation             |       |                            | (8,860,000 | ) |   | (7,903,000 | ) |
|                                                |       |                            |       |   |   |   |   |
| Net                real estate and other properties |       |                            | 12,050,000 |   |   | 12,210,000 |   |
|                                                |       |                            |       |   |   |   |   |
| Real                estate held for sale:           |       |                            |       |   |   |   |   |
| Land                                                |       |                            | 7,485,000  |   |   | 8,124,000 |   |
| Building                                            |       |                            | 26,059,000 |   |   | 25,752,000 |   |
| Furniture,                fixtures and equipment    |       |                            | 4,400,000  |   |   | 4,948,000 |   |
|                                                |       |                            |       |   |   |   |   |
| Accumulated                depreciation             |       |                            | (5,822,000 | ) |   | (8,997,000 | ) |
|                                                |       |                            |       |   |   |   |   |
| Net                real estate held for sale        |       |                            | 32,122,000 |   |   | 29,827,000 |   |
|                                                |       |                            |       |   |   |   |   |
| Net                real estate and other properties |       | $                               | 44,172,000 |   | $ | 42,037,000 |   |
|                                                |       |                            |       |   |   |   |   |

**Revenue      recognition:**

----

**Income      taxes:**

**Foreign      operations:**

**Earnings      (loss) per share:**

----

|                                                 |   | **2005** |      | **2004** |   |
|------------------------------------------------------|--------|----------|-----------|----------|--------|
| Numerator-                                           |   |     |      |     |   |
| Net                income (loss) - Basic and Diluted |   | $        | 6,891,000 |     | $      | 2,027,000 |   |
|                                                 |   |     |      |     |   |   |   |
| Denominator-                                         |   |     |      |     |   |   |   |
| Weighted                average common               |   |     |      |     |   |   |   |
| shares                outstanding - Basic            |   |     | 7,863,886 |     |   | 7,795,843 |   |
| Incremental                shares from assumed       |   |     |      |     |   |   |   |
| conversions                of stock options          |   |     | 102,512   |     |   | 159,242 |   |
| Weighted                average common shares        |   |     |      |     |   |   |   |
| outstanding                - Diluted                 |   |     | 7,966,398 |     |   | 7,955,085 |   |
|                                                 |   |     |      |     |   |   |   |
| Basic                earnings (loss) per share:      |   | $        | 0.88      |     | $      | 0.26 |   |
|                                                 |   |     |      |     |   |   |   |
| Diluted                earnings (loss) per share:    |   | $        | 0.87      |     | $      | 0.25 |   |
|                                                 |   |     |      |     |   |   |   |

**Stock-based      compensation:**

----

|                                   |   | **2005** | ** **             | **2004** | ** ** | **2003**               |   |
|----------------------------------------|--------|----------|------------------------|----------|------------|------------------------|--------|
|                                   |   |     |                   |     |       |                   |   |
| Risk                free interest rate |   |     | 4.09                   | %        |       | 3.97                   | %      |   | 3.00 | % |
| Volatility                             |   |     | 40.3                   | %        |       | 37.4                   | %      |   | 33.1 | % |
| Dividend                yield          |   |     | —                | %        |       | —                | %      |   | — | % |
| Expected                option life    |   |     | 5                years |     |       | 5                years |   |   | 5                years |   |

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

|                                      |       | **Unrealized                Gains** | ** ** | **Cumulative**                      | ** ** | **Accumulated**                  | ** ** |
|-------------------------------------------|------------|-------------------------------------|------------|-------------------------------------|------------|----------------------------------|------------|
| ** **                                | ** ** | **(Losses)                on**      | ** ** | **Foreign                Currency** | ** ** | **Other**                        | ** ** |
| ** **                                | ** ** | **Available-for-Sale**              | ** ** | **Translation**                     | ** ** | **Comprehensive**                | ** ** |
| ** **                                | ** ** | **Securities**                      | ** ** | **Adjustment**                      | ** ** | **Income                (Loss)** |       |
|                                      |       |                                |       |                                |       |                             |       |
| BALANCE,                December 31, 2002 |       | $                                   | 653,000    |                                | $          | (3,742,000                       | )          | $ | (3,089,000 | ) |
| Change                for the year 2003   |       |                                | (545,000   | )                                   |       | 2,206,000                        |       |   | 1,661,000 |   |
| BALANCE,                December 31, 2003 |       |                                | 108,000    |                                |       | (1,536,000                       | )          |   | (1,428,000 | ) |
| Change                for the year 2004   |       |                                | 456,000    |                                |       | 1,536,000                        |       |   | 1,992,000 |   |
| BALANCE,                December 31, 2004 |       |                                | 564,000    |                                |       | —                          |       |   | 564,000 |   |
| Change                for the year 2005   |       |                                | (420,000   | )                                   |       | —                          |       |   | (420,000 | ) |
|                                      |       |                                |       |                                |       |                             |       |   |   |   |
| BALANCE,                December 31, 2005 |       | $                                   | 144,000    |                                | $          | —                          |       | $ | 144,000 |   |

**Advertising      expense: **

**Reclassifications:**

----

**2.**
**Discontinued      operations:**

----

----

**3.         **
**Restatement        of financial statements:**

|                                                            |       | **Restated                Balance Sheet as of December 31, 2004** | ** **  |
|-----------------------------------------------------------------|------------|-------------------------------------------------------------------|-------------|
| ** **                                                      | ** ** | **As                Previously                Reported**          | ** **  | **Restatement                Adjustments** | ** ** | **As                Restated** |   |
| Assets                                                          |       |                                                              |        |   |   |   |   |
| Current                assets:                                  |       |                                                              |        |   |   |   |   |
| Income                taxes receivable                          |       | $                                                                 | 4,389,000   |   | $ | (637,000 | ) | $ | 3,752,000 |   |
| All                other assets                                 |       |                                                              | 83,164,000  |   |   | — |   |   | 83,164,000 |   |
| Total                Assets                                     |       | $                                                                 | 87,553,000  |   | $ | (637,000 | ) | $ | 86,916,000 |   |
|                                                            |       |                                                              |        |   |   |   |   |   |   |   |
| Liabilities                and Stockholders’ Equity       |       |                                                              |        |   |   |   |   |   |   |   |
| Current                liabilities                              |       | $                                                                 | 9,785,000   |   | $ | — |   | $ | 9,785,000 |   |
| Noncurrent                liabilities                           |       |                                                              | 48,657,000  |   |   | — |   |   | 48,657,000 |   |
| Total                liabilities                                |       |                                                              | 58,442,000  |   |   | — |   |   | 58,442,000 |   |
|                                                            |       |                                                              |        |   |   |   |   |   |   |   |
| Stockholders’                equity:                      |       |                                                              |        |   |   |   |   |   |   |   |
| Preferred                stock                                  |       |                                                              | 0           |   |   | — |   |   | 0 |   |
| Common                stock                                     |       |                                                              | 10,014,000  |   |   | — |   |   | 10,014,000 |   |
| Capital                in excess of par value                   |       |                                                              | 9,524,000   |   |   | — |   |   | 9,524,000 |   |
| Retained                earnings                                |       |                                                              | 19,905,000  |   |   | (611,000 | ) |   | 19,294,000 |   |
| Unearned                compensation                            |       |                                                              | (431,000    | ) |   | — |   |   | (431,000 | ) |
| Treasury                stock                                   |       |                                                              | (10,491,000 | ) |   | — |   |   | (10,491,000 | ) |
| Accumulated                other comprehensive income           |       |                                                              | 590,000     |   |   | (26,000 | ) |   | 564,000 |   |
| Total                stockholders’ equity                 |       |                                                              | 29,111,000  |   |   | (637,000 | ) |   | 28,474,000 |   |
| Total                Liabilities and Stockholders’ Equity |       | $                                                                 | 87,553,000  |   | $ | (637,000 | ) | $ | 86,916,000 |   |

----

|                                                  |   | **Restated                Statement of Operations for the year ended December 31,                2004** |       |
|-------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|------------|
|                                                  |   | **As                Previously Reported**                                                               |       | **Restatement                Adjustments** |   | **As                Restated** |   |
|                                                  |   |                                                                                                    |       |   |   |   |   |
| Revenues                                              |   | $                                                                                                       | 4,628,000  |   | $ | — |   | $ | 4,628,000 |   |
| Costs                and expenses                     |   |                                                                                                    | 5,357,000  |   |   | — |   |   | 5,357,000 |   |
| Loss                from operations                   |   |                                                                                                    | (729,000   | ) |   | — |   |   | (729,000 | ) |
| Other                income                           |   |                                                                                                    | 685,000    |   |   | — |   |   | 685,000 |   |
| Interest                expense                       |   |                                                                                                    | (1,083,000 | ) |   | — |   |   | (1,083,000 | ) |
| Loss                before provision for income taxes |   |                                                                                                    | (1,127,000 | ) |   | — |   |   | (1,127,000 | ) |
| Income                tax benefit                     |   |                                                                                                    | (409,000   | ) |   | — |   |   | (409,000 | ) |
| Loss                from continuing operations        |   |                                                                                                    | (718,000   | ) |   | — |   |   | (718,000 | ) |
| Discontinued                operations - Real estate  |   |                                                                                                    | 4,067,000  |   |   | — |   |   | 4,067,000 |   |
| Discontinued                operations - Oil and gas  |   |                                                                                                    | (711,000   | ) |   | (611,000 | ) |   | (1,322,000 | ) |
| Net                income                             |   | $                                                                                                       | 2,638,000  |   | $ | (611,000 | ) | $ | 2,027,000 |   |
|                                                  |   |                                                                                                    |       |   |   |   |   |   |   |   |

| Basic                  earnings (loss) per share:             |   |   |   |   |   |    |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|---------|--------|
| Loss                  from continuing operations              |   | $      | (0.09  | )      | $      | — |   | $ | (0.09 | ) |
| Income                  (loss) from discontinued operations - |   |   |        |   |   |         |   |   |  |   |
| Discontinued                  operations - Real estate        |   |   | 0.52   |   |   | — |   |   | 0.52 |   |
| Discontinued                  operations - Oil and gas        |   |   | (0.09  | )      |   | (0.08   | )      |   | (0.17 | ) |
| Net                  income applicable to common stockholders |   | $      | 0.34   |   | $      | (0.08   | )      | $ | 0.26 |   |
|                                                          |   |   |        |   |   |         |   |   |  |   |
| Diluted                  earnings (loss) per share:           |   |   |        |   |   |         |   |   |  |   |
| Loss                  from continuing operations              |   | $      | (0.09  | )      | $      | — |   | $ | (0.09 | ) |
| Income                  (loss) from discontinued operations - |   |   |        |   |   |         |   |   |  |   |
| Discontinued                  operations - Real estate        |   |   | 0.51   |   |   | — |   |   | 0.51 |   |
| Discontinued                  operations - Oil and gas        |   |   | (0.09  | )      |   | (0.08   | )      |   | (0.17 | ) |
| Net                  income applicable to common stockholders |   | $      | 0.33   |   | $      | (0.08   | )      | $ | 0.25 |   |

**4.**
**Long-term      debt:**

|                                                                 |   |     |       |     |   |
|----------------------------------------------------------------------|--------|----------|------------|----------|--------|
|                                                                 |   | **2005** | ** ** | **2004** |   |
|                                                                 |   |     |       |     |   |
| Mortgage                notes payable (a)                            |   | $        | 7,474,000  |     | $      | 11,935,000 |   |
| Mortgage                notes payable (b)                            |   |     | 21,410,000 |     |   | 30,802,000 |   |
| Mortgage                notes payable (c)                            |   |     | 4,068,000  |     |   | 4,118,000 |   |
| Unsecured                note payable (d)                            |   |     | 400,000    |     |   | — |   |
|                                                                 |   |     |       |     |   |   |   |
| Total                                                                |   |     | 33,352,000 |     |   | 46,855,000 |   |
| Less                current portion                                  |   |     | 1,862,000  |     |   | 729,000 |   |
|                                                                 |   |     |       |     |   |   |   |
| Long                term portion                                     |   | $        | 31,490,000 |     | $      | 46,126,000 |   |
|                                                                 |   |     |       |     |   |   |   |
| Long-term                debt applicable to discontinued operations: |   |     |       |     |   |   |   |
| Included                in current liabilities                       |   | $        | 1,581,000  |     | $      | 462,000 |   |
| Included                in noncurrent liabilities                    |   |     | 15,024,000 |     |   | 29,381,000 |   |
|                                                                 |   |     |       |     |   |   |   |
| Total                                                                |   | $        | 16,605,000 |     | $      | 29,843,000 |   |
|                                                                 |   |     |       |     |   |   |   |

| (a)   | Mortgage                notes payable to North Fork Bank (formerly The Trust Company of New                Jersey) payable in monthly installments, bearing interest at a weighted                average effective rate of 6.375%. These mortgage notes were secured                by a                first mortgage interest in various residential and commercial real                estate                properties in Arizona, Florida, Georgia, and New Jersey. The notes                are                being amortized over a 25-year period and mature in February 2013,                with a                balloon principal payment due at maturity. At December 31, 2005,                the                properties securing the notes had an approximate net book value of                $7,678,000. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Mortgage                notes payable to five real estate mortgage conduits arranged by Merrill                Lynch 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, 2005 had an approximate net book value of                $14,815,000. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (c)   | Mortgage                note payable to Orix Real Estate Capital Markets that is payable                in                monthly installments of principal and interest, bears 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, 2005                had an approximate net book value of                $5,287,000. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | During                June 2005, WO Grand Hotel, L.L.C., a limited liability company that                is 50%                owned by Wilshire and where Wilshire is the manager of the limited                liability company, borrowed $400,000 from Wilshire and $400,000 from                the                other 50% owner of WO Grand Hotel, LLC, Proud Three, L.L.C. Interest                accrues on the note at a rate of 8% per annum and is payable monthly.                The                note has a 10 year amortization period and a five year payment period.                The                note matures on May 2, 2010 with a balloon principal payment due                at                maturity. The amount borrowed from Wilshire has been eliminated in                consolidation. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Year**   |   | **Amount** |       |
|------------|--------|------------|------------|
| 2006       |   | $          | 1,862,000  |   |
| 2007       |   |       | 596,000    |   |
| 2008       |   |       | 631,000    |   |
| 2009       |   |       | 4,503,000  |   |
| 2010       |   |       | 863,000    |   |
| Thereafter |   |       | 24,897,000 |   |
|       |   | $          | 33,352,000 |   |

**5.**
**Mortgage      notes receivable:**

----

**6.**
**Commitments      and contingencies:**

**Commercial      leases:**

| **Year**   |   | **                 Amount** |      |
|------------|--------|----------------------------------|-----------|
|       |   |                             |      |
| 2006       |   | $                                | 962,000   |   |
| 2007       |   |                             | 678,000   |   |
| 2008       |   |                             | 344,000   |   |
| 2009       |   |                             | 159,000   |   |
| 2010       |   |                             | 93,000    |   |
| Thereafter |   |                             | 19,000    |   |
|       |   | $                                | 2,255,000 |   |

**Residential      leases:**

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

**Headquarters      lease:**

----

**Rights      plan:**

**Share      repurchase authorization:**

**7.**
**Stock      option plans:**

----

|                                                    |       | **2005**   | ** ** | **2004**                            | ** ** | **2003**   | ** ** |
|---------------------------------------------------------|------------|------------|------------|-------------------------------------|------------|------------|------------|
|                                                    | ** ** |       | ** ** | **Weighted                Average** | ** ** |       | ** ** | **Weighted                Average** | ** ** |   | ** ** | **Weighted                Average** | ** ** |
|                                                    | ** ** | **Shares** | ** ** | **Exercise                Price**   | ** ** | **Shares** | ** ** | **Exercise                Price** | ** ** | **Shares** | ** ** | **Exercise                Price** |   |
| Options                outstanding at beginning of year |       |       | 457,460    |                                | $          | 3.81       |       |   | 438,740 |   | $ | 3.61 |   |   | 383,740 |   | $ | 3.61 |   |
| Options                granted                          |       |       | 25,000     |                                |       | 7.20       |       |   | 55,000 |   |   | 5.18 |   |   | 55,000 |   |   | 3.60 |   |
| Options                exercised                        |       |       | (318,150   | )                                   |       | 3.48       |       |   | (9,330 | ) |   | 3.61 |   |   | — |   |   | — |   |
| Options                terminated and expired           |       |       | (3,860     | )                                   |       | 4.72       |       |   | (26,950 | ) |   | 3.32 |   |   | — |   |   | — |   |
| Options                outstanding at end of year       |       |       | 160,450    |                                |       | 4.97       |       |   | 457,460 |   |   | 3.81 |   |   | 438,740 |   |   | 3.61 |   |
| Options                exercisable at end of year       |       |       | 70,950     |                                | $          | 4.55       |       |   | 364,760 |   | $ | 3.64 |   |   | 185,940 |   | $ | 4.06 |   |
|                                                    |       |       |       |                                |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   |

|                                        |       | **Options                Outstanding** | ** ** | **Options                Exercisable**                         | ** ** |
|---------------------------------------------|------------|----------------------------------------|------------|----------------------------------------------------------------|------------|
| **Range                of Exercise Prices** | ** ** | **Number                Outstanding**  | ** ** | **Weighted                Average Remaining Contractual Life** | ** ** | **Weighted                Average Exercise Price** | ** ** | **Number                Exercisable** | ** ** | **Weighted                Average Exercise Price** |   |
| $3.32                                       |       |                                   | 50,000     |                                                           |       | 6.54                years |   | $ | 3.32 |   |   | 30,000 |   | $ | 3.32 |   |
| $3.97                                       |       |                                   | 5,000      |                                                           |       | 3.42                years |   |   | 3.97 |   |   | 5,000 |   |   | 3.97 |   |
| $4.55                                       |       |                                   | 5,000      |                                                           |       | 7.46                years |   |   | 4.55 |   |   | 2,000 |   |   | 4.55 |   |
| $5.15                                       |       |                                   | 50,000     |                                                           |       | 8.46                years |   |   | 5.15 |   |   | 12,500 |   |   | 5.15 |   |
| $5.48                                       |       |                                   | 5,000      |                                                           |       | 8.38                years |   |   | 5.48 |   |   | 1,000 |   |   | 5.48 |   |
| $6.00                                       |       |                                   | 5,000      |                                                           |       | 2.42                years |   |   | 6.00 |   |   | 5,000 |   |   | 6.00 |   |
| $6.13                                       |       |                                   | 15,450     |                                                           |       | 0.50                years |   |   | 6.13 |   |   | 15,450 |   |   | 6.13 |   |
| $7.20                                       |       |                                   | 25,000     |                                                           |       | 9.46                years |   |   | 7.20 |   |   | — |   |   | 7.20 |   |
|                                        |       |                                   | 160,450    |                                                           |       | 6.87                years |   |   | 4.97 |   |   | 70,950 |   |   | 4.55 |   |
|                                        |       |                                   |       |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |

----

**8.**
**Income      taxes**

|                                                |   | **2005** | ** ** | **2004                (Restated)** | ** ** | **2003**  |   |
|-----------------------------------------------------|--------|----------|------------|------------------------------------|------------|-----------|--------|
|                                                |   |     |       |                               |       |      |   |
| United                States operations             |   | $        | 11,969,000 |                               | $          | 2,688,000 |   | $ | 2,440,000 |   |
| Operations                outside the United States |   |     | 100,000    |                               |       | 1,866,000 |   |   | (2,770,000 | ) |
|  Total                                         |   | $        | 12,069,000 |                               | $          | 4,554,000 |   | $ | (330,000 | ) |
|                                                |   |     |       |                               |       |      |   |   |   |   |

----

|                                     |   | **2005** |       | **2004                (Restated)** |   | **2003**   |   |
|------------------------------------------|--------|----------|------------|------------------------------------|--------|------------|--------|
| Continuing                Operations     |   |     |       |                               |   |       |   |
| Federal                                  |   |     |       |                               |   |       |   |
|  Current                            |   | $        | (785,000   | )                                  | $      | (782,000   | )      | $ | (406,000 | ) |
|  Deferred                           |   |     | (41,000    | )                                  |   | 189,000    |   |   | 749,000 |   |
|                                     |   |     | (826,000   | )                                  |   | (593,000   | )      |   | 343,000 |   |
| State                                    |   |     |       |                               |   |       |   |   |   |   |
|  Current                            |   |     | (277,000   | )                                  |   | 670,000    |   |   | — |   |
|  Deferred                           |   |     | (1,000     | )                                  |   | (486,000   | )      |   | — |   |
|                                     |   |     | (278,000   | )                                  |   | 184,000    |   |   | — |   |
|  Total                Continuing    |   | $        | (1,104,000 | )                                  | $      | (409,000   | )      | $ | 343,000 |   |
|                                     |   |     |       |                               |   |       |   |   |   |   |
| Discontinued                Operations   |   |     |       |                               |   |       |   |   |   |   |
| Real                Estate               |   |     |       |                               |   |       |   |   |   |   |
|  Federal                            |   |     |       |                               |   |       |   |   |   |   |
|  Current                            |   | $        | (167,000   | )                                  | $      | 2,463,000  |   | $ | (162,000 | ) |
|  Deferred                           |   |     | 4,744,000  |                               |   | (247,000   | )      |   | 73,000 |   |
|                                     |   |     | 4,577,000  |                               |   | 2,216,000  |   |   | (89,000 | ) |
|  State                              |   |     |       |                               |   |       |   |   |   |   |
|  Current                            |   |     | 211,000    |                               |   | 222,000    |   |   | — |   |
|  Deferred                           |   |     | 910,000    |                               |   | (176,000   | )      |   | — |   |
|                                     |   |     | 1,121,000  |                               |   | 46,000     |   |   | — |   |
|  Total                Real Estate   |   | $        | 5,698,000  |                               | $      | 2,262,000  |   | $ | (89,000 | ) |
|                                     |   |     |       |                               |   |       |   |   |   |   |
| Oil                and Gas               |   |     |       |                               |   |       |   |   |   |   |
|  Federal                            |   |     |       |                               |   |       |   |   |   |   |
|  Current                            |   | $        | (59,000    | )                                  | $      | 3,235,000  |   | $ | 68,000 |   |
|  Deferred                           |   |     | —    |                               |   | (3,488,000 | )      |   | (569,000 | ) |
|                                     |   |     | (59,000    | )                                  |   | (253,000   | )      |   | (501,000 | ) |
|  State                              |   |     |       |                               |   |       |   |   |   |   |
|  Current                            |   |     | 191,000    |                               |   | 3,000      |   |   | 42,000 |   |
|  Deferred                           |   |     | —    |                               |   | —    |   |   | — |   |
|                                     |   |     | 191,000    |                               |   | 3,000      |   |   | 42,000 |   |
|  Foreign                            |   |     |       |                               |   |       |   |   |   |   |
|  Current                            |   |     | 452,000    |                               |   | 4,044,000  |   |   | 635,000 |   |
|  Deferred                           |   |     | —    |                               |   | (3,120,000 | )      |   | (1,987,000 | ) |
|                                     |   |     | 452,000    |                               |   | 924,000    |   |   | (1,352,000 | ) |
|  Total                Oil & Gas |   | $        | 584,000    |                               | $      | 674,000    |   | $ | (1,811,000 | ) |
|  Total                              |   | $        | 5,178,000  |                               | $      | 2,527,000  |   | $ | (1,557,000 | ) |

----

|                                                                      |       | **2005**   | ** ** | **2004                (Restated)** | ** ** | **2003**   | ** ** |
|---------------------------------------------------------------------------|------------|------------|------------|------------------------------------|------------|------------|------------|
|                                                                      | ** ** | **Amount** | ** ** | **%**                              | ** ** | **Amount** | ** ** | **%** | ** ** | **Amount** | ** ** | **%** |   |
|                                                                      |       |       |       |                               |       |       |       |   |   |   |   |   |   |
| Federal                income tax provision (benefit) at statutory rate   |       | $          | 4,381,000  |                               |       | 35.0       | %          | $ | 1,585,000 |   |   | 35.0 | % | $ | (1,376,000 | ) |   | (35.0 | )% |
| State                income tax net of Federal impact                     |       |       | 673,000    |                               |       | 5.4        |       |   | 152,000 |   |   | 3.3 |   |   | 27,000 |   |   | 0.7 |   |
| Impact                of discontinued foreign operations                  |       |       | 274,000    |                               |       | 2.2        |       |   | 908,000 |   |   | 20.1 |   |   | 408,000 |   |   | 10.4 |   |
| Dividend                exclusion                                         |       |       | (37,000    | )                                  |       | (0.3       | )          |   | (50,000 | ) |   | (1.1 | ) |   | (91,000 | ) |   | (2.3 | ) |
| Tax-exempt                interest                                        |       |       | (113,000   | )                                  |       | (0.9       | )          |   | (68,000 | ) |   | (1.5 | ) |   | — |   |   | — |   |
| Liquidating                dividend from foreign operations               |       |       | —    |                               |       | —    |       |   | — |   |   | — |   |   | 2,075,000 |   |   | 52.8 |   |
| Impairment                tax benefit                                     |       |       | —    |                               |       | —    |       |   | — |   |   | — |   |   | (2,600,000 | ) |   | (66.2 | ) |
|                                                                      |       |       |       |                               |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                tax expense (benefit) / Effective tax rate (benefit) |       | $          | 5,178,000  |                               |       | 41.4       | %          | $ | 2,527,000 |   |   | 55.8 | % | $ | (1,557,000 | ) |   | (39.6)% |  |
|                                                                      |       |       |       |                               |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                         |   | **2005** | ** ** | **2004** |   |
|-------------------------------------------------------------------------|--------|----------|------------|----------|--------|
|                                                                    |   |     |       |     |   |
| Tax                over book depreciation, depletion and amortization - |   |     |       |     |   |
| Oil                and gas and real estate properties - U.S.            |   | $        | 1,672,000  |     | $      | 1,485,000 |   |
| Deferred                gains on sales of real estate properties - U.S. |   |     | 5,794,000  |     |   | 370,000 |   |
| U.S.                tax on liquidating dividend from Canada             |   |     | —    |     |   | 2,075,000 |   |
| Unrealized                gain on marketable securities                 |   |     | 99,000     |     |   | 390,000 |   |
|                                                                    |   |     |       |     |   |   |   |
| Net                deferred tax liability                               |   |     | 7,565,000  |     |   | 4,320,000 |   |
| Deferred                tax liability included in current               |   |     | (99,000    | )        |   | (2,465,000 | ) |
|                                                                    |   |     |       |     |   |   |   |
| Noncurrent                deferred tax liability                        |   | $        | 7,466,000  |     | $      | 1,855,000 |   |

**9.**
**Segment      information:**

----

|                                                                                                          |   | **2005** |       | **2004** |   | **2003**   |   |
|---------------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|------------|--------|
|                                                                                                          |   |     |       |     |   |       |   |
| Real                estate revenue:                                                                           |   |     |       |     |   |       |   |
| Residential                                                                                                   |   | $        | 3,018,000  |     | $      | 2,976,000  |   | $ | 2,902,000 |   |
| Commercial                                                                                                    |   |     | 1,606,000  |     |   | 1,652,000  |   |   | 1,592,000 |   |
| Total                                                                                                         |   | $        | 4,624,000  |     | $      | 4,628,000  |   | $ | 4,494,000 |   |
|                                                                                                          |   |     |       |     |   |       |   |   |   |   |
| Real                estate operating expenses:                                                                |   |     |       |     |   |       |   |   |   |   |
| Residential                                                                                                   |   | $        | 1,664,000  |     | $      | 1,607,000  |   | $ | 1,592,000 |   |
| Commercial                                                                                                    |   |     | 780,000    |     |   | 734,000    |   |   | 695,000 |   |
| Total                                                                                                         |   | $        | 2,444,000  |     | $      | 2,341,000  |   | $ | 2,287,000 |   |
|                                                                                                          |   |     |       |     |   |       |   |   |   |   |
| Net                operating income:                                                                          |   |     |       |     |   |       |   |   |   |   |
| Residential                                                                                                   |   | $        | 1,354,000  |     | $      | 1,369,000  |   | $ | 1,310,000 |   |
| Commercial                                                                                                    |   |     | 826,000    |     |   | 918,000    |   |   | 897,000 |   |
| Total                                                                                                         |   | $        | 2,180,000  |     | $      | 2,287,000  |   | $ | 2,207,000 |   |
|                                                                                                          |   |     |       |     |   |       |   |   |   |   |
| Capital                improvements:                                                                          |   |     |       |     |   |       |   |   |   |   |
| Residential                                                                                                   |   | $        | 396,000    |     | $      | 383,000    |   | $ | 310,000 |   |
| Commercial                                                                                                    |   |     | 246,000    |     |   | 332,000    |   |   | 123,000 |   |
| Total                                                                                                         |   | $        | 642,000    |     | $      | 715,000    |   | $ | 433,000 |   |
|                                                                                                          |   |     |       |     |   |       |   |   |   |   |
| Reconciliation                of NOI to consolidated income (loss) from continuing                operations: |   |     |       |     |   |       |   |   |   |   |
| Segment                NOI                                                                                    |   | $        | 2,180,000  |     | $      | 2,287,000  |   | $ | 2,207,000 |   |
| Total                other income, including net investment income                                            |   |     | 1,541,000  |     |   | 685,000    |   |   | 4,596,000 |   |
| Depreciation                expense                                                                           |   |     | (957,000   | )        |   | (873,000   | )      |   | (995,000 | ) |
| General                and administrative expense                                                             |   |     | (3,493,000 | )        |   | (2,143,000 | )      |   | (2,349,000 | ) |
| Interest                expense                                                                               |   |     | (1,090,000 | )        |   | (1,083,000 | )      |   | (1,305,000 | ) |
| Income                tax benefit (expense)                                                                   |   |     | 1,104,000  |     |   | 409,000    |   |   | (343,000 | ) |
|                                                                                                          |   |     |       |     |   |       |   |   |   |   |
| Income                (loss) from continuing operations                                                       |   | $        | (715,000   | )        | $      | (718,000   | )      | $ | 1,811,000 |   |

**10.**
**Preferred      Stock**

----

**11.**
**Fair      value of financial instruments**

**12.**
**Subsequent      events**

----

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

**Restatement      of Quarterly Data (Unaudited)**

|                                                               |       | **Restated                Statement of Operations for the quarter ended March 31,                2004** | ** ** |
|--------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|------------|
|                                                               | ** ** | **As                Previously Reported**                                                               | ** ** | **Restatement                Adjustment** | ** ** | **As                Restated** |   |
|                                                               |       |                                                                                                    |       |   |   |   |   |
| Revenues                                                           |       | $                                                                                                       | 1,161,000  |   | $ | — |   | $ | 1,161,000 |   |
| Costs                and expenses                                  |       |                                                                                                    | 1,114,000  |   |   | — |   |   | 1,114,000 |   |
| Income                from operations                              |       |                                                                                                    | 47,000     |   |   | — |   |   | 47,000 |   |
| Other                income                                        |       |                                                                                                    | 194,000    |   |   | — |   |   | 194,000 |   |
| Interest                expense                                    |       |                                                                                                    | (263,000   | ) |   | — |   |   | (263,000 | ) |
| Loss                before provision for income taxes              |       |                                                                                                    | (22,000    | ) |   | — |   |   | (22,000 | ) |
| Income                tax benefit                                  |       |                                                                                                    | (29,000    | ) |   | — |   |   | (29,000 | ) |
| Income                from continuing operations                   |       |                                                                                                    | 7,000      |   |   | — |   |   | 7,000 |   |
| Discontinued                operations - Real estate               |       |                                                                                                    | 2,849,000  |   |   | — |   |   | 2,849,000 |   |
| Discontinued                operations - Oil and gas               |       |                                                                                                    | (257,000   | ) |   | (2,657,000 | ) |   | (2,914,000 | ) |
| Net                income (loss)                                   |       | $                                                                                                       | 2,599,000  |   | $ | (2,657,000 | ) | $ | (58,000 | ) |
|                                                               |       |                                                                                                    |       |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:                    |       |                                                                                                    |       |   |   |   |   |   |   |   |
| Income                from continuing operations                   |       | $                                                                                                       | —    |   | $ | — |   | $ | — |   |
| Income                (loss) from discontinued operations -        |       |                                                                                                    |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate         |       |                                                                                                    | 0.36       |   |   | — |   |   | 0.36 |   |
|  Discontinued                operations - Oil and gas         |       |                                                                                                    | (0.03      | ) |   | (0.34 | ) |   | (0.37 | ) |
| Net                income (loss) applicable to common stockholders |       | $                                                                                                       | 0.33       |   | $ | (0.34 | ) | $ | (0.01 | ) |
|                                                               |       |                                                                                                    |       |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:                  |       |                                                                                                    |       |   |   |   |   |   |   |   |
| Income                from continuing operations                   |       | $                                                                                                       | —    |   | $ | — |   | $ | — |   |
| Income                (loss) from discontinued operations -        |       |                                                                                                    |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate         |       |                                                                                                    | 0.36       |   |   | — |   |   | 0.36 |   |
|  Discontinued                operations - Oil and gas         |       |                                                                                                    | (0.03      | ) |   | (0.34 | ) |   | (0.37 | ) |
| Net                income (loss) applicable to common stockholders |       | $                                                                                                       | 0.33       |   | $ | (0.34 | ) | $ | (0.01 | ) |

----

|                                                        |       | **Restated                Statement of Operations for the quarter ended June 30,                2004** | ** ** |
|-------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------|------------|
|                                                        | ** ** | **As                Previously Reported**                                                              | ** ** | **Restatement                Adjustment** | ** ** | **As                Restated** |   |
|                                                        |       |                                                                                                   |       |   |   |   |   |
| Revenues                                                    |       | $                                                                                                      | 1,188,000  |   | $ | — |   | $ | 1,188,000 |   |
| Costs                and expenses                           |       |                                                                                                   | 1,334,000  |   |   | — |   |   | 1,334,000 |   |
| Loss                from operations                         |       |                                                                                                   | (146,000   | ) |   | — |   |   | (146,000 | ) |
| Other                income                                 |       |                                                                                                   | 46,000     |   |   | — |   |   | 46,000 |   |
| Interest                expense                             |       |                                                                                                   | (262,000   | ) |   | — |   |   | (262,000 | ) |
| Loss                before provision for income taxes       |       |                                                                                                   | (362,000   | ) |   | — |   |   | (362,000 | ) |
| Income                tax benefit                           |       |                                                                                                   | (162,000   | ) |   | — |   |   | (162,000 | ) |
| Loss                from continuing operations              |       |                                                                                                   | (200,000   | ) |   | — |   |   | (200,000 | ) |
| Discontinued                operations - Real estate        |       |                                                                                                   | 381,000    |   |   | — |   |   | 381,000 |   |
| Discontinued                operations - Oil and gas        |       |                                                                                                   | 842,000    |   |   | 873,000 |   |   | 1,715,000 |   |
| Net                income                                   |       | $                                                                                                      | 1,023,000  |   | $ | 873,000 |   | $ | 1,896,000 |   |
|                                                        |       |                                                                                                   |       |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:             |       |                                                                                                   |       |   |   |   |   |   |   |   |
| Loss                from continuing operations              |       | $                                                                                                      | (0.03      | ) | $ | — |   | $ | (0.03 | ) |
| Income                from discontinued operations -        |       |                                                                                                   |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate  |       |                                                                                                   | 0.05       |   |   | — |   |   | 0.05 |   |
|  Discontinued                operations - Oil and gas  |       |                                                                                                   | 0.11       |   |   | 0.11 |   |   | 0.22 |   |
| Net                income applicable to common stockholders |       | $                                                                                                      | 0.13       |   | $ | 0.11 |   | $ | 0.24 |   |
|                                                        |       |                                                                                                   |       |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:           |       |                                                                                                   |       |   |   |   |   |   |   |   |
| Loss                from continuing operations              |       | $                                                                                                      | (0.03      | ) | $ | — |   | $ | (0.03 | ) |
| Income                from discontinued operations -        |       |                                                                                                   |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate  |       |                                                                                                   | 0.05       |   |   | — |   |   | 0.05 |   |
|  Discontinued                operations - Oil and gas  |       |                                                                                                   | 0.11       |   |   | 0.11 |   |   | 0.22 |   |
| Net                income applicable to common stockholders |       | $                                                                                                      | 0.13       |   | $ | 0.11 |   | $ | 0.24 |   |

|                                                            |       | **Restated                Statement of Operations for the quarter ended September 30,                2004** | ** ** |
|-----------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------|------------|
|                                                            | ** ** | **As                Previously Reported**                                                                   | ** ** | **Restatement                Adjustment** | ** ** | **As                Restated** |   |
|                                                            |       |                                                                                                        |       |   |   |   |   |
| Revenues                                                        |       | $                                                                                                           | 1,146,000  |   | $ | — |   | $ | 1,146,000 |   |
| Costs                and expenses                               |       |                                                                                                        | 1,538,000  |   |   | — |   |   | 1,538,000 |   |
| Loss                from operations                             |       |                                                                                                        | (392,000   | ) |   | — |   |   | (392,000 | ) |
| Other                income                                     |       |                                                                                                        | 192,000    |   |   | — |   |   | 192,000 |   |
| Interest                expense                                 |       |                                                                                                        | (263,000   | ) |   | — |   |   | (263,000 | ) |
| Loss                before provision for income taxes           |       |                                                                                                        | (463,000   | ) |   | — |   |   | (463,000 | ) |
| Income                tax benefit                               |       |                                                                                                        | (177,000   | ) |   | — |   |   | (177,000 | ) |
| Loss                from continuing operations                  |       |                                                                                                        | (286,000   | ) |   | — |   |   | (286,000 | ) |
| Discontinued                operations - Real estate            |       |                                                                                                        | 98,000     |   |   | — |   |   | 98,000 |   |
| Discontinued                operations - Oil and gas            |       |                                                                                                        | (390,000   | ) |   | 88,000 |   |   | (302,000 | ) |
| Net                loss                                         |       | $                                                                                                           | (578,000   | ) | $ | 88,000 |   | $ | (490,000 | ) |
|                                                            |       |                                                                                                        |       |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:                 |       |                                                                                                        |       |   |   |   |   |   |   |   |
| Loss                from continuing operations                  |       | $                                                                                                           | (0.03      | ) | $ | — |   | $ | (0.03 | ) |
| Income                (loss) from discontinued operations -     |       |                                                                                                        |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate |       |                                                                                                        | 0.01       |   |   | — |   |   | 0.01 |   |
|  Discontinued                operations - Oil and gas      |       |                                                                                                        | (0.05      | ) |   | 0.01 |   |   | (0.04 | ) |
| Net                loss applicable to common stockholders       |       | $                                                                                                           | (0.07      | ) | $ | 0.01 |   | $ | (0.06 | ) |
|                                                            |       |                                                                                                        |       |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:               |       |                                                                                                        |       |   |   |   |   |   |   |   |
| Loss                from continuing operations                  |       | $                                                                                                           | (0.03      | ) | $ | — |   | $ | (0.03 | ) |
| Income                (loss) from discontinued operations -     |       |                                                                                                        |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate      |       |                                                                                                        | 0.01       |   |   | — |   |   | 0.01 |   |
|  Discontinued                operations - Oil and gas      |       |                                                                                                        | (0.05      | ) |   | 0.01 |   |   | (0.04 | ) |
| Net                loss applicable to common stockholders       |       | $                                                                                                           | (0.07      | ) | $ | 0.01 |   | $ | (0.06 | ) |

----

|                                                               |       | **Restated                Statement of Operations for the quarter ended December 31,                2004** | ** ** |
|--------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------|------------|
| ** **                                                         | ** ** | **As                Previously Reported**                                                                  | ** ** | **Restatement                Adjustment** | ** ** | **As                Restated** |   |
|                                                               |       |                                                                                                       |       |   |   |   |   |
| Revenues                                                           |       | $                                                                                                          | 1,133,000  |   | $ | — |   | $ | 1,133,000 |   |
| Costs                and expenses                                  |       |                                                                                                       | 1,371,000  |   |   | — |   |   | 1,371,000 |   |
| Loss                from operations                                |       |                                                                                                       | (238,000   | ) |   | — |   |   | (238,000 | ) |
| Other                income                                        |       |                                                                                                       | 253,000    |   |   | — |   |   | 253,000 |   |
| Interest                expense                                    |       |                                                                                                       | (295,000   | ) |   | — |   |   | (295,000 | ) |
| Loss                before provision for income taxes              |       |                                                                                                       | (280,000   | ) |   | — |   |   | (280,000 | ) |
| Income                tax benefit                                  |       |                                                                                                       | (41,000    | ) |   | — |   |   | (41,000 | ) |
| Loss                from continuing operations                     |       |                                                                                                       | (239,000   | ) |   | — |   |   | (239,000 | ) |
| Discontinued                operations - Real estate               |       |                                                                                                       | 739,000    |   |   | — |   |   | 739,000 |   |
| Discontinued                operations - Oil and gas               |       |                                                                                                       | (906,000   | ) |   | 1,085,000 |   |   | 179,000 |   |
| Net                income (loss)                                   |       | $                                                                                                          | (406,000   | ) | $ | 1,085,000 |   | $ | 679,000 |   |
|                                                               |       |                                                                                                       |       |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:                    |       |                                                                                                       |       |   |   |   |   |   |   |   |
| Loss                from continuing operations                     |       | $                                                                                                          | (0.03      | ) | $ | — |   | $ | (0.03 | ) |
| Income                (loss) from discontinued operations -        |       |                                                                                                       |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate    |       |                                                                                                       | 0.10       |   |   | — |   |   | 0.10 |   |
|  Discontinued                operations - Oil and gas         |       |                                                                                                       | (0.12      | ) |   | 0.14 |   |   | 0.02 |   |
| Net                income (loss) applicable to common stockholders |       | $                                                                                                          | (0.05      | ) | $ | 0.14 |   | $ | 0.09 |   |
|                                                               |       |                                                                                                       |       |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:                  |       |                                                                                                       |       |   |   |   |   |   |   |   |
| Loss                from continuing operations                     |       | $                                                                                                          | (0.03      | ) | $ | — |   | $ | (0.03 | ) |
| Income                (loss) from discontinued operations -        |       |                                                                                                       |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate         |       |                                                                                                       | 0.09       |   |   | — |   |   | 0.09 |   |
|  Discontinued                operations - Oil and gas         |       |                                                                                                       | (0.11      | ) |   | 0.13 |   |   | 0.02 |   |
| Net                income (loss) applicable to common stockholders |       | $                                                                                                          | (0.05      | ) | $ | 0.13 |   | $ | 0.08 |   |

|                                                            |       | **Restated                Statement of Operations for the quarter ended March 31,                2005** | ** ** |
|-----------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|------------|
| ** **                                                      | ** ** | **As                Previously Reported**                                                               | ** ** | **Restatement                Adjustment** | ** ** | **As                Restated** |   |
|                                                            |       |                                                                                                    |       |   |   |   |   |
| Revenues                                                        |       | $                                                                                                       | 1,134,000  |   | $ | — |   | $ | 1,134,000 |   |
| Costs                and expenses                               |       |                                                                                                    | 1,309,000  |   |   | — |   |   | 1,309,000 |   |
| Loss                from operations                             |       |                                                                                                    | (175,000   | ) |   | — |   |   | (175,000 | ) |
| Other                income                                     |       |                                                                                                    | 918,000    |   |   | — |   |   | 918,000 |   |
| Interest                expense                                 |       |                                                                                                    | (258,000   | ) |   | — |   |   | (258,000 | ) |
| Income                before provision for income taxes         |       |                                                                                                    | 485,000    |   |   | — |   |   | 485,000 |   |
| Income                tax expense                               |       |                                                                                                    | 170,000    |   |   | — |   |   | 170,000 |   |
| Income                from continuing operations                |       |                                                                                                    | 315,000    |   |   | — |   |   | 315,000 |   |
| Discontinued                operations - Real estate            |       |                                                                                                    | 30,000     |   |   | — |   |   | 30,000 |   |
| Discontinued                operations - Oil and gas            |       |                                                                                                    | (27,000    | ) |   | (63,000 | ) |   | (90,000 | ) |
| Net                income                                       |       | $                                                                                                       | 318,000    |   | $ | (63,000 | ) | $ | 255,000 |   |
|                                                            |       |                                                                                                    |       |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:                 |       |                                                                                                    |       |   |   |   |   |   |   |   |
| Income                from continuing operations                |       | $                                                                                                       | 0.04       |   | $ | — |   | $ | 0.04 |   |
| Income                (loss) from discontinued operations -     |       |                                                                                                    |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate |       |                                                                                                    | —    |   |   | — |   |   | — |   |
|  Discontinued                operations - Oil and gas      |       |                                                                                                    | —    |   |   | (0.01 | ) |   | (0.01 | ) |
| Net                income applicable to common stockholders     |       | $                                                                                                       | 0.04       |   | $ | (0.01 | ) | $ | 0.03 |   |
|                                                            |       |                                                                                                    |       |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:               |       |                                                                                                    |       |   |   |   |   |   |   |   |
| Income                from continuing operations                |       | $                                                                                                       | 0.04       |   | $ | — |   | $ | 0.04 |   |
| Income                (loss) from discontinued operations -     |       |                                                                                                    |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate      |       |                                                                                                    | —    |   |   | — |   |   | — |   |
|  Discontinued                operations - Oil and gas      |       |                                                                                                    | —    |   |   | (0.01 | ) |   | (0.01 | ) |
| Net                income applicable to common stockholders     |       | $                                                                                                       | 0.04       |   | $ | (0.01 | ) | $ | 0.03 |   |

----

|                                                        |       | **Restated                Statement of Operations for the quarter ended June 30,                2005** | ** ** |
|-------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------|------------|
| ** **                                                  | ** ** | **As                Previously Reported**                                                              | ** ** | **Restatement                Adjustment** | ** ** | **As                Restated** |   |
|                                                        |       |                                                                                                   |       |   |   |   |   |
| Revenues                                                    |       | $                                                                                                      | 1,162,000  |   | $ | — |   | $ | 1,162,000 |   |
| Costs                and expenses                           |       |                                                                                                   | 2,363,000  |   |   | — |   |   | 2,363,000 |   |
| Loss                from operations                         |       |                                                                                                   | (1,201,000 | ) |   | — |   |   | (1,201,000 | ) |
| Other                income                                 |       |                                                                                                   | 209,000    |   |   | — |   |   | 209,000 |   |
| Interest                expense                             |       |                                                                                                   | (259,000   | ) |   | — |   |   | (259,000 | ) |
| Loss                before provision for income taxes       |       |                                                                                                   | (1,251,000 | ) |   | — |   |   | (1,251,000 | ) |
| Income                tax benefit                           |       |                                                                                                   | (505,000   | ) |   | — |   |   | (505,000 | ) |
| Loss                from continuing operations              |       |                                                                                                   | (746,000   | ) |   | — |   |   | (746,000 | ) |
| Discontinued                operations - Real estate        |       |                                                                                                   | (58,000    | ) |   | — |   |   | (58,000 | ) |
| Discontinued                operations - Oil and gas        |       |                                                                                                   | 162,000    |   |   | (694,000 | ) |   | (532,000 | ) |
| Net                loss                                     |       | $                                                                                                      | (642,000   | ) | $ | (694,000 | ) | $ | (1,336,000 | ) |
|                                                        |       |                                                                                                   |       |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:             |       |                                                                                                   |       |   |   |   |   |   |   |   |
| Loss                from continuing operations              |       | $                                                                                                      | (0.09      | ) | $ | — |   | $ | (0.09 | ) |
| Income                (loss) from discontinued operations - |       |                                                                                                   |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate  |       |                                                                                                   | (0.01      | ) |   | — |   |   | (0.01 | ) |
|  Discontinued                operations - Oil and gas  |       |                                                                                                   | 0.02       |   |   | (0.09 | ) |   | (0.07 | ) |
| Net                loss applicable to common stockholders   |       | $                                                                                                      | (0.08      | ) | $ | (0.09 | ) | $ | (0.17 | ) |
|                                                        |       |                                                                                                   |       |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:           |       |                                                                                                   |       |   |   |   |   |   |   |   |
| Loss                from continuing operations              |       | $                                                                                                      | (0.09      | ) | $ | — |   | $ | (0.09 | ) |
| Income                (loss) from discontinued operations - |       |                                                                                                   |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate  |       |                                                                                                   | (0.01      | ) |   | — |   |   | (0.01 | ) |
|  Discontinued                operations - Oil and gas  |       |                                                                                                   | 0.02       |   |   | (0.09 | ) |   | (0.07 | ) |
| Net                loss applicable to common stockholders   |       | $                                                                                                      | (0.08      | ) | $ | (0.09 | ) | $ | (0.17 | ) |

|                                                        |       | **Restated                Statement of Operations for the quarter ended September 30,                2005** | ** ** |
|-------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------|------------|
| ** **                                                  | ** ** | **As                Previously Reported**                                                                   | ** ** | **Restatement                Adjustment** | ** ** | **As                Restated** |   |
|                                                        |       |                                                                                                        |       |   |   |   |   |
| Revenues                                                    |       | $                                                                                                           | 1,149,000  |   | $ | — |   | $ | 1,149,000 |   |
| Costs                and expenses                           |       |                                                                                                        | 1,499,000  |   |   | — |   |   | 1,499,000 |   |
| Loss                from operations                         |       |                                                                                                        | (350,000   | ) |   | — |   |   | (350,000 | ) |
| Other                income                                 |       |                                                                                                        | 188,000    |   |   | — |   |   | 188,000 |   |
| Interest                expense                             |       |                                                                                                        | (258,000   | ) |   | — |   |   | (258,000 | ) |
| Loss                before provision for income taxes       |       |                                                                                                        | (420,000   | ) |   | — |   |   | (420,000 | ) |
| Income                tax benefit                           |       |                                                                                                        | (169,000   | ) |   | — |   |   | (169,000 | ) |
| Loss                from continuing operations              |       |                                                                                                        | (251,000   | ) |   | — |   |   | (251,000 | ) |
| Discontinued                operations - Real estate        |       |                                                                                                        | 70,000     |   |   | — |   |   | 70,000 |   |
| Discontinued                operations - Oil and gas        |       |                                                                                                        | (8,000     | ) |   | 141,000 |   |   | 133,000 |   |
| Net                loss                                     |       | $                                                                                                           | (189,000   | ) | $ | 141,000 |   | $ | (48,000 | ) |
|                                                        |       |                                                                                                        |       |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:             |       |                                                                                                        |       |   |   |   |   |   |   |   |
| Loss                from continuing operations              |       | $                                                                                                           | (0.03      | ) | $ | — |   | $ | (0.03 | ) |
| Income                (loss) from discontinued operations - |       |                                                                                                        |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate  |       |                                                                                                        | 0.01       |   |   | — |   |   | 0.01 |   |
|  Discontinued                operations - Oil and gas  |       |                                                                                                        | —    |   |   | 0.02 |   |   | 0.02 |   |
| Net                loss applicable to common stockholders   |       | $                                                                                                           | (0.02      | ) | $ | 0.02 |   | $ | — |   |
|                                                        |       |                                                                                                        |       |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:           |       |                                                                                                        |       |   |   |   |   |   |   |   |
| Loss                from continuing operations              |       | $                                                                                                           | (0.03      | ) | $ | — |   | $ | (0.03 | ) |
| Income                (loss) from discontinued operations - |       |                                                                                                        |       |   |   |   |   |   |   |   |
|  Discontinued                operations - Real estate  |       |                                                                                                        | 0.01       |   |   | — |   |   | 0.01 |   |
|  Discontinued                operations - Oil and gas  |       |                                                                                                        | —    |   |   | 0.02 |   |   | 0.02 |   |
| Net                loss applicable to common stockholders   |       | $                                                                                                           | (0.02      | ) | $ | 0.02 |   | $ | — |   |

----

|                                                                               |   | **Quarter                ended ** |      |
|------------------------------------------------------------------------------------|--------|----------------------------------------|-----------|
|                                                                               |   | **March                31 (Restated)** |      | **June                30 (Restated)** |   | **September                30 (Restated)** |   | **December                31 ** |   |
|                                                                               |   |                                   |      |   |   |   |   |   |   |
| **2005:**                                                                          |   |                                   |      |   |   |   |   |   |   |
| Revenues                                                                           |   | $                                      | 1,134,000 |   | $ | 1,162,000 |   | $ | 1,149,000 |   | $ | 1,179,000 |   |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Costs                and expenses:                                                 |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                                                  |   |                                   | 550,000   |   |   | 564,000 |   |   | 653,000 |   |   | 677,000 |   |
| Depreciation                                                                       |   |                                   | 253,000   |   |   | 205,000 |   |   | 244,000 |   |   | 255,000 |   |
| General                and administrative                                          |   |                                   | 506,000   |   |   | 1,594,000 |   |   | 602,000 |   |   | 791,000 |   |
| Total                costs and expenses                                            |   |                                   | 1,309,000 |   |   | 2,363,000 |   |   | 1,499,000 |   |   | 1,723,000 |   |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from operations                                       |   |                                   | (175,000  | ) |   | (1,201,000 | ) |   | (350,000 | ) |   | (544,000 | ) |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Dividend                and interest income                                        |   |                                   | 102,000   |   |   | 185,000 |   |   | 188,000 |   |   | 225,000 |   |
| Gain                on sale of marketable securities                               |   |                                   | 134,000   |   |   | — |   |   | — |   |   | — |   |
| Gain                on sale of real estate related assets                          |   |                                   | 675,000   |   |   | — |   |   | — |   |   | — |   |
| Other                income                                                        |   |                                   | 7,000     |   |   | 24,000 |   |   | — |   |   | 1,000 |   |
| Interest                expense including amortization of deferred financing costs |   |                                   | (258,000  | ) |   | (259,000 | ) |   | (258,000 | ) |   | (315,000 | ) |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) before provision for taxes                            |   |                                   | 485,000   |   |   | (1,251,000 | ) |   | (420,000 | ) |   | (633,000 | ) |
| Income                tax expense (benefit)                                        |   |                                   | 170,000   |   |   | (505,000 | ) |   | (169,000 | ) |   | (600,000 | ) |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                            |   |                                   | 315,000   |   |   | (746,000 | ) |   | (251,000 | ) |   | (33,000 | ) |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - real estate                               |   |                                   | 30,000    |   |   | (58,000 | ) |   | 70,000 |   |   | 8,669,000 |   |
| Discontinued                operations - oil & gas                             |   |                                   | (90,000   | ) |   | (532,000 | ) |   | 133,000 |   |   | (616,000 | ) |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                                                   |   | $                                      | 255,000   |   | $ | (1,336,000 | ) | $ | (48,000 | ) | $ | 8,020,000 |   |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:                                    |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                               |   | $                                      | 0.04      |   | $ | (0.09 | ) | $ | (0.03 | ) | $ | (0.01 | ) |
| Discontinued                operations                                             |   |                                   | (0.01     | ) |   | (0.08 | ) |   | 0.03 |   |   | 1.03 |   |
| Net                income (loss)                                                   |   | $                                      | 0.03      |   | $ | (0.17 | ) | $ | — |   | $ | 1.02 |   |
|                                                                               |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:                                  |   |                                   |      |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                               |   | $                                      | 0.04      |   | $ | (0.09 | ) | $ | (0.03 | ) | $ | — |   |
| Discontinued                operations                                             |   |                                   | (0.01     | ) |   | (0.08 | ) |   | 0.03 |   |   | 1.01 |   |
| Net                income (loss)                                                   |   | $                                      | 0.03      |   | $ | (0.17 | ) | $ | — |   | $ | 1.01 |   |

----

|                                                                               |   | **Quarter                Ended**       |       |
|------------------------------------------------------------------------------------|--------|----------------------------------------|------------|
|                                                                               |   | **March                31 (Restated)** |       | **June                30 (Restated)** |   | ** September                30 (Restated)** |   | ** December                31 (Restated)** |   |
|                                                                               |   |                                   |       |   |   |    |   |    |   |
| **2004:**                                                                          |   |                                   |       |   |   |    |   |    |   |
| Revenues                                                                           |   | $                                      | 1,161,000  |   | $ | 1,188,000 |   | $ | 1,146,000 |   | $ | 1,133,000 |   |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Costs                and expenses:                                                 |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                                                  |   |                                   | 567,000    |   |   | 573,000 |   |   | 565,000 |   |   | 636,000 |   |
| Depreciation                                                                       |   |                                   | 218,000    |   |   | 218,000 |   |   | 221,000 |   |   | 216,000 |   |
| General                and administrative                                          |   |                                   | 329,000    |   |   | 543,000 |   |   | 752,000 |   |   | 519,000 |   |
| Total                costs and expenses                                            |   |                                   | 1,114,000  |   |   | 1,334,000 |   |   | 1,538,000 |   |   | 1,371,000 |   |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from operations                                       |   |                                   | 47,000     |   |   | (146,000 | ) |   | (392,000 | ) |   | (238,000 | ) |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Dividend                and interest income                                        |   |                                   | 194,000    |   |   | 46,000 |   |   | 192,000 |   |   | 253,000 |   |
| Other                income                                                        |   |                                   | —    |   |   | — |   |   | — |   |   | — |   |
| Interest                expense including amortization of deferred financing costs |   |                                   | (263,000   | ) |   | (262,000 | ) |   | (263,000 | ) |   | (295,000 | ) |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) before provision for taxes                            |   |                                   | (22,000    | ) |   | (362,000 | ) |   | (463,000 | ) |   | (280,000 | ) |
| Income                tax expense (benefit)                                        |   |                                   | (29,000    | ) |   | (162,000 | ) |   | (177,000 | ) |   | (41,000 | ) |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) from continuing operations                            |   |                                   | 7,000      |   |   | (200,000 | ) |   | (286,000 | ) |   | (239,000 | ) |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Discontinued                operations - real estate                               |   |                                   | 2,849,000  |   |   | 381,000 |   |   | 98,000 |   |   | 739,000 |   |
| Discontinued                operations - oil & gas                             |   |                                   | (2,914,000 | ) |   | 1,715,000 |   |   | (302,000 | ) |   | 179,000 |   |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                                                   |   | $                                      | (58,000    | ) | $ | 1,896,000 |   | $ | (490,000 | ) | $ | 679,000 |   |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Basic                earnings (loss) per share:                                    |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                               |   | $                                      | 0.00       |   | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.03 | ) |
| Discontinued                operations                                             |   |                                   | (0.01      | ) |   | 0.27 |   |   | (0.03 | ) |   | 0.12 |   |
| Net                income (loss)                                                   |   | $                                      | (0.01      | ) | $ | 0.24 |   | $ | (0.06 | ) | $ | 0.09 |   |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Diluted                earnings (loss) per share:                                  |   |                                   |       |   |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                               |   | $                                      | 0.00       |   | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.03 | ) |
| Discontinued                operations                                             |   |                                   | (0.01      | ) |   | 0.27 |   |   | (0.03 | ) |   | 0.11 |   |
| Net                income (loss)                                                   |   | $                                      | (0.01      | ) | $ | 0.24 |   | $ | (0.06 | ) | $ | 0.08 |   |
|                                                                               |   |                                   |       |   |   |   |   |   |   |   |   |   |   |

----

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

**December      31, 2005**

**($      in 000s)**

|                                              |       |                        |       |                            |       |                                            |       |                                 |       | **Column                E**                     |       |             |       |                                            |       |      |       |
|---------------------------------------------------|------------|-----------------------------|------------|---------------------------------|------------|-------------------------------------------------|------------|--------------------------------------|------------|-------------------------------------------------|------------|------------------|------------|-------------------------------------------------|------------|-----------|------------|
|                                              |       |                        |       |                            |       |                                            |       | **Column                D**          |       | **Gross                Amount**                 |       |             |       |                                            |       |      |       |
|                                              |       |                        |       |                            |       |                                            |       | **Costs                Capitalized** |       | **At                Which**                     |       |             |       |                                            |       |      |       |
|                                              |       |                        |       | **Column                C**     |       | **Subsequent                To**                |       | **Carried                as of**     |       |                                            |       | ** Column** | ** ** | ** **                                      | ** ** |
| **Column                A**                       | ** ** | **Column                B** | ** ** | **Initial                Cost** | ** ** | **Acquisition**                                 | ** ** | **December                31, 2005** |       | **Column                F**                     |       | **H**            |       | **Column                I**                     |       |
| **Description**                                   |       | **Encumbrances**            | ** ** | **Land**                        | ** ** | **Building                & Improve-ments** | ** ** | **Land**                             | ** ** | **Building                & Improve-ments** | ** ** | **Land**         | ** ** | **Building                & Improve-ments** | ** ** | **Total** | ** ** | **Accumulated                Depreciation** | ** ** | **Date                Acquired** | ** ** | **Life                on Which Depreciation is                Computed** |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |
| Arizona                                           |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |
| 340                unit garden apartment complex  |       | $                           | 10,320     |                            | $          | 800                                             |       | $                                    | 5,600      |                                            | $          | -0-              |       | $                                               | 3,182      |      | $          | 800 |   | $ | 8,782 |   | $ | 9,582 |   | $ | 4,020 |   |   | 1992 |   |   | Various |   |
| 53,000                square foot office building |       | $                           | 3,806      |                            | $          | 313                                             |       | $                                    | 2,384      |                                            | $          | -0-              |       | $                                               | 1,874      |      | $          | 313 |   | $ | 4,258 |   | $ | 4,571 |   | $ | 2,093 |   |   | 1992 |   |   | Various |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Texas                                             |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 228                unit apartment complex         |       | $                           | 4,243      |                            | $          | 620                                             |       | $                                    | 3,015      |                                            | $          | -0-              |       | $                                               | 2,877      |      | $          | 620 |   | $ | 5,892 |   | $ | 6,512 |   | $ | 2,518 |   |   | 1992 |   |   | Various |   |
| 180                unit apartment complex         |       | $                           | 4,068      |                            | $          | 805                                             |       | $                                    | 4,450      |                                            | $          | -0-              |       | $                                               | 711        |      | $          | 805 |   | $ | 5,161 |   | $ | 5,966 |   | $ | 679 |   |   | 2001 |   |   | Various |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| New                Jersey                         |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 45                unit condominium complex        |       | $                           | 833        |                            | $          | 517                                             |       | $                                    | 1,533      |                                            | $          | (35              | )          | $                                               | 536        |      | $          | 482 |   | $ | 2,069 |   | $ | 2,551 |   | $ | 558 |   |   | 1993 |   |   | Various |   |
| 132                unit apartment complex         |       | $                           | 4,822      |                            | $          | 480                                             |       | $                                    | 3,541      |                                            | $          | -0-              |       | $                                               | 633        |      | $          | 480 |   | $ | 4,174 |   | $ | 4,654 |   | $ | 1,171 |   |   | 1997 |   |   | Various |   |
| Hotel                & banquet facility       |       | $                           | 400        |                            | $          | 3,057                                           |       | $                                    | 1,031      |                                            | $          | -0-              |       | $                                               | 7,893      |      | $          | 3,057 |   | $ | 8,924 |   | $ | 11,981 |   | $ | -0- |   |   | 1997 |   |   | Various |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                residential                  |       | $                           | 3,810      |                            | $          | 470                                             |       | $                                    | 3,365      |                                            | $          | (16              | )          | $                                               | 1,824      |      | $          | 454 |   | $ | 5,189 |   | $ | 5,643 |   | $ | 1,882 |   |   | Various |   |   | Various |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                office/retail                |       | $                           | 1,050      |                            | $          | 1,241                                           |       | $                                    | 2,610      |                                            | $          | -0-              |       | $                                               | 2,635      |      | $          | 1,241 |   | $ | 5,245 |   | $ | 6,486 |   | $ | 1,761 |   |   | Various |   |   | Various |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Land                held for development          |       | $                           | 0          |                            | $          | 908                                             |       | $                                    | 0          |                                            | $          | 0                |       | $                                               | 0          |      | $          | 908 |   | $ | 0 |   | $ | 908 |   | $ | 0 |   |   | Various |   |   | Various |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |       | $                           | 33,352     |                            | $          | 9,211                                           |       | $                                    | 27,529     |                                            | $          | (51              | )          | $                                               | 22,165     |      | $          | 9,160 |   | $ | 49,694 |   | $ | 58,854 |   | $ | 14,682 |   |   |   |   |   |   |   |
|                                              |       |                        |       |                            |       |                                            |       |                                 |       |                                            |       |             |       |                                            |       |      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                        |   | **2005**                   | ** ** | **2004** | ** ** | **2003** |   |
|---------------------------------------------|--------|----------------------------|------------|----------|------------|----------|--------|
|                                        |   | ($                in 000s) |       |
|                                        |   |                       |       |     |       |     |   |
| Balance                at beginning of year |   | $                          | 58,937     |     | $          | 72,069   |   | $ | 71,355 |   |
| Property                acquisitions        |   |                       | 6,765      |     |       | —  |   |   | — |   |
| Improvements                                |   |                       | 1,339      |     |       | 2,251    |   |   | 2,415 |   |
| Retirements/disposals                       |   |                       | (8,187     | )        |       | (15,383  | )      |   | (1,701 | ) |
| Balance                at end of year       |   | $                          | 58,854     |     | $          | 58,937   |   | $ | 72,069 |   |

|                                        |   | **2005**                   | ** ** | **2004** | ** ** | **2003** |   |
|---------------------------------------------|--------|----------------------------|------------|----------|------------|----------|--------|
|                                        |   | ($                in 000s) |       |
|                                        |   |                       |       |     |       |     |   |
| Balance                at beginning of year |   | $                          | 16,900     |     | $          | 17,731   |   | $ | 15,504 |   |
| Depreciation                for year        |   |                       | 1,288      |     |       | 1,928    |   |   | 2,547 |   |
| Retirements/disposals                       |   |                       | (3,506     | )        |       | (2,759   | )      |   | (320 | ) |
| Balance                at end of year       |   | $                          | 14,682     |     | $          | 16,900   |   | $ | 17,731 |   |

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

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

----

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

----

**PART      III**

**Item      10.          **
**Directors      and Executive Officers of the Registrant**

**Item      11.          **
**Executive      Compensation**

**Item      12.          **
**Security      Ownership of Certain Beneficial Owners and Management**

**Item      13.          **
**Certain      Relationships and Related Transactions**

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

----

**PART      IV**

**Item      15.          **
**Exhibits,      Financial Statement Schedules**

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

| (i)   | Reports                of Independent Registered Public Accounting                Firms |
|-----------------|-----------------------------------------------------------------------------------------|

| (ii)   | Consolidated                Balance Sheets as of December 31, 2005 and 2004 (as                restated) |
|------------------|----------------------------------------------------------------------------------------------------------|

| (iii)   | Consolidated                Statements of Operations for the years ended December 31, 2005, 2004                (as                restated) and 2003 |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | Consolidated                Statements of Changes in Stockholders’ Equity for the years ended December                31, 2005, 2004 (as restated) and                2003 |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v)   | Consolidated                Statements of Cash Flows for the years ended December 31, 2005, 2004                (as                restated) and 2003 |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (i)   | Real                Estate and Accumulated Depreciation December 31,                2005 |
|-----------------|------------------------------------------------------------------------------------------|

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

| **Exhibit                      #**  | **Description** |
|------------------------------------------|-----------------|

| 3.1  | Restated                Certificate of Incorporation of Wilshire Enterprises, Inc., as amended.                (Incorporated by reference to Exhibit 3.1 of Item 14 of the Registrant’s                Annual Report on Form 10-K for the year ended December 31,                1992.) |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2   | Amended                By-Laws, as of June 11, 1998, of Wilshire Enterprises, Inc. (Incorporated                by reference to Exhibit 3 of the Registrant’s Quarterly Report on Form                10-Q for the quarter ended June 30,                1998.) |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1   | Stockholder                Protection Rights Agreement, dated as of June 21, 1996, between Wilshire                Enterprises, Inc. and Continental Stock Transfer & Trust Company, as                Rights Agent. (Incorporated by reference to Exhibit 1 to the Company’s                Current Report on Form 8-K dated June 21,                1996.) |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2   | Reference                is made to Exhibits 10.7 through                10.27. |
|-----------------|---------------------------------------------------------------------------------|

| 4.3   | The                Company agrees to furnish the Commission upon request any agreements                with                respect to long-term debt not referenced                herein. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1   | General                Assignments and Assignments of Leases dated March 31, 1992 with respect                to                the purchase of income producing real estate properties. (Incorporated                by                reference to Exhibit 1 and 2 of Form 8 dated December 9, 1992 filed                with                the Commission.) |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2   | General                Assignments, Assignments of Leases, and Escrow Agreements and Early                Possession Agreements with respect to the purchase of four income                producing real estate properties. (Incorporated by reference to Exhibits                1(a) through 4(c) on the Company’s Form 8-K dated December 31, 1992 filed                with the Commission.) |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3   | 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.) |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.4   | 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.) |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5   | Wilshire                Enterprises, Inc. 2004 Stock Option and Incentive Plan. (Incorporated                by                reference to Appendix C of the Registrant’s Definitive Proxy Statement for                its 2004 Annual Meeting of                Stockholders.) |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6   | 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.) |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7   | Environmental                  Indemnity Agreement between Biltmore Club Apartments, L.L.C., a                  subsidiary                  of Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending,                  Inc.                  dated February 27, 2003. (Incorporated by reference to the similarly                  numbered exhibit to the Company’s Annual Report on Form 10-K for the year                  ended December 31, 2002.) |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8   | Promissory Note given by Biltmore Club Apartments,                  L.L.C., a subsidiary of Wilshire Enterprises, Inc., and Merrill                  Lynch                  Mortgage Lending, Inc. dated February 27, 2003. (Incorporated by                  reference                  to the similarly numbered exhibit to the Company’s Annual Report on Form                  10-K for the year ended December 31,                  2002.) |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9   | Indemnity                      and Guaranty Agreement between Biltmore Club Apartments, L.L.C.,                      a                      subsidiary of Wilshire Enterprises, Inc., and Merrill Lynch                      Mortgage                      Lending, Inc. dated February 27, 2003. (Incorporated by reference                      to the                      similarly numbered exhibit to the Company’s Annual Report on Form 10-K for                      the year ended December 31, 2002.) |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10   | Multifamily                        Deed of Trust, Security Agreement, Assignment of Rents and                        Fixture Filing                        between Biltmore Club Apartments, L.L.C., a subsidiary of                        Wilshire                        Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc.                        dated February                        27, 2003. (Incorporated by reference to the similarly numbered                        exhibit to                        the Company’s Annual Report on Form 10-K for the year ended December                        31,                        2002.) |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11   | Promissory                          Note given by Alpine Village Apartments, L.L.C., a subsidiary                          of Wilshire                          Enterprises, Inc., and Merrill Lynch Mortgage Lending,                          Inc. dated February                          28, 2003. (Incorporated by reference to the similarly numbered                          exhibit to                          the Company’s Annual Report on Form 10-K for the year ended December                          31,                          2002.) |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12   | Environmental                            Indemnity Agreement between Alpine Village Apartments,                            L.L.C., a                            subsidiary of Wilshire Enterprises, Inc., and Merrill                            Lynch Mortgage                            Lending, Inc. dated February 28, 2003. (Incorporated                            by reference to the                            similarly numbered exhibit to the Company’s Annual Report on Form 10-K for                            the year ended December 31, 2002.) |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13   | Indemnity and Guaranty Agreement between                            Alpine Village                            Apartments, L.L.C., a subsidiary of Wilshire Enterprises,                            Inc., and                            Merrill Lynch Mortgage Lending, Inc. dated February 28,                            2003.                            (Incorporated by reference to the similarly numbered                            exhibit to the                            Company’s Annual Report on Form 10-K for the year ended December                            31,                            2002.) |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14   | Multifamily                                Mortgage, Security Agreement, Assignment of Rents                                and Fixture Filing                                between Alpine Village Apartments, L.L.C., a subsidiary                                of Wilshire                                Enterprises, Inc., and Merrill Lynch Mortgage Lending,                                Inc. dated February                                28, 2003. (Incorporated by reference to the similarly                                numbered exhibit to                                the Company’s Annual Report on Form 10-K for the year ended December                                31,                                2002.) |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.15   | Promissory                                Note given by Sunrise Ridge, L.L.C., a subsidiary                                of Wilshire Enterprises,                                Inc., and Merrill Lynch Mortgage Lending, Inc. dated                                February 27, 2003.                                (Incorporated by reference to the similarly numbered                                exhibit to the                                Company’s Annual Report on Form 10-K for the year ended December                                31,                                2002.) |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16   | Environmental                                  Indemnity Agreement between Sunrise Ridge, L.L.C.,                                  a subsidiary of                                  Wilshire Enterprises, Inc., and Merrill Lynch Mortgage                                  Lending, Inc. dated                                  February 27, 2003. (Incorporated by reference to                                  the similarly numbered                                  exhibit to the Company’s Annual Report on Form 10-K for the year ended                                  December 31, 2002.) |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17   | Indemnity and Guaranty Agreement                                  between Sunrise Ridge,                                  L.L.C., a subsidiary of Wilshire Enterprises, Inc.,                                  and Merrill Lynch                                  Mortgage Lending, Inc. dated February 27, 2003.                                  (Incorporated by reference                                  to the similarly numbered exhibit to the Company’s Annual Report on Form                                  10-K for the year ended December 31,                                  2002.) |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18   | Multifamily                                      Deed of Trust, Security Agreement, Assignment                                      of Rents and Fixture Filing                                      between Sunrise Ridge, L.L.C., a subsidiary                                      of Wilshire Enterprises, Inc.,                                      and Merrill Lynch Mortgage Lending, Inc. dated                                      February 27, 2003.                                      (Incorporated by reference to the similarly                                      numbered exhibit to the                                      Company’s Annual Report on Form 10-K for the year ended                                      December 31,                                      2002.) |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19   | Promissory                  Note given by Van Buren, L.L.C., a subsidiary of Wilshire Enterprises,                  Inc., and Merrill Lynch Mortgage Lending, Inc. dated February 27,                  2003.                  (Incorporated by reference to the similarly numbered exhibit to                  the                  Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.) |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20   | Environmental                      Indemnity Agreement between Van Buren, L.L.C., a subsidiary                      of Wilshire                      Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc.                      dated February                      27, 2003. (Incorporated by reference to the similarly numbered                      exhibit to                      the Company’s Annual Report on Form 10-K for the year ended December 31,                      2002.) |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.21   | Indemnity                        and Guaranty Agreement between Van Buren, L.L.C., a subsidiary                        of Wilshire                        Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc.                        dated February                        27, 2003. (Incorporated by reference to the similarly numbered                        exhibit to                        the Company’s Annual Report on Form 10-K for the year ended December                        31,                        2002.) |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.22   | Multifamily                  Deed of Trust, Security Agreement, Assignment of Rents and Fixture                  Filing                  between Van Buren, L.L.C., a subsidiary of Wilshire Enterprises,                  Inc., and                  Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.                  (Incorporated by reference to the similarly numbered exhibit to                  the                  Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.) |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.23   | Promissory                  Note given by Wellington Apartments, L.L.C., a subsidiary of Wilshire                  Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated                  February                  27, 2003. (Incorporated by reference to the similarly numbered                  exhibit to                  the Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.) |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.24   | Environmental                  Indemnity Agreement between Wellington Apartments, L.L.C., a subsidiary                  of                  Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending,                  Inc. dated                  February 27, 2003. (Incorporated by reference to the similarly                  numbered                  exhibit to the Company’s Annual Report on Form 10-K for the year ended                  December 31, 2002.) |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.25   | Indemnity                  and Guaranty Agreement between Wellington Apartments, L.L.C., a                  subsidiary                  of Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending,                  Inc.                  dated February 27, 2003. (Incorporated by reference to the similarly                  numbered exhibit to the Company’s Annual Report on Form 10-K for the year                  ended December 31, 2002.) |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.26   | Multifamily                  Deed of Trust, Security Agreement, Assignment of Rents and Fixture                  Filing                  between Wellington Apartments, L.L.C., a subsidiary of Wilshire                  Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated                  February                  27, 2003. (Incorporated by reference to the similarly numbered                  exhibit to                  the Company’s Annual Report on Form 10-K for the year ended December 31,                  2002.) |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.27   | Intentionally                  omitted. |
|-------------------|-----------------------------------------|

| 10.28   | Agreement                  dated March 17, 2004 between Wilshire Enterprises, Inc. and Crow                  Creek                  Energy L.L.C. to sell the U.S. Oil and Gas business. (Incorporated                  by                  reference to the similarly numbered exhibit to the Company’s Annual Report                  on Form 10-K for the year ended December 31,                  2003.) |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.29   | Contract                  of sale dated January 23, 2004 between Wilshire Enterprises, Inc.                  and                  Economic Properties 2004 L.L.C. for the sale of eleven properties                  in                  Jersey City, New Jersey. (Incorporated by reference to the similarly                  numbered exhibit to the Company’s Annual Report on Form 10-K for the year                  ended December 31, 2003.) |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.30   | Employment                  agreement between the Company and Philip Kupperman dated as of                  July 1,                  2002. (Incorporated by reference to Exhibit 10.1 to the Company’s Current                  Report on Form 8-K dated September 4,                  2002.) |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.31   | Severance                    Letter Agreement between the Company and Sherry Wilzig Izak dated                    as of                    March 29, 2004. (Incorporated by reference to the similarly numbered                    exhibit to the Company’s Annual Report on Form 10-K for the year ended                    December 31, 2003.) |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.32   | Employment                agreement between the Company and Daniel C. Pryor dated as of April                24,                2004. (Incorporated by reference to Exhibit 10.32 to the Company’s Annual                Report on Form 10-K for the year ended December 31,                2004.) |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.33   | Employment                letter between the Company and Seth H. Ugelow dated as of June 1,                2004.                (Incorporated by reference to Exhibit 10.33 to the Company’s Annual Report                on Form 10-K for the year ended December 31,                2004.) |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.34   | Letter                agreement between the Company and Philip Kupperman dated as of April                18,                2005 terminating the employment agreement between the Company and                Philip                Kupperman. (Incorporated by reference to Exhibit 10.1 to the Company’s                Current Report on Form 8-K dated April 19,                2005.) |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.35   | Purchase                agreement and escrow instructions between Biltmore Club Apartments,                L.L.C.                (a subsidiary of Wilshire Enterprises, Inc.) and GDG Partners L.L.C.                dated                February 2, 2005. (Incorporated by reference to Exhibit 10.34 to                the                Company’s Annual Report on Form 10-K for the year ended December 31,                2004.) |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.36   | Operating                agreement of WO Grand Hotel, LLC dated as of June 2, 2005. (Incorporated                by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form                10-Q for the quarter ended June 30,                2005.) |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.37   | Agreement                for Purchase and Sale dated as of July 29, 2005 between Avondale                Multi-Family Limited Partnership and Wilshire Enterprises, Inc.                (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly                Report on Form 10-Q for the quarter ended June 30,                2005.) |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.38   | Hotel                purchase agreement dated as of September 30, 2005, by and between                WO GRAND                HOTEL, LLC, a New Jersey limited liability company, and 350 PLEASANT                VALLEY HOTEL ASSOCIATES, L.L.C., a New Jersey limited liability company.                (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly                Report on Form 10-Q for the quarter ended September 30,                2005.) |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.39   | Operating                lease dated September 30, 2005 between WO GRAND HOTEL, LLC and Pleasant                Valley 350 Catering Associates, LLC. (Incorporated by reference to                Exhibit                10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended                September 30, 2005.) |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.40                | Purchase                Agreement dated October 6, 2005 between Wilshire Enterprises, Inc.                and                Jewel Corp. |
|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| 10.41                | Purchase                Agreement dated October 19, 2005 between Wilshire Enterprises, Inc.                and                Citadel Equity Group, LLC |
|---------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 21 | List                of significant subsidiaries of the Registrant. |
|--|----|--------------------------------------------------------------------|

| 23.1   | Consent                of J.H. Cohn LLP, Independent Registered Public Accounting                Firm. |
|------------------|--------------------------------------------------------------------------------------------------------|

| 23.2   | Consent                of Ernst & Young, 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.    |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                                                 |                                                                           |                            |
|------------------------------------------------------|--------------------------------------------------------------------------------|---------------------------------|
|                                                 | WILSHIRE                ENTERPRISES, INC. (Registrant)                         |
|                                            |                                                                      |                       |
| Date:              March              31, 2006  | By:                                                                  | /s/              S. Wilzig Izak |
|                                                 | S. Wilzig IzakChairman of the Board and Chief Executive                Officer |
|                                                 |                                                                           |

**Directors:**

| By:    |                  *               |   | Date:  | March                31, 2006 |
|--------|---------------------------------------|--------|--------|-------------------------------|
|   | Miles                Berger           |   |   |                          |
|   |                                  |   |   |                          |
| By:    | *                                     |   | Date:  | March                31, 2006 |
|   | Milton                Donnenberg      |   |   |                          |
|   |                                  |   |   |                          |
| By:    | /s/                S. Wilzig Izak     |   | Date:  | March                31, 2006 |
|   | S.                Wilzig Izak         |   |   |                          |
|   |                                  |   |   |                          |
| By:    | *                                     |   | Date:  | March                31, 2006 |
|   | Eric                J. Schmertz, Esq. |   |   |                          |
|   |                                  |   |   |                          |
| By:    | *                                     |   | Date:  | March                31, 2006 |
|   | Ernest                Wachtel         |   |   |                          |
|   |                                  |   |   |                          |
| By:    | *                                     |   | Date:  | March                31, 2006 |
|   | Martin                Willschick      |   |   |                          |

**Officers:**

| By:    | /s/                S. Wilzig Izak                                  |   | Date:  | March                31, 2006 |
|--------|--------------------------------------------------------------------|--------|--------|-------------------------------|
|   | S.                Wilzig Izak                                      |   |   |                          |
|   | *Chairman                of the Board and Chief Executive Officer* |   |   |                          |
|   |                                                               |   |   |                          |
| By:    | /s/                Seth H. Ugelow                                  |   | Date:  | March                31, 2006 |
|   | Seth                H. Ugelow                                      |   |   |                          |
|   | *Chief                Financial Officer*                           |   |   |                          |

----

**Exhibit      Index**

| Exhibit                  # | Description                                                                                                                                                                                                                |
|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |                                                                                                                                                                                                                       |
| 10.40                      | Purchase                  Agreement dated October 6, 2005 between Wilshire Enterprises, Inc.                  and                  Jewel Corp.                                                                             |
|                       |                                                                                                                                                                                                                       |
| 10.41                      | Purchase                  Agreement dated October 19, 2005 between Enterprises, Inc. and                  Citadel                  Equity Group, LLC.                                                                      |
|                       |                                                                                                                                                                                                                       |
| 21                         | List                  of significant subsidiaries.                                                                                                                                                                         |
|                       |                                                                                                                                                                                                                       |
| 23.1                       | Consent                  of J.H. Cohn LLP, Independent Registered Public Accounting                  Firm.                                                                                                                 |
|                       |                                                                                                                                                                                                                       |
| 23.2                       | Consent                  of Ernst & Young, 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. |

----