UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D. C. 20549





FORM
10-K




(Mark
One)




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




For the
fiscal year ended December 31, 2009




Or





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




For the
transition period from ___________ to __________





Commission
file number 1-4673




WILSHIRE
ENTERPRISES, INC.


(Exact
name of registrant as specified in its charter)





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





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





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





Name
      of each exchangeTitle of each class
              
              on which registeredNone
              
              None





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





Common
Stock, $1 par value(Title of each
class)





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





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





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




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes o No oNot
Applicable





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





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





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





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


Yes 
o No x





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant computed by reference to the price at which the
common equity was last sold, or the average bid and asked price of such common
equity, as of the last business day of the registrant’s most recently completed
second fiscal quarter (June 30, 2009), was $2,510,000.





The
number of shares outstanding of the registrant’s $1 par value common stock, as
of March 26, 2010, was 4,141,099.









WILSHIRE
ENTERPRISES, INC.


INDEX




Page No.Part IItem
      1.
                                      Business
                                      
                                      
                                      3Item
      1A.
                                      Risk
      Factors
                                      
                                      
                                      7Item
      1B.
                                      Unresolved
      Staff Comments
                                      
                                      
                                      8Item
      2.
                                      Properties
                                      
                                      
                                      8Item
      3.
                                      Legal
      Proceedings
                                      
                                      
                                      10Item
      3A.
                                      Executive
      Officers of the Registrant
                                      
                                      
                                      10Item
      4.
                                      Reserved
                                      
                                      
                                      10Part IIItem
      5.
                                      Market
      for Registrant’s Common Equity, Related StockholderMatters
      and Issuer Purchases of Equity Securities
                                      
                                      
                                      11Item
      6.
                                      Selected
      Financial Data
                                      
                                      
                                      12Item
      7.
                                      Management’s
      Discussion and Analysis of Financial Conditionand
      Results of Operations
                                      
                                      
                                      14Item
      7A.
                                      Quantitative
      and Qualitative Disclosures About Market Risk
                                      
                                      
                                      27Item
      8.
                                      Financial
      Statements and Supplementary Data
                                      
                                      
                                      28Item
      9.
                                      Changes
      in and Disagreements with Accountants on Accountingand
      Financial Disclosure
                                      
                                      
                                      51Item
      9A.
                                      Controls
      and Procedures
                                      
                                      
                                      51Item
      9B.
                                      Other
      Information
                                      
                                      
                                      52Part IIIItem
      10.
                                      Directors,
      Executive Officers and Corporate Governance
                                      
                                      
                                      53Item
      11.
                                      Executive
      Compensation
                                      
                                      
                                      53Item
      12.
                                      Security
      Ownership of Certain Beneficial Owners and Managementand
      Related Stockholder Matters
                                      
                                      
                                      53Item
      13.
                                      Certain
      Relationships and Related Transactions, and Director
      Independence
                                      
                                      
                                      53Item
      14.
                                      Principal
      Accountant Fees and Services
                                      
                                      
                                      53Part IVItem
      15.
                                      Exhibits
      and Financial Statement Schedules
                                      
                                      
                                      54Signatures
                                      
                                      
                                      57


2




PART
I




Item 1.     Business





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





Background





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





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





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





After the
termination of the merger agreement and in light of declines in the real estate
market and the general economic downturn, management adopted a strategy,
described below under “Business Strategy,” to grow the Company and enhance
stockholder value.


3




Real
Estate Operations





Wilshire
is engaged principally in acquiring, owning and operating real estate
properties. As of December 31, 2009, Wilshire owned the properties described
below:





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





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


Business
Strategy





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


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


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


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




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





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





Wilshire’s
principal investment objective is to increase the net asset value of its
investment portfolio through effective management, growth, financing and
investment strategies. Wilshire is currently focused on optimizing the valuation
potential and cash flow from many of its assets, repositioning or selling select
assets, and potentially acquiring assets in targeted geographic regions. The
Company is also focused on increasing long-term growth in cash and cash
equivalents generated from operations.





On
September 4, 2009 the Company completed a tender offer to purchase shares of its
common stock.  As a result of the tender offer, the Company purchased
and retired 4,047,380 shares of its common stock at a purchase price of $2.00
per share, for an aggregate purchase price of $8,094,760.  The
4,047,380 shares purchased pursuant to the tender offer are comprised of the
4,000,000 shares the Company offered to purchase and 47,380 shares purchased
pursuant to the Company’s right under applicable securities laws to purchase up
to an additional 2% of the Company’s outstanding shares without extending the
tender offer.


See Item
5 of this Annual Report on Form 10-K.


4




Divestiture
of Assets





The
Company did not divest any real estate properties in 2009 and divested the
following real estate properties in 2008:





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





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




Employees





As of
December 31, 2009, the Company had a total of five employees in its corporate
office.





Property
Management





Wilshire
contracts with a property management company (the “PMC”) located in Phoenix,
Arizona to assist in the management of the Company’s properties, including
providing onsite personnel, regional supervision, and bookkeeping functions. The
PMC has managed nearly all of Wilshire’s properties located outside of New
Jersey since 1998. In January of 2005 Wilshire contracted with the PMC to assist
in the management of the Company’s New Jersey properties obligating the PMC to
provide onsite personnel and bookkeeping functions and regional supervision for
the New Jersey properties. Wilshire believes that the PMC can provide
cost-efficient bookkeeping functions in part because it is located in Arizona, a
state that generally has lower wage expense than that experienced in New Jersey.
As of December 31, 2009 the PMC employed 621 full time and 35 part time people
and managed property on behalf of Wilshire in the states of Arizona, New Jersey,
and Texas. To Wilshire’s knowledge, the PMC does not currently own real estate
assets for its own investment purposes. PMC has advised Wilshire that in 2009,
Wilshire accounted for approximately 6% of PMC’s total revenues.





Insurance





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





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





Competition





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


5





Environmental
Matters





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





Investment
in Marketable Securities




During
the second and third quarters of 2008, the Company sold $1.2 million and
$250,000, respectively, of its auction rate securities (“ARS”) at par value
through successful redemptions. In addition, during the second quarter of 2008,
the Company sold $3.7 million of its ARS in a private transaction for $3.3
million.  As a result of this transaction, the Company recorded a
$365,000 loss on the sale of these securities in the second quarter of
2008.  During the fourth quarter of 2008, as a result of a settlement
between government entities and our investment advisor, the Company was
reimbursed for its $365,000 loss.    This reimbursement
offset the loss, and, accordingly, no gain or loss is reflected on the Company’s
consolidated financial statements for the year ended December 31, 2008 for these
transactions.  The sale of the ARS in a private transaction was
considered a one-time transaction by the Company.





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





As of
December 31, 2009, the Company did not maintain any investments in marketable
securities.


6




Item 1A.   Risk Factors





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





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





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





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





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





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





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





Competition
in our markets limits rental income from tenants.





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





Certain
properties may require substantial capital expenditures to remain
competitive.





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





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




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





•
            the
      attractiveness of our equity securities in comparison to other equity
      securities, including securities issued by other real estate-based
      companies;





•
            our
      financial performance; and





•
            general
      stock and bond market
conditions.


7





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





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





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




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





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





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





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




Item 1B.   Unresolved Staff
Comments





None.




Item 2.   Properties





The
executive and administrative office of the Company consists of approximately
4,000 square feet, located at 1 Gateway Center, Suite 1030, Newark, New Jersey.
Beginning on April 1, 2005, Wilshire leased this office pursuant to a sixty five
month lease, with two renewal options of five years each. The base monthly
rental is $10,880.  The Company is reviewing its future leasing
requirements as the current lease expires in August 2010.





The
following table provides summary information regarding the Company’s apartment
and condominium properties as of December 31, 2009.





Apartment Unit TypeName (State)
                        
                        Date
                          Acquired
                        
                        No. of
                          Units
                        
                        Studio /
                          Efficiencies
                        
                        1 BR
                        
                        2 BR
                        
                        3 BR
                        
                        Acreage
                        
                        Rentable
                          Sq. Ft.Apartments:Alpine
      Village (NJ)
                        
                        
                        10/29/95
                        
                        132
                        
                        
                        -
                        
                        48
                        
                        
                        84
                        
                        -
                        
                        
                        13.73
                        
                        101,724Summercreek
      (TX)
                        
                        
                        3/29/01
                        
                        180
                        
                        
                        -
                        
                        84
                        
                        
                        96
                        
                        -
                        
                        
                        8.17
                        
                        142,452Sunrise
      Ridge (AZ)
                        
                        
                        10/24/97
                        
                        340
                        
                        
                        -
                        
                        144
                        
                        
                        196
                        
                        -
                        
                        
                        17.73
                        
                        291,674Van
      Buren (AZ)
                        
                        
                        6/11/98
                        
                        70
                        
                        
                        -
                        
                        42
                        
                        
                        28
                        
                        -
                        
                        
                        1.41
                        
                        81,404Wellington
      (TX)
                        
                        
                        7/30/98
                        
                        228
                        
                        
                        24
                        
                        60
                        
                        
                        116
                        
                        28
                        
                        
                        8.69
                        
                        214,744Condominiums:Jefferson
      Gardens (NJ) (a)(b)
                        
                        
                        3/31/94
                        
                        10
                        
                        
                        -
                        
                        8
                        
                        
                        2
                        
                        -
                        
                        
                        -
                        
                        7,785




(a)
      Classified by the Company as Discontinued Operations. See Note 2 to the
      Consolidated Financial Statements in Item 8 of this Annual Report on Form
      10-K(b)
      The Jefferson Gardens condominium complex has a total of 50 units, 34 one
      bedroom and 16 two bedroom, of which the Company owned 10 units as of
      December 31, 2009.


8




The
following table provides summary information regarding the Company’s commercial
properties and vacant land as of December 31, 2009.





Name (State)
                    
                    Date Acquired
                    
                    
                    Rentable Sq. Ft.
                    
                    AcreageOffice
      & Retail:Amboy
      Tower (NJ) (a)
                    
                    
                    3/31/98
                    
                    
                    75,000Royal
      Mall Plaza (AZ)
                    
                    
                    3/31/94
                    
                    
                    66,552Tempe
      Corporate (AZ)
                    
                    
                    12/31/92
                    
                    
                    50,700Land:Alpine
      Village, Sussex (NJ) (a)
                    
                    
                    10/28/98
                    
                    
                    -
                    
                    
                    0.51Alpine
      Village, Wantage (NJ) (a)
                    
                    
                    2/16/01
                    
                    
                    -
                    
                    
                    17.32Alpine
      Village, Center Street, Sussex (NJ) (a)
                    
                    
                    6/13/07
                    
                    
                    -
                    
                    
                    0.49Alpine
      Village, Unionville Ave., Sussex (NJ) (a)
                    
                    
                    11/26/07
                    
                    
                    -
                    
                    
                    0.22West
      Orange (NJ) (a)
                    
                    
                    3/31/94
                    
                    
                    -
                    
                    
                    0.60




(a)
      Classified by the Company as Discontinued Operations. See Note 2 to the
      Consolidated Financial Statements in Item 8 of this Annual Report on Form
      10-K.





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





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





As of December 31, 2009
                  
                  
                  For the Year Ended December 31, 2009Name (State)
                  
                  Net Book
                    Value
                  
                  
                  Mortgage
                    Principal
                  
                  
                  Net
                    Operating
                    Income
                  
                  
                  Interest
                    Expense
                  
                  
                  Capital
                    ExpendituresApartments:Sunrise
      Ridge (AZ)
                  
                  $
                  4,780,000
                  
                  
                  $
                  9,657,000
                  
                  
                  $
                  971,000
                  
                  
                  $
                  569,000
                  
                  
                  $
                  12,000Van
      Buren (AZ)
                  
                  
                  1,419,000
                  
                  
                  
                  1,895,000
                  
                  
                  
                  211,000
                  
                  
                  
                  111,000
                  
                  
                  
                  2,000Summercreek
      (TX)
                  
                  
                  4,973,000
                  
                  
                  
                  4,550,000
                  
                  
                  
                  295,000
                  
                  
                  
                  283,000
                  
                  
                  
                  385,000Wellington
      (TX)
                  
                  
                  3,424,000
                  
                  
                  
                  3,971,000
                  
                  
                  
                  541,000
                  
                  
                  
                  234,000
                  
                  
                  
                  79,000Alpine
      Village (NJ)
                  
                  
                  2,860,000
                  
                  
                  
                  4,513,000
                  
                  
                  
                  502,000
                  
                  
                  
                  266,000
                  
                  
                  
                  6,000Office
      & Retail:Royal
      Mall Plaza (AZ)
                  
                  
                  1,213,000
                  
                  
                  
                  -
                  
                  
                  
                  168,000
                  
                  
                  
                  -
                  
                  
                  
                  50,000Tempe
      Corporate (AZ)
                  
                  
                  2,251,000
                  
                  
                  
                  3,430,000
                  
                  
                  
                  427,000
                  
                  
                  
                  181,000
                  
                  
                  
                  17,000Total:
                  
                  $
                  20,920,000
                  
                  
                  $
                  28,016,000
                  
                  
                  $
                  3,115,000
                  
                  
                  $
                  1,644,000
                  
                  
                  $
                  551,000


9




Item 3.     Legal Proceedings





Other
Matters





On or
about July 31, 2009, James Robert Soprito, individually and as
successor-in-interest to Josephine Soprito, as Decedent; Cindy Maguglin and
Donna Tryon (collectively, "Plaintiffs"), filed a Complaint for Damages in the
Superior Court of the State of California for the County of San Francisco
against numerous defendants, including the Company.  Plaintiffs are seeking
damages based on claims of, among other things, wrongful death, negligence,
strict liability, enterprise liability, and premises liability.  These
claims are based on the allegation that the decedent and others suffered
injuries as a result of exposure to asbestos materials at certain unspecified
times in the past.  The Company presented materials in support of a request
that the Company not be included as a party.  On or about March 22, 2010,
Plaintiff's counsel filed a notice of dismissal, by which Plaintiffs dismissed
their claims against the Company without prejudice and without
costs.





Item 3A.   Executive Officers of the
Registrant





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





Name and Age
                  
                  Executive Officer of The
                    Company Since
                  
                  Position with the Company
                    and Business ExperienceS.
      Wilzig Izak, Age 51
                  
                  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 PresidentFrancis
      J. Elenio, Age 44
                  
                  September
      2006
                  
                  Chief
      Financial Officer, Secretary and Treasurer of the Company since September
      2006; Chief Financial Officer of Premier Wealth Management, Inc. since
      September 2007; Chief Financial Officer of Webcollage, Inc. (March 2006 -
      August 2006); Interim Chief Financial Officer of TWS Holdings, Inc.
      (November 2005 - March 2006); Chief Financial Officer and Director of
      Roomlinx, Inc. (April 2004 - November 2005); Chief Financial Officer,
      Secretary and Treasurer of GoAmerica, Inc. (January 1999 - August
      2003)




Item 4.     Reserved


10




PART
II




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





The
Company’s common stock was traded on the American Stock Exchange until January
26, 2010 under the symbol “WOC”. Effective January 27, 2010, the Company’s
common stock is quoted on the Over the Counter (“OTC”) Electronic Bulletin Board
maintained by the National Association of Securities Dealers, Inc. (“NASD”)
under the symbol “WLSE”.  The following table indicates the high and
low sales prices of the Company’s common stock for the quarters indicated during
the years ended December 31, 2009 and 2008:





Quarter 1
                                  
                                  
                                  Quarter 2
                                  
                                  
                                  Quarter 3
                                  
                                  
                                  Quarter 4High
                                  
                                  
                                  -
                                  
                                  
                                  Low
                                  
                                  
                                  High
                                  
                                  
                                  -
                                  
                                  
                                  Low
                                  
                                  
                                  High
                                  
                                  
                                  -
                                  
                                  
                                  Low
                                  
                                  
                                  High
                                  
                                  
                                  -
                                  
                                  
                                  Low2009
                                  
                                  $
                                  1.69
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  .90
                                  
                                  
                                  $
                                  1.85
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1.19
                                  
                                  
                                  $
                                  2.22
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1.50
                                  
                                  
                                  $
                                  2.33
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  .902008
                                  
                                  $
                                  3.71
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2.50
                                  
                                  
                                  $
                                  3.84
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2.53
                                  
                                  
                                  $
                                  3.80
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2.88
                                  
                                  
                                  $
                                  3.24
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  .84




As of
March 23, 2010, there were 3,274 common shareholders of record.





Issuer Purchases of Equity SecuritiesPeriod
                      
                      Total Number
                        of Shares
                        Purchased
                      
                      
                      Average
                        Price Paid
                        Per Share
                      
                      
                      Total Number
                        of Shares
                        Purchased as
                        Part of
                        Publicly
                        Announced
                        Plans or
                        Programs
                      
                      
                      Maximum
                        Number of
                        Shares that
                        May Yet Be
                        Purchased
                        Under the
                        Plans or
                        ProgramsQuarter ended
      March 31, 2009
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Quarter
      ended June 30, 2009
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Quarter
      ended September 30, 2009
                      
                      
                      4,047,380
                      
                      
                      $
                      2.00
                      
                      
                      
                      4,047,380
                      
                      
                      
                      -Quarter
      ended December 31, 2009
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Total
                      
                      
                      4,047,380
                      
                      
                      $
                      2.00
                      
                      
                      
                      4,047,380
                      
                      
                      
                      -





On August
10, 2009 the Company announced the commencement of a tender offer to purchase
shares of its common stock. The Company was offering to purchase up to 4,000,000
shares of its common stock at a price of $2.00 per share for a maximum aggregate
purchase price of $8,000,000. The tender offer expired at 12:00 midnight, New
York City time, on Friday, September 4, 2009.  As a result of the
tender offer, the Company purchased and retired 4,047,380 shares of its common
stock at a purchase price of $2.00 per share, for an aggregate purchase price of
$8,094,760.  The 4,047,380 shares purchased pursuant to the tender
offer are comprised of the 4,000,000 shares the Company offered to purchase and
47,380 shares purchased pursuant to the Company’s right under applicable
securities laws to purchase up to an additional 2% of the Company’s outstanding
shares without extending the tender offer.





In June
2004, the Company’s Board of Directors authorized management to conduct a
buyback of up to 1,000,000 common shares. The authorization to repurchase common
shares has no expiration date and the Company has not determined when, or if,
the program will be discontinued. Under this authorization, the Company
conducted an odd-lot share repurchase program, which offered shareholders who
owned a small number of common shares the opportunity to sell their shares
without paying a broker’s commission. The Company also benefited under the
odd-lot share repurchase program by lowering its administrative costs through
the closing of approximately 1,900 shareholder accounts. Under the Board
authorization, the Company also allowed other shareholders the opportunity to
sell their shares to the Company. No shares were repurchased during the period
October 1, 2009 through December 31, 2009.


11





Item 6.     Selected Financial
Data





The
selected consolidated financial data for the Company for each of the five (5)
fiscal years in the period ended December 31, 2009 are derived from the
consolidated financial statements that have been audited. J.H. Cohn LLP, an
Independent Registered Public Accounting Firm, has reported upon the
consolidated financial statements as of and for the years ended December 31,
2009, 2008, 2007, 2006 and 2005.





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


12





As of December 31,(In thousands)2009
                        
                        
                        2008
                        
                        
                        2007
                        
                        
                        2006
                        
                        
                        2005Balance
      Sheet Data at Year-End:Total
      assets
                        
                        $
                        32,480
                        
                        
                        $
                        43,343
                        
                        
                        $
                        45,384
                        
                        
                        $
                        46,915
                        
                        
                        $
                        88,915Long-term
      debt
                        
                        
                        28,016
                        
                        
                        
                        27,845
                        
                        
                        
                        28,952
                        
                        
                        
                        29,618
                        
                        
                        
                        33,352Stockholders'
      equity
                        
                        
                        1,200
                        
                        
                        
                        11,976
                        
                        
                        
                        13,136
                        
                        
                        
                        13,923
                        
                        
                        
                        41,852Weighted
      average shares outstanding:Basic
                        
                        
                        6,799
                        
                        
                        
                        7,924
                        
                        
                        
                        7,922
                        
                        
                        
                        7,888
                        
                        
                        
                        7,864Diluted
                        
                        
                        6,799
                        
                        
                        
                        7,924
                        
                        
                        
                        7,922
                        
                        
                        
                        8,015
                        
                        
                        
                        7,966




For the Year Ended December 31,(In thousands of dollars except per share amounts)2009
                  
                  
                  2008
                  
                  
                  2007
                  
                  
                  2006
                  
                  
                  2005Income
      Statement Data:Revenues
                  
                  $
                  8,920
                  
                  
                  $
                  9,203
                  
                  
                  $
                  9,420
                  
                  
                  $
                  8,834
                  
                  
                  $
                  8,186Costs
      and expenses:Operating
      expenses
                  
                  
                  5,857
                  
                  
                  
                  5,892
                  
                  
                  
                  5,863
                  
                  
                  
                  5,275
                  
                  
                  
                  4,708Depreciation
                  
                  
                  1,148
                  
                  
                  
                  1,188
                  
                  
                  
                  1,368
                  
                  
                  
                  1,987
                  
                  
                  
                  1,215General
      and administrative
                  
                  
                  3,865
                  
                  
                  
                  3,816
                  
                  
                  
                  3,617
                  
                  
                  
                  2,475
                  
                  
                  
                  3,493Total
      costs and expenses
                  
                  
                  10,870
                  
                  
                  
                  10,896
                  
                  
                  
                  10,848
                  
                  
                  
                  9,737
                  
                  
                  
                  9,416Dividend
      and interest income
                  
                  
                  33
                  
                  
                  
                  415
                  
                  
                  
                  540
                  
                  
                  
                  836
                  
                  
                  
                  700Sale
      of marketable securities
                  
                  
                  -
                  
                  
                  
                  (188
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  134Sale
      of real estate related assets
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  675Other
      income
                  
                  
                  3
                  
                  
                  
                  -
                  
                  
                  
                  36
                  
                  
                  
                  7
                  
                  
                  
                  32Interest
      expense including amortization of deferred financing costs
                  
                  
                  (1,708
                  )
                  
                  
                  (1,776
                  )
                  
                  
                  (1,837
                  )
                  
                  
                  (1,811
                  )
                  
                  
                  (1,911
                  )Loss
      before provision for taxes
                  
                  
                  (3,622
                  )
                  
                  
                  (3,242
                  )
                  
                  
                  (2,689
                  )
                  
                  
                  (1,871
                  )
                  
                  
                  (1,600
                  )Income
      tax benefit
                  
                  
                  (1,110
                  )
                  
                  
                  (1,343
                  )
                  
                  
                  (1,321
                  )
                  
                  
                  (829
                  )
                  
                  
                  (1,019
                  )Loss
      from continuing operations
                  
                  
                  (2,512
                  )
                  
                  
                  (1,899
                  )
                  
                  
                  (1,368
                  )
                  
                  
                  (1,042
                  )
                  
                  
                  (581
                  )Discontinued
      operations - real estate
                  
                  
                  (465
                  )
                  
                  
                  214
                  
                  
                  
                  176
                  
                  
                  
                  3,212
                  
                  
                  
                  8,577Discontinued
      operations - oil & gas
                  
                  
                  218
                  
                  
                  
                  324
                  
                  
                  
                  300
                  
                  
                  
                  115
                  
                  
                  
                  (1,105
                  )Net
      income (loss)
                  
                  $
                  (2,759
                  )
                  
                  $
                  (1,361
                  )
                  
                  $
                  (892
                  )
                  
                  $
                  2,285
                  
                  
                  $
                  6,891Basic
      earnings (loss) per share:Continuing
      operations
                  
                  $
                  (0.37
                  )
                  
                  $
                  (0.24
                  )
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.13
                  )
                  
                  $
                  (0.07
                  )Discontinued
      operations
                  
                  
                  (0.04
                  )
                  
                  
                  0.07
                  
                  
                  
                  0.06
                  
                  
                  
                  0.42
                  
                  
                  
                  0.95Net
      income (loss) per share
                  
                  $
                  (0.41
                  )
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.11
                  )
                  
                  $
                  0.29
                  
                  
                  $
                  0.88Diluted
      earnings (loss) per share:Continuing
      operations
                  
                  $
                  (0.37
                  )
                  
                  $
                  (0.24
                  )
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.13
                  )
                  
                  $
                  (0.07
                  )Discontinued
      operations
                  
                  
                  (0.04
                  )
                  
                  
                  0.07
                  
                  
                  
                  0.06
                  
                  
                  
                  0.41
                  
                  
                  
                  0.94Net
      income (loss) per share
                  
                  $
                  (0.41
                  )
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.11
                  )
                  
                  $
                  0.28
                  
                  
                  $
                  0.87


13




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





In 2009,
Wilshire primarily engaged in the real estate business. During 2009, 2008 and
2007, the Company also conducted activities related to winding up its oil and
gas business which was sold in April 2004.





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





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





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





Critical
Accounting Policies





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




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





Impairment
of Property and Equipment





On a
periodic basis, the Company assesses whether there are any indicators that the
value of its real estate properties may be impaired. A property’s value is
considered impaired if management’s estimate of the aggregate future cash flows
(undiscounted and without interest charges) to be generated by the property is
less than the carrying value of the property. To the extent impairment has
occurred, the loss shall be measured as the excess of the carrying amount of the
property over the fair value of the property. The Company does not believe that
at December 31, 2009 or 2008 the value of any of its properties was
impaired.





Revenue
Recognition





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


14


Foreign
Operations





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





Stock-Based
Compensation





Wilshire
records stock-based compensation expense at the grant date fair value of the
related stock-based award. The Company measures the compensation costs for these
shares as of the date of the grant, with subsequent remeasurement for any
unvested shares granted to non-employees with such amounts expensed against
earnings, at the grant date (for the portion that vest immediately) or ratably
over the respective vesting periods. The cost of these grants is amortized over
the vesting term. Dividends are paid on the restricted shares as dividends
are paid on shares of our common stock whether or not they are
vested.





Effects of Recent Accounting
Pronouncements




In June
2009, the Financial Accounting Standards Board (“FASB”) issued an amendment to
the accounting and disclosure requirements for transfers of financial assets.
This amendment requires greater transparency and additional disclosures for
transfers of financial assets and the entity’s continuing involvement with them
and changes the requirements for derecognizing financial assets. In addition,
this amendment eliminates the concept of a qualifying special-purpose entity
(“QSPE”). This amendment is effective for financial statements issued for fiscal
years beginning after November 15, 2009. This amendment will not have a material
effect on our consolidated financial position, results of operations or
liquidity.




In June
2009, the FASB also issued an amendment to the accounting and disclosure
requirements for the consolidation of variable interest entities (“VIEs”). The
elimination of the concept of a QSPE, as discussed above, removes the exception
from applying the consolidation guidance within this amendment. This amendment
requires an enterprise to perform a qualitative analysis when determining
whether or not it must consolidate a VIE. The amendment also requires an
enterprise to continuously reassess whether it must consolidate a VIE.
Additionally, the amendment requires enhanced disclosures about an enterprise’s
involvement with VIEs and any significant change in risk exposure due to that
involvement, as well as how its involvement with VIEs impacts the enterprise’s
financial statements. Finally, an enterprise will be required to disclose
significant judgments and assumptions used to determine whether or not to
consolidate a VIE. This amendment is effective for financial statements issued
for fiscal years beginning after November 15, 2009. This amendment will not have
a material effect on our consolidated financial position, results of operations
or liquidity.




In June
2009, the FASB issued the FASB Accounting Standards Codification (“Codification”
or “ASC”). The Codification has become the single source for all authoritative
Generally Accepted Accounting Principal (“GAAP”) recognized by the FASB to be
applied for financial statements issued for periods ending after September 15,
2009. The Codification does not change GAAP and will not have an effect on our
consolidated financial position, results of operations or
liquidity.





In May
2009, the FASB issued SFAS No. 165, Subsequent Events, which was primarily
codified into Topic 855 – Subsequent Events in the ASC.  This standard
establishes general standards for accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued and shall be applied to subsequent events not
addressed in other applicable accounting principles generally accepted in the
United States of America.  ASC Topic 855, among other things, sets
forth the period after the balance sheet date during which management should
evaluate events or transactions that may occur for potential recognition or
disclosure in the financial statements, the circumstances under which an entity
should recognize events or transactions occurring after the balance sheet date
in its financial statements and the disclosures an entity should make about
events or transactions that occurred after the balance sheet
date.  ASC Topic 855 is effective for the fiscal quarter ended June
30, 2009.  The Company’s adoption of ASC Topic 855 did not have a
material impact on the interim or annual consolidated financial statements or
the disclosures in those financial statements.





In April
2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly, which was primarily codified into
ASC 82-10-65-4.  ASC 82-10-65-4 provides additional guidance for
estimating fair value when the volume and level of activity for the asset or
liability have significantly decreased, and re-emphasizes that regardless of
market conditions the fair value measurement is an exit price
concept.  The scope of this pronouncement does not include assets and
liabilities measured under Level 1 inputs (quoted prices in active markets for
identical assets).  ASC 82-10-65-4 is applied prospectively to all
fair value measurements where appropriate and is effective for the Company’s
interim and annual periods beginning in the second quarter of fiscal year
2009.  The Company’s adoption of ASC 82-10-65-4 did not have a
material impact on the consolidated financial statements.





In
April 2008, the FASB issued FASB Staff Position FAS 142-3, Determination of
Useful Life of Intangible Assets, which was primarily codified into ASC Topic
350 – Intangibles.   This guidance amends the factors that should
be considered in developing the renewal or extension assumptions used to
determine the useful life of a recognized intangible asset and requires enhanced
related disclosures.  ASC Topic 350 also requires expanded disclosure
related to the determination of intangible asset useful lives. This guidance is
effective for fiscal years beginning after December 15, 2008. Earlier adoption
is not permitted. The adoption of ASC Topic 350 did not have a material impact
on the Company’s consolidated financial statements.


15





In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement
No. 133,which was
primarily codified into ASC Topic 815 – Derivatives and Hedging.  ASC
Topic 815 requires qualitative disclosures about objectives and strategies for
using derivatives, quantitative disclosures about fair value amounts and gains
and losses on derivative instruments, and disclosures about credit-risk-related
contingent features in derivative agreements.   ASC Topic 815 was
effective beginning January 1, 2009. The Company does not have any
derivative instruments or utilize any hedging activities and therefore, ASC
Topic 815 is not applicable to the Company at this time.





In
December 2007, the FASB issued SFAS No. 141-R, Business Combinations, which was
primarily codified into ASC Topic 805 – Business Combinations.  This
guidance changes the accounting for acquisitions specifically eliminating the
step acquisition model, changing the recognition of contingent consideration
from being recognized when it is probable to being recognized at the time of
acquisition, disallowing the capitalization of transaction costs and changes
when restructurings related to acquisition can be recognized.  The
standard is effective for fiscal years beginning on or after December 15, 2008
and will only impact the accounting for acquisitions that are made after
adoption.  The Company believes the adoption of ASC Topic 805 will not
have an effect on the Company’s consolidated financial position or results of
operations as there are no current acquisitions being contemplated.





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51, which was
primarily codified into ASC Topic 810 – Consolidation Noncontrolling Interest.
ASC Topic 810 is effective for fiscal years beginning on or after December 15,
2008, with earlier adoption prohibited.  This statement requires the
recognition of a noncontrolling interest (minority interest) as equity in the
consolidated financial statements and separate from the Company’s
equity.  The amount of net income attributable to the noncontrolling
interest will be included in the consolidated net income on the face of the
consolidated income statement.  It also amends certain of ARB No. 51’s
consolidation procedures for consistency with the requirements of ASC Topic
805.  ASC Topic 810 also includes expanded disclosure requirements
regarding the interests of the parent and its noncontrolling
interest.  The Company believes the adoption of ASC Topic 810 will not
have an effect on the Company’s consolidated financial position or results of
operations as there are no non-controlling interests.


16




Results
of Operations





The
following table presents the increases (decreases) in each major statement of
income category for the year ended December 31, 2009 (“2009”) compared with the
year ended December 31, 2008 (“2008”) and 2008 compared with the year ended
December 31, 2007 (“2007”).





Increase (Decrease) in Consolidated Statementsof Operations Categories for the Periods:2009 v. 2008
                                                                                                                  
                                                                                                                  
                                                                                                                  2008 v. 2007Amount ($)
                                                                                                                  
                                                                                                                  
                                                                                                                  %
                                                                                                                  
                                                                                                                  
                                                                                                                  Amount ($)
                                                                                                                  
                                                                                                                  
                                                                                                                  %Revenues
                                                                                                                  
                                                                                                                  $
                                                                                                                  (283,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (3.1
                                                                                                                  )%
                                                                                                                  
                                                                                                                  $
                                                                                                                  (217,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (2.3
                                                                                                                  )%Costs and
      expenses:Operating expenses
                                                                                                                  
                                                                                                                  
                                                                                                                  (35,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (0.6
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  29,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  0.5
                                                                                                                  %Depreciation and
      amortization
                                                                                                                  
                                                                                                                  
                                                                                                                  (40,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (3.4
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  (180,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (13.2
                                                                                                                  )%General and administrative
                                                                                                                  
                                                                                                                  
                                                                                                                  49,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1.3
                                                                                                                  %
                                                                                                                  
                                                                                                                  
                                                                                                                  199,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  5.5
                                                                                                                  %Total costs and expenses
                                                                                                                  
                                                                                                                  
                                                                                                                  (26,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (0.2
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  48,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  0.4
                                                                                                                  %Loss from
      Operations
                                                                                                                  
                                                                                                                  
                                                                                                                  (257,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  15.2
                                                                                                                  %
                                                                                                                  
                                                                                                                  
                                                                                                                  (265,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  18.6
                                                                                                                  %Other
      IncomeDividend and interest
      income
                                                                                                                  
                                                                                                                  
                                                                                                                  (382,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (92.0
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  (125,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (23.1
                                                                                                                  )%Loss on sale of marketable
      securities
                                                                                                                  
                                                                                                                  
                                                                                                                  188,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (100.0
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  (188,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  -Other income
                                                                                                                  
                                                                                                                  
                                                                                                                  3,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  100.0
                                                                                                                  %
                                                                                                                  
                                                                                                                  
                                                                                                                  (36,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (100.0
                                                                                                                  )%Interest expense
                                                                                                                  
                                                                                                                  
                                                                                                                  68,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (3.8
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  61,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (3.3
                                                                                                                  )%Loss before
      benefit for taxes
                                                                                                                  
                                                                                                                  
                                                                                                                  (380,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  11.7
                                                                                                                  %
                                                                                                                  
                                                                                                                  
                                                                                                                  (553,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  20.6
                                                                                                                  %Income tax
      benefit
                                                                                                                  
                                                                                                                  
                                                                                                                  233,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (17.3
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  (22,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  1.7
                                                                                                                  %Loss from
      continuing operations
                                                                                                                  
                                                                                                                  
                                                                                                                  (613,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  32.3
                                                                                                                  %
                                                                                                                  
                                                                                                                  
                                                                                                                  (531,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  38.8
                                                                                                                  %Discontinued operations - real
      estateLoss from operations
                                                                                                                  
                                                                                                                  
                                                                                                                  127,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (21.5
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  (80,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  15.6
                                                                                                                  %Gain from sales
                                                                                                                  
                                                                                                                  
                                                                                                                  (806,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (100.0
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  118,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  17.2
                                                                                                                  %Discontinued operations - oil
      & gasLoss from operations
                                                                                                                  
                                                                                                                  
                                                                                                                  (106,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (32.7
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  24,000
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  8.0
                                                                                                                  %Net loss
                                                                                                                  
                                                                                                                  $
                                                                                                                  (1,398,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (102.7
                                                                                                                  )%
                                                                                                                  
                                                                                                                  $
                                                                                                                  (469,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (52.6
                                                                                                                  )%Basic earnings (loss) per
      share:Loss from continuing
      operations
                                                                                                                  
                                                                                                                  $
                                                                                                                  (0.13
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  54.2
                                                                                                                  %
                                                                                                                  
                                                                                                                  $
                                                                                                                  (0.07
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  41.2
                                                                                                                  %Income from discontinued
      operations
                                                                                                                  
                                                                                                                  
                                                                                                                  (0.11
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (157.1
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  0.01
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  16.7
                                                                                                                  %Net income (loss) applicable to
      common stockholders
                                                                                                                  
                                                                                                                  $
                                                                                                                  (0.24
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  141.2
                                                                                                                  %
                                                                                                                  
                                                                                                                  $
                                                                                                                  (0.06
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  54.5
                                                                                                                  %Diluted earnings (loss) per
      share:Loss from continuing
      operations
                                                                                                                  
                                                                                                                  $
                                                                                                                  (0.13
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  54.2
                                                                                                                  %
                                                                                                                  
                                                                                                                  $
                                                                                                                  (0.07
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  41.2
                                                                                                                  %Income from discontinued
      operations
                                                                                                                  
                                                                                                                  
                                                                                                                  (0.11
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (157.1
                                                                                                                  )%
                                                                                                                  
                                                                                                                  
                                                                                                                  0.01
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  16.7
                                                                                                                  %Net income (loss) applicable to
      common stockholders
                                                                                                                  
                                                                                                                  $
                                                                                                                  (0.24
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  141.2
                                                                                                                  %
                                                                                                                  
                                                                                                                  $
                                                                                                                  (0.06
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  54.5
                                                                                                                  %


17





Results
of Operations - For the year ended December 31, 2009 as compared to the year
ended December 31, 2008





Overview





Net loss
for the year ended December 31, 2009 was $2,759,000 or $0.41 per basic and
diluted share, an increase of $1,398,000 from a net loss of $1,361,000 or $0.17
per basic and diluted share for the year ended December 31, 2008. Results of
operations are shown as continuing and discontinued, with discontinued
operations comprised of the results of operations from the Company’s oil and gas
businesses, the results of the sale of the oil and gas properties, the operating
results from real estate properties held for sale and the gain from real estate
properties held for sale that were sold during the year.





Continuing
Operations:





Loss from
continuing operations was $2,512,000 during 2009 as compared to a loss of
$1,899,000 during 2008. Results per basic and diluted share from continuing
operations were $(0.37) for the year ended December 31, 2009 as compared to
$(0.24) per basic and diluted share during 2008. The increased loss from
continuing operations during 2009 as compared to 2008 primarily relates to a
decrease in revenue of $283,000, an increase in general and administrative
expense of $49,000, and a decrease in dividend and interest income of $382,000
offset by a reduction in interest expense of $68,000 during the year end
December 31, 2009 and the loss on sale of marketable securities of $188,000
during 2008.





Reported
loss from continuing operations in 2009 compared with 2008 reflects an increased
loss from operations (defined as revenues reduced by operating expenses,
depreciation and general and administrative expenses), that was partially offset
by the other factors described herein. These factors are discussed
below.




Segment
Information





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





Residential Real Estate
                        
                        
                        Commercial Real Estate
                        
                        
                        Total
                        
                        
                        TotalYear ended
                        
                        
                        
                        
                        
                        Year ended
                        
                        
                        Increase
                        
                        
                        Year endedDecember 31,
                        
                        
                        Decrease
                        
                        
                        December 31,
                        
                        
                        (Decrease)
                        
                        
                        December 31,
                        
                        
                        Decrease2009
                        
                        
                        2008
                        
                        
                        $
                        
                        
                        %
                        
                        
                        2009
                        
                        
                        2008
                        
                        
                        $
                        
                        
                        %
                        
                        
                        2009
                        
                        
                        2008
                        
                        
                        $
                        
                        
                        %(In 000's of $)
                        
                        
                        
                        
                        
                        
                        
                        
                        (In 000's of $)
                        
                        
                        
                        
                        
                        
                        
                        
                        (In 000's of $)Total
      revenues
                        
                        $
                        7,663
                        
                        
                        $
                        7,770
                        
                        
                        $
                        (107
                        )
                        
                        
                        (1.4
                        ) %
                        
                        $
                        1,257
                        
                        
                        $
                        1,433
                        
                        
                        $
                        (176
                        )
                        
                        
                        (12.3
                        )%
                        
                        $
                        8,920
                        
                        
                        $
                        9,203
                        
                        
                        $
                        (283
                        )
                        
                        
                        (3.1
                        )%Operating
      expenses
                        
                        
                        5,143
                        
                        
                        
                        5,192
                        
                        
                        
                        (49
                        )
                        
                        
                        (0.9
                        ) %
                        
                        
                        714
                        
                        
                        
                        700
                        
                        
                        
                        14
                        
                        
                        
                        2.0
                        %
                        
                        
                        5,857
                        
                        
                        
                        5,892
                        
                        
                        
                        (35
                        )
                        
                        
                        (0.6
                        )%Net
      operating income
                        
                        $
                        2,520
                        
                        
                        $
                        2,578
                        
                        
                        $
                        (58
                        )
                        
                        
                        (2.2
                        ) %
                        
                        $
                        543
                        
                        
                        $
                        733
                        
                        
                        $
                        (190
                        )
                        
                        
                        (25.9
                        )%
                        
                        $
                        3,063
                        
                        
                        $
                        3,311
                        
                        
                        $
                        (248
                        )
                        
                        
                        (7.5
                        )%




Reconciliation
to consolidated loss from continuing operations:
 
 Net
      operating income
                  
                  $
                  3,063
                  
                  
                  $
                  3,311Depreciation
      and amortization expense
                  
                  
                  (1,148
                  )
                  
                  
                  (1,188
                  )General
      and administrative expense
                  
                  
                  (3,865
                  )
                  
                  
                  (3,816
                  )Other
      income
                  
                  
                  36
                  
                  
                  
                  227Interest
      expense
                  
                  
                  (1,708
                  )
                  
                  
                  (1,776
                  )Income
      tax benefit
                  
                  
                  1,110
                  
                  
                  
                  1,343Loss
      from continuing operations
                  
                  $
                  (2,512
                  )
                  
                  $
                  (1,899
                  )




18





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





Residential
Segment





The
residential segment is comprised of Sunrise Ridge Apartments and Van Buren
Apartments, both in Arizona, Wellington Estates and Summercreek Apartments, both
in Texas, and Alpine Village Apartments in New Jersey. During 2009, NOI
decreased by $58,000 or 2.2% to $2,520,000 as a result of a decrease in revenues
of $107,000 or 1.4% to $7,663,000  which was partially offset by a
decrease in operating expenses of $49,000 or .9% to $5,143,000.





The
decrease in revenues primarily relates to increased vacancy rates at the
Company’s Sunrise Ridge apartment complex. Through successful marketing efforts
at the New Jersey property, the Company has seen an increase in occupancy which
partially offset the decreased revenues.





The
decrease in operating expenses was primarily attributable to reduced insurance
costs as a result of effective risk management control at the properties and the
implementation of greater cost controls at the Company’s Arizona and Texas
apartment complexes.





Commercial
Segment





The
commercial segment is comprised of Royal Mall Plaza in Mesa, Arizona and Tempe
Corporate Center in Tempe, Arizona. During 2009, NOI decreased $190,000 or 25.9%
to $543,000, primarily due to a decrease in revenues of $176,000 or 12.3% to
$1,257,000 and a slight increase in operating expenses of $14,000 or 2.0% to
$714,000.  The revenue decrease was attributable to a $113,000
decrease in revenue at Royal Mall (Arizona) and a $63,000 decrease at Tempe
Corporate Center (Arizona).  The decrease in revenue is directly
related to increased vacancy levels during part of 2009 as compared to 2008, as
well as the impact of tenant space reductions.




Revenues





Years Ended December 31,
                  
                  
                  Increase2009
                  
                  
                  2008
                  
                  
                  (Decrease)Sunrise
      Ridge, Arizona
                  
                  $
                  2,568,000
                  
                  
                  $
                  2,732,000
                  
                  
                  $
                  (164,000
                  )Van
      Buren Apartments, Arizona
                  
                  
                  680,000
                  
                  
                  
                  655,000
                  
                  
                  
                  25,000Wellington
      Estates, Texas
                  
                  
                  1,824,000
                  
                  
                  
                  1,825,000
                  
                  
                  
                  (1,000
                  )Alpine
      Village, New Jersey
                  
                  
                  1,416,000
                  
                  
                  
                  1,394,000
                  
                  
                  
                  22,000Summercreek,
      Texas
                  
                  
                  1,175,000
                  
                  
                  
                  1,164,000
                  
                  
                  
                  11,000Sub-total
      - Residential Properties
                  
                  
                  7,663,000
                  
                  
                  
                  7,770,000
                  
                  
                  
                  (107,000
                  )Royal
      Mall Plaza, Arizona
                  
                  
                  464,000
                  
                  
                  
                  577,000
                  
                  
                  
                  (113,000
                  )Tempe
      Corporate Center, Arizona
                  
                  
                  793,000
                  
                  
                  
                  856,000
                  
                  
                  
                  (63,000
                  )Sub-total-
      Commercial Properties
                  
                  
                  1,257,000
                  
                  
                  
                  1,433,000
                  
                  
                  
                  (176,000
                  )Total
      Revenues
                  
                  $
                  8,920,000
                  
                  
                  $
                  9,203,000
                  
                  
                  $
                  (283,000
                  )





19




Revenues
from rental properties amounted to $8,920,000 in 2009, a decrease of $283,000 or
3.1%, from $9,203,000 in 2008. The decrease during 2009 is attributable to
Sunrise Ridge Apartments, which had a decrease in rental revenues of $164,000 or
6.0%, Royal Mall Plaza, which had a decrease in rental income of $113,000 or
19.6% and Tempe Corporate Center which had a decrease in rental income of
$63,000 or 7.4%, which was partially offset by increased rental income at Van
Buren Apartments which experienced a $25,000 increase in rental income or 3.8%,
Alpine Village which experienced a $22,000 increase in rental income or 1.6%,
and Summercreek, which had an increase in rental income of $11,000 or
0.9%.





Operating
Expenses





Years Ended December 31,
                          
                          
                          Increase2009
                          
                          
                          2008
                          
                          
                          (Decrease)Sunrise
      Ridge, Arizona
                          
                          $
                          1,597,000
                          
                          
                          $
                          1,619,000
                          
                          
                          $
                          (22,000
                          )Van
      Buren Apartments, Arizona
                          
                          
                          468,000
                          
                          
                          
                          433,000
                          
                          
                          
                          35,000Wellington
      Estates, Texas
                          
                          
                          1,283,000
                          
                          
                          
                          1,316,000
                          
                          
                          
                          (33,000
                          )Alpine
      Village, New Jersey
                          
                          
                          915,000
                          
                          
                          
                          927,000
                          
                          
                          
                          (12,000
                          )Summercreek,
      Texas
                          
                          
                          880,000
                          
                          
                          
                          897,000
                          
                          
                          
                          (17,000
                          )Sub-total
      - Residential Properties
                          
                          
                          5,143,000
                          
                          
                          
                          5,192,000
                          
                          
                          
                          (49,000
                          )Royal
      Mall Plaza, Arizona
                          
                          
                          308,000
                          
                          
                          
                          301,000
                          
                          
                          
                          7,000Tempe
      Corporate Center, Arizona
                          
                          
                          406,000
                          
                          
                          
                          399,000
                          
                          
                          
                          7,000Sub-total-
      Commercial Properties
                          
                          
                          714,000
                          
                          
                          
                          700,000
                          
                          
                          
                          14,000Total
      Operating Expenses
                          
                          $
                          5,857,000
                          
                          
                          $
                          5,892,000
                          
                          
                          $
                          (35,000
                          )





Operating
expenses were $5,857,000 in 2009, which is a decrease of $35,000 or .6% as
compared to $5,892,000 during 2008. The overall decrease in operating expenses
during 2009 was primarily related to reduced insurance costs at our residential
properties.





Depreciation
and amortization expense amounted to $1,148,000 in 2009, a decrease of $40,000
or 3.4% as compared to $1,188,000 during 2008. The decrease relates to fully
depreciated assets in 2009.




General
and administrative expense increased $49,000, or 1.3%, to $3,865,000 in 2009 as
compared to $3,816,000 during 2008.  The increase in general and
administrative expense is primarily attributable to the increased payroll and
payroll related costs, which is partially associated with the appointment of the
Company’s new President and Chief Operating Officer in January 2009, an increase
in payroll taxes associated with the additional salary and the recording of a
severance accrual in December 2009 in connection with the resignation of such
individual, all of which amount to $507,000, an increase in shareholder reports
and solicitations primarily related to the Company’s annual meeting and
completed issuer tender offer of $326,000, which was partially offset by a
decrease in accounting fees of $213,000, legal fees of $198,000 and consulting
fees of $288,000 which were incurred in connection with the proposed merger
during the 2008 period.





Other
income decreased by $191,000 to $36,000 in 2009 as compared to $227,000 in 2008.
The decrease primarily relates to a decline in interest and dividend income as a
result of the declining interest rates during 2009 and the completed issuer
tender offer in September 2009.





Interest
expense decreased to $1,708,000 in 2009 from $1,776,000 during 2008. The
decrease primarily relates to the reduction in the Company’s mortgage liability
and the refinancing of the mortgage on Summercreek in May 2009.




The
provision for income taxes amounted to a tax benefit of $1,110,000 in 2009
compared to a tax benefit of $1,343,000 during 2008. The change in the provision
for income taxes is related to the level of loss from continuing operations in
2009 compared to 2008 and the recording of a valuation allowance related to the
utilization of certain state net operating losses during 2009.





Discontinued
Operations, Net of Taxes:





Real
Estate





Discontinued
operations amounted to an after tax loss from operations of $465,000 during 2009
as compared to an after tax loss from operations of $592,000 during
2008.  The after tax loss during 2008 was offset by a gain on sale of
properties of $806,000 for net income from discontinued operations of
$214,000.  The gain on the sale of properties during the 2008 period
reflects the sales of two condominium units at Jefferson Gardens and the sale of
the Tamarac Office Plaza resulting in gross proceeds of $2.3 million and an
after tax gain of $806,000.




20




Oil
and Gas




The
Company announced in July 2003 its intention to sell its oil and gas businesses.
The Canadian oil and gas business was sold in April 2004 to Addison Energy Inc.,
a wholly owned subsidiary of Exco Resources, Inc., for $15 million in gross
proceeds. The United States oil and gas business was sold in April 2004 to Crow
Creek Energy LLC, a Tulsa, Oklahoma based privately held portfolio company of
Natural Gas Partners of Dallas, Texas, for $13.3 million in gross proceeds.
During 2009, the Company recognized after-tax income from the wind down of its
former oil and gas business, of $218,000 as compared to $324,000 during 2008.
The net income from the wind down of the oil and gas business during 2009 and
2008 relates to a foreign currency gain and interest income during those
years.


21




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





Overview





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





Continuing
Operations:





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





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




Segment
Information





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





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





Reconciliation
to consolidated loss from continuing operations:





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




22




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





Residential
Segment





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





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





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





Commercial
Segment





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




Revenues





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




23




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





Operating
Expenses





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





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





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




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





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





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




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





Discontinued
Operations, Net of Taxes:





Real
Estate





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





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




24




Oil
and Gas





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





Effects
of Inflation





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




Liquidity
and Capital Resources





At
December 31, 2009 and 2008, the Company had working capital, including
restricted cash, of $3.7 and $10.1 million, respectively.  The
decrease in working capital during the period primarily relates to the completed
issuer tender offer during September 2009 which reduced current assets by
approximately $8.1 million.  This was partially offset by the
refinancing of the existing Summercreek debt which was classified as a current
liability at December 31, 2008.  As a result, current liabilities were
reduced by $3.9 million.  As it relates to the completed issuer tender
offer, the Company purchased and retired 4,047,380 shares of its common stock at
a purchase price of $2.00 per share, for an aggregate purchase price of
$8,094,760.





The
Company had $4.5 million of cash and cash equivalents, including restricted cash
at December 31, 2009. This balance is comprised of working capital accounts for
its real estate properties and corporate needs  and money market
accounts. In the short-term, the Company will continue to invest in highly
liquid investments that are consistent with its investment policy.




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




The
Company formerly held investments in certain marketable equity securities and
short-term marketable debt securities, including auction rate securities (“ARS”)
with interest rate resets ranging from every seven days to every 45
days.  As of December 31, 2008, the Company held $2.0 million of
auction rate securities, classified as available-for-sale. During the year ended
December 31, 2009, the Company redeemed its remaining investment of $2.0 million
of ARS at par.




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





Net cash
used in operating activities amounted to $2.2 million during 2009, cash flow
provided by operating activities during 2008 was $42,000, while $1.4 million was
used in operating activities during 2007. The 2009 use of net cash primarily
relates to the net loss of $2.8 million, a decrease in deferred income tax
liabilities of $133,000, and an increase in income tax receivables of $313,000,
which was partially offset by depreciation expense of $1.2
million.  The 2008 provision of net cash primarily relates to a
decrease in prepaid income taxes and income tax receivables of $877,000 and
depreciation of $1.2 million, which was partially offset by the gain on real
estate assets of $1.3 million.  The 2007 use of net cash primarily
relates to gains on sales of real estate assets of $1.1 million, a net loss of
$0.9 million and an increase in prepaid income taxes and income taxes receivable
of $1.1 million, partially offset by depreciation and amortization expense of
$1.4 million.





Net cash
provided by investing activities amounted to $1.4 million in 2009 and 9.2
million in 2008, while cash used in investing activities was $2.8 million during
2007. The cash provided by investing activities during 2009 primarily relates to
the proceeds from the redemption and sale of marketable securities in the amount
of $2,000,000, which was partially offset by capital expenditures on real estate
properties of $558,000 and an increase in restricted cash in the amount of
$2,000.  The cash provided by investing activities during 2008 is
primarily due to the sale and redemption of marketable securities of $7.3
million and the net proceeds from the sale of real estate assets of $2.2
million.  The cash used in investing activities during 2007 is due to
an increase in short-term marketable securities of $3.6 million and capital
expenditures related to our real estate properties of $0.9 million, partially
offset by proceeds from the sales of real estate assets of $1.7
million.




25




Net cash
used in financing activities amounted to $8.0 million in 2009, $1.1 million in
2008, and $600,000 in 2007.  The 2009 use of cash was primarily
attributable to the completed issuer tender offer in September 2009 in the
amount of $8.1 million, the repayment of the existing debt on the Summercreek
property of $3.9 million and the repayment of scheduled long-term debt in the
amount of $541,000 during the period, which was partially offset by the proceeds
related to the refinancing of the Summercreek property in the amount of $4.6
million.  The 2008 and 2007 use of cash reflects the normal annual
amortization of long-term debt from debt service payments.




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





The
Company is committed to investing in its properties to maintain their
competitiveness within their markets and for the purposes of upgrading and
repositioning where appropriate.





The
following table sets forth the amounts of capital expenditures made in each
property within the past three years, exclusive of those properties which were
sold.




Name of property
                                  
                                  Years ended December 31,2009
                                  
                                  
                                  2008
                                  
                                  
                                  2007Residential continuing
      operations:Sunrise
      Ridge
                                  
                                  $
                                  12,000
                                  
                                  
                                  $
                                  78,000
                                  
                                  
                                  $
                                  220,000Van
      Buren
                                  
                                  
                                  2,000
                                  
                                  
                                  
                                  2,000
                                  
                                  
                                  
                                  9,000Wellington
                                  
                                  
                                  79,000
                                  
                                  
                                  
                                  60,000
                                  
                                  
                                  
                                  50,000Alpine
                                  
                                  
                                  6,000
                                  
                                  
                                  
                                  13,000
                                  
                                  
                                  
                                  12,000Summercreek
                                  
                                  
                                  385,000
                                  
                                  
                                  
                                  27,000
                                  
                                  
                                  
                                  21,000Commercial continuing
      operations:Royal
      Mall Plaza
                                  
                                  
                                  50,000
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  100,000Tempe
      Corporate
                                  
                                  
                                  17,000
                                  
                                  
                                  
                                  63,000
                                  
                                  
                                  
                                  32,000Discontinued operations -
      residential:Jefferson
      Gardens
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  4,000Alpine
      Land (a)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  355,000Discontinued operations -
      commercial:Amboy
      Towers
                                  
                                  
                                  2,000
                                  
                                  
                                  
                                  12,000
                                  
                                  
                                  
                                  60,000Tamarac
      Office Plaza(b)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2,000
                                  
                                  
                                  
                                  21,000Total
      capital expenditures
                                  
                                  $
                                  553,000
                                  
                                  
                                  $
                                  257,000
                                  
                                  
                                  $
                                  884,000




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


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




On June
3, 2004, the Company’s Board of Directors approved the repurchase of up to
1,000,000 shares of its common stock on the open market, in privately negotiated
transactions or otherwise. This purchasing activity may occur from time to time,
in one or more transactions. At December 31, 2009, the Company had purchased
138,231 shares at an aggregate cost of $1,017,000 under this program.




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





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





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




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




26




Item
7A.   Quantitative
and Qualitative Disclosures About Market Risk





After the
sale of its Canadian oil and gas assets, the Company has cash and cash
equivalents at its Canadian subsidiary, whose value is exposed to fluctuations
in the value of the Canadian dollar / U.S. dollar exchange rate. The change in
value in the Canadian dollar denominated accounts is reported in the Statement
of Operations. The Company repatriated substantially all of its assets, net of
liabilities, during 2009.  The Company has completed the wind down of
its Canadian subsidiary during the first quarter of 2010.





Long-term
debt, consisting solely of mortgage notes payable, totaled the following as of
December 31, 2009 and December 31, 2008:




2009
                
                
                2008Total
      debt
                
                
                28,016,000
                
                
                
                27,845,000Less-current
      portion
                
                
                572,000
                
                
                
                4,378,000Long
      term portion
                
                $
                27,444,000
                
                
                $
                23,467,000





The
aggregate maturities of the long-term debt in each of the five years subsequent
to December 31, 2009 are -




Year
                
                Amount2010
                
                $
                572,0002011
                
                
                606,0002012
                
                
                637,0002013
                
                
                21,910,0002014
                
                
                74,000Thereafter
                
                
                4,217,000$
                28,016,000





At
December 31, 2009, the Company had $28,016,000 of mortgage debt and notes
outstanding which all bear interest at an average fixed rate of 5.62% and an
average remaining life of approximately 3.4 years. The fixed rate mortgages and
notes are subject to repayment (amortization) schedules that are longer than the
term of the mortgages. As such, the approximate amount of balloon payments for
all mortgage debt and notes that will be required is as follows:





Year
                  
                  Amount2013
                  
                  $
                  21,699,0002017
                  
                  
                  3,841,000$
                  25,540,000





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





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





27




Item 8.     Financial Statements and
Supplementary Data




Report
of Independent Registered Public Accounting Firm





The Board
of Directors and Stockholders


Wilshire
Enterprises, Inc.





We have
audited the accompanying consolidated balance sheets of Wilshire Enterprises,
Inc. and Subsidiaries as of December 31, 2009 and 2008, and the related
consolidated statements of operations, stockholders’ equity and cash flows and
the financial statement schedule listed in the index at Item 15 for each of the
three years in the period ended December 31, 2009. These consolidated financial
statements and financial statement schedule are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on our
audits.





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





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Wilshire Enterprises, Inc.
and Subsidiaries as of December 31, 2009 and 2008, and their results of
operations and cash flows for each of the three years in the period ended
December 31, 2009, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, the financial statement
schedule referred to above, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.




/s/ J.H.
Cohn LLP





Roseland,
New Jersey


March
31,
2010




28





WILSHIRE ENTERPRISES, INC.


CONSOLIDATED
BALANCE SHEETS


As
of December 31, 2009 and 2008





2009
                      
                      
                      2008ASSETSCurrent
      assets:Cash
      and cash equivalents
                      
                      $
                      4,263,000
                      
                      
                      $
                      13,023,000Restricted
      cash
                      
                      
                      197,000
                      
                      
                      
                      195,000Marketable
      debt securities, available-for-sale, at fair value
                      
                      
                      -
                      
                      
                      
                      2,000,000Accounts
      receivable, net
                      
                      
                      181,000
                      
                      
                      
                      173,000Income
      taxes receivable
                      
                      
                      1,086,000
                      
                      
                      
                      773,000Prepaid
      expenses and other current assets
                      
                      
                      1,260,000
                      
                      
                      
                      1,133,000Total
      current assets
                      
                      
                      6,987,000
                      
                      
                      
                      17,297,000Other
      noncurrent assets
                      
                      
                      233,000
                      
                      
                      
                      196,000Property
      and equipment:Real
      estate properties
                      
                      
                      39,432,000
                      
                      
                      
                      38,876,000Real
      estate properties - held for sale
                      
                      
                      4,640,000
                      
                      
                      
                      4,638,00044,072,000
                      
                      
                      
                      43,514,000Less:Accumulated
      depreciation and amortization
                      
                      
                      18,441,000
                      
                      
                      
                      17,293,000Accumulated
      depreciation and amortization – property held for
sale
                      
                      
                      371,000
                      
                      
                      
                      371,00025,260,000
                      
                      
                      
                      25,850,000Total
      assets
                      
                      $
                      32,480,000
                      
                      
                      $
                      43,343,000LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Current
      portion of long-term debt
                      
                      $
                      572,000
                      
                      
                      $
                      4,378,000Accounts
      payable
                      
                      
                      1,272,000
                      
                      
                      
                      1,342,000Income
      taxes payable
                      
                      
                      90,000
                      
                      
                      
                      77,000Accrued
      liabilities
                      
                      
                      1,093,000
                      
                      
                      
                      1,066,000Deferred
      income
                      
                      
                      108,000
                      
                      
                      
                      87,000Current
      liabilities associated with discontinued operations
                      
                      
                      166,000
                      
                      
                      
                      264,000Total
      current liabilities
                      
                      
                      3,301,000
                      
                      
                      
                      7,214,000Noncurrent
      liabilities:Long-term
      debt, less current portion
                      
                      
                      27,444,000
                      
                      
                      
                      23,467,000Deferred
      income taxes
                      
                      
                      464,000
                      
                      
                      
                      597,000Deferred
      income
                      
                      
                      71,000
                      
                      
                      
                      89,000Total
      liabilities
                      
                      
                      31,280,000
                      
                      
                      
                      31,367,000Commitments
      and contingenciesStockholders'
      equity:Preferred
      stock, $1 par value, 1,000,000 shares authorized; none issued and
      outstanding in 2009 and 2008
                      
                      
                      -
                      
                      
                      
                      -Common
      stock, $1 par value, 15,000,000 shares authorized; issued
      5,966,164  and 10,013,544 shares in 2009 and 2008,
      respectively
                      
                      
                      5,966,000
                      
                      
                      
                      10,014,000Capital
      in excess of par value
                      
                      
                      5,340,000
                      
                      
                      
                      9,309,000Treasury
      stock, 2,088,130 and 2,087,296 shares at December 31, 2009 and December
      31, 2008, respectively, at cost
                      
                      
                      (9,867,000
                      )
                      
                      
                      (9,867,000
                      )Retained
      (deficit) earnings
                      
                      
                      (239,000
                      )
                      
                      
                      2,520,000Total
      stockholders’ equity
                      
                      
                      1,200,000
                      
                      
                      
                      11,976,000Total
      liabilities and stockholders' equity
                      
                      $
                      32,480,000
                      
                      
                      $
                      43,343,000





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




29





WILSHIRE ENTERPRISES, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


For
the years ended December 31, 2009, 2008 and 2007





2009
                
                
                2008
                
                
                2007Revenues
                
                $
                8,920,000
                
                
                $
                9,203,000
                
                
                $
                9,420,000Costs
      and expensesOperating
      expenses
                
                
                5,857,000
                
                
                
                5,892,000
                
                
                
                5,863,000Depreciation
      and amortization expense
                
                
                1,148,000
                
                
                
                1,188,000
                
                
                
                1,368,000General
      and administrative
                
                
                3,865,000
                
                
                
                3,816,000
                
                
                
                3,617,000Total
      costs and expenses
                
                
                10,870,000
                
                
                
                10,896,000
                
                
                
                10,848,000Loss
      from operations
                
                
                (1,950,000
                )
                
                
                (1,693,000
                )
                
                
                (1,428,000
                )Other
      income (loss)Dividend
      and interest income
                
                
                33,000
                
                
                
                415,000
                
                
                
                540,000Loss
      on sale of marketable securities
                
                
                -
                
                
                
                (188,000
                )Other
      income
                
                
                3,000
                
                
                
                -
                
                
                
                36,000Interest
      expense
                
                
                (1,708,000
                )
                
                
                (1,776,000
                )
                
                
                (1,837,000
                )Loss
      before benefit for income taxes
                
                
                (3,622,000
                )
                
                
                (3,242,000
                )
                
                
                (2,689,000
                )Income
      tax benefit
                
                
                (1,110,000
                )
                
                
                (1,343,000
                )
                
                
                (1,321,000
                )Loss
      from continuing operations
                
                
                (2,512,000
                )
                
                
                (1,899,000
                )
                
                
                (1,368,000
                )Discontinued
      operations - real estate, net of taxesLoss
      from operations
                
                
                (465,000
                )
                
                
                (592,000
                )
                
                
                (512,000
                )Gain
      from sales
                
                
                -
                
                
                
                806,000
                
                
                
                688,000Discontinued
      operations - oil & gas, net of taxesIncome
      from operations
                
                
                218,000
                
                
                
                324,000
                
                
                
                300,000Net
      loss
                
                $
                (2,759,000
                )
                
                $
                (1,361,000
                )
                
                $
                (892,000
                )Basic
      net loss per share:Loss
      from continuing operations
                
                $
                (0.37
                )
                
                $
                (0.24
                )
                
                $
                (0.17
                )Income
      (loss) from discontinued operations -Real
      estate - loss from operations
                
                
                (0.07
                )
                
                
                (0.07
                )
                
                
                (0.06
                )Real
      estate - gain on sales
                
                
                -
                
                
                
                0.10
                
                
                
                0.09Oil
      and gas – income from operations
                
                
                0.03
                
                
                
                0.04
                
                
                
                0.03Net
      loss applicable to common stockholders
                
                $
                (0.41
                )
                
                $
                (0.17
                )
                
                $
                (0.11
                )Diluted
      net loss per share:Loss
      from continuing operations
                
                $
                (0.37
                )
                
                $
                (0.24
                )
                
                $
                (0.17
                )Income
      (loss) from discontinued operations -Real
      estate - loss from operations
                
                
                (0.07
                )
                
                
                (0.07
                )
                
                
                (0.06
                )Real
      estate - gain on sales
                
                
                -
                
                
                
                0.10
                
                
                
                0.09Oil
      and gas – income from operations
                
                
                0.03
                
                
                
                0.04
                
                
                
                0.03Net
      loss applicable to common stockholders
                
                $
                (0.41
                )
                
                $
                (0.17
                )
                
                $
                (0.11
                )




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




30




WILSHIRE
ENTERPRISES, INC.


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY


December
31, 2009, 2008 and 2007





Non- controlling
                                                            Interest in
                                                            Joint
                                                            Venture
                                                          
                                                          
                                                          Preferred Stock
                                                          
                                                          
                                                          Common Stock
                                                          
                                                          
                                                          Capital in
                                                            Excess of
                                                          
                                                          
                                                          Retained
                                                          
                                                          
                                                          Treasury
                                                          
                                                          
                                                          Accumulated
                                                            Other
                                                            Comprehensive
                                                          
                                                          
                                                          Comprehensive
                                                          
                                                          
                                                          Total
                                                            Stockholders'Partner
                                                          
                                                          
                                                          Shares
                                                          
                                                          
                                                          Amount
                                                          
                                                          
                                                          Shares
                                                          
                                                          
                                                          Amount
                                                          
                                                          
                                                          Par Value
                                                          
                                                          
                                                          Earnings
                                                          
                                                          
                                                          Stock
                                                          
                                                          
                                                          Income (Loss)
                                                          
                                                          
                                                          Income (Loss)
                                                          
                                                          
                                                          EquityBalance,
      December 31, 2006
                                                          
                                                          $
                                                          2,000
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          
                                                          10,013,544
                                                          
                                                          
                                                          $
                                                          10,014,000
                                                          
                                                          
                                                          $
                                                          8,984,000
                                                          
                                                          
                                                          $
                                                          4,773,000
                                                          
                                                          
                                                          $
                                                          (9,918,000
                                                          )
                                                          
                                                          $
                                                          68,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          13,923,000Net
      loss
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (892,000
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          (892,000
                                                          )
                                                          
                                                          
                                                          (892,000
                                                          )Change
      in unrealized loss on marketable securities, net of income tax benefit of
      $77,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (144,000
                                                          )
                                                          
                                                          
                                                          (144,000
                                                          )
                                                          
                                                          
                                                          (144,000
                                                          )Comprehensive
      loss
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          (1,036,000
                                                          )Amortization
      of compensation associated with stock and stock option
    awards
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          218,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          218,000Exercise
      of stock options
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          33,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          33,000Disposition
      of interest in joint venture
                                                          
                                                          
                                                          (2,000
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (2,000
                                                          )Balance,
      December 31, 2007
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          10,013,544
                                                          
                                                          
                                                          
                                                          10,014,000
                                                          
                                                          
                                                          
                                                          9,202,000
                                                          
                                                          
                                                          
                                                          3,881,000
                                                          
                                                          
                                                          
                                                          (9,885,000
                                                          )
                                                          
                                                          
                                                          (76,000
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          13,136,000Net
      loss
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (1,361,000
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          (1,361,000
                                                          )
                                                          
                                                          
                                                          (1,361,000
                                                          )Change
      in unrealized loss on marketable securities, net of income tax benefit of
      $50,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          76,000
                                                          
                                                          
                                                          
                                                          76,000
                                                          
                                                          
                                                          
                                                          76,000Comprehensive
      loss
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          (1,285,000
                                                          )Grant
      of 6,133 shares of
                                                            restricted
      stock
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (18,000
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          18,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          -Amortization
      of compensation associated with stock and stock option
    awards
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          125,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          125,000Balance,
      December 31, 2008
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          10,013,544
                                                          
                                                          
                                                          
                                                          10,014,000
                                                          
                                                          
                                                          
                                                          9,309,000
                                                          
                                                          
                                                          
                                                          2,520,000
                                                          
                                                          
                                                          
                                                          (9,867,000
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          11,976,000Net
      loss
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (2,759,000
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          (2,759,000
                                                          )
                                                          
                                                          
                                                          (2,759,000
                                                          )Amortization
      of compensation associated with stock and stock option
    awards
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          78,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          78,000Purchase
      of treasury shares
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (4,047,380
                                                          )
                                                          
                                                          
                                                          (4,048,000
                                                          )
                                                          
                                                          
                                                          (4,047,000
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (8,095,000
                                                          )Balance,
      December 31, 2009
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          
                                                          5,966,164
                                                          
                                                          
                                                          $
                                                          5,966,000
                                                          
                                                          
                                                          $
                                                          5,340,000
                                                          
                                                          
                                                          $
                                                          (239,000
                                                          )
                                                          
                                                          $
                                                          (9,867,000
                                                          )
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          1,200,000




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




31





WILSHIRE
ENTERPRISES, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


For
the Years Ended December 31, 2009, 2008 and 2007





2009
                
                
                2008
                
                
                2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                
                $
                (2,759,000
                )
                
                $
                (1,361,000
                )
                
                $
                (892,000
                )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
                
                
                1,148,000
                
                
                
                1,188,000
                
                
                
                1,368,000Bad
      debt expense
                
                
                78,000Stock-based
      compensation expense
                
                
                78,000
                
                
                
                125,000
                
                
                
                218,000Amortization
      of mortgage finance costs
                
                
                63,000
                
                
                
                57,000
                
                
                
                56,000Deferred
      income tax (benefit)
                
                
                (133,000
                )
                
                
                28,000
                
                
                
                (31,000
                )Increase
      (decrease) in deferred income
                
                
                3,000
                
                
                
                (83,000
                )
                
                
                (9,000
                )Loss
      on sale of marketable securities
                
                
                -
                
                
                
                188,000
                
                
                
                -Gain
      on sales of real estate assets
                
                
                -
                
                
                
                (1,344,000
                )
                
                
                (1,147,000
                )Changes
      in operating assets and liabilities -(Increase)
      decrease  in accounts receivable
                
                
                (86,000
                )
                
                
                28,000
                
                
                
                34,000(Increase)
      decrease in income taxes receivable
                
                
                (313,000
                )
                
                
                877,000
                
                
                
                (1,083,000
                )(Increase)
      decrease  in prepaid expenses and other current
      assets
                
                
                (127,000
                )
                
                
                45,000
                
                
                
                178,000Increase
      (decrease) in accounts payable, accrued liabilities and taxes
      payable
                
                
                (128,000
                )
                
                
                294,000
                
                
                
                (64,000
                )Net
      cash provided by (used in) operating activities
                
                
                (2,176,000
                )
                
                
                42,000
                
                
                
                (1,372,000
                )CASH
      FLOWS FROM INVESTING ACTIVITIES:Net
      capital expenditures - real estate
                
                
                (558,000
                )
                
                
                (257,000
                )
                
                
                (882,000
                )Proceeds
      from sales and redemptions of marketable securities
                
                
                2,000,000
                
                
                
                7,257,000
                
                
                
                -Proceeds
      from sales of real estate
                
                
                -
                
                
                
                2,182,000
                
                
                
                1,729,000Increase
      in short-term marketable securities
                
                
                -
                
                
                
                -
                
                
                
                (3,554,000
                )(Increase)
      decrease in restricted cash
                
                
                (2,000
                )
                
                
                62,000
                
                
                
                (45,000
                )Net
      cash provided by (used in) investing activities
                
                
                1,440,000
                
                
                
                9,244,000
                
                
                
                (2,752,000
                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of debt
                
                
                4,582,000
                
                
                
                -
                
                
                
                -Principal
      payments of long-term debt
                
                
                (4,411,000
                )
                
                
                (1,106,000
                )
                
                
                (666,000
                )Proceeds
      from exercise of stock options
                
                
                -
                
                
                
                -
                
                
                
                33,000Repurchase
      of common stock
                
                
                (8,095,000
                )
                
                
                -
                
                
                
                -Non-controlling
      interest of joint venture partner
                
                
                -
                
                
                
                -
                
                
                
                (2,000
                )Financing
      costs
                
                
                (100,000
                )
                
                
                -
                
                
                
                -Net
      cash used in financing activities
                
                
                (8,024,000
                )
                
                
                (1,106,000
                )
                
                
                (635,000
                )Net
      increase (decrease) in cash and cash equivalents
                
                
                (8,760,000
                )
                
                
                8,180,000
                
                
                
                (4,759,000
                )CASH
      AND CASH EQUIVALENTS, beginning of year
                
                
                13,023,000
                
                
                
                4,843,000
                
                
                
                9,602,000CASH
      AND CASH EQUIVALENTS, end of year
                
                $
                4,263,000
                
                
                $
                13,023,000
                
                
                $
                4,843,000SUPPLEMENTAL DISCLOSURES TO THE STATEMENTS
      OF CASH FLOWS:Cash
      paid during the period for -Interest
                
                $
                1,644,000
                
                
                $
                1,732,000
                
                
                $
                1,824,000Income
      taxes, net
                
                $
                (934,000
                )
                
                $
                (2,135,000
                )
                
                $
                580,000




32





WILSHIRE ENTERPRISES, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




1.
            Organization and significant
      accounting policies:




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





The
Company had been engaged in oil and gas exploration and production in the United
States and Canada. In April 2004, the Company sold its oil and gas operations
and received net proceeds of $28,131,000, recording a gain of $567,000 (after
taxes) on the transaction. Since the sale was effective as of March 1, 2004, the
2009, 2008 and 2007 consolidated financial statements include the continuing
reconciliation process between the Company and its joint interest partners,
final assessments from various governmental bodies for tax audits and other
matters and changes in estimates for the remaining obligations related to the
wind-up of the oil and gas businesses.





Principles
of consolidation:





The
consolidated financial statements include the accounts of the Company and its
subsidiaries for the years ended December 31, 2009, 2008 and 2007. All
significant intercompany account balances and transactions have been eliminated
in consolidation.





Use
of estimates:





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





Cash
and cash equivalents and marketable debt securities:





Financial
instruments that potentially subject Wilshire to concentrations of credit risk
consist primarily of cash and cash equivalents and marketable investments.
Wilshire considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents. At December 31, 2009, Wilshire
maintained its cash in the United States in bank accounts (in the amount of
$3,497,000) and brokerage and securities accounts (in the amount of $963,000).
The balances maintained in bank accounts may, at times, exceed Federally insured
limits. At December 31, 2009, cash balances in banks that exceeded Federally
insured limits amounted to $2,310,000. Investments in accounts maintained at
brokerage houses consist of funds held in highly liquid money market
accounts.





Restricted
cash at December 31, 2009 and 2008 represents $197,000 and $195,000,
respectively, of residential tenant deposits for Company properties located in
New Jersey.





Marketable
equity securities:




The
Company formerly held investments in certain marketable equity securities and
short-term marketable debt securities, including auction rate securities (“ARS”)
with interest rate resets ranging from every seven days to every 45
days.  As of December 31, 2008, the Company held $2.0 million of
auction rate securities, classified as available-for-sale. During the first
quarter of 2009, the Company redeemed its remaining investment of $2.0 million
of ARS at par.





During
June 2008, the Company sold its investment in marketable equity securities which
consisted of common shares in one real estate company for gross proceeds of $1.3
million.  As a result of this sale, the Company recognized a loss from
the sale of securities of $553,000.





Assets
measured at fair value on a recurring basis:





On
January 1, 2008, the Company adopted Topic 820 – “Fair Value Measurements”
(“ASC Topic 820”) in the Accounting Standards Codification
(“ASC”).  ASC Topic 820 provides a single definition of fair value and
a common framework for measuring fair value as well as new disclosure
requirements for fair value measurements used in financial statements. Under ASC
Topic 820, fair value is determined based upon the exit price that would be
received by a company to sell an asset or paid a company to transfer a liability
in an orderly transaction between market participants, exclusive of any
transaction costs. Fair value measurements are determined by either the
principal market or the most advantageous market. The principal market is the
market with the greatest level of activity and volume for the asset or
liability. Absent a principal market to measure fair value, the Company has used
the most advantageous market, which is the market where the Company would
receive the highest selling price for the asset or pay the lowest price to
settle the liability, after considering transaction costs. However, when using
the most advantageous market, transaction costs are only considered to determine
which market is the most advantageous and these costs are then excluded when
applying a fair value measurement. Adoption of ASC Topic 820 did not have a
material effect on the Company’s consolidated financial position, results of
operations or cash flows.




33




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





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




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




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




Following
are the major categories of assets measured at fair value on a recurring basis
during the year ended December 31, 2009 and 2008 using quoted prices in active
markets for identical assets (Level 1); significant other observable inputs
(Level 2); and significant unobservable inputs (Level 3):




Year ended December 31, 2009Level 1
                        
                        
                        Level 2
                        
                        
                        Level 3
                        
                        
                        TotalCash
      and cash equivalents and restricted cash
                        
                        $
                        4,460,000
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        4,460,000$
                        4,460,000
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        4,460,000




Year ended December 31, 2008Level 1
                      
                      Level 2
                      
                      Level 3
                      
                      TotalCash
      and cash equivalents and restricted cash
                      
                      $
                      13,218,000
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      13,218,000Marketable
      debt securities
                      
                      
                      -
                      
                      
                      
                      2,000,000
                      
                      
                      
                      -
                      
                      
                      
                      2,000,000$
                      13,218,000
                      
                      
                      $
                      2,000,000
                      
                      
                      $
                      -
                      
                      
                      $
                      15,218,000




The
Company’s investment in cash equivalents consists of short-term (less than 90
days) investments in money market funds and is priced at fair value, thus
recorded in Level 1 above.




Deferred
loan costs:





Other
noncurrent assets include deferred loan costs of $233,000 at December 31, 2009
and $196,000 at December 31, 2008. Deferred loan costs are amortized on the
straight-line method by annual charges to operations over the terms of the
loans. Amortization of such costs is included in interest expense and amounted
to approximately $63,000 in 2009, $57,000 in 2008 and $56,000 in 2007. Deferred
loan costs relate to mortgage loans for continuing real estate
properties.





Real
estate and other properties:





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





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




34





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





December 31,2009
                            
                            
                            2008Real
      estate and other properties:Land
                            
                            $
                            3,378,000
                            
                            
                            $
                            3,378,000Building
                            
                            
                            27,326,000
                            
                            
                            
                            26,779,000Furniture,
      fixtures and equipment
                            
                            
                            8,728,000
                            
                            
                            
                            8,720,000Accumulated
      depreciation
                            
                            
                            (18,441,000
                            )
                            
                            
                            (17,293,000
                            )Net
      real estate and other properties
                            
                            
                            20,991,000
                            
                            
                            
                            21,584,000Real
      estate held for sale:Land
                            
                            
                            1,043,000
                            
                            
                            
                            1,043,000Building
                            
                            
                            3,405,000
                            
                            
                            
                            3,400,000Furniture,
      fixtures and equipment
                            
                            
                            192,000
                            
                            
                            
                            194,000Accumulated
      depreciation
                            
                            
                            (371,000
                            )
                            
                            
                            (371,000
                            )Net
      real estate held for sale
                            
                            
                            4,269,000
                            
                            
                            
                            4,266,000Net
      real estate and other properties
                            
                            $
                            25,260,000
                            
                            
                            $
                            25,850,000





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





Management
does not believe at December 31, 2009 and 2008 that the value of any of its
properties is impaired.





Revenue
recognition:





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





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




35





Income
taxes:





Deferred
taxes are provided for the net tax effect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. The primary temporary differences are
those related to tax over book depreciation, capital loss carryovers, state net
operating loss carryovers, accruals and deferred income.




Deferred
tax benefits are evaluated for realizability and a determination is made, taking
into account tax planning strategies, on whether the deferred tax benefit is
more likely than not to be realized. Based upon this evaluation, a valuation
allowance is established to reduce the deferred tax benefit to the level where
it is more likely than not to be ultimately realized. At December 31, 2009 and
2008, the Company had a valuation allowance for a portion of state tax loss
carry-forwards in the amount of $222,000 and $0, respectively.





The tax
years ended December 31, 2008, 2007 and 2006 remain open to examination by the
major taxing jurisdictions to which the Company is subject.




Foreign
operations:





The
assets and liabilities of the Company’s substantially liquidated Canadian
subsidiary have been translated at year-end exchange rates. The related revenues
and expenses have been translated at average annual exchange rates. In 2009,
2008 and 2007, foreign currency translation income totaling $188,000, $82,000
and $272,000, respectively, were included in the statements of
operations.





Loss
per share:





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




36





2009
                      
                      
                      2008
                      
                      
                      2007Numerator-Net
      loss – Basic and Diluted
                      
                      $
                      (2,759,000
                      )
                      
                      $
                      (1,361,000
                      )
                      
                      $
                      (892,000
                      )Denominator-Weighted
      average common shares outstanding – Basic and Diluted
                      
                      
                      6,799,216
                      
                      
                      
                      7,924,299
                      
                      
                      
                      7,922,303Basic
      and Diluted loss per share:
                      
                      $
                      (0.41
                      )
                      
                      $
                      (0.17
                      )
                      
                      $
                      (0.11
                      )





For the
years ended December 31, 2009, 2008 and 2007, 178,628, 110,880 and 33,037 of
potentially dilutive securities, respectively, have been excluded from the
calculation of net loss per share since the effects of such potentially dilutive
securities would be anti-dilutive because the Company incurred net
losses.





Stock-based
compensation:





During
2009, 2008 and 2007, the Company recorded charges of $69,000, $90,000 and
$107,000, respectively, in connection with the issuance of stock options to
employees and non-employee directors.





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





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





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





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




37




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




2009
                      
                      
                      2007Risk
      free interest rate
                      
                      
                      2.41% - 2.84
                      %
                      
                      
                      5.04
                      %Volatility
                      
                      
                      67.15% - 68.03
                      %
                      
                      
                      51.51
                      %Dividend
      yield
                      
                      
                      -
                      
                      
                      
                      -Expected
      option life
                      
                      10
      years
                      
                      
                      10
      years





As of
December 31, 2009 and 2008, the Company had total unrecognized compensation
expense related to options granted to non-employee directors of $76,000 and
$109,000, respectively, which will be recognized over a remaining average period
of 1.9 years. The expected future amortization expense for unrecognized
compensation expense for stock option grants to non-employee directors at
December 31, 2009 is as follows:




Year
      ending December 31, 2010
                
                $
                42,000Year
      ending December 31, 2011
                
                
                23,000Year
      ending December 31, 2012
                
                
                11,000$
                76,000




Accumulated
other comprehensive income (loss):





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




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




Advertising
expense:





The
Company advertises for tenants for its properties through various media,
including print and Internet. Advertising costs are expensed as incurred and
amounted to $113,000 in 2009, $141,000 in 2008 and $150,000 in
2007.





2.
            Discontinued
      operations:





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





During
2007, the Company sold its 1.8 acres of land in Lake Hopatcong, New Jersey and
six condominium units at Jefferson Gardens Condominiums in Sussex, New Jersey
for a gross sales price of $1,814,000 and an after-tax gain of
$688,000.





The
Company has designated certain of its properties as held for sale, which under
accounting principles generally accepted in the United States requires that the
Company report the results of operating these properties as discontinued
operations. At December 31, 2009, the Company’s residential apartment complex
known as Jefferson Gardens Condominiums (Sussex, New Jersey) and its office
buildings Amboy Towers (Perth Amboy, New Jersey) and several parcels of
undeveloped land in New Jersey have been classified as discontinued
operations.




During 2009, 2008 and 2007, the Company recorded income, net of
taxes from operating its oil and gas businesses of $218,000, $324,000 and
$300,000, respectively. The income from operating the oil and gas business in
2009, 2008 and 2007 reflects the foreign currency exchange gains which were
partially offset by professional fees associated with the wind down of the oil
and gas businesses, the continuing reconciliation process between the Company
and its partners for periods prior to the effective date of the sale and
adjustments to the accruals recorded in prior years for the liquidation of the
oil and gas business.




38




3.
            Long-term
      debt:





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





2009
                          
                          
                          2008Mortgage
      notes payable (a)
                          
                          $
                          3,430,000
                          
                          
                          $
                          3,540,000Mortgage
      notes payable (b)
                          
                          
                          20,037,000
                          
                          
                          
                          20,412,000Mortgage
      notes payable (c)
                          
                          
                          4,549,000
                          
                          
                          
                          3,893,000Totals
                          
                          
                          28,016,000
                          
                          
                          
                          27,845,000Less
      current portion
                          
                          
                          572,000
                          
                          
                          
                          4,378,000Long-term
      debt
                          
                          $
                          27,444,000
                          
                          
                          $
                          23,467,000




(a)
            Mortgage note payable to Capital
      One NA payable in monthly installments, bearing interest at a weighted
      average effective rate of 5.125%. This mortgage note is secured by a first
      mortgage interest in a commercial real estate property in Arizona. The
      note is being amortized over a 25-year period and matures in February
      2013, with a balloon principal payment due at maturity. At December 31,
      2009, the property securing this note had an approximate net book value of
      $2,251,000.





(b)
            Mortgage notes payable to four
      real estate mortgage conduits arranged by Wachovia Bank that are payable
      in monthly installments of principal and interest, bearing interest at a
      weighted average effective rate of 5.75%, a 30-year amortization and a ten
      year term, maturing in March 2013, with a balloon principal payment due at
      maturity. The residential properties securing the mortgage conduit loans
      are located in Arizona, New Jersey and Texas and at December 31, 2009, had
      an approximate net book value of
  $12,484,000.





(c)
            Mortgage note payable to Orix
      Real Estate Capital Markets was refinanced under Gemsa Loan Services, LP
      effective June 2009, and is payable in monthly installments of principal
      and interest, bearing interest at 5.55%.  The note is being
      amortized over a 30-year period and matures in June 2019, with a balloon
      principal payment due at maturity. The note is secured by residential
      property located in Texas that at December 31, 2009 had an approximate net
      book value of $4,973,000.




The aggregate maturities of the long-term debt in each of the
five years subsequent to December 31, 2009 and thereafter are as
follows:





Year
                      
                      Amount2010
                      
                      $
                      572,0002011
                      
                      
                      606,0002012
                      
                      
                      637,0002013
                      
                      
                      21,910,0002014
                      
                      
                      74,000Thereafter
                      
                      
                      4,217,000$
                      28,016,000




39





4.
            Commitments and
      contingencies:





Commercial
leases:





Wilshire
leases commercial space to tenants for periods of up to seven years. Most of the
leases contain clauses for reimbursement of real estate taxes, maintenance,
insurance and certain other operating expenses of the properties. Minimum rental
income to be received from non-cancelable operating leases in the five years
subsequent to December 31, 2009 is as follows:




Year
                      
                      Amount2010
                      
                      $
                      1,315,0002011
                      
                      
                      746,0002012
                      
                      
                      464,0002013
                      
                      
                      273,0002014
                      
                      
                      133,000$
                      2,931,000





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





Minimum
future rentals do not include contingent rentals, which may be received under
certain leases on the basis of the percentage of tenants’ reported sales volume
or other factors. Rental income that is contingent on future events is not
included in income until the contingency is resolved. Contingent rentals
included in income for each of the three years in the period ended December 31,
2009 were not material.





Residential
leases:





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





Headquarters
lease:





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





During
2007, the Company received a rent abatement in accordance with the lease for
five months. Rental expense for all of the Company’s offices amounted to
approximately $157,000 in 2009, $148,000 in 2008 and $93,000 in
2007.




40





Rights
plan:





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




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





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





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





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




The
Company's prior rights plan expired on August 31, 2008, pursuant to its
terms.





Issuer
Tender Offer:





On August
10, 2009, the Company announced the commencement of a tender offer to purchase
shares of its common stock. The Company offered to purchase up to 4,000,000
shares of its common stock at a price of $2.00 per share for a maximum aggregate
purchase price of $8,000,000. As a result of the tender offer, the Company
purchased and retired 4,047,380 shares of its common stock at a purchase price
of $2.00 per share, for an aggregate purchase price of
$8,094,760.  The 4,047,380 shares purchased pursuant to the tender
offer are comprised of the 4,000,000 shares the Company offered to purchase and
47,380 shares purchased pursuant to the Company’s right under applicable
securities laws to purchase up to an additional 2% of the Company’s outstanding
shares without extending the tender offer.





Shares
repurchase authorization:





On June
3, 2004, the Company announced that the Board of Directors had authorized the
purchase of up to 1,000,000 shares of its common stock on the open market, in
privately negotiated transactions or otherwise. This purchasing activity may
occur from time to time, in one or more transactions. Through December 31, 2009,
the Company had purchased 138,231 shares under this program at an approximate
cost of $1,017,000 or $7.35 per share.




41





5.
            Stock option
      plans:





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





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





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





Stock
option grants under the 2004 Director Plan amounted to 35,000 options in 2009
and 25,000 in 2007. No options were granted under the 2004 Incentive Plan in
2009, 2008 or 2007.





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




42





A summary
of option activity under the option plans as of December 31, 2009, 2008 and
2007, and changes during the year then ended is presented below:





Shares
                                          
                                          
                                          Weighted
                                            Average
                                            Exercise Price
                                          
                                          
                                          Weighted Average
                                            Remaining
                                            Contractual Term
                                          
                                          
                                          Aggregate
                                            Intrinsic ValueOptions
      Outstanding at January 1, 2009
                                          
                                          
                                          130,000
                                          
                                          
                                          $
                                          6.27
                                          
                                          
                                          
                                          6.5
                                          
                                          
                                          $
                                          -Options
      granted
                                          
                                          
                                          35,000
                                          
                                          
                                          
                                          1.44
                                          
                                          
                                          
                                          9.28
                                          
                                          
                                          
                                          -Options
      terminated and expired
                                          
                                          
                                          (22,500
                                          )
                                          
                                          
                                          6.26
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Options
      outstanding at December 31, 2009
                                          
                                          
                                          142,500
                                          
                                          
                                          $
                                          5.03
                                          
                                          
                                          
                                          6.3
                                          
                                          
                                          $
                                          -Options
      exercisable at December 31, 2009
                                          
                                          
                                          92,500
                                          
                                          
                                          $
                                          6.1
                                          
                                          
                                          
                                          5.1
                                          
                                          
                                          $
                                          -




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





Shares
                          
                          
                          Weighted
                            Average
                            Exercise Price
                          
                          
                          Weighted Average
      Remaining
                            Contractual Term
                          
                          
                          Aggregate
                            Intrinsic ValueOptions
      outstanding at January 1, 2007
                          
                          
                          120,000
                          
                          
                          $
                          6.15
                          
                          
                          
                          7.5
                          
                          
                          $
                          192,000Options
      granted
                          
                          
                          25,000
                          
                          
                          
                          5.60
                          
                          
                          
                          9.5
                          
                          
                          
                          -Options
      exercised
                          
                          
                          (10,000
                          )
                          
                          
                          3.32
                          
                          
                          
                          -
                          
                          
                          
                          21,000Options
      terminated and expired
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Options
      outstanding at December 31, 2007
                          
                          
                          135,000
                          
                          
                          $
                          6.26
                          
                          
                          
                          7.2
                          
                          
                          $
                          -Options
      exercisable at December 31, 2007
                          
                          
                          63,250
                          
                          
                          $
                          5.73
                          
                          
                          
                          6.1
                          
                          
                          $
                          -





Options
for 35,000 and 25,000 shares were granted during 2009 and 2007, respectively,
with a weighted average grant date fair value of $1.01 and $3.82 per
share.





Options
for 16,000, 33,250 and 37,000 shares had vested during 2009, 2008 and 2007,
respectively, with a weighted average remaining contractual life of 6.7, 7.7 and
6.4 years and a weighted average grant date fair value of $2.04, $1.93 and $1.77
per share.




Options
for 18,750 shares will vest during 2010 with a weighted average grant date fair
value of $1.76 per share.





A summary
of the status of the Company’s nonvested restricted shares as of December 31,
2009, and changes during the year ended December 31, 2009, is presented below:


2009
                    
                    
                    2008
                    
                    
                    2007Weighted
                    
                    
                    
                    
                    
                    Weighted
                    
                    
                    
                    
                    
                    WeightedAverage
                    
                    
                    
                    
                    
                    Average
                    
                    
                    
                    
                    
                    AverageGrant Date
                    
                    
                    
                    
                    
                    Grant Date
                    
                    
                    
                    
                    
                    Grant DateNonvested Shares
                    
                    Shares
                    
                    
                    Fair Value
                    
                    
                    Shares
                    
                    
                    Fair Value
                    
                    
                    Shares
                    
                    
                    Fair ValueNonvested
      shares at the beginning of year
                    
                    
                    7,633
                    
                    
                    $
                    3.90
                    
                    
                    
                    34,467
                    
                    
                    $
                    7.65
                    
                    
                    
                    59,100
                    
                    
                    $
                    7.48Shares
      Granted
                    
                    
                    125,000
                    
                    
                    
                    0.99
                    
                    
                    
                    6,133
                    
                    
                    
                    3.05
                    
                    
                    
                    -
                    
                    
                    
                    -Shares
      Vested
                    
                    
                    (2,711
                    )
                    
                    
                    3.50
                    
                    
                    
                    (26,834
                    )
                    
                    
                    5.24
                    
                    
                    
                    (24,633
                    )
                    
                    
                    5.59Shares
      Forfeited
                    
                    
                    (125,833
                    )
                    
                    
                    1.05
                    
                    
                    
                    (6,133
                    )
                    
                    
                    6.30
                    
                    
                    
                    -
                    
                    
                    
                    -Nonvested
      shares at end of year
                    
                    
                    4,089
                    
                    
                    $
                    3.05
                    
                    
                    
                    7,633
                    
                    
                    $
                    3.90
                    
                    
                    
                    34,467
                    
                    
                    $
                    7.65




The
Company recognized compensation expense associated with the issuance of
restricted shares of $9,000, $35,000 and $111,000 for the years ended December
31, 2009, 2008 and 2007, respectively.




43


6.
              Income
    taxes


The
Company did not have any foreign operations included in continuing operations
for the years ended December 31, 2009, 2008 and 2007.




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




2009
                  
                  
                  2008
                  
                  
                  2007Continuing
      Operations:Federal:Current
                  
                  $
                  (981,000
                  )
                  
                  $
                  (1,310,000
                  )
                  
                  $
                  (1,194,000
                  )Deferred
                  
                  
                  (140,000
                  )
                  
                  
                  100,000
                  
                  
                  
                  34,000(1,121,000
                  )
                  
                  
                  (1,210,000
                  )
                  
                  
                  (1,160,000
                  )State:Current
                  
                  
                  -
                  
                  
                  
                  (10,000
                  )
                  
                  
                  25,000Deferred
                  
                  
                  11,000
                  
                  
                  
                  (123,000
                  )
                  
                  
                  (186,000
                  )11,000
                  
                  
                  
                  (133,000
                  )
                  
                  
                  (161,000
                  )Total
      Continuing
                  
                  $
                  (1,110,000
                  )
                  
                  $
                  (1,343,000
                  )
                  
                  $
                  (1,321,000
                  )Discontinued
      Operations:Real
      Estate:FederalCurrent
                  
                  $
                  (285,000
                  )
                  
                  $
                  200,000
                  
                  
                  $
                  107,000Deferred
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0(285,000
                  )
                  
                  
                  200,000
                  
                  
                  
                  107,000State:Current
                  
                  
                  0
                  
                  
                  
                  44,000
                  
                  
                  
                  21,000Deferred
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  00
                  
                  
                  
                  44,000
                  
                  
                  
                  21,000Total
      Real Estate
                  
                  $
                  (285,000
                  )
                  
                  $
                  244,000
                  
                  
                  $
                  128,000Oil
      and Gas:Federal:Current
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0Deferred
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  00
                  
                  
                  
                  0
                  
                  
                  
                  0State:Current
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0Deferred
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  00
                  
                  
                  
                  0
                  
                  
                  
                  0Foreign:Current
                  
                  
                  0
                  
                  
                  
                  (85,000
                  )
                  
                  
                  0Deferred
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  00
                  
                  
                  
                  (85,000
                  )
                  
                  
                  0Total
      Oil & Gas
                  
                  $
                  0
                  
                  
                  $
                  (85,000
                  )
                  
                  $
                  0Totals
                  
                  $
                  (1,395,000
                  )
                  
                  $
                  (1,184,000
                  )
                  
                  $
                  (1,193,000
                  )




44




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





2009
                    
                    
                    2008
                    
                    
                    2007Amount
                    
                    
                    %
                    
                    
                    Amount
                    
                    
                    %
                    
                    
                    Amount
                    
                    
                    %Federal
      income tax benefit at statutory rate
                    
                    $
                    (1,268,000
                    )
                    
                    
                    35.0
                    %
                    
                    $
                    (1,135,000
                    )
                    
                    
                    35.0
                    %
                    
                    $
                    (941,000
                    )
                    
                    
                    35.0
                    %State
      tax expense (benefit) including Federal impact
                    
                    
                    55,000
                    
                    
                    
                    (1.5
                    )
                    
                    
                    (130,000
                    )
                    
                    
                    4.0
                    
                    
                    
                    (105,000
                    )
                    
                    
                    3.9Dividend
      exclusion
                    
                    
                    -
                    
                    
                    
                    0.0
                    
                    
                    
                    (22,000
                    )
                    
                    
                    0.7
                    
                    
                    
                    (41,000
                    )
                    
                    
                    1.5Tax-exempt
      interest
                    
                    
                    (1,000
                    )
                    
                    
                    0.0
                    
                    
                    
                    (67,000
                    )
                    
                    
                    2.1
                    
                    
                    
                    (88,000
                    )
                    
                    
                    3.3Other
                    
                    
                    104,000
                    
                    
                    
                    (2.9
                    )
                    
                    
                    11,000
                    
                    
                    
                    (0.3
                    )
                    
                    
                    (146,000
                    )
                    
                    
                    5.4Total
      tax benefit / Effective tax rate (benefit)
                    
                    $
                    (1,110,000
                    )
                    
                    
                    30.6
                    %
                    
                    $
                    (1,343,000
                    )
                    
                    
                    41.5
                    %
                    
                    $
                    (1,321,000
                    )
                    
                    
                    49.1
                    %





Significant
components of net deferred tax liabilities as of December 31, 2009 and 2008 were
as follows:




2009
                
                
                2008Deferred
      tax assets:State
      net loss carryover
                
                $
                443,000
                
                
                $
                265,000Accrued
      liabilities
                
                
                80,000
                
                
                
                -Deferred
      income
                
                
                73,000
                
                
                
                70,000Capital
      loss carryover
                
                
                59,000
                
                
                
                -655,000
                
                
                
                335,000Less
      valuation allowance
                
                
                222,000
                
                
                
                -433,000
                
                
                
                335,000Deferred
      tax liabilitiesTax
      over book depreciation, depletion and amortization -
                  Oil
      and gas and real estate properties - U.S.
                
                
                875,000
                
                
                
                923,000Restricted
      stock
                
                
                22,000
                
                
                
                5,000Unrealized
      loss on marketable securities
                
                
                -
                
                
                
                4,000897,000
                
                
                
                932,000Net
      deferred tax liabilities
                
                $
                464,000
                
                
                $
                597,000




Although
the Company anticipates that future profitability from operations and potential
tax planning strategies will enable it to utilize its state tax loss
carry-forwards, a valuation allowance has been provided for a portion of this
deferred tax asset in the amount of $222,000.  This amount has been
provided since the Company believes it is more likely than not that the deferred
tax asset will not be fully realized.   The Company’s position with
respect to the likelihood of recoverability of this deferred tax asset will be
evaluated each reporting period.





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





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





7.
            Segment
      information:




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


45





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




Continuing
real estate revenue, operating expenses, NOI and recurring capital improvements
for the reportable segments are summarized below and reconciled to consolidated
income (loss) from continuing operations for each of the three years in the
period ended December 31, 2009.  Asset information is not reported
since Wilshire does not use this measure to assess performance.





2009
                
                
                2008
                
                
                2007Real
      estate revenue:Residential
                
                $
                7,663,000
                
                
                $
                7,770,000
                
                
                $
                7,765,000Commercial
                
                
                1,257,000
                
                
                
                1,433,000
                
                
                
                1,655,000Totals
                
                $
                8,920,000
                
                
                $
                9,203,000
                
                
                $
                9,420,000Real
      estate operating expenses:Residential
                
                $
                5,143,000
                
                
                $
                5,192,000
                
                
                $
                5,174,000Commercial
                
                
                714,000
                
                
                
                700,000
                
                
                
                689,000Totals
                
                $
                5,857,000
                
                
                $
                5,892,000
                
                
                $
                5,863,000Net
      operating income (“NOI”):Residential
                
                $
                2,520,000
                
                
                $
                2,578,000
                
                
                $
                2,591,000Commercial
                
                
                543,000
                
                
                
                733,000
                
                
                
                966,000Totals
                
                $
                3,063,000
                
                
                $
                3,311,000
                
                
                $
                3,557,000Capital
      improvements:Residential
                
                $
                484,000
                
                
                $
                180,000
                
                
                $
                312,000Commercial
                
                
                69,000
                
                
                
                77,000
                
                
                
                132,000Totals
                
                $
                553,000
                
                
                $
                257,000
                
                
                $
                444,000Reconciliation
      of NOI to consolidated loss from continuing operations:Segment
      NOI
                
                $
                3,063,000
                
                
                $
                3,311,000
                
                
                $
                3,557,000Total
      other income, including net investment income
                
                
                36,000
                
                
                
                227,000
                
                
                
                576,000Depreciation
      and amortization expense
                
                
                (1,148,000
                )
                
                
                (1,188,000
                )
                
                
                (1,368,000
                )General
      and administrative expense
                
                
                (3,865,000
                )
                
                
                (3,816,000
                )
                
                
                (3,617,000
                )Interest
      expense
                
                
                (1,708,000
                )
                
                
                (1,776,000
                )
                
                
                (1,837,000
                )Income
      tax benefit
                
                
                1,110,000
                
                
                
                1,343,000
                
                
                
                1,321,000Loss
      from continuing operations
                
                $
                (2,512,000
                )
                
                $
                (1,899,000
                )
                
                $
                (1,368,000
                )




8.
            Preferred
      Stock





The
Company is authorized to issue up to 1,000,000 shares of preferred stock, par
value $1.00 per share. At December 31, 2009 and 2008, there were no shares of
preferred stock outstanding. The preferred stock may be issued in one or more
series, from time to time, with each such series to have such designation,
powers, preferences and relative participating, optional or other special
rights, and qualifications, limitations or restriction thereof, as shall be
stated and expressed in the resolution or resolutions providing for the issue of
such series adopted by the Board of Directors of the Company, subject to the
limitations prescribed by law and in accordance with the provisions set forth in
the Certificate of Incorporation of the Company.





9.
            Fair value of financial
      instruments




The
following disclosures of estimated fair value were determined by management,
using available market information and appropriate valuation methodologies.
Considerable judgment is necessary to interpret market data and develop
estimated fair values. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts the Company could realize on disposition
of the financial instruments. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.


46





Cash
equivalents, accounts receivable, and accounts payable reasonably approximate
their fair values due to the short maturities of these items.





Mortgage
notes payable have an estimated fair value based on discounted cash flow models
of approximately $28.3 million at December 31, 2009, which is greater than the
carrying value by $300,000. At December 31, 2008, mortgage notes payable had an
estimated fair value based on discounted cash flow models of approximately $29.3
million at December 31, 2008, which is greater than the carrying value by $1.4
million.





Disclosure
about fair value of financial instruments is based on pertinent information
available to management as of December 31, 2009.




10.
            Other
    matters




Legal
Matters





On or
about July 31, 2009, James Robert Soprito, individually and as
successor-in-interest to Josephine Soprito, as Decedent; Cindy Maguglin and
Donna Tryon (collectively, "Plaintiffs"), filed a Complaint for Damages in the
Superior Court of the State of California for the County of San Francisco
against numerous defendants, including the Company.  Plaintiffs are seeking
damages based on claims of, among other things, wrongful death, negligence,
strict liability, enterprise liability, and premises liability.  These
claims are based on the allegation that the decedent and others suffered
injuries as a result of exposure to asbestos materials at certain unspecified
times in the past.  The Company presented materials in support of a request
that the Company not be included as a party.  On or about March 22, 2010,
Plaintiff's counsel filed a notice of dismissal, by which Plaintiffs dismissed
their claims against the Company without prejudice and without
costs.


47




11.
            Quarterly data
      (Unaudited)




The
following represents the Company’s consolidated results of operations for each
quarter for the years ended December 31, 2009 and 2008. The earnings per share
amounts may not total to the earnings per share for the full year.





Quarter EndedMarch 31
                    
                    
                    June 30
                    
                    
                    September 30
                    
                    
                    December 312009:Revenues
                    
                    $
                    2,279,000
                    
                    
                    $
                    2,261,000
                    
                    
                    $
                    2,234,000
                    
                    
                    $
                    2,146,000Costs
      and expenses:Operating
      expenses
                    
                    
                    1,334,000
                    
                    
                    
                    1,449,000
                    
                    
                    
                    1,520,000
                    
                    
                    
                    1,554,000Depreciation
      and amortization expense
                    
                    
                    321,000
                    
                    
                    
                    265,000
                    
                    
                    
                    272,000
                    
                    
                    
                    290,000General
      and administrative
                    
                    
                    1,297,000
                    
                    
                    
                    868,000
                    
                    
                    
                    826,000
                    
                    
                    
                    874,000Total
      costs and expenses
                    
                    
                    2,952,000
                    
                    
                    
                    2,582,000
                    
                    
                    
                    2,618,000
                    
                    
                    
                    2,718,000Loss
      from operations
                    
                    
                    (673,000
                    )
                    
                    
                    (321,000
                    )
                    
                    
                    (384,000
                    )
                    
                    
                    (572,000
                    )Dividend
      and interest income
                    
                    
                    16,000
                    
                    
                    
                    9,000
                    
                    
                    
                    5,000
                    
                    
                    
                    3,000Other
      income
                    
                    
                    2,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,000Interest
      expense
                    
                    
                    (429,000
                    )
                    
                    
                    (437,000
                    )
                    
                    
                    (422,000
                    )
                    
                    
                    (420,000
                    )Loss
      before benefit from income taxes
                    
                    
                    (1,084,000
                    )
                    
                    
                    (749,000
                    )
                    
                    
                    (801,000
                    )
                    
                    
                    (988,000
                    ).Income
      tax benefit
                    
                    
                    (415,000
                    )
                    
                    
                    (264,000
                    )
                    
                    
                    (281,000
                    )
                    
                    
                    (150,000
                    )Loss
      from continuing operations
                    
                    
                    (669,000
                    )
                    
                    
                    (485,000
                    )
                    
                    
                    (520,000
                    )
                    
                    
                    (838,000
                    )Discontinued
      operations - real estate, net of taxes
                    
                    
                    (148,000
                    )
                    
                    
                    (105,000
                    )
                    
                    
                    (56,000
                    )
                    
                    
                    (156,000
                    )Discontinued
      operations - oil & gas, net of taxes
                    
                    
                    86,000
                    
                    
                    
                    (73,000
                    )
                    
                    
                    104,000
                    
                    
                    
                    101,000Net
      loss
                    
                    $
                    (731,000
                    )
                    
                    $
                    (663,000
                    )
                    
                    $
                    (472,000
                    )
                    
                    $
                    (893,000
                    )Basic
      earnings (loss) per share:Continuing
      operations
                    
                    $
                    (0.08
                    )
                    
                    $
                    (0.06
                    )
                    
                    $
                    (0.07
                    )
                    
                    $
                    (0.21
                    )Discontinued
      operations
                    
                    
                    (0.01
                    )
                    
                    
                    (0.02
                    )
                    
                    
                    0.00
                    
                    
                    
                    (
      0.01
                    )Net
      loss
                    
                    $
                    (0.09
                    )
                    
                    $
                    (0.08
                    )
                    
                    $
                    (0.07
                    )
                    
                    $
                    (0.22
                    )Diluted
      earnings (loss) per share:Continuing
      operations
                    
                    $
                    (0.08
                    )
                    
                    $
                    (0.06
                    )
                    
                    $
                    (0.07
                    )
                    
                    $
                    (0.21
                    )Discontinued
      operations
                    
                    
                    (0.01
                    )
                    
                    
                    (0.02
                    )
                    
                    
                    0.00
                    
                    
                    
                    (
      0.01
                    )Net
      loss
                    
                    $
                    (0.09
                    )
                    
                    $
                    (0.08
                    )
                    
                    $
                    (0.07
                    )
                    
                    $
                    (0.22
                    )





48





Quarter EndedMarch 31
                  
                  
                  June 30
                  
                  
                  September 30
                  
                  
                  December 312008:Revenues
                  
                  $
                  2,251,000
                  
                  
                  $
                  2,323,000
                  
                  
                  $
                  2,334,000
                  
                  
                  $
                  2,295,000Costs
      and Expenses:Operating
      expenses
                  
                  
                  1,432,000
                  
                  
                  
                  1,472,000
                  
                  
                  
                  1,469,000
                  
                  
                  
                  1,519,000Depreciation
      and amortization expense
                  
                  
                  326,000
                  
                  
                  
                  292,000
                  
                  
                  
                  284,000
                  
                  
                  
                  286,000General
      and administrative
                  
                  
                  743,000
                  
                  
                  
                  1,054,000
                  
                  
                  
                  1,051,000
                  
                  
                  
                  968,000Total
      costs and expenses
                  
                  
                  2,501,000
                  
                  
                  
                  2,818,000
                  
                  
                  
                  2,804,000
                  
                  
                  
                  2,773,000Loss
      from Operations
                  
                  
                  (250,000
                  )
                  
                  
                  (495,000
                  )
                  
                  
                  (470,000
                  )
                  
                  
                  (478,000
                  )Dividend
      and interest income
                  
                  
                  138,000
                  
                  
                  
                  134,000
                  
                  
                  
                  80,000
                  
                  
                  
                  63,000Gain
      (loss) on sale of marketable securities
                  
                  
                  
                  
                  
                  
                  (553,000
                  )
                  
                  
                  
                  
                  
                  
                  365,000Other
      income (loss)
                  
                  
                  1,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,000
                  )Interest
      Expense
                  
                  
                  (465,000
                  )
                  
                  
                  (428,000
                  )
                  
                  
                  (443,000
                  )
                  
                  
                  (440,000
                  )Loss
      before benefit from income taxes
                  
                  
                  (576,000
                  )
                  
                  
                  (1,342,000
                  )
                  
                  
                  (833,000
                  )
                  
                  
                  (491,000
                  )Income
      Tax Benefit
                  
                  
                  (263,000
                  )
                  
                  
                  (476,000
                  )
                  
                  
                  (380,000
                  )
                  
                  
                  (224,000
                  )Loss
      from Continuing Operations
                  
                  
                  (313,000
                  )
                  
                  
                  (866,000
                  )
                  
                  
                  (453,000
                  )
                  
                  
                  (267,000
                  )Discontinued
      Operations – Real Estate Gain from Sales
                  
                  
                  61,000
                  
                  
                  
                  686,000
                  
                  
                  
                  -
                  
                  
                  
                  59,000Discontinued
      Operations - Real Estate, Net of Taxes
                  
                  
                  (92,000
                  )
                  
                  
                  (178,000
                  )
                  
                  
                  (120,000
                  )
                  
                  
                  (202,000
                  )Discontinued
      Operations - Oil & Gas, Net of Taxes
                  
                  
                  40,000
                  
                  
                  
                  (130,000
                  )
                  
                  
                  277,000
                  
                  
                  
                  137,000Net
      loss
                  
                  $
                  (304,000
                  )
                  
                  $
                  (488,000
                  )
                  
                  $
                  (296,000
                  )
                  
                  $
                  (273,000
                  )Basic
      earnings (loss) per share:Continuing
      operations
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.11
                  )
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.03
                  )Discontinued
      operations
                  
                  
                  0.00
                  
                  
                  
                  0.05
                  
                  
                  
                  0.02
                  
                  
                  
                  (0.00
                  )Net
      loss
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.03
                  )Diluted
      earnings (loss) per share:Continuing
      operations
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.11
                  )
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.03
                  )Discontinued
      operations
                  
                  
                  0.00
                  
                  
                  
                  0.05
                  
                  
                  
                  0.02
                  
                  
                  
                  (0.00
                  )Net
      loss
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.04
                  )
                  
                  $
                  (0.03
                  )




12.
            Subsequent
      Events





The
Company’s Board of Directors adopted an amendment to the Rights Plan, which
has the effect of terminating the Rights Plan as of March 11,
2010.  Accordingly, the Rights Plan has no further force or
effect.




49





Item
15




Real
Estate and Accumulated Depreciation


December
31, 2009


($
in 000s)





Column A
                            
                            Column B
                            
                            
                            Column C Initial Cost
                            
                            
                            Column D Costs
                              Capitalized
                              Subsequent To
                              Acquisition
                            
                            
                            Column E Gross Amount At
                              Which Carried as of December
                              31, 2009
                            
                            
                            Column F
                            
                            Column H
                            
                            Column IDescription
                            
                            Encumbrances
                            
                            
                            Land
                            
                            
                            Building &
                              Improvements
                            
                            
                            Land
                            
                            
                            Building &
                              Improvements
                            
                            
                            Land
                            
                            
                            Building &
                              Improvements
                            
                            
                            Total
                            
                            
                            Accumulated
                              Depreciation
                            
                            Date
                              Acquired
                            
                            Life on Which
                              Depreciation is
                              ComputedArizona340 unit garden
      apartment complex
                            
                            $
                            9,657
                            
                            
                            $
                            800
                            
                            
                            $
                            5,600
                            
                            
                            $
                            -0-
                            
                            
                            $
                            3,713
                            
                            
                            $
                            800
                            
                            
                            $
                            9,313
                            
                            
                            $
                            10,113
                            
                            
                            $
                            5,333
                            
                            1992
                            
                            Various51,000
      square foot office building
                            
                            $
                            3,430
                            
                            
                            $
                            313
                            
                            
                            $
                            2,384
                            
                            
                            $
                            -0-
                            
                            
                            $
                            2,289
                            
                            
                            $
                            313
                            
                            
                            $
                            4,673
                            
                            
                            $
                            4,986
                            
                            
                            $
                            2,735
                            
                            1992
                            
                            VariousTexas228
      unit apartment complex
                            
                            $
                            3,971
                            
                            
                            $
                            620
                            
                            
                            $
                            3,015
                            
                            
                            $
                            -0-
                            
                            
                            $
                            3,240
                            
                            
                            $
                            620
                            
                            
                            $
                            6,255
                            
                            
                            $
                            6,875
                            
                            
                            $
                            3,452
                            
                            1992
                            
                            Various180
      unit apartment complex
                            
                            $
                            4,550
                            
                            
                            $
                            805
                            
                            
                            $
                            4,450
                            
                            
                            $
                            -0-
                            
                            
                            $
                            1,260
                            
                            
                            $
                            805
                            
                            
                            $
                            5,710
                            
                            
                            $
                            6,515
                            
                            
                            $
                            1,542
                            
                            2001
                            
                            VariousNew
      Jersey132
      unit apartment complex
                            
                            $
                            4,513
                            
                            
                            $
                            480
                            
                            
                            $
                            3,541
                            
                            
                            $
                            -0-
                            
                            
                            $
                            838
                            
                            
                            $
                            480
                            
                            
                            $
                            4,379
                            
                            
                            $
                            4,859
                            
                            
                            $
                            1,999
                            
                            1997
                            
                            VariousOther
      residential
                            
                            $
                            1,895
                            
                            
                            $
                            312
                            
                            
                            $
                            2,397
                            
                            
                            $
                            -0-
                            
                            
                            $
                            1,119
                            
                            
                            $
                            312
                            
                            
                            $
                            3,516
                            
                            
                            $
                            3,828
                            
                            
                            $
                            1,782
                            
                            Various
                            
                            VariousOther
      office/retail
                            
                            $
                            -0-
                            
                            
                            $
                            435
                            
                            
                            $
                            1,948
                            
                            
                            $
                            -0-
                            
                            
                            $
                            3,649
                            
                            
                            $
                            435
                            
                            
                            $
                            5,597
                            
                            
                            $
                            6,032
                            
                            
                            $
                            1,836
                            
                            Various
                            
                            VariousLand
      held for development
                            
                            $
                            -0-
                            
                            
                            $
                            655
                            
                            
                            $
                            -0-
                            
                            
                            $
                            -0-
                            
                            
                            $
                            -0-
                            
                            
                            $
                            655
                            
                            
                            $
                            -0-
                            
                            
                            $
                            655
                            
                            
                            $
                            -0-
                            
                            Various
                            
                            Various$
                            28,016
                            
                            
                            $
                            4,420
                            
                            
                            $
                            23,335
                            
                            
                            $
                            -0-
                            
                            
                            $
                            16,108
                            
                            
                            $
                            4,420
                            
                            
                            $
                            39,443
                            
                            
                            $
                            43,863
                            
                            
                            $
                            18,679




The
changes in real estate for the three years ended December 31, 2009, are as
follows ($ in 000s) :





2009
                  
                  
                  2008
                  
                  
                  2007Balance
      at beginning of year
                  
                  $
                  43,514
                  
                  
                  $
                  44,579
                  
                  
                  $
                  44,353Property
      acquisitions
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Improvements
                  
                  
                  558
                  
                  
                  
                  257
                  
                  
                  
                  882Retirements/disposals
                  
                  
                  -
                  
                  
                  
                  (1,322
                  )
                  
                  
                  (656
                  )Balance
      at end of year
                  
                  $
                  44,072
                  
                  
                  $
                  43,514
                  
                  
                  $
                  44,579





The
aggregate cost of land, buildings and improvements, before depreciation, for
Federal income tax purposes at December 31, 2009 was $43,251.





The
changes in accumulated depreciation, for the three years ended December 31,
2009, are as follows:




2009
                
                
                2008
                
                
                2007Balance
      at beginning of year
                
                $
                17,664
                
                
                $
                16,960
                
                
                $
                15,666Depreciation
      for year
                
                
                1,148
                
                
                
                1,188
                
                
                
                1,373Retirements/disposals
                
                
                0
                
                
                
                (484
                )
                
                
                (79
                )Balance
      at end of year
                
                $
                18,812
                
                
                $
                17,664
                
                
                $
                16,960




50




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





None.





Item 9A.
            Controls and
      Procedures




Disclosure
controls and procedures (as defined in Exchange Act Rule 13a-15(e)) are designed
only to provide reasonable assurance that they will meet their objectives that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosures. As of the end of the period covered by this report, we carried
out an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e)) pursuant to Exchange Act Rule
13a-15. Based upon that evaluation and subject to the foregoing, our Chief
Executive Officer and Chief Financial Officer have concluded that our disclosure
controls and procedures were effective as of December 31,
2009.




Changes
in internal control over financial reporting.




Management
has determined that, as of December 31, 2009, there were no changes in our
internal control over financial reporting that occurred during the quarter then
ended that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.




Management’s
Report on Internal Control Over Financial Reporting





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934. The Company’s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with accounting principles generally
accepted in the United States of America.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management
assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2009. Management based this assessment on
criteria for effective internal control over financial reporting described in
“Internal Control-Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Management’s assessment included an
evaluation of the design of the Company’s internal control over financial
reporting and testing of the operational effectiveness of its internal control
over financial reporting. Management reviewed the results of its assessment with
the Audit Committee.




Based on
this assessment, management determined that, as of December 31, 2009, the
Company’s internal control over financial reporting was effective to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of
America.





This
Annual Report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to
provide only management's report in this Annual Report.


51




Item 9B.
            Other
      Information





The
following matters were submitted to a vote of the Company’s stockholders at its
Annual Meeting held on December 29, 2009, and the votes cast were as set forth
below:





(i)
            The
      election of two directors of the Company to serve as directors of the
      Company until the expiration of their terms. The votes cast were as
      follow:





For
                  
                  WithheldMilton
      Donnenberg
                  
                  
                  2,551,283
                  
                  45,866S.
      Wilzig Izak
                  
                  
                  2,550,856
                  
                  46,293





Mr.
Donnenberg and Ms. Izak were re-elected as directors at the annual meeting. The
names of each other director whose term of office as a director continued after
the annual meeting are as follows: Miles Berger, Eric J. Schmertz, Esq., James
Orphanides, and Martin Willschick.  Mr. Orphanides resigned frm the
Board of Directors effective January 15, 2010.





(ii)
            Ratification
      of the appointment of J.H. Cohn LLP as the Company’s auditors for 2009.
      The votes cast were as follows:





For
                        
                        
                        Against
                        
                        
                        Abstain2,571,686
                        
                        
                        
                        22,155
                        
                        
                        
                        3,308




52




PART
III





Certain
information required by Part III is incorporated by reference to Wilshire’s
definitive proxy statement for its 2010 Annual Meeting of Stockholders (the
“Proxy Statement”).  Only those sections of the Proxy Statement that
specifically address the items set forth in this Annual Report are incorporated
by reference from the Proxy Statement into this Annual Report.




Item 10.
            Directors, Executive Officers and
      Corporate Governance





The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.




The
information concerning Wilshire’s executive officers required by this item is
included in Item 3A of this Annual Report on Form 10-K.





The
Company has adopted a Code of Conduct for its officers and employees. A copy of
the Code of Conduct is available on the Company’s website (http://www.wilshireenterprisesinc.com)
under the caption “Corporate Policies.”




Item 11.
            Executive
      Compensation





The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.




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





The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.





Equity
Compensation Plan Information





The
following table provides information as of December 31, 2009 with respect to
shares of the Company’s common stock that may be issued under the Company’s
existing equity compensation plans, which consist of the (i) 1995 Stock Option
and Incentive Plan, (ii) 1995 Non-Employee Director Stock Option Plan, (iii)
2004 Stock Option and Incentive Plan, and (iv) 2004 Non-Employee Director Stock
Option Plan, each of which has been approved by the Company’s
shareholders.





(a)
                                Number of
                                Securities To Be
                                Issued Upon
                                Exercise Of
                                Outstanding
                                Options, Warrants
                                and Rights
                              
                              (b)
                                Weighted
                                Average Exercise
                                Price Of
                                Outstanding
                                Options, Warrants
                                and Rights
                              
                              (c)
                                Number of
                                Securities
                                Remaining
                                Available
                                For Future
                                Issuance
                                Under Equity
                                Compensation
                                Plans
                                (Excluding
                                Securities
                                Reflected
                                In Column (a))Equity
      compensation plans approved by security holders
                              
                              142,500
                              
                              $
                              5.03
                              
                              567,924Equity
      compensation plans not approved by security holders
                              
                              -
                              
                              
                              -
                              
                              -Total
                              
                              142,500
                              
                              $
                              5.03
                              
                              567,924




Item 13.
            Certain Relationships and Related
      Transactions, and Director
Independence





The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.




Item 14.
            Principal Accountant Fees and
      Services





The
Company responds to this Item by incorporating by reference the material
responsive to this Item in the Company's Proxy Statement.


53


PART
IV




Item 15.
            Exhibits and Financial Statement
      Schedules





(a)
            Financial
      Statements





(i)
              Report
      of Independent Registered Public Accounting Firm(ii)
              Consolidated
      Balance Sheets as of December 31, 2009 and 2008(iii)
              Consolidated
      Statements of Operations for the years ended December 31, 2009, 2008 and
      2007(iv)
              Consolidated
      Statements of Changes in Stockholders’ Equity for the years ended December
      31, 2009, 2008 and 2007(v)
              Consolidated
      Statements of Cash Flows for the years ended December 31, 2009, 2008 and
      2007(vi)
              Notes
      to Consolidated Financial Statements




Financial
Statement Schedules:





(i)
            Real Estate and Accumulated
      Depreciation December 31,
2009




(b)
            Exhibits





Exhibit
      #
                    
                    Description3.1
                    
                    Restated
      Certificate of Incorporation of Wilshire Enterprises, Inc., as
      amended.  (Incorporated by referenced to Exhibit 3.1 of the
      Company’s Current Report on Form 8-K filed with the SEC on December 8,
      2008.)3.2
                    
                    By-laws,
      as amended and restated through August 7, 2009.  (Incorporated by
      reference to Exhibit 3.1 of the Company's Current Report on Form 8-K filed
      with the SEC on August 7, 2009.)4.1
                    
                    Qualified
      Offer Plan Rights Agreement, dated as of December 4, 2008, between
      Wilshire Enterprises, Inc. and Continental Stock Transfer & Trust
      Company, as Rights Agent.  (Incorporated by referenced to
      Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC
      on December 4, 2008.)10.2
                    
                    Wilshire
      Enterprises, Inc. 1995 Stock Option and Incentive Plan. (Incorporated by
      reference to Exhibit A of the Company’s Definitive Proxy Statement for its
      1995 Annual Meeting of Stockholders.)10.3
                    
                    Wilshire
      Enterprises, Inc. 1995 Non-Employee Director Stock Option Plan.
      (Incorporated by reference to Exhibit B of the Company’s Definitive Proxy
      Statement for its 1995 Annual Meeting of Stockholders.)10.4
                    
                    Wilshire
      Enterprises, Inc. 2004 Stock Option and Incentive Plan. (Incorporated by
      reference to Appendix C of the Company’s Definitive Proxy Statement for
      its 2004 Annual Meeting of Stockholders.)10.5
                    
                    Wilshire
      Enterprises, Inc. 2004 Non-Employee Director Stock Option Plan.
      (Incorporated by reference to Appendix D of the Company’s Definitive Proxy
      Statement for its 2004 Annual Meeting of Stockholders.)10.6
                    
                    Promissory
      Note given by Alpine Village Apartments, L.L.C., a subsidiary of Wilshire
      Enterprises, Inc., to Merrill Lynch Mortgage Lending, Inc. dated February
      28, 2003.  (Incorporated by reference to Exhibit 10.74 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2002.)10.7
                    
                    Environmental
      Indemnity Agreement between Alpine Village Apartments, L.L.C., a
      subsidiary of Wilshire Enterprises, Inc., and Merrill Lynch Mortgage
      Lending, Inc. dated February 28, 2003. (Incorporated by reference to
      Exhibit 10.75 of the Company’s Annual Report on Form 10-K for the year
      ended December 31, 2002.)10.8
                    
                    Indemnity
      and Guaranty Agreement between Alpine Village Apartments, L.L.C., a
      subsidiary of Wilshire Enterprises, Inc., and Merrill Lynch Mortgage
      Lending, Inc. dated February 28, 2003. (Incorporated by
      reference to Exhibit 10.76 of the Company’s Annual Report on Form 10-K for
      the year ended December 31, 2002.)10.9
                    
                    Multifamily
      Mortgage, Security Agreement, Assignment of Rents and Fixture Filing
      between Alpine Village Apartments, L.L.C., a subsidiary of Wilshire
      Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated February
      28, 2003. (Incorporated by reference to Exhibit 10.77 of the Company’s
      Annual Report on Form 10-K for the year ended
      December 31, 2002.)10.10
                    
                    Promissory
      Note given by Sunrise Ridge, L.L.C., a subsidiary of Wilshire Enterprises,
      Inc., to Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.
      (Incorporated by reference to Exhibit 10.78 of the Company’s Annual Report
      on Form 10-K for the year ended December 31,
2002.)10.11
                    
                    Environmental
      Indemnity Agreement between Sunrise Ridge, L.L.C., a subsidiary of
      Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated
      February 27, 2003. (Incorporated by reference to Exhibit 10.79 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2002.)




54





10.12
                
                Indemnity
      and Guaranty Agreement between Sunrise Ridge, L.L.C., a subsidiary of
      Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated
      February 27, 2003. (Incorporated by reference to Exhibit 10.80 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2002.)10.13
                
                Multifamily
      Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing
      between Sunrise Ridge, L.L.C., a subsidiary of Wilshire Enterprises, Inc.,
      and Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.
      (Incorporated by reference to Exhibit 10.81 of the Company’s Annual Report
      on Form 10-K for the year ended December 31, 2002.)10.14
                
                Promissory
      Note given by Van Buren, L.L.C., a subsidiary of Wilshire Enterprises,
      Inc., to Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.
      (Incorporated by reference to Exhibit 10.82 of the Company’s Annual Report
      on Form 10-K for the year ended December 31,
2002.)10.15
                
                Environmental
      Indemnity Agreement between Van Buren, L.L.C., a subsidiary of Wilshire
      Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated February
      27, 2003. (Incorporated by reference to Exhibit 10.83 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.16
                
                Indemnity
      and Guaranty Agreement between Van Buren, L.L.C., a subsidiary of Wilshire
      Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated February
      27, 2003. (Incorporated by reference to Exhibit 10.84 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.17
                
                Multifamily
      Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing
      between Van Buren, L.L.C., a subsidiary of Wilshire Enterprises, Inc., and
      Merrill Lynch Mortgage Lending, Inc. dated February 27, 2003.
      (Incorporated by reference to Exhibit 10.85 of the Company’s Annual Report
      on Form 10-K for the year ended December 31, 2002.)10.18
                
                Promissory
      Note given by Wellington Apartments, L.L.C., a subsidiary of Wilshire
      Enterprises, Inc., to Merrill Lynch Mortgage Lending, Inc. dated February
      27, 2003. (Incorporated by reference to Exhibit 10.86 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.19
                
                Environmental
      Indemnity Agreement between Wellington Apartments, L.L.C., a subsidiary of
      Wilshire Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated
      February 27, 2003. (Incorporated by reference to Exhibit 10.87 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2002.)10.20
                
                Indemnity
      and Guaranty Agreement between Wellington Apartments, L.L.C.,
      a  subsidiary of Wilshire Enterprises, Inc., and Merrill Lynch
      Mortgage Lending, Inc. dated February 27, 2003. (Incorporated by reference
      to Exhibit 10.88 of the Company’s Annual Report on Form 10-K for the year
      ended December 31, 2002.)10.21
                
                Multifamily
      Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing
      between Wellington Apartments, L.L.C., a subsidiary of Wilshire
      Enterprises, Inc., and Merrill Lynch Mortgage Lending, Inc. dated February
      27, 2003. (Incorporated by reference to Exhibit 10.89 of the Company’s
      Annual Report on Form 10-K for the year ended December 31,
      2002.)10.22
                
                Letter
      Agreement, dated as of September 4, 2007, between Wilshire Enterprises,
      Inc. and Frank Elenio. (Incorporated by reference to Exhibit 10.1 of the
      Company’s Current Report on Form 8-K filed with the SEC on September 5,
      2007.)10.23
                
                Severance
      Letter Agreement between the Company and Sherry Wilzig Izak, dated as of
      March 29, 2004. (Incorporated by reference to Exhibit 10.94 of the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2003.)10.24
                
                Amendment
      to Severance Letter Agreement between the Company and Sherry Wilzig Izak,
      dated December 31, 2008, in order to comply with Section 409A of the
      Internal Revenue Code of 1986, as amended. (Incorporated by reference to
      Exhibit 10.26 of the Company’s Annual Report on Form 10-K for the year
      ended December 31, 2008.)10.25
                
                Form
      of Indemnification Agreement of Directors and Chief Financial Officer
      (Incorporated by reference to Exhibit 10.1 of the Company's Current Report
      on Form 8-K filed with the SEC on January 18, 2007).10.26
                
                Settlement
      Agreement, dated as of April 2, 2009, among Wilshire Enterprises, Inc.,
      Bulldog Investors, Full Value Partners, L.P. and certain of their
      affiliates. (Incorporated by reference to Exhibit 10.1 of the Company’s
      Current Report on Form 8-K filed with the SEC on April 3,
      2009.)10.27
                
                Amendment
      No. 1 to Qualified Offer Plan Rights Agreement, dated as of March 11,
      2010, between Wilshire Enterprises, Inc.and
      Continental Stock Transfer & Trust Company, as Rights
      Agent.  (Incorporated by reference to Exhibit 4.1 of the
      Company’sCurrent
      Report on Form 8-K filed with the SEC on March 12,
  2010.)21
                
                List
      of significant subsidiaries of the
Company.




55





23.1
              
              Consent
      of J.H. Cohn LLP, Independent Registered Public Accounting
      Firm.24
              
              Power
      of Attorney.31.1
              
              Certification
      of the Chief Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
              
              Certification
      of the Chief Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
              
              Certification
      of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
              
              Certification
      of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.




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


56





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.




WILSHIRE
      ENTERPRISES, INC.
                    (Registrant)Date:
      March 31, 2010
                  By:
                  /s/
      S. Wilzig IzakS.
      Wilzig IzakChairman
      of the Board and Chief Executive
Officer




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





Directors:





By:
                                        *
                                        
                                        Date:
      March 31, 2010Miles
      BergerBy:
                                        *
                                        
                                        Date:
      March 31, 2010Milton
      DonnenbergBy:
                                        /s/
      S. Wilzig Izak
                                        
                                        Date:
      March 31, 2010S.
      Wilzig IzakBy:
                                        *
                                        
                                        Date:
      March 31, 2010Eric
      J. Schmertz, Esq.By:
                                        *
                                        
                                        Date:
      March 31, 2010Martin
      Willschick




Officers:




By:
                          /s/
      S. Wilzig Izak
                          
                          Date:
      March 31, 2010S.
      Wilzig IzakChairman
      of the Board and Chief Executive OfficerBy:
                          /s/
      Francis J. Elenio
                          
                          Date:
      March 31, 2010Francis
      J. ElenioChief
      Financial Officer





*  
Signed under power of attorney dated March 31, 2010 and filed herewith as
Exhibit 24.




57




Exhibit
Index





Exhibit
      #
                    
                    Description21
                    
                    List
      of significant subsidiaries.23.1
                    
                    Consent
      of J.H. Cohn LLP, Independent Registered Public Accounting
      Firm.24
                    
                    Power
      of attorney.31.1
                    
                    Certification
      of the Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley
      Act of 2002.31.2
                    
                    Certification
      of the Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley
      Act of 2002.32.1
                    
                    Certification
      of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
                    
                    Certification
      of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.


58