WILSHIRE ENTERPRISES INC - FORM 10-K

Attached files

file	filename
EX-21 - WILSHIRE ENTERPRISES INC	v178928_ex21.htm
EX-24 - WILSHIRE ENTERPRISES INC	v178928_ex24.htm
EX-23.1 - WILSHIRE ENTERPRISES INC	v178928_ex23-1.htm
EX-31.1 - WILSHIRE ENTERPRISES INC	v178928_ex31-1.htm
EX-32.1 - WILSHIRE ENTERPRISES INC	v178928_ex32-1.htm
EX-31.2 - WILSHIRE ENTERPRISES INC	v178928_ex31-2.htm
EX-32.2 - WILSHIRE ENTERPRISES INC	v178928_ex32-2.htm

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

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 Employer
incorporation or organization)		Identification No.)

1 Gateway Center
Newark, 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 exchange
Title of each class		on which registered
None		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 o Not 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 I

Item 1.	Business		3
Item 1A.	Risk Factors		7
Item 1B.	Unresolved Staff Comments		8
Item 2.	Properties		8
Item 3.	Legal Proceedings		10
Item 3A.	Executive Officers of the Registrant		10
Item 4.	Reserved		10

Part II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder
	Matters and Issuer Purchases of Equity Securities		11
Item 6.	Selected Financial Data		12
Item 7.	Management’s Discussion and Analysis of Financial Condition
	and Results of Operations		14
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		27
Item 8.	Financial Statements and Supplementary Data		28
Item 9.	Changes in and Disagreements with Accountants on Accounting
	and Financial Disclosure		51
Item 9A.	Controls and Procedures		51
Item 9B.	Other Information		52

Part III

Item 10.	Directors, Executive Officers and Corporate Governance		53
Item 11.	Executive Compensation		53
Item 12.	Security Ownership of Certain Beneficial Owners and Management
	and Related Stockholder Matters		53
Item 13.	Certain Relationships and Related Transactions, and Director Independence		53
Item 14.	Principal Accountant Fees and Services		53

Part IV

Item 15.	Exhibits and Financial Statement Schedules		54

	Signatures		57

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.

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	Size

Sunrise Ridge	Tucson	AZ	Apartments	340 units
Van Buren	Tucson	AZ	Apartments	70 units
Royal Mall Plaza	Mesa	AZ	Office & retail	66,552 SF
Tempe Corporate	Tempe	AZ	Office	50,700 SF
Alpine Village	Sussex	NJ	Apartments	132 units
Jefferson Gardens	Jefferson	NJ	Condominiums	10 units
Amboy Tower	Perth Amboy	NJ	Office & Retail	75,000 SF
Alpine Village (a)	Sussex	NJ	Land	0.51 acres
Alpine Village (a)	Wantage	NJ	Land	17.32 acres
Alpine Village (a)	Sussex	NJ	Land	0.49 acres
Alpine Village (a)	Sussex	NJ	Land	0.22 acres
West Orange	West Orange	NJ	Land	0.6 acres
Summercreek	San Antonio	TX	Apartments	180 units
Wellington Estates	San Antonio	TX	Apartments	228 units

(a) 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.

Divestiture of Assets

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

								Taxes
Name (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	$	98,000
Tamarac Office Plaza (FL)
(26,990 SF Office complex)	5/23/2008	$	2,000,000	$	763,000	$	566,000	$	446,000	$	895,000
Jefferson 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.

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.

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 affect our ability to obtain financing on reasonable terms and have other adverse effects on us and the market price of our common stock.

Global stock and credit markets have 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.

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

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

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

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, 2009
Name (State)	Net Book Value		Mortgage Principal		Net Operating Income		Interest Expense		Capital Expenditures
Apartments:
Sunrise Ridge (AZ)	$	4,780,000	$	9,657,000	$	971,000	$	569,000	$	12,000
Van Buren (AZ)		1,419,000		1,895,000		211,000		111,000		2,000
Summercreek (TX)		4,973,000		4,550,000		295,000		283,000		385,000
Wellington (TX)		3,424,000		3,971,000		541,000		234,000		79,000
Alpine Village (NJ)		2,860,000		4,513,000		502,000		266,000		6,000
Office & Retail:
Royal Mall Plaza (AZ)		1,213,000		-		168,000		-		50,000
Tempe Corporate (AZ)		2,251,000		3,430,000		427,000		181,000		17,000

Total:	$	20,920,000	$	28,016,000	$	3,115,000	$	1,644,000	$	551,000

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 Experience

S. 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 President

Francis 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

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 4
	High		-		Low		High		-		Low		High		-		Low		High		-		Low

2009	$	1.69		-		.90	$	1.85		-		1.19	$	2.22		-		1.50	$	2.33		-		.90
2008	$	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 Securities
Period	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 Programs
Quarter 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.

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.

	As of December 31,
	(In thousands)
	2009		2008		2007		2006		2005
Balance Sheet Data at Year-End:
Total assets	$	32,480	$	43,343	$	45,384	$	46,915	$	88,915
Long-term debt		28,016		27,845		28,952		29,618		33,352
Stockholders' equity		1,200		11,976		13,136		13,923		41,852
Weighted average shares outstanding:
Basic		6,799		7,924		7,922		7,888		7,864
Diluted		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			2005
Income Statement Data:
Revenues	$	8,920		$	9,203		$	9,420		$	8,834		$	8,186
Costs and expenses:
Operating expenses		5,857			5,892			5,863			5,275			4,708
Depreciation		1,148			1,188			1,368			1,987			1,215
General and administrative		3,865			3,816			3,617			2,475			3,493
Total costs and expenses		10,870			10,896			10,848			9,737			9,416
Dividend and interest income		33			415			540			836			700
Sale of marketable securities		-			(188	)		-			-			134
Sale of real estate related assets		-			-			-			-			675
Other income		3			-			36			7			32
Interest 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			8,577
Discontinued operations - oil & gas		218			324			300			115			(1,105	)
Net income (loss)	$	(2,759	)	$	(1,361	)	$	(892	)	$	2,285		$	6,891
Basic 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			0.95
Net income (loss) per share	$	(0.41	)	$	(0.17	)	$	(0.11	)	$	0.29		$	0.88
Diluted 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			0.94
Net income (loss) per share	$	(0.41	)	$	(0.17	)	$	(0.11	)	$	0.28		$	0.87

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.

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.

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.

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 Statements
	of Operations Categories for the Periods:
	2009 v. 2008						2008 v. 2007
	Amount ($)			%			Amount ($)			%

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 Income
Dividend 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 estate
Loss from operations		127,000			(21.5	)%		(80,000	)		15.6	%
Gain from sales		(806,000	)		(100.0	)%		118,000			17.2	%
Discontinued operations - oil & gas
Loss 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	%

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				Total
	Year ended										Year ended				Increase						Year ended
	December 31,				Decrease						December 31,				(Decrease)						December 31,				Decrease
	2009		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		$	3,311
Depreciation and amortization expense		(1,148	)		(1,188	)
General and administrative expense		(3,865	)		(3,816	)
Other income		36			227
Interest expense		(1,708	)		(1,776	)
Income tax benefit		1,110			1,343
Loss from continuing operations	$	(2,512	)	$	(1,899	)

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,				Increase
	2009		2008		(Decrease)
Sunrise Ridge, Arizona	$	2,568,000	$	2,732,000	$	(164,000	)
Van Buren Apartments, Arizona		680,000		655,000		25,000
Wellington Estates, Texas		1,824,000		1,825,000		(1,000	)
Alpine Village, New Jersey		1,416,000		1,394,000		22,000
Summercreek, Texas		1,175,000		1,164,000		11,000
Sub-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	)

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,				Increase
	2009		2008		(Decrease)
Sunrise Ridge, Arizona	$	1,597,000	$	1,619,000	$	(22,000	)
Van Buren Apartments, Arizona		468,000		433,000		35,000
Wellington 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		7,000
Tempe Corporate Center, Arizona		406,000		399,000		7,000
Sub-total- Commercial Properties		714,000		700,000		14,000

Total 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.

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.

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

	Residential Real Estate										Commercial Real Estate										Total				Total
	Year ended				Increase						Year ended				Increase						Year ended				Increase
	December 31,				(Decrease)						December 31,				(Decrease)						December 31,				(Decrease)
	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		$	3,557
Depreciation expense		(1,188	)		(1,368	)
General and administrative expense		(3,816	)		(3,617	)
Other income		227			576
Interest expense		(1,776	)		(1,837	)
Income tax benefit		1,343			1,321
Loss from continuing operations	$	(1,899	)	$	(1,368	)

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,				Increase
	2008		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		50,000
Alpine Village, New Jersey		1,394,000		1,327,000		67,000
Summercreek, Texas		1,164,000		1,131,000		33,000
Sub-total - Residential Properties		7,770,000		7,765,000		5,000

Royal 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	)

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,				Increase
	2008		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		13,000
Alpine Village, New Jersey		927,000		914,000		13,000
Summercreek, Texas		897,000		877,000		20,000
Sub-total - Residential Properties		5,192,000		5,174,000		18,000

Royal Mall Plaza, Arizona		301,000		300,000		1,000
Tempe Corporate Center, Arizona		399,000		389,000		10,000
Sub-total- Commercial Properties		700,000		689,000		11,000

Total 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.

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.

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		2007

Residential continuing operations:
Sunrise Ridge	$	12,000	$	78,000	$	220,000
Van Buren		2,000		2,000		9,000
Wellington		79,000		60,000		50,000
Alpine		6,000		13,000		12,000
Summercreek		385,000		27,000		21,000

Commercial continuing operations:
Royal Mall Plaza		50,000		-		100,000
Tempe Corporate		17,000		63,000		32,000

Discontinued operations - residential:
Jefferson Gardens		-		-		4,000
Alpine Land (a)		-		-		355,000

Discontinued operations - commercial:
Amboy Towers		2,000		12,000		60,000
Tamarac Office Plaza(b)		-		2,000		21,000

Total 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.

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		2008
Total debt		28,016,000		27,845,000
Less-current portion		572,000		4,378,000
Long 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	Amount
2010	$	572,000
2011		606,000
2012		637,000
2013		21,910,000
2014		74,000
Thereafter		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	Amount
2013	$	21,699,000
2017		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.

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

WILSHIRE ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2009 and 2008

	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	4,263,000		$	13,023,000
Restricted cash		197,000			195,000
Marketable debt securities, available-for-sale, at fair value		-			2,000,000
Accounts receivable, net		181,000			173,000
Income taxes receivable		1,086,000			773,000
Prepaid expenses and other current assets		1,260,000			1,133,000
Total current assets		6,987,000			17,297,000

Other noncurrent assets		233,000			196,000

Property and equipment:
Real estate properties		39,432,000			38,876,000
Real estate properties - held for sale		4,640,000			4,638,000
		44,072,000			43,514,000
Less:
Accumulated depreciation and amortization		18,441,000			17,293,000
Accumulated depreciation and amortization – property held for sale		371,000			371,000
		25,260,000			25,850,000
Total assets	$	32,480,000		$	43,343,000

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	572,000		$	4,378,000
Accounts payable		1,272,000			1,342,000
Income taxes payable		90,000			77,000
Accrued liabilities		1,093,000			1,066,000
Deferred income		108,000			87,000
Current liabilities associated with discontinued operations		166,000			264,000
Total current liabilities		3,301,000			7,214,000
Noncurrent liabilities:
Long-term debt, less current portion		27,444,000			23,467,000
Deferred income taxes		464,000			597,000
Deferred income		71,000			89,000
Total liabilities		31,280,000			31,367,000

Commitments and contingencies

Stockholders' 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			10,014,000
Capital in excess of par value		5,340,000			9,309,000
Treasury 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	)		2,520,000
Total stockholders’ equity		1,200,000			11,976,000
Total 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.

WILSHIRE ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

	2009			2008			2007
Revenues	$	8,920,000		$	9,203,000		$	9,420,000

Costs and expenses
Operating expenses		5,857,000			5,892,000			5,863,000
Depreciation and amortization expense		1,148,000			1,188,000			1,368,000
General and administrative		3,865,000			3,816,000			3,617,000
Total costs and expenses		10,870,000			10,896,000			10,848,000

Loss from operations		(1,950,000	)		(1,693,000	)		(1,428,000	)

Other income (loss)
Dividend and interest income		33,000			415,000			540,000
Loss on sale of marketable securities		-			(188,000	)
Other income		3,000			-			36,000
Interest 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 taxes
Loss from operations		(465,000	)		(592,000	)		(512,000	)
Gain from sales		-			806,000			688,000

Discontinued operations - oil & gas, net of taxes
Income from operations		218,000			324,000			300,000

Net 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			0.09
Oil and gas – income from operations		0.03			0.04			0.03
Net 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			0.09
Oil and gas – income from operations		0.03			0.04			0.03
Net 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.

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)			Equity

Balance, December 31, 2006	$	2,000			-	$	-		10,013,544		$	10,014,000		$	8,984,000		$	4,773,000		$	(9,918,000	)	$	68,000					$	13,923,000
Net 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															218,000
Exercise of stock options																					33,000									33,000
Disposition 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	)					13,136,000
Net 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			76,000
Comprehensive 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															125,000

Balance, December 31, 2008		-			-		-		10,013,544			10,014,000			9,309,000			2,520,000			(9,867,000	)		-						11,976,000
Net loss																		(2,759,000	)							$	(2,759,000	)		(2,759,000	)
Amortization of compensation associated with stock and stock option awards															78,000															78,000
Purchase 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.

WILSHIRE ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

	2009			2008			2007
CASH 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			1,368,000
Bad debt expense		78,000
Stock-based compensation expense		78,000			125,000			218,000
Amortization of mortgage finance costs		63,000			57,000			56,000
Deferred 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			178,000
Increase (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			1,729,000
Increase 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		-			-			33,000
Repurchase 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			9,602,000
CASH AND CASH EQUIVALENTS, end of year	$	4,263,000		$	13,023,000		$	4,843,000

SUPPLEMENTAL DISCLOSURES TO THE STATEMENTS OF CASH FLOWS:

Cash paid during the period for -
Interest	$	1,644,000		$	1,732,000		$	1,824,000
Income taxes, net	$	(934,000	)	$	(2,135,000	)	$	580,000

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.

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, 2009
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents and restricted cash	$	4,460,000	$	-	$	-	$	4,460,000
	$	4,460,000	$	-	$	-	$	4,460,000

Year ended December 31, 2008
	Level 1			Level 2			Level 3			Total
Cash and cash equivalents and restricted cash		$	13,218,000		$	-		$	-		$	13,218,000
Marketable 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.

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

	December 31,
	2009			2008

Real estate and other properties:
Land	$	3,378,000		$	3,378,000
Building		27,326,000			26,779,000
Furniture, fixtures and equipment		8,728,000			8,720,000

Accumulated depreciation		(18,441,000	)		(17,293,000	)

Net real estate and other properties		20,991,000			21,584,000

Real estate held for sale:
Land		1,043,000			1,043,000
Building		3,405,000			3,400,000
Furniture, fixtures and equipment		192,000			194,000

Accumulated depreciation		(371,000	)		(371,000	)

Net real estate held for sale		4,269,000			4,266,000

Net 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.

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.

	2009			2008			2007
Numerator-
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			7,922,303

Basic 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.

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

	2009			2007

Risk 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	$	42,000
Year ending December 31, 2011		23,000
Year 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 Securities
BALANCE, December 31, 2006	$	68,000
Change for the year 2007		(144,000	)
BALANCE, December 31, 2007		(76,000	)
Change for the year 2008		76,000
BALANCE, 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.

3.	Long-term debt:

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

	2009		2008

Mortgage notes payable (a)	$	3,430,000	$	3,540,000
Mortgage notes payable (b)		20,037,000		20,412,000
Mortgage notes payable (c)		4,549,000		3,893,000

Totals		28,016,000		27,845,000
Less current portion		572,000		4,378,000

Long-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	Amount
2010	$	572,000
2011		606,000
2012		637,000
2013		21,910,000
2014		74,000
Thereafter		4,217,000

	$	28,016,000

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	Amount
2010	$	1,315,000
2011		746,000
2012		464,000
2013		273,000
2014		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.

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.

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.

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 Value
Options 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 Value
Options 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 Value
Options outstanding at January 1, 2007		120,000		$	6.15		7.5	$	192,000
Options granted		25,000			5.60		9.5		-
Options exercised		(10,000	)		3.32		-		21,000
Options 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					2007
				Weighted					Weighted					Weighted
				Average					Average					Average
				Grant Date					Grant Date					Grant Date
Nonvested Shares	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Nonvested shares at the beginning of year		7,633		$	3.90		34,467		$	7.65		59,100		$	7.48
Shares Granted		125,000			0.99		6,133			3.05		-			-
Shares Vested		(2,711	)		3.50		(26,834	)		5.24		(24,633	)		5.59
Shares 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.

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			2007
Continuing 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	)		25,000
Deferred		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:
Federal
Current	$	(285,000	)	$	200,000		$	107,000
Deferred		0			0			0
		(285,000	)		200,000			107,000
State:
Current		0			44,000			21,000
Deferred		0			0			0
		0			44,000			21,000

Total Real Estate	$	(285,000	)	$	244,000		$	128,000

Oil and Gas:
Federal:
Current	$	0		$	0		$	0
Deferred		0			0			0
		0			0			0
State:
Current		0			0			0
Deferred		0			0			0
		0			0			0
Foreign:
Current		0			(85,000	)		0
Deferred		0			0			0
		0			(85,000	)		0

Total Oil & Gas	$	0		$	(85,000	)	$	0

Totals	$	(1,395,000	)	$	(1,184,000	)	$	(1,193,000	)

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						2007
	Amount			%			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	)		3.9
Dividend exclusion		-			0.0			(22,000	)		0.7			(41,000	)		1.5
Tax-exempt interest		(1,000	)		0.0			(67,000	)		2.1			(88,000	)		3.3
Other		104,000			(2.9	)		11,000			(0.3	)		(146,000	)		5.4
Total 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		2008
Deferred tax assets:
State net loss carryover	$	443,000	$	265,000
Accrued liabilities		80,000		-
Deferred income		73,000		70,000
Capital loss carryover		59,000		-
		655,000		335,000
Less valuation allowance		222,000		-
		433,000		335,000

Deferred tax liabilities
Tax over book depreciation, depletion and amortization - Oil and gas and real estate properties - U.S.		875,000		923,000
Restricted stock		22,000		5,000
Unrealized loss on marketable securities		-		4,000
		897,000		932,000

Net 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.

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			2007
Real estate revenue:
Residential	$	7,663,000		$	7,770,000		$	7,765,000
Commercial		1,257,000			1,433,000			1,655,000
Totals	$	8,920,000		$	9,203,000		$	9,420,000

Real estate operating expenses:
Residential	$	5,143,000		$	5,192,000		$	5,174,000
Commercial		714,000			700,000			689,000
Totals	$	5,857,000		$	5,892,000		$	5,863,000

Net operating income (“NOI”):
Residential	$	2,520,000		$	2,578,000		$	2,591,000
Commercial		543,000			733,000			966,000
Totals	$	3,063,000		$	3,311,000		$	3,557,000

Capital improvements:
Residential	$	484,000		$	180,000		$	312,000
Commercial		69,000			77,000			132,000
Totals	$	553,000		$	257,000		$	444,000

Reconciliation of NOI to consolidated loss from continuing operations:
Segment NOI	$	3,063,000		$	3,311,000		$	3,557,000
Total other income, including net investment income		36,000			227,000			576,000
Depreciation 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			1,321,000

Loss 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.

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

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 Ended
	March 31			June 30			September 30			December 31
2009:

Revenues	$	2,279,000		$	2,261,000		$	2,234,000		$	2,146,000

Costs and expenses:
Operating expenses		1,334,000			1,449,000			1,520,000			1,554,000
Depreciation and amortization expense		321,000			265,000			272,000			290,000
General and administrative		1,297,000			868,000			826,000			874,000
Total costs and expenses		2,952,000			2,582,000			2,618,000			2,718,000

Loss from operations		(673,000	)		(321,000	)		(384,000	)		(572,000	)

Dividend and interest income		16,000			9,000			5,000			3,000
Other income		2,000			-			-			1,000
Interest 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			101,000

Net 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	)

	Quarter Ended
	March 31			June 30			September 30			December 31
2008:
Revenues	$	2,251,000		$	2,323,000		$	2,334,000		$	2,295,000

Costs and Expenses:
Operating expenses		1,432,000			1,472,000			1,469,000			1,519,000
Depreciation and amortization expense		326,000			292,000			284,000			286,000
General and administrative		743,000			1,054,000			1,051,000			968,000
Total costs and expenses		2,501,000			2,818,000			2,804,000			2,773,000

Loss from Operations		(250,000	)		(495,000	)		(470,000	)		(478,000	)

Dividend and interest income		138,000			134,000			80,000			63,000
Gain (loss) on sale of marketable securities					(553,000	)					365,000
Other 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			-			59,000
Discontinued 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			137,000

Net 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.

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 I
Description	Encumbrances		Land		Building & Improvements		Land		Building & Improvements		Land		Building & Improvements		Total		Accumulated Depreciation		Date Acquired	Life on Which Depreciation is Computed

Arizona
340 unit garden apartment complex	$	9,657	$	800	$	5,600	$	-0-	$	3,713	$	800	$	9,313	$	10,113	$	5,333	1992	Various
51,000 square foot office building	$	3,430	$	313	$	2,384	$	-0-	$	2,289	$	313	$	4,673	$	4,986	$	2,735	1992	Various

Texas
228 unit apartment complex	$	3,971	$	620	$	3,015	$	-0-	$	3,240	$	620	$	6,255	$	6,875	$	3,452	1992	Various
180 unit apartment complex	$	4,550	$	805	$	4,450	$	-0-	$	1,260	$	805	$	5,710	$	6,515	$	1,542	2001	Various

New Jersey
132 unit apartment complex	$	4,513	$	480	$	3,541	$	-0-	$	838	$	480	$	4,379	$	4,859	$	1,999	1997	Various

Other residential	$	1,895	$	312	$	2,397	$	-0-	$	1,119	$	312	$	3,516	$	3,828	$	1,782	Various	Various

Other office/retail	$	-0-	$	435	$	1,948	$	-0-	$	3,649	$	435	$	5,597	$	6,032	$	1,836	Various	Various

Land 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			2007
Balance at beginning of year	$	43,514	$	44,579		$	44,353
Property acquisitions		-		-			-
Improvements		558		257			882
Retirements/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			2007

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

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.

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		Withheld

Milton Donnenberg		2,551,283	45,866
S. 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				Abstain
			2,571,686				22,155				3,308

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	567,924

Equity 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.

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 #		Description

3.1		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.)

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’s Current Report on Form 8-K filed with the SEC on March 12, 2010.)

21		List of significant subsidiaries of the Company.

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.

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 Izak
		S. Wilzig Izak
		Chairman 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, 2010
	Miles Berger

By:	*	Date: March 31, 2010
	Milton Donnenberg

By:	/s/ S. Wilzig Izak	Date: March 31, 2010
	S. Wilzig Izak

By:	*	Date: March 31, 2010
	Eric J. Schmertz, Esq.

By:	*	Date: March 31, 2010
	Martin Willschick

Officers:

By:	/s/ S. Wilzig Izak	Date: March 31, 2010
	S. Wilzig Izak
	Chairman of the Board and Chief Executive Officer

By:	/s/ Francis J. Elenio	Date: March 31, 2010
	Francis J. Elenio
	Chief Financial Officer

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

Exhibit Index

Exhibit #		Description
21		List of significant subsidiaries.

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

24		Power of attorney.

31.1		Certification of the Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

WILSHIRE ENTERPRISES INC Reports

Also read

Attached files