	Page No.

Part I -Financial Information

Item 1. Financial Statements

Condensed Consolidated Balance Sheets -
September 30, 2008 (Unaudited) and December 31, 2007	3

Unaudited Condensed Consolidated Statements of Operations -
Three months ended September 30, 2008 and 2007	4

Unaudited Condensed Consolidated Statements of Operations -
Nine months ended September 30, 2008 and 2007	5

Unaudited Condensed Consolidated Statements of Cash Flows -	6
Nine months ended September 30, 2008 and 2007

Notes to Condensed Consolidated Financial Statements (Unaudited)	7

2. Management's Discussion and Analysis of Financial
Condition and Results of Operations	17

3. Quantitative and Qualitative Disclosure About Market Risk	26

4T. Controls and Procedures	27

Part II - Other Information	28

Item 1. Legal Proceedings	28

6. Exhibits	29

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

WILSHIRE ENTERPRISES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2008 (Unaudited)			December 31, 2007 (Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	10,427,000		$	4,843,000
Restricted cash		212,000			257,000
Marketable debt securities, available-for-sale, at fair value		2,750,000			7,925,000
Marketable equity securities, available-for-sale, at fair value		-			1,432,000
Accounts receivable, net		181,000			201,000
Prepaid income taxes and income taxes receivable		2,375,000			1,650,000
Deferred income taxes		-			26,000
Prepaid expenses and other current assets		1,477,000			1,431,000
Total current assets		17,422,000			17,765,000
Noncurrent assets:
Property and equipment:
Real estate properties		38,802,000			38,632,000
Real estate properties - held for sale		4,682,000			5,947,000
		43,484,000			44,579,000
Less:
Accumulated depreciation and amortization		17,007,000			16,104,000
Accumulated depreciation and amortization – property held for sale		383,000			856,000
		26,094,000			27,619,000
Total assets	$	43,516,000		$	45,384,000

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	4,387,000		$	503,000
Accounts payable		1,442,000			1,528,000
Income taxes payable		89,000			81,000
Accrued liabilities		774,000			556,000
Deferred income		89,000			147,000
Current liabilities associated with discontinued operations		215,000			292,000
Total current liabilities		6,996,000			3,107,000
Noncurrent liabilities:
Long-term debt, less current portion		23,588,000			27,861,000
Deferred income taxes		608,000			595,000
Deferred income		103,000			112,000
Noncurrent liabilities associated with discontinued operations		-			573,000
Total liabilities		31,295,000			32,248,000

Commitments and contingencies

Stockholders' equity:

Preferred stock, $1 par value, 1,000,000 shares authorized; none issued and outstanding at September 30, 2008 and December 31, 2007		-			-
Common stock, $1 par value, 15,000,000 shares authorized; issued 10,013,544 shares at September 30, 2008 and December 31, 2007		10,014,000			10,014,000
Capital in excess of par value		9,281,000			9,202,000
Treasury stock, 2,087,296 shares at September 30, 2008 and December 31, 2007, at cost		(9,867,000	)		(9,885,000	)
Retained earnings		2,793,000			3,881,000
Accumulated other comprehensive loss		-			(76,000	)
Total stockholders’ equity		12,221,000			13,136,000
Total liabilities and stockholders' equity	$	43,516,000		$	45,384,000

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

WILSHIRE ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended September 30, 2008 and 2007

	2008			2007
Revenues	$	2,334,000		$	2,412,000

Costs and Expenses
Operating expenses		1,469,000			1,435,000
Depreciation and amortization expense		284,000			364,000
General and administrative		1,051,000			892,000
Total costs and expenses		2,804,000			2,691,000

Loss from Operations		(470,000	)		(279,000	)

Other Income (Loss)
Dividend and interest income		80,000			137,000
Other income		—			48,000

Interest Expense		(443,000	)		(447,000	)

Loss before provision for income taxes		(833,000	)		(541,000	)
.
Income Tax Benefit		(380,000	)		(175,000	)

Loss from Continuing Operations		(453,000	)		(366,000	)

Discontinued Operations - Real Estate, Net of Taxes
Loss from operations		(120,000	)		(168,000	)
Gain from sales		—			123,000

Discontinued Operations - Oil & Gas, Net of Taxes
Income from operations		277,000			205,000

Net loss	$	( 296,000	)	$	(206,000	)

Basic net loss per share:
Loss from continuing operations	$	(0.06	)	$	(0.05	)
Income (loss) from discontinued operations -
Real estate - loss from operations		(0.02	)		(0.02	)
Real estate - gain on sales		—			0.02
Oil and gas - income from operations		0.04			0.02
Net loss applicable to common stockholders	$	(0.04	)	$	(0.03	)

Diluted net loss per share:
Loss from continuing operations	$	(0.06	)	$	(0.05	)
Income (loss) from discontinued operations -
Real estate - loss from operations		(0.02	)		(0.02	)
Real estate - gain on sales		—			0.02
Oil and gas - income from operations		0.04			0.02
Net loss applicable to common stockholders	$	(0.04	)	$	(0.03	)

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

WILSHIRE ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Nine Months Ended September 30, 2008 and 2007

	2008			2007
Revenues	$	6,908,000		$	7,044,000

Costs and Expenses
Operating expenses		4,373,000			4,341,000
Depreciation and amortization expense		902,000			1,098,000
General and administrative		2,848,000			2,637,000
Total costs and expenses		8,123,000			8,076,000

Loss from Operations		(1,215,000	)		(1,032,000	)

Other Income (Loss)
Dividend and interest income		352,000			406,000
Loss on sale of marketable securities		(553,000	)		—
Other income		1,000			52,000

Interest Expense		(1,336,000	)		(1,335,000	)

Loss before provision for income taxes		(2,751,000	)		(1,909,000	)
.
Income Tax Benefit		(1,119,000	)		(767,000	)

Loss from Continuing Operations		(1,632,000	)		(1,142,000	)

Discontinued Operations - Real Estate, Net of Taxes
Loss from operations		(390,000	)		(521,000	)
Gain from sales		747,000			610,000

Discontinued Operations - Oil & Gas, Net of Taxes
Income from operations		187,000			476,000

Net loss	$	( 1,088,000	)	$	(577,000	)

Basic net loss per share:
Loss from continuing operations	$	(0.21	)	$	(0.14	)
Income (loss) from discontinued operations -
Real estate - loss from operations		(0.04	)		(0.07	)
Real estate - gain on sales		0.09			0.08
Oil and gas - income from operations		0.02			0.06
Net loss applicable to common stockholders	$	(0.14	)	$	(0.07	)

Diluted net loss per share:
Loss from continuing operations	$	(0.21	)	$	(0.14	)
Income (loss) from discontinued operations -
Real estate - loss from operations		(0.04	)		(0.07	)
Real estate - gain on sales		0.09			0.08
Oil and gas - income from operations		0.02			0.06
Net loss applicable to common stockholders	$	(0.14	)	$	(0.07	)

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

WILSHIRE ENTERPRISES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2008 and 2007

	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,088,000	)	$	(577,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		902,000			1,098,000
Stock-based compensation expense		79,000			170,000
Deferred income taxes		39,000			28,000
Decrease in deferred income		(67,000	)		(31,000	)
Loss on sales of marketable securities		553,000			-
Gain on sales of real estate assets		(1,244,000	)		(1,023,000	)
Other expense - non-controlling interest of joint venture partner		-			1,000
Changes in operating assets and liabilities -
Decrease in accounts receivable		20,000			46,000
Increase in prepaid income taxes and income taxes receivable		(725,000	)		(386,000	)
(Increase) decrease in prepaid expenses and other current assets		(46,000	)		341,000
Increase (decrease) in accounts payable, accrued liabilities and income taxes payable		83,000			(227,000	)
Net cash used in operating activities		(1,494,000	)		(560,000	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures - real estate		(177,000	)		(606,000	)
Proceeds from sales and redemptions of marketable securities		6,142,000			-
Proceeds from sales of real estate		2,044,000			1,524,000
Increase in marketable securities		-			(3,650,000	)
Decrease (increase) in restricted cash		45,000			(286,000	)
Net cash provided by (used in) investing activities		8,054,000			(3,018,000	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt		(976,000	)		(543,000	)
Non-controlling interest of joint venture partner		-			2,000
Proceeds from the exercise of stock options		-			33,000
Net cash used in financing activities		(976,000	)		(508,000	)

Net increase (decrease) in cash and cash equivalents		5,584,000			(4,086,000	)
CASH AND CASH EQUIVALENTS, beginning of period		4,843,000			9,602,000
CASH AND CASH EQUIVALENTS, end of period	$	10,427,000		$	5,516,000

SUPPLEMENTAL DISCLOSURES TO THE STATEMENTS OF CASH FLOWS:

Cash paid during the period for -
Interest	$	1,319,000		$	1,385,000
Income taxes, net	$	4,500		$	12,000

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

WILSHIRE ENTERPRISES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2008

1. Financial Statements:

The unaudited condensed consolidated financial statements included herein have been prepared by the registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although Wilshire Enterprises, Inc. “registrant”, the “Company”, “Wilshire”, “we”, “us”, or “our” believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K, as amended. The accompanying condensed consolidated balance sheet as of December 31, 2007 has been derived from the audited balance sheet as of that date included in the Form 10-K. In the opinion of management, this condensed consolidated financial information reflects all adjustments necessary to present fairly the results for the interim periods. The results of operations for the three and nine months ended September 30, 2008 are not necessarily indicative of the results to be expected for the year ending December 31, 2008 or any other subsequent period.

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.

In July 2003, the Company committed to the sale of its oil and gas operations, which were sold in April 2004 for net proceeds of $28,131,000. The 2008 and 2007 periods include residual costs related to winding up the oil and gas operations. The condensed consolidated financial statements reflect the oil and gas operations as “Discontinued Operations” in 2008 and 2007.

In January 2008, the Company closed on the sale of a 1 bedroom condominium at Jefferson Gardens, New Jersey for gross proceeds of approximately $150,000. After payments of closing costs and providing for taxes, the Company realized a net gain during the nine months ended September 30, 2008 of approximately $61,000 from this sale.

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 during the nine months ended September 30, 2008 of approximately $686,000 from this sale.

During the three and nine months ended September 30, 2007, the Company sold the following properties that had been classified as discontinued operations.

●

In January and February 2007, the Company closed on the sale of a one bedroom and a two bedroom condominium unit at Jefferson Gardens for gross proceeds of $144,300 and $195,000, respectively.

●

In February 2007, the Company closed on the sale of a parcel of land located in Lake Hopatcong, New Jersey for gross proceeds of $850,000.

●

In April 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $150,000.

●

In July 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $150,000.

●

In August 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $154,500.

After payment of closing costs and providing for taxes, the Company realized net gains from sales of properties of $123,000 and $610,000 during the three and nine months ended September 30, 2007, respectively. A portion of the taxes payable was deferred as a result of an Internal Revenue Service Section 1031 tax deferred exchange for which the Company purchased a replacement property.

Marketable equity securities:

The Company holds 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 September 30, 2008, the Company held $2.8 million of auction rate securities, classified as available-for-sale. These securities were then and are currently valued at par. Available-for-sale securities are carried at estimated fair value, based on available information. Consistent with our policy, all ARS investments were rated at the time of purchase and are still currently rated AAA or the equivalent thereto. Beginning in February 2008, with the liquidity issues in the global credit and capital markets, the Company was informed that there was insufficient demand at auction for its ARS investments. As a result, auctions for these securities began to fail and by March 31, 2008, all normal market activity had essentially ceased. During the second and third quarters of 2008, the Company sold $1.2 million and $250,000, respectively, of its ARS at par value through successful redemptions. In addition, during the second quarter of 2008, the Company sold $3.7 million of its ARS in a private transaction for $3.3 million. As a result of this transaction, the Company recorded a $365,000 loss on the sale of these securities. The sale of the ARS in a private transaction is considered a one-time transaction by the Company. If the Company did not sell these ARS in a private transaction, the Company would not have recorded an unrealized loss as such securities would have been recorded at par similar to the remaining ARS which the Company currently holds. The Company has been notified by its investment advisor as a result of recent settlements between government entities and our investment advisor that effective December 15, 2008 the Company can submit for redemption the ARS it currently holds and that such securities can be redeemed by the investment advisor on the next scheduled redemption date after December 15, 2008. However, in the event we are unable to sell the investments through the investment advisor after December 15, 2008 or sell the investments at or above our carrying value, these securities may not provide us a liquid source of cash or might require us to record an impairment to the asset value.

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

The Company periodically reviews available-for-sale securities for impairment that is other than temporary. At September 30, 2008 and December 31, 2007, no write down was required to record other than temporary impairment of securities.

Assets measured at fair value on a recurring basis:

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

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

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

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

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

Following are the major categories of assets measured at fair value on a recurring basis during the nine months ended September 30, 2008 using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

	Level 1		Level 2		Level 3		Total
Cash equivalents and restricted cash	$	10,639,000	$	-	$	-	$	10,639,000
Marketable debt securities		-		2,750,000		-		2,750,000
	$	10,639,000	$	2,750,000	$	-	$	13,389,000

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

The Company’s investments in short-term and long-term investment securities are exposed to price fluctuations. The fair value measurements for short-term and long-term investment securities are based upon the quoted price in active markets multiplied by the number of shares owned exclusive of any transaction costs and without any adjustments to reflect discounts that may be applied to selling a large block of the securities at one time. The Company does not believe that the changes in fair value of these assets will materially differ from the amount that could be realized upon settlement or that the changes in fair value will have a material effect on the Company’s consolidated results of operations or financial position. However, the ultimate amount that could be realized upon sale or settlement is dependent on several factors including external market conditions, the terms and conditions of a sale agreement, the counterparty to a sale agreement, the investment’s liquidity in capital markets and the length of time to liquidate an equity investment.

Accounting for Stock-Based Compensation:

The Company adopted the provisions of SFAS 123(R) effective January 1, 2006 and recorded charges of $23,000 and $28,000 during the three month periods ended September 30, 2008 and 2007, respectively, and $67,000 and $76,000 during the nine month periods ended September 30, 2008 and 2007, respectively, in connection with the issuance of stock options to employees and non-employee directors. The effect of applying SFAS 123(R) on basic and diluted earnings per share was $0.00 for both the three months ended September 30, 2008 and 2007 and $0.01 for both the nine months ended September 30, 2008 and 2007.

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

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

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

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

	·	Dividends - the Company uses an expected dividend yield of zero despite the fact that the Company paid a one-time distribution of $3.00 per share during 2006. The Company does not anticipate paying any cash dividends in the foreseeable future.

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

	2007

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

As of September 30, 2008, the Company had total unrecognized compensation expense related to options granted to non-employee directors of $132,000, which will be recognized over a remaining average period of 1.9 years.

2. Proposed Merger:

On June 13, 2008, the Company entered into an Agreement and Plan of Merger among the Company, NWJ Apartment Holdings Corp. ("Parent") and NWJ Acquisition Corp., a wholly-owned subsidiary of Parent ("Merger Sub"). Both Parent and Merger Sub are affiliates of NWJ Companies, Inc. ("NWJ"), a privately owned real estate development company based in New York, New York. The merger agreement provides that at the closing of the merger, Merger Sub will merge with and into the Company, and each outstanding share of the Company's common stock will be converted into the right to receive $3.88 per share in cash, without interest. On September 17, 2008, a special meeting of stockholders was held at which the Company’s stockholders approved the proposal to adopt the merger agreement.

The Company has been informed by the Parent that unless there is a significant improvement in the current economic and lending environment in the United States, the Parent will not be able to secure the financing of the Company's residential properties required to close the merger with the Company. If the merger is not consummated by December 13, 2008 as a result of the failure to obtain such financing, either party may terminate the merger agreement without liability to the other, provided that the terminating party has not breached the merger agreement in a manner that caused the merger not to close by December 13, 2008. Under the terms of the merger agreement, the Parent is obligated to use its commercially reasonable best efforts to arrange the financing of the Company's residential properties unless and until the merger agreement is terminated.

3. Segment Information:

The Company conducts real estate operations in the United States, principally consisting of residential apartment and condominium complexes and commercial and retail properties. Continuing real estate revenues, operating expenses, net operating income (“NOI”) and recurring capital improvements for the reportable segments are summarized below and reconciled to the consolidated net income (loss) from continuing operations for each of the three and nine month periods ended September 30, 2008 and 2007. Asset information is not reported since Wilshire does not use this measure to assess performance.

	Three Months Ended September 30,
	2008			2007
Real estate revenues:
Residential	$	2,004,000		$	1,969,000
Commercial		330,000			443,000
Totals	$	2,334,000		$	2,412,000

Real estate operating expenses:
Residential	$	1,279,000		$	1,252,000
Commercial		190,000			183,000
Totals	$	1,469,000		$	1,435,000

Net operating income (“NOI”):
Residential	$	725,000		$	717,000
Commercial		140,000			260,000
Totals	$	865,000		$	977,000

Capital improvements:
Residential	$	18,000		$	46,000
Commercial		25,000			57,000
Totals	$	43,000		$	103,000

Reconciliation of NOI to consolidated loss from continuing operations:
Segment NOI	$	865,000		$	977,000
Total other income, including net investment income		80,000			185,000
Depreciation expense		(284,000	)		(364,000	)
General and administrative expense		(1,051,000	)		(892,000	)
Interest expense		(443,000	)		(447,000	)
Income tax benefit		380,000			175,000

Consolidated loss from continuing operations	$	(453,000	)	$	(366,000	)

	Nine Months Ended September 30,
	2008			2007
Real estate revenues:
Residential	$	5,815,000		$	5,797,000
Commercial		1,093,000			1,247,000
Totals	$	6,908,000		$	7,044,000

Real estate operating expenses:
Residential	$	3,854,000		$	3,824,000
Commercial		519,000			517,000
Totals	$	4,373,000		$	4,341,000

Net operating income (“NOI”):
Residential	$	1,961,000		$	1,973,000
Commercial		574,000			730,000
Totals	$	2,535,000		$	2,703,000

Capital improvements:
Residential	$	122,000		$	270,000
Commercial		55,000			336,000
Totals	$	177,000		$	606,000

Reconciliation of NOI to consolidated loss from
continuing operations:
Segment NOI	$	2,535,000		$	2,703,000
Total other (loss) income, including net investment income		(200,000	)		458,000
Depreciation expense		(902,000	)		(1,098,000	)
General and administrative expense		(2,848,000	)		(2,637,000	)
Interest expense		(1,336,000	)		(1,335,000	)
Income tax benefit		1,119,000			767,000

Consolidated loss from continuing operations	$	(1,632,000	)	$	(1,142,000	)

4. Comprehensive Loss:

During the three months ended September 30, 2008, the Company’s net loss of $296,000 would also be the Comprehensive loss for the period. Comprehensive loss for the nine months ended September 30, 2008 is as follows:

	Before Tax			Income Tax Benefit (Expense)			After Tax

Net loss	$	(1,088,000	)	$	-		$	(1,088,000	)
Reclassification adjustment		553,000			(219,000	)		334,000
Unrealized loss arising during period		(427,000	)		169,000			(258,000	)

Total comprehensive loss	$	(962,000	)	$	(50,000	)	$	(1,012,000	)

Changes in the components of Accumulated Other Comprehensive Loss are attributable to a reclassification adjustment as a result of the sale of marketable equity securities during the second quarter 2008 and unrealized gains on marketable equity securities as of September 30, 2008. For the nine months ended September 30, 2008, the changes in Accumulated Other Comprehensive Income (Loss) are as follows:

	Accumulated Other Comprehensive Loss

BALANCE, December 31, 2007	$	(76,000	)
Unrealized loss for the nine months ended September 30, 2008, net of taxes		(258,000	)
Reclassification adjustment, net of taxes		334,000

BALANCE, September 30, 2008	$	-

5. Earnings Per Share:

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Numerator-
Net loss – basic and diluted	$	(296,000	)	$	(206,000	)	$	(1,088,000	)	$	(577,000	)

Denominator-
Weighted average common shares outstanding – basic		7,926,248			7,926,248			7,923,642			7,920,973
Incremental shares from assumed conversions of stock options		-			-			-			-
Weighted average common shares outstanding – diluted		7,926,248			7,926,248			7,923,642			7,920,973

Basic net loss per share:	$	(0.04	)	$	(0.03	)	$	(0.14	)	$	(0.07	)

Diluted net loss per share:	$	(0.04	)	$	(0.03	)	$	(0.14	)	$	(0.07	)

For the three and nine months ended September 30, 2008, 96,003 and 117,049 of potentially dilutive securities have been excluded from the calculation of net loss per share since the effects of such potentially dilutive securities would be anti-dilutive because the Company incurred net losses in each period presented. For the three and nine months ended September 30, 2007, 63,250 of potentially dilutive securities have been excluded in the calculation of net loss per share since the effects of such potentially dilutive securities would be anti-dilutive because the Company incurred net losses in each period presented.

6. Commitments and Contingencies:

On June 3, 2004, the Company announced a program to purchase 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. From the inception of the authorization through September 30, 2008, the Company had purchased 138,231 shares under this program at an approximate cost of $1,017,000 or $7.35 per share. No shares were purchased during the three and nine months ended September 30, 2008.

7. Stock Option Plans:

No options were granted under the 2004 Director Plan or 2004 Incentive Plan during the three and nine months ended September 30, 2008 or 2007.

A summary of option activity under the option plans as of September 30, 2008, and changes during the period then ended, is presented below:

	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 September 30, 2008		130,000	$	6.27		6.7	$	-

Options exercisable at September 30, 2008		91,500	$	5.95		6.2	$	-

A summary of the status of the Company’s nonvested restricted shares as of September 30, 2008, and changes during the nine months ended September 30, 2008, are presented below:

Nonvested Shares	Shares			Weighted-Average Grant-Date Fair Value

Nonvested shares at January 1, 2008		34,467		$	7.65

Shares Granted		6,133			3.05
Shares Vested		(26,167	)		5.25
Shares Forfeited		(6,133	)		6.30

Nonvested shares at September 30, 2008		8,300		$	3.98

8. Income Taxes:

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an Interpretation of SFAS No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in tax positions recognized in a company’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of the tax position taken or expected to be taken in a tax return. The Company adopted FIN 48 effective January 1, 2007. The adoption of FIN 48 did not have any impact on the accompanying condensed consolidated financial statements.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The tax years 2005, 2006 and 2007 remain open to examination by the major taxing jurisdictions to which the Company is subject.

9. Other Matters:

A complaint was filed on August 8, 2008 in the Chancery Court of New Jersey, General Equity, in Essex County, by Pennsylvania Avenue Funds as plaintiff individually and on behalf of the public stockholders of Company in connection with the proposed merger of the Company with a wholly-owned subsidiary of NWJ Apartment Holdings Corp., an affiliate of NWJ Companies, Inc., a privately owned real estate development company. The Company, its directors, NWJ Apartment Holdings Corp. and NWJ Acquisition Corp. are named as defendants. The complaint alleges, among other things, three causes of action: (i) breach of fiduciary duty by the directors as a result of their alleged failure to maximize shareholder value, (ii) breach of fiduciary duty by the directors as a result of their alleged failure to disclose to the Company’s stockholders all information material to the stockholder’s decision about the merger and (iii) aiding and abetting by the NWJ entities of the directors’ alleged breach of fiduciary duties. The complaint seeks, among other things, certification of the litigation as a class action, for plaintiff to be appointed class representative, preliminary and permanent injunctive relief against the proposed transaction, an accounting, costs, disbursements and attorneys’ fees and such other relief as the Court determines appropriate. The Company regards the complaint as completely without merit.

See the Company's Annual Report on Form 10-K for the year ended December 31, 2007 for a description of a preliminary investigation.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion addresses the Company’s results of operations for the three and nine month period ended September 30, 2008 compared to the three and nine month period ended September 30, 2007 and the Company’s consolidated financial condition as of September 30, 2008. It is presumed that readers have read or have access to Wilshire’s 2007 Annual Report on Form 10-K which includes disclosures regarding critical accounting policies as part of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Report on Form 10-Q for the quarter and nine months ended September 30, 2008 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included herein other than statements of historical fact are forward-looking statements. Although the Company believes that the underlying assumptions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. The Company’s business and prospects are subject to a number of risks which could cause actual results to differ materially from those reflected in such forward-looking statements, including uncertainties relating to the closing of the proposed merger described herein, environmental risks relating to the Company’s real estate properties, competition, the substantial capital expenditures required to fund the Company’s real estate operations, market and economic changes in areas where the Company holds real estate properties, interest rate fluctuations, government regulation, and the ability of the Company to implement its business strategy. For additional information regarding risk factors impacting the Company and its forward-looking statements, see Item 1A of the Company’s Annual Report on Form 10-K, as amended for the year ended December 31, 2007.

Effects of Recent Accounting Pronouncements

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with Generally Accepted Accounting Principles (“GAAP”). The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The FASB believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. The adoption of FASB 162 is not expected to have a material impact on the Company’s consolidated financial position

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” , which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our consolidated financial position, financial performance and cash flows. SFAS No. 161 is effective beginning January 1, 2009. The Company does not have any derivative instruments or utilize any hedging activities and therefore, SFAS No. 161 is not applicable to the Company at this time.

In December 2007, the FASB issued SFAS No. 141-R, “Business Combinations” (“SFAS 141-R”). SFAS 141-R 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 SFAS 141-R 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”. This statement 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 SFAS 141-R. This statement also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. The Company believes the adoption of SFAS 160 will not have an effect on the Company’s consolidated financial position or results of operations.

Overview

On June 13, 2008, the Company entered into an Agreement and Plan of Merger among the Company, NWJ Apartment Holdings Corp. (the "Parent") and NWJ Acquisition Corp., a wholly-owned subsidiary of the Parent ("Merger Sub"). Both the Parent and Merger Sub are affiliates of NWJ Companies, Inc. ("NWJ"), a privately owned real estate development company based in New York, New York. The merger agreement provides that at the closing of the merger, the Merger Sub will merge with and into the Company, and each outstanding share of the Company's common stock will be converted into the right to receive $3.88 per share in cash, without interest. On September 17, 2008, a special meeting of stockholders was held at which the Company’s stockholders approved the proposal to adopt the merger agreement.

The Company has been informed by the Parent that unless there is a significant improvement in the current economic and lending environment in the United States, the Parent will not be able to secure the financing of the Company's residential properties required to close the merger with the Company. If the merger is not consummated by December 13, 2008, as a result of the failure to obtain such financing, either party may terminate the merger agreement without liability to the other, provided that the terminating party has not breached the merger agreement in a manner that caused the merger not to close by December 13, 2008. Under the terms of the merger agreement, the Parent is obligated to use its commercially reasonable best efforts to arrange the financing of the Company's residential properties unless and until the merger agreement is terminated.

Net loss for the three months ended September 30, 2008 was $296,000 or $0.04 per diluted share as compared to a net loss of $206,000 or $0.03 per diluted share for the three month period ended September 30, 2007. For the nine months ended September 30, 2008, the Company recorded a net loss of $1,088,000 or $0.14 per diluted share as compared to a net loss of $577,000 or $0.07 per diluted share during the nine months ended September 30, 2007. Operations are shown as continuing and discontinued, with discontinued operations comprised of the results of operations from the Company’s real estate properties held for sale, the gain from real estate properties held for sale that were sold during the period and the wind down of the oil and gas businesses.

In January 2008, the Company closed on the sale of a one bedroom condominium at Jefferson Gardens, New Jersey for gross proceeds of approximately $150,000. After payments of closing costs and providing for taxes, the Company realized a net gain during the nine months ended September 30, 2008 of approximately $61,000 from this sale.

During the three and nine months ended September 30, 2007, the Company sold the following real estate assets:

●

In January and February 2007, the Company closed on the sale of a one bedroom and a two bedroom condominium unit at Jefferson Gardens for gross proceeds of $144,300 and 195,000, respectively.

●

In February 2007, the Company closed on the sale of a parcel of land located in Lake Hopatcong, New Jersey for gross proceeds of $850,000.

In April 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $150,000.

●

In July 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $150,000.

●

In August 2007, the Company closed on the sale of a one bedroom condominium unit at Jefferson Gardens for gross proceeds of $154,500.

After payment of closing costs and providing for taxes, the Company realized net gains from sales of properties of $123,000 and $610,000, respectively, during the three and nine months ended September 30, 2007. A portion of the taxes payable was deferred as a result of an Internal Revenue Service Section 1031 tax deferred exchange for which the Company has identified a replacement property. These gains were included in the statements of operations in discontinued operations – real estate – gain from sales.

The following table presents the increases (decreases) in each major statements of operations category for the three and nine months ended September 30, 2008 as compared to 2007, respectively. The following discussion of “Results of Operations” references these increases (decreases).

Increase (Decrease) in Consolidated Statements of Income Categories for the Periods:

	For the three months ended September						For the nine months ended September 30,
	30, 2008 vs 2007						2008 vs 2007
	Amount ($)			%			Amount ($)			%

Revenues	$	(78,000	)		-3.2	%	$	(136,000	)		-1.9	%
Costs and expenses:
Operating expenses		34,000			2.4	%		32,000			0.7	%
Depreciation expense		(80,000	)		-22.0	%		(196,000	)		-17.9	%
General and administrative expense		159,000			17.8	%		211,000			8.0	%
Total costs and expenses		113,000						47,000
Loss from Operations		(191,000	)					(183,000	)
Other Income (Loss)
Dividend and interest income		(57,000	)		-41.6	%		(54,000	)		-13.3	%
Loss on sale of marketable securities		—			—			(553,000	)		-100.0	%
Other income		(48,000	)		-100.0	%		(51,000	)		-98.1	%
Interest expense		4,000			-0.9	%		(1,000	)		0.1	%
Loss before provision for taxes		(292,000	)					(842,000	)
Income tax benefit		(205,000	)		117.1	%		(352,000	)		45.9	%
Loss from continuing operations		(87,000	)					(490,000	)
Discontinued operations - real estate
Loss from operations		48,000			28.6	%		131,000			-25.1	%
Gain from sales		(123,000	)		-100.0	%		137,000			22.5	%
Discontinued operations - oil & gas
Loss from operations		72,000			35.1	%		(289,000	)		-60.7	%
Gain from sale		-			-			-			-
Net loss	$	(90,000	)		43.7	%	$	(511,000	)		88.6	%
Basic loss per share:
Loss from continuing operations	$	(0.01	)		20.0	%	$	(0.07	)		42.9	%
Income from discontinued operations		-			0.0	%		-			-
Net loss applicable to common shareholders	$	(0.01	)		33.3	%	$	(0.07	)		100.0	%
Diluted loss per share:
Loss from continuing operations	$	(0.01	)		20.0	%	$	(0.07	)		42.9	%
Income from discontinued operations		-			0.0	%		-			-
Net loss applicable to common shareholders	$	(0.01	)		33.3	%	$	(0.07	)		100.00	%

Results of Operations

Three Months Ended September 30, 2008 as Compared with Three Months Ended September 30, 2007

Continuing Operations:

Loss from continuing operations amounted to $453,000 during the three months ended September 30, 2008 as compared to a loss from continuing operations of $366,000 during the three months ended September 30, 2007. Results per diluted share from continuing operations amounted to $(0.06) during the three months ended September 30, 2008 as compared to $(0.05) during the three months ended September 30, 2007. The 2008 period included the following charges to expense: an increase in general and administrative expense of $159,000, which primarily relates to professional fees incurred related to the proposed sale of the Company, as well as an increase in operating expenses of $34,000 partially offset by a decrease in depreciation expense of $80,000 and an increased income tax benefit of 205,000 resulting from an increased operating loss for the period.

Segment Information

Wilshire presently conducts business in the residential 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														Totals
	Three months ended				Increase					Three months ended				Increase						Three months ended				Increase
	September 30,									September 30,				(Decrease)						September 30,				(Decrease)
	2008		2007		$		%			2008		2007		$			%			2008		2007		$			%
	(In 000's of $)									(In 000's of $)										(In 000's of $)

Total revenues	$	2,004	$	1,969	$	35		1.8	%	$	330	$	443	$	(113	)		(25.5	)%	$	2,334	$	2,412	$	(78	)		(3.2	)%

Operating expenses		1,279		1,252		27		2.2	%		190		183		7			3.8	%		1,469		1,435		34			2.4	%

Net operating income (“NOI”)	$	725	$	717	$	8		1.1	%	$	140	$	260	$	(120	)		(46.2	)%	$	865	$	977	$	(112	)		(11.5	)%

Reconciliation of NOI to consolidated loss from continuing operations:	Three months ended September 30,
	2008			2007
Net operating income	$	865		$	977
Depreciation expense		(284	)		(364	)
General and administrative expense		(1,051	)		(892	)
Other income		80			185
Interest expense		(443	)		(447	)
Income tax benefit		380			175
Consolidated loss from continuing operations	$	(453	)	$	(366	)

The above table details the comparative revenues, expenses and 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 consolidated income (loss) from continuing operations. NOI is not a measure of operating results or cash flow as measured by accounting principles generally accepted in the United States of America and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity.

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 the three month period ended September 30, 2008, NOI increased by $8,000 or 1.1% to $725,000 as compared to $717,000 during the same period in 2007.

Revenues increased $35,000 or 1.8% during the quarter ended September 30, 2008 to $2,004,000, compared to $1,969,000 during the quarter ended September 30, 2007. Operating expenses increased $27,000 or 2.2% to $1,279,000. The increase in revenues was primarily attributable to the Company’s Texas and New Jersey apartment complexes, which experienced a slight increase in occupancy during the period. The increase in operating expenses was primarily attributable to 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. Revenues during the quarter ended September 30, 2008, as compared to the quarter ended September 30, 2007, decreased $113,000 or 25.5% to $330,000 and operating expenses increased $7,000 or 3.8% to $190,000. The revenue decrease was primarily attributable to decreased occupancy at both Tempe Corporate Center and Royal Mall (Arizona) resulting in decreased rental revenues in the amounts of $43,000 and $70,000, respectively.

The increase in operating expenses is primarily attributable to increased costs at Royal Mall (Arizona).

Other Operating Expenses

Depreciation expense amounted to $284,000 during the three months ended September 30, 2008, a decrease of $80,000 from $364,000 during the three months ended September 30, 2007. The decrease in depreciation expense relates to the retirement of certain assets during the past year.

General and administrative expense increased $159,000, or 17.8%, to $1,051,000 during the three months ended September 30, 2008 as compared to $892,000 during the same period in 2007. The increase in general and administrative expense is primarily attributable to professional fees incurred related to the proposed sale of the Company.

Other income (loss) decreased from income of $185,000 in the 2007 quarter to $80,000 in the 2008 quarter, a decrease of $105,000. The decrease is primarily relates to declining interest rates and reduced dividend income during the three months ended September 30, 2008 as compared to the same period in 2007.

Interest expense decreased to $443,000 during the three months ended September 30, 2008 as compared to $447,000 during the three months ended September 30, 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.

The benefit for income taxes amounted to $380,000 and $175,000 during the three month period ended September 30, 2008 and 2007, respectively. The change in the benefit for income taxes is related to an increased loss from continuing operations during the 2008 quarter as compared to the 2007 quarter.

Discontinued Operations, Net of Taxes:

Real Estate

The after tax loss from discontinued operations for the three months ended September 30, 2008 amounted to $120,000 as compared to an after tax loss of $45,000 during the three months ended September 30, 2007. The loss during the 2008 period reflects the loss from operations of $120,000. The loss during the 2007 period is comprised of a loss from discontinued operations of $168,000 which was partially offset by a gain from the sale of a two condominium units at Jefferson Gardens for gross proceeds of $305,000 that resulted in an after tax gain of $123,000.

The loss from operating properties classified as discontinued operations decreased by $48,000 to a loss of $120,000 during the quarter ended September 30, 2008 as compared to a loss of $168,000 during the same period in 2007.

Oil and Gas

During the quarter ended September 30, 2008, the Company recorded income from the wind down of its former oil and gas business, of $277,000 as compared to income of $205,000 during the same period in 2007. The net income from the wind down of the oil and gas business during the quarter ended September 30, 2008 relates to foreign currency gain during the period and a tax refund in the amount of $85,000. The net income from the wind down of the oil and gas business during the quarter ended September 30, 2007 relates to a foreign currency gain and interest income during the period.

Nine Months Ended September 30, 2008 as Compared with Nine Months Ended September 30, 2007

Continuing Operations:

Loss from continuing operations amounted to $1,632,000 during the nine months ended September 30, 2008 as compared to a loss from continuing operations of $1,142,000 during the nine months ended September 30, 2007. Results per diluted share from continuing operations amounted to $(0.21) during the nine months ended September 30, 2008 as compared to $(0.14) during the nine months ended September 30, 2007. The 2008 period included the following charges to expense: an increase in general and administrative expense of $211,000, increased operating expenses of $32,000, which was offset by a decrease in depreciation expense of $196,000 and an increase in income tax benefit of $352,000 resulting from an increase in the loss from operations.

Segment Information

	Residential Real Estate										Commercial Real Estate														Total
	Nine months ended				Increase						Nine months ended				Increase						Nine months ended				Increase
	September 30,				(Decrease)						September 30,				(Decrease)						September 30,				(Decrease)
	2008		2007		$			%			2008		2007		$			%			2008		2007		$			%
	(In 000's of $)										(In 000's of $)										(In 000's of $)

Total revenues	$	5,815	$	5,797	$	18			0.3	%	$	1,093	$	1,247	$	(154	)		(12.3	)%	$	6,908	$	7,044	$	(136	)		(1.9	)%

Operating expenses		3,854		3,824		30			0.8	%		519		517		2			0.4	%		4,373		4,341		32			0.7	%

Net operating income (“NOI”)	$	1,961	$	1,973	$	(12	)		(0.6	)%	$	574	$	730	$	(156	)		(21.4	)%	$	2,535	$	2,703	$	(168	)		(6.2	)%

Reconciliation of NOI to consolidated loss from continuing operations:	Nine months ended September 30,
	2008			2007
Net operating income	$	2,535		$	2,703
Depreciation expense		(902	)		(1,098	)
General and administrative expense		(2,848	)		(2,637	)
Other income (loss)		(200	)		458
Interest expense		(1,336	)		(1,335	)
Income tax benefit		1,119			767
Consolidated loss from continuing operations	$	(1,632	)	$	(1,142	)

The above table details the comparative revenues, expenses and 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 income (loss) from continuing operations. NOI is not a measure of operating results or cash flow as measured by accounting principles generally accepted in the United States of America and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity.

Residential Segment

Revenues from the residential segment increased $18,000 or 0.3% to $5,815,000 during the nine months ended September 30, 2008 as compared to $5,797,000 during the same period in 2007. In addition, operating expenses increased $30,000 or 0.8% to $3,854,000 during the nine months ended September 30, 2008 as compared to the nine month period ended September 30, 2007. The slight increase in revenues was primarily attributable to increased rental revenues at the Company’s Texas and New Jersey locations of $132,000, which was partially offset by a decrease in rental revenues at the Arizona properties of $114,000.

Commercial Segment

Commercial segment revenues decreased $154,000 or 12.3% for the nine months ended September 30, 2008 to $1,093,000 as compared to $1,247,000 for the nine months ended September 30, 2007. Operating expenses increased $2,000 or 0.4% to $519,000 for the nine months ended September 30, 2008 as compared to $517,000 for the same period in 2007. The revenue decrease was primarily attributable to decreases in occupancy rates at both Tempe Corporate Center and Royal Mall (Arizona) resulting in decreased rental revenues of $83,000 and $70,000, respectively.

Other Operating Expenses

Depreciation expense amounted to $902,000 during the nine months ended September 30, 2008, a decrease of $196,000 or 17.9% from $1,098,000 during the nine months ended September 30, 2007. The decrease in depreciation expense primarily relates to the retirement of certain assets during the past year.

General and administrative expense increased $211,000, or 8.0%, to $2,848,000 during the nine month period ended September 30, 2008 as compared to $2,637,000 during the same period in 2007. The increase is primarily related to professional fees incurred related to the proposed sale of the Company which was partially offset by the absence of costs associated with the preliminary investigation described in the Company’s Form 10-K for the year ended December 31, 2007.

Other income (loss) decreased from income of $458,000 during the nine months ended September 30, 2007 to a loss of $200,000 during the nine months ended September 30, 2008, a decrease of $658,000. The decrease is primarily related to the $553,000 loss on the sale of the Company’s marketable securities in the 2008 period.

Interest expense increased slightly to $1,336,000 during nine months ended September 30, 2008 as compared to $1,335,000 during the nine months ended September 30, 2007.

The benefit for income taxes increased to $1,119,000 during the nine months ended September 30, 2008 as compared to $767,000 during the nine months ended September 30, 2007. The change in the benefit for income taxes is related to the increased loss from continuing operations during the nine months ended September 30, 2008 as compared to the nine months ended September 30, 2007.

Discontinued Operations, Net of Taxes:

Real Estate

Income from discontinued operations amounted to after tax income of $357,000 for the nine months ended September 30, 2008 as compared to after tax income of $89,000 for the same period in 2007. The income during the 2008 period reflects the sales of one condominium unit at Jefferson Gardens in January 2008 for an after-tax gain of approximately $61,000 and the sale of the Tamarac Office Plaza in May 2008 for an after-tax gain of approximately $686,000, which was partially offset by a loss from operations of $390,000 during the nine months ended September 30, 2008. The income during the 2007 period reflects the sale of five condominium units at Jefferson Gardens and the sale of the Lake Hopatcong land resulting in gross proceeds of $1.6 million and after tax gain of $610,000, partially offset by a loss from operations of $521,000.

The loss from operating properties classified as discontinued operations decreased to a loss of $390,000 during the nine months ended September 30, 2008 as compared to a loss of $521,000 during the nine month period ended September 30, 2007.

Oil and Gas

During the nine months ended September 30, 2008, the Company recorded income from the wind down of its former oil and gas business, of $187,000 as compared to income of $476,000 during the nine months ended September 30, 2007. The net income from the wind down of the oil and gas business during the nine months ended September 30, 2008 relates to a foreign currency gain during the period and a tax refund in the amount of $85,000. The net income from the wind down of the oil and gas business during the nine months ended September 30, 2007 relates to a foreign currency gain and interest income during the period.

Liquidity and Capital Resources

At September 30, 2008, the Company had working capital, including restricted cash, of $10.4 million, compared to working capital of $14.7 million at December 31, 2007. The decline in working capital during the period is primarily attributable to the inclusion of $3.9 million of long-term mortgage debt which has been reclassified to current debt as such amount is due in June 2009.

The Company has $13.4 million of cash and cash equivalents, restricted cash and short-term marketable debt securities at September 30, 2008. This balance is comprised of working capital accounts for its real estate properties and corporate needs, short-term investments in government and corporate securities, including $2.8 million of auction rate debt securities and money market funds. In the short-term, the Company will continue to invest these funds in high quality investments that are consistent with its investment policy.

Regarding the investments in short-term marketable debt securities, the Company invests its available funds in high quality investments that are consistent with the Company’s investment policy which includes the following objectives: a) to maintain liquidity which is sufficient to meet any reasonably forecasted cash requirements; b) to preserve principal through investment in products and entities that are consistent with the Company’s risk tolerance; and c) to maximize income consistent with the Company’s liquidity and risk tolerance. Consistent with this investment policy, the Company only invests in approved securities such as obligations of the U.S. Treasury, the U.S. Government and agencies with obligations guaranteed by the U.S. Government and highly rated municipal and corporate issuers. As it relates to the Company's investment in marketable equity securities, the Company had invested in a publicly traded real estate company. In June 2008, the Company sold its investment of marketable equity securities which consisted of common shares in one real estate company for gross proceeds of $1.3 million. As a result of this sale, the Company recognized a loss from the sale of securities of $188,000. The Company generally does not invest in marketable equity securities.

The Company holds investments in certain marketable equity securities and short-term marketable debt instruments, including auction rate securities (“ARS”) with interest rate resets ranging from every seven days to every 45 days. As of September 30, 2008, the Company held $2.8 million of auction rate securities, classified as available-for-sale. These securities were then and are currently valued at par. Available-for-sale securities are carried at estimated fair value, based on available information. Consistent with our policy, all ARS investments were rated at the time of purchase and are still currently rated AAA or the equivalent thereto. Beginning in February 2008, with the liquidity issues in the global credit and capital markets, the Company was informed that there was insufficient demand at auction for its ARS investments. As a result, auctions for these securities began to fail and by March 31, 2008, all normal market activity had essentially ceased. During the second and third quarters of 2008, the Company sold $1.2 million and $250,000 of its ARS at par value through successful redemptions. In addition, 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. The sale of the ARS in a private transaction is considered a one-time transaction by the Company. As a result of recent settlements between government entities and our investment advisor related to the sale of ARS, the Company may be entitled to recover its $365,000 loss incurred on the sale of its $3.7 million of ARS during the second quarter 2008. The Company is currently providing its investment advisor with the necessary documentation in order to process its claim to recover such loss. If the Company did not sell these ARS in a private transaction, the Company would not have recorded an unrealized loss as such securities would have been recorded at par similar to the remaining ARS which the Company currently holds. The Company has been notified by its investment advisor as a result of recent settlements between government entities and our investment advisor that effective December 15, 2008 the Company can submit for redemption the ARS it currently holds and that such securities can be redeemed by the investment advisor on the next scheduled redemption date after December 15, 2008. However, in the event we are unable to sell the investments through the investment advisor after December 15, 2008 or sell the investments at or above our carrying value, these securities may not provide us a liquid source of cash or might require us to record an impairment to the asset value.

On June 13, 2008, the Company entered into an Agreement and Plan of Merger among the Company, NWJ Apartment Holdings Corp. (the "Parent") and NWJ Acquisition Corp., a wholly-owned subsidiary of the Parent ("Merger Sub"). Both the Parent and Merger Sub are affiliates of NWJ Companies, Inc. ("NWJ"), a privately owned real estate development company based in New York, New York. The merger agreement provides that at the closing of the merger, Merger Sub will merge with and into the Company, and each outstanding share of the Company's common stock will be converted into the right to receive $3.88 per share in cash, without interest. On September 17, 2008 a special meeting of stockholders was held at which the Company’s stockholders approved the proposal to adopt the merger agreement.

The Company has been informed by the Parent that unless there is a significant improvement in the current economic and lending environment in the United States, the Parent will not be able to secure the financing of the Company's residential properties required to close the merger with the Company. If the merger is not consummated by December 13, 2008, as a result of the failure to obtain such financing, either party may terminate the merger agreement without liability to the other, provided that the terminating party has not breached the merger agreement in a manner that caused the merger not to close by December 13, 2008. Under the terms of the merger agreement, the Parent is obligated to use its commercially reasonable best efforts to arrange the financing of the Company's residential properties unless and until the merger agreement is terminated.

Net cash used in operating activities amounted to $1,494,000 and $560,000 during the nine month periods ended September 30, 2008 and 2007, respectively. During the nine months ended September 30, 2008, the use of cash resulted from a net loss of $1,088,000, the effect of the sale and depreciation of real estate properties, and the changes in receivables, prepaid expenses, payables and current and deferred tax accounts. During the nine months ended September 30, 2007, the use of cash resulted from a net loss of $577,000, the effect of the sale of real estate properties with their related changes in receivables, payables and current and deferred tax accounts.

Net cash provided by investing activities amounted to $8,054,000 for the nine month period ended September 30, 2008 while net cash used in investing activities amounted to $3,018,000 during the nine month period ended September 30, 2007. The cash provided by investing activities during the nine months ended September 30, 2008 primarily relates to the proceeds from the redemption and sale of marketable securities in the amount of $6,142,000, proceeds from the sale of real estate properties of $2,044,000, a decrease in restricted cash of $45,000 which was partially offset by capital expenditures on real estate properties of $177,000. The cash used in investing activities during the nine months ended September 30, 2007 primarily relates to an increase in short-term marketable securities of $3,650,000, capital expenditures on real estate properties of $606,000, an increase in restricted cash of $286,000 which was partially offset by the proceeds from the sale of real estate properties of $1,524,000.

Net cash used in financing activities amounted to $976,000 and $508,000 during the nine month periods ended September 30, 2008 and 2007, respectively. During the nine months ended September 30, 2008, the use of cash primarily reflects the repayment of long-term debt due to the normal amortization of long-term debt from monthly debt service payments and the payoff of the debt related to the Tamarac Office Plaza in May 2008 in the amount of $566,000. During the nine months ended September 30, 2007, the use of cash reflects the repayment of long-term debt due to the sales of real estate properties and normal amortization of long-term debt from monthly debt service payments in the amount of $543,000 which was partially offset by the proceeds received from the exercise of stock options in the amount of $33,000.

On June 3, 2004, the Board of Directors approved the repurchase of up to 1,000,000 shares of the Company’s 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 September 30, 2008, the Company had purchased 138,231 shares at an aggregate cost of $1,017,000 under this program. There were no shares repurchased by the Company during the nine month period ended September 30, 2008.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

The Company had an investment in the common stock of one publicly traded real estate company in the United States in which the Company had exposure to the risk of market value fluctuation. Such investment was sold in June 2008. The Company accounted for this investment as securities that were available for sale and marked them to market at each period-end. The change in value in the investment, net of tax impact, is reported in Accumulated Other Comprehensive Income (Loss), a separate component of stockholders’ equity. The Company also evaluated its investment to determine if it had suffered a decline in market value that is permanent, which would require a charge to the Statement of Operations. At September 30, 2008 and 2007, in the opinion of management, there has been no other than temporary decline in value in the Company’s holdings of equity securities.

At September 30, 2008, we held $2.8 million of ARS which were valued at par. Historically, ARS were priced at par, as per industry convention, based on observed or reported verifiable trades and provided a liquid market for these ARS investments. Consistent with our policy, all ARS investments were rated at the time of purchase and are still currently rated AAA or the equivalent thereto. Beginning in February 2008, with the liquidity issues in the global credit and capital markets, the Company was informed that there was insufficient demand at auction for its ARS investments. As a result, auctions for these securities began to fail and by March 31, 2008, all normal market activity had essentially ceased. During the second and third quarters of 2008, the Company sold $1.2 million and $250,000, respectively, of its ARS at par value through successful redemptions. In addition, 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. The sale of the ARS in a private transaction is considered a one-time transaction by the Company. As a result of recent settlements between government entities and our investment advisor related to the sale of ARS, the Company may be entitled to recover its $365,000 loss incurred on the sale of its $3.7 million of ARS during the second quarter 2008. The Company is currently providing its investment advisor with the necessary documentation in order to process its claim to recover such loss. If the Company did not sell these ARS in a private transaction, the Company would not have recorded an unrealized loss as such securities would have been recorded at par similar to the remaining ARS which the Company currently holds. The Company has been notified by its investment advisor that as a result of recent settlements between government entities and our investment advisor that effective December 15, 2008 the Company can submit for redemption the ARS it currently holds and that such securities can be redeemed by the investment advisor on the next scheduled redemption date after December 15, 2008. However, in the event we are unable to sell the investments through the investment advisor after December 15, 2008 or sell the investments at or above our carrying value, these securities may not provide us a liquid source of cash or might require us to record an impairment to the asset value.

Even if secondary markets do emerge, we might experience temporary losses of principal if such securities are marketed at a discount or realize a loss if it becomes necessary to sell these investments at such a discount. In addition, should the credit ratings of our ARS be downgraded, we might incur a value impairment and potential problems liquidating such investment.

After the sale of its Canadian oil and gas assets, the Company held cash and cash equivalents at its Canadian subsidiary the value of which is exposed to fluctuations in the value of the Canadian dollar / U.S. dollar exchange rate. During 2008 the Company began repatriating its cash held in its Canadian subsidiary as it was determined that no additional tax liabilities would be levied with respect to the Company’s tax examination by the Province of Alberta. At September 30, 2008 the Company maintained a cash balance in its Canadian subsidiary of approximately $32,000. It is intended the remaining assets, net of liabilities, of its Canadian subsidiary will be repatriated during the remainder of 2008. However, no assurance can be given as to the specific timing of any such repatriation.

Long-term debt as of September 30, 2008 and December 31, 2007 consists of the following –

	2008		2007
Mortgage notes payable	$	27,975,000	$	28,938,000
Less-current portion (1)		4,387,000		518,000
Long-term portion (2)	$	23,588,000	$	28,420,000

(1)	Includes mortgage debt associated with discontinued operations of $0 in 2008 and $15,000 in 2007.
(2)	Includes mortgage debt associated with discontinued operations of $0 in 2008 and $559,000 in 2007.

The aggregate maturities of the long-term debt in each of the five years subsequent to September 30, 2008 and thereafter are –

Year Ended	Amount
September 30, 2009	$	4,387,000
September 30, 2010		505,000
September 30, 2011		535,000
September 30, 2012		563,000
September 30, 2013		608,000
Thereafter		21,377,000
	$	27,975,000

At September 30, 2008, the Company had $27,975,000 of mortgage debt outstanding which all bears interest at an average fixed rate of 6.0% and an average remaining life of approximately 6.5 years. The fixed rate mortgages 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 that will be required is as follows:

Year	Amount
2009	$	3,870,000
2013		18,656,000
	$	22,526,000

If the proposed merger described herein does not close, Wilshire expects to re-finance the individual mortgages with new mortgages 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 4T. Controls and Procedures

(a) Disclosure 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 December 31, 2007, 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 September 30, 2008 and continue to be effective as of the date of this report.

(b) Changes in internal controls over financial reporting. Management has determined that, as of September 30, 2008, there were no changes in our internal control over financial reporting that occurred during our fiscal quarter then ended that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Other Matters

A complaint was filed on August 8, 2008 in the Chancery Court of New Jersey, General Equity, in Essex County, by Pennsylvania Avenue Funds as plaintiff individually and on behalf of the public stockholders of Wilshire Enterprises, Inc. ("Wilshire" or the "Company") in connection with the proposed merger of the Company with a wholly-owned subsidiary of NWJ Apartment Holdings Corp., an affiliate of NWJ Companies, Inc., a privately owned real estate development company. The Company, its directors, NWJ Apartment Holdings Corp. and NWJ Acquisition Corp. are named as defendants. The complaint alleges, among other things, three causes of action: (i) breach of fiduciary duty by the directors as a result of their alleged failure to maximize shareholder value, (ii) breach of fiduciary duty by the directors as a result of their alleged failure to disclose to the Company’s stockholders all information material to the stockholder’s decision about the merger and (iii) aiding and abetting by the NWJ entities of the directors’ alleged breach of fiduciary duties. The complaint seeks, among other things, certification of the litigation as a class action, for plaintiff to be appointed class representative, preliminary and permanent injunctive relief against the proposed transaction, an accounting, costs, disbursements and attorneys’ fees and such other relief as the Court determines appropriate. The Company regards the complaint as completely without merit.

See the Company's Annual Report on Form 10-K for the year ended December 31, 2007 for a description of a preliminary investigation.

Item 6. Exhibits

Exhibit 31.1	Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act

Exhibit 31.2	Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act

Exhibit 32.1	Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act

Exhibit 32.2	Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act

SIGNATURES

Pursuant to the requirements 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: November 14, 2008		/s/ S. Wilzig Izak
	By:	S. Wilzig Izak
		Chairman of the Board and Chief Executive Officer


		/s/ Francis J. Elenio
	By:	Francis J. Elenio
		Chief Financial Officer