The following table presents the increases (decreases) in each major statement of operations category for the three and six months ended June 30, 2007 and 2006, 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 June 30, 2007 v 2006						For the six months ended June 30, 2007 v 2006
	Amount ($)			%			Amount ($)			%

Revenues	$	118,000			5.3	%	$	289,000			6.7	%
Costs and expenses:
Operating expenses		183,000			14.8	%		461,000			18.9	%
Depreciation expense		(569,000	)		-61.7	%		(412,000	)		-36.0	%
General and administrative		(113,000	)		-13.5	%		393,000			29.1	%
Total costs and expenses		(499,000	)					442,000
Income (loss) from Operations		617,000						(153,000	)
Other Income
Dividend and interest income		(156,000	)		-52.0	%		(283,000	)		-51.3	%
Other income		(1,000	)		-50.0	%		(1,000	)		-20.0	%
Interest expense		26,000			-5.5	%		38,000			-4.1	%
Income (loss) before provision for taxes		486,000						(399,000	)
Income tax expense (benefit)		94,000			-29.1	%		(144,000	)		36.5	%
Income (loss) from continuing operations		392,000						(255,000	)
Discontinued operations - real estate:
Loss from operations		46,000			-21.6	%		(71,000	)		25.2	%
Gain from sales		(178,000	)		-74.5	%		(3,365,000	)		-87.4	%
Discontinued operations - oil & gas:
Loss from operations		526,000			-151.6	%		771,000			-154.2	%
Net income (loss)	$	786,000			-84.6	%	$	(2,920,000	)		-117.0	%
Basic earnings (loss) per share:
Income (loss) from continuing operations	$	0.04			-57.1	%	$	(0.03	)		42.9	%
Income (loss) from discontinued operations		0.06			-120.0	%		(0.34	)		-87.2	%
Net income (loss) applicable to common shareholders	$	0.10			-83.3	%	$	(0.37	)		-115.6	%
Diluted earnings (loss) per share:
Income (loss) from continuing operations	$	0.04			-57.1	%	$	(0.03	)		42.9	%
Income (loss) from discontinued operations		0.06			-120.0	%		(0.34	)		-87.2	%
Net income (loss) applicable to common shareholders	$	0.10			-83.3	%	$	(0.37	)		-115.6	%

Results of Operations

Three Months Ended June 30, 2007 as Compared with Three Months Ended June 30, 2006

Continuing Operations:

Loss from continuing operations amounted to $216,000 during the three months ended June 30, 2007 as compared to a loss from continuing operations of $608,000 during the three months ended June 30, 2006. Results per diluted share from continuing operations amounted to $(0.03) during the three months ended June 30, 2007 as compared to $(0.07) during the three months ended June 30, 2006. The 2007 period included the following charges to expense: a decrease in general and administrative expense of $113,000, which primarily relates to decreased personnel related costs, as well as a decrease in depreciation expense of $569,000 related to the reclassification of Alpine Village Apartments, New Jersey, Summercreek Apartments, Texas and Wellington Estates, Texas, into continuing operations from discontinued operations during the second quarter of 2006.

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								Total
	Three months ended June 30,				Increase (Decrease)						Three months ended June 30,				Increase				Three months ended June 30,						Increase (Decrease)
	2007		2006		$			%			2007		2006		$		%		2007			2006			$			%
	(In 000s of $)										(In 000s of $)								(In 000s of $)
Total revenues	$	1,949	$	1,883	$	66			3.5		$	403	$	351	$	52		14.8	$	2,352		$	2,234		$	118			5.3
Operating expenses		1,256		1,080		176			16.3			160		153		7		4.6		1,416			1,233			183			14.8
Net operating income	$	693	$	803	$	(110	)		(13.7	)	$	243	$	198	$	45		22.7	$	936		$	1,001		$	(65	)		(6.5	)

Reconciliation to consolidated loss from continuing operations:
Net operating income																			$	936		$	1,001
Depreciation expense																				(353	)		(922	)
General and administrative expenses																				(727	)		(840	)
Other income																				145			302
Interest expense																				(446	)		(472	)
Income tax benefit																				229			323

Loss from continuing operations																			$	(216	)	$	(608	)

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

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 June 30, 2007, NOI decreased by $110,000 or 13.7% to $693,000 as compared to $803,000 during the same period in 2006. The decrease in NOI is a result of increased operating expenses of $176,000 or 16.3%, which was partially offset by increased revenues of $66,000 or 3.5%.

Revenues increased $66,000 or 3.5% during the quarter ended June 30, 2007 to $1,949,000, compared to $1,883,000 during the quarter ended June 30, 2006. Operating expenses increased $176,000 or 16.3% to $1,256,000. The increase in revenues was primarily attributable to the Company’s Arizona and New Jersey apartment complexes, which have experienced an increase in occupancy and have also been able to raise rental rates per unit as compared to the same period last year.

The increase in operating expenses during the quarter ended June 30, 2007 as compared to the same period in 2006 was primarily attributable to maintenance and upgrades at all our residential properties, as well as seasonal landscaping. Such upgrades include installation of new appliances and carpeting.

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 June 30, 2007, as compared to the quarter ended June 30, 2006, increased $52,000 or 14.8% to $403,000 and operating expenses increased $7,000 or 4.6% to $160,000. The revenue increase was attributable to increased rental revenue of $47,000 at Tempe Corporate Center (Arizona) and $5,000 at Royal Mall Plaza (Arizona).

The increase in operating expenses is primarily related to preparation costs at Royal Mall Plaza which reflects increased tenant occupancy at the property.

Depreciation expense amounted to $353,000 during the three months ended June 30, 2007, a decrease of $569,000 from $922,000 during the three months ended June 30, 2006. The decrease in depreciation expense relates to the reclassification of Alpine Village Apartments, New Jersey, Summercreek Apartments, Texas and Wellington Estates, Texas into continuing operations from discontinued operations during the second quarter of 2006.

General and administrative expense decreased $113,000, or 13.5%, to $727,000 during the three months ended June 30, 2007 as compared to $840,000 during the same period in 2006. The decrease in general and administrative expense is primarily attributable to the inclusion of a $387,000 charge during the second quarter of 2006 related to the failure to close a proposed purchase of a property in Avondale, Arizona which was partially offset by the costs associated with the matters described in Note 8 of the Financial Statements which amounted to $83,000 for the three months ended June 30, 2007.

Other income decreased $157,000 to $145,000 or 8.3% in the 2007 quarter from $302,000 in the 2006 quarter. The decrease is primarily related to a decline in interest and dividend income as a result of the payment of a special distribution on June 29, 2006 to stockholders of $3.00 per share or $23.7 million.

Interest expense decreased to $446,000 during the three months ended June 30, 2007 as compared to $472,000 during the three months ended June 30, 2006. The decrease primarily relates to the reduction in mortgages as a result of the sales of properties during 2006 and 2007.

The benefit for income taxes amounted to $229,000 and $323,000 during the three month periods ended June 30, 2007 and 2006, respectively. The change in the benefit for income taxes is related to the level of loss from continuing operations during the 2007 quarter as compared to the 2006 quarter and the change in the mix between taxable and tax-exempt income.

Discontinued Operations, Net of Taxes:

Real Estate

The after tax loss from discontinued operations for the three months ended June 30, 2007 amounted to $106,000 as compared to an after tax income of $26,000 during the three months ended June 30, 2006. The loss during the 2007 period is comprised of a loss from discontinued operations of $167,000 which was partially offset by a gain from the sale of a condominium unit at Jefferson Gardens for gross proceeds of $150,000 that resulted in an after tax gain of $61,000. Income during the quarter ended June 30, 2006 reflects the sale of the Wilshire Grand Hotel for gross proceeds of $12.8 million that resulted in an after tax gain of $239,000.

The loss from operating properties classified as discontinued operations decreased to a loss of $167,000 during the quarter ended June 30, 2007 as compared to a loss of $213,000 during the same period in 2006. The decrease in the operating loss resulted from the sale of the Twelve Oaks apartment complex during the third quarter of 2006, which had negatively affected operating income during the quarter ended June 30, 2006.

Oil and Gas

During the quarter ended June 30, 2007, the Company recorded income from the wind down of its former oil and gas business, of $179,000 as compared to a loss of $347,000 during the same period in 2006. The net income from the wind down of the oil and gas business during the quarter ended June 30, 2007 relates to a foreign currency gain and interest income during the period. The loss during the quarter ended June 30, 2006 relates to professional fees associated with the wind down of the oil and gas business which was sold in 2004.

Six Months Ended June 30, 2007 as Compared with Six Months Ended June 30, 2006

Continuing Operations:

Loss from continuing operations amounted to $776,000 during the six months ended June 30, 2007 as compared to a loss from continuing operations of $575,000 during the six months ended June 30, 2006. Results per diluted share from continuing operations amounted to $(0.10) during the six months ended June 30, 2007 as compared to $(0.07) during the six months ended June 30, 2006. The 2007 period included the following charges to expense: an increase in general and administrative expense of $393,000, which primarily relates to the costs associated with the matters described in Note 8 of the Financial Statements, which was partially offset by a decrease in personnel related costs, and a decrease in depreciation expense of $412,000 related to the reclassification of Alpine Village Apartments, New Jersey, Summercreek Apartments, Texas and Wellington Estates, Texas, into continuing operations from discontinued operations during the second quarter of 2006.

The 2006 period included an increase in depreciation expense of $687,000 related to the reclassification of Alpine Village Apartments, New Jersey, Summercreek Apartments, Texas, and Wellington Estates, Texas, into continuing operations from discontinued operations.

Segment Information

	Residential Real Estate										Commercial Real Estate								Total
	Six months ended June 30,				Increase (Decrease)						Six months ended June 30,				Increase				Six months ended June 30,						Increase (Decrease)
	2007		2006		$			%			2007		2006		$		%		2007			2006			$			%
	(In 000s of $)										(In 000s of $)								(In 000s of $)
Total revenues	$	3,828	$	3,671	$	157			4.3		$	804	$	672	$	132		19.6	$	4,632		$	4,343		$	289			6.7
Operating expenses		2,572		2,154		418			19.4			334		291		43		14.8		2,906			2,445			461			18.9
Net operating income	$	1,256	$	1,517	$	(261	)		(17.2	)	$	470	$	381	$	89		23.4	$	1,726		$	1,898		$	(172	)		(9.1	)


Reconciliation to consolidated loss from continuing operations:
Net operating income < /fo nt>																			$	1,726		$	1,898
Depreciation expense																				(734	)		(1,146	)
General and administrative expenses																				(1,745	)		(1,352	)
Other income																				273			557
Interest expense																				(888	)		(926	)
Income tax benefit &# 160;																				592			394

Loss from continuing operations																			$	(776	)	$	(575	)

Residential Segment

Revenues from the residential segment increased $157,000 or 4.3% to $3,828,000 during the six months ended June 30, 2007 as compared to $3,671,000 during the same period in 2006. In addition, operating expenses increased $418,000 or 19.4% to $2,572,000 during the six months ended June 30, 2007 as compared to the six month period ended June 30, 2006. The increase in revenues was primarily attributable to increased rental revenues at the Arizona properties of $104,000 and the New Jersey property of $84,000, which was partially offset by a decline in rental revenues at the Company’s Texas location of $31,000.

The increase in operating expense during the six month period June 30, 2007 as compared to the same period in 2006 was related to all residential properties, comprised of increased maintenance costs, upgrades to the facilities, and increased labor costs to maintain and attract tenants, as well as costs of repairs during the first quarter 2007 at our Texas properties resulting from severe weather damage requiring non-recurring repairs of approximately $60,000 and increased real estate taxes of $24,000.

Commercial Segment

Commercial segment revenues increased $132,000 or 19.6% for the six months ended June 30, 2007 to $804,000 as compared to $672,000 for the six months ended June 30, 2006. Operating expenses increased $43,000 or 14.8% to $334,000 for the six months ended June 30, 2007 as compared to $291,000 for the same period in 2006. The revenue increase was primarily attributable to a $97,000 increase in revenue at Tempe Corporate Center (Arizona) and a $35,000 increase at Royal Mall (Arizona).

The increase in operating expenses is primarily related to the Royal Mall and is related to the increased leasing activity, refurbishment and maintenance activities taking place at the property, as well as increased real estate taxes of $10,000 during the period

Depreciation expense amounted to $734,000 during the six months ended June 30, 2007, a decrease of $412,000 or 36.0% from $1,146,000 during the six months ended June 30, 2006. The decrease in depreciation expense primarily relates to the reclassification of Alpine Village Apartments, New Jersey, Summercreek Apartments, Texas and Wellington Estates, Texas into continuing operations from discontinued operations during the second quarter of 2006.

General and administrative expense increased $393,000, or 29.1%, to $1,745,000 during the six month period ended June 30, 2007 as compared to $1,352,000 during the same period in 2006. The increase is primarily related to the costs associated with the matters described in Note 8 of the Financial Statements which amounted to $507,000 for the six months ended June 30, 2007, which was partially offset by the inclusion of a $387,000 charge during the second quarter of 2006 related to the failure to close a proposed purchase of a property in Avondale, Arizona

Other income decreased $284,000 to $273,000 during the six month period ended June 30, 2007 from $557,000 during the six months ended June 30, 2006. The decrease is primarily related to a decline in interest and dividend income as a result of the payment of a special distribution on June 29, 2006 to stockholders of $3.00 per share or $23.7 million.

Interest expense decreased to $888,000 during six months ended June 30, 2007 as compared to $926,000 during the six months ended June 30, 2006. The decrease primarily relates to the reduction in mortgages as a result of the sales of properties during 2006 and 2007.

The benefit for income taxes increased to $592,000 during the six months ended June 30, 2007 as compared to $394,000 during the six months ended June 30, 2006. The change in the benefit for income taxes is related to the level of loss from continuing operations during the six months ended June 30, 2007 as compared to the six months ended June 30, 2006 quarter and the change in the mix between taxable and tax-exempt income.

Discontinued Operations, Net of Taxes:

Real Estate

Income from discontinued operations amounted to after tax income of $134,000 for the six months ended June 30, 2007 as compared to after tax income of $3,570,000 for the same period in 2006. The income during the 2007 period reflects the sale of three condominium units at Jefferson Gardens and the sale of the Lake Hopatcong land resulting in gross proceeds of $1.3 million and after tax gain of $487,000. Income during the 2006 period reflects the following sales of real estate properties:

●

In January 2006, the Company closed on the sales of its triple net lease on a bank branch building in Rutherford, New Jersey and 41 of its 42 condominium units at Galsworthy Arms in Long Branch, New Jersey, for gross proceeds of $1,602,500 and $6,904,500, respectively. In March 2006, the Company closed on the sale of the one remaining condominium unit at Galsworthy Arms, which had a comprehensive interior upgrade prior to the sale, for gross proceeds of $292,000.

●

On May 4, 2006, the Company closed on the sale of the Wilshire Grand Hotel. The Wilshire Grand Hotel was owned by WO Grand Hotel, L.L.C., which is 50% owned by the Company and 50% owned by Proud Three, L.L.C. The hotel was sold for gross proceeds of $12.8 million, including adjustments to the purchase price for fees extending the closing date. The Company received approximately $6.0 million of proceeds from this transaction, including repayment of debt.

The loss from operating properties classified as discontinued operations increased to a loss of $353,000 during the six months ended June 30, 2007 as compared to a loss of $282,000 during the six month period ended June 30, 2006. The increase in the operating loss resulted from the sale the Wilshire Grand Hotel during the second quarter of 2006, which was a positive contributor to operating income. This was partially offset by the sale of the Twelve Oaks Apartment complex, which had a negative impact on the operating loss during the second quarter of 2006.

Oil and Gas

During the six months ended June 30, 2007, the Company recorded income from the wind down of its former oil and gas business, of $271,000 as compared to a loss of $500,000 during the six months ended June 30, 2006. The net income from the wind down of the oil and gas business during the six months ended June 30, 2007 relates to a foreign currency gain and interest income during the period. The loss during the six months ended June 30, 2006 relates to professional fees associated with the wind down of the oil and gas business which was sold in 2004.

Liquidity and Capital Resources

At June 30, 2007, the Company had working capital, including restricted cash, of $15.1 million, compared to working capital of $15.0 million at December 31, 2006. Fluctuations in individual components of working capital include proceeds received in connection with the sale of real estate of $1.3 million, which was partially offset by the loss from continuing operations of $830,000 and the purchase of a property in Sussex New Jersey for $250,000.

The Company had $15.5 million of cash and cash equivalents, restricted cash and short-term marketable debt and equity securities at June 30, 2007. This balance is comprised of working capital accounts for its real estate properties and corporate needs, short-term investments in government and corporate securities, including auction rate debt securities, marketable and money market funds and marketable equity securities. In the short-term, the Company will continue to invest these funds in high quality investments that are consistent with its investment policy.

As previously disclosed, the Company is aggressively pursuing a sale or merger of the Company.

Net cash used in operating activities amounted to $786,000 and $7,614,000 during the six month periods ended June 30, 2007 and 2006, respectively. During the six months ended June 30, 2007, the use of cash resulted from a net loss of $371,000, the effect of the sale of real estate properties with their related changes in receivables, payables and current and deferred tax accounts. During the six month period ended June 30, 2006 the use of cash resulted from the effect of the sale of real estate properties of $6.3 million, an adjustment to deferred income taxes of $6.2 million related to a Section 1031 exchange which was not consummated, which was partially offset by net income during the period of $2.5 million and the related changes in receivables, payables and current and deferred tax accounts.

Net cash used in investing activities amounted to $2.8 million during the six months ended June 30, 2007 as compared to net cash provided by investing activities of $40.0 million during the six months ended June 30, 2006.

The cash used in investing activities during the six months ended June 30, 2007 primarily relates to the increase in the Company’s short-term marketable debt securities of $3.7 million and capital expenditures on real estate properties of $503,000, which was partially offset from proceeds related to the sale of real estate properties of $1.3 million. Cash provided by investing activities during the six months ended June 30, 2006 primarily relates to the proceeds from the sale of real estate properties of $20.5 million, a decrease in the Company’s short-term marketable securities of $17.7 million (related to the payment of the special cash distribution on June 29, 2006), a decrease in the Company’s restricted cash of $4.7 million related to the contemplated Section 1031 exchange which was partly offset by capital expenditures on real estate properties of $2.9 million.

Net cash used in financing activities amounted to $385,000 and $31.0 million during the six month periods ended June 30, 2007 and 2006, respectively. During the six months ended June 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 of $418,000, which was partially offset by the proceeds from the exercise of stock options in the amount of $33,000. The use of cash during the six month period ended June 30, 2006 reflects the payment of the special cash distribution to stockholders on June 29, 2006 in the amount of $23.7 million, a cash distribution to the non-controlling joint venture partner related to the sale of the Wilshire Grand Hotel of $5.2 million, and 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.

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 June 30, 2007, the Company had purchased 138,231 shares at an aggregate cost of $1,017,000 under this program.

Item 3. Qualitative and Quantitative Disclosure About Market Risk

The Company has an investment in the common stock of one publicly traded real estate company in the United States in which the Company has exposure to the risk of market value fluctuation. The Company accounts for this investment as securities that are available for sale and marks 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, a separate component of stockholders’ equity. The Company also evaluates its investment to determine if it has suffered a decline in market value that is permanent, which would require a charge to the Statement of Operations. At June 30, 2007, in the opinion of management, there has been no permanent decline in value in the Company’s holdings of equity securities.

After the sale of its Canadian oil and gas assets in April 2004, the Company has 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. Pending the resolution of an ongoing tax examination by the Province of Alberta, the Company intends to repatriate all assets, net of liabilities, of its Canadian subsidiary during 2007. However, no assurance can be given as to the specific timing of any such repatriation.

Long-term debt as of June 30, 2007 and December 31, 2006 consists of the following –

	2007		2006
Mortgage notes payable	$	29,199,000	$	29,618,000
Less-current portion (1)		501,000		535,000
Long-term portion (2)	$	28,698,000	$	29,083,000

(1)	Includes mortgage debt associated with discontinued operations of $14,000 in 2007 and $58,000 in 2006.

(2)	Includes mortgage debt associated with discontinued operations of $566,000 in 2007 and $700,000 in 2006.

The aggregate maturities of the long-term debt in each of the five years subsequent to June 30, 2007 and thereafter are –

Year Ended	Amount
June 30, 2008	$	501,000
June 30, 2009		4,402,000
June 30, 2010		500,000
June 30, 2011		532,000
June 30, 2012		562,000
Thereafter		22,702,000
	$	29,199,000

At June 30, 2007, the Company had $29,199,000 of mortgage debt outstanding which all bears interest at an average fixed rate of 6.14% and an average remaining life of approximately 5.7 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 Ended	Amount
September 30, 2009	$	3,870,000
September 30, 2013		22,292,000
	$	26,162,000

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 obligations. If interest rates, at the time any individual mortgage note 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 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.

Item 4. Controls and Procedures

(a) Disclosure controls and procedures. As of the end of the first quarter of 2007, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of such date due to the material weaknesses described below.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As previously disclosed in the Company’s 2006 Annual Report on Form 10-K (the “10-K”) and in its Form 10-Q for the quarter ended March 31, 2007 and as referred to in Item 1 of Part II of this Quarterly Report on Form 10-Q, material weaknesses have been noted in connection with the documentation of certain leases and rents at one of the Company’s properties and in connection with certain matters the Company voluntarily reported to government authorities (the “Other Matters”).

With respect to the documentation of leases and rents at one of the Company’s properties, all leases and contracts have been reviewed. Multiple levels of approval by management and the management company engaged by the Company are now required to approve leases and other contracts. In addition, management and its management company will receive and analyze more detailed reports concerning this property on a monthly basis. With respect to the Other Matters, as previously disclosed in the Company’s SEC Reports, management has concluded, after its review of its records and record keeping practices, that (i) the events under investigation by governmental authorities do not materially adversely affect any financial statements previously filed by the Company and (ii) the Company is not aware of any comparable arrangements with other public servants.

Also, as noted in Item 9A of the Company’s 10-K, issues existed regarding the Company’s recording of estimated income tax receivable amounts. The tax item was brought to management’s attention through the Company’s own internal review process. The Company engaged a national independent accounting firm to conduct a tax analysis pursuant to FAS 109 in connection with the 10-K, and on a quarterly basis thereafter. Such a tax analysis was performed with respect to the quarters ended June 30, 2007 and March 31, 2007. Management believes that these tax issues are resolved.

Based on the steps taken, management (i) believes that the consolidated financial statements included in this 10-Q are fairly stated in all material respects and (ii) does not believe that the material weaknesses described above will result in any additional adjustments to previously released financial statements.

(b) Changes in internal controls over financial reporting. There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, other than those actions described above and in Item 9A of the 10-K. The Company also hired additional accounting personnel to assist with the preparation of this 10-Q.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Other Matters

See the “Legal Proceedings” section in the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2006 and Quarterly Report on Form 10-Q for the Three Months Ended March 31, 2007. The Company incurred expenses of $507,000 during the first six months of 2007 in connection with the investigation described in such reports, of which $83,000 was incurred in the second quarter of 2007. The Company is unable to predict the amount of expenses it could be required to incur in the future, or whether or not such amounts would be material.

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

S I G N A T U R E S

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: August 7, 2007		/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

Delaware	84-0513668
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1 Gateway Center, Newark, New Jersey	07102
(Address of principal executive offices)	(Zip Code)

	Page No.

Part I -Financial Information

Item 1. Financial Statements

Condensed Consolidated Balance Sheets -
June 30, 2007 (Unaudited) and December 31, 2006		3

Unaudited Condensed Consolidated Statements of Operations -		4
Three months ended June 30, 2007 and 2006

Unaudited Condensed Consolidated Statements of Operations -		5
Six months ended June 30, 2007 and 2006

Unaudited Condensed Consolidated Statements of Cash Flows -		6
Six months ended June 30, 2007 and 2006

Notes to Unaudited Condensed Consolidated Financial Statements		7

2. Management's Discussion and Analysis of Financial		16
Condition and Results of Operations

3. Quantitative and Qualitative Disclosure About Market Risk		26

4. Controls and Procedures		27

Part II - Other Information

Item 1. Legal Proceedings		28

6. Exhibits		29

	June 30, 2007 (Unaudited)			December 31, 2006 (Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	5,604,000		$	9,602,000
Restricted cash		225,000			212,000
Marketable debt securities, available for sale, at fair value		7,925,000			4,275,000
Marketable equity securities, available for sale, at fair value		1,710,000			1,672,000
Accounts receivable, net		196,000			235,000
Income taxes receivable		777,000			567,000
Prepaid expenses and other current assets		1,477,000			1,665,000
Total current assets		17,914,000			18,228,000
Property and equipment:
Real estate properties		38,410,000			38,191,000
Real estate properties - held for sale		5,936,000			6,162,000
		44,346,000			44,353,000
Less:
Accumulated depreciation and amortization		(15,443,000	)		(14,734,000	)
Accumulated depreciation, depletion and amortization – property held for sale		(891,000	)		(932,000	)
		28,012,000			28,687,000
Total Assets	$	45,926,000		$	46,915,000

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	566,000		$	477,000
Accounts payable		1,353,000			1,642,000
Income taxes payable		89,000			81,000
Deferred income taxes		12,000			48,000
Accrued liabilities		362,000			330,000
Deferred income		150,000			130,000
Current liabilities associated with discontinued operations		282,000			480,000
Total current liabilities		2,814,000			3,188,000
Noncurrent liabilities:
Long-term debt, less current portion		28,053,000			28,383,000
Deferred income taxes		649,000			552,000
Deferred income		119,000			138,000
Noncurrent liabilities associated with discontinued operations		566,000			731,000
Total liabilities		32,201,000			32,992,000

Commitments and Contingencies

Stockholders' equity:
Non-controlling interest of joint venture partner		2,000			2,000
Preferred stock, $1 par value, 1,000,000 shares authorized; none issued and outstanding in 2007 and 2006		-			-
Common stock, $1 par value, 15,000,000 shares authorized; issued 10,013,544 shares in 2007 and 2006		10,014,000			10,014,000
Capital in excess of par value		9,125,000			8,984,000
Treasury stock, 2,087,296 shares at June 30, 2007 and 2,097,296 at December 31, 2006, at cost		(9,908,000	)		(9,918,000	)
Retained earnings		4,401,000			4,773,000
Accumulated other comprehensive income		91,000			68,000
Total stockholders’ equity		13,725,000			13,923,000
Total liabilities and stockholders' equity	$	45,926,000		$	46,915,000

	2007			2006

Revenues	$	2,352,000		$	2,234,000

Costs and Expenses
Operating expenses		1,416,000			1,233,000
Depreciation expense		353,000			922,000
General and administrative		727,000			840,000
Total costs and expenses		2,496,000			2,995,000

Loss from Operations		(144,000	)		(761,000	)

Other Income
Dividend and interest income		144,000			300,000
Other income		1,000			2,000

Interest Expense		(446,000	)		(472,000	)

Loss before provision for income taxes		(445,000	)		(931,000	)
.
Income Tax Benefit		(229,000	)		(323,000	)

Loss from Continuing Operations		(216,000	)		(608,000	)

Discontinued Operations - Real Estate, Net of Taxes
Loss from operations		(167,000	)		(213,000	)
Gain from sales		61,000			239,000

Discontinued Operations - Oil & Gas, Net of Taxes
Income (loss) from operations		179,000			(347,000	)

Net loss	$	(143,000	)	$	(929,000	)

Basic earnings (loss) per share:
Loss from continuing operations	$	(0.03	)	$	(0.07	)
Income (loss) from discontinued operations:
Real estate - loss from operations		(0.02	)		(0.03	)
Real estate - gain on sales		0.01			0.02
Oil and gas - income (loss) from operations		0.02			(0.04	)
Net loss applicable to common stockholders	$	(0.02	)	$	(0.12	)
Diluted earnings (loss) per share:
Loss from continuing operations		(0.03	)	$	(0.07	)
Income (loss) from discontinued operations:
Real estate - loss from operations		(0.02	)		(0.03	)
Real estate - gain on sales		0.01			0.02
Oil and gas - income (loss) from operations		0.02			(0.04	)
Net loss applicable to common stockholders	$	(0.02	)	$	(0.12	)

	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(371,000	)	$	2,495,000
Adjustments to reconcile net (loss) income to net cash used in operating activities
Depreciation and amortization		734,000			1,221,000
Stock-based compensation expense		116,000			98,000
Deferred income tax (benefit)		61,000			(6,213,000	)
Increase (decrease) in deferred income		1,000			(77,000	)
Gain on sales of real estate assets		(812,000	)		(6,315,000	)
Other expense - non-controlling interest of joint venture partner		1,000			549,000
Changes in operating assets and liabilities:
Decrease in accounts receivable		39,000			194,000
Decrease (increase) in income taxes receivable		(210,000	)		1,059,000
Decrease in prepaid expenses and other current assets		188,000			706,000
Decrease in accounts payable, accrued liabilities and taxes payable		(533,000	)		(1,331,000	)
Net cash used in operating activities		(786,000	)		(7,614,000	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Net capital expenditures - real estate		(503,000	)		(2,898,000	)
Proceeds from mortgage notes receivable		-			12,000
Proceeds from sales of real estate		1,339,000			20,489,000
(Increase) decrease in short-term marketable securities		(3,650,000	)		17,732,000
(Decrease) increase in restricted cash		(13,000	)		4,672,000
Net cash provided by (used in) investing activities		(2,827,000	)		40,007,000

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt					416,000
Principal payments of long-term debt		(418,000	)		(2,347,000	)
Purchase of treasury stock		-			(459,000	)
Non-controlling interest of joint venture partner					(5,194,000	)
Payment of cash dividend					(23,697,000	)
Proceeds from exercise of stock options		33,000			290,000
Net cash used in financing activities		(385,000	)		(30,991,000	)

Net increase (decrease) in cash and cash equivalents		(3,998,000	)		1,402,000
CASH AND CASH EQUIVALENTS, beginning of period		9,602,000			6,081,000
CASH AND CASH EQUIVALENTS, end of period	$	5,604,000		$	7,483,000

SUPPLEMENTAL DISCLOSURES TO THE STATEMENTS OF CASH FLOWS:

Cash paid during the period for -
Interest	$	888,000		$	1,029,000
Income taxes, net	$	12,000		$	7,568,000

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

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

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

	·	Dividends - the Company uses an expected dividend yield of zero despite the fact that the Company paid a one-time distribution of $3.00 per share during 2006. The Company intends to retain any earnings to fund future operations and potentially invest in additional real estate activities and, therefore, does not anticipate paying any cash dividends in the foreseeable future.

	2006

Risk free interest rate		5.03	%
Volatility		18.9	%
Dividend yield		-	%
Expected option life		10 years

	Three Months Ended June 30,
	2007			2006
Real estate revenue:
Residential	$	1,949,000		$	1,883,000
Commercial		403,000			351,000
Totals	$	2,352,000		$	2,234,000

Real estate operating expenses:
Residential	$	1,256,000		$	1,080,000
Commercial		160,000			153,000
Totals	$	1,416,000		$	1,233,000

Net operating income (“NOI”):
Residential	$	693,000		$	803,000
Commercial		243,000			198,000
Totals	$	936,000		$	1,001,000

Capital improvements:
Residential	$	82,000		$	279,000
Commercial		35,000			274,000
Totals	$	117,000		$	553,000

Reconciliation of NOI to consolidated net loss from continuing operations:
Segment NOI	$	936,000		$	1,001,000
Total other income, including net investment income		145,000			302,000
Depreciation expense		(353,000	)		(922,000	)
General and administrative expense		(727,000	)		(840,000	)
Interest expense		(446,000	)		(472,000	)
Income tax benefit		229,000			323,000

Loss from continuing operations	$	(216,000	)	$	(608,000	)

	Six Months Ended June 30,
	2007			2006
Real estate revenue:
Residential	$	3,828,000		$	3,671,000
Commercial		804,000			672,000
Totals	$	4,632,000		$	4,343,000

Real estate operating expenses:
Residential	$	2,572,000		$	2,154,000
Commercial		334,000			291,000
Totals	$	2,906,000		$	2,445,000

Net operating income (“NOI”):
Residential	$	1,256,000		$	1,517,000
Commercial		470,000			381,000
Totals	$	1,726,000		$	1,898,000

Capital improvements:
Residential	$	109,000		$	420,000
Commercial		114,000			351,000
Totals	$	223,000		$	771,000

Reconciliation of NOI to consolidated net loss from continuing operations:
Segment NOI	$	1,726,000		$	1,898,000
Total other income, including net investment income		273,000			557,000
Depreciation expense		(734,000	)		(1,146,000	)
General and administrative expense		(1,745,000	)		(1,352,000	)
Interest expense		(888,000	)		(926,000	)
Income tax benefit		592,000			394,000

Loss from continuing operations	$	(776,000	)	$	(575,000	)

	Three Months Ended June 30,
	2007 (Unaudited)			2006 (Unaudited)

Net loss	$	(143,000	)	$	(929,000	)
Other comprehensive income (loss) net of taxes:
Change in unrealized gain (loss) on marketable securities		(44,000	)		26,000

Comprehensive loss	$	(187,000	)	$	(903,000	)

	Six Months Ended June 30,
	2007 (Unaudited)			2006 (Unaudited)

Net income (loss)	$	(371,000	)	$	2,495,000
Other comprehensive income (loss) net of taxes:
Change in unrealized gain (loss) on marketable securities		23,000			(88,000	)

Comprehensive income (loss)	$	(348,000	)	$	2,407,000

	Accumulated Other Comprehensive Income

BALANCE, December 31, 2006	$	68,000
Change for the six months ended June 30, 2007, net of taxes		23,000

BALANCE, June 30, 2007	$	91,000

	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		-			-		-		-

Options exercised		(10,000	)		3.32		-		21,000
Options terminated and expired		-			-		-		-
Options outstanding at June 30, 2007		110,000		$	6.41		6.6	$	33,000

Options exercisable at June 30, 2007		53,250		$	6.18		6.8	$	8,000

Nonvested Shares	Shares			Weighted-Average Grant-Date Fair Value

Nonvested shares at January 1, 2007		59,100		$	7.48

Shares Granted		-
Shares Vested		(15,633	)		6.46
Shares Forfeited		-

Nonvested shares at June 30, 2007		43,467		$	5.32