##### 









U.S. SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




---

Form 10-QSB/A

Amendment No. 1


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT UNDER SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934       
|          
|           |  | For the quarterly period ended June 30,
    2003                                            
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission file number 000-24803

Vestin Group, Inc.

(Exact name of small business issuer as
specified in its charter)


|                                                                                                    |  |                                         
|--------------------------------------------------------------------------------------------------- |  | ----------------------------------------
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Delaware                                                                                            |  | 52-2102142                              
|(State or other jurisdiction of
    incorporation or organization)                                  |  | (I.R.S. Employer
    Identification No.)
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|2901 El Camino Avenue, Suite 206,
    Las Vegas, Nevada(Address of Principal Executive
    Offices) |  | 89102(Zip Code)                         

(702) 227-0965

(Issuers Telephone Number)


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

Number of shares outstanding of
each of the issuers classes of common equity, as of
October 24, 2003:

As of October 24, 2003, there
were 5,328,140 shares of the issuers common stock, $.0001
par value issued and 5,197,840 outstanding.

Transitional Small Business
Disclosure Format (Check
one):     Yes o          No þ



---






---



##### 



Explanatory Note

This Form 10-QSB/A is
being filed in response to comments received from the Securities
and Exchange Commission.

1



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##### 



VESTIN GROUP, INC. AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEET


|                                                                               |                                                                                                            |                                            |           |           |            | 
|------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | --------- | ---------- | 
|                                                                               |                                                                                                            | June 30, 2003                             
|                                                                               |                                                                                                            |                                           
|                                                                               |                                                                                                            | (Unaudited)                               
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|ASSETS                                                                        
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Cash                                                                           |                                                                                                            | $                                          | 2,585,260 |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Accounts receivable                                                            |                                                                                                            |                                            | 4,585,701 |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest receivable                                                            |                                                                                                            |                                            | 11,515    |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Due from related parties                                                       |                                                                                                            |                                            | 3,292,872 |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Notes receivable                                                               |                                                                                                            |                                            | 400,000   |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Note receivable  related party                                                |                                                                                                            |                                            | 117,964   |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Investments in real estate held for sale                                       |                                                                                                            |                                            | 7,274,614 |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Investments in mortgage loans on real estate, net
    of allowance of $190,000 |                                                                                                            |                                            | 628,171   |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other investments  related parties                                            |                                                                                                            |                                            | 2,101,449 |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other assets                                                                   |                                                                                                            |                                            | 568,618   |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Property and equipment, net                                                    |                                                                                                            |                                            | 731,858   |          
|                                                                               |                                                                                                            |                                            |           |          
|                                                                               |                                                                                                            | Total assets                               |           | $         | 22,298,022 | 
|                                                                               |                                                                                                            |                                            |           |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|LIABILITIES AND STOCKHOLDERS
    EQUITY                                      
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Accounts payable and accrued expenses                                          |                                                                                                            | $                                          | 3,242,383 |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Dividend payable                                                               |                                                                                                            |                                            | 74,817    |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Income taxes payable                                                           |                                                                                                            |                                            | 440,380   |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Notes payable  related party                                                  |                                                                                                            |                                            | 3,287,138 |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Notes payable                                                                  |                                                                                                            |                                            | 1,474,654 |          
|                                                                               |                                                                                                            |                                            |           |          
|                                                                               |                                                                                                            | Total liabilities                          |           |           | 8,519,372  | 
|                                                                               |                                                                                                            |                                            |           |          
|Commitments and contingencies                                                  |                                                                                                            |                                            |          |          
|Stockholders equity                                                           |                                                                                                            |                                            |           |          
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Preferred stock, $.0001 par value; 20 million
    shares authorized; 897,800 shares issued and outstanding |                                            |           | 90        |           
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Common stock, $.0001 par value; 100 million
    shares authorized 5,328,340 shares issued and outstanding  |                                            |           | 532       |           
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Additional paid-in capital                                                                                 |                                            |           | 9,303,036 |           
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Retained earnings                                                                                          |                                            |           | 4,474,992 |           
|                                                                               |                                                                                                            |                                            |           |          
|                                                                               |                                                                                                            | Total stockholders equity                 |           |           | 13,778,650 | 
|                                                                               |                                                                                                            |                                            |           |          
|                                                                               |                                                                                                            | Total liabilities and stockholders equity |           | $         | 22,298,022 | 
|                                                                               |                                                                                                            |                                            |           |          

The accompanying notes are an integral part of this statement.

2



---



##### 



VESTIN GROUP, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF INCOME (LOSS)


|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |            |            | 
|------------------------------------------------------------------ | ------------------------------------------- | ---------------------------------------------------------------------------------------- | --------- | ------------------------ | ---------- | ------------- | --------- | ------------- | --------- | - | ---------- | ---------- | ---------- | - | --------- | ---------- | ---------- | 
|                                                                   |                                             |                                                                                          |           |                         
|                                                                   |                                             | For the Three Months Ended                                                               |           | For the Six Months Ended
|                                                                   |                                             |                                                                                          |           |                         
|                                                                   |                                             | June 30, 2003                                                                            |           | June 30, 2002            |            | June 30, 2003 |           | June 30, 2002
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |              
|                                                                   |                                             |                                                                                         
|                                                                   |                                             | (Unaudited)                                                                             
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Revenues                                                           |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Loan placement and related fees             |                                                                                          | $         | 6,636,766                |            |               | $         | 8,740,203     |           |   | $          | 12,396,512 |            |   | $         | 13,347,801 |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Interest income                             |                                                                                          |           | 183,737                  |            |               |           | 63,722        |           |   |            | 367,598    |            |   |           | 242,501    |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Other revenue                               |                                                                                          |           | 372,730                  |            |               |           | 63,097        |           |   |            | 798,850    |            |   |           | 297,625    |           
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|                                                                   |                                             | Total revenues                                                                           |           |                          | 7,193,233  |               |           |               | 8,867,022 |   |            |            | 13,562,960 |   |           |            | 13,887,927 | 
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|Expenses                                                           |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Sales and marketing expenses                |                                                                                          |           | 2,815,242                |            |               |           | 2,533,215     |           |   |            | 5,634,781  |            |   |           | 4,067,698  |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | General and administrative expenses         |                                                                                          |           | 3,376,849                |            |               |           | 2,908,906     |           |   |            | 6,934,332  |            |   |           | 5,277,695  |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Valuation loss on real estate held for sale |                                                                                          |           | 1,287,883                |            |               |           |              |           |   |            | 1,287,883  |            |   |           |           |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Bad debt expense                            |                                                                                          |           | 715,301                  |            |               |           |              |           |   |            | 715,301    |            |   |           |           |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Capital Contribution to Vestin Fund I       |                                                                                          |           |                         |            |               |           |              |           |   |            | 1,600,000  |            |   |           |           |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Interest expenses                           |                                                                                          |           | 104,591                  |            |               |           | 170,709       |           |   |            | 199,950    |            |   |           | 440,591    |           
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|                                                                   |                                             | Total expenses                                                                           |           |                          | 8,299,866  |               |           |               | 5,612,830 |   |            |            | 16,372,247 |   |           |            | 9,785,984  | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                             | Income (loss) from continuing operations
    before provision (benefit) for income taxes |           |                          | (1,106,633 | )             |           |               | 3,254,192 |   |            |            | (2,809,287 | ) |           |            | 4,101,943  | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Provision (benefit) for income
    taxes                           |                                             |                                                                                          | (376,255  | )                        |            |               | 1,106,425 |               |           |   | (955,157   | )          |            |   | 1,394,661 |           
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|                                                                   |                                             | NET INCOME (LOSS)                                                                        |           |                          | (730,378   | )             |           |               | 2,147,767 |   |            |            | (1,854,130 | ) |           |            | 2,707,282  | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Preferred stock dividend                                           |                                             |                                                                                          | (225,228  | )                        |            |               | (234,450  | )             |           |   | (452,178   | )          |            |   | (468,900  | )         
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|Net income (loss) applicable to common
    shareholders            |                                             | $                                                                                        | (955,606  | )                        |            | $             | 1,913,317 |               |           | $ | (2,306,308 | )          |            | $ | 2,238,382 |           
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|Earnings (loss) per common
    share  Basic                       |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Net income (loss)                           |                                                                                          | $         | (0.18                    | )          |               | $         | 0.35          |           |   | $          | (0.43      | )          |   | $         | 0.41       |           
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|Earnings (loss) per common
    share  Diluted                     |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Net income (loss)                           |                                                                                          | $         | (0.18                    | )          |               | $         | 0.22          |           |   | $          | (0.43      | )          |   | $         | 0.26       |           
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|Weighted average number of common shares
    outstanding  Basic   |                                             |                                                                                          | 5,328,340 |                          |            |               | 5,444,883 |               |           |   | 5,328,031  |            |            |   | 5,482,952 |           
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           
|Weighted average number of common shares
    outstanding  Diluted |                                             |                                                                                          | 5,328,340 |                          |            |               | 8,738,727 |               |           |   | 5,328,031  |            |            |   | 8,662,066 |           
|                                                                   |                                             |                                                                                          |           |                          |            |               |           |               |           |   |            |            |            |   |           |           

The accompanying notes are an integral part of these statements.

3



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##### 



VESTIN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS
EQUITY

For the Six Months Ended June 30, 2003

|                                             |  |                 |         |              |  |            |    |          |  |         |           |          |  |       |     |  |  |   |           |   |  |   |            |   |  |   |            |  
|-------------------------------------------- |  | --------------- | ------- | ------------ |  | ---------- | -- | -------- |  | ------- | --------- | -------- |  | ----- | --- |  |  | - | --------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                             |  |                 |         |              |  |            |    |          |  |        
|                                             |  | Preferred Stock |         | Common Stock |  | Additional |    |          |  |        
|                                             |  |                 |         |              |  | Paid-in    |    | Retained |  |        
|                                             |  | Shares          |         | Amount       |  | Shares     |    | Amount   |  | Capital |           | Earnings |  | Total
|                                             |  |                 |         |              |  |            |    |          |  |         |           |          |  |      
|                                             |  |                
|                                             |  | (Unaudited)    
|                                            
|                                            
|                                            
|                                            
|Balance at January 1, 2003                   |  |                 | 907,800 |              |  | $          | 91 |          |  |         | 5,324,340 |          |  | $     | 532 |  |  | $ | 8,922,885 |   |  | $ | 7,420,672  |   |  | $ | 16,344,180 |  
|                                            
|                                            
|                                            
|                                            
|Dividends paid on preferred stock            |  |                 |        |              |  |            |   |          |  |         |          |          |  |       |    |  |  |   |          |   |  |   | (452,178   | ) |  |   | (452,178   | )
|                                            
|                                            
|                                            
|                                            
|Dividends paid on common stock               |  |                 |        |              |  |            |   |          |  |         |          |          |  |       |    |  |  |   |          |   |  |   | (639,372   | ) |  |   | (639,372   | )
|                                            
|                                            
|                                            
|                                            
|Expenses related to the issuance of warrants |  |                 |        |              |  |            |   |          |  |         |          |          |  |       |    |  |  |   | 464,151   |   |  |   |           |   |  |   | 464,151    |  
|                                            
|                                            
|                                            
|                                            
|Common stock options exercised               |  |                 |        |              |  |            |   |          |  |         | 4,000     |          |  |       |    |  |  |   | 15,999    |   |  |   |           |   |  |   | 15,999     |  
|                                            
|                                            
|                                            
|                                            
|Redemption of preferred stock                |  |                 | (10,000 | )            |  |            | (1 | )        |  |         |          |          |  |       |    |  |  |   | (99,999   | ) |  |   |           |   |  |   | (100,000   | )
|                                            
|                                            
|                                            
|                                            
|Net loss                                     |  |                 |        |              |  |            |   |          |  |         |          |          |  |       |    |  |  |   |          |   |  |   | (1,854,130 | ) |  |   | (1,854,130 | )
|                                             |  |                 |         |              |  |            |    |          |  |         |           |          |  |       |     |  |  |   |           |   |  |   |            |   |  |   |            |  
|Balance at June 30, 2003                     |  |                 | 897,800 |              |  | $          | 90 |          |  |         | 5,328,340 |          |  | $     | 532 |  |  | $ | 9,303,036 |   |  | $ | 4,474,992  |   |  | $ | 13,778,650 |  
|                                             |  |                 |         |              |  |            |    |          |  |         |           |          |  |       |     |  |  |   |           |   |  |   |            |   |  |   |            |  

The accompanying notes are an integral part of these statements.

4



---



##### 



VESTIN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |            |            |         |           |           | 
|----------------------------------------------- | ----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ----------------------------------------- | ----------------------------------------- | --------- | ---------- | ---------- | ---------- | ------- | --------- | --------- | 
|                                                |                                                                                                       |                                                                                                                                      
|                                                |                                                                                                       | For the Six Months Ended                                                                                                             
|                                                |                                                                                                       |                                                                                                                                      
|                                                |                                                                                                       | June 30, 2003                                                                                                                         |                                                                   | June 30, 2002                            
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                          
|                                                |                                                                                                       |                                                                                                                                      
|                                                |                                                                                                       | (Unaudited)                                                                                                                          
|                                               
|                                               
|                                               
|                                               
|Cash flow from operating activities:            |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                               
|                                               
|                                               
|                                               
|                                                | Net income (loss)                                                                                     |                                                                                                                                       | $                                                                 | (1,854,130                                | )                                         |           | $          | 2,707,282  |           
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       | Adjustments to reconcile net income
    (loss) from continuing operations to net cash provided by
    (used in) operating activities: |                                                                   |                                           |                                           |           |            |            |            |        
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       | Depreciation and amortization                                     |                                           |                                           | 62,079    |            |            |            | 50,589  |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       | Stock based compensation                                          |                                           |                                           | 464,151   |            |            |            | 501,959 |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       | Net loss from sale of investment in real estate
    held for sale |                                           |                                           |          |            |            |            | 198,111 |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       | Capital contribution to Fund I                                    |                                           |                                           | 1,600,000 |            |            |            |        |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       | Valuation allowance for real estate held for sale                 |                                           |                                           | 1,287,883 |            |            |            |        |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       | Provision for loan losses                                         |                                           |                                           | 110,000   |            |            |            |        |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       | Changes in operating assets and liabilities:                      |                                           |                                           |           |            |            |            |         |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       |                                                                   | Accounts receivable                       |                                           |           | 278,041    |            |            |         | 139,098   |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       |                                                                   | Interest receivable                       |                                           |           | 101,836    |            |            |         |          |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       |                                                                   | Other assets                              |                                           |           | 102,381    |            |            |         | (12,802   | )        
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       |                                                                   | Due from related parties                  |                                           |           | (2,052,708 | )          |            |         | (100,077  | )        
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       |                                                                   | Accounts payable and accrued expenses     |                                           |           | 1,273,004  |            |            |         | (122,573  | )        
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       |                                                                   | Dividend payable                          |                                           |           | (833       | )          |            |         |          |          
|                                               
|                                               
|                                               
|                                               
|                                                |                                                                                                       |                                                                                                                                       |                                                                   | Income taxes payable                      |                                           |           | (955,158   | )          |            |         | 549,648   |          
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           | Net cash provided by operating activities |           |            | 416,546    |            |         |           | 3,911,235 | 
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|Cash flows from investing
    activities:       |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                               
|                                               
|                                               
|                                               
|                                                | Purchase of property and equipment                                                                    |                                                                                                                                       |                                                                   | (74,824                                   | )                                         |           |            | (111,544   | )         
|                                               
|                                               
|                                               
|                                               
|                                                | Cash advanced on notes receivable                                                                     |                                                                                                                                       |                                                                   |                                          |                                           |           |            | (110,000   | )         
|                                               
|                                               
|                                               
|                                               
|                                                | Principal payments received on notes receivable                                                       |                                                                                                                                       |                                                                   |                                          |                                           |           |            | 991,499    |           
|                                               
|                                               
|                                               
|                                               
|                                                | Net purchase of investment in marketable
    securities                                               |                                                                                                                                       |                                                                   |                                          |                                           |           |            | (138,039   | )         
|                                               
|                                               
|                                               
|                                               
|                                                | Net sale of other investments                                                                         |                                                                                                                                       |                                                                   |                                          |                                           |           |            | 114,999    |           
|                                               
|                                               
|                                               
|                                               
|                                                | Purchase of other investments  related
    party                                                     |                                                                                                                                       |                                                                   | (1,449                                    | )                                         |           |            |           |           
|                                               
|                                               
|                                               
|                                               
|                                                | Purchase of investments in mortgage loans on real
    estate (net of sales)                           |                                                                                                                                       |                                                                   |                                          |                                           |           |            | (2,293,341 | )         
|                                               
|                                               
|                                               
|                                               
|                                                | Proceeds from investments in mortgage loans                                                           |                                                                                                                                       |                                                                   | 8,058,939                                 |                                           |           |            |           |           
|                                               
|                                               
|                                               
|                                               
|                                                | Purchase of investment in real estate held for
    sale                                               |                                                                                                                                       |                                                                   | (1,100,000                                | )                                         |           |            | (30,721    | )         
|                                               
|                                               
|                                               
|                                               
|                                                | Proceeds from sale of investment in mortgage
    loans on real estate                                 |                                                                                                                                       |                                                                   |                                          |                                           |           |            | 4,717,000  |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   | Net cash provided by investing activities |                                           |           | 6,882,666  |            |            |         | 3,139,853 |          
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|Cash flows from financing
    activities:       |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                               
|                                               
|                                               
|                                               
|                                                | Payments on lines of credit                                                                           |                                                                                                                                       |                                                                   | (7,000,000                                | )                                         |           |            |           |           
|                                               
|                                               
|                                               
|                                               
|                                                | Proceeds from notes payable  related
    party                                                       |                                                                                                                                       |                                                                   | (140,415                                  | )                                         |           |            |           |           
|                                               
|                                               
|                                               
|                                               
|                                                | Payments on notes payable                                                                             |                                                                                                                                       |                                                                   |                                          |                                           |           |            | 4,397,232  |           
|                                               
|                                               
|                                               
|                                               
|                                                | Proceeds from notes payable                                                                           |                                                                                                                                       |                                                                   | 1,078,997                                 |                                           |           |            |           |           
|                                               
|                                               
|                                               
|                                               
|                                                | Common stock options exercised                                                                        |                                                                                                                                       |                                                                   | 15,999                                    |                                           |           |            |           |           
|                                               
|                                               
|                                               
|                                               
|                                                | Redemption of preferred stock                                                                         |                                                                                                                                       |                                                                   | (100,000                                  | )                                         |           |            |           |           
|                                               
|                                               
|                                               
|                                               
|                                                | Payment of dividend on preferred stock                                                                |                                                                                                                                       |                                                                   | (452,178                                  | )                                         |           |            | (468,900   | )         
|                                               
|                                               
|                                               
|                                               
|                                                | Payment of dividend on common stock                                                                   |                                                                                                                                       |                                                                   | (639,372                                  | )                                         |           |            | (550,062   | )         
|                                               
|                                               
|                                               
|                                               
|                                                | Purchase of treasury stock                                                                            |                                                                                                                                       |                                                                   |                                          |                                           |           |            | (1,885,582 | )         
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                |                                                                                                       | Net cash used in financing activities                                                                                                 |                                                                   |                                           | (7,236,969                                | )         |            |            | (7,301,776 | )      
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|NET INCREASE (DECREASE) IN CASH                 |                                                                                                       |                                                                                                                                       | 62,243                                                            |                                           |                                           |           | (250,688   | )         
|                                               
|                                               
|                                               
|                                               
|Cash at beginning of period                     |                                                                                                       |                                                                                                                                       | 2,523,017                                                         |                                           |                                           |           | 3,776,682  |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|Cash at end of period                           |                                                                                                       | $                                                                                                                                     | 2,585,260                                                         |                                           |                                           | $         | 3,525,994  |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|Supplemental cash flow information:             |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                               
|                                               
|                                               
|                                               
|                                                | Cash paid for federal income taxes                                                                    |                                                                                                                                       | $                                                                 |                                          |                                           |           | $          | 1,335,091  |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                | Cash paid for interest                                                                                |                                                                                                                                       | $                                                                 | 199,950                                   |                                           |           | $          | 325,883    |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|Noncash investing and financing
    activities: |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                               
|                                               
|                                               
|                                               
|                                                | Dividends declared on preferred stock                                                                 |                                                                                                                                       | $                                                                 | 75,650                                    |                                           |           | $          | 78,150     |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                | Dividends declared on common stock                                                                    |                                                                                                                                       | $                                                                 |                                          |                                           |           | $          | 109,248    |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                | Notes payable assumed through foreclosure                                                             |                                                                                                                                       | $                                                                 | 244,654                                   |                                           |           | $          | 158,000    |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                | Notes payable  related parties assumed
    through foreclosure                                       |                                                                                                                                       | $                                                                 | 802,363                                   |                                           |           | $          |           |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                | Note payable related to capital contribution to
    Fund I                                            |                                                                                                                                       | $                                                                 | 723,763                                   |                                           |           | $          |           |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                | In substance receipt of amounts due from Fund I
    related to capital contribution in Fund I         |                                                                                                                                       | $                                                                 | 876,237                                   |                                           |           | $          |           |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                | Investments in real estate held for sale acquired
    through foreclosure                             |                                                                                                                                       | $                                                                 | 1,094,914                                 |                                           |           | $          | 1,321,600  |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           
|                                                | Investment in real estate held for sale acquired
    for investments in mortgage loans on real estate |                                                                                                                                       | $                                                                 | 478,829                                   |                                           |           | $          |           |           
|                                                |                                                                                                       |                                                                                                                                       |                                                                   |                                           |                                           |           |            |           

The accompanying notes are an integral part of these statements.

5



---



##### 



VESTIN GROUP, INC.

AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)


Note 1  Basis of Presentation

Vestin Group, Inc. (Vestin or the
Company) conducts its operations primarily through Vestin
Mortgage, Inc., a wholly owned subsidiary (Vestin
Mortgage). Vestin Mortgage operates as a mortgage broker
licensed in the state of Nevada. Vestin Mortgage is engaged in
the brokerage and placement of commercial loans secured by real
property. Vestin Mortgages primary operations consist of
the brokerage and placement of commercial, construction,
acquisition and development, land, and residential mortgage
loans secured by real property as well as managing two publicly
held funds, Vestin Fund I, LLC (Fund I)
and Vestin Fund II, LLC (Fund II), and an
entity owned by the Companys Chief Executive Officer,
inVestin Nevada, Inc. (inVestin) which invest in
mortgage loans. Vestin Mortgage as manager of Fund I,
Fund II and inVestin will be referred to as
Manager.

The interim consolidated financial statements present the
balance sheet, statements of income, stockholders equity
and cash flows of Vestin Group, Inc. and its subsidiaries. All
significant intercompany balances have been eliminated in
consolidation.

The interim consolidated financial information is unaudited. In
the opinion of management, all adjustments necessary to present
fairly the financial position as of June 30, 2003 and the
results of operations and cash flows presented herein have been
included in the consolidated financial statements. Interim
results are not necessarily indicative of results of operations
for the full year.

The accompanying consolidated financial statements have been
prepared in accordance with Securities and Exchange Commission
requirements for interim financial statements. Therefore, they
do not include all of the information and footnotes required by
accounting principles generally accepted in the United States
for complete financial statements. The financial statements
should be read in conjunction with the Form 10-KSB/ A for
the year ended December 31, 2002 of the Company.

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 the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.

Certain reclassifications have been made to the prior
years consolidated financial statements to conform with
the current year presentation.

Note 2  Stock-Based Compensation

The Company has stock-based compensation plans covering the
majority of its employees, a plan covering the Companys
Board of Directors, and plans related to employment contracts
with certain Executive Officers of the Company. The Company
accounts for stock-based compensation utilizing the intrinsic
value method in accordance with the provisions of Accounting
Principles Board Opinion No. 25 (APB 25),
Accounting for Stock Issued to Employees and related
Interpretations. Accordingly, no compensation expense is
recognized for fixed option plans because the exercise prices of
Employee stock options equal or exceed the market prices of the
underlying stock on the dates of grant.

The Company applies APB 25 in accounting for stock options
issued to employees. Under APB 25, employee compensation
cost is recognized when estimated fair value of the underlying
stock on date of the grant exceeds exercise price of the stock
option. For stock options and warrants issued to non-employees,
the Company applies Statement of Financial Accounting Standards
(SFAS) 123, Accounting for Stock-Based
Compensation (SFAS 123), which requires the
recognition of compensation cost based upon the fair value of
stock options at the grant date using the Black-Scholes option
pricing model.

6



---



##### 



VESTIN GROUP, INC.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)


The following table represents the effect on net loss and loss
per share if the Company had applied the fair value based method
and recognition provisions SFAS 123 to stock-based employee
compensation:

|                                                                                                                                            |                                    |                          |            |          |   |   |           |      | 
|------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ------------------------ | ---------- | -------- | - | - | --------- | ---- | 
|                                                                                                                                            |                                    |                         
|                                                                                                                                            |                                    | For the Six Months Ended
|                                                                                                                                            |                                    |                         
|                                                                                                                                            |                                    | June 30,                 |            | June 30,
|                                                                                                                                            |                                    | 2003                     |            | 2002    
|                                                                                                                                            |                                    |                          |            |         
|Net income (loss), as reported                                                                                                              |                                    | $                        | (1,854,130 | )        |   | $ | 2,707,282 |     
|                                                                                                                                           
|                                                                                                                                           
|                                                                                                                                           
|                                                                                                                                           
|Add: Stock-based compensation expense included in
    reported income (loss), net of related tax effects                                    |                                    |                          | 464,151    |          |   |   | 501,959   |     
|                                                                                                                                           
|                                                                                                                                           
|                                                                                                                                           
|                                                                                                                                           
|Deduct: Total stock-based compensation expense
    determined under fair value based methods for all awards, net of
    related tax effects |                                    |                          | (1,181,661 | )        |   |   | (610,128  | )   
|                                                                                                                                            |                                    |                          |            |          |   |   |           |     
|Pro forma net income (loss)                                                                                                                 |                                    | $                        | (2,571,640 | )        |   | $ | 2,599,113 |     
|                                                                                                                                            |                                    |                          |            |          |   |   |           |     
|Net income (loss) per common share                                                                                                          |                                    |                          |            |          |   |   |           |     
|                                                                                                                                           
|                                                                                                                                           
|                                                                                                                                           
|                                                                                                                                           
|                                                                                                                                            | Basic income (loss), as reported   |                          | $          | (0.43    | ) |   | $         | 0.41 | 
|                                                                                                                                            |                                    |                          |            |          |   |   |           |     
|                                                                                                                                            | Basic income (loss), pro forma     |                          | $          | (0.57    | ) |   | $         | 0.39 | 
|                                                                                                                                            |                                    |                          |            |          |   |   |           |     
|                                                                                                                                            | Diluted income (loss), as reported |                          | $          | (0.43    | ) |   | $         | 0.26 | 
|                                                                                                                                            |                                    |                          |            |          |   |   |           |     
|                                                                                                                                            | Diluted income (loss), pro forma   |                          | $          | (0.57    | ) |   | $         | 0.25 | 
|                                                                                                                                            |                                    |                          |            |          |   |   |           |     

As required, the pro forma disclosures above include options
granted since January 1, 1995. Consequently, the effects of
applying SFAS 123 for providing pro forma disclosures may not be
representative of the effects on reported net income for future
years until all options outstanding are included in the pro
forma disclosures. For purposes of pro forma disclosures, the
estimated fair value of stock-based compensation plans and other
options is amortized to expense primarily over the vesting
period.

In December 2002, the FASB issued SFAS No. 148,
Accounting for Stock-Based Compensation 
Transition and Disclosure. SFAS No. 148 amends the
transition and disclosure provisions of SFAS No. 123. The
Company has determined that it will not adopt SFAS No. 123
to account for employee stock options using the fair value
method.



|         |                           
|-------- | --------------------------
|Note 3  | Related Party Transactions

Notes receivable  In 2000, we loaned Donovan Jacobs,
one of our employees, approximately $251,000 to enable him to
operate, develop and grow a California real estate loan fund. We
do not have any affiliations with the California real estate
loan fund. The loan is unsecured but is a full recourse loan to
Mr. Jacobs. The interest rate of 10% is payable on a
semi-annual basis and the principal is due on the maturity date
of April 19, 2004. As of June 30, 2003, the balance on
this note was approximately $118,000.

Due from related parties approximating $3,292,872 as of
June 30, 2003 are comprised of the following:



| |                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Amounts due from Fund I totaling $56,421 relate to
    management fees, earnings on units in Fund I, and
    reimbursable expenses. Amounts due from Fund I bear no
    interest and are due on demand.                                                             
|
| | Amounts due from Fund II totaling $2,735,713 relate to
    management fees, earnings on units in Fund II, and
    reimbursable expenses. Amounts due from Fund II bear no
    interest and are due on demand.                                                       
|
| | Amounts due from the Companys Chief Executive Officer or
    Companies wholly owned by him totaling approximately $365,831
    relate to various advances made, primarily related to litigation
    expenses. Such advances bear no interest and are due on demand.

7



---



##### 



VESTIN GROUP, INC.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)




| |                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Amounts due from Vestin Fund III, LLC (formerly known as
    RE Investments III, LLC), a related entity, totaling
    $134,907 relate to expenses paid on behalf of the entity for
    which the Company expects to receive payment.

Other investments  related parties consists of the
Companys investments in units of Fund I and Fund II
totaling $1.0 million and $1.1 million, respectively,
as of June 30, 2003.

During the three and six months ended June 30, 2003, the
Company incurred expenses of $283,102 and $528,863,
respectively, for legal fees to Berkley, Gordon, Levine,
Goldstein & Garfinkel, LLP, and Levine,
Garfinkel & Katz, LLP, law firms in which the Executive
Vice President of Legal and Corporate Affairs of the Company has
or had an equity ownership interest.

The Companys President and Tax Manager are equity owners
in a L.L. Bradford & Company, LLC, Certified Public
Accounting firm (L.L. Bradford). For the three and
six months ended June 30, 2003, $54,955 and $92,455,
respectively, was paid to L.L. Bradford for services provided to
the Company. During the three and six months ended June 30,
2003, L.L. Bradford also assisted in the preparation of the
Companys financial reports and provided bookkeeping
services at no charge to the Company.

For the three-month periods ended June 30, 2003 and 2002,
the Company recorded revenues of approximately $25,000 and
$31,000, respectively, from its investment in Fund I as a result
of distributions declared during those periods. For the six
month periods ended June 30, 2003 and 2002, the Company
recorded revenues of approximately $52,000 and $64,000,
respectively, from its investment in Fund I as a result of
distributions declared during those periods. Vestin Mortgage, as
the Manager is entitled to a monthly management fee of up to
0.25% of the aggregate capital contributions to Fund I.
During the three month periods ended June 30, 2003 and
2002, Vestin Mortgage recorded management fees from Fund I
of approximately $64,000 and $63,000, respectively. During the
six month periods ended June 30, 2003 and 2002, Vestin
Mortgage recorded management fees from Fund I of
approximately $126,000 and $124,000, respectively.

For the three month periods ended June 30, 2003 and 2002,
the Company recorded revenues of approximately $28,000 and
$34,000, respectively, from its investment in Fund II as a
result of distributions declared during those periods. For the
six month periods ended June 30, 2003 and 2002, the Company
recorded revenues of approximately $69,000 and $69,000,
respectively, from its investment in Fund II as a result of
distributions declared during those periods. Vestin Mortgage as
the Manager is entitled to a monthly management fee of up to
0.25% of the aggregate capital contributions to Fund II.
During the three month periods ended June 30, 2003 and
2002, Vestin Mortgage recorded management fees from Fund II
approximating $234,000 and $134,000, respectively. During the
six month periods ended June 30, 2003 and 2002, Vestin
Mortgage recorded management fees from Fund II
approximating $443,000 and $237,000, respectively.

During the three month periods ended June 30, 2003, the
Company sold $7.0 million in loans to Fund II pursuant
to the terms of the Operating Agreements of the Funds which
permits the Funds to acquire loans from the Company if the loans
were acquired to facilitate their acquisition by the Funds and
provided that the price paid by the Funds is no greater than the
Companys cost. For the six months ended June 30,
2003, the Company sold approximately $479,000 and
$9.3 million in loans to Fund I and Fund II respectively.
During the three month period ended June 30, 2003, the
Company purchased $2.0 million in loans from Fund II.
For the six month period ended June 30, 2003, the Company
purchased approximately $479,000 and $2.0 million in loans
from Fund I and Fund II, respectively.

During the six months ended June 30, 2003, the Company
purchased real estate held for sale of $1.6 million from
Vestin Fund I. No gain or loss was recorded by Fund I
on this sale.

8



---



##### 



VESTIN GROUP, INC.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)


The Company relies primarily on Fund I and Fund II as
funding sources for mortgage loans brokered. The Company placed
approximately $97.1 million and $151.1 million in
mortgage loans in the three month periods ended June 30,
2003, and 2002, respectively. The Company placed approximately
$152.6 million and $235.2 million in mortgage loans in
the six-month periods ended June 30, 2003, and 2002,
respectively. These loans were primarily funded by Fund I
and Fund II.

During the three and six months ended June 30, 2003, the
Company paid $388,250 and $641,500, respectively, to C5, LLC, a
company wholly owned by the Companys Chief Executive
Officer pursuant to an Aircraft Usage Agreement. The agreement
allows the Company to use an airplane on a preferred basis over
any other proposed user. The Company is required to pay a
monthly fee based on an hourly rate of $3,000 per hour for the
first 10 hours and $2,500 per hour for each hour thereafter. The
Company is required to make a minimum monthly payment equivalent
to 16 hours of usage ($45,000).

Note 4  Investments in Mortgage Loans on Real
Estate

As of June 30, 2003, all outstanding mortgage loans were
current and performing according to their terms. No outstanding
mortgage loans were past due with respect to payment of interest
at June 30, 2003. See Note 5 for information with
respect to properties acquired through foreclosure on certain
defaulted mortgage loans. Management has evaluated the
collectibility of the loans in foreclosure in light of the
category and dollar amounts of such loans, adverse situations
that may affect the borrowers ability to repay, prevailing
economic conditions and the underlying collateral securing the
loan. Due to economic uncertainties and historical loss
experience, the Companys management has established a
reserve for inherent losses in the portfolio totaling $190,000
based on the Companys policies and procedures regarding
the valuation of its investments in mortgage loans on real
estate as a long-term investment.

Loan to value ratios are based on appraisals obtained at the
time of loan origination and may not reflect subsequent changes
in value estimates. Such appraisals are generally dated within
12 months of the date of loan origination. The appraisals
may be for the current estimate of the as-if
developed value of the property, which approximates the
post-construction value of the collateralized property assuming
that such property is developed. As-if developed values on raw
land loans or acquisition and development loans often
dramatically exceed the immediate sales value and may include
anticipated zoning changes, selection by a purchaser against
multiple alternatives, and successful development by the
purchaser; upon which development is dependent on availability
of financing. As most of the appraisals will be prepared on an
as-if developed basis, if a loan goes into default prior to any
development of a project, the market value of the property may
be substantially less than the appraised value. As a result,
there may be less security than anticipated at the time the loan
was originally made. If there is less security and a default
occurs, the Company may not recover the full amount of the loan.

Note 5  Investments in Real Estate Held for
Sale

At June 30, 2003, the Company had various properties with a
carrying value totaling $7.3 million, which were acquired
through foreclosure and recorded as investments in real estate
held for sale and secure specific payables as discussed in
Note 7. Such investments in real estate held for sale are
accounted for at the lower of cost or fair value less costs to
sell, based on appraisals and knowledge of local market
conditions. It is not the

9



---



##### 



VESTIN GROUP, INC.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)


Companys intent to invest in or own real estate acquired
through foreclosure. The Company seeks to sell properties
acquired through foreclosure as quickly as circumstances permit.

|                                                 |  |           |     |          |  |   |           | 
|------------------------------------------------ |  | --------- | --- | -------- |  | - | --------- | 
|                                                 |  |           |     | Adjusted
|                                                 |  | % of      |     | Carrying
|Description                                      |  | Ownership |     | Value   
|                                                 |  |           |     |         
|Raw land in Utah                                 |  |           | 100 | %        |  | $ | 3,000,000 | 
|                                                
|                                                
|                                                
|                                                
|Raw land in Las Vegas, Nevada                    |  |           | 100 | %        |  |   | 595,860   | 
|                                                
|                                                
|                                                
|                                                
|Raw land in Las Vegas, Nevada                    |  |           | 100 | %        |  |   | 593,840   | 
|                                                
|                                                
|                                                
|                                                
|72-unit condominium project in Las Vegas, Nevada |  |           | 83  | %        |  |   | 1,084,914 | 
|                                                
|                                                
|                                                
|                                                
|Residence in Las Vegas, Nevada                   |  |           | 100 | %        |  |   | 2,000,000 | 
|                                                 |  |           |     |          |  |   |           | 
|Total                                            |  |           |     |          |  | $ | 7,274,614 | 
|                                                 |  |           |     |          |  |   |           | 

Note 6  Lines of Credit

The Company maintained two revolving lines of credit totaling
$5.0 million and $2.0 million with two financial
institutions specifically for interim funding of mortgage loans
placed. Both lines of credit expired in June 2003. As of
June 30, 2003, both lines had been paid in full upon
maturity. The Company plans to negotiate the renewal of the
$2.0 million line of credit within the next three months,
but has informed the lender that it does not wish to renew the
$5.0 million line of credit. These lines of credit were
guaranteed by the Companys Chief Executive Officer and
were secured by the deeds of trust on the property being
advanced against. The Company was in compliance with all
covenants on these lines of credit through maturity.

Note 7  Notes Payable

Notes payable totaling $1,474,654 as of June 30, 2003,
consist of the following:



| |                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Promissory notes totaling $374,654 to various parties related to
    foreclosed real estate properties. Since the Company acquired
    the properties through foreclosure, it is not required and does
    not intend to pay interest on these notes.                                                                                                                         
|
| | Promissory note to a financial institution totaling $1,100,000
    related to a residential real estate property the Company had
    purchased from Fund I. The note is collateralized by the
    property, at an interest rate of 1.5% over the prime interest
    rate (4.25% at June 30, 2003) payable in monthly interest
    installments and is due on February 1, 2004.

Note 8  Notes Payable  Related Party

Notes payable  related party totaling $3,287,138 as
of June 30, 2003, consists of the following:



| |                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Note payable to a company solely owned by the Companys
    Chief Executive Officer totaling $158,000 related to developed
    parcels of land. Since the Company acquired the properties
    through foreclosure, it is not required and does not intend to
    pay interest on this note.
|
| | Note payable to an entity controlled by the Companys Chief
    Executive Officer totaling $569,061 related to vacant land.
    Since the Company acquired the properties through foreclosure,
    it is not required and does not intend to pay interest on this
    note.                
|
| | Note payable to entities controlled by the Companys Chief
    Executive Officer totaling $1,174,367 related to vacant land.
    Since the Company acquired the properties through foreclosure,
    it is not required and does not intend to pay interest on this
    note.               

10



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##### 



VESTIN GROUP, INC.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)




| |                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Notes payable to entities controlled by the Companys Chief
    Executive Officer totaling $541,901 related to an apartment
    complex. Since the Company acquired the properties through
    foreclosure, it is not required and does not intend to pay
    interest on this note.                                                                                    
|
| | Notes payable to entities controlled by the Companys
    President totaling $260,462 related to an apartment complex.
    Since the Company acquired the properties through foreclosure,
    it is not required and does not intend to pay interest on this
    note.                                                                                                  
|
| | Note payable to Fund I totaling $583,347 as further discussed in
    Note 11. The original value of the note was $723,763 and is
    unsecured, bears interest at 6%, matures on September 30,
    2003, and requires five equal monthly payments totaling $147,668
    which began on May 31, 2003. The Company made the payment
    due June 30, 2003 on July 1, 2003.

Note 9  Dividends Payable

In June 2003, the Company declared a cash dividend to preferred
stockholders of approximately $0.08 per share that was paid in
July 2003.

Note 10  Earnings (Loss) per Share

Basic earnings (loss) per share exclude the effects of
dilution and are computed by dividing net income
(loss) available to common shareholders adjusted for
dividends to preferred shareholders by the weighted average
amount of common stock outstanding for the periods. Diluted
earnings (loss) per share reflect the potential dilution
that may occur if options, convertible preferred stock or other
contracts to issue stock were exercised or converted into common
stock. During the three and six months ended June 30, 2003,
basic and diluted earnings per share included adjustments for
dividends to preferred shareholders of $225,228 and $452,178,
respectively. For the three and six months ended June 30,
2003, options and warrants to purchase 2,487,467 and 2,277,967
shares, respectively, of common stock were excluded from the
computation of diluted earnings per share because their effect
would be antidilutive.

Note 11  Capital Contribution to Vestin
Fund I

The Company elected to contribute capital of $1.6 million
to Fund I in the form of an interest-bearing amortizing
note of $723,763 and the forgiveness of an obligation due from
Fund I in the amount of $876,237. The Company did not
receive any additional units in Fund I in consideration of
the capital contribution. The capital contribution increased the
existing members capital accounts in Fund I to
approximately $10 per unit. The amount of the contribution was
charged to current operating results during the six months ended
June 30, 2003, as the Company did not receive additional
units for the contribution.

Note 12  New Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46,
Consolidation of Variable Interest Entities(FIN 46), which addresses consolidation by
business enterprises of variable interest entities
(VIEs). The accounting provisions and expanded
disclosure requirements for VIEs are effective at inception for
VIEs created after January 31, 2003, and are effective for
reporting periods beginning after June 15, 2003 for VIEs
created prior to February 1, 2003. An entity is subject to
consolidation according to the provisions of FIN 46 if, by
design, either (i) the total equity investment at risk is
not sufficient to permit the entity to finance its activities
without additional subordinated financial support from other
parties, or (ii) as a group, the holders of the equity
investment at risk lack: (a) direct or indirect ability to
make decisions about an entitys activities
(b) the obligation to absorb the expected losses of the
entity if they occur; or (c) the right to receive the
expected residual returns of the entity if they occur. In
general, FIN 46 will require a VIE to be consolidated when
an enterprise has a variable interest that will absorb a
majority of the VIEs expected losses or receive a

11



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##### 



VESTIN GROUP, INC.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)


majority of the VIEs expected residual return. The Company
continues to evaluate its relationships and interest in entities
that may be considered VIEs. The impact of adopting FIN 46 on
the Consolidated Financial Statements is still being reviewed.

Note 13  Legal Proceedings

The Company, Vestin Mortgage and Del Mar Mortgage, Inc., a
company wholly owned by Mike Shustek, the largest shareholder
and CEO of the Company, and various affiliates of the Company
are defendants in a civil action (the Action). The
Action was initiated by Desert Land, L.L.C. (Desert
Land) on various loans arranged by Del Mar Mortgage, Inc.
and/or Vestin Mortgage. On April 10, 2003, the United
States District Court for the District of Nevada (the
Court) entered judgment jointly and severally in
favor of Desert Land against the Company, Vestin Mortgage and
Del Mar Mortgage, Inc. Judgment was predicated upon the
Courts finding that Del Mar Mortgage, Inc. received an
unlawful penalty fee from plaintiffs. Vestin Group and Vestin
Mortgage, which did not receive any portion of the penalty fee,
were found by the Court to be successors to Del Mar
Mortgage, Inc. Vestin Group and Vestin Mortgage are appealing
this finding.

Defendants subsequently filed a motion for reconsideration. The
Court denied the motion and, on August 13, 2003, held that
Vestin Group, Vestin Mortgage, and Del Mar Mortgage, Inc. are
jointly and severally liable for the judgment in the amount of
$5,683,312.19 (which amount includes prejudgment interest and
attorneys fees). On August 27, 2003, the Court stayed
execution of the judgment against Vestin Group and Vestin
Mortgage based upon the posting of a bond in the amount of
$5,830,000. The bond was arranged by Michael Shustek and was
posted without any cost or obligation to Vestin Group and Vestin
Mortgage. Additionally, Del Mar Mortgage, Inc. has indemnified
Vestin Group and Vestin Mortgage for any losses and expenses in
connection with the Action, and Mr. Shustek has guaranteed
the indemnification. All of the defendants held liable to Desert
Land are planning to appeal the judgment.

The Company and its subsidiaries are involved in a number of
legal proceedings concerning matters arising in connection with
the conduct of their business activities. The Company believes
it has meritorious defenses to each of these actions and intends
to defend them vigorously. The Company believes that it is not a
party to, nor are any of its subsidiaries the subject of, any
pending legal or arbitration proceedings that would have a
material adverse effect on the Companys financial
condition or results of operations or cash flows, although it is
possible that the outcome of any such proceedings could have a
material impact on the Companys net income in any
particular period.



|          |                                             
|--------- | --------------------------------------------
|Note 14  | Redemption Limitations of Fund I and Fund II

In order to comply with the operating agreements of Fund I
and Fund II and Federal statutes, both Funds may redeem no
more than 10% of the members capital in any calendar year.
Beginning capital as of January 1, 2003 for Fund I and
Fund II were $97.5 million and $315.0 million,
respectively, which would limit redemptions for Fund I and
Fund II to $9.75 million and $31.5 million for
calendar 2003, respectively. On June 17, 2003, Fund I
discontinued accepting requests for the redemption of units for
the 2003 calendar year. As of September 19, 2003, the total
of redemptions made and redemptions requested and awaiting
payment was $9.1 million for Fund I. All redemptions
requests received after that date have been logged for
redemption beginning in January 2004. As of September 30,
requests to redeem 831,000 units in 2004 and 120,526 units
in 2005 had been logged. On September 12, 2003,
Fund II discontinued accepting requests for the redemption
of units for the 2003 calendar year. As of September 12,
2003, the total of redemptions made and redemptions requested
and awaiting payment was $30.9 million for Fund II.
All redemptions requests received after that date have been
logged for redemption beginning in January 2004. As of
September 30, 2003, requests to redeem 579,480 units
had been logged.

12



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##### 



PART II.     OTHER
INFORMATION



|        |                                 
|------- | --------------------------------
|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K



|    |         
|--- | --------
|(a) | Exhibits

|        |    |             |  |                                                                                                                                                                  |  |  |    |  
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | -- | -
|Exhibit |    |             |  |                                                                                                                                                                 
|Number  |    | Description |  | Filing Method                                                                                                                                                   
|        |    |             |  |                                                                                                                                                                 
|        | 2  | .1          |  | Agreement and Plan of Reorganization among the
    Company, Capsource, Inc. and Stephen J. Byrne, dated as of
    April 9, 1999                                  |  |  | (1 | )
|        | 2  | .2          |  | Asset Acquisition Agreement between the Company
    and Del Mar Holdings, Inc., dated as of April 9, 1999                                                        |  |  | (1 | )
|        | 2  | .3          |  | Asset Acquisition Agreement between the Company
    and Del Mar Mortgage, Inc., dated as of April 9, 1999                                                        |  |  | (1 | )
|        | 2  | .4          |  | Agreement and Plan of Reorganization among the
    Company, L.L. Bradford & Company and the
    Shareholders of L.L. Bradford & Company, dated
    June 30, 2000 |  |  | (2 | )
|        | 3  | .1          |  | Certificate of Incorporation                                                                                                                                     |  |  | (3 | )
|        | 3  | .2          |  | By-laws                                                                                                                                                          |  |  | (3 | )
|        | 10 | .1          |  | Employment Agreement between Del Mar Mortgage,
    Inc. and Steve Byrne, dated November 3, 1998                                                                  |  |  | (3 | )
|        | 10 | .2          |  | Transition Agreement between Del Mar Mortgage,
    Inc. and Capsource, Inc., dated April 27, 1999 and First
    Amendment thereto                                |  |  | (4 | )
|        | 10 | .3          |  | Employment Agreement between Del Mar Mortgage
    Inc. and Mike Whiteaker, dated May 3, 1999                                                                     |  |  | (4 | )
|        | 10 | .4          |  | The 2000 Stock Option Plan of Sunderland
    Corporation                                                                                                         |  |  | (4 | )
|        | 10 | .5          |  | Employment Agreement between the Company and
    Michael V. Shustek, dated December 1, 1999                                                                      |  |  | (4 | )
|        | 10 | .6          |  | Employment Agreement between the Company and Ira
    S. Levine, dated September 1, 2000                                                                          |  |  | (6 | )
|        | 10 | .7          |  | Employment Agreement between the Company and
    Lance K. Bradford, dated April 1, 2000                                                                          |  |  | (7 | )
|        | 10 | .8          |  | Third Amended and Restated Operating Agreement of
    DM Mortgage Investors, LLC, dated as of November 2, 2000                                                   |  |  | (5 | )
|        | 31 | .1          |  | Section 302 Certification of Michael N.
    Shustek                                                                                                              |  |  |    |  
|        | 31 | .2          |  | Section 302 Certification of John W. Alderfer                                                                                                                    |  |  |    |  
|        | 32 |             |  | Certification Pursuant to U.S.C.
    18 Section 1350                                                                                                             |  |  |    |  



---



|    |                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Previously filed on Form 8-K (File No. 000-24803) on
    May 4, 1999.                                                                                                  
|   
|(2) | Previously filed on Form 8-K (File No. 000-24803) on
    April 14, 2000.                                                                                               
|   
|(3) | Previously filed on Form 10-SB (File No. 000-24803) on
    August 13, 1998.                                                                                            
|   
|(4) | Previously filed on Form 10-KSB (File No. 000-24803)
    on March 31, 2000.                                                                                            
|   
|(5) | Previously filed by Vestin Fund I (formerly DM Mortgage
    Investors, LLC or DM) on DMs prospectus on
    Form 424B5 (File No. 333-32800) on November 15,
    2000.
|   
|(6) | Previously filed on Form 10-KSB (File No. 000-24803)
    on April 2, 2001.                                                                                             
|   
|(7) | Previously filed on Form 10-KSB/A (File No. 000-24803)
    on April 30, 2001.                                                                                          
|   
|(b) | Reports on Form 8-K                                                                                                                                                    

Current Report on Form 8-K filed with the Commission on
August 18, 2003, which reports the following item:

(i) Item 9  Regulation FD Disclosure.

13



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##### 



SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned there unto duly authorized.



| |                  
| | -----------------
| | VESTIN GROUP, INC



| |     |                       
| | --- | ----------------------
| | By: | /s/ MICHAEL V. SHUSTEK

| |                              
| | -----------------------------
| |                              
| | Michael V. Shustek           
| | Chief Executive Officer      
| | (Principal Executive Officer)

Date: November 3, 2003



| |     |                     
| | --- | --------------------
| | By: | /s/ JOHN W. ALDERFER

| |                                             
| | --------------------------------------------
| |                                             
| | John W. Alderfer                            
| | Chief Financial Officer                     
| | (Principal Financial and Accounting Officer)

Date: November 3, 2003

14