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                Annual Report For Small Business Issuers Subject
                     to the 1934 Act Reporting Requirements

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
                      For the Year Ended December 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
                           Commission File No. 0-21417


                            CAPITAL TITLE GROUP, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its charter)

              Delaware                                   87-0399785
    -------------------------------            ---------------------------------
    (State or other jurisdiction of            (IRS Employer Identification No.)
     incorporation or organization)

2901 East Camelback Road, Phoenix, Arizona                   85016
------------------------------------------                 ----------
 (Address of principal executive offices)                  (Zip Code)

         Issuer's telephone number, including area code: (602) 954-0600
                                                         --------------

           Securities registered under Section 12(b) of the Act: NONE

             Securities registered under Section 12(g) of the Act:

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of class)

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference in Part III of this Form 10-KSB,  or any amendment to
this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year. $36,147,427.

On March 15,  2000,  the  aggregate  market  value of the voting and  non-voting
common equity held by  non-affiliates  of the registrant was  $18,006,752.  This
figure was  estimated  based on March 15, 2000  closing  price of the  Company's
common stock. The number of shares of Common Stock outstanding on March 15, 2000
was 16,957,901.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  Proxy  Statement  for the 2000 Annual  Meeting of
Stockholders to be held on May 16, 2000 are  incorporated by reference into Part
III.
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<PAGE>
                                     PART I
ITEM 1. BUSINESS

COMPANY HISTORY AND OVERVIEW

     Capital Title Group,  Inc. (the "Company") is a Delaware  corporation which
acts as the parent holding company of the following subsidiaries:

     Capital Title Agency Inc. ("Capital Title") is an Arizona corporation which
     has operated  under the  authority of the State  Banking  Commission  since
     November  1,  1981.  Capital  Title is an  independent  title  agency  that
     provides  escrow  services  and,  as an  agent  for  five  title  insurance
     companies,  issues title insurance  policies to the real estate industry in
     Maricopa,  Yavapai and Mohave  Counties  in  Arizona.  As of March 15, 2000
     Capital Title operated 32 offices located throughout Maricopa,  Yavapai and
     Mohave Counties in Arizona.

     New Century Title Company ("New Century"), a California corporation,  is an
     independent  title agency that  provides  escrow and title  services to the
     real estate  industry in selected  California  counties.  New Century began
     operations  in July 1998 with the  purchase  of a dormant  escrow and title
     agency in San Diego, California. New Century currently has three offices in
     San Diego County.  New Century also has operations in northern  California,
     which it obtained by acquisition  in November  1998. New Century  currently
     has 11 offices in Sonoma,  Contra Costa and Alameda Counties in California.
     During 1999, New Century was granted a license to operate in six additional
     southern  California  counties  and  opened an  office in Orange  County in
     February 2000.

     The Company plans to continue its growth in Arizona and California,  and as
conditions  merit, to expand into other southern and  southwestern  states.  The
Company  intends  to  accomplish  this  planned   expansion   primarily  through
recruitment of escrow  officers with  significant  existing  revenue  production
based upon their  relationships  with real estate brokers,  mortgage lenders and
other  industry  participants.   The  Company  will  attempt  to  attract  these
significant producers through employment packages that include commissions based
on revenue generated and stock options.

     The  principal  executive  offices of the  Company are located at 2901 East
Camelback Road,  Phoenix,  Arizona 85016 and the Company's  telephone  number is
(602) 954-0600.

COMPANY OPERATIONS

     The Company is an independent  title agency  providing escrow services and,
as  an  agent  for  First  American  Title  Insurance  Company,   Chicago  Title
Corporation,  Stewart Information Services Corporation, United General Insurance
Company,  Old Republic  Insurance  Company and American  Pioneer Title Insurance
Company, issues title insurance policies to service the real estate industry.

     Capital  Title's  operations  commenced in 1981 in Prescott,  Arizona.  The
Company is  licensed  to conduct  business  in three  counties in Arizona and 10
counties in  California.  During late 1996 the Company  began its  expansion  in
Maricopa County,  Arizona and in 1998 expanded into Mohave County, Arizona along
with entering the California market.

                                       2
<PAGE>
     The  Company's   operations  are  positively  impacted  by  the  geographic
locations  in which it  operates as Arizona  and  California  rank among the top
states in the  nation in the rate of new job  creation,  population  growth  and
gains in personal  income.  Additionally,  these states have some of the largest
single family housing markets in the nation with Phoenix and San Diego currently
the 6th and 7th  largest  cities in the United  States as  reported  by the U.S.
Census Bureau.

     December  1999 market share  reports  show  Capital  Title as the top title
insurer in Yavapai  County.  As of December 1999,  Capital Title ranked third in
Maricopa County market share, having moved up from fourth in 1998 and from tenth
just  three  years  before.   The  Company  believes  that  its  combination  of
technology,  management and employee stock options will play a significant  role
in  positively  impacting  its  market  share  in the  locations  in which it is
currently operating and in the areas into which it expands.

INDUSTRY OVERVIEW

     Title  insurance  has  become  accepted  as the  most  efficient  means  of
determining  title to, and the priority of  interests  in, real estate in nearly
all parts of the United  States.  Virtually  all real property  lenders  require
their  borrowers to obtain title  insurance  policies at the time mortgage loans
are made.

     The major expense of a title agency  company is the search and  examination
function in preparing preliminary title reports, commitments and title policies,
and not from claim losses associated with said policies.  Companies have focused
on advancing  technology in order to reduce costs,  improve accuracy and respond
to the continuing  pressures within the real estate industry for faster and more
cost effective processing of transactions.

     The Company  possesses  advanced  title report  generation  and  processing
technology that combines title  information from multiple sources via electronic
data  exchange.  The  Company has  implemented  this  technology  in its Arizona
operations  and  a  substantial  portion  of  its  California  operations.  This
technology  facilitates  expansion  of  the  Company's  operations  in  existing
markets,  and management  believes it outperforms  the technology of other major
title companies that possess greater resources than the Company.

     TITLE  POLICIES.  Title  insurance  policies state the terms and conditions
upon  which  a  title  underwriter  will  insure  title  to  real  estate.   The
beneficiaries of title insurance  policies are generally buyers of real property
or secured lenders.

     Title  insurance  is  different  from other types of  insurance  because it
relates to past events that affect  title to property at the time of closing and
not  unforeseen  future  events.  Prior to  issuing  policies  underwriters  can
eliminate future losses by accurately performing searches and examinations.  The
premium  for  title  insurance  is due in full on the  closing  date of the real
estate  transaction and is based upon the purchase price of the property insured
or the amount of the secured loan.

     Title insurance policies are issued on the basis of a preliminary report or
commitment.  These reports are prepared after a search of public  records,  maps
and other relevant  documents to ascertain  title ownership and the existence of
easements,  restrictions,  rights  of way,  conditions,  encumbrances  or  other
matters affecting the title to, or use of, real property. A visual inspection of
the property may also be made prior to the issuance of certain  title  insurance
policies.

                                       3
<PAGE>
     To facilitate the preparation of preliminary  reports without the necessity
of manually searching public records,  copies of public records,  maps and other
relevant historical  documents are compiled and indexed in a "title plant." Each
title plant  relates to a  particular  county and is kept  current on a daily or
other frequent basis by the addition of copies of recorded documents that affect
rights  in  real  property  in the  particular  county.  Title  companies  often
subscribe to independent title information services to assist in the updating of
their title plants and the maintenance of title records.

     DIRECT VS.  AGENCY  SALES.  Preliminary  reports and  commitments  to issue
policies are prepared by title  underwriters  (direct  sales) or by  independent
agents on behalf of the  underwriters  (agency sales).  The terms and conditions
upon which the real property will be insured are  determined in accordance  with
the standard policies and procedures of the title underwriter.  In direct sales,
the title underwriter  issues the preliminary  report and commitment and retains
the entire title  premium paid in  connection  with the  transaction.  In agency
sales, the search and examination function is performed by the independent agent
and the  majority of the premium  collected  is retained by the agent,  with the
balance remitted to the title underwriter.

     THE TITLE POLICY PROCESS.  A brief  description of the process of issuing a
title insurance policy is as follows:

      (i)   The customer,  typically a real estate salesperson or broker, escrow
            agent or lender, places an order for a title policy.

      (ii)  After the relevant historical data on the property is compiled,  the
            title officer  prepares a preliminary  report that documents (a) the
            current  status  of  title  to the  property,  (b)  any  exemptions,
            exceptions  and/or  limitations that might be attached to the policy
            and (c) specific  issues that need to be  addressed  and resolved by
            the  parties  to the  transaction  before the title  policy  will be
            issued  (such as  removal  of prior tax liens and  payment  of prior
            loans on the property).  The preliminary report is circulated to all
            the parties for satisfaction of any specific issues.

      (iii) After all specific issues  identified in the preliminary  report are
            satisfied,  the escrow agent closes the  transaction  in  accordance
            with the instructions of the parties and the policy conditions.

      (iv)  Once the  transaction  is closed and all monies have been  released,
            the  policy  is issued  (a) to the owner and the  lender on a resale
            transaction or (b) to the lender only on a refinancing transaction.

     LOSSES  AND  RESERVES.  The  maximum  amount  of  liability  under  a title
insurance  policy is  usually  the face  amount of the  policy  plus the cost of
defending the insurer's  title against an adverse  claim.  The reserve for claim
losses is based upon known claims as well as losses the insurer expects to incur
based on historical  experience and other factors,  including industry averages,
claims loss history,  current legal environment,  geographic  considerations and
type of policy written.  Because the Company operates an independent  agency, it
provides  title  insurance on behalf of third party  underwriters.  As such, the
Company's  losses and reserves are less than those carried by a title  insurance
underwriter (see Company Operations-Claims and Underwriting).

     ECONOMIC FACTORS  AFFECTING  INDUSTRY.  Title insurance  revenue is closely
related to the level of activity in the real estate market and the average price
of  real  estate  sales.   Real  estate  sales  are  directly  affected  by  the
availability of money to finance purchases.  Other factors affecting real estate
activity  include  demand,  mortgage  interest  rates,  family income levels and
general economic conditions.

     During 1999, there was a significant  decrease in the refinance market from
1998 levels as a result of increased mortgage interest rates.

                                       4
<PAGE>
COMPANY STRATEGY

     The  Company's  strategy  is to  pursue  aggressive  growth  in  the  title
insurance industry in the Southwestern United States.  Essential elements of the
Company's strategy are as follows:

     COMMITMENT TO SERVICE. The Company is built on three basic  entrepreneurial
premises: (1) every employee is a salesperson for the Company; (2) the Company's
services are a one-stop,  computer-based  contact point for complete real estate
transactions;  and (3) success is achieved through focus on an unequaled quality
of customer service.  Because title insurance  policies and escrow functions are
generally standardized, the level of service provided is the key differentiating
factor  among  competitors  in the title  industry.  Through its  commitment  to
customer service, the Company seeks to build lasting relationships with its real
estate industry clients.

     MARKET  FOCUS.  The  Company's  market focus is on real estate  brokers and
mortgage lenders as this business has historically been more consistent and less
prone to fluctuation than commercial,  new home sales or refinancing segments of
the market.  To set itself apart as a service company,  the Company continues to
enhance industry specific information technology to better serve its clients.

     MANAGEMENT.  The Company  recognizes that its aggressive  growth plan calls
for executive  management  with  extensive  industry  operational  and expansion
experience.  The Company was  co-founded by Donald R. Head, and he has served as
Chairman of the Board and Chief Executive Officer since inception.  Mr. Head has
extensive  experience  as a developer  and  entrepreneur  within the real estate
industry and has nearly 20 years of experience in the title insurance industry.

     In February 1998, the Company  appointed Milt  Ferrantelli,  Executive Vice
President of Capital Title Group and  President of Capital Title Agency,  Inc.'s
Arizona operations.  Mr. Ferrantelli  purchased United Title Insurance Agency in
1986 with two active  partners and served as its President  and Chief  Executive
Officer prior to its acquisition by Norwest Financial in 1994. United Title held
the number one market  share for title and escrow  services in  Maricopa  County
from 1984 through 1994. Mr.  Ferrantelli  has over 25 years of experience in the
title and escrow industry in the Arizona marketplace.

     In September 1999, the Company  appointed  Mervyn L. Morris as President of
California  Operations for New Century Title Company. He is directly responsible
for the  California  operations.  Prior to joining New Century,  Mr.  Morris was
Executive  Vice  President,  Southern  Division  Manager for Old Republic  Title
Company,  covering 25 branch offices and approximately 600 employees.  He has 28
years of experience in the California market.

     In addition,  the Company employs managers to run the day-to-day operations
in the  counties  the Company  operates  in and to support  the above  mentioned
executives.  These managers average over 20 years of experience in the title and
escrow industry.

     EQUITY  PARTICIPATION  BY ESCROW  OFFICERS.  Escrow  officers are the major
revenue  producers  for  title  insurance   companies.   It  is  their  business
relationships with real estate brokers,  lenders and other industry participants
whom are primarily  responsible  for the direction of escrow and title business.
The Company will seek to attract the most  successful  escrow  officers  through
employment packages that include commissions based on revenue produced and stock
options as added  motivational  incentives.  The Company  believes such programs
will also promote  Company  loyalty,  which will help to insulate the  Company's
escrow officers from competitive recruiting efforts.

COMPANY OPERATIONS

     The Company  reported  revenue of $36.1 million for the year ended December
31, 1999  compared to $23.2 million for the year ended  December 31, 1998.  (See
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations).

                                       5
<PAGE>
     MARKETING.  The Company believes that the primary source of its business is
from referrals from participants in the real estate industry such as real estate
brokers, mortgage lenders, developers and attorneys. In addition to the referral
market,  the Company markets its services directly to larger brokerages and real
property lenders.  Marketing  activities are performed by the escrow officers of
the  Company  and   marketing   representatives   whose  sole  function  is  the
solicitation of business from major real estate brokers, developers,  owners and
lenders.

     ESCROW  SERVICE.  The Company's  escrow  departments  are  responsible  for
handling the consummation of real estate transactions.

     The  escrow  officer  and  assistant  typically  prepare  escrow  documents
pursuant to the real estate contract.  The escrow instructions  provide guidance
to all  concerned  parties as to the  conditions  required  for the real  estate
transaction.  The  escrow  officers  then  receipt  in funds and  disburse  them
pursuant to the escrow instructions.

     The escrow agent is held  accountable  by state  governmental  agencies for
strict  compliance  with its fiduciary  responsibilities  outlined by the escrow
instructions.  The officer must possess a high degree of skill,  professionalism
and confidentiality in the handling, preparation,  collecting and recordation of
all escrow  matters  between the buyer,  seller,  real estate  brokers and their
agents, developers, lenders and investors.

     TITLE  DEPARTMENT.  The  primary  function of the title  department  is the
accumulation  and analysis of various  documents from the many sources that make
up the  public  record.  From this  analysis,  a  preliminary  report is written
showing  the  present  condition  of title.  This  report is given to the escrow
officer  who, in turn,  distributes  it to the parties  involved in the purchase
agreement.  After the  preliminary  report has been read and approved by all the
parties and the requirements of the report have been fulfilled,  the escrow will
proceed to closing and a final title insurance policy will be issued.

     The  accumulation  of title data from public  records  which  provides  the
history of each parcel of real estate in a particular county is referred to as a
"title plant." The Company has entered into  multi-year  service  agreements for
title plant access in the counties it operates. In certain counties, the Company
may be a partial owner in a title plant or own a title plant which contains data
prior to the time period  covered by a third party  title  plant  provider.  The
Company  believes it will be able to obtain title plants on terms and conditions
that are acceptable to it as the Company  expands into other  markets;  however,
there can be no assurance in this regard.

     CLAIMS AND  UNDERWRITING.  The Company provides title insurance as an agent
of six title  insurance  companies.  These  services  are  provided  pursuant to
Underwriting  Agreements  with  each  of  these  underwriters  which  state  the
conditions on which the Company is authorized to issue a title insurance  policy
on behalf of the  underwriter  and prescribe the  circumstances  under which the
Company may be liable to the  underwriter  if a policy loss is  attributable  to
errors made by the Company.

                                       6
<PAGE>
     Claims against title insurance  policies normally arise out of human error.
During the process of  accumulation  and analysis of the public record,  certain
inaccuracies  and  inconsistencies  are encountered  that sometimes  result in a
situation in which interpretation of these documents could lead to a claim. With
certain  exceptions,  the  Company's  exposure is limited to $5,000 for any loss
resulting from a title insurance  claim.  The Company assumes the entire risk of
losses  incurred  in errors  made  during the escrow  process;  however,  it has
secured insurance coverage to limit any significant losses.

     OTHER SERVICES. In addition to title and escrow services,  the Company also
provides account servicing, foreclosure and tax-free exchange services.

CUSTOMERS

     The Company is not  dependent  upon any single  customer or single group of
customers. The loss of any one customer would not have a material adverse effect
on the Company.

SEASONALITY

     The title  insurance  business is closely related to overall levels of real
estate  activity.  Historically,  real estate  activity slows down in the winter
months with volumes  showing  significant  improvements in the spring and summer
months. In addition,  the title insurance business is cyclical due to the effect
of interest rate  fluctuations on the level of real estate activity.  Periods of
high interest rates adversely effect real estate activity and therefore  premium
and escrow revenues.

COMPETITION

     The  title  insurance  business  is  highly  competitive.   Companies  with
significant  market  share in Arizona and  California  include  First  American,
Chicago Title, Old Republic,  Security Title,  ATI Title Agency,  Stewart Title,
Fidelity  Title and Lawyers  Title.  The number and size of competing  companies
varies in different  geographic areas. In those areas where the Company operates
and intends to operate the Company  will face  competition  from major  national
insurance  underwriters  and  other  independent  agencies,  many of which  have
financial  and other  resources  greater than those of the Company.  The Company
believes that quality and timeliness of service are the key competitive  factors
in the  industry  because  parties  to a real  estate  transaction  are  usually
concerned with time schedules and costs associated with delays in the closing of
transactions.  In those states where prices are not  established  by regulation,
the price of title insurance is also an important competitive factor.

REGULATION

     The Company  conducts  its  business  under  licenses  granted by the State
Banking and Insurance  Departments of the State of Arizona and the Department of
Insurance in California. The title insurance and escrow businesses generally are
subject  to  extensive  regulation  under  applicable  state  laws.  These  laws
establish  supervisory  agencies with broad  administrative  powers  relating to
issuing and revoking  licenses,  regulating trade practices,  licensing  agents,
approving  policy forms and  approving  rate  schedules.  Failure to comply with
these  regulations  or an inability to secure or maintain any required  licenses
could materially  adversely affect the Company's business.  The Company believes
that it is in material  compliance with applicable laws and regulations and that
it will  maintain  and  obtain  all  licenses  required  for the  conduct of its
business.

                                       7
<PAGE>
EMPLOYEES

     As of December 31, 1999, the Company had a total of 468 employees, of which
288 are located in Arizona and 180 are in California.  The Company believes that
its relations with its employees are excellent.

ITEM 2. PROPERTIES

     The Company  conducts its business  operations  primarily in leased  office
space. The Company currently leases offices at 46 locations with remaining lease
periods ranging from one to sixty months.  The Company's monthly rental payments
at the foregoing locations are approximately $209,600. The Company owns a 24,000
square  foot   building  in  Phoenix,   Arizona,   which  houses  its  corporate
headquarters and its Maricopa County operations.  In addition,  the Company owns
two  buildings  in Northern  California  in which it  conducts  title and escrow
operations.

ITEM 3. LEGAL PROCEEDINGS

     The Company is involved in certain legal actions, which arise in the normal
course of its title business. The Company believes that none of these claims are
material, either individually or in the aggregate.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were  submitted to a vote of security  holders during the fourth
quarter of the fiscal year ended December 31, 1999.

                                     PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS

     The Company's  Common Stock has been quoted on The Nasdaq  SmallCap  Market
under the symbol  "CTGI"  since  September  21,  1998 and on the OTC  Electronic
Bulletin Board market from May 15, 1997 to September 20, 1998.

     The  following  table sets  forth high and low bid prices of the  Company's
Common Stock for the periods  indicated.  Bid quotations  represent  interdealer
prices,  without retail mark-up,  mark-down or commissions and may not represent
actual transactions.

      Date                                     High/Bid        Low/Bid
      ----                                     --------        -------
      1998
         First Quarter                          $2.56           $1.56
         Second Quarter                          3.62            2.63
         Third Quarter                           4.50            3.25
         Fourth Quarter                          4.06            3.38
      1999
         First Quarter                           3.94            3.00
         Second Quarter                          3.56            2.50
         Third Quarter                           2.88            2.13
         Fourth Quarter                          2.30            1.50
      2000
         First Quarter (through March 15)        2.00            1.31

     As of December 31, 1999, the Company had issued and outstanding  16,947,901
shares of common stock. In addition, 3,900,000 shares are reserved for issuance

                                       8
<PAGE>
under the Company's  1996 Stock Option Plan and 600,000  shares are reserved for
issuance under the Company's Directors  Non-Employee Plan. At December 31, 1999,
there were 327 record holders of the Company's Common Stock.

     In March 1998, the Company issued  463,500  warrants in conjunction  with a
private placement. Each warrant entitles the holder to purchase one share of the
Company's  common stock at $2.50 until  September 30, 2000.  In April 1998,  the
Company  issued  308,642  warrants to an  investment  banking firm that acted as
placement  agent in  connection  with another  private  placement.  Each warrant
entitles the holder to purchase one share of the Company's common stock at $1.62
until May 1, 2001.

     The Company has never paid a dividend on its Common Stock. The Company does
not  anticipate  paying any  dividends  on its Common  Stock in the  foreseeable
future.  Rather,  the Company  anticipates  that its  earnings,  if any, will be
retained to fund the Company's  working capital needs and the planned  expansion
of its  business.  The  payment  of any  dividends  will be  dependent  upon the
discretion of the Board of Directors. Furthermore, under Delaware corporate law,
in the absence of current or retained  earnings,  the Company may be  prohibited
from paying dividends (whether in cash or otherwise).

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

     The  following  discussion of the results of the  operations  and financial
condition  of the  Company  should  be read in  conjunction  with the  Company's
Consolidated  Financial  Statements and Notes thereto included elsewhere in this
report.  Historical results and percentage  relationships among accounts are not
necessarily an indication of trends in operating results for any future period.

OVERVIEW

     Capital Title Group,  Inc. reported an operating loss of $1,969,027 for the
year ended  December  31,  1999 due to losses in its  California  operations,  a
downturn in refinance  business  resulting from increased  interest  rates,  and
costs associated with expansion.  The California operations,  which were heavily
dependent on the refinance  market lost  approximately  $3,474,000  for the year
ended  December  31,  1999.  During late 1999,  the Company had a change in four
senior  management  positions in California  and is focusing on  increasing  its
residential  resale  business,  which  has  historically  been more  stable  and
profitable.  Contributing to the loss, were increased operating costs associated
with the  Company's  commitment to its  California  operations as it invested in
expanding its infrastructure  and branch  operations.  This approach to internal
growth was developed  utilizing the same successful  formula employed in growing
the Arizona market and was chosen because the strong economy earlier in the year
had placed excessive values on targeted acquisitions.

     The Company's core  operations in Arizona  (Maricopa and Yavapai  Counties)
had net income of approximately $2,974,000 (13.4% of revenue on a pre-tax basis)
for the year ended  December  31,  1999.  The net income in these  counties  was
negatively  impacted by the decline in refinance  business and costs  associated
with opening seven new branch offices during 1999.

     During  the  year  ended  December  31,  1999,  there  were   approximately
$3,721,000 of operating  expenses (net of revenue  recognized)  related to costs
for the Company's California and Mohave County (Arizona)  operations.  Excluding
these costs,  income,  before income taxes, from existing  operations would have
been approximately $1,752,000 for the year ended December 31, 1999.

                                       9
<PAGE>
RESULTS OF OPERATIONS

     The following table sets forth, for the periods  indicated,  the components
of the Company's  revenue and expenses  along with the  percentage  they bear to
total revenue:

<TABLE>
<CAPTION>
                                                For The Years Ended December 31,
                            -------------------------------------------------------------------
                                1999        %           1998        %          1997         %
                            -----------   -----     -----------   -----     ----------    -----
<S>                         <C>            <C>      <C>            <C>      <C>            <C>
Title insurance premiums    $22,979,047    63.6%    $14,634,442    63.0%    $5,359,001     64.2%
Escrow and related fees      11,087,910    30.7       7,030,248    30.3      2,190,641     26.2
Account servicing               510,475     1.4         504,813     2.2        341,292      4.1
Interest and other income     1,569,995     4.3       1,036,722     4.5        457,570      5.5
                            -----------   -----     -----------   -----     ----------    -----
                            $36,147,427   100.0%    $23,206,225   100.0%    $8,348,504    100.0%
                            ===========   =====     ===========   =====     ==========    =====

Personnel cost              $20,819,793    57.6%    $11,186,564    48.2%    $4,650,618     55.7%
Escrow commissions            2,781,947     7.7       2,249,468     9.7        519,670      6.2
Title remittance fees         2,170,919     6.0       1,459,452     6.3        494,776      5.9
Rent                          2,193,615     6.0       1,254,010     5.4        692,732      8.3
Other operating expenses      9,863,660    27.3       5,121,998    22.1      2,206,402     26.4
Interest expense                286,520     0.8          99,257      .4         71,458       .9
                            -----------   -----     -----------   -----     ----------    -----
                            $38,116,454   105.4%    $21,370,749    92.1%    $8,635,656    103.4%
                            ===========   =====     ===========   =====     ==========    =====
</TABLE>

FISCAL 1999 COMPARED TO FISCAL 1998

     The Company's revenues increased by $12,941,202 or 55.8% for the year ended
December 31, 1999 as compared to the year ended December 31, 1998. Approximately
$9,300,000  of this  increase  resulted  from 1999  being the first full year of
operations for companies  acquired or opened during 1998. The remaining increase
is attributable to the Company's expansion and increased market share, primarily
in Arizona, and a favorable real estate market.

     The  Company's  revenue  from title  insurance  premiums and escrow fees is
primarily from three  sources.  The largest  revenue source is from  residential
resales.  The current residential resale marketing  projections for the counties
in which the Company  operates predict that the resale market should continue to
be strong as new house prices  continue to climb and the economy remains strong.
The Company's marketing plan is to have the vast majority of the Company's title
and escrow revenue be derived from the resale business. Historically, the resale
business  has  been  more  consistent  and less  subject  to  fluctuations  than
commercial,  new  homes  sales,  or  refinancing  segments  of the  market.  The
commercial, new home sales and refinancing markets tend to be more influenced by
interest rates and other economic conditions.

                                       10
<PAGE>
     Personnel costs, including commissions,  are the most significant component
of the  Company's  operating  expenses.  The  number of people  employed  by the
Company decreased from 477 on December 31, 1998 to 468 on December 31, 1999. For
the year ended December 31, 1999,  personnel  costs including  commissions  were
65.3% of total  revenue  compared  to 57.9% of total  revenue for the year ended
December 31, 1998.  This increase was a result of lower  productivity  given the
decline in refinance  business and higher costs  associated  with the  Company's
California operations.

     Title  remittance  fees  relate  to the  amounts  paid  pursuant  to  title
insurance  underwriting  agreements  the  Company  has with six  national  title
companies.  Title  remittance  fees as a  percentage  of revenue  have  remained
relatively unchanged when comparing 1999 results with fiscal year 1998.

     Rent  expense  increased  as a  percentage  of  revenue  in the year  ended
December  31,  1999 to 6.0% from  5.4% in 1998.  This  increase  was a result of
adding new offices and the fixed nature of these costs in relation to revenue.

     The significant  components of other operating  expenses include  supplies,
utilities, insurance,  depreciation, title plant maintenance and access, postage
and  professional  fees. Other operating  expenses  increased as a percentage of
total revenue to 27.3% in 1999 from 22.1% in 1998.  This increase was the result
of increased costs related to the Company's  expansion and the relatively  fixed
nature  of many of these  expenses  in  relation  to the  decline  in  refinance
business.

     No income tax provision  was recorded for the year ended  December 31, 1999
as a result of the net loss reported. As of December 31, 1999, the Company has a
net operating loss carryforward of $2,074,000.

FISCAL 1998 COMPARED TO FISCAL 1997

     The Company's  revenues increased by $14,857,721 or 178% for the year ended
December 31, 1998 as compared to the year ended December 31, 1997. Approximately
$3,626,000 of this increase resulted from  acquisitions and startup  operations.
The remaining increase is attributable to the Company's  expansion and increased
market share in Maricopa and Yavapai counties,  Arizona, a favorable real estate
market and favorable interest rates.

     During  the  year  ended  December  31,  1998,  there  were   approximately
$1,270,000 of operating expenses (net of revenue  recognized) related to startup
costs for the Company's San Diego,  California and Mohave County  operations and
from costs associated with the Company's property and casualty insurance agency.
Excluding the startup costs (net of revenue  recognized) of $1,270,000,  income,
before income  taxes,  from existing  operations  would have been  approximately
$3,105,000 for the year ended December 31, 1998.

     Personnel costs, including commissions,  are the most significant component
of the  Company's  operating  expenses.  Due to the growth the  Company has been
experiencing  since  initiating its business plan, the number of people employed
by the Company  increased  from 175 on December  31, 1997 to 477 on December 31,
1998.  For  the  year  ended  December  31,  1998,   personnel  costs  including
commissions  were 57.9% of total revenue  compared to 61.9% of total revenue for
the  year  ended  December  31,  1997.  This  decrease  was a result  of  higher
productivity  and the somewhat fixed nature of those expenses in relation to the
increase in revenue.

                                       11
<PAGE>
     Title  remittance  fees  relate  to the  amounts  paid  pursuant  to  title
insurance  underwriting  agreements  the  Company has with five  national  title
companies.  Title  remittance  fees as a  percentage  of revenue  have  remained
relatively unchanged when comparing 1998 results with fiscal year 1997.

     Rent  expense  decreased  as a  percentage  of  revenue  in the year  ended
December 31, 1998 to 5.4% from 8.3% in 1997.  These decreases were the result to
the fixed nature of these costs in relation to the increase in revenue.

     The significant  components of other operating  expenses include  supplies,
utilities, insurance,  depreciation, title plant maintenance and access, postage
and  professional  fees. Other operating  expenses  decreased as a percentage of
total revenue to 22.1% in 1998 from 26.4% in 1997.  This decrease was the result
of the  relatively  fixed  nature of most of these  expenses  in relation to the
increase in revenue.

     An income  tax  provision  of  $159,449  was  recorded  for the year  ended
December 31, 1998 based on the estimated  annual effective tax rate after giving
consideration to the available net operating loss  carryforward.  As of December
31, 1998, the Company's net operating loss carryforward was fully utilized.

LIQUIDITY AND CAPITAL RESOURCES

     Capital Title Group requires capital to expand its geographical  base, make
acquisitions,  further  implement its market  penetration  program,  recruit and
train new personnel and purchase  additional property and equipment to implement
its  expansion  program.  During the year ended  December 31, 1999,  the Company
financed its operating and business  development  activities  through  operating
revenue, through the use of cash on hand, and through additional borrowings.

     At December 31, 1999,  the Company had current assets  totaling  $2,696,828
compared to current liabilities,  which totaled $2,099,267.  Management believes
that cash on hand,  future cash  receipts  and  borrowings  available  under its
credit facility will be sufficient to meet the Company's  expansion plans and to
pay all obligations as they become due.

     The Company has a $2,000,000 revolving line of credit, which bears interest
on any outstanding balance at the prime rate. At December 31, 1999, $500,000 had
been drawn  against  this credit  facility,  in  addition  to $150,000  which is
committed  for a standby  letter  of credit  pursuant  to an  office  lease.  In
addition,  the  Company  has a  commitment  from the same bank,  subject to bank
approval  and  various  conditions  being  met,  to  lend up to  $3,000,000  for
acquisitions  and  capital  expenditures.  These  credit  facilities  mature  in
February 2001.

     In August 1999 the Company  sold a building in Oakland,  California,  which
provided  approximately  $1,157,000  in cash and retired  $1,515,000 in debt. In
September 1999, the Company purchased a building in Phoenix, Arizona to serve as
its corporate offices for $4,309,000.  This purchase was financed with a 10-year
$3,130,000  loan,  which bears interest at 8.32% per annum and requires  monthly
principal and interest payments of $23,540.

                                       12
<PAGE>
IMPACT OF YEAR 2000

     In prior years, the Company  discussed the nature and progress of its plans
to become Year 2000 ready.  In late 1999, the Company  completed its remediation
and  testing  of  systems.  As a result  of those  planning  and  implementation
efforts, the Company experienced no significant disruptions in business critical
information technology and non-information technology systems and believes those
systems successfully  responded to the Year 2000 date change. The Company is not
aware of any material problems resulting from Year 2000 issues,  either with its
products,  its internal systems,  or the products and services of third parties.
The Company will continue to monitor its business critical computer applications
and those of its vendors throughout the year 2000 to ensure that any latent Year
2000 matters that may arise are addressed promptly.

FORWARD-LOOKING STATEMENTS

     This  Annual  Report  on  Form  10-KSB  contains  certain   forward-looking
statements. The forward-looking statements contained herein are based on current
expectations  that involve a number of risks and  uncertainties.  Among  others,
these forward-looking statements are based on assumptions that (a) the volume of
real estate transactions in the Company's market areas will remain at sufficient
levels to  support  the  Company's  business,  (b) the  Company  will be able to
successfully  integrate  acquired  businesses  and  the  results  of  operations
therefrom will support the acquisition  price, (c) that the Company will be able
to retain, and when needed, add key personnel,  (d) that the Company's forecasts
will  accurately  anticipate  market demand,  (e) that there will be no material
adverse changes in the Company's existing operations and (f) the Company will be
able to obtain  sufficient  equity  or debt  funding  to  increase  its  capital
resources  by  the  amount  needed  for  new  business  acquisitions,   if  any.
Assumptions  related to the foregoing  involve  judgments with respect to, among
other things,  future economic,  competitive and market  conditions,  and future
business decisions, all of which are beyond the control of the Company. Although
the  Company  believes  that  the  assumptions  underlying  the  forward-looking
statements are reasonable,  any of the assumptions  could prove  inaccurate and,
therefore,   there  can  be  no  assurance  that  the  results  contemplated  in
forward-looking  statements  will be  realized.  In  addition,  the business and
operations of the Company are subject to substantial  risks,  which increase the
uncertainty  inherent  in  such  forward-looking  statements.  In  light  of the
significant  uncertainties inherent in the forward-looking  information included
herein,  the  inclusion  of  such  information  should  not  be  regarded  as  a
representation by the Company,  or any other person, that the Company's plans or
objectives will be achieved.

                                       13
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

                         Report of Independent Auditors

Shareholders and Board of Directors
Capital Title Group, Inc.

     We have audited the  accompanying  consolidated  balance  sheets of Capital
Title Group,  Inc. and  Subsidiaries  (the  Company) as of December 31, 1999 and
1998,  and the related  consolidated  statements  of  operations,  stockholders'
equity,  and cash flows for each of the two years in the period  ended  December
31, 1999. These consolidated  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

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

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
the Company at December 31, 1999 and 1998, and the consolidated results of their
operations  and their cash  flows for each of the two years in the period  ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.


/s/ Ernst & Young LLP

Phoenix, Arizona
March 3, 2000

                                       14
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                              December 31,
                                                      -------------------------
                                                          1999          1998
                                                      -----------   -----------
ASSETS
Current Assets:
  Cash and cash equivalents                           $ 1,884,059   $ 4,833,826
  Accounts receivable, net                                110,796       364,725
  Notes and other receivables                             291,262       406,028
  Other current assets                                    410,711       575,875
                                                      -----------   -----------
      Total Current Assets                              2,696,828     6,180,454

Property and Equipment, net                            11,259,054     8,863,133

Other Assets:
  Notes receivable                                         72,608       231,531
  Investment in title plant                               521,278       520,249
  Deposits and other assets                               403,224       473,963
  Goodwill                                                246,399       259,024
                                                      -----------   -----------
      Total Assets                                    $15,199,391   $16,528,354
                                                      ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of long-term debt                   $   717,507   $   532,346
  Accounts payable                                        362,786       664,737
  Accrued expenses                                      1,018,974     2,656,572
                                                      -----------   -----------
      Total Current Liabilities                         2,099,267     3,853,655

Long-Term Debt                                          4,173,032     1,766,815
Other Liabilities                                         383,236       117,905

Stockholders' Equity:
  Common stock, $.001 par value, 50,000,000 shares
   authorized, 16,947,901 and 16,926,791 shares
   issued and outstanding in 1999 and 1998,
   respectively                                            16,948        16,927
  Additional paid-in capital                           10,667,177    10,944,294
  Accumulated deficit                                  (2,140,269)     (171,242)
                                                      -----------   -----------
      Total Stockholders' Equity                        8,543,856    10,789,979
                                                      -----------   -----------
        Total Liabilities and Stockholders' Equity    $15,199,391   $16,528,354
                                                      ===========   ===========

                  The accompanying notes are an integral part
                    of the consolidated financial statements

                                       15
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                      Year ended December 31,
                                                    ---------------------------
                                                        1999            1998
                                                    ------------    -----------
REVENUE:
  Title insurance premiums                           $22,979,047    $14,634,442
  Escrow and related fees                             11,087,910      7,030,248
  Account servicing                                      510,475        504,813
  Interest and other income                            1,569,995      1,036,722
                                                     -----------    -----------
                                                      36,147,427     23,206,225
                                                     -----------    -----------

EXPENSES:
  Personnel costs                                     20,819,793     11,186,564
  Escrow commissions                                   2,781,947      2,249,468
  Title remittance fees                                2,170,919      1,459,452
  Rent                                                 2,193,615      1,254,010
  Other operating expenses                             9,863,660      5,121,998
  Interest expense                                       286,520         99,257
                                                     -----------    -----------
                                                      38,116,454     21,370,749
                                                     -----------    -----------

Income (loss) before income taxes                     (1,969,027)     1,835,476

Income tax provision                                          --        159,449
                                                     -----------    -----------

Net income (loss)                                    $(1,969,027)   $ 1,676,027
                                                     ===========    ===========

Net income (loss) per common share:
  Basic                                              $      (.12)   $       .11
                                                     ===========    ===========
  Diluted                                            $      (.12)   $       .11
                                                     ===========    ===========

Weighted average shares outstanding:
  Basic                                               16,868,292     14,566,390
                                                     ===========    ===========
  Diluted                                             16,868,292     15,938,041
                                                     ===========    ===========

                   The accompanying notes are an integral part
                    of the consolidated financial statements

                                       16
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                               Common Stock          Additional
                                          -----------------------      Paid-in      Accumulated
                                          Shares        Par Value      Capital        Deficit
                                          ------        ---------      -------        -------
<S>                                      <C>            <C>         <C>             <C>
Balance at December 31, 1997             11,231,029     $ 11,231    $  2,653,731    $(1,847,269)

Shares issued in private placements,
 net of costs of $754,000                 4,727,415        4,728       5,946,886             --

Shares issued in connection
 with options exercised                       7,700            7           7,693             --

Shares issued in connection
 with convertible notes                     250,000          250         249,750             --

Shares issued in connection
 with acquisitions                          710,647          711       2,086,234             --

Net income                                       --           --              --      1,676,027
                                         ----------     --------    ------------    -----------

Balance at December 31, 1998             16,926,791       16,927      10,944,294       (171,242)

Shares issued in connection
 with options exercised                     127,900          128         127,772             --

Escrowed shares to Northwestern's
 stockholders returned to Company          (146,790)        (147)       (453,998)            --

Shares issued to retire debt                 15,000           15          29,985             --

Shares issued for building                   25,000           25          19,124             --

Net loss                                         --           --              --     (1,969,027)
                                         ----------     --------    ------------    -----------

Balance at December 31, 1999             16,947,901     $ 16,948    $ 10,667,177    $(2,140,269)
                                         ==========     ========    ============    ===========
</TABLE>
                  The accompanying notes are an integral part
                    of the consolidated financial statements

                                       17
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                                        ---------------------------
                                                           1999             1998
                                                        -----------     -----------
<S>                                                      <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                      (1,969,027)    $ 1,676,027
  Adjustments to reconcile net income (loss) to
   net cash provided (used) by operating activities:
    Depreciation and amortization                         1,389,924         678,658
  Changes in operating assets and liabilities,
   net of effects from purchase of subsidiaries:
    Accounts receivable                                     181,489        (182,420)
    Notes and other receivables                              36,253        (102,836)
    Other current assets                                    163,842        (492,979)
    Deposits and other assets                                 1,258         (97,052)
    Accounts payable                                       (253,345)        198,767
    Accrued expenses                                     (1,637,598)        753,728
    Other liabilities                                        12,421          39,905
                                                        -----------     -----------
Net Cash Flows - Operating Activities                    (2,074,783)      2,471,798
                                                        -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net additions to property and equipment                (5,013,538)     (3,192,277)
  Cash received from sale of property and
   equipment                                              1,156,982              --
  Purchase/sale of subsidiaries, net cash                  (107,035)        209,921
  Collection of loans receivable                            290,542              --
  Purchase of title plant                                    (1,029)        (97,447)
                                                        -----------     -----------
Net Cash Flows - Investing Activities                    (3,674,078)     (3,079,803)
                                                        -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings                                              4,630,000         125,000
  Debt service payments                                  (1,958,806)       (581,254)
  Proceeds from the issuance of stock, net                  127,900       5,699,182
                                                        -----------     -----------
Net Cash Flows - Financing Activities                     2,799,094       5,242,928
                                                        -----------     -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS                                              (2,949,767)      4,634,923

CASH AT THE BEGINNING OF THE YEAR                         4,833,826         198,903
                                                        -----------     -----------

CASH AT THE END OF THE YEAR                             $ 1,884,059     $ 4,833,826
                                                        ===========     ===========
</TABLE>

                  The accompanying notes are an integral part
                    of the consolidated financial statements

                                       18
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     NATURE OF CORPORATION:

Capital Title Group, Inc. (the "Company") is a Delaware corporation,  which acts
as the parent holding company of the following subsidiaries.

Capital Title Agency,  Inc. ("Capital Title") is an Arizona  corporation,  which
has operated under the authority of the State Banking  Commission since November
1, 1981.  Capital Title is an independent title agency providing escrow services
and,  as an agent for six title  insurance  companies,  issues  title  insurance
policies to the real estate industry in Maricopa, Yavapai and Mohave Counties in
Arizona.  As of  March  1,  2000  Capital  Title  operated  32  offices  located
throughout Maricopa, Yavapai and Mohave Counties in Arizona.

New Century Title  Company  ("New  Century"),  a California  corporation,  is an
independent  title agency that  provides  escrow and title  services to the real
estate industry in selected California counties. New Century began operations in
July 1998 with the  purchase of a dormant  escrow and title agency in San Diego,
California.  New Century  currently has three  offices in San Diego County.  New
Century  also has  operations  in  northern  California,  which it  obtained  by
acquisition in November  1998.  New Century  currently has 11 offices in Sonoma,
Contra Costa and Alameda  Counties in  California.  During 1999, New Century was
granted a license to operate in six additional  southern California counties and
opened an office in Orange County in February 2000.

     BASIS OF PRESENTATION:

The accompanying  consolidated  financial statements include the accounts of the
Company and its wholly owned subsidiaries.  All material  inter company accounts
and transactions have been eliminated in consolidation.

The  preparation  of  consolidated   financial  statements  in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts  reported in the consolidated  financial
statements and the  accompanying  notes.  Actual results could differ from those
estimates.

     CASH AND CASH EQUIVALENTS:

Cash and cash equivalents  include all highly liquid investments  purchased with
an initial maturity of three months or less.

                                       19
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     ACCOUNTS RECEIVABLE:

The Company uses the allowance  method to account for  non-collectible  accounts
receivable.  The allowance is established  based upon a review of the individual
accounts  and  the  Company's  prior  collection  history.   The  allowance  for
non-collectible accounts was $13,750 and $27,942 in 1999 and 1998, respectively.

     INCOME RECOGNITION:

Title  insurance  premiums and escrow fees are recognized as revenue at the time
of closing the related real estate  transaction.  Income from account  servicing
and  other  fees is  recognized  when the  service  is  performed.  Income  from
insurance  recoveries is recognized when the dispute is settled and the money is
received.

     PROPERTY AND EQUIPMENT:

Property  and  equipment  are  stated  at cost and are  being  depreciated  on a
straight-line basis over estimated useful lives and consist of the following:

                                      Useful Lives      1999           1998
                                      ------------   -----------    -----------
Land and construction in progress          N/A       $   656,577    $ 1,872,271
Buildings and leasehold improvements   10-40 years     6,759,648      4,174,975
Office equipment                           5 years     6,016,139      4,533,085
Furniture and fixtures                     7 years     3,006,607      2,583,289
Vehicles                                   5 years        85,456        270,098
                                                     -----------    -----------
                                                      16,524,427     13,433,718
Less: accumulated depreciation and
      amortization                                    (5,265,373)    (4,570,585)
                                                     -----------    -----------
                                                     $11,259,054    $ 8,863,133
                                                     ===========    ===========

     CAPITAL LEASE OBLIGATION:

The Company is the lessee of office  equipment  under capital lease  agreements,
which expire throughout the year 2000. The asset and liability under the capital
lease  are  recorded  at the lower of the  present  value of the  minimum  lease
payments or the fair market value of the asset.  The asset is amortized over the
lower of its related lease term or its estimated productive life.

     TITLE PLANT:

Title  plants are  recorded  at the cost  incurred  to  construct  and  organize
historical  title  information  to the  point  it can be used to  perform  title
searches. Cost incurred to maintain, update and operate title plants is expensed
as incurred.  Title plants are not  amortized as they are  considered to have an
indefinite life if maintained.

                                       20
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     GOODWILL:

The Company recorded  approximately $263,000 of goodwill in 1998 related to cost
in excess of net assets  acquired  pursuant to its purchase of a title agency in
San  Diego,  California.  Goodwill  is being  amortized  over  twenty  years and
accumulated amortization at December 31, 1999 was approximately $16,736.

     IMPAIRMENT OF LONG-LIVED ASSETS:

In  accordance  with the  Financial  Accounting  Standards  Board  Statement  of
Financial  Accounting  Standards  No.  121,  ACCOUNTING  FOR THE  IMPAIRMENT  OF
LONG-LIVED  ASSETS AND FOR  LONG-LIVED  ASSETS TO BE  DISPOSED  OF, the  Company
records  impairment  losses on long-lived  assets used in operations when events
and   circumstances   indicate  that  the  assets  might  be  impaired  and  the
undiscounted  cash flows estimated to be generated by those assets are less than
the carrying  amounts of those assets.  This methodology  includes  goodwill and
intangible  assets  acquired.  As of  December  31,  1999,  management  has  not
identified  any  events or  circumstances  which  indicate  that any  assets are
impaired.

     INCOME TAXES:

The Company and its subsidiaries file consolidated  federal and state income tax
returns.  The Company  accounts for income taxes in accordance with Statement of
Financial  Accounting  Standards  Statement No. 109 ACCOUNTING FOR INCOME TAXES.
Statement 109,  provides that deferred tax assets and liabilities are recognized
for  the  future  tax  consequences  attributable  to  differences  between  the
financial  statement  carrying  amounts of existing  assets and  liabilities and
their  respective  tax basis,  and the  utilization  of the net  operating  loss
("NOL")  carryforwards,  net of  valuation  allowances.  Deferred tax assets and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered or settled.

     EARNINGS PER SHARE:

The  Company  calculates  earnings  per share  ("EPS")  in  accordance  with the
Financial  Accounting  Standards  Board  Statement No. 128,  EARNINGS PER SHARE.
Basic EPS  excludes any dilutive  effects of options,  warrants and  convertible
securities.

The following table sets forth the computation of basic and diluted EPS:

<TABLE>
<CAPTION>
                                                       For the year ended December 31,
                                 -----------------------------------------------------------------------
                                                 1999                                 1998
                                 -----------------------------------   ---------------------------------
                                                           Per share                           Per share
                                  Net loss       Shares      amount    Net income     Shares     amount
                                 -----------   ----------   -------    ----------   ----------   ------
<S>                              <C>           <C>          <C>        <C>          <C>          <C>
Basic EPS                        $(1,969,027)  16,868,292    $(0.12)   $1,676,027   14,566,390    $0.11
                                                             ======                               =====
Effect of Dilutive Securities:
  Stock options                           --           --                      --    1,237,569
  Warrants                                --           --                      --      134,082
                                 -----------   ----------              ----------   ----------
Diluted EPS                      $(1,969,027)  16,868,292    $(0.12)   $1,676,027   15,938,041    $0.11
                                 ===========   ==========    ======    ==========   ==========    =====
</TABLE>
                                       21
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


     FAIR VALUE OF FINANCIAL INSTRUMENTS:

The Company discloses fair value  information about financial  instruments where
it is practicable to estimate their value in accordance  with Statement No. 107,
DISCLOSURES  ABOUT FAIR VALUE OF FINANCIAL  INSTRUMENTS.  The Company  estimates
that the carrying value of its financial  instruments,  consisting of cash, cash
equivalents,  certificates  of deposit,  notes  receivable and debt  obligations
approximate their fair values at December 31, 1999 and 1998.

    RECLASSIFICATIONS:

Certain   reclassifications  have  been  made  to  the  prior  period  financial
statements to conform to the current period presentation.

2. ACQUISITION:

In November 1998, the Company acquired Northwestern Consolidated Corporation for
a purchase price of  approximately  $3.5 million in cash and 665,647  restricted
shares of its  common  stock.  The  merger,  which is being  accounted  for as a
purchase, was effective November 1, 1998.

The assets acquired and liabilities assumed in this acquisition were as follows:

       Assets acquired at fair value                        $ 7,917,911
       Liabilities assumed at fair value                     (2,454,351)
                                                            -----------
                Total purchase price                        $ 5,463,560
                                                            ===========

The unaudited proforma results of operations, assuming this acquisition occurred
at the beginning of 1998, is indicated in the following  table.  These unaudited
proforma  results do not purport to be  indicative  of the results of operations
which  actually would have resulted had the  combination  been in effect for the
entire year ended December 31, 1998.

       Revenue                                              $31,583,000
       Net income                                           $ 2,335,000
       Basic EPS                                            $      0.15
       Diluted EPS                                          $      0.14

3. CASH IN ESCROW:

The Company is the  custodian  of cash  deposited  by  customers  with  specific
instructions  as to its  disbursement  from  active  escrow,  trust and  account
servicing.  The  balances  in these  accounts  have not been  included  in these
financial statements.  As of December 31, 1999, the accounts contain balances of
approximately $49,860,000.

4. CONCENTRATION OF CREDIT RISK:

The  Company   maintains  cash  and  cash  equivalents  with  various  financial
institutions. Deposits not to exceed $100,000 at each institution are insured by
the Federal Deposit Insurance Corporation. At December 31, 1999, the Company had
uninsured cash and cash equivalents of approximately $726,460.

                                       22
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


5. INCOME TAXES:

The income tax provision consists of the following:

                                                        Year Ended December 31,
                                                        -----------------------
                                                          1999           1998
                                                        --------       --------
      Current tax provision                             $     --       $119,544
      Deferred tax provision                                  --         39,905
                                                        --------       --------
                                                        $     --       $159,449
                                                        ========       ========

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the  Company's  deferred  tax  assets as of  December  31,  1999 and 1998 are as
follows:

                                                         1999            1998
                                                      ---------       ---------
      Accounts receivable                             $  60,000       $   5,501
      Property and equipment                           (156,251)       (115,980)
      Alternative minimum credit                         45,588          70,574
      Net operating loss carryforwards                  850,071              --
      Other                                              10,000              --
                                                      ---------       ---------
                                                        809,408         (39,905)
      Less:  valuation allowance                       (849,313)             --
                                                      ---------       ---------

                                                      $ (39,905)      $ (39,905)
                                                      =========       =========

At December 31, 1999,  the Company has a net  operating  loss  carryforwards  of
approximately $2,074,000 for federal and state income tax purposes.

The  reconciliation  of the provision for income taxes with the expected  income
taxes based on the statutory federal income tax rate is as follows:

                                                       Year Ended December 31,
                                                      -------------------------
                                                         1999           1998
                                                      ---------       ---------
       Expected income tax provision (benefit)
         at the federal statutory rate                $(669,469)      $ 642,106
       State income taxes net of federal benefit       (154,481)         16,154
       Effect of rate schedule                               --          (5,334)
       Effect of net permanent differences               15,470          15,612
       Effect of alternative minimum tax                     --          70,574
       Utilization of net operating loss carryover           --        (579,663)
       Other                                            (40,833)             --
       Increase to valuation reserve                    849,313              --
                                                      ---------       ---------
                                                      $      --       $ 159,449
                                                      =========       =========

                                       23
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. LONG TERM DEBT:

Long term debt consists of the following:
<TABLE>
<CAPTION>
                                                                            1999            1998
                                                                         ----------      ----------
<S>                                                                     <C>             <C>
8.32%  term loan  with GMAC  Commercial  Mortgage,  with  monthly
installments  of $23,940  including  principal and interest,  due
August 2009; secured by a building                                       $3,120,223      $       --

Note payable to Imperial Bank bearing interest at the prime rate,
with monthly principal payments of $2,800, due December 2002;
secured by a building                                                     1,000,000              --

Credit line with Imperial Bank bearing  interest at the prime rate,
credit line  matures  February  2001;  secured by  furniture  and
equipment                                                                   500,000              --

Capital  lease  obligations,  with  varying  rates  of 9% to  13%
throughout the year 2000; secured by equipment                              231,181         467,041

8% note payable to an individual,  with monthly  installments  of
$435, including principal and interest, due October 2011; secured
by land                                                                      39,135          41,173

8.75% note payable to Imperial Bank of  California,  with monthly
principal  installments  of $1,417  plus  accrued  interest;
secured by a building                                                            --       1,523,969

8.2% note  payable to  Imperial  Bank of  Arizona,  with  monthly
installments  of $11,000  including  principal and interest;
secured by furniture and equipment                                               --         105,978

Note  payable  to  Imperial  Bank  of  California,  with  monthly
interest payments at prime plus 1%                                               --          36,000

Convertible notes                                                                --         125,000
                                                                         ----------      ----------
                                                                          4,890,539       2,299,161

Less: current portion                                                      (717,507)       (532,346)
                                                                         ----------      ----------
                                                                         $4,173,032      $1,766,815
                                                                         ==========      ==========
</TABLE>
                                       24
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

On February 2, 1998,  the Company issued  $125,000 in convertible  notes for the
purpose of obtaining  capital for  expansion.  The  convertible  notes  required
payment of  interest  only for  eighteen  months at prime plus 2 1/2%.  The note
holders had an option to convert the obligation into common stock of the Company
at $2.00 per  share.  In August  1999 the notes were  retired by the  payment of
$95,000 with the balance owed converted to 15,000 shares of the Company's common
stock.

In February 1999, the Company secured a $5,000,000  credit facility from a bank,
which will bear  interest on any  outstanding  balance at the prime  rate.  This
credit  facility is  comprised of a  $2,000,000  revolving  line of credit and a
$3,000,000 term loan to be used for future acquisitions. As of December 31, 1999
$500,000  was  drawn  on the  credit  line in  addition  to  $150,000,  which is
committed for a standby letter of credit required pursuant to an office lease.

The maturities of long-term Debt as of December 31, 1999 were as follows:

                      2000                    $  717,507
                      2001                       124,826
                      2002                       976,026
                      2003                        34,554
                      2004                        36,832
                   Thereafter                  3,000,794
                                              ----------
                                              $4,890,539
                                              ==========

7. OPERATING LEASE COMMITMENTS:

The Company leases offices and office  equipment at 46 locations.  The remaining
lease  periods  range from one month to sixty months with renewal  options up to
ten years.  For the years ended  December  31, 1999 and 1998 rental  expense was
$2,193,615 and $1,254,010 respectively.

The Company's  future minimum lease  commitments as of December 31, 1999 were as
follows:

                      2000                   $ 2,699,385
                      2001                     2,336,099
                      2002                     1,906,927
                      2003                     1,167,470
                      2004                       560,499
                   Thereafter                  4,799,642
                                             -----------
                                             $13,470,022
                                             ===========

                                       25
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. RELATED PARTY TRANSACTIONS:

During the year ended  December  31,  1998,  the Company paid $55,866 to Dale A.
Head for legal services.  Dale A. Head is Donald R. Head's  brother.  In October
1998,  the Company  hired Dale A. Head as Executive  Vice  President and General
Counsel.

9. CONTINGENCIES AND UNCERTAINTIES:

The  Company  is a  defendant  in  various  lawsuits  and  claims,  which  it is
vigorously defending.  It is management's contention that such matters arise out
of the  normal  course  of  business,  primarily  related  to title  and  escrow
disputes.  While the results of litigation  cannot be predicted with  certainty,
management  believes,  based on the  advice  of legal  counsel,  that the  final
outcome of such lawsuits and claims will not have a material  adverse  effect on
the Company's financial  position,  results of operations,  or liquidity.  As of
December  31, 1999 and 1998,  the Company had  accrued  $155,000  and  $173,000,
respectively, for possible title and escrow losses.

The  California  State  Controller's  Office is  currently  examining  all title
companies to identify unclaimed property escheatable to the State of California.
At December  31,  1999,  the Company  has an accrual of  approximately  $203,000
related  to  escheatable  funds  owed  by  subsidiaries  the  Company  acquired.
Approximately  $166,000 was remitted to the State of  California in January 2000
to fulfill  the  Company's  obligations  identified  in the  examination  of its
northern  California  operations.  The  examination  of the  Company's  southern
California  operations is still ongoing but management believes the outcome will
not have a material adverse effect on the Company's financial position,  results
of operations or liquidity.

10. SUPPLEMENTARY CASH FLOW INFORMATION:

The following  supplemental  cash flow  information  is provided with respect to
interest and tax payments,  as well as certain non-cash  investing and financing
activities.
                                                         Year Ended December 31,
                                                         -----------------------
                                                             1999         1998
                                                           --------     --------
Cash paid during the year:
 Interest                                               $   286,520     $ 99,257
 Income taxes                                               228,604           --
Non-cash investing and financing activities:
 Equipment purchased under capital leases                        --      372,270
 Conversion of convertible debt                              30,000      250,000
 Shares issued in connection with a building purchase        19,149      260,136
 Acquisition of New Century Title Company                        --       95,000
 Acquisition of Northwestern Consolidated Corporation      (454,140)     806,556

                                       26
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. EMPLOYEE BENEFIT PLAN:

     PROFIT SHARING PLAN:

The Company maintains a profit sharing plan under Section 401(k) of the Internal
Revenue Code. Under this plan,  substantially all full-time  employees may elect
to defer up to 15% of their salary. The Company contributes $.25 for every $1.00
the  employee  contributes,  up to a maximum of four  percent of the  employee's
earnings.  Vesting  of  matching  contributions  is  based  on  certain  service
requirements. Employees are fully vested after six years of service.

Employer  contributions  for the years  ended  December  31,  1999 and 1998 were
approximately $72,660 and $33,600, respectively.

     CAFETERIA PLAN:

The Company  maintains an Internal  Revenue Code Section 125 Cafeteria Plan as a
benefit to its employees.  The plan provides for employee and dependent coverage
to be paid from  before  tax  compensation.  As such,  there is no effect on the
financial statements.

12. PRIVATE PLACEMENTS OF COMMON STOCK:

On March 31, 1998, the Company completed a private placement of 463,500 units at
$3.00 per unit.  Each unit consisted of two shares of common stock and a warrant
to purchase one share of common stock at a per share price of $2.50 within a two
year period.  The net proceeds from this private  placement  were  approximately
$1.3 million.

On April 30, 1998 the Company  completed a $5.0  million  private  placement  of
common stock in which 3,703,703  shares of common stock were issued at $1.35 per
share.  In  addition,  the  Company  issued  three-year  warrants to purchase an
additional  308,642  shares of common stock at $1.62 per share to an  investment
banking firm that acted as placement agent in the transaction.  The net proceeds
from this  private  placement  of  approximately  $4.4  million were used by the
Company to support  expansion of its business in Arizona and  California and for
working capital and general corporate purposes.

On October  29,  1998,  the  Company  issued  86,712  shares of common  stock to
developers  in a  transaction  to  acquire  a  build-to-suit  building  for  its
corporate  offices.

13. STOCK OPTION PLANS:

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES ("APB 25") and related  Interpretations
in  accounting  for its 1996 Stock  Option Plan and the  Company's  Non-Employee
Directors Stock Option Plan because,  as discussed  below,  the alternative fair
value  accounting  provided for under FASB  Statement  No. 123,  ACCOUNTING  FOR
STOCK-BASED  COMPENSATION  (Statement  123)  requires  use  of option  valuation
models that were not developed for use in valuing stock  options.  Under APB 25,
because the exercise  price of the  Company's  stock  options  equals the market
price of the underlying  stock on the date of grant, no compensation  expense is
recognized.


                                       27
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company's  1996 Stock Option Plan ("The Plan") has  authorized  the grant of
common stock options to all the Company's employees. Currently, 3,900,000 shares
of Common Stock are authorized for issuance pursuant to the Plan. As of December
31, 1999, 2,728,400 shares have been granted under the Plan. All options granted
have 5-year  terms.  Fifty  percent of the options  can be  exercised  after two
years,  the  remaining  shares can be exercised  after three years  provided the
optionee remains employed with the Company at such vesting date. Options granted
under  the Plan are not  transferable  and the per  share  exercise  price of an
incentive  stock  option  granted  under  the Plan may not be less than the fair
market value of the common stock on the date of grant.

The Company's  Non-Employee  Directors Stock Option Plan ("Directors  Plan") has
authorized  the  grant  of  options  to  non-employee  members  of the  Board of
Directors and advisory  boards.  Currently,  600,000  shares of Common Stock are
authorized for issuance pursuant to the Directors Plan. As of December 31, 1999,
496,000 shares have been granted under the Directors  Plan. All options  granted
have 5-year  terms.  Fifty  percent of the options  can be  exercised  after two
years;  the  remaining  shares can be exercised  after three years  provided the
optionee remains an eligible director at such vesting date. Upon election to the
Board of Directors  each board  member is granted the option to purchase  15,000
shares of common stock.  In addition to the foregoing  option grants,  each year
every non-employee director  automatically  receives an option to acquire 10,000
shares of the  Company's  common stock on the third  business day  following the
date the Company publicly announces its annual financial results;  provided that
such  director  has  attended  at  least  75% of the  meetings  of the  Board of
Directors  and the Board  Committees  of which such  non-employee  director is a
member in the preceding fiscal year.

A summary of the Company's  stock option  activity  pursuant to its stock option
plans, and related information for the years ended December 31, 1999 and 1998 is
as follows:

                                            1999                  1998
                                    -------------------   --------------------
                                               Weighted               Weighted
                                                Average                Average
                                     Options     Price     Options      Price
                                     -------     -----     -------      -----
Outstanding - beginning of year     2,778,150    $1.53     1,760,150    $1.10
Granted                               929,950     2.75     1,104,600     2.25
Exercised                            (127,900)    1.00        (7,700)    1.00
Forfeited                            (355,800)    2.05       (78,900)    1.74
                                   ----------             ----------
Outstanding - end of year           3,224,400     1.84     2,778,150     1.53
                                   ==========             ==========

Exercisable at end of year          1,271,100     1.06       569,500     1.00
                                   ==========             ==========
Weighted - average fair value of
options granted during the year    $     1.27             $     1.01
                                   ==========             ==========


                                       28
<PAGE>
                   CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pro forma information regarding net income and earnings per share is required by
Statement  123, and has been  determined as if the Company had accounted for its
employee stock options under the fair value method of that  statement.  The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions:  risk-free
interest rate of 4.5%; dividend yields of 0%; volatility factors of the expected
market  price of the  Company's  common  stock for 1999 and 1998 of .49 and .44,
respectively;  and a  weighted-average  expected life of the option for 1999 and
1998 of 4 years and 5 years, respectively.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options,  which have no vesting  restrictions and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective assumptions including the expected stock price volatility.

Because the Company's stock options have characteristics significantly different
from  those of traded  options,  and  because  changes in the  subjective  input
assumptions  can  materially  affect the fair value  estimate,  in  management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its stock options.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the  options'  vesting  period.  If the Company had
accounted for its stock-based compensation plans using a fair value based method
of accounting, the pro forma information would have been reported as follows:

                                                       Year ended December 31,
                                                      -------------------------
                                                         1999           1998
                                                      -----------    ----------
Pro forma net income (loss)                           $(2,639,686)   $1,294,066
Pro forma net income (loss) per share-basic           $     (0.16)   $     0.09
Pro forma net income (loss) per share-diluted         $     (0.16)   $     0.08

14. SEGMENT INFORMATION:

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No. 131,
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION ("SFAS 131")
in the fiscal year ended December 31, 1998. SFAS 131  establishes  standards for
reporting   information   regarding   operating  segments  in  annual  financial
statements and requires selected  information for those segments to be presented
in interim financial  reports issued to stockholders.  SFAS 131 also establishes
standards for related  disclosures  about  products and services and  geographic
areas.  To date,  the  Company  has viewed its  operations  as  principally  one
segment; services and one geographic region; the Southwestern United States.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     Not Applicable.

                                       29
<PAGE>
                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

The  information  required  by this Item is  incorporated  by  reference  to the
Company's Proxy Statement for its 2000 Annual Meeting of Stockholders.

ITEM 10. EXECUTIVE COMPENSATION

The  information  required  by this Item is  incorporated  by  reference  to the
Company's Proxy Statement for its 2000 Annual Meeting of Stockholders.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required  by this Item is  incorporated  by  reference  to the
Company's Proxy Statement for its 2000 Annual Meeting of Stockholders.

ITEM 12. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Index to Exhibits

Exhibit                                                                Method of
  No.                      Description                                  Filing
-------                    -----------                                 ---------

2       Share Exchange  Agreement  between Capital Title Agency,  Inc.
        and Norvex, Inc. dated May 23, 1996                               (1)
3.1     Certificate of Incorporation                                      (1)
3.2     Amended and Restated Bylaws
10.1    Underwriting  Agreement between Capital Title Agency, Inc. and
        Old Republic  National Title Insurance  Company dated March 1,
        1996                                                              (1)
10.2    Underwriting  Agreement between Capital Title Agency, Inc. and
        First American Title  Insurance  Company dated August 16, 1996    (1)
10.3    Image Service Agreement between Capital Title Agency, Inc. and
        Security Union Title Insurance Company dated June 5, 1996         (1)
10.4    Title Plant Service  Agreement  between  Capital Title Agency,
        Inc. and Diversified  Information  Services  Corporation dated
        March 1, 1996                                                     (1)
10.5    Office  Lease  between  Capital  Title  Agency,  Inc. and 4808
        Corporation dated June 7, 1996                                    (1)
10.6    Promissory  Note between PWCC,  Inc. and BankOne  Arizona,  NA
        dated January 5, 1996                                             (1)
10.7    Assumption  Agreement  between Capital Title Agency,  Inc. and
        PWCC, Inc. dated January 5, 1996                                  (1)
10.8    Employment  Agreement  between  Registrant  and Donald R. Head
        dated June 1, 1996                                                (1)
10.9    Employment  Agreement  between  Registrant and Andrew A. Johns
        dated June 1, 1996                                                (1)
10.10   Promissory Note between Capital Title Group, Inc. and Imperial
        Bank, dated November 15, 1996                                     (2)
10.11   Financial  Advisor  Agreement  between  Registrant  and Miller
        Capital Corporation dated June 17, 1997                           (2)
10.12   Employment  Agreement  between Capital Title Agency,  Inc. and
        Milt Ferrantelli dated June 17, 1997                              (2)
10.13   Underwriting  Agreement between Capital Title Agency, Inc. and
        United General Insurance Company dated January 21, 1998.          (2)
10.14   Credit Line  Agreement  between  Registrant and Imperial Bank,
        dated November 17, 1997                                           (2)
10.15   Acquisition Consulting Agreement between Registrant and Miller
        Capital Corporation dated January 28, 1998.                       (2)

                                    30
<PAGE>
Exhibit                                                                Method of
  No.                      Description                                  Filing
-------                    -----------                                 ---------

10.16   Issuing  Underwriting  Agreement between Capital Title Agency,
        Inc. and Chicago Title Insurance  Company dated April 1, 1998.    (3)
10.17   Placement  Agent  Agreement  between  Registrant  and  Sanders
        Morris Mundy Inc. dated April 13, 1998.                           (3)
10.18   Title Plant  Agreement  between  Registrant and Security Union
        Title Insurance Company dated April 29, 1998                      (3)
10.19   Amendment  to   Acquisition   Consulting   Agreement   between
        Registrant and Miller Capital Corporation dated June 12, 1998.    (3)
10.20   Financial  Advisor  Agreement  between  Registrant  and Miller
        Capital Corporation dated June 16, 1998.                          (3)
10.21   Purchase and Sale Agreement between Registrant and KDC-AZ, LLC
        dated July 1, 1998                                                (3)
10.22   Merger Agreement among Registrant,  Northwestern  Consolidated
        Corporation and related  subsidiaries dated September 1, 1998.    (4)
10.23   Credit  Agreement  between  Registrant and Imperial Bank dated
        February 1, 1999.                                                 (3)
10.24   Access Agreement By and Between Security Union Title Insurance
        Company and New Century  Title Company  dated  September 30,
        1999.                                                              *
10.25   Title  Plant  Lease  and  Service  Agreement  by  and  between
        Security  Union Title  Insurance  Company and Capital  Title
        Agency Inc. dated May 19, 1999.                                    *
10.26   Promissory  Note between CTG Building Co. and GMAC  Commercial
        Mortgage Corporation dated July 30, 1999.                          *
10.27   Amendment to  Underwriting  Agreement  by and between  Stewart
        Title  Guaranty  Company and New Century  Title  Company dated
        September 28, 1999.                                                *
21      Subsidiaries                                                       *
23      Consent of Ernst & Young LLP                                       *
27      Financial Data Schedule                                            *

----------
*    Filed herewith
(1)  Incorporated  by reference to the  Registrant's  Form 10-QSB filed with the
     Securities and Exchange Commission on September 20, 1996.
(2)  Incorporated  by  reference  to the  Registrant's  Form 10-KSB for the year
     ended December 31, 1997, filed with the Securities and Exchange  Commission
     on March 25, 1998.
(3)  Incorporated  by  reference  to the  Registrant's  Form 10-KSB for the year
     ended December 31,1998,  filed with the Securities and Exchange  Commission
     on March 23, 1999.
(4)  Incorporated  by  reference  to the  Registrant's  Form 8-K filed  with the
     Securities and Exchange Commission on December 10, 1998.


     (b) Reports on Form 8-K

     The Company  did not file any reports on Form 8-K during the quarter  ended
December 31, 1999.

                                       31
<PAGE>
                                   SIGNATURES

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

                                        CAPITAL TITLE GROUP, INC.



                                        By /s/ Donald R. Head
                                           -------------------------------------
                                           Donald R. Head
                                           Chief Executive Officer
Date:  March 24, 2000

     In accordance with the requirements of the Securities Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S>                      <C>                         <C>                         <C>
Donald R. Head          Chairman of the Board and     /s/ Donald R. Head            March 24, 2000
                        Chief Executive Officer       -------------------------


Mark C. Walker          Vice President, Chief         /s/ Mark C. Walker            March 24, 2000
                        Financial Officer and         -------------------------
                        Treasurer


Richard A. Alexander           Director               /s/ Richard A. Alexander      March 24, 2000
                                                      -------------------------


David C. Dewar                 Director               /s/ David C. Dewar            March 24, 2000
                                                      -------------------------


Theo F. Lamb                   Director               /s/ Theo F. Lamb              March 24, 2000
                                                      -------------------------


Robert B. Liverant             Director               /s/ Robert B. Liverant        March 24, 2000
                                                      -------------------------


Stephen A McConnell            Director               /s/ Stephen A McConnell       March 24, 2000
                                                      -------------------------


Ben T. Morris                  Director               /s/ Ben T. Morris             March 24, 2000
                                                      -------------------------
</TABLE>

                                       32