U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

                      For the year ended December 31, 2002

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

        For the transition period from _______________ to _______________

                        Commission File Number 000-24803

                               VESTIN GROUP, INC.
                 (Name of small business issuer in its charter)

           DELAWARE                                              52-2102142
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation of organization)                              Identification No.)

                 2901 El Camino Avenue, Las Vegas, Nevada 89102
                    (Address of principal executive offices)

                                 (702) 227-0965
                           (Issuer's telephone number)

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

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.0001 Par Value

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  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. $31,904,304

As of February  6, 2003,  there were  5,324,340  shares of the  issuer's  common
stock, $.0001 par value,  issued and outstanding.  The aggregate market value of
the common stock held by  non-affiliates  on February 6, 2003 was  approximately
$35.3 million.

DOCUMENTS INCORPORATED BY REFERENCE

The issuer's Proxy  Statement on Schedule 14A for the 2002 Annual Meeting of the
Stockholders of the issuer (Part III).

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
                                     PART I

NOTE REGARDING FORWARD LOOKING STATEMENTS

This annual report and other written  reports and oral statements made from time
to time by the Company may contain  forward  looking  statements.  Such  forward
looking  statements  may be  identified  by the use of such words as  "experts,"
"plans," "estimates,"  "forecasts,"  "projects,"  "anticipates,"  "believes" and
words of similar meaning.  Forward looking statements are likely to address such
matters as the Company's  business strategy,  future operating  results,  future
sources of funding for mortgage loans brokered by the Company,  future  economic
conditions and pending litigation involving the Company. As a result,  investors
should carefully consider any forward looking statements in light of the various
factors which could affect future  results.  Some of these factors are discussed
below.

ITEM 1. DESCRIPTION OF BUSINESS.

Introduction

Vestin Group,  Inc.  ("Vestin Group") is a holding company which conducts all of
its operations through its wholly owned subsidiaries. Vestin Group together with
its subsidiaries shall be hereinafter  referred to as the "Company." The Company
conducts its operations primarily through Vestin Mortgage,  Inc., a wholly owned
subsidiary  ("Vestin  Mortgage").  Vestin Mortgage operates as a mortgage broker
licensed in the state of Nevada. Vestin Mortgage is engaged in the brokerage and
placement  of  commercial  loans  secured by real  property.  Vestin  Mortgage's
primary  operations  consist  of the  brokerage  and  placement  of  commercial,
construction,  acquisition and development, land, and residential mortgage loans
secured by real property.

Vestin  Mortgage  serves as the  manager  of  Vestin  Fund I, LLC  (formerly  DM
Mortgage Investors, LLC; "Fund I"), a Nevada limited liability company which was
organized to invest in mortgage loans. Fund I filed a registration  statement on
Form S-11 with the Securities and Exchange  Commission  (the "SEC") to offer and
sell up to  $100,000,000 of its units. In August 2000, the SEC declared the Form
S-11 effective;  by June 2001, Fund I had raised  $100,000,000  from the sale of
units.  The Company is also the manager of Vestin  Fund II, LLC ("Fund  II"),  a
second Nevada limited  liability  company to invest in mortgage  loans.  Fund II
filed a  registration  statement  with  the SEC  with  respect  to the  proposed
issuance of up to $500,000,000 of its units which was declared effective in June
2001.  As of February 25,  2003,  Fund II had raised  approximately  $337,000,00
through  the sale of its units.  Fund I and Fund II are  sometimes  referred  to
collectively hereinafter as the "Funds."

Vestin Capital,  Inc., a wholly owned  subsidiary of the Company,  serves as the
lead broker dealer on the sale of units for Fund I and Fund II and also provides
administrative  services.  Vestin Capital does not receive any commissions  from
the sale of units for Fund I and Fund II.  Rather,  Vestin  Capital  receives an
administrative  fee from Vestin Mortgage  related to the maintenance of investor
files.

The Company

The Company is primarily engaged in the commercial  mortgage brokerage business.
The Company  arranges  loans to owners and  developers  of real  property  whose
financing  needs  are  not  being  met  by  traditional  mortgage  lenders.  The
underwriting  standards  and length of time  required  by  traditional  mortgage
lenders,  such as commercial banks,  results in certain potential  borrowers who
are unable to or  unwilling  to go through the process  required by  traditional
lenders.  As a  non-conventional  lender,  the  Company  focuses on the needs of
borrowers  unable or  unwilling  to meet the more  restrictive  requirements  of
traditional lenders.  When evaluating  prospective  borrowers,  the Company will
typically focus on the value of collateral, which reduces the paperwork and time
needed to evaluate other factors.

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<PAGE>
Mortgage Brokerage Operations

The Company's mortgage business involves processing loan applications as well as
approving,  funding, and servicing loans. In processing a loan application,  the
Company will determine  whether a proposed loan satisfies the Company's  lending
criteria by analyzing the purpose of the loan, the value of the underlying  real
estate,  and the credit  history and  references  of the  borrower.  In order to
verify a  prospective  borrower's  equity in a property or project,  the Company
typically  receives  an  independent  appraisal  from an  appraiser  licensed or
qualified  as an  independent  appraiser  and  who  is  certified  by  or  holds
designations  from  one or  more of the  following  organizations:  the  Federal
National Mortgage Association of Review Appraisers, the Appraisal Institute, the
Society  of Real  Estate  Appraisers,  M.A.I.,  or  Class  IV  Savings  and Loan
Appraisers. Generally, these appraisals are completed within twelve months prior
to funding of the loan and may have been previously  performed for the borrower.
The  appraisals  may be for the current  estimated  "as-if  developed" or "as-if
completed"  value of the property or, in the case of acquisition and development
loans or  construction  loans,  for the  estimated  value of the  property  upon
completion of the project. As-if completed or as-if developed values on raw land
loans or  acquisition  and  development  loans  often  dramatically  exceed  the
immediate sales value and may include anticipated zoning changes, selection by a
purchaser  against  multiple  alternatives,  and  successful  development by the
purchaser;  upon which  development is dependent on  availability  of financing.
However,  appraisals  are only estimates of value and cannot be relied on solely
as measures of realizable value. An employee or agent of Vestin Mortgage reviews
each appraisal report and conducts a physical inspection for each property.

Additionally,  the  Company  will order and review a property  title  search and
review the  documentation  provided to determine whether there exists sufficient
evidence  of  the  borrower's  right  to the  property  or  project.  Generally,
employees  of the Company  will  physically  inspect the property to enhance the
Company's  knowledge  with  respect to the  underlying  property in an effort to
ensure there is  sufficient  equity in the property to secure the  financing.  A
physical inspection includes an assessment of the subject property, the adjacent
properties  and the  neighborhood  but generally  does not include  entering any
structures on the property.

The loan approval process of the Company  typically  involves a review by a loan
committee  consisting  of three or more  officers of the Company  authorized  to
approve loans.  The loan committee  meets on a weekly basis to review  potential
loans,  reports  and  other  information  regarding  a  particular  loan  and/or
borrower. The officers serving on the loan committee have substantial experience
in the real  estate and  mortgage  lending  industries.  The  credit  evaluation
process  may take up to 20 days as compared to  conventional  lenders  which may
take up to 120 days or longer in approving a particular loan.

The loans brokered by the Company for the Funds typically  require the borrowers
to  execute  promissory  notes on the  behalf of the  Funds.  The Funds  receive
monthly  interest  payments from the promissory  notes as paid by the borrowers.
Interest  payments from the borrower may actually come from an interest  reserve
account  established  at loan closing which the Company  controls.  The deeds of
trust grant a security  interest in the real  property that serves as collateral
for the loan. The Company will arrange loans which  generally  range from 50-75%
of the appraised value of the property that serves as collateral for the loan in
order to provide  protection for the investments  while permitting a significant
return.  The  appraised  value  can  increase  or  decrease  as  conditions  and
circumstances affecting the property change. Such change can be significant.

The general terms of a loan brokered by the Company typically include: (i) a one
to seven  year  maturity  date;  (ii)  regular  interest  payments;  and (iii) a
"balloon"  payment of principal  payable in full at the end of the term.  To the
extent that a borrower has an  obligation  to pay mortgage  loan  principal in a
large lump sum  payment,  such  borrower's  ability to repay the loan may depend
upon its ability to sell the property, obtain suitable refinancing, or otherwise
raise capital.

The Company  monitors  the  repayment of the loans  through its loan  accounting
department  which services the loans.  Servicing  agents in the loan  accounting
department  receive loan payments  from the  borrowers,  disburse  corresponding
payments to the applicable  lenders and assist in collection efforts on past due
loans.  Additionally,  the servicing agents review loan status reports and alert
collection  agents  within the  Company  in the event a borrower  has not made a
payment on its loan within one day of such payment's due date. Collection agents

                                       3
<PAGE>
notify the delinquent  borrower of its default and allow the borrower to respond
in a timely fashion prior to engaging in foreclosure action.  Should the Company
be required to commence  foreclosure action on property serving as collateral to
a loan in default,  the Company  will  simultaneously  begin  negotiations  with
potential  purchasers of the  foreclosed  property.  Neither the Company nor the
Funds intend to hold foreclosed properties as investments.

Management of Fund I and Fund II

Vestin  Mortgage is the manager of Fund I and Fund II, Nevada limited  liability
companies.  As  manager,  Vestin  Mortgage  evaluates  prospective  investments,
selects the  mortgages  in which the Funds will invest and makes all  investment
decisions for the Funds.  Additionally,  Vestin  Mortgage is responsible for all
administrative  matters such as accounting,  tax and legal  requirements for the
Funds.  Vestin  Mortgage  records  an annual  management  fee up to 0.25% of the
aggregate capital  contributions to the Funds per annum. The Company may, in its
sole discretion, waive its management fee. For the year ended December 31, 2002,
the Company recorded  management fees of approximately  $249,000 from Fund I and
$586,000  from Fund II as compared to $131,000 from Fund I and $87,000 from Fund
II for the same  period in 2001.  In  connection  with the  organization  of the
Funds, the Company received  approximately  100,000 Units in Fund I for expenses
paid by the  Company  to  unaffiliated  third  parties  in  connection  with the
offering  of units in Fund I, and 110,000  units from Fund II for such  offering
expenses  which is the  maximum  amount  allowed  for such  expenses  under  the
Operating Agreement of Fund II.

The Operating  Agreements for the Funds allow Vestin  Mortgage to be indemnified
for any action, claim or liability arising from any act or omission made in good
faith and in the performance of its duties under the Operating Agreement.  Types
of Loans Brokered

The  Company  primarily  brokers  loans  which  are  secured  by first or second
mortgages on real property.  Such loans fall into the following categories:  raw
and unimproved  land,  acquisition  and  development,  construction,  commercial
property, residential and bridge loans.

Raw And Unimproved Land Loans

Approximately 15 - 25% of the loans placed by the Company are loans made for the
purchase  or  development  of  raw,  unimproved  land.  Generally,  the  Company
determines  whether to broker these loans based upon the appraised  value of the
property and the  borrower's  actual  capital  investment in the  property.  The
Company will generally  broker loans with a face value of up to 60% of the as-if
developed  appraised  value of the  property  and we  usually  require  that the
borrower has invested in the property  actual capital  expenditures  of at least
25% of the property's  value.  As-if developed values on raw and unimproved land
loans  often  dramatically  exceed the  immediate  sales  value and may  include
anticipated   zoning  changes,   selection  of  a  purchaser   against  multiple
alternatives,   and  successful   development  by  the  purchaser;   upon  which
development is dependent on availability of financing.

Acquisition and Development Loans

Approximately  10-25% of the loans  placed by the  Company are  acquisition  and
development   loans.   These  loans  enable  borrowers  to  complete  the  basic
infrastructure  and  development of their property prior to the  construction of
buildings or structures.  Such  development  may include  installing  utilities,
sewers,  water pipes, and/or streets.  Generally,  the Company will broker loans
with a face value of up to 60% of the appraised  value of the property.  Loan to
value ratios on some  acquisition and development  loans may be calculated using
as-if developed appraisals.  Such appraisals have the same valuation limitations
as raw and unimproved land loans, described above.

Construction Loans

Approximately  10-70% of the Company's brokered loans are construction  loans. A
construction  loan provides funds for the construction of one or more structures
on developed land. Funds under this type of loan will generally not be forwarded
to the  borrower  until  work in the  previous  phase  of the  project  has been
completed  and an  independent  inspector  has verified  certain  aspects of the
construction  and its costs.  The Company will  typically  require  material and
labor lien  releases by the borrower  per  completed  phase of the project.  The

                                       4
<PAGE>
Company  will  review  the   appraised   value  of  the  property  and  proposed
improvements,  and will arrange loans for up to 75% of the appraised value. Loan
to value  ratios  on some  construction  loans  may be  calculated  using  as-if
developed appraisals. Such appraisals have the same valuation limitations as raw
and unimproved land loans, described above.

Commercial Property Loans

Approximately  20-50% of the loans placed by the Company are commercial property
loans.  Commercial property loans provide funds to allow commercial borrowers to
make  improvements  or  renovations to the property in order to increase the net
operating  income  of the  property  so that it may  qualify  for  institutional
refinancing.  The Company  will review the  appraised  value of the property and
will broker loans for up to 75% of such appraised value.

Residential Loans

A small  percentage of the loans brokered by the Company are residential  loans.
Such  loans  facilitate  the  purchase  or  refinance  of  one  to  four  family
residential property provided the borrower uses one of the units on the property
as such borrower's principal  residence.  The Company will place loans for up to
75% of the appraised value of the property.

Bridge Loans

Up to 15% of the Company's  brokered loans are bridge loans.  Such loans provide
interim financing (up to six months) to enable  commercial  borrowers to qualify
for permanent  refinancing.  The Company will review the appraised  value of the
property and will generally  arrange for loans of up to 75% of that value.  Such
appraisals  may be based on  either  an as-is  basis or as-if  developed  basis,
depending on the circumstances.

Collateral

The types of  collateral  that will  secure the loans  brokered  by the  Company
include a first deed of trust, a second deed of trust or a leasehold interest.

First Deed of Trust

The  majority of the loans  placed by the Company are secured by a first deed of
trust. Thus the applicable lender will have rights as a first mortgage lender of
the collateralized property.

Second Deed of Trust

Up to 10% of the loans placed by the Company may be in second mortgage loans and
in wraparound  mortgage  loans.  In a second  mortgage  loan,  the rights of the
lender (such as the right to receive payment on foreclosure)  will be subject to
the rights of the first  mortgage  lender.  In a wraparound  loan,  the lender's
rights will be comparably  subject to the rights of a first mortgage lender, but
the aggregate indebtedness evidenced by the loan documentation will be the first
mortgage  loan plus the new funds the lender  invests.  The lender would receive
all payments  from the borrower and forward to the senior  lender its portion of
the payments the lender receives.

Leasehold Interest

Up to 20% of the  loans  brokered  by the  Company  may be in  loans  where  the
collateral is an interest in a lease.

Sources of Revenue

The Company's mortgage brokerage  operations  generate revenues through (i) loan
placement fees on the loans it brokers; (ii) loan servicing fees; and (iii) loan
extension  fees  charged  to  borrowers  who  desire to extend the term of their
loan(s).  Mortgage brokerage  operations accounted for approximately 93% and 94%
of the Company's revenues in 2002 and 2001, respectively.

For each loan brokered by the Company, the Company receives a loan placement fee
between 2% to 6% of the principal  amount of the loan. Such fee is a competitive
fee based upon local market  conditions.  An evaluation and processing fee of up
to 5% per loan is charged to document  and package the loan.  Such fee is also a
competitive  fee based upon  local  market  conditions.  The  servicing  fee for

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<PAGE>
administering  the  financing  is an  annual  fee up to .25% of the  outstanding
principal  of each  loan.  Loan  extension  fees may be up to 5% of  outstanding
principal on the loan as  determined  by law and local market  conditions.  Late
charges are assessed for non-timely payments.

During the year ended December 31, 2002,  there were 79 mortgage loans placed by
the  Company  with an  aggregate  value of  $477,942,550.  During the year ended
December  31, 2001,  there were 54 mortgage  loans placed by the Company with an
aggregate value of $243,894,870. The majority of the loans placed by the Company
are secured by real estate  located in Nevada and other  western  states such as
Arizona, California, Hawaii, Texas, Utah and Washington.

The following  chart sets forth a summary of the types of loans  arranged by the
Company for the years ended December 31, 2002 and 2001.

<TABLE>
<CAPTION>
                                             NUMBER OF         AGGREGATE       LOAN PLACEMENT        AVERAGE
                                               LOANS         DOLLAR AMOUNT     FEES BY LOAN      ORIGINATION FEES
                LOAN TYPE                   ORIGINATED         IN TOTAL            TYPE          AS A % OF LOANS
                ---------                  ------------      ------------      ------------      ---------------
<S>                                        <C>              <C>               <C>                        <C>
                   2002
Bridge and Residential Loans                         15      $ 31,205,050      $  1,217,496               3.90%
Construction  and  Acquisition and
Development Loans                                    25       226,836,000        11,084,200               4.89%
Land Loans                                           12        34,271,500         1,047,450               3.06%
Commercial Loans                                     27       185,630,000         7,422,825               4.00%
                                           ------------      ------------      ------------       ------------
                                                     79      $477,942,550      $ 20,771,971               4.35%
                                           ============      ============      ============       ============
                   2001
Bridge and Residential Loans                         13      $ 87,868,600      $  3,333,050               3.79%
Construction  and  Acquisition and
Development Loans                                    21        99,353,000         4,392,617               4.42%
Land Loans                                            8        12,180,000           494,775               4.06%
Commercial Loans                                     12        44,493,270         1,773,082               3.98%
                                           ------------      ------------      ------------       ------------
                                                     54      $243,894,870      $  9,993,524               4.10%
                                           ============      ============      ============       ============
</TABLE>

Investment in Mortgage Loans and Other Investments

The Company accesses funds for loans which it brokers  primarily from the Fund I
and Fund II. From time to time,  the Company may  co-invest in certain  mortgage
loans.  The  type  and  nature  of such  mortgage  loans  generally  mirror  the
composition of loans placed through the Company's mortgage brokerage operations.
As  of  December  31,  2002,  the  Company  held  for  investment  approximately
$9,100,000 of interests in mortgage  loans.  Interest  income  generated by such
investments comprised less than 5% of the Company's revenues for 2002 and 2001.

In the event of a default of loans  brokered by the  Company,  the Company  will
initiate  foreclosure  activity on the property securing the corresponding  loan
and as a  result,  own such real  estate.  The  types of real  estate  which the
Company may own as a result of foreclosure  include raw and undeveloped land and
commercial  and  residential  properties.  Simultaneously  with the  foreclosure
actions,  the Company  anticipates  entering into  negotiations  with  potential
purchasers  of  such  property.  At  December  31,  2002,  the  Company  had ten
properties  totaling  $5,980,509,  which were acquired  through  foreclosure and
recorded as investments in real estate held for sale.  Such  investments in real
estate held for sale are  recorded at the lower of cost or fair value less costs
to sell. It is not the Company's intent to invest in or own real estate.

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<PAGE>
As of December 31, 2002, the Company held approximately 100,000 units in Fund I,
representing approximately 1% of the equity of Fund I, and 110,000 units in Fund
II,  representing  approximately  0.3% of the  equity  of Fund II.  The  primary
activity of the Funds  consists of  investing  in  mortgage  loans.  The Company
serves as manager of the Funds and evaluates  loans to determine which loans the
Funds should invest in.

Competition

The Company must compete both for sources of funds to finance the mortgage loans
which it brokers and for borrowers who are seeking mortgage loans.

Competition for Funds

Historically,  the main  source  of the  Company's  funds  had  been  individual
investors  interested in the investment  opportunity  offered by the Company. In
2002,  the main  source of the  Company's  funds was from the Funds.  In seeking
investors  for the Funds,  the  Company  competes  with  alternative  investment
vehicles  as well as  competing  mortgage  brokers.  The  attractiveness  of the
Company's mortgage loans as compared with other investment opportunities depends
upon the yields on loans  placed by the  Company,  the safety of the  underlying
investment,  the Company's  reputation,  general  economic  conditions  and real
estate  market  conditions.  The  Company's  principal  advantage in  attracting
investors  is the high  historical  yields  generated  by loans  brokered by the
Company.  However,  the Company is at a  disadvantage  compared  to  alternative
investment  vehicles to the extent that an  investment  in mortgage  loans lacks
liquidity  and is  not  guaranteed  or  insured  by a  governmental  agency.  In
addition,  the Company is smaller than many of the full service  financial firms
which market  alternative  investment  vehicles and has a more limited operating
history.

In competing  with other mortgage  brokers,  the Company enjoys the advantage of
its track record and the fact that it is a leading  non-traditional  real estate
lender in southern Nevada. These advantages may carry less weight as the Company
expands its operations into other markets.

Competition for Borrowers

Generally, real estate developers depend upon the timely completion of a project
to obtain a competitive advantage when selling their properties. The Company has
sought to attract real estate developers by offering  expedited loan processing,
which generally provides quick loan approval and funding of a loan. As a result,
the  Company  has  established  a market  niche as a  non-conventional  mortgage
lender.

The  Company   considers  its  direct   competitors   to  be  the  providers  of
non-conventional   mortgage  loans,  that  is,  lenders  who  offer  short-term,
equity-based  loans on an  expedited  basis for higher fees and rates than those
charged by conventional  lenders.  To a lesser extent, the Company also competes
with  conventional  mortgage  lenders  and  mortgage  loan  investors,  such  as
commercial  banks,  thrifts,  conduit  lenders,  insurance  companies,  mortgage
brokers,  pension funds and other financial institutions that offer conventional
mortgage  loans.  The Company's  principal  competitors in its market niche as a
non-conventional  mortgage  lender  include:  Bank of America,  Bank One,  Wells
Fargo,  Residential Funding, First Security Bank, and United Bank of Texas. Many
of the companies against which the Company competes have  substantially  greater
financial,  technical and other  resources than the Company.  Competition in the
Company's  market niche  depends upon a number of factors,  including  price and
interest  rates  of the  loan,  speed  of  loan  processing,  cost  of  capital,
reliability, quality of service and support services.

Government Approval and Regulation

The operations of Vestin Group are conducted  through its wholly owned operating
subsidiary,  Vestin  Mortgage.  These  operations  are subject to  regulation by
federal,  state and local laws and  governmental  authorities.  Vestin  Mortgage
conducts its real estate mortgage  business under a "privileged"  license issued
by the State of Nevada Financial  Institutions Division (the "Division").  Under
applicable  Nevada law,  the  Division has broad  discretionary  authority  over
Vestin  Mortgage's  activities,  including  the  authority  to conduct  periodic
regulatory audits of all aspects of Vestin Mortgage's operations.

The Company is required to comply with the Equal Credit Opportunity Act of 1974,
which  prohibits  creditors from  discriminating  against loan applicants on the
basis of race, color, sex, age or marital status,  and the Fair Credit Reporting

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<PAGE>
Act of 1970,  which  requires  lenders  to supply  applicants  with the name and
address of the reporting  agency if the applicant is denied credit.  The Company
is also subject to various other federal and state  securities  laws  regulating
the issuance and sale of securities,  as well as the Employee  Retirement Income
Security Act of 1974.

Because the Company's  business is regulated,  the laws,  rules and  regulations
applicable to the Company are subject to regular  modification and change. There
can be no assurance that laws,  rules or regulations  will not be adopted in the
future that could make compliance much more difficult or expensive, restrict the
Company's  ability to broker or service  loans,  further  limit or restrict  the
amount of  commissions,  interest and other charges  earned on loans brokered by
the  Company,  or  otherwise  adversely  affect the business or prospects of the
Company.

Employees

As of December 31, 2002, the Company employed 58 personnel.  Of these employees,
16 were  employed  to  identify,  arrange,  and service  loans and 42  performed
general and  administrative  as well as  information  technology  and  marketing
functions.  The Company has entered  into  employment  agreements  with  certain
officers and key employees.  No employees are covered by a collective bargaining
agreement.

ITEM 2. DESCRIPTION OF PROPERTY

The Company maintains its executive offices at 2901 El Camino Avenue, Las Vegas,
Nevada  89102.  The  Company's  office is  approximately  15,000 square feet and
houses the Company's  marketing,  loan processing and administrative  personnel.
The lease agreement governing this property expires on April 2006.

ITEM 3. LEGAL PROCEEDINGS

The Company is a defendant  in the  following  lawsuit  incurred in the ordinary
course of business.

On or about  November 22, 2000, a borrower  which had defaulted on various loans
arranged by Vestin  Mortgage  filed a cause of action against the Company in the
U.S. District Court for the District of Nevada.  The complaint in Howard Bulloch
et al. v. Vestin  Mortgage,  Inc. et al. alleges,  among other things,  that the
Company  breached a contract  with the  borrower  and seeks  damages of at least
$2,500,000.  The Company has denied the  allegations  and intends to  vigorously
defend its position. The case is currently set for trial on March 4, 2003.

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

None.

                                       8
<PAGE>
                                    PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) The Company's Common Stock is traded on the Nasdaq National Market under the
ticker symbol "VSTN".

The table below  lists the  quarterly  high and low sales  prices for the Common
Stock as  reported by the Nasdaq for the four  quarters in 2002 and 2001.  As of
February 26, 2003,  the closing  sale price for the  Company's  Common Stock was
$6.18 per share.

                                                        NASDAQ
                                               -----------------------
                                               US $HIGH        US $LOW
                                               --------        -------
              2002
              Fourth Quarter                     7.84           6.55
              Third Quarter                      9.20           6.11
              Second Quarter                     9.24           6.80
              First Quarter                      8.02           5.05

              2001
              Fourth Quarter                     8.45           2.87
              Third Quarter                      3.32           1.35
              Second Quarter                     4.65           2.00
              First Quarter                      5.12           4.06

(b) Holders

On February 26, 2003, there were approximately 650 stockholders of record of the
Company's Common Stock, which does not reflect the beneficial stockholders whose
shares are held in nominee names.

(c) Dividends

Any  determination  to pay dividends is at the discretion of the Company's Board
of Directors and will depend upon the Company's financial condition,  results of
operations,  capital requirements,  limitations contained in loan agreements and
such other factors as the Board of Directors  deems  relevant.  According to the
Company's  Certificate  of  Designations,  holders  of the  Company's  Series  A
Preferred  Stock are entitled to receive,  when, as and if declared by the Board
of Directors, dividends in an amount to be determined by the Board of Directors,
but not less than 0.83% of the Original  Issue Price per annum and not more than
10% of the  Original  Issue  Price per  annum,  prior and in  preference  to any
declaration  or payment of any dividends on the Common Stock,  which may be paid
in  cash  or  in  Common  Stock  and  are  not  cumulative.   The  Company  paid
approximately $934,000 in dividends to Preferred Stock shareholders during 2002.
During the year 2002 the Company declared dividends on Common Stock as follows:

          Month                       Dividend Per
        Declared                      Common Share
        --------                      ------------
         March                            $0.10
         June                             $0.02
         August                           $0.12
         November                         $0.12

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

The following financial review and analysis concerns the financial condition and
results of operations  of the Company for the years ended  December 31, 2002 and
2001.  This  information  should  be  read in  conjunction  with  the  Company's
Consolidated  Financial  Statements  and  accompanying  notes and other detailed
information regarding the Company appearing elsewhere in this Form 10-KSB.

                                       9
<PAGE>
CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION

The  Company  recognizes  revenue  primarily  from  loan  placement  fees,  loan
servicing fees and extension  fees.  Loan placement fees are recorded as revenue
at the close of escrow and reduced by direct loan placement costs on loans which
the Company has not recorded as  investments  in mortgage loans on its financial
statements.  Typically,  deeds of trust related to loans placed are initially in
the Company's name to facilitate the loan  placement  process.  Upon arranging a
funding source for such loans, the deeds of trust are assigned to the respective
investor (i.e., individual investors,  Fund I, and Fund II). Loan servicing fees
are  recorded  as  revenue  when such  services  are  rendered.  Servicing  fees
represent the interest  spread between what is paid to the investor and what the
borrower  pays  for the use of the  money,  which  can vary  from  loan to loan.
Servicing costs  approximate  servicing fees and therefore,  the Company has not
recognized a servicing asset or liability. Extension fees are generally recorded
as revenue at the extension grant date.

Interest  income on  investments  in mortgage loans on real estate is accrued by
the effective  interest method.  The Company does not recognize  interest income
from loans once they are  determined  to be impaired.  A loan is impaired  when,
based on current information and events, it is probable that the Company will be
unable to collect all amounts due according to the contractual terms of the loan
agreement or when the payment of interest is 90 days past due.

INVESTMENTS IN REAL ESTATE HELD FOR SALE

Investments  in real estate held for sale include real estate  acquired  through
foreclosure  and are carried at the lower of the recorded  amount,  inclusive of
any senior indebtedness,  or the property's estimated fair value, less estimated
costs to sell.

INVESTMENTS IN MORTGAGE LOANS

Investments  in  mortgage  loans  are  secured  by trust  deeds  and  mortgages.
Generally,  all of the Company's  mortgage loans require interest only payments,
either  through  payments or decrease  of an  interest  reserve,  with a balloon
payment  of the  principal  at  maturity.  The  Company  has both the intent and
ability to hold mortgage loans until maturity and therefore,  mortgage loans are
classified  and  accounted for as held for  investment  and are carried at cost.
Loan to value  ratios  are  based  on  appraisals  obtained  at the time of loan
origination  and may not reflect  subsequent  changes in value  estimates.  Such
appraisals are generally dated within 12 months of the date of loan origination.
Appraisals are also based on either an "as is basis" or "as-if completed basis".
These  appraised  values do not reflect  immediate  sales  values,  which may be
substantially less.

ALLOWANCE FOR LOAN LOSSES

The Company maintains an allowance for loan losses on its investment in mortgage
loans for estimated  credit  impairment in the Company's  investment in mortgage
loans  portfolio.  The  Company's  estimate  of  losses  is based on a number of
factors  including  the  types and  dollar  amounts  of loans in the  portfolio,
adverse situations that may affect the borrower's  ability to repay,  prevailing
economic conditions and the underlying  collateral securing the loan.  Additions
to the allowance  are provided  through a charge to earnings and are based on an
assessment of certain factors including, but not limited to, estimated losses on
the loans. Actual losses on loans are recorded as a charge-off or a reduction to
the  allowance  for loan losses.  Subsequent  recoveries  of amounts  previously
charged off are added back to the allowance.

INCOME TAXES

The Company  accounts for its income  taxes using the  liability  method,  which
requires  recognition of deferred tax assets and  liabilities for the future tax
consequences  attributable to differences  between  carrying amounts of existing
assets  and  liabilities   and  their   respective  tax  bases  and  tax  credit
carryforwards.  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.  The effect on
deferred tax assets and  liabilities  of a change in tax rates is  recognized in
income in the period that includes the enactment date.

                                       10
<PAGE>
RESULTS OF OPERATIONS

COMPARISON OF YEAR ENDED DECEMBER 31, 2002 AND YEAR ENDED DECEMBER 31, 2001

REVENUE

Historical Performance

During  2002 the  Company's  total  revenues  increased  $10.5  million to $31.9
million  compared to $21.4 million for the same period in 2001. More than 90% of
total revenues were generated by the Company's mortgage brokerage operations for
both  years.  Less than 5% of total  revenue was  generated  by  investments  in
mortgage  loans.  The Company  generated $20.8 million of loan placement fees in
2002 as compared to $10.0 million in 2001. The increase in origination  fees was
due in  large  part  to a $234  million  increase  in  dollar  volume  of  loans
originated. Extension fee revenues also increased by $1.0 million, primarily due
to the increase in the loan portfolio the Company  serviced  throughout  2002 as
compared to 2001.

The Company placed 79 and 54 loans with an aggregate value of  $477,942,550  and
$243,894,870   in  the  fiscal  years  ended   December  31,  2002,   and  2001,
respectively.   Historically,   the  Company  has  used  funds  from  individual
investors,  Fund I, Fund II and its own  resources  to fund loans to real estate
developers and owners for raw land,  acquisition and development,  construction,
commercial,  residential  and bridge  loans.  In 2002,  the  Company  used funds
primarily from Fund I and Fund II.

Direct Investment

As of December 31, 2002 and 2001, the Company had  approximately  $9,000,000 and
$6,074,000  invested in mortgage loans,  respectively.  Revenues  related to the
Company's  investments in mortgage loans approximated  $543,000 and $403,000 for
the years ended  December  31, 2002 and 2001,  respectively.  As of December 31,
2002 the Company also had $2,100,000 invested as capital contributions in Fund I
and Fund II. The Company earns additional  income from interest earned on monies
in its bank deposits.

Geographical Expansion

Although the Company has historically  focused its operations in certain Western
states,  the Company has commenced  expansion of its  operations  throughout the
U.S. The Company has developed a significant degree of knowledge with respect to
the real estate markets in the Western states. Such knowledge is critical to the
Company's  business as it enables the Company to process loan  applications more
quickly than many conventional  lenders.  The Company is able to rapidly process
loan  applications  in large part because the Company's  underwriting  standards
focus  heavily  on  the  value  of  the  underlying  property  rather  than  the
creditworthiness  of the borrower.  The Company's  ability to quickly assess the
underlying value of real estate when it arranges the terms of a mortgage loan is
therefore  essential  to its  strategy of  providing  fast  turnaround  for loan
applications.

Real estate markets are significantly  influenced by local conditions as well as
by national  economic  conditions.  Thus,  real estate markets vary greatly from
place to place and local  knowledge  of a real  estate  market is  essential  to
prudent lending. In order to obtain such local knowledge, the Company intends to
engage the services of local real estate brokers and real estate lawyers who are
believed to be familiar  with the markets into which the Company may expand.  No
assurances can be given that the Company will be successful in any  geographical
expansion of its operations or that it will be able to mitigate the risk of such
expansion  by  working  with  local  brokers  and  lawyers.   Any   difficulties
encountered by the Company in this regard could  adversely  affect the Company's
results of operations, slow down its expansion plans or result in a reduction of
loan placement fees.

SALES AND MARKETING EXPENSES

Sales  and  marketing  expenses  primarily  consist  of  advertising  costs  and
commissions.  Sales and marketing  expenses  approximated  $7.9 million and $7.6
million  or 25% and 35% of the  Company's  total  revenues  for the years  ended
December 31, 2002 and 2001,  respectively.  The decrease in sales and  marketing

                                       11
<PAGE>
expenses in proportion  to total  revenues is primarily  attributable  to, among
others, the following factors:  (i) during 2001, the Company broadened the scope
of its marketing  efforts for awareness of the  availability  of the Funds as an
investment.  The  Company  has  reduced  these  efforts,  as the Funds have been
successful in raising investor capital.  Therefore  advertising costs and public
relations  costs were  decreased  by $0.7 million  during 2002 (ii)  commissions
expense  increased  by $0.7  million as a direct  result of the increase in loan
volume  generated  during 2002 (iii) The Company's  printing costs  increased by
$0.2 million primarily due to the preparation and printing of public filings.

GENERAL AND ADMINISTRATIVE EXPENSES

General and  administrative  expenses  include  payroll  and  related  expenses,
professional  fees, and general corporate  expenses.  General and administrative
expenses of the Company were $17.5 million or 55% of the total  revenues for the
year ended  December  31,  2002,  as compared to $10.1  million or 47% for 2001.
General corporate expenses remained fairly constant for 2002 as compared to 2001
with the exception of payroll expense which increased by $0.5 million due to the
hiring of additional  staff during 2002 to support the  Company's  growth and an
increase in legal fees of $0.7 million due primarily to the Company's growth and
increases in the legal work related to public filings and reports.

Losses on investments increased by $5.2 million for 2002 from 2001 primarily due
to the  Company's  write-off  of $4.8  million  related to the rights to a legal
judgment it  acquired  from the Funds as  described  in more  detail  below.  In
addition,  in 2002 the Company  recorded a loss of $0.2  million  related to the
sale of the  Company's  investment  in Prepaid  Advisors.com.  These  losses are
included in general and administrative expenses in the accompanying Consolidated
Statements of Income.

The  Company  purchased  from  Vestin  Fund I and  Vestin  Fund II, the right to
receive the proceeds of a personal loan guarantee  related to a foreclosed loan.
Vestin Fund I and Vestin Fund II did not  recognize any gain or loss on the sale
to the  Company.  Because of the  uncertainties  inherent  with  litigation  and
enforcement of judgments,  the Company elected to write off the full amount paid
for the right to receive the proceeds of the loan guarantee.  A summary judgment
motion was filed in the Nevada State  District  Court in February 2003 seeking a
judgment  against the loan  guarantors.  To date, a ruling on the motion has not
been rendered.  If the summary judgment motion is not granted,  the Company will
proceed to  litigate  the matter in Nevada  State  District  Court.  The Company
believes a judgment will ultimately be ordered and that it will collect the full
amount of the loan guarantee plus accrued interest.

INCOME BEFORE INCOME TAXES

As a result of the foregoing factors,  income from continuing  operations before
provision  for income taxes  approximated  $6.0 million or 20% of the  Company's
total revenues in 2002, an increase from $3.0 million or 15% in 2001.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity  is  a  measure  of  an  entity's   ability  to  meet  potential  cash
requirements,  including  ongoing  commitments to fund lending  activities.  The
Company has  historically met its capital  requirements  through cash flows from
operations and its ability to access individual investors, as well as the Funds,
who acquire interests in mortgage loans.

For the year ended  December  31,  2002,  the cash flows  provided by  operating
activities  of the Company  approximated  $7.6  million or 24% of the  Company's
total revenue,  compared to cash provided by in operating  activities of $23,000
or less  than 1% of total  revenue  for the same  period  in 2001.  Cash used in
investing  activities  approximated $5.5 million for the year ended December 31,
2002,  compared to $3.1  million  for the same  period in 2001.  During 2002 the
Company  received  proceeds  from the sale of real estate held for sale totaling
$4.7 million which were  reinvested  into  investments in mortgage loans on real
estate.  The Company also received  payments on notes  receivable  totaling $1.1
million which were also  reinvested  into  investments in mortgage loans on real
estate.

The Company has historically  relied upon cash flow from operations and the sale
of  securities  to provide for its capital  requirements.  During the year ended
December  31,  2002,  the  Company  generated  net income of $3.8  million and a

                                       12
<PAGE>
positive  cash flow from  operating  activities  of $7.6  million.  The  Company
believes that cash generated from operations,  together with cash and cash flows
from  investments in mortgage loans on real estate on hand at December 31, 2002,
will be sufficient to provide for its capital  requirements to sustain currently
expected loan volumes for at least the next 12 months.

The Company is also  exploring  additional  sources of financing  including  new
and/or  expanded credit  facilities.  There can be no assurance that the Company
will be able to obtain any additional financing.

Funding Sources

The Company  must have access to funding  sources that are prepared to invest in
mortgage  loans which the Company  arranges.  Historically,  the Company  relied
primarily upon individual investors for this purpose.  This provided the Company
with a reasonably reliable source of funding for mortgage loans.

However, in order to expand its business,  the Company organized Fund I and Fund
II upon which the Company has depended  upon as its principal  funding  sources.
Fund I  completed  a  public  offering  of its  units in June  2001.  Fund II is
currently seeking to raise $500,000,000  through a public offering of its units;
as of December 31, 2002 Fund II had raised  approximately  $314 million  through
the sale of units. The Company's wholly owned  subsidiary,  Vestin Mortgage,  is
the manager of both Funds.

The Company's  ability to continue to attract investors to acquire units in Fund
II depends  upon a number of  factors,  some of which are  beyond the  Company's
control. The key factors in this regard include general economic conditions, the
condition of real estate markets,  the  availability  of alternative  investment
opportunities,  the  Company's  track record and the Company's  reputation.  The
Company  believes that its ability to attract  investors for mortgage  loans has
been enhanced by the high  historical  yields  generated by such mortgage loans.
These yields may prove more  attractive  in the near term if equity  markets are
perceived as risky or volatile and if most fixed rate  investments  do not offer
comparable yields.

Notwithstanding  the high historical yields generated by its mortgage loans, the
Company believes its ability to attract  investors to Fund II may be impaired by
the Company's small size and Fund II's limited operating  history.  In addition,
the units in Fund II and the mortgage loan interests acquired by Fund II are not
federally  insured as are certain bank  deposits and are  generally  illiquid as
compared to  government  or corporate  bonds.  Thus,  the  Company's  ability to
generate  high yields is critical to  offsetting  some of the  disadvantages  of
investments in mortgage loans. The Company's  ability to attract investors would
suffer if the  performance  of  Company-arranged  mortgage  loans declines or if
alternative  investment vehicles offering comparable rates and greater safety or
liquidity  become  available.   If  the  Company's  access  to  funding  sources
deteriorates  for any reason,  then the scope of the Company's  operations  will
decline proportionately.

The Company  maintains a total of $7,000,000  in revolving  lines of credit with
two financial  institutions  specifically  for interim funding of mortgage loans
placed.  As of December 31, 2002,  the balance on these lines of credit  totaled
$7,000,000  which are payable in monthly  installments  of interest  only at the
prime  lending  rate plus an  additional  rate  ranging from 1.0% to 2.0% (prime
lending rate of 4.25% at December  31,  2002),  and expire in June 2003.  One of
these lines of credit  totaling  $2,000,000  has a floor  interest rate of 7.5%.
These lines of credit are guaranteed by the Company's  Chief  Executive  Officer
and are secured by the deeds of trust on the property  being  advanced  against.
The  Company  has  complied  with all  covenants  on these lines of credit as of
December 31, 2002.

The  Company  from time to time  considers  additional  funding  sources for its
mortgage  brokerage  operations  including new and/or expanded credit facilities
and securitization arrangements.  The Company has no current commitments in this
regard,  and there can be no  assurance  that the Company will be able to obtain
any additional financing.

                                       13
<PAGE>
An intercreditor agreement provides the Company an additional funding source for
mortgage loans whereby a third party investor (the  "Investor")  may participate
in certain  mortgage loans with the Company,  Fund I, and Fund II  (collectively
the "Lead Lenders"). In the event of borrower non-performance, the intercreditor
agreement  gives the Lead  Lenders the right to either (i)  continue to remit to
the Investor the interest due on the participated  loan amount;  (ii) substitute
an  alternative  loan  acceptable  to the  Investor;  or  (iii)  repurchase  the
participated  loan amount from the  Investor  for the  outstanding  balance plus
accrued interest.

COMMITMENTS AND CAPITAL REQUIREMENTS

The Company does not anticipate  any material  capital  expenditures  during the
next 12 months. The Company is committed to pay Joe Namath's  management company
$1,000,000 per year through 2005 for public relations services. In addition, the
Company anticipates incurring significant marketing expenses related to the sale
of Units of Fund II as well as the general promotion of Vestin and its services.
The Company's minimum obligation for office rent and equipment leases in 2003 is
approximately  $418,000.  Fees  generated by its mortgage  brokerage  activities
should be  sufficient to meet all of these  capital  requirements.  Factors that
could  reduce cash flow from  mortgage  brokerage  operations  include a general
slowdown of commercial real estate lending  activity,  a reduction in the amount
of funds available to invest in mortgages and a significant level of defaults on
outstanding  loans.  The current  recession  has not  resulted in a  significant
slowdown in commercial  lending  activity in the markets serviced by the Company
with the sole  exception of Hawaii which has suffered a  significant  decline in
tourism after September 11, 2001. However, a prolonged or deeper recession could
adversely  impact the market for commercial  real estate loans. If the Company's
mortgage brokerage  operations do not generate sufficient cash flow, the Company
might be required to cut back the scope of its  operations and the extent of its
marketing and promotional efforts.

The Company pays its Preferred Stock  shareholders a dividend in an amount to be
determined  by the Board of  Directors,  but not less than 0.83% of the Original
Issue  Price per annum and not more  than 10% of the  Original  Issue  Price per
annum.

The Company does not have any interests in  off-balance  sheet  special  purpose
entities  nor  does it have  any  interests  in  non-exchange  traded  commodity
contracts.

Related Party Transactions

The  Company  has  entered  into a number  of  transactions  with its  principal
shareholder and other related parties. Such transactions fall into the following
categories:

1. Transactions with the Funds

The Company  recognizes  an annual  management  fee up to 0.25% of the aggregate
capital  contributions  to the Funds per annum.  The  Company  may,  in its sole
discretion,  waive its management fee. For the year ended December 31, 2002, the
Company  recorded  management  fees of  approximately  $249,000  from Fund I and
$586,000  from Fund II as compared to $131,000 from Fund I and $87,000 from Fund
II for the same  period in 2001.  In  connection  with the  organization  of the
Funds, the Company received  approximately  100,000 Units in Fund I for expenses
paid by the  Company  to  unaffiliated  third  parties  in  connection  with the
offering  of units in Fund I, and 110,000  units from Fund II for such  offering
expenses  which is the  maximum  amount  allowed  for such  expenses  under  the
Operating Agreement of Fund II.

                                       14
<PAGE>
During the year ended December 31, 2002, the Company sold $24.2 million in loans
to the Funds pursuant to the terms of the Operating Agreement of the Funds which
permits the Funds to acquire  loans from the Company if the loans were  acquired
to facilitate their acquisition by the Funds and provided that the price paid is
no greater than the Company's cost. During the year ended December 31, 2002, the
Company also purchased $23.3 million in loans from the Funds.

During the year ended  December 31, 2002,  the Company  acquired the rights to a
legal  judgment  for a personal  guarantee  from the Funds in the amount of $4.8
million in exchange for investments in mortgage loans on real estate of the same
value.   Subsequent  to  the  acquisition  and  as  a  result  of  unanticipated
uncertainties inherent with litigation and enforcement of judgments, the Company
elected to write off the full amount paid for the right to receive the  proceeds
of the loan guarantee. This write-off is reflected in General and Administrative
expenses on the Consolidated Statement of Income for the year ended December 31,
2002.

2. Transactions with Officers and Directors and their Affiliates

In 2000, the Company loaned a junior officer, who is no longer employed with the
Company,  approximately  $251,000 to enable him to  operate,  develop and grow a
California  real  estate  loan fund.  The loan is  unsecured  but is backed by a
personal  guaranty.  The interest rate of 10% is payable on a semi-annual  basis
and the  principal is due on the maturity date of April 19, 2004. As of December
31, 2002, the balance on this note was approximately $118,000.

The Company had an investment in the amount of $153,810 in a mortgage loan to an
entity which is 100% owned by the Company's  Chief  Executive  Officer  ("CEO").
During  December  2002,  a sale of the  property  securing  the  investment  was
consummated.  As of December 31, 2002, the Company recorded a receivable for the
proceeds of the loan payoff which was collected in January 2003.

The Company's President, Financial Advisor, and Tax Manager are equity owners in
a Certified Public Accounting  ("CPA") firm.  During 2002,  $150,000 was paid to
the  Financial  Advisor and Tax Manager for  services  provided to the  Company.
Also,  During 2002,  the CPA firm's  staff  assisted in the  preparation  of the
Company's  financial reports and provided  bookkeeping  services at no charge to
the Company.

During the years ended December 31, 2002 and 2001, the Company paid $509,283 and
$54,200,  respectively, for legal fees to a law firm in which the Executive Vice
President of Legal and Corporate  Affairs of the Company has an equity ownership
interest.

In September  2002, the Company entered into a one year Aircraft Usage Agreement
with C5, LLC, a company  wholly-owned by the Company's Chief Executive  Officer.
The  agreement  is to allow the Company to use an airplane on a preferred  basis
over any other proposed user. The Company is required to pay a monthly fee based
on an hourly  rate of $3,000 per hour for the first 10 hours and $2,500 per hour
for each hour  thereafter.  The Company is  required  to make a minimum  monthly
payment equivalent to 16 hours of usage ($45,000).  The agreement  automatically
renews for successive periods of one year each unless terminated by either party
no less than thirty days prior to the end of the term.

During 2002, the Company paid approximately  $232,000 to a Company owned jointly
by the  Company's  Chief  Executive  Officer  and a  stockholder  of the Company
related to the use of an airplane for company travel.

FACTORS AFFECTING THE COMPANY'S OPERATING RESULTS

The Company's  business is subject to numerous  factors  affecting its operating
results.  In addition to the factors  discussed above,  the Company's  operating
results may be affected by:

                                       15
<PAGE>
LIMITED EXPERIENCE IN CERTAIN REAL ESTATE MARKETS

Currently,  the Company  brokers  mortgage loans or works with mortgage  brokers
primarily in areas in which Vestin Mortgage has  substantial  experience such as
Arizona,  California,  Nevada, Texas, and Hawaii. Depending on the market and on
the  Company's  performance,   it  plans  to  expand  the  Company's  operations
throughout the United States.  However,  Vestin Mortgage has limited  experience
outside of certain  western  states.  Real  estate  markets  vary  greatly  from
location to location.  Vestin  Mortgage's  limited  experience in most U.S. real
estate markets may impact its ability to make prudent  investment  decisions and
may delay the loan approval process.  This delay could have a material impact on
the  Company's   competitive   advantage  of  providing  fast  loan   approvals.
Accordingly,  Vestin Mortgage plans to utilize  independent real estate advisors
located in markets where Vestin Mortgage lacks experience for consultation prior
to making  investment  decisions.  No assurance  can be given such advisors will
provide effective assistance to the Company.

DEPENDENCE ON KEY PERSONNEL

The Company's  success depends upon the continued  contributions  of certain key
personnel,  including  Michael V. Shustek,  Stephen J. Byrne and Lance Bradford,
each of whom would be difficult to replace  because of his extensive  experience
in his field,  extensive  market  contacts and  familiarity  with the  Company's
activities.  If any of  these  key  employees  were  to  cease  employment,  the
Company's  operating  results could suffer.  The Company's  future  success also
depends in large part upon its  ability  to hire and  retain  additional  highly
skilled managerial,  operational and marketing personnel.  Should the Company be
unable to attract and retain skilled  personnel,  the Company's  performance may
suffer.

RISKS OF UNDERWRITING STANDARDS AND PROCEDURES

The  Company's  underwriting  standards  and  procedures  are more  lenient than
conventional  lenders in that the Company will invest in loans to borrowers  who
will not be  required  to meet the credit  standards  of  conventional  mortgage
lenders.

The Company  approves  mortgage loans more quickly than other mortgage  lenders.
Due to the nature of loan approvals, there may be a risk that the credit inquiry
the  Company  performs  may not  reveal all  material  facts  pertaining  to the
borrower and the security.  As a result, loans arranged by the Company and loans
in which the  Company  may invest may suffer  from a higher  rate of defaults as
compared to loans arranged by more conventional lenders. The Company attempts to
mitigate this risk by insisting  upon lower loan to value  ratios.  Nonetheless,
the  Company's  future  results  of  operations  may be  adversely  affected  by
defaulting   borrowers  and  the  attendant  risk  and  expense  of  foreclosure
proceedings.  Additionally,  loan  to  value  ratios  on some  construction  and
development  loans may be calculated using an "As-if Completed"  appraisal,  the
values of which can dramatically change.

RISKS OF INTEREST RATE CHANGES

The Company's results of operations will vary with changes in interest rates and
with the performance of the relevant real estate markets.

If the  economy  is  healthy,  the  Company  expects  that more  people  will be
borrowing money to acquire,  develop or renovate real property.  However, if the
economy  grows too fast,  interest  rates may  increase too much and the cost of
borrowing  may become too  expensive.  This could  result in a slowdown  in real
estate lending which may mean the Company will have fewer loans to acquire, thus
reducing its revenues and the distributions to stockholders.

                                       16
<PAGE>
One of the results of interest rate  fluctuations  is that borrowers may seek to
extend their  low-interest-rate  mortgage loans after market interest rates have
increased.  Generally,  the Company's loan documents permit the Company to raise
the interest rate it charges on extended  loans anywhere from between 3/4% to 3%
from the  then-current  rate on the  loan.  This  creates  three  risks  for the
Company:

(i) There can be no assurance that this permitted rate increase will be adequate
if interest rates have increased beyond the range  contemplated by the Company's
loan documents.

(ii) If interest  rates rise,  borrowers  under loans with  monthly or quarterly
principal  payments  may be  compelled  to extend  their loans to  decrease  the
principal paid with each payment  because the interest  component has increased.
If this  happens,  there is a higher risk that the  borrower  may default on the
extended  loan,  and the  increase in the  interest  rate on the loan may not be
adequate  compensation  for the increased risk.  Distributions on mortgage loans
placed by the  Company  may  decline if lenders are unable to reinvest at higher
rates or if an increasing number of borrowers default on their loans.

(iii) If,  at a time of  relatively  low  interest  rates,  a  borrower  prepays
obligations  that have a higher interest rate from an earlier period,  investors
will likely not be able to reinvest  the funds in mortgage  loans  earning  that
higher rate of interest.  In the absence of a prepayment fee, the investors will
receive  neither  the  anticipated   revenue  stream  at  the  higher  rate  nor
compensation  for their loss.  This in turn could harm the Company's  reputation
and may make it more difficult for the Company to attract  investors  willing to
acquire interests in mortgage loans.

COMPETITION FOR FUNDS

The ability of the Company to access funds for mortgage  loans  depends upon the
perceived attractiveness of yields on loans placed by the Company, the safety of
the underlying investment, the Company's reputation, general economic conditions
and  real  estate  market  conditions.  The  Company's  principal  advantage  in
attracting  investors is the high historical  yields generated by loans brokered
by the  Company.  The  Company  is at a  disadvantage  compared  to  alternative
investment  vehicles to the extent that an  investment  in mortgage  loans lacks
liquidity  and is  not  guaranteed  or  insured  by a  governmental  agency.  In
addition,  the fact that the  Company is smaller  than many of the full  service
financial firms offering alternative  investment vehicles and has a more limited
operating history may be disadvantages in seeking to attract investors.

COMPETITION FOR BORROWERS

The Company  considers  its  competitors  for  borrowers to be the  providers of
non-conventional   mortgage  loans,  that  is,  lenders  who  offer  short-term,
equity-based loans on an expedited basis for slightly higher fees and rates than
those charged by  conventional  lenders.  To a lesser  extent,  the Company also
competes with conventional mortgage lenders and mortgage loan investors, such as
commercial  banks,  thrifts,  conduit  lenders,  insurance  companies,  mortgage
brokers,  pension funds and other financial institutions that offer conventional
mortgage loans.  Many of the companies  against which the Company  competes have
substantially greater financial, technical and other resources than the Company.
Competition  in the  Company's  market  niche  depends upon a number of factors,
including price and interest rates of the loan, speed of loan  processing,  cost
of capital, reliability, quality of service and support services.

                                       17
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

                                 C O N T E N T S


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS......................... S-1

CONSOLIDATED FINANCIAL STATEMENTS

         Consolidated Balance Sheet........................................ S-2

         Consolidated Statements of Income................................. S-3

         Consolidated Statements of Stockholders' Equity................... S-4

         Consolidated Statements of Cash Flows............................. S-5

         Notes to Consolidated Financial Statements........................ S-7

                                       18
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Stockholders and Board of Directors of Vestin Group, Inc.

We have audited the  accompanying  consolidated  balance  sheet of Vestin Group,
Inc. and  Subsidiaries  (the "Company") as of December 31, 2002, and the related
consolidated  statements of income,  changes in stockholders'  equity,  and cash
flows for each of the two years in the period ended  December  31,  2002.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these 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 audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Vestin Group, Inc.
and  Subsidiaries  at December 31, 2002, and the  consolidated  results of their
operations  and their  consolidated  cash flows for each of the two years in the
period  ended  December 31,  2002,  in  conformity  with  accounting  principles
generally accepted in the United States.

Phoenix, Arizona
February 27, 2003

                                      S-1
<PAGE>
                      VESTIN GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                               DECEMBER 31, 2002

                                     ASSETS

Cash                                                                 $ 2,523,017
Accounts receivable, net of allowance of $160,995                      5,234,469
Interest receivable                                                      113,352
Due from related parties                                               1,803,112
Notes receivable                                                         700,000
Notes receivable - related party                                         117,964
Investments in real estate held for sale                               5,980,509
Investments in mortgage loans on real estate,
  net of allowance of $80,000                                          8,874,643
Other investments - related parties                                    2,100,000
Other assets                                                             670,999
Property and equipment, net                                              719,113
                                                                     -----------

            Total assets                                             $28,837,178
                                                                     ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses                                $ 1,969,379
Dividend payable                                                          75,650
Income taxes payable                                                   1,395,538
Line of credit                                                         7,000,000
Notes payable - related party                                          1,901,428
Notes payable                                                            151,003
                                                                     -----------
            Total liabilities                                         12,492,998
                                                                     -----------

Commitments and contingencies                                                 --

Stockholders' equity
  Preferred stock, $.0001 par value; 20 million shares
    authorized; 907,800 shares issued and outstanding                         91
  Common stock, $.0001 par value; 100 million shares
    authorized 5,324,340 shares issued and outstanding                       532
  Additional paid-in capital                                           8,922,885
  Retained earnings                                                    7,420,672
                                                                     -----------
            Total stockholders' equity                                16,344,180
                                                                     -----------

            Total liabilities and stockholders' equity               $28,837,178
                                                                     ===========

The accompanying notes are an integral part of these statements.

                                      S-2
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                                          For the year ended
                                                      --------------------------
                                                      December 31,  December 31,
                                                          2002          2001
                                                       -----------   -----------
Revenues
  Loan placement and related fees                      $30,607,054   $20,201,393
  Interest income                                          626,657       605,763
  Other income                                             670,593       634,482
                                                       -----------   -----------
          Total revenues                                31,904,304    21,441,638
                                                       -----------   -----------
EXPENSES
  General and administrative expenses (2002 includes
    a $4,798,926 provision for loss - see Note M)       17,516,041    10,064,969
  Sales and marketing expenses                           7,896,687     7,577,806
  Interest expenses                                        493,078       753,361
                                                       -----------   -----------
          Total expenses                                25,905,806    18,396,136
                                                       -----------   -----------
          Income from continuing operations before
            provision for income taxes                   5,998,498     3,045,502

PROVISION FOR INCOME TAXES                               2,166,660     1,220,281
                                                       -----------   -----------

          NET INCOME                                   $ 3,831,838   $ 1,825,221
                                                       ===========   ===========

EARNINGS PER COMMON SHARE - BASIC                      $      0.54   $      0.29
                                                       ===========   ===========

EARNINGS PER COMMON SHARE - DILUTED                    $      0.34   $      0.26
                                                       ===========   ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING - BASIC                                    5,396,363     5,985,701
                                                       ===========   ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING - DILUTED                                  8,498,358     6,794,634
                                                       ===========   ===========

The accompanying notes are an integral part of these statements.

                                      S-3
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                              PREFERRED STOCK                 COMMON STOCK                    TREASURY STOCK
                                       ----------------------------    ----------------------------    ----------------------------
                                          SHARES          AMOUNT          SHARES          AMOUNT          SHARES         AMOUNT
                                       ------------    ------------    ------------    ------------    ------------    ------------

<S>                                    <C>             <C>             <C>             <C>             <C>             <C>
Balance at January 1, 2001                       --    $         --       6,989,270    $        699          (2,400)   $    (11,306)

Comprehensive income:
  Net income                                                                     --              --              --              --
  Net unrealized loss on
    investments available-for-sale,
    net of tax of $24,591                        --              --              --              --              --              --


          Total comprehensive income             --              --              --              --              --              --

Divestiture of L.L. Bradford and
  Company                                        --              --                                        (800,000)       (540,000)

Issuance of preferred stock                 937,800              94              --              --              --              --

Declaration of dividend on
  preferred stock                                --              --              --              --              --              --

Declaration of common stock stock
  dividend                                       --              --              --              --              --              --

Common stock issued for employee
  bonuses                                        --              --              --              --          30,000          44,442

Expenses related to issuance of
  warrants                                       --              --              --              --              --              --

Treasury stock acquired                          --              --              --              --        (648,672)     (3,640,581)

Retirement of treasury stock                     --              --      (1,421,072)           (142)      1,421,072       4,147,445

                                       ------------    ------------    ------------    ------------    ------------    ------------
BALANCE AT DECEMBER 31, 2001                937,800              94       5,568,198             557              --              --

Comprehensive income:
  Net income
  Realization of loss on marketable
    securities

          Total comprehensive income

Declaration of dividend on
  preferred stock                                --              --              --              --              --              --

Declaration of dividend on common
  stock                                          --              --              --              --              --              --

Expenses related to issuance of
  warrants                                       --              --              --              --              --              --

Treasury stock acquired                          --              --              --              --        (296,200)     (2,518,714)

Common stock options exercised                   --              --           2,000              --              --              --

Warrants issued to purchase common
  stock for consulting services                  --              --              --              --              --              --

Common stock issued from treasury
  for employee bonus                             --              --              --              --           1,000           6,120


Treasury stock retired                           --              --        (295,200)            (30)        295,200       2,512,594

Preferred stock converted into
  common stock                              (30,000)             (3)         49,342               5

                                       ------------    ------------    ------------    ------------    ------------    ------------
BALANCE AT DECEMBER 31, 2002                907,800    $         91       5,324,340    $        532    $         --    $         --
                                       ============    ============    ============    ============    ============    ============


                                                                       ACCUMULATED
                                        ADDITIONAL                        OTHER
                                         PAID-IN         RETAINED     COMPREHENSIVE
                                         CAPITAL         EARNINGS         INCOME          TOTAL
                                       ------------    ------------    ------------    ------------

Balance at January 1, 2001             $  1,739,427    $  7,347,117    $   (115,790)   $  8,960,147

Comprehensive income:
  Net income                                     --       1,825,221              --       1,825,221
  Net unrealized loss on
    investments available-for-sale,
    net of tax of $24,591                        --              --         (47,733)        (47,733)
                                                       ------------    ------------    ------------

          Total comprehensive income             --       1,825,221         (47,733)      1,777,488

Divestiture of L.L. Bradford and
  Company                                        --              --              --        (540,000)

Issuance of preferred stock               9,377,904              --              --       9,377,998

Declaration of dividend on
  preferred stock                                --         (75,731)             --         (75,731)

Declaration of common stock stock
  dividend                                       --        (112,324)             --        (112,324)

Common stock issued for employee
  bonuses                                    49,758              --              --          94,200

Expenses related to issuance of
  warrants                                  928,992              --              --         928,992

Treasury stock acquired                          --              --              --      (3,640,581)

Retirement of treasury stock             (4,147,303)             --              --              --

                                       ------------    ------------    ------------    ------------
BALANCE AT DECEMBER 31, 2001              7,948,778       8,984,283        (163,523)     16,770,189

Comprehensive income:
  Net income                                              3,831,838                       3,831,838
  Realization of loss on marketable
    securities                                                              163,523         163,523
                                                       ------------    ------------    ------------
          Total comprehensive income                      3,831,838         163,523       3,995,361

Declaration of dividend on
  preferred stock                                --        (933,800)             --        (933,800)

Declaration of dividend on common
  stock                                          --      (1,942,965)             --      (1,942,965)

Expenses related to issuance of
  warrants                                  928,302              --              --         928,302

Treasury stock acquired                          --              --              --      (2,518,714)

Common stock options exercised                8,000              --              --           8,000

Warrants issued to purchase common
  stock for consulting services              37,807              --              --          37,807

Common stock issued from treasury
  for employee bonus                             --              --              --           6,120


Treasury stock retired                           --      (2,518,684)             --          (6,120)

Preferred stock converted into
  common stock                                   (2)                                             --

                                       ------------    ------------    ------------    ------------
BALANCE AT DECEMBER 31, 2002           $  8,922,885    $  7,420,672    $         --    $ 16,344,180
                                       ============    ============    ============    ============
</TABLE>

The accompanying notes are an integral part of these statements.

                                      S-4
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    FOR THE YEAR ENDED
                                                                               ----------------------------
                                                                               DECEMBER 31,    DECEMBER 31,
                                                                                   2002            2001
                                                                               ------------    ------------
<S>                                                                            <C>             <C>
Cash flow from operating activities:
  Net income                                                                   $  3,831,838    $  1,825,221
  Adjustments to reconcile net income to net cash provided
    by operating activities:
      Depreciation                                                                  114,875          74,861
      Stock based compensation                                                      966,109       1,023,192
      Net gain from sales of investment in real estate held for sale               (168,889)             --
      Loss on investment in marketable securities                                   256,658              --
      Loss on other investments                                                   5,202,426              --
      Provision for losses on investments in mortgage loans
        on real estate                                                               80,000              --
      Changes in operating assets and liabilities:
        Accounts receivable                                                      (1,859,079)     (1,469,985)
        Interest receivable                                                        (113,352)             --
        Due from stockholder                                                             --         (20,037)
        Due from related parties                                                 (1,074,346)       (220,116)
        Notes receivable                                                                 --        (814,999)
        Other assets                                                                 71,012        (271,422)
        Accounts payable and accrued expenses                                       446,614         761,204
        Due to related parties                                                           --        (147,962)
        Dividend payable                                                           (112,324)             --
        Income taxes payable                                                        (67,705)       (716,769)
                                                                               ------------    ------------

             Net cash provided by operating activities                            7,573,837          23,188
                                                                               ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                               (529,271)       (194,895)
  Cash advanced on notes receivable                                                (144,500)             --
  Principal payments received on notes receivable                                 1,071,999         153,000
  Principal payments received on notes receivable - related party                   132,999              --
  Purchase of investment in real estate held for sale                              (111,171)       (407,746)
  Proceeds from sale of investment in real estate held for sale                   4,717,000          83,500
  Net purchase of investment in marketable securities                               (64,373)        (41,576)
  Net purchase of other investments                                                      --      (1,161,262)
  Purchase of investments in mortgage loans on real
    estate from the Funds                                                       (23,273,124)             --
  Proceeds from sale of investments in mortgage loans
    on real estate to the Funds                                                  24,200,856              --
  Purchase of investments in mortgage loans on real
   estate, net of sales                                                         (11,457,106)     (1,526,366)
                                                                               ------------    ------------

                 Net cash used in investing activities                           (5,541,191)     (3,095,345)
                                                                               ------------    ------------
</TABLE>

                                      S-5
<PAGE>
                      VESTIN GROUP, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>
                                                                                   2002            2001
                                                                               ------------    ------------
<S>                                                                            <C>             <C>
Cash flows from financing activities:
  Advances on line of credit, net                                                 7,000,000              --
  Payments on notes payable                                                      (5,058,982)     (3,402,412)
  Proceeds from notes payable                                                            --       7,600,000
  Proceeds from sale of preferred stock                                                  --       4,377,998
  Proceeds from common stock options exercised                                        8,000              --
  Payment of dividend on preferred stock                                           (858,150)        (75,731)
  Payment of dividend on common stock                                            (1,942,965)             --
  Purchase of treasury stock                                                     (2,518,714)     (2,699,871)
                                                                               ------------    ------------

                 Net cash provided by (used in) financing activities             (3,370,811)      5,799,984
                                                                               ------------    ------------

                 NET CHANGE IN CASH                                              (1,253,665)      2,727,827

CASH AT BEGINNING OF PERIOD                                                       3,776,682       1,048,855
                                                                               ------------    ------------

CASH AT END OF PERIOD                                                          $  2,523,017    $  3,776,682
                                                                               ============    ============

SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid for federal income taxes                                           $  2,221,360    $  2,167,342
                                                                               ============    ============
  Cash paid for interest                                                       $    495,935    $    639,358
                                                                               ============    ============

NONCASH INVESTING AND FINANCING ACTIVITIES:
  Sale of real property in exchange for note receivable                        $         --    $    812,500
                                                                               ============    ============
  Acquisition of real properties in exchange for notes payable                 $         --    $  4,109,644
                                                                               ============    ============
  Exchange of mortgage loan for note receivable                                $         --    $    940,710
                                                                               ============    ============
  Spin-off of L.L. Bradford and Company                                        $         --    $    572,147
                                                                               ============    ============
  Issuance of 500,000 shares of preferred stock in satisfaction
    of note payable                                                            $         --    $  5,000,000
                                                                               ============    ============
  Retirement of treasury stock                                                 $  2,518,714    $  4,147,445
                                                                               ============    ============
  Dividends declared on preferred stock                                        $     75,650    $    112,324
                                                                               ============    ============
  Exchange of note receivable for acquisition of treasury stock                $         --    $    940,710
                                                                               ============    ============
  Notes payable assumed through foreclosure                                    $  2,714,181    $         --
                                                                               ============    ============
  Investments in real estate held for sale acquired through foreclosure        $  5,900,059    $         --
                                                                               ============    ============
  Purchase of rights to receive proceeds related to loan guarantee
    in exchange for investments in mortgage loans on real estate               $  4,798,926    $         --
                                                                               ============    ============
</TABLE>

The accompanying notes are an integral part of these statements.

                                      S-6
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    ORGANIZATION

    Vestin Group, Inc. ("Vestin Group" or the "Company") was incorporated in the
    State of  Delaware  on June 2, 1998.  The Company  conducts  its  operations
    primarily through Vestin Mortgage,  Inc., a wholly owned subsidiary ("Vestin
    Mortgage").  Vestin  Mortgage  operates as a mortgage broker licensed in the
    state of Nevada.  Vestin  Mortgage is engaged in the brokerage and placement
    of commercial  loans secured by real  property.  Vestin  Mortgage's  primary
    operations   consist  of  the  brokerage   and   placement  of   commercial,
    construction,  acquisition and development,  land, and residential  mortgage
    loans  secured by real property as well as managing two publicly held funds,
    Vestin  Fund I, LLC ("Fund I") and Vestin  Fund II, LLC ("Fund  II"),  which
    invest in mortgage  loans.  Vestin Mortgage as manager of Fund I and Fund II
    will be referred to as "Managing Member".

    The Company operates in one business segment.

    PRINCIPLES OF CONSOLIDATION

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

    USE OF ESTIMATES

    The  preparation  of financial  statements  in  conformity  with  accounting
    principles  generally  accepted  in the United  States of  America  requires
    management  to make  estimates  and  assumptions  that  affect the  reported
    amounts of assets and  liabilities  and disclosure of contingent  assets and
    liabilities at the date of the financial statements and the reported amounts
    of revenues and expenses during the reporting  period.  Actual results could
    differ from those estimates.

    REVENUE RECOGNITION

    The Company  recognizes  revenue  primarily from loan placement  fees,  loan
    servicing  fees and  extension  fees.  Loan  placement  fees are recorded as
    revenue at the close of escrow and reduced by direct loan placement costs on
    loans which the Company has not recorded as investments in mortgage loans on
    its financial statements.  Typically, deeds of trust related to loans placed
    are  initially  in the  Company's  name to  facilitate  the  loan  placement
    process.  Upon arranging a funding source for such loans, the deeds of trust
    are assigned to the respective investor (i.e., individual investors, Fund I,
    and Fund II). Loan servicing fees are recorded as revenue when such services
    are rendered.  Servicing fees represent the interest  spread between what is
    paid to the investor  and what the  borrower  pays for the use of the money,
    which can vary from loan to loan. Servicing costs approximate servicing fees
    and  therefore,  the  Company  has  not  recognized  a  servicing  asset  or
    liability. Extension fees are generally recorded as revenue at the extension
    grant date.

    Interest  income on  investments in mortgage loans on real estate is accrued
    by the effective  interest method.  The Company does not recognize  interest
    income  from  loans  once  they are  determined  to be  impaired.  A loan is
    impaired when, based on current  information and events, it is probable that
    the  Company  will be unable to collect all  amounts  due  according  to the
    contractual  terms of the loan  agreement or when the payment of interest is
    90 days past due.

                                      S-7
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


    INVESTMENTS IN REAL ESTATE HELD FOR SALE

    Investments  in real  estate  held for sale  include  real  estate  acquired
    through  foreclosure  and are carried at the lower of the  recorded  amount,
    inclusive  of any senior  indebtedness,  or the  property's  estimated  fair
    value, less estimated costs to sell.

    INVESTMENTS IN MORTGAGE LOANS

    Investments  in mortgage  loans are  secured by trust  deeds and  mortgages.
    Generally,  all  of the  Company's  mortgage  loans  require  interest  only
    payments with a balloon  payment of the  principal at maturity.  The Company
    has both the intent and ability to hold  mortgage  loans until  maturity and
    therefore,  mortgage  loans are  classified  and  accounted  for as held for
    investment  and are  carried  at cost.  Loan to value  ratios  are  based on
    appraisals  obtained  at the time of loan  origination  and may not  reflect
    subsequent  changes in value estimates.  Such appraisals are generally dated
    within 12 months of the date of loan origination.  Appraisals are also based
    on  either an "as is basis" or  "as-if  completed  basis".  These  appraised
    values do not reflect  immediate  sales values,  which may be  substantially
    less as  appraised  values  can  increase  or  decrease  as  conditions  and
    circumstances   affecting  the  properties   change.   Such  change  can  be
    significant.

    ALLOWANCE FOR LOAN LOSSES

    The Company  maintains an  allowance  for loan losses on its  investment  in
    mortgage loans for estimated credit  impairment in the Company's  investment
    in mortgage loans portfolio.  The Company's estimate of losses is based on a
    number of factors  including  the types and  dollar  amounts of loans in the
    portfolio,  adverse  situations  that may affect the  borrower's  ability to
    repay, prevailing economic conditions and the underlying collateral securing
    the  loan.  Additions  to the  allowance  are  provided  through a charge to
    earnings and are based on an assessment of certain  factors  including,  but
    not limited to,  estimated  losses on the loans.  Actual losses on loans are
    recorded as a charge-off  or a reduction to the  allowance  for loan losses.
    Subsequent  recoveries of amounts  previously  charged off are added back to
    the allowance.

    PROPERTY AND EQUIPMENT

    Property  and  equipment  are  stated  at  cost.  Depreciation  is  provided
    principally on the  straight-line  method over the estimated useful lives of
    the assets  ranging  from  three to seven  years.  The cost of  repairs  and
    maintenance is charged to expense as incurred.

    ADVERTISING COSTS

    Advertising costs are expensed as incurred and were approximately $3,015,000
    and $4,220,000 for the years ended December 31, 2002 and 2001, respectively.

    INCOME TAXES

    The Company accounts for its income taxes using the liability method,  which
    requires  recognition of deferred tax assets and  liabilities for the future
    tax  consequences  attributable to differences  between  carrying amounts of
    existing  assets  and  liabilities  and their  respective  tax bases and tax
    credit carryforwards. 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.  The
    effect on deferred  tax assets and  liabilities  of a change in tax rates is
    recognized in income in the period that includes the enactment date.

                                      S-8
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


    IMPAIRMENT OF LONG-LIVED ASSETS

    The Company  continually  monitors events and changes in circumstances  that
    could indicate carrying amounts of long-lived assets may not be recoverable.
    When such  events or changes  in  circumstances  are  present,  the  Company
    assesses the recoverability of long-lived assets by determining  whether the
    carrying  value  of such  assets  will  be  recovered  through  undiscounted
    expected  future cash  flows.  If the total of the future cash flows is less
    than the  carrying  amount  of  those  assets,  the  Company  recognizes  an
    impairment  loss  based  on the  excess  of the  carrying  amount  over  the
    estimated fair value of the assets. Assets to be disposed of are reported at
    the lower of the carrying amount or the fair value less costs to sell.

    STOCK-BASED COMPENSATION

    The Company  applies  Accounting  Principles  Board ("APB")  Opinion No. 25,
    Accounting for Stock Issued to Employees,  and Related  Interpretations,  in
    accounting for stock options issued to employees. Under APB No. 25, employee
    compensation  cost is recognized when estimated fair value of the underlying
    stock on date of the grant exceeds  exercise price of the stock option.  For
    stock options and warrants issued to non-employees, the Company applies SFAS
    No.  123,  Accounting  for  Stock-Based  Compensation,  which  requires  the
    recognition of compensation  cost based upon the fair value of stock options
    at the grant date using the Black-Scholes option pricing model.

    The following table  represents the effect on net loss and loss per share if
    the  Company  had  applied  the fair  value  based  method  and  recognition
    provisions of Statement of Financial  Accounting Standards ("SFAS No. 123"),
    Accounting   for   Stock-Based   Compensation,   to   stock-based   employee
    compensation:

                                                     2002          2001
                                                  -----------   -----------
     Net income, as reported                      $ 3,831,838   $ 1,825,221
     Deduct: Total stock-based employee
       compensation expense determined under
       fair value based methods for all awards,
       net of related tax effects                  (2,657,916)   (1,418,707)
                                                  -----------   -----------
     Pro forma net income                         $ 1,173,922   $   406,514
                                                  ===========   ===========

     Net income per common share
       Basic earnings per share, as reported      $      0.54   $      0.29
                                                  ===========   ===========
       Diluted earnings per share, as reported    $      0.34   $      0.26
                                                  ===========   ===========
       Basic earnings per share, pro forma        $      0.22   $      0.07
                                                  ===========   ===========
       Diluted earnings per share, pro forma      $      0.14   $      0.06
                                                  ===========   ===========

    As required,  the pro forma  disclosures above include options granted since
    February 26, 1998  (Inception).  Consequently,  the effects of applying SFAS
    No. 123 for providing pro forma disclosures may not be representative of the
    effects  on  reported   net  income  for  future  years  until  all  options
    outstanding are included in the pro forma disclosures.

                                       S-9
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


    RECENT ACCOUNTING PRONOUNCEMENTS

    In December 2002, SFAS No. 148,  Accounting for Stock-Based  Compensation --
    Transition and Disclosure, (SFAS No. 148") was issued. This Statement amends
    FASB Statement No. 123, Accounting for Stock-Based Compensation,  to provide
    alternative  methods of transition for an entity that voluntarily changes to
    the  fair  value  based  method  of  accounting  for  stock-based   employee
    compensation. In addition, this Statement amends the disclosure requirements
    of SFAS No. 123 and APB Opinion No. 28,  "Interim  Financial  Reporting," to
    require   prominent   disclosures  in  both  annual  and  interim  financial
    statements   about  the  method  of  accounting  for  stock-based   employee
    compensation and the effect of the method used on reported results. SFAS No.
    148 is effective  for fiscal  years  ending after  December 15, 2002 and for
    interim  periods  beginning  after  December 15,  2002.  The adoption of the
    provisions  of SFAS No. 148 did not have a material  impact on the Company's
    results of operations, financial position or cash flows.

    In November  2002,  the  Financial  Accounting  Standards  Board issued FASB
    Interpretation No. 45 ("FIN No. 45"),  Guarantor's Accounting and Disclosure
    Requirements for Guarantees,  Including Indirect  Guarantees of Indebtedness
    of Others an  interpretation  of SFAS No. 5, 57, and 107 and  rescission  of
    FASB   Interpretation   No.  34,  was  issued.  FIN  No.  45  clarifies  the
    requirements  of SFAS No. 5,  Accounting  for  Contingencies,  relating to a
    guarantor's accounting for, and disclosure of, the issuance of certain types
    of  guarantees.  The adoption of the provisions of FIN No. 45 did not have a
    material impact on the Company's results of operations,  financial  position
    or cash flows.

    On January 17, 2003, the Financial  Accounting  Standards  Board issued FASB
    Interpretation  No. 46 ("FIN No. 46"),  Consolidation  of Variable  Interest
    Entities, an interpretation of ARB 51, was issued. The primary objectives of
    FIN No. 46 are to provide guidance on the  identification  and consolidation
    of  variable  interest  entities,  or VIE's,  which are  entities  for which
    control is achieved  through  means other than through  voting  rights.  The
    Company does not have VIEs.

NOTE B - ACCOUNTS RECEIVABLE

    The Company services loans which have been arranged for the investor parties
    through a servicing  agreement.  The servicing agreement stipulates that all
    extension  fees charged on behalf of the investors  shall be retained by the
    Company as part of the loan servicing fees.  Accounts  receivable  represent
    extension,  interest and loan placement fees earned but not yet received. As
    of December 31, 2002,  accounts  receivable  totaling  $5,234,469  is net of
    allowance for doubtful accounts of $160,995.

NOTE C - NOTES RECEIVABLE

    Notes receivable consist of the following:

        Promissory  note totaling  $400,000  related to proceeds from properties
        sold by the Company. This note matures in December, 2006, bears interest
        at 8%, and is secured by real estate.

        Promissory  note totaling  $300,000  related to proceeds from properties
        sold by the Company. This note matures in October,  2003, bears interest
        at 10.5%, and is secured by real estate.

NOTE D - INVESTMENT IN MORTGAGE LOANS ON REAL ESTATE

    At December  31,  2002,  the  Company's  investments  in mortgage  loans had
    maturity  dates ranging from January 1999 through June 2006. The Company had
    approximately  $712,000 in loans that were  greater than 90 days past due on
    interest or past maturity at December 31, 2002. As of December 31, 2002, all
    other mortgage loans payments were current and performing according to their
    terms.  Management has evaluated the collectibility of the loans in light of
    the types and dollar amounts of loans in the portfolio,  adverse  situations
    that may  affect  the  borrower's  ability  to  repay,  prevailing  economic
    conditions and the underlying  collateral  securing the loan and, therefore,
    believes  that the  allowance  for loan losses of $80,000 as of December 31,
    2002 is sufficient.

                                      S-10
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


NOTE E - INVESTMENT IN REAL ESTATE HELD FOR SALE

    At December 31, 2002,  the Company had ten properties  totaling  $5,980,509,
    which were acquired through  foreclosure and recorded as investments in real
    estate held for sale and secure  specific  payables as  discussed in Note H.
    Such  investments  in real estate held for sale are recorded at the lower of
    cost or fair  value less costs to sell.  It is not the  Company's  intent to
    invest in or own real estate.  The underlying value of these investments was
    sufficient at December 31, 2002 to realize their carrying value.

NOTE F - PROPERTY AND EQUIPMENT

    Property and equipment consists of the following as of December 31, 2002:

        Furniture and fixtures                                $ 102,176
        Computers and equipment                                 448,363
        Real estate                                             293,774
                                                              ---------
        Leasehold improvements                                   89,174
                                                              ---------
                                                                933,487
        Less: Accumulated depreciation                         (214,374)
                                                              ---------
        Total property and equipment                          $ 719,113
                                                              =========

NOTE G - NOTES PAYABLE

    Notes  payable  totaling  $151,003  as of  December  31,  2002,  consists of
    promissory  notes to various  parties  related  to  foreclosed  real  estate
    properties   (developed   parcels  of  land)  during  2002.  The  notes  are
    collateralized  by the foreclosed  real estate  property.  Since the Company
    acquired the properties through foreclosure, it is not required and does not
    intend to accrue or pay interest on these notes.

NOTE H - NOTES PAYABLE - RELATED PARTY

    Notes payable - related party  totaling  $1,901,428 as of December 31, 2002,
    consists of the following:

    Note payable to a company  solely  owned by the  Company's  Chief  Executive
    Officer totaling  $158,000 related to developed parcels of land. The note is
    collateralized  by the real estate property.  Since the Company acquired the
    properties  through  foreclosure,  it is not required and does not intend to
    accrue or pay interest on this note.

    Note payable to an entity  controlled  by a company  owned by the  Company's
    Chief Executive  Officer totaling  $569,061 related to vacant land. The note
    is  collateralized  by the real estate property.  Since the Company acquired
    the property through foreclosure,  it is not required and does not intend to
    accrue or pay interest on this note.

    Note payable to an entity  controlled  by a company  owned by the  Company's
    Chief Executive Officer totaling $1,174,367 related to vacant land. The note
    is  collateralized  by the real estate property.  Since the Company acquired
    the property through foreclosure,  it is not required and does not intend to
    accrue or pay interest on this note.

NOTE I - LINES OF CREDIT

    The Company  maintains a total of  $7,000,000  in revolving  lines of credit
    with two financial institutions specifically for interim funding of mortgage
    loans placed.  As of December 31, 2002, the balance on these lines of credit
    totaled  $7,000,000  which are payable in monthly  installments  of interest
    only at the prime lending rate plus an additional  rate ranging from 1.0% to
    2.0% (prime lending rate of 4.25% at December 31, 2002),  and expire in June
    2003. However,  one of these lines of credit totaling $2,000,000 has a floor
    interest rate of 7.5%. These lines of credit are guaranteed by the Company's
    Chief  Executive  Officer  and are  secured  by the  deeds  of  trust on the
    property being advanced against. The Company has complied with all covenants
    on these lines of credit as of December 31, 2002.

                                      S-11
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


NOTE J - CREDIT AGREEMENT

    The Company has entered into a credit agreement with a financial institution
    that  maintains  non-interest  bearing  trust  funds  held on  behalf of the
    investors and other funds of the Company.  The credit  agreement  allows the
    Company to borrow  funds up to the  amount  held in the trust  accounts  and
    other funds held at the  institution  at a rate of 1% and invest those funds
    in  commercial  paper  (securities).  The Company has provided the financial
    institution  with a security  interest in the securities  and, at all times,
    the securities  remain in the financial  institution's  custody and control.
    The balance  drawn down upon the credit  agreement  was $-0- at December 31,
    2002.

NOTE K - TRUST ACCOUNTS

    The Company manages  certain trust assets  including cash and receivables on
    behalf of the investors.  The cash is held at a financial  institution,  and
    the Company  records and  reconciles  the  receivables  from  borrowers.  At
    December 31, 2002,  the cash held in trust  approximated  $7,605,662 and the
    trust receivable was $1,277,044.  The related trust liability was $8,882,706
    at December 31, 2002. The trust assets and  liabilities  are not recorded on
    the balance sheet of the Company at December 31, 2002.

NOTE L - LOANS SERVICED FOR OTHERS

    The Company  services loans for others that were  originated by the Company,
    which are not shown on the balance sheet.  The face amount of these loans at
    December 31, 2002 approximated $678,439,707.

NOTE M - RELATED PARTY TRANSACTIONS

    Notes   receivable  -  related  party  consists  of  a  note  receivable  of
    approximately $118,000 from a former employee of the Company dated April 19,
    2000. The note is unsecured, matures on April 19, 2004 and bears interest at
    10%.  Interest  only  payments  are  made on a  semi-annual  basis  with the
    principal and any accrued interest due as a lump sum at maturity.

    Due from related parties totaling  $1,803,112 are comprised of the following
    as of December 31, 2002:

        Amounts due from Fund I totaling  $530,873  relate to  management  fees,
        earnings on units invested in Fund I, and reimbursable expenses. Amounts
        due from Fund I bear no interest and are due on demand.

        Amounts due from Fund II totaling  $1,247,156 relate to management fees,
        earnings  on units  invested  in Fund  II,  and  reimbursable  expenses.
        Amounts due from Fund II bear no interest and are due on demand.

        Amounts  due from  inVestin  Nevada,  Inc.  totaling  $25,083  relate to
        advances made for start-up costs. Amounts due from inVestin Nevada, Inc.
        bear no interest and are due on demand. In October 2002, Vestin Mortgage
        entered  into an agreement  to provide  management  services to inVestin
        Nevada, Inc., a corporation  wholly-owned by the Chief Executive Officer
        of the Company that will seek to raise $100,000,000  through the sale of
        subordinated  notes to Nevada  residents.  During  February  2003,  this
        balance was paid off in full.

    During the year ended December 31, 2002, the Company  acquired the rights to
    a legal  judgment for a personal  guarantee  from the Funds in the amount of
    $4.8 million in exchange for investments in mortgage loans on real estate of
    the  same  value.   Subsequent  to  the  acquisition  and  as  a  result  of
    unanticipated  uncertainties  inherent with  litigation  and  enforcement of
    judgments,  the  Company  elected to write off the full  amount paid for the
    right to receive  the  proceeds of the loan  guarantee.  This  write-off  is
    reflected  in  General  and  Administrative  expenses  on  the  Consolidated
    Statement of Income for the year ended December 31, 2002.

                                      S-12
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


    Other investments - related parties consists of the Company's investments in
    units  of  Fund I and  Fund II  totaling  $1.0  million  and  $1.1  million,
    respectively, as of December 31, 2002.

    During the years ended December 31, 2002 and 2001, the Company paid $509,283
    and  $54,200,  respectively,  for  legal  fees to a law  firm in  which  the
    Executive Vice  President of Legal and Corporate  Affairs of the Company has
    an equity ownership interest.

    The  Company's  President,  Financial  Advisor,  and Tax  Manager are equity
    owners in a Certified Public Accounting ("CPA") firm. During 2002,  $150,000
    was paid to the Financial  Advisor and Tax Manager for services  provided to
    the  Company.  Also,  During  2002,  the CPA firm's  staff  assisted  in the
    preparation  of the  Company's  financial  reports and provided  bookkeeping
    services at no charge to the Company.

    The Company recognizes an annual management fee up to 0.25% of the aggregate
    capital  contributions  to the Funds per annum. The Company may, in its sole
    discretion,  waive its management fee. For the year ended December 31, 2002,
    the Company recorded  management fees of approximately  $249,000 from Fund I
    and  $586,000  from Fund II as compared to $131,000  from Fund I and $87,000
    from  Fund  II  for  the  same  period  in  2001.  In  connection  with  the
    organization of the Funds, the Company received  approximately 100,000 Units
    in Fund I for expenses paid by the Company to unaffiliated  third parties in
    connection with the offering of units in Fund I, and 110,000 units from Fund
    II for such offering  expenses  which is the maximum amount allowed for such
    expenses under the Operating Agreement of Fund II.

    During the year ended  December 31, 2002,  the Company sold $24.2 million in
    loans to the Funds  pursuant to the terms of the Operating  Agreement of the
    Funds which permits the Funds to acquire loans from the Company if the loans
    were acquired to facilitate their acquisition by the Funds and provided that
    the price paid is no greater than the Company's cost.  During the year ended
    December 31, 2002,  the Company also  purchased  $23.3 million in loans from
    the Funds.

    In  September  2002,  the Company  entered  into a one year  Aircraft  Usage
    Agreement  with C5,  LLC,  a company  wholly-owned  by the  Company's  Chief
    Executive Officer.  The agreement is to allow the Company to use an airplane
    on a preferred  basis over any other  proposed user. The Company is required
    to pay a  monthly  fee based on an  hourly  rate of $3,000  per hour for the
    first 10 hours and $2,500 per hour for each hour thereafter.  The Company is
    required to make a minimum monthly  payment  equivalent to 16 hours of usage
    ($45,000).  The agreement automatically renews for successive periods of one
    year each unless  terminated  by either party no less than thirty days prior
    to the end of the term.

    During 2002,  the Company  paid  approximately  $232,000 to a Company  owned
    jointly by the Company's  Chief  Executive  Officer and a stockholder of the
    Company related to the use of an airplane for company travel.

    The Company had an  investment  in the amount of $153,810 in a mortgage loan
    to an entity which is 100% owned by the Company's  Chief  Executive  Officer
    ("CEO").  During  December  2002,  a  sale  of  the  property  securing  the
    investment was consummated.  As of December 31, 2002, the Company recorded a
    receivable  for the  proceeds  of the loan  payoff  which was  collected  in
    January 2003.

                                      S-13
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002

NOTE N - INCOME TAXES

    The components of the provision (benefit) for income taxes are as follows at
    December 31:

                                                      2002          2001
                                                  -----------   -----------
        Current                                   $ 2,096,827   $ 1,475,246
        Deferred                                       69,832      (254,965)
                                                  -----------   -----------
                                                  $ 2,166,660   $ 1,220,281
                                                  ===========   ===========

    Deferred  taxes result from  temporary  differences  in the  recognition  of
    certain  revenue and expense  items for income tax and  financial  reporting
    purposes.  The significant  components of the Company's deferred taxes as of
    December 31 are as follows:

                                                        2002         2001
                                                      --------     --------
        Deferred tax assets:
             Allowance for doubtful accounts          $ 27,448     $ 53,465
             Unrealized loss on investments                 --       84,240
             Spokesperson stock warrants               315,623      315,623
             Officer salaries                           25,295       12,070
             Allowance for loan losses                  27,200           --
                                                      --------     --------
        Net deferred tax assets                       $395,566     $465,398
                                                      ========     ========

    Deferred  tax  assets  are  included  in other  assets  in the  accompanying
    Consolidated Balance Sheet.

    The reconciliation of the statutory federal rate to the Company's  effective
    income tax rate is as follows:

                                                       2002         2001
                                                    ----------   ----------
        Statutory tax provision                     $2,039,490   $1,035,471
        Non-deductible expenses                        127,170      184,810
                                                    ----------   ----------
                                                    $2,166,660   $1,220,281
                                                    ==========   ==========

                                     S-14
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


NOTE O - EARNINGS PER COMMON SHARE

    Basic  earnings per common share is calculated by dividing net income by the
    weighted  average  number of common  share  outstanding  during the  period.
    Diluted  earnings per common share is  calculated  by dividing net income by
    the sum of the weighted  average number of common shares  outstanding,  plus
    all additional common shares that would have been outstanding if potentially
    dilutive  securities  or  common  stock  equivalents  had been  issued.  The
    following table reconciles the weighted average number of shares used in the
    earnings per share calculations as of December 31, 2002 and 2001:

<TABLE>
<CAPTION>
                                                                FOR THE YEAR ENDED DECEMBER 31, 2002
                                                              ------------------------------------------
                                                                INCOME           SHARES       PER-SHARE
                                                              (NUMERATOR)    (DENOMINATOR)      AMOUNT
                                                              -----------    -------------    ----------
<S>                                                           <C>            <C>              <C>
        Net income:                                           $ 3,831,838
        Less:  Preferred stock dividends                         (933,800)
        Basic EPS:
            Income available to common stockholders             2,898,038       5,396,363     $     0.54
                                                                                              ==========
        Effect of dilutive securities:
            Options/warrants                                           --       3,101,995             --
                                                              -----------     -----------     ----------
        Diluted EPS:
            Income available to common stockholders
             plus assumed conversions                         $ 2,898,038       8,498,358     $     0.34
                                                              ===========     ===========     ==========

                                                                FOR THE YEAR ENDED DECEMBER 31, 2001
                                                              ------------------------------------------
                                                                INCOME           SHARES       PER-SHARE
                                                              (NUMERATOR)    (DENOMINATOR)      AMOUNT
                                                              -----------    -------------    ----------
        Net income:                                           $ 1,825,221
        Less:  Preferred stock dividends                          (75,731)
        Basic EPS:
            Income available to common stockholders             1,749,490       5,985,701     $     0.29
                                                                                              ==========
        Effect of dilutive securities:
            Options/warrants                                           --         808,933             --
                                                              -----------     -----------     ----------
        Diluted EPS:
            Income available to common stockholders
             plus assumed conversions                         $ 1,749,490       6,794,634     $     0.26
                                                              ===========     ===========     ==========
</TABLE>

    There were no  securities  considered  antidilutive  in the  computation  of
    diluted earnings per share.

                                      S-15
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


NOTE P - EMPLOYEE BENEFIT PLAN

    401(K) PLAN

    The Company  maintains a 401(k) Savings Plan which covers  substantially all
    full-time employees.  Participants may make tax-deferred contributions of up
    to 15% of annual compensation (subject to other limitations specified by the
    Internal Revenue Code). The Company matches  employee  contributions  dollar
    for dollar up to 7% of compensation.  The Company contributed  approximately
    $161,000 and $110,000 to the plan for the years ended  December 31, 2002 and
    2001, respectively.

NOTE Q - STOCKHOLDERS' EQUITY

    PREFERRED STOCK

    During  fiscal year 2001,  the  Company  issued  937,800  shares of Series A
    Convertible  Preferred Stock  ("Preferred  Stock") at $10.00 per share for a
    total of $9,378,000.  This consisted of $4,378,000 in cash and $5,000,000 in
    exchange of a note payable. The holder of the Preferred Stock is entitled to
    receive,  when, as and if declared by the Board of Directors of the Company,
    out of any funds legally available therefore, dividends equal to ten percent
    (10%) of the original issue price prior and in preference to any declaration
    or payment of any dividends on the Company's  common stock;  and convertible
    into the Company's  common stock,  at the option of the holder  thereof,  at
    anytime after the date of issuance at a conversion  price of $6.08 per share
    of common  stock.  The  Preferred  Stock is  redeemable at the option of the
    Company at a redemption price of eleven dollars ($11.00) per share. On March
    29, 2002,  the Company  amended the Preferred  Stock  agreement to allow the
    holders of the  Preferred  Stock to be entitled to receive,  when, as and if
    declared by the Board of Directors,  dividends in an amount to be determined
    by the Board of  Directors,  but not less than 0.83% of the  original  issue
    price  per  annum and not more  than 10% of the  original  issued  price per
    annum,  prior  and  in  preference  to any  declaration  or  payment  of any
    dividends on the Common  Stock.  Dividends on the Series A Preferred  may be
    paid in cash or in Common Stock and shall not be cumulative.

    COMMON STOCK DIVIDENDS

    During  fiscal  year 2002,  the  Company  declared  and paid cash  dividends
    approximating $1,943,000 to common stockholders.

    STOCK OPTIONS

    During fiscal year 2002, the Company  granted stock options and warrants for
    1,140,000  shares of common stock to the chief  executive  officer and other
    eligible employees. The stock options granted to eligible employees totaling
    640,000 have a term of 10 years from the date of grant and vest equally over
    a two year  period  beginning  upon the date of grant.  The  stock  warrants
    granted to the chief executive  officer  totaling  500,000 have a term of 10
    years from the date of grant and vest entirely on the date of grant.

    As of December  31, 2002,  outstanding  stock  options and warrants  totaled
    2,714,000.

                                      S-16
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


    STOCK OPTIONS AND WARRANTS ACTIVITY

    The following  table  summarizes the Company's  employee and directors stock
    options and warrants activity:

                                                                    WEIGHTED
                                                                    AVERAGE
                                                        NUMBER      EXERCISE
                                                       OF SHARES     PRICE
                                                       ---------     -----
        Balance, January 1, 2001                         961,800     $4.00
        Options and warrants granted                     636,700      5.05
        Options and warrants exercised                        --        --
        Options and warrants forfeited/expired             9,500      4.00
                                                       ---------     -----
        Balance, January 1, 2002                       1,589,000      4.45
        Options and warrants granted                   1,140,000      7.02
        Options and warrants exercised                        --        --
        Options and warrants forfeited/expired            15,000      6.24
                                                       ---------     -----
        Balance, December 31, 2002                     2,714,000     $5.36
                                                       =========     =====

    The  following  table  summarizes  information  about  options and  warrants
    outstanding and exercisable at December 31, 2002:

<TABLE>
<CAPTION>
                                                                    SHARES UNDERLYING
             SHARES UNDERLYING OPTIONS OUTSTANDING                 OPTIONS EXERCISABLE
        ----------------------------------------------------     -----------------------
                        SHARES       WEIGHTED
                      UNDERLYING      AVERAGE       WEIGHTED       SHARES       WEIGHTED
                       OPTIONS/      REMAINING      AVERAGE      UNDERLYING     AVERAGE
        EXERCISE       WARRANTS     CONTRACTUAL     EXERCISE       OPTIONS      EXERCISE
         PRICES       OUTSTANDING      LIFE          PRICE       EXERCISABLE     PRICE
         ------       -----------      ----          -----       -----------     -----
<S>                    <C>           <C>             <C>           <C>            <C>
        $4.00            967,300     7.83 years       $ 4.00         962,300       $ 4.00
        $5.07            609,700     8.27 years       $ 5.07         573,134       $ 5.07
        $7.02          1,137,000     9.92 years       $ 7.02         712,333       $ 7.02
</TABLE>

    Pro forma  information  regarding  net income  and net income per share,  as
    disclosed in Note A, has been determined as if the Company had accounted for
    its Employee  stock-based  compensation  plans and other stock options under
    the fair value  method of SFAS No.  123.  The fair value of each  option and
    warrant  grant are  estimated  on the date of grant using the  Black-Scholes
    option pricing model with the following  weighted-average  assumptions  used
    for grants under the fixed option and warrant plans:

                                                            2002       2001
                                                            ----       ----
        Average risk-free interest rates                     2.58%      3.41%
        Average expected life (in years)                        3          3
        Volatility                                          74.50%     84.22%
        Dividend yield                                       0.25%      1.43%

    The Black-Scholes option valuation model was developed for use in estimating
    the  fair  value  of  short-term   traded   options  that  have  no  vesting
    restrictions  and are fully  transferable.  In  addition,  option  valuation
    models require the input of highly subjective assumptions including expected
    stock price  volatility.  Because the Company's  Employee 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
    employee stock options.  During 2002 and 2001, there were no options granted
    with an exercise price below the fair value of the  underlying  stock at the
    grant date.

                                      S-17
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


    The  weighted  average  fair  value of options  and  warrants  granted  with
    exercise  prices at the current  fair value of the  underlying  stock during
    2002 and 2001 was approximately $3.51 and $2.76 per option, respectively.

    STOCK WARRANTS

    SPOKESPERSON  STOCK  WARRANTS - In January 2001,  the Company  consummated a
    Consulting  Agreement with Joe Namath,  a National  Football  League Hall of
    Fame inductee,  to act as a  spokesperson  on behalf of the Company for five
    years.  In  consideration,  Mr. Namath will be  compensated in the amount of
    $1,000,000 cash annually and received warrants to purchase 800,000 shares of
    the  Company's  common  stock at an exercise  price of $0.01 and warrants to
    purchase  400,000 shares of the Company's  common stock at an exercise price
    of $4.60.  The 800,000 warrants vest  immediately,  and the 400,000 warrants
    vest within one year. The  outstanding  warrants  granted have a term of ten
    years from the date of grant.  The fair value of the warrants was  estimated
    as of the measurement date using the Black-Scholes option pricing model with
    the following  assumptions:  dividend yield of 0.0%,  expected volatility of
    54.51%,  risk-free  interest rate of 5.77% and an expected holding period of
    five years.  Based on these assumptions,  total compensation  expense of the
    warrants  granted was  approximately  $4,650,000 and will be recognized over
    five years, the length of the consulting agreement. Accordingly, the Company
    recorded  consulting  expenses of approximately  $930,000 for the year ended
    December 31, 2002.  The following  tables  summarize  information  about the
    Spokesperson  Stock  Warrants  activity  during the year ended  December 31,
    2002:

                                                           WEIGHTED
                                                            AVERAGE
                                             NUMBER OF     EXERCISE
                                              WARRANTS       PRICE
                                            -----------      ------
        Balance, January 1, 2002              1,200,000      $ 1.54

              Warrants granted                       --          --
              Warrants canceled                      --          --
              Warrants expired                       --          --
              Warrants exercised                     --          --
                                            -----------      ------
        Balance, December 31, 2002            1,200,000      $ 1.54
                                            ===========      ======

                             EXERCISE PRICE
                           EQUALS, EXCEEDS OR   WEIGHTED
            NUMBER OF      IS LESS THAN MARKET   AVERAGE               WEIGHTED
        WARRANTS GRANTED     PRICE OF STOCK     EXERCISE   EXERCISE    AVERAGE
           DURING 2002        ON GRANT DATE       PRICE      PRICE    FAIR VALUE
           -----------        -------------       -----      -----    ----------
                  --             Equals          $   --     $   --      $   --
             400,000             Exceeds           4.60       4.60        2.81
             800,000             Less than         0.01       0.01        4.62
          ----------                             ------                 ------
           1,200,000                             $ 1.54                 $ 4.00
          ==========                             ======                 ======

    CONSULTANT  WARRANTS - During 2002, the Company issued  warrants to purchase
    8,333 shares of common stock to  consultants,  and as a result,  the Company
    recorded  $37,807 in consulting  expenses  during 2002. The warrants have an
    exercise  price $7.25 per share,  weighted  average  fair value of $4.54 per
    share,  vest  immediately  and have a term of 5 years.  The fair  value  was
    estimated as of the  measurement  date using  Black-Scholes  option  pricing
    model with the  following  assumptions:  dividend  yield of 0.25%,  expected
    volatility of 89.52%,  risk-free interest rate of 2.89% and expected holding
    period of one year.

                                      S-18
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


    TREASURY STOCK

    During fiscal year 2001, the Company  acquired  1,448,672 shares of treasury
    stock, which includes 800,000 shares related to the spin-off L.L. Bradford &
    Company, for a total value of approximately $4,191,887. During October 2001,
    the Company  awarded 30,000 shares of its treasury stock to two employees of
    the  Company.  Expenses  related to this bonus  totaled  $94,200.  1,421,072
    shares of treasury stock were retired as of December 31, 2001.

    During fiscal year 2002,  the Company  acquired  296,200  shares of treasury
    stock for a total value of  $2,518,714 of which 1,000 shares were awarded to
    an  employee as bonus  totaling  $6,120.  The  remaining  295,200  shares of
    treasury stock were retired as of December 31, 2002.

NOTE R - EMPLOYMENT AGREEMENTS

    The Company has employment agreements and arrangements with certain officers
    and key employees.  The agreements  generally continue for a period of three
    years or until  terminated by the  executive or the Company with cause.  The
    agreements  and  arrangements  provide the employees  with a base salary and
    benefits.  The agreements  contain  covenants  against  competition with the
    Company, which extend for a period of time after termination.

NOTE S - FAIR VALUE OF FINANCIAL INSTRUMENTS

    The  carrying  amounts  of  cash,  accounts  receivable,  accounts  payable,
    dividends payable,  and notes payable  approximate fair value because of the
    short-term maturity of these instruments.

    The carrying value of mortgage loans and notes  receivable  approximates the
    fair value at December  31,  2002.  The fair value is  estimated  based upon
    projected cash flows  discounted at the estimated  current interest rates at
    which similar loans would be made.

NOTE T - CONCENTRATIONS

    Financial instruments, which potentially subject the Company to credit risk,
    include cash in bank, accounts receivable and loans secured by trust deeds.

    The Company  maintains its cash in bank deposit  accounts,  which, at times,
    may exceed  federally  insured  limits.  The Company has not experienced any
    losses in such  accounts and  believes it is not exposed to any  significant
    credit risk on cash.

    Concentration of credit risk with respect to accounts  receivable is limited
    because  of the large  number of diverse  customers.  The  Company  controls
    credit risk  through  real estate  securing  mortgage  loans and  monitoring
    procedures. The Company believes it is not exposed to any significant credit
    risk on accounts receivable.

    Concentrations  of mortgage  loans  serviced  exist in  California,  Hawaii,
    Nevada,  and Texas with approximately 14%, 10%, 38% and 22% of mortgage loan
    balances as of December 31, 2002,  respectively.  As such, the Company has a
    significant  geographic  concentration  of credit risk that may be adversely
    affected by periods of economic decline in these states.

    Concentrations  of mortgage  loans exist at December 31, 2002 in commercial,
    construction,  and  acquisition  and development  loans.  Concentrations  of
    mortgage loans also exist with one borrower which  represents  approximately
    77% of the total  investments  in mortgage  loans at December 31,  2002.  As
    such, the Company has a significant product  concentration and concentration
    of credit risk with one borrower  that may be adversely  affected by periods
    of economic decline.

    The Company's  investments in mortgage loans on real estate will require the
    borrower to make a balloon  payment of the  principal  at  maturity.  To the
    extent that a borrower has an  obligation  to pay a mortgage  loan in a lump
    sum payment,  its ability to satisfy this  obligation  may be dependent upon
    its ability to refinance or raise a substantial  amount of cash. An increase
    in interest  rates over the mortgage rate  applicable at  origination of the
    loan may have an adverse effect on the borrower's ability to refinance.

                                      S-19
<PAGE>
                          VESTIN GROUP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002


NOTE U - COMMITMENTS AND CONTINGENCIES

    LEASE COMMITMENTS

    The Company  operates from leased office  facilities  under a noncancellable
    operating  lease.  The lease requires the Company to pay certain  escalation
    clauses  for real estate  taxes,  operating  expense,  usage and common area
    charges.   The  Company   also  leases   equipment   and  a  vehicle   under
    noncancellable  operating leases. Rent expense for leased office facilities,
    equipment, and the vehicle charged to operations for the year ended December
    31, 2002 and 2001 was $568,772 and $404,849, respectively.

    Future minimum  rental  payments  required under the operating  leases as of
December 31, 2002, are as follows:

                2003                           418,329
                2004                           364,608
                2005                           326,398
                2006                            74,700
                                           -----------
                                           $ 1,184,035
                                           ===========

    In  September  2002,  the Company  entered  into a one year  Aircraft  Usage
    Agreement  with C5,  LLC,  a company  wholly  owned by the  Company's  Chief
    Executive Officer.  The agreement is to allow the Company to use an airplane
    on a preferred  basis over any other  proposed user. The Company is required
    to pay a  monthly  fee based on an  hourly  rate of $3,000  per hour for the
    first 10 hours and $2,500 per hour for each hour thereafter.  The Company is
    required to make a minimum monthly  payment  equivalent to 16 hours of usage
    ($45,000).  The agreement automatically renews for successive periods of one
    year each unless  terminated  by either party no less than thirty days prior
    to the  end  of the  term.  Future  minimum  payments  required  under  this
    agreement for 2003 total $360,000.

                                      S-20
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Effective April 18, 2002, the Company replaced Grant Thornton LLP with Ernst and
Young as its  independent  auditors.  During  the  period  from  January 1, 2002
through April 18, 2002, there were no  disagreements  with Grant Thornton LLP on
any  matters  of  accounting   principles  or  practices,   financial  statement
disclosure,  or auditing  scope and  procedures  which,  if not  resolved to the
satisfaction  of Grant Thornton LLP would have caused Grant Thornton LLP to make
reference to the matter in their report.

                                    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 9 is set forth in the  Company's  Proxy
Statement  for the  2002  Annual  Meeting  of  Stockholders  under  the  caption
"Election of  Directors,"  "Executive  Officers," and  "Compliance  With Section
16(a) of the Exchange Act," which is incorporated herein by reference.

ITEM 10. EXECUTIVE COMPENSATION

The  information  required by this Item 10 is set forth in the  Company's  Proxy
Statement  for the  2002  Annual  Meeting  of  Stockholders  under  the  caption
"Executive Compensation," which is incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required by this Item 11 is set forth in the  Company's  Proxy
Statement  for the  2002  Annual  Meeting  of  Stockholders  under  the  caption
"Security  Ownership  of Certain  Beneficial  Owners and  Management,"  which is
incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required by this Item 12 is set forth in the  Company's  Proxy
Statement for the 2002 Annual Meeting of Stockholders under the caption "Certain
Relationships  and  Related  Transactions,"  which  is  incorporated  herein  by
reference.

                                       19
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

<TABLE>
<CAPTION>
     EXHIBIT                                                                         PAGE NUMBER/
     NUMBER                         DESCRIPTION                                     FILING METHOD
     ------                         -----------                                     -------------
<S>             <C>                                                                 <C>
       2.1      Agreement and Plan of Reorganization among the Company,
                Capsource, Inc. and Stephen J. Byrne, dated as of April 9, 1999           *

       2.2      Asset Acquisition Agreement between the Company and Del Mar
                Holdings, Inc., dated as of April 9, 1999                                 *

       2.3      Asset Acquisition Agreement between the Company and Del Mar
                Mortgage, Inc., dated as of April 9. 1999                                 *

       2.4      Agreement and Plan of Reorganization among the Company, L. L.
                Bradford & Company and the Shareholders of L. L. Bradford &
                Company, dated June 30, 2000                                              **

       3.1      Certificate of Incorporation                                             ***

       3.2      By-laws                                                                  ***

      10.1      Employment Agreement between Del Mar Mortgage, Inc. and Steve
                Byrne, dated November 3, 1998                                            ***

      10.2      Transition Agreement between Del Mar Mortgage, Inc. and
                Capsource, Inc., dated April 27, 1999 and First Amendment
                thereto                                                                  ****

      10.3      Employment Agreement between Del Mar Mortgage and Mike
                Whiteaker, dated May 3, 1999                                             ****

      10.4      The 2000 Stock Option Plan of Sunderland Corporation                     ****

      10.5      Employment Agreement between the Company and Michael V. Shustek,
                dated December 1, 1999                                                   ****

      10.6      Employment Agreement between the Company and Ira S. Levine,
                dated September 1, 2000                                                 ******

      10.7      Employment Agreement between the Company and Lance K. Bradford,
                dated April 1, 2000                                                     *******

      10.8      Third Amended and Restated Operating Agreement of DM Mortgage
                Investors, LLC, dated as of November 2, 2000                             *****

      99.1      Certification Pursuant to U.S.C. 18 Section 1350                           24
</TABLE>

----------
      *   Previously filed on Form 8-K (File No. 000-24803) on May 4, 1999.
     **   Previously filed on Form 8-K (File No. 000-24803) on April 14, 2000.
    ***   Previously filed on Form 10-SB/A (File No. 000-24803) on August 13,
          1998.
   ****   Previously filed on Form 10-KSB (File No. 000-24803) on June 30, 2000.
  *****   Previously filed on Form 424B5 (File No. 333-32800) on November 15,
          2000.
 ******   Previously filed on Form 10-KSB (File No. 000-24803) on April 2, 2001.
*******   Previously filed on Form 10-KSB/A (File No. 000-24803) on April 30,
          2001.

(b) Reports on Form 8-K.

Current Reports on Form 8-K filed with the Commission on April 25, 2002 and June
4, 2002, which report the following items:

   (i) Item 4 -- Changes in Registrant's Certifying Accountant; and

   (ii) Item 7 -- Exhibits.

                                       20
<PAGE>
                                    PART IV

ITEM 14. CONTROL AND PROCEDURES

The Company has evaluated the  effectiveness  of the design and operation of its
disclosure  controls  and  procedures  as of a date  within 90 days prior to the
filing of this transition  report on Form 10-KSB (the "Evaluation  Date").  Such
evaluation was conducted under the supervision and with the participation of the
Chief Executive  Officer ("CEO") and the Chief Financial  Officer ("CFO") of the
Company.  Based upon such  evaluation,  the Company's CEO and CFO have concluded
that,  as  of  the  Evaluation  Date,  the  Company's  disclosure  controls  and
procedures  were  effective.  There  have  been no  significant  changes  in the
Company's  internal  controls or other factors that could  significantly  affect
these controls subsequent to the date of their most recent evaluation.


                                   SIGNATURES

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

                                       VESTIN GROUP, INC.

                                       /s/ John W. Alderfer
                                       -----------------------------------------
                                       John W. Alderfer, Chief Financial Officer

Dated: March 10, 2003

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

    SIGNATURES                       TITLE                           DATE
    ----------                       -----                           ----

/s/ John W. Alderfer         Chief Financial Officer,            March 10, 2003
-------------------------
John W. Alderfer
*Principal Financial
Officer

/s/ Michael V. Shustek       Chairman of the Board,              March 10, 2003
-------------------------
Michael V. Shustek           Chief Executive Officer and
*Principal Executive         Director
Officer

                                       21
<PAGE>
                            CERTIFICATION PURSUANT TO

                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John W. Alderfer,  Chief  Financial  Officer of Vestin Group,  Inc.,  certify
that:

(1) I have reviewed  this annual  report on Form 10-KSB (this "Form  10-KSB") of
Vestin Group, Inc.;

(2)  Based on my  knowledge,  this  Form  10-KSB  does not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect  to the  period  covered by this Form
10-KSB;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this  Form  10-KSB,  fairly  present  in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this Form 10-KSB;

(4)  The  registrant's  other  certifying  officers  and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this Form 10-KSB is being prepared;

     (b) evaluated the effectiveness of the registrant's disclosure controls and
procedures  as of a date  within 90 days prior to the  filing  date of this Form
10-KSB (the "Evaluation Date"); and

     (c) presented in this Form 10-KSB our conclusions  about the  effectiveness
of the  disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date;

(5) The registrant's  other certifying  officers and I have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  fulfilling  the  equivalent
function):

     (a) all  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     (b) any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls; and

(6) The registrant's other certifying officers and I have indicated in this Form
10-KSB whether there were significant  changes in internal  controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent  evaluation,  including any corrective actions with regard to
significant deficiencies and material weaknesses.


/s/ John W. Alderfer
-----------------------------------------------
John W. Alderfer
Chief Financial Officer


Dated: March 10, 2003

                                       22
<PAGE>
                            CERTIFICATION PURSUANT TO

                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael V.  Shustek,  Chief  Executive  Officer and Director of Vestin Group,
Inc., certify that:

(1) I have reviewed  this annual  report on Form 10-KSB (this "Form  10-KSB") of
Vestin Group, Inc.;

(2)  Based on my  knowledge,  this  Form  10-KSB  does not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect  to the  period  covered by this Form
10-KSB;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this  Form  10-KSB,  fairly  present  in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this Form 10-KSB;

(4)  The  registrant's  other  certifying  officers  and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this Form 10-KSB is being prepared;

     (b) evaluated the effectiveness of the registrant's disclosure controls and
procedures  as of a date  within 90 days prior to the  filing  date of this Form
10-KSB (the "Evaluation Date"); and

     (c) presented in this Form 10-KSB our conclusions  about the  effectiveness
of the  disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date;

(5) The registrant's  other certifying  officers and I have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board of  directors  (or  persons  fulfilling  the  equivalent
function):

     (a) all  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     (b) any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls; and

(6) The registrant's other certifying officers and I have indicated in this Form
10-KSB whether there were significant  changes in internal  controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent  evaluation,  including any corrective actions with regard to
significant deficiencies and material weaknesses.


/s/ Michael V. Shustek
---------------------------------------
Michael V. Shustek
Chief Executive Officer and Director

Dated: March 10, 2003

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