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

                                  FORM 10-KSB/A

(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

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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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                      9.75           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.  As most of the  appraisals  will be  prepared on an "as-if
developed  basis", if a loan goes into default prior to completion of a project,
the market value of the property may be  substantially  less than the  appraised
value. As a result,  there may be less security than anticipated at the time the
loan was originally  made. If there is less security and a default  occurs,  the
Company may not recover the full amount of the loan.

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

                                    CONTENTS

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.

/s/ Ernst & Young, LLP
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

<TABLE>
<CAPTION>
                                                                FOR THE YEAR ENDED
                                                       -------------------------------------
                                                       DECEMBER 31, 2002   DECEMBER 31, 2001
                                                       -----------------   -----------------
<S>                                                       <C>                 <C>
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        17,516,041          10,064,969
    a $4,798,926 provision for loss - see Note M)
  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
                                                          ============        ============
</TABLE>

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                   --            --             --            --          1,000          6,120
  employee bonus

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                      --              --              --           6,120
  employee bonus

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, 2002     DECEMBER 31, 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                          (5,456,691)           (3,095,345)
                                                                         ------------          ------------
</TABLE>

The accompanying notes are an integral part of these statements.

                                      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>
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>
     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.  As  most of the  appraisals  will be  prepared  on an  "as-if
     developed  basis",  if a loan goes into default  prior to  completion  of a
     project,  the market value of the property may be  substantially  less than
     the  appraised  value.  As a  result,  there  may  be  less  security  than
     anticipated  at the time the loan  was  originally  made.  If there is less
     security and a default occurs,  the Company may not recover the full amount
     of the loan.

     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>
     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                    (1,900,730)     (1,427,117)
                                                   ------------    ------------
     Pro forma net income                          $  1,931,108    $    398,104
                                                   ============    ============
     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         $       0.18    $       0.05
                                                   ============    ============
       Diluted earnings per share, pro forma       $       0.12    $       0.05
                                                   ============    ============

     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>
     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>
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.

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>
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)  which are generally  one-day
     sweep accounts.  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>
     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. 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>
NOTE N - INCOME TAXES

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

                                            2002              2001
                                        -----------       -----------

          Current                       $ 2,096,828       $ 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>
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>
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 three  year  period  beginning  one year  after 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>
     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  for  employees and directors at December 31,
     2002 and 2001:

<TABLE>
<CAPTION>
                                                                    SHARES UNDERLYING
            SHARES UNDERLYING OPTIONS/WARRANTS OUTSTANDING     OPTIONS/WARRANTS EXERCISABLE
          -------------------------------------------------    ----------------------------
                        SHARES       WEIGHTED
                      UNDERLYING      AVERAGE      WEIGHTED        SHARES           WEIGHTED
                       OPTIONS/      REMAINING      AVERAGE       UNDERLYING         AVERAGE
          EXERCISE     WARRANTS     CONTRACTUAL    EXERCISE    OPTIONS/WARRANTS     EXERCISE
           PRICES    OUTSTANDING       LIFE          PRICE       EXERCISABLE         PRICE
           ------    -----------       ----          -----       -----------         -----
<S>         <C>       <C>           <C>              <C>          <C>               <C>
            $2.81        15,000     8.00 years       $2.81          10,000           $2.81

            $4.00       967,300     7.83 years       $4.00         952,300           $4.00

            $5.07       609,700     8.27 years       $5.07         604,700           $5.07

            $7.02     1,137,000     9.92 years       $7.02         500,000           $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                            0.26%        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>
     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>
     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>
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.

NOTE V - EVENTS (UNAUDITED) SUBSEQUENT TO THE DATE OF THE INDEPENDENT AUDITOR'S
         REPORT

     The  Company,  Vestin  Mortgage  and  Del Mar  Mortgage,  Inc.,  ("Del  Mar
     Mortgage"), a company wholly owned by Mike Shustek, the largest shareholder
     and  CEO of  the  Company,  and  various  affiliates  of  the  Company  are
     defendants in a civil action (the "Action").  On April 10, 2003, the United
     States  District  Court for the District of Nevada (the "Court")  entered a
     judgment in the Action for $5.0 million,  plus interest accruing from March
     26, 2003,  jointly and severally  against the Company,  Vestin Mortgage and
     Del Mar  Mortgage.  Subsequent  to April 10,  2003,  the Court  stayed  the
     execution  of the  judgment  pending the  hearing and ruling on  post-trial
     motions and accordingly, the Court did not require the defendants to post a
     bond for the  judgment.  Del Mar Mortgage has  indemnified  the Company and
     Vestin  Mortgage for any losses and expenses in connection with the Action.
     Mr. Shustek has guaranteed the indemnification. If the stay of execution is
     lifted,  Mr.  Shustek  has  agreed to  provide a bond in the  amount of the
     judgment.  In management's  opinion after  consultation with legal counsel,
     the judgment  against the Company and Vestin  Mortgage  will be vacated and
     will have no effect on the operating results and financial condition of the
     Company. The defendants are appealing the ruling by the District Court.

     The Company is involved with certain other legal proceedings  incidental to
     its  business  activities.  Management  believes  that the outcome of these
     proceedings  will not  have a  material  adverse  effect  on the  Company's
     financial condition, results of operations and cash flows.

     The Company has elected to contribute  capital of $1.6 million to Fund I in
     the  form  of an  interest-bearing  amortizing  note  of  $251,000  and the
     forgiveness  of an obligation  due from Fund I in the amount of $1,349,000.
     The capital contribution will increase the members' capital account in Fund
     I to  approximately  $10 per unit. The amount of the  contribution  will be
     charged to current  operating  results  during the quarter  ended March 31,
     2003,   as  the  Company  will  not  receive   additional   units  for  the
     contribution.

                                      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 directors and officers of Vestin Group are as follows:

<TABLE>
<CAPTION>
       NAME               AGE                            TITLE
       ----               ---                            -----
<S>                       <C>     <C>
Michael V. Shustek         44     Chairman of the Board, Chief Executive Officer and Director
Lance K. Bradford          36     President, Treasurer and Director
John W. Alderfer           58     Chief Financial Officer
Ira S. Levine              42     Executive Vice President of Legal and Corporate Affairs and Secretary
Stephen J. Byrne           45     Chief Operations Officer and Director
Michael J. Whiteaker       53     Vice President of Regulatory Affairs
Peggy S. May               34     President of Vestin Mortgage, a subsidiary of Vestin Group
Daniel Stubbs              41     Executive Vice President of Vestin Mortgage, a subsidiary of Vestin Group
Robert J. Aalberts         52     Director
John E. Dawson             45     Director
Robert L. Forbuss          54     Director
Robert A. Groesbeck        42     Director
James C. Walsh             62     Director
Steven Ducharme            55     Director
Jan Jones                  55     Director
</TABLE>

All the  directors of Vestin Group hold office until the next annual  meeting of
shareholders.  The last annual meeting of Vestin Group  shareholders  was August
21, 2002. Michael Shustek can cause a change in the Board of Directors of Vestin
Group by virtue of his controlling  ownership  interest in Vestin Group.  Vestin
Group,  which is a reporting company under the Securities  Exchange Act of 1934,
as amended,  has established an audit committee  consisting of three independent
directors  and requires  that its audit  committee  be comprised of  independent
directors. The By-laws of Vestin Group provide for up to 10 directors and permit
the Board of Directors to fill any vacancy on the Board of  Directors.  Officers
of the company serve at the discretion of the Board of Directors.

The principal  occupation  and business  experience for each of our officers and
directors and key employees, for at least the last five years, are as follows:

     ROBERT J.  AALBERTS  has been a director of Vestin  Group since April 1999.
Since 1991,  Mr.  Aalberts has held the Ernst Lied  Professor  of Legal  Studies
professorship  at the  University of Nevada,  Las Vegas.  From 1984 to 1991, Mr.
Aalberts  was  an  Associate  Professor  of  Business  Law  at  Louisiana  State
University  in  Shreveport,  Louisiana.  From 1982 through 1984, he served as an
attorney for Gulf Oil Company.  Mr.  Aalberts has co-authored a book relating to
the  regulatory  environment,  law and  business of real  estate;  and he is the
author of numerous legal articles,  dealing with various aspects of real estate,
business and the practice of law. Mr. Aalberts  received his Juris Doctor degree
from Loyola University, in New Orleans,  Louisiana and received a Master of Arts
from the University of Missouri. He is a member of the State Bar of Louisiana.

     JOHN W. ALDERFER was appointed the Chief Financial  Officer of Vestin Group
in  September  2002.  From  October 1998 to  September  2002,  Mr.  Alderfer was
retired. From September 1996 to October 1998, Mr. Alderfer was a Director,  Vice
President,   Treasurer,  and  Chief  Financial  Officer  of  Interactive  Flight
Technologies,  Inc. From September  1990 to June 1996,  Mr.  Alderfer was Senior
Vice  President,  Treasurer,  and Chief  Financial  Officer of  Alliance  Gaming
Corporation.  Mr.  Alderfer  is the  former  Senior  Vice  President,  Corporate
Controller  and Chief  Accounting  Officer of Summa  Corporation  and The Hughes
Corporation, 100% owned by the Estate of Howard R. Hughes. Mr. Alderfer received
his BBA  degree in  accounting  from Texas Tech  University.  He is a  Certified
Public Accountant.

                                       19
<PAGE>
     LANCE K.  BRADFORD has been the  President  of Vestin  Group since  January
2001. In addition,  Mr. Bradford has been a director,  Chief Financial  Officer,
Treasurer  and  Secretary  of Vestin  Mortgage and  Treasurer  and a director of
Vestin  Group  since  April  1999.  Mr.  Bradford  also  acts as the  functional
equivalent of a Chief  Financial  Officer for both Vestin Fund I and Vestin Fund
II. Mr. Bradford was also the Chief Financial  Officer of Vestin Group from 1999
to September 2002 and the Corporate Secretary of Vestin Group from 1999 to 2000.
Since 1992,  Mr.  Bradford  has been a partner in L.L.  Bradford & Company,  Las
Vegas, Nevada, a Certified Public Accounting firm that he founded.  From 1988 to
1991, Mr. Bradford served as an accountant with Ernst & Young International. Mr.
Bradford received a Bachelor of Science degree in Accounting from the University
of Nevada, in Reno, Nevada.

     STEPHEN J. BYRNE has been the Chief  Executive  Officer of Vestin  Mortgage
and the Chief  Operations  Officer of Vestin Group since January 2001. Mr. Byrne
has also been a director of Vestin Mortgage since 1997 and of Vestin Group since
April 1999.  From its inception in 1997 to 2000,  Mr. Byrne was the President of
Vestin  Mortgage.  From 1999 to 2000,  Mr. Byrne also served as the President of
Vestin  Group.  Mr.  Byrne  joined Del Mar  Mortgage  in June 1998 as its Senior
Lending Officer.  In 1997, Mr. Byrne founded  Capsource,  Inc., a predecessor of
Vestin  Mortgage,  which he owned and operated  before joining Del Mar Mortgage.
From 1991 to 1997, Mr. Byrne served as Vice President of Wells Fargo Bank and of
its predecessor  First  Interstate  Bank of Nevada.  Mr. Byrne served in various
capacities  with First  Interstate  Bank,  including  Manager of the Diversified
Asset Group  based in Las Vegas and the  commercial  Diversified  Asset Group in
Houston,  Texas.  Mr.  Byrne  received a Bachelor of Science  degree in Business
Administration from Hastings College, Hastings, Nebraska.

     JOHN E. DAWSON has been a director of Vestin Group since March 2000.  Since
1995, Mr. Dawson has been a partner at the law firm of Marquis & Aurbach. Before
joining  Marquis &  Aurbach,  Mr.  Dawson  was  affiliated  with the law firm of
Jeffrey  L. Burr &  Associates.  Mr.  Dawson  co-authored  the Asset  Protection
Guidebook  for  Attorneys and  Accountants  and has presented  seminars on asset
protection.  Mr. Dawson received his Bachelor's  Degree from Weber State and his
Juris Doctor from Brigham Young  University.  Mr. Dawson received his Masters of
Law (L.L.M.) in Taxation from the  University  of San Diego in 1993.  Mr. Dawson
was admitted to the Nevada Bar in 1988 and the Utah Bar in 1989.

     STEVEN  DUCHARME has been a director of Vestin Group since August 2001. Mr.
DuCharme served as a member of the Nevada Gaming Control Board (the "Board") for
10 years  including  two  years as  Chairman.  First  appointed  to the Board on
January 2, 1991 by Nevada  Governor Bob Miller,  he was  reappointed to a second
term in January 1995.  He served as the law  enforcement  representative  on the
three-member  Board.  Mr.  DuCharme was named Chairman of the Board on September
19,  1998 by  Governor  Miller  and  served  two  years  as  Chairman.  With his
retirement  from the Board in January 2001,  he concluded  more than 30 years of
public service in Nevada.  Mr.  DuCharme began his career in law  enforcement in
1970 as a Deputy  Sheriff with the Clark County  Sheriff's  Office,  which later
became the Las Vegas  Metropolitan  Police  Department (the "LVMPD").  During 20
years with the LVMPD, he spent 12 years working  undercover  investigating  vice
and narcotic activities.  As a Sergeant, he was the supervising detective in the
Fraud Unit and later the Sexual Assault Unit.  Mr.  DuCharme's  last  assignment
with the LVMPD was as the  department's  spokesman  through the Office of Public
Information as well as being the Commander of the Crime  Prevention  Bureau.  He
retired from the LVMPD to accept the Governor's  appointment  to the Board.  Mr.
DuCharme holds a B.A. degree in Criminal  Justice from the University of Nevada,
Las Vegas  and an  associate's  degree  in Law  Enforcement  from  Clark  County
Community College. He is also a graduate of the Southern Police Institute at the
University of Louisville  in Kentucky.  Mr.  DuCharme is currently an advisor to
the faculty of the National  Judicial  College and also serves as an instructor.
He is the past Chairman of the  International  Association of Gaming  Regulators
and past President of the Board of Trustees for the Nevada  Treatment  Center, a
non-profit service for substance abuse.

     ROBERT L.  FORBUSS  has been a director  of Vestin  Group since March 2000.
Since February 1999, Mr. Forbuss has been the President of Strategic  Alliances,
a business  and  government  affairs  consulting  organization.  From March 1998
through  February  1999,  he was the  President  of  Medical  Transportation  of
America.  From February 1997 to March 1998, Mr. Forbuss was the Chief  Executive
Officer of the Southwest Division of American Medical Response.  From March 1994
to  February   1997,   he  was  Senior  Vice   President   of  Laidlaw   Medical
Transportation,  which had acquired Mercy Medical Services, Inc., a company that
Mr. Forbuss  founded,  owned and managed for 22 years. The latter four companies
are all in the  business of providing  emergency  ambulance  and  transportation
services. Mr. Forbuss received his Bachelor of Arts in Public Administration and
Political   Science  from  the  California   State  University  at  Long  Beach,
California.

                                       20
<PAGE>
     ROBERT A.  GROESBECK has been a director of Vestin Group since August 2000.
Mr.  Groesbeck  received  his  Bachelor  of Arts in  Criminal  Justice  from the
University  of Nevada in 1985,  his Juris Doctor from Thomas S. Cooley School of
Law in 1990 and his Masters of Business  Administration from National University
in 1993.  Mr.  Groesbeck  is the  founder of Home  Works,  a full  service  home
services company.  From 1994 to June 2000, Mr. Groesbeck was the General Counsel
of Republic Silver State Disposal, Inc. From 1993 to 1997, Mr. Groesbeck was the
Mayor  of  Henderson,   Nevada.  Mr.  Groesbeck  currently  serves  on  numerous
charitable boards.

     JAN JONES has been a director of Vestin Group since January 2002. Ms. Jones
currently  serves as Senior Vice  President  of  Communications  and  Government
Relations  for  Harrah's  Entertainment,  Inc., a $3 billion  company,  publicly
traded on the New York Stock  Exchange.  In her  capacity,  Ms.  Jones  oversees
government   relations,   public  relations,   community   relations,   employee
communications  and financial  communications  for 25 casinos across the country
under the Harrah's,  Showboat,  Rio and Harveys brand names.  She is responsible
for communicating the company's position on critical issues facing both Harrah's
and the gaming  industry.  Prior to joining the company in  November  1999,  Ms.
Jones held the elected public office of Mayor of the City of Las Vegas from 1991
until 1999.  During her tenure as Mayor,  Las Vegas was the fastest growing city
in America.  Ms. Jones is a graduate of Stanford  University  with a bachelor of
arts  degree in  English.  Ms.  Jones has an  extensive  background  in business
administration, marketing, and business development.

     IRA S. LEVINE has been the Executive  Vice President of Legal and Corporate
Affairs since September  2000. Mr. Levine has also been the Corporate  Secretary
of Vestin  Group since  January  2001.  Mr.  Levine  received his BS in Business
Administration specializing in accounting from the University of Nevada in 1982,
his  Juris  Doctor  from  Pepperdine  University  School  of Law in 1985 and his
Masters of Legal  Letters in  Taxation  from New York  University  in 1986.  Mr.
Levine is a member of the state bars of both Nevada and California.  Since 1997,
Mr.  Levine  has been a  partner  in the law firm of  Berkley,  Gordon,  Levine,
Goldstein & Garfinkel,  LLP.  Prior to that he was a shareholder in the law firm
of  Levine,  McBride &  Garfinkel,  LLP.  From 1995 to 1997,  Mr.  Levine  was a
shareholder  in the law firm of Quartes & Brady LLP,  formerly  known as Streich
Lang. Prior to that, Mr. Levine was senior vice president, secretary and general
counsel of United  Gaming,  Inc. now known as Alliance  Gaming,  Inc. Mr. Levine
started  his legal  career  with the law firm of  McKenna  Long &  Aldridge  LLP
formerly known as McKenna, Conner & Cuneo in Los Angeles, California.

     PEGGY S. MAY has been with Vestin Group since  September 1995, and has been
the President of Vestin  Mortgage since January 2001. From 1997 to 2000, Ms. May
was the Senior Vice President of Vestin Mortgage. Ms. May is responsible for all
new and existing clients,  loan packages and manages investor  relationships and
serves as the administrator of the corporate offices. Ms. May has over ten years
of experience in title, escrow and private lending.

     MICHAEL V.  SHUSTEK has been a director of Vestin  Mortgage and Chairman of
the Board of Directors,  Chief Executive  Officer and a director of Vestin Group
since April 1999. In 1995,  Mr. Shustek  founded Del Mar Mortgage,  and has been
involved in various aspects of the real estate industry in Nevada since 1990. In
1993,  he  founded  Foreclosures  of Nevada,  Inc.,  a company  specializing  in
non-judicial   foreclosures.   In  1993,  Mr.   Shustek  also  started   Shustek
Investments,  a company that originally  specialized in property  valuations for
third-party  lenders  or  investors  and which  continues  today as the  primary
vehicle for his private investment portfolio.  In 1997, Mr. Shustek was involved
in the initial  founding of Nevada First Bank,  with the largest initial capital
base of any new  state  charter  in  Nevada's  history.  In  2000,  Mr.  Shustek
co-authored a book,  Trust Deed  Investments,  on the topic of private  mortgage
lending. Mr. Shustek is a guest lecturer at the University of Nevada, Las Vegas,
where he also has taught a course in Real  Estate Law and  Ethics.  Mr.  Shustek
received a Bachelor of Science  degree in Finance at the  University  of Nevada,
Las Vegas.

     On March 26, 1999, Del Mar Mortgage,  a company  controlled by Mr. Shustek,
entered into a stipulated  court order (the  "Order")  with the State of Nevada,
Department  of Business  and  Industry,  Financial  Institutions  Division  (the
"Division")   resolving  a  dispute   regarding  Del  Mar   Mortgage's   alleged
noncompliance  with various Nevada  regulatory  statutes.  Without admitting any
facts,  and solely to settle these  matters,  Del Mar Mortgage  agreed to assure
compliance  with  applicable  Nevada  law in  its  advertising  solicitation  of
mortgage  borrowers  and in its making and servicing of mortgage  loans.  Vestin
Group and Vestin Mortgage, as successors to the mortgage company business of Del
Mar Mortgage,  agreed to adhere to the terms of the Order. Del Mar Mortgage paid
the Division an aggregate of $50,000 to cover the  Division's  costs.  The Order
contained no findings of wrongful conduct by Del Mar Mortgage.

     DANIEL B. STUBBS has been the Executive  Vice  President  and  Underwriting
Administrator  of Vestin  Mortgage since January 2000. Mr. Stubbs is responsible
for  analyzing  the risks of each loan as well as  prescribing  Title  Insurance
coverage for each individual transaction.  In addition, Mr. Stubbs serves on the
loan  committee and acts as a liaison  between  Vestin  Mortgage and the various
banks that carry its lines of credit. Mr. Stubbs has over 13 years experience in
the Title  Insurance  industry.  Mr.  Stubbs  received  his  Bachelor of Arts in
Communications Studies from the University of Nevada, in Las Vegas, Nevada.

                                       21
<PAGE>
     JAMES C. WALSH has been a director of Vestin Group since January 2001.  Mr.
Walsh has  practiced  law in New York City since 1966,  after  receiving his law
degree  from  the   University  of  Alabama.   Mr.  Walsh   specializes  in  the
representation of professional athletes and entertainers. Mr. Walsh has been the
exclusive  attorney,  agent and business  manager of Joe Namath since 1969.  Mr.
Walsh is a member of the New York and Louisiana Bar Association.

     MICHAEL J.  WHITEAKER  has been Vice  President  of  Regulatory  Affairs of
Vestin  Group since May 14, 1999 and is  experienced  in the banking and finance
regulatory  fields,  having  most  recently  served  with the  State of  Nevada,
Financial  Institution  Division from 1982 to 1999 as its Supervisory  Examiner,
responsible for the financial and regulatory  compliance audits of all financial
institutions  in  Nevada.  Mr.  Whiteaker  has  worked  extensively  on  matters
pertaining to both state and federal statutes,  examination  procedures,  policy
determination  and credit  administration  for commercial and real estate loans.
From 1973 to 1982

Mr. Whiteaker was Assistant Vice President of Nevada National Bank,  responsible
for a variety of matters including loan review.

ITEM 10. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                 ANNUAL COMPENSATION                          LONG-TERM COMPENSATION
                                         ----------------------------------   ---------------------------------------------------
                                                                                       AWARDS              PAYOUTS
                                                                              -------------------------    -------
                                                                              RESTRICTED    SECURITIES
                                                               OTHER ANNUAL     STOCK       UNDERLYING       LTIP     ALL OTHER
                                         SALARY      BONUS     COMPENSATION    AWARD(S)    OPTIONS/SARS    PAYOUTS   COMPENSATION
 NAME AND PRINCIPAL POSITION    YEAR       ($)        ($)         ($)(2)          ($)           (#)          ($)          ($)
 ---------------------------    ----       ---        ---         ------          ---           ---          ---          ---
<S>                             <C>      <C>         <C>             <C>           <C>        <C>             <C>          <C>
Michael V. Shustek              2002     793,500          0          0             0          500,000         0            0
  Chief Executive Officer       2001     852,000     20,529          0             0          500,000         0            0
  of the Company                2000     884,500     40,000          0             0          500,000         0            0


Stephen J. Byrne                2002     361,100     14,175          0             0          100,000         0            0
  Chief Executive Officer       2001     332,908     22,406          0             0                0         0            0
  of Vestin Mortgage            2000     240,000    142,081          0             0          100,000         0            0

Lance K. Bradford               2002     302,160          0          0             0          200,000         0            0
  President of the Company      2001     296,500      2,597          0             0                0         0            0
                                2000     228,994          0          0             0                0         0            0

Peggy S. May                    2002     176,100     62,009          0             0           63,334         0            0
  President of Vestin           2001     132,667     29,000          0             0           35,000         0            0
  Mortgage(1)                   2000     118,800     13,500          0             0           10,000         0            0

Daniel Stubbs                   2002     128,174     70,000          0             0           50,000         0            0
  Executive Vice President      2001      90,000     49,395          0             0           10,000         0            0
  of Vestin Mortgage            2000      75,000     20,027          0             0            5,000         0            0
</TABLE>


(1)  The compensation for Ms. May includes compensation for services rendered to
     Vestin  Mortgage  and Vestin  Capital,  Inc. All of Ms. May's 2002 and 2000
     compensation was paid directly by Vestin Mortgage,  and Vestin Mortgage and
     Vestin Capital each paid 50% of her  compensation  in 2001.
(2)  None of the Named Officers received other annual compensation exceeding the
     lesser of $50,000 or 10% of their salary and bonus for the relevant year.

     The following Option and Warrant/SAR Grants Tables set forth the individual
grants of stock options made in fiscal 2002 to Vestin  Group's  Chief  Executive
Officers and the next most highly  compensated  executive  officers named in the
Summary Compensation Table above.

                                       22
<PAGE>
                OPTION & WARRANT/ SAR GRANTS IN FISCAL YEAR 2002

                               (INDIVIDUAL GRANTS)

                       NUMBER OF    PERCENT OF TOTAL
                      SECURITIES      OPTIONS/SARS
                      UNDERLYING       GRANTED TO       EXERCISE OR
                     OPTIONS/SARS       EMPLOYEES          BASE       EXPIRATION
      NAME            GRANTED(#)    IN FISCAL 2002(%)   PRICE($/SH)      DATE
      ----            ----------    -----------------   -----------      ----
Michael V. Shustek     500,000            43.9             7.02         11/27/12
Stephen J. Byrne       100,000             8.8             7.02         11/27/12
Lance K. Bradford      200,000            17.5             7.02         11/27/12
Peggy S. May            63,334             5.6             7.02         11/27/12
Daniel Stubbs           50,000             4.4             7.02         11/27/12

     Michael V. Shustek  entered into an Employment  Agreement with Vestin Group
in December 1999 as its Chief Executive Officer.  Pursuant to the agreement, Mr.
Shustek is entitled  to receive a minimum  annual  salary of  $720,000  and such
additional  salary as the Board of Directors deems  appropriate.  Mr. Shustek is
also  entitled to receive an  automobile  allowance  in the amount of $1,000 per
month during the term of the agreement. The agreement additionally provides that
Mr.  Shustek is to receive  warrants to purchase up to 500,000  shares of Vestin
Group's common stock each year during the term of the  agreement.  The agreement
terminates  on November 30, 2002,  but will  continue  for  successive  one year
periods unless either Vestin Group or Mr. Shustek  provides  thirty days notice.
In May 2002,  Mr.  Shustek  voluntarily  reduced  his annual  salary to $150,000
effective the fourth quarter of 2002.

     On November 3, 1998, Stephen J. Byrne entered into an Employment  Agreement
with Vestin  Group  (formerly  known as Del Mar  Mortgage) to serve as its Chief
Loan Officer for the operation of the mortgage  broker  business in the State of
Nevada.  The  terms of such  employment  include  an  initial  annual  salary of
$240,000 and performance  bonuses as the Board of Directors  deems  appropriate.
The agreement is terminable by either Vestin Group or Mr. Byrne with thirty days
notice.

     Lance K. Bradford entered into an Employment Agreement with Vestin Group on
April  1,  2000  to  serve  as its  Chief  Financial  Officer.  Pursuant  to the
agreement,  Mr.  Bradford  is entitled  to receive an initial  annual  salary of
$296,000 and performance  bonuses as the Board of Directors  deems  appropriate.
Mr.  Bradford is also entitled to receive an automobile  allowance in the amount
of $1,000 per month during the term of the agreement.  The agreement  terminates
March 31, 2003 but will continue for  successive  one year periods unless either
Vestin Group or Mr. Bradford provides thirty days notice.

     Peggy S. May entered into an  Employment  Agreement  with Vestin  Mortgage,
with an effective date of July 1, 2002, to serve as its  President.  The term of
the agreement begins on July 1, 2002 and ends on December 31, 2004.  Pursuant to
the  agreement,  Ms. May is  entitled  to receive  an initial  annual  salary of
$160,000,  subject to review by the Board of Directors. Ms. May is also eligible
for  bonuses  but  subject  to the  discretion  of the Board of  Directors.  The
agreement  additionally provides that Ms. May is to receive a one-year salary if
Vestin Mortgage terminates the agreement without cause.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SHARE OWNERSHIP

     The following  table  indicates the beneficial  ownership of Vestin Group's
voting  securities  by each person  known by Vestin  Group to be the  beneficial
owner of more than 5% of such  securities,  as well as the  securities of Vestin
Group  beneficially  owned by all officers  and  directors of Vestin Group as of
March 1, 2003.  Beneficial  ownership is determined in accordance with the rules
of the  Securities  and Exchange  Commission.  In computing the number of shares
beneficially  owned by a person and the  percentage  ownership  of that  person,
shares of common stock  subject to options and warrants held by that person that
are  currently  exercisable  or that will become  exercisable  within 60 days of
March 1,  2003,  are  deemed  outstanding  even if they have not  actually  been
exercised.  Those shares,  however,  are not deemed  outstanding  for purpose of
computing  the  percentage  ownership  of any  other  person.  Unless  otherwise
indicated, the stockholders listed possess sole voting and investment power with
respect to the shares shown.

                                       23
<PAGE>
<TABLE>
<CAPTION>
                                                                                                          PERCENTAGE OF
                                                                                      COMMON STOCK         COMMON STOCK
                                       NAME                                        BENEFICIALLY OWNED   BENEFICIALLY OWNED(1)
                                       ----                                        ------------------   ---------------------
<S>                                                                                   <C>                      <C>
Michael V. Shustek, Chairman and Chief Executive Officer of Vestin Group              4,664,199(2)             68.3%
2901 El Camino Avenue
Las Vegas, Nevada 89102
Stephen J. Byrne, Chief Operations Officer and Director of Vestin Group and
Chief Executive Officer of Vestin Mortgage                                              132,900(3)              2.5%
2901 El Camino Avenue
Las Vegas, Nevada 89102
Ira S. Levine, Executive Vice President of Legal and Corporate Affairs and
Corporate Secretary of Vestin Group                                                     175,100(4)              3.2%
2901 El Camino Avenue
Las Vegas, Nevada 89102
Peggy S. May, President of Vestin Mortgage                                               89,875(5)              1.7%
2901 El Camino Avenue
Las Vegas, Nevada 89102
Lance K. Bradford, Director, President and Treasurer of Vestin Group and Chief
Financial Officer, Treasurer, Secretary and Director of Vestin Mortgage                  30,000                   *
2901 El Camino Avenue
Las Vegas, Nevada 89102
Daniel Stubbs, Executive Vice President of Vestin Mortgage                               17,660(6)                *
2901 El Camino Avenue
Las Vegas, Nevada 89102
John W. Alderfer, Chief Financial Officer of Vestin Group                                     0                   *
2901 El Camino Avenue
Las Vegas, Nevada 89102
Stephen A. Schneider, Vice President of Vestin Mortgage                                  30,000(7)                *
2901 El Camino Avenue
Las Vegas, Nevada 89102
Michael J. Whiteaker, Vice President of Regulatory Affairs of Vestin Group               50,300(8)                *
2901 El Camino Avenue
Las Vegas, Nevada 89102
Robert J. Aalberts, Director of Vestin Group                                             16,700(9)                *
2901 El Camino Avenue
Las Vegas, Nevada 8910
John E. Dawson, Esq., Director of Vestin Group                                           25,050(10)(11)           *
2901 El Camino Avenue
Las Vegas, Nevada 89102
Robert L. Forbuss, Director of Vestin Group                                              15,000(12)               *
2901 El Camino Avenue
Las Vegas, Nevada 89102
Robert A. Groesbeck, Director of Vestin Group                                            15,000(13)               *
2901 El Camino Avenue
Las Vegas, Nevada 89102
James C. Walsh, Director of Vestin Group                                              1,200,000(14)            18.4%
2901 El Camino Avenue
Las Vegas, Nevada 89102
Steven Ducharme, Director of Vestin Group                                                10,000(15)               *
2901 El Camino Avenue
Las Vegas, Nevada 89102
Jan Jones, Director of Vestin Group                                                      10,000(16)               *
2901 El Camino Avenue
Las Vegas, Nevada 89102
All directors and executive officers as a group (16 persons)                          6,481,784(17)            76.3%
</TABLE>

                                       24
<PAGE>
* Less than 1%

(1)  Based upon 5,324,340 shares outstanding on March 1, 2003.
(2)  Includes warrants to purchase up to 1,500,000 shares of Common Stock.
(3)  Includes options to purchase up to 100,000 shares of Common Stock.
(4)  Includes options to purchase up to 150,000 shares of Common Stock.
(5)  Includes options to purchase up to 45,000 shares of Common Stock.
(6)  Includes options to purchase up to 15,000 shares of Common Stock.
(7)  Includes options to purchase up to 30,000 shares of Common Stock.
(8)  Includes options to purchase up to 50,000 shares of Common Stock.
(9)  Includes options to purchase up to 15,000 shares of Common Stock.
(10) Includes options to purchase up to 15,000 shares of Common Stock.
(11) Includes  1,850  shares  of  Common  Stock  owned by a  family  partnership
     indirectly controlled by Mr. Dawson.
(12) Includes options to purchase up to 15,000 shares of Common Stock.
(13) Includes options to purchase up to 15,000 shares of Common Stock.
(14) Includes  warrants to purchase  up to 1.2  million  shares of Common  Stock
     granted to Planned Licensing, Inc. ("PLI"). Mr. Walsh has a majority equity
     interest in PLI.
(15) Includes options to purchase up to 10,000 shares of Common Stock.
(16) Includes options to purchase up to 10,000 shares of Common Stock.
(17) Includes  warrants and options to purchase up to 3,170,000 shares of Common
     Stock.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED 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.

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

                                       25
<PAGE>
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.

                                       26
<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

99.2    Consent of Independent Auditors                                                 25

99.3    Consent of Independent Auditors                                                 26
</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.

                                       27
<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: April 30, 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,          April 30, 2003
----------------------------    *Principal Financial Officer
John W. Alderfer



/s/ Michael V. Shustek          Chairman of the Board,            April 30, 2003
----------------------------    Chief Executive Officer and
Michael V. Shustek              *Principal Executive Director
                                Officer

                                       28
<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: April 30, 2003

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<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: April 30, 2003

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