<PAGE>

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

                                   FORM 10-KSB

(Mark One)

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

                   For the fiscal year ended December 31, 2001

 | | 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                                               522102142
           --------                                               ---------
(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. $21,441,638

      As of March 15, 2002, there were 5,502,148 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 March 15, 2002 was
      approximately $13,737,896.

                       DOCUMENTS INCORPORATED BY REFERENCE

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


                                       1
<PAGE>
Transitional Small Business Disclosure Format (check one):  Yes | | No |X|

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., was incorporated in Delaware on June 2, 1998 under the name
Sunderland Acquisition Corporation ("Vestin Group"). 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."

On August 13, 1998, Vestin Group filed a Registration Statement on Form 10-SB
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
registering its class of common stock, $.0001 par value per share (the "Common
Stock"). On April 27, 1999, Vestin Group acquired all the outstanding capital
stock of Capsource, Inc., a licensed Nevada mortgage company ("Capsource"), in
exchange for 20,000 shares of Vestin Group's Common Stock. Simultaneously with
the acquisition of Capsource, Vestin Group acquired certain assets and assumed
certain liabilities of Del Mar Mortgage, Inc. and Del Mar Holdings, Inc.
(collectively, the "Del Mar Entities") in exchange for 4,891,270 shares of
Common Stock of Vestin Group. The Del Mar Entities are controlled by Michael V.
Shustek, Chief Executive Officer and Chairman of the Board of Vestin Group.

As part of a corporate restructuring, Vestin Group transferred the commercial
mortgage brokerage business of the Del Mar Entities to Capsource. On October 15,
1999, Vestin Group filed a Registration Statement on Form SB-2 registering
1,926,270 shares of its Common Stock held by various stockholders. On July 6,
2000, Capsource changed its name to Vestin Mortgage, Inc. ("Vestin Mortgage").
Vestin Mortgage is currently a wholly-owned subsidiary of Vestin Group and holds
a mortgage broker's license in Nevada.

In December 1999, Vestin Group acquired Vestin Capital, Inc., formerly DM
Financial Services, Inc. ("Vestin Capital"), a registered broker-dealer in 49
states. Vestin Group also acquired DM Mortgage Advisers, Inc., an Arizona based
mortgage funding business which has changed its name to Vestin Mortgage
Advisers, Inc. ("VM Advisers"), in exchange for Vestin Group's Common Stock in
December 1999. Both Vestin Capital and VM Advisors were wholly owned by Michael
Shustek, who received 10,300 shares of Vestin Group's Common Stock for Vestin
Capital, and 17,700 shares of Vestin Group's Common Stock for VM Advisers in
connection with the acquisitions.

Vestin Mortgage serves as the manager of Vestin Fund I, LLC (formerly DM
Mortgage Investors, LLC; "VF-I"), a Nevada limited liability company which was
organized to invest in mortgage loans. VF-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, VF-I had raised $100,000,000 from the sale of
units. The Company also organized Vestin Fund II, LLC ("VF-II"), a second Nevada
limited liability company to invest in mortgage loans. VF-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
March 15, 2002, VF-II had raised approximately $175,000,000 through the sale of
its units. VF-I and VF-II are sometimes referred to collectively hereinafter as
the "Funds."


                                       2
<PAGE>
In February 2000, the Company initiated a strategy to expand its business focus
to include various financial services. On March 31, 2000, the Company acquired
the assets of L.L. Bradford & Company ("L.L. Bradford"), for 800,000 shares of
the Company's Common Stock. L.L. Bradford operates as a certified public
accounting and consulting firm in the state of Nevada. L.L. Bradford was
majority owned by Leilani D. Bradford and Lance K. Bradford, at the time Mr.
Bradford served as the Company's Chief Financial Officer and a Director. Mr.
Bradford has since also become the Company's President and Treasurer.

In furtherance of the Company's goal to become a full service financial service
firm, on August 31, 2000, the Company acquired Mortgage Source Inc., a Nevada
company whose business focused on mortgage financing for single family
residences ("Mortgage Source"). Pursuant to this acquisition, the Company
acquired all of Mortgage Source's capital stock in exchange for 251,000 shares
of the Company's Common Stock.

At the end of 2000, the Company decided to refocus its efforts on its commercial
mortgage operations. As a result, in January 2001, the Company entered into a
Purchase Agreement with the former shareholders of L.L. Bradford whereby the
Company repurchased its 800,000 shares of Common Stock. The Company also decided
to unwind the acquisition of Mortgage Source. Thus, on January 10, 2001, the
Company and Mortgage Source rescinded the acquisition and the Company paid the
former Mortgage Source shareholder a total of $175,000. See Note V to the
Financial Statements for further information regarding these transactions.

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 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 being unable to obtain
such financing or who are unwilling to go through the time consuming 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, and those borrowers who require
quicker responses. 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.

Mortgage Brokerage Operations

The Company's mortgage business involves processing loan applications, approving
loans, funding loans 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.

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.

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 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 Members of the Funds
receive monthly interest payments from the promissory notes as paid by the


                                       3
<PAGE>
borrowers. 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 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 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 his/her 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 in the Company in the event a borrower has not made a payment
on its loan within five (5) days of such payment's due date. Collection agents
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 an investment.

Management of VF-I and VF-II

Vestin Mortgage is the Manager of VF-I and VF-II, Nevada limited liability
companies. As manager, Vestin Mortgage evaluates prospective investments,
selects the mortgages in which VF-I and VF-II 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 receives an annual management fee up to 0.25% of
the aggregate capital contributions to VF-I and VF-II per annum. The Company
may, in its sole discretion, waive its management fee. For the year ended
December 31, 2001, the Company had received management fees of approximately
$131,000 from VF-I and $87,000 from VF-II as compared to $25,000 from VF-I in
2000. The Company received approximately 100,000 Units in VF-I for expenses paid
by the Company to unaffiliated third parties in connection with the offering of
units in VF-I, and through December 31, 2001, had received 110,000 units from
VF-II for such offering expenses which is the maximum amount receivable for such
expenses under the Operating Agreement of VF-II.

The Operating Agreements for VF-I and VF-II 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,
residential and bridge loans.

Raw And Unimproved Land Loans

Approximately 15 to 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 90-day quick sale value
of the property and the borrower's actual capital investment in the property.
The "90-day quick sale value" is the highest price for which the land could
actually be sold within the next 90 days, as determined by local real estate
brokers. The Company believes that this 90-day period approximates the time
required for a foreclosure. The value is generally the same as the cost of the
land to the borrower. Typically, the Company will broker loans with a face value
which is less than 60% of the "90-day quick sale value," and the Company usually
requires that the borrower have invested in the property actual capital
expenditures of at least 25% of the property's value.

Acquisition and Development Loans


                                       4
<PAGE>
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.

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
Company will review the appraisal of the value of the property and proposed
improvements, and will arrange loans for up to 75% of the appraised value.

Commercial Property Loans

Approximately 20-40% 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 appraisal of the value of the property
and will broker loans for up to 75% of such appraised value.

Residential Loans

About 5% 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 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 appraisal of the value of
the property and will generally arrange for loans of up to 75% of that value.

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.


                                       5
<PAGE>
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 95% of the
Company's revenues in 2000 and 2001.

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
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, 2001, there were 54 mortgage loans placed by
the Company with an aggregate value of $243,894,870. During the year ended
December 31, 2000, there were 86 mortgage loans placed by the Company with an
aggregate value of $222,195,839. During fiscal 1999, there were 111 loans placed
by the Company with an aggregate value of $198,151,020. 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, 2001, 2000 and 1999.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
               LOAN TYPE                        NUMBER OF         AGGREGATE          LOAN PLACEMENT           AVERAGE
               ---------                          LOANS         DOLLAR AMOUNT         FEES BY LOAN       ORIGINATION FEES
                                                ORIGINATED        IN TOTAL                TYPE            AS A % OF LOANS
                                                ----------        --------                ----            ---------------
-------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>             <C>                  <C>                 <C>
                 2001
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
Bridge and Residential Loans                        13          $ 87,868,600          $  3,333,050              3.79%
-------------------------------------------------------------------------------------------------------------------------
Construction and Acquisition and                    21          $ 99,353,000          $  4,392,617              4.42%
Development Loans
-------------------------------------------------------------------------------------------------------------------------
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
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
                 2000
-------------------------------------------------------------------------------------------------------------------------
Bridge and Residential Loans                        41          $ 57,636,600          $  2,355,157              4.09%
-------------------------------------------------------------------------------------------------------------------------
Construction and Acquisition and                    29          $131,458,671          $  4,875,895              3.71%
Development Loans
-------------------------------------------------------------------------------------------------------------------------
Land Loans                                          16          $ 33,100,568          $  1,241,271              3.75%
                                                   ---          ------------          ------------              ----
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
                                                    86          $222,195,839          $  8,472,323
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
                 1999
-------------------------------------------------------------------------------------------------------------------------
Bridge and Residential Loans                        38          $ 32,692,170          $  1,628,410              4.98%
-------------------------------------------------------------------------------------------------------------------------
Construction and Acquisition and                    47          $133,161,850          $  6,278,599              4.72%
Development Loans
-------------------------------------------------------------------------------------------------------------------------
Land Loans                                          26          $ 32,297,000          $  1,356,474              4.20%
                                                   ---          ------------          ------------              ----
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
                                                   111          $198,151,020          $  9,263,483
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

Investment in Mortgage Loans and Other Investments


                                       6
<PAGE>
The Company accesses funds for loans which it brokers primarily from the Funds.
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,
2001, the Company held for investment approximately $6,100,000 of interests in
mortgage loans. Interest Income generated by such investments comprised less
than 5% of the Company's revenues for 2001 and 2000.

In the event of a default of one of the loans brokered by the Company, the
Company will instigate 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, 2001, the Company had two
properties totaling $4,517,390, 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.

In February 2001, the Company sold an investment in commercial real estate for
$896,000. The sale of the investment was a result of a foreclosure of a property
containing an office building with 1 to 2 tenants due to a borrower defaulting
on a loan owed to the Company. No gain or loss was recorded on this transaction.

As of December 31, 2001, the Company held approximately 100,000 units in VF-I,
representing approximately 1% of the equity of VF-I, and 110,000 units in VF-II,
representing approximately 0.9% of the equity of VF-II. The primary activity of
VF-I and VF-II consists of investing in mortgage loans. The Company serves as
manager of the Funds and evaluates loans to determine in which loans the Funds
should invest.

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.


                                       7
<PAGE>
Competition for Funds

Historically, the main source of the Company's funds has been individual
investors interested in the investment opportunity offered by the Company. In
2001, 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 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. The Company's principal competitors in its market niche as a
non-conventional mortgage lender in the Nevada area include: Consolidated
Mortgage Corp. and Global Express Mortgage, both of which engage in brokering
the same types of loans as those currently made by the Company. In the broader
market, the Company's competitors consist of conventional mortgage lenders,
which 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
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,


                                       8
<PAGE>
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, 2001, the Company employed 43 personnel. Of these employees,
22 were employed to identify and arrange for loans and 21 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 12,500 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 in early discovery stage and is not currently
set for trial.

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

None.


                                       9
<PAGE>
PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) The Company commenced trading its Common Stock on the OTC Bulletin Board on
December 10, 1999 under the symbol "DLMA." In the third quarter of fiscal year
ended 2000, the Company's Common Stock was approved for quotation on the Nasdaq
Small Cap Market. In June 2000, the Company changed its symbol to "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 2001 and 2000 and the
high and low bid price for the Common Stock as reported by the OTC Bulletin
Board for the fourth quarter of fiscal 1999. The price reported by the OTC
Bulletin Board reflects inter-dealer prices without retail mark-ups, mark-downs
or commissions and may not reflect actual transactions. As of March 15, 2002,
the closing sale price for the Company's Common Stock was $6.65 per share. On
that date, there were 443 stockholders of record. The figure does not reflect
the beneficial stockholders whose shares are held in nominee names.

<TABLE>
<CAPTION>
                                                          Nasdaq Small Cap Market
                                                          -----------------------

                                                      US $High                US $Low
                                                      --------                -------
<S>                                                   <C>                     <C>
2001

 Fourth Quarter                                         8.45                   2.87

 Third Quarter                                          3.32                   1.35

 Second Quarter                                         4.65                   2.00

 First Quarter                                          5.13                   4.06

2000

 Fourth Quarter                                         6.88                   3.13

 Third Quarter                                          8.25                   6.50

 Second Quarter                                         8.06                   7.25

 First Quarter                                          7.69                   6.13
</TABLE>

<TABLE>
<CAPTION>
                                                             OTC Bulletin Board
                                                             ------------------

                                                      US $High                US $Low
                                                      --------                -------
<S>                                                   <C>                     <C>
1999

 Fourth Quarter                                         6.75                   5.50
</TABLE>

(b)   Holders

      On March 15, 2002, there were approximately 443 stockholders of record of
      the Company's Common Stock.

(c)   Dividends


                                       10
<PAGE>
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. During November 2001, the
Company adopted a resolution to declare a $0.02 per share dividend to Common
Stock shareholders on record as of December 20, 2001, which will be paid on
January 10, 2002. In addition, the Company paid approximately $76,000 in
dividends to Preferred Stock shareholders during 2001. On March 5, 2002, the
Company announced that on April 15, 2002 it would pay a cash dividend of $.10
per share to all Common Stock shareholders of record as of March 20, 2002.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following financial review and analysis concerns the financial condition and
results of operations of the Company for the years ended December 31, 2001 and
2000. 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.

RESULTS OF OPERATIONS

COMPARISON OF YEAR ENDED DECEMBER 31, 2001 AND YEAR ENDED DECEMBER 31, 2000

REVENUE

Historical Performance

The Company reported total revenues of approximately $21,442,000 in 2001, an
increase from $15,353,000 in 2000. The Company derived approximately 95% of its
revenue in both fiscal 2001 and 2000 from its mortgage brokerage operations.
Less than 5% of the Company's total revenue was generated by investments in
mortgage loans. The increase in revenue was primarily due to the following
factors: First, in 2001, the Company generated $4,100,000 in extension fees as
compared to approximately $1,100,000 of extension fees in 2000. This increase,
which also represented an increase from 0.5% to 1.7% of the loans managed by the
Company, was attributable to a limited number of large loans which were
extended, generating high extension fees. Management does not believe that the
extension fees generated in 2001 are indicative of the level of extension fees
which the Company may receive in the future. While the absolute amount of
extension fees may be expected to increase as the principal amount of loans
arranged by the Company increases, extension fees as a percentage of outstanding
loans are not expected in the future to be equal to the percentage generated in
2001.

Secondly, the Company's loan placement fees were 4.5% of total loans arranged in
2001 as compared to 3.8% in 2000. As a result, the Company generated $10,985,000
of loan placement fees in 2001 as compared to $8,472,000 in 2000. The total
amount of loans arranged by the Company may increase in the future if the
Company is able to raise additional funding for VF-II. Management believes the
increase in origination fees as a percentage of loans arranged was due in large
part to the tighter lending requirements of traditional lenders which resulted
in more potential borrowers seeking funds from the Company. However, as the
Company continues its efforts to enhance the quality of its borrowers, it is
possible that loan placement fees in the future will be a lower percentage of
loans originated as better quality borrowers are often able to secure more
favorable terms. The principal amount of loans arranged by the Company
increased by approximately 10% from 2000.

The Company placed 54 and 86 loans with an aggregate value of $243,894,870 and
$222,195,839 in the fiscal years ended December 31, 2001, and 2000,
respectively. Historically, the Company has used funds from individual
investors, VF-I, VF-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 2001, the Company used funds
primarily from VF-I and VF-II.



                                       11
<PAGE>
Direct Investment

Less than 5% of revenues in fiscal 2001 and 2000 were derived from investment in
mortgage loans. As of December 31, 2001 and 2000, the Company had approximately
$6,074,000 and $5,500,000 invested in mortgage loans, respectively. As of
December 31, 2001 the Company also had $2,100,000 invested as capital
contributions in VF-I and VF-II. The Company earns additional income from
interest earned on monies in its bank deposits.


                                       12
<PAGE>
Geographical Expansion

Historically, the Company has focused its operations in Arizona, California,
Hawaii, Nevada and Texas. The Company has developed a significant degree of
knowledge with respect to the real estate markets in these locales. Such
knowledge is critical to the Company's business strategy which emphasizes the
Company's ability to process loan applications more quickly than many
conventional lenders. One of the key factors in attracting qualified borrowers
is the Company's ability to approve a mortgage loan quickly (20 days or less.)
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.

As the Company grows, it is likely to be expanding into more and more real
estate markets. 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 currently plans in most cases to engage the services of local real
estate brokers and real estate lawyers who are believed to have substantial
familiarity with the markets into which the Company is expanding. It is not
possible at this time to predict if the Company will be successful in this
effort. Any difficulties encountered by the Company in this regard could slow
down its expansion plans or could result in the Company placing loans which
degrade its historical performance.

SALES AND MARKETING EXPENSES

Sales and marketing expenses primarily consist of advertising costs and
commissions. Sales and marketing expenses amounted to approximately 35% and 14%
of the Company's total revenues for the fiscal years ended December 31, 2001 and
2000, respectively. The significant increase in marketing expenses is primarily
attributable to the following factors: (i) the Company conducted sales efforts
throughout 2001 in connection with the public offerings of the Funds; during
2000, the Company's marketing of Fund Units was limited to the last four months
of the year; (ii) the Company engaged Joe Namath as its principal spokesman in
January 2001; and (iii) the Company broadened the scope of its marketing efforts
in 2001 as the Funds are eligible for sale in approximately 40 states. The
Company believes that in 2002 it may incur sales and marketing expenses at a
level reduced from that incurred in 2001.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses include payroll and related expenses,
transition fees, professional fees, and general corporate expenses. General and
administrative expenses of the Company amounted to 47% of the total revenues for
the year ended December 31, 2001, as compared to 46% in 2000. General and
administrative expenses may decrease as a percentage of revenues as the Company
continues to grow. The Company anticipates that general and administrative
expenses will remain constant as a percentage of total revenues for the year
2002 as compared to prior years. As the Company continues to grow in subsequent
years, it believes that its overall general and administrative expenses will
decrease as a percentage of total revenues.

INCOME BEFORE INCOME TAXES

As a result of the foregoing factors, income from continuing operations before
provision for income taxes equaled 14% of the Company's total revenues in 2001,
a decrease from 38% in 2000.


                                       13
<PAGE>
DISCONTINUED OPERATIONS

As a result of the Company's decision to refocus its efforts on its commercial
mortgage operations, L.L. Bradford was spun off in January 2001. The
Consolidated Financial Statements as of December 31, 2000 and 1999 reflect L.L.
Bradford as a discontinued operation. Accordingly, the revenues, expenses,
assets and liabilities, and cash flows of L.L. Bradford have been segregated in
the consolidated balance sheets, income statements, and cash flows. Net assets
of the discontinued operations as of December 31, 2000 were approximately
$572,000. For the year ended December 31, 2001, the Company did not generate
income from discontinued operations. For the years ended December 31, 2000 and
1999, the discontinued operations generated net income of approximately $362,000
and $377,000 respectively.

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 the sale of securities.

During 2001, the Company raised $9,378,000 from the private placement of Series
A Convertible Preferred Stock ("Preferred Stock"). The holders of the 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 Company's Common Stock, which may
be paid in cash or in Common Stock and are not cumulative. At the option of the
holder thereof, the Preferred Stock is convertible into Common Stock at the
conversion price of $6.08 per share. There is no liquidation preference for the
holders of Preferred Stock in the event of voluntary or involuntary liquidation;
however, the holders will participate, on an as-converted basis, ratably with
the holders of Common Stock then outstanding. The Preferred Stock is redeemable
at the option of the Company according to the terms of the Company's Certificate
of Designations, as amended.

The Company maintains a total of $6,000,000 in revolving lines of credit with
two financial institutions specifically for interim funding of mortgage loans
placed. No balances were outstanding on these lines of credit as of December 31,
2001. These lines of credit 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 4.75% at December 1, 2001), and expire in June 2002.
These lines of credit are guaranteed by the Company's Chief Executive Officer
and majority stockholder and are secured by the deeds of trust on the property
being advanced against. These lines of credit contain certain covenants, which
the Company has complied with as of December 31, 2001.

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 two public funds
dedicated to investing in mortgage loans and since January 2001, the Company has
depended upon VF-I and VF-II as its principal funding sources. VF-I completed a
public offering of its units in June 2001; as of December 31, 2001 it had
approximately $97,000,000 invested in mortgage loans. VF-II is currently seeking
to raise $500,000,000 through a public offering of its units; as of March 15,
2002 VF-II had raised approximately $175,030,800 through the sale of units of
which approximately $167,850,000 was invested in mortgage loans. 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 VF-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
(approximately 13.2% for 2001). 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 VF-II may be impaired by
the Company's small size and VF-II's limited operating history. In addition, the
VF-II Units and the mortgage loan interests acquired by VF-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


                                       14
<PAGE>
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 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.

COMMITMENTS AND CAPITAL REQUIREMENTS

The Company does not anticipate any material capital expenditures during the
next 12 months. The Company is committed to pay Mr. Namath's management company
$1,000,000 a year through 2005. In addition, the Company anticipates incurring
significant marketing expenses related to the sale of Units of VF II as well as
the general promotion of Vestin and its services. The Company's minimum
obligation for office rent and equipment leases in 2002 is approximately
$320,000. 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. The Company
believes that with the capital currently invested in the Funds, it will continue
to have adequate funding sources to operate its mortgage brokerage business. The
Company continually monitors potential defaults on outstanding loans; at this
time, neither Fund has any reserve for loan losses and the Company believes that
the collateral underlying the Funds' loans is sufficient to protect against any
loss of principal. However, no assurance can be given that there will not be a
significant increase in loan defaults, particularly if the recession is
prolonged. 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.

Also, on March 5, 2002, the Company declared that on April 15, 2002 it would pay
a cash dividend of $.10 per share to all Common Stock shareholders of record as
of March 20, 2002. Such declaration requires the Company to also pay the
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
anticipates that it may declare additional dividends to Common Stock
Shareholders in 2002.

The Company does not have any commitments or obligations which are not reflected
in its financial statements. The Company does not have any interest in any
off-balance sheet special purpose entities nor does it have any interest 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 Operating Agreements of VF-I and VF-II allow the Company to receive Units in
the Funds for expenses paid by the Company to unaffiliated third parties in
connection with the offering of units in VF-I and VF-II. Through December 31,
2001, the Company received 100,000 Units of limited liability company interest
in VF-I and 110,000 Units of limited


                                       15
<PAGE>
liability company interest in VF-II, which are the maximum amounts receivable
from the Funds. The Company will not be reimbursed by the Funds for marketing
and organizational expenses other than as set forth above. These terms were
established by the Company and are contained in the Operating Agreements which
govern the Funds.

The Company is entitled to a management fee from each Fund equal to 0.25% of the
amount of capital in each Fund. In 2001, the Company voluntarily waived $82,000
of the management fee due from VF I. In making these decisions, Company
management took into account the performance of the Funds and overall revenues
generated by the Company from borrowers. These decisions were not negotiated or
reviewed with any third party. In 2001, the Company recorded management fees
from VF-II approximating $87,000. The total management fees waived by the Funds
for the year ended December 31, 2001 approximated $54,200 (net of tax effect).

2. Transactions with Officers and Directors and their Affiliates

Prior to becoming a public company, a predecessor of the Company which was
organized as an S corporation, loaned the Company's principal shareholder and
Chief Executive Officer approximately $352,000 to enable him to pay taxes on
undistributed S corporation income. That loan remains outstanding at December
31, 2001. The loan does not bear interest and is due on demand. The terms of the
loan were not reviewed by any independent party.

In 2000, the Company loaned a junior officer approximately $251,000 to enable
him to operate, develop and grow a California real estate loan fund. The loan
was reviewed and approved by the Company's Audit Committee. 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.

The Company has an investment of approximately $453,000 in an investment
advisory firm organized by the Company's President and Chief Financial Officer.
The Company received a 1.6% stake in the investment advisory firm in exchange
for its investment. There is no market for such equity units. The transaction
was reviewed and approved by the Company's Audit Committee.

The Company has an investment of $150,000 in an internet credit reporting
company founded by a former director of the Company. In consideration of its
investment, the Company received 150,000 shares of preferred stock in the credit
reporting company; there is no market for such shares. The investment was
reviewed and approved by the Company's Audit Committee.

The Company invested $69,310 out of $669,310 in a mortgage loan indirectly owned
by the Company's Chief Executive Officer (CEO), and the remaining portion of the
loan amount totaling $600,000 was funded by another entity owned 100% by the CEO
of the Company. The note bears interest at 13.5% and matures in January 2003. At
December 31, 2001, the note was delinquent in interest payments; the note is
secured by a first deed of trust on the property and has a loan to value ratio
of 31.87%. Accordingly, management estimates that an allowance for loan loss is
not necessary for this loan.

In 2001, the Company paid approximately $150,000 for accounting services to an
accounting firm majority owned by the Company's President and Chief Financial
Officer. The Company is charged the accounting firm's standard hourly rates for
such services. The agreement with such accounting firm was reviewed and approved
by the Company's Audit Committee.

3. Transactions with Investors

In 2001, the Company borrowed $5,000,000 from an investor in the Funds in order
to increase the Company's working capital. In November 2001, the loan was
converted into convertible preferred stock. The terms of the loan and the
convertible preferred stock were reviewed and approved by the Company's Board of
Directors.

In November 2000, the Company announced a stock repurchase program. In early
2001, two shareholders of the Company proposed to resell to the Company an
aggregate of 155,400 shares of the Company's common stock (the "Shares").
Shortly prior to being contacted by these shareholders, an executive officer of
the Company had been contacted by a Nevada real estate developer who had an
existing business relationship with the Company; the developer expressed an
interest in acquiring a large block of Company stock. The Company attempted to
facilitate a sale of the Shares to the developer. However, the developer lacked
sufficient liquidity to acquire the Shares. The Company thereupon financed the
purchase of the Shares by the developer by transferring its interests in
certain trust deeds worth approximately $940,000 to the selling shareholders
while receiving from the developer a recourse promissory note in like amount
secured by the Shares. In December 2001, the Company released the developer's
note in exchange for all of the Shares. At such time, the market price for the
Company's common stock was $7.55. The Shares were thereupon retired.

FACTORS AFFECTING THE COMPANY'S OPERATING RESULTS


                                       16
<PAGE>
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:

      Limited experience in certain real estate markets.

      Currently, the Company brokers mortgage loans primarily in areas in which
      Vestin Mortgage has substantial experience such as Arizona, California,
      Hawaii, Nevada and Texas. 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 it 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 is a risk that the
      credit inquiry the Company performs will not reveal all material facts
      pertaining to the borrower and the security.

      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.

      - 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 it to raise the interest rate the Company charges on extended loans
      anywhere from between 3/4% to 3% from the then-current rate on the loan.
      This creates two risks for the Company:

      There is 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.

      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 of the borrower
      defaulting on the extended loan, and the increase in the interest


                                       17
<PAGE>
      rate on the loan may not be adequate compensation for the increased risk.
      Distributions on mortgage loans placed by the Company will decline if
      lenders are unable to reinvest at higher rates or if an increasing number
      of borrowers default on their loans.

      If, at a time of relatively low interest rates, a borrower should prepay
      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 any compensation for their loss. This in turn could harm
      the Company's reputation and 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 are disadvantages in seeking to attract investors. As a
result, the Company's ability to provide a high rate of return is critical to
its ability to sell additional Units of VF II or to attract other funding
sources. In this regard, any significant level of defaults on loans arranged by
the Company could have a material adverse effect upon the performance of the
Funds, thereby impairing the ability of the Company to continue to raise funds
for VF II. While the Company believes that its loan to value ratios are
generally sufficiently low to protect against a loss of principal on defaulted
loans, no assurance can be given that this will prove correct, particularly if a
significant number of defaults occur at a time when commercial real estate
values are dropping rapidly in the markets serviced by the Company. Moreover,
loans that are in foreclosure may not provide any current income, thereby
reducing the overall performance of the Funds.

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.

ITEM 7. FINANCIAL STATEMENTS

The financial statements are included herewith commencing on page 4.


                                       18
<PAGE>
                                 C O N T E N T S

<TABLE>
<CAPTION>
                                                                            PAGE
<S>                                                                         <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.......................      3

CONSOLIDATED FINANCIAL STATEMENTS

         Consolidated Balance Sheet......................................      4

         Consolidated Statements of Income...............................      5

         Consolidated Statements of Stockholders' Equity.................      6

         Consolidated Statements of Cash Flows...........................      7

         Notes to Consolidated Financial Statements......................      9
</TABLE>
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


BOARD OF DIRECTORS
VESTIN GROUP, INC. AND SUBSIDIARIES


We have audited the accompanying consolidated balance sheet of Vestin Group,
Inc. and Subsidiaries as of December 31, 2001, and the related consolidated
statements of income, stockholders' equity and cash flows for the years ended
December 31, 2001 and 2000. 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 of America. 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 as of December 31, 2001, and the results of their operations
and their cash flows for the years ended December 31, 2001 and 2000 in
conformity with accounting principles generally accepted in the United States of
America.


/s/ GRANT THORNTON LLP


Reno, Nevada
February 8, 2002 (Except for Note X,
as to which the date is March 5, 2002,
and the first paragraph of Note Q,
as to which the date is March 29, 2002)
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                December 31, 2001

<TABLE>
<S>                                                                 <C>
                                     ASSETS

Cash                                                                $ 3,776,682
Accounts receivable, net                                              3,909,016
Due from stockholder                                                    351,899
Due from related parties                                                486,613
Notes receivable                                                      1,627,499
Investments in marketable securities available for sale                  28,762
Investments in real estate held for sale                              4,517,390
Investments in mortgage loans on real estate                          6,074,394
Other investments - related parties                                   2,703,499
Other assets                                                            542,011
Property and equipment, net                                             304,717
                                                                    -----------

            Total assets                                            $24,322,482
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses                               $ 1,522,765
Dividend payable                                                        112,324
Income taxes payable                                                  1,463,243
Due to related parties                                                   56,729
Note payable                                                          4,397,232
                                                                    -----------
            Total liabilities                                         7,552,293
                                                                    -----------

Commitments and contingencies                                                --
                                                                    -----------

Stockholders' equity
      Preferred stock, $.0001 par value; 20 million shares
       authorized; 937,800 shares issued and outstanding                     94
      Common stock, $.0001 par value; 100 million shares
       authorized; 5,568,198 shares issued and outstanding                  557
      Additional paid-in capital                                      7,948,778
      Retained earnings                                               8,984,283
      Accumulated other comprehensive loss                             (163,523)
                                                                    -----------
            Total stockholders' equity                               16,770,189
                                                                    -----------

            Total liabilities and stockholders' equity              $24,322,482
                                                                    ===========
</TABLE>

The accompanying notes are an integral part of this statement.


                                       4
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                            Years ended December 31,

<TABLE>
<CAPTION>
                                                              2001          2000
                                                          -----------   -----------
<S>                                                       <C>           <C>
Revenues
     Loan placement and related fees                      $20,201,393   $14,549,415
     Interest income                                          605,763       724,919
     Other income                                             634,482        78,333
                                                          -----------   -----------
               Total revenues                              21,441,638    15,352,667
                                                          -----------   -----------
EXPENSES
     Sales and marketing expenses                           7,577,806     2,185,356
     General and administrative expenses                   10,064,969     7,069,482
     Interest expenses                                        753,361       312,596
                                                          -----------   -----------
               Total expenses                              18,396,136     9,567,434
                                                          -----------   -----------
               Income from continuing operations
                before provision for income taxes           3,045,502     5,785,233

PROVISION FOR INCOME TAXES                                  1,220,281     2,019,893
                                                          -----------   -----------
               NET INCOME FROM CONTINUING
                OPERATIONS                                  1,825,221     3,765,340

DISCONTINUED OPERATIONS
     Income from discontinued operations - Financial
     Services Division, net of income taxes of $140,869            --       361,658
                                                          -----------   -----------
               NET INCOME                                 $ 1,825,221   $ 4,126,998
                                                          ===========   ===========

EARNINGS PER COMMON SHARE - BASIC
     Income from continuing operations                    $      0.29   $      0.54
                                                          ===========   ===========
     Income from discontinued operations                  $        --   $      0.05
                                                          ===========   ===========
     Net income                                           $      0.29   $      0.59
                                                          ===========   ===========

EARNINGS PER COMMON SHARE - DILUTED
     Income from continuing operations                    $      0.26   $      0.54
                                                          ===========   ===========
     Income from discontinued operations                  $        --   $      0.05
                                                          ===========   ===========
     Net income                                           $      0.26   $      0.59
                                                          ===========   ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
 OUTSTANDING - BASIC                                        5,985,701     6,989,206
                                                          ===========   ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
 OUTSTANDING - DILUTED                                      6,794,634     7,010,127
                                                          ===========   ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       5
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     Years ended December 31, 2001 and 2000

<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, 2000                                --      $--        6,989,270       $ 699            --       $        --

Comprehensive income:
     Net income                                           --       --               --          --            --                --
     Net unrealized loss on investments
      available-for-sale, net of tax of $59,649

            Total comprehensive income

Treasury stock acquired                                   --       --               --          --        (2,400)          (11,306)

Distribution to stockholders of
 L.L. Bradford & Company                                  --       --               --          --            --                --
                                                     -------      ---       ----------       -----     ---------       -----------

BALANCE AT DECEMBER 31, 2000                              --       --        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 & Company                    --       --               --          --      (800,000)         (540,000)

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

Payment of preferred stock dividend                       --       --               --          --            --                --

Declaration of common 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            --       $        --
                                                     =======      ===       ==========       =====     =========       ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                                      ACCUMULATED
                                                      ADDITIONAL                         OTHER
                                                       PAID-IN          RETAINED     COMPREHENSIVE
                                                       CAPITAL          EARNINGS          LOSS             TOTAL
                                                     -----------       ----------    -------------      -----------
<S>                                                  <C>               <C>           <C>                <C>
Balance at January 1, 2000                           $ 1,739,427       $3,280,932       $      --       $ 5,021,058

Comprehensive income:
     Net income                                               --        4,126,998              --         4,126,998
     Net unrealized loss on investments
      available-for-sale, net of tax of $59,649                                --        (115,790)         (115,790)
                                                                       ----------       ---------       -----------
            Total comprehensive income                                  4,126,998        (115,790)        4,011,208

Treasury stock acquired                                       --               --              --           (11,306)

Distribution to stockholders of
 L.L. Bradford & Company                                      --          (60,813)             --           (60,813)
                                                     -----------       ----------       ---------       -----------

BALANCE AT DECEMBER 31, 2000                           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 & Company                        --               --              --          (540,000)

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

Payment of preferred stock dividend                           --          (75,731)             --           (75,731)

Declaration of common 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
                                                     ===========       ==========       =========       ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       6
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                                             2001              2000
                                                                         -----------       -----------
<S>                                                                      <C>               <C>
CASH FLOW FROM OPERATING ACTIVITIES:
      Net income                                                         $ 1,825,221       $ 4,126,998
      Less net income from discontinued operations                                --          (361,658)
                                                                         -----------       -----------
      Income from continuing operations                                    1,825,221         3,765,340
      Adjustments to reconcile net income from continuing
       operations to net cash provided by operating activities:
          Depreciation and amortization                                       74,861            19,479
          Stock based compensation                                         1,023,192                --
          Loss on investment in real estate held for sale                         --           397,194
          Changes in operating assets and liabilities:
              Accounts receivable                                         (1,469,985)       (1,530,184)
              Other assets                                                  (271,422)         (158,808)
              Due from stockholder                                           (20,037)         (331,862)
              Due from related parties                                      (220,116)          (15,533)
              Increase in notes receivable                                  (814,999)               --
              Accounts payable and accrued expenses                          761,204           330,597
              Due to related parties                                        (147,962)           (7,803)
              Income taxes payable                                          (716,769)        1,443,137
                                                                         -----------       -----------
                  Net cash provided by operating activities
                   of continuing operations                                   23,188         3,911,557
                                                                         -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchase of property and equipment                                    (194,895)         (169,157)
      Cash advanced on notes receivable                                           --          (250,964)
      Principal payments received on notes receivable                        153,000           170,000
      Purchase of investment in real estate held for sale                   (407,746)               --
      Proceeds from sale of investment in real estate held for sale           83,500                --
      Purchase of investment in marketable securities                        (41,576)         (120,000)
      Purchase of other investments                                       (1,161,262)       (1,422,622)
      Purchase of investments in mortgage loans on real
       estate, net of sales                                               (1,526,366)           27,506
                                                                         -----------       -----------
                  Net cash used in investing activities of
                   continuing operations                                  (3,095,345)       (1,765,237)
                                                                         -----------       -----------
</TABLE>


                                       7
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                            YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                                             2001              2000
                                                                         -----------       -----------
<S>                                                                      <C>               <C>
Cash flows from financing activities:
      Advances (payments) on line of credit, net                         $        --       $(1,980,000)
      Proceeds from notes payable                                          7,600,000                --
      Payments on notes payable                                           (3,402,412)         (200,000)
      Distribution to stockholders                                                --           (60,813)
      Proceeds from sale of preferred stock                                4,377,998                --
      Issuance of preferred stock dividend                                   (75,731)               --
      Purchase of treasury stock                                          (2,699,871)          (11,306)
                                                                         -----------       -----------
                  Net cash provided by (used in) financing
                   activities of continuing operations                     5,799,984        (2,252,119)
                                                                         -----------       -----------

                  Net cash provided by (used in) continuing
                   operations                                              2,727,827          (105,799)
                                                                         -----------       -----------

                  Net cash provided by discontinued operations                    --            61,609
                                                                         -----------       -----------

                  NET INCREASE (DECREASE) IN CASH                          2,727,827           (44,190)

CASH AT BEGINNING OF YEAR                                                  1,048,855         1,093,045
                                                                         -----------       -----------

CASH AT END OF YEAR                                                      $ 3,776,682       $ 1,048,855
                                                                         ===========       ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
      Cash paid for federal income taxes                                 $ 2,167,342       $   800,000
                                                                         ===========       ===========
      Cash paid for interest                                             $   639,358       $   326,302
                                                                         ===========       ===========

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 L.L. Bradford & Company                                   $   572,147       $        --
                                                                         ===========       ===========
      Issuance of 500,000 shares of preferred stock in satisfaction
       of note payable                                                   $ 5,000,000       $        --
                                                                         ===========       ===========
      Retirement of 1,421,072 shares of common stock                     $ 4,147,445       $        --
                                                                         ===========       ===========
      $0.02 per share of common stock dividends declared                 $   112,324       $        --
                                                                         ===========       ===========
      Exchange of note receivable for acquisition of treasury stock      $   940,710       $        --
                                                                         ===========       ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       8
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      ORGANIZATION

      Vestin Group, Inc. ("Vestin Group" or the "Company"), formerly Sunderland
      Corporation, 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, Inc. ("Vestin Mortgage")
      operates as a mortgage company licensed in the state of Nevada. Vestin
      Mortgage is engaged in the brokerage and placement of commercial loans
      secured by real property. The Company's primary operations consist of
      arranging for investor funding of commercial, construction, acquisition
      and development, land and residential mortgage loans in Southern Nevada.
      The Company also services such loans.

      On April 27, 1999, Vestin Group, a non-operating public company with
      nominal net assets, acquired certain assets and assumed certain
      liabilities representing the operations of Del Mar Mortgage, Inc. and Del
      Mar Holdings, Inc. (the "Del Mar Entities") in exchange for 4,891,270
      shares of Vestin Group common stock (post 5-for-3 stock split). The
      combination of the Del Mar Entities has been accounted for in a manner
      similar to a pooling of interest, as the companies were under common
      control. Vestin Group concurrently acquired 100% of the outstanding common
      stock of Vestin Mortgage in exchange for 20,000 shares of Vestin Group
      common stock.

      Under generally accepted accounting principles, the acquisition of the Del
      Mar Entities was considered to be a capital transaction in substance,
      rather than a business combination. That is, the acquisition was
      equivalent to the issuance of stock by the Del Mar Entities for the net
      monetary assets of Vestin Group, accompanied by a recapitalization, and is
      accounted for as a change in capital structure. Accordingly, the
      accounting for the acquisition is identical to that resulting from a
      reverse acquisition, except that no goodwill is recorded. Under reverse
      takeover accounting, the post reverse-acquisition comparative historical
      financial statements of the "legal acquirer" ("Vestin Group"), are those
      of the "legal acquiree" ("Del Mar Entities") (i.e., the accounting
      acquirer).

      Accordingly, the consolidated financial statements of Vestin Group for the
      year ended December 31, 1999 are the combined historical financial
      statements of Del Mar Mortgage, Inc. and Del Mar Holdings, Inc., as
      restated to reflect the business combination accounted for as a
      pooling-of-interest. The assets not acquired, net of the liabilities not
      assumed, have been accounted for as distributions to Del Mar Mortgage,
      Inc. and Del Mar Holdings, Inc.'s stockholders.

      The business combination with Vestin Mortgage has been accounted for as a
      purchase business combination. The cost of Vestin Mortgage is based upon
      the fair value of the 20,000 common shares issued to the Vestin Mortgage
      shareholder, which was $12,360. The acquisition resulted in the
      recognition of $1,390 of goodwill.

      On December 23, 1999, the Company consummated an agreement to acquire all
      the outstanding capital stock of Vestin Capital, Inc., a Las Vegas, Nevada
      based securities broker-dealer for 10,300 shares of the Company's common
      stock and Vestin Mortgage Advisors, Inc. (formerly known as DM Mortgage
      Advisors, Inc.), a Phoenix, Arizona based mortgage funding company, for
      17,700 shares of the Company's common stock. The acquisition of Vestin
      Capital, Inc. and Vestin Mortgage Advisors, Inc. is accounted for as a
      pooling of interest.


                                       9
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

      ORGANIZATION - Continued

      In February 2000, the Company changed its business focus to provide a wide
      array of financial services. As a result of this business focus change,
      the Company acquired L.L. Bradford & Company ("LLB") and Mortgage Source,
      Inc. ("MSI") during fiscal year 2000. However, due to unfavorable changing
      market conditions, the Company reverted back to its original business
      focus of providing commercial and other loans in December 2000.
      Accordingly, the Company divested itself of LLB and terminated its
      acquisition of MSI in January 2001 as further described in Note V.

      The Company operates in one business segment as a result of the LLB and
      MSI divestiture discussed above.

      PRINCIPLES OF CONSOLIDATION

      The consolidated financial statements include the accounts of the Company
      and it's 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.
      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.
      This can vary from loan to loan. Extension fees are recorded as revenue at
      the extension grant date.

      Loan origination fees related to the Company's investments in mortgage
      loans on real estate are amortized by the effective interest method over
      the term of the related obligation.

      INVESTMENTS IN MARKETABLE SECURITIES

      Investments in marketable securities consist of equity securities. The
      securities are stated at market value as determined by the most recently
      traded price of each security at the balance sheet date. All marketable
      securities are classified as available-for-sale securities under the
      provisions of Statement of Financial Accounting Standards (FAS) No. 115,
      Accounting for Certain Investments in Debt and Equity Securities.


                                       10
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

      INVESTMENTS IN MARKETABLE SECURITIES - Continued

      Management determines the appropriate classification of its investments in
      marketable securities at the time of purchase and reevaluates such
      determination at each balance sheet date. Securities that are bought and
      held principally for the purpose of selling them in the near term are
      classified as trading securities, and unrealized holding gains and losses
      are included in earnings. Debt securities for which the Company does not
      have the intent or ability to hold to maturity and equity securities are
      classified as available-for-sale. Available-for-sale securities are
      carried at fair value, with the unrealized gains and losses, net of tax,
      reported in other comprehensive income. The cost of investments sold is
      determined on the specific identification method.

      INVESTMENTS IN REAL ESTATE HELD FOR SALE

      The investments in real estate held for sale are recorded at the lower of
      cost or fair value less cost to sell.

      INVESTMENTS IN MORTGAGE LOANS

      Investments in mortgage loans are secured by trust deeds and mortgages.
      Substantially all of the mortgage loans are fixed rate loans with
      maturities of one year or less, interest ranging from 6% to 14%, and
      secured by first and second deeds of trust. Currently, 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. Interest income on loans is accrued by the effective
      interest method. The Company does not recognize interest income on 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 principal or interest is 90 days
      past due. Management believes the underlying value of the assets securing
      the mortgage loans was sufficient at December 31, 2001 to realize the
      carrying value. Accordingly, no allowance for loan losses has been
      established.

      ALLOWANCE FOR LOAN LOSSES

      When deemed necessary, the Company will set an allowance for possible
      credit losses on mortgage loans. Additions to the reserve are based on an
      assessment of certain factors including, but not limited to, estimated
      future losses on the loans, and general economic conditions. Additions to
      the reserve are provided through a charge to earnings. Actual losses on
      loans are recorded as a charge-off or a reduction to the loan loss
      reserve. Subsequent recoveries of amounts previously charged off are added
      back to the reserve.

      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
      $4,220,000 and $1,035,000 for the years ended December 31, 2001 and 2000,
      respectively.


                                       11
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

      INCOME TAXES

      The Company accounts for its income taxes in accordance with Statement of
      Financial Accounting Standards No. 109, 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.

      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 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 accounts for employee stock options in accordance with
      Accounting Principles Board Opinion No. 25 ("APB 25"), Accounting for
      Stock Issued to Employees. Under APB 25, the Company recognizes no
      compensation expense related to employee stock options, as no options are
      granted at a price below the market price on the day of grant.

      Stock-based compensation is accounted for under FAS No. 123, Accounting
      for Stock-Based Compensation. FAS 123, which prescribes the recognition of
      compensation expense based on the fair value of options on the grant date,
      allows companies to continue applying APB 25 if certain pro forma
      disclosures are made assuming hypothetical fair value method application.
      See Note Q for pro forma disclosures required by FAS 123 plus additional
      information on the Company's stock options.

      RECENT PRONOUNCEMENTS

      On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
      Statement of Financial Accounting Standards (SFAS) 141, Business
      Combinations, and SFAS 142, Goodwill and Intangible Assets. SFAS 141 is
      effective for all business combinations completed after June 30, 2001.
      SFAS 142 is effective for fiscal years beginning after December 15, 2001;
      however, certain provisions of this Statement apply to goodwill and other
      intangible assets acquired between July 1, 2001 and the effective date of
      SFAS 142. Major provisions of these Statements and their effective dates
      for the Company are as follows:

      -     All business combinations initiated after June 30, 2001 must use the
            purchase method of accounting. The pooling of interest method of
            accounting is prohibited except for transactions initiated before
            July 1, 2001.


                                       12
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

      RECENT PRONOUNCEMENTS - Continued

      -     Intangible assets acquired in a business combination must be
            recorded separately from goodwill if they arise from contractual or
            other legal rights or are separable from the acquired entity and can
            be sold, transferred, licensed, rented or exchanged, either
            individually or as part of a related contract, asset or liability.

      -     Goodwill, as well as intangible assets with indefinite lives,
            acquired after June 30, 2001, will not be amortized. Effective
            January 1, 2002, all previously recognized goodwill and intangible
            assets with indefinite lives will no longer be subject to
            amortization.

      -     Effective January 1, 2002, goodwill and intangible assets with
            indefinite lives will be tested for impairment annually and whenever
            there is an impairment indicator.

      -     All acquired goodwill must be assigned to reporting units for
            purposes of impairment testing and segment reporting.

      The adoption of these standards will not have a material impact on the
      Company's financial position or results of operations.

      In August 2001, the Financial Accounting Standards Board issued SFAS 144,
      Accounting for the Impairment or Disposition of Long Lived Assets. This
      Statement supersedes SFAS 121, Accounting for the Impairment of Long-lived
      Assets and for Long-lived Assets to be Disposed of, and the Accounting and
      Reporting Provisions of Accounting Principles Board Opinion No. 30,
      Reporting Results of Operations - Reporting the Effect of Disposals on a
      Segment of a Business, and Extraordinary, Unusual and Infrequently
      Occurring Events and Transactions for the Disposal of a Segment of a
      Business. This Statement retains the fundamental provisions of SFAS 121
      for recognition and measurement of impairment, but amends the accounting
      and reporting standards for segments of business to be disposed of. The
      provisions of this Statement are required to be adopted no later than
      fiscal years beginning after December 31, 2001, with early adoption
      encouraged. We are currently evaluating the impact of the adoption of SFAS
      144 but do not expect its impact to be material to the Company's financial
      position or results of operations.

      In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
      Retirement Obligations, which addresses financial accounting and reporting
      for obligations associated with the retirement of tangible long-lived
      assets and associated asset retirement costs. Beginning on January 1,
      2003, the new rules apply to legal obligations associated with the
      retirement of long-lived assets that result from the acquisition,
      construction and development and (or) normal operation of long-lived
      assets. Adoption of this Statement is not expected to have a material
      impact on the Company's financial position or results of operations.

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, 2001, accounts receivable
      totaling $3,909,016 is net of allowance for doubtful accounts of $157,252.

NOTE C - NOTES RECEIVABLE

      Notes receivable consist of five promissory notes related to fees earned
      and proceeds from properties sold by the Company. These notes receivable
      have maturities ranging from October 2002 through December 2006 and
      interest rates ranging from 0.0% to 12%. Of the $1,627,499 recorded as
      notes receivable, $912,500 is secured by deeds of trust and $400,000 is
      secured by furniture, fixtures and equipment. The remaining balance of
      $314,999 is unsecured.

NOTE D - INVESTMENT IN MORTGAGE LOANS ON REAL ESTATE

      At December 31, 2001, the Company's investments in mortgage loans had
      maturity dates ranging from January 1999 through June 2006. The Company
      had approximately $443,000 in loans that were greater than 90 days past
      maturity at December 31, 2001.

      In addition, the Company had approximately $1,505,000 in loans that were
      delinquent greater than 90 days in regards to interest at December 31,
      2001, which the Company was in the process of foreclosure. As of December
      31, 2001, 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 effect the borrower's ability to
      repay, prevailing economic conditions and the underlying collateral
      securing the loan. Accordingly, the Company's management estimates that
      an allowance for loan losses is not necessary.







                                       13
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE E - OTHER INVESTMENTS

      In June 2001, Vestin Fund I, LLC ("Fund I"), completed the sale of
      10,000,000 units at $10 per unit. Fund I invests in mortgage loans secured
      by real property. Vestin Mortgage, Inc. a subsidiary of the Company is the
      Managing Member of the Fund I. As of December 31, 2001, Vestin's
      investment in Fund I totals $1,000,000 which is included as part of Other
      Investments totaling $2,703,499. For the year ended December 31, 2001, the
      Company recorded revenues of approximately $151,000 from its investment in
      Fund I as a result of distributions declared during 2001. Vestin Mortgage,
      Inc., as the Managing Member, is entitled to an annual management fee of
      up to 0.25% of the aggregate capital contributions to Fund I. During 2001
      and 2000, Vestin Mortgage recorded management fees from Fund I of
      approximately $131,000 and $25,000, respectively. Total management fees
      waived by Vestin Mortgage for the years ended December 31, 2001 and 2000
      approximated $82,000 and $-0-, respectively.

      In June 2001, the SEC declared effective the registration statement of
      Vestin Fund II, LLC ("Fund II") under which it will offer up to 50,000,000
      units at $10 per unit. Fund II is similar to Fund I as it will invest in
      mortgage loans secured by real property. As of December 31, 2001, Vestin's
      investment in Fund II was $1,100,000 which is included as part of Other
      Investments totaling $2,703,499. For the year ended December 31, 2001, the
      Company recorded revenues of approximately $47,000 from its investment in
      Fund II as a result of distributions declared during 2001. Vestin
      Mortgage, Inc. is also the managing member of Fund II entitling it to
      receive annual management fees of 0.25% of the aggregate capital
      contributions to Fund II. During 2001, Vestin Mortgage recorded management
      fees from Fund II approximating $87,000.

      Total management fees waived from Fund I and II for the year ended
      December 31, 2001 approximated $54,200 (net of tax effect), or $0.01 basic
      and fully diluted earnings per common share.

      Other investments consist primarily of equity holdings in
      PrepaidAdvisors.com and Creditmart.com (see Note M) totaling $603,500.
      These investments are recorded at historical cost and although the market
      value of these investments are not readily determinable, management
      believes the fair value of these investments exceeds its carrying cost.

NOTE F - INVESTMENT IN REAL ESTATE HELD FOR SALE

      The Company has two properties totaling $4,517,390 recorded as investments
      in real estate held for sale. The Company acquired these properties
      through foreclosure during the year, and these properties are subject to
      existing liens (see Note H). The investments in real estate held for sale
      are recorded at the lower of cost or fair value less costs to sell. The
      underlying value of these investments was sufficient at December 31, 2001
      to realize their carrying value. Accordingly, no allowance for impairment
      has been established.

NOTE G - PROPERTY AND EQUIPMENT

      Property and equipment consists of the following as of December 31, 2001:

<TABLE>
<S>                                                                    <C>
Furniture and equipment                                                $178,082
Computers                                                               226,134
                                                                       --------
                                                                        404,216
Less: Accumulated depreciation                                          (99,499)
                                                                       --------

Total property and equipment                                           $304,717
                                                                       ========

</TABLE>


                                       14
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE H - NOTES PAYABLE

      Notes payable totaling $4,397,232, at December 31, 2001, consist of the
following:

<TABLE>
<S>                                                                           <C>
Promissory notes to various parties secured by real property
included as part of investments in real estate held for sale,
interest ranging from 12% to 15% paid monthly, and due on demand.             $2,095,000

Promissory notes to various parties secured by real property
included as part of investments in real estate held for sale,
interest ranging from 11.5% to 15% paid monthly, and due on demand.            1,352,232

Promissory notes to various parties related to foreclosed real
estate property in 1999 and subsequently sold in 2001 in which the
Company carried a promissory note included in notes receivable. The
note payable has an interest rate ranging from 10.75% to 12.75% paid
monthly, unsecured, and due on demand                                            950,000
                                                                              ----------

                                                                              $4,397,232
                                                                              ==========
</TABLE>

NOTE I - LINES OF CREDIT

      The Company maintains a total of $6,000,000 in revolving lines of credit
      with two financial institutions specifically for interim funding of
      mortgage loans placed. No balances were outstanding on these lines of
      credit as of December 31, 2001. These lines of credit 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 4.75% at
      December 1, 2001) and expire in June 2002. These lines of credit are
      guaranteed by the Company's Chief Executive Officer and majority
      stockholder and are secured by the deeds of trust on the property being
      advanced against. These lines of credit contain certain covenants, which
      the Company has complied with as of December 31, 2001.

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 (Note K). The credit
      agreement allows the Company to borrow funds up to the amount held in the
      trust accounts and other funds held at the institution at a rate of 1% and
      invest those funds in commercial paper (securities). The Company has
      provided the financial institution with a security interest in the
      securities and, at all times, the securities remain in the financial
      institution's custody and control. The balance drawn down upon the credit
      agreement was $-0- at December 31, 2001.


                                       15
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

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, 2001, the cash held in trust approximated $1,537,000 and the
      trust receivable was approximately $1,284,000. The related trust liability
      approximated $2,821,000 at December 31, 2001. The trust assets and
      liabilities are not recorded on the balance sheet of the Company at
      December 31, 2001.

NOTE L - LOANS SERVICED FOR OTHERS

      The Company services loans for others, which are not shown on the balance
      sheet. The face amount of these loans at December 31, 2001 approximated
      $387,946,000. Loans serviced for others include commercial loans that are
      placed by the Company.

NOTE M - RELATED PARTY TRANSACTIONS

      On April 27, 1999, the Company entered into a non-renewable transition
      agreement (the "Agreement") with Del Mar Mortgage, Inc., a company wholly
      owned by the Company's Chief Executive Officer and majority stockholder.
      The Agreement required the Company to pay Del Mar Mortgage, Inc. 25% of
      loan origination fees earned from April 27, 1999 through October 26, 1999
      and 12.5% of such fees from October 27, 1999 through April 26, 2000. The
      Agreement also required the Company to remit to Del Mar Mortgage, Inc. all
      future loan servicing and extension fees recognized on loans placed by the
      Company prior to April 27, 1999. The Agreement terminated on April 26,
      2000. The Company incurred $286,580 in fees related to the Agreement for
      the year ended December 31, 2000, which was recorded as part of general
      and administrative expenses in the consolidated financial statements.

      The Company has approximately $352,000 due from the majority stockholder
      and Chief Executive Officer of the Company at December 31, 2001. These
      balances bear no interest and are due on demand.

      The Company has a note receivable totaling $250,964 due from an 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 along with any accrued interest
      due as a lump sum on the date of maturity.

      The Company has approximately $222,000 due from Vestin Fund II, LLC
      included as part of due from related parties of $486,613 at December 31,
      2001. This balance bears no interest and is due on demand.

      The Company has an investment in Prepaid advisors.com, a financial
      services start-up company, of $453,500 recorded at cost as of December 31,
      2001. The Chairman of the Board of Directors of this start-up company is
      the President and Chief Financial Officer of the Company.


                                       16
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE M - RELATED PARTY TRANSACTIONS - Continued

      The Company has an investment in an internet credit reporting start-up
      company of $150,000 recorded at cost as of December 31, 2001. The
      President of Creditmart.com is a stockholder and former Director of the
      Company.

      The Company has an investment in a mortgage loan to an entity that is 100%
      owned by the Company's Chief Executive Officer (CEO). The note has a face
      value of $669,310, bears interest at 13.5% and matures in January 2003. At
      December 31, 2001, this note was delinquent more than 90 days in regards
      to interest payments. The Company's investment in this mortgage loan was
      $69,310 at December 31, 2001, and the remaining portion of the loan amount
      totaling $600,000 was funded by another entity owned 100% by the CEO of
      the Company. The note is secured by a first deed of trust on the property
      and has a loan to value ratio of 31.87%. Accordingly, management estimates
      that an allowance for loan loss is not necessary for this loan.

      During 2001, the Company borrowed $5,000,000 in the form of a promissory
      note from an investor in Fund I and II, and trust deeds placed by the
      Company. During November 2001, the Company converted the promissory note
      of $5,000,000 into Series A Convertible Preferred Stock as full
      satisfaction (see Note Q).

      In 2001, two shareholders of the Company proposed to resell to the Company
      155,400 shares of the Company's common stock under the stock repurchase
      program. Prior to being contacted by these shareholders, a consultant of
      the Company expressed interest in acquiring the Company's stock. In order
      to facilitate this transaction, the Company finalized the purchase of the
      shares by the consultant by transferring its interests in certain trust
      deeds in the amount of $940,710 to the selling stockholders and received a
      recourse promissory note from the consultant for $940,710. In December
      2001, the 155,400 shares were returned to the Company in satisfaction of
      the promissory note, and the shares were retired. No gain or loss was
      recorded on this transaction.

      During 2001, the Company paid approximately $54,200 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.

      During 2001, the Company paid $150,000 for outsourced financial reporting
      and accounting services (i.e., SEC and financial reporting, taxation, and
      other consulting matters) to an accounting firm majority owned by the
      President and CFO of the Company.


                                       17
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE N - INCOME TAXES

      The components of income tax expense (benefit) are as follows at December
      31:

<TABLE>
<CAPTION>
                                                     2001               2000
                                                  ----------         ----------
<S>                                               <C>                <C>
Current                                           $1,475,246         $2,343,655
Deferred                                            (254,965)          (182,893)
Discontinued operations                                   --           (140,869)
                                                  ----------         ----------

                                                  $1,220,281         $2,019,893
                                                  ==========         ==========
</TABLE>

      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:

<TABLE>
<CAPTION>
                                                         2001             2000
                                                       --------         --------
<S>                                                    <C>              <C>
Deferred tax assets:
     Allowance for doubtful accounts                   $ 53,465         $ 11,078
     Unrealized loss on investments                      84,240           59,649
     Spokesperson stock warrants                        315,623               --
     Officer salaries                                    12,070               --
     Impairment loss on property                             --          139,706
                                                       --------         --------

Less: Valuation allowance                                    --               --
                                                       --------         --------

Net deferred tax assets                                $465,398         $210,433
                                                       ========         ========
</TABLE>

      Deferred tax assets are included in other assets on the Balance Sheet
      totaling $542,011.

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

<TABLE>
<CAPTION>
                                                    2001                 2000
                                                 ----------           ----------
<S>                                              <C>                  <C>
Statutory tax provision                          $1,035,471           $1,966,979
Non-deductible expenses                             184,810               52,914
                                                 ----------           ----------

                                                 $1,220,281           $2,019,893
                                                 ==========           ==========
</TABLE>


                                       18
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

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, 2001
      and 2000:

<TABLE>
<CAPTION>
                                                   For the year ended December 31, 2001
                                                 -----------------------------------------
                                                    Income         Shares        Per-Share
                                                 (Numerator)    (Denominator)     Amount
                                                 -----------    -------------    ---------
<S>                                              <C>            <C>              <C>
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>

<TABLE>
<CAPTION>
                                                   For the year ended December 31, 2000
                                                 -----------------------------------------
                                                    Income         Shares        Per-Share
                                                 (Numerator)    (Denominator)     Amount
                                                 -----------    -------------    ---------
<S>                                              <C>            <C>              <C>
Income from continuing operations:               $3,765,340
                                                 ----------
Basic EPS:
    Income available to common stockholders       3,765,340       6,989,206        $0.54
                                                 ----------                        -----
Effect of Dilutive securities:
    Stock options                                                    20,921
                                                                  ---------
Diluted EPS:
    Income available to common stockholders
     plus assumed conversions                    $3,765,340       7,010,127        $0.54
                                                 ==========       =========        =====

Income from discontinued operations:             $  361,658
                                                 ----------
Basic EPS:
    Income available to common stockholders         361,658       6,989,206        $0.05
                                                 ----------                        -----
Effect of Dilutive securities:
    Stock options                                                    20,921
                                                                  ---------
Diluted EPS:
    Income available to common stockholders
     plus assumed conversions                    $  361,658       7,010,127        $0.05
                                                 ==========       =========        =====

Net income:                                      $4,126,998
                                                 ----------
Basic EPS:
    Income available to common stockholders       4,126,998       6,989,206        $0.59
                                                 ----------                        -----
Effect of Dilutive securities:
    Stock options                                                    20,921
                                                                  ---------
Diluted EPS:
    Income available to common stockholders
     plus assumed conversions                    $4,126,998       7,010,127        $0.59
                                                 ==========       =========        =====
</TABLE>


                                       19
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE O - EARNINGS PER COMMON SHARE - Continued

      Securities that could potentially dilute basic EPS in the future that were
      not included in the computation of diluted EPS because they would have had
      an antidiutive effect on EPS for the periods presented include the
      following: 937,800 shares of convertible preferred stock, 900,000 warrants
      and 145,000 options.

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 5% of compensation. The Company contributed
      approximately $110,000 and $28,000 to the plan for the years ended
      December 31, 2001 and 2000, 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 (see Note M). The holder of the Preferred
      Stock shall be 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 any time commencing
      one hundred eighty (180) days after the issuance date 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 November 2001, the Company adopted a resolution to declare a $0.02
      per share dividend to common stockholders on record as of December 20,
      2001, which will be paid on January 10, 2002.

      STOCK OPTIONS

      During fiscal year 2000, the Company's stockholders approved the adoption
      of a stock option plan for the benefit of its eligible employees,
      consultants, officers and directors. The plan provides for 600,000 shares
      of common stock to be issued upon exercise of stock options. Additionally,
      the Company granted its Chief Executive Officer warrants to purchase
      500,000 shares of the Company's common stock during each of the fiscal
      years 2000 and 2001 exclusive of the approved stock option plan. The
      options granted to the Chief Executive Officer are fully vested and have a
      strike price equal to the fair value of such shares at the date of grant
      with a life of ten years.


                                       20
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE Q - STOCKHOLDERS' EQUITY - Continued

      STOCK OPTIONS - Continued

      Options granted as of December 31, 2001, have a term of 10 years from the
      date of grant for options to the officers and employees. Options granted
      to the officers, employees, and non-employees generally vest and become
      exercisable with the following vesting schedule: 33% at the date of grant,
      33% every year, and fully vested in two years.

      STOCK OPTION AND WARRANT ACTIVITY

      The following table summarizes the Company's stock option activity:

<TABLE>
<CAPTION>
                                                                        Weighted
                                                                         Average
                                                       Number           Exercise
                                                     of Shares            Price
                                                     ---------          --------
<S>                                                  <C>                <C>
Balance, January 1, 2000                                   --             $  --
Options granted                                       961,800              4.00
Options exercised                                          --                --
Options forfeited/expired                                  --                --
                                                      -------             -----

Balance, January 1, 2001                              961,800              4.00
Options granted                                       645,000              5.05
Options exercised                                          --                --
Options forfeited/expired                               9,500              4.00
                                                      -------             -----

Balance, December 31, 2001                            961,800             $4.45
                                                      =======             =====
</TABLE>

      The following table summarizes information about options outstanding and
      exercisable at December 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                             Shares Underlying
              Shares Underlying Options Outstanding                         Options Exercisable
-------------------------------------------------------------------    -------------------------------
                       Shares          Weighted
                     Underlying         Average         Weighted           Shares          Weighted
                      Options/         Remaining         Average         Underlying         Average
  Exercise            Warrants        Contractual       Exercise          Options          Exercise
   Prices           Outstanding          Life             Price         Exercisable          Price
---------------    ---------------   --------------    ------------    ---------------    ------------
<S>                <C>               <C>               <C>             <C>                <C>
December 31, 2000:
-----------------
$4.00                  961,800         9.83 years         $4.00            699,300            $4.00


December 31, 2001:
-----------------
$4.00 - $6.00        1,592,300         9.27 years         $4.44          1,480,967            $4.41
$6.01 - $7.29            5,000         9.93 years         $7.29                 --               --
</TABLE>


                                       21
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE Q - STOCKHOLDERS' EQUITY - Continued

      PRO FORMA DISCLOSURE

      SFAS No. 123 requires companies that follow APB No. 25 to provide a pro
      forma disclosure of the impact of applying the fair value method of SFAS
      No. 123. Accordingly, had compensation cost been recognized based on the
      fair value of options granted at the date of grant in 2001 and 2000, the
      pro forma amounts of the Company's net income and net income per share for
      the years ended December 31, 2001 and 2000 would have been as follows:

<TABLE>
<CAPTION>
                                               December 31, 2001              December 31, 2000
                                           -------------------------     ---------------------------
                                           As Reported     Pro Forma     As Reported      Pro Forma
                                           -----------     ---------     -----------      ----------
<S>                                        <C>             <C>           <C>              <C>
Net income                                  $1,825,221      $649,101      $4,126,998      $3,005,000

Earnings per common share - Basic
   Income from continuing operations        $     0.29      $   0.10      $     0.54      $     0.38
   Income from discontinued operations      $       --      $     --      $     0.05      $     0.05
   Net income                               $     0.29      $   0.10      $     0.59      $     0.43

Earnings per common share - Diluted
   Income from continuing operations        $     0.26      $   0.08      $     0.54      $     0.38
   Income from discontinued operations      $       --      $     --      $     0.05      $     0.05
   Net income                               $     0.26      $   0.08      $     0.59      $     0.43
</TABLE>

      The fair value for each option granted was estimated at the date of grant
      using the Black-Scholes option-pricing model and the following weighted
      average assumptions as of December 31:

<TABLE>
                                                     2001         2000
                                                     -----        -----
<S>                                                  <C>          <C>
              Average risk-free interest rates        3.33%        5.77%
              Average expected life (in years)           3            3
              Volatility                             84.22%       54.51%
              Dividend yield                          1.43%          --
</TABLE>

      The weighted average fair value of options granted with exercise prices at
      the current fair value of the underlying stock during 2001 and 2000 was
      approximately $1,782,000 or $2.76 per option and $1,700,000 or $1.77 per
      option, respectively. During 2001 and 2000, there were no options granted
      with an exercise price below the fair value of the underlying stock at the
      grant date.


                                       22
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE Q - STOCKHOLDERS' EQUITY - Continued

      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, 2001. The following
      tables summarize information about the Spokesperson Stock Warrants granted
      during the year ended December 31, 2001:

<TABLE>
<CAPTION>
                                                                   Weighted
                                                Number of           Average
                                                Warrants         Exercise Price
                                                ---------        --------------
<S>                                             <C>              <C>
Balance, January 1, 2001                               --            $  --
      Warrants granted                          1,200,000             1.54
      Warrants canceled                                --               --
      Warrants expired                                 --               --
      Warrants exercised                               --               --
                                                ---------            -----

Balance, December 31, 2001                      1,200,000            $1.54
                                                =========            =====
</TABLE>

<TABLE>
<CAPTION>
                        Exercise Price
                      Equals, Exceeds or
    Number of         is Less than Market        Weighted                               Weighted
 Warrants Granted       Price of Stock           Average                                Average
   During 2001           on Grant Date        Exercise Price     Exercise Price        Fair Value
------------------    --------------------    ---------------    ----------------    ---------------
<S>                   <C>                     <C>                <C>                 <C>
               --          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
==================                            ===============                        ===============
</TABLE>


                                       23
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE Q - STOCKHOLDERS' EQUITY - Continued

      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 $4,180,581. 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.
      As of December 31, 2001, the Company retired a total of 1,421,072 shares
      held in treasury.

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 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, 2001. 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.

      Concentration of mortgage loans exist in Nevada, Texas and Utah with
      approximately 45%, 36% and 15% of mortgage loan balances as of December
      31, 2001, 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, 2001 in commercial,
      construction, and acquisition and development loans. Concentrations of
      mortgage loans also exist with one borrower which represents approximately
      35% of the total investments in mortgage loans at December 31, 2001. 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.


                                       24
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

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 under a noncancellable
      operating lease. Rent expense for leased office facilities and equipment
      charged to operations for the year ended December 31, 2001 and 2000 was
      $404,849 and $180,418, respectively.

      Future minimum rental payments required under the operating leases as of
      December 31, 2001, are as follows:

<TABLE>
<S>                                          <C>
                        2002                 $  348,547
                        2003                    355,821
                        2004                    339,322
                        2005                    320,325
                        2006                     56,609
                                             ----------

                                             $1,420,624
                                             ==========
</TABLE>

NOTE V - ACQUISITIONS AND DIVESTITURES

      L.L. BRADFORD & COMPANY

      On March 31, 2000, the Company consummated a merger with L.L. Bradford &
      Company whereby acquiring all of LLB's capital stock in exchange for
      800,000 shares of the Company's common stock. LLB operates as a certified
      public accounting and consulting practice in the State of Nevada. The
      Company accounted for this business combination as a pooling of interests.
      As a result of the Company's change in business focus in December 2000,
      the Company consummated a Purchase Agreement on January 1, 2001 with the
      former shareholders of LLB, whereby, the Company repurchased the 800,000
      shares of its common stock originally issued to the former shareholders of
      LLB and divested itself of LLB. The Company has accounted for this
      divestiture as a spin-off in accordance with Accounting Principles Board
      Statement ("APB") No. 29. The repurchase will be considered to be a
      distribution of nonmonetary assets to the former shareholders of LLB,
      whereby the rescission of prior business combination will based on the
      historical cost of the nonmonetary assets distributed and no gain or loss
      will be recognized.

      As of December 31, 2000, the consolidated financial statements have been
      reclassified to reflect the spin-off of LLB as a discontinued operation.
      Accordingly, the revenues, expenses, assets and liabilities, cash flows of
      LLB have been segregated in the Consolidated Income Statements, and Cash
      Flows.


                                       25
<PAGE>
                       VESTIN GROUP, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                           DECEMBER 31, 2001 AND 2000

NOTE V - ACQUISITIONS AND DIVESTITURES - Continued

      MORTGAGE SOURCE, INC.

      On August 31, 2000, the Company consummated a merger with Mortgage Source,
      Inc., whereby, acquiring all of MSI's capital stock in exchange for
      251,000 shares of the Company's common stock. MSI operates as a
      residential mortgage company in the State of Nevada. The Company accounted
      for this business combination as a pooling of interests. As a result of
      certain claims related to the acquisition, the Company consummated a
      Termination Agreement on January 10, 2001 rescinding the August 31, 2000
      merger with MSI. Furthermore, the Company paid the former shareholder of
      MSI the sum of $175,000 as consideration for the termination and release
      of all potential and future claims of both parties. The Company has
      accounted for this termination as a reversal of the business combination.
      Accordingly, these financial statements do not reflect the financial
      position, results of operation, and cash flows of MSI.

      Information required under APB No. 16 to disclose the operating results of
      L.L. Bradford & Company as a result of the pooling are not presented due
      to the presentation of L.L. Bradford & Company as a discontinued operation
      under APB No. 30 discussed above.

NOTE W - LITIGATION

      The Company is a defendant in various lawsuits incurred in the normal
      course of business. In the opinion of management, after consulting with
      legal counsel, the liabilities, if any, resulting from these matters will
      not have a material effect on the consolidated financial statements of the
      Company.

NOTE X - SUBSEQUENT EVENT

      On March 5, 2002, the Company declared a cash dividend of $0.10 per common
      share to stockholders of record as of March 20, 2002 to be paid on April
      15, 2002.


                                       26
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

      Not applicable.

PART III

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

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

ITEM 10. EXECUTIVE COMPENSATION

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits. The exhibits as indexed below are included as part of this annual
report on Form 10-KSB.

(b) Reports on Form 8-K.

There was one current report on Form 8-K filed during the fiscal quarter ending
December 31, 2001. Such Form 8-K, filed on November 29, 2001, reported the
acceptance by the Delaware Secretary of State of a Certificate of Designations
filed by the Company authorizing the issuance of up to 1,250,000 shares of
Series A Convertible Preferred Stock ("Preferred Stock"). In addition, such Form
8-K also reported that the Company issued and sold 867,000 shares of Preferred
Stock at a per share price of $10.00 per share to accredited investors for total
consideration of $8,670,000. An amendment to such Form 8-K was filed on February
26, 2002 on Form 8-K/A which amended the total number of shares of Series A
Convertible Preferred Stock issued and sold from 867,000 to 937,800 shares for
total consideration of $9,378,000.


                                       27
<PAGE>
                                   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/ Lance K. Bradford
                                    ---------------------

                                    Lance K. Bradford, Chief Financial Officer,
                                    President and Treasurer

Dated: APRIL 1, 2002

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.

<TABLE>
<CAPTION>
Signatures                             Title                     Date
                                       -----                     ----
<S>                        <C>                                   <C>
/s/ Lance K. Bradford      Chief Financial Officer,
---------------------      President, Treasurer and Director     April 1, 2002
Lance K. Bradford
*Principal Accounting
and Financial Officer

/s/ Michael V. Shustek     Chairman of the Board,                April 1, 2002
----------------------     Chief Executive Officer and
Michael V. Shustek         Director
*Principal Executive
Officer

/s/ Stephen J. Byrne       Director                              April 1, 2002
------------------------
Stephen J. Byrne
*Chief Operating Officer

/s/ Robert J. Aalberts     Director                              April 1, 2002
----------------------
Robert J. Aalberts

/s/ John E. Dawson         Director                              April 1, 2002
------------------
John E. Dawson

/s/ Robert A. Groesbeck    Director                              April 1, 2002
-----------------------
Robert A. Groesbeck
</TABLE>


                                       28
<PAGE>
                                  EXHIBIT INDEX

The following documents are incorporated herein by reference:

<TABLE>
<CAPTION>
                                                                                   PAGE NUMBER
EXHIBIT                                                                             AND FILING
NUMBER     DESCRIPTION                                                                METHOD
           -----------                                                                ------
<S>        <C>                                                                     <C>
2.1        Agreement and Plan of Reorganization among the Company, Capsource,           (1)
           Inc. and Stephen J. Byrne, dated as of April 9, 1999

2.2        Asset Acquisition Agreement between the Company and Del Mar Holdings,        (1)
           Inc., dated as of April 9, 1999

2.3        Asset Acquisition Agreement between the Company and Del Mar Mortgage,        (1)
           Inc., dated as of April 9, 1999

2.4        Agreement and Plan of Reorganization among the Company, L. L.                (2)
           Bradford & Company and the shareholders of L. L. Bradford & Company,
           dated March 31, 2000

3.1        Certificate of Incorporation                                                 (3)

3.2        By-laws                                                                      (3)

10.1       Employment Agreement between Del Mar Mortgage, Inc. and Steve Byrne,         (4)
           dated November 3, 1998

10.2       Transition Agreement between Del Mar Mortgage, Inc. and Capsource,           (4)
           Inc., dated April 27, 1999, and First Amendment to said Transition
           Agreement, dated April 27, 1999

10.3       Employment Agreement between Del Mar Mortgage, Inc. and Mike                 (4)
           Whiteaker, dated May 3, 1999

10.4       The 2000 Stock Option Plan of Sunderland Corporation                         (4)

10.5       Employment Agreement between the Company and Michael                         (4)
           Shustek, dated December 1, 1999
</TABLE>


                                       29
<PAGE>
<TABLE>
<CAPTION>
                                                                                   PAGE NUMBER
EXHIBIT                                                                             AND FILING
NUMBER     DESCRIPTION                                                                METHOD
           -----------                                                                ------
<S>        <C>                                                                     <C>
10.6       Employment Agreement between the Company and Ira Levine, dated               (8)
           September 1, 2000

10.7       Third Amended and Restated Operating Agreement of VF-I (formerly DM          (5)
           Mortgage Investors, LLC or "DM") among DM, Vestin Mortgage, Inc. and
           other members of DM, dated as of November 2, 2000

10.8       Certificate of Designations authorizing the issuance of Series A             (6)
           Convertible Preferred Stock

10.9       Operating Agreement of VF-II, among VF-II, Vestin Mortgage, Inc. and         (9)
           other members of VF-II, dated as of December 7, 2001

16.1       Letter on Changes in Company's Certifying Accountant                         (7)

21.1       List of Subsidiaries                                                         (8)

23.1       Consent of Grant Thornton LLP, the Company's Independent Public
           Accountants

--------------------------------------

(1)        Previously filed by the Company on Form 8-K, filed with the
           Commission on May 4, 1999, File No. 000-24803

(2)        Previously filed by the Company on Form 8-K, filed with the
           Commission on April 14, 2000, File No. 000-24803

(3)        Previously filed by the Company on its registration statement on Form
           10-SBA, filed with the Commission on August 13, 1998, File No.
           000-24803

(4)        Previously filed by the Company on its annual report for the fiscal
           year 1999 on Form 10-K, filed with the Commission on March 31, 2000,
           File No. 000-24803

(5)        Previously filed by VF-I (formerly DM Mortgage Investors, LLC or
           "DM") on DM's prospectus on Form 424B5, filed with the Commission on
           November 15, 2000, File No. 333-32800

(6)        Previously filed by the Company on Form 8-K, filed with the
           Commission on November 29, 2001, File No. 000-24803

(7)        Previously filed by the Company on Form 8-K, filed with the
           Commission on December 17, 1999, File No. 000-24803

(8)        Previously filed by the Company on its annual report for the fiscal
           year 2000 on Form 10-KSB, filed with the Commission on April 2, 2001,
           File No. 000-24803

(9)        Previously filed by VF-II in an S-11 Registration Statement filed
           with the Commission on December 21, 2000, File No. 793646.
</TABLE>


                                       30