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U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-KSB


|           |  |                                                                                         
|---------- |  | ----------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                         
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the year ended December 31, 2004                                                    
|          
|o          |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934  
|          
|           |  | For the transition period
    from           to                                         

Commission File Number 000-24803


VESTIN GROUP, INC.


(Name of small business issuer in its charter)


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

8379 W. Sunset Road,


Las Vegas, Nevada 89113


(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


þ o


o






DOCUMENTS INCORPORATED BY REFERENCE




o þ










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TABLE OF CONTENTS


|              |  |                                                                                                                         |      |  |    | 
|------------- |  | ----------------------------------------------------------------------------------------------------------------------- | ---- |  | -- | 
|PART I       
|Item 1.       |  | Description of Business                                                                                                 |      |  | 3  | 
|Item 2.       |  | Description of Property                                                                                                 |      |  | 9  | 
|Item 3.       |  | Legal Proceedings                                                                                                       |      |  | 9  | 
|Item 4.       |  | Submission of Matters to a Vote of
    Security Holders                                                                 |      |  | 10 | 
|             
|PART II      
|Item 5.       |  | Market for Common Equity and Related
    Stockholder Matters                                                            |      |  | 10 | 
|Item 6.       |  | Managements Discussion and
    Analysis                                                                                |      |  | 11 | 
|Item 7.       |  | Financial Statements                                                                                                    |      |  | 24 | 
|Item 8.       |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosures                               |      |  | 24 | 
|Item 8A.      |  | Control and Procedures                                                                                                  |      |  | 24 | 
|Item 8B.      |  | Other Information                                                                                                       |      |  | 25 | 
|             
|PART III     
|Item 9.       |  | Directors, Executive Officers, Promoters
    and Control Persons; Compliance with Section 16(a) of the
    Exchange Act |      |  | 25 | 
|Item 10.      |  | Executive Compensation and Related
    Information                                                                      |      |  | 28 | 
|Item 11.      |  | Security Ownership of Certain Beneficial
    Owners and Management                                                      |      |  | 30 | 
|Item 12.      |  | Certain Relationships and Related
    Transactions                                                                      |      |  | 32 | 
|Item 13.      |  | Exhibits and Reports on Form 8-K                                                                                        |      |  | 35 | 
|Item 14.      |  | Principal Accounting Fees and Services                                                                                  |      |  | 37 | 
|Signatures    |  |                                                                                                                         | F-23 | 
|Exhibit Index |  |                                                                                                                         |      | 
|Exhibit 10.26
|Exhibit 21.1 
|EX-31.1      
|EX-31.2      
|EX-32        





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PART I


NOTE REGARDING FORWARD LOOKING STATEMENTS









|        |                        
|------- | -----------------------
|ITEM 1. | DESCRIPTION OF BUSINESS

The Company










Mortgage Brokerage Operations




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Management of the Funds




4



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Types of Loans Brokered




Raw and Unimproved Land Loans




Acquisition and Development Loans




Construction Loans




5



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Commercial Property Loans




Residential Loans




Bridge Loans




Collateral




First Deed of Trust




Second Deed of Trust




Leasehold Interest




Sources of Revenue






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|                                                   |  |            |    |  |               |   |             |                |  |   |                  |  |  |  |      |  
|-------------------------------------------------- |  | ---------- | -- |  | ------------- | - | ----------- | -------------- |  | - | ---------------- |  |  |  | ---- | -
|                                                   |  | Number     |    |  | Aggregate     |   |             | Loan Placement |  |   | Average          | 
|                                                   |  | of Loans   |    |  | Dollar Amount |   |             | Fees by Loan   |  |   | Origination Fees | 
|Loan Type                                          |  | Originated |    |  | in Total      |   |             | Type*          |  |   | as % of Loans    | 
|                                                   |  |            |    |  |               |   |             |                |  |   |                  | 
|2004                                               |  |            |    |  |               |   |             |                |  |   |                  |  |  |  |      |  
|Bridge and Residential Loans                       |  |            | 61 |  |               | $ | 59,513,000  |                |  | $ | 2,909,000        |  |  |  | 4.95 | %
|Construction and Acquisition and Development Loans |  |            | 9  |  |               |   | 149,076,000 |                |  |   | 6,820,970        |  |  |  | 4.60 | %
|Land Loans                                         |  |            | 5  |  |               |   | 35,329,000  |                |  |   | 1,275,185        |  |  |  | 3.67 | %
|Commercial Loans                                   |  |            | 5  |  |               |   | 38,998,136  |                |  |   | 1,035,120        |  |  |  | 2.69 | %
|                                                   |  |            |    |  |               |   |             |                |  |   |                  | 
|                                                   |  |            | 80 |  |               | $ | 282,916,136 |                |  | $ | 12,040,275       |  |  |  | 4.29 | %
|                                                   |  |            |    |  |               |   |             |                |  |   |                  | 
|2003                                               |  |            |    |  |               |   |             |                |  |   |                  |  |  |  |      |  
|Bridge and Residential Loans                       |  |            | 32 |  |               | $ | 15,658,750  |                |  | $ | 361,820          |  |  |  | 2.31 | %
|Construction and Acquisition and Development Loans |  |            | 17 |  |               |   | 87,191,500  |                |  |   | 5,025,119        |  |  |  | 5.76 | %
|Land Loans                                         |  |            | 3  |  |               |   | 43,618,000  |                |  |   | 1,649,950        |  |  |  | 3.78 | %
|Commercial Loans                                   |  |            | 13 |  |               |   | 120,375,000 |                |  |   | 6,211,050        |  |  |  | 5.16 | %
|                                                   |  |            |    |  |               |   |             |                |  |   |                  | 
|                                                   |  |            | 65 |  |               | $ | 266,843,250 |                |  | $ | 13,247,939       |  |  |  | 4.96 | %
|                                                   |  |            |    |  |               |   |             |                |  |   |                  | 






|  |                                                                                                                                                                                                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Loan fees presented in this table are shown gross of certain
    fees shared with other brokers or referring agents which we did
    not record as revenues during the years ended December 31,
    2004 and 2003.

Investment in Mortgage Loans and Other Investments








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Competition






| |                      
| | ---------------------
| | Competition for Funds





| |                          
| | -------------------------
| | Competition for Borrowers



Other Business Operations








Government Approval and Regulation






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Employees




Available Information


www.vestingroup.com







|        |                        
|------- | -----------------------
|ITEM 2. | DESCRIPTION OF PROPERTY








|        |                  
|------- | -----------------
|ITEM 3. | LEGAL PROCEEDINGS







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






PART II







|        |                                                             
|------- | ------------------------------------------------------------
|ITEM 5. | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
    MATTERS

Market Information






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|               |  |           |      |  |            |  |      |          |  |  |         |  |  |  |       | 
|-------------- |  | --------- | ---- |  | ---------- |  | ---- | -------- |  |  | ------- |  |  |  | ----- | 
|               |  | NASDAQ    |     
|               |  |           |     
|               |  | Pre-split |      |  | Post-split | 
|               |  |           |      |  |            | 
|               |  | US $High  |      |  | US $Low    |  |      | US $High |  |  | US $Low | 
|               |  |           |      |  |            |  |      |          |  |  |         | 
|2004           |  |           |      |  |            |  |      |          |  |  |         |  |  |  |       | 
|First Quarter  |  |           | 2.92 |  |            |  | 1.42 |          |  |  | 5.84    |  |  |  | 2.84  | 
|Second Quarter |  |           | 2.90 |  |            |  | 1.52 |          |  |  | 5.80    |  |  |  | 3.04  | 
|Third Quarter  |  |           | 2.26 |  |            |  | 0.75 |          |  |  | 4.52    |  |  |  | 1.50  | 
|Fourth Quarter |  |           | 5.00 |  |            |  | 2.58 |          |  |  | 10.00   |  |  |  | 5.16  | 
|2003           |  |           |      |  |            |  |      |          |  |  |         |  |  |  |       | 
|First Quarter  |  |           | 7.00 |  |            |  | 5.20 |          |  |  | 14.00   |  |  |  | 10.40 | 
|Second Quarter |  |           | 6.01 |  |            |  | 2.92 |          |  |  | 12.02   |  |  |  | 5.84  | 
|Third Quarter  |  |           | 3.70 |  |            |  | 2.22 |          |  |  | 7.40    |  |  |  | 4.44  | 
|Fourth Quarter |  |           | 3.15 |  |            |  | 1.85 |          |  |  | 6.30    |  |  |  | 3.70  | 

Holders




Dividends




Recent Sales of Unregistered Securities




Purchases of Equity Securities by the Issuer and Affiliated
Purchasers


|              |  |                  |        |  |                    |                     |      |                    |                     |  |              |  |  |  |   | 
|------------- |  | ---------------- | ------ |  | ------------------ | ------------------- | ---- | ------------------ | ------------------- |  | ------------ |  |  |  | - | 
|              |  |                  |        |  |                    |                     |      | Maximum Number     |                    
|              |  |                  |        |  |                    |                     |      | (or Approximate    |                    
|              |  |                  |        |  |                    | Total Number of     |      |                    | Dollar Value) of    | 
|              |  |                  |        |  |                    | Shares Purchased as |      |                    | Shares that May Yet | 
|              |  |                  |        |  |                    | Part of Publicly    |      |                    | be Purchased under  | 
|              |  | Total Number of  |        |  | Average Price Paid |                     |      | Announced Plans or |                     |  | the Plans or | 
|Period        |  | Shares Purchased |        |  | per Share          |                     |      | Programs           |                     |  | Programs     | 
|              |  |                  |        |  |                    |                     |      |                    |                     |  |              | 
|October 2004  |  |                  | 52,341 |  |                    | $                   | 3.33 |                    |                     |  | 52,341       |  |  |  |  | 
|November 2004 |  |                  |       |  |                    | $                   |     |                    |                     |  |             |  |  |  |  | 
|December 2004 |  |                  | 47,796 |  |                    | $                   | 3.08 |                    |                     |  | 47,796       |  |  |  |  | 






|        |                                     
|------- | ------------------------------------
|ITEM 6. | MANAGEMENTS DISCUSSION AND ANALYSIS



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OVERVIEW








RESULTS OF OPERATIONS




| |                                                                                  
| | ---------------------------------------------------------------------------------
| | COMPARISON OF YEAR ENDED DECEMBER 31, 2004 AND 
     YEAR ENDED DECEMBER 31, 2003

HISTORICAL
PERFORMANCE


REVENUE




Loan placement and related fees:








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Gain from settlement of lawsuit:




Gain on sale of real estate held for sale:




Other revenues:






| |                  
| | -----------------
| | Direct Investment







| |                       
| | ----------------------
| | Geographical Expansion





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SALES AND MARKETING EXPENSES






| |   |                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Advertising expenses totaled $1.6 million in 2004 compared
    to $4.5 million in 2003, a decrease of $2.9 million or
    64%. The decrease in advertising expenses is attributable, among
    other things, to the termination of the offering of Fund II
    in June 2004 and a more conservative advertising budget.                                                                     
|
| |  | Commissions expense totaled $0.5 million in 2004 compared
    to $3.0 million in 2003, a decrease of $2.5 million or
    83%. The majority of loans placed during the period were not
    referred to the Company by brokers or other outside sources. We
    believe the decrease is not indicative of a trend and we are
    actively pursuing loans from outside sources such as brokers.
|
| |  | Travel expense decreased by approximately $1.2 million for
    the year ended December 31, 2004 compared to the year ended
    December 31, 2003 primarily as a result of a significant
    decrease in the number of seminars held out of state related to
    the offering of the units in the Funds.                                                                                     
|
| |  | Printing expenses totaled $0.3 million in 2004 compared to
    $0.7 million in 2003, a decrease of $0.4 million or
    57% generally due to our cost cutting measures in 2004.                                                                                                                                                                                                              
|
| |  | Also as part of our cost cutting measures, we decreased public
    relations expense by $0.2 million in 2004. On
    March 15, 2004, we notified Planned Licensing, Inc., the
    public relations firm for Joe Namath, that we were terminating
    our License Agreement with Mr. Namath. We do not intend to
    replace Mr. Namath with another company spokesperson.                   

GENERAL AND ADMINISTRATIVE EXPENSES






OTHER EXPENSES




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|                                                 |  |            |           |  |              |   |           |       |           |   |             |              |  |      |            |   |  |   |           | 
|------------------------------------------------ |  | ---------- | --------- |  | ------------ | - | --------- | ----- | --------- | - | ----------- | ------------ |  | ---- | ---------- | - |  | - | --------- | 
|                                                 |  | Balance at |           |  |              |   |           |       |           |   | Balance at  |             
|                                                 |  | January 1, |           |  |              |   |           |       | Valuation |   |             | December 31, | 
|Description                                      |  | 2004       |           |  | Acquisitions |   |           | Sales |           |   | Adjustments |              |  | 2004 |           
|                                                 |  |            |           |  |              |   |           |       |           |   |             |              |  |      |           
|Raw land in Utah(2)                              |  | $          | 3,000,000 |  |              | $ |          |       |           | $ |            |              |  | $    | (1,350,000 | ) |  | $ | 1,650,000 | 
|Raw land in Las Vegas, Nevada(1)                 |  |            | 595,860   |  |              |   |          |       |           |   | (492,800    | )            |  |      | (103,060   | ) |  |   |          | 
|Raw land in Las Vegas, Nevada                    |  |            | 593,840   |  |              |   |          |       |           |   | (250,000    | )            |  |      |           |   |  |   | 343,840   | 
|30-unit condominium project in Las Vegas, Nevada |  |            | 1,084,913 |  |              |   |          |       |           |   | (1,084,913  | )            |  |      |           |   |  |   |          | 
|Residence in Las Vegas, NV(1)                    |  |            | 1,761,590 |  |              |   |          |       |           |   | (1,758,787  | )            |  |      | (2,803     | ) |  |   |          | 
|Raw land in Mesquite, Nevada(2)                  |  |            |          |  |              |   | 3,600,000 |       |           |   | (3,500,000  | )            |  |      | (100,000   | ) |  |   |          | 
|                                                 |  |            |           |  |              |   |           |       |           |   |             |              |  |      |           
|Total                                            |  | $          | 7,036,203 |  |              | $ | 3,600,000 |       |           | $ | (7,086,500  | )            |  | $    | (1,555,863 | ) |  | $ | 1,993,840 | 
|                                                 |  |            |           |  |              |   |           |       |           |   |             |              |  |      |           






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The sale of two of our real estate properties resulted in losses
    upon sale of $105,863 during the year ended December 31,
    2004. In January 2004, we completed the sale of a residence in
    Las Vegas, NV which resulted in a loss of $2,803. In
    October of 2004, we sold two parcels of land in Las Vegas,
    NV which resulted in a loss of $103,060.                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(2) | During the year ended December 31, 2004, we provided
    valuation adjustments on two of our properties totaling
    $1,450,000. Based on our estimate of the net realizable value of
    the raw land in Utah which was determined by research of the
    local real estate market and the anticipated use of the
    property, we provided valuation allowances on this property
    totaling $1,350,000 during the year ended December 31,
    2004. In addition, subsequent to the acquisition of the raw land
    in Mesquite, Nevada as part of a legal settlement with a loan
    guarantor, we wrote down the carrying value of the property by
    $100,000 based on our estimated costs to sell the property. We
    subsequently recovered $73,000 of this amount.

VALUATION LOSS ON PURCHASE OF RIGHTS TO RECEIVE PROCEEDS OF
JUDGMENT




INCOME BEFORE INCOME TAXES




LIQUIDITY AND CAPITAL RESOURCES






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Funding Sources














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|                           |  |        |           |  |         |   |            | 
|-------------------------- |  | ------ | --------- |  | ------- | - | ---------- | 
|Total Redemption Scheduled |  | Fund I |           |  | Fund II |  
|                           |  |        |           |  |         |  
|2005                       |  | $      | 8,200,000 |  |         | $ | 35,700,000 | 
|2006                       |  | $      | 7,200,000 |  |         | $ | 31,900,000 | 
|2007                       |  | $      | 6,500,000 |  |         | $ | 28,700,000 | 
|2008                       |  | $      | 5,900,000 |  |         | $ | 25,900,000 | 
|2009                       |  | $      | 5,300,000 |  |         | $ | 23,300,000 | 
|2010                       |  | $      | 4,800,000 |  |         | $ | 20,900,000 | 
|2011                       |  | $      | 4,300,000 |  |         | $ | 18,800,000 | 
|2012*                      |  | $      | 3,900,000 |  |         | $ | 3,100,000  | 
|2013*                      |  | $      | 1,300,000 |  |         | $ | 400,000    | 
|2014*                      |  | $      |          |  |         | $ | 200,000    | 
|2015*                      |  | $      |          |  |         | $ | 200,000    | 
|2016*                      |  | $      |          |  |         | $ | 200,000    | 
|2017*                      |  | $      |          |  |         | $ | 200,000    | 
|2018*                      |  | $      |          |  |         | $ | 200,000    | 
|2018*                      |  | $      |          |  |         | $ | 200,000    | 
|2020*                      |  | $      |          |  |         | $ | 100,000    | 






|  |                                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------
|* | Scheduled redemptions for this year include redemption requests
    for those who will be limited to the $100,000 maximum annual
    redemption.







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|                          |  |                        |            |           |        |   |            |       |  |     |           |  |           |         |           |  |  |   |           | 
|------------------------- |  | ---------------------- | ---------- | --------- | ------ | - | ---------- | ----- |  | --- | --------- |  | --------- | ------- | --------- |  |  | - | --------- | 
|                          |  | Payments Due By Period |           
|                          |  |                        |           
|                          |  |                        |            | Less Than |        |   | 1-3        |       |  | 3-5 |           |  | More Than |        
|Contractual Obligations   |  | Total                  |            |           | 1 Year |   |            | Years |  |     | Years     |  |           | 5 Years |          
|                          |  |                        |            |           |        |   |            |       |  |     |           |  |           |         |          
|Long-term debt            |  | $                      | 4,115,155  |           |        | $ | 4,115,155  |       |  | $   |          |  |           | $       |          |  |  | $ |          | 
|Capital lease obligations |  |                        | 87,456     |           |        |   | 84,897     |       |  |     | 2,559     |  |           |         |          |  |  |   |          | 
|Operating leases          |  |                        | 10,561,188 |           |        |   | 1,013,793  |       |  |     | 2,926,329 |  |           |         | 3,115,995 |  |  |   | 3,505,071 | 
|Secured Borrowings        |  |                        | 28,865,613 |           |        |   | 28,865,613 |       |  |     |          |  |           |         |          |  |  |   |          | 
|                          |  |                        |            |           |        |   |            |       |  |     |           |  |           |         |          
|Total                     |  | $                      | 43,629,412 |           |        | $ | 34,079,458 |       |  | $   | 2,928,888 |  |           | $       | 3,115,995 |  |  | $ | 3,505,071 | 
|                          |  |                        |            |           |        |   |            |       |  |     |           |  |           |         |          









Related Party Transactions






|   |                            
|-- | ---------------------------
|1. | Transactions with the Funds





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Transactions with Officers and Directors and their
Affiliates








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OFF BALANCE SHEET ARRANGEMENTS




CRITICAL ACCOUNTING ESTIMATES


Revenue recognition




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Investments in real estate held for sale




Investments in mortgage loans




Allowance for loan losses




Income taxes




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FACTORS AFFECTING OUR OPERATING RESULTS




LIMITED EXPERIENCE IN CERTAIN REAL ESTATE MARKETS




DEPENDENCE ON KEY PERSONNEL




RISKS OF UNDERWRITING STANDARDS AND PROCEDURES






RISKS OF INTEREST RATE CHANGES










| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) There can be no assurance that this permitted rate
    increase will be adequate if interest rates have increased
    beyond the range contemplated by our loan documents.                                                                                                                                                                                                                                                                      
|
| | (ii) If interest rates rise, borrowers under loans with
    monthly or quarterly principal payments may be compelled to
    extend their loans to decrease the principal paid with each
    payment because the interest component has increased. If this
    happens, there is a higher risk that the borrower may default on
    the extended loan, and the increase in the interest rate on the
    loan may not be adequate compensation for the

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | increased risk. Interest on mortgage loans placed by us may
    decline if lenders are unable to reinvest at higher rates or if
    an increasing number of borrowers default on their loans.                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | (iii) If, at a time of relatively low interest rates, a
    borrower prepays obligations that have a higher interest rate
    from an earlier period, investors will likely not be able to
    reinvest the funds in mortgage loans earning that higher rate of
    interest. In the absence of a prepayment fee, the investors will
    receive neither the anticipated revenue stream at the higher
    rate nor compensation for their loss. This in turn could harm
    our reputation and may make it more difficult for us to attract
    investors willing to acquire interests in mortgage loans.

RISKS OF FUND MANAGEMENT






COMPETITION FOR BORROWERS









|        |                     
|------- | --------------------
|ITEM 7. | FINANCIAL STATEMENTS








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURES








|         |                       
|-------- | ----------------------
|ITEM 8A. | CONTROL AND PROCEDURES



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|         |                  
|-------- | -----------------
|ITEM 8B. | OTHER INFORMATION






PART III







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



|                              |  |     |    |  |       |                                                                                         
|----------------------------- |  | --- | -- |  | ----- | ----------------------------------------------------------------------------------------
|Name                          |  | Age |    |  | Title
|                              |  |     |    |  |      
|Michael V. Shustek            |  |     | 46 |  |       | Chairman of the Board, Chief Executive Officer, President and
    Director              
|John Alderfer                 |  |     | 60 |  |       | Chief Financial Officer                                                                 
|Ira S. Levine                 |  |     | 44 |  |       | Secretary                                                                               
|Michael J. Whiteaker          |  |     | 55 |  |       | Vice President of Regulatory Affairs                                                    
|Peggy S. Shustek              |  |     | 35 |  |       | Vice President of Vestin Mortgage, a subsidiary of Vestin Group                         
|Daniel B. Stubbs              |  |     | 43 |  |       | Senior Vice President, Underwriting of Vestin Mortgage, a
    subsidiary of Vestin Group
|Lance K. Bradford             |  |     | 38 |  |       | Director                                                                                
|Robert J. Aalberts            |  |     | 54 |  |       | Director                                                                                
|Fredrick J. Zaffarese Leavitt |  |     | 33 |  |       | Director                                                                                
|Roland M. Sansone             |  |     | 50 |  |       | Director                                                                                





Robert J. Aalberts


John W. Alderfer


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Lance K. Bradford


Ira S. Levine


Peggy S. Shustek


Roland M. Sansone


Michael V. Shustek


26



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##### Table of Contents





Daniel B. Stubbs


Michael J. Whiteaker


Fredrick J. Zaffarese Leavitt


Audit Committee




Director Compensation






SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE




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CODE OF ETHICS






|         |                                               
|-------- | ----------------------------------------------
|ITEM 10. | EXECUTIVE COMPENSATION AND RELATED INFORMATION



SUMMARY COMPENSATION TABLE


|                     |                                      |      |      |                     |     |              |         |            |         |                        |         |         |      |              |           |   |         |     |              |     |  |  |         |         |  |   |   |   |  |   |   |   | 
|-------------------- | ------------------------------------ | ---- | ---- | ------------------- | --- | ------------ | ------- | ---------- | ------- | ---------------------- | ------- | ------- | ---- | ------------ | --------- | - | ------- | --- | ------------ | --- |  |  | ------- | ------- |  | - | - | - |  | - | - | - | 
|                     |                                      |      |      |                     |     |              |         |            |         | Long-Term Compensation |         |        
|                     |                                      |      |      |                     |     |              |         |            |         |                        |         |        
|                     |                                      |      |      |                     |     | Awards       |         |            | Payouts |                        |        
|                     |                                      |      |      | Annual Compensation |     |              |         |            |         |                        |        
|                     |                                      |      |      |                     |     | Restricted   |         | Securities |         |                        |         |         |     
|                     |                                      |      |      |                     |     | Other Annual |         | Stock      |         | Underlying             |         |         | LTIP |              | All Other
|Name and             |                                      |      |      | Salary              |     |              | Bonus   |            |         | Compensation           |         | Awards  |      | Options/SARs |           |   | Payouts |     | Compensation
|Principal Position   |                                      | Year |      |                     | ($) |              |         | ($)        |         |                        | ($)     |         | ($)  |              | (#)       |   |         | ($) |              | ($)
|                     |                                      |      |      |                     |     |              |         |            |         |                        |         |         |      |              |           |   |         |     |              |    
|Michael V. Shustek   |                                      |      | 2004 |                     |     | $            | 156,250 |            |         | $                      | 690,000 |         |      | $            |          |   |         | $   |             |     |  |  | 250,000 |         |  | $ |  |   |  | $ |  |  
|                     | Chief Executive Officer              |      |      | 2003                |     |              | $       | 150,000    |         |                        | $       | 875,000 |      |              | $         |  |         |     | $            |    |  |  |         | 250,000 |  |   | $ |  |  |   | $ |  | 
|                     | of the Company                       |      |      | 2002                |     |              | $       | 793,500    |         |                        | $       |        |      |              | $         |  |         |     | $            |    |  |  |         | 250,000 |  |   | $ |  |  |   | $ |  | 
|                    
|Lance K. Bradford(1) |                                      |      | 2004 |                     |     | $            | 208,333 |            |         | $                      | 96,000  |         |      | $            |          |   |         | $   |             |     |  |  |        |         |  | $ |  |   |  | $ |  |  
|                     | President, Chief Financial           |      |      | 2003                |     |              | $       | 200,000    |         |                        | $       | 122,000 |      |              | $         |  |         |     | $            |    |  |  |         |        |  |   | $ |  |  |   | $ |  | 
|                     | Officer and Treasurer of the Company |      |      | 2002                |     |              | $       | 302,160    |         |                        | $       |        |      |              | $         |  |         |     | $            |    |  |  |         | 100,000 |  |   | $ |  |  |   | $ |  | 
|                    
|John W. Alderfer(2)  |                                      |      | 2004 |                     |     | $            | 303,109 |            |         | $                      |        |         |      | $            |          |   |         | $   |             |     |  |  |        |         |  | $ |  |   |  | $ |  |  
|                     | Chief Financial Officer              |      |      | 2003                |     |              | $       | 178,750    |         |                        | $       |        |      |              | $         |  |         |     | $            |    |  |  |         |        |  |   | $ |  |  |   | $ |  | 
|                     | of the Company                       |      |      | 2002                |     |              | $       | 175,000    |         |                        | $       |        |      |              | $         |  |         |     | $            |    |  |  |         | 25,000  |  |   | $ |  |  |   | $ |  | 
|                    
|Peggy S. Shustek(3)  |                                      |      | 2004 |                     |     | $            | 166,666 |            |         | $                      | 25,000  |         |      | $            |          |   |         | $   |             |     |  |  |        |         |  | $ |  |   |  | $ |  |  
|                     | Vice President of                    |      |      | 2003                |     |              | $       | 160,000    |         |                        | $       | 43,000  |      |              | $         |  |         |     | $            |    |  |  |         |        |  |   | $ |  |  |   | $ |  | 
|                     | Vestin Mortgage                      |      |      | 2002                |     |              | $       | 176,100    |         |                        | $       | 62,009  |      |              | $         |  |         |     | $            |    |  |  |         | 31,667  |  |   | $ |  |  |   | $ |  | 
|                    
|Daniel Stubbs        |                                      |      | 2004 |                     |     | $            | 131,559 |            |         | $                      | 25,000  |         |      | $            |          |   |         | $   |             |     |  |  |        |         |  | $ |  |   |  | $ |  |  
|                     | Senior Vice President                |      |      | 2003                |     |              | $       | 121,800    |         |                        | $       | 20,685  |      |              | $         |  |         |     | $            |    |  |  |         |        |  |   | $ |  |  |   | $ |  | 
|                     | of Vestin Mortgage                   |      |      | 2002                |     |              | $       | 128,174    |         |                        | $       | 70,000  |      |              | $         |  |         |     | $            |    |  |  |         | 25,000  |  |   | $ |  |  |   | $ |  | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Mr. Bradford resigned as President and assumed the role of
    Chief Financial Officer in February 2004. Mr. Bradford
    resigned as Chief Financial Officer and Treasurer of the Company
    as of December 31, 2004.                                                                                                                                                                                             
|   
|(2) | Mr. Alderfer resigned as Chief Financial Officer as of
    February 2004. Mr. Alderfer then served as a consultant for
    the Company. Mr. Alderfer took the position of Chief
    Financial Officer effective January 1, 2005. $126,558
    represents amounts paid Mr. Alderfer as a consultant during
    the period he did not act as Chief Financial Officer of the
    Company.                              
|   
|(3) | The compensation for Ms. Shustek includes compensation for
    services rendered to Vestin Mortgage and Vestin Capital, Inc.
    $78,333 of Ms. Shusteks 2004 Compensation was paid by
    Vestin Mortgage and $113,333 was paid by Vestin Capital. All of
    Ms. Shusteks 2003 compensation was paid directly by
    Vestin Capital, Inc., and all of her 2002 compensation was paid
    for by Vestin Mortgage.

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Option Grants in Last Fiscal Year




Option & Warrant/ SAR Grants in Fiscal Year 2004


(Individual Grants)


(post-split)


|                |  |              |         |  |                  |  |     |             |  |   |            |  |  |  |            | 
|--------------- |  | ------------ | ------- |  | ---------------- |  | --- | ----------- |  | - | ---------- |  |  |  | ---------- | 
|                |  | Number of    |         |  | Percent of Total |  |     |             |  |  
|                |  | Securities   |         |  | Options/SARs     |  |     |             |  |  
|                |  | Underlying   |         |  | Granted to       |  |     | Exercise or |  |   |           
|                |  | Options/SARs |         |  | Employees in     |  |     | Base        |  |   | Expiration | 
|Name            |  | Granted(#)   |         |  | Fiscal 2004(%)   |  |     | Price($/SH) |  |   | Date       | 
|                |  |              |         |  |                  |  |     |             |  |   |            | 
|Michael Shustek |  |              | 250,000 |  |                  |  | 100 | %           |  | $ | 3.00       |  |  |  | 12/31/2014 | 

Aggregated Option Exercises and Fiscal Year-End Values






|                   |  |              |   |  |             |                           |                   |             |                         |                   |               |  |  |                |        |  |                  |  |   |  |  |  |   | 
|------------------ |  | ------------ | - |  | ----------- | ------------------------- | ----------------- | ----------- | ----------------------- | ----------------- | ------------- |  |  | -------------- | ------ |  | ---------------- |  | - |  |  |  | - | 
|                   |  |              |   |  |             | Number of Shares of Stock |                   |             |                        
|                   |  |              |   |  |             | Underlying Unexercised    |                   |             | Value of Unexercised    |                  
|                   |  |              |   |  |             | Common Options at         |                   |             | In-the-Money Options at |                  
|                   |  | Shares       |   |  |             |                           | December 31, 2004 |             |                         | December 31, 2004 |              
|                   |  | Acquired on  |   |  | Value       |                           |                   |             |                         |                   |               | 
|Name               |  | Exercise (#) |   |  | Realized($) |                           |                   | Exercisable |                         |                   | Unexercisable |  |  | Exercisable($) |        |  | Unexercisable($) | 
|                   |  |              |   |  |             |                           |                   |             |                         |                   |               |  |  |                |        |  |                  | 
|Michael V. Shustek |  |              |  |  |             |                           |                  |             |                         |                   | 1,250,000     |  |  |                |       |  |                  |  |  |  |  |  |  | 
|Lance K. Bradford  |  |              |  |  |             |                           |                  |             |                         |                   | 66,660        |  |  |                | 33,340 |  |                  |  |  |  |  |  |  | 
|Peggy S. May       |  |              |  |  |             |                           |                  |             |                         |                   | 43,609        |  |  |                | 10,558 |  |                  |  |  |  |  |  |  | 
|John Alderfer      |  |              |  |  |             |                           |                  |             |                         |                   | 16,665        |  |  |                | 8,335  |  |                  |  |  |  |  |  |  | 
|Daniel Stubbs      |  |              |  |  |             |                           |                  |             |                         |                   | 24,165        |  |  |                | 8,335  |  |                  |  |  |  |  |  |  | 

EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS






29



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|         |                                                                   
|-------- | ------------------------------------------------------------------
|ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT

Share Ownership




|                                                                                        |                         |                    |           |               |                       |  |        |     | 
|--------------------------------------------------------------------------------------- | ----------------------- | ------------------ | --------- | ------------- | --------------------- |  | ------ | --- | 
|                                                                                        |                         |                    |           | Percentage of |                      
|                                                                                        |                         | Common Stock       |           |               | Common Stock          | 
|Name                                                                                    |                         | Beneficially Owned |           |               | Beneficially Owned(1) | 
|                                                                                        |                         |                    |           |               |                       | 
|Michael V. Shustek, Chairman, Chief Executive Officer and
    President of Vestin Group |                         |                    | 2,901,350 | (2)           |                       |  | 100.00 | %**
|                                                                                        | 8379 W. Sunset Road     |                    |           |               |                       |  |        |     | 
|                                                                                        | Las Vegas, Nevada 89113 |                    |           |               |                       |  |        |     | 
|Ira S. Levine, Corporate Secretary of Vestin Group                                      |                         |                    | 87,550    | (3)           |                       |  | 3.46   | %  
|                                                                                        | 8379 W. Sunset Road     |                    |           |               |                       |  |        |     | 
|                                                                                        | Las Vegas, Nevada 89113 |                    |           |               |                       |  |        |     | 
|Peggy S. Shustek, Vice President of Vestin Mortgage                                     |                         |                    | 64,814    | (4)           |                       |  | 2.17   | %  
|                                                                                        | 8379 W. Sunset Road     |                    |           |               |                       |  |        |     | 
|                                                                                        | Las Vegas, Nevada 89113 |                    |           |               |                       |  |        |     | 
|Lance K. Bradford, Director of Vestin Group                                             |                         |                    | 81,910    | (5)           |                       |  | 3.24   | %  
|                                                                                        | 8379 W. Sunset Road     |                    |           |               |                       |  |        |     | 
|                                                                                        | Las Vegas, Nevada 89113 |                    |           |               |                       |  |        |     | 
|Daniel Stubbs, Senior Vice President, Underwriting of Vestin
    Mortgage               |                         |                    | 24,166    | (6)           |                       |  | *      |    
|                                                                                        | 8379 W. Sunset Road     |                    |           |               |                       |  |        |     | 
|                                                                                        | Las Vegas, Nevada 89113 |                    |           |               |                       |  |        |     | 
|Michael J. Whiteaker, Vice President of Regulatory Affairs of
    Vestin Group          |                         |                    | 25,000    | (7)           |                       |  | *      |    
|                                                                                        | 8379 W. Sunset Road     |                    |           |               |                       |  |        |     | 
|                                                                                        | Las Vegas, Nevada 89113 |                    |           |               |                       |  |        |     | 
|Robert J. Aalberts, Director of Vestin Group                                            |                         |                    | 8,000     | (8)           |                       |  | *      |    
|                                                                                        | 8379 W. Sunset Road     |                    |           |               |                       |  |        |     | 
|                                                                                        | Las Vegas, Nevada 89113 |                    |           |               |                       |  |        |     | 
|Rick Zaffarese, Director of Vestin Group                                                |                         |                    |          |               |                       |  | *      |    
|                                                                                        | 8379 W. Sunset Road     |                    |           |               |                       |  |        |     | 
|                                                                                        | Las Vegas, Nevada 89113 |                    |           |               |                       |  |        |     | 

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|                                                                      |                         |                    |           |               |                       |  |       |   | 
|--------------------------------------------------------------------- | ----------------------- | ------------------ | --------- | ------------- | --------------------- |  | ----- | - | 
|                                                                      |                         |                    |           | Percentage of |                      
|                                                                      |                         | Common Stock       |           |               | Common Stock          | 
|Name                                                                  |                         | Beneficially Owned |           |               | Beneficially Owned(1) | 
|                                                                      |                         |                    |           |               |                       | 
|Roland M. Sansone, Director of Vestin Group                           |                         |                    |          |               |                       |  | *     |  
|                                                                      | 8379 W. Sunset Road     |                    |           |               |                       |  |       |   | 
|                                                                      | Las Vegas, Nevada 89113 |                    |           |               |                       |  |       |   | 
|Sierra Trust, Tammy Redd, Trustee                                     |                         |                    | 339,844   | (9)           |                       |  | 13.44 | %
|                                                                      | 2340 Camero Avenue      |                    |           |               |                       |  |       |   | 
|                                                                      | Las Vegas, Nevada 89123 |                    |           |               |                       |  |       |   | 
|All directors and executive officers as a group
    (9 persons)(10)** |                         |                    | 3,532,634 |               |                       |  | 100   | %






| |   |             
| | - | ------------
| | * | Less than 1%



| |    |                                                                                                                                                                                                                    
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ** | The actual percentage of beneficially owned common stock exceeds
    100% assuming all options, warrants, and convertible preferred
    stock exercisable within 60 days of March 10, 2005
    have been exercised.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based upon 2,528,835 shares outstanding on March 10,
    2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(2) | Includes warrants to purchase up to 1,250,000 shares of
    Common Stock within 60 days of March 10, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(3) | Includes options to purchase up to 75,000 shares of Common
    Stock exercisable within 60 days of March 10, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(4) | Includes options to purchase up to 43,609 shares of Common
    Stock exercisable within 60 days of March 10, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(5) | Includes warrants to purchase up to 66,660 shares of Common
    Stock exercisable within 60 days of March 10, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(6) | Includes options to purchase up to 24,166 shares of Common
    Stock exercisable within 60 days of March 10, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(7) | Includes options to purchase up to 25,000 shares of Common
    Stock exercisable within 60 days of March 10, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(8) | Includes options to purchase up to 7,500 shares of Common
    Stock exercisable within 60 days of March 10, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(9) | The holders of our preferred stock are entitled to convert their
    preferred stock into common stock at a ratio of $6.08 pre-split
    for one share of common stock. If all of the preferred
    stockholders were to convert into common stock, the Sierra Trust
    would own approximately 11.69% of the total issued and
    outstanding shares. In addition, the beneficial ownership of the
    following stockholders would be reduced as follows: Michael
    Shustek 99.84%, Ira Levine 3.01%, Peggy May 1.89%, Lance
    Bradford 11.69%, Michael Whiteaker will own less than 1%, and
    all directors and executive officers as a group 121.25%.



|     |                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------
|(10) | Includes options and warrants to purchase up to
    1,491,934 shares of Common Stock exercisable within
    60 days of March 10, 2005.

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EQUITY COMPENSATION PLAN INFORMATION




|                                                       |  |                        |           |     |                        |                      |                         |                            |  |  |         |    
|------------------------------------------------------ |  | ---------------------- | --------- | --- | ---------------------- | -------------------- | ----------------------- | -------------------------- |  |  | ------- | ---
|                                                       |  |                        |           |     |                        | Number of Securities |                        
|                                                       |  | Number of Securities   |           |     |                        |                      | Remaining Available for |                           
|                                                       |  | to be Issued           |           |     | Weighted-average       |                      |                         | Future Issuance Under      | 
|                                                       |  | Upon Exercise of       |           |     | Exercise Price of      |                      |                         | Equity Compensation Plans  | 
|                                                       |  | Outstanding Options,   |           |     | Outstanding Options,   |                      |                         | (Excluding Securities      | 
|Plan Category                                          |  | Warrants and Rights(a) |           |     | Warrants and Rights(b) |                      |                         | Reflected in Column(a))(c) | 
|                                                       |  |                        |           |     |                        |                      |                         |                            | 
|Equity Compensation Plans Approved by Stockholders(1)  |  |                        | 564,665   |     |                        | $                    | 11.14                   |                            |  |  | 185,335 | (2)
|Equity Compensation Plans Not Approved by Stockholders |  |                        | 1,250,000 | (3) |                        | $                    | 7.85                    |                            |  |  |        |    
|                                                       |  |                        |           |     |                        |                      |                         |                            | 
|Total                                                  |  |                        | 1,814,665 |     |                        | $                    | 8.87                    |                            |  |  | 185,335 |    
|                                                       |  |                        |           |     |                        |                      |                         |                            | 






|    |                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Consists of the 2000 Stock Option Plan, as amended in 2002.                                                                                                                                                                             
|   
|(2) | Consists of shares available for future issuance under the 2000
    Stock Option Plan. As of December 31, 2004, an aggregate of
    185,335 shares of our common stock were available for
    issuance under the 2000 Stock Option Plan.
|   
|(3) | Consists of 1,250,000 warrants of which 250,000 have been
    granted each year for the past four years to Mr. Shustek
    pursuant to his employment agreement.                                                                        




ITEM 12.     CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS






|   |                            
|-- | ---------------------------
|1. | Transactions with the Funds









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33



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Transactions with Officers and Directors and their
Affiliates














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|         |                                 
|-------- | --------------------------------
|ITEM 13. | EXHIBITS AND REPORTS ON FORM 8-K

Exhibits


|        |    |    |             |                                                                                                                                                                |               |  |      | 
|------- | -- | -- | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- |  | ---- | 
|        |    |    |             | Page                                                                                                                                                           |              
|Exhibit |    |    |             |                                                                                                                                                                | Number/       | 
|Number  |    |    | Description |                                                                                                                                                                | Filing Method | 
|        |    |    |             |                                                                                                                                                                |               | 
|        | 2  | .1 |             | Agreement and Plan of Reorganization among the Company,
    Capsource, Inc. and Stephen J. Byrne, dated as of April 9,
    1999                                |               |  | (1)  | 
|        | 2  | .2 |             | Asset Acquisition Agreement between the Company and Del Mar
    Holdings, Inc., dated as of April 9, 1999                                                      |               |  | (1)  | 
|        | 2  | .3 |             | Asset Acquisition Agreement between the Company and Del Mar
    Mortgage, Inc., dated as of April 9, 1999                                                      |               |  | (1)  | 
|        | 2  | .4 |             | Agreement and Plan of Reorganization among the Company, L. L.
    Bradford & Company and the Shareholders of L. L. Bradford
    & Company, dated June 30, 2000 |               |  | (2)  | 
|        | 3  | .1 |             | Certificate of Incorporation                                                                                                                                   |               |  | (3)  | 
|        | 3  | .2 |             | By-laws                                                                                                                                                        |               |  | (3)  | 
|        | 10 | .1 |             | Employment Agreement between Del Mar Mortgage, Inc. and Steve
    Byrne, dated November 3, 1998                                                                |               |  | (4)  | 
|        | 10 | .2 |             | Transition Agreement between Del Mar Mortgage, Inc. and
    Capsource, Inc., dated April 27, 1999 and First Amendment
    thereto, dated April 27, 1999        |               |  | (4)  | 
|        | 10 | .3 |             | Employment Agreement between Del Mar Mortgage and Mike
    Whiteaker, dated May 3, 1999                                                                        |               |  | (4)  | 
|        | 10 | .4 |             | The 2000 Stock Option Plan of Sunderland Corporation                                                                                                           |               |  | (4)  | 
|        | 10 | .5 |             | Employment Agreement between the Company and Michael V. Shustek,
    dated December 1, 1999                                                                    |               |  | (4)  | 
|        | 10 | .6 |             | Employment Agreement by and between the Company and Peggy May
    (now known as Peggy Shustek), dated September 1, 2001.                                       |               |  | (14) | 
|        | 10 | .7 |             | Totally Restated and Amended Employment Agreement by and between
    the Company and Lance Bradford, dated as of January 1, 2003.                              |               |  | (14) | 
|        | 10 | .8 |             | Third Amended and Restated Operating Agreement of Vestin
    Fund I, LLC (formerly known as DM Mortgage Investors, LLC),
    dated as of November 2, 2000      |               |  | (5)  | 

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|        |    |     |             |                                                                                                                                                                                                                             |               |  |      | 
|------- | -- | --- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- |  | ---- | 
|        |    |     |             | Page                                                                                                                                                                                                                        |              
|Exhibit |    |     |             |                                                                                                                                                                                                                             | Number/       | 
|Number  |    |     | Description |                                                                                                                                                                                                                             | Filing Method | 
|        |    |     |             |                                                                                                                                                                                                                             |               | 
|        | 10 | .9  |             | Certificate of Designations authorizing the issuance of
    Series A Convertible Preferred Stock                                                                                                                            |               |  | (6)  | 
|        | 10 | .10 |             | Operating Agreement of Vestin Fund II, LLC, dated as of
    December 7, 2001                                                                                                                                                |               |  | (7)  | 
|        | 10 | .11 |             | License Agreement by and between the Company and Planned
    Licensing, Inc., dated as of January 2001                                                                                                                      |               |  | (8)  | 
|        | 10 | .12 |             | Amended and Restated Intercreditor Agreement by and between
    Vestin Mortgage, Inc., Vestin Fund I, LLC, Vestin
    Fund II, LLC and Owens Financial Group, Inc., dated as of
    September 25, 2002                      |               |  | (14) | 
|        | 10 | .13 |             | Amended and Restated Operating Agreement of Vestin
    Fund III, LLC, dated as of May 2, 2003                                                                                                                               |               |  | (13) | 
|        | 10 | .14 |             | Office Lease Agreement between the Company and The Wildwood
    Hills Development, Corporation, dated January 5, 2001                                                                                                       |               |  | (14) | 
|        | 10 | .15 |             | Employment Agreement by and between the Company and Daniel
    Stubbs, dated January 1, 2003                                                                                                                                |               |  | (11) | 
|        | 10 | .16 |             | Office Lease by and between Luke Properties, LLC and the
    Company, dated March 2004                                                                                                                                      |               |  | (14) | 
|        | 10 | .17 |             | Separation Agreement and Release of All Claims by and between
    Steve Byrne and the Company, dated as of October 14, 2003                                                                                                 |               |  | (11) | 
|        | 10 | .18 |             | Amended and Restated Intercreditor Agreement by and among Vestin
    Mortgage, Inc., Vestin Fund I, LLC, Vestin Fund II,
    LLC, Owens Financial Group, Inc., and Owens Mortgage Investment
    Fund, dated April 18, 2003 |               |  | (9)  | 
|        | 10 | .19 |             | Aircraft Usage Agreement by and between the Company and C5, LLC,
    dated September 1, 2002                                                                                                                                |               |  | (9)  | 
|        | 10 | .20 |             | Indemnity Agreement by and between the Company and Del Mar
    Mortgage, Inc., dated April 15, 2003                                                                                                                         |               |  | (10) | 
|        | 10 | .21 |             | Guaranty by and among the Company, Michael V. Shustek, and Del
    Mar Mortgage, Inc., dated April 15, 2003                                                                                                                 |               |  | (10) | 
|        | 10 | .22 |             | Office Lease Agreement by and between The Wildwood Hills
    Development, Corporation and the Company, dated January 5,
    2001                                                                                            |               |  | (12) | 
|        | 10 | .23 |             | Office Lease Agreement by and between 2901 El Camino, Las Vegas,
    NV, LLC and the Company, dated August 1, 2002                                                                                                          |               |  | (12) | 
|        | 10 | .24 |             | Office Lease Agreement by and between The Wildwood Hills
    Development, Corporation and the Company, dated January 5,
    2001                                                                                            |               |  | (12) | 
|        | 10 | .25 |             | Office Lease Agreement by and between 2901 El Camino, Las Vegas,
    NV, LLC and the Company, dated August 1, 2002                                                                                                          |               |  | (14) | 
|        | 10 | .26 |             | Amended Management Agreement by and between Vestin Mortgage,
    Inc. and inVestin Nevada, Inc.                                                                                                                             |               |  |      | 
|        | 10 | .27 |             | Amended Operating Agreement of Vestin Fund III, LLC dated
    as of January 17, 2005                                                                                                                                        |               |  | (15) | 
|        | 14 | .1  |             | Code of Ethics                                                                                                                                                                                                              |               |  | (11) | 
|        | 21 | .1  |             | List of Subsidiaries of the Company                                                                                                                                                                                         |               |  |      | 
|        | 31 | .1  |             | Section 302 Certification of Michael V. Shustek                                                                                                                                                                             |               |  |      | 
|        | 31 | .2  |             | Section 302 Certification of John W. Alderfer                                                                                                                                                                               |               |  |      | 
|        | 32 |     |             | Certification Pursuant to U.S.C. 18 Section 1350                                                                                                                                                                            |               |  |      | 






|    |                                                                               
|--- | ------------------------------------------------------------------------------
|(1) | Previously filed on Form 8-K (File No. 000-24803) on
    May 4, 1999.         
|   
|(2) | Previously filed on Form 8-K (File No. 000-24803) on
    April 14, 2000.      
|   
|(3) | Previously filed on Form 10-SB/ A (File No. 000-24803)
    on August 13, 1998.
|   
|(4) | Previously filed on Form 10-KSB (File No. 000-24803)
    on March 31, 2000.   

36



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##### Table of Contents





|    |                                                                              
|--- | -----------------------------------------------------------------------------
|(5) | Previously filed on Form 424B5 (File No. 333-32800) on
    November 15, 2000.
|   
|(6) | Previously filed on Form 8-K (File No. 000-24803) on
    December 7, 2001.   
|   
|(7) | Previously filed on Form S-11 (File No. 793646) on
    December 21, 2000.    
|   
|(8) | Previously filed on Form 8-K (File No. 000-24803) on
    January 25, 2001.   
|   
|(9) | Previously filed by Form SB-2/ A (File No. 333-104109)
    on June 4, 2003.  



|     |                                                                                           
|---- | ------------------------------------------------------------------------------------------
|(10) | Previously filed on Form SB-2/ A (File No. 333-104109)
    on October 15, 2003.           
|    
|(11) | Previously filed on Form 10-KSB (File No. 000-24803)
    on March 30, 2004.               
|    
|(12) | Previously filed on Form 10-KSB/ A (File
    No. 000-24803) on April 14, 2004.            
|    
|(13) | Previously filed on Form S-11/ A (File No. 333-105017)
    on April 29, 2004.             
|    
|(14) | Previously filed on Form 10-KSB/ A Amendment #2 (File
    No. 000-24803) on August 4, 2004
|    
|(15) | Previously filed on Form 8-K/ A (File No. 000-24803)
    on February 2, 2005              

Reports on Form 8-K.






| |                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) Item 2.02  Results of Operations and
    Financial Condition, including Consolidated Statements of Income
    (Unaudited) for the three and nine months ended
    September 30, 2004 and 2003;
|
| | (ii) Item 5.02  Departure of Directors or
    Principal Officers; Election of Directors; Appointment of
    Principal Officers; and                                                               
|
| | (iii) Item 9.01  Financial Statements and
    Exhibits.                                                                                                                                           

37



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|         |                                       
|-------- | --------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES



|                   |  |                   |         | 
|------------------ |  | ----------------- | ------- | 
|                   |  | December 31, 2004 |        
|                   |  |                   |        
|Audit Fees         |  | $                 | 221,130 | 
|Audit Related Fees |  | $                 | 72,443  | 
|Tax Fees           |  | $                 |        | 
|All Other Fees     |  | $                 |        | 



|                   |  |                   |         |  |                   |   |         | 
|------------------ |  | ----------------- | ------- |  | ----------------- | - | ------- | 
|                   |  | December 31, 2003 |         |  | December 31, 2002 |  
|                   |  |                   |         |  |                   |  
|Audit Fees         |  | $                 | 77,445  |  |                   | $ | 191,660 | 
|Audit Related Fees |  | $                 | 332,226 |  |                   | $ | 127,931 | 
|Tax Fees           |  | $                 | 0       |  |                   | $ | 0       | 
|All Other Fees     |  | $                 | 174,520 |  |                   | $ | 48,417  | 



de minimus


38



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##### Table of Contents



VESTIN GROUP, INC.


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


CONTENTS


|                                                   |                                                 |  |     |     | 
|-------------------------------------------------- | ----------------------------------------------- |  | --- | --- | 
|REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS |                                                 |  | F-1 |    
|                                                  
|CONSOLIDATED FINANCIAL STATEMENTS                  |                                                 |  |     |    
|                                                   | Consolidated Balance Sheet                      |  |     | F-2 | 
|                                                   | Consolidated Statements of Operations           |  |     | F-3 | 
|                                                   | Consolidated Statements of Stockholders Equity |  |     | F-4 | 
|                                                   | Consolidated Statements of Cash Flows           |  |     | F-5 | 
|                                                   | Notes to Consolidated Financial Statements      |  |     | F-7 | 



---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














| |                                                    
| | ---------------------------------------------------
| | /s/ Moore Stephens Wurth
    Frazer and Torbet, LLP





F-1



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##### Table of Contents



Vestin Group, Inc. and Subsidiaries


CONSOLIDATED BALANCE SHEET


December 31, 2004


|                                                             |                                                                                                            |                                            |           |           |            | 
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | --------- | ---------- | 
|ASSETS                                                      
|Cash                                                         |                                                                                                            | $                                          | 3,110,702 |          
|Accounts receivable                                          |                                                                                                            |                                            | 110,158   |          
|Interest advanced to borrowers, net of allowance of $210,608 |                                                                                                            |                                            | 737,290   |          
|Interest receivable                                          |                                                                                                            |                                            | 4,365     |          
|Due from related parties                                     |                                                                                                            |                                            | 2,601,209 |          
|Note receivable  related party                              |                                                                                                            |                                            | 22,964    |          
|Investments in real estate held for sale                     |                                                                                                            |                                            | 1,993,840 |          
|Investments in mortgage loans on real estate                 |                                                                                                            |                                            | 34        |          
|Other investments  related parties                          |                                                                                                            |                                            | 3,475,358 |          
|Deferred tax asset                                           |                                                                                                            |                                            | 810,903   |          
|Property and equipment, net                                  |                                                                                                            |                                            | 1,314,182 |          
|Other assets                                                 |                                                                                                            |                                            | 155,305   |          
|                                                             |                                                                                                            |                                            |          
|                                                             |                                                                                                            | Total assets                               |           | $         | 14,336,310 | 
|                                                             |                                                                                                            |                                            |          
|LIABILITIES AND STOCKHOLDERS EQUITY                        
|Accounts payable and accrued expenses                        |                                                                                                            | $                                          | 1,474,598 |          
|Due to related party                                         |                                                                                                            |                                            | 336,008   |          
|Dividend payable                                             |                                                                                                            |                                            | 38,223    |          
|Income taxes payable                                         |                                                                                                            |                                            | 929,591   |          
|Note payable  Fund II                                       |                                                                                                            |                                            | 1,000,000 |          
|Notes payable  related party                                |                                                                                                            |                                            | 2,427,340 |          
|Notes payable                                                |                                                                                                            |                                            | 140,000   |          
|Capital leases payable                                       |                                                                                                            |                                            | 87,456    |          
|                                                             |                                                                                                            |                                            |          
|                                                             |                                                                                                            | Total liabilities                          |           |           | 6,433,216  | 
|                                                             |                                                                                                            |                                            |          
|Commitments and contingencies                                |                                                                                                            |                                            |          |          
|Stockholders equity                                         |                                                                                                            |                                            |           |          
|                                                             | Preferred stock, $.0001 par value; 20 million shares
    authorized; 458,675 shares issued and outstanding |                                            |           | 46        |           
|                                                             | Common stock, $.0001 par value; 100 million shares
    authorized; 2,528,835 shares issued and outstanding |                                            |           | 252       |           
|                                                             | Additional paid-in capital                                                                                 |                                            |           | 4,659,599 |           
|                                                             | Retained earnings                                                                                          |                                            |           | 3,243,197 |           
|                                                             |                                                                                                            |                                            |          
|                                                             |                                                                                                            | Total stockholders equity                 |           |           | 7,903,094  | 
|                                                             |                                                                                                            |                                            |          
|                                                             |                                                                                                            | Total liabilities and stockholders equity |           | $         | 14,336,310 | 
|                                                             |                                                                                                            |                                            |          



F-2



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##### Table of Contents



Vestin Group, Inc. and Subsidiaries


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                   |                                                                          |                                                                               |           |            |                   |   |            |            |            |  
|------------------------------------------------------------------ | ------------------------------------------------------------------------ | ----------------------------------------------------------------------------- | --------- | ---------- | ----------------- | - | ---------- | ---------- | ---------- | -
|                                                                   |                                                                          | For the Year Ended                                                            |          
|                                                                   |                                                                          |                                                                               |          
|                                                                   |                                                                          | December 31, 2004                                                             |           |            | December 31, 2003 |  
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|Revenues                                                           |                                                                          |                                                                               |           |            |                   |   |            |           
|                                                                   | Loan placement and related fees                                          |                                                                               | $         | 19,508,482 |                   |   | $          | 20,651,118 |           
|                                                                   | Interest income                                                          |                                                                               |           | 130,372    |                   |   |            | 596,750    |           
|                                                                   | Gain from settlement of lawsuit                                          |                                                                               |           | 5,850,000  |                   |   |            |           |           
|                                                                   | Gain on sale of real estate held for sale                                |                                                                               |           | 426,440    |                   |   |            |           |           
|                                                                   | Other revenues                                                           |                                                                               |           | 2,080,618  |                   |   |            | 1,832,697  |           
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|                                                                   |                                                                          | Total revenues                                                                |           |            | 27,995,912        |   |            |            | 23,080,565 |  
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|Expenses                                                           |                                                                          |                                                                               |           |            |                   |   |            |           
|                                                                   | Sales and marketing expenses                                             |                                                                               |           | 4,389,439  |                   |   |            | 11,703,687 |           
|                                                                   | General and administrative expenses                                      |                                                                               |           | 13,442,266 |                   |   |            | 14,442,264 |           
|                                                                   | Write downs on real estate held for sale                                 |                                                                               |           | 1,450,000  |                   |   |            | 1,438,241  |           
|                                                                   | Loss on sale of real estate held for sale                                |                                                                               |           | 105,863    |                   |   |            |           |           
|                                                                   | Valuation loss on purchase of rights to receive proceeds of
    judgment |                                                                               |           | 3,565,795  |                   |   |            |           |           
|                                                                   | Bad debt expense                                                         |                                                                               |           | 48,709     |                   |   |            | 1,455,834  |           
|                                                                   | Capital Contribution to Fund I                                           |                                                                               |           |           |                   |   |            | 1,600,000  |           
|                                                                   | Interest expense                                                         |                                                                               |           | 38,864     |                   |   |            | 262,413    |           
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|                                                                   |                                                                          | Total expenses                                                                |           |            | 23,040,936        |   |            |            | 30,902,439 |  
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|                                                                   |                                                                          | Income (loss) from operations before provision
    (benefit) for income taxes |           |            | 4,954,976         |   |            |            | (7,821,874 | )
|Provision (benefit) for income taxes                               |                                                                          |                                                                               | 1,739,323 |            |                   |   | (2,620,607 | )         
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|                                                                   |                                                                          | NET INCOME (LOSS)                                                             |           | $          | 3,215,653         |   |            | $          | (5,201,267 | )
|Preferred stock dividends                                          |                                                                          |                                                                               | (651,411  | )          |                   |   | (901,079   | )         
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|Net income (loss) applicable to common shareholders                |                                                                          | $                                                                             | 2,564,242 |            |                   | $ | (6,102,346 | )         
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|Earnings (loss) per common share  Basic                           |                                                                          | $                                                                             | 0.99      |            |                   | $ | (2.31      | )         
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|Earnings (loss) per common share  Diluted                         |                                                                          | $                                                                             | 0.77      |            |                   | $ | (2.31      | )         
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|Weighted average number of common shares
    outstanding  Basic   |                                                                          |                                                                               | 2,593,268 |            |                   |   | 2,641,633  |           
|                                                                   |                                                                          |                                                                               |           |            |                   |  
|Weighted average number of common shares
    outstanding  Diluted |                                                                          |                                                                               | 3,347,667 |            |                   |   | 2,641,633  |           
|                                                                   |                                                                          |                                                                               |           |            |                   |  



F-3



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##### Table of Contents



Vestin Group, Inc. and Subsidiaries


CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY


For the Year Ended December 31, 2004


|                                         |  |                 |          |   |              |   |     |                |  |  |            |   |  |          |     |   |        |  |          |         |  |   |            |   |  |       |            |   |  |   |           |   |  |   |            |  
|---------------------------------------- |  | --------------- | -------- | - | ------------ | - | --- | -------------- |  |  | ---------- | - |  | -------- | --- | - | ------ |  | -------- | ------- |  | - | ---------- | - |  | ----- | ---------- | - |  | - | --------- | - |  | - | ---------- | -
|                                         |  | Preferred Stock |          |   | Common Stock |   |     | Treasury Stock |  |  | Additional |   |  |          |     |  
|                                         |  |                 |          |   |              |   |     |                |  |  | Paid-in    |   |  | Retained |     |   |       
|                                         |  | Shares          |          |   | Amount       |   |     | Shares         |  |  | Amount     |   |  | Shares   |     |   | Amount |  |          | Capital |  |   | Earnings   |   |  | Total |           
|                                         |  |                 |          |   |              |   |     |                |  |  |            |   |  |          |     |   |        |  |          |         |  |   |            |   |  |       |           
|Balance at January 1, 2004               |  |                 | 897,800  |   |              | $ | 90  |                |  |  | 2,664,170  |   |  | $        | 266 |   |        |  | (89,000  | )       |  | $ | (544,305   | ) |  | $     | 9,767,453  |   |  | $ | 678,955   |   |  | $ | 9,902,459  |  
|Expenses related to issuance of warrants |  |                 |         |   |              |   |    |                |  |  |           |   |  |          |    |   |        |  |         |         |  |   |           |   |  |       | 1,856,604  |   |  |   |          |   |  |   | 1,856,604  |  
|Dividends paid on preferred stock        |  |                 |         |   |              |   |    |                |  |  |           |   |  |          |    |   |        |  |         |         |  |   |           |   |  |       |           |   |  |   | (651,411  | ) |  |   | (651,411   | )
|Purchase of treasury stock               |  |                 |         |   |              |   |    |                |  |  |           |   |  |          |    |   |        |  | (446,335 | )       |  |   | (1,639,161 | ) |  |       |           |   |  |   |          |   |  |   | (1,639,161 | )
|Redemption of preferred stock            |  |                 | (439,125 | ) |              |   | (44 | )              |  |  |           |   |  |          |    |   |        |  |         |         |  |   |           |   |  |       | (4,789,006 | ) |  |   |          |   |  |   | (4,789,050 | )
|Retirement of treasury stock             |  |                 |         |   |              |   |    |                |  |  | (535,335   | ) |  |          | (54 | ) |        |  | 535,335  |         |  |   | 2,183,466  |   |  |       | (2,183,412 | ) |  |   |          |   |  |   |           |  
|Common stock options exercised           |  |                 |         |   |              |   |    |                |  |  | 400,000    |   |  |          | 40  |   |        |  |         |         |  |   |           |   |  |       | 7,960      |   |  |   |          |   |  |   | 8,000      |  
|Net income                               |  |                 |         |   |              |   |    |                |  |  |           |   |  |          |    |   |        |  |         |         |  |   |           |   |  |       |           |   |  |   | 3,215,653 |   |  |   | 3,215,653  |  
|                                         |  |                 |          |   |              |   |     |                |  |  |            |   |  |          |     |   |        |  |          |         |  |   |            |   |  |       |           
|Balance at December 31, 2004             |  |                 | 458,675  |   |              | $ | 46  |                |  |  | 2,528,835  |   |  | $        | 252 |   |        |  |         |         |  | $ |           |   |  | $     | 4,659,599  |   |  | $ | 3,243,197 |   |  | $ | 7,903,094  |  
|                                         |  |                 |          |   |              |   |     |                |  |  |            |   |  |          |     |   |        |  |          |         |  |   |            |   |  |       |           



F-4



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##### Table of Contents



Vestin Group, Inc. and Subsidiaries


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                      |                                                                                                              |                                                                          |                                       |                                           |                   |            |           |            |            |            |           | 
|------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------ | ------------------------------------- | ----------------------------------------- | ----------------- | ---------- | --------- | ---------- | ---------- | ---------- | --------- | 
|                                      |                                                                                                              | For the Year Ended                                                       |                                      
|                                      |                                                                                                              |                                                                          |                                      
|                                      |                                                                                                              | December 31, 2004                                                        |                                       |                                           | December 31, 2003 |           
|                                      |                                                                                                              |                                                                          |                                       |                                           |                   |           
|Cash flow from operating activities:  |                                                                                                              |                                                                          |                                       |                                           |                   |            |           |           
|                                      | Net income (loss)                                                                                            |                                                                          | $                                     | 3,215,653                                 |                   |            | $         | (5,201,267 | )         
|                                      | Adjustments to reconcile net income (loss) from operations
    to net cash provided by operating activities: |                                                                          |                                       |                                           |                   |            |           |            |           
|                                      |                                                                                                              | Depreciation                                                             |                                       |                                           | 202,985           |            |           |            | 167,741    |           
|                                      |                                                                                                              | Bad debt                                                                 |                                       |                                           | 48,709            |            |           |            | 1,285,527  |           
|                                      |                                                                                                              | Stock based compensation                                                 |                                       |                                           | 1,856,604         |            |           |            | 928,302    |           
|                                      |                                                                                                              | Capital contribution to Fund I                                           |                                       |                                           |                  |            |           |            | 1,600,000  |           
|                                      |                                                                                                              | Gain from settlement of lawsuit                                          |                                       |                                           | (3,600,000        | )          |           |            |           |           
|                                      |                                                                                                              | Valuation loss on purchase of rights to receive proceeds of
    judgment |                                       |                                           | 3,565,795         |            |           |            |           |           
|                                      |                                                                                                              | Provision for loan losses                                                |                                       |                                           |                  |            |           |            | 30,000     |           
|                                      |                                                                                                              | Reduction in allowance for loan losses                                   |                                       |                                           | (110,000          | )          |           |            |           |           
|                                      |                                                                                                              | Gain on sale of real estate held for sale                                |                                       |                                           | (426,440          | )          |           |            |           |           
|                                      |                                                                                                              | Loss on sale of real estate held for sale                                |                                       |                                           | 105,863           |            |           |            |           |           
|                                      |                                                                                                              | Write downs on real estate held for sale                                 |                                       |                                           | 1,450,000         |            |           |            | 1,608,048  |           
|                                      |                                                                                                              | Changes in operating assets and liabilities:                             |                                       |                                           |                  |            |           |            |           |           
|                                      |                                                                                                              |                                                                          | Accounts receivable                   |                                           |                   | 364,196    |           |            |            | 1,113,778  |          
|                                      |                                                                                                              |                                                                          | Interest advanced to borrowers        |                                           |                   | 946,020    |           |            |            |           |          
|                                      |                                                                                                              |                                                                          | Interest receivable                   |                                           |                   | 6,284      |           |            |            | 102,703    |          
|                                      |                                                                                                              |                                                                          | Due from related parties              |                                           |                   | (811,302   | )         |            |            | (1,619,539 | )        
|                                      |                                                                                                              |                                                                          | Other assets                          |                                           |                   | (11,100    | )         |            |            | 131,228    |          
|                                      |                                                                                                              |                                                                          | Deferred tax asset                    |                                           |                   | 1,068,625  |           |            |            | (1,483,962 | )        
|                                      |                                                                                                              |                                                                          | Accounts payable and accrued expenses |                                           |                   | (2,558,979 | )         |            |            | 2,064,198  |          
|                                      |                                                                                                              |                                                                          | Due to related party                  |                                           |                   | 336,008    |           |            |            |           |          
|                                      |                                                                                                              |                                                                          | Dividend payable                      |                                           |                   | (36,594    | )         |            |            | (833       | )        
|                                      |                                                                                                              |                                                                          | Deferred income                       |                                           |                   | (2,875,000 | )         |            |            | 2,875,000  |          
|                                      |                                                                                                              |                                                                          | Income taxes payable                  |                                           |                   | 670,697    |           |            |            | (1,136,644 | )        
|                                      |                                                                                                              |                                                                          |                                       |                                           |                   |           
|                                      |                                                                                                              |                                                                          |                                       | Net cash provided by operating activities |                   |            | 3,408,024 |            |            |            | 2,464,280 | 
|                                      |                                                                                                              |                                                                          |                                       |                                           |                   |           
|Cash flows from investing activities: |                                                                                                              |                                                                          |                                       |                                           |                   |            |           |           
|                                      | Purchase of property and equipment                                                                           |                                                                          |                                       | (619,947                                  | )                 |            |           | (175,004   | )         
|                                      | Purchase of investment in real estate held for sale                                                          |                                                                          |                                       |                                          |                   |            |           | (1,100,000 | )         
|                                      | Purchase of other investments  related party                                                                |                                                                          |                                       |                                           |                   |            |           | (602,387   | )         
|                                      | Principal payments received on notes receivable 
    related party                                          |                                                                          |                                       |                                           |                   |            |           | 30,000     |           
|                                      | Purchase of investments in mortgage loans on real estate                                                     |                                                                          |                                       |                                          |                   |            |           | (1,659,205 | )         
|                                      | Purchase of investments in mortgage loans on real estate from:                                               |                                                                          |                                       |                                           |                   |            |           |            |           
|                                      |                                                                                                              | Fund II                                                                  |                                       |                                           |                  |            |           |            | (2,000,000 | )         
|                                      |                                                                                                              | Other related parties                                                    |                                       |                                           |                   |            |           |            | (1,080,000 | )         
|                                      | Proceeds from sale of investment in real estate held for sale                                                |                                                                          |                                       | 4,951,788                                 |                   |            |           |           |           
|                                      | Proceeds from payoff on note receivable                                                                      |                                                                          |                                       | 400,000                                   |                   |            |           |           |           
|                                      | Proceeds from payoff on note receivable  related party                                                      |                                                                          |                                       | 65,000                                    |                   |            |           |           |           
|                                      | Purchase of other investments  related party                                                                |                                                                          |                                       | (338,596                                  | )                 |            |           |           |           
|                                      | Proceeds from the sale of investments in mortgage loans                                                      |                                                                          |                                       |                                          |                   |            |           | 2,563,069  |           
|                                      | Proceeds from the sale of investments in mortgage loans from:                                                |                                                                          |                                       |                                           |                   |            |           |            |           
|                                      |                                                                                                              | Fund II                                                                  |                                       |                                           |                  |            |           |            | 9,297,925  |           
|                                      |                                                                                                              | Other related party                                                      |                                       |                                           | 295,000           |            |           |            | 693,286    |           
|                                      | Proceeds from loan payoff                                                                                    |                                                                          |                                       | 658,001                                   |                   |            |           |           |           
|                                      |                                                                                                              |                                                                          |                                       |                                           |                   |           
|                                      |                                                                                                              |                                                                          |                                       | Net cash provided by investing activities |                   |            | 5,411,246 |            |            |            | 5,967,684 | 
|                                      |                                                                                                              |                                                                          |                                       |                                           |                   |           



F-5



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##### Table of Contents



Vestin Group, Inc. and Subsidiaries


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)


|                                             |                                                                                                       |                                       |           |            |                   |   |           |            |            |  
|-------------------------------------------- | ----------------------------------------------------------------------------------------------------- | ------------------------------------- | --------- | ---------- | ----------------- | - | --------- | ---------- | ---------- | -
|                                             |                                                                                                       | For the Year Ended                    |          
|                                             |                                                                                                       |                                       |          
|                                             |                                                                                                       | December 31, 2004                     |           |            | December 31, 2003 |  
|                                             |                                                                                                       |                                       |           |            |                   |  
|Cash flows from financing activities:        |                                                                                                       |                                       |           |            |                   |   |           |           
|                                             | Payments on lines of credit                                                                           |                                       |           |           |                   |   |           | (7,000,000 | )         
|                                             | Proceeds from note payable-related party                                                              |                                       |           | 1,600,000  |                   |   |           | 1,078,997  |           
|                                             | Payments on notes payable-related party                                                               |                                       |           | (960,363   | )                 |   |           | (723,763   | )         
|                                             | Payments on note payable                                                                              |                                       |           | (1,334,654 | )                 |   |           |           |           
|                                             | Payments on capital leases                                                                            |                                       |           | (72,984    | )                 |   |           | (10,404    | )         
|                                             | Common stock options exercised                                                                        |                                       |           | 8,000      |                   |   |           | 15,999     |           
|                                             | Redemption of preferred stock                                                                         |                                       |           | (4,789,050 | )                 |   |           | (100,000   | )         
|                                             | Payment of dividend on preferred stock                                                                |                                       |           | (651,411   | )                 |   |           | (639,371   | )         
|                                             | Purchase of treasury stock                                                                            |                                       |           | (1,639,161 | )                 |   |           | (544,305   | )         
|                                             | Payment of dividend on common stock                                                                   |                                       |           |           |                   |   |           | (901,079   | )         
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             |                                                                                                       | Net cash used in financing activities |           |            | (7,839,623        | ) |           |            | (8,823,926 | )
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             |                                                                                                       | NET CHANGE IN CASH                    |           |            | 979,647           |   |           |            | (391,962   | )
|Cash at beginning of period                  |                                                                                                       |                                       | 2,131,055 |            |                   |   | 2,523,017 |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|Cash at end of period                        |                                                                                                       | $                                     | 3,110,702 |            |                   | $ | 2,131,055 |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|Supplemental cash flow information:          |                                                                                                       |                                       |           |            |                   |   |           |           
|                                             | Cash paid for federal income taxes                                                                    |                                       | $         |           |                   |   | $         |           |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Cash paid for interest                                                                                |                                       | $         | 21,628     |                   |   | $         | 262,413    |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|Non-cash investing and financing activities: |                                                                                                       |                                       |           |            |                   |   |           |           
|                                             | Dividends declared on preferred stock                                                                 |                                       | $         | 38,223     |                   |   | $         | 74,817     |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Retirement of treasury stock                                                                          |                                       | $         | 3,783,466  |                   |   | $         |           |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Notes payable assumed through foreclosure                                                             |                                       | $         |           |                   |   | $         | 244,654    |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Notes payable  related parties assumed through
    foreclosure                                       |                                       | $         |           |                   |   | $         | 802,363    |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Note payable related to capital contribution to Fund I                                                |                                       | $         |           |                   |   | $         | 723,763    |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | In substance receipt of amounts due from Fund I related to
    capital contribution in Fund I         |                                       | $         |           |                   |   | $         | 876,237    |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Investments in real estate held for sale acquired through
    foreclosure                             |                                       | $         |           |                   |   | $         | 1,094,914  |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Investment in real estate held for sale acquired for investments
    in mortgage loans on real estate |                                       | $         |           |                   |   | $         | 478,829    |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Purchase of rights to receive proceeds of judgment                                                    |                                       | $         | 1,000,000  |                   |   | $         |           |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Purchase of equipment through capital lease                                                           |                                       | $         |           |                   |   | $         | 170,844    |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Investments received as partial satisfaction of shareholder
    receivable                            |                                       | $         |           |                   |   | $         | 325,375    |           
|                                             |                                                                                                       |                                       |           |            |                   |  
|                                             | Relief of note payable-related party as satisfaction of
    shareholder receivable                    |                                       | $         | 547,815    |                   |   | $         | 368,273    |           
|                                             |                                                                                                       |                                       |           |            |                   |  



F-6



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##### Table of Contents



Vestin Group, Inc. and Subsidiaries


CONSOLIDATED STATEMENTS OF CASH
FLOWS  (Continued)




|         |                                                                
|-------- | ---------------------------------------------------------------
|NOTE A  | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES

ORGANIZATION














PRINCIPLES OF CONSOLIDATION




USE OF ESTIMATES




REVENUE RECOGNITION




F-7



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##### Table of Contents







INVESTMENTS IN REAL ESTATE HELD FOR SALE




INVESTMENTS IN MORTGAGE LOANS




ALLOWANCE FOR LOAN LOSSES




PROPERTY AND EQUIPMENT




F-8



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##### Table of Contents



ADVERTISING COSTS




INCOME TAXES




IMPAIRMENT OF LONG-LIVED ASSETS




STOCK-BASED COMPENSATION






|                                                                                                                                                     |                                                 |      |           |      |      |   |            |       |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | ---- | --------- | ---- | ---- | - | ---------- | ----- | -
|                                                                                                                                                     |                                                 | 2004 |           |      | 2003 |  
|                                                                                                                                                     |                                                 |      |           |      |      |  
|Net income (loss), as reported                                                                                                                       |                                                 | $    | 3,215,653 |      |      | $ | (5,201,267 | )    
|Deduct: Total stock-based employee compensation expense
    determined under fair value based methods for all awards, net of
    related tax effects |                                                 |      | (776,686  | )    |      |   | (1,727,583 | )    
|                                                                                                                                                     |                                                 |      |           |      |      |  
|Pro forma net income (loss)                                                                                                                          |                                                 | $    | 2,438,967 |      |      | $ | (6,928,850 | )    
|                                                                                                                                                     |                                                 |      |           |      |      |  
|Net income (loss) per common share                                                                                                                   |                                                 |      |           |      |      |   |            |      
|                                                                                                                                                     | Basic earnings (loss) per share, as reported*   |      | $         | 0.99 |      |   | $          | (2.31 | )
|                                                                                                                                                     |                                                 |      |           |      |      |  
|                                                                                                                                                     | Diluted earnings (loss) per share, as reported* |      | $         | 0.77 |      |   | $          | (2.31 | )
|                                                                                                                                                     |                                                 |      |           |      |      |  
|                                                                                                                                                     | Basic earnings (loss) per share, pro forma*     |      | $         | 0.69 |      |   | $          | (2.96 | )
|                                                                                                                                                     |                                                 |      |           |      |      |  
|                                                                                                                                                     | Diluted earnings (loss) per share, pro forma*   |      | $         | 0.53 |      |   | $          | (2.96 | )
|                                                                                                                                                     |                                                 |      |           |      |      |  






|  |                                                         
|- | --------------------------------------------------------
|* | Based on post-split weighted average shares outstanding.



F-9



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##### Table of Contents





RECENT ACCOUNTING PRONOUNCEMENTS


Share-Based Payment, Accounting for Stock Issued to Employees,


RECLASSIFICATION






|         |                    
|-------- | -------------------
|NOTE B  | ACCOUNTS RECEIVABLE





|         |                               
|-------- | ------------------------------
|NOTE C  | INTEREST ADVANCED TO BORROWERS





|         |                                
|-------- | -------------------------------
|NOTE D  | NOTE RECEIVABLE  RELATED PARTY





|         |                                            
|-------- | -------------------------------------------
|NOTE E  | INVESTMENT IN MORTGAGE LOANS ON REAL ESTATE



F-10



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##### Table of Contents







|         |                                        
|-------- | ---------------------------------------
|NOTE F  | INVESTMENT IN REAL ESTATE HELD FOR SALE



|                                                 |  |                 |           |  |              |   |           |       |           |            |             |              |  |      |            |   |  |   |           | 
|------------------------------------------------ |  | --------------- | --------- |  | ------------ | - | --------- | ----- | --------- | ---------- | ----------- | ------------ |  | ---- | ---------- | - |  | - | --------- | 
|                                                 |  |                 |           |  |              |   |           |       |           | Balance at |            
|                                                 |  | Balance at      |           |  |              |   |           |       | Valuation |            |             | December 31, | 
|Description                                      |  | January 1, 2004 |           |  | Acquisitions |   |           | Sales |           |            | Adjustments |              |  | 2004 |           
|                                                 |  |                 |           |  |              |   |           |       |           |            |             |              |  |      |           
|Raw land in Utah(2)                              |  | $               | 3,000,000 |  |              | $ |          |       |           | $          |            |              |  | $    | (1,350,000 | ) |  | $ | 1,650,000 | 
|Raw land in Las Vegas, Nevada(1)                 |  |                 | 595,860   |  |              |   |          |       |           |            | (492,800    | )            |  |      | (103,060   | ) |  |   |          | 
|Raw land in Las Vegas, Nevada                    |  |                 | 593,840   |  |              |   |          |       |           |            | (250,000    | )            |  |      |           |   |  |   | 343,840   | 
|30-unit condominium project in Las Vegas, Nevada |  |                 | 1,084,913 |  |              |   |          |       |           |            | (1,084,913  | )            |  |      |           |   |  |   |          | 
|Residence in Las Vegas, NV(1)                    |  |                 | 1,761,590 |  |              |   |          |       |           |            | (1,758,787  | )            |  |      | (2,803     | ) |  |   |          | 
|Raw land in Mesquite, Nevada(2)                  |  |                 |          |  |              |   | 3,600,000 |       |           |            | (3,500,000  | )            |  |      | (100,000   | ) |  |   |          | 
|                                                 |  |                 |           |  |              |   |           |       |           |            |             |              |  |      |           
|Total                                            |  | $               | 7,036,203 |  |              | $ | 3,600,000 |       |           | $          | (7,086,500  | )            |  | $    | (1,555,863 | ) |  | $ | 1,993,840 | 
|                                                 |  |                 |           |  |              |   |           |       |           |            |             |              |  |      |           






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The sale of two of our real estate properties resulted in losses
    upon sale of $105,863 during the year ended December 31,
    2004. In January 2004, we complete the sale of a residence in
    Las Vegas, NV which resulted in a loss of $2,803. In October of
    2004, we sold two parcels of land in Las Vegas, NV which
    resulted in a loss of $103,060.                                                                                                                                                                                                                                                                                                                                                                 
|   
|(2) | During the year ended December 31, 2004, we provided
    valuation adjustments on two of our properties totaling
    $1,450,000. Based on our estimate of the net realizable value of
    the raw land in Utah which was determined by research of the
    local real estate market, we provided valuation allowances on
    this property totaling $1,350,000 during the year ended
    December 31, 2004. In addition, subsequent to the
    acquisition of the raw land in Mesquite, Nevada as part of a
    legal settlement with a loan guarantor, we wrote down the
    carrying value of the property by $100,000 based on our
    estimated costs to sell the property. We subsequently recovered
    $73,000 of this amount.

F-11



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##### Table of Contents





|         |                       
|-------- | ----------------------
|NOTE G  | PROPERTY AND EQUIPMENT



|                               |  |   |           |  
|------------------------------ |  | - | --------- | -
|Furniture and fixtures         |  | $ | 292,153   |  
|Computers and equipment        |  |   | 741,678   |  
|Real estate                    |  |   | 273,774   |  
|Vehicles                       |  |   | 20,362    |  
|Leasehold improvements         |  |   | 571,315   |  
|                               |  |   |          
|                               |  |   | 1,899,282 |  
|Less: Accumulated depreciation |  |   | (585,100  | )
|                               |  |   |          
|Total property and equipment   |  | $ | 1,314,182 |  
|                               |  |   |          

NOTE H  NOTES PAYABLE






| |                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Promissory notes totaling $140,000 to various parties related to
    foreclosed real estate properties. Since we acquired the
    properties through foreclosure, we are not required and do not
    intend to pay interest on these notes.

NOTE I  NOTES
PAYABLE  RELATED PARTY






| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As further discussed in Note L, in December 2004, we
    borrowed $1,600,000 from Shustek Investments, Inc., a Nevada
    corporation wholly owned by our Chairman, Chief Executive
    Officer, President and majority stockholder, Michael Shustek to
    effect the repurchase of common stock from Joe Namath. The terms
    of the loan are monthly payments of interest only at the rate of
    eight percent (8%) per annum with the entire principal balance
    due one year from the execution of the promissory note. The loan
    is secured by a stock pledge of the Shares. During December 2004
    Mr. Shustek satisfied all amounts owed to us totaling
    $547,815 via a reduction to the principal balance of this note.
    As of December 31, 2004, the balance was $1,052,185.
|
| | Note payable to an entity controlled by our Chief Executive
    Officer totaling $569,061 related to vacant land. Since we
    acquired the properties through foreclosure, we are not required
    and do not intend to pay interest on this note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | Notes payable to entities controlled by our Chief Executive
    Officer totaling $806,094 related to vacant land. Since we
    acquired the properties through foreclosure, we are not required
    and do not intend to pay interest on these notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



|         |                       
|-------- | ----------------------
|NOTE J  | NOTE PAYABLE  FUND II



F-12



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##### Table of Contents





|         |               
|-------- | --------------
|NOTE K  | TRUST ACCOUNTS







NOTE L  LOANS SERVICED FOR OTHERS






|         |                                               
|-------- | ----------------------------------------------
|NOTE M  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





|   |                            
|-- | ---------------------------
|1. | Transactions with the Funds











F-13



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##### Table of Contents



















F-14



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##### Table of Contents





Transactions with Officers and Directors and their
Affiliates
















F-15



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##### Table of Contents















|         |             
|-------- | ------------
|NOTE N  | INCOME TAXES



|         |  |      |           |  |      |   |            |  
|-------- |  | ---- | --------- |  | ---- | - | ---------- | -
|         |  | 2004 |           |  | 2003 |  
|         |  |      |           |  |      |  
|Current  |  | $    | 670,698   |  |      | $ | (1,136,644 | )
|Deferred |  |      | 1,068,625 |  |      |   | (1,483,963 | )
|         |  |      |           |  |      |  
|         |  | $    | 1,739,323 |  |      | $ | (2,620,607 | )
|         |  |      |           |  |      |  



|                        |                                 |      |         |         |      |   |           |         | 
|----------------------- | ------------------------------- | ---- | ------- | ------- | ---- | - | --------- | ------- | 
|                        |                                 | 2004 |         |         | 2003 |  
|                        |                                 |      |         |         |      |  
|Deferred tax assets:    |                                 |      |         |         |      |   |           |        
|                        | Allowance for doubtful accounts |      | $       | 71,606  |      |   | $         | 55,046  | 
|                        | Spokesperson stock warrants     |      |         |        |      |   |           | 315,623 | 
|                        | Officer salaries                |      |         |        |      |   |           | 4,958   | 
|                        | Deferred revenue                |      |         |        |      |   |           | 977,500 | 
|                        | Valuation loss on real estate   |      |         | 739,297 |      |   |           | 489,001 | 
|                        | Allowance for loan losses       |      |         |        |      |   |           | 37,400  | 
|                        |                                 |      |         |         |      |  
|Net deferred tax assets |                                 | $    | 810,903 |         |      | $ | 1,879,528 |        
|                        |                                 |      |         |         |      |  



|                        |  |      |           |  |      |   |            |  
|----------------------- |  | ---- | --------- |  | ---- | - | ---------- | -
|                        |  | 2004 |           |  | 2003 |  
|                        |  |      |           |  |      |  
|Statutory tax provision |  | $    | 1,684,692 |  |      | $ | (2,659,437 | )
|Non-deductible expenses |  |      | 54,631    |  |      |   | 38,830     |  
|                        |  |      |           |  |      |  
|                        |  | $    | 1,739,323 |  |      | $ | (2,620,607 | )
|                        |  |      |           |  |      |  

F-16



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##### Table of Contents



NOTE O  EARNINGS PER COMMON SHARE




|                                |                                                                  |                                      |           |           |               |  |  |           |  |  |   |      | 
|------------------------------- | ---------------------------------------------------------------- | ------------------------------------ | --------- | --------- | ------------- |  |  | --------- |  |  | - | ---- | 
|                                |                                                                  | For the Year Ended December 31, 2004 |          
|                                |                                                                  |                                      |          
|                                |                                                                  | Income                               |           |           | Shares        |  |  | Per-Share | 
|                                |                                                                  | (Numerator)                          |           |           | (Denominator) |  |  | Amount    | 
|                                |                                                                  |                                      |           |           |               |  |  |           | 
|Net income:                     |                                                                  | $                                    | 3,215,653 |           |               |  |  |           |  |  |   |     
|Less: Preferred stock dividends |                                                                  |                                      | (651,411  | )         |               |  |  |           |  |  |   |     
|Basic EPS:                      |                                                                  |                                      |           |           |               |  |  |           |  |  |   |     
|                                | Income available to common stockholders                          |                                      |           | 2,564,242 |               |  |  | 2,593,268 |  |  | $ | 0.99 | 
|                                |                                                                  |                                      |           |           |               |  |  |           | 
|Effect of dilutive securities:  |                                                                  |                                      |           |           |               |  |  |           |  |  |   |     
|                                | Options/warrants                                                 |                                      |           |          |               |  |  | 754,400   |  |  |   |     | 
|                                |                                                                  |                                      |           |           |               |  |  |           | 
|Diluted EPS:                    |                                                                  |                                      |           |           |               |  |  |           |  |  |   |     
|                                | Income available to common stockholders plus assumed conversions |                                      | $         | 2,564,242 |               |  |  | 3,347,668 |  |  | $ | .77  | 
|                                |                                                                  |                                      |           |           |               |  |  |           | 

|                                |                                                                 |                                      |            |            |               |  |  |           |  |  |   |       |  
|------------------------------- | --------------------------------------------------------------- | ------------------------------------ | ---------- | ---------- | ------------- |  |  | --------- |  |  | - | ----- | -
|                                |                                                                 | For the Year Ended December 31, 2003 |           
|                                |                                                                 |                                      |           
|                                |                                                                 | Loss                                 |            |            | Shares        |  |  | Per-Share | 
|                                |                                                                 | (Numerator)                          |            |            | (Denominator) |  |  | Amount    | 
|                                |                                                                 |                                      |            |            |               |  |  |           | 
|Net loss:                       |                                                                 | $                                    | (5,201,267 | )          |               |  |  |           |  |  |   |      
|Less: Preferred stock dividends |                                                                 |                                      | (901,079   | )          |               |  |  |           |  |  |   |      
|Basic EPS:                      |                                                                 |                                      |            |            |               |  |  |           |  |  |   |      
|                                | Loss applicable to common stockholders                          |                                      |            | (6,102,346 | )             |  |  | 2,641,633 |  |  | $ | (2.31 | )
|                                |                                                                 |                                      |            |            |               |  |  |           | 
|Effect of dilutive securities:  |                                                                 |                                      |            |            |               |  |  |           |  |  |   |      
|                                | Options/warrants                                                |                                      |            |           |               |  |  |          |  |  |   |      |  
|                                |                                                                 |                                      |            |            |               |  |  |           | 
|Diluted EPS:                    |                                                                 |                                      |            |            |               |  |  |           |  |  |   |      
|                                | Loss applicable to common stockholders plus assumed conversions |                                      | $          | (6,102,346 | )             |  |  | 2,641,633 |  |  | $ | (2.31 | )
|                                |                                                                 |                                      |            |            |               |  |  |           | 

NOTE P  EMPLOYEE BENEFIT PLAN


401(k) PLAN




NOTE Q  STOCKHOLDERS EQUITY


COMMON STOCK




F-17



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##### Table of Contents



PREFERRED STOCK






COMMON STOCK DIVIDENDS




STOCK OPTIONS






STOCK OPTIONS AND WARRANTS ACTIVITY






F-18



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##### Table of Contents





|                                       |  |            |           |  |                  |   |      | 
|-------------------------------------- |  | ---------- | --------- |  | ---------------- | - | ---- | 
|                                       |  | Number     |           |  | Weighted Average |  
|                                       |  | of Shares* |           |  | Exercise Price   |  
|                                       |  |            |           |  |                  |  
|Balance, January 1, 2002               |  |            | 1,599,000 |  |                  | $ | 4.41 | 
|Options and warrants granted           |  |            | 1,140,000 |  |                  |   | 7.02 | 
|Options and warrants exercised         |  |            | 2,000     |  |                  |   | 4.00 | 
|Options and warrants forfeited/expired |  |            | 15,000    |  |                  |   | 6.51 | 
|                                       |  |            |           |  |                  |  
|Balance, January 1, 2003               |  |            | 2,722,000 |  |                  |   | 5.49 | 
|Options and warrants granted           |  |            | 510,000   |  |                  |   | 2.13 | 
|Options and warrants exercised         |  |            | 4,000     |  |                  |   | 4.00 | 
|Options and warrants forfeited/expired |  |            | 94,670    |  |                  |   | 7.02 | 
|                                       |  |            |           |  |                  |  
|Balance, December 31, 2003             |  |            | 3,133,330 |  |                  | $ | 4.90 | 
|Options and warrants granted           |  |            | 250,000   |  |                  |   | 3.00 | 
|Options and warrants exercised         |  |            |          |  |                  |   |     | 
|Options and warrants forfeited/expired |  |            | 2,000     |  |                  |   | 4.00 | 
|                                       |  |            |           |  |                  |  
|Outstanding Balance, December 31, 2004 |  |            | 3,381,330 |  |                  | $ | 4.76 | 
|                                       |  |            |           |  |                  |  
|Shares exercisable, December 31, 2004  |  |            | 3,211,629 |  |                  | $ | 4.64 | 
|                                       |  |            |           |  |                  |  






|  |                                                                           
|- | --------------------------------------------------------------------------
|* | The number of shares reflected in this table are presented
    post-split.



|               |  |                     |           |  |             |  |                     |          |  |   |             |  |  |          |           |  |  |   |      | 
|-------------- |  | ------------------- | --------- |  | ----------- |  | ------------------- | -------- |  | - | ----------- |  |  | -------- | --------- |  |  | - | ---- | 
|               |  | Shares Underlying   |           |  |             |  |                    
|               |  | Options Outstanding |           |  |             |  | Shares Underlying   |         
|               |  |                     |           |  |             |  | 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    |          
|               |  |                     |           |  |             |  |                     |          |  |   |             |  |  |          |          
|$2.03 to $4.00 |  |                     | 1,713,300 |  |             |  | 6.89 years          |          |  | $ | 3.27        |  |  |          | 1,719,299 |  |  | $ | 3.27 | 
|$5.07          |  |                     | 609,700   |  |             |  | 6.88 years          |          |  | $ | 5.07        |  |  |          | 609,700   |  |  | $ | 5.07 | 
|$7.02          |  |                     | 1,052,330 |  |             |  | 7.91 years          |          |  | $ | 7.02        |  |  |          | 882,629   |  |  | $ | 7.02 | 





|                                 |  |      |       |   |      |  |       |  
|-------------------------------- |  | ---- | ----- | - | ---- |  | ----- | -
|                                 |  | 2004 |       |   | 2003 | 
|                                 |  |      |       |   |      | 
|Average risk-free interest rates |  |      | 3.25  | % |      |  | 2.79  | %
|Average expected life (in years) |  |      | 3.00  |   |      |  | 3.94  |  
|Volatility                       |  |      | 62.86 | % |      |  | 73.76 | %
|Dividend yield                   |  |      | 0.00  | % |      |  | 0.00  | %



F-19



---



##### Table of Contents







STOCK WARRANTS


Spokesperson Stock Warrants


|                                       |  |            |           |  |                  |   |      | 
|-------------------------------------- |  | ---------- | --------- |  | ---------------- | - | ---- | 
|                                       |  | Number     |           |  | Weighted Average |  
|                                       |  | of Shares* |           |  | Exercise Price   |  
|                                       |  |            |           |  |                  |  
|Balance, January 1, 2004               |  |            | 1,200,000 |  |                  | $ | 1.54 | 
|Options and warrants granted           |  |            |          |  |                  |   |     | 
|Options and warrants exercised         |  |            | 800,000   |  |                  |   | 0.01 | 
|Options and warrants forfeited/expired |  |            | 400,000   |  |                  |   | 4.60 | 
|                                       |  |            |           |  |                  |  
|Balance, December 31, 2004             |  |            |          |  |                  | $ |     | 
|                                       |  |            |           |  |                  |  

TREASURY STOCK




NOTE R  EMPLOYMENT AGREEMENTS




NOTE S  FAIR VALUE OF FINANCIAL
INSTRUMENTS






F-20



---



##### Table of Contents



NOTE T  CONCENTRATIONS










NOTE U  COMMITMENTS AND CONTINGENCIES


LEASE COMMITMENTS






|           |  |   |            | 
|---------- |  | - | ---------- | 
|2005       |  | $ | 1,013,793  | 
|2006       |  |   | 985,507    | 
|2007       |  |   | 978,549    | 
|2008       |  |   | 962,272    | 
|Thereafter |  |   | 6,621,067  | 
|           |  |   |           
|           |  | $ | 10,561,188 | 
|           |  |   |           



NOTE V  LEGAL MATTERS




F-21



---



##### Table of Contents









NOTE W  SUBSEQUENT EVENTS






F-22



---



##### Table of Contents






SIGNATURES






| |                                       
| | --------------------------------------
| | VESTIN GROUP, INC.                    
|
| | /s/ John Alderfer                     
| |                                       
| | John Alderfer, Chief Financial Officer





|                                                                                          |  |                                                             |  |               
|----------------------------------------------------------------------------------------- |  | ----------------------------------------------------------- |  | --------------
|Signatures                                                                                |  | Title                                                       |  | Date          
|                                                                                          |  |                                                             |  |               
|                                                                                         
|/s/ Michael V. ShustekMichael
    V. Shustek
    * Principal Executive Officer            |  | Chairman of the Board, Chief Executive Officer and Director |  | March 24, 2005
|                                                                                         
|/s/ John W. AlderferJohn
    W. Alderfer
    * Principal Financial and Accounting Officer |  | Chief Financial Officer                                     |  | March 24, 2005
|                                                                                         
|/s/ Lance K. BradfordLance
    K. Bradford                                                |  | Director                                                    |  | March 24, 2005
|                                                                                         
|/s/ Robert J. AalbertsRobert
    J. Aalberts                                              |  | Director                                                    |  | March 24, 2005
|                                                                                         
|/s/ Roland M. SansoneRoland
    M. Sansone                                                |  | Director                                                    |  | March 24, 2005
|                                                                                         
|/s/ Fredrick J. Zaffarese
    LeavittFredrick
    J. Zaffarese Leavitt                    |  | Director                                                    |  | March 24, 2005

F-23



---



##### Table of Contents






EXHIBIT INDEX


|        |    |     |             |                                                                                                                                                                                                                             |               |  |      | 
|------- | -- | --- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- |  | ---- | 
|        |    |     |             | Page                                                                                                                                                                                                                        |              
|Exhibit |    |     |             |                                                                                                                                                                                                                             | Number/       | 
|Number  |    |     | Description |                                                                                                                                                                                                                             | Filing Method | 
|        |    |     |             |                                                                                                                                                                                                                             |               | 
|        | 2  | .1  |             | Agreement and Plan of Reorganization among the Company,
    Capsource, Inc. and Stephen J. Byrne, dated as of April 9,
    1999                                                                                             |               |  | (1)  | 
|        | 2  | .2  |             | Asset Acquisition Agreement between the Company and Del Mar
    Holdings, Inc., dated as of April 9, 1999                                                                                                                   |               |  | (1)  | 
|        | 2  | .3  |             | Asset Acquisition Agreement between the Company and Del Mar
    Mortgage, Inc., dated as of April 9, 1999                                                                                                                   |               |  | (1)  | 
|        | 2  | .4  |             | Agreement and Plan of Reorganization among the Company, L. L.
    Bradford & Company and the Shareholders of L. L. Bradford
    & Company, dated June 30, 2000                                                              |               |  | (2)  | 
|        | 3  | .1  |             | Certificate of Incorporation                                                                                                                                                                                                |               |  | (3)  | 
|        | 3  | .2  |             | By-laws                                                                                                                                                                                                                     |               |  | (3)  | 
|        | 10 | .1  |             | Employment Agreement between Del Mar Mortgage, Inc. and Steve
    Byrne, dated November 3, 1998                                                                                                                             |               |  | (4)  | 
|        | 10 | .2  |             | Transition Agreement between Del Mar Mortgage, Inc. and
    Capsource, Inc., dated April 27, 1999 and First Amendment
    thereto, dated April 27, 1999                                                                     |               |  | (4)  | 
|        | 10 | .3  |             | Employment Agreement between Del Mar Mortgage and Mike
    Whiteaker, dated May 3, 1999                                                                                                                                     |               |  | (4)  | 
|        | 10 | .4  |             | The 2000 Stock Option Plan of Sunderland Corporation                                                                                                                                                                        |               |  | (4)  | 
|        | 10 | .5  |             | Employment Agreement between the Company and Michael V. Shustek,
    dated December 1, 1999                                                                                                                                 |               |  | (4)  | 
|        | 10 | .6  |             | Employment Agreement by and between the Company and Peggy May
    (now known as Peggy Shustek), dated September 1, 2001.                                                                                                    |               |  | (14) | 
|        | 10 | .7  |             | Totally Restated and Amended Employment Agreement by and between
    the Company and Lance Bradford, dated as of January 1, 2003.                                                                                           |               |  | (14) | 
|        | 10 | .8  |             | Third Amended and Restated Operating Agreement of Vestin
    Fund I, LLC (formerly known as DM Mortgage Investors, LLC),
    dated as of November 2, 2000                                                                   |               |  | (5)  | 
|        | 10 | .9  |             | Certificate of Designations authorizing the issuance of
    Series A Convertible Preferred Stock                                                                                                                            |               |  | (6)  | 
|        | 10 | .10 |             | Operating Agreement of Vestin Fund II, LLC, dated as of
    December 7, 2001                                                                                                                                                |               |  | (7)  | 
|        | 10 | .11 |             | License Agreement by and between the Company and Planned
    Licensing, Inc., dated as of January 2001                                                                                                                      |               |  | (8)  | 
|        | 10 | .12 |             | Amended and Restated Intercreditor Agreement by and between
    Vestin Mortgage, Inc., Vestin Fund I, LLC, Vestin
    Fund II, LLC and Owens Financial Group, Inc., dated as of
    September 25, 2002                      |               |  | (14) | 
|        | 10 | .13 |             | Amended and Restated Operating Agreement of Vestin
    Fund III, LLC, dated as of May 2, 2003                                                                                                                               |               |  | (13) | 
|        | 10 | .14 |             | Office Lease Agreement between the Company and The Wildwood
    Hills Development, Corporation, dated January 5, 2001                                                                                                       |               |  | (14) | 
|        | 10 | .15 |             | Employment Agreement by and between the Company and Daniel
    Stubbs, dated January 1, 2003                                                                                                                                |               |  | (11) | 
|        | 10 | .16 |             | Office Lease by and between Luke Properties, LLC and the
    Company, dated March 2004                                                                                                                                      |               |  | (14) | 
|        | 10 | .17 |             | Separation Agreement and Release of All Claims by and between
    Steve Byrne and the Company, dated as of October 14, 2003                                                                                                 |               |  | (11) | 
|        | 10 | .18 |             | Amended and Restated Intercreditor Agreement by and among Vestin
    Mortgage, Inc., Vestin Fund I, LLC, Vestin Fund II,
    LLC, Owens Financial Group, Inc., and Owens Mortgage Investment
    Fund, dated April 18, 2003 |               |  | (9)  | 



---



##### Table of Contents



|        |    |     |             |                                                                                                                                  |               |  |      | 
|------- | -- | --- | ----------- | -------------------------------------------------------------------------------------------------------------------------------- | ------------- |  | ---- | 
|        |    |     |             | Page                                                                                                                             |              
|Exhibit |    |     |             |                                                                                                                                  | Number/       | 
|Number  |    |     | Description |                                                                                                                                  | Filing Method | 
|        |    |     |             |                                                                                                                                  |               | 
|        | 10 | .19 |             | Aircraft Usage Agreement by and between the Company and C5, LLC,
    dated September 1, 2002                                     |               |  | (9)  | 
|        | 10 | .20 |             | Indemnity Agreement by and between the Company and Del Mar
    Mortgage, Inc., dated April 15, 2003                              |               |  | (10) | 
|        | 10 | .21 |             | Guaranty by and among the Company, Michael V. Shustek, and Del
    Mar Mortgage, Inc., dated April 15, 2003                      |               |  | (10) | 
|        | 10 | .22 |             | Office Lease Agreement by and between The Wildwood Hills
    Development, Corporation and the Company, dated January 5,
    2001 |               |  | (12) | 
|        | 10 | .23 |             | Office Lease Agreement by and between 2901 El Camino, Las Vegas,
    NV, LLC and the Company, dated August 1, 2002               |               |  | (12) | 
|        | 10 | .24 |             | Office Lease Agreement by and between The Wildwood Hills
    Development, Corporation and the Company, dated January 5,
    2001 |               |  | (12) | 
|        | 10 | .25 |             | Office Lease Agreement by and between 2901 El Camino, Las Vegas,
    NV, LLC and the Company, dated August 1, 2002               |               |  | (14) | 
|        | 10 | .26 |             | Amended Management Agreement by and between Vestin Mortgage,
    Inc. and inVestin Nevada, Inc.                                  |               |  |      | 
|        | 10 | .27 |             | Amended Operating Agreement of Vestin Fund III, LLC dated
    as of January 17, 2005                                             |               |  | (15) | 
|        | 14 | .1  |             | Code of Ethics                                                                                                                   |               |  | (11) | 
|        | 21 | .1  |             | List of Subsidiaries of the Company                                                                                              |               |  |      | 
|        | 31 | .1  |             | Section 302 Certification of Michael V. Shustek                                                                                  |               |  |      | 
|        | 31 | .2  |             | Section 302 Certification of John W. Alderfer                                                                                    |               |  |      | 
|        | 32 |     |             | Certification Pursuant to U.S.C. 18 Section 1350                                                                                 |               |  |      | 






|    |                                                                               
|--- | ------------------------------------------------------------------------------
|(1) | Previously filed on Form 8-K (File No. 000-24803) on
    May 4, 1999.         
|   
|(2) | Previously filed on Form 8-K (File No. 000-24803) on
    April 14, 2000.      
|   
|(3) | Previously filed on Form 10-SB/ A (File No. 000-24803)
    on August 13, 1998.
|   
|(4) | Previously filed on Form 10-KSB (File No. 000-24803)
    on March 31, 2000.   
|   
|(5) | Previously filed on Form 424B5 (File No. 333-32800) on
    November 15, 2000. 
|   
|(6) | Previously filed on Form 8-K (File No. 000-24803) on
    December 7, 2001.    
|   
|(7) | Previously filed on Form S-11 (File No. 793646) on
    December 21, 2000.     
|   
|(8) | Previously filed on Form 8-K (File No. 000-24803) on
    January 25, 2001.    
|   
|(9) | Previously filed by Form SB-2/ A (File No. 333-104109)
    on June 4, 2003.   



|     |                                                                                           
|---- | ------------------------------------------------------------------------------------------
|(10) | Previously filed on Form SB-2/ A (File No. 333-104109)
    on October 15, 2003.           
|    
|(11) | Previously filed on Form 10-KSB (File No. 000-24803)
    on March 30, 2004.               
|    
|(12) | Previously filed on Form 10-KSB/ A (File
    No. 000-24803) on April 14, 2004.            
|    
|(13) | Previously filed on Form S-11/ A (File No. 333-105017)
    on April 29, 2004.             
|    
|(14) | Previously filed on Form 10-KSB/ A Amendment #2 (File
    No. 000-24803) on August 4, 2004
|    
|(15) | Previously filed on Form 8-K/ A (File No. 000-24803)
    on February 2, 2005