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

                                   FORM 10-QSB

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005


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


                        COMMISSION FILE NUMBER 000-50893

                           LAKESIDE MORTGAGE FUND, LLC
                 (Name of Small Business Issuer in its Charter)


              CALIFORNIA                                  52-2387294
     (State or other jurisdiction of                   (I.R.S. Employer
      Incorporation or organization)                  Identification No.)


            443 REDCLIFF DRIVE, SUITE 240, REDDING, CALIFORNIA, 96002
                     (Address of Principal Executive Office)

                                 (530) 226-5850
                           (Issuer's Telephone Number)


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

Transitional Small Business Disclosure Format (Check One):   Yes [X]  No [ ]


                                      -1-
<PAGE>

                                TABLE OF CONTENTS


Part I - Financial Information

    Item 1   Financial Statements                                             3

    Item 2   Management's Discussion and Analysis or Plan of Operation       17

    Item 3   Controls and Procedures                                         17


Part II - Other Information

    Item 1   Legal Proceedings                                               22

    Item 2   Changes in Securities                                           22

    Item 3   Defaults Upon Senior Securities                                 22

    Item 4   Submission of Matters to a Vote of Security Holders             23

    Item 5   Other Information                                               23

    Item 6   Exhibits                                                        23

    Signatures 24



                                      -2-
<PAGE>

ITEM 1.           FINANCIAL STATEMENTS AND NOTES

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)

                           BALANCE SHEETS (UNAUDITED)
                              MARCH 31, 2005 & 2004

<TABLE>
<CAPTION>
                                                                           2005         2004
                                                                        ----------   ----------
<S>                                                                     <C>          <C>
                                    ASSETS

   Cash and cash items                                                  $  416,679   $  427,295

   Loan interest reserve (restricted)                                      316,947       20,620

   Accrued interest receivable                                               8,844        4,397

   Participating note receivable from related party (Note 3, 4 and 5)      305,000      305,000

   Loans secured by trust deeds - related parties                          677,000            0

   Loans secured by trust deeds - others, net of allowance for bad
     debts amounting to $ 15,700 (Notes 3 and 5)                         5,248,724    1,211,715
                                                                        ----------   ----------

TOTAL ASSETS                                                            $6,973,194   $1,969,027
                                                                        ----------   ----------

                       LIABILITIES AND MEMBERS' EQUITY


   Accounts payable and accrued liabilities                             $   21,293   $        0

   Uninvested subscriptions                                                288,208      380,668

   Deferred interest on loans secured by trust deeds                       316,947       20,620
                                                                        ----------   ----------

    TOTAL LIABILITIES                                                      626,448      401,288
                                                                        ----------   ----------

   Members' contributions, net                                           6,318,817    1,559,705

   Retained earnings                                                        27,931        8,034
                                                                        ----------   ----------

   TOTAL MEMBERS' EQUITY (NOTE 4)                                        6,346,748    1,567,739
                                                                        ----------   ----------

TOTAL LIABILITIES AND MEMBERS' EQUITY                                   $6,973,196   $1,969,027
                                                                        ----------   ----------
</TABLE>

See accompanying notes


                                      -3-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)

                      STATEMENTS OF OPERATIONS (UNAUDITED)
                  FOR THE QUARTERS ENDED MARCH 31, 2005 & 2004



                                                            2005         2004
                                                          --------     --------
REVENUES

     Interest  income                                     $155,635     $ 26,980
                                                          --------     --------

     Total revenues                                        155,635       26,980
                                                          --------     --------

EXPENSES

     Professional fees - legal and accounting                7,610            0

     Management fees (Note 4)                                8,996        2,074

     Advertising & Printing                                  2,549            0

     Provision for loan losses                               8,600            0

     Trailer commissions                                     3,000            0

     Taxes, fees & licenses                                  5,098
     Total expenses                                         35,853        2,074
                                                          --------     --------

NET INCOME                                                $119,782     $ 24,906
                                                          ========     ========


See accompanying notes


                                      -4-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)

                    STATEMENTS OF MEMBERS' EQUITY (UNAUDITED)
                  FOR THE QUARTERS ENDED MARCH 31, 2005 & 2004


<TABLE>
<CAPTION>
                                                           MEMBERS'       RETAINED
                                                        CONTRIBUTIONS     EARNINGS        TOTAL
                                                         -----------    -----------    -----------
<S>                                                      <C>            <C>            <C>
BALANCE, JANUARY 1, 2004                                 $   836,080    $     5,358    $   841,438

          Contributions                                      762,819                       762,819

          Costs incurred in raising capital                  (51,699)                      (51,699)

          Reinvestment of members' share of net income        12,505                        12,505

          Net income                                                         24,906         24,906

          Cash distribution                                                 (22,230)       (22,230)
                                                         -----------    -----------    -----------

BALANCE, MARCH 31, 2004                                  $ 1,559,705    $     8,034    $ 1,567,739
                                                         ===========    ===========    ===========



BALANCE, JANUARY 1, 2005                                 $ 5,267,710    $    19,760    $ 5,287,470

          Contributions                                    1,013,147                     1,013,147

          Costs incurred in raising capital                  (42,863)                      (42,863)

          Reinvestment of members' share of net income        80,822                        80,822

          Net income                                                        119,782        119,782

          Cash distribution                                                (111,611)      (111,611)
                                                         -----------    -----------    -----------

 BALANCE, MARCH 31, 2005                                 $ 6,318,816    $    27,931    $ 6,346,747
                                                         ===========    ===========    ===========
</TABLE>


see accompanying notes


                                      -5-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)

                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                  FOR THE QUARTERS ENDED MARCH 31, 2005 & 2004

<TABLE>
<CAPTION>
                                                                            2005             2004
                                                                        -----------      -----------
<S>                                                                     <C>              <C>
CASH FLOWS  FROM OPERATING ACTIVITIES:
     Net income from operations                                         $   119,782      $    24,906
     Adjustments to reconcile net income to net cash provided
       by operations:
        Provision for bad debts                                               8,600                0
        Accrued interest receivable                                           5,336           (2,560)
        Loan interest reserve (restricted)                                  (81,326)         (13,716)
        Accounts payable and accrued liabilities                              5,770             (599)
        Deferred interest on loans secured by trust deeds                    81,326           13,717
                                                                        -----------      -----------
        Net cash provided by operating activities                           139,488           21,748
                                                                        -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

     Investment in participating note receivable from related party              --         (130,000)
     Investment in short term commercial papers                                  --          100,000
     Investment in loans secured by trust deeds - others                 (1,229,935)        (831,715)
                                                                        -----------      -----------
        Net cash used in investing activities                            (1,229,935)        (861,715)
                                                                        -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

     Uninvested subscriptions                                                53,467          209,313
     Members' contributions, net                                          1,051,106          698,626
     Distributions to members                                              (111,611)         (22,231)
                                                                        -----------      -----------
        Net cash provided by financing activities                           992,962          885,708
                                                                        -----------      -----------

NET CHANGE IN CASH AND CASH ITEMS                                           (97,484)          45,741

CASH AND CASH ITEMS, BEGINNING OF PERIOD                                    514,164          381,554
                                                                        -----------      -----------

CASH AND CASH ITEMS, END OF PERIOD                                      $   416,679      $   427,295
                                                                        ===========      ===========
</TABLE>


See accompanying notes


                                      -6-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005

NOTE 1 -          ORGANIZATION AND DESCRIPTION OF BUSINESS

Lakeside Mortgage Fund, LLC (the "Fund"), a California limited liability company
was formed on  December  4, 2002  under the  California  Beverly-Killea  Limited
Liability  Company Act (the "Act") to conduct  any lawful  business  for which a
limited liability company may be organized under the Act,  including  investment
of the Fund's  cash and making or  investing  in notes,  mortgages  and loans to
members  of the  general  public  secured  by  deeds  of  trust  on real  estate
properties located primarily in the State of California.

The Fund will continue to operate indefinitely until dissolved and terminated by
vote of Members holding a majority of the outstanding membership interests, with
the concurrence of the Fund Manager.

The Fund began operations on September 26, 2003.  Fiscal year 2003 was the first
year  during  which  the  Fund is  considered  an  operating  company.  Prior to
September 26, 2003, the Company had been in the  development  stage.  The fiscal
year of the Fund ends on December 31.

The  Fund's  operation  plan is to  continue  to seek  investors  and use  those
proceeds to fund suitable loans  consistent  with the Fund's  lending  criteria.
Management  believes qualified  investors will continue to invest in the Fund so
that the Fund will  continue to raise  capital from such  investors,  and invest
such capital in commercial mortgage loans.

The  Manager of the Fund is  Lakeside  Financial  Group,  Inc.  ("Lakeside"),  a
California corporation formed for the purpose of managing the Fund. Lakeside was
incorporated in August 2002 and began doing business in November 2002.  Lakeside
is not a Member of the Fund, and is owned by shareholders who are not members of
the Fund.

The profit or loss of the Fund is  allocated  to the  Members in  proportion  to
their respective Percentage Interest. The Manager is required to allocate to the
Members all  profits and losses  realized by the Fund during the month as of the
close of business on the last day of each calendar  month,  in  accordance  with
their  respective  Percentage  Interests and in proportion to the number of days
during the calendar month that they owned the interests.

Cash available for distribution  will be the equivalent of net income during the
calendar month using the accrual method of accounting and in accordance  with US
generally  accepted  accounting  principles.  Monthly,  the  Fund  will  provide
statements of account to Members and distribute or reinvest amounts equal to the
Members' proportionate share of the Fund's accrued net income during such month.
Accrued  net income  means the  excess of accrued  income  from  operations  and
investment  of, or sale or  refinancing  or other  disposition  of,  Fund assets
during  such  calendar  month over the  accrued  operating  expenses of the Fund
during such month,  including any  adjustments  for bad debt  reserves,  accrued
Fund's  operating  expenses or other  reserves  for  expenses  and losses as the
Manager may deem  appropriate or for which the Manager  believes it to be in the
best interests of the Fund, all determined in accordance with generally accepted
accounting  principles.  The Manager is  required to allocate  funds only to the
extent that funds are available.  Cash available for  distributions in an amount
equal to their  respective  allocable  shares of Fund net  profits  during  such
month,  and the  balance  of Fund net income  will be  credited  to the  capital
accounts of Members who elected to compound earnings.


                                      -7-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


Fund  Members are allowed to withdraw  from the Fund and receive a return of the
amount in their capital accounts only after 12 months from the date of admission
into the Fund  ("Holding  Period").  Members must give a 60-day  written  notice
prior to  withdrawing  and payments to any  withdrawing  member are limited to $
25,000 per quarter. After the Holding Period, Members may withdraw and receive a
return of their  capital  accounts  subject to the  availability  of cash in the
Fund, and subject to the following  penalties for early  withdrawal  pursuant to
the terms of the Operating  Agreement:  (i) 3% of  withdrawal  amount within the
first year following the holding period; (ii) 2% of withdrawal amount within the
second year  following the holding  period;  and (iii) 1% of  withdrawal  amount
within the third year following the holding period.  Aggregate withdrawals among
all Members  may not exceed 10% of the Fund's  total  capital  for any  calendar
year. The Fund does not maintain a reserve for withdrawing  members.  The Fund's
capacity  to return a  withdrawing  member's  capital  account is limited by the
availability  of cash on hand  after  payment  of  expenses  and  provision  for
maintaining adequate reserves, in the discretion of the Manager.

The  Manager is  entitled  to receive  certain  fees,  compensation  and expense
reimbursements  from the Fund.  The Manager is entitled to receive from the Fund
an Asset Management Fee,  payable  monthly,  in a maximum amount of 2.75% of the
gross assets under  management per year (0.229% per month).  The Manager is also
entitled to receive a Note Servicing Fee, payable  monthly,  in a maximum amount
of 0.25% of the total unpaid  principal  balances of loans  serviced  (0.02% per
month).  The  Manager  may waive  these fees in order to  improve  the return to
investor Members. The Manager is also entitled to receive reimbursement from the
Fund for  organizational,  syndication and other operating  expenses incurred on
behalf of the Fund, including  out-of-pocket general and administrative expenses
of the Fund  related to the offering of  membership  interests,  accounting  and
audit fees,  legal fees and expenses,  postage and other expenses related to the
preparation of reports to Members.

The  Manager  receives  other fees from third  parties  as  compensation  to the
Manager for acting as broker in arranging loans from the Fund. These fees (which
are not paid by the Fund, but rather by third party borrowers) are determined on
a case-by-case  basis, are generally 3% to 5% of the loan amount,  and generally
consist of brokerage, origination, renewal and/or processing fees.

NOTE 2 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)      BASIS OF ACCOUNTING

The financial  statements of the organization  have been prepared on the accrual
basis  of  accounting  and  accordingly  reflect  all  significant  receivables,
payables and other liabilities.

(b)      ESTIMATES AND ASSUMPTIONS

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

(c)      REVENUE RECOGNITION

Interest is recognized as revenue when earned according to the contractual terms
of the loan and in accordance with generally accepted accounting principles.


                                      -8-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


(d)      INCOME TAXES

The Fund is treated as a  partnership  for  federal  and  California  income tax
purposes.  Consequently, all tax effects of the Fund's income or loss are passed
through to the Members  individually,  and no federal or California income taxes
are  provided  for in the  financial  statements  of the Fund.  The Fund pays an
annual  California  tax of $800 and an annual  California LLC fee based upon its
annual gross receipts.

(e)      CASH AND CASH EQUIVALENTS

For purposes of the statements of cash flows, cash and cash equivalents  include
interest-bearing and non interest-bearing  bank deposits,  money market accounts
and commercial paper with original maturities of three months or less.

(f)      LOANS SECURED BY TRUST DEEDS

Loans  secured by trust deeds are recorded at cost.  To date,  no loans had been
purchased  from  outside  third  party  issuers  of loans;  all loans  have been
originated by the Fund.  Interest is recognized as revenue when earned according
to the contractual  terms of the loan. The Fund loans will have varying terms at
the discretion of the Manager.  Construction loans will generally have a term of
between one and five years and will  provide  for  monthly  payments of interest
only with a "balloon  payment" at the end of the term. Other Fund loans may have
a longer  amortization  schedule  and may be  fully  amortizing,  i.e.  original
principal  amount of the loan will be repaid in equal  monthly  installments  of
principal  and interest over the term.  In such cases,  the Fund will  recognize
income using the effective  interest  method of  accounting  in accordance  with
generally accepted accounting  principles.  The Fund will not recognize interest
income on loans once they are  determined  to be impaired  until the interest is
collected in cash. A loan is impaired  when,  based on current  information  and
events,  it is probable  that the Fund will be unable to collect all amounts due
according to the contractual  terms of the loan agreement or when the payment of
principal or interest is 90 days past due,  and a specific  reserve is recorded.
Cash  receipts will be allocated to interest  income,  except when such payments
are specifically  designated as principal  reduction or when management does not
believe the Fund's investment in the loan is fully recoverable.

As of March 31, 2005, no loan was in default or on delinquent status.

(g)      ALLOWANCE FOR LOAN LOSSES

The  allowance  for loan losses will be  established  as losses are estimated to
have  occurred  through a  provision  for loan  losses  that will be  charged to
earnings.  Loan losses will be charged  against the  allowance  when  management
believes  the  uncollectibility  of a  loan  balance  is  confirmed.  Subsequent
recoveries, if any, will be credited to allowance. The allowance for loan losses
will  be  evaluated  on  a  regular  basis  by  management  and  is  based  upon
management's  periodic  review  of the  collectibility  of the loans in light of
historical  experience,  the types and dollar amounts of loans in the portfolio,
adverse  situations that may affect the borrower's  ability to repay,  estimated
value of any underlying  collateral,  and prevailing economic  conditions.  This
evaluation  is  inherently   subjective  as  it  requires   estimates  that  are
susceptible  to  significant  revision as more  information  becomes  available.
Impairment  is measured  on a loan by loan basis by either the present  value of
expected future cash flows discounted at the loan's effective interest rate, the
loan's obtainable market price, or the fair value of the underlying collateral.


                                      -9-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


As of March 31,  2005 and 2004,  the  balance  of the  reserve  for loan  losses
amounted to $15,700.00 and $ 0.00, respectively.

(h)      INTEREST RESERVE ACCOUNT

The Fund often requires borrowers to set up interest reserve accounts from which
monthly  payments of interest are made. The interest reserve is deposited into a
separate  bank  account  in the name of the  Fund,  designated  specifically  as
interest  reserve on loans issued by the Fund. At the end of the month, the Fund
draws the calculated  monthly  interest on  outstanding  loans from the interest
reserve account and transfers such amount into the general  operating account of
the Fund as part of the distributable fund available for monthly disbursement to
the members.  The equivalent  unearned amount is recorded as a Deferred Interest
Reserve Account in the liabilities section of the balance sheet. As of March 31,
2005 and 2004,  the interest  reserve and  deferred  interest  reserve  accounts
carried balance amounting to $ 316,947.00 and $ 20,620.00, respectively.

(i)  CONTRA-EQUITY   ACCOUNTS:   OFFERING  COSTS  AND  COMMISSIONS  INCURRED  IN
CONNECTION WITH RAISING OF CAPITAL

Syndication costs incurred in connection with the raising of capital by offering
units of  membership  interest in the Fund are being  treated as a reduction  of
paid in capital.  Initial  marketing  fees and broker's  commissions  paid to an
outside  brokerage firm are treated as  contra-equity  accounts.  The fees range
between 3.5% - 6.5%,  depending on the  commission  plan  selected by individual
brokers.  The  brokers  are  also  entitled  to  receive  "trailer  commissions"
equivalent to 1/2 of 1% of the average daily invested capital at the anniversary
of the invested funds.  The initial  marketing/broker's  fees are capitalized in
accordance with GAAP, pursuant to the AICPA's Technical Practice Aid TIS 7200.07
(Accounting for Syndication Costs of Limited Partnerships).  Subsequent payments
of trailer  commissions  however  will be  treated  as period  costs and will be
charged to current earnings of the Fund. As such, the initial marketing/broker's
fees are  included in the Balance  Sheet  under the  caption  heading  "Members'
contributions, net" while the trailer commissions will be shown in the Statement
of Operations,  when incurred. The Fund has capitalized $ 42,863 and $ 76,699 of
syndication  costs and brokers'  fees during the first quarter of 2005 and 2004,
respectively.

(j)      ORGANIZATION COSTS

All costs including  registration and legal fees incurred in connection with the
setting up and  incorporating of the Fund have been expensed and have been borne
by the Manager.

(k)      SUBSCRIPTION ACCOUNT

Upon receipt of the funds from  prospective  investors  subscribing  to purchase
membership interests, those funds are deposited into a Subscription Account. The
funds are held,  in the Manager's  discretion up to a maximum of 60 days,  until
needed by the Fund for a loan or other purpose.  The funds are then  contributed
to the capital of the Fund in exchange  for a Membership  Interest.  The Manager
may hold funds in the Subscription Account for longer than 60 days only upon the
written consent of the subscriber.

         As of March 31, 2005 and 2004, the uninvested funds in the Subscription
Account amounted to $288,208.00 and $380,668.00, respectively.


                                      -10-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


(l)      NEW ACCOUNTING PRONOUNCEMENTS

SFAS 149

In April 2003, the FASB issued Statement No. 149, "amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends SFAS No. 133
to provide clarification on the financial accounting and reporting of derivative
instruments  and hedging  activities  and requires that  contracts  with similar
characteristics  be  accounted  for  on a  comparable  basis.  The  standard  is
effective  for  contracts  entered  into or modified  after June 30,  2003.  The
adoption  of SFAS No. 149 did not have any impact on our  financial  position or
results of operations.

SFAS 150

In May  2003,  the FASB  issued  SFAS  150,  Accounting  for  Certain  Financial
Instruments  with  Characteristics  of Both  Liabilities  and  Equity.  SFAS 150
specifies that instruments within its scope embody obligations of the issuer and
that, therefore, the issuer must classify them as liabilities.  SFAS 150 did not
have a material impact on our financial position or results of operations.

Interpretation No. 46

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable  Interest  Entities"  ("Interpretation  46") which was then  revised in
December  2003.  Interpretation  46  clarifies  the  application  of  Accounting
Research  Bulletin  No.  51,  "Consolidated  Financial  Statements,"  to certain
entities  in  which  equity  investors  do not  have  the  characteristics  of a
controlling  financial interest or do not have sufficient equity at risk for the
entity to finance  its  activities  without  additional  subordinated  financial
support from other  parties.  The  recognition  and  measurement  provisions  of
Interpretation  46 are effective for newly created  variable  interest  entities
formed after January 31, 2003, and for existing variable interest  entities,  on
the first interim or annual reporting period beginning after March 31, 2004. The
adoption  of FIN 46  did  not  impact  our  financial  position  or  results  of
operations.

SOP 03-3

In October 2003, the AICPA issued SOP 03-3  Accounting for Loans or Certain Debt
Securities Acquired in a Transfer.  SOP 03-3 applies to a loan with the evidence
of deterioration of credit quality since origination acquired by completion of a
transfer for which it is probable at acquisition,  that the Partnership  will be
unable to collect all contractually  required payments  receivable.  SOP 03-3 is
effective for loans acquired in fiscal years  beginning after December 31, 2004.
We do not expect SOP 03-3 to have a material impact on our financial position or
results of operations.

EITF 00-21

Emerging  Issue  Task  Force  00-21  ("EITF  00-21"),   Accounting  for  Revenue
Arrangements  with Multiple  Deliverables,  issued during the fourth  quarter of
2003,  provides  guidance on revenue  recognition  for  revenues  derived from a
single  contract that contains  multiple  products or services.  EITF 00-21 also
provides  additional  requirements  to  determine  when  these  revenues  may be
recorded  separately  for  accounting  purposes.  EITF  00-21 did not impact our
financial statements.


                                      -11-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


SAB 104

In December 2003, the SEC issued Staff Accounting  Bulletin No. 104 ("SAB 104"),
Revenue Recognition,  which supercedes SAB 101, Revenue Recognition in Financial
Statements.  SAB 104's  primary  purpose is to rescind the  accounting  guidance
contained  in  SAB  101  related  to  multiple  element  revenue   arrangements,
superceded as a result of the issuance of EITF 00-21. SAB 104 did not impact our
financial statements.

NOTE 3 -          LOANS SECURED BY TRUST DEEDS

At March 31, 2005 and 2004, the Fund held the following types of mortgages:

                                                   2005           2004
                                                ----------     ----------
         Commercial                             $1,561,985     $1,136,715
         Construction                           $  850,439
         Unimproved Land                        $3,834,000     $  380,000
         Residential                            $        0     $        0
                                                -------------------------
         Total                                  $6,246,424     $1,516,715
                                                -------------------------

         First Mortgages                        $3,348,424     $  848,715
         Second Mortgages                       $2,898,000     $  668,000
         Third Mortgages                        $        0     $        0
                                                -------------------------
         Total                                  $6,246,424     $1,516,715
                                                -------------------------


     Scheduled  maturities  of loans secured by trust deeds as of March 31, 2005
     and the interest sensitivity of such loans is as follows:


                                        Fixed         Variable
                                        Interest      Interest
                                        Rate          Rate         Total
                                        ----------------------------------
          Year Ending December 31:
          2005                          $3,908,424       0      $3,908,424
          2006                          $1,868,000       0      $1,868,000
          2007                          $  470,000       0      $  470,000
          2008                                   0       0               0
          2009                                   0       0               0
                                        ----------------------------------
         Total                          $6,246,424       0      $6,246,424
                                        ----------------------------------


                                      -12-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


The Fund has no variable interest rate loans at March 31, 2005.

At March 31, 2005,  95% of the Fund's Loans  Receivable  was  collateralized  by
properties located in California.

As of March 31, 2005, the Fund's loan portfolio  consisted of thirteen (13) real
estate  loans to  unrelated  parties  totaling $  5,264,424  and three (3) loans
receivable  from related  parties  amounting to $ 982,000.  One loan,  which was
outstanding  during the quarter ended March 31, 2005,  was repaid before the end
of the quarter. These debt securities are all secured by deeds of trust.

1.       Loan 200301  amounting to $ 444,000,  due in monthly  installments of $
         4,033 interest only at 10.90%  maturing on November 1, 2005.  This loan
         is secured by a first trust deed on the underlying property.

2.       Loan 200402  amounting to $ 220,485,  due in monthly  installments of $
         2,003 interest only at 10.90%  maturing on February 18, 2005. This loan
         is secured by a first trust deed on the underlying  property.  The note
         was partially paid off in 2005 ($ 152,000) and the balance amounting to
         $ 68,485 was subsequently extended to mature on May 18, 2005.

3.       Loan 200403  amounting to $ 363,000,  due in monthly  installments of $
         3,297 interest only at 10.90%  maturing on March 2, 2005.  This loan is
         secured by a second trust deed on the  underlying  property.  This note
         was  subsequently  paid off on  January  5, 2005.  An  additional  loan
         amounting to $487,200  was  extended to the same  borrower on April 14,
         2004,  under the same terms and maturity date. The additional loan, due
         in monthly installments of $4,425,  however is secured by a first trust
         deed on a separate property.  The additional loan was paid off on March
         3, 2005.

4.       Loan 200406  amounting to $ 150,000,  due in monthly  installments of $
         1,363  interest only at 10.90%  maturing on May 21, 2005.  This loan is
         secured by a second trust deed on the underlying property.

5.       Loan 200407  amounting to $ 155,500,  due in monthly  installments of $
         1,425 interest only at 11.00%  maturing on June 15, 2005.  This loan is
         secured by a first trust deed on the underlying property.

6.       Loan 200408  amounting to $ 206,000,  due in monthly  installments of $
         1,871 interest only at 10.90%  maturing on June 22, 2005.  This loan is
         secured by a second trust deed on the underlying property.

7.       Loan 200410  amounting to $ 890,000,  due in monthly  installments of $
         8,900 interest only at 12.00% maturing on September 14, 2005. This loan
         is secured by a second trust deed on the underlying property.

8.       Loan 200409  amounting to $ 450,000,  due in monthly  installments of $
         4,088 interest only at 10.90%  maturing on October 12, 2005.  This loan
         is secured by a first trust deed on the underlying property.

9.       Loan 200411  amounting to $ 697,439,  due in monthly  installments of $
         6,335 interest only at 10.90%  maturing on December 6, 2005.  This loan
         is secured by a first trust deed on the underlying property.


                                      -13-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


10.      Loan 200501  amounting to $ 160,000,  due in monthly  installments of $
         1,453 interest only at 10.90%  maturing on January 11, 2006.  This loan
         is secured by a first trust deed on the underlying property.

11.      Loan 200502  amounting to $ 470,000,  due in monthly  installments of $
         4,269 interest only at 10.90%  maturing on January 18, 2007.  This loan
         is secured by a first trust deed on the underlying property.

12.      Loan 200503  amounting to $ 670,000,  due in monthly  installments of $
         6,086 interest only at 10.90%  maturing on August 1, 2005. This loan is
         secured by a second trust deed on the underlying property.

13.      Loan 200504  amounting  to $ 750,000 due in monthly  installments  of $
         7,500 interest only at 12.00%  maturing on March 8, 2006.  This loan is
         secured by a first trust deed on the underlying property.

14.      Loan 200505  amounting  to $ 153,000 due in monthly  installments  of $
         1,390 interest only at 10.90%  maturing on March 11, 2006. This loan is
         secured by a first trust deed on the underlying property.

15.      Loan 200405 to a related party  amounting to $ 177,000,  due in monthly
         installments  of $ 1,608  interest only at 10.90%  maturing on June 11,
         2005.  This loan is  secured by a second  trust deed on the  underlying
         property.

16.      Investment in 2003 Combined  Note  Participation  amounting to $305,000
         and maturing at various  dates from  September  2006  through  December
         2006. Interest is payable monthly at 12% per annum.

17.      Investment in participation notes issued by Mountain House Golf Course,
         LLC amounting to $ 500,000 and maturing in December  2006.  Interest is
         payable monthly at an effective rate of approximately 11.00% per annum.

NOTE 4 - RELATED PARTY TRANSACTIONS

LOANS SECURED BY TRUST DEEDS

The  Fund may  invest  up to 20% of its  total  assets  in  loans to  affiliated
entities.  On March 31, 2005, the Fund had an interest in two (2)  participating
notes issued by affiliated  entities.  One note is a  participation  interest in
five separate  promissory  notes. The loan is carried at cost. This loan earns a
12%  interest  rate  and will be  repaid  between  various  dates  ranging  from
September  21, 2006 to December 21,  2006,  at which time the amount of the loan
will be  returned  to the Fund.  The life of the loan may be  extended up to two
years pursuant to an extension option in the notes. The loan does have an option
for early withdrawal. The second participation note matures in December 2006 and
bears an effective  interest of approximately 11% per annum.  Additionally,  the
Fund has a loan  receivable  from another  related party  amounting to $ 177,000
secured by a second  trust deed on the  underlying  property.  This loan accrues
monthly interest of $ 1,608 (10.90% per year) and the principal amount is due in
full on June 11, 2005. For the 3-month period ended March 31, 2005 and 2004, the
Fund recognized  interest income on notes and loan receivable to related parties
amounting to $ 27,444 and $ 6,408, respectively.

As noted, the Fund is limited in its investments  with affiliated  entities to a
maximum of 20% of its total assets,  as defined.  As of March 31, 2005, the Fund
is in compliance with this restriction.


                                      -14-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


CONTRA EQUITY COSTS

The Fund incurred $ 0.00 and $ 50,000 during the 3-month periods ended March 31,
2005 and 2004, respectively, as additional costs in connection with the offering
of  units  of  membership  interest  in the  Fund.  The  expenditures  consisted
primarily  of  the  initial   accounting   and  filing  costs  relating  to  the
registration  and as such being treated as syndication  costs as contemplated in
the AICPA's Technical Practice Aid TIS 7200.07 (Accounting for Syndication Costs
of Limited Partnerships).  Accordingly,  these costs are treated as reduction of
Paid In Capital.

The Fund also paid commissions to securities brokers in connection with the sale
of membership  interests by the Fund. The commission  rates ranged between 3.50%
and 6.50% of the gross sales  proceeds  from the sale of units of the Fund.  The
total amount of brokers  commissions  paid during the 3-month period ended March
31,  2005 and 2004 was $ 42,863  and $  26,699,  respectively.  These  costs are
recorded as "Costs  incurred  in raising  capital"  and  included in the Balance
Sheet under the heading "Members' contributions, net".

The Manager  received $ 8,996 and $ 2,075 during the 3-month  period ended March
31, 2005 and 2004,  respectively,  representing management and servicing fees it
was entitled to receive from the Fund .

BORROWER'S COSTS

The Manager  acts as loan broker in the initial  placement of the Fund loans and
performs a loan  servicing  function as well.  The Manager is compensated by the
Fund for such loan  servicing  activities and is compensated by the borrower for
the initial placement of the loans. The Fund does not incur "Incremental  Direct
Costs" as defined in FASB's SFAS # 91. These are costs to  originate  loans that
result directly from and are essential to the lending  transaction and would not
have been incurred by the Fund had the lending  transaction  not  incurred.  The
Manager of the Fund  incurs  these types of costs;  consequently  the Manager is
entitled  to  receive  certain  fees  for its  services  such as loan  brokerage
commissions,  loan processing and  documentation  fees, loan servicing and asset
management  fees and  reimbursement  of other  expenses of the Manager.  None of
these fees are paid by the borrower to the Fund  directly and  therefore are not
included in the income and expenses of the Fund.

BROKERS' COMMISSIONS ON INVESTED FUNDS

The Fund has retained the services of securities broker/dealers to sell units of
membership interest in the Fund. One such broker/dealer is ePlanning Securities,
Inc., which is affiliated with the Manager.  Certain shareholders of the Manager
(who are not  members of the Fund) are also  shareholders  and/or  directors  of
ePlanning.  ePlanning sold membership units of the Fund to its  client-investors
during  the  3-month  periods  ended  March  31,  2005 and  2004,  amounting  to
$1,093,969  and  $775,325,  respectively,  for  which  it  realized  commissions
totaling $42,863 and $26,699, respectively. The brokers do not earn a commission
until  funds are  transferred  from the  Subscription  Account to the  "Invested
Funds" account, at which time the funds become contributed capital of the Fund.

NOTE 5 - CONCENTRATIONS

CASH AND CASH ITEMS


                                      -15-
<PAGE>

                           LAKESIDE MORTGAGE FUND, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2005


Cash and cash items are maintained with several financial institutions. Deposits
held with banks may exceed the amount of insurance provided on such deposits. At
March 31, 2005, the Fund had  approximately $ 188,208 of cash that exceeded this
limit and thus was not covered by federal depository  insurance.  These deposits
may be redeemed  upon demand and therefore  bear minimal risk.  The Fund has not
experienced any losses in such accounts

NOTE 6 - REGULATORY REQUIREMENTS

EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 ("ERISA")

Some of the  investors  purchasing  membership  interests  are employee  benefit
plans,  including Individual  Retirement  Accounts,  which are subject to ERISA.
Persons making the investment  decisions for such ERISA  investors are deemed to
be  "fiduciaries"  of such  investors and must  discharge  their duties with the
care,  skill  and  prudence  which  a  prudent  man  would  exercise  under  the
circumstances.

Normally an investment in an equity interest of an entity,  such as a membership
interest in the Fund, will be deemed a "plan asset" of the ERISA  investor,  but
the underlying assets of the entity will not be deemed plan assets.  However, if
(i) the equity interests are not publicly-offered securities, (ii) the entity is
not one of several types of "operating  companies" defined in ERISA regulations,
and (iii) investment by ERISA investors exceeds 25% of the value of the class of
equity  interests,  then the underlying assets of the entity may be deemed "plan
assets,"  with the  entity  deemed  a  "fiduciary"  with  respect  to the  ERISA
investors.

SECURITIES LAWS

In offering the units of membership interest,  the Fund is subject to applicable
federal and state  securities  laws. On the federal level,  the Fund is offering
the  membership  interests  pursuant  to the  exemption  from  registration  for
intrastate offerings provided by Section 3(a)(11) of the Securities Act of 1933,
as  amended,  and Rule 147  promulgated  thereunder.  In  accordance  with  this
exemption,  the membership  interests are offered only in  California,  the Fund
restricts the amount of its assets which are located outside of California,  and
members are prohibited from transferring any part of their membership  interests
to out-of-state transferees for a period of nine (9) months.

On the  state  level,  the Fund is  offering  the units of  Membership  Interest
pursuant to a permit issued by the California  Department of  Corporations.  The
permit requires  annual renewal.  The original permit was issued on February 24,
2003. The permit was renewed on March 2, 2005.

As of March 31, 2005, the Fund was in compliance with all applicable federal and
state securities laws.


                                      -16-
<PAGE>

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

                  (a)      PLAN OF OPERATION.

                  As of March 31, 2005, we have sold a total of 64,755.49 Units,
at $100.00 per Unit, for a total of $6,475,549.00. As of March 31, 2005, Company
members electing to reinvest their monthly income  distributions have reinvested
$228,159.00  back into the Company.  After deducting for broker  commissions and
offering  expenses  ($384,892.00),  the net  proceeds to the Company  from these
sales have been $6,318,816.  As of March 31, 2005, the Company has $6,246,424.00
invested in commercial  mortgage loans,  with the remainder in the form of cash,
other  temporary  investments  such as short  term  commercial  paper  and other
assets. As of March 31, 2005, the Company has 195 Members.

                  Syndication  costs incurred in connection  with the raising of
capital by  offering  units of  membership  interest  in the  Company  are being
treated as a reduction of paid in capital.  Initial  marketing fees and broker's
commissions  paid to an outside  brokerage  firm are  treated  as  contra-equity
accounts.  The fees range between 3.5% - 6.5%,  depending on the commission plan
selected by individual  brokers.  Under certain commission plans the brokers are
also entitled to receive "trailer commissions" equivalent to 0.5% of the average
daily invested capital at the anniversary of the invested funds. The Company has
capitalized $384,892 of syndication costs since inception.

                  During the next twelve months, the Company will continue to be
managed by Lakeside  Financial Group, Inc. (the "Manager"),  which will continue
to  underwrite  and select  loans for the Company to invest in, as well as short
term  investments  for cash between  loans.  The Company will  continue to raise
capital  with  its  intrastate  offering  under a  permit  from  the  California
Department of Corporations. It is anticipated that, at some point in the future,
we will offer the Units of Membership  Interest in additional  states  through a
registered public offering, but this is not anticipated to occur within the next
twelve  months.  The Manager will continue to manage the Company as described in
the Company's Operating Agreement. The Company will continue to pay the Manager,
on a monthly basis, a management fee  (annualized at 2.75% of gross assets under
management)  and loan  servicing  fee  (annualized  at  0.25% of loan  principal
amounts)  to the extent  these fees are not  waived by the  Manager.  During the
quarter ended March 31, 2005, the Manager accepted  $8,996.00 of these fees, and
waived a total of $39,715.00 of these fees.

                  The Company  does not expect to conduct  product  research and
development  during  the next 12  months,  but will  continue  to raise  capital
through the sale of  membership  interests and invest that capital in commercial
real estate loans. The Company does not expect to make any significant  plant or
equipment  purchases or sales in the next 12 months.  The Company expects to add
one or two employees in the next 12 months.

                  (b)  OFF-BALANCE  SHEET  ARRANGEMENTS.   The  Company  has  no
off-balance sheet arrangements.


ITEM 3.           CONTROLS AND PROCEDURES.

                  The Company receives  subscriptions/investment  funds from the
general  investing public through its designated  brokers  (primarily  ePlanning
Securities),  and uses those  funds to make  loans  secured by deeds of trust on
real estate  located  primarily in  California.  The  Company's  operations  are
managed by its fund manager, Lakeside Financial Group, Inc. The Manager does not
own any membership interests in the Company.


                                      -17-
<PAGE>

                  The Company  maintains its banking  relationship  with Bank of
America and Morgan  Stanley  Dean  Witter.  The  following  are the cash in bank
accounts established for the Company:

                  SUBSCRIPTION  ACCOUNT  - BANK  OF  AMERICA.  Upon  receipt  of
initial subscriptions from potential investors, the funds are deposited directly
into the BofA Subscription  Account. This is a non-interest bearing account. The
funds are held for a maximum  period of sixty  (60)  days,  until  needed by the
Company  for loans or other  purposes.  The funds  are then  contributed  to the
capital of the Company in exchange  for a membership  interest.  The Manager may
hold funds in this account for longer than 60 days upon  written  consent of the
subscriber.  The  Manager  maintains  a  detailed  record of the  details of the
Subscription  Account  by  each  subscriber.  The  balance  in this  account  is
reconciled monthly between the general ledger and the bank statement.

                  GENERAL  OPERATING/DISBURSEMENT  ACCOUNT  - BANK  OF  AMERICA.
Monthly  distributions to investors are drawn against this account. This account
typically  has a zero balance.  Funds are  deposited  into this account from the
interest  reserve  account and the Morgan Stanley Money Market account where the
Company's income is recognized and accrued.  Disbursements  are processed at the
beginning of each month for income  distributions to each member. The balance in
this  account is  reconciled  monthly  between the  general  ledger and the bank
statement.

                  INTEREST RESERVE ACCOUNT - BANK OF AMERICA.  Certain borrowers
are  required  to set up an  interest  reserve  account  for the  benefit of the
Company.  Typically, the reserve is equivalent to the interest income that would
accrue  throughout  the life of the loan.  This  ensures  that the  interest  is
collected on time by the Company. The Manager maintains a detailed record of the
details of the reserve account by loan/borrower.  The balance in this account is
reconciled monthly between the general ledger and the bank statement.

                  MONEY MARKET  ACCOUNT - MORGAN  STANLEY.  When funds are swept
from the Subscription  Account, the money is transferred to Morgan Stanley Money
Market Account.  This account bears a nominal interest rate that is based on the
existing  Fed Funds rate.  When  excess/unrestricted  funds  accumulate  in this
account, the Manager makes a determination of whether to invest the excess funds
in short term commercial  papers,  generally 30 days, 60 days or 90 days.  Loans
are funded through this account. Other expenses such as brokers' commissions are
also  paid  out of  this  account  directly.  The  balance  in this  account  is
reconciled monthly between the general ledger and the bank statement

INTERNAL ACCOUNTING CONTROL & PROCEDURES

                  CASH RECEIPTS AND SUBSCRIPTIONS.

                  Funds are generally  received through the mail (in the form of
checks from investors or directly from investors'  pension manager) or through a
wire  transfer.  The mail is  opened  by  either P H Canta  (CFO) or W F Webster
(President).  Checks are generally received with a signed subscription agreement
from the  investor.  This is processed by W F Webster and a copy of the investor
info summary  along with the actual  check is forwarded to P H Canta.  P H Canta
endorses the checks, completes a deposit slip and deposits the funds on the same
day or  the  following  business  day to  Bank  of  America.  The  cash  receipt
transaction  is recorded into the  accounting  system  (PeachTree) by P H Canta.
Wire  transfer  advice is generally  received via fax;  this goes  directly to W
Webster  who  forwards  a copy to P H Canta for  recording  into the  accounting
system.

                  P H  Canta  prepares  a  weekly  subscription  report  for W F
Webster.  This  is  reconciled  to  the  general  ledger  balance  of  both  the


                                      -18-
<PAGE>

Subscription  Account and the uninvested  Subscription  Account.  The uninvested
Subscription Account is the corresponding credit account that is used to monitor
and hold all  subscriptions  that have not been  swept into the  invested  funds
category.   The  Subscription   Account  is  reconciled  monthly  and  the  bank
reconciliation statement is reviewed by W F Webster.

                  The cash receipts are also disclosed in the monthly  statement
of account to the investors.  Any discrepancies  between the investors' personal
records and such statement of accounts are reported to the investors'  broker of
record and followed up by either P H Canta or W F Webster for resolution.

                  Interest  income is credited  directly  into the bank account.
Maturities of short term commercial  papers and notes are also credited directly
into the Morgan Stanley account.

                  CASH DISBURSEMENTS

                  All  payments  are made either  through  company  checks drawn
against  one  of  the  Company's  bank  accounts  or  via  wire  transfer.   All
disbursements  are authorized by W F Webster.  Checks and wire  instructions are
signed and approved by W F Webster.  Disbursements are generally for the monthly
income  distribution to members.  Check  disbursements are automatically  posted
into the accounting  system via the accounts payable system.  Wire transfers are
entered into the system via journal entry  prepared by P H Canta.  Disbursements
for monthly distribution are disclosed in the statement of accounts furnished to
investors-members at the beginning of each month. Any discrepancies are reported
to the brokers, then to W F Webster for final resolution.

                  REAL ESTATE LOANS AND RESERVE FOR LOAN LOSSES

                  The Company was organized to make various types of real estate
loans such as acquisition and development loans,  construction loans, bridge and
mezzanine loans and refinancing loans. The loans are secured by various types of
real property such as office, industrial, mobile home parks, retail, apartments,
assisted living facilities, mini-storage and other special purpose facilities on
a case-by-case basis,  entertainment and recreational  facilities on a selective
basis.  The loans will  generally be short term (1-3 years) and generally in the
amounts ranging from $ 100,000 to $ 5 million.

                  Prospective borrowers are generally referred to the Company by
a mortgage loan broker. Initial evaluation of the borrower's credit standing and
ability to pay is assessed by the President, W F Webster. The borrower completes
an  application  form and is given a checklist of items to be  furnished  (title
reports, appraisals,  credit reports, financial statements, etc.). The resulting
loan  package is reviewed by W F Webster.  Following  his review and write-up of
the loan in a Loan Review  Summary,  the loan is presented to the loan committee
for review and approval. If the loan is approved by the loan committee, the loan
documents (promissory notes,  contracts,  etc.) are ordered and signed, then the
loan is funded. The CFO disburses the funds,  either directly to the borrower or
the escrow company for final accounting and disbursement of the funds.

                  The original  promissory  notes,  contracts and other critical
loan  documents  are  maintained  in a fire proof safe located in the  corporate
headquarters of the Manager.  Each loan  transaction is also supported by a loan
application  form,  copies  of  credit  evaluation  documents  of the  borrower,
collateral filing,  title and insurance  documents,  loan approval documents and
other  correspondence  pertaining to the real estate loan.  These  documents are
contained in a separate loan folder maintained for each borrower.

                  If  an  interest   reserve   account  was  stipulated  in  the
agreement, a check corresponding to the amount of the required reserve is issued


                                      -19-
<PAGE>

and  deposited  into  the  Interest   Reserve  account  with  Bank  of  America.
Subsequently,  at the end of each month, the interest on such loan is calculated
and  transferred  to  the  General  Operating  Account  via  Company  check  for
distribution to members-investors at the beginning of the following month

                  The  reserve  for loan  losses is  established  as losses  are
estimated  to have  occurred  through a  provision  for loan losses that will be
charged against the company's earnings.  Loan losses will be charged against the
allowance when management believes the  uncollectibility of a loan is confirmed.
Subsequent  recoveries,  if any,  will be credited to the reserve  account.  The
reserve for loan losses will be evaluated on a regular basis by  management  and
is based upon management's periodic review of the collectibility of the loans in
light of  historical  experience,  the types and dollar  amounts of loans in the
portfolio,  adverse  situations that may affect the borrower's ability to repay,
estimated value of any underlying collateral and prevailing economic conditions.
Impairment  is measured  on a loan by loan basis by either the present  value of
expected future cash flows discounted at the loan's effective interest rate, the
loan's obtainable market price, or the fair value of the underlying collateral.

                  ROLLOVERS OF INVESTMENTS FROM AFFILIATES

                  An  investor-member  may invest its monthly  income from other
investments  into the Company.  In such cases,  the  administrator  of the other
investments  issues checks in favor of the Company.  These checks are handled in
the same manner as any other cash receipts, i.e. endorsed, deposited into BofA's
Subscription  Account  and  entered  into the  accounting  system.  Again,  such
receipts for each  investor-member  are  disclosed  in the monthly  statement of
account furnished to each investor-member.

                  REINVESTMENTS OF MONTHLY EARNINGS

                  Investor-members  may  choose to  re-invest  their  respective
share of company profits back into the Company.  This is accomplished through an
instruction to Lakeside  Mortgage Fund in the original  subscription  agreement.
Each month, the total of such re-invested funds is summarized and a single check
is written to be reinvested on behalf of those  investors-members.  The check is
deposited into the Morgan Stanley money market account; such amount then becomes
capital of the Company.  Similarly, the re-invested amounts are disclosed in the
monthly  statement  of accounts  furnished  to  investor-members  for review and
reconciliation  with their personal  records.  Any discrepancies are treated the
same way as described above.

                  MEMBERS' EQUITY AND PERCENTAGE OWNERSHIP

                  The Manager, at its discretion,  may transfer the Subscription
Account  funds into the  Invested  Fund  category  within 60 days of the date of
receipt of the funds.  The  determination  to transfer  the  subscription  funds
depends on the needs of the  Company to fund a loan or a  mortgage.  The Manager
will obtain  subscriber's  consent if the funds  cannot be  invested  within the
60-day  period,  as  stipulated  in the Offering  Circular.  Each  subscriber is
credited  with units of  membership  interest  in the Company  depending  on the
amount of his/her subscription that was invested into the Company.  Each unit is
priced at a fixed  dollar  amount of  $100.00.  The  minimum  amount of  initial
investment is 20 units, or $2,000.00.


                                      -20-
<PAGE>

                  FINANCIAL REPORTING

                  Monthly  financial  statements  are provided to the members of
the board of the Manager (W F Webster, J Koenig, G Armitage and J Guidi). Annual
financial  statements are also furnished to the board members.  The President of
the Manager (W F Webster)  issues an annual report to all  investors-members  at
the beginning of each year summarizing the operating  results of the Company and
its financial  condition and other  significant  events  affecting the Company's
operations.

                  EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

                  The  principal   executive  officer  and  principal  financial
officer have evaluated the disclosure controls and procedures and have concluded
that they are effective as of the end of the period ending March 31, 2005.



                                      -21-
<PAGE>

PART II - OTHER INFORMATION


ITEM 1.           LEGAL PROCEEDINGS

         None


ITEM 2.           CHANGES IN SECURITIES

         (c) During the period  covered by this report the Company made sales of
unregistered securities set forth in the table below. All sales were of Units of
Membership  Interest in the Company,  for the purchase price of $100.00 per Unit
of  Membership  Interest,  and all sales were for cash  consideration.  No sales
involved  any  underwriter,  but all sales  were  effected  through  a  licensed
securities broker, ePlanning Securities,  Inc., to whom a commission was paid of
up to 6.5% of the sales price.

                  All sales  were made  under the  exemption  from  registration
provided by Section  3(a)(11) of the  Securities  Act of 1933,  as amended,  and
under Rule 147  promulgated  thereunder.  The offering is limited to  California
residents  only.  The Company  derives at least 80% of its  revenues  from loans
secured  by  real  property  located  in  California.  The  Company's  Operating
Agreement  and  Subscription  Agreement,  both  of  which  are  executed  by the
investor,  contain  written  disclosures  regarding  the  limitations  on resale
prescribed by Rule 147.

                  With respect to applicable  state  securities  laws, all sales
were  made  pursuant  to a  permit  issued  to the  Company  by  the  California
Department of Corporations  ("DOC")  pursuant to Sections 25110 and 25113 of the
California  Corporations  Code. The permit must be renewed each year by filing a
renewal  application and an updated  Offering  Circular for approval by the DOC.
The renewed permit was issued by the DOC on March 2, 2005. The updated  Offering
Circular is attached hereto as Exhibit 12.1.

                  During the period  covered by this report the Company made the
following sales of unregistered  securities,  to various  investors  meeting the
Company's investor suitability standards, on the terms described above:

                  Date of Sale             Units Sold        Purchase Price
                  ------------             ----------        --------------
                  01/20/05                  3,499.83          $ 349,983.00
                  02/02/05                  2,633.65          $ 263,365.00
                  02/08/05                    100.00          $  10,000.00
                  02/25/05                  1,371.28          $ 137,128.00
                  03/01/05                  1,022.39          $ 102,239.00
                  03/18/05                  1,504.32          $ 150,432.00



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ITEM 3.           DEFAULTS ON SENIOR SECURITIES

         None


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

         The Company has held no regularly scheduled, called or special meetings
of members during the reporting period.


ITEM 5.           OTHER INFORMATION

         None.


ITEM 6.           EXHIBITS


Exhibit No.    Description
-----------    -----------

2.1.*          Articles of Organization
3.1.*          Operating Agreement of Lakeside Mortgage Fund, LLC
6.1.*          Broker/Dealer Agreement
6.2.*          Amendment No. 1 to Broker Dealer Agreement
12.1.          Offering Circular dated March 2, 2005
31.1.          Certification of Chief Executive Officer Pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.
31.2.          Certification of Chief Financial Officer Pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.
32.1.          Certification of Chief Executive Officer Pursuant to Section 906
               of the Sarbanes-Oxley Act of 2002.
32.2.          Certification of Chief Financial Officer Pursuant to Section 906
               of the Sarbanes-Oxley Act of 2002.

*Incorporated  by  reference  to the  Company's  Registration  Statement on Form
10-SB, as amended,  originally  filed with the Commission under the Exchange Act
on August 6, 2004.



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<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                         LAKESIDE MORTGAGE FUND, LLC,
                                         A California Limited Liability Company

                                         By:  Lakeside Financial Group, Inc.,
                                              Manager


Date:  May 13, 2005                           By: /S/ William F. Webster
                                                  ----------------------
                                                  William F. Webster, President



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