**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, 2007**




**o 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.
                EmployerIncorporation
                or organization)
            Identification
                No.)




**1738
      Yuba Street, Redding, California, 96001**


(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 o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act.


Yes o
      No x





Transitional
      Small Business Disclosure Format (Check One): Yes x No o







**TABLE
      OF CONTENTS**




Part
                I - Financial InformationItem
                1
            Financial
                Statements and Notes
            4Item
                2
            Management’s
                Discussion and Analysis or Plan of Operation
            22Item
                3
            Controls
                and Procedures
            23Part
                II - Other InformationItem
                1
            Legal
                Proceedings
            24Item
                2
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            24Item
                3
            Defaults
                Upon Senior Securities
            25Item
                4
            Submission
                of Matters to a Vote of Security Holders
            25Item
                5
            Other
                Information
            25Item
                6
            Exhibits
            25Signatures
            26





-2-


**PART
      I**





FORWARD-LOOKING
      STATEMENTS




This
      Form
      10-QSB contains “forward-looking statements” relating to Lakeside Mortgage Fund,
      LLC (the “Fund” or the “Company”), which represent the Fund’s current
      expectations or beliefs including, but not limited to, statements concerning
      the
      Fund’s operations, performance, financial condition and growth. For this
      purpose, any statements contained in this Form 10-QSB that are not statements
      of
      historical fact are forward-looking statements. Without limiting the generality
      of the foregoing, words such as “may”, “anticipation”, “intend”, “could”,
“estimate”, or “continue” or the negative or other comparable terminology are
      intended to identify forward-looking statements. These statements by their
      nature involve substantial risks and uncertainties, such as credit losses,
      dependence on management and key personnel, variability of quarterly results,
      and the ability of the Fund to continue its growth strategy and competition,
      certain of which are beyond the Fund’s control. Should one or more of these
      risks or uncertainties materialize or should the underlying assumptions prove
      incorrect, actual outcomes and results could differ materially from those
      indicated in the forward-looking statements.




Any
      forward-looking statement speaks only as of the date on which such statement
      is
      made, and the Fund undertakes no obligation to update any forward-looking
      statement or statements to reflect events or circumstances after the date on
      which such statement is made or to reflect the occurrence of unanticipated
      events. New factors emerge from time to time and it is not possible for
      management to predict all of such factors, nor can it assess the impact of
      each
      such factor on the business or the extent to which any factor, or combination
      of
      factors, may cause actual results to differ materially from those contained
      in
      any forward-looking statements.




-3-


**Item
      1.**   **Financial
      Statements and Notes**





**Lakeside
                Mortgage Fund, LLC****(A
                California Limited Liability Company)****Balance
                Sheet (Unaudited)****March
                31, 2007**




**ASSETS**Cash
                and cash equivalents (Note 5)
            
            $
            1,050,236Loan
                interest reserve (restricted)
            
            
            661,855Accrued
                interest receivable
            
            
            127,020Notes
                receivable - related parties (Notes 3 and 4)
            
            
            724,390Notes
                receivable - non related parties, net of allowance forloan
                losses: $ 128,000 (Note 3)
            
            
            18,698,837Other
                assets - real estate owned property (Note 5)
            
            
            380,000**TOTAL
                ASSETS**
            
            **$**
            **21,642,338****LIABILITIES
                AND MEMBERS’ EQUITY**Accounts
                payable and other current liabilities
            
            $
            43,892Uninvested
                subscriptions
            
            
            267,201Deferred
                interest on notes receivable
            
            
            661,855Total
                liabilities
            
            
            972,948Members’
                equity (Note 4)Members’
                contributions, net
            
            
            20,551,770Retained
                earnings
            
            
            117,620Total
                members’ equity
            
            
            20,669,390**TOTAL
                LIABILITIES AND MEMBERS’ EQUITY**
            
            **$**
            **21,642,338**




**see
        accompanying notes**




-4-




**Lakeside
      Mortgage Fund, LLC**


**(A
        California Limited Liability Company)**
 **Statements
        of Income (Unaudited)**
 **For
        the Quarters Ended March 31,**
 
 **2007**
              
              **2006****Revenues**Interest
                  income
              
              $
              435,064
              
              $
              310,636Total
                  revenues
              
              
              435,064
              
              
              310,636**Operating
                  Expenses**Professional
                  fees - accounting and taxes
              
              
              13,200
              
              
              11,200Advertising
              
              
              4,500
              
              
              750Provision
                  for loan losses
              
              
              18,000
              
              
              22,000Management
                  fees (Notes 1 and 4)
              
              
              14,013
              
              
              14,393Permits
                  fees and licenses
              
              
              750
              
              
              750Printing
              
              
              4,500
              
              
              600Legal
              
              
              2,250
              
              
              2,250Trailer
                  commissions
              
              
              16,000
              
              
              13,000Conference
                  and seminars
              
              
              5,000
              
              
              1,500Other
                  operating expenses
              
              
              5,350
              
              
              4,100Taxes
              
              
              450
              
              
              450Total
                  operating expenses
              
              
              84,013
              
              
              70,993**Net
                  income**
              
              **$**
              **351,051**
              
              **$**
              **239,643**
 
 **see
        accompanying notes**




-5-





**Lakeside
                Mortgage Fund, LLC****(A
                California Limited Liability Company)****Statements
                of Members’ Equity (Unaudited)****For
                the quarters ended March 31, 2007 and
                2006**




**Members’**
            
            **Retained****Contributions**
            
            **Earnings**
            
            **TOTAL****Balance,
                January 1, 2006**
            
            **$**
            **10,102,408**
            
            **$**
            **56,549**
            
            **$**
            **10,158,957**Contributions
            
            
            2,638,158
            
            
            
            
            
            2,638,158Costs
                incurred in raising capital
            
            
            (116,325
            )
            
            
            
            
            (116,325
            )Reinvestment
                of members’ share of net income
            
            
            150,260
            
            
            
            
            
            150,260Investors’
                withdrawal
            
            
            (14,934
            )
            
            
            
            
            (14,934
            )Net
                income
            
            
            
            
            
            239,643
            
            
            239,643Distribution
            
            
            
            
            
            (252,862
            )
            
            (252,862
            )**Balance,
                March 31, 2006**
            
            **$**
            **12,759,567**
            
            **$**
            **43,330**
            
            **$**
            **12,802,897****Balance,
                January 1, 2007**
            
            **$**
            **15,827,117**
            
            **$**
            **101,342**
            
            **$**
            **15,928,459**Contributions
            
            
            4,968,487
            
            
            
            
            
            4,968,487Costs
                incurred in raising capital
            
            
            (201,523
            )
            
            
            
            
            (201,523
            )Reinvestment
                of members’ share of net income
            
            
            209,828
            
            
            
            
            
            209,828Investors’
                withdrawal
            
            
            (252,139
            )
            
            
            
            
            (252,139
            )Net
                income
            
            
            
            
            
            351,051
            
            
            351,051Distribution
            
            
            
            
            
            (334,773
            )
            
            (334,773
            )**Balance,
                March 31, 2007**
            
            **$**
            **20,551,770**
            
            **$**
            **117,620**
            
            **$**
            **20,669,390**




**see
        accompanying notes**




-6-




**Lakeside
      Mortgage Fund, LLC**


**(A
        California Limited Liability Company)**
 **Statements
        of Cash Flows**
 **For
        the quarters ended March 31,**
  **2007**
                
                **2006****Cash
                    Flows from Operating Activities:**Net
                    income
                
                $
                351,051
                
                $
                239,643Provision
                    for loan losses
                
                
                18,000
                
                
                22,000Accrued
                    interest receivable
                
                
                32,010
                
                
                (6,504
                )Loan
                    interest reserves (restricted)
                
                
                234,648
                
                
                31,966Accounts
                    payable and other liabilities
                
                
                (37,509
                )
                
                15,438Deferred
                    interest receivable
                
                
                (234,648
                )
                
                (31,996
                )Change
                
                
                363,552
                
                
                270,578**Cash
                    Flows from Investing Activities:**Notes
                    receivable secured by real estate-non related parties:Funding
                
                
                (4,107,770
                )
                
                (3,209,072
                )Payoff
                
                
                -
                
                
                439,000Change
                
                
                (4,107,770
                )
                
                (2,770,072
                )**Cash
                    Flows from Financing Activities:**Members’
                    contributions
                
                
                1,889,295
                
                
                2,446,854Members’
                    withdrawals
                
                
                (252,139
                )
                
                (14,934
                )Costs
                    incurred in raising capital and commissions, net
                
                
                (201,523
                )
                
                (116,325
                )Distributions
                    to members
                
                
                (334,774
                )
                
                (252,862
                )Change
                
                
                1,100,859
                
                
                2,062,732**Net
                    Change in Cash during the Period**
                
                
                **(2,643,359**
                **)**
                
                **(436,762**
                **)****Cash
                    in Bank, Beginning of Period**
                
                
                **3,693,595**
                
                
                **1,338,971****Cash
                    in Bank, End of Period**
                
                **$**
                **1,050,236**
                
                **$**
                **902,209**
  **see
        accompanying notes**




-7-




**LAKESIDE
        MORTGAGE FUND, LLC**
 **(A
        CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
        to Financial Statements (Unaudited)**
 **March
        31, 2007**


**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
      accompanying unaudited condensed financial statements of the Fund have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America (“U.S. GAAP”) for interim financial information and
      pursuant to the instructions to Form 10-QSB and Article 10 of Regulation S-X
      of
      the Securities and Exchange Commission (“SEC”). Accordingly, these statements do
      not include all of the information and footnotes required by U.S. GAAP for
      complete financial statements. In the opinion of the Fund’s Manager, these
      unaudited condensed financial statements reflect all adjustments (consisting
      of
      normal recurring adjustments) necessary to present fairly the financial position
      of the Fund at March 31, 2007, the results of operations for the three
      months ended March
      31, 2007 and 2006 and cash flows for the three
      months ended
      March 31, 2007 and 2006. Results of operations for the three months ended March
      31, 2007 are not necessarily indicative of results of operations expected for
      the full fiscal year ending December 31, 2007. Please refer to the Fund’s 2006
      Annual Report on Form 10-KSB for the complete financial statements for the
      period ended December 31, 2006.





**Terms**




The
      Fund’s operating 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. (the “Manager” or
“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
      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.





**Profits
      and losses**




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.





-8-
 
  **LAKESIDE
          MORTGAGE FUND, LLC**
 **(A
          CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
          to Financial Statements (Unaudited)**
 **March
          31, 2007**


**Distributions**




Cash
      available for distribution is the net income during the calendar month using
      the
      accrual method of accounting and in accordance with US GAAP. Monthly, the Fund
      provides statements of account to members and distributes or reinvests amounts
      equal to the members’ proportionate share of the Fund’s net income during such
      month. The Manager is required to distribute funds only to the extent that
      funds
      are available.





**Withdrawals**




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.





**Related
      parties**




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 loan 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.





-9-
 
 **LAKESIDE
          MORTGAGE FUND, LLC**
 **(A
          CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
          to Financial Statements (Unaudited)**
 **March
          31, 2007**


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.





The
      Fund
      receives certain operating and administrative services form the Manager, some
      of
      which may not be reimbursed to the Manager. The Fund’s financial position and
      results of operations would likely be different without this relationship with
      the Manager.





**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)**
            **Management
                Estimates**




The
      preparation of financial statements in conformity with US GAAP 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. Such estimates related principally to
      the
      determination of the allowance for loan losses, including the valuation of
      impaired loans and valuation of real estate owned properties. 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.





**(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.
      Periodically, the Fund’s cash balances exceed federally insured limits. At March
      31, 2007, the Fund had approximately $ 750,236 of cash that exceeded this limit
      and thus was not covered by federal depository insurance.





-10-
 
  **LAKESIDE
          MORTGAGE FUND, LLC**
 **(A
          CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
          to Financial Statements (Unaudited)**
 **March
          31, 2007**


(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. 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. The Fund will not
      recognize interest income on loans once they are determined to be impaired
      until
      the interest is collected in cash after principal is collected. 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. 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. 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.





**(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 income. 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.





The
      following shows the activities in the allowance for loan losses during the
      3-month period ended March 31, 2007:




Balance,
                December 31, 2006
            
            $
            110,000Additions
            
            $
            18,000Write
                offs
            
            $
            0Balance,
                March 31, 2007
            
            $
            128,000


-11-




**LAKESIDE
        MORTGAGE FUND, LLC**
 **(A
        CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
        to Financial Statements (Unaudited)**
 **March
        31, 2007**




**(h)**
            **Real
                Estate Held for Sale**




Real
      estate held for sale includes real estate acquired through foreclosure and
      is
      stated at the lower of the recorded investment in the loan, plus any senior
      indebtedness, or at the property’s estimated fair value, less estimated costs to
      sell.





**(i)**
            **Loan
                Interest Reserve**




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 deferred interest in
      the
      liabilities section of the balance sheet. As of March 31, 2007, the loan
      interest reserve and deferred interest were $661,855.





**(j)**
            **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
                paid by the Fund are currently 4.5%. The brokers are also entitled
                to
                receive “trailer commissions” equivalent to 1.0% of the average daily
                invested capital at the 1 year anniversary of the invested funds.
                The
                initial marketing/broker’s fees are capitalized in accordance with US
                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 are treated as period costs
                and
                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 are shown in the statement of operations, when incurred.The
                Fund has capitalized $201,523 of syndication costs and brokers’ fees
                during the quarter ended March 31,
                2007.




**(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. 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.





-12-
 
  **LAKESIDE
          MORTGAGE FUND, LLC**
 **(A
          CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
          to Financial Statements (Unaudited)**
 **March
          31, 2007**


As
      of
      March 31, 2007, the uninvested funds in the subscription account was
      $267,201.





**(l)**
            **Fair
                Value of Financial
                Instruments**





The
      following methods and assumptions were used to estimate the fair value of
      financial instruments:





(a)
            Cash
                and cash equivalents - The carrying amount equals fair value.  All
                amounts, including interest bearing, are subject to immediate
                withdrawal.





(b)
            Secured
                loans had a carrying value of $ 19,423,227 at March 31, 2007, which
                is
                substantially equivalent to its fair
                value.





**(m)**
            **Recent
                accounting pronouncements**





In
      March
      2006, the Financial Accounting Standards Board (FASB) issued Statement of
      Financial Accounting Standards (SFAS) SFAS No. 156, “Accounting for Servicing of
      Financial Assets, an amendment of FASB Statement No. 140” (SFAS 156), which
      permits, but does not require, an entity to account for one or more classes
      of
      servicing rights (i.e. mortgage servicing rights) at fair value, with the
      changes in fair value recorded in the statement of income. SFAS 156 is effective
      in the first quarter of 2007. The adoption of SFAS 156 did not have a material
      impact on the Fund’s financial condition and results of operations.





On
      September 15, 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(SFAS 154). SFAS 157 defines fair value, establishes a framework for measuring
      fair value under GAAP and enhances disclosures about fair value measurements.
      SFAS 157 defines fair value as the exchange price that would be received for
      an
      asset or paid to transfer a liability (an exit price) in the principal or most
      advantageous market for the asset or liability in an orderly transaction between
      market participants on the measurement date. SFAS 157 is effective for the
      Fund’s financial statements issued for the year beginning on January 1, 2008,
      with earlier adoption permitted. Management is currently evaluating the impact
      and timing of the adoption of SFAS 157 on the Fund’s financial condition and
      results of operations.





-13-
 
  **LAKESIDE
          MORTGAGE FUND, LLC**
 **(A
          CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
          to Financial Statements (Unaudited)**
 **March
          31, 2007**


On
      February 15, 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Liabilities (SFAS 159), “The Fair Value Option for Financial Assets
      and Financial Liabilities” (SFAS 159), which allows entity the irrevocable
      option to elect fair value for the initial and subsequent measurement for
      certain financial assets and liabilities on a contract-by-contract basis.
      Subsequent changes in fair value of these financial assets and liabilities
      would
      be recognized in earnings when they occur. SFAS 159 further establishes certain
      additional disclosure requirements. SFAS 159 is effective for the Fund’s
      financial statements for the year beginning on January 1, 2008, with earlier
      adoption permitted. Management is currently evaluating the impact and timing
      of
      the adoption of SFAS 159 on the Fund’s financial condition and results of
      operations.





On
      July
      13, 2006, the FASB released FASB interpretation No. 48, “Accounting for
      Uncertainty in Income Taxes, an interpretation of FASB Statement No. 106” (FIN
      48). FIN 48 clarifies the accounting and reporting for income taxes where
      interpretation of the tax laws may be uncertain. FIN 48 prescribes a
      comprehensive model for the financial statement recognition, measurement,
      presentation and disclosure of income tax uncertainties with respect to
      positions taken or expected to be taken in income tax returns. The Fund adopted
      FIN 48 in the first quarter of 2007. The adoption of FIN 48 did not have an
      impact on the Fund’s financial condition and results of operations.





On
      September 13, 2006, the Securities and Exchange Commission (SEC) issued Staff
      Accounting Bulletin (SAB) No. 108 “Considering the Effects of Prior Year
      Misstatements when Quantifying Misstatements in Current Year Financial
      Statements (SAB 108). SAB 108 expresses the SEC Staff’s views regarding the
      process of quantifying financial statement misstatements. SAB 108 states that
      in
      evaluating the materiality of financial statement misstatements, an entity
      must
      quantify the impact of correcting misstatements, including both the carryover
      and reversing effects of prior year misstatements, on the current year financial
      statements. SAB 108 is effective for the year ended December 31, 2006. The
      application of SAB 108 did not have an impact on the Fund’s financial condition
      and results of operations.





**Note
      3 -**  **Loans
      Secured by Trust Deeds**





At
      March
      31, 2007, the Fund held the following types of mortgages:




Commercial
              
              $
              4,770,390Construction
              
              $
              4,013,448Unimproved
                  Land
              
              $
              10,767,389Total
              
              $
              19,551,227First
                  Mortgages
              
              $
              13,412,485Second
                  Mortgages
              
              $
              6,138,742Total
              
              $
              19,551,227
  -14-
  **LAKESIDE
        MORTGAGE FUND, LLC**
 **(A
        CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
        to Financial Statements (Unaudited)**
 **March
        31, 2007**





Scheduled
      maturities of loans secured by trust deeds as of March 31, 2007 and the interest
      sensitivity of such loans are as follows:




Fixed
                  Interest RateYear
                  Ending December 31:2007
              
              $
              12,060,0672008
              
              $
              7,191,1602009
              
              $
              300,000Total
              
              $
              19,551,227




The
      scheduled maturities for 2007 include $
      2,787,000 in loans
      that are past maturity at March 31, 2007. It is the Fund’s experience that loans
      can be refinanced or repaid before or after the maturity date. Therefore, the
      above tabulation for scheduled maturities is not a forecast of future cash
      receipts.





At
      March
      31, 2007, four (4) loans ($2,787,000 or 14% of total loans) have already matured
      and have remained outstanding at the end of the year. Accrued interest
      receivable on these loans amounted to $ 72,968 as of March 31, 2007. These
      loans
      are in the process of being paid off or extended. Additionally, interest
      payments on three (3) other loans were in default, ranging from 5 - 6 months
      past due ($25,281). These past due interests however were subsequently collected
      in April 2007. Occasionally, the Fund allows borrowers to continue to make
      the
      payments on loans past maturity for periods of time. The
      loans
      are adequately covered by the fair values of the underlying collateral, and
      the
      Fund does not expect to suffer significant losses in the case of any of these
      loans





The
      Fund
      has no variable interest rate loans at March 31, 2007.





At
      March
      31, 2007, 98.9% of the Fund’s loans receivable was collateralized by properties
      located in California.





At
      March
      31, 2007, the Fund’s loan portfolio consisted of thirty one (31) real estate
      loans to unrelated parties totaling $ 18,826,837, and two (2) loans receivable
      from related parties amounting to $ 724,390. These debt securities are all
      secured by deeds of trust.





-15-
 
  **LAKESIDE
          MORTGAGE FUND, LLC**
 **(A
          CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
          to Financial Statements (Unaudited)**
 **March
          31, 2007**


1.
            Loan
                200408 amounting to $ 206,000, due in monthly installments of $ 1,871
                interest only at 10.90% maturing onMarch
                22, 2007.
                This loan is secured by a second trust deed on the underlying property.


2.
            Loan
                200410 amounting to $ 890,000, due in monthly installments of $ 8,900
                interest only at 12.00% maturing on June 14, 2007. This loan is secured
                by
                a second trust deed on the underlying
                property.


3.
            Loan
                200409 amounting to $ 450,000, due in monthly installments of $ 4,088
                interest only at 10.90% maturing on April 12, 2007. This loan is
                secured
                by a first trust deed on the underlying
                property.


4.
            Loan
                200411 amounting to $ 928,200, due in monthly installments of $ 8,431
                interest only at 10.90% maturing onDecember
                6, 2006.
                This loan is secured by a first trust deed on the underlying
                property.


5.
            Loan
                200502 amounting to $ 470,737, due in monthly installments of $ 4,276
                interest only at 10.90% maturing onJuly
                18, 2007.
                This loan is secured by a first trust deed on the underlying
                property.


6.
            Loan
                200504 amounting to $ 802,800 due in monthly installments of $ 8,028
                interest only at 12.00% maturing on September 8, 2006. This loan
                is
                secured by a second trust deed on the underlying
                property.


7.
            Loan
                200507 amounting to $ 230,000 due in monthly installments of $ 2,300
                interest only at 12.00% maturing on June 25, 2007. This loan is secured
                by
                a second trust deed on the underlying
                property.


8.
            Loan
                200508 amounting to $ 490,000 due in monthly installments of $ 4,900
                interest only at 12.00% maturing on April 11, 2007. This loan is
                secured
                by a second trust deed on the underlying
                property.


9.
            Loan
                200510 amounting to $ 400,000 due in monthly installments of $ 4,000
                interest only at 12.00% maturing on August 8, 2007. This loan is
                secured
                by a second trust deed on the underlying
                property.


10.
            Loan
                200511 amounting to $ 496,728 due in monthly installments of $ 4,967
                interest only at 12.00% maturing on June 15, 2007. This loan is secured
                by
                a first trust deed on the underlying
                property.


11.
            Loan
                200512 amounting to $ 850,000 due in monthly installments of $ 8,500
                interest only at 12.00% maturing on October 14, 2006. This loan is
                secured
                by a first trust deed on the underlying
                property.


12.
            Loan
                200513 amounting to $ 286,051 due in monthly installments of $ 2,861
                interest only at 12.00% maturing on June 12, 2007. This loan is secured
                by
                a first trust deed on the underlying
                property.


13.
            Loan
                200601 amounting to $ 552,000 due in monthly installments of $ 5,014
                interest only at 10.90% maturing on January 11, 2008. This loan is
                secured
                by a first trust deed on the underlying
                property.




-16-




**LAKESIDE
        MORTGAGE FUND, LLC**
 **(A
        CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
        to Financial Statements (Unaudited)**
 **March
        31, 2007**




14.
            Loan
                200602 amounting to $ 586,300 due in monthly installments of $ 5,863
                interest only at 12% maturing on January 30, 2007. This loan is secured
                by
                a first trust deed on the underlying
                property.


15.
            Loan
                200603 amounting to $ 1,735,523 due in monthly installments of $
                17,355
                interest only at 12% maturing on May 2, 2007. This loan is secured
                by a
                first trust deed on the underlying
                property.


16.
            Loan
                200604 amounting to $ 680,000 due in monthly installments of $ 6,177
                interest only at 10.90% maturing on March 7, 2007. This loan is secured
                by
                a first trust deed on the underlying
                property.


17.
            Loan
                200605 amounting to $ 350,000 due in monthly installments of $ 3,179
                interest only at 10.90% maturing on August 27, 2007. This loan is
                secured
                by a first trust deed on the underlying
                property.


18.
            Loan
                200606 amounting to $ 320,000 due in monthly installments of $ 3,173
                interest only at 11.90% maturing on May 25, 2007. This loan is secured
                by
                a first trust deed on the underlying
                property.


19.
            Loan
                200607 amounting to $ 525,000 due in monthly installments of $ 4,769
                interest only at 10.90% maturing on June 7, 2007. This loan is secured
                by
                a first trust deed on the underlying
                property.


20.
            Loan
                200608 amounting to $ 625,000 due in monthly installments of $ 6,198
                interest only at 11.90% maturing on May 23, 2007. This loan is secured
                by
                a second trust deed on the underlying
                property.


21.
            Loan
                200609 amounting to $ 345,000 due in monthly installments of $ 3,134
                interest only at 10.90% maturing on June 27, 2008. This loan is secured
                by
                a first trust deed on the underlying
                property.


22.
            Loan
                200610 amounting to $ 282,070 due in monthly installments of $ 3,291
                interest only at 14.00% maturing on July 3, 2007. This loan is secured
                by
                a second trust deed on the underlying
                property.


23.
            Loan
                200611 amounting to $ 288,482 due in monthly installments of $ 2,885
                interest only at 12.00% maturing on August 3, 2007. This loan is
                secured
                by a second trust deed on the underlying
                property.


24.
            Loan
                200612 amounting to $ 570,000 due in monthly installments of $ 5,653
                interest only at 11.90% maturing on August 30, 2008. This loan is
                secured
                by a first trust deed on the underlying
                property.


25.
            Loan
                200613 amounting to $ 400,000 due in monthly installments of $4,167
                interest only at 12.50% maturing on October 4, 2008. This loan is
                secured
                by a first trust deed on the underlying
                property.


26.
            Loan
                200614 amounting to $ 167,177 due in monthly installments of $1,672
                interest only at 12.00% maturing on October 17, 2007. This loan is
                secured
                by a first trust deed on the underlying
                property.




-17-




**LAKESIDE
        MORTGAGE FUND, LLC**
 **(A
        CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
        to Financial Statements (Unaudited)**
 **March
        31, 2007**




27.
            Loan
                200615 amounting to $ 1,100,000 due in monthly installments of $10,542
                interest only at 11.50% maturing on October 20, 2008. This loan is
                secured
                by a first trust deed on the underlying
                property.


28.
            Loan
                200616 amounting to $ 300,000 due in monthly installments of $2,975
                interest only at 11.90% maturing on December 14, 2009. This loan
                is
                secured by a first trust deed on the underlying
                property.


29.
            Loan
                200617 amounting to $ 1,900,000 due in monthly installments of $19,792
                interest only at 12.50% maturing on January 11, 2008. This loan is
                secured
                by a first trust deed on the underlying
                property.


30.
            Loan
                200618 amounting to $ 1,200,000 due in monthly installments of $11,900
                interest only at 11.90% maturing on March 8, 2008. This loan is secured
                by
                a second trust deed on the underlying
                property.


31.
            Loan
                200619 amounting to $ 399,770 due in monthly installments of $3,964
                interest only at 11.90% maturing on March 2, 2008. This loan is secured
                by
                a first trust deed on the underlying
                property.


32.
            Investment
                in 2003 Combined Note Participation amounting to $305,000, maturing
                on
                June 4, 2007. This amount was partially paid off by $ 80,610 on December
                23, 2005. Interest is payable monthly at 12% per
                annum.


33.
            Investment
                in participation notes issued by Mountain House Golf Course, LLC
                amounting
                to $ 500,000 and maturing in December 2008. 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, 2007, the Fund had an interest in two (2) loans issued by affiliated
      entities. One loan is a participation interest in five separate promissory
      notes. The loan is carried at cost. **** This
      loan
      anticipates earning a 12% interest rate and will mature in June, 2007, at which
      time the amount of the loan will be returned to the Fund. The loan does have
      an
      option for early withdrawal. A portion of the combined notes was partially
      paid
      off ($80,610) on December 23, 2005. The second participation loan matures in
      December 2008 and bears an effective interest of 11% per annum. For the quarters
      ended March 31, 2007 and 2006, the Fund recognized interest income on loans
      to
      related parties amounting to $16,758
      and $25,138, 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, 2007, the Fund is in
      compliance with this restriction.





-18-




**LAKESIDE
        MORTGAGE FUND, LLC**
 **(A
        CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
        to Financial Statements (Unaudited)**
 **March
        31, 2007**


**Contra
      Equity Costs**




During
      the quarter ended March 31, 2007 the Fund incurred no additional cost in
      connection with the offering of units of membership interest in the Fund. Such
      expenditures consisted primarily of the initial accounting and filing costs
      relating to the registration and have been 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
      paid commissions to securities brokers in connection with the sale of membership
      interests by the Fund. The commission rate was 4.5% of the gross sales proceeds
      from the sale of units of the Fund. The total amount of net brokers’ commissions
      paid during the quarter ended March 31, 2007 and 2006 were $201,523 and
      $ 116,325 ,
      respectively. These costs are recorded as “Costs incurred in raising capital”
and included in the balance sheet under the heading “Members’ contributions,
      net”.





**Borrower’s
      Costs**




The
      Manager acts as loan broker in the initial placement of the Fund loans and
      performs loan servicing functions 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 SFAS No. 91, “ *Accounting
      for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans
      and Initial Direct Costs of Leases* .”
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 occurred. 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.





**Broker’s
      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 quarters ended March 31, 2007 and 2006 amounting to $4,968,487 and
      $2,638,158 of which it realized commissions totaling $201,523 and $116,325,
      respectively. The brokers do not earn a commission until funds are transferred
      from the subscription account to members’ equity, at which time the funds become
      contributed capital of the Fund.





-19-
 
  **LAKESIDE
          MORTGAGE FUND, LLC**
 **(A
          CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
          to Financial Statements (Unaudited)**
 **March
          31, 2007**


**Management
      and servicing fees**




The
      Manager earned $14,013 and $14,393 during the quarters ended March 31, 2007
      and
      2006, respectively, representing management and servicing fees it was entitled
      to receive from the Fund.





**Note
      5 - Real Estate Held for Sale**




The
      following schedule reflects the cost of the property and recorded reductions
      to
      estimated fair values, including estimated costs to sell, at March 31,
      2007:


Cost
                  of property
              
              $
              385,000Reduction
                  in value
              
              
              (
                  5,000
              )Real
                  estate held for sale, net
              
              $
              380,000





During
      2006, the Fund acquired an undeveloped 20-acre parcel through foreclosure which
      resulted in an increase in real estate held for sale of $ 385,000 and a decrease
      in loans receivable and accrued interest of $ 380,000 and $ 27,613,
      respectively. The accrued interest was written down by $ 27,613 upon foreclosure
      and included in the provision for losses on loans and real estate owned
      properties. Subsequent to foreclosure, the real estate held for sale was reduced
      in value by $ 5,000.





**Note
      6 -**  **Concentrations**





**Notes
      receivable - non related parties**




Seven
      (7)
      loans totaling $3,895,828 were made to separate entities controlled by the
      same
      person. The various borrowing entities were organized for different purposes,
      and own real property
      in various places in California, mostly in the Central Valley. These loans
      represent 20% of the total loan portfolio and 13% of total interest income.
      The
      loans are adequately collateralized by the underlying real estate properties,
      and are personally guaranteed by the controlling person.





**Commitments
      and contingencies**




The
      Fund
      has outstanding loan commitments on six (6) construction loans totaling
      $1,235,992 which was undisbursed at March 31, 2007.





**Workout
      agreements**




The
      Fund
      periodically negotiates various workout agreements with borrowers whose loans
      are past maturity or who are delinquent in making payments. The Fund is not
      obligated to fund additional money as of March 31, 2007. As of March 31, 2007,
      there were six (6) loans totaling $ 4,129,723 under workout
      agreements.





-20-
 
  **LAKESIDE
          MORTGAGE FUND, LLC**
 **(A
          CALIFORNIA LIMITED LIABILITY COMPANY)**
 **Notes
          to Financial Statements (Unaudited)**
 **March
          31, 2007**


**Legal
      proceedings**




The
      Fund
      is involved in various legal actions arising in the normal course of business.
      In the opinion of management, such matters will not have a material effect
      on
      the financial position of the Fund.





**Note
      7 - 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 person 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 most recently renewed on January
      17, 2007.





As
      of
      March 31, 2007, the Fund was in compliance with all applicable federal and
      state
      securities laws.





-21-





**Item
      2.**  **M** **anagement’s
      Discussion and Analysis or Plan of Operation**





As
      of
      March 31, 2007, we have sold a total of 211,388.77 Units, at $100 per Unit,
      for
      a total of $21,138,877. As of March 31, 2007, Fund members electing to reinvest
      their monthly income distributions have reinvested $1,518,142 back into the
      Fund. After deducting for broker commissions and offering expenses ($966,561),
      the net proceeds to the Fund from these sales (which includes reinvestment
      of
      earnings) have been $21,690,458. Members withdrew a total of $1,138,688 through
      the period ended March 31, 2007. As of March 31, 2007, the Fund has $19,551,227
      invested in commercial mortgage loans, with the remainder in the form of cash
      and other assets. As of March 31, 2007, the Fund has 381 members.





To
      compare this with how the Fund was doing during the same period last year,
      as of
      March 31, 2006 we had sold a total of 131,963.86 Units, for a total of
      $13,196,386. Reinvested funds amounted to $736,129. After deducting for broker
      commissions and offering expenses ($682,029), the net proceeds to the Fund
      from
      these sales were $13,250,486. Members withdrew a total of $ 524,454 through
      the
      period ended March 31, 2006. The Fund had $12,401,887 invested in commercial
      mortgage loans, with the remainder in the form of cash and other assets. As
      of
      March 31, 2006, the Fund had 316 members.





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 are currently 4.5% (4% commission, 0.5%
      marketing fee). Brokers are also entitled to receive “trailer commissions,”
equivalent to 1.0% of the average daily balance of invested capital for each
      investor. These are received following each anniversary of the investor’s
      initial investment. As of March 31, 2007, the Fund has
      capitalized $966,561 of syndication costs since inception.





During
      the next twelve months, the Fund will continue to be managed by Lakeside
      Financial Group, Inc., which will continue to underwrite and select loans for
      the Fund to invest in, as well as short term investments for cash between loans.
      The Fund 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 Fund as described in the Fund’s Operating Agreement. The Fund 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, 2007, the Manager accepted $14,013
      in management fees and waived a total of $144,570 of these
      fees.





During
      the next 12 months the Fund will continue to raise capital through the sale
      of
      membership interests and invest that capital in commercial real estate loans.
      The Fund does not expect to make any significant plant or equipment purchases
      or
      sales in the next 12 months. The Fund has no off-balance sheet
      arrangements.





-22-


**Item
      3.**  **Controls
      and Procedures.**





As
      of the
      end of the period covered by this report, the Fund carried out an evaluation,
      under the supervision and with the participation of the Manager’s Principal
      Executive Officer and Principal Financial Officer, of the effectiveness of
      the
      design and operation of the Fund’s disclosure controls and procedures. The
      Fund’s disclosure controls and procedures are designed to provide a reasonable
      level of assurance of achieving the Fund’s disclosure control objectives. The
      Manager’s Principal Executive Officer and Acting Principal Financial Officer
      have concluded that the Fund’s disclosure controls and procedures are, in fact,
      effective at this reasonable assurance level as of the period covered. In
      addition, the Fund reviewed its internal controls, and there have been no
      significant changes in its internal controls or in other factors that could
      significantly affect those controls subsequent to the date of their last
      evaluation or from the end of the reporting period to the date of this
      Form 10-QSB. In connection with the evaluation of the Fund’s internal
      controls during the Fund’s third fiscal quarter ended March 31, 2007, the
      Manager’s Principal Executive Officer and Principal Financial Officer have
      determined that there are no changes to the Fund’s internal controls over
      financial reporting that has materially affected, or is reasonably likely to
      materially effect, the Fund’s internal controls over financial reporting. The Fund 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 Fund ’s
      operations are managed by its fund manager, Lakeside Financial Group, Inc.
      The
      Manager does not own a membership interest in the Fund .




-23-


**PART
      II - OTHER INFORMATION**




**Item
      1.**  **Legal
      Proceedings**





None





**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds**





During
      the period covered by this report the Fund made sales of unregistered securities
      set forth in the table below. All sales were of units of membership interest
      in
      the Fund, for the purchase price of $100 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 4.5% 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 Fund
      derives at least 98% of its revenues from loans secured by real property located
      in California. The Fund’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 Fund 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 January 17, 2007.





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




Date
                  of Sale
              
              Units
                  Sold
              
              Purchase
                  Price01/16/07
              
              
              29,145.10
              
              $
              2,914,509.8702/02/07
              
              
              6,400.71
              
              $
              640,071.0002/13/07
              
              
              930.40
              
              $
              93,040.0002/26/07
              
              
              5,377.95
              
              $
              537,795.4203/05/07
              
              
              3,584.35
              
              $
              358,435.0303/12/07
              
              
              1,657.87
              
              $
              165,787.1603/27/07
              
              
              2,588.48
              
              $
              258,848.43


01/04/07
                    (reinvestment)
                
                
                679.38
                
                $
                67,937.9402/05/07
                    (reinvestment)
                
                
                614.32
                
                $
                61,432.3703/05/07
                    (reinvestment)
                
                
                804.58
                
                $
                80,457.75
 -24-


**Item
      3.**  **Defaults
      on Senior Securities**





None





**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders**





The
      Fund
      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.
              
              Description2.1.*
              
              Articles
                  of Organization3.1.*
              
              Operating
                  Agreement of Lakeside Mortgage Fund, LLC6.1.*
              
              Broker/Dealer
                  Agreement6.2.*
              
              Amendment
                  No. 1 to Broker Dealer Agreement6.3.
              
              Amendment
                  No. 2 to Broker Dealer Agreement12.1.
              
              Offering
                  Circular dated January 17, 200731.1.
              
              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 Fund’s Registration Statement on Form 10-SB, as
                amended, originally filed with the Commission under the Exchange
                Act on
                August 6, 2004.





**
            Incorporated
                by reference to the Fund’s Quarterly Report on Form 10-QSB for the
                quarterly period ended June 30,
                2006.





-25-


**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
                CompanyBy:
            Lakeside
                Financial
                Group, Inc.,
              ManagerDate:
              May 15, 2007
            By:
            /S/
              William F. WebsterWilliam
                F. Webster, President




-26-