UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    Form 10-Q



(Mark one)
X    Quarterly  Report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934


                  For the quarterly period ended March 31, 2008

     Transition Report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934


         For the transition period from ______________ to _____________



                         Commission File Number: 0-53132

                        SMSA El Paso 1 Acquisition Corp.
        (Exact name of small business issuer as specified in its charter)

        Nevada                                              26-1516355
----------------------                             ---------------------------
(State of incorporation)                              (IRS Employer ID Number)

                      12890 Hilltop Road, Argyle, TX 76226
                      ------------------------------------
                    (Address of principal executive offices)

                                 (972) 233-0300
                                 --------------
                           (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 [ ]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer",  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

       Large accelerated filer               Accelerated filer

       Non-accelerated filer                 Smaller reporting company    X


Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act): YES [X] NO [ ]


State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: May 29, 2008: 500,016
                                          ---------------------

Transitional Small Business Disclosure Format (check one):    YES [ ]  NO [X]




<PAGE>






                        SMSA El Paso 1 Acquisition Corp.

                Form 10-QSB for the Quarter ended March 31, 2008

                                Table of Contents


                                                                            Page
                                                                            ----
Part I - Financial Information

  Item 1 - Financial Statements                                                3

  Item 2 - Management's Discussion and Analysis or Plan of Operation          13

  Item 3 - Quantitative and Qualitative Disclosures About Market Risk         16

  Item 4 - Controls and Procedures                                            16

Part II - Other Information

  Item 1 - Legal Proceedings                                                  17

  Item 2 - Recent Sales of Unregistered Securities and Use of Proceeds        17

  Item 3 - Defaults Upon Senior Securities                                    17

  Item 4 - Submission of Matters to a Vote of Security Holders                17

  Item 5 - Other Information                                                  17

  Item 6 - Exhibits                                                           17

Signatures                                                                    17








                                                                               2
<PAGE>

Part I
Item 1 - Financial Statements

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                                  Balance Sheet
                                 March 31, 2008

                                   (Unaudited)


                                                                March 31,
                                                                  2008
                                     ASSETS                     --------
                                     ------
Current Assets
   Cash on hand and in bank                                     $   --
   Due from controlling shareholder                                 --
                                                                --------

     Total Assets                                               $   --
                                                                ========



                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------
Current Liabilities
   Accounts payable - trade                                     $   --
   Working capital advances from controlling stockholder           9,471
                                                                --------

     Total Liabilities                                             9,471
                                                                --------


Commitments and Contingencies


Stockholders' Equity (Deficit)
   Preferred stock - $0.001 par value
     10,000,000 shares authorized.
     None issued and outstanding
   Common stock - $0.001 par value.                                 --
     100,000,000 shares authorized.
     500,016 shares issued and outstanding                           500
   Additional paid-in capital                                        500
   Deficit accumulated during the development stage              (10,471)
                                                                --------

     Total Stockholders' Equity (Deficit)                         (9,471)
                                                                --------

     Total Liabilities and
       Stockholders' Equity (Deficit)                           $   --
                                                                ========







   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.



                                                                               3
<PAGE>

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                 Statement of Operations and Comprehensive Loss
                      Three months ended March 31, 2008 and
                 Period from August 1, 2007 (date of bankruptcy
                       settlement) through March 31, 2008

                                   (Unaudited)


                                                        Period from
                                                       August 1, 2007
                                                          (date of
                                                        bankruptcy
                                       Three months     settlement)
                                          ended            through
                                        March 31,        March 31,
                                           2008             2008
                                        ---------        ---------

Revenues                                $    --          $    --
                                        ---------        ---------

Operating expenses
   Reorganization costs                     1,850            5,213
   Legal and professional fees              5,258            5,258
                                        ---------        ---------

   Total operating expenses                 7,108           10,471
                                        ---------        ---------

Loss from operations                       (7,108)         (10,471)

Provision for income taxes                   --               --
                                        ---------        ---------

Net loss                                   (7,108)         (10,471)

Other comprehensive income                   --               --
                                        ---------        ---------

Comprehensive loss                      $  (7,108)       $ (10,471)
                                        =========        =========

Loss per weighted-average share
   of common stock outstanding,
   computed on net loss - basic
   and fully diluted                    $   (0.01)       $   (0.02)
                                        =========        =========

Weighted-average number of shares
   of common stock outstanding -
   basic and fully diluted                500,016          500,016
                                        =========        =========



The financial information presented herein has been prepared by management
        without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.





                                                                               4
<PAGE>



                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                             Statement of Cash Flows
                      Three months ended March 31, 2008 and
                  Period from August 1, 2007(date of bankruptcy
                       settlement) through March 31, 2008

                                   (Unaudited)


                                                                    Period from
                                                                  August 1, 2007
                                                                     (date of
                                                                    bankruptcy
                                                      Three months  settlement)
                                                         ended        through
                                                       March 31,     March 31,
                                                         2008          2008
                                                       --------      --------
Cash Flows from Operating Activities
   Net loss for the period                             $ (7,108)     $(10,471)
   Adjustments to reconcile net loss
     to net cash provided by
     operating activities
     Increase in accounts payable-trade                    --            --
                                                       --------      --------

Net cash used in operating activities                    (7,108)      (10,471)
                                                       --------      --------


Cash Flows from Investing Activities                       --            --
                                                       --------      --------


Cash Flows from Financing Activities
   Cash funded from bankruptcy trust                       --           1,000
   Working capital advances from majority stockholder     7,108         9,471
                                                       --------      --------

Net cash provided by financing activities                 7,108        10,471
                                                       --------      --------

Increase in Cash                                           --

Cash at beginning of period                                --            --
                                                       --------      --------

Cash at end of period                                  $   --        $   --
                                                       ========      ========


Supplemental Disclosure of
   Interest and Income Taxes Paid
     Interest paid during the period                   $   --        $   --
                                                       ========      ========
     Income taxes paid during the period               $   --        $   --
                                                       ========      ========






   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.


                                                                               5
<PAGE>

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                          Notes to Financial Statements
                                 March 31, 2008



Note A - Background and Description of Business

SMSA El Paso I Acquisition  Corp.  (Company) was organized on September 26, 2007
as a Nevada  corporation  to effect  the  reincorporation  of Senior  Management
Services of El Paso Sunset,  Inc., a Texas corporation,  mandated by the plan of
reorganization discussed below.

The Company's emergence from Chapter 11 of Title 11 of the United States Code on
August 1, 2007 created the  combination  of a change in majority  ownership  and
voting control - that is, loss of control by the then-existing  stockholders,  a
court-approved reorganization, and a reliable measure of the entity's fair value
- resulting in a fresh start,  creating,  in substance,  a new reporting entity.
Accordingly,   the  Company,   post  bankruptcy,   has  no  significant  assets,
liabilities or operating activities.  Therefore, the Company, as a new reporting
entity, qualifies as a "development stage enterprise" as defined in Statement of
Financial  Accounting  Standard No. 7, as amended and a shell company as defined
in Rule 405 under the Securities Act of 1933,  (Securities  Act), and Rule 12b-2
under the Securities Exchange Act of 1934, (Exchange Act).

In accordance with the confirmed plan of  reorganization,  our current  business
plan is to seek to  identify a  privately-held  operating  company  desiring  to
become a publicly  held  company by merging  with the Company  through a reverse
merger or acquisition.


Note B - Bankruptcy Action

On January 17, 2007, Senior Management  Services of El Paso Sunset, Inc. and its
affiliated  companies (SMS Companies) filed a petition for reorganization  under
Chapter 11 of the United States Bankruptcy Code. During the three years prior to
filing the  reorganization  petition,  SMS Companies operated a chain of skilled
nursing homes in Texas, which prior to the bankruptcy  proceedings  consisted of
14 nursing facilities,  ranging in size from approximately 114 beds to 325 beds.
In the aggregate,  SMS Companies  provided care to approximately  1,600 resident
patients and employed over 1,400  employees.  A  significant  portion of the SMS
Companies  cash flow was provided by patients  covered by Medicare and Medicaid.
The SMS  Companies  facilities  provided  round-the-clock  care for the  health,
well-being,  safety and medical needs of its patients.  The  administrative  and
operational  oversight of the nursing  facilities  was provided by an affiliated
management company located in Arlington,  Texas. In 2005, SMS Companies obtained
a secured  credit  facility from a financial  institution.  The credit  facility
eventually was comprised of an $8.3 million term loan and a revolving loan of up
to $15  million  which was  utilized  for  working  capital  and to finance  the
purchase  of the  real  property  on  which  2 of its  nursing  care  facilities
operated. By late 2006, SMS Companies were in an "overadvance" position, whereby
the amount of funds by the lender exceeded the amount of collateral  eligible to
be  borrowed  under the  credit  facility.  Beginning  in  September  2006,  SMS
Companies entered into the first of a series of forbearance  agreements  whereby
the lender agreed to forebear from  declaring the financing in default  provided
SMS  Companies  obtained  a  commitment  from  a new  lender  to  refinance  and
restructure the credit facility.  SMS Companies were unsuccessful in obtaining a
commitment  from a new lender and, on January 5, 2007,  the lender  declared SMS
Companies in default and commenced  foreclosure and collection  proceedings.  On
January 9, 2007, the lender agreed to provide an additional $1.7 million to fund
payroll and permit a controlled  transaction  to  bankruptcy.  Subsequently,  on
January 17, 2007, the SMS Companies  filed a petition for  reorganization  under
Chapter 11 of the Bankruptcy Code.

All assets, liabilities and other claims against the Company and it's affiliated
entities  were combined for the purpose of  distribution  of funds to creditors.
Each of the entities otherwise remained separate  corporate  entities.  From the
commencement of the bankruptcy proceedings through August 1, 2007 (the effective
date of the plan of  reorganization),  all secured claims and/or  administrative
claims  during this period  were  satisfied  through  either  direct  payment or
negotiation.




                                                                               6
<PAGE>

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                    Notes to Financial Statements - Continued
                                 March 31, 2008



Note B - Bankruptcy Action - Continued

We will remain  subject to the  jurisdiction  of the  bankruptcy  court until we
consummate a merger or acquisition. Pursuant to the confirmation order, if we do
not  consummate a business  combination  prior to February  10,  2009,  the Plan
Shares  will be  deemed  canceled,  the  pre-merger  or  acquisition  injunction
provisions of the confirmation  order, as they pertain to the Company,  shall be
deemed  dissolved and no discharge  will be granted to the Company,  all without
further  order of the  bankruptcy  court.  If we timely  consummate  a merger or
acquisition  with an  entity  which  is  engaged  in  business,  we will  file a
certificate of compliance  with the  bankruptcy  court which will state that the
requirements of the Plan have been met,  resulting in the discharge to be deemed
granted.  Thereafter,  the post discharge injunction provisions set forth in the
Plan and the confirmation order shall then become effective.

The First  Amended,  Modified  Chapter 11 Plan,  (the Plan) as  presented by SMS
Companies  and their  creditors  was  approved by the United  States  Bankruptcy
Court, Northern District of Texas - Dallas Division on August 1, 2007. The Plan,
which  contemplates  the Company  entering  into a reverse  merger  transaction,
provided that certain identified  claimants as well as unsecured  creditors,  in
accordance with the allocation provisions of the Plan of Reorganization, and the
Company's  new  controlling  stockholder  would  receive  "new"  shares  of  the
Company's  post-reorganization  common stock, pursuant to Section 1145(a) of the
Bankruptcy  Code.  As a result  of the  Plan's  approval,  all  liens,  security
interests,  encumbrances  and  other  interests,  as  defined  in  the  Plan  of
Reorganization,  attach to the creditor's trust.  Specific  injunctions prohibit
any of these  claims  from  being  asserted  against  the  Company  prior to the
contemplated reverse merger.

The cancellation of all existing shares at the date of the bankruptcy filing and
the issuance of "new"  shares of the  reorganized  entity  caused an issuance of
shares of common stock and a related  change of control of the Company with more
than 50.0% of the "new" shares being held by persons and/or  entities which were
not  pre-bankruptcy   stockholders.   Accordingly,  per  American  Institute  of
Certified Public Accountants'  Statement of Position 90-7,  "Financial Reporting
by Entities in  Reorganization  Under the Bankruptcy  Code", the Company adopted
"fresh-start"  accounting  as of  the  bankruptcy  discharge  date  whereby  all
continuing  assets and  liabilities  of the  Company  were  restated to the fair
market value. As of August 1, 2007, by virtue of the Plan, the only asset of the
Company was approximately $1,000 in cash due from the Bankruptcy Estate.


Note C - Preparation of Financial Statements

The Company follows the accrual basis of accounting in accordance with generally
accepted  accounting  principles  and has  established a year-end for accounting
purposes of December 31.

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.

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented





                                                                               7
<PAGE>

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                    Notes to Financial Statements - Continued
                                 March 31, 2008



Note C - Preparation of Financial Statements - Continued

During interim periods, the Company follows the accounting policies set forth in
its annual  audited  financial  statements  filed with the U. S.  Securities and
Exchange  Commission on its  Registration  Statement on Form 10  containing  the
Company's  financial  statements  for the year  ended  December  31,  2007.  The
information  presented within these interim financial statements may not include
all disclosures  required by generally  accepted  accounting  principles and the
users of financial  information provided for interim periods should refer to the
annual financial  information and footnotes when reviewing the interim financial
results presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in  accordance  with the U. S.  Securities  and  Exchange  Commission's
instructions for Form 10-Q, are unaudited and contain all material  adjustments,
consisting only of normal recurring  adjustments necessary to present fairly the
financial condition, results of operations and cash flows of the Company for the
respective interim periods  presented.  The current period results of operations
are not necessarily  indicative of results which ultimately will be reported for
the full fiscal year ending December 31, 2008.


Note D - Going Concern Uncertainty

The Company has no post-bankruptcy operating history, no cash on hand, no assets
and has a  business  plan with  inherent  risk.  Because of these  factors,  the
Company's  auditors  have  issued an audit  opinion on the  Company's  financial
statements which includes a statement  describing our going concern status. This
means, in the auditor's opinion, substantial doubt about our ability to continue
as a going concern exists at the date of their opinion.

The Company's majority stockholder maintains the corporate status of the Company
and has provided all nominal  working  capital  support on the Company's  behalf
since the bankruptcy  discharge date. Because of the Company's lack of operating
assets,  its  continuance  is fully  dependent  upon the majority  stockholder's
continuing support.  The majority stockholder intends to continue the funding of
nominal necessary expenses to sustain the corporate entity.

The  Company's  continued  existence is  dependent  upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis. Further, the Company faces considerable risk in it's business plan
and a potential  shortfall of funding due to our  inability to raise  capital in
the equity  securities  market.  If no additional  operating capital is received
during the next twelve  months,  the Company  will be forced to rely on existing
cash in the bank and additional  funds loaned by management  and/or  significant
stockholders.

The Company's  business plan is to seek an  acquisition or merger with a private
operating   company  which  offers  an  opportunity   for  growth  and  possible
appreciation of our stockholders'  investment in the then issued and outstanding
common stock.  However,  there is no assurance  that the Company will be able to
successfully  consummate  an  acquisition  or merger  with a  private  operating
company or, if  successful,  that any  acquisition  or merger will result in the
appreciation  of our  stockholders'  investment in the then  outstanding  common
stock.

The Company  remains  dependent upon additional  external  sources of financing;
including being dependent upon its management and/or significant stockholders to
provide   sufficient   working  capital  in  excess  of  the  Company's  initial
capitalization to preserve the integrity of the corporate entity.

The Company  anticipates  offering future sales of equity  securities.  However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional  equity  securities  or, that such  funding,  if
available, will be obtained on terms favorable to or affordable by the Company.





                                                                               8
<PAGE>

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                    Notes to Financial Statements - Continued
                                 March 31, 2008



Note D - Going Concern Uncertainty - Continued

The Company's  certificate  of  incorporation  authorizes  the issuance of up to
10,000,000  million shares of preferred stock and  100,000,000  shares of common
stock.  The Company's  ability to issue  preferred stock may limit the Company's
ability to obtain debt or equity financing as well as impede potential  takeover
of the Company, which takeover may be in the best interest of stockholders.  The
Company's  ability to issue these  authorized  but unissued  securities may also
negatively  impact our ability to raise  additional  capital through the sale of
our debt or equity securities.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.  However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.

In such a restricted cash flow scenario, the Company would be unable to complete
its  business  plan  steps,  and  would,  instead,   delay  all  cash  intensive
activities.  Without  necessary cash flow, the Company may become dormant during
the next twelve months, or until such time as necessary funds could be raised in
the equity securities market.


While the Company is of the opinion that good faith  estimates of the  Company's
ability to secure additional  capital in the future to reach its goals have been
made, there is no guarantee that the Company will receive  sufficient funding to
sustain operations or implement any future business plan steps.


Note E - Summary of Significant Accounting Policies

1. Cash and cash equivalents
   -------------------------

     The  Company  considers  all cash on hand  and in  banks,  certificates  of
     deposit and other highly-liquid investments with maturities of three months
     or less, when purchased, to be cash and cash equivalents.

2. Reorganization costs
   --------------------

     The Company has adopted the provisions of AICPA Statement of Position 98-5,
     "Reporting on the Costs of Start-Up  Activities" whereby all costs incurred
     with the incorporation and reorganization,  post-bankruptcy, of the Company
     were charged to operations as incurred.

3. Income taxes
   ------------

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At March 31, 2008, the deferred tax asset and deferred tax liability
     accounts,  as recorded  when  material  to the  financial  statements,  are
     entirely  the  result  of  temporary  differences.   Temporary  differences
     represent  differences in the recognition of assets and liabilities for tax
     and financial reporting purposes,  primarily  accumulated  depreciation and
     amortization, allowance for doubtful accounts and vacation accruals.

     As of March 31, 2008,  the deferred tax asset  related to the Company's net
     operating loss  carryforward  is fully  reserved.  Due to the provisions of
     Internal  Revenue Code  Section 338, the Company may have no net  operating
     loss  carryforwards  available to offset financial  statement or tax return
     taxable  income  in  future  periods  as a result  of a change  in  control
     involving  50  percentage  points  or more of the  issued  and  outstanding
     securities of the Company.





                                                                               9
<PAGE>

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                    Notes to Financial Statements - Continued
                                 March 31, 2008



Note E - Summary of Significant Accounting Policies - Continued

4. Income (Loss) per share
   -----------------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) available to common stockholders by the  weighted-average  number of
     common shares  outstanding  during the respective  period  presented in our
     accompanying financial statements.

     Fully diluted earnings (loss) per share is computed similar to basic income
     (loss) per share  except that the  denominator  is increased to include the
     number of common  stock  equivalents  (primarily  outstanding  options  and
     warrants).

     Common  stock  equivalents  represent  the  dilutive  effect of the assumed
     exercise of the outstanding stock options and warrants,  using the treasury
     stock method, at either the beginning of the respective period presented or
     the date of  issuance,  whichever  is later,  and only if the common  stock
     equivalents  are  considered  dilutive  based upon the Company's net income
     (loss) position at the calculation date.

     As  of  March  31,  2008,  and  subsequent  thereto,  the  Company  had  no
     outstanding stock warrants,  options or convertible  securities which could
     be considered as dilutive for purposes of the loss per share calculation.


Note F - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  Company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.





                (Remainder of this page left blank intentionally)





                                                                              10
<PAGE>

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                    Notes to Financial Statements - Continued
                                 March 31, 2008



Note G - Income Taxes

The components of income tax (benefit)  expense for the three month period ended
March 31,  2008 and for the  period  from  August  1,  2007(date  of  bankruptcy
settlement) through March 31, 2008 is as follows:

                                                                  Period from
                                                                August 1, 2007
                                                                   (date of
                                                                  bankruptcy
                                               Three months       settlement)
                                                   ended            through
                                                 March 31,         March 31,
                                                   2008              2008
                                                 -------           -------
       Federal:
         Current                                 $     -           $     -
         Deferred                                      -                 -
                                                 -------           -------
                                                       -                 -
                                                 -------           -------
   State:
         Current                                       -                 -
         Deferred                                      -                 -
                                                 -------           -------
                                                       -                 -
                                                 -------           -------

         Total                                   $     -           $     -
                                                 =======           =======

As of March 31,  2008,  the Company had a net  operating  loss  carryforward  of
approximately   $10,500  to  offset  future  taxable  income.   The  amount  and
availability  of any net  operating  loss  carryforwards  will be subject to the
limitations  set forth in the Internal  Revenue Code. Such factors as the number
of shares ultimately issued within a three year look-back period;  whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate;  continuity of historical  business;  and subsequent income of
the  Company  all  enter  into  the  annual   computation  of  allowable  annual
utilization of any net operating loss carryforward(s).

The  Company's  income tax expense for the three months ended March 31, 2008 and
for the period from August 1, 2007(date of bankruptcy  settlement) through March
31, 2008 is as follows:

                                                               Period from
                                                             August 1, 2007
                                                               (date of
                                                              bankruptcy
                                             Three months     settlement)
                                                 ended          through
                                               March 31,       March 31,
                                                 2008            2008
                                               -------         -------
Statutory rate applied to
   income before income taxes                  $(2,400)        $(3,560)
Increase (decrease) in income
   taxes resulting from:
     State income taxes                           --              --
     Other, including reserve for
     deferred tax asset and application
     of net operating loss carryforward          2,400           3,560
                                               -------         -------

Income tax expense                             $  --           $  --
                                               =======         =======





                                                                              11
<PAGE>

                        SMSA El Paso 1 Acquisition Corp.
                          (a development stage company)
                    Notes to Financial Statements - Continued
                                 March 31, 2008



Note G - Income Taxes - Continued

The  Company's  only  temporary  differences  as of March 31, 2008 relate to the
Company's  net operating  loss.  Accordingly,  any deferred tax asset,  as fully
reserved, or liability, if any, as of March 31, 2008 is nominal and not material
to the accompanying financial statements.


Note H - Capital Stock Transactions

Pursuant to the Plan affirmed by the U. S. Bankruptcy Court - Northern  District
of Texas - Dallas Division,  the Company will issue a sufficient  number of Plan
shares to meet the  requirements  of the Plan.  Such number was estimated in the
Plan to be approximately  500,000 Plan Shares relative to each Post Confirmation
Debtor.

As provided in the Plan,  80.0% of the Plan Shares of the Company were issued to
Halter Financial  Group,  Inc. (HFG). In exchange for the release of its Allowed
Administrative  Claims  and for the  performance  of  certain  services  and the
payment of certain fees related to the anticipated reverse merger or acquisition
transactions  described in the Plan.  The remaining  20.0% of the Plan Shares of
the  Company  were issued to other  holders of various  claims as defined in the
Plan.

Based upon the  calculations  provided by the  Creditor's  Trustee,  the Company
issued an aggregate  500,016  shares of the Company's  "new" common stock to all
unsecured creditors and the controlling  stockholder in settlement of all unpaid
pre-confirmation obligations of the Company and/or the bankruptcy trust.

Effective  September 26, 2007, HFG transferred its 400,000 Plan Shares to Halter
Financial  Investments,  L.P. (HFI), a Texas limited  partnership  controlled by
Timothy P. Halter, who is also the controlling officer of HFG.

















                                                                              12
<PAGE>
Part I - Item 2

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

(1)  Caution Regarding Forward-Looking Information

Certain  statements  contained  in this  quarterly  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-QSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

(2)  Background

SMSA El Paso I Acquisition  Corp.  (Company) was organized on September 26, 2007
as a Nevada  corporation  to effect  the  reincorporation  of Senior  Management
Services of El Paso Sunset,  Inc., a Texas corporation,  mandated by the plan of
reorganization discussed below.

On January 17, 2007, Senior Management  Services of El Paso Sunset, Inc. and its
affiliated  companies (SMS Companies) filed a petition for reorganization  under
Chapter 11 of the United States Bankruptcy Code. During the three years prior to
filing the  reorganization  petition,  SMS Companies operated a chain of skilled
nursing homes in Texas, which prior to the bankruptcy  proceedings  consisted of
14 nursing facilities,  ranging in size from approximately 114 beds to 325 beds.
In the aggregate,  SMS Companies  provided care to approximately  1,600 resident
patients and employed over 1,400  employees.  A  significant  portion of the SMS
Companies  cash flow was provided by patients  covered by Medicare and Medicaid.
The SMS  Companies  facilities  provided  round-the-clock  care for the  health,
well-being,  safety and medical needs of its patients.  The  administrative  and
operational  oversight of the nursing  facilities  was provided by an affiliated
management company located in Arlington,  Texas. In 2005, SMS Companies obtained
a secured  credit  facility from a financial  institution.  The credit  facility
eventually was comprised of an $8.3 million term loan and a revolving loan of up
to $15  million  which was  utilized  for  working  capital  and to finance  the
purchase  of the  real  property  on  which  2 of its  nursing  care  facilities
operated. By late 2006, SMS Companies were in an "overadvance" position, whereby
the amount of funds by the lender exceeded the amount of collateral  eligible to
be  borrowed  under the  credit  facility.  Beginning  in  September  2006,  SMS
Companies entered into the first of a series of forbearance  agreements  whereby
the lender agreed to forebear from  declaring the financing in default  provided
SMS  Companies  obtained  a  commitment  from  a new  lender  to  refinance  and
restructure the credit facility.  SMS Companies were unsuccessful in obtaining a
commitment  from a new lender and, on January 5, 2007,  the lender  declared SMS
Companies in default and commenced  foreclosure and collection  proceedings.  On
January 9, 2007, the lender agreed to provide an additional $1.7 million to fund
payroll and permit a controlled  transaction  to  bankruptcy.  Subsequently,  on
January 17, 2007, the SMS Companies  filed a petition for  reorganization  under
Chapter 11 of the Bankruptcy Code.

All assets, liabilities and other claims against the Company and it's affiliated
entities  were combined for the purpose of  distribution  of funds to creditors.
Each of the entities otherwise remained separate  corporate  entities.  From the
commencement of the bankruptcy proceedings through August 1, 2007 (the effective
date of the plan of  reorganization),  all secured claims and/or  administrative
claims  during this period  were  satisfied  through  either  direct  payment or
negotiation.

We will remain  subject to the  jurisdiction  of the  bankruptcy  court until we
consummate a merger or acquisition. Pursuant to the confirmation order, if we do
not  consummate a business  combination  prior to February  10,  2009,  the Plan
Shares  will be  deemed  canceled,  the  pre-merger  or  acquisition  injunction
provisions of the confirmation  order, as they pertain to the Company,  shall be
deemed  dissolved and no discharge  will be granted to the Company,  all without
further  order of the  bankruptcy  court.  If we timely  consummate  a merger or


                                                                              13
<PAGE>
acquisition  with an  entity  which  is  engaged  in  business,  we will  file a
certificate of compliance  with the  bankruptcy  court which will state that the
requirements of the Plan have been met,  resulting in the discharge to be deemed
granted.  Thereafter,  the post discharge injunction provisions set forth in the
Plan and the confirmation order shall then become effective.

The First  Amended,  Modified  Chapter 11 Plan,  (the Plan) as  presented by SMS
Companies  and their  creditors  was  approved by the United  States  Bankruptcy
Court, Northern District of Texas - Dallas Division on August 1, 2007. The Plan,
which  contemplates  the Company  entering  into a reverse  merger  transaction,
provided that certain identified  claimants as well as unsecured  creditors,  in
accordance with the allocation provisions of the Plan of Reorganization, and the
Company's  new  controlling  stockholder  would  receive  "new"  shares  of  the
Company's  post-reorganization  common stock, pursuant to Section 1145(a) of the
Bankruptcy  Code.  As a result  of the  Plan's  approval,  all  liens,  security
interests,  encumbrances  and  other  interests,  as  defined  in  the  Plan  of
Reorganization,  attach to the creditor's trust.  Specific  injunctions prohibit
any of these  claims  from  being  asserted  against  the  Company  prior to the
contemplated reverse merger.

The cancellation of all existing shares at the date of the bankruptcy filing and
the issuance of "new"  shares of the  reorganized  entity  caused an issuance of
shares of common stock and a related  change of control of the Company with more
than 50.0% of the "new" shares being held by persons and/or  entities which were
not  pre-bankruptcy   stockholders.   Accordingly,  per  American  Institute  of
Certified Public Accountants'  Statement of Position 90-7,  "Financial Reporting
by Entities in  Reorganization  Under the Bankruptcy  Code", the Company adopted
"fresh-start"  accounting  as of  the  bankruptcy  discharge  date  whereby  all
continuing  assets and  liabilities  of the  Company  were  restated to the fair
market value. As of August 1, 2007, by virtue of the Plan, the only asset of the
Company was approximately $1,000 in cash due from the Bankruptcy Estate.

The Company's emergence from Chapter 11 of Title 11 of the United States Code on
August 1, 2007 created the  combination  of a change in majority  ownership  and
voting control - that is, loss of control by the then-existing  stockholders,  a
court-approved reorganization, and a reliable measure of the entity's fair value
- resulting in a fresh start,  creating,  in substance,  a new reporting entity.
Accordingly,   the  Company,   post  bankruptcy,   has  no  significant  assets,
liabilities or operating activities.  Therefore, the Company, as a new reporting
entity, qualifies as a "development stage enterprise" as defined in Statement of
Financial  Accounting  Standard No. 7, as amended and a shell company as defined
in Rule 405 under the Securities Act of 1933,  (Securities  Act), and Rule 12b-2
under the Securities Exchange Act of 1934, (Exchange Act).

In accordance with the confirmed plan of  reorganization,  our current  business
plan is to seek to  identify a  privately-held  operating  company  desiring  to
become a publicly  held  company by merging  with the Company  through a reverse
merger or acquisition.

The  Company  filed a  General  Form for  Registration  of  Securities  of Small
Business  Issuers under Section 12(b) or (g) of The  Securities  Exchange Act of
1934, as amended, on Form 10 on March 12, 2008. This Registration Statement went
effective  on May 11,  2008.  This Form 10-Q is filed to  report  the  Company's
operations for the quarter ended March 31, 2008.

(3)  Plan of Operations

The Company had no revenue for either of the three month  period ended March 31,
2008.

General and  administrative  expenses for the three month period ended March 31,
2008 was related to the court mandated  reorganization  of the Company since the
August 2007 affirmation of the Company's Plan of Reorganization, maintaining the
corporate entity and maintaining  compliance with the Securities Exchange Act of
1934, as amended.

It is  anticipated  that future  expenditure  levels may increase as the Company
intends to fully comply with it's periodic reporting requirements.

Earnings per share for the  respective  three month periods ended March 31, 2008
were $(0.01) based on the weighted-average  shares issued and outstanding at the
end of each respective period.

The  Company  does not  expect  to  generate  any  meaningful  revenue  or incur
operating  expenses for purposes  other than  fulfilling  the  obligations  of a
reporting  company  under the  Securities  Exchange Act of 1934 unless and until
such time that the Company's operating subsidiary begins meaningful operations.

At March 31, 2008, the Company had working capital of approximately $(9,500).

It is the  belief of  management  and  significant  stockholders  that they will
provide  sufficient  working  capital  necessary  to support  and  preserve  the
integrity of the corporate  entity will be present.  However,  there is no legal
obligation  for  either  management  or  significant   stockholders  to  provide
additional  future funding.  Should this pledge fail to provide  financing,  the



                                                                              14
<PAGE>

Company has not  identified  any  alternative  sources.  Consequently,  there is
substantial doubt about the Company's ability to continue as a going concern.

The Company's need for working  capital may change  dramatically  as a result of
any business acquisition or combination  transaction.  There can be no assurance
that the Company will identify any such business, product, technology or company
suitable for acquisition in the future.  Further, there can be no assurance that
the Company would be successful in  consummating  any  acquisition  on favorable
terms  or that it will be able  to  profitably  manage  the  business,  product,
technology or company it acquires.

Plan of Business

General

The  Company  intends to locate and  combine  with an  existing,  privately-held
company which is profitable  or, in  management's  view,  has growth  potential,
irrespective of the industry in which it is engaged.  However,  the Company does
not  intend  to  combine  with a  private  company  which may be deemed to be an
investment  company subject to the Investment Company Act of 1940. A combination
may be structured as a merger,  consolidation,  exchange of the Company's common
stock for stock or assets or any other form which  will  result in the  combined
enterprise's becoming a publicly-held corporation.

Pending  negotiation and consummation of a combination,  the Company anticipates
that it will have, aside from carrying on its search for a combination  partner,
no business  activities,  and, thus, will have no source of revenue.  Should the
Company incur any significant  liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.

If the Company's management pursues one or more combination opportunities beyond
the  preliminary  negotiations  stage and those  negotiations  are  subsequently
terminated,  it is  foreseeable  that such efforts  will  exhaust the  Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated.  In that event,  the Company's common stock will
become  worthless  and  holders of the  Company's  common  stock will  receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.

Combination Suitability Standards

In its pursuit for a combination  partner,  the Company's  management intends to
consider only  combination  candidates  which are profitable or, in management's
view, have growth potential.  The Company's management does not intend to pursue
any  combination  proposal  beyond the  preliminary  negotiation  stage with any
combination  candidate which does not furnish the Company with audited financial
statements  for at least its most  recent  fiscal year and  unaudited  financial
statements for interim periods  subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner.  The Company will, if necessary  funds are available,  engage  attorneys
and/or accountants in its efforts to investigate a combination  candidate and to
consummate a business  combination.  The Company may require  payment of fees by
such combination  candidate to fund the investigation of such candidate.  In the
event such a combination candidate is engaged in a high technology business, the
Company may also obtain  reports from  independent  organizations  of recognized
standing  covering the technology  being developed and/or used by the candidate.
The  Company's  limited  financial  resources may make the  acquisition  of such
reports  difficult  or even  impossible  to obtain  and,  thus,  there can be no
assurance  that the Company  will have  sufficient  funds to obtain such reports
when considering combination proposals or candidates.  To the extent the Company
is  unable to  obtain  the  advice or  reports  from  experts,  the risks of any
combined enterprise's being unsuccessful will be enhanced.  Furthermore,  to the
knowledge of the Company's officers and directors, neither the candidate nor any
of  its  directors,   executive  officers,  principal  stockholders  or  general
partners:

(1)      will not have been  convicted  of  securities  fraud,  mail fraud,  tax
         fraud,  embezzlement,  bribery, or a similar criminal offense involving
         misappropriation  or theft of  funds,  or be the  subject  of a pending
         investigation or indictment involving any of those offenses;

(2)      will not have been subject to a temporary or  permanent  injunction  or
         restraining  order arising from unlawful  transactions  in  securities,
         whether as issuer, underwriter,  broker, dealer, or investment advisor,
         may be the subject of any  pending  investigation  or a defendant  in a
         pending  lawsuit  arising  from or based upon  allegations  of unlawful
         transactions in securities; or

(3)      will not have been a defendant in a civil  action  which  resulted in a
         final judgement  against it or him awarding damages or rescission based
         upon unlawful practices or sales of securities.

The Company's  officers and directors will make these  determinations  by asking
pertinent  questions of the  management of prospective  combination  candidates.
Such persons will also ask pertinent  questions of others who may be involved in



                                                                              15
<PAGE>

the combination proceedings.  However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable.  Unless  something  comes to their  attention
which  puts  them on  notice  of a  possible  disqualification  which  is  being
concealed  from them,  such persons will rely on  information  received from the
management of the prospective  combination  candidate and from others who may be
involved in the combination proceedings.

(4)  Liquidity and Capital Resources

It is the  belief of  management  and  significant  stockholders  that they will
provide  sufficient  working  capital  necessary  to support  and  preserve  the
integrity of the corporate  entity will be present.  However,  there is no legal
obligation  for  either  management  or  significant   stockholders  to  provide
additional  future funding.  Should this pledge fail to provide  financing,  the
Company has not  identified  any  alternative  sources.  Consequently,  there is
substantial doubt about the Company's ability to continue as a going concern.

The Company has no current plans, proposals, arrangements or understandings with
respect to the sale or issuance of additional  securities  prior to the location
of a merger or  acquisition  candidate.  Accordingly,  there can be no assurance
that sufficient  funds will be available to the Company to allow it to cover the
expenses related to such activities.

Regardless of whether the  Company's  cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.

(5)  Critical Accounting Policies

Our financial  statements and related public financial  information are based on
the application of accounting principles generally accepted in the United States
("GAAP").  GAAP  requires  the  use of  estimates;  assumptions,  judgments  and
subjective  interpretations of accounting  principles that have an impact on the
assets,  liabilities,  revenue and expense amounts reported. These estimates can
also affect  supplemental  information  contained  in our  external  disclosures
including information regarding contingencies,  risk and financial condition. We
believe our use if estimates and  underlying  accounting  assumptions  adhere to
GAAP and are consistently and conservatively  applied.  We base our estimates on
historical  experience  and on various other  assumptions  that we believe to be
reasonable under the  circumstances.  Actual results may differ  materially from
these  estimates  under  different  assumptions  or  conditions.  We continue to
monitor  significant  estimates  made during the  preparation  of our  financial
statements.

Our  significant  accounting  policies are summarized in Note E of our financial
statements. While all these significant accounting policies impact our financial
condition  and  results of  operations,  we view  certain of these  policies  as
critical.  Policies  determined to be critical are those  policies that have the
most significant  impact on our financial  statements and require  management to
use a greater degree of judgment and  estimates.  Actual results may differ from
those  estimates.   Our  management   believes  that  given  current  facts  and
circumstances,  it is unlikely that applying any other  reasonable  judgments or
estimate  methodologies  would  cause  effect  on our  consolidated  results  of
operations,  financial  position or liquidity for the periods  presented in this
report.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

The  Company  may be subject  to  certain  market  risks,  including  changes in
interest  rates and currency  exchange  rates.  At the present time, the Company
does not undertake any specific actions to limit those exposures.

Item 4 - Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

   Under the supervision and with the participation of our management, including
   our principal executive officer and principal financial officer, we conducted
   an  evaluation of our  disclosure  controls and  procedures,  as such term is
   defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of
   1934,  as  amended  (Exchange  Act),  as of  March  31,  2008.  Based on this
   evaluation,  our principal  executive officer and principal financial officer
   concluded  that our  disclosure  controls  and  procedures  are  effective in
   alerting  them on a timely  basis to  material  information  relating  to our
   Company  required to be included in our reports filed or submitted  under the
   Exchange Act.

(b) Changes in Internal Controls

   There were no significant  changes (including  corrective actions with regard
   to significant  deficiencies or material weaknesses) in our internal controls
   over  financial  reporting  that occurred  during the quarter ended March 31,
   2008 that has  materially  affected,  or is  reasonably  likely to materially
   affect, our internal control over financial reporting.



                                                                              16
<PAGE>


Part II - Other Information

Item 1 - Legal Proceedings

   None

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

   None

Item 3 - Defaults upon 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
stockholders during the reporting period.

Item 5 - Other Information

   None

Item 6 - Exhibits

 31.1  Certification  pursuant  to  Section  302 of  Sarbanes-Oxley  Act of 2002
 32.1  Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002





                                   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.

                                                SMSA El Paso 1 Acquisition Corp.


Dated: May 29, 2008                                 /s/ Richard Crimmins
       ------------                         ------------------------------------
                                                                Richard Crimmins
                                             President, Chief Executive Officer,
                                       Chief Financial Officer and Sole Director






                                                                              17