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**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-QSB

(Mark One)

x Quarterly Report
  Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934

For the quarterly period ended May 31, 2005

 ̈ Transition Report
  Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934

For the transition period ________ to ________

COMMISSION FILE NUMBER 000-51376

RANCHO SANTA MONICA DEVELOPMENTS INC.(Exact name of small business issuer as specified in its charter)

|NEVADA                                           | 83-0414306                       
|------------------------------------------------ | ---------------------------------
|(State or other jurisdiction of incorporation or | (IRS Employer Identification No.)
|organization)                                    |                                  

3104 Sunnyhurst RoadNorth Vancouver, BC, Canada V7K 2G3(Address of principal executive offices)

(604) 537-5905Issuer's telephone number

Not Applicable(Former name, former address and former fiscal year, if changed since last
  report)

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 twelve 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. Yesx No  ̈

State the number of shares outstanding of each of the issuer's
  classes of common equity, as of the latest practicable date: As of July 8,
  2005, the Issuer had 7,564,332 Shares of Common Stock outstanding.

Transitional Small Business Disclosure Format (check one): Yes  ̈
  No x

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PART I - FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS.
|------- | ---------------------

The accompanying unaudited financial statements have been prepared
  in accordance with the instructions to Form 10-QSB and Item 310(b) of Regulation
  S-B, and, therefore, do not include all information and footnotes necessary
  for a complete presentation of financial position, results of operations, cash
  flows, and stockholders' equity in conformity with generally accepted accounting
  principles. In the opinion of management, all adjustments considered necessary
  for a fair presentation of the results of operations and financial position
  have been included and all such adjustments are of a normal recurring nature.
  Operating results for the six months ended May 31, 2005 are not necessarily
  indicative of the results that can be expected for the year ending November
  30, 2005.

As used in this Quarterly Report, the terms "we", "us", "our",
  the “Company” and “Rancho” mean Rancho Santa Monica
  Developments Inc. unless otherwise indicated. All dollar amounts in this Quarterly
  Report are in U.S. dollars unless otherwise stated.

2

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RANCHO SANTA MONICA DEVELOPMENTS INC.(A Development Stage Company)

FINANCIAL STATEMENTS

MAY 31, 2005(Unaudited)
  (Stated in U.S. Dollars)

F-1

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RANCHO SANTA MONICA DEVELOPMENTS INC.(A Development Stage Company)

BALANCE SHEETS(Unaudited)
  (Stated in U.S. Dollars)

|                                                                       |   | MAY 31  |   |   | NOVEMBER 30 |  
|---------------------------------------------------------------------- | - | ------- | - | - | ----------- | -
|                                                                       |   | 2005    |   |   | 2004        |  
|ASSETS                                                                 |   |         |   |   |             |  
|                                                                       |   |         |   |   |             |  
|Current                                                                |   |         |   |   |             |  
|Cash                                                                   | $ | 13,724  |   | $ | 43,154      |  
|                                                                       |   |         |   |   |             |  
|Property(Note 2)                                                       |   | 80,000  |   |   | 80,000      |  
|                                                                       | $ | 93,724  |   | $ | 123,154     |  
|                                                                       |   |         |   |   |             |  
|LIABILITIES                                                            |   |         |   |   |             |  
|                                                                       |   |         |   |   |             |  
|Current                                                                |   |         |   |   |             |  
|Accounts payable and accrued
      liabilities                         | $ | 12,880  |   | $ | 5,331       |  
|                                                                       |   |         |   |   |             |  
|Note Payable(Note 3)                                                   |   | 50,000  |   |   | 50,000      |  
|                                                                       |   | 62,880  |   |   | 55,331      |  
|STOCKHOLDERS’ EQUITY                                                   |   |         |   |   |             |  
|                                                                       |   |         |   |   |             |  
|Share Capital                                                          |   |         |   |   |             |  
|Authorized:                                                            |   |         |   |   |             |  
|100,000,000 common shares with
      a par value of                    |   |         |   |   |             |  
|$0.0001
      per share                                                |   |         |   |   |             |  
|100,000,000 preferred shares
      with a par value of                 |   |         |   |   |             |  
|$0.0001
      per share                                                |   |         |   |   |             |  
|Issued:                                                                |   |         |   |   |             |  
|7,564,332
      common shares at May 31, 2005 and at November 30, 2004 |   | 7,564   |   |   | 7,564       |  
|                                                                       |   |         |   |   |             |  
|Additional paid-in capital                                             |   | 103,366 |   |   | 103,366     |  
|                                                                       |   |         |   |   |             |  
|Subscriptions Receivable                                               |   | -       |   |   | (3,000      | )
|                                                                       |   |         |   |   |             |  
|Deficit Accumulated During The Development Stage                       |   | (80,086 | ) |   | (40,107     | )
|                                                                       |   | 30,844  |   |   | 67,823      |  
|                                                                       | $ | 93,724  |   | $ | 123,154     |  

The accompanying notes are an integral part of these financial
  statements.

F-2

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RANCHO SANTA MONICA DEVELOPMENTS INC.(A Development Stage Company)

STATEMENTS OF OPERATIONS(Unaudited)
  (Stated in U.S. Dollars)

|                                  |   | Three     |   |   | Inception |  |   | Six       |   |   | Inception |  |   | Cumulative   |  
|--------------------------------- | - | --------- | - | - | --------- |  | - | --------- | - | - | --------- |  | - | ------------ | -
|                                  |   | Months    |   |   | May 28,   |  |   | Months    |   |   | May 28,   |  |   | from         |  
|                                  |   | Ended     |   |   | 2004 to   |  |   | Ended     |   |   | 2004 to   |  |   | May 28, 2004 |  
|                                  |   | May 31    |   |   | May 31,   |  |   | May 31    |   |   | May 31,   |  |   | to May 31,   |  
|                                  |   | 2005      |   |   | 2004      |  |   | 2005      |   |   | 2004      |  |   | 2005         |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|REVENUE                           | $ | -         |   | $ | -         |  | $ | -         |   | $ | -         |  | $ | -            |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|OPERATING EXPENSES                |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|Consulting fees                   |   | 4,800     |   |   | -         |  |   | 11,600    |   |   | -         |  |   | 18,800       |  
|General and Administrative        |   | 480       |   |   | -         |  |   | 3,134     |   |   | -         |  |   | 4,933        |  
|Interest on long-term debt        |   | 1,500     |   |   | -         |  |   | 2,980     |   |   | -         |  |   | 2,980        |  
|Professional fees                 |   | 21,495    |   |   | -         |  |   | 22,265    |   |   | -         |  |   | 53,373       |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   | 28,275    |   |   | -         |  |   | 39,979    |   |   | -         |  |   | 80,086       |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|NET LOSS FOR THE PERIOD           | $ | (28,275   | ) | $ | -         |  | $ | (39,979   | ) | $ | -         |  | $ | (80,086      | )
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|Basic and Diluted Loss per        |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|Share                             | $ | (0.04     | ) | $ | -         |  | $ | (0.05     | ) | $ | -         |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|                                  |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|Weighted Average Number of Shares |   |           |   |   |           |  |   |           |   |   |           |  |   |              |  
|Outstanding                       |   | 7,564,332 |   |   | 4,000,000 |  |   | 7,564,332 |   |   | 4,000,000 |  |   |              |  

The accompanying notes are an integral part of these financial
  statements.

F-3

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RANCHO SANTA MONICA DEVELOPMENTS INC.(A Development Stage Company)

STATEMENTS OF CASH FLOWS(Unaudited)
  (Stated in U.S. Dollars)

|                                                          |   | Six     |   |   | Inception |  |   | Cumulative   |  
|--------------------------------------------------------- | - | ------- | - | - | --------- |  | - | ------------ | -
|                                                          |   | Months  |   |   | May 28,   |  |   | from         |  
|                                                          |   | Ended   |   |   | 2004 to   |  |   | May 28, 2004 |  
|                                                          |   | May 31, |   |   | May 31,   |  |   | to May 31,   |  
|                                                          |   | 2005    |   |   | 2004      |  |   | 2005         |  
|                                                          |   |         |   |   |           |  |   |              |  
|                                                          |   |         |   |   |           |  |   |              |  
|Cash Flows Used By Operating Activities                   |   |         |   |   |           |  |   |              |  
|                                                          |   |         |   |   |           |  |   |              |  
|Net Loss for the Period                                   | $ | (39,979 | ) | $ | -         |  | $ | (80,086      | )
|                                                          |   |         |   |   |           |  |   |              |  
|Adjustments to Reconcile Loss to Net Cash Used            |   |         |   |   |           |  |   |              |  
|by Operating Activities                                   |   |         |   |   |           |  |   |              |  
|                                                          |   |         |   |   |           |  |   |              |  
|Changes in Accounts payable
      and accrued liabilities |   | 11,880  |   |   | -         |  |   | 12,880       |  
|                                                          |   | (28,099 | ) |   | -         |  |   | (67,206      | )
|                                                          |   |         |   |   |           |  |   |              |  
|Cash Flows Used by Investing Activity                     |   |         |   |   |           |  |   |              |  
|Purchase of property                                      |   | (4,331  | ) |   | -         |  |   | (30,000      | )
|                                                          |   |         |   |   |           |  |   |              |  
|Cash Flows from Financing Activity                        |   |         |   |   |           |  |   |              |  
|Issue of share capital                                    |   | 3,000   |   |   | 4,000     |  |   | 110,930      |  
|                                                          |   |         |   |   |           |  |   |              |  
|Increase (Decrease) In Cash                               |   | (29,430 | ) |   | 4,000     |  |   | 13,724       |  
|                                                          |   |         |   |   |           |  |   |              |  
|Cash, Beginning of Period                                 |   | 43,154  |   |   | -         |  |   | -            |  
|                                                          |   |         |   |   |           |  |   |              |  
|Cash, End of Period                                       | $ | 13,724  |   | $ | 4,000     |  | $ | 13,724       |  

The accompanying notes are an integral part of these financial
  statements.

F-4

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RANCHO SANTA MONICA DEVELOPMENTS INC.(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITYPERIOD FROM INCEPTION, MAY 28, 2004, TO MAY 31, 2005(Unaudited)
  (Stated in U.S. Dollars)

|                           | COMMON
      STOCK |   |       |   |            | DEFICIT |               |  |   |            
|-------------------------- | ------------------ | - | ----- | - | ---------- | ------- | ------------- |  | - | -----------
|                           | NUMBER             |   |       |   |            |         |               |  |   | ACCUMULATED
|                           | OF                 |   |       |   | ADDITIONAL |         |               |  |   | DURING THE 
|                           | COMMON             |   | PAR   |   | PAID-IN    |         | SUBSCRIPTIONS |  |   | DEVELOPMENT
|                           | SHARES             |   | VALUE |   | CAPITAL    |         | RECEIVABLE    |  |   | STAGE      
|                           |                    |   |       |   |            |         |               |  |   |            
|Shares issued for          |                    |   |       |   |            |         |               |  |   |            
|cash at $0.001 per         |                    |   |       |   |            |         |               |  |   |            
|share – May 28, 2004       | 4,000,000          | $ | 4,000 | $ | -          | $       | -             |  | $ | -          
|Shares issued for          |                    |   |       |   |            |         |               |  |   |            
|cash at $0.03 per          |                    |   |       |   |            |         |               |  |   |            
|share – November 30, 2004  | 3,564,332          |   | 3,564 |   | 103,366    |         | (3,000)       |  |   | -          
|Net loss for the period    | -                  |   | -     |   | -          |         | -             |  |   | (40,107)   
|                           |                    |   |       |   |            |         |               |  |   |            
|Balance, November 30, 2004 | 7,564,332          |   | 7,564 |   | 103,366    |         | (3,000)       |  |   | (40,107)   
|                           |                    |   |       |   |            |         |               |  |   |            
|Subscriptions              |                    |   |       |   |            |         |               |  |   |            
|received – May 31, 2005    | -                  |   | -     |   | -          |         | 3,000         |  |   | -          
|Net loss for the period    | -                  |   | -     |   | -          |         | -             |  |   | (39,979)   
|                           |                    |   |       |   |            |         |               |  |   |            
|Balance, May 31, 2005      | 7,564,332          | $ | 7,564 | $ | 103,366    | $       | -             |  | $ | (80,086)   

The accompanying notes are an integral part of these financial
  statements.

F-5

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RANCHO SANTA MONICA DEVELOPMENTS LTD.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MAY 31, 2005(Unaudited)
  (Stated in U. S. Dollars)

|1. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The unaudited financial statements as of May 31,
        2005 included herein have been prepared without audit pursuant to the
        rules and regulations of the Securities and Exchange Commission. Certain
        information and footnote disclosures normally included in financial statements
        prepared in accordance with United States generally accepted accounting
        principles have been condensed or omitted pursuant to such rules and regulations.
|  
|   | In the opinion of management, all adjustments (consisting
        of normal recurring accruals) considered necessary for a fair presentation
        have been included. It is suggested that these financial statements be
        read in conjunction with the November 30, 2004 audited financial statements
        and notes thereto.                                                                                                                                      
|  
|2. | PROPERTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | By an agreement, dated November 29, 2004, the Company
        acquired the right to possess and make use of a fraction of a property
        located in the State of Quintana Roo, Mexico, for consideration of a $30,000
        cash payment and a $50,000 unsecured promissory note. The Company
        will own title to the property upon completion of a legal survey by the
        Mexican Government.                                                                 
|  
|   | A total of nine apartment units are currently under
        construction on the portion of the property not purchased. Upon completion
        of construction, the Company will receive maintenance and management fees
        of $250 per unit per month, and service fees of $50 per unit per
        month.                                                                                                                                                                
|  
|3. | NOTE PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | Note Payable is comprised of a $50,000 unsecured
        promissory note, bearing interest at 12% per annum and payable in full
        on November 29, 2006.                                                                                                                                                                                                                                                                                                                   
|  
|4. | RELATED PARTIES TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | During the six month period ended May 31, 2005,
        pursuant to written agreements, the Company paid Directors and Officers
        a total of $11,600 for management services. Cumulatively to that date,
        management fees paid to Directors and Officers totals $18,800.                                                                                                                                                                                           

F-6

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

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report constitute
  "forward-looking statements". These statements, identified by words such as
  “plan”, "anticipate," "believe," "estimate," "should", "expect"
  and similar expressions, include our expectations and objectives regarding our
  future financial position, operating results and business strategy. These statements
  reflect the current views of management with respect to future events and are
  subject to risks, uncertainties and other factors that may cause our actual
  results, performance or achievements, or industry results, to be materially
  different from those described in the forward-looking statements. Such risks
  and uncertainties include those set forth under the caption "Management's Discussion
  and Analysis or Plan of Operation" and elsewhere in this Quarterly Report. We
  advise you to carefully review the reports and documents we file from time to
  time with the Securities and Exchange Commission (“SEC”), particularly
  our Annual Reports on Form 10-KSB and our Current Reports on Form 8-K.

Corporate Background

We are a development stage company focused on the development
  of real estate. We have acquired real property located in Solidaridad, Mexico
  on which we plan to construct certain facilities and provide management services
  for the apartment units being constructed on the adjoining property. Ms. Galan-Rios
  has applied for all remaining permits to complete construction of the apartment
  units which are 80% complete as of July 8, 2005 The permit for the construction
  of the units is expected to be received by August, 2005. We expect that completion
  of the development of the Solidaridad Property and the apartment units on the
  adjoining property will occur within two months from the date the permit is
  received.

We are not obligated to fund any of the costs of construction
  of the apartment units. Our project requires capital expenditures for infrastructure
  development before we can begin generating revenue from our property. Our property
  development is 80% complete. We intend to complete the construction of the cabanas,
  reception area, sewer system and water facilities in the next three months using
  local contractors upon our receipt of a regularization permit from the local
  Mexican environmental authority. As of July 8, 2005 we have not incurred any
  construction costs relating to our Solidaridad Property. We estimate that we
  will be required to expend $15,000 to complete the development of our property.
  See “Acquisition of Solidaridad Property” below.

Acquisition of Solidaridad Property

We entered into an agreement dated for reference November
  29, 2004 with Monica Galan-Rios for the purchase of certain lands located in
  Solidaridad, Mexico consisting of approximately 2,120 square meters, See Figure
  1 below. Under the terms of the property purchase agreement with Ms. Galan-Rios:

|(1) | In consideration of Ms. Galan-Rios’s grant
        of all of her interests in the Solidaridad Property to us, we: (i) paid
        $30,000 to Ms. Galan-Rios, and (ii) issued an unsecured promissory
        note to Ms. Galan-Rios in the amount of $50,000, plus accrued interest
        at a rate of 12% per year, maturing on November 29, 2006;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | We acknowledged that nine apartment units are being
        constructed by Ms. Galan-Rios on land adjacent to the Solidaridad Property
        and are intended to be sold or leased to potential tenants on completion
        of construction;                                                                                                      

3

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|(3) | We agreed to provide septic and water services to
        tenants at a rate of $50 per apartment unit per month;                                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(4) | We agreed that commencing on the completion of construction
        of the units, for a 25 year period following November 29, 2004, we will
        provide security, maintenance and gardening services for the Solidaridad
        Property for a fee of $250 per unit per month; and
|   
|(5) | We agreed to grant to Ms. Galan-Rios and any of
        the potential tenants, access to the road presently existing on the Solidaridad
        Property.                                                                                                                              

Prior to entering into the property purchase agreement with
  Ms. Galan-Rios, Ms. Galan-Rios completed 80% of the construction of the cabanas,
  reception area, sewer system and water facilities. We estimate that we will
  be required to expend an additional $10,000 to complete construction of
  the cabanas, reception area, sewer system and water facilities. Also, prior
  to entering into the property purchase agreement, Ms. Galan-Rios applied to
  Procuraduría Federal de Protección al Ambiente (PROFEPA), a division
  of Secretaria de Medio Ambiento y Recursos Naturales (SEMARNAT) for a regularization
  permit respecting the construction of the cabanas and reception area on the
  Solidaridad Property. SEMARNAT is the Mexican federal agency responsible for
  environmental protection. Ms. Galan-Rios cannot complete the remaining 20% of
  the construction of the apartment units on the adjoining property until the
  PROFEPA permit is received. Also, once the permit is approved, we expect to
  obtain a local permit from the municipality of Solidaridad for our proposed
  business operations on the Solidaridad Property. We expect to receive the permit
  from PROFEPA by August, 2005. We expect that completion of the development of
  the Solidaridad Property and the apartment units on the adjoining property will
  occur within two months from the date the permit is received. We presently do
  not have any written agreements with our third party contractors to provide
  the management, maintenance and septic services to the apartment units on the
  adjoining property. All understandings and arrangements with our consultants
  are presently verbal.

Under the terms of our agreement with Ms. Galan-Rios, we were
  assigned her interest in an occupation order issued by the Ejidal Commissariat
  of the Ejido NCPE Jose Maria Pino Suarez for the use and possession of the Solidaridad
  Property. Under Mexican law we own the right to possess and make use of the
  Solidaridad Property but do not own title to the property until a legal survey
  is completed by the Mexican government. The Mexican government is expected to
  undertake a legal survey of the Solidaridad Property and surrounding areas within
  the next twelve months. Once the legal survey is completed the Mexican government
  may require an additional fee prior to effecting a transfer of legal title to
  the property to Rancho. Because we do not own legal title to our Solidaridad
  Property we are subject to the risk that: (i) conditions may be imposed on our
  occupation order for the property and/or the order may be cancelled; (ii) the
  Mexican government may delay the implementation of a legal survey or decide
  not to undertake a survey of the property; and (iii) if a legal survey is completed
  there is no assurance that we will not be required to pay additional fees for
  the transfer of legal title to the property or that the property boundaries
  will be identical to those granted in the occupation order issued by the Ejidal
  Commissariat.

Location of Solidaridad Property

The property consists of the Western half of the fraction
  of Lot #10 located at Km 8, Carretara a Tulum-Boca Paila Ejido Jose Maria Pino
  Suarez Municipality of Solidaridad, Quintana Roo, Mexico. See Figure 1 below.
  Solidaridad is one of the eight municipalities that make up the Mexican state
  of Quintana Roo. Quintana Roo is located on the eastern part of the Yucatán
  Peninsula. It borders the Mexican states of Yucatán and Campeche to the
  north and west, the

4

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Caribbean Sea to the east, and the nation of Belize to the south.



PLAN OF OPERATION

Our plan of operation is to acquire, manage, and develop income-producing
  real property in Mexico. We have not earned any revenues to date. Our auditors
  have made reference to the substantial doubt as to our ability to continue as
  a going concern in their audit report on our audited financial statements for
  the period ended November 30, 2004. We plan to earn revenues from management
  services, including reception, greeting, and general bookkeeping services, provided
  to the apartment units being constructed on the land adjacent to the Solidaridad
  Property and the operation of certain facilities on the Solidaridad Property.

Once completed, the Solidaridad Property is expected to consist
  of the two cabanas, a reception area, washrooms, and a food preparation area.
  One of the cabanas is expected to be 8 x 4 meters, and the second cabana is
  expected to be 6 x 4 meters. Each cabana is oval shaped and is expected to fit
  a family of 4 to 5 but are also suited for couples.

The amenities that we intend to provide to apartment unit
  owners and guests are as follows:

|- | a tour of the Mayan ruins including the Tulum Ruins
        and the Coba Ruins; and
|- | -----------------------------------------------------------------------------------
| 
|- | in-room spa treatments to be booked with reception.                                

5

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These additional services will be charged out to the guests
  and are not included in the rental and future revenue stream for Rancho. We
  are presently negotiating with a neighbouring spa and local tour company for
  provision of spa packages and tours to residents and guests on the adjoining
  property.

The reception area will consist of a separate wooden building
  unit already constructed which will check in and check out the guests. This
  also includes the bookings for the apartment unit guests and the cabana guests
  of Rancho. The guests are expected to be able to book any of the packages they
  want to, including any tours, and spa services. The reception area is expected
  to be serviced by one person who will also be the grounds keeper.

The nine apartment units on the adjoining property have been
  sold. Rancho is presently negotiating with the owners of the apartment units
  to receive a commission from the rental of these units on behalf of the owners
  by Rancho. If such commission is agreed to by the unit owner, Rancho intends
  to advertise the units through various media including brochures, internet,
  and presentations by its principals. We also intend initially to market the
  apartment units and our rental facilities by creating a website and preparing
  marketing brochures. We estimate expending $3,500 on our initial marketing
  campaign for the Solidaridad Property. Our fees for property maintenance and
  management of the apartment units on the adjoining property are not dependent
  on the sale or rental of the apartment units.

We have engaged an independent contractor to provide property
  maintenance, gardening and security services to the Solidaridad Property at
  a rate of $400 per month. Upon completion of the apartment units on the
  adjoining property and the development of our Solidaridad Property we intend
  to increase the payment rate to our contractor to $600 per month for property
  maintenance, gardening and security services provided to the Solidaridad Property
  and the adjoining property. We intend to hire an additional contractor to provide
  property management services to the apartment units on the adjoining property
  and the Solidaridad Property at a rate of $600 per month upon completion
  of the apartment units and the Solidaridad Property.

Our business plan is to continue to develop, maintain and
  manage our Solidaridad Property. We do not anticipate earning revenues until
  such time as the units are constructed on the land adjacent to our Solidaridad
  Property and we complete development of the cabanas and the reception area.
  We are presently in the development stage of our business and we can provide
  no assurance that we will be able to generate revenues from the development
  and management of our Solidaridad Property or that the revenues generated will
  exceed the operating costs of our business. We have no employees as of July
  8, 2005. We conduct our business largely through agreements with consultants,
  independent contractors and arms-length third parties. We do not intend to hire
  any employees over the next twelve months.

6

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Revenue

In addition to providing maintenance services and septic/water
  services to tenants of the adjoining property, we plan to construct a reception
  area and two cabanas on the Solidaridad Property for rental to tenants and/or
  tourists. Initially, we anticipate revenue will be generated through the following
  channels:

|Revenue Stream                                                 | Projected Fee            | Estimated Expenses                                  
|-------------------------------------------------------------- | ------------------------ | ----------------------------------------------------
|Rental of 2 Cabanas                                            | $60 per Cabana per night | -                                                   
|Management Services for 9 Units                                | $10 per Unit per night   | $600 per month for management consulting services(1)
|Maintenance, Security and Gardening Services
      for 9 Units | $250 per Unit per month  | $600 per month for maintenance/gardening services(2)
|Septic and Water Services for 9 Units                          | $50 per Unit per month   | $200 per year for sewer removal and water
      fees
|Total per Month                                                | -                        | $1,400                                              
|Total per Year                                                 | -                        | $14,600                                             

| | (1) | Commencing on completion of the apartment units
        on the adjoining property.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) | We have engaged an independent contractor to provide
        property maintenance, gardening and security services to the Solidaridad
        Property at a rate of $400 per month. Upon completion of the apartment
        units on the adjoining property and the development of our Solidaridad
        Property we intend to increase the payment rate to our contractor to $600
        per month for property maintenance, gardening and security services provided
        to the Solidaridad Property and the adjoining property.

In the event we do not generate any revenues from our Solidaridad
  Property we will not have sufficient cash on hand to fund our proposed expenditures
  for the next twelve months, and will require additional financing to pursue
  our stated plan of operation. We anticipate that such funding will be in the
  form of equity financing from the sale of our common stock. However, we cannot
  provide investors with any assurance that we will be able to raise sufficient
  funding from the sale of our common stock to fund additional expenditures. The
  risky nature of this enterprise and lack of tangible assets places debt financing
  beyond the credit-worthiness required by most banks or typical investors of
  corporate debt until we generate revenues from our property development. We
  do not have any arrangements in place for any future equity financing.

MILESTONES AND OBJECTIVES

The table below highlights our milestones and objectives over the next twelve months:

|Milestones And Objectives                                                                                                                                                                                                                                                 | AnticipatedCost | Time Frame
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------- | ----------
|PHASE I - COMPANY START-UP
      - Construct Cabanas. 
        - Complete construction of water and septic facilities for the provision
        of water services.
        - Construct reception area. 
        - Completion of construction of Apartment Units by Vendor | $10,000         | 3 Months  

7

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|Milestones And Objectives                                                                                                                                                                                                                                                                | AnticipatedCost | Time Frame
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------- | ----------
|PHASE II – MANAGEMENT OF SOLIDARIDAD PROPERTY
      - Commence rental of Cabanas and provision of property management services.
        - Obtain all necessary regulatory approvals.
        - Hire consultants for provision of maintenance, security and  management
        services. | $5,000          | 3-6 Months
|TOTAL                                                                                                                                                                                                                                                                                    | $15,000         | -         

In addition to the costs outlined above, we anticipate that
  we will incur over the next twelve months the following expenses:

|Category                        | Planned Expenditures OverThe Next Twelve Months
|------------------------------- | -----------------------------------------------
|Professional Fees               | $31,000                                        
|General Administrative Expenses | $9,000                                         
|Consulting Fees                 | $12,000                                        
|Contractor Fees                 | $11,200                                        
|Marketing Expenses              | $3,500                                         
|TOTAL                           | $66,700                                        

We have cash of $28,193and working capital of
  $22,862as of July 8, 2005. We estimate that the completion of the
  development of our Solidaridad Property will cost approximately $15,000.
  Our total expenditures over the next twelve months are anticipated to be approximately
  $81,700, the majority of which is due to the development of our Solidaridad
  Property, general, legal, accounting and administrative expenses as a result
  of our becoming a reporting issuer under the Exchange Act.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital           |                 |                      |                      
|------------------------- | --------------- | -------------------- | ---------------------
|                          |                 |                      | Percentage           
|                          | At May 31, 2005 | At November 30, 2004 | Increase / (Decrease)
|Current Assets            | $13,724         | $43,154              | (68)%                
|Current Liabilities       | $12,880         | $5,331               | 141%                 
|Working Capital (Deficit) | $844            | $37,823              | (977)%               

8

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|Cash Flows                                     |   |               |   |   |              |   |                 |  
|---------------------------------------------- | - | ------------- | - | - | ------------ | - | --------------- | -
|                                               |   | Six Months    |   |   | Inception to |   | Cumulative from |  
|                                               |   | Ended May 31, |   |   | May 31,      |   | Inception to    |  
|                                               |   |               |   |   |              |   | May 31          |  
|                                               |   | 2005          |   |   | 2004         |   | 2005            |  
|Cash Flows from (used in) Operating Activities | $ | (25,099       | ) |   | -            | $ | (67,206         | )
|Cash Flows from (used in) Investing Activities | $ | (4,331        | ) |   | -            | $ | (30,000         | )
|Cash Flows from (used in) Financing Activities | $ | 3,000         |   | $ | 4,000        | $ | 110,930         |  
|Net Increase (decrease) in Cash During Period  | $ | (29,430       | ) | $ | 4,000        | $ | 13,724          |  

The decreases in our working capital surplus at May 31, 2005
  from our year ended November 30, 2004, and the increases in our cash used during
  the periods ended on May 31, 2005, from the comparable periods of the preceding
  fiscal years are primarily a result of the increase in our professional fees
  related to the professional fees paid in connection with preparing and filing
  our Registration Statement on Form SB-2 and the amendments thereto and from
  the fact that we had no revenue or sources of financing during the period ended
  May 31, 2005.

As of July 8, 2005, we had cash on hand of $28,193. Since
  our inception, we have used our common stock to raise money for our operations
  and for our property acquisitions. We have not attained profitable operations
  and are dependent upon obtaining financing to pursue our plan of operation.
  For these reasons, our auditors stated in their report to our audited financial
  statements for the year ended November 30, 2004, that there is substantial doubt
  that we will be able to continue as a going concern.

We anticipate continuing to rely on equity sales of our common
  stock in order to continue to fund our business operations. Issuances of additional
  shares will result in dilution to our existing stockholders. There is no assurance
  that we will achieve any of additional sales of our equity securities or arrange
  for debt or other financing for to fund our planned business activities.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that
  have or are reasonably likely to have a current or future effect on our financial
  condition, changes in financial condition, revenues or expenses, results of
  operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES

The financial statements presented with this quarterly report
  on Form 10-QSB have been prepared in accordance with generally accepted accounting
  principles in the United States of America for interim financial information.
  These financial statements do not include all information and footnote disclosures
  required for an annual set of financial statements prepared under United States
  generally accepted accounting principles. In the opinion of our management,
  all adjustments (consisting solely of normal recurring accruals) considered
  necessary for a fair presentation of the financial position, results of operations
  and cash flows as at May 31, 2005 and

9

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for all periods presented in the attached financial statements,
  have been included. Interim results for the six month period ended May 31, 2005
  are not necessarily indicative of the results that may be expected for the fiscal
  year as a whole.

Our significant accounting policies are disclosed in the notes
  to the audited financial statements for the year ended November 30, 2004.

Use of Estimates

The interim financial statements accompanying this Quarterly
  Report are prepared in accordance with rules set forth in Regulation S-B of
  the Securities and Exchange Commission. These statements do not include all
  disclosures required under generally accepted principles and should be read
  in conjunction with the audited financial statements for the year ended November
  30, 2004. In the opinion of management, all required adjustments which consist
  of normal reoccurring accrual have been made to the financial statements.

RISK FACTORS

We Have Yet To Attain Profitable Operations And Because
  We Will Need Additional Financing To Fund The Development Of Our Property, Our
  Accountants Believe There Is Substantial Doubt About Our Ability To Continue
  As A Going Concern.

We have incurred a net loss of $80,086 for the period
  from May 28, 2004 (inception) to May 31, 2005, and have no revenues to date.
  Our future is dependent upon successful completion of our development program
  and obtaining adequate financing to fulfill our development activities. The
  following factors raise substantial doubt that we will be able to continue as
  a going concern:

|- | We presently do not have sufficient cash on hand
        to fund our proposed expenditures for the next twelve months and will
        require additional financing if our Solidaridad Property fails to generate
        revenues. We have cash in the amount of $28,193 as of July 8, 2005
        and our total expenditures over the next twelve months are anticipated
        to be approximately $81,700.       
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|- | We estimate that we will be required to expend $15,000
        on completion of the development of our Solidaridad Property and an additional
        $3,500 on an initial marketing campaign for the property over the
        next twelve months before we can commence generating revenues from the
        property.                                                                                               
| 
|- | We expect to continue to expend $1,400 per month
        on fees to consultants and contractors until our property is completed.                                                                                                                                                                                                                                                                                       
| 
|- | The development of our Solidaridad property is subject
        to receipt of a regularization permit from the Mexican government. We
        cannot complete the development of our property which is presently 80%
        complete, until we receive the required permits from the Mexican Government,
        and there is no assurance that we will receive the required permits by
        August, 2005 or at all.

Our financial statements included with this quarterly report
  have been prepared assuming that we will continue as a going concern. Our auditors
  have made reference to the substantial doubt as to our ability to continue as
  a going concern in their audit report on our audited financial statements for
  the period ended November 30, 2004. Our project requires capital expenditures
  for infrastructure development before we can begin generating revenue from our
  property. If we are unsuccessful in our development efforts, we may not be able
  to recover the capital expenditures that we have incurred. If we are not able
  to achieve revenues or complete our development

10

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program, then we may not be able to continue as a going concern
  and our financial condition and business prospects will be adversely affected.
  These factors raise substantial doubt that we will be able to continue as a
  going concern and adversely affect our ability to obtain additional financing.

Our Short Operating History Makes our Business Difficult
  To Evaluate, Accordingly, We Have A Limited Operating History Upon Which To
  Base An Evaluation Of Our Business And Prospects.

Our business is in the early stage of development and we have
  not generated any revenues or profit to date. Further development of our Solidaridad
  Property is necessary prior to our achieving revenues or profitability. We estimate
  that we will expend $15,000 over the next twelve months on the development
  of our Solidaridad Property. We have a limited operating history upon which
  to base an evaluation of our business and prospects. Our business and prospects
  must be considered in light of the risks, expenses and difficulties frequently
  encountered by companies in their early stage of development, particularly companies
  involved in real estate development.

Our real estate development activities entail risks that include:

- construction delays or cost overruns, which
    may increase project development costs.
- an inability to obtain required governmental
    permits and authorizations.
- failure to achieve anticipated rentals of
    our facilities.

In addition, our real estate development activities require
  capital expenditures. We have to obtain funds for our capital expenditures through
  cash flow from operations or financings. We cannot assure you that funds available
  from cash flow and financings will be sufficient to fund our required or desired
  capital expenditures for development. If we are unable to obtain sufficient
  funds, we may have to defer or otherwise limit development activities. To address
  these risks, we must successfully implement our business plan. We may not successfully
  implement all or any of our business strategies or successfully address the
  risks and uncertainties that we encounter.

We Do Not Own Legal Title To Our Solidaridad Property,
  And As A Result May Lose All Or Substantially All Of Our Interests In The Property

Under the terms of the property purchase agreement for our
  Solidaridad Property, Ms. Galan-Rios assigned to us her interest in an occupation
  order issued by the Ejidal Commissariat of the Ejido NCPE Jose Maria Pino Suarez
  for the use and possession of the Solidaridad Property. Under Mexican law we
  own the right to possess and make use of our Solidaridad Property but do not
  own title to the property until a legal survey is completed by the Mexican government.
  Because we do not own legal title to our Solidaridad Property we are subject
  to the risk that: (i) conditions may be imposed on our occupation order for
  the property and/or the order may be cancelled; (ii) the Mexican government
  may delay the implementation of a legal survey or decide not to undertake a
  survey of the property; and (iii) if a legal survey is completed there is no
  assurance that we will not be required to pay additional fees for the transfer
  of legal title to the property or that the property boundaries will be identical
  to those granted in the occupation order issued by the Ejidal Commissariat.
  The occurrence of any of the above risks would have a material adverse effect
  our business, results of operations or financial condition.

11

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Environmental And Other Regulations May Have An Adverse
  Effect On Our Business.

Our present operations and development activities in Mexico
  are subject to Mexican state and local laws and regulations, respectively, relating
  to the protection of the environment, including those concerning water supply,
  wastewater, noise, soil pollution and generation and handling of hazardous waste
  and materials and environmental impact.

Pursuant to the terms of our property purchase agreement with
  Ms. Galan-Rios, Ms. Galan-Rios has applied to Procuraduría Federal de
  Protección al Ambiente (PROFEPA), a division of Secretaria de Medio Ambiento
  y Recursos Naturales (SEMARNAT) for a regularization permit respecting the construction
  of the cabanas and reception area on our Solidaridad Property. SEMARNAT is the
  Mexican federal agency responsible for environmental protection. We are not
  required to pay for any of the costs relating to the regularization permit.
  If Ms. Galan-Rios is not successful in obtaining the regularization permit for
  our Solidaridad Property we will not be able to complete our property development,
  which would materially adversely affect our financial condition and our business
  plan. We are also subject to administrative sanctions for any breaches of Mexican
  environmental law as administered by PROFEPA, which can result in fines ranging
  from $350 to $70,000, the requirement to perform environmental assessments,
  and which may result in temporary or permanent closure of all or part of any
  facilities on our property.

We believe that we are in compliance in all material respects
  with all Mexican state and local laws and regulations relating to water, atmospheric
  pollution, hazardous wastes or substances. We have not been notified by any
  environmental authority or any third party, of any material noncompliance, liability
  or claim related to those environmental matters in connection with any of our
  present properties. The possibility exists that in the future that our facilities
  and operations will encounter: (i) newer and stricter state or local environmental
  laws and regulations, (ii) more rigorous interpretations of existing environmental
  laws and regulations, and/or (iii) stricter enforcement of federal, state and
  local environmental law regulations.

The Solidaridad Property is subject to federal, state and
  local regulations and restrictions that may impose significant limitations on
  our ability to develop them. In addition, our ownership and operation of real
  property is subject to extensive and evolving federal, state and local environmental
  laws and other regulations. The provisions and enforcement of these environmental
  laws and regulations may become more stringent in the future. Violations of
  these laws and regulations can result in:

| | (1) | civil penalties;            
| | --- | ----------------------------
|
| | (2) | remediation expenses;       
|
| | (3) | natural resource damages;   
|
| | (4) | personal injury damages;    
|
| | (5) | potential injunctions;      
|
| | (6) | cease and desist orders; and
|
| | (7) | criminal penalties.         

12

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In addition, some of these environmental laws impose strict
  liability, which means that we may be held liable for any environmental damages
  on our property regardless of our fault. The presence of hazardous substances
  on a property may also adversely affect our ability to sell or develop the property
  or to borrow using the property as collateral.

Changes in laws or the interpretation thereof, new enforcement
  of laws, the identification of new facts or the failure of other parties to
  perform remediation could all lead to new or greater liabilities that could
  materially adversely affect our business, results of operations or financial
  condition.

We Are Highly Dependent On Our Senior Management. The Loss
  Of Any Of Our Executive Officers Could Have A Material Adverse Effect On Our
  Business.

Our future success is highly dependent upon the continued
  employment of our senior management. The loss of any of our executive officers
  could have a material adverse effect on our business. We believe that our continued
  success depends to a significant extent upon the efforts and abilities of our
  senior management and in particular Graham Alexander, our president, chief financial
  officer, chief executive officer, secretary and treasurer. The loss of Mr. Alexander’s
  business experience, personal knowledge of the Tulum region where our property
  is located, and his local business contacts in Mexico, could materially adversely
  affect our business, results of operations or financial condition.

The Occurrence In Mexico Of Natural Disasters Could Adversely
  Affect Our Business.

Our property is located in Mexico. The occurrence of natural
  disasters, such as fires, hurricanes, floods, unusually heavy or prolonged rain
  and droughts in Mexico could have a material adverse effect on our ability to
  develop properties or realize income from our property.

Because We Are Significantly Smaller And Less Established
  Than A Majority Of Our Competitors, We May Lack The Financial Resources Necessary
  To Compete Effectively And Sustain Profitability.

Our competitors have substantially greater capital resources,
  name recognition, expertise in commercial real estate development and marketing.
  A number of residential and commercial developers and real estate services companies,
  some with greater financial and other resources, compete with us in seeking
  properties for acquisition, resources for development and prospective purchasers.
  Competition from other real estate developers and real estate services companies
  may adversely affect our ability to:

- develop rental facilities
- attract purchasers
- sell undeveloped rural land

The presence of competing real estate development companies
  in Mexico may impact on our ability to raise additional capital in order to
  fund our property acquisitions or property developments in Mexico if investors
  are of the view that investments in competitors are more attractive. Competition
  could also reduce the availability of properties of merit or increase the cost
  of acquiring the properties.

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Because Our President And Our Vice-President Have Only
  Agreed To Provide Their Services On A Part-Time Basis, They May Not Be Able
  Or Willing To Devote A Sufficient Amount Of Time To Our Business Operations,
  Causing Our Business To Fail.

Our directors and officers are employed on a full time basis
  by other companies. Because we are in the early stages of our business, Mr.
  Alexander, our president, chief financial officer, chief executive officer,
  secretary and treasurer, and Ms. Manetta, our vice-president, are not expected
  to spend a significant amount of time on our business. Mr. Alexander and Ms.
  Manetta each expect to expend approximately 8-10 hours per week on our business.
  Competing demands on their time may lead to a divergence between their interests
  and the interests of other shareholders.

Because Our President, Mr. Graham Alexander, Owns 53% Of
  Our Outstanding Common Stock, Investors May Find That Corporate Decisions Influenced
  By Mr. Alexander Are Inconsistent With The Best Interests Of Other Stockholders.

Mr. Graham Alexander, our president, chief financial officer,
  chief executive officer, secretary and treasurer, controls 53% of our issued
  and outstanding shares of common stock. Accordingly, in accordance with our
  articles of incorporation and bylaws, Mr. Alexander is able to control who is
  elected to our board of directors and thus could act, or could have the power
  to act, as our management. The interests of Mr. Alexander may not be, at all
  times, the same as that of other shareholders. Since Mr. Alexander is not simply
  a passive investor but is also one of our active executives, his interests as
  an executive may, at times, be adverse to those of passive investors. Where
  those conflicts exist, our shareholders will be dependent upon Mr. Alexander
  exercising, in a manner fair to all of our shareholders, his fiduciary duties
  as an officer or as a member of our board of directors. Also, Mr. Alexander
  will have the ability to significantly influence the outcome of most corporate
  actions requiring shareholder approval, including the merger of Rancho with
  or into another company, the sale of all or substantially all of our assets
  and amendments to our articles of incorporation. This concentration of ownership
  with Mr. Alexander may also have the effect of delaying, deferring or preventing
  a change in control of Rancho which may be disadvantageous to minority shareholders.

We Are Vulnerable To Concentration Risks Because Our Current
  Revenue Sources Are Linked To The Development of Apartment Units On An Adjoining
  Property.

A majority of our revenues are expected to be derived from
  the provision of management services and maintenance services to occupants of
  a condominium development on a property adjacent to our property in Solidaridad,
  Mexico. If the construction of the apartment units on the neighboring property
  is delayed or terminated, we may lose the source of all or substantially all
  of our revenues. Our substantial dependence on a single prospect property for
  cash flow increases the risk of our future success.

We Do Not Carry Comprehensive Liability Insurance. As A
  Result, Should An Uninsured Loss Occur, We Could Lose Our Capital Invested In
  The Solidaridad Property, As Well As The Anticipated Future Revenues From Such
  Property

As of July 8, 2005 we do not carry comprehensive liability,
  fire, hurricane, storm, earthquake and business interruption insurance with
  respect to our business operations in Mexico. Should an uninsured loss occur,
  we could lose our capital invested in the Solidaridad Property, as well as the
  anticipated future revenues from such property and would continue to be obligated
  on any indebtedness or other obligations related to the property. Any such loss
  could have a material adverse effect on Rancho.

14

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Our Ability To Issue “Blank Check” Preferred
  Stock, Could Have The Effect Of Deterring Or Delaying A Take Over Or Other Change
  In Control, Denying Shareholders The Receipt Of A Premium On Their Common Stock
  And Depress The Market Price Of Our Common Stock.

Rancho’s board of directors, without any action by Rancho’s
  shareholders, has the authority to issue the remaining undesignated and unissued
  authorized shares and to fix the powers, preferences, rights and limitations
  of such shares or any class or series thereof, without shareholder approval.
  Persons acquiring such shares could have preferential rights with respect to
  voting, liquidation, dissolution or dividends over existing shareholders. The
  ability to issue undesignated shares, could have the effect of deterring or
  delaying a take over or other change in control, deny shareholders the receipt
  of a premium on their common stock and depress the market price of Rancho’s
  common stock.

Our Adoption Of Stock Based Benefit Plans And Future Equity
  Financings May Dilute Existing Stockholders' Ownership Interests.

In November, 2004, our board of directors approved the 2004
  Stock Option Plan (the “2004 Plan”). Under the 2004 Plan, options
  to purchase up to 750,000 shares of our common stock may be granted to our employees,
  officers, directors, and eligible consultants. The 2004 Plan will increase our
  future compensation costs, thereby reducing our earnings, and shareholders may
  experience a reduction in ownership interest in the event newly issued shares
  are used to fund awards made under the plan. Further, we rely upon the availability
  of equity capital to fund our growth, which financing may or may not be available
  on favorable terms or at all. Equity capital could include our common stock
  or preferred stock. We cannot guarantee that additional financing, refinancing
  or other capital will be available in the amounts we desire or on favorable
  terms.

As of July 8, 2005, we have raised equity capital through
  the issuance of 4,000,000 shares of our restricted common stock to our President
  Mr. Alexander on May 28, 2004 and through the offering of 3,564,332 shares of
  our restricted common stock to certain shareholders on November 30, 2004. On
  May 28, 2006, 4,000,000 shares of our common stock held by Mr. Alexander will
  be available for resale to the public in accordance with the volume, public
  notice and trading limitations of Rule 144. On November 30, 2006, an additional
  3,564,332 shares of our common stock will be available for resale to the public
  in accordance with the volume, public notice and trading limitations of Rule
  144. Subject to the completion of the development of our Solidaridad Property
  and any revenues generated in relation thereto, we anticipate continuing to
  rely on equity sales of our common stock in order to fund our business operations.
  Issuances of additional shares will result in dilution to our existing stockholders.
  There is no assurance that we will achieve any additional sales of our equity
  securities or arrange for debt or other financing to fund our planned business
  activities.

|ITEM 3. | CONTROLS AND PROCEDURES.
|------- | ------------------------

Evaluation Of Disclosure Controls And Procedures

As of the end of the period covered by this report, our management
  carried out an evaluation, under the supervision and with the participation
  of our principal executive officer and principal financial officer, of the effectiveness
  of the design and operation of our disclosure controls and procedures (as defined
  in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation,
  our principal executive officer and principal financial officer has concluded
  that our disclosure controls and procedures are, as of the date covered by this
  Quarterly Report, effective

15

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to ensure that the information required to be disclosed by
  us in the reports that we file or submit under the Exchange Act is recorded,
  processed, summarized and reported within the time periods specified in the
  SEC rules and forms.

Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of our internal controls
  during our last fiscal quarter, our principal executive officer and principal
  financial officer has determined that there have been no changes to our internal
  controls over financial reporting that has materially affected, or is reasonably
  likely to materially effect, our internal controls over financial reporting.

16

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PART II - OTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

None.

|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|------- | ------------------------------------------------------------

We registered the resale of 3,554,332 shares of our common
  stock (the “Shares”) offered by selling stockholders of Rancho at
  a price of $0.04 per share pursuant to a registration statement on Form
  SB-2 under the Securities Act of 1933 (the “Offering”). The SEC
  declared our registration statement on Form SB-2 (File No. 333-122375), effective
  on June 27, 2005 (the “Effective Date”). We did not sell any shares
  of our common stock in the Offering and therefore will not receive any proceeds
  from the Offering. The Offering will terminate nine months after the Effective
  Date. None of the securities were sold through an underwriter and accordingly,
  there were no underwriting discounts or commissions involved. We are paying
  all expenses of the Offering. No portion of these expenses will be paid by the
  selling stockholders. The selling stockholders, however, will pay any other
  expenses incurred in selling their common stock, including any brokerage commissions
  or costs of sale. To date we have expended $9,217 on the costs of the Offering.

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

None.

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

None.

|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

None.

---



|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K.
|------- | ---------------------------------

|Exhibit
      Number |  | Description of Exhibits                                                                                                                                                                               
|-------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |  |                                                                                                                                                                                                       
|3.1                  |  | Articles of Incorporation.(1)                                                                                                                                                                         
|3.2                  |  | Bylaws, as amended.(1)                                                                                                                                                                                
|4.1                  |  | Form of Share Certificate.(1)                                                                                                                                                                         
|10.1                 |  | 2004 Stock Option Plan.(1)                                                                                                                                                                            
|10.2                 |  | Management Consulting Agreement dated
        October 1, 2004 between Rancho Santa Monica Developments Inc. and
        Graham G. Alexander.(1)                                                       
|10.3                 |  | Management Consulting Agreement dated
        October 1, 2004 between Rancho Santa Monica Developments Inc. and
        Angela Manetta.(1)                                                            
|10.4                 |  | Extension Agreement dated December 31,
        2004 between Rancho Santa Monica Developments Inc. and Graham G.
        Alexander.(1)                                                                 
|10.5                 |  | Extension Agreement dated December 31,
        2004 between Rancho Santa Monica Developments Inc. and Angela Manetta.(1)                                                                              
|10.6                 |  | Purchase Agreement dated for reference
        November 29, 2004 between Monica Galan-Rios and Rancho Santa Monica
        Developments Inc.(1)                                                       
|10.7                 |  | Promissory Note dated November 29, 2004 Monica Galan-Rios
      and Rancho Santa Monica Developments Inc.(1)                                                                                          
|31.1                 |  | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002.                                                       
|32.1                 |  | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002.

|(1) | Filed with the SEC as an exhibit to our Registration Statement on Form
      SB-2 originally filed on January 29, 2005, as amended.
|--- | -----------------------------------------------------------------------------------------------------------------------------------

REPORTS ON FORM 8-K

We did not file any Current Reports on Form 8-K during the
  fiscal quarter ended May 31, 2005. We have not filed any Current Reports on
  Form 8-K since May 31, 2005.

18

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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.

|                     | RANCHO SANTA MONICA DEVELOPMENTS INC.
|-------------------- | -------------------------------------
|                     |                                      
|Date:  July 11, 2005 | By:                                  
|                     |                                      
|                     | Title:                               
|                     |                                      
|                     |                                      
|                     |                                      
|                     |                                      

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