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 **August
              31, 2007**  o
            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 organization)
            
            (IRS
                Employer Identification No.)**3104
                Sunnyhurst Road****North
                Vancouver, BC, Canada V7K 2G3**(Address
                of principal executive offices)**(604)
                537-5905**Issuer'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 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. **Yes
      x** No o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes
o **No
      x**





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: **As
      of October 11th, 2007, the Issuer had 7,791,542 Shares of Common Stock
      outstanding.**




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







**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 three months ended August 31 st ,
      2007
      are not necessarily indicative of the results that can be expected for the
      year
      ending November 30, 2006.





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.


**RANCHO
        SANTA MONICA DEVELOPMENTS INC.**
 **(A
        Development Stage Company)**
 
 
 **FINANCIAL
        STATEMENTS**
 
 
 **August
        31, 2007**
 **(Unaudited)**
 
 
 
 
 
 
 **MOORE
          & ASSOCIATES, CHARTERED**
 ****** ***ACCOUNTANTS
          AND ADVISORS***
 ***PCAOB
          REGISTERED***
 
 
 **Report
          of Independent Registered Public Accounting Firm**
 
 
 **Rancho
          Santa Monica Developments Inc.**
 **(A
          Development Stage Company)**
 **Las
          Vegas, Nevada**
 
 
 We
          have
          reviewed the accompanying balance sheet of Rancho Santa Monica Developments
          Inc.
          (A Development Stage Company). as of August 31, 2007, and the related statements
          of income, retained earnings, and cash flows for the nine months then ended,
          in
          accordance with the standards of the Public Company Accounting Oversight
          Board
          (United States). All information included in these financial statements
          is the
          representation of the management of Rancho Santa Monica Developments Inc.
          (A
          Development Stage Company).
 
 A
          review
          consists principally of inquiries of company personnel and analytical procedures
          applied to financial data. It is substantially less in scope than an audit
          in
          accordance with generally accepted auditing standards, the objective of
          which is
          the expression of an opinion regarding the financial statements taken as
          a
          whole. Accordingly, we do not express such an opinion.
 
 Based
          on
          our review, we are not aware of any material modifications that should
          be made
          to the financial statements in order for them to be in conformity with
          generally
          accepted accounting principles.
 
 
 
 ***/s/
          Moore & Associates, Chartered***
 
 Moore
          & Associates, Chartered
 Las
          Vegas, Nevada
 September
          18, 2007
  
 
   ***2675
          S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146 (702) 253-7499 Fax:
          (702)253-7501***
 
 **RANCHO
        SANTA MONICA DEVELOPMENTS INC.**
 
 **BALANCE
        SHEETS**
 **August
                  31,**
              
              NOVEMBER
                  30**2007**
              
              2006**ASSETS**
              
              **(Unaudited)****Current
                  Assets**Cash
              
              **$**
              **590**
              
              $
              8,761Total
                  Current Assets
              
              
              **590**
              
              
              8,761**Property
                  and Equipment, net**
              
              
              **289,448**
              
              
              164,917**Total
                  Assets**
              
              **$**
              **290,038**
              
              $
              173,678**LIABILITIES****Current
                  Liabilities**Accounts
                  payable and accrued liabilities
              
              **$**
              **25,483**
              
              $
              23,496Due
                  to related parties
              
              
              **118,385**
              
              
              14,000Total
                  Current Liabilities
              
              
              **143,868**
              
              
              37,496**Note
                  Payable**
              
              
              **50,000**
              
              
              50,000**193,868**
              
              
              87,496**STOCKHOLDERS’
                  EQUITY****Share
                  Capital**Authorized:100,000,000
                  common shares with a par value of $0.0001 per share100,000,000
                  preferred shares with a par value of $0.0001 per shareIssued:7,791,542
                  and 7,751,999 common shares, respectively
              
              
              **7,791**
              
              
              7,751Additional
                  paid-in capital
              
              
              **213,453**
              
              
              139,510Additional
                  paid-in capital (Canadian funds)Currency
                  Translation Adjustment
              
              
              **(4,835**
              **)**
              
              (4,456
              )Subscriptions
                  Receivable
              
              
              -
              
              
              68,043Accumulated
                  Deficit
              
              
              **(120,239**
              **)**
              
              (124,666
              )**96,170**
              
              
              86,182**Total
                  Liabilities and Stockholders’ Equity**
              
              **$**
              **290,038**
              
              $
              173,678
   The
        accompanying notes are an integral part of these financial
        statements.
 
 **RANCHO
        SANTA MONICA DEVELOPMENTS INC.**
 
 
 **STATEMENTS
        OF OPERATIONS**
 **(Unaudited)**
 
  Three
              
              Three
              
              Nine
              
              NineMonths
              
              Months
              
              Months
              
              MonthsEnded
              
              Ended
              
              Ended
              
              EndedAugust
                  31
              
              August
                  31
              
              August
                  31
              
              August
                  312007
              
              2006
              
              2007
              
              2006**REVENUE**
              
              $
              33,111
              
              $
              -
              
              $
              41,211
              
              $
              -**EXPENSES**Depreciation
                  Expense
              
              
              1,820
              
              
              -
              
              
              1,820
              
              
              -General
                  and Administrative
              
              
              18,435
              
              
              1,340
              
              
              29,726
              
              
              9,511Interest
                  on long-term debt
              
              
              1,500
              
              
              1,500
              
              
              1,500
              
              
              4,000Professional
                  fees
              
              
              488
              
              
              750
              
              
              3,738
              
              
              8,30022,243
              
              
              3,590
              
              
              36,784
              
              
              21,811**NET
                  INCOME (LOSS)**
              
              $
              10,868
              
              $
              (3,590
              )
              $
              4,427
              
              $
              (21,811
              )**Basic
                  and Diluted Loss per Share**
              
              $
              0.00
              
              $
              (0.00
              )
              $
              0.00
              
              $
              (0.00
              )Weighted
                  Average Number of SharesOutstanding
              
              
              7,791,542
              
              
              7,723,499
              
              
              7,791,542
              
              
              7,723,499
 
 
 The
        accompanying notes are an integral part of these financial
        statements.
 
 **RANCHO
        SANTA MONICA DEVELOPMENTS INC.**
 
 
 **STATEMENTS
        OF CASH FLOWS**
 **(Unaudited)**
 
  Nine
              
              NineMonths
              
              MonthsEnded
              
              EndedAugust
                  31
              
              August
                  312007
              
              2006**Cash
                  Flows From Operating Activities**Net
                  Income (Loss)
              
              $
              4,427
              
              $
              (21,811
              )Depreciation
                  expense
              
              
              1,820
              
              
              -**Adjustments
                  to Reconcile Loss to Net Cash Used by Operating
                  Activities**Changes
                  in Accounts payable and accrued liabilities
              
              
              1,987
              
              
              11,031Changes
                  in amounts due to related parties
              
              
              104,385
              
              
              1,200112,619
              
              
              (9,580
              )**Cash
                  Flows from Investing Activities**Capital
                  Improvements
              
              
              (126,351
              )
              
              (54,500
              )(126,351
              )
              
              (54,500
              )**Cash
                  Flows from Financing Activities**Proceeds
                  of share capital
              
              
              5,940
              
              
              101,318Increase
                  (Decrease) in Cash
              
              
              (7,792
              )
              
              37,238Translation
                  Adjustment
              
              
              (379
              )
              
              5,192Cash,
                  Beginning of Period
              
              
              8,761
              
              
              4,275**Cash,
                  End of Period**
              
              $
              590
              
              $
              46,705**Non
                  Cash Financing Activities**Note
                  Payable Issued for Property
              
              $
              -
              
              $
              -
 
 The
        accompanying notes are an integral part of these financial
        statements.
 
  **RANCHO
        SANTA MONICA DEVELOPMENTS LTD.**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **August
        31, 2007**
 
 **1.** **BASIS
        OF PRESENTATION**
 
 The
        unaudited financial statements as of August 31, 2007 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,
        2006 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 by December 31, 2004,
        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.
  The
        Company is depreciating the property over the expected life of 40 years using
        the straight line method.
 
 **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. This note has not
        been
        paid yet to Monica Galan Rios, the vendor of the property.
 
 
 **4.** **RELATED
        PARTIES TRANSACTIONS**
 
 During
        the nine month period ended August 31, 2007, pursuant to written agreements,
        the
        Company paid Directors and Officers a total of $1,200 for management services.
        Cumulatively to that date, management fees paid to Directors and Officers
        totals
        $23,000. The amount $14,000 remains unpaid. In addition, personal funds of
        Graham Alexander and Monica Galan Rios were used to make capital improvements
        for the Solidaridad Property for the sum of $120,451. $16,066 was repaid
        during
        the nine months ended August 31, 2007.





**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 have
      constructed certain facilities and provide management services for the apartment
      units constructed on the adjoining property.





**Recent
      Corporate Developments**





We
      experienced the following significant developments since our quarter ending
      August 31st, 2007:





Our
      operations of our Solidaridad Property earned revenue of $33,111 and net income
      of $10,868 for the quarter.





We
      have
      also identified several candidates for development in the Puerta Vallarta area
      of Mexico as our second development property, Our vice president, Trevor Barr,
      is conducting an extensive review of these properties.





Our
      President, Graham Alexander, is reviewing development candidates for Rancho
      in
      Vancouver, Canada.





Hurricane
      Dean made landing in Tulum, Mexico on August 23th, 2007 causing damage and
      major
      debris cleanup for the Solidaridad Property.





**Acquisition
      of Solidaridad Property**





We
      entered into an agreement dated for reference November 29, 2005 with Monica
      Galan-Rios for the purchase of certain lands located in Solidaridad, Mexico
      consisting of approximately 1,220 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
                agreed to provide septic and water services to tenants at a rate
                of $50
                per apartment unit per month;





(3)
            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





(4)
            We
                agreed to grant to Ms. Galan-Rios and any of the potential tenants,
                access
                to the road presently existing on the Solidaridad
                Property.





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





Figure
      1


Property
      Location














**PLAN
      OF OPERATION**





Our
      plan
      of operation is to acquire, manage, and develop income-producing real property
      in Mexico. In addition, our company is considering acquiring other development
      or income-producing properties in other parts of the world. We plan to earn
      revenues from management services, including reception, greeting, and general
      bookkeeping services, provided to the apartment units on the land adjacent
      to
      the Solidaridad Property and the operation of certain facilities on the
      Solidaridad Property.





The
      reception area consists 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.





We
      have
      engaged an independent contractor to provide property maintenance, gardening
      and
      security services to the Solidaridad Property at a rate of $600 per month.





Our
      business plan is to continue to develop, maintain and manage our Solidaridad
      Property. 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.




**MILESTONES
        AND OBJECTIVES**





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





**MILESTONES
                AND OBJECTIVES**
            **ANTICIPATED
                COST**
            **TIME
                FRAME****PHASE
                I**-**MANAGEMENT
                OF SOLIDARIDAD PROPERTY**
              
              -Obtain
                all necessary regulatory approvals for operations
              -Service
                property gardening, cleaning, receiption
            **$7,200**
            **3
                Months****PHASE
                II - AQUIRING OTHER DEVELOPMENT OR INCOME**
              **PRODUCING
                PROPERTIES IN CANADA OR**
              **UNITED
                STATES**
              
              -
                Visit areas in Canada and the United States reviewing real estate
                development opportunities
              -
                Negotiate purchase of lands
              -
                Cash deposit required to secure potential land parcels
            **$50,000**
            **3
                Months****PHASE
                III - AQUIRING OTHER DEVELOPMENT OR INCOME**
              **PRODUCING
                PROPERTIES IN MEXICO**
              
              -
                Visit other resort areas in Mexico to review real estate development
                opportunities
              -
                Negotiate purchase of lands
              -
                Cash deposit required to secure potential land parcels
            **$50,000**
            **12
                Months****TOTAL**
            **$107,200**
            **-**




We
        anticipate spending approximately $107,200 in pursuing our plan of operation
        and
        to pursue other development properties in Mexico over the next twelve months.
        Currently, we have cash of $1,905 which is insufficient to allow us to meet
        our
        current commitments and to complete our plan of operation for the next twelve
        months. We are likely to need substantial additional financing in order to
        implement our long term business strategy and plan of operation. We anticipate
        that any additional financing will likely be in the form of equity financing
        as
        substantial debt financing is not expected to be available at this stage
        of our
        business.




Our
      actual expenditures and business plan may differ from the one stated above.
      Our
      Board of Directors may decide not to pursue this plan. In addition, we may
      modify the plan based on available financing.




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


***Category***
            ***Planned
                Expenditures Over***
              ***The
                Next Twelve Months***Professional
                Fees
            $5,000General
                Administrative Expenses
            $9,000Consulting
                Fees
            $2,000Contractor
                Fees
            $2,200**TOTAL**
            **$18,200**








Our
      total
      expenditures over the next twelve months are anticipated to be approximately
      $125,400, 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.





**Revenue**





Initially,
      we anticipate revenue will be generated through the following
      channels:





**Revenue
                Stream**
            **Projected
                Fee**
            **Estimated
                Expenses**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 $600 per
              month.





In
      the
      event we do not generate sufficient 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.




**LIQUIDITY
        AND CAPITAL RESOURCES**





As
      of
      October 11th, 2007 we had cash on hand of $590. Since our inception, we have
      used our common stock to raise money for our operations and for our property
      acquisitions. We are currently under operations for our Solidaridad
      Property.





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 August 31st, 2006 and for all periods presented
      in the attached financial statements, have been included. Interim results for
      the three month period ended August 31st, 2007 are not necessarily indicative
      of
      the results that may be expected for the fiscal year as a whole.





We
      have
      identified below certain accounting policies that are most important to the
      portrayal of our current financial condition and results of
      operation:





*Development
      Stage Company*





Rancho
      is
      a development stage company as defined in the Statements of Financial Accounting
      Standards No. 7. Rancho is devoting substantially all of its present efforts
      to
      establish a new business and none of its planned principal operations have
      commenced. All losses accumulated since inception have been considered as part
      of the Rancho’s development stage activities.





*Property*





Property
      consists of land and is recorded at cost. Land improvements are capitalized
      and
      maintenance, repairs and minor replacements are expensed as
      incurred.





*Stock
      Based Compensation*





Rancho
      accounts for employee stock based compensation using the intrinsic value method
      prescribed in Accounting Principles Board Opinion No. 25 - “Accounting for Stock
      Issued to Employees”, and related interpretations. Accordingly, compensation
      cost for stock options is measured as the excess, if any, of the market price
      of
      the Company’s common stock at the date of the grant over the amount an employee
      must pay to acquire the common stock. Non-employee stock based compensation
      is
      accounted for using the fair value method in accordance with SFAS No. 123 -
      “Accounting for Stock Based Compensation”.




*Impairment
        of Long-Lived Assets*





Rancho
      periodically evaluates potential impairments of its long-lived assets, including
      intangibles. When Rancho determines that the carrying value of long-lived assets
      may not be recoverable based upon the existence of one or more indicators of
      impairment, Rancho evaluates the projected undiscounted cash flows related
      to
      the assets. If these cash flows are less than the carrying value of the assets,
      Rancho measures the impairment using discounted cash flows or other methods
      of
      determining fair value.





Long-lived
      assets to be disposed of are carried at the lower of cost or fair value less
      estimated costs of disposal.





**RISKS
      AND UNCERTAINTIES**





**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.




**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.





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.





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:




1.
            attract
                purchasers





2.
            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.





**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
      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**





We
      do not
      currently 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.




**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.





**Future
      Equity Financings May Dilute Existing Stockholders’ Ownership
      Interests.**





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
      March 1, 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 Quarterly 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 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 affect, our internal controls over financial reporting.







**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.**





None.








**ITEM
      5.** **OTHER
      INFORMATION.**





None.








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




Exhibit
              Number
            Description
                of Exhibits3.1
            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**




None.




**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:
            October
                11th,
                2007
            
            By:
            *“Graham
                G. Alexander”***GRAHAM
                G. ALEXANDER**Chief
                Executive Officer, Chief Financial Officer
              President,
                Secretary and Treasurer(Principal
                Executive Officer
              and
                Principal Accounting Officer)